EXHIBIT 1.1
▇▇▇▇▇▇ MIDSTREAM PARTNERS L.P.
3,000,000 COMMON UNITS*
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
St. Petersburg, Florida
________, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇. ▇. ▇▇▇▇▇▇▇ & Sons, 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 3,000,000 common units, each representing a
limited partner interest in the Partnership (the "Common Units"). The aggregate
of 3,000,000 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
450,000 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. and RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. are acting as the
representatives of the several Underwriters and in such capacity are referred to
in this Agreement as the "Representatives."
----------
* Plus an additional 450,000 units subject to the Underwriters' over-allotment
option.
1
(a) It is understood and agreed to by all parties that the Partnership
was formed to acquire, own and operate, through ▇▇▇▇▇▇ Operating Partnership
L.P., a Delaware limited partnership (the "Operating Partnership"), certain of
the assets and operations of the marine transportation, terminalling, LPG
distribution and fertilizer business (the "MRMC Business") held by various
subsidiaries of ▇▇▇▇▇▇ Resource Management Corporation, a Texas corporation
("MRMC"), and, thereafter, to manage such assets and operations as more
particularly described in the Prospectus (as defined herein). On __________,
2002, the Operating Partnership entered into a credit agreement (the "Credit
Agreement") with RBC Capital Markets, Royal Bank of Canada and the lenders named
therein providing for borrowings of up to $70.0 million.
(b) It is further understood and agreed by all parties that as of the
date hereof:
(i) ▇▇▇▇▇▇ Resource LLC, a Delaware limited liability company
("▇▇▇▇▇▇ LLC"), is a wholly-owned direct subsidiary of MRMC;
(ii) ▇▇▇▇▇▇ Midstream GP LLC, a Delaware limited liability
company (the "General Partner"), is a wholly-owned direct subsidiary of ▇▇▇▇▇▇
LLC;
(iii) the General Partner is the sole general partner of the
Partnership, having a 2% general partner interest in the Partnership;
(iv) ▇▇▇▇▇▇ LLC is the sole limited partner of the
Partnership, having a 98% limited partner interest in the Partnership;
(v) ▇▇▇▇▇▇ Operating GP LLC, a Delaware limited liability
company ("Operating GP"), is a wholly-owned direct subsidiary of ▇▇▇▇▇▇ LLC;
(vi) Operating GP is the sole general partner of the Operating
Partnership, having a 0.1% general partner interest in the Operating
Partnership;
(vii) ▇▇▇▇▇▇ LLC is the sole limited partner of the Operating
Partnership, having a 99.9% limited partner interest in the Operating
Partnership;
(viii) each of ▇▇▇▇▇▇ Gas Marine, Inc., a Texas corporation
("MGMI"), ▇▇▇▇▇▇ Resources, Inc., a Texas corporation ("Resources"), ▇▇▇▇▇▇
Transport, Inc., a Texas corporation ("MTI"), ▇▇▇▇▇▇ Gas Sales, Inc., a Texas
corporation ("MGSI"), and Midstream Fuel Service, Inc., an Alabama corporation
("MFSI"), is a wholly-owned direct subsidiary of MRMC;
(ix) ▇▇▇▇▇▇ ▇.▇. Gas, Inc., a Texas corporation ("MLP Gas"),
is a wholly-owned indirect subsidiary of MRMC and a wholly-owned direct
subsidiary of MGS;
(x) ▇▇ ▇▇▇▇▇▇ Sulphur Holding Corporation, a Nevada
corporation ("CFMSHC"), is a wholly-owned indirect subsidiary of MRMC and its
direct shareholders (and ownership percentages) are MGMI (50.1%), MGSI (49.2%)
and MTI (0.7%);
(xi) MRMC indirectly owns 50% of the membership interests of
▇▇ ▇▇▇▇▇▇ Sulphur L.L.C., a Delaware limited liability company ("CFMSLLC"), and
the direct members of
2
CFMSLLC (and their ownership percentages) are Marine (25.05%), MTI (.35%) and
MGSI (24.6%);
(xii) CF Industries Inc., a Delaware corporation ("CFI"),
directly owns 50% of the membership interests of CFMSLLC;
(xiii) CFMSLLC is the sole general partner of ▇▇ ▇▇▇▇▇▇
Sulphur, L.P., a Delaware limited partnership ("CFMSLP"), having a 1% general
partner interest in CFMSLP; and
(xiv) each of CFMSHC and CFI hold a 49.5% limited partner
interest in CFMSLP.
(c) Prior to or concurrently with the Closing (as defined herein), the
following transactions will occur:
(i) MGSI will convert under Texas law into ▇▇▇▇▇▇ Gas Sales
LLC, a Texas limited liability company ("MGS");
(ii) MFSI will convert under Alabama law into Midstream Fuel
Service LLC, an Alabama limited liability company ("Midstream");
(iii) MGMI will convert under Texas law into ▇▇▇▇▇▇ Gas Marine
LLC, a Texas limited liability company ("Marine");
(iv) MRMC will contribute to ▇▇▇▇▇▇ LLC, as a capital
contribution, (i) all of the outstanding membership interest in Marine and (ii)
all of the outstanding common stock of Resources;
(v) ▇▇▇▇▇▇ LLC will contribute to the Operating Partnership,
in exchange for a _____% limited partner interest in the Operating Partnership,
(i) all of the outstanding membership interest in Marine LLC and (ii) all of the
outstanding common stock of Resources;
(vi) MGS will contribute to the Operating Partnership all of
the outstanding capital stock of ▇▇▇▇▇▇ ▇.▇. Gas, Inc., a Texas corporation
("MLP Gas") and a wholly-owned subsidiary of MGS, in exchange for a _____%
limited partner interest in the Operating Partnership;
(vii) Resources will merge with and into the Operating
Partnership with the Operating Partnership being the surviving entity;
(viii) MLP Gas will merge with and into the Operating
Partnership with the Operating Partnership being the surviving entity;
(ix) MGS will contribute to the Operating Partnership the LPG
Assets (as defined in the Contribution, Conveyance and Assumption Agreement,
dated as of the date hereof, among MRMC, the General Partner, the Partnership,
Operating GP, the Operating Partnership, Marine, Resources, MLP Gas, MGS, ▇▇▇▇▇▇
LLC, CFMSHC and Midstream (the
3
"Contribution Agreement")) in exchange for a _____% limited partner interest in
the Operating Partnership;
(x) Midstream will contribute the Tenn-▇▇▇ Towing Assets (as
defined in the Contribution Agreement) to the Operating Partnership in exchange
for a _____% limited partner interest in the Operating Partnership;
(xi) Marine will distribute to the Operating Partnership (i)
its 25.05% membership interest in CFMSLLC and (ii) the Marine Retained Assets
(as defined in the Contribution Agreement);
(xii) Operating Partnership will distribute to ▇▇▇▇▇▇ LLC the
Retained Assets (as defined in the Contribution Agreement);
(xiii) MTI will sell 7.3 shares of common stock of CFMSHC
owned by MTI to MGS in exchange for either $_______ in cash or _____ shares of
common stock of MRMC;
(xiv) CFMSHC will liquidate and dissolve and in such
liquidation and dissolution distribute its assets, including its 49.5% interest
in CFMSLP, on a pro-rata basis to its shareholders Marine and MGS, and MGS will
immediately contribute its distributed interest to the Operating Partnership in
exchange for a _____% limited partner interest in the Operating Partnership;
(xv) MGS will contribute its _______ limited partner interest
in the Operating Partnership to the Partnership in exchange for ______
subordinated units of the Partnership ("Subordinated Units");
(xvi) Midstream will contribute its _______ limited partner
interest in the Operating Partnership to the Partnership in exchange for _______
Subordinated Units;
(xvii) ▇▇▇▇▇▇ LLC will contribute (i) a _____% limited partner
interest in the Operating Partnership to the General Partner as a capital
contribution;
(xviii) ▇▇▇▇▇▇ LLC will contribute (i) its remaining ___%
limited partner interest in the Operating Partnership and (ii) all of its
membership interest in the Operating GP to the Partnership in exchange for ____
Subordinated Units;
(xix) the General Partner will contribute the ____% limited
partner interest in the Operating Partnership that it received from ▇▇▇▇▇▇ LLC
to the Partnership in exchange for (i) a continuation of its 2% general partner
interest in the Partnership and (ii) the issuance of incentive distribution
rights ("Incentive Distribution Rights") under the partnership agreement of the
Partnership (the "Partnership Agreement");
(xx) CFMSHC, CFI and CFMSLLC will enter into an amendment to
the Agreement of Limited Partnership of CFMSLP (the "CFMSLP Amendment");
(xxi) the Operating Partnership will borrow $29,400,000 under
the Credit Agreement;
4
(xxii) the limited partner interest in the Partnership owned
by ▇▇▇▇▇▇ LLC will be redeemed for $980; and
(xxiii) the public offering of the Firm Units contemplated
hereby will be consummated.
Promptly after the Closing, Marine will merge with and into the
Operating Partnership with the Operating Partnership being the surviving entity.
The transactions described in the immediately preceding paragraph (c) are
referred to as the "Transactions." In connection with the Transactions, the
parties to the Transactions entered into various bills of sale, deeds, leases,
assignments, conveyances, contribution agreements and related documents
(collectively, the "Conveyances"). The mergers described in clauses (viii), (ix)
and (xxiii) of paragraph (c) above are referred to herein as the "Mergers." In
connection with the consummation of the Mergers, the parties to these
Transactions entered into, as applicable, merger agreements and certificates and
articles of merger (the "Merger Documents"). The conversions described in
clauses (i) through (iii) of paragraph (c) above are referred to herein as the
"Conversions." In connection with the consummation of the Conversions, the
parties to those Transactions entered into, as applicable, conversion agreements
and certificates and articles of conversion (the "Conversion Documents"). The
Conveyances, Merger Documents and Conversion Documents are collectively referred
to herein as the "Transaction Documents."
The General Partner, the Partnership, Operating GP and the Operating
Partnership collectively constitute the "Partnership Entities." MRMC, ▇▇▇▇▇▇
LLC, Marine, MGS, MLP Gas, CFMSHC and the Partnership Entities (collectively,
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.
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. 333-91706), 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 Statement"),
then any reference to "Registration Statement" herein shall be deemed to include
5
the registration statement on Form S-1 (File No. 333-91706) 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 ▇▇▇▇▇▇ 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 $[______] 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 sell to the Underwriters, and,
upon the basis of the representations, warranties and agreements of 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 450,000 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 ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ at
10:00 a.m., Dallas, Texas time, on [_________], or such other place, time and
date not later than 1:30 p.m., Dallas, Texas time, on [__________] as the
Representatives shall designate by notice to the Partnership (the time and date
of such closing
6
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 10:00 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 for any Additional Units 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 any Additional Units 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 account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
7
5. Covenants and Agreements of the ▇▇▇▇▇▇ Parties. Each of the ▇▇▇▇▇▇
Parties, jointly and severally, covenants and agrees with the several
Underwriters as follows:
(a) Preparation of Registration Statement and Prospectus. The
▇▇▇▇▇▇ Parties will use their 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 ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇
Parties 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 of the
Registration Statement as originally filed and of each amendment thereto as you
may reasonably request.
8
(c) Amendments to Registration Statement. The ▇▇▇▇▇▇ Parties
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 ▇▇▇▇▇▇ Parties have 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 ▇▇▇▇▇▇ Parties.
(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 they 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 ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties will cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Units for 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;
9
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 ▇▇▇▇▇▇ Parties shall so advise you promptly in writing. The
Partnership Entities 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 ▇▇▇▇▇▇ Parties 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) Copies of Reports. During the period ending two years from
the date hereof, the ▇▇▇▇▇▇ Parties will furnish to you and, upon your request,
to each of the other Underwriters, (i) as soon as practical, copies of all
materials furnished by the Partnership to its security holders or filed with the
Commission, the National Association of Securities Dealers, Inc. (the "NASD") or
the Nasdaq Stock Market ("NASDAQ") or any national securities exchange.
(i) Expenses. If this Agreement shall terminate or shall be
terminated after execution pursuant to any provision hereof or if this Agreement
shall be terminated by the Underwriters because of any inability, failure or
refusal on the part of the ▇▇▇▇▇▇ Parties to perform in all material respects
any agreement herein or to comply in all material respects with any of the terms
or provisions hereof or to fulfill in all material respects any of the
conditions of this Agreement, the ▇▇▇▇▇▇ Parties agree to reimburse you and the
other Underwriters for all out-of-pocket expenses (including travel expenses and
reasonable fees and expenses of counsel for the Underwriters, but excluding
wages and salaries paid by you) reasonably incurred by you in connection
herewith; provided that such reimbursement amount shall not exceed $350,000.
(j) Application of Proceeds. The ▇▇▇▇▇▇ Parties will cause the
Partnership to 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.
(k) Rule 430A. If Rule 430A under the Act is employed, the
▇▇▇▇▇▇ Parties 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.
(l) Lock-up Period. For a period of 180 days after the date of
the Prospectus first filed pursuant to Rule 424(b) under the Act, the ▇▇▇▇▇▇
Parties will cause the Partnership not to, 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
10
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 to employee benefit plans, qualified unit option plans or other
employee compensation plans and issuances of Common Units upon the exercise of
options under such plans and (C) the issuance of Common Units in connection with
accretive acquisitions made by the Partnership provided that the recipients of
those Common Units agree to be bound by the restrictions in this paragraph (l).
(m) Copies of Financial Statements. Prior to the Closing Date
or the Additional Closing Date, as the case may be, the ▇▇▇▇▇▇ Parties 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.
(n) Undertakings. The ▇▇▇▇▇▇ Parties will cause the
Partnership to comply with all provisions of any undertakings contained in the
Registration Statement.
(o) Stabilization or Manipulation. The ▇▇▇▇▇▇ Parties will not
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.
(p) NASDAQ Requirements. The ▇▇▇▇▇▇ Parties will cause the
Partnership to timely file with NASDAQ all documents and notices required by
NASDAQ of companies that have or will issue securities that are traded on
NASDAQ. The ▇▇▇▇▇▇ Parties will use their best efforts to complete the inclusion
of the Units on NASDAQ, subject only to official notice of issuance, prior to
the Closing Date.
(q) Transfer Agent and Registrar. The ▇▇▇▇▇▇ Parties will
cause the Partnership to engage and 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 Common Units.
(r) Consents. The ▇▇▇▇▇▇ Parties will accomplish or obtain as
soon as practicable all consents, recordings and filings necessary to perfect,
preserve and protect the title of the Operating Partnership to the properties
and assets owned by it as a result of the Transactions.
(s) Directed Unit Program. It is understood that up to 150,000
of the Firm Units (the "Directed Units") will initially be reserved by the
Underwriters for offer and sale to officers, directors, employees and persons
having business relationships with the ▇▇▇▇▇▇ Parties ("Directed Unit
Participants") upon the terms and conditions set forth in the Prospectus and in
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc.
11
(the "Directed Unit Program"). Under no circumstances will any Underwriter be
liable to the ▇▇▇▇▇▇ Parties or to any Directed Unit Participant for any action
taken or omitted to be taken in good faith in connection with such Directed Unit
Program. To the extent that any Directed Units are not affirmatively reconfirmed
for purchase by any Directed Unit Participant on or immediately after the date
of this Agreement, such Directed Units may be offered to the public as part of
the public offering contemplated hereby.
(t) NASD Requirements. The ▇▇▇▇▇▇ Parties 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
▇▇▇▇▇▇ 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 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.
(c) Conformity of ▇▇▇▇▇ Filings. To the best knowledge of the
▇▇▇▇▇▇ Parties, 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.
12
(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 to be owned or leased and operated by it at each Closing
Date, to assume the liabilities being assumed by it pursuant to the Transaction
Documents 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 to be 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, lease and operate its properties to be owned or leased and operated by it
at each Closing Date, to assume the liabilities being assumed by it pursuant to
the Transaction Documents, 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 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 to be 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
or (ii) subject the limited partners of the Partnership to any material
liability of 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 to be owned or leased and operated by it at
each Closing Date 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 to be 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 or (ii) subject the
Operating Partnership, as a limited partner of CFMSLP, to any material liability
or disability.
13
(g) Ownership of General Partner Interest. On the Closing Date
and the Additional Closing Date, as the case may be, the General Partner will be
the sole general partner of the Partnership with a 2% general partner interest
in the Partnership; such general partner interest will be 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 will own such general partner interest free and clear of all
liens, encumbrances, security interests, equities, charges or claims.
(h) Ownership of the Sponsor Units and Incentive Distribution
Rights. On the Closing Date and the Additional Closing Date, as the case may be,
the General Partner will own __________ Common Units, MGS will own _________
Subordinated Units, Midstream will own ______________ Subordinated Units and
▇▇▇▇▇▇ LLC will own _________ Subordinated Units (all such Common Units and
Subordinated Units being collectively referred to herein as the "Sponsor
Units"); all of such Sponsor Units and the limited partner interests represented
thereby will be duly authorized and validly issued in accordance with the
Partnership Agreement, fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in the Prospectus under the caption "The Partnership
Agreement--Limited Liability"); the General Partner will own all of the
Incentive Distribution Rights, and such Incentive Distribution Rights will be
duly authorized and validly issued in accordance with the Partnership Agreement,
and fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters
described in the Prospectus under the caption "The Partnership
Agreement--Limited Liability"); and the Sponsor Units and the Incentive
Distribution Rights will be owned free and clear of all liens, encumbrances
(except, with respect to the Incentive Distribution Rights, restrictions on
transferability as described in the Prospectus), security interests, equities,
charges or claims.
(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 matters 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
limited partner interests of the Partnership issued and outstanding.
(j) Ownership of ▇▇▇▇▇▇ LLC. At each Closing Date, MRMC will
own a 100% member interest in ▇▇▇▇▇▇ LLC; such member interest will be 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") and will be 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 will own such member interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
14
(k) Ownership of Operating GP. At each Closing Date, the
Partnership will own a 100% member interest in Operating GP; such member
interest will be 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") and
will be 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 will own such member interest free
and clear of all liens, encumbrances, security interests, equities, charges or
claims.
(l) Ownership of the Operating Partnership. At each Closing
Date,
(i) Operating GP will be the sole general partner of
the Operating Partnership with a .1% general partner interest in the
Operating Partnership; such general partner interest will be 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"); and Operating GP will own such general partner interest
free and clear of all liens, encumbrances (except restrictions on
transferability as described in the Prospectus), security interests,
equities, charges or claims; and
(ii) the Partnership will be the sole limited partner
of the Operating Partnership with a 99.9% limited partner interest in
the Operating Partnership; such limited partner interest will be duly
authorized and validly issued in accordance with the Operating
Partnership Agreement and will be 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 will own such limited partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(m) Ownership of General Partner. At each Closing Date, ▇▇▇▇▇▇
LLC will own 100% of the member interests in the General Partner; such member
interest will be 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") and will be 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 will own
such member interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(n) Ownership of Limited Partner Interest in CFMSLP. At each
Closing Date, the Operating Partnership will be a limited partner of CFMSLP with
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 and 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 will own such limited partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
15
(o) No Other Subsidiaries. Upon the completion of the
transactions summarized in the introductory paragraphs of this Agreement, at
each Closing Date, 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 .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. Upon the completion of the
transactions summarized in the introductory paragraphs of this Agreement, at
each Closing Date, 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 as described in the Prospectus, 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 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, other than as described in the Prospectus and the
Partnership Agreement or 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 (i) 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, and
(ii) the Subordinated Units and the Incentive Distribution Rights, in accordance
with the terms and conditions set forth in the Partnership Agreement and the
Transaction Documents. All corporate, partnership and limited liability company
action, as the case may be, required to be taken by the ▇▇▇▇▇▇ Parties or any of
their stockholders, partners or members for the authorization, issuance, sale
and delivery of the Units, the Subordinated Units and the Incentive Distribution
Rights, the execution and delivery of the Operative Agreements (as defined in
Section 6(t)) and the consummation of the transactions (including the
Transactions) contemplated by this Agreement and the Operative Agreements 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 ▇▇▇▇▇▇ 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 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
16
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 Subordinated
Units and the Incentive Distribution Rights. The Units, when issued and
delivered against payment therefor as provided herein, and the Subordinated
Units and the Incentive Distribution Rights, when issued and delivered in
accordance with the terms of the Partnership Agreement, will conform in all
material respects to the descriptions thereof contained in the Prospectus.
(t) Enforceability of Other Agreements. At or before the
Closing:
(i) the Partnership Agreement will be duly
authorized, executed and delivered by the General Partner and ▇▇▇▇▇▇
LLC as the "Organizational Limited Partner," and will be a valid and
legally binding agreement of the General Partner and the Organizational
Limited Partner, enforceable against the General Partner and the
Organizational Limited Partner in accordance with its terms;
(ii) the ▇▇▇▇▇▇ LLC Agreement will be duly
authorized, executed and delivered by MRMC and will be a valid and
legally binding agreement of MRMC, enforceable against MRMC in
accordance with its terms;
(iii) the Operating GP Agreement will be duly
authorized, executed and delivered by the Partnership and will be a
valid and legally binding agreement of the Partnership, enforceable
against the Partnership in accordance with its terms;
(iv) the Operating Partnership Agreement will be duly
authorized, executed and delivered by Operating GP and the Partnership
and will be a valid and legally binding agreement of Operating GP and
the Partnership, enforceable against Operating GP and the Partnership
in accordance with its terms;
(v) the General Partner LLC Agreement will be duly
authorized, executed and delivered by ▇▇▇▇▇▇ LLC and will be a valid
and legally binding agreement of ▇▇▇▇▇▇ LLC enforceable against ▇▇▇▇▇▇
LLC in accordance with its terms;
(vi) each of the Transaction Documents will be duly
authorized, executed and delivered by the parties thereto and will be
valid and legally binding agreements of each of them, enforceable
against each of them in accordance with its terms;
(vii) the omnibus agreement (the "Omnibus Agreement")
will be duly authorized, executed and delivered by each of MRMC, the
General Partner, the Partnership and the Operating Partnership, and
will be valid and legally binding agreement of each of them,
enforceable against each of them in accordance with its terms;
(viii) the motor carrier agreement (the "Motor
Carrier Agreement") will be duly authorized, executed and delivered by
each of the Partnership and MTI, and
17
will be a valid and legally binding agreement of each of them,
enforceable against each of them in accordance with its terms;
(ix) the product supply agreement (the "Product
Supply Agreement") will be duly authorized, executed and delivered by
each of the Partnership and MGS and will be a valid and legally binding
agreement of each of them, enforceable against each of them in
accordance with its terms;
(x) the marine fuel agreement (the "Marine Fuel
Agreement") will be duly authorized, executed and delivered by each of
the Partnership and Midstream and will be a valid and legally binding
agreement of each of them, enforceable against each of them in
accordance with its terms;
(xi) the product storage agreement (the "Product
Storage Agreement") will be duly authorized, executed and delivered by
each of the Partnership and ▇▇▇▇▇▇ Underground Storage, Inc. and will
be a valid and legally binding agreement of each of them, enforceable
against each of them in accordance with its terms;
(xii) the terminal services agreement (the "Terminal
Services Agreement") will be duly authorized, executed and delivered by
each of the Partnership and MGS and will be a valid and legally binding
agreement of each of them, enforceable against each of them in
accordance with its terms;
(xiii) the contract for marine transportation (the
"Marine Transportation Agreement") will be duly authorized, executed
and delivered by each of the Partnership and MRMC and will be a valid
and legally binding agreement of each of them, enforceable against each
of them in accordance with its terms;
(xiv) the throughput agreement (the "Throughput
Agreement") will be duly authorized, executed and delivered by each of
the Partnership and MGS and will be a valid and legally binding
agreement of each of them, enforceable against each of them in
accordance with its terms; and
(xv) the Credit Agreement will be duly authorized,
executed and delivered by the Partnership, the Operating Partnership
and Operating GP and will be a valid and legally binding agreement of
each of them, enforceable against each of them 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 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 policy. The Partnership
Agreement, the ▇▇▇▇▇▇ LLC Agreement, the Operating GP Agreement, the Operating
Partnership Agreement, the General Partner LLC Agreement, the Transaction
Documents, the Omnibus Agreement, the Motor Carrier Agreement, the Product
Supply Agreement, the Marine Fuel Agreement, the Product Storage Agreement, the
Terminal Services Agreement, the Marine Transportation Agreement,
18
the Throughput Agreement and the Credit Agreement are herein collectively
referred to as the "Operative Agreements."
(u) Sufficiency of Transferred Assets Under the Transaction
Documents. The Transaction Documents will be legally sufficient to transfer or
convey to the Operating Partnership all properties not already held by it that
are, individually or in the aggregate, required to enable the Operating
Partnership to conduct its operations in all material respects as contemplated
by the Prospectus, subject to the conditions, reservations, encumbrances and
limitations contained in the Transaction Documents and those set forth in the
Prospectus. The Operating Partnership, upon execution and delivery of the
Transaction Documents and the filing of related articles of merger, certificates
of merger and articles of conversion with the applicable governmental
authorities, will succeed in all material respects to the business, assets,
properties, liabilities and operations of the MRMC Business, except as disclosed
in the Prospectus and the Transaction Documents.
(v) Legal Proceedings. There are no legal or governmental
proceedings pending or, to the best knowledge of the ▇▇▇▇▇▇ Parties, threatened,
against any of the ▇▇▇▇▇▇ Parties or CFMSLP or to which any of the ▇▇▇▇▇▇
Parties 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
▇▇▇▇▇▇ Parties, threatened, against or involving any of the ▇▇▇▇▇▇ Parties 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.
(w) 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.
(x) No Default. None of the ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties to perform their obligations
under this Agreement or the Operative Agreements, 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 ▇▇▇▇▇▇ Parties to perform their
obligations under this Agreement or the Operative Agreements; 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
19
Material Adverse Effect or could materially impair the ability of any of the
▇▇▇▇▇▇ Parties to perform their obligations under this Agreement or the
Operative Agreements. To the knowledge of 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.
(y) 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 or the Operative Agreements by the ▇▇▇▇▇▇ Parties that are
parties hereto or thereto, or the consummation of the transactions contemplated
hereby and thereby (including the Transactions) (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, the registration of the Common Units under the
Securities Exchange Act of 1934 and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act") 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, (b) as contemplated by the Contribution
Agreement or (c) 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 ▇▇▇▇▇▇
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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties or CFMSLP pursuant to, or requires the
consent of any other party to, any Existing Instrument, except in case of (i),
(iii), (iv) or (v) above, for such conflicts, breaches, defaults, liens,
encumbrances, security interests, equities, charges or claims that will not,
individually or in the aggregate, result in a Material Adverse Effect.
(z) 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.
(aa) Capitalization; Financial Statements. On June 30, 2002,
the Partnership would have had, on the consolidated pro forma 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 respective dates or for the
respective periods to which they apply; such statements and related
20
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein. The 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 caption
"Selected Historical and Pro Forma Financial and Operating Data" is accurately
presented in all material respects and prepared on a basis consistent with the
audited and unaudited historical consolidated financial statements and pro forma
financial statements from which it 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 ▇▇▇▇▇▇ Parties,
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.
(bb) 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) none of
the Partnership Entities or CFMSLP is in default under the terms of outstanding
debt obligations, (iv) 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 (v) 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.
(cc) Prior Sales of Securities. All offers and sales of
securities of Marine, Resources, MLP Gas or any of the 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.
(dd) NASDAQ Listing. The Units have been approved for
inclusion on the NASDAQ National Market under the symbol "MMLP," subject to
official notice of issuance of the Units being sold by the Partnership, and upon
consummation of the offering contemplated hereby the Partnership will be in
compliance with the designation and maintenance criteria applicable to NASDAQ
National Market issuers.
(ee) No Other Offering Material. None of the ▇▇▇▇▇▇ Parties
has distributed and will not distribute, and has not authorized the Underwriters
to distribute, any offering
21
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.
(ff) No Stabilization or Manipulation. Other than excepted
activity pursuant to Regulation M under the Exchange Act, none of the ▇▇▇▇▇▇
Parties has 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.
(gg) Taxes. At each Closing Date, each of the ▇▇▇▇▇▇ Parties
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 ▇▇▇▇▇▇ Party will
be in default in the payment of any taxes that are payable pursuant to such
returns or any assessments with respect thereto.
(hh) 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
▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ Parties, CFMSLP or
any of their subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of 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.
(ii) Investment Company Act; Public Utility Holding Company
Act. None of the ▇▇▇▇▇▇ Parties 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.
(jj) Title to Properties. Each of the Partnership Entities and
CFMSLP has, or at each Closing Date will have, 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 or (ii) 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 or result in a Material Adverse Effect.
(kk) Permits. Each of the Partnership Entities and CFMSLP has,
or at each Closing Date will have, all permits, licenses, franchises, approvals,
consents and authorizations of governmental or regulatory authorities
(hereinafter "permit" or "permits") as are necessary to own its properties and
to conduct its business in the manner described in the Prospectus, subject
22
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.
(ll) 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.
(mm) Environmental Compliance. Except as described in the
Prospectus, the ▇▇▇▇▇▇ Parties (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 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
▇▇▇▇▇▇ Parties has been named as a "potentially responsible party" under the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended. None of the ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties have procured
lock-up agreements, in the form of Exhibit A attached hereto ("Lock-Up
Agreements"), from each of the ▇▇▇▇▇▇ Parties and the executive officers and
directors of the General Partner.
(oo) NASD Affiliations. No officer, director, manager or
nominee for any of the foregoing of the Partnership Entities has a direct or
indirect affiliation or association with any member of the NASD.
(pp) Insurance. Each of the ▇▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇ Parties has reason to believe that it will
not be able to renew its existing insurance coverage as and when such
23
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 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) Forecast. The financial forecast of combined statements
of operations of the Partnership for the 12 months ending September 30, 2003,
the notes thereto and the financial forecast of available cash from operating
surplus based on such financial forecast that are included in Appendix E to the
Registration Statement and the Prospectus were made with a reasonable basis in
good faith. All significant assumptions used in the preparation of such
financial forecast are accurately disclosed in the Registration Statement and
the Prospectus, and such assumptions are, in the opinion of management of the
Partnership, reasonable. The calculation of available cash from operating
surplus was derived from such financial forecast on a basis consistent with the
terms of the Partnership Agreement. Each of the other 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.
(ss) Private Placement. The offer, sale and issuance of the
Sponsor Units and the Incentive Distribution Rights to the General Partner
pursuant to the Partnership Agreement are exempt from the registration
requirements of the Act and the securities laws of any state having jurisdiction
with respect thereto, and none of the ▇▇▇▇▇▇ Parties has taken or will take any
action that would cause the loss of such exemption.
(tt) Directed Unit Sales. None of the Directed Units
distributed in connection with the Directed Unit Program will be offered or sold
outside of the United States.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the ▇▇▇▇▇▇
Parties agree to pay or cause to be
24
paid the following: (i) the fees, disbursements and expenses of the ▇▇▇▇▇▇
Parties' 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) expenses
incurred by the Underwriters in connection with the Directed Unit Program,
including counsel fees and any stamp duties or other taxes incurred by the
Underwriters in connection with the Directed Unit Program; (x) all other fees,
costs and expenses referred to in Item 13 of the Registration Statement; and
(xi) 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. In addition, in the event that the
proposed offering is terminated for the reasons set forth in Section 5(i)
hereof, the Partnership agrees to reimburse the Underwriters as provided in
Section 5(i).
8. Indemnification and Contribution. (a) Subject to the limitations in
this paragraph below, 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 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 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.
This indemnification shall be in addition to any liability that the ▇▇▇▇▇▇
Parties may otherwise have.
25
In addition to their other obligations under this Section 8, 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 ▇▇▇▇▇▇ 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 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 ▇▇▇▇▇▇ 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 the basis of the base lending rate announced from time to time by
The Wall Street Journal from the date of such request.
In connection with the offer and sale of the Directed Units, the ▇▇▇▇▇▇
Parties, jointly and severally, agree, promptly upon a request in writing, to
indemnify and hold harmless the Underwriters and the directors, officers,
employees, agents and controlling persons thereof from and against any loss,
claim, damage, expense, liability or action which (i) arises out of, or is based
upon, any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the approval of the ▇▇▇▇▇▇ Parties
for distribution to Directed Unit Participants in connection with the Directed
Unit Program or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) arises out of the failure of any Directed Unit Participant
to pay for and accept delivery of Directed Units that the Directed Unit
Participant agreed to purchase or (iii) is otherwise related to the Directed
Unit Program, other than losses, claims, damages or liabilities (or expenses
relating thereto) that are finally judicially determined to have resulted
directly from the materials prepared by the Underwriters in connection with the
Directed Unit Program or from the bad faith, gross negligence or willful
misconduct of the Underwriters.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the ▇▇▇▇▇▇ Parties and their respective directors
and officers who sign the Registration Statement and any person who controls 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
▇▇▇▇▇▇ 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
26
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 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ Party 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 ▇▇▇▇▇▇ Parties 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 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 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇
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
27
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 ▇▇▇▇▇▇ 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
▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
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
28
Schedule I hereto (or such numbers of Firm Units increased as set forth in
Section 11 hereof) and not joint.
Notwithstanding the second paragraph of this Section 8, any Damages for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇
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
▇▇▇▇▇▇ 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 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
29
not insured) to the property of the Partnership Entities 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 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 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 ▇▇▇▇▇▇ 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, to assume the liabilities being assumed by it pursuant to
the Transaction Documents 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 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.
(ii) Each of ▇▇▇▇▇▇ LLC, the General Partner and
Operating GP has been duly formed and is validly existing and 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, to assume the liabilities being assumed by it
pursuant to the Transaction Documents 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. 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
30
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, equities, 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, other than those created by or arising under the
Delaware LP Act.
(v) The General Partner owns _____ Common Units and
all of the Incentive Distribution Rights, MGS owns _________
Subordinated Units, Midstream owns _________ Subordinated Units and
▇▇▇▇▇▇ LLC owns _____ Subordinated Units; all of such Common Units,
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
matters described in the Prospectus under the caption "The Partnership
Agreement--Limited Liability"); and the General Partner, MGS, Midstream
and ▇▇▇▇▇▇ LLC own their respective Common Units, Subordinated Units
and Incentive Distribution Rights free and clear of all liens,
encumbrances (except, with respect to the Incentive Distribution
Rights, restrictions on transferability as described in the
Prospectus), security interests, equities, 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, MGS,
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, other than those created by or
arising under the Delaware LP Act.
(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
matters 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 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
31
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, equities, 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, other than those
created by or arising under the Delaware LP Act.
(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 the Partnership owns such member interest free and clear of
all liens, encumbrances, security interests, equities, 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, other than those created by or arising under the
Delaware LP Act.
(ix) Operating GP is the sole general partner of the
Operating Partnership with a .1% general partner interest in the
Operating Partnership; such general partner interest has been duly
authorized and validly issued in accordance with the Operating
Partnership Agreement, and Operating GP owns such general partner
interest free and clear of all liens, encumbrances (except restrictions
on transferability as described in the Prospectus), security interests,
equities, 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, other than those created by or arising under
the Delaware LP Act.
(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 the Partnership owns such limited partner
interest free and clear of all liens, encumbrances, security interests,
equities, 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, other than those created by or
arising under the Delaware LP Act.
(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
32
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, equities, 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, other than those created by or
arising under the Delaware LP Act.
(xii) At each Closing Date, the Operating Partnership
will be a limited partner of CFMSLP with 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 and 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 will own such limited partner interest free and clear of
all liens, encumbrances, security interests, equities, 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, other than those created by or arising under
the Delaware LP Act.
(xiii) Except as described in the Prospectus, 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, other than
as described in the Prospectus and the Partnership Agreement or as 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 (i) 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, and (ii) the Subordinated Units and the
Incentive Distribution Rights, in accordance with the terms and
conditions set forth in the Partnership Agreement and the Transaction
Documents.
(xv) This Agreement has been duly authorized and
validly executed and delivered by each of the ▇▇▇▇▇▇ Parties.
33
(xvi) Each of the Operative Agreements to which any
of the ▇▇▇▇▇▇ Parties is a party has been duly authorized and validly
executed and delivered by the ▇▇▇▇▇▇ Parties that are parties thereto.
Assuming due authorization, execution and delivery by each party other
than a ▇▇▇▇▇▇ Party, each of the Operative Agreements (other than any
Operating Agreement governed by law other than Texas, New York or
Delaware law) to which any of the ▇▇▇▇▇▇ Parties is a party constitutes
a valid and legally binding obligation of the ▇▇▇▇▇▇ Parties that are
parties thereto, enforceable against each such party in accordance with
its terms, subject to (i) bankruptcy, insolvency, reorganization,
moratorium 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 (ii) public policy, applicable law relating to fiduciary duties and
indemnification and contribution and an implied covenant of good faith
and fair dealing.
(xvii) The Mergers of Resources and MLP Gas with and
into the Operating Partnership became effective under the Delaware LP
Act and the Texas Business Corporation Act, as applicable, on ________,
2002.
(xviii) The Mergers and the Conversions were legally
sufficient under the laws of the States of Delaware and Texas to vest
in the Operating Partnership the assets of the parties to the Mergers
and the Conversions located in the States of Texas and Delaware.
(xix) Each of the Conveyances that purports to
transfer right, title or interest to property (i) is in a form legally
sufficient as between the parties thereto to convey to the transferee
thereunder all of the right, title and interest of the transferor
stated therein in and to the properties located in the State of Texas,
as described in the Conveyances, subject to the conditions,
reservations and limitations contained in the Conveyances, except motor
vehicles or other property regarding conveyances of certificated title
as to which the Conveyances are legally sufficient, (ii) is in a form
legally sufficient for recordation in the appropriate public offices of
the State of Texas to the extent such recordation is required, and
(iii) upon proper recordation of any such deeds and real property
assignments in the State of Texas and upon compliance with all
applicable local requirements, will constitute record notice to all
third parties under the applicable recordation statutes of the State of
Texas concerning record title to the assets transferred thereby;
recordation in the office of the County Clerk for each county in which
the Partnership Entities own property is the appropriate public office
in the State of Texas for the recordation of deeds and assignments of
interests in real property located in such county.
(xx) 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 ▇▇▇▇▇▇ Parties, or to which
any of the ▇▇▇▇▇▇ Parties or their properties are subject: (A) which
might individually or in the aggregate prevent or adversely affect the
transactions contemplated by this Agreement or result in a Material
Adverse Effect or (B) that are required to be described in the
34
Registration Statement or Prospectus (or any amendment or supplement
thereto) that are not described as required therein.
(xxi) None of the offering, issuance and sale of the
Units by the Partnership, the execution, delivery or performance of
this Agreement or the Operative Agreements by the ▇▇▇▇▇▇ Parties that
are parties hereto or thereto, or the consummation of the transactions
contemplated hereby and thereby (including the Transactions) (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 ▇▇▇▇▇▇ 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, or (iv) 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, which conflicts, breaches, violations, defaults
or liens, encumbrances, security interests, equities, charges or
claims, in the case of clauses (ii), (iii) or (iv), would individually
or in the aggregate, result in a Material Adverse Effect.
(xxii) 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 ▇▇▇▇▇▇ Parties for the valid offering, issuance and sale of the
Units to the Underwriters under this Agreement, the execution, delivery
and performance of this Agreement or the Operative Agreements by the
▇▇▇▇▇▇ Parties that are parties hereto or thereto or the consummation
by the ▇▇▇▇▇▇ Parties of the transactions (including the Transactions)
contemplated by this Agreement or the Operative Agreements 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, (B) are not customarily obtained or made prior
to the consummation of transactions such as those contemplated by this
Agreement and the Operative Agreements and (C) are expected in the
reasonable judgment of the General Partner to be obtained in the
ordinary course of business subsequent to the consummation of the
Transactions, (iv) for such consents which, if not obtained or made,
would not, individually or in the aggregate, have a Material Adverse
Effect.
(xxiii) 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
35
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).
(xxiv) 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.
(xxv) None of the Partnership Entities is an
"investment company", as such term is defined in the Investment Company
Act of 1940, as amended, or a "public utility holding company" or
"holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(xxvi) 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.
(xxvii) 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 Credit Agreement," "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."
(xxviii) The offer, sale and issuance of the Sponsor
Units and the Incentive Distribution Rights to the General Partner or
any of the ▇▇▇▇▇▇ Parties pursuant to the Partnership Agreement are
exempt from the registration requirements of the Act and the securities
laws of any state having jurisdiction with respect thereto.
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
▇▇▇▇▇▇ Parties and of government officials, provided that counsel shall state
their belief that they and you are justified in relying
36
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 ▇▇▇▇▇▇ Parties, 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 and statistical 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 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 a written
opinion of each of _______________ [FLORIDA COUNSEL] and __________________
[ALABAMA COUNSEL], counsel to the ▇▇▇▇▇▇ Parties, substantially to the effect
set forth in Exhibit B attached hereto.
(e) You shall have received on the Closing Date a written
opinion of _______________ [LOUISIANA COUNSEL], counsel to the ▇▇▇▇▇▇ Parties,
substantially to the effect set forth in Exhibit C attached hereto.
(f) You shall have received on the Closing Date a written
opinion of _________________ [NEVADA COUNSEL], counsel to the ▇▇▇▇▇▇ Parties,
substantially to the effect set forth in Exhibit D attached hereto.
(g) 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 ▇▇▇▇▇▇ 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.
(h) 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
37
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.
(i) 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 Common Units, the
Subordinated Units, the Incentive Distribution Rights, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement, the transactions contemplated hereby and the Transactions 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.
(j) The Credit Agreement shall have been duly authorized,
executed and delivered by the Partnership, Operating Partnership and Operating
GP and each of the other parties thereto.
(k) (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 Partnership (or such
other officers as are acceptable to you) to the effect set forth in this Section
9(k) and in Sections 9(b) and 9(l) hereof and that shall set forth a
representation of the Partnership that all of the transactions summarized in the
introductory paragraphs of this Agreement have been completed.
(l) 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
38
complied with by them hereunder at or prior to the Closing Date or Additional
Closing Date, as the case may be.
(m) The Partnership shall have furnished or caused to have
been furnished to you such further certificates and documents as you shall have
reasonably requested.
(n) At or prior to the Closing Date, you shall have received
Lock-Up Agreements from each of the ▇▇▇▇▇▇ Parties and 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, before the expiration of 180 days from the Closing Date,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
(o) 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.
(p) 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.
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.
39
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 Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Partnership. 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 ▇▇▇▇▇▇ 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
▇▇▇▇▇▇ 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
▇▇▇▇▇▇ 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
40
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 ▇▇▇▇▇▇ 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
(iii) the statements set forth in the third, eighth, ninth, tenth, and
eighteenth paragraphs, the last sentence of the eleventh 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 6.1(a), 6.1(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:
--------------------------------
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇ Lemon, III
(ii) to the Underwriters:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
--------------------------------
41
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
1001 ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
This Agreement has been and is made solely for the benefit of the
several Underwriters, 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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.
42
Please confirm that the foregoing correctly sets forth the agreement
among the ▇▇▇▇▇▇ Parties and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇ RESOURCE MANAGEMENT CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ RESOURCE LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ MIDSTREAM GP LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ MIDSTREAM PARTNERS L.P.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ OPERATING GP LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-1
▇▇▇▇▇▇ OPERATING PARTNERSHIP L.P.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ GAS MARINE, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ GAS SALES, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇▇▇▇▇ ▇.▇. GAS, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇▇ ▇▇▇▇▇▇ SULPHUR HOLDING CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-2
CONFIRMED as of the date first above
mentioned.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇. ▇. ▇▇▇▇▇▇▇ & SONS, 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:
------------------------------------
Authorized Representative
S-3
SCHEDULE I
Number
Name Firm Shares
---- -----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
===========
TOTAL: 3,000,000
EXHIBIT A
_______, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇. ▇. ▇▇▇▇▇▇▇ & SONS, 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 ▇▇▇▇▇▇ Parties (as
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. 333-91706 (the "Registration Statement"), as
filed with the Securities and Exchange Commission on July 1, 2002 (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
A-1
promulgated under the Act and the Exchange Act for a period commencing on the
date hereof and ending 180 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 ▇▇▇▇▇▇ Parties held by
the undersigned, or to otherwise participate as a selling securityholder in any
manner in any registration effected by the ▇▇▇▇▇▇ Parties 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 employee incentive plans
or upon the exercise of options issued under employee
incentive plans.(1)
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 ▇▇▇▇▇▇ Parties and their transfer
agents and registrars are 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]
----------
(1) For the agreement signed by the Partnership, add: (3) Units issued in
connection with accretive acquisitions; provided that the recipients of such
Units agree to be bound by the restrictions set forth herein.
A-2
EXHIBIT B
FORM OF LOCAL COUNSEL OPINIONS
FOR
FLORIDA AND ALABAMA
In the case of the Closing Date only, each of ___________________, with
respect to the State of
Florida, and __________________, with respect to the
State of Alabama, shall have furnished to you their written opinions, dated the
Closing Date, in form and substance satisfactory to you, to the effect that:
(a) The Operating Partnership has been duly qualified
or registered as a foreign limited partnership for the
transaction of business under the laws of [
FLORIDA OR ALABAMA,
AS APPLICABLE].
(b) The Operating GP has been duly qualified or
registered as a foreign limited liability company for the
transaction of business under the laws of [
FLORIDA OR ALABAMA,
AS APPLICABLE].
(c) Each of the Operative Agreements to which MFSI or
Midstream is a party has been duly authorized and validly
executed and delivered by such party. [ALABAMA ONLY]
(d) Each of the Partnership and the Operating
Partnership has all requisite limited partnership power and
authority under the laws of the State of [INSERT APPLICABLE
STATE] to own or lease its properties and to conduct its
business in the State of [INSERT APPLICABLE STATE], in each
case in all material respects as described or otherwise
disclosed in the Prospectus; each of the General Partner and
the Operating GP has all requisite limited liability company
power and authority under the laws of the State of [INSERT
APPLICABLE STATE] to own or lease its properties and to
conduct its business in the State of [INSERT APPLICABLE
STATE], in each case in all material respects as described or
otherwise disclosed in the Prospectus; and upon the
consummation of the Transactions (assuming that the
Partnership will not be liable under the laws of the State of
Delaware for the liabilities of the Operating Partnership and
assuming that unitholders will not be liable under the laws of
the State of Delaware for the liabilities of the Partnership
or the Operating Partnership), the Partnership will not be
liable under the laws of the State of [INSERT APPLICABLE
STATE] for the liabilities of the Operating Partnership, and
unitholders will not be liable under the laws of the State of
[INSERT APPLICABLE STATE] for the liabilities of the
Partnership or the Operating Partnership except in each case
to the same extent as under the laws of the State of Delaware.
(e) [ALABAMA ONLY: THE CONVERSION OF MFSI INTO
MIDSTREAM WAS LEGALLY SUFFICIENT UNDER THE LAWS OF THE STATE
OF ALABAMA TO VEST IN MIDSTREAM THE ASSETS OF MFSI LOCATED IN
THE STATE OF ALABAMA.] Assuming that the
B-1
Mergers and the Conversions [ALABAMA ONLY: , OTHER THAN THE
CONVERSION OF MFSI INTO MIDSTREAM,] were legally sufficient
under applicable Delaware and Texas law to vest in the
Operating Partnership, as applicable, the assets of the
parties to the Mergers and the Conversions, then the Mergers
and the Conversions were legally sufficient under the law of
the State of [INSERT APPLICABLE STATE] to vest, directly or
indirectly, in the Operating Partnership, as applicable, the
assets of the parties to the Mergers and the Conversions
located in the State of [INSERT APPLICABLE STATE].
(f) No permit, consent, approval, authorization,
order, registration, filing or qualification ("consent") of or
with any court, governmental agency or body of the State of
[INSERT APPLICABLE STATE] having jurisdiction over the ▇▇▇▇▇▇
Parties or any of their respective properties is required for
the issuance and sale of the Units by the Partnership, or for
the conveyance of the properties located in the State of
[INSERT APPLICABLE STATE] purported to be conveyed to the
Operating Partnership, as applicable, pursuant to the
Conveyances, except (A) for such consents required under the
Securities Act, the Exchange Act and state securities or "Blue
Sky" laws, as to which such counsel need not express any
opinion, (B) for such consents which have been obtained or
made, (C) for such consents which (i) are of a routine or
administrative nature, (ii) are not customarily obtained or
made prior to the consummation of transactions such as those
contemplated by this Agreement and the Operative Agreements
and (iii) are expected in the reasonable judgment of the
General Partner to be obtained or made in the ordinary course
of business subsequent to the consummation of the
Transactions, (D) for such consents which, if not obtained or
made, would not, individually or in the aggregate, have a
material adverse effect upon the operations conducted or to be
conducted as described in the Prospectus in the State of
[INSERT APPLICABLE STATE] by the Partnership Entities or (E)
as disclosed in the Prospectus.
(g) The execution, delivery and performance of the
Conveyances relating to the transfer of property in the State
of [INSERT APPLICABLE STATE] has not violated and will not
violate any statute of the State of [INSERT APPLICABLE STATE]
or any rule, regulation or, to the knowledge of such counsel,
any order of any agency of the State of [INSERT APPLICABLE
STATE] having jurisdiction over any of the ▇▇▇▇▇▇ Parties or
any of their respective properties, except for any such
violations which, individually or in the aggregate, would not
have a material adverse effect on the unitholders or the
operations conducted in the State of [INSERT APPLICABLE STATE]
by the Partnership Entities, taken as a whole.
(h) Each of the Conveyances is in a form legally
sufficient as between the parties thereto to convey to the
transferee thereunder all of the right, title and interest of
the transferor stated therein in and to the properties located
in the State of [INSERT APPLICABLE STATE], as described in the
Conveyances, subject to the conditions, reservations and
limitations contained in the Conveyances, except motor
vehicles or other property requiring conveyance of
certificated title as to which the Conveyances are legally
sufficient to compel delivery of such certificated title.
B-2
(i) Each of the Conveyances in the form of a deed or
real property assignment (including, without limitation, the
form of the exhibits and schedules thereto) is in a form
legally sufficient for recordation in the appropriate public
offices of the State of [INSERT APPLICABLE STATE], to the
extent such recordation is required, and, upon proper
recordation of any of such deeds and real property assignments
in the State of [INSERT APPLICABLE STATE], will constitute
notice to all third parties under the recordation statutes of
the State of [INSERT APPLICABLE STATE] concerning record title
to the assets transferred thereby; recordation in the office
of the County Clerk for each county in which the Partnership
Entities own property is the appropriate public office in the
State of [INSERT APPLICABLE STATE] for the recordation of
deeds and assignments of interests in real property located in
such county.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the ▇▇▇▇▇▇
Parties and upon information obtained from public officials, (B) assume that all
documents submitted to them as originals are authentic, and all copies submitted
to them conform to the originals thereof, and that the signatures on all
documents examined by them are genuine, (C) state that such opinions are limited
to the laws of the State of [INSERT APPLICABLE STATE], excepting therefrom
municipal and local ordinances and regulations, (D) state that they express no
opinion with respect to state or local taxes or tax statutes to which any of the
limited partners of the Partnership or any of the Partnership Entities may be
subject, and (E) with respect to the opinion in paragraph (i) rely upon
certificates of foreign qualification provided by the Secretary of State of
[INSERT APPLICABLE STATE] (each of which shall be dated as of the date not more
than fourteen days prior to the Closing Date and provided to you).
In rendering such opinion, such counsel shall state that (A) ▇▇▇▇▇
▇▇▇▇▇ L.L.P. is hereby authorized to rely upon such opinion letter in connection
with the Transactions as if such opinion letter were addressed and delivered to
them on the date hereof and (B) subject to the foregoing, such opinion letter
may be relied upon by the Underwriters and its counsel only in connection with
the Transactions and no other use or distribution of this opinion letter may be
made without such counsel's prior written consent.
B-3
EXHIBIT C
FORM OF LOCAL COUNSEL
OPINION FOR LOUISIANA
In the case of the Closing Date only, ___________________, with respect
to the State of Louisiana, shall have furnished to you its written opinion,
dated the Closing Date, in form and substance satisfactory to you, to the effect
that:
(a) The Operating Partnership has been duly qualified or
registered as a foreign limited partnership for the transaction of
business under the laws of Louisiana.
(b) The Operating GP has been duly qualified or registered as
a foreign limited liability company for the transaction of business
under the laws of Louisiana.
(c) Each of the Partnership and the Operating Partnership has
all requisite limited partnership power and authority under the laws of
the State of Louisiana to own or lease its properties and to conduct
its business in the State of Louisiana, in each case in all material
respects as described or otherwise disclosed in the Prospectus; each of
the General Partner and the Operating GP has all requisite limited
liability company power and authority under the laws of the State of
Louisiana to own or lease its properties and to conduct its business in
the State of Louisiana, in each case in all material respects as
described or otherwise disclosed in the Prospectus; and upon the
consummation of the Transactions (assuming that the Partnership will
not be liable under the laws of the State of Delaware for the
liabilities of the Operating Partnership and assuming that unitholders
will not be liable under the laws of the State of Delaware for the
liabilities of the Partnership or the Operating Partnership), the
Partnership will not be liable under the laws of the State of Louisiana
for the liabilities of the Operating Partnership, and unitholders will
not be liable under the laws of the State of Louisiana for the
liabilities of the Partnership or the Operating Partnership except in
each case to the same extent as under the laws of the State of
Delaware.
(d) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any court,
governmental agency or body of the State of Louisiana having
jurisdiction over the ▇▇▇▇▇▇ Parties or any of their respective
properties is required for the issuance and sale of the Units by the
Partnership, or for the execution, delivery and performance of that
certain Product Storage Agreement, by and between ▇▇▇▇▇▇ Underground
Storage, Inc. and the Partnership (the "Product Storage Agreement"),
except (A) for such consents required under the Securities Act, the
Exchange Act and state securities or "Blue Sky" laws, as to which such
counsel need not express any opinion, (B) for such consents which have
been obtained or made, (C) for such consents which (i) are of a routine
or administrative nature, (ii) are not customarily obtained or made
prior to the consummation of transactions such as those contemplated by
this Agreement and the Operative Agreements and (iii) are expected in
the reasonable judgment of the General Partner to be obtained or made
in the ordinary course of
C-1
business subsequent to the consummation of the Transactions, (D) for
such consents which, if not obtained or made, would not, individually
or in the aggregate, have a material adverse effect upon the operations
conducted or to be conducted as described in the Prospectus in the
State of Louisiana by the Partnership Entities or (E) as disclosed in
the Prospectus.
(e) The execution, delivery and performance of the Product
Storage Agreement has not violated and will not violate any statute of
the State of Louisiana or any rule, regulation or, to the knowledge of
such counsel, any order of any agency of the State of Louisiana having
jurisdiction over any of the ▇▇▇▇▇▇ Parties or any of their respective
properties, except for any such violations which, individually or in
the aggregate, would not have a material adverse effect on the
unitholders or the operations conducted in the State of Louisiana by
the Partnership Entities, taken as a whole.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the ▇▇▇▇▇▇
Parties and upon information obtained from public officials, (B) assume that all
documents submitted to them as originals are authentic, and all copies submitted
to them conform to the originals thereof, and that the signatures on all
documents examined by them are genuine, (C) state that such opinions are limited
to the laws of the State of Louisiana, excepting therefrom municipal and local
ordinances and regulations, (D) state that they express no opinion with respect
to state or local taxes or tax statutes to which any of the limited partners of
the Partnership or any of the Partnership Entities may be subject, and (E) with
respect to the opinion in paragraph (i) rely upon certificates of foreign
qualification provided by the Secretary of State of Louisiana (each of which
shall be dated as of the date not more than fourteen days prior to the Closing
Date and provided to you).
In rendering such opinion, such counsel shall state that (A) ▇▇▇▇▇
▇▇▇▇▇ L.L.P. is hereby authorized to rely upon such opinion letter in connection
with the Transactions as if such opinion letter were addressed and delivered to
them on the date hereof and (B) subject to the foregoing, such opinion letter
may be relied upon by the Underwriters and its counsel only in connection with
the Transactions and no other use or distribution of this opinion letter may be
made without such counsel's prior written consent.
C-2
EXHIBIT D
FORM OF LOCAL COUNSEL OPINION FOR NEVADA
In the case of the Closing Date only, _______________ shall have
furnished to you their written opinion, dated the Closing Date, in form and
substance satisfactory to you, to the effect that the distribution of assets by
CFMSHC pursuant to a liquidation proceeding was legally sufficient under the
laws of the State of Nevada to vest in each of Marine, MGS and MTI an interest
in CFMSLP on the basis of their pro rata interest in CFMSHC.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the ▇▇▇▇▇▇
Parties and upon information obtained from public officials, (B) assume that all
documents submitted to them as originals are authentic, and all copies submitted
to them conform to the originals thereof, and that the signatures on all
documents examined by them are genuine, (C) state that such opinions are limited
to the laws of the State of Nevada, excepting therefrom municipal and local
ordinances and regulations and (D) state that they express no opinion with
respect to state or local taxes or tax statutes to which any of the limited
partners of the Partnership or any of the Partnership Entities may be subject.
In rendering such opinion, such counsel shall state that (A) ▇▇▇▇▇
▇▇▇▇▇ L.L.P. is hereby authorized to rely upon such opinion letter in connection
with the Transactions as if such opinion letter were addressed and delivered to
them on the date hereof and (B) subject to the foregoing, such opinion letter
may be relied upon by the Underwriters and its counsel only in connection with
the Transactions and no other use or distribution of this opinion letter may be
made without such counsel's prior written consent.
D-1