EXHIBIT 1.1
GULFTERRA ENERGY PARTNERS, L.P.
GULFTERRA ENERGY FINANCE CORPORATION
as Issuers
and
THE SUBSIDIARIES LISTED ON SCHEDULE A
as Subsidiary Guarantors
$250,000,000
6 1/4% Series A Senior Notes due 2010
Purchase Agreement
June 26, 2003
J.P. MORGAN SECURITIES INC.
BANC ONE CAPITAL MARKETS, INC.
BNP PARIBAS SECURITIES CORP.
CREDIT LYONNAIS SECURITIES (USA) INC.
CREDIT SUISSE FIRST BOSTON LLC
FORTIS INVESTMENT SERVICES LLC
THE ROYAL BANK OF SCOTLAND PLC
SCOTIA CAPITAL (USA) INC.
SUNTRUST CAPITAL MARKETS, INC.
WACHOVIA SECURITIES, LLC
as Initial Purchasers
$250,000,000
6 1/4% Series A Senior Notes due 2010
of
GULFTERRA ENERGY PARTNERS, L.P.
and
GULFTERRA ENERGY FINANCE CORPORATION
Purchase Agreement
June 26, 2003
J.P. MORGAN SECURITIES INC.
BANC ONE CAPITAL MARKETS, INC.
BNP PARIBAS SECURITIES CORP.
CREDIT LYONNAIS SECURITIES (USA) INC.
CREDIT SUISSE FIRST BOSTON LLC
FORTIS INVESTMENT SERVICES LLC
THE ROYAL BANK OF SCOTLAND PLC
SCOTIA CAPITAL (USA) INC.
SUNTRUST CAPITAL MARKETS, INC.
WACHOVIA SECURITIES, LLC
c/o J.P. Morgan Securities Inc.
270 Park Avenue, 5th Floor
New York, New York 10017
Ladies and Gentlemen:
GulfTerra Energy Partners, L.P., a Delaware limited partnership (the
"Partnership"), and GulfTerra Energy Finance Corporation, a Delaware corporation
("GulfTerra Finance" and together with the Partnership, the "Issuers"), propose
to issue and sell to J.P. Morgan Securities Inc., Banc One Capital Markets,
Inc., BNP Paribas Securities Corp., Credit Lyonnais Securities (USA) Inc.,
Credit Suisse First Boston LLC, Fortis Investment Services LLC, The Royal Bank
of Scotland plc, Scotia Capital (USA) Inc., SunTrust Capital Markets, Inc.,
Wachovia Securities, LLC, (each an "Initial Purchaser" and, collectively, the
"Initial Purchasers") an aggregate of $250,000,000 in principal amount of its
6 1/4% Series A Senior Notes due 2010 (the "Series A Notes"), subject to the
terms and conditions set forth herein. The Series A Notes are to be issued
pursuant to the provisions of an indenture, to be dated as of July 3, 2003 (the
"Indenture"), among the Issuers, the Subsidiary Guarantors (as defined below)
and Wells Fargo Bank, as trustee (the "Trustee"). The Series A Notes and the
Series B Notes (as defined below) issuable in exchange therefor are collectively
referred to herein as the "Notes." The Series A Notes will
be guaranteed pursuant to guarantees (the "Series A Guarantees") by each of the
entities listed on Part 1 of Schedule A hereto (each, a "Subsidiary Guarantor"
and, collectively, the "Subsidiary Guarantors"). The Series A Guarantees and the
Series B Guarantees (as defined below) are collectively referred to herein as
the "Guarantees".
1. Offering Memorandum. The Series A Notes will be offered and sold to the
Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended
(the "Act"). The Issuers and the Subsidiary Guarantors have prepared an
offering memorandum, dated June 26, 2003 (the "Offering Memorandum"),
relating to the Series A Notes and the Guarantees. Any reference herein
to the Offering Memorandum shall be deemed to include the documents and
other information incorporated by reference therein.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUERS OF THIS
NOTE THAT: (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO GULFTERRA ENERGY PARTNERS, L.P., GULFTERRA
ENERGY FINANCE CORPORATION, OR ANY SUBSIDIARY OF GULFTERRA ENERGY
PARTNERS, L.P., (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) , (V) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT
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OR FOR THE ACCOUNT OF SUCH INSTITUTIONAL ACCREDITED INVESTOR, IN EACH
CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
(VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE."
2. Agreements to Sell and Purchase. On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to
the terms and conditions contained herein, the Issuers agree to issue
and sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Issuers, the principal
amounts of Series A Notes set forth opposite the name of such Initial
Purchaser on Schedule B hereto at a purchase price equal to 98.25% of
the principal amount thereof (the "Purchase Price").
3. Terms of Offering. The Initial Purchasers have advised the Issuers that
the Initial Purchasers will make offers (the "Exempt Resales") of the
Series A Notes purchased hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely to (i) persons
whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers" as defined in Rule 144A under the Act ("QIBs")
and (ii) persons permitted to purchase the Series A Notes in offshore
transactions in reliance upon Regulation S under the Act (each, a
"Regulation S Purchaser") (such persons specified in clauses (i) and
(ii) being referred to herein as the "Eligible Purchasers"). The
Initial Purchasers will offer the Series A Notes to Eligible Purchasers
initially at a price equal to 100% of the principal amount thereof.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated as of the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Series A Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers
and the Subsidiary Guarantors will agree to file with the Securities and
Exchange Commission (the "Commission") under the circumstances set forth
therein, (i) a registration statement under the Act (the "Exchange Offer
Registration Statement") relating to the Issuers' 6 1/4% Series B Senior Notes
due 2010 (the "Series B Notes"), and the guarantees thereof by each of the
Subsidiary Guarantors (the "Series B Guarantees") to be offered in exchange for
the Series A Notes and the Series A Guarantees thereof (such offer to exchange
being referred to as the "Exchange Offer") and (ii) a shelf registration
statement pursuant to Rule 415 under the Act (the "Shelf Registration Statement"
and, together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Series A Notes and
to use its best
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efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes, the Guarantees and the Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents."
4. Delivery and Payment.
(a) Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at the offices of Akin, Gump, Strauss, Hauer &
Feld, L.L.P., 1900 Pennzoil Place South Tower, 711 Louisiana Street,
Houston, TX 77002, or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 9:00 a.m. New
York City time, on July 3, 2003 or at such other time on the same date
or such other date as shall be agreed upon by the Initial Purchasers
and the Issuers in writing. The time and date of such delivery and the
payment for the Series A Notes are herein called the "Closing Date."
(b) One or more of the Series A Notes in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository
Trust Company ("DTC"), having an aggregate principal amount
corresponding to the aggregate principal amount of the Series A Notes
(collectively, the "Global Note"), shall be delivered by the Issuers to
the Initial Purchasers (or as the Initial Purchasers direct) in each
case with any transfer taxes thereon duly paid by the Issuers against
payment by the Initial Purchasers of the Purchase Price thereof by wire
transfer in same day funds to the order of the Partnership. The Global
Note shall be made available to the Initial Purchasers for inspection
not later than 9:30 a.m., New York City time, on the business day
immediately preceding the Closing Date.
5. Agreements of the Issuers and the Subsidiary Guarantors. Each of the
Partnership, GulfTerra Finance and the Subsidiary Guarantors hereby
agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, to confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order
suspending the qualification or exemption from qualification of any
Series A Notes for offering or sale in any jurisdiction designated by
the Initial Purchasers pursuant to Section 5(e) hereof, or the
initiation of any proceeding by any state securities commission or any
other federal or state regulatory authority for such purpose and (ii)
of the happening of any event during the period referred to in Section
5(c) below that makes any statement of a material fact made in the
Offering Memorandum untrue or that requires any additions to or changes
in the Offering Memorandum in order to make the statements therein not
misleading. The Issuers and the Subsidiary Guarantors shall use their
best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Series A Notes under
any state securities or Blue Sky laws and, if at any time any state
securities commission or other federal or state regulatory authority
shall issue an order suspending the qualification or exemption of any
Series A Notes under any state securities or Blue Sky laws, the Issuers
and the Subsidiary
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Guarantors shall use their best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Issuers as many copies of the Offering
Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request for the time period specified in
Section 5(c). Subject to the Initial Purchasers' compliance with its
representations and warranties and agreements set forth in Section 7
hereof, the Issuers consent to the use of the Offering Memorandum, and
any amendments and supplements thereto required pursuant hereto, by the
Initial Purchasers in connection with Exempt Resales;
(c) At any time prior to the completion of the initial offering of the
Series A Notes and in connection with market-making activities of the
Initial Purchasers for so long as any Series A Notes are outstanding,
(i) not to make any amendment or supplement to the Offering Memorandum
of which the Initial Purchasers shall not previously have been advised
or to which the Initial Purchasers shall reasonably object after being
so advised, provided, that this clause (i) shall not apply to any
filing by the Partnership of an Annual Report on Form 10-K, Quarterly
Report on Form 10-Q or Current Report on Form 8-K with respect to (A)
matters unrelated to the Series A Notes and the offering or exchange
thereof or (B) a press release permitted by Rule 135c under the Act,
and (ii) to prepare promptly upon the Initial Purchasers' reasonable
request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales or
such market-making activities;
(d) If, during the period referred to in Section 5(c) above, any event
shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchasers, it becomes necessary to
amend or supplement the Offering Memorandum in order to make the
statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser, not
misleading, or if, in the opinion of counsel to the Initial Purchasers,
it is necessary to amend or supplement the Offering Memorandum to
comply with any applicable law, forthwith to prepare, subject to
Section 5(c), an appropriate amendment or supplement to such Offering
Memorandum so that the statements therein, as so amended or
supplemented, will not, in the light of the circumstances when it is so
delivered, be misleading, or so that such Offering Memorandum will
comply with applicable law, and to furnish to the Initial Purchasers
and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably
request;
(e) Prior to the sale of all Series A Notes pursuant to Exempt Resales
as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration
or qualification of the Series A Notes for offer and sale to the
Initial Purchasers and pursuant to Exempt Resales under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchasers may
request and to continue such registration or qualification in effect so
long as required for Exempt Resales and to file such consents to
service of process or other documents as may be necessary in order to
effect such registration or qualification; provided, however, that
neither the Issuers nor
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any Subsidiary Guarantor shall be required in connection therewith to
qualify as a foreign partnership, limited liability company, trust or
corporation in any jurisdiction in which it is not now so qualified or
to take any action that would subject it to general consent to service
of process or taxation other than as to matters and transactions
relating to the Offering Memorandum or Exempt Resales, in any
jurisdiction in which it is not now so subject;
(f) For so long as the Series A Notes are outstanding, to furnish or
make available to the Initial Purchasers copies of any annual reports,
quarterly reports and current reports filed by the Partnership with the
Commission on Forms 10-K, 10-Q and 8-K, and such other documents,
reports and information as shall be furnished by the Company to the
Trustee or to the holders of Series A Notes, in each case pursuant to
the Indenture;
(g) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of the obligations of the
Issuers and the Subsidiary Guarantors under this Agreement, including:
(i) the fees, disbursements and expenses of counsel to the
Issuers and the Subsidiary Guarantors and accountants of the
Issuers and the Subsidiary Guarantors in connection with the
sale and delivery of the Series A Notes to the Initial
Purchasers and pursuant to Exempt Resales, and all other fees
and expenses in connection with the preparation, printing,
filing and distribution of the Offering Memorandum and all
amendments and supplements to any of the foregoing (including
financial statements), including the mailing and delivery of
copies thereof to the Initial Purchasers and persons
designated by them in the quantities specified herein,
(ii) all costs and expenses related to the transfer and
delivery of the Series A Notes to the Initial Purchasers and
pursuant to Exempt Resales, including any transfer or other
taxes payable thereon,
(iii) all costs of printing or producing this Agreement, the
other Operative Documents and any other agreements or
documents in connection with the offering, purchase, sale or
delivery of the Series A Notes,
(iv) all expenses in connection with the registration or
qualification of the Series A Notes and the Series A
Guarantees for offer and sale under the securities or Blue Sky
laws of the several states and all costs of printing or
producing any preliminary and supplemental Blue Sky memoranda
in connection therewith (including the filing fees and fees
and disbursements of counsel for the Initial Purchasers in
connection with such registration or qualification and
memoranda relating thereto),
(v) the cost of printing certificates representing the Series
A Notes and the Series A Guarantees,
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(vi) all expenses and listing fees in connection with the
application for quotation of the Series A Notes in the
National Association of Securities Dealers, Inc. ("NASD")
Automated Quotation System - PORTAL ("PORTAL"),
(vii) the fees and expenses of the Trustee and the Trustee's
counsel in connection with the Indenture, the Notes and the
Guarantees,
(viii) the costs and charges of any transfer agent, registrar
and/or depositary (including DTC),
(ix) any fees charged by rating agencies for the rating of the
Notes,
(x) all costs and expenses of the Exchange Offer and any
Registration Statement, as set forth in the Registration
Rights Agreement, and
(xi) all other costs and expenses incident to the performance
of the obligations of the Issuers and the Subsidiary
Guarantors hereunder for which provision is not otherwise made
in this Section;
(h) To use its best efforts to effect the inclusion of the Series A
Notes in PORTAL and to maintain the listing of the Series A Notes on
PORTAL for so long as the Series A Notes are outstanding;
(i) To obtain the approval of DTC for "book-entry" transfer of the
Notes, and to comply with all of its agreements set forth in the
representation letters of the Issuers and the Subsidiary Guarantors to
DTC relating to the approval of the Notes by DTC for "book-entry"
transfer;
(j) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of each of the
Issuers or any Subsidiary Guarantor or any warrants, rights or options
to purchase or otherwise acquire debt securities of the Issuers or any
Subsidiary Guarantor substantially similar to the Notes and the
Guarantees (other than (i) the Notes and the Guarantees, (ii)
commercial paper issued in the ordinary course of business and (iii)
the incurrence of debt in connection with the Credit Facility and the
GulfTerra Holding Term Loan) without the prior written consent of J.P.
Morgan Securities Inc. As used herein, the term "Credit Facility" means
the Sixth Amended and Restated Credit Agreement among the Issuers, the
several lenders from time to time parties thereto, Credit Lyonnais New
York Branch and Wachovia Bank, National Association, as Co-Syndication
Agents, Fleet National Bank and Fortis Capital Corp., as
Co-Documentation Agents, and JPMorgan Chase Bank, as Administrative
Agent, dated as of March 23, 1995, as amended and restated through June
13, 2003, and the collateral documents related thereto. As used herein,
the term "GulfTerra Holding Term Loan" means the Amended and Restated
Credit Agreement among GulfTerra Holding Company, L.P., formerly EPN
Holding Company, L.P., the Lenders party thereto, Banc One Capital
Markets, Inc. and Wachovia Bank, National Association, as
Co-Syndication Agents, Fleet National Bank and Fortis Capital Corp., as
Co-Documentation Agents, and
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JPMorgan Chase Bank, as Administrative Agent, dated as of April 8,
2002, as amended and restated through October 10, 2002, and the related
collateral documents.
(k) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would
be integrated with the sale of the Series A Notes to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require
the registration of any such sale of the Series A Notes under the Act;
(l) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes
and the related Guarantees;
(m) To comply with all of its agreements set forth in the Registration
Rights Agreement;
(n) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to
the Closing Date and to satisfy all conditions precedent to the
delivery of the Series A Notes and the Series A Guarantees; and
(o) Promptly following the Closing Date, apply the proceeds from the
issuance and sale of the Series A Notes as described in the Offering
Memorandum under "Use of Proceeds."
6. Representations, Warranties and Agreements of the Partnership,
GulfTerra Finance and the Subsidiary Guarantors. As of the date hereof,
each of the Partnership, GulfTerra Finance and the Subsidiary
Guarantors represents and warrants to, and agrees with, the Initial
Purchasers as to the following:
(a) the Offering Memorandum does not, and any supplement or amendment
to it will not, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties contained in this paragraph (a) shall not apply to
statements in or omissions from the Offering Memorandum (or any
supplement or amendment thereto) based upon information relating to the
Initial Purchasers furnished to the Issuers in writing by the Initial
Purchasers expressly for use therein. The parties hereto acknowledge
and agree that for purposes of this Agreement, including this Section
6(a) and Section 8(b) hereof, the only information furnished to the
Issuers in writing by the Initial Purchasers expressly for use in the
Offering Memorandum (or any amendment or supplement to it) is the
information set forth in the third paragraph, the fifth and sixth
sentences in the ninth paragraph, and the twelfth paragraph under the
caption "Plan of Distribution" in the Offering Memorandum. Furthermore,
the parties hereto acknowledge that for purposes of this Agreement,
including this Section 6(a) and Section 8(b) hereof, the Initial
Purchasers shall not be deemed to have provided any information (and
therefore are not responsible for any statements or omissions)
pertaining to any arrangement or agreement with respect to any party
other than the Initial Purchasers. No stop order preventing the use of
the Offering Memorandum, or any amendment or
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supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued.
(b) Each of the Partnership and its Restricted Subsidiaries (as defined
in the Offering Memorandum) and GulfTerra Finance, as applicable, has
been duly formed or incorporated, is validly existing as a partnership,
corporation, business trust or limited liability company in good
standing under the laws of their respective jurisdictions of formation
or incorporation and has the partnership, corporate, trust or limited
liability company power and authority to carry on their respective
businesses as described in the Offering Memorandum and to own, lease
and operate their respective properties, and each (other than the
general partnerships) is duly qualified and is in good standing as a
foreign limited partnership, corporation, business trust or limited
liability company authorized to do business in each jurisdiction in
which the nature of each of their businesses or their ownership or
leasing of property requires such qualification, except where the
failure to be so qualified could reasonably be expected not to have a
material adverse effect on the business, financial condition or results
of operations of the Partnership, its subsidiaries and GulfTerra
Finance, taken as a whole (a "Material Adverse Effect").
(c) GulfTerra Energy Company, a Delaware limited liability company,
(the "General Partner") has been duly formed and is validly existing in
good standing under the laws of the State of Delaware with full company
power and authority to carry on its businesses; to own, lease and
operate its properties; and to act as the general partner of the
Partnership in all material respects as described in the Offering
Memorandum. The General Partner is duly qualified and is in good
standing as a foreign limited liability company authorized to do
business in each jurisdiction in which the nature of its businesses or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified could reasonably be
expected not to (i) have a Material Adverse Effect, or (ii) subject the
limited partners of the Partnership to any material liability or
disability.
(d) All of the issued and outstanding equity interests of the General
Partner have been duly and validly authorized and issued and are fully
paid and (except as required to the contrary by the Delaware Limited
Liability Company Act) nonassessable, and are owned by GulfTerra GP
Holding Company a Delaware Corporation ("GulfTerra GP Holding") free
and clear of any lien, adverse claim, security interest equity or other
encumbrance (each, a "Lien"), except for any Permitted Encumbrances.
DeepTech is a wholly-owned subsidiary of El Paso Corporation. All of
the issued and outstanding shares of capital stock of GulfTerra GP
Holding have been duly and validly authorized and issued and are fully
paid and nonassessable, and are owned by DeepTech International Inc.
("DeepTech") free and clear of any Lien except for Permitted
Encumbrances. As used herein "Permitted Encumbrances" means any lien or
adverse claim established by or under (i) the Credit Facility, (ii) the
credit agreement to which Poseidon Oil Pipeline Company, L.L.C., a
Delaware limited liability company in which a Subsidiary of the
Partnership owns a 36% membership interest, is party, and the
collateral documents related thereto, (iii) the credit agreement to
which Deepwater Gateway, L.L.C., a Delaware limited liability company
in which a Subsidiary of the Partnership owns a 50%
9
membership interest, is party, and the collateral documents related
thereto, (iv) the financing arrangements to which Sabine I or Sabine II
(each as defined below) or El Paso Corporation or any other
subsidiaries of El Paso Corporation are or will be parties, and the
collateral documents related thereto, (v) the GulfTerra Holding Term
Loan, (vi) the indenture into which the Partnership entered on May 27,
1999, as amended and supplemented, (vii) the indenture into which the
Partnership entered on May 17, 2001, as amended and supplemented,
(viii) the indenture into which the Partnership entered on November 27,
2002, as amended and supplemented, (ix) the indenture into which the
Partnership entered on March 24, 2003, as amended and supplemented, (x)
the Indenture, as amended and supplemented and (xi) the financing
arrangements to which Cameron Highway Oil Pipeline Company will be
party.
(e) All outstanding shares of capital stock or partnership interests of
GulfTerra Finance or the Partnership, as applicable, have been duly
authorized and validly issued and are fully paid, non-assessable
(except, in the case of the partnership interests of the Partnership,
to the extent set forth in Section 17-303 of the Delaware Revised
Uniform Limited Partnership Act (the "DRULPA")) and not subject to any
preemptive or similar rights except as otherwise set forth in the
Partnership Agreement and disclosed in the Offering Memorandum.
(f) The entities listed on Schedule C hereto are the only subsidiaries,
direct or indirect, of the Partnership. Upon completion of the Cameron
Highway Transactions, Cameron Highway Pipeline GP I, L.L.C., Cameron
Highway Pipeline II, L.P. and Cameron Highway Pipeline III, L.P. will
no longer be direct or indirect subsidiaries of the Partnership. Prior
to the Closing Date, the Restricted Subsidiaries listed on part 2 of
Exhibit A will have merged into or dissolved into one or more
Subsidiary Guarantors. All of the outstanding shares of capital stock,
limited partner interests, general partner interests or limited
liability company interests or other equity interests of each of the
Partnership's subsidiaries have been duly authorized and validly issued
and are fully paid and (except (i) as required to the contrary by the
Delaware Limited Liability Company Act and DRULPA and (ii) with respect
to any general partner interests) non-assessable, and except as
otherwise set forth in the Offering Memorandum (exclusive of any
supplement or amendment) or on Schedule C are owned by the Partnership,
directly or indirectly through one or more wholly-owned subsidiaries or
the General Partner, free and clear of any Lien, other than Permitted
Encumbrances.
(g) The General Partner is the sole general partner of the Partnership
with a 1.0% general partner interest in the Partnership, and such
general partner interest is duly authorized and validly issued to the
General Partner in accordance with the Second Amended and Restated
Agreement of Limited Partnership of GulfTerra Energy Partners, L.P.
dated as of February 19, 1993 as amended and restated effective as of
August 31, 2000 (as amended, the "Partnership Agreement"). The
Partnership Agreement has been duly authorized, executed and delivered
by the General Partner and is a valid and legally binding agreement of
the General Partner, enforceable against the General Partner in
accordance with its terms, except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
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principles of general applicability. The General Partner owns such
general partner interest free and clear of any Lien, other than
Permitted Encumbrances.
(h) Sabine River Investors I, L.L.C. ("Sabine I") and Sabine River
Investors II, L.L.C. ("Sabine II") own limited partner interests in the
Partnership represented by 11,674,245 common units ("Common Units"), El
Paso EPN Investments, L.L.C. ("EPN Investments") owns limited partner
interests in the Partnership represented by 10,937,500 Series C Units
("Series C Units") and DeepTech owns limited partner interests in trhe
Partnership represented by 124,324 Series B preference units ("Series B
Units"); all of such Common Units, Series C Units and Series B Units
and the limited partner interests represented thereby have been duly
authorized and validly issued and are fully paid (to the extent
required by the Partnership Agreement) and nonassessable (except (i) as
required to the contrary by DRULPA and (ii) as such nonassessablility
may be affected by matters described in the Offering Memorandum); and
Sabine I, Sabine II, EPN Investments and DeepTech own such limited
partner interests free and clear of any Lien, other than Permitted
Encumbrances.
(i) This Agreement has been duly authorized, executed and delivered by
each of the Issuers and each of the Subsidiary Guarantors and
constitutes a valid and binding obligation of each of the Issuers and
each of the Subsidiary Guarantors, enforceable in accordance with its
terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(j) The Indenture has been duly authorized by each of the Issuers and
each of the Subsidiary Guarantors and, on the Closing Date, will have
been validly executed and delivered by each of the Issuers and each of
the Subsidiary Guarantors and will be a valid and binding agreement of
each of the Issuers and each of the Subsidiary Guarantors, enforceable
against each of the Issuers and each of the Subsidiary Guarantors in
accordance with its terms, except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability. The Indenture conforms in all
material respects to the requirements of the Trust Indenture Act of
1939, as amended (the "TIA"), and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder.
(k) The Series A Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by each of the
Issuers. When the Series A Notes have been issued, executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, the Series A Notes will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Issuers, enforceable in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable
11
principles of general applicability. On the Closing Date, the Series A
Notes will conform as to legal matters to the description thereof
contained in the Offering Memorandum.
(l) On the Closing Date, the Series B Notes will have been duly
authorized by each of the Issuers. When the Series B Notes are issued,
executed and authenticated in accordance with the terms of the Exchange
Offer and the Indenture, the Series B Notes will be entitled to the
benefits of the Indenture and will be the valid and binding obligations
of the Issuers, enforceable against the Issuers in accordance with
their terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(m) The Series A Guarantee to be endorsed on the Series A Notes by each
Subsidiary Guarantor has been duly authorized by such Subsidiary
Guarantor and, on the Closing Date, will have been duly executed and
delivered by each such Subsidiary Guarantor. When the Series A Notes
have been issued, executed and authenticated in accordance with the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Series A Guarantee of
each Subsidiary Guarantor endorsed thereon will be entitled to the
benefits of the Indenture and will be the valid and binding obligation
of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability. On the Closing Date,
the Series A Guarantees to be endorsed on the Series A Notes will
conform as to legal matters to the description thereof contained in the
Offering Memorandum.
(n) The Series B Guarantee to be endorsed on the Series B Notes by each
Subsidiary Guarantor has been duly authorized by such Subsidiary
Guarantor and, when issued, will have been duly executed and delivered
by each such Subsidiary Guarantor. When the Series B Notes have been
issued, executed and authenticated in accordance with the terms of the
Exchange Offer and the Indenture, the Series B Guarantee of each
Subsidiary Guarantor endorsed thereon will be entitled to the benefits
of the Indenture and will be the valid and binding obligation of such
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms, except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability. When the Series B Notes are
issued, authenticated and delivered, the Series B Guarantees to be
endorsed on the Series B Notes will conform as to legal matters to the
description thereof in the Offering Memorandum.
(o) The Registration Rights Agreement has been duly authorized by each
of the Issuers and each of the Subsidiary Guarantors and, on the
Closing Date, will have been duly executed and delivered by each of the
Issuers and each of the Subsidiary Guarantors. When the Registration
Rights Agreement has been duly executed and delivered, the
12
Registration Rights Agreement will be a valid and binding agreement of
each of the Issuers and each of the Subsidiary Guarantors, enforceable
against each of the Issuers and each of the Subsidiary Guarantors in
accordance with its terms, except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(p) Neither the Issuers nor any of their subsidiaries is in violation
of its respective limited partnership agreement, limited liability
company agreement, charter, by-laws or similar organizational document
or in default in the performance of any obligation, agreement, covenant
or condition contained in any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Issuers
and their subsidiaries, taken as a whole, to which the Issuers or any
of their subsidiaries is a party or by which the Issuers or any of
their subsidiaries or their respective property is bound, except with
respect to any such indenture, loan agreement, mortgage, lease or other
agreement or instrument, any default which could reasonably be expected
not to have a Material Adverse Effect.
(q) The execution, delivery and performance of this Agreement and the
other Operative Documents by each of the Issuers and each of the
Subsidiary Guarantors, compliance by each of the Issuers and each of
the Subsidiary Guarantors with all provisions hereof and thereof and
the consummation of the transactions contemplated hereby and thereby
did not and will not (i) require any consent, approval, authorization,
filing with or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states or, with respect to
the proposed offer to exchange the Exchange Notes for the Notes, the
federal securities laws), (ii) conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the limited
partnership agreement, limited liability company agreement, charter,
by-laws or similar organizational document of the Partnership or any of
its Restricted Subsidiaries or GulfTerra Finance (collectively, the
"Organizational Documents") or any existing indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to
the Partnership and its Restricted Subsidiaries and GulfTerra Finance,
taken as a whole, to which the Partnership or any of its Restricted
Subsidiaries or GulfTerra Finance is a party or by which the
Partnership or any of its Restricted Subsidiaries or GulfTerra Finance
or their respective property is bound, (iii) violate or conflict with
any applicable existing law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having
jurisdiction over the Partnership or any of its Restricted Subsidiaries
or GulfTerra Finance or their respective property, (iv) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under, any existing agreement or instrument to which the
Partnership or any of its Restricted Subsidiaries or GulfTerra Finance
is a party or by which the Partnership or any of its Restricted
Subsidiaries or GulfTerra Finance or their respective property is bound
or (v) result in the termination, suspension or revocation of any
existing Authorization (as defined below) of the Partnership or any of
its Restricted Subsidiaries or GulfTerra Finance, or result in any
other impairment of the rights of the
13
holder of any such Authorization, except (other than in the case of
clause (ii) above with respect to Organizational Documents) to the
extent they could reasonably be expected not to have a Material Adverse
Effect.
(r) No action, suit or governmental proceedings by or before any court
or governmental agency, authority or body is pending or, to our
knowledge, threatened to which the Partnership or any of its Restricted
Subsidiaries or GulfTerra Finance is or could be a party or to which
any of their respective property is or could be subject, except for
such proceedings which, singly or in the aggregate, could reasonably be
expected not to result in a Material Adverse Effect and except as set
forth in the Offering Memorandum.
(s) The Partnership, its Restricted Subsidiaries and GulfTerra Finance
are (i) in compliance with any and all foreign, federal, state or local
law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) have not received notice of any actual
or potential liability under the Environmental Laws, in the case of (i)
through (iii), except where such non-compliance or liability, singly or
in the aggregate, could reasonably be expected not to result in a
Material Adverse Effect. None of the Partnership, its Restricted
Subsidiaries or GulfTerra Finance has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"). The
Partnership, its Restricted Subsidiaries and GulfTerra Finance are not
in violation of any provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or any provisions of the
Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, could reasonably be expected not to result in a Material
Adverse Effect.
(t) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any Authorization, any related constraints
on operating activities and any potential liabilities to third parties)
which, singly or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
(u) Each of the Partnership and its Restricted Subsidiaries and
GulfTerra Finance has such permits, licenses, consents, exemptions,
franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease, license and operate its respective properties and to
conduct its business, except where the failure to have any such
Authorization or to make any such filing or notice could, singly or in
the aggregate, reasonably be expected not to have a Material Adverse
Effect. Each such Authorization is valid and in full force and effect
and each of the Partnership and its Restricted Subsidiaries and
GulfTerra Finance is in compliance with all the terms and conditions
thereof and with the rules and
14
regulations of the authorities and governing bodies having jurisdiction
with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing
body) which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such Authorization
or results or, after notice or lapse of time or both, would result in
any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Partnership or any of its Restricted Subsidiaries or
GulfTerra Finance; except where such failure to be valid and in full
force and effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction could, singly or in the
aggregate, reasonably be expected not to have a Material Adverse
Effect.
(v) Each of the Partnership and its Restricted Subsidiaries and
GulfTerra Finance owns or leases all such properties as are necessary
to the conduct of its operations as presently conducted, except where
the lack of ownership or leasing would not, individually or in the
aggregate, have a Material Adverse Effect.
(w) Each of the Partnership and its Restricted Subsidiaries and
GulfTerra Finance has, or at the Closing Date will have, such consents,
easements, rights-of-way or licenses from any person ("rights-of-way")
as are necessary to conduct its business in the manner described in the
Offering Memorandum, subject to such qualifications as may be set forth
in the Offering Memorandum and except for such rights-of-way which, if
not obtained, could, singly or in the aggregate, reasonably be expected
not to have a Material Adverse Effect; each of the Partnership and its
subsidiaries and GulfTerra Finance has, or at the Closing Date will
have, fulfilled and performed all its material obligations with respect
to such rights-of-way and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof
or would result in any impairment of the rights of the holder of any
such rights-of-way, except for such revocations, terminations and
impairments that could reasonably be expected not to have a Material
Adverse Effect, subject in each case to such qualifications as may be
set forth in the Offering Memorandum; and except as described in the
Offering Memorandum, none of such rights-of-way contains any
restriction that is materially burdensome to the Partnership and its
subsidiaries and GulfTerra Finance considered as a whole.
(x) The accountants, PricewaterhouseCoopers LLP, that have certified
financial statements and supporting schedules included in the Offering
Memorandum are independent public accountants with respect to the
Issuers, the Subsidiary Guarantors and Poseidon Oil Pipeline Company,
L.L.C., as required by the Act and the Exchange Act. The historical
financial statements, together with related schedules and notes, set
forth in the Offering Memorandum comply as to form in all material
respects with the requirements applicable to registration statements on
Form S-3 under the Act.
(y) The historical financial statements, together with related
schedules and notes, forming part of the Offering Memorandum (and any
amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial
position of the Partnership and its subsidiaries (including GulfTerra
Finance) on the basis stated in the Offering Memorandum at the
respective dates or for the respective periods to
15
which they apply; such statements and related schedules and notes have
been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except
as disclosed therein; and the other financial and statistical
information and data set forth in the Offering Memorandum (and any
amendment or supplement thereto) are, in all material respects,
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Partnership and
GulfTerra Finance.
(z) The pro forma financial statements included in the Offering
Memorandum have been prepared on a basis consistent with the historical
financial statements of the Partnership and its subsidiaries and
GulfTerra Finance and give effect to assumptions used in the
preparation thereof on a reasonable basis and in good faith and present
fairly the historical transactions described therein; and such pro
forma financial statements comply as to form in all material respects
with the requirements applicable to pro forma financial statements
included in registration statements on Form S-3 under the Act. The
other pro forma financial and statistical information and data included
in the Offering Memorandum are, in all material respects, accurately
presented and prepared on a basis consistent with the pro forma
financial statements.
(aa) Neither of the Issuers nor any of the Partnership's Restricted
Subsidiaries is or, after giving effect to the offering and sale of the
Series A Notes and the application of the net proceeds thereof as
described in the Offering Memorandum, neither of the Issuers, will be,
an "investment company," as such term is defined in the Investment
Company Act of 1940, as amended or a "holding company" within the
meaning of, or subject to regulation under, the Public Utility Holding
Company Act of 1935, as amended, and the rules and regulations
promulgated by the Commission thereunder.
(bb) There are no contracts, agreements or understandings between the
Issuers or any Subsidiary Guarantor, on the one hand, and any person,
on the other hand, granting such person the right to require the
Issuers or such Subsidiary Guarantor to file a registration statement
under the Act with respect to any securities of the Issuers or such
Subsidiary Guarantor other than the rights (i) of the General Partner
and its affiliates in Section 6.14 of the Partnership Agreement and in
the registration rights agreement executed in connection with the
November 2002 acquisition by the Partnership of the San Juan assets
(the "Series C RRA"); (ii) of EPEC Deepwater Gathering Company ("EPEC")
and its successors pursuant to a registration rights agreement between
EPEC and the Partnership executed in connection with the acquisition by
the Partnership of an additional interest in Viosca Knoll Gathering
Company; (iii) of Crystal Gas Storage, Inc. pursuant to the
registration rights agreement between Crystal Gas Storage, Inc. and the
Partnership which was executed in connection with the acquisition by
the Partnership of the Crystal storage facilities; provided, however,
that with respect to (i), (ii) and (iii) above, the General Partner,
EPN Investments, Sabine I, Sabine II and DeepTech have waived such
rights with respect to any Registration Statement filed pursuant to the
Registration Rights Agreement; (iv) granted under the Credit Facility,
the GulfTerra Holding Term Loan and related agreements; and (v) granted
under the Registration Rights Agreement. There are no contracts,
agreements or understandings between the Issuers or any Subsidiary
Guarantor, on the one hand, and any person, on the other hand, granting
such person the
16
right to require the Issuers or such Subsidiary Guarantor to include
such securities with the Notes and Guarantees registered pursuant to
any Registration Statement, other than the rights of the General
Partner and its affiliates in Section 6.14 of the Partnership Agreement
(which rights have been waived with respect to any Registration
Statement filed pursuant to the Registration Rights Agreement).
(cc) Neither the Partnership nor any of its subsidiaries nor GulfTerra
Finance nor any agent thereof acting on the behalf of them has taken,
and none of them will take, any action that might cause this Agreement
or the issuance or sale of the Series A Notes to violate Regulation T
(12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X
(12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve
System.
(dd) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Issuers or any Subsidiary Guarantor that
it is considering imposing) any condition (financial or otherwise) on
the Issuers' or any Subsidiary Guarantor's retaining any rating
assigned to the Issuers or any Subsidiary Guarantor, any securities of
the Issuer or any Subsidiary Guarantor or (ii) has indicated to the
Issuers or any Subsidiary Guarantor that it is considering (a) the
downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in,
any rating so assigned or (b) any change in the outlook for any rating
of the Issuers, any Subsidiary Guarantor or any securities of the
Issuers or any Subsidiary Guarantor, other than, in the case of this
cause (ii), any such downgrading, suspension, withdrawal, review or
change that has been publicly announced by such organization as of the
time of the execution of this Agreement.
(ee) Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material
adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Partnership and its
subsidiaries and GulfTerra Finance, taken as a whole, (ii) there has
not been any material adverse change or any development involving a
prospective material adverse change in the capital stock, limited
liability company interests or partnership units, as applicable, or in
the long-term debt of the Partnership or any of its subsidiaries or
GulfTerra Finance and (iii) neither the Partnership, any of its
subsidiaries nor GulfTerra Finance has incurred any material liability
or obligation, direct or contingent.
(ff) The Offering Memorandum, as of its date, contains all the
information specified in, and meets all of the requirements of, Rule
144A(d)(4) under the Act.
(gg) The Offering Memorandum, as of its date, contains all of the
information specified in, and complies in all material respects with,
the applicable requirements of the Act as if such document were filed
using a registration statement on Form S-3.
17
(hh) Upon execution and delivery by the parties thereto, the Indenture
will comply as to form in all material respects with the requirements
of the TIA, and the rules and regulations of the Commission applicable
to an indenture which is qualified thereunder. It is not necessary in
connection with the offer, sale and delivery of the Series A Notes to
the Initial Purchasers in the manner contemplated by this Agreement or
in connection with the initial placement of the Series A Notes by the
Initial Purchasers in the manner contemplated by the Offering
Memorandum pursuant to Exempt Resales to qualify the Indenture under
the TIA.
(ii) The statements under the captions "Description of Notes,"
"Description of Other Indebtedness," "United States Federal Income and
Estate Tax Considerations" and "Plan of Distribution" in the Offering
Memorandum, insofar as such statements purport to constitute a summary
of the legal matters, documents or proceedings referred to therein,
fairly present in all material respects such legal matters, documents
and proceedings.
(jj) When the Series A Notes and the Series A Guarantees are issued and
delivered pursuant to this Agreement, neither the Series A Notes nor
the Series A Guarantees will be of the same class (within the meaning
of Rule 144A under the Act) as any security of the Issuers or the
Subsidiary Guarantors that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a
United States automated inter-dealer quotation system.
(kk) No form of general solicitation or general advertising (as defined
in Regulation D under the Act) was used by the Issuers, the Subsidiary
Guarantors or any of their respective representatives (other than the
Initial Purchasers, as to whom the Issuers and the Subsidiary
Guarantors make no representation) in connection with the offer and
sale of the Series A Notes contemplated hereby, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising. No securities of the
same class as the Series A Notes have been issued and sold by the
Issuers within the six-month period immediately prior to the date
hereof.
(ll) None of the Issuers, the Subsidiary Guarantors nor any of their
respective affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Issuers and the
Subsidiary Guarantors make no representation) has engaged or will
engage in any directed selling efforts within the meaning of Regulation
S under the Act ("Regulation S") with respect to the Series A Notes or
the Series A Guarantees.
(mm) The Issuers, the Subsidiary Guarantors and their respective
affiliates and all persons acting on their behalf (other than the
Initial Purchasers, as to whom the Issuers and the Subsidiary
Guarantors make no representation) have complied with and will comply
with the offering restrictions requirements of Regulation S in
connection with the offering of the Series A Notes outside the United
States and, in connection therewith, the Offering Memorandum will
contain the disclosure required by Regulation S.
(nn) The Partnership is a "reporting issuer," as defined in Rule 902
under the Act.
18
(oo) The Series A Notes offered and sold in reliance on Regulation S
have been and will be offered and sold only in offshore transactions.
(pp) The sale of the Series A Notes pursuant to Regulation S is not
part of a plan or scheme to evade the registration provisions of the
Act.
(qq) No registration under the Act of the Series A Notes or the Series
A Guarantees is required for the sale of the Series A Notes and the
Series A Guarantees to the Initial Purchasers as contemplated hereby or
for the Exempt Resales assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7
hereof.
(rr) Each certificate signed by any officer of the Issuers or any
Subsidiary Guarantor and delivered to the Initial Purchasers or counsel
for the Initial Purchasers shall be deemed to be a representation and
warranty by the Issuers or such Subsidiary Guarantor to the Initial
Purchasers as to the matters covered thereby.
(ss) Except as otherwise set forth in the Offering Memorandum or such
as are not material to the business, prospects, financial condition or
results of operations of the Partnership and its subsidiaries (taken as
a whole), and except for liens created by operation and maintenance
agreements, space lease agreements and other similar types of
agreements ordinary and customary to the operations of the General
Partner, the Partnership and its subsidiaries, the Partnership and the
Subsidiary Guarantors have good and defensible title to their interests
in their oil and gas properties.
(tt) The information which was supplied by the Partnership to
Netherland, Sewell & Associates, Inc. ("Netherland & Sewell"),
independent petroleum engineers, for purposes of evaluating the oil and
gas reserves of the Partnership and the Subsidiary Guarantors as of
March 27, 2003, including, without limitation, production, costs of
operation and development, current prices for production, agreements
relating to current and future operations and sales of production, was
true and correct in all material respects on the dates such estimates
were made and such information was supplied and was prepared in
accordance with customary industry practices, as indicated in the
letter of Netherland & Sewell dated January 28, 2002 (the "Netherland &
Sewell Letter"); Netherland & Sewell was, as of the date of the
Netherland & Sewell Letter, and is, as of the date hereof, independent
with respect to the Partnership and the Subsidiary Guarantors; other
than normal production of the reserves and intervening spot market
product price fluctuations, the Partnership is not aware of any facts
or circumstances that would result in a materially adverse change in
the reserves, or the present value of future net cash flows therefrom,
as described in the Offering Memorandum and as reflected in the
Netherland & Sewell Letter and the reserve report referenced therein;
estimates of such reserves and present values as described in the
Offering Memorandum and reflected in the Netherland & Sewell Letter and
the reserve report referenced therein comply in all material respects
to the applicable requirements of Regulation S-X and Industry Guide 2
under the Securities Act.
19
(uu) The Partnership and each of its subsidiaries are 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 they are engaged; and neither the Partnership nor
any of its subsidiaries (i) has received notice from any insurer or
agent of such insurer that substantial capital improvements or other
material expenditures will have to be made in order to continue such
insurance or (ii) has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers at a cost that
could reasonably be expected not to have a Material Adverse Effect;
(vv) Except as disclosed in the Offering Memorandum, no relationship,
direct or indirect, exists between or among the Partnership or any of
its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Partnership or any of its
subsidiaries, on the other hand, which would be required by the Act to
be described in the Offering Memorandum if the Offering Memorandum were
a prospectus included in a registration statement on Form S-1 filed
with the Commission.
(ww) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the
Partnership or any of its subsidiaries before the National Labor
Relations Board or any state or local labor relations board, (ii)
strike, labor dispute, slowdown or stoppage pending or threatened
against the Partnership or any of its subsidiaries or (iii) union
representation question existing with respect to the employees of the
Partnership or any of its subsidiaries, except in the case of clauses
(i), (ii) and (iii) for such actions which, singly or in the aggregate,
could reasonably be expected not to have a Material Adverse Effect. To
the best knowledge of the Partnership, no collective bargaining
organizing activities are taking place with respect to the Partnership
or any of its subsidiaries.
(xx) The Issuers and each of their subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(yy) All material tax returns required to be filed by the Issuers and
each of their subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material
taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Issuers or any of their
subsidiaries have been paid, other than those being contested in good
faith and for which adequate reserves have been provided. There are no
transfer taxes or other similar fees or charges under Federal law or
the laws of any state, or any political subdivision thereof, required
to paid in connection with the execution and delivery of this Agreement
or the issuance and sale of the Notes.
20
(zz) All indebtedness of the Partnership that will be repaid with the
proceeds of the issuance and sale of the Series A Notes was incurred,
and the indebtedness represented by the Series A Notes is being
incurred, for proper purposes and in good faith and each of the Issuers
and the Subsidiary Guarantors was, at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance
and sale of the Series A Notes, and will be on the Closing Date (after
giving effect to the application of the proceeds from the issuance of
the Series A Notes) solvent, and had at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance
and sale of the Series A Notes and will have on the Closing Date (after
giving effect to the application of the proceeds from the issuance of
the Series A Notes) sufficient capital for carrying on their respective
business and were, at the time of the incurrence of such indebtedness
that will be repaid with the proceeds of the issuance and sale of the
Series A Notes, and will be on the Closing Date (after giving effect to
the application of the proceeds from the issuance of the Series A
Notes) able to pay their respective debts as they mature.
(aaa) No action has been taken and no law, statute, rule or regulation
or order has been enacted, adopted or issued by any governmental agency
or body which prevents the execution, delivery and performance of any
of the Operative Documents, or the issuance of the Series A Notes or
the Series A Guarantees, or suspends the sale of the Series A Notes or
the Series A Guarantees in any jurisdiction referred to in Section
5(e); and no injunction, restraining order or other order or relief of
any nature by a federal or state court or other tribunal of competent
jurisdiction has been issued with respect to the Issuers or any of
their subsidiaries which would prevent or suspend the issuance or sale
of the Series A Notes or the Series A Guarantees in any jurisdiction
referred to in Section 5(e).
The Issuers acknowledge that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Issuers and the Subsidiary Guarantors and counsel to the
Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. Initial Purchasers' Representations and Warranties. Each of the Initial
Purchasers, severally and not jointly, represents and warrants to each
of the Issuers and the Subsidiary Guarantors, and agrees that:
(a) Such Initial Purchaser is a QIB with such knowledge and experience
in financial and business matters as is necessary in order to evaluate
the merits and risks of an investment in the Series A Notes;
(b) Such Initial Purchaser (A) is not acquiring the Series A Notes with
a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that
would violate the Act or the securities laws of any state of the United
States or any other applicable jurisdiction and (B) will be reoffering
and reselling the Series A Notes only to (x) QIBs in reliance on the
exemption from the registration requirements of the Act provided by
Rule 144A, and (y) in offshore transactions in reliance upon
Regulation S under the Act;
21
(c) Such Initial Purchaser agrees that no form of general solicitation
or general advertising (within the meaning of Regulation D under the
Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A
Notes pursuant hereto, including, but not limited to, articles, notices
or other communications published in any newspaper, magazine or similar
medium or broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising;
(d) Such Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Series A
Notes only from, and will offer to sell the Series A Notes only to,
Eligible Purchasers. Each Initial Purchaser further agrees that it will
offer to sell the Series A Notes only to, and will solicit offers to
buy the Series A Notes only from (A) Eligible Purchasers that the
Initial Purchaser reasonably believes are QIBs, and (B) Regulation S
Purchasers, in each case, that will be deemed to have agreed that (x)
the Series A Notes purchased by them may be offered, resold, pledged or
otherwise transferred, only (i) to the Partnership, GulfTerra Finance,
or any subsidiary of the Partnership, (ii) in the United States to a
person whom the seller reasonably believes is a Qualified Institutional
Buyer (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A, (iii) outside the
United States in an offshore transaction in accordance with Rule 904
under the Securities Act, (iv) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder
(if available) or (v) pursuant to an effective registration statement
under the Securities Act, in each of cases (i) through (v) in
accordance with any applicable securities laws of any state of the
United States, and (y) they will deliver to each person to whom such
Series A Notes or an interest therein is transferred a notice
substantially to the effect of the foregoing;
(e) Such Initial Purchaser and its affiliates or any person acting on
its or their behalf have not engaged or will not engage in any directed
selling efforts within the meaning of Regulation S with respect to the
Series A Notes or the Series A Guarantees;
(f) The Series A Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S have been and will be
offered and sold only in offshore transactions;
(g) The sale of the Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act;
(h) Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Series A Notes in the United States or to,
or for the benefit or account of, a U.S. Person (other than a
distributor), in each case, as defined in Rule 902 under the Act (i) as
part of its distribution at any time and (ii) otherwise until 40 days
after the later of the commencement of the offering of the Series A
Notes pursuant hereto and the Closing Date, other than in accordance
with Regulation S of the Act or another exemption from the registration
requirements of the Act. Such Initial Purchaser agrees that, during
such 40-day restricted period, it will not cause any advertisement with
respect to the Series A
22
Notes (including any "tombstone" advertisement) to be published in any
newspaper or periodical or posted in any public place and will not
issue any Memorandum relating to the Series A Notes, except such
advertisements as are permitted by and include the statements required
by Regulation S;
(i) Such Initial Purchaser agrees that, at or prior to confirmation of
a sale of Series A Notes by it to any distributor, dealer or person
receiving a selling concession, fee or other remuneration during the
40-day restricted period referred to in Rule 903(b) under the Act, it
will send to such distributor, dealer or person receiving a selling
concession, fee or other remuneration a confirmation or notice to
substantially the following effect:
"The Series A Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered and sold within the
United States or to, or for the account or benefit of, U.S.
persons (i) as part of your distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the Offering and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act (or Rule
144A or to institutional accredited investors as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act, in
transactions that are exempt from the registration
requirements of the Securities Act), and in connection with
any subsequent sale by you of the Series A Notes covered
hereby in reliance on Regulation S during the period referred
to above to any distributor, dealer or person receiving a
selling concession, fee or other remuneration, you must
deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in
Regulation S."; and
(j) Such initial purchaser:
(i) has not offered or sold and, prior to the date six months
after the date of issuance of the Series A Notes, will not
offer or sell any notes to persons in the United Kingdom
except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities
Regulations 1995 (as amended);
(ii) has only communicated or caused to be communicated and
will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services
and Markets Act 2000 received by it in connection with the
issue or sale of any Series A Notes in circumstances in which
Section 21(1) of the Financial Services and Markets Act 2000
does not apply to us or the guarantors; and
(iii) has complied and will comply with all applicable
provisions of the Financial Services and Markets Act 2000 with
respect to anything done by it in relation to the Series A
Notes in, from or otherwise involving the United Kingdom.
23
Each Initial Purchaser acknowledges that the Issuers and the Subsidiary
Guarantors and, for purposes of the opinions to be delivered to each Initial
Purchaser pursuant to Section 9 hereof, counsel to the Issuers and the
Subsidiary Guarantors and counsel to the Initial Purchasers will rely upon the
accuracy and truth of the foregoing representations and the Initial Purchasers
hereby consent to such reliance.
8. Indemnification.
(a) Each of the Issuers and each Subsidiary Guarantor agree, jointly
and severally, to indemnify and hold harmless the Initial Purchasers,
their directors, affiliates, their officers and each person, if any,
who controls such Initial Purchasers 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 judgments (including,
without limitation, any legal or other expenses incurred in connection
with investigating or defending any matter, including any action, that
could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto) or any information provided by the
Issuers or any Subsidiary Guarantor to any holder or prospective
purchaser of Series A Notes pursuant to Section 5(f), or caused by 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, except insofar as such losses, claims, damages, liabilities
or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
the Initial Purchasers furnished in writing to the Issuers by such
Initial Purchaser (and not with respect to the information provided by
any other Initial Purchaser).
(b) The Initial Purchasers agree, severally and not jointly, to
indemnify and hold harmless the Issuers and the Subsidiary Guarantors,
and their respective directors and officers and each person, if any,
who controls (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Issuers or the Subsidiary Guarantors, to the
same extent as the foregoing indemnity from the Issuers and the
Subsidiary Guarantors to the Initial Purchasers but only with reference
to information relating to the Initial Purchaser furnished in writing
to the Issuers by such Initial Purchaser expressly for use in the
Offering Memorandum and not with respect to the information provided by
any other Initial Purchaser.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or
8(b) (the "indemnified party"), the indemnified party shall promptly
notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party shall
assume the defense of such action, including the employment of counsel
reasonably satisfactory to the indemnified party and the payment of all
fees and expenses of such counsel, as incurred (except that in the case
of any action in respect of which indemnity may be sought pursuant to
both Sections 8(a) and 8(b), the Initial Purchasers shall not be
required to assume the defense of such action pursuant to this Section
8(c), but may employ separate counsel and participate in the defense
thereof, but the fees and expenses of such counsel, except as provided
below, shall be at the expense of the Initial Purchasers). Any
24
indemnified party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such
action or employ counsel reasonably satisfactory to the indemnified
party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised
by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not,
in connection with any one action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by J.P. Morgan Securities Inc., in the case of
the parties indemnified pursuant to Section 8(a), and by the Issuers,
in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified
party from and against any and all losses, claims, damages, liabilities
and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after
the indemnifying party shall have received a request from the
indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of
the indemnifying party) and, prior to the date of such settlement, the
indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could
have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability on claims that are or could have
been the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein,
then each 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 losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Issuers and the
Subsidiary Guarantors, on the one hand, and the Initial Purchasers on
the other hand from the offering of the Series A Notes or (ii) if the
allocation provided by clause 8(d)(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 8(d)(i) above but also
the relative fault of the
25
Issuers and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities
or judgments, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers and the Subsidiary
Guarantors, on the one hand and the Initial Purchasers, on the other
hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Series A Notes (after discounts and
commissions received by the Initial Purchasers, but before deducting
expenses) received by the Issuers, and the total discounts and
commissions received by the Initial Purchasers bear to the total price
to investors of the Series A Notes, in each case as set forth in the
table on the cover page of the Offering Memorandum. The relative fault
of the Issuers and the Subsidiary Guarantors, on the one hand, and the
Initial Purchasers, 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 Issuers or the
Subsidiary Guarantors, on the one hand, or the Initial Purchasers, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Issuers and the Subsidiary Guarantors, and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant
to this Section 8(d) were determined by pro rata allocation, even if
the Initial Purchasers were treated as one entity for such purpose, or
by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses incurred by such indemnified party in connection with
investigating or defending any matter, including any action, that could
have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, the
Initial Purchasers shall not be required to contribute any amount in
excess of the amount by which the total discounts and commissions
received by such Initial Purchasers exceeds the amount of any damages
which each Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the
respective principal amount of Series A Notes purchased by each of the
Initial Purchasers hereunder and not joint.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available
to any indemnified party at law or in equity.
9. Conditions of Initial Purchasers' Obligations. The obligations of each
of the Initial Purchasers to purchase the Series A Notes under this
Agreement are subject to the satisfaction of each of the following
conditions:
26
(a) All the representations and warranties of the Issuers and the
Subsidiary Guarantors contained in this Agreement shall be true and
correct in all material respects on the Closing Date with the same
force and effect as if made on and as of the Closing Date, provided
that the representations and warranties qualified by "materiality"
shall be true and correct on the Closing Date;
(b) On or after the date hereof, there shall not have occurred (i) any
downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended
review) for a possible change that either does not indicate the
direction of the possible change or indicates a negative change in, any
rating of the Issuers or any Subsidiary Guarantor or any securities of
the Issuers or any Subsidiary Guarantor (including, without limitation,
the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain
or negative direction) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Act, (ii) any change, nor shall any notice have been given of
any potential or intended change, in the outlook for any rating of the
Issuers or any Subsidiary Guarantor or any securities of the Issuers or
any Subsidiary Guarantor by any such rating organization and (iii) no
such rating organization shall have given notice that it has assigned
(or is considering assigning) a lower rating to the Notes than that on
which the Notes were marketed; (iv) any change in U.S. or international
financial, political or economic conditions or currency exchange rates
or exchange controls as would, in the judgment of J.P. Morgan
Securities Inc., be likely to prejudice materially the success of the
proposed issue, sale or distribution of the Notes, whether in the
primary market or in respect of dealings in the secondary market; (v)
any material suspension or material limitation of trading in securities
generally on the New York Stock Exchange or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Issuers on any exchange or in the
over-the-counter market; (vi) any banking moratorium declared by U.S.
Federal or New York authorities; (vii) any major disruption of
settlements of securities or clearance services in the United States or
(viii) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency
if, in the judgment of J.P. Morgan Securities Inc., the effect of any
such attack, outbreak, escalation, act, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with
completion of the offering or sale of and payment for the Series A
Notes on the terms and in the manner contemplated in the Offering
Memorandum.
(c) Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any change
or any development involving a prospective change in the condition,
financial or otherwise, or the earnings, business, management or
operations of the Partnership and its subsidiaries and GulfTerra
Finance, taken as a whole, (ii) there shall not have been any change or
any development involving a prospective change in the capital stock,
limited liability company interests or partnership units, as
applicable, or in the long-term debt of the Issuers or any of their
subsidiaries and
27
(iii) neither the Issuers nor any of their subsidiaries shall have
incurred any liability or obligation, direct or contingent, the effect
of which, in any such case described in clause 9(c)(i), 9(c)(ii) or
9(c)(iii), in your judgment, is material and adverse and, in your
judgment, makes it or impracticable or inadvisable to proceed with the
completion of the offering and sale and payment for market the Series A
Notes on the terms and in the manner contemplated in the Offering
Memorandum;
(d) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by the President or a Senior Vice President and
the Chief Financial Officer of the Partnership and GulfTerra Finance
and each of the Subsidiary Guarantors, confirming the matters set forth
in Sections 6(cc), 9(a) and 9(b)(i), (ii) and (iii) and stating that
each of the Issuers and the Subsidiary Guarantors has complied with all
the agreements and satisfied all of the conditions herein contained and
required to be complied with or satisfied on or prior to the Closing
Date;
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the
Closing Date, of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel for
the Issuers and the Subsidiary Guarantors, to the effect that:
(i) Each of the Partnership and its Restricted Subsidiaries
(other than any business trust) and GulfTerra Finance, as
applicable, has been duly formed or incorporated and is
validly existing as a partnership, corporation or limited
liability company and in good standing (other than any general
partnership) under the laws of its jurisdiction of formation
or incorporation and has the partnership, corporate or limited
liability company power and authority to conduct its business
and to own, lease and operate its properties, in each case as
described in the Offering Memorandum;
(ii) Each of the Partnership and its Restricted Subsidiaries
(other than general partnerships) and GulfTerra Finance, as
applicable, is duly qualified or registered to do business as
a foreign limited partnership, corporation, limited liability
company or business trust, as the case may be, and, based
solely on the various certificates from public officials of
Texas, Louisiana, Mississippi, New Mexico, Massachusetts,
Nevada and Alabama (the "Good Standing Certificates"), is in
good standing as a foreign limited partnership, corporation,
limited liability company or business trust authorized to do
business in the respective jurisdictions listed on Schedule D
hereto;
(iii) The General Partner has been duly formed and is validly
existing and in good standing as a limited liability company
under the laws of the State of Delaware with full company
power and authority to carry on its businesses; to own, lease
and operate its properties; and to act as the general partner
of the Partnership in all material respects as described in
the Offering Memorandum. The General Partner is duly qualified
and, based solely on the Good Standing Certificates, is in
good standing as a foreign limited liability company
authorized to do business in the jurisdictions listed on
Schedule D hereto;
28
(iv) The General Partner is the sole general partner of the
Partnership and owns (of record) a 1.0% general partner
interest in the Partnership;
(v) the Series A Notes have been duly authorized by each of
the Issuers and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Initial Purchasers in accordance with the terms of
this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the
Issuers, enforceable in accordance with their terms except as
may be limited by (i) applicable bankruptcy, insolvency,
fraudulent transfer and conveyance, reorganization, moratorium
and similar laws affecting creditors' rights and remedies
generally; (ii) general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity); (iii) commercial
reasonableness and unconscionability and an implied covenant
of good faith and fair dealing; (iv) the power of the courts
to award damages in lieu of equitable remedies; and (v)
securities laws and public policy underlying such laws with
respect to rights to indemnification and contribution (the
"General Exceptions");
(vi) The Series A Guarantees have been duly authorized and,
when the Series A Notes are executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, the Series A Guarantees endorsed
by the notations on the Series A Notes will be entitled to the
benefits of the Indenture and will be valid and binding
obligations of the Subsidiary Guarantors, enforceable in
accordance with their terms except as may be limited by the
General Exceptions;
(vii) The Series B Guarantees have been duly authorized and,
when the Series B Notes are executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, the Series B Guarantees endorsed
by the notations on the Series B Notes will be entitled to the
benefits of the Indenture and will be valid and binding
obligations of the Subsidiary Guarantors, enforceable in
accordance with their terms except as may be limited by the
General Exceptions;
(viii) The Indenture has been duly authorized, executed and
delivered by each of the Issuers and each Subsidiary Guarantor
and is a valid and binding agreement of each of the Issuers
and each Subsidiary Guarantor, enforceable against each of the
Issuers and each Subsidiary Guarantor in accordance with its
terms except as may be limited by the General Exceptions;
(ix) This Agreement has been duly authorized, executed and
delivered by each of the Issuers and the Subsidiary
Guarantors;
29
(x) The Registration Rights Agreement has been duly
authorized, executed and delivered by each of the Issuers and
the Subsidiary Guarantors and is a valid and binding agreement
of each of the Issuers and each Subsidiary Guarantor,
enforceable against each of the Issuers and each Subsidiary
Guarantor in accordance with its terms, except as may be
limited by the General Exceptions;
(xi) The Series B Notes have been duly authorized by each of
the Issuers;
(xii) The statements under the captions "Description of
Notes," "Description of Other Indebtedness," "United States
Federal Income and Estate Tax Considerations" and "Plan of
Distribution" in the Offering Memorandum, insofar as such
statements purport to constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly
present in all material respects such legal matters, documents
and proceedings;
(xiii) To the knowledge of such counsel, neither the
Partnership nor any of its Restricted Subsidiaries nor
GulfTerra Finance is in violation of its respective
partnership agreement, limited liability company agreement,
charter or by-laws or other organizational documents, as
applicable and, neither the Partnership nor any of its
subsidiaries nor GulfTerra Finance is in default in the
performance of any obligation, agreement, covenant or
condition contained in any of the material agreements attached
as exhibits to the Partnership's 2002 Annual Report on Form
10-K or any Current Report on Form 8-K or Quarterly Report on
Form 10-Q filed since January 1, 2003 (the "Material
Agreements");
(xiv) The execution, delivery and performance of this
Agreement and the other Operative Documents by each of the
Issuers and each of the Subsidiary Guarantors, the compliance
by each of the Issuers and each of the Subsidiary Guarantors
with all provisions hereof and thereof and the consummation by
the Issuers and the Subsidiary Guarantors, of the transactions
contemplated by this Agreement and the other Operative
Documents will not, to the knowledge of such counsel, (i)
require any consent, approval, authorization, filing with or
other order of, or qualification with, any court or
governmental body or agency (except (x) such as may be
required under the securities or Blue Sky laws of the various
states or, with respect to the proposed offer to exchange the
Exchange Notes for the Notes, the federal securities laws or
the TIA, (y) routine corporate, partnership and limited
liability company filings required after the date thereof, and
(z) routine filings under the Exchange Act), (ii) conflict
with or constitute a breach of any of the terms or provisions
of, or a default under, the partnership agreement, limited
liability company agreement, charter or by-laws or other
organizational documents, as applicable, of the Partnership or
any of its Restricted Subsidiaries or GulfTerra Finance or any
Material Agreement, or (iii) result in the imposition or
creation of (or the obligation to create or impose) a Lien
under any Material Agreement; and except that such counsel
need express no opinion regarding antifraud provisions of
federal or state securities or blue sky laws with respect to
clause (i) of this paragraph (xiii);
30
(xv) Neither of the Issuers is and, after giving effect to the
offering and sale of the Series A Notes and the application of
the net proceeds thereof as described in the Offering
Memorandum, neither of the Issuers will be, an "investment
company" as such term is defined in the Investment Company Act
of 1940, as amended;
(xvi) To the knowledge of such counsel, there are no
contracts, agreements or understandings between the
Partnership, GulfTerra Finance, any Subsidiary Guarantor and
any person granting such person the right to require the
Partnership, GulfTerra Finance or such Subsidiary Guarantor to
file a registration statement under the Act with respect to
any securities of the Partnership, GulfTerra Finance or such
Subsidiary Guarantor (other than the rights (i) of the General
Partner and its affiliates in Section 6.14 of the Partnership
Agreement and in the Series C RRA; (ii) of EPEC Deepwater
Gathering Company and its successors pursuant to a
registration rights agreement between EPEC Deepwater Gathering
Company and the Partnership executed in connection with the
acquisition by the Partnership of an additional interest in
Viosca Knoll Gathering Company; (iii) of Crystal Gas Storage,
Inc. pursuant to the registration rights agreement between
Crystal Gas Storage, Inc. and the Partnership which was
executed in connection with the acquisition by the Partnership
of the Crystal storage facilities; provided, however, that
with respect to (i), (ii) and (iii) above, such rights have
been waived in connection with any Registration Statement
filed pursuant to the Registration Rights Agreement; (iv)
granted under the Credit Facility and the GulfTerra Holding
Term Loan and related agreements; and (v) granted under the
Registration Rights Agreement); and to the knowledge of such
counsel there are no contracts, agreements or understandings
between the Partnership, GulfTerra Finance or any Subsidiary
Guarantor and any person granting such person the right to
require the Partnership, GulfTerra Finance or such Subsidiary
Guarantor include such securities with the Notes and
Guarantees registered pursuant to any Registration Statement
other than the rights of the General Partner and its
affiliates in Section 6.14 of the Partnership Agreement and in
the Series C RRA (which rights have been waived in connection
with any Registration Statement filed pursuant to the
Registration Rights Agreement).
(xvii) The Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which
is qualified thereunder. It is not necessary in connection
with the offer, sale and delivery of the Series A Notes to the
Initial Purchasers in the manner contemplated by this
Agreement or in connection with the initial placement of the
Series A Notes by the Initial Purchasers in the manner
contemplated by the Offering Memorandum pursuant to Exempt
Resales to qualify the Indenture under the TIA (it being
understood that such counsel need express no opinion as to any
other offer or sale);
(xviii) No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial
Purchasers as contemplated by this Agreement or for the Exempt
Resales assuming that (i) each Initial Purchaser is a QIB, or
a
31
Regulation S Purchaser, (ii) the accuracy of, and compliance
with, the Initial Purchasers' representations and agreements
contained in Section 7 of this Agreement and (iii) the
accuracy of the representations and agreements of each of the
Issuers and the Subsidiary Guarantors set forth in Sections
5(f) and (k) and 6(dd), (gg), (hh), (jj), (kk), (ll) and (mm)
of this Agreement;
(xix) The Offering Memorandum, as of its date, and each
amendment or supplement thereto, as of its date, complied as
to form in all material respects with the applicable
requirements of Rule 144A(d)(4) of the Act (it being
understood that such counsel need express no opinion with
respect to this paragraph (xix) regarding the financial
statements and the notes thereto, oil and gas reserve
information and the schedules and other financial data
included in the Offering Memorandum);
(xx) A court applying Texas conflict of laws rules in a
properly presented and argued case should give effect to the
express choice of law provisions contained in the Operative
Documents to the extent that such provisions provide that the
laws of the State of New York are to govern issues under the
Operative Documents.
In addition, such counsel shall include a statement in such opinion
letter to the effect that although such counsel has not undertaken,
except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy
or completeness of the statements in the Offering Memorandum, such
counsel has participated in the preparation of the Offering Memorandum
and any amendments or supplements thereto, including review and
discussion of the contents thereof, and nothing has come to the
attention of such counsel that has caused them to believe that, as of
the date of the Offering Memorandum or as of the Closing Date, the
Offering Memorandum, as amended or supplemented, if applicable,
contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no opinion with respect to the financial statements and
notes thereto, oil and gas reserve information and the schedules and
other financial data included in the Offering Memorandum).
The opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. described in
Section 9(e) above (i) may be subject to customary qualifications,
assumptions and limitations and (ii) shall be rendered to you at the
request of the Issuers and the Subsidiary Guarantors and shall so state
therein.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of Gregory W. Jones, counsel for the
Partnership, to the effect that:
(i) except as set forth in the Offering Memorandum, such
counsel does not know of any legal or governmental proceedings
pending or threatened to which the Partnership or any of its
Restricted Subsidiaries or GulfTerra Finance is a party or to
which any of their respective property is subject, except for
those
32
which, singly or in the aggregate, could reasonably be
expected not to result in a Material Adverse Effect;
(ii) The execution, delivery and performance of this Agreement
and the other Operative Documents by each of the Issuers and
each of the Subsidiary Guarantors, the compliance by each of
the Issuers and each of the Subsidiary Guarantors with all
provisions hereof and thereof and the consummation by the
Issuers and the Subsidiary Guarantors, of the transactions
contemplated by this Agreement and the other Operative
Documents will not, to the knowledge of such counsel, (A)
violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the
Partnership, any of its Restricted Subsidiaries or GulfTerra
Finance or their respective property or (B) result in the
termination, suspension or revocation of any Authorization of
the Partnership or any of its Restricted Subsidiaries or
GulfTerra Finance or result in any other impairment of the
rights of the holder of any such Authorization, except for
those which, singly or in the aggregate, could reasonably be
expected not to result in a Material Adverse Effect; and
except that such counsel need express no opinion regarding
antifraud provisions of federal or state securities or blue
sky laws with respect to clause (A) of this paragraph (B);
(iii) To the knowledge of such counsel, (A) each of the
Partnership and its Restricted Subsidiaries and GulfTerra
Finance has such Authorizations of, and has made all filings
with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts
and other tribunals, including without limitation, under any
applicable Environmental Laws, as are necessary to own, lease,
license and operate its respective properties and to conduct
its business, except where the failure to have any such
Authorization or to make any such filing or notice could,
singly or in the aggregate, reasonably be expected not to have
a Material Adverse Effect; (B) each such Authorization known
to us is valid and in full force and effect and, to the
knowledge of such counsel, each of the Partnership and its
Restricted Subsidiaries and GulfTerra Finance is in compliance
with all the terms and conditions thereof and with the rules
and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; (C) no event has occurred
(including the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time
or both, would allow, revocation, suspension or termination of
any such Authorization or results or, after notice or lapse of
time or both, would result in any other material impairment of
the rights of the holder of any such Authorization; and (D)
such Authorizations contain no restrictions that are
materially burdensome to the Partnership or any of its
Restricted Subsidiaries or GulfTerra Finance; except in the
case of (A) through (D) above those which could reasonably be
expected not to, singly or in the aggregate, have a Material
Adverse Effect; and
(iv) Neither the General Partner nor the Partnership is a
"holding company" or, after giving effect to the offering and
sale of the Series A Notes and the
33
application of the proceeds thereof as described in the
Offering Memorandum will be a "holding company," within the
meaning of, or subject to regulation under, the Public Holding
Utility Company Act of 1935, as amended, and the rules and
regulations promulgated by the Commission thereunder.
(g) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of Simpson Thacher & Bartlett LLP,
counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(h) The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers containing the information and
statements of the type ordinarily included in accountants' "comfort
letters" to the Initial Purchasers from PricewaterhouseCoopers LLP,
independent public accountants, with respect to the financial
statements of the Issuers and their subsidiaries, and certain financial
information contained in the Offering Memorandum.
(i) The Initial Purchasers shall have received, at the time of this
Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from Netherland & Sewell.
(j) The Series A Notes shall have been approved by the NASD for trading
and duly listed in PORTAL.
(k) The Issuers, the Subsidiary Guarantors and the Trustee shall have
executed the Indenture.
(l) The Issuers and the Subsidiary Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have
received an original copy thereof, duly executed by the Issuers and the
Subsidiary Guarantors.
(m) Neither the Issuers nor the Subsidiary Guarantors shall have failed
at or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied
with by each of the Issuers or the Subsidiary Guarantors, as the case
may be, at or prior to the Closing Date.
10. Effectiveness of Agreement and Termination. This Agreement shall become
effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchasers by written notice to the Issuers if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in any of the
Initial Purchasers' judgment, is material and adverse and, in any of the Initial
Purchasers' judgment, makes it impracticable or inadvisable to proceed with the
completion of the offering and sale and payment for the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago
34
Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of
Trade or the Nasdaq National Market or limitation on prices for securities or
other instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Issuers or any Subsidiary
Guarantor on any exchange or in the over-the-counter market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business, prospects, financial condition or results of operations of
the Issuers and their subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase the Series A Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Series
A Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased on such
date by all Initial Purchasers, each non-defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount of the Series
A Notes set forth opposite its name in Schedule B bears to the aggregate
principal amount of the Series A Notes which all the non-defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Series A Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial Purchaser
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount of
the Series A Notes without the consent of such Initial Purchaser. If on the
Closing Date any Initial Purchaser or Initial Purchasers shall fail or refuse to
purchase the Series A Notes and the aggregate principal amount of the Series A
Notes with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of the Series A Notes to be purchased by all Initial
Purchasers and arrangements satisfactory to the Initial Purchasers and the
Issuers for purchase of such Series A Notes are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Initial Purchaser and the Issuers. In any such case which does
not result in termination of this Agreement, either you or the Issuers 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 Offering
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Issuers by written notice to the Initial Purchasers if, there is a
failure to obtain any consent or waiver under, or amendment of, the Credit
Facility, that is required in order for the issuance of the Notes to not
constitute a default thereunder.
35
11. Miscellaneous.
(a) Notices given pursuant to any provision of this Agreement shall be
addressed as follows:
(i) if to the Issuers or any Subsidiary Guarantor, to:
GulfTerra Energy Partners, L.P.
4 Greenway Plaza
Houston, Texas 77046
Attention: Chief Financial Officer;
With a copy to (which shall not constitute notice):
Akin Gump Strauss Hauer & Feld, LLP
1900 Pennzoil Place, South Tower
711 Louisiana Street
Houston, Texas 77002
Attention: J. Vincent Kendrick
(ii) if to the Initial Purchasers, to:
J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Attention: Lawrence Landry
or in any case to such other address as the person to be notified may
have requested in writing.
(b) The respective indemnities, contribution agreements,
representations, warranties and other statements of the Issuers, the
Subsidiary Guarantors and the Initial Purchasers, set forth in or made
pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Series A
Notes, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Initial Purchasers, the
officers or directors of the Initial Purchasers, any person controlling
the Initial Purchasers, the Issuers, any Subsidiary Guarantor, the
officers or directors of the Issuers or any Subsidiary Guarantor, or
any person controlling the Issuers or any Subsidiary Guarantor, (ii)
acceptance of the Series A Notes and payment for them hereunder and
(iii) termination of this Agreement.
(c) If for any reason the Series A Notes are not delivered by or on
behalf of the Issuers as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Issuers and
each Subsidiary Guarantor, jointly and severally, agree to reimburse
the Initial Purchasers for all out-of-pocket expenses (including the
fees and disbursements of counsel) incurred by them. Notwithstanding
any termination of this Agreement, the Issuers shall be liable for all
expenses which they have agreed to pay
36
pursuant to Section 5(i) hereof. Each of the Issuers and each
Subsidiary Guarantor also agrees, jointly and severally, to reimburse
each of the Initial Purchasers and its officers, directors and each
person, if any, who controls such Initial Purchasers within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act for any and
all fees and expenses (including without limitation the fees and
expenses of counsel) incurred by them in connection with enforcing
their rights under this Agreement (including without limitation its
rights under Section 8).
(d) Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Partnership,
GulfTerra Finance, the Subsidiary Guarantors, the Initial Purchasers,
each of the Initial Purchasers' affiliates, directors and officers, any
controlling persons referred to herein, the directors of the Issuers
and the Subsidiary Guarantors and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Series A Notes from the Initial Purchasers
merely because of such purchase.
(e) This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
(f) This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
(Signatures Page Follows)
37
Please confirm that the foregoing correctly sets forth the agreement
among the Partnership, GulfTerra Finance, the Subsidiary Guarantors and the
Initial Purchasers.
Very truly yours,
Issuers:
GULFTERRA ENERGY PARTNERS, L.P.
By: /s/ Keith Forman
------------------------------------
Name: Keith Forman
Title: Vice President and Chief
Financial Officer
GULFTERRA ENERGY FINANCE CORPORATION
By: /s/ Keith Forman
------------------------------------
Name: Keith Forman
Title: Vice President and Chief
Financial Officer
38
Subsidiary Guarantors:
CAMERON HIGHWAY PIPELINE GP, L.L.C.*
CAMERON HIGHWAY PIPELINE I, L.P.*
CRYSTAL HOLDING, L.L.C.*
FIRST RESERVE GAS, L.L.C.*
FLEXTREND DEVELOPMENT COMPANY, L.L.C.*
GULFTERRA ALABAMA INTRASTATE, L.L.C.*
GULFTERRA FIELD SERVICES, L.L.C.*
GULFTERRA GC, L.P.*
GULFTERRA HOLDING I, L.L.C.*
GULFTERRA HOLDING II, L.L.C.*
GULFTERRA HOLDING III, L.L.C.*
GULFTERRA HOLDING IV, L.P.*
GULFTERRA HOLDING V, L.P.*
GULFTERRA INTRASTATE, L.P.*
GULFTERRA NGL STORAGE, L.L.C.*
GULFTERRA OIL TRANSPORT, L.L.C.
GULFTERRA OPERATING COMPANY, L.L.C.*
GULFTERRA SOUTH TEXAS, L.P.*
GULFTERRA TEXAS PIPELINE, L.P*.
HATTIESBURG GAS STORAGE COMPANY
By: FIRST RESERVE GAS, L.L.C., in its capacity as 50%
general partner of Hattiesburg Gas Storage Company*
By: HATTIESBURG INDUSTRIAL GAS SALES, L.L.C., in its
capacity as 50% general partner of Hattiesburg Gas
Storage Company*
HATTIESBURG INDUSTRIAL GAS SALES, L.L.C.*
HIGH ISLAND OFFSHORE SYSTEM, L.L.C.
By: GULFTERRA ENERGY PARTNERS, L.P.,
its sole member*
MANTA RAY GATHERING COMPANY, L.L.C.*
PETAL GAS STORAGE, L.L.C.*
POSEIDON PIPELINE COMPANY, L.L.C.*
*By: /s/ Keith Forman
---------------------------------------------
Name: Keith Forman
Title: Vice President and Chief Financial Officer
39
Initial Purchasers:
J.P. MORGAN SECURITIES INC.
BANC ONE CAPITAL MARKETS, INC.
BNP PARIBAS SECURITIES CORP.
CREDIT LYONNAIS SECURITIES (USA) INC.
CREDIT SUISSE FIRST BOSTON LLC
FORTIS INVESTMENT SERVICES LLC
THE ROYAL BANK OF SCOTLAND PLC
SCOTIA CAPITAL (USA) INC.
SUNTRUST CAPITAL MARKETS, INC.
WACHOVIA SECURITIES, LLC
By: J.P. MORGAN SECURITIES INC.
By: /s/ Adam Bernard
----------------------------------------
Title: Vice President
40
SCHEDULE A
SUBSIDIARY GUARANTORS
PART 1
Cameron Highway Pipeline GP, L.L.C.
Cameron Highway Pipeline I, L.P.
Crystal Holding, L.L.C.
First Reserve Gas, L.L.C.
Flextrend Development Company, L.L.C.
GulfTerra Alabama Intrastate, L.L.C.
GulfTerra Field Services, L.L.C.
GulfTerra GC, L.P.
GulfTerra Holding I, L.L.C.
GulfTerra Holding II, L.L.C.
GulfTerra Holding III, L.L.C.
GulfTerra Holding IV, L.P.
GulfTerra Holding V, L.P.
GulfTerra Intrastate, L.P.
GulfTerra NGL Storage, L.L.C.
GulfTerra Oil Transport, L.L.C.
GulfTerra Operating Company, L.L.C.
GulfTerra South Texas, L.P.
GulfTerra Texas Pipeline, L.P.
Hattiesburg Gas Storage Company
Hattiesburg Industrial Gas Sales, L.L.C.
High Island Offshore System, L.L.C.
Manta Ray Gathering Company, L.L.C.
Petal Gas Storage, L.L.C.
Poseidon Pipeline Company, L.L.C.
PART 2
Chaco Liquids Plant Trust
El Paso Energy Warwick I Company, L.P.
El Paso Energy Warwick II Company, L.P.
El Paso Offshore Gathering and Transmission, L.P.
EPN Gathering and Treating Company, L.P.
EPN Gathering and Treating GP Holdings, L.L.C.
Warwick Gathering and Treating Company
Schedule A - Page 1
SCHEDULE B
<Table>
<Caption>
Principal
Amount
Initial Purchaser of Notes
- ----------------- ------------
J.P. Morgan Securities Inc................................................................ $ 96,875,000
Credit Suisse First Boston LLC............................................................ 96,875,000
Wachovia Securities, LLC.................................................................. 12,500,000
Banc One Capital Markets, Inc............................................................. 6,250,000
BNP Paribas Securities Corp............................................................... 6,250,000
Credit Lyonnais Securities (USA) Inc...................................................... 6,250,000
Fortis Investment Services LLC............................................................ 6,250,000
Scotia Capital (USA) Inc.................................................................. 6,250,000
SunTrust Capital Markets, Inc............................................................. 6,250,000
The Royal Bank of Scotland plc............................................................ 6,250,000
Total..................................................................................... $250,000,000
============
</Table>
Schedule B - Page 1
SCHEDULE C
<Table>
<Caption>
JURISDICTION OF
ENTITY NAME FORMATION OWNERSHIP
----------- --------------- ---------
Arizona Gas Storage, L.L.C. Delaware 60%
Chaco Liquids Plant Trust Massachusetts 100%
Crystal Holding, L.L.C. Delaware 100%
GulfTerra Intrastate, L.P. Delaware 100%
GulfTerra Oil Transport, L.L.C. Delaware 100%
GulfTerra Operating Company, L.L.C. Delaware 100%
El Paso Energy Warwink I Company, L.P. Delaware 100%
El Paso Energy Warwink II Company, L.P. Delaware 100%
El Paso Offshore Gathering and Transmission, L.P. Delaware 100%
GulfTerra South Texas, L.P. Delaware 100%
GulfTerra Texas Pipeline, L.P. Delaware 100%
GulfTerra Alabama Intrastate, L.L.C. Delaware 100%
GulfTerra Arizona Gas, L.L.C. Delaware 100%
GulfTerra Energy Finance Corporation Delaware 100%
GulfTerra Field Services, L.L.C. Delaware 100%
GulfTerra Gathering and Treating Company, L.P. Delaware 100%
EPN Gathering and Treating GP Holding, L.L.C. Delaware 100%
GulfTerra Holding I, L.L.C. Delaware 100%
GulfTerra Holding II, L.L.C. Delaware 100%
GulfTerra Holding III, L.L.C. Delaware 100%
GulfTerra Holding IV, L.P. Delaware 100%
GulfTerra Holding V, L.P. Delaware 100%
GulfTerra GC, L.P. Delaware 100%
GulfTerra NGL Storage, L.L.C. Delaware 100%
First Reserve Gas, L.L.C. Delaware 100%
Flextrend Development Company, L.L.C. Delaware 100%
Hattiesburg Gas Storage Company Delaware 100%
Hattiesburg Industrial Gas Sales, L.L.C. Delaware 100%
High Island Offshore System, L.L.C. Delaware 100%
Manta Ray Gathering Company, L.L.C. Delaware 100%
Petal Gas Storage, L.L.C. Delaware 100%
Poseidon Pipeline Company, L.L.C. Delaware 100%
Warwink Gathering and Treating Company Texas 100%
</Table>
Schedule C - Page 1
SCHEDULE D
<Table>
<Caption>
JURISDICTION OF FOREIGN QUALIFICATION
ENTITY NAME FORMATION JURISDICTIONS
----------- --------------- ---------------------
GulfTerra Energy Partners, L.P. Delaware Texas, Louisiana
GulfTerra Energy Company, L.L.C. Delaware Texas, Louisiana
Crystal Holding, L.L.C. Delaware --
GulfTerra Intrastate, L.P. Delaware Texas, Louisiana
GulfTerra Energy Finance Corporation Delaware Texas
GulfTerra Oil Transport, L.L.C. Delaware Texas, Louisiana
GulfTerra Operating Company, L.L.C. Delaware Texas, Louisiana,
Massachusetts, New Mexico
GulfTerra South Texas, L.P. Delaware Texas
GulfTerra Texas Pipeline, L.P. Delaware Texas
GulfTerra Alabama Intrastate, L.L.C. Delaware --
GulfTerra Field Services, L.L.C. Delaware Texas, Louisiana, New Mexico
GulfTerra Holding I, L.L.C. Delaware Texas
GulfTerra Holding II, L.L.C. Delaware Texas
GulfTerra GC, L.P. Delaware Texas, Louisiana, Alabama,
New Mexico
GulfTerra Holding III, L.L.C. Delaware Texas
GulfTerra Holding IV, L.P. Delaware Texas
GulfTerra Holding V, L.P. Delaware Texas
GulfTerra NGL Storage, L.L.C. Delaware Mississippi, Nevada
First Reserve Gas, L.L.C. Delaware Mississippi
Flextrend Development Company, L.L.C. Delaware Texas, Louisiana, Alabama
Hattiesburg Gas Storage Company Delaware --
Hattiesburg Industrial Gas Sales, L.L.C. Delaware Mississippi
High Island Offshore System, L.L.C. Delaware Texas, Louisiana
Manta Ray Gathering Company, L.L.C. Delaware Texas, Louisiana
Petal Gas Storage, L.L.C. Delaware Mississippi
Poseidon Pipeline Company, L.L.C. Delaware Texas
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Schedule D- Page 1
EXHIBIT A
Registration Rights Agreement
Filed as Exhibit 4.M to the Quarterly Report on Form 10-Q for the Company for
the quarter ended June 30, 2003.