e8vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 7, 2007
ENTERPRISE GP HOLDINGS L.P.
(Exact name of registrant as specified in its charter)
|
|
|
|
|
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
1-32610
(Commission File Number)
|
|
13-4297064
(I.R.S. Employer
Identification No.) |
1100 Louisiana, 10th Floor
Houston, Texas 77002
(Address of Principal Executive Offices, including Zip Code)
(713) 381-6500
(Registrants Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Unless the context requires otherwise, references to we, us, our, Partnership, or
Enterprise GP Holdings within the context of this Current Report on Form 8-K refer to Enterprise
GP Holdings L.P.
ETE Securities Purchase Agreement and Related Agreements
ETE Securities Purchase Agreement. On May 7, 2007, we entered into a Securities Purchase
Agreement (the ETE Purchase Agreement) by and among us, Natural Gas Partners VI, L.P. (NGP),
Ray C. Davis (Davis), Avatar Holdings, LLC (Avatar LLC), Avatar Investments, LP (Avatar LP),
Lon Kile (Kile), MHT Properties, Ltd. (MHT Properties) and P. Brian Smith Holdings, LP (Smith
Holdings), and LE GP, LLC, a Delaware limited liability company (the ETE General Partner),
pursuant to which we purchased Equity Units representing membership interests (the GP Interests)
of the ETE General Partner, which is the general partner of Energy Transfer Equity, L.P., a
Delaware limited partnership (ETE), from Davis and NGP, and common units representing limited
partner interests of ETE (ETE Common Units) from Davis, Avatar LLC, Avatar LP, NGP, Kile, MHT
Properties and Smith Holdings. Following the transaction, including a redemption of certain Equity
Units of the ETE General Partner in exchange for ETE Common Units, we own approximately 34.9% of
the membership interests in the ETE General Partner and 38,976,090 ETE Common Units representing
approximately 17.6% of the outstanding limited partner interests in ETE. The ETE General Partner
currently owns an approximate 0.3% general partner interest in ETE. We paid approximately $1.65
billion in cash to the sellers for these interests at the closing on May 7, 2007.
LE GP, LLC Amended and Restated Limited Liability Company Agreement. In connection with the
ETE Purchase Agreement, we entered into an Amended and Restated Limited Liability Company Agreement
of the ETE General Partner (the LE GP LLC Agreement). Pursuant to the LE GP LLC Agreement, we
have the right to acquire additional equity units representing membership interests of the ETE
General Partner (GP Equity Units) issued by the ETE General Partner in accordance with the
proportion of our membership interest to the total number of GP Equity Units outstanding as of the
date of the determination (the Sharing Ratio). In addition, we have a right of first refusal in
the event another member elects to sell all or a portion of its membership interest unless such
transfer is a permitted transfer under the LE GP LLC Agreement.
In addition, if any members owning 80% or more of the membership interests propose to transfer
80% or more of the outstanding membership interests, such members may at their option require all
members to transfer an amount equal to their Sharing Ratio multiplied by a fraction, the numerator
being the number of units proposed to be sold and the denominator being the total number of units
outstanding as of the date of such determination (the Drag-Along Right). If any members propose
to transfer 50% or more of the outstanding membership interests in a sale to a third party, then
each member may elect, at its option, to transfer an amount of its GP Equity Units to the third
party determined by multiplying its GP Equity Units by a fraction, the numerator of which is the
maximum number of GP Equity Units that the third party buyer is willing to purchase and the
denominator of which is the number of GP Equity Units held by all members electing to participate
in the sale (the Tag-Along Right).
In the event any member or its affiliates sells or otherwise disposes of at least 10% of the
ETE Common Units owned, directly or indirectly, by such member as of the date of the LE GP LLC
Agreement, other than through transfers to wholly-owned affiliates of such member, the other
members have the right to purchase a portion of the units held by such member (the Purchase
Option). The number of GP Equity Units that a member may purchase pursuant to the Purchase Option
will be equal to (i) a fraction, the numerator of which is the number of ETE Common Units sold and
the denominator of which is the number of ETE Common Units originally owned, directly or
indirectly, by such member as of the date of the LE GP LLC Agreement, multiplied by (ii) the GP
Equity Units originally owned by such member as of the date of the LE GP LLC Agreement. The
purchase price for GP Equity Units purchased pursuant to the Purchase Option will be based upon the
fair market value of the ETE Common Units during the ten trading days prior to the notice of the
Purchase Option.
Certain members of the ETE General Partner have a put option to require the ETE General
Partner to acquire all of their membership interests if (i) with respect to Davis, Warren ceases to
own at least 20% of the membership interests of the ETE General Partner, and (ii) with respect to
NGP, NGP ceases to own any ETE Common Units.
1
Unitholder Rights and Restrictions Agreement. In connection with the ETE Purchase Agreement,
we also entered into a Unitholder Rights and Restrictions Agreement, dated as of May 7, 2007 (the
ETE Unitholder Agreement), between ETE, us, Davis and NGP. Under this agreement, we, Davis and
NGP each agree not to transfer ETE Common Units held by the parties as of the date of this
agreement for a period of six months from the date of the agreement (the Initial Restricted
Period), and, with respect to 50% of such ETE Common Units, for twelve months after the date
immediately after the end of the Initial Restricted Period; provided, however, parties may (i) sell
or otherwise transfer their ETE Common Units to their respective affiliates that agree in writing
with ETE to be bound by the terms of this Agreement, (ii) pledge their ETE Common Units as security
for bona fide loans, letters of credit, interest rate or other hedging transactions and related
fees, costs, indemnities and other obligations from one or more third parties who are not
affiliates of such party, or (iii) sell all or a portion of their ETE Common Units, as a result of
any divestiture ordered by, or agreed to with, a Governmental Authority. These restrictions also
do not restrict or affect the manner of sale or other disposition of any ETE Common Units in
connection with any foreclosure or other disposition after default of a lender or other
counterparty in connection with the pledge of such securities for bona fide loans, letters of
credit, interest rate or other hedging transactions and related fees, costs, indemnities and other
obligations from one or more third parties who are not affiliates of such party.
After the Initial Restricted Period, we have certain demand and piggyback registration rights
with respect to the ETE Common Units acquired by us.
The ETE Unitholder Agreement provides that unless (i) we have the prior written consent of ETE
or (ii) we are making an offer and sale pursuant to an underwritten offering, we shall not sell, or
offer to sell, after the end of the Initial Restricted Period, ETE Common Units on the New York
Stock Exchange (NYSE) or any other public market upon which the ETE Common Units are then traded,
on any trading day in an amount in excess of 10% of the average daily trading volume of the ETE
Common Units on the NYSE, or such other market, for the previous ten trading days, or such other
amount as may be mutually agreed upon in writing by ETE and us.
The ETE Unitholder Agreement further provides that from the date of this agreement through the
date three years from the date of this agreement, we shall not, and agree to cause our Affiliates
not to, directly or indirectly without the prior written consent of the board of directors of the
ETE General Partner: (i) in any manner acquire, agree to acquire or make a proposal to acquire any
ETE Common Units or other securities or other property of ETE, Energy Transfer Partners, L.P.
(ETP) or any of their respective affiliates if such acquisition would cause us and our affiliates
to collectively own ETE Common Units in excess of 49.9% of the then outstanding ETE Common Units,
or (ii) form or join or in any way participate in a group (within the meaning of Section 13(d)(3)
of the Exchange Act) with respect to any voting securities of ETE, ETP or any of their respective
affiliates, other than a group consisting of one or more of the members of the general partner of
ETE or ETP or us and our affiliates.
Based on our equity ownership of ETE Common Units and membership interests in the ETE General
Partner acquired pursuant to the ETE Purchase Agreement, and the foregoing limitations and other
contractual rights under these transaction documents, we will not have any rights to exercise
control over ETE or the ETE General Partner.
Copies of the ETE Purchase Agreement, the LE GP LLC Agreement and the ETE Unitholder Agreement
are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K, respectively, and are
incorporated by reference into this Item 1.01.
TEPPCO Purchase Agreement and Related Agreements
TEPPCO Purchase Agreement. On May 7, 2007, we entered into a Securities Purchase Agreement
(the TEPPCO Purchase Agreement) by and among us, Duncan Family Interests, Inc. (DFI) and DFI GP
Holdings L.P. (DFIGP) pursuant to which (i) DFI contributed to us 4,400,000 common units
representing limited partner interests of TEPPCO Partners, L.P. (TEPPCO) and (ii) DFIGP
contributed to us 100% of the membership interests of Texas Eastern Products Pipeline Company, LLC,
the general partner of TEPPCO (TEPPCO GP). DFI and DFIGP are affiliates of EPE Holdings, LLC
(our General Partner) and indirect subsidiaries of EPCO, Inc., our indirect parent. EPCO, Inc.
is controlled by Dan L. Duncan, our Chairman.
Amendment No. 1 to Partnership Agreement. As consideration for the contributions of the
TEPPCO common units and the membership interests in the TEPPCO GP, we issued an aggregate of
14,173,304 Class B Units (Class B Units) and 16,000,000 Class C Units (the Class C Units) of
Enterprise GP Holdings to DFI and DFIGP. The Class B
2
Units and Class C Units were issued in accordance with an Amendment No. 1 (Amendment No. 1)
to our First Amended and Restated Agreement of Limited Partnership (the Partnership Agreement)
adopted by our General Partner in connection with the issuance of these securities in accordance
with Section 13.1(g) of the Partnership Agreement.
The Class B Units (i) entitle the holder to the allocation of Partnership income, gain, loss,
deduction and credit to the same extent as such items would be allocated to the holder if the Class
B Units were converted and outstanding common units, (ii) entitle the holder to share in our
distributions of available cash pursuant to Section 6.3 of our Partnership Agreement on a pro rata
basis, and (ii) are non-voting, except that, other than with respect to Class B conversion
approval, the Class B Units shall be entitled to vote as a separate class on any matter that
adversely affects the rights or preferences of the Class B Units in relation to other classes of
Partnership Interests (including as a result of a merger or consolidation) or as required by law.
The approval of a majority of the Class B Units is required to approve any matter for which the
holders of the Class B Units are entitled to vote as a separate class. The Class B Units will be
convertible into our units on the date on which holders of a majority of our units (excluding the
Class B and Class C units) approve the conversion of the Class B Units into units.
The Class C Units (i) entitle the holder to the allocation of Partnership income, gain, loss,
deduction and credit to the same extent as such items would be allocated to the holder if the Class
C Units were converted and outstanding common units; (ii) entitle the holder, to the extent not
converted into common units, the right to share in distributions of available cash on and after
February 1, 2009, on a pro rata basis with the common units (excluding distributions with respect
to any record date prior to February 1, 2009), and (iii) prior to the date on which holders of a
majority of our units (excluding the Class B and Class C units) approve the conversion of the Class
C Units into units (the Class C Conversion Approval Date), are non-voting, except that, other
than with respect to Class C Conversion Approval, the Class C Units shall be entitled to vote as a
separate class on any matter that adversely affects the rights or preferences of the Class C Units
in relation to other classes of Partnership Interests (including as a result of a merger or
consolidation) or as required by law. After the Class C Conversion Approval Date and prior to
conversion of the units, the Class C Units will have such voting rights pursuant to the Partnership
Agreement as such Class C Units would have if they were units that were then outstanding and shall
be entitled to vote as a separate class on any matter that adversely affects the rights or
preferences of the Class C Units in relation to other classes of Partnership Interests or as
required by law. The approval of a majority of the Class C Units is required to approve any matter
for which the holders of the Class C Units are entitled to vote as a separate class. The Class C
Units will be convertible into our units on February 1, 2009 assuming holders of a majority of our
units (excluding the Class B and Class C units) approve the conversion of the Class C Units into
units prior to such time.
Copies of the TEPPCO Purchase Agreement and Amendment No. 1 are filed as Exhibits 10.4 and 3.1
to this Current Report on Form 8-K, respectively, and are incorporated by reference into this Item
1.01.
EPE Credit Agreement
Effective on May 7, 2007, we entered into a Second Amended and Restated Credit Agreement (the
EPE Credit Agreement), dated as of May 1, 2007, with the Lenders named therein, Citicorp North
America, Inc., as Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent,
Citibank, N.A., as Issuing Bank, and The Bank of Nova Scotia, Sun Trust Bank and Mizuho Corporate
Bank, Ltd., as Co-Documentation Agents. The EPE Credit Agreement amended and restated our existing
credit agreement (the Existing Facility). The EPE Credit Agreement provides for a $200.0 million
revolving credit facility (the Revolving Facility), $1.2 billion of term loans (Debt Bridge) (the
Term Loan (Debt Bridge)) and $500.0 million of term loans (Equity Bridge) (the Term Loan (Equity
Bridge)).
On May 7, 2007, we made initial borrowings of $1.8 billion under the EPE Credit Agreement,
$1.2 billion under the Term Loan (Debt Bridge) and $500.0 million under the Term Loan (Equity
Bridge) to fund the $1.65 billion cash purchase price for the acquisition of membership interests
in the ETE General Partner and common units of ETE, as well as to repay approximately $155 million
outstanding under the Existing Facility.
The Revolving Facility matures on May 6, 2008 and may be used by us in the future to fund
working capital and other capital requirements and for general partnership purposes. The Revolving
Facility offers the following secured loans, each having different interest requirements: (i) ABR
loans (ABR Loans), bearing interest at (a) the Alternative Base Rate (a rate per annum equal
to the greater of (1) the annual interest rate publicly announced by
3
Citibank, N.A. as its base rate in effect at its principal office in New York, New York (the
Prime Rate) in effect on such day and (2) the federal funds effective rate in effect on such day
plus 0.50%) plus (b) the Applicable Rate for ABR Loans noted below; and (ii) Eurodollar loans
(Eurodollar Loans) bear interest at (A) a LIBO rate (a rate per annum equal to the rate per
annum appearing at Reuters Reference LIBOR01 page (or on any successor thereto or substitute
therefor provided by Reuters, providing rate quotations comparable to those currently provided on
such page, as determined by the Administrative Agent from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two business days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such interest period) plus
the Applicable Rate for Eurodollar Loans noted below.
The Term Loan (Debt Bridge) matures on May 6, 2008. All borrowings outstanding under the Term
Loan (Debt Bridge) will, at our option, be made and maintained as ABR Loans or Eurodollar Loans, or
a combination thereof. Any amount repaid under the Term Loan (Debt Bridge) may not be reborrowed.
The Term Loan (Equity Bridge) matures on May 6, 2008. All borrowings outstanding under the
Term Loan (Equity Bridge) will, at our option, be made and maintained as ABR Loans or Eurodollar
Loans, or a combination thereof. Any amount repaid under the Term Loan (Equity Bridge) may not be
reborrowed.
The Applicable Rate for ABR Loans and Eurodollar Loans under our Revolving Facility, Term
Loan (Debt Bridge) and Term Loan (Equity Bridge) is the rate per annum as follows:
|
|
|
|
|
|
|
|
|
Class |
|
ABR Loans |
|
Eurodollar Loans |
|
|
|
|
|
|
|
|
|
Revolving credit loans (first 105 days
after May 7, 2007)
|
|
|
0.25 |
% |
|
|
1.75 |
% |
|
|
|
|
|
|
|
|
|
Revolving credit loans (106th
day after May 7, 2007 through Maturity
Date)
|
|
|
0.25 |
% |
|
|
2.00 |
% |
|
|
|
|
|
|
|
|
|
Term Loans (Debt Bridge) (first 105 days
after May 7, 2007) and Term Loans (Equity
Bridge) (all dates)
|
|
|
0.25 |
% |
|
|
1.75 |
% |
|
|
|
|
|
|
|
|
|
Term Loans (Debt Bridge) (106th
day after May 7, 2007 through Maturity
Date)
|
|
|
0.25 |
% |
|
|
2.00 |
% |
Upon receipt by us of net cash proceeds from (i) any issuance of indebtedness and/or equity by
us (other than certain permitted indebtedness) or (ii) any asset sale by us (other than sales of
assets having an aggregate fair market value not exceeding $25 million during the term of the EPE
Credit Agreement), we are required to prepay the outstanding amount of the loans in the full amount
of such net cash proceeds. Each such prepayment required to be made will be applied as follows:
|
|
|
if such prepayment is required as a result of the issuance of indebtedness,
first, to reduce pro rata all Term Loans (Debt Bridge), second, to reduce pro rata
all Term Loans (Equity Bridge) and third, to reduce pro rata all Revolving Credit
Loans; |
|
|
|
|
if such prepayment is required as a result of the issuance of equity, first, to
reduce pro rata all Term Loans (Equity Bridge), second, to reduce pro rata all Term
Loans (Debt Bridge) and third, to reduce pro rata all Revolving Credit Loans; and |
|
|
|
|
if such prepayment is required as a result of an asset sale, first to reduce pro
rata all Term Loans (Debt Bridge) and all Term Loans (Equity Bridge), and second,
to reduce pro rata all Revolving Credit Loans. |
The EPE Credit Agreement contains other customary covenants, including:
|
|
|
a prohibition on incurring debt, subject to permitted exceptions; |
|
|
|
|
a restriction on creating liens, subject to permitted exceptions; |
|
|
|
|
restrictions on merging and selling assets outside the ordinary course of business; |
|
|
|
|
a prohibition against making distributions, purchasing or redeeming capital
stock or prepaying indebtedness, subject to permitted exceptions; |
4
|
|
|
a restriction on our ability, and our ability to permit Enterprise Products
Partners L.P. (Enterprise Products Partners) and its general partner, TEPPCO and
its general partner, and Enterprise Products Operating L.P. (EPOLP), or any of
our subsidiaries other than Enterprise Products Partners and its general partner,
TEPPCO and its general partner, ETE and the ETE General Partner (a Subsidiary),
and their subsidiaries, to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement with any person, other than the lenders
under the EPE Credit Agreement or restrictions or conditions existing on the date
of the EPE Credit Agreement identified to such lenders, which prohibits, restricts
or imposes any conditions upon the ability of any Subsidiary to (i) pay dividends
or make other distributions or pay any indebtedness owed to us, Enterprise Products
Partners and its general partner, TEPPCO and its general partner, EPOLP or a
Subsidiary, or (ii) make subordinate loans or advances to or make other investments
in us, Enterprise Products Partners and its general partner, TEPPCO and its general
partner, EPOLP or any Subsidiary, in each case, other than permitted exceptions;
and |
|
|
|
|
the maintenance of a leverage ratio for the prior four full fiscal quarters most
recently ended of not more than 7.50 to 1.00 (including, if during any period of
four fiscal quarters we acquire any person (or any interest in any person) or all
or substantially all of the assets of any person, the EBITDA (as defined in the EPE
Credit Agreement) attributable to such assets or an amount equal to our percentage
of ownership in such person multiplied by the EBITDA of such person, for such
period determined on a pro forma basis (which determination, in each case, will be
subject to approval of each Administrative Agent, not to be unreasonably withheld)
may be included as Consolidated EBITDA (as defined in the EPE Credit Agreement)
for such period; provided that during the portion of such period that follows such
acquisition, the computation in respect of the EBITDA of such person or such
assets, as the case may be, will be made on the basis of actual (rather than pro
forma) results. |
The EPE Credit Agreement contains customary events of default. If an event of default occurs
and is continuing under the credit agreement, the lenders will be able to accelerate the maturity
date of amounts borrowed under the credit agreement and exercise other rights and remedies.
Our obligations under the EPE Credit Agreement and the loans thereunder are secured by
substantially all of our assets, including the ETE Common Units owned by us but excluding our
membership interests in the ETE General Partner.
A copy of the EPE Credit Agreement is filed as Exhibit 10.5 to this Current Report on Form
8-K, which is incorporated by reference into this Item 1.01.
Item 2.01. Completion of Acquisition or Disposition of Assets.
Acquisition of Common Units of Energy Transfer Equity, L.P. and 35% Membership Interest in Its
General Partner
On May 7, 2007, we paid approximately $1.65 billion in cash to acquire approximately 34.9% of
the membership interests in the ETE General Partner and 38,976,090 ETE Common Units representing
approximately 17.6% of the outstanding limited partner interests in ETE. The descriptions of the
ETE Purchase Agreement and related documents under Item 1.01 of this Current Report on Form 8-K are
incorporated herein by reference. Copies of the ETE Purchase Agreement, the LE GP LLC Agreement
and the ETE Unitholder Agreement are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report
on Form 8-K, respectively, and are also incorporated by reference into this Item 2.01.
Acquisition of Common Units of TEPPCO Partners, L.P. and 100% Membership Interest in Its
General Partner
On May 7, 2007, we acquired 4,400,000 TEPPCO common units and 100% of the membership interests
of TEPPCO GP from affiliates of our General Partner and indirect subsidiaries of EPCO, Inc. The
descriptions of the TEPPCO Purchase Agreement and related documents under Item 1.01 of this Current
Report on Form 8-K are incorporated herein by reference. Copies of the TEPPCO Purchase Agreement
and Amendment No. 1 are filed as
5
Exhibits 10.4 and 3.1 to this Current Report on Form 8-K, respectively, and are incorporated
by reference into this Item 2.01.
Item 3.02. Unregistered Sales of Equity Securities
On May 7, 2007, we issued an aggregate of 14,173,304 Class B Units and 16,000,000 Class C
Units of Enterprise GP Holdings in a private placement to our affiliates, DFI and DFIGP pursuant to
the TEPPCO Purchase Agreement described above under Item 2.01 of this Current Report on Form 8-K,
which description is incorporated by reference into this Item 3.02. The Class B Units and Class C
Units were issued as consideration for the TEPPCO Common Units and the TEPPCO GP membership
interests described under Item 2.01 of this Current Report on Form 8-K. We relied upon the
exemption set forth in Section 4(2) under the Securities Act of 1933, as amended, in connection
with the private placement of these securities.
Item 3.03. Material Modification to Rights of Security Holders
On May 7, 2007, we entered into Amendment No. 1 as described under Item 1.01 of this Current
Report on Form 8-K, which description is incorporated by reference into this Item 3.03. The
issuance of the Class B Units and Class C Units pursuant to Amendment No. 1 on May 7, 2007 will
have the effect of (i) creating new classes of equity securities that will be entitled to
allocations and distributions as designated for these classes of securities, and, (ii) upon
conversion approval, granting voting rights to holders of these securities equivalent to holders of
our existing units.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(a) On May 4, 2007, Robert G. Phillips resigned from the Board of Directors of EPE Holdings,
LLC, our general partner. Mr. Phillips did not serve on any committees of the Board of Directors,
and his resignation was not the result of any disagreement with us or our general partner. Mr.
Phillips will continue to serve as a director and President and Chief Executive Officer of
Enterprise Products GP, LLC, our wholly-owned subsidiary and the general partner of Enterprise
Products Partners L.P.
(d) On May 4, 2007, the sole member of EPE Holdings, LLC elected Mrs. Randa Duncan Williams to
our general partners board of directors. Ms. Williams is the daughter of Dan L. Duncan, the
Chairman of EPE Holdings, LLC.
(e) On May 7, 2007, EPCO, Inc. formed EPE Unit III, L.P. (EPE Unit III) to serve as an
incentive arrangement for certain employees of EPCO through a profits interest in EPE Unit III.
DFI contributed 4,421,326 Units of EPE as a capital contribution on May 7, 2007, with a fair market
value of approximately $170.0 million and was admitted as the Class A limited partner. Certain
EPCO employees, including our named executive officers, were issued Class B limited partner
interests and admitted as Class B limited partners of EPE Unit III without any capital
contribution. As with the awards granted in connection with our initial public offering in 2005 in
EPE Unit, L.P., these awards are designed to provide additional long-term incentive compensation
for our named executive officers. The profits interest awards (or Class B limited partner
interests) in EPE Unit III entitle the holder to participate in the appreciation in value of our
Common Units and are subject to forfeiture. The Class B limited partner interests in EPE Unit III
held (a) by our named executive officers are as follows: Michael A. Creel, 7.0588% and W. Randall
Fowler, 7.0588%, and (b) by the executives serving with Enterprise Products Partners L.P.: Robert
G. Phillips, 7.0588%, James H. Lytal, 5.8824% and A.J. Teague, 5.8824%. A copy of the EPE Unit
III limited partnership agreement is attached as Exhibit 10.6 to this Current Report on Form 8-K.
Unless otherwise agreed to by EPCO, DFI and a majority in interest of the Class B limited
partners of EPE Unit III, EPE Unit III will terminate at the earlier of May 7, 2012 (five years
from the date of the agreement) or a change in control of us or our General Partner. EPE Unit III
has the following material terms regarding its quarterly cash distribution to partners:
6
|
|
|
Distributions of Cashflow Each quarter, 100% of the
cash distributions received by EPE Unit III from us
will be distributed to the Class A limited partner
until DFI has received an amount equal to the Class A
preferred return (as defined below), and any remaining
distributions received by EPE Unit III will be
distributed to the Class B limited partners. The Class
A preferred return equals 3.797%, of the Class A
limited partners capital base. The Class A limited
partners capital base equals approximately $170.0
million plus any unpaid Class A preferred return from
prior periods, less any distributions made by EPE Unit
III of proceeds from the sale of our units owned by EPE
Unit III (as described below). |
|
|
|
|
Liquidating Distributions Upon liquidation of EPE
Unit III, units having a fair market value equal to the
Class A limited partner capital base will be
distributed to DFI, plus any accrued Class A preferred
return for the quarter in which liquidation occurs. Any
remaining units will be distributed to the Class B
limited partners. |
|
|
|
|
Sale Proceeds If EPE Unit III sells any of the
4,421,326 of our units that it owns, the sale proceeds
will be distributed to the Class A limited partner and
the Class B limited partners in the same manner as
liquidating distributions described above. |
The Class B limited partner interests in EPE Unit III that are owned by EPCO employees are
subject to forfeiture if the participating employees employment with EPCO and its affiliates is
terminated prior to May 7, 2012, with customary exceptions for death, disability and certain
retirements. The risk of forfeiture associated with the Class B limited partner interests in EPE
Unit III will also lapse upon certain change of control events.
Since we have an indirect interest in Enterprise Products Partners, Duncan Energy Partners and
TEPPCO through our direct or indirect ownership of their respective general partners, EPE Unit III,
including its Class B limited partners, may derive some benefit from Enterprise Products Partners,
Duncan Energy Partners and TEPPCOs results of operations. Accordingly, a portion of the fair
value of these equity awards will be allocated to Enterprise Products Partners, Duncan Energy
Partners and TEPPCO under the EPCO administrative services agreement as a non-cash expense. We,
Enterprise Products GP, Enterprise Products Partners, DEP Holdings, Duncan Energy Partners, the
TEPPCO GP and TEPPCO will not reimburse EPCO, EPE Unit III or any of their affiliates or partners,
through the administrative services agreement or otherwise, for any expenses related to EPE Unit
III, including the contribution of 4,421,326 of our common units to EPE Unit III by DFI.
Item 7.01 Regulation FD Disclosure.
The TEPPCO Purchase Agreement was approved using the Special Approval (as defined under our
partnership agreement) process of our Audit, Conflicts and Governance Committee (the ACG
Committee). In giving its Special Approval to the TEPPCO Purchase Agreement, the ACG Committee
reviewed and considered:
|
|
|
financial projections based upon the assumption that the transactions
contemplated by the TEPPCO Purchase Agreement and the ETE Purchase Agreement did
not occur; |
|
|
|
|
combined financial projections reflecting the transactions contemplated by the
TEPPCO Purchase Agreement and the ETE Purchase Agreement; |
|
|
|
|
financial projections reflecting only the transactions contemplated by the
TEPPCO Purchase Agreement; |
|
|
|
|
analyst reports prepared by third parties regarding TEPPCO; |
|
|
|
|
presentations by us to ratings agencies; |
|
|
|
|
presentations by us to lenders under the ETE Credit Agreement; and |
|
|
|
|
other internal analysis prepared by management regarding the transactions. |
In connection with this review, the ACG Committee noted in these materials:
|
|
|
the relative discount for the TEPPCO assets compared to both (i) current trading
multiples of many other publicly traded partnerships holding similar general
partner interests and (ii) recent transactions involving acquisitions interests in
the general partner of, and limited partner interests in, publicly traded
partnerships; |
|
|
|
|
financial projections showing that the transactions contemplated by the TEPPCO
Purchase Agreement appear to be accretive to us on a stand-alone cash flow basis; |
|
|
|
|
the attractiveness of the TEPPCO assets for anticipated future growth in
distributions; and |
7
|
|
|
the enhancement of the equity capitalization of EPE by acquiring these assets in
connection with the concurrent acquisition of ETE common units and incurrence of
indebtedness under the ETE Credit Agreement. |
Based on these and other considerations, the ACG Committee concluded the TEPPCO Purchase
Agreement was in the best interests of the Partnership and fair to the public unitholders of EPE,
gave Special Approval to the TEPPCO Purchase Agreement and recommended it to the Board of Directors
of our General Partner.
On May 7, 2007, we issued a press release relating to the transactions contemplated by the ETE
Purchase Agreement, the TEPPCO Purchase Agreement and the EPE Credit Agreement. Pursuant to
General Instruction B.2 of Form 8-K, the press release attached as Exhibit 99.1 is not filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), is
not subject to the liabilities of that section and is not deemed incorporated by reference in any
filing under the Exchange Act or the Securities Act of 1933, as amended, but is instead furnished
for purposes of that instruction.
Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The financial statements required to be disclosed in connection with the acquisition of
partnership interests in TEPPCO will be filed for the periods specified in Rule 3-05(b) of
Regulation S-X by amendment not later than 71 calendar days after the date that the initial report
on this Current Report Form 8-K must be filed.
(b) Pro forma financial information.
The pro forma financial information required pursuant to Article 11 of Regulation S-X giving
effect to the acquisition of partnership interests in TEPPCO will be filed by amendment not later
than 71 calendar days after the date that the initial report on this Current Report on Form 8-K
must be filed.
(d) Exhibits.
|
|
|
Exhibit No. |
|
Description |
|
|
|
3.1
|
|
Amendment No. 1 to First Amended and Restated Agreement of Limited
Partnership of Enterprise GP Holdings L.P., dated as of May 7, 2007. |
|
|
|
10.1
|
|
Securities Purchase Agreement, dated as of May 7, 2007, by and among
Enterprise GP Holdings L.P., Natural Gas Partners VI, L.P., Ray C.
Davis, Avatar Holdings, LLC, Avatar Investments, LP, Lon Kile, MHT
Properties, Ltd., P. Brian Smith Holdings, LP., and LE GP, LLC. |
|
|
|
10.2
|
|
Amended and Restated Limited Liability Company Agreement of LE GP,
LLC, dated as of May 7, 2007. |
|
|
|
10.3
|
|
Unitholder Rights and Restrictions Agreement, dated as of May 7,
2007, by and among Energy Transfer Equity, L.P., Enterprise GP
Holdings L.P., Natural Gas Partners VI, L.P. and Ray C. Davis. |
|
|
|
10.4
|
|
Securities Purchase Agreement, dated as of May 7, 2007, by and among
Enterprise GP Holdings L.P., DFI GP Holdings L.P. and Duncan Family
Interests, Inc. |
|
|
|
10.5
|
|
Second Amended and Restated Credit Agreement, dated as of May 1,
2007, by and among Enterprise GP Holdings L.P., as Borrower, the
Lenders named therein, Citicorp North America, Inc., as
Administrative Agent, Lehman Commercial Paper Inc., as Syndication
Agent, Citibank, N.A., as Issuing Bank, and The Bank of Nova Scotia,
Sun Trust Bank and Mizuho Corporate Bank, Ltd., as Co-Documentation
Agent. |
|
|
|
10.6
|
|
EPE Unit III, L.P. Agreement of Limited Partnership dated May 7, 2007. |
|
|
|
99.1
|
|
Press Release dated May 7, 2007. |
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P.
|
|
|
By: |
EPE Holdings, LLC,
|
|
|
|
as General Partner |
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: May 10, 2007 |
By: |
/s/ Michael J. Knesek
|
|
|
|
Name: |
Michael J. Knesek |
|
|
|
Title: |
Senior Vice President, Controller and Principal
Accounting Officer of EPE Holdings, LLC |
|
|
9
Exhibit Index
|
|
|
Exhibit No. |
|
Description |
|
|
|
3.1
|
|
Amendment No. 1 to First Amended and Restated Agreement of Limited
Partnership of Enterprise GP Holdings L.P., dated as of May 7, 2007. |
|
|
|
10.1
|
|
Securities Purchase Agreement, dated as of May 7, 2007, by and among
Enterprise GP Holdings L.P., Natural Gas Partners VI, L.P., Ray C.
Davis, Avatar Holdings, LLC, Avatar Investments, LP, Lon Kile, MHT
Properties, Ltd., P. Brian Smith Holdings, LP., and LE GP, LLC. |
|
|
|
10.2
|
|
Amended and Restated Limited Liability Company Agreement of LE GP,
LLC, dated as of May 7, 2007. |
|
|
|
10.3
|
|
Unitholder Rights and Restrictions Agreement, dated as of May 7,
2007, by and among Energy Transfer Equity, L.P., Enterprise GP
Holdings L.P., Natural Gas Partners VI, L.P. and Ray C. Davis. |
|
|
|
10.4
|
|
Securities Purchase Agreement, dated as of May 7, 2007, by and among
Enterprise GP Holdings L.P., DFI GP Holdings L.P. and Duncan Family
Interests, Inc. |
|
|
|
10.5
|
|
Second Amended and Restated Credit Agreement, dated as of May 1,
2007, by and among Enterprise GP Holdings L.P., as Borrower, the
Lenders named therein, Citicorp North America, Inc., as
Administrative Agent, Lehman Commercial Paper Inc., as Syndication
Agent, Citibank, N.A., as Issuing Bank, and The Bank of Nova Scotia,
Sun Trust Bank and Mizuho Corporate Bank, Ltd., as Co-Documentation
Agent. |
|
|
|
10.6
|
|
EPE Unit III, L.P. Agreement of Limited Partnership dated May 7, 2007. |
|
|
|
99.1
|
|
Press Release dated May 7, 2007. |
10
exv3w1
EXHIBIT 3.1
Execution Copy
AMENDMENT NO. 1
TO
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
ENTERPRISE GP HOLDINGS L.P.
This Amendment No. 1 (this Amendment) to the First Amended and Restated Agreement of Limited
Partnership of Enterprise GP Holdings L.P., a Delaware limited partnership (the Partnership),
dated as of August 29, 2005 (the Partnership Agreement), is entered into effective as of May 7,
2007, by EPE Holdings, LLC, a Delaware limited liability company (the General Partner), as the
general partner of the Partnership, on behalf of itself and the Limited Partners of the
Partnership. Capitalized terms used but not defined herein are used as defined in the Partnership
Agreement.
RECITALS
WHEREAS, Section 5.6 of the Partnership Agreement provides that the General Partner, without
the approval of any Limited Partner except as otherwise provided in the Partnership Agreement, may,
for any Partnership purpose, at any time or from time to time, issue additional Partnership
Securities for such consideration and on such terms and conditions as determined by the General
Partner in its sole discretion; and
WHEREAS, Section 13.1(d)(i) of the Partnership Agreement provides that the General Partner,
without the approval of any Partner, may amend any provision of the Partnership Agreement (to
reflect a change that, in the discretion of the General Partner, does not adversely affect the
Unitholders in any material respect); and
WHEREAS, Section 13.1(g) of the Partnership Agreement provides that the General Partner,
without the approval of any Partner (subject to Section 5.9 of the Partnership Agreement), may
amend any provision of the Partnership Agreement to reflect an amendment that, the General Partner
determines to be necessary or appropriate in connection with the authorization of the issuance of
any class or series of Partnership Securities pursuant to Section 5.6 of the Partnership Agreement;
and
WHEREAS, the Partnership has entered into a Securities Purchase Agreement, dated as of May 7,
2007 (the Purchase Agreement), between the Partnership, DFI GP Holdings L.P., a Delaware limited
partnership (DFIGP), and Duncan Family Interests, Inc., a Delaware corporation (DFI and
collectively with DFIGP, the Sellers), pursuant to which DFI will contribute to the Partnership
4,400,000 common units representing limited partner interests of TEPPCO Partners, L.P. (TEPPCO),
and DFIGP will contribute to the Partnership 100% of the membership interests in Texas Eastern
Products Pipeline Company, LLC, a Delaware limited liability company (the TEPPCO GP), in exchange
for (i) a new class of Partnership Securities to be designated as Class B Units and (ii) a new
class of Partnership Securities to be designated as Class C Units, with such terms as are set
forth in this Amendment; and
1
WHEREAS, the General Partner has determined that the creation of the Class B Units and the
Class C Units will be in the best interests of the Partnership and fair to the Partnerships
unaffiliated Unitholders; and
WHEREAS, the issuance of the Class B Units and the Class C Units complies with the
requirements of the Partnership Agreement; and
WHEREAS, the General Partner has determined, pursuant to Section 13.1(j) of the Partnership
Agreement, that the amendments to the Partnership Agreement set forth herein are necessary or
appropriate in connection with the authorization of the issuance of the Class B Units and the Class
C Units; and
NOW, THEREFORE, the Partnership Agreement is hereby amended as follows:
Section 1. Amendments.
(a)
Section 1.1 and Attachment 1. Section 1.1 and the definitions listed on
Attachment I are hereby amended to add, or to amend and restate, the following definitions:
Class B Conversion Approval has the meaning assigned to such term in Section 5.13(f).
Class B Conversion Approval Date has the meaning assigned to such term in Section 5.13(f).
Class B Conversion Effective Date has the meaning assigned to such term in Section 5.13(g).
Class C Conversion Approval has the meaning assigned to such term in Section 5.14(f).
Class C Conversion Approval Date has the meaning assigned to such term in Section 5.14(f).
Class C Conversion Effective Date has the meaning assigned to such term in Section 5.14(g).
Class B Unit means a Partnership Security representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees, and having the rights and obligations specified
with respect to the Class B Units in this Agreement. The term Class B Unit does not refer to a
Unit until such Class B Unit has converted into a Unit pursuant to the terms hereof.
Class C Unit means a Partnership Security representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees, and having the rights and obligations specified
with respect to the Class C Units in this Agreement. The term Class C Unit does not refer to a
Unit until such Class C Unit has converted into a Unit pursuant to the terms hereof.
2
Limited Partner Interest means the ownership interest of a Limited Partner in the
Partnership, which may be evidenced by Units, Class B Units, Class C Units or other Partnership
Securities or a combination thereof or interest therein, and includes any and all benefits to which
such Limited Partner or Assignee is entitled as provided in this Agreement, together with all
obligations of such Limited Partner or Assignee to comply with the terms and provisions of this
Agreement;
Outstanding means, with respect to Partnership Securities, all Partnership Securities that
are issued by the Partnership and reflected as outstanding on the Partnerships books and records
as of the date of determination; provided, however, that with respect to Partnership Securities, if
at any time any Person or Group (other than the General Partner or its Affiliates) beneficially
owns 20% or more of any Outstanding Partnership Securities of any class then Outstanding, all
Partnership Securities owned by such Person or Group shall not be voted on any matter and shall not
be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on
any matter (unless otherwise required by law), calculating required votes, determining the presence
of a quorum or for other similar purposes under this Agreement, except that Units so owned shall be
considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Units shall not, however, be
treated as a separate class of Partnership Securities for purposes of this Agreement); provided,
further, that the limitation in the foregoing proviso shall not apply (i) to any Person or Group
who acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding
directly from the General Partner or its Affiliates, (ii) to any Person or Group who acquired 20%
or more of any Outstanding Partnership Securities of any class then Outstanding directly or
indirectly from a Person or Group described in clause (i) if the General Partner shall have
notified such Person or Group in writing, prior to such acquisition, that such limitation shall not
apply to such Person or Group or (iii) to any Person or Group who acquired 20% or more of any
Partnership Securities issued by the Partnership with the prior approval of the Board of Directors
of the General Partner; and provided, further, that none of the Class B Units or Class C Units
shall be deemed to be Outstanding for purposes of determining if any Class B Units or Class C Units
are entitled to distributions of Available Cash unless such Class B Units or Class C Units shall
have been reflected on the books of the Partnership as outstanding during such Quarter and on the
Record Date for the determination of any distribution of Available Cash. In addition, Non-Voting
Units shall not be voted on any matter (unless otherwise required by law) and shall not be
considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on any
matter (unless otherwise required by law), calculating required votes, determining the presence of
a quorum or for other similar purposes under this Agreement.
Per Unit Capital Amount means, as of any date of determination, the Capital Account, stated
on a per Unit basis, underlying any Unit held by a Person other than the General Partner or any
Affiliate of the General Partner who holds Units.
(b) Section 1.1 and Attachment I. Section 1.1 and the definitions listed on
Attachment I are hereby further amended to amend and restate the final sentence of the definition
of Unit as follows:
The term Unit does not refer to a Class B Unit or a Class C Unit prior to its
conversion into a Unit pursuant to the terms hereof.
3
(c) Section 4.7(c). Section 4.7(c) of the Partnership Agreement is hereby amended and
restated to read in its entirety:
(c) The transfer of a Class B Unit or a Class C Unit that has converted into a Unit
shall be subject to the restrictions imposed by Section 6.4(b). The transfer of a Class C
Unit shall be subject to the restrictions imposed by Section 6.5.
(d) Article V; Section 5.5 Article V is hereby amend and restate Section 5.5(c) as
follows:
(c)(i) A transferee of a Partnership Interest shall succeed to a pro rata portion of
the Capital Account of the transferor relating to the Partnership Interest so transferred.
(ii) Subject to Section 6.4, immediately prior to the transfer of a Class B Unit or of
a Class B Unit that has converted into a Unit pursuant to Section 5.13(f) by a holder
thereof (other than a transfer to an Affiliate unless the General Partner elects to have
this subparagraph 5.5(c)(ii) apply), the Capital Account maintained for such Person with
respect to its Class B Units or converted Class B Units will (A) first, be allocated to the
Class B Units or converted Class B Units to be transferred in an amount equal to the product
of (x) the number of such Class B Units or converted Class B Units to be transferred and (y)
the Per Unit Capital Amount for a Unit, and (B) second, any remaining balance in such
Capital Account will be retained by the transferor, regardless of whether it has retained
any Class B Units or converted Class B Units. Following any such allocation, the
transferors Capital Account, if any, maintained with respect to the retained Class B Units
or retained converted Class B Units, if any, will have a balance equal to the amount
allocated under clause (B) hereinabove, and the transferees Capital Account established
with respect to the transferred Class B Units or converted Class B Units will have a balance
equal to the amount allocated under clause (A) hereinabove.
(iii) Subject to Section 6.4, immediately prior to the transfer of a Class C Unit or of
a Class C Unit that has converted into a Unit pursuant to Section 5.14(f) by a holder
thereof (other than a transfer to an Affiliate unless the General Partner elects to have
this subparagraph 5.5(c)(iii) apply), the Capital Account maintained for such Person with
respect to its Class C Units or converted Class C Units will (A) first, be allocated to the
Class C Units or converted Class C Units to be transferred in an amount equal to the product
of (x) the number of such Class C Units or converted Class C Units to be transferred and (y)
the Per Unit Capital Amount for a Unit, and (B) second, any remaining balance in such
Capital Account will be retained by the transferor, regardless of whether it has retained
any Class C Units or converted Class C Units. Following any such allocation, the
transferors Capital Account, if any, maintained with respect to the retained Class C Units
or retained converted Class C Units, if any, will have a balance equal to the amount
allocated under clause (B) hereinabove, and the transferees Capital Account established
with respect to the transferred Class C Units or converted Class C Units will have a balance
equal to the amount allocated under clause (A) hereinabove.
4
(e) Article V; Section 5.13. Article V is hereby amended to add a new Section 5.13
creating a new series of Partnership Units as follows:
Section 5.13 Establishment of Class B Units.
(a) General. The General Partner hereby designates and creates a class of
Units to be designated as Class B Units and consisting of a total of 14,173,304
Class B Units, and fixes the designations, preferences and relative, participating,
optional or other special rights, powers and duties of holders of the Class B Units
as set forth in this Section 5.13.
(b) Rights of Class B Units. During the period commencing upon issuance of the
Class B Units and ending on the Class B Conversion Effective Date (or that later
time specified in this Section 5.13(b)):
(i) Allocations. Except as otherwise provided in this Agreement, all
items of Partnership income, gain, loss, deduction and credit shall be
allocated to the Class B Units to the same extent as such items would be so
allocated if such Class B Units were Units that were then Outstanding.
(ii) Distributions. Except as otherwise provided in this Agreement,
the Class B Units shall have the right to share in partnership distributions
of Available Cash pursuant to Section 6.3 on a pro rata basis with the
Units, so that the amount of any Partnership distribution to each Unit will
equal the amount of such distribution to each Class B Unit.
(c) Voting Rights. The Class B Units are non-voting, except that, other than
with respect to Class C Conversion Approval, the Class B Units shall be entitled to
vote as a separate class on any matter that adversely affects the rights or
preferences of the Class B Units in relation to other classes of Partnership
Interests (including as a result of a merger or consolidation) or as required by
law. The approval of a majority of the Class B Units shall be required to approve
any matter for which the holders of the Class B Units are entitled to vote as a
separate class. Each Class B Unit will be entitled to the number of votes equal to
the number of Units into which a Class B Unit is convertible at the time of the
record date for the vote or written consent on the matter.
(d) Certificates. The Class B Units will be evidenced by certificates in
substantially the form of Exhibit A to this Amendment, subject to the
satisfaction of any applicable legal and regulatory requirements, may be assigned or
transferred in a manner identical to the assignment and transfer of other Units.
The certificates will initially include a restrictive legend to the effect that the
Class B Units have not been registered under the Securities Act or any state
securities laws.
(e) Registrar and Transfer Agent. The General Partner will act as registrar
and transfer agent of the Class B Units.
5
(f) Conversion. Except as provided in this Section 5.13(f), the Class B Units
are not convertible into Units. The Partnership shall, pursuant to the Securities
Purchase Agreement, take such actions as may be necessary or appropriate to submit
to a vote or consent of the Unitholders (other than holders of Class B Units and
Class C Units in their capacity as holders of such securities) the approval of a
change in the terms of the Class B Units to provide that each Class B Unit shall
automatically convert into one Unit (subject to appropriate adjustment in the event
of any split-up, combination or similar event affecting the Units that occurs prior
to the conversion of the Class B Units) effective immediately upon receipt of such
approval from such Unitholders (the Class B Conversion Approval) without any
further action by the holders thereof. The vote or consent required for the Class B
Conversion Approval will be the requisite vote required under the rules or staff
interpretations of the National Securities Exchange on which the Units are listed or
admitted for trading. The date that Class B Conversion Approval is obtained is
herein referred to as the Class B Conversion Approval Date. Upon receipt of the
Class B Conversion Approval, the terms of the Class B Units will be changed,
automatically and without further action, on the Class B Conversion Effective Date
(as defined in Section 5.13(g) below), so that each Class B Unit is converted into
one Unit and, immediately thereafter, none of the Class B Units shall be
Outstanding; provided, however, that such converted Class B Units will remain
subject to the provisions of Sections 6.1(d)(x) and 6.4.
(g) Surrender of Certificates. Upon receipt of the Class B Conversion Approval
in accordance with Section 5.13(f) or a change in rules of the National Securities
Exchange as described in Section 5.13(h), the General Partner shall give the holders
of the Class B Units prompt notice of such Class B Conversion Approval or change in
rules. Subject to receipt of the Class B Conversion Approval or such change in
rules, and subject to the requirements of Section 6.4, each holder of Class B Units
shall promptly surrender the Class B Unit Certificates therefor, duly endorsed, at
the office of the General Partner or of any transfer agent for the Class B Units.
In the case of any such conversion, the Partnership shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Class B Units one or
more Unit Certificates, registered in the name of such holder, for the number of
Units to which such holder shall be entitled. Such conversion shall be deemed to
have been made as of the date of the Class B Conversion Approval (the Class B
Conversion Effective Date) whether or not the Class B Unit certificate has been
surrendered as of such date, and the Person entitled to receive the Units issuable
upon such conversion shall be treated for all purposes as the record holder of such
Units as of such date.
(h) Change in Rules of National Securities Exchange. If at any time (i) the
rules of the National Securities Exchange on which the Units are listed or admitted
to trading or the staff interpretations of such rules are changed or (ii) facts or
circumstances arise so that no vote or consent of Unitholders is required as a
condition to the listing or admission to trading of the Units that would be issued
upon any conversion of any Class B Units into Units as provided in Section
6
5.13(g), the terms of such Class B Units will be changed so that each Class B
Unit is immediately converted (without further action or any vote of any Unitholders
other than compliance with Section 5.13(g)) into one Unit and, immediately
thereafter, none of the Class B Units shall be Outstanding; provided, however, that
such converted Class B Units will remain subject to the provisions of Sections
5.5(c)(ii), 6.1(d)(x) and 6.4.
(f) Article V; Section 5.14. Article V is hereby amended to add a new Section 5.14
creating a new series of Partnership Units as follows:
Section 5.14 Establishment of Class C Units.
(a) General. The General Partner hereby designates and creates a class of Units to be
designated as Class C Units and consisting of a total of 16,000,000 Class C Units, and
fixes the designations, preferences and relative, participating, optional or other special
rights, powers and duties of holders of the Class C Units as set forth in this Section 5.14.
(b) Rights of Class C Units. During the period commencing upon issuance of the Class C
Units and ending on the Conversion Effective Date (or that later time specified in this
Section 5.14(b)):
(i) Allocations. Except as otherwise provided in this Agreement, [all items of
Partnership income, gain, loss, deduction and credit shall be allocated to the Class
C Units to the same extent as such items would be so allocated if such Class C Units
were Units that were then Outstanding].
(ii) Distributions. Except as otherwise provided in this Agreement, Class C
Units will not share in partnership distributions of Available Cash pursuant to
Section 6.3. To the extent not converted into Units, on and after February 1, 2009,
Class C Units then Outstanding shall have the right to share in partnership
distributions on a pro rata basis with the Units (excluding distributions with
respect to any Record Date prior to February 1, 2009), so that the amount of any
Partnership distribution to each Unit will equal the amount of such distribution to
each Class C Unit.
(c) Voting Rights. Prior to the Class C Conversion Approval Date, the Class B Units
are non-voting, except that, other than with respect to Class C Conversion Approval, the
Class B Units shall be entitled to vote as a separate class on any matter that adversely
affects the rights or preferences of the Class B Units in relation to other classes of
Partnership Interests (including as a result of a merger or consolidation) or as required by
law. After the Class C Conversion Approval Date and prior to conversion, the Class C Units
will have such voting rights pursuant to the Partnership Agreement as such Class C Units
would have if they were Units that were then Outstanding and shall be entitled to vote as a
separate class on any matter that adversely affects the rights or preferences of the Class C
Units in relation to other classes of Partnership Interests or as required by law. The
approval of a majority of the Class C Units shall be required to approve any
7
matter for which the holders of the Class C Units are entitled to vote as a separate
class. Each Class C Unit will be entitled to the number of votes equal to the number of
Units into which a Class C Unit is convertible at the time of the record date for the vote
or written consent on the matter.
(d) Certificates. The Class C Units will be evidenced by certificates in substantially
the form of Exhibit B to this Amendment, subject to the satisfaction of any
applicable legal and regulatory requirements, may be assigned or transferred in a manner
identical to the assignment and transfer of other Units. The certificates will initially
include a restrictive legend to the effect that the Class C Units have not been registered
under the Securities Act or any state securities laws.
(e) Registrar and Transfer Agent. The General Partner will act as registrar and
transfer agent of the Class C Units.
(f) Conversion. Except as provided in this Section 5.14(f), the Class C Units are not
convertible into Units. The Partnership shall, pursuant to the Securities Purchase
Agreement, take such actions as may be necessary or appropriate to submit to a vote or
consent of the Unitholders (other than holders of Class C Units in their capacity as holders
of such securities) the approval of a change in the terms of the Class C Units to provide
that each Class C Unit shall automatically convert into one Unit (subject to appropriate
adjustment in the event of any split-up, combination or similar event affecting the Units
that occurs prior to the conversion of the Class C Units) effective as of February 1, 2009
following receipt of such approval from such Unitholders (the Class C Conversion Approval)
without any further action by the holders thereof. The vote or consent required for the
Class C Conversion Approval will be the requisite vote required under the rules or staff
interpretations of the National Securities Exchange on which the Units are listed or
admitted for trading. The date that Conversion Approval is obtained is herein referred to
as the Class C Conversion Approval Date. Subject to receipt of the Class C Conversion
Approval, the terms of the Class C Units will be changed, automatically and without further
action, on the Class C Conversion Effective Date (as defined in Section 5.14(g) below), so
that each Class C Unit is converted into one Unit and, immediately thereafter, none of the
Class C Units shall be Outstanding; provided, however, that such converted Class C Units
will remain subject to Sections 6.1(d)(x) and 6.4.
(g) Surrender of Certificates. Upon receipt of the Class C Conversion Approval in
accordance with Section 5.14(f) or a change in rules of the National Securities Exchange as
described in Section 5.14(h), the General Partner shall give the holders of the Class C
Units prompt notice of such Class C Conversion Approval or change in rules. Subject to
receipt of the Class C Conversion Approval or such change in rules, and subject to the
requirements of Section 6.4, on or after February 1, 2009, each holder of Class C Units
shall promptly surrender the Class C Unit Certificates therefor, duly endorsed, at the
office of the General Partner or of any transfer agent for the Class C Units. In the case
of any such conversion, the Partnership shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Class C Units one or more Unit Certificates,
registered in the name of such holder, for the number of Units to which
8
such holder shall be entitled. Such conversion shall be deemed to have been made as of
February 1, 2009 (the Class C Conversion Effective Date) whether or not the Class C Units
certificate has been surrendered as of such date, and the Person entitled to receive the
Units issuable upon such conversion shall be treated for all purposes as the record holder
of such Units as of such date.
(h) Change in Rules of National Securities Exchange. If at any time (i) the rules of
the National Securities Exchange on which the Units are listed or admitted to trading or the
staff interpretations of such rules are changed or (ii) facts or circumstances arise so that
no vote or consent of Unitholders is required as a condition to the listing or admission to
trading of the Units that would be issued upon any conversion of any Class C Units into
Units as provided in Section 5.14(g), the terms of such Class C Units will be changed so
that each Class C Unit is converted (without further action or any vote of any Unitholders
other than compliance with Section 5.14(g)) on February 1, 2009 into one Unit and,
immediately thereafter, none of the Class C Units shall be Outstanding; provided, however,
that such converted Class C Units will remain subject to Sections 5.5(c)(iii), 6.1(d)(x) and
6.4.
(g) Section 6.1(d)(x). Section 6.1(d) is hereby amended and restated to add a new
Section 6.1(d)(x) as follows:
(x) Economic Uniformity.
(A) With respect to any taxable period in which the Class B Conversion Effective Date
occurs (and, if necessary, any subsequent taxable period), items of Partnership gross
income, gain, deduction or loss for the taxable period shall be allocated 100% to each
Limited Partner with respect to such Limited Partners Class B Units that are Outstanding on
the Class B Conversion Effective Date in the proportion that the respective number of Class
B Units held by such Partner bears to the total number of Class B Units then Outstanding,
until each such Partner has been allocated the amount of gross income, gain, deduction or
loss with respect to such Partners Class B Units that causes the Capital Account
attributable to each Class B Unit, on a per Unit basis, to equal the Per Unit Capital Amount
for a Unit on the Class B Conversion Effective Date. The purpose for this allocation is to
establish uniformity between the Capital Accounts underlying converted Class B Units and the
Capital Accounts underlying Units immediately prior to the conversion of Class B Units into
Units.
(B) After the application of Section 6.1(d)(x)(A), with respect to any taxable period
in which the Class C Conversion Effective Date occurs (and, if necessary, any subsequent
taxable period), items of Partnership gross income, gain, deduction or loss for the taxable
period shall be allocated 100% to each Limited Partner with respect to such Limited
Partners Class C Units that are Outstanding on the Class C Conversion Effective Date in the
proportion that the respective number of Class B Units held by such Partner bears to the
total number of Class B Units then Outstanding, until each such Partner has been allocated
the amount of gross income, gain, deduction or loss with respect to such Partners Class C
Units that causes the Capital Account attributable to each Class C Unit, on a per Unit
basis, to equal the Per Unit Capital Amount for a Unit on the Class C
9
Conversion Effective Date. The purpose for this allocation is to establish uniformity
between the Capital Accounts underlying converted Class C Units and the Capital Accounts
underlying Units immediately prior to the conversion of Class C Units into Units.
(h) Article VI; Section 6.4. Article VI is hereby amended and restated to add a new
Section 6.4 as follows:
Section 6.4 Special Provisions Relating to the Holders of Class B Units and Class C
Units.
(a) A Unitholder holding a Class B Unit that has converted into a Unit pursuant to
Section 5.13 shall not be issued a Unit Certificate pursuant to Section 4.1, and shall not
be permitted to transfer such Units until such time as the General Partner determines, based
on advice of counsel, that the converted Class B Unit should have, as a substantive matter,
like intrinsic economic and federal income tax characteristics of an Initial Unit. In
connection with the condition imposed by this Section 6.4, the General Partner shall take
whatever steps are required to provide economic uniformity to the converted Class B Units in
preparation for a transfer of such Units, including the application of Sections 5.5(c)(ii)
and 6.1(d)(x)(A); provided, however, that no such steps may be taken that would have a
material adverse effect on the Unitholders holding Units represented by Unit Certificates.
(b) A Unitholder holding a Class C Unit that has converted into a Unit pursuant to
Section 5.14 shall not be issued a Unit Certificate pursuant to Section 4.1, and shall not
be permitted to transfer such Units until such time as the General Partner determines, based
on advice of counsel, that the converted Class C Unit should have, as a substantive matter,
like intrinsic economic and federal income tax characteristics of an Initial Unit. In
connection with the condition imposed by this Section 6.4, the General Partner shall take
whatever steps are required to provide economic uniformity to the converted Class C Units in
preparation for a transfer of such Units, including the application of Sections 5.5(c)(iii)
and 6.1(d)(x)(B); provided, however, that no such steps may be taken that would have a
material adverse effect on the Unitholders holding Units represented by Unit Certificates.
Section 2. Ratification of Partnership Agreement. Except as
expressly modified and amended herein, all of the terms and conditions of the Partnership Agreement
shall remain in full force and effect.
Section 3. Governing Law. This Amendment will be governed by and
construed in accordance with the laws of the State of Delaware.
Section 4. Counterparts. This Amendment may be executed in counterparts, all of which together
shall constitute an
agreement binding on all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart.
10
IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.
|
|
|
|
|
|
|
|
|
GENERAL PARTNER: |
|
|
|
|
|
|
|
|
|
|
|
EPE Holdings, LLC |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Michael A. Creel |
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Creel, President |
|
|
|
|
|
|
|
|
|
|
|
LIMITED PARTNERS: |
|
|
|
|
|
|
|
|
|
|
|
All Limited Partners now and hereafter admitted as
limited partners of the Partnership, pursuant to
Powers of Attorney now and hereafter executed in
favor of, and granted and delivered to, the General
Partner. |
|
|
|
|
|
|
|
|
|
|
|
By: EPE HOLDINGS, LLC, General Partner of
ENTERPRISE GP HOLDINGS L.P., as attorney-in-fact for
all Limited Partners pursuant to the powers of
Attorney granted pursuant to Section 2.6 of the
Partnership Agreement. |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Michael A. Creel |
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael A. Creel, President |
|
|
SIGNATURE PAGE TO
AMENDMENT NO. 1
TO
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
ENTERPRISE GP HOLDINGS L.P.
11
EXHIBIT A
Certificate Evidencing Class B Units
Representing Limited Partner Interests in
ENTERPRISE GP HOLDINGS L.P.
In accordance with Section 4.1 of the First Amended and Restated Agreement of Limited
Partnership of ENTERPRISE GP HOLDINGS L.P., as amended, supplemented or restated from time to time
(the Partnership Agreement), ENTERPRISE GP HOLDINGS L.P., a Delaware limited partnership (the
Partnership), hereby certifies that (the Holder) is the registered owner of Class B Units
representing limited partner interests in the Partnership (the Class B Units) transferable on the
books of the Partnership, in person or by duly authorized attorney, upon surrender of this
Certificate properly endorsed and accompanied by a properly executed application for transfer of
the Class B Units represented by this Certificate. The rights, preferences and limitations of the
Class B Units are set forth in, and this Certificate and the Class B Units represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the Partnership
Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without
charge on delivery of written request to the Partnership at, the principal office of the
Partnership located at 1100 Louisiana Street, 10th Floor, Houston, Texas 77002. Capitalized terms
used herein but not defined shall have the meanings given them in the Partnership Agreement.
The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and
agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have
executed the Partnership Agreement, (ii) represented and warranted that the Holder has all right,
power and authority and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (iii) granted the powers of attorney provided for in the Partnership Agreement and (iv)
made the waivers and given the consents and approvals contained in the Partnership Agreement.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IT MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE PARTNERSHIP THAT SUCH REGISTRATION IS NOT REQUIRED.
THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF ENTERPRISE GP HOLDINGS L.P. THAT
THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IF SUCH TRANSFER
WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF
THE SECURITIES AND EXCHANGE
A-1
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL AUTHORITY WITH
JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR QUALIFICATION OF ENTERPRISE GP
HOLDINGS L.P. UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE ENTERPRISE GP HOLDINGS L.P. TO
BE TREATED AS AN ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR
FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED). EPE HOLDINGS, LLC,
THE GENERAL PARTNER OF ENTERPRISE GP HOLDINGS L.P., MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE
TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY
TO AVOID A SIGNIFICANT RISK OF ENTERPRISE GP HOLDINGS L.P. BECOMING TAXABLE AS A CORPORATION OR
OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES. THE RESTRICTIONS SET
FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED
INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR
ADMITTED TO TRADING.
This Certificate shall not be valid for any purpose unless it has been countersigned and
registered by the Transfer Agent and Registrar.
|
|
|
|
|
|
|
|
|
|
|
Dated: |
|
|
|
ENTERPRISE GP HOLDINGS L.P. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Countersigned and Registered by: |
|
|
|
By: |
|
EPE HOLDINGS, LLC, |
|
|
|
|
|
|
|
|
|
|
its General Partner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as Transfer Agent and Registrar |
|
|
|
Name: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
By: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized Signature
|
|
|
|
|
|
Secretary |
|
|
A-2
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Certificate,
shall be construed as follows according to applicable laws or regulations:
|
|
|
TEN COM - as tenants in common
|
|
UNIF GIFT/TRANSFERS MIN ACT |
TEN ENT - as tenants by the entireties
|
|
Custodian |
|
|
(Cust) (Minor) |
JT TEN - as joint tenants with right of
|
|
under Uniform Gifts/Transfers to CD Minors |
survivorship and not as tenants in common
|
|
Act (State) |
Additional abbreviations, though not in the above list, may also be used.
FOR VALUE RECEIVED,
hereby assigns, conveys, sells and transfers unto
|
|
|
|
|
|
(Please print or typewrite name and address of Assignee) |
|
(Please insert Social Security or
other identifying number of Assignee) |
Class B Units representing limited partner interests
evidenced by this Certificate, subject
to the Partnership Agreement, and does hereby irrevocably constitute and appoint
as its attorney-in-fact with full power of substitution to
transfer the same on the books of ENTERPRISE GP HOLDINGS L.P.
|
|
|
|
|
|
|
Date:
|
|
|
|
NOTE:
|
|
The signature to any
endorsement hereon must
correspond with the name as
written upon the face of this
Certificate in every particular,
without alteration, enlargement
or change. |
|
|
|
THE SIGNATURE(S) MUST BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15
|
|
(Signature)
(Signature) |
A-3
No transfer of the Class B Units evidenced hereby will be registered on the books of the
Partnership, unless the Certificate evidencing the Class B Units to be transferred is surrendered
for registration or transfer and, if requested by the General Partner pursuant to Section 4.8 of
the Partnership Agreement, a Citizenship Certificate has been properly completed and executed by a
transferee on a separate application that the Partnership will furnish on request without charge.
A transferor of the Class B Units shall have no duty to the transferee with respect to execution of
Citizenship Certificate in order for such transferee to obtain registration of the transfer of the
Class B Units.
A-4
EXHIBIT B
Certificate Evidencing Class C Units
Representing Limited Partner Interests in
ENTERPRISE GP HOLDINGS L.P.
In accordance with Section 4.1 of the First Amended and Restated Agreement of Limited
Partnership of ENTERPRISE GP HOLDINGS L.P., as amended, supplemented or restated from time to time
(the Partnership Agreement), ENTERPRISE GP HOLDINGS L.P., a Delaware limited partnership (the
Partnership), hereby certifies that (the Holder) is the registered owner of Class C Units
representing limited partner interests in the Partnership (the Class C Units) transferable on the
books of the Partnership, in person or by duly authorized attorney, upon surrender of this
Certificate properly endorsed and accompanied by a properly executed application for transfer of
the Class C Units represented by this Certificate. The rights, preferences and limitations of the
Class C Units are set forth in, and this Certificate and the Class C Units represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the Partnership
Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without
charge on delivery of written request to the Partnership at, the principal office of the
Partnership located at 1100 Louisiana Street, 10th Floor, Houston, Texas 77002. Capitalized terms
used herein but not defined shall have the meanings given them in the Partnership Agreement.
The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and
agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have
executed the Partnership Agreement, (ii) represented and warranted that the Holder has all right,
power and authority and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (iii) granted the powers of attorney provided for in the Partnership Agreement and (iv)
made the waivers and given the consents and approvals contained in the Partnership Agreement.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IT MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE PARTNERSHIP THAT SUCH REGISTRATION IS NOT REQUIRED.
THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF ENTERPRISE GP HOLDINGS L.P. THAT
THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IF SUCH TRANSFER
WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF
THE SECURITIES AND EXCHANGE
B-1
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL AUTHORITY WITH
JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR QUALIFICATION OF ENTERPRISE GP
HOLDINGS L.P. UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE ENTERPRISE GP HOLDINGS L.P. TO
BE TREATED AS AN ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR
FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED). EPE HOLDINGS, LLC,
THE GENERAL PARTNER OF ENTERPRISE GP HOLDINGS L.P., MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE
TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY
TO AVOID A SIGNIFICANT RISK OF ENTERPRISE GP HOLDINGS L.P. BECOMING TAXABLE AS A CORPORATION OR
OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES. THE RESTRICTIONS SET
FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED
INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR
ADMITTED TO TRADING.
This Certificate shall not be valid for any purpose unless it has been countersigned and
registered by the Transfer Agent and Registrar.
|
|
|
|
|
|
|
|
|
|
|
Dated: |
|
|
|
ENTERPRISE GP HOLDINGS L.P. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Countersigned and Registered by: |
|
|
|
By: |
|
EPE HOLDINGS, LLC, |
|
|
|
|
|
|
|
|
|
|
its General Partner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as Transfer Agent and Registrar |
|
|
|
Name: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
By: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized Signature
|
|
|
|
|
|
Secretary |
|
|
B-2
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Certificate,
shall be construed as follows according to applicable laws or regulations:
|
|
|
TEN COM - as tenants in common
|
|
UNIF GIFT/TRANSFERS MIN ACT |
TEN ENT - as tenants by the entireties
|
|
Custodian |
|
|
(Cust) (Minor) |
JT TEN - as joint tenants with right of
|
|
under Uniform Gifts/Transfers to CD Minors |
survivorship and not as tenants in common
|
|
Act (State) |
Additional abbreviations, though not in the above list, may also be used.
FOR VALUE RECEIVED,
hereby assigns, conveys, sells and transfers unto
|
|
|
|
|
|
(Please print or typewrite name and address of Assignee)
|
|
(Please insert Social Security or
other identifying number of Assignee) |
Class C Units representing limited partner interests
evidenced by this Certificate, subject
to the Partnership Agreement, and does hereby irrevocably constitute and appoint
as its attorney-in-fact with full power of substitution to
transfer the same on the books of ENTERPRISE GP HOLDINGS L.P.
|
|
|
|
|
|
|
Date:
|
|
|
|
NOTE:
|
|
The signature to any
endorsement hereon must
correspond with the name as
written upon the face of this
Certificate in every particular,
without alteration, enlargement
or change. |
|
|
|
THE SIGNATURE(S) MUST BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15
|
|
(Signature)
(Signature) |
B-3
No transfer of the Class C Units evidenced hereby will be registered on the books of the
Partnership, unless the Certificate evidencing the Class C Units to be transferred is surrendered
for registration or transfer and, if requested by the General Partner pursuant to Section 4.8 of
the Partnership Agreement, a Citizenship Certificate has been properly completed and executed by a
transferee on a separate application that the Partnership will furnish on request without charge.
A transferor of the Class C Units shall have no duty to the transferee with respect to execution of
Citizenship Certificate in order for such transferee to obtain registration of the transfer of the
Class C Units.
B-4
exv10w1
EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
by and among
Ray C. Davis,
an individual person
Avatar Holdings, LLC,
a Texas limited liability company
Avatar Investments, LP,
a Texas limited partnership
Natural Gas Partners VI, L.P.,
a Delaware limited partnership
Lon Kile,
an individual person
MHT Properties, Ltd.,
a Texas limited partnership
and
P. Brian Smith Holdings LP,
a Texas limited partnership
collectively, as the Selling Parties,
LE GP, LLC,
a Delaware limited liability company
and
Enterprise GP Holdings L.P.,
a Delaware limited partnership,
as Buyer,
for the purchase and sale of
(i) an aggregate of 34.9% of the Equity Units representing membership interests of
LE GP, LLC,
a Delaware limited liability company,
and (ii) 38,976,090 Common Units representing limited partner interests of
Energy Transfer Equity, L.P.,
a Delaware limited partnership
dated as of May 7, 2007
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page |
|
ARTICLE I. SALE AND PURCHASE |
|
|
2 |
|
|
|
|
|
|
SECTION 1.1. Agreement to Sell and to Purchase |
|
|
2 |
|
SECTION 1.2. Deliveries at Closing |
|
|
2 |
|
SECTION 1.3. Purchase Price |
|
|
6 |
|
|
|
|
|
|
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES |
|
|
6 |
|
|
|
|
|
|
SECTION 2.1. Representations and Warranties with Respect to the Selling Parties and their
Interests |
|
|
6 |
|
SECTION 2.2. Representations of the General Partner |
|
|
8 |
|
|
|
|
|
|
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER |
|
|
13 |
|
|
|
|
|
|
SECTION 3.1. Limited Partnership Organization |
|
|
13 |
|
SECTION 3.2. Validity of Agreement; Authorization |
|
|
13 |
|
SECTION 3.3. No Conflict or Violation |
|
|
13 |
|
SECTION 3.4. Consents and Approvals |
|
|
14 |
|
SECTION 3.5. Buyer Status |
|
|
14 |
|
SECTION 3.6. Brokers |
|
|
14 |
|
SECTION 3.7. Independent Investigation |
|
|
14 |
|
SECTION 3.8. Investment Intent; Investment Experience; Restricted Securities |
|
|
14 |
|
SECTION 3.9. Litigation |
|
|
15 |
|
SECTION 3.10. Title to Redeemed Interests |
|
|
15 |
|
|
|
|
|
|
ARTICLE IV. COVENANTS |
|
|
15 |
|
|
|
|
|
|
SECTION 4.1. Further Assurances |
|
|
15 |
|
SECTION 4.2. Commercially Reasonable Efforts |
|
|
15 |
|
SECTION 4.3. Notice of Breach |
|
|
15 |
|
SECTION 4.4. Tax Covenants |
|
|
16 |
|
SECTION 4.5. No Control of the General Partner |
|
|
16 |
|
|
|
|
|
|
ARTICLE V. CONDITIONS TO OBLIGATIONS OF BUYER |
|
|
16 |
|
|
|
|
|
|
SECTION 5.1. Receipt of Documents |
|
|
16 |
|
SECTION 5.2. Representations and Warranties of the Selling Parties |
|
|
16 |
|
SECTION 5.3. Performance of Selling Parties Obligations |
|
|
17 |
|
SECTION 5.4. No Violation of Orders |
|
|
17 |
|
SECTION 5.5. Unitholder Rights and Restrictions Agreement |
|
|
17 |
|
SECTION 5.6. Amended and Restated GP LLC Agreement |
|
|
17 |
|
SECTION 5.7. 10b-5 Certificate of ETE |
|
|
17 |
|
|
|
|
|
|
ARTICLE VI. CONDITIONS TO OBLIGATIONS OF SELLING PARTIES |
|
|
17 |
|
|
|
|
|
|
SECTION 6.1. Receipt of Documents |
|
|
17 |
|
SECTION 6.2. Representations and Warranties of Buyer |
|
|
18 |
|
SECTION 6.3. Performance of Buyers Obligations |
|
|
18 |
|
SECTION 6.4. No Violation of Orders |
|
|
18 |
|
-i-
|
|
|
|
|
|
|
Page |
|
SECTION 6.5. Unitholder Rights and Restrictions Agreement |
|
|
18 |
|
SECTION 6.6. Amended and Restated GP LLC Agreement |
|
|
18 |
|
|
|
|
|
|
ARTICLE VII. TERMINATION AND ABANDONMENT |
|
|
18 |
|
|
|
|
|
|
SECTION 7.1. Methods of Termination; Upset Date |
|
|
18 |
|
SECTION 7.2. Effect of Termination |
|
|
19 |
|
|
|
|
|
|
ARTICLE VIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION |
|
|
19 |
|
|
|
|
|
|
SECTION 8.1. Survival |
|
|
19 |
|
SECTION 8.2. Indemnification Coverage |
|
|
20 |
|
SECTION 8.3. Procedures |
|
|
20 |
|
SECTION 8.4. Tax Treatment of Indemnity Payments |
|
|
20 |
|
SECTION 8.5. Remedies |
|
|
20 |
|
|
|
|
|
|
ARTICLE IX. MISCELLANEOUS PROVISIONS |
|
|
20 |
|
|
|
|
|
|
SECTION 9.1. Publicity |
|
|
20 |
|
SECTION 9.2. Successors and Assigns; Third-Party Beneficiaries |
|
|
20 |
|
SECTION 9.3. Fees and Expenses |
|
|
20 |
|
SECTION 9.4. Notices |
|
|
20 |
|
SECTION 9.5. Entire Agreement |
|
|
20 |
|
SECTION 9.6. Waivers and Amendments |
|
|
20 |
|
SECTION 9.7. Severability |
|
|
20 |
|
SECTION 9.8. Titles and Headings |
|
|
20 |
|
SECTION 9.9. Signatures and Counterparts |
|
|
20 |
|
SECTION 9.10. Enforcement of the Agreement; Damages |
|
|
20 |
|
SECTION 9.11. Governing Law |
|
|
20 |
|
SECTION 9.12. Disclosure |
|
|
20 |
|
SECTION 9.13. Consent to Jurisdiction |
|
|
20 |
|
SECTION 9.14. Certain Definitions |
|
|
20 |
|
|
|
|
Exhibits |
|
|
Exhibit 1.2(a)(i)(3)
|
|
Amended and Restated GP LLC Agreement |
Exhibit 1.2(a)(i)
|
|
Davis Assignment |
Exhibit 1.2(a)(iv)
|
|
NGP Assignment |
Exhibit 1.2(c)
|
|
ETE Assignment |
Exhibit 5.5
|
|
Unitholder Rights and Restrictions Agreement |
Exhibit 5.7
|
|
10b-5 Certificate of ETE |
-ii-
|
|
|
Disclosure Schedules |
|
|
Schedule 1.3
|
|
Purchase Price Allocation |
Schedule 2.1(c)
|
|
Consents and Approvals |
Schedule 2.1(h)
|
|
Contracts with General Partner and its Subsidiaries |
Schedule 2.2(c)
|
|
Consents and Approvals |
Schedule 2.2(e)
|
|
Subsidiaries; Equity Interests; Business of the General Partner |
Schedule 2.2(f)
|
|
No Conflict or Violation |
Schedule 2.2(g)
|
|
General Partner Financial Statements |
Schedule 2.2(h)(ii)
|
|
Taxes |
Schedule 2.2(i)
|
|
Absence of Undisclosed Liabilities |
Schedule 2.2(j)
|
|
Litigation |
-iii-
Index of Defined Terms
|
|
|
Affiliate |
|
9.14 |
Agreement |
|
Preamble |
Amended and Restated LLC |
|
|
Agreement |
|
1.2(a)(i) |
Avatar LLC |
|
Preamble |
Avatar LP |
|
Preamble |
Buyer |
|
Preamble |
Closing |
|
1.1(b) |
Closing Date |
|
1.1(b) |
Code |
|
2.1(h)(ii) |
Common Units |
|
Recitals |
Confidentiality Agreement |
|
9.14 |
Current GP Members |
|
Recitals |
Davis |
|
Preamble |
Davis Assignment |
|
1.2(a)(i) |
Encumbrances |
|
1.1(a)(i) |
EPE Assignment |
|
1.2(c) |
ETE |
|
Recitals |
ETE Unit Transfer Application(s) |
|
1.2(c)(ii) |
ETP |
|
Recitals |
GAAP |
|
2.2(g) |
General Partner |
|
Recitals |
General Partner Entities |
|
2.2(c) |
Governmental Authority |
|
2.1(d) |
GP Financial Statements |
|
2.2(g) |
GP Interest |
|
Recitals |
GP LLC Agreement |
|
2.2(b) |
GP LLC Interests |
|
Recitals |
GP Sellers |
|
Recitals |
IDRs |
|
Preamble |
Indemnifying Party |
|
8.2(a) |
Kile |
|
Preamble |
Legal Proceeding |
|
2.2(j) |
Loss |
|
8.2(a) |
Losses |
|
8.2(a) |
Material Adverse Effect |
|
9.14 |
MHT Properties |
|
Preamble |
NGP VI |
|
Preamble |
NGP Assignment |
|
1.2(a)(iv) |
Offered Common Units |
|
Recitals |
Organizational Documents |
|
9.14 |
Partnership Agreement |
|
9.14 |
Partnership Entities |
|
2.1(c) |
Person |
|
9.14 |
Purchase Price |
|
1.3 |
Redeemed Interests |
|
1.1(a) |
Securities |
|
Recitals |
Securities Act |
|
3.8 |
Selling Parties |
|
Preamble |
Smith Holdings |
|
Preamble |
Tax, or Taxes |
|
2.2(h)(i) |
Tax Returns |
|
2.2(h)(i) |
Transaction Documents |
|
9.14(h) |
Transfer Agent |
|
1.2(a)(i) |
Transfer Taxes |
|
4.4(a) |
Warren |
|
Preamble |
-iv-
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this Agreement) is made and entered into as of this 7th
day of May, 2007, by and among Ray C. Davis, an individual person (Davis), Avatar Holdings,
L.L.C., a Texas limited liability company (Avatar LLC), Avatar Investments, L.P., a Texas limited
partnership (Avatar LP), Natural Gas Partners VI, L.P., a Delaware limited partnership (NGP
VI), Lon Kile, an individual person Kile), MHT Properties, Ltd., a Texas limited partnership
(MHT Properties), and P. Brian Smith Holdings LP, a Texas limited partnership (Smith Holdings
and, together with Davis, Avatar LLC, Avatar LP, NGP VI, Kile and MHT Properties the Selling
Parties), Enterprise GP Holdings L.P., a Delaware limited partnership (Buyer), and LE GP, LLC, a
Delaware limited liability company (the General Partner).
W I T N E S S E T H:
WHEREAS, NGP VI, Davis and Kelcy L. Warren (Warren) are the current members (the Current GP
Members and such persons who are selling GP LLC Interests (as defined below) pursuant to this
Agreement, the GP Sellers) of the General Partner.
WHEREAS, the General Partner is the sole general partner of Energy Transfer Equity, L.P.
(ETE), and owns a 0.30915% general partner interest in ETE (the GP Interest) and common units
representing limited partner interests in ETE (Common
Units) (an aggregate of 841,765 Common
Units as of the date hereof);
WHEREAS, as of the date of this Agreement, ETE (i) owns 36,413,840 common units and 26,086,957
Class G Units, each representing limited partner interests in Energy Transfer Partners, L.P., a
Delaware limited partnership (ETP), is the sole member of Energy Transfer Partners, L.L.C., a
Delaware limited liability company, which is the 0.01% general partner of Energy Transfer Partners
GP, L.P. and the owner of 1% of the Class A limited partner interest of Energy Transfer Partners
GP, L.P., and (ii) owns 100% of the Class B limited partner interest and 99% of the Class A limited
Partner interests of Energy Transfer GP, L.P.;
WHEREAS, Energy Transfer Partners GP, L.P. owns the 2.0% general partner interest and all the
incentive distribution rights in ETP;
WHEREAS, Buyer desires to purchase (i) an aggregate of 877,251 Equity Units of the General
Partner (the GP LLC Interests) from Davis and NGP VI, and (ii) an aggregate of 38,976,090 Common
Units from Davis, Avatar LLC, Avatar LP, NGP VI, Kile, MHT Properties, Smith Holdings and the
General Partner (the Offered Common Units, and collectively with the GP LLC Interests, the
"Securities), and each of the Selling Parties and the General Partner desires to sell such
Securities to the Buyer, for the consideration and upon the terms and subject to the conditions set
forth in this Agreement;
WHEREAS, effective immediately after the acquisition of the GP LLC Interests by Buyer, the
General Partner desires to redeem from Buyer 501,461 GP LLC Interests in exchange for 392,020 of
the Offered Common Units upon the terms and subject to the conditions set forth in this Agreement;
-1-
NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set
forth herein, the parties hereto hereby agree as follows:
ARTICLE I.
SALE AND PURCHASE
SECTION 1.1. Agreement to Sell and to Purchase.
(a) On the Closing Date (as hereinafter defined) and upon the terms and subject to the
conditions set forth in this Agreement:
(i) Each of the Selling Parties shall sell, assign, transfer, convey and deliver to Buyer, and
Buyer shall purchase and accept from each of the Selling Parties, the respective Securities owned
by it, in each case, free and clear of any pledges, restrictions on transfer, proxies and voting or
other agreements, liens, claims, charges, mortgages, security interests or other legal or equitable
encumbrances, limitations or restrictions of any nature whatsoever (Encumbrances), except, in the
case of the GP LLC Interests, as may be set forth in the GP LLC Agreement (as defined in
Section 2.2(a)) or, in the case of the Offered Common Units, as may be set forth in the
Partnership Agreement and the Unitholders Rights and Restrictions Agreement, (each as defined in
Section 9.14);
(ii) The General Partner shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall purchase and accept from the General Partner, the Offered Common Units owned by it, in each
case, free and clear of any Encumbrances, except as may be set forth in the Partnership Agreement
and the Unitholders Rights and Restrictions Agreement;
(iii) The Buyer shall sell, assign, transfer, convey and deliver to the General Partner, and
the General Partner shall purchase and accept from the Buyer, 501,461 GP LLC Interests (the
Redeemed Interests), free and clear of any Encumbrances, except, as may be set forth in the GP
LLC Agreement.
(b) The closing of such sale and purchase (the Closing) shall take place at 10:00 a.m.
(Houston, Texas time), on the date of this agreement, or at such other time and date as the parties
hereto shall agree in writing (the Closing Date), at the offices of Andrews Kurth LLP. in
Houston, Texas or at such other place as the parties hereto shall agree in writing.
SECTION 1.2. Deliveries at Closing.
(a) At the Closing, each of the Selling Parties shall make the following deliveries to Buyer:
|
(i) |
|
Davis shall deliver to Buyer: |
|
(1) |
|
a duly executed assignment of membership
interest, in substantially the form attached hereto as Exhibit
1.2(a)(i), transferring 201,252 Equity Units representing a 12.745%
GP LLC Interest (the Davis Assignment); |
-2-
|
(2) |
|
(i) a duly executed certificate, countersigned
by the American Stock Transfer & Trust Company, as the transfer agent
and registrar with respect to the Common Units (the Transfer Agent),
representing 14,048,545 Common Units in the name of the Buyer (or an
Affiliate of the Buyer designated in writing by the Buyer), (ii) a copy
of a letter from the General Partner, addressed to and acknowledged by
the Transfer Agent, instructing the Transfer Agent to cancel the
certificate(s) representing such Common Units and to reissue a new
certificate representing 14,048,545 Common Units in the name of the
Buyer (or an Affiliate of the Buyer designated in writing by the Buyer)
and (iii) a copy of the cancelled certificate(s) representing such
Common Units previously owned by it; and |
|
|
(3) |
|
a duly executed copy of the Amended and
Restated Limited Liability Company Agreement of LE GP LLC, in
substantially the form attached hereto as Exhibit 1.2(a)(i)(3)
(the Amended and Restated GP LLC Agreement). |
|
(ii) |
|
Avatar LLC shall deliver to Buyer: |
|
(1) |
|
(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 12,925 Common Units in the name of
the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed to
and acknowledged by the Transfer Agent, instructing the Transfer Agent
to cancel the certificate(s) representing such Common Units and to
reissue a new certificate representing 12,925 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer) and (iii) a copy of the cancelled certificate(s) representing
such Common Units previously owned by it. |
|
(iii) |
|
Avatar LP shall deliver to Buyer: |
|
(1) |
|
(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 6,801,489 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed
to and acknowledged by the Transfer Agent, instructing the Transfer
Agent to cancel the certificate(s) representing such Common Units and
to reissue a new certificate representing 6,801,489 Common Units in
the name of the Buyer (or an Affiliate of the Buyer designated in
writing by the Buyer) and (iii) a copy of the cancelled
certificate(s) representing such Common Units previously owned by it. |
-3-
|
(iv) |
|
NGP VI shall deliver to Buyer: |
|
(1) |
|
a duly executed assignment of membership
interests, in substantially the form attached hereto as Exhibit
1.2(a)(iv), transferring 675,999 Equity Units representing a
42.813% GP LLC Interest (the NGP Assignment); |
|
|
(2) |
|
(i) a duly executed certificate, countersigned
by the Transfer Agent (as defined below), representing 17,202,745
Common Units in the name of the Buyer (or an Affiliate of the Buyer
designated in writing by the Buyer), (ii) a copy of a letter from the
General Partner, addressed to and acknowledged by the Transfer Agent,
instructing the Transfer Agent to cancel the certificate(s)
representing such Common Units and to reissue a new certificate
representing 17,202,745 Common Units in the name of the Buyer (or an
Affiliate of the Buyer designated in writing by the Buyer) and (iii) a
copy of the cancelled certificate(s) representing such Common Units
previously owned by it; and |
|
|
(3) |
|
a duly executed copy of the Amended and
Restated GP LLC Agreement. |
|
(v) |
|
Kile shall deliver to Buyer: |
|
(1) |
|
(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 129,592 Common Units in the name of
the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed to
and acknowledged by the Transfer Agent, instructing the Transfer Agent
to cancel the certificate(s) representing such Common Units and to
reissue a new certificate representing 129,592 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer) and (iii) a copy of the cancelled certificate(s) representing
such Common Units previously owned by it. |
|
(vi) |
|
MHT Properties shall deliver to Buyer: |
|
(1) |
|
(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 129,592 Common Units in the name of
the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed to
and acknowledged by the Transfer Agent, instructing the Transfer Agent
to cancel the certificate(s) representing such Common Units and to
reissue a new certificate representing 129,592 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer) and (iii) a copy of |
-4-
|
|
|
the cancelled certificate(s) representing
such Common Units previously owned by it. |
|
(vii) |
|
Smith Holdings shall deliver to Buyer: |
|
(1) |
|
(i) a duly executed certificate, countersigned
by the Transfer Agent, representing 259,182 Common Units in the name of
the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (ii) a copy of a letter from the General Partner, addressed to
and acknowledged by the Transfer Agent, instructing the Transfer Agent
to cancel the certificate(s) representing such Common Units and to
reissue a new certificate representing 259,182 Common Units in the name
of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer) and (iii) a copy of the cancelled certificate(s) representing
such Common Units previously owned by it. |
(b) At the Closing, each of the Selling Parties shall provide Buyer with a FIRPTA certificate
certifying that it (or the applicable transferor for federal income tax purposes) is not a foreign
person within the meaning of Treasury Regulation 1.1445-2(b).
(c) At the Closing, Buyer shall make the following deliveries to each of the Selling Parties
and the General Partner, as applicable:
(i) the Purchase Price payable to it, as provided in Section 1.3 below;
(ii) one or more transfer applications in respect of the Offered Common Units to be acquired
by it, in the form specified in the Partnership Agreement, seeking admission to ETE as a substitute
limited partner (the ETE Unit Transfer Application(s));
(iii) a duly executed copy of the Amended and Restated GP LLC Agreement;
(iv) a duly executed assignment of membership interest, in substantially the form attached
hereto as Exhibit 1.2(a)(i), transferring 501,461 Equity Units (the EPE Assignment) to the
General Partner.
(d) At the Closing, the General Partner shall make the following deliveries to the Buyer:
(i) (A) a duly executed certificate, countersigned by the Transfer Agent, representing 392,020
Common Units in the name of the Buyer (or an Affiliate of the Buyer designated in writing by the
Buyer), (B) a copy of a letter from the General Partner, addressed to and acknowledged by the
Transfer Agent, instructing the Transfer Agent to cancel the certificate(s) representing such
Common Units and to reissue a new certificate representing 392,020 Common Units in the name of the
Buyer (or an Affiliate of the Buyer designated in writing by the Buyer) and (C) a copy of the
cancelled certificate(s) representing such Common Units previously owned by it.
-5-
SECTION 1.3. Purchase Price. The aggregate purchase price for the Securities (the Purchase
Price) shall be paid to the applicable Selling Parties on the Closing Date in the allocations set
forth on Schedule 1.3 and shall be allocated among the Selling Parties and between the
Securities in accordance with Schedule 1.3.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
SECTION 2.1. Representations and Warranties with Respect to the Selling Parties and their
Interests. As of the date hereof, each of the Selling Parties hereby severally, but not jointly,
represents and warrants to Buyer, as follows:
(a) Organization.
(i) Avatar LLC represents and warrants that it is a limited liability company duly formed,
validly existing and in good standing under the laws of Texas.
(ii) Avatar LP represents and warrants that it is a limited partnership duly formed, validly
existing and in good standing under the laws of Texas.
(iii) NGP VI represents and warrants that it is a limited partnership duly formed, validly
existing and in good standing under the laws of Delaware.
(iv) MHT Properties represents and warrants that it is a limited partnership duly formed,
validly existing and in good standing under the laws of Texas.
(v) Smith Holdings represents and warrants that it is a limited partnership duly formed,
validly existing and in good standing under the laws of Texas.
(b) Validity of Agreement; Authorization. Such Selling Party has the power and
authority to enter into this Agreement and the Transaction Documents to which it is party and to
carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement
and such Transaction Documents and the performance of the Selling Partys obligations hereunder
and thereunder have been duly authorized by the Board of Directors of the Selling Party or the
general partner of the Selling Party, as applicable, and no other proceedings on the part of any
of the Selling Party are necessary to authorize such execution, delivery and performance. This
Agreement and the Transaction Documents to which any of the Selling Party is party have been (in
the case of this Agreement), or will be at the Closing (in the case of such other Transaction
Documents), duly executed and delivered by the Selling Party, as applicable, and constitute, or
will constitute at the Closing, as applicable, each such partys valid and binding obligation
enforceable against each such party in accordance with its terms (except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other
similar law affecting the enforcement of creditors rights generally or by general equitable
principles).
-6-
(c) Consents and Approvals. Except as disclosed on Schedule 2.1(c), no
material consent, approval, waiver or authorization of, or filing, registration or qualification
with, any Governmental Authority or any other Person (on the part of such Selling Party) is
required for the Selling Party to execute and deliver this Agreement or the Transaction Documents
to which the Selling Party is party or to perform its respective obligations hereunder or
thereunder. The General Partner, any subsidiaries of the General Partner set forth on
Schedule 2.2(e), ETE and each of the subsidiaries of ETE set forth on Schedule
2.2(e) are collectively referred to herein as the Partnership Entities.
(d) No Conflict or Violation. The execution, delivery and performance of this
Agreement and the Transaction Documents by the Selling Party does not and will not: (i) with
respect to any Selling Party who is not an individual person, violate or conflict with any
provision of the Organizational Documents (as defined in Section 9.14) of the Selling
Party; (ii) violate any applicable provision of law, statute, judgment, order, writ, injunction,
decree, award, rule, or regulation of any foreign, federal, state or local government, court,
arbitrator, agency or commission or other governmental or regulatory body or authority
(Governmental Authority); (iii) violate, result in a breach of, constitute (with due notice or
lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue
under any material contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which the Selling Party is a party or by which it is bound or
to which its properties or assets is subject; or (iv) result in the creation or imposition of any
Encumbrance upon any of the properties or assets of such Selling Party, except in the cases of
clauses (ii) and (iv) above, as would not have a Material Adverse Effect and, in the case of
clauses (iii) and (iv) above, as set forth on Schedule 2.2(d).
(e) Title. The GP LLC Interests or Offered Common Units, as applicable, being sold to Buyer by such
Selling Party are owned by such Selling Party of record and beneficially solely by such person.
Upon delivery of the Purchase Price to such Selling Party, Buyer will acquire such Securities free
and clear of any Encumbrances other than as set forth in the Amended and Restated LLC Agreement,
the Unitholders Rights and Restrictions Agreement or the Partnership Agreement.
(f) Litigation. No Action by or against such Selling Party is pending or, to the best
knowledge of such Selling Party, threatened, which could affect the legality, validity or
enforceability of this Agreement or the consummation of the transactions contemplated hereby or
thereby.
(g) Brokers. The Selling Party has not employed the services of an investment banker,
financial advisor, broker or finder in connection with this Agreement or any of the transactions
contemplated hereby.
(h) Contracts with General Partner and its Subsidiaries. The Selling Party and its
Affiliates are not party to any contract or agreement with the General Partner or any of its
Subsidiaries (excluding ETE and its Subsidiaries to the extent such contracts and agreements are
required to be disclosed under the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, and have been so disclosed in filings made by ETE and its Subsidiaries)
except as disclosed on Schedule 2.1(h); provided, however, that the
-7-
representation
contained in this Section 2.1(h) relating to NGP and its Affiliates, includes only NGP,
its general partner and the partners, managers and employees of such general partner and related
investment funds, but does not include any portfolio company of NGP or its related investment
funds.
SECTION 2.2. Representations of the General Partner. As of the date hereof, the General
Partner hereby represents and warrants to Buyer as follows:
(a) Organization. The General Partner is a limited liability company duly formed,
validly existing and in good standing under the laws of Delaware, and has all requisite limited
liability company power and authority, as the case may be, and all governmental licenses,
authorizations, permits, consents and approvals to own its respective properties and assets and to
conduct its business as now conducted, except where the failure to have such governmental
licenses, authorizations, permits, consents and approvals would not have a Material Adverse Effect
(as defined in Section 9.14). The General Partner is duly qualified to do business as a
foreign entity and is in good standing in each jurisdiction where the character of the properties
owned or leased by it or the nature of the business conducted by it makes such qualification
necessary,
except where the failure to be so qualified or in good standing would not individually or in
the aggregate have a Material Adverse Effect.
(b) Validity of Agreement; Authorization. The General Partner has the power and
authority to enter into this Agreement and the Transaction Documents to which it is party and to
carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement
and such Transaction Documents and the performance of the General Partners obligations hereunder
and thereunder have been duly authorized by the Board of Directors of the General Partner, and no
other proceedings on the part of the General Partner are necessary to authorize such execution,
delivery and performance. This Agreement and the Transaction Documents to which General Partner is
party have been (in the case of this Agreement), or will be at the Closing (in the case of such
other Transaction Documents), duly executed and delivered by the General Partner, and constitute,
or will constitute at the Closing, as applicable, the General Partners valid and binding
obligation enforceable against the General Partner in accordance with its terms (except to the
extent that its enforceability may be limited by applicable bankruptcy, insolvency, reorganization
or other similar law affecting the enforcement of creditors rights generally or by general
equitable principles).
(c) Consents and Approvals; No Prohibition on Distributions. Except as disclosed on
Schedule 2.2(c), no material consent, approval, waiver or authorization of, or filing,
registration or qualification with, any Governmental Authority or any other Person (on the part of
the General Partner) is required for the General Partner to execute and deliver this Agreement or
the Transaction Documents to which the General Partner is party or to perform its obligations
hereunder or thereunder. The General Partner is not currently prohibited, directly or indirectly,
from making distributions in respect of its equity securities, except as set forth in the GP LLC
Agreement (defined below).
-8-
(d) Capitalization of the General Partner; Title.
(i) NGP VI, Davis and Warren are the sole members of the General Partner. All of the
outstanding GP LLC Interests have been duly authorized and validly issued in accordance with the
Limited Liability Company Agreement of LE GP LLC, dated as of February 8, 2006 (the GP LLC
Agreement), are fully paid (to the extent required by the GP LLC Agreement) and nonassessable
(except as such nonassessability may be affected by Section 18-607 of the Delaware Limited
Liability Company Act). Except for the GP LLC Interests, there are no outstanding securities of LE
GP. There are no preemptive or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any interest in the General Partner pursuant to any agreement to
which LE GP or the Selling Party is a party or to which either of them may be bound. There are no
outstanding options, warrants or similar rights to purchase or acquire any equity interests in the
General Partner. A true and correct copy of the GP LLC Agreement, with any and all amendments
thereto to the date hereof, has been made available by the Current GP Members to the Buyer or its
representatives.
(ii) Except for any Encumbrances provided in the Partnership Agreement, the General Partner is
the sole general partner and owns the GP Interest, free and clear of any Encumbrances.
(iii) The Offered Common Units being sold to Buyer by the General Partner are owned solely by
the General Partner of record and beneficially. Upon delivery of the Redeemed Interests to the
General Partner, Buyer will acquire such Offered Common Units free and clear of any Encumbrances
other than as set forth in the Amended and Restated LLC Agreement, the Unitholders Rights and
Restrictions Agreement or the Partnership Agreement.
(e) Subsidiaries; Equity Interests; Business of the General Partner Entities.
(i) Except as set forth on Schedule 2.2(e), the General Partner does not have any
Non-ETE Subsidiary, and does not own, directly or indirectly, any shares of capital stock, voting
rights or other equity interests or investments in any other Person, other than ETE and its direct
and indirect subsidiaries. Except as set forth in the Partnership Agreement or on Schedule
2.2(e), the General Partner has no obligation or rights to acquire by any means, directly or
indirectly, any capital stock, voting rights, equity interests or investments in another Person.
The General Partner and ETI GP, LLC, which has been dissolved, are referred to herein collectively
as the General Partner Entities.
(ii) The General Partner was formed as a limited liability company under the laws of the State
of Texas on September 5, 2002, and effective August 23, 2005 was converted from a Texas limited
liability company to a Delaware limited liability company. Since its date of formation, the
General Partner has not engaged in or conducted, directly or indirectly, any business or other
activities other than (i) serving as the general partner of ETE and owning the GP Interest and
Common Units, and (ii) owning all of the member interests in ETI GP and the limited partner
interests in ETI.
(f) No Conflict or Violation. The execution, delivery and performance of this
Agreement and the Transaction Documents by the General Partner do not and will not:
-9-
(a) violate or
conflict with any provision of the Organizational Documents (as defined in Section 9.14)
of the General Partner; (b) violate any applicable provision of law, statute, judgment, order,
writ, injunction, decree, award, rule, or regulation of any foreign, federal, state or local
Governmental Authority; (c) violate, result in a breach of, constitute (with due notice or lapse
of time or both) a default or cause any obligation, penalty or premium to arise or accrue under
any material contract, lease, loan agreement, mortgage, security agreement, trust indenture or
other agreement or instrument to which the General Partner is a party or by which it is bound or
to which its properties or assets is subject; (d) result in the creation or imposition of any
Encumbrance upon any of the properties or assets of any of the General Partner; or (e) result in
the cancellation, modification, revocation or suspension of any license or permit of the General
Partner, except in the cases of clauses (b), (d) and (e) above, as would not have a Material
Adverse Effect and, in the case of clauses (c) and (d) above, as set forth on Schedule
2.2(f).
(g) General Partner Financial Statements. Attached as Schedule 2.2(g) are
copies of the audited balance sheet, as of August 31, 2006, and the unaudited income statements
and statement of partners equity at, or for the 12-
month period, or portion thereof, ended August 31, 2006, of the General Partner and the
unaudited balance sheet and income statement for the six month period ended February 28, 2007, of
the General Partner (collectively, the GP Financial Statements). The GP Financial Statements
were prepared in accordance with U.S. generally accepted accounting principles (GAAP) applied on
a consistent basis throughout the periods involved and fairly present in all material respects the
financial condition of the General Partner as of their respective dates and the results of its
operations for the periods covered thereby.
(h) Tax Matters.
(i) For purposes of this Agreement, Tax Returns shall mean returns, reports, exhibits,
schedules, information statements and other documentation (including any additional or supporting
material) filed or maintained, or required to be filed or maintained, in connection with the
calculation, determination, assessment or collection of any Tax and shall include any amended
returns required as a result of examination adjustments made by the Internal Revenue Service or
other Tax authority. For purposes of this Agreement, Tax or Taxes shall mean any and all
federal, state, local, foreign and other taxes, levies, fees, imposts and duties of whatever kind
(including any interest, penalties or additions to the tax imposed in connection therewith or with
respect thereto), including, without limitation, taxes imposed on, or measured by, income,
franchise, profits or gross receipts, and also ad valorem, value added, sales, use, service, real
or personal property, capital stock, license, payroll, withholding, employment, social security,
workers compensation, unemployment compensation, utility, severance, production, excise, stamp,
occupation, premium, windfall profits, transfer and gains taxes and customs duties.
(ii) Except as disclosed on Schedule 2.2(h)(ii), (A) each of the General Partner
Entities has filed (or joined in the filing of) when due all Tax Returns required by applicable law
to be filed with respect to each of such General Partner Entities; (B) each such Tax Return is
true, correct and complete in all material respects; (C) all Taxes owed by the any of the General
Partner Entities (whether or not shown on any Tax Return) at any time on or prior to the Closing
-10-
Date, if required to have been paid, have been or will be timely paid (except for Taxes that are
being contested in good faith in appropriate proceedings and, to the extent the amount being
contested exceeds $100,000, that are set forth on Schedule 2.2(h)(ii)); (D) any material
liability of any of the General Partner Entities for Taxes not yet due and payable, or that is
being contested in good faith in appropriate proceedings, has been provided for on the financial
statements of the applicable General Partner Entity or Entities, as the case may be, in accordance
with GAAP; (E) there is no action, suit, proceeding, investigation, audit or claim now pending
against, or with respect to, any of the General Partner Entities in respect of any material Tax or
Tax assessment, nor has any claim for additional material Tax or Tax assessment been asserted in
writing; (F) no written claim has been made by any Tax authority in a jurisdiction where any of the
General Partner Entities does not currently file a Tax Return that it is or may be subject to Tax
by such jurisdiction; (G) none of the General Partner Entities has any outstanding request for any
extension of time within which to pay its Taxes or file its Tax Returns; (H) there has been no
waiver or extension of any applicable statute of limitations for the assessment or collection of
any Taxes of any of the Partnership Entities; (I) none of the General Partner Entities has entered
into any agreement or arrangement with any Tax authority that requires any of the General
Partner Entities or the Partnership Entities to take any action or to refrain from taking any
action; (J) none of the Selling Parties or the General Partner Entities is a foreign person
within the meaning of Section 1445 of the United States Internal Revenue Code of 1986, as amended
(the Code); (K) none of the General Partner Entities is a party to any agreement, whether written
or unwritten, providing for the payment of Taxes, payment for Tax losses, entitlements to refunds
or similar Tax matters; (L) each of the General Partner Entities treated as a partnership for
federal income tax purposes has made a currently effective election under Section 754 of the Code;
and (M) each of the General Partner Entities has withheld and paid all material Taxes required to
be withheld by such General Partner Entity in connection with any amounts paid or owing to any
partner, member, employee, creditor, independent contractor or other third party and (N) each of
the General Partner Entities is and has been since its formation treated as a partnership or
disregarded as an entity for federal income tax purposes.
(i) Absence of Undisclosed Liabilities.
(i) Except as disclosed on Schedule 2.2(i), the General Partner has no indebtedness or
liability, absolute or contingent, which is not shown or provided for in the GP Financial
Statements, other than (i) liabilities incurred or accrued in the ordinary course of business
consistent with past practice, including liens for current taxes and assessments not in default,
since August 31, 2006, (ii) liabilities of the General Partner that individually or in the
aggregate are not material to the General Partner and that are not required by GAAP to be included
in the GP Financial Statements and (iii) liabilities of ETE for which the General Partner may be
liable in its capacity as General Partner.
(ii) Except as disclosed on Schedule 2.2(i), the General Partner has not made any
distributions to its members or redeemed or repurchased any equity securities of the General
Partner or the General Partner Entities, since August 31, 2006.
(j) Litigation Except as set forth on Schedule 2.2(j), there are no Legal
Proceedings pending or, to the knowledge of the Selling Parties after reasonable inquiry,
threatened against the General Partner Entities or any officer, director or member thereof in its
capacity as a
-11-
member that, individually or in the aggregate, are reasonably likely to (a) have a
Material Adverse Effect or (b) materially impair or delay the ability of any of the Selling
Parties to perform its obligations under this Agreement or the Transaction Documents or consummate
the transactions contemplated hereby or thereby. Except as set forth in the GP Financial
Statements for the fiscal year ended August 31, 2006, there is no order, judgment, injunction or
decree of any Governmental Authority outstanding against the General Partner Entities that,
individually or in the aggregate, would have any effect referred to in the foregoing clauses (a)
and (b). Legal Proceeding shall mean any judicial, administrative or arbitral actions, suits,
proceedings (public or private), investigations or governmental proceedings before any
Governmental Authority.
(k) Brokers. None of the General Partner Entities has employed the services of an
investment banker, financial advisor, broker or finder in connection with this Agreement or any of
the transactions contemplated hereby.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BUYER
As of the date hereof, Buyer hereby represents and warrants to each of the Selling Parties as
follows:
SECTION 3.1. Limited Partnership Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the state of Delaware and has
all requisite limited partnership power and authority to own its properties and assets and to
conduct its business as now conducted. Buyer is duly qualified to do business as a foreign entity
in every jurisdiction where the character of the properties owned or leased by it or the nature of
the business conducted by it makes such qualifications necessary.
SECTION 3.2. Validity of Agreement; Authorization. Buyer has the power and authority to
enter into this Agreement and the Transaction Documents to which Buyer is a party and to carry out
its obligations hereunder and thereunder. The execution and delivery of this Agreement and such
Transaction Documents and the performance of Buyers obligations hereunder and thereunder have
been duly authorized by the Board of Directors of the general partner of Buyer and no other
proceedings on the part of Buyer, its general partner or its owners are necessary to authorize
such execution, delivery and performance. This Agreement and the Transaction Documents to which
Buyer is a party each have been (in the case of this Agreement) or will be at the Closing (in the
case of such Transaction Documents) duly executed and delivered by Buyer and constitute or will
constitute at the Closing, as applicable, the valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms (except to the extent that its enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other similar law affecting the
enforcement of creditors rights generally or by general equitable principles).
SECTION 3.3. No Conflict or Violation. The execution, delivery and performance by Buyer of
this Agreement and the Transaction Documents to which Buyer is a party does not and will not: (a)
violate or conflict with any provision of its or its general
-12-
partners Organizational Documents, (b) violate any applicable provision of law, or any
order, judgment or decree of any Governmental Authority, (c) violate or result in a breach of or
constitute (with due notice or lapse of time or both) a default under any contract, lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which
Buyer is a party or by which it is bound or to which any of its properties or assets is subject or
(d) result in the creation or imposition of any Encumbrance upon any of its properties or assets
where such violations, breaches, defaults or Encumbrances in the aggregate would have a material
adverse effect on the transactions contemplated hereby or on the assets, properties, business,
operations, net income or financial condition of Buyer.
SECTION 3.4. Consents and Approvals. Except as disclosed on Schedule 3.4, no
material consent, approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person (on the part of Buyer), is required for Buyer to
execute and deliver this Agreement or the Transaction Documents to which Buyer is a party or to
perform its obligations hereunder or thereunder.
SECTION 3.5. Buyer Status. Buyer is not an employee benefit plan or other organization
exempt from taxation pursuant to Section 501(a) of the Code, a non-resident alien, a foreign
corporation or other foreign Person, or a regulated investment company within the meaning of
Section 851 of the Code.
SECTION 3.6. Brokers. Except as disclosed on Schedule 3.6, Buyer has not employed
the services of an investment banker, financial advisor, broker or finder in connection with this
Agreement or any of the transactions contemplated hereby.
SECTION 3.7. Independent Investigation. Buyer has conducted its own independent
investigation, review and analysis of the business, operations, assets, liabilities, results of
operations, financial condition and prospects of each of the Partnership Entities, both
individually and on a consolidated basis, which investigation, review and analysis was done by
Buyer and its Affiliates and, to the extent Buyer deemed necessary or appropriate, by Buyers
representatives. Buyer acknowledges that it and its representatives have been provided adequate
access to the personnel, properties, premises and records of each of the Partnership Entities for
such purpose.
SECTION 3.8. Investment Intent; Investment Experience; Restricted Securities. In acquiring
the Securities, Buyer is not offering or selling, and will not offer or sell the Securities, for
the Selling Parties in connection with any distribution of any of such Securities, and Buyer does
not have a participation and will not participate in any such undertaking or in any underwriting
of such an undertaking except in compliance with
applicable federal and state securities laws. Buyer acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in the Securities, and has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits and risks
of an investment in all of such Securities. Buyer is an accredited investor as such term is
defined in Regulation D under the Securities Act of 1933 (the Securities Act). Buyer
understands that none of the Securities will have been registered pursuant to the Securities Act
or any applicable state securities laws, that all of such Securities will be characterized as
restricted securities under federal securities laws and that under such laws and applicable
-13-
regulations none of such Securities can be sold or otherwise disposed of without registration
under the Securities Act or an exemption therefrom.
SECTION 3.9. Litigation. No Action by or against the Buyer is pending or, to the best
knowledge of the Buyer, threatened, which could affect the legality, validity or enforceability of
this Agreement or the consummation of the transactions contemplated hereby or thereby.
SECTION 3.10. Title to Redeemed Interests. The Redeemed Interests being sold to the General
Partner by Buyer are owned solely by the Buyer of record and beneficially. Upon delivery of the
Offered Common Units to the Buyer, the General Partner will acquire such Redeemed Interests free
and clear of any Encumbrances other than as set forth in the Amended and Restated LLC Agreement.
ARTICLE IV.
COVENANTS
SECTION 4.1. Further Assurances. Upon the request of Buyer at any time on or after the
Closing Date, each of the Selling Parties will promptly execute and deliver, or cause the General
Partner to execute and deliver, such further instruments of assignment, transfer, conveyance,
endorsement, direction or authorization and other documents as Buyer or its counsel may reasonably
request in order to perfect title of Buyer and its successors and assigns to the Securities.
SECTION 4.2. Commercially Reasonable Efforts. Upon the terms and subject to the conditions
of this Agreement, each of the Selling Parties and Buyer hereto will use all commercially
reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable consistent with applicable law to consummate and make
effective in the most expeditious manner practicable the transactions contemplated hereby.
SECTION 4.3. Notice of Breach. Each party shall promptly give to the other parties written
notice with particularity upon having knowledge of any matter that would constitute a breach by
such party of any
representation, warranty, agreement or covenant of such party contained in this Agreement,
including, without limitation, the Selling Parties representations in Article II.
SECTION 4.4. Tax Covenants.
(a) All excise, sales, use, transfer (including real property transfer or gains), stamp,
documentary, filing, recordation and other similar taxes, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or penalties,
resulting directly from the transactions contemplated by this Agreement (the Transfer Taxes),
shall be borne by the Selling Parties. Notwithstanding anything to the contrary in this
Section 4.4, any Tax Returns that must be filed in connection with Transfer Taxes shall be
prepared and filed when due by the party primarily or customarily responsible under the applicable
local law for
-14-
filing such Tax Returns, and such party will use commercially reasonable efforts to
provide such Tax Returns to the other party at least ten days prior to the due date for such Tax
Returns.
(b) The Selling Parties shall cause each of the Partnership Entities to adopt the remedial
allocation method under Treas. Reg. Section 1.704-3(d).
SECTION 4.5. No Control of the General Partner. Buyer hereby agrees with the General
Partner, NGP and Davis that Buyer shall not exercise any control whatsoever, take any action as a
Member, or request that any actions be taken by the Members or the Board of Directors other than
the transactions contemplated by this Agreement, with respect to the General Partner prior to the
redemption of the Redeemed Interests in accordance with Section 1.1(a).
ARTICLE V.
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or
more of which may be waived by Buyer in its sole discretion:
SECTION 5.1. Receipt of Documents. The Selling Parties and the General Partner shall have
delivered, or be standing ready to deliver, to Buyer the items specified in Sections
1.2(a)(i)-(vii), and Section 1.2(d), respectively, in each case duly executed and
dated the Closing Date.
SECTION 5.2. Representations and Warranties of the Selling Parties. All representations and
warranties made by the Selling Parties and the General Partner in this Agreement that are not
qualified by materiality or Material Adverse Effect shall be true and correct in all material
respects on and as of the Closing Date as if again made by the Selling Parties and the General
Partner on and as of such date, and all representations and
warranties that are qualified by materiality or Material Adverse Effect shall be true and
correct on the Closing Date as if made by the Selling Parties and the General Partner on and as of
such date; and Buyer shall have received a certificate dated the Closing Date and signed by a
senior executive officer of each of the Selling Parties and the General Partner to that effect.
SECTION 5.3. Performance of Selling Parties Obligations. The Selling Parties shall have
performed in all material respects all obligations required under this Agreement to be performed
by them on or before the Closing Date, and Buyer shall have received a certificate dated the
Closing Date and signed by a senior executive officer of each of the Selling Parties to that
effect.
SECTION 5.4. No Violation of Orders. No preliminary or permanent injunction or other order
issued by any Governmental Authority that declares this Agreement or any of the Transaction
Documents invalid or unenforceable in any respect or that prevents the consummation of the
transactions contemplated hereby or thereby shall be in effect; and no action or proceeding before
any Governmental Authority shall have been instituted by a Governmental Authority or threatened by
any Government Authority that seeks to prevent or
-15-
delay the consummation of the transactions
contemplated by this Agreement or any of the Transaction Documents or that challenges the validity
or enforceability of this Agreement or any of the Transaction Documents.
SECTION 5.5. Unitholder Rights and Restrictions Agreement. ETE shall have entered into the
Unitholder Rights and Restrictions Agreement with the Buyer substantially in the form attached
hereto as Exhibit 5.5.
SECTION 5.6. Amended and Restated GP LLC Agreement. Warren, NGP VI, Davis and the Buyer
shall have executed the Amended and Restated GP LLC Agreement.
SECTION 5.7. 10b-5 Certificate of ETE. Buyer shall have received a 10b-5 Certificate from
ETE in the form attached hereto as Exhibit 5.7.
ARTICLE VI.
CONDITIONS TO OBLIGATIONS OF SELLING PARTIES
The obligations of the Selling Parties to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, at or before the Closing Date, of the following
conditions, any one or more of which may be waived by the Selling Parties in their sole discretion:
SECTION 6.1. Receipt of Documents. Buyer shall have delivered, or be standing ready to
deliver, to the Selling Parties and the General Partner the items specified in Section
1.2(b), in each case duly executed and dated the Closing Date.
SECTION 6.2. Representations and Warranties of Buyer. All representations and warranties
made by Buyer in this Agreement that are not qualified by materiality or material adverse effect
shall be true and correct in all material respects on and as of the Closing Date as if again made
by Buyer on and as of such date, and all representations and warranties that are qualified by
materiality or material adverse effect shall be true and correct on the Closing Date as if made by
the Buyer on and as of such date; and the Selling Parties shall have received a certificate dated
the Closing Date and signed by a senior executive officer of Buyer to that effect.
SECTION 6.3. Performance of Buyers Obligations. Buyer shall have performed in all material
respects all obligations required under this Agreement to be performed by it on or before the
Closing Date, and the Selling Parties shall have received a certificate dated the Closing Date and
signed by a senior executive officer of Buyer to that effect.
SECTION 6.4. No Violation of Orders. No preliminary or permanent injunction or other order
issued by any Governmental Authority that declares this Agreement or any of the Transaction
Documents invalid or unenforceable in any respect or that prevents the consummation of the
transactions contemplated hereby or thereby shall be in effect; and no action or proceeding before
any Governmental Authority shall have been instituted by a Governmental Authority or threatened by
any Governmental Authority that seeks to prevent or
-16-
delay the consummation of the transactions
contemplated by this Agreement or any of the Transaction Documents or that challenges the validity
or enforceability of this Agreement or any of the Transaction Documents.
SECTION 6.5. Unitholder Rights and Restrictions Agreement. Buyer shall have entered into the
Unitholder Rights and Restrictions Agreement with ETE substantially in the form attached hereto as
Exhibit 5.5.
SECTION 6.6. Amended and Restated GP LLC Agreement. Warren, NGP VI, Davis and the Buyer
shall have executed the Amended and Restated GP LLC Agreement.
ARTICLE VII.
TERMINATION AND ABANDONMENT
SECTION 7.1. Methods of Termination; Upset Date. This Agreement may, or in the case of
Section 7.1(e) will, be terminated and the transactions contemplated hereby may be
abandoned at any time before the Closing:
(a) by the mutual written consent of the Selling Parties and Buyer;
(b) by the Selling Parties, if Buyer fails to comply with any of its covenants or agreements
contained herein, or breaches their representations and warranties contained herein, which failure
to comply or breach is not cured on the Closing Date;
(c) by Buyer, if the Selling Parties fail to comply with any of their covenants or agreements
contained herein, or breaches its representations and warranties contained herein, which failure to
comply or breach is not cured on the Closing Date; or
(d) by the Selling Parties or Buyer, if a Governmental Authority shall have issued an order,
decree or ruling or taken any other action (which order, decree or ruling the parties hereto shall
use their commercially reasonable efforts to lift), which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this Agreement and which order, decree, ruling
or other action is not subject to appeal; or
(e) without any action required by the Selling Parties or Buyer, if the Closing has not
occurred by 11:59 p.m. New York time on the date after the date of this Agreement.
SECTION 7.2. Effect of Termination. In the event of termination of this Agreement pursuant
to Section 7.1(a), (d) or (e) hereof, this Agreement shall forthwith become void
and there shall be no liability on the part of Buyer, the Selling Parties or the General Partner
(or their respective officers or directors), except based upon obligations set forth in
Sections 9.3 and 9.4 hereof, and except that Buyer shall thereupon promptly return
or destroy (and cause its agents and representatives to return or destroy) to the Selling Parties
all documents (and copies thereof) furnished to Buyer and the parties shall continue to adhere to
the Confidentiality Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, termination of this Agreement pursuant to Section 7.1(b) or Section
7.1(c) shall not in any way limit or restrict the rights and remedies of any party hereto
against any other
-17-
party hereto that has violated or breached any of the representations,
warranties, agreements or other provisions of this Agreement prior to termination hereof.
ARTICLE VIII.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
SECTION 8.1. Survival. The representations and warranties of Buyer, the Selling Parties and
the General Partner contained herein or in any certificates or other documents delivered pursuant
to this Agreement on the Closing Date terminate on the Closing Date; provided, however, that (i)
the representations and warranties set forth in Section 2.1(b) and Section 2.2(b)
(Validity of Agreement; Authorization), Section 2.1(e) (Title), Section 2.1(g)
(Brokers) and Section 2.2(d) (Capitalization of the General Partner) shall survive
indefinitely; and (ii) the other representations and warranties made by the General Partner in
Section 2.2 shall survive for a period of six months after the Closing Date. The
covenants and agreements set forth in Article I, Section 4.1, this Article
VIII and Article IX shall survive the Closing for a period of one year.
SECTION 8.2. Indemnification Coverage.
(a) From and after the Closing, each Selling Party (the Indemnifying Parties) shall
severally but not jointly indemnify and defend, save and hold Buyer harmless if Buyer shall
actually incur any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax,
expense (including reasonable attorneys, consultants and experts fees), claim or cause of action
(each, a Loss, and collectively, Losses) arising out of, relating to or resulting from (i) any
breach or inaccuracy in any representation by the General Partner or the breach of any warranty by
the General Partner contained in Section 2.2 of this Agreement; (ii) any breach or
inaccuracy in any representation by such Selling Party contained in Section 2.1 of this
Agreement; or (iii) any breach of the covenants and agreements by such Selling Party under this
Agreement; provided, that in determining whether any representation or warranty has been breached
or is inaccurate, such representation or warranty shall be construed as if Material Adverse Effect
or materiality is not a qualification thereto.
(b) The foregoing indemnification obligations shall be subject to the following limitations:
(i) each Indemnifying Partys aggregate liability (A) under
Section 8.2(a)(i), except
with respect to a breach of Section 2.2(d)(iii), shall not exceed such Indemnifying Partys
allocated portion of $12,338,597 set forth on Schedule 1.3 to such Indemnifying Partys
sale of a GP Interest and (B) under Section 8.2(a)(i) (with respect to a breach of Section
2.2(d)(iii) only), Section 8.2(a)(ii) or 8.2(a)(iii) shall not exceed the total
Purchase Price allocated on Schedule 1.3 to be paid to such Indemnifying Party;
(ii) any claims made pursuant to (A) Section 8.2(a)(i), except with respect to a
breach of Section 2.2(d), must be made by Buyer within six months from the date of this
Agreement and (B) pursuant to Section 8.2(a)(i) (with respect to a breach of Section
2.2(d) only), Section 8.2(a)(ii) or 8.2(a)(iii) must be made by Buyer within
the survival period specified in
-18-
Section 8.1 for the representation or other provision which the Buyer is alleging has
been breached;
(iii) the amount of any Losses suffered by Buyer shall be reduced by any third-party insurance
or other indemnification payments which such party receives in respect of or as a result of such
Losses, less the reasonable costs incurred to recover those insurance or indemnification payments
to the extent such costs are not otherwise recovered. If any Losses for which indemnification is
provided hereunder is subsequently reduced by any third-party insurance or other indemnification
payments received by the Buyer less the reasonable costs incurred to obtain payment, the amount of
the reduction shall be remitted pro rata to the Selling Parties who have made payment hereunder;
(iv) no claim may be asserted nor may any action be commenced against any party for breach or
inaccuracy of any representation or breach of a warranty, unless written notice of such claim or
action is received by the other party describing in reasonable detail the facts and circumstances
with respect to the subject matter of such claim or action on or prior to the date on which the
representation or warranty on which such claim or action is based ceases to survive as set forth in
Section 8.1;
(v) Buyer shall not be entitled under this Agreement to multiple recovery for the same Losses.
SECTION 8.3. Procedures.
(a) Buyer shall notify the Indemnifying Party (with reasonable detail) promptly (but in each
case within 10 business days) after it becomes aware of facts supporting a claim or action for
indemnification under this Article VIII, and shall provide to the Indemnifying Party as
soon as practicable thereafter all reasonable available information and documentation necessary to
support and verify any Losses associated with such claim or action. Subject to Section
8.2(c)(iv), the failure to so notify or provide information to the Indemnifying Party shall not
relieve the Indemnifying Party of any liability that it may have to Buyer, except to the extent
that the Indemnifying Party demonstrates that it has been materially prejudiced by Buyers failure
to give such notice, in which case the Indemnifying Party shall be relieved from its obligations
hereunder to the extent of such material prejudice. The Indemnifying Party shall participate in
and defend, contest or otherwise protect Buyer against any such claim or action by counsel of the
Indemnifying Partys choice at its sole cost and expense; provided, however, that the Indemnifying
Party shall not make any settlement or compromise without the prior written consent of Buyer (which
consent shall not be unreasonably withheld or delayed) unless the sole relief provided is monetary
damages that are paid in full by the Indemnifying Party, there is no admission or statement of
fault or culpability on the part of Buyer and there is an unconditional release of Buyer from all
liability on any claims that are the subject of such claim or action. Buyer shall have the right,
but not the obligation, to participate at its own expense in the defense thereof by counsel of
Buyers choice and shall in any event use its commercially reasonable efforts to cooperate with and
assist the Indemnifying Party; provided, however, that the Indemnifying Party shall pay the fees
and expenses of separate counsel for Buyer if (i) the
Indemnifying Party has agreed to pay such fees and expenses or (ii) counsel for the
Indemnifying Party reasonably determines that representation of both the Indemnifying Party and
Buyer by the
-19-
same counsel would create a conflict of interest. If the Indemnifying Party fails
timely to defend, contest or otherwise protect against such suit, action, investigation, claim or
proceeding, Buyer shall have the right to do so, including, without limitation, the right to make
any compromise or settlement thereof, and Buyer shall be entitled to recover the entire cost
thereof from the Indemnifying Party, including, without limitation, reasonable attorneys fees,
disbursements and amounts paid as the result of such suit, action, investigation, claim or
proceeding.
SECTION 8.4. Tax Treatment of Indemnity Payments. Each party, to the extent permitted by
applicable law, agrees to treat any payments made pursuant to this Article VIII as
adjustments to the Purchase Price for all federal and state income and franchise Tax purposes. To
the extent that any such payment is not permitted to be treated as an adjustment to the Purchase
Price, the amount of such payment shall be increased so that after reduction for the amount of any
actual additional Tax cost incurred as a result of the receipt of such payment, the amount
remaining will be equal to the amount of the payment that is owed under this Article VIII.
SECTION 8.5. Remedies.
(a) The Buyer acknowledges and agrees that following the Closing, the indemnification
provisions of Article VIII shall be the sole and exclusive remedies of the Buyer for any
breach by any Selling Party or the General Partner of the representations and warranties in this
Agreement, or any certificate delivered in connection herewith, and for any failure by the Selling
Parties or the General Partner to perform and comply with any covenants and agreements in this
Agreement, except that if any of the provisions of this Agreement are not performed in accordance
with their terms or are otherwise breached, the parties shall be entitled to specific performance
of the terms thereof in addition to any other remedy at law or equity. Each party hereto shall
take all commercially reasonable steps to mitigate its Losses upon and after becoming aware of any
event which could reasonably be expected to give rise to any Losses.
(b) No Selling Party nor the General Partner shall have any liability under any provision of
this Agreement for any punitive or exemplary damages relating to the breach or alleged breach of
this Agreement or any representations or warranties contained herein or in any certificate
delivered in connection herewith.
(c) The provisions of this Section 8.5 do not apply to nor restrict the remedies of
the Buyer with respect to any representations or warranties of ETE contained in the certificate to
be delivered to the Buyer by ETE pursuant to Section 5.7.
(d) The Buyer and the Selling Parties agree that (i) the General Partner shall have no
liability under this Agreement to the Buyer or any Selling Party, for the breach of any
representations or warranty contained in Section 2.2, covenant or otherwise, except with
respect to the covenants set forth in Section 1.01(a)(ii), Section 1.01(a)(iii) and
Section 1.2(d)(i), and (ii) the Selling Parties shall be solely responsible to indemnify
the Buyer for any breach of any
representation or warranty of the General Partner under this Agreement, in accordance with
this Article VIII.
-20-
ARTICLE IX.
MISCELLANEOUS PROVISIONS
SECTION 9.1. Publicity. On or prior to the Closing Date, no party shall, nor shall it permit
its Affiliates to, issue or cause the publication of any press release or other announcement with
respect to this Agreement or the transactions contemplated hereby without the consent of the other
party hereto; provided, any party may issue a press release and file any required reports with the
SEC after consultation with counsel for the Selling Parties. Notwithstanding the foregoing, in
the event any such press release or announcement is required by law or stock exchange rule to be
made by the party proposing to issue the same, such party shall use its commercially reasonable
efforts to consult in good faith with the other party prior to the issuance of any such press
release or announcement.
SECTION 9.2. Successors and Assigns; Third-Party Beneficiaries. This Agreement shall inure
to the benefit of, and be binding upon, the parties hereto and their respective successors and
permitted assigns. Except as set forth in Article VIII, nothing in this Agreement shall
confer upon any Person not a party to this Agreement, or the legal representatives of such Person,
any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement. No
party shall sell, assign or otherwise transfer all or any of its rights, benefits or obligations
hereunder without the prior written consent of the other party, such consent not to be
unreasonably withheld or delayed, provided, however, that, for the purposes of any financing or
refinancing arrangement entered into by the Buyer in connection with the purchase of the
Securities the Buyer may, without the Selling Parties prior written consent, assign to or create
a security interest in favor of any party providing any such financing or refinancing to the
Buyer, all of its rights, benefits, obligations and interests hereunder, and the Selling Parties
hereby consent to the exercise by any such party of any rights, benefits, obligations or interests
assigned to or created in favor of such party pursuant to the foregoing and any remedies arising
in connection therewith.
SECTION 9.3. Fees and Expenses. Except as otherwise expressly provided in this Agreement,
all legal, accounting and other fees, costs and expenses of a party hereto incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by the party incurring
such fees, costs or expenses.
SECTION 9.4. Notices. All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made if delivered personally or
sent by
overnight courier or sent by facsimile (with evidence of confirmation of receipt) to the
parties at the following addresses:
Enterprise GP Holdings L.P.
1100 Louisiana Street, 18th Floor
Houston, Texas 77002
Facsimile: (713) 803-2096
Attention: Michael A. Creel
-21-
with a copy to:
Enterprise GP Holdings L.P.
1100 Louisiana Street, 18th Floor
Houston, Texas 77002
Facsimile: (713) 381-2905
Attention: Richard H. Bachmann, Esq.
and with a copy to:
Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas 77002
Facsimile: (713) 220-4285
Attention: David C. Buck, Esq.
|
(b) |
|
If to the Selling Parties, to: |
Natural Gas Partners VI, L.P.
125 East John Carpenter Freeway, Suite 600
Irving, TX 75062
Facsimile: (972) 432-1441
Attention: Richard L. Covington
with a copy to:
McKee Nelson LLP
One Battery Park Plaza, 34th Floor
New York, NY 10004
Facsimile: (917) 777-4299
Ray C. Davis
Avatar Investments LLC
Avatar Holdings, LP
2838 Woodside Street
Dallas, Texas 75204
Facsimile: (214) 981-0703
with a copy to:
McKee Nelson LLP
One Battery Park Plaza, 34th Floor
New York, NY 10004
Facsimile: (917) 777-4299
-22-
Lon Kile
c/o Natural Gas Partners VI, L.P.
125 East John Carpenter Freeway, Suite 600
Irving, TX 75062
Facsimile: (972) 432-1441
Attention: Lon Kile
with a copy to:
McKee Nelson LLP
One Battery Park Plaza, 34th Floor
New York, NY 10004
Facsimile: (917) 777-4299
MHT Properties, Ltd.
125 East John Carpenter Freeway, Suite 600
Irving, TX 75062
Facsimile: (972) 432-1441
with a copy to:
McKee Nelson LLP
One Battery Park Plaza, 34th Floor
New York, NY 10004
Facsimile: (917) 777-4299
P. Brian Smith Holdings LP
125 East John Carpenter Freeway, Suite 600
Irving, TX 75062
Facsimile: (972) 432-1441
Attention: P. Brian Smith
with a copy to:
McKee Nelson LLP
One Battery Park Plaza, 34th Floor
New York, NY 10004
Facsimile: (917) 777-4299
or to such other Persons or at such other addresses as shall be furnished by any party by like
notice to the other, and such notice or communication shall be deemed to have been given or made as
of the date so delivered or mailed. No change in any of such addresses shall be effective insofar
as notices under this Section 9.4 are concerned unless such changed address is located in
the United States of America and notice of such change shall have been given to such other party
hereto as provided in this Section 9.4.
-23-
SECTION 9.5. Entire Agreement. This Agreement, together with the Disclosure Schedules and
the Exhibits hereto, the Confidentiality Agreement and the Transaction Documents represent the
entire agreement and understanding of the parties with reference to the transactions set forth
herein and therein and no representations or warranties have been made in connection herewith and
therewith by Buyer, any Selling Party, the General Partner or any of their respective officers,
directors, employees or representatives other than those expressly set forth herein or therein.
This Agreement, together with the Disclosure Schedules and the Exhibits hereto, the
Confidentiality Agreement and the Transaction Documents supersede all prior negotiations,
discussions, correspondence, communications, understandings and agreements between the parties
relating to the subject matter hereof or thereof and all prior drafts of such documents, all of
which are merged into such documents. No prior drafts of such documents and no words or phrases
from any such prior drafts shall be admissible into evidence in any action or suit involving such
documents.
SECTION 9.6. Waivers and Amendments. The Selling Parties or Buyer may, by written notice to
the other party: (a) extend the time for the performance of any of the obligations or other
actions of the other party; (b) waive any inaccuracies in the representations or warranties of the
other party contained in this Agreement or in any document delivered pursuant to this Agreement by
the other party; (c) waive compliance with any of the covenants of the other party contained in
this Agreement; (d) waive performance of any of the obligations of the other party created under
this Agreement; or (e) waive fulfillment of any of the conditions to its own obligations under
this
Agreement or in any documents delivered pursuant to this Agreement by the other party. The
waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach, whether or not similar, unless such waiver
specifically states that it is to be construed as a continuing waiver. This Agreement may be
amended, modified or supplemented only by a written instrument executed by the parties hereto.
SECTION 9.7. Severability. This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such
invalid or unenforceable term or provision, the parties hereto intend that there shall be added as
a part of this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
SECTION 9.8. Titles and Headings. The Article and Section headings and any table of contents
contained in this Agreement are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or of any term or provision hereof.
SECTION 9.9. Signatures and Counterparts. Facsimile transmission of any signed original
document and/or retransmission of any signed facsimile transmission shall be the same as delivery
of an original. At the request of Buyer or the Selling Parties, the parties will confirm facsimile
transmission by signing a duplicate original document. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which together shall be
considered one and the same agreement.
-24-
SECTION 9.10. Enforcement of the Agreement; Damages. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereto, this being in addition to
any other remedy to which they are entitled at law or in equity.
SECTION 9.11. Governing Law. This Agreement shall be governed by and construed in accordance
with the internal and substantive laws of Texas and without regard to any conflicts of laws
concepts that would apply the substantive law of some other jurisdiction.
SECTION 9.12. Disclosure. Certain information set forth in the Disclosure Schedules is included solely for
informational purposes, is not an admission of liability with respect to the matters covered by
the information, and may not be required to be disclosed pursuant to this Agreement. Disclosure
of any item in any section of the Disclosure Schedules only qualifies (i) the correspondingly
numbered representation and warranty or covenant in this Agreement to the extent specified therein
and (ii) such other representations and warranties or covenants in this Agreement that are
qualified by another Disclosure Schedule (or section of a Disclosure Schedule), but only to the
extent (a) there is an explicit cross-reference in such other Disclosure Schedule (or section of a
Disclosure Schedule, as applicable) or (b) such item is disclosed in such a way as to make its
relevance to the information called for by such other Disclosure Schedule (or section of a
Disclosure Schedule, as applicable) readily apparent on its face. The specification of any dollar
amount in the representations and warranties contained in this Agreement or the inclusion of any
specific item in the Disclosure Schedules is not intended to imply that such amounts (or higher or
lower amounts) are or are not material, and no party shall use the fact of the setting of such
amounts or the fact of the inclusion of any such item in the Disclosure Schedules in any dispute
or controversy between the parties as to whether any obligation, item, or matter not described
herein or included in a Disclosure Schedule is or is not material for purposes of this Agreement.
SECTION 9.13. Consent to Jurisdiction. The parties hereby irrevocably submit to the
jurisdiction of the courts of the State of Texas and the federal courts of the United States of
America located in Houston, Texas over any dispute arising out of or relating to this Agreement or
any of the transactions contemplated hereby, and each party irrevocably agrees that all claims in
respect of such dispute or proceeding shall be heard and determined in such courts. The parties
hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the venue of any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each party agrees that a judgment in any
dispute heard in the venue specified by this section may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by applicable law.
SECTION 9.14. Certain Definitions. For purposes of this Agreement, the term:
(a) Action means any claim, action, suit, arbitration, inquiry, proceeding or investigation
by or before any Governmental Authority.
-25-
(b) Antitrust Investigation shall mean any investigation, inquiry, review, proceeding,
action, or threatened action taken by a Governmental Authority in enforcing the Antitrust Laws.
(c) Antitrust Laws shall include the Sherman Act, as amended, the Clayton Act, as amended,
the HSR Act, the Federal Trade Commission Act, as amended, and all other federal, state, and
foreign statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade or lessening of
competition.
(d) Affiliate of a Person means a Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the first- mentioned
Person.
(e) Confidentiality Agreement means, the Confidentiality Agreement among Buyer, Davis, NGP
VI and ETE, dated April 20, 2007.
(f) Governmental Authority means any federal, national, supranational, state, provincial,
local or other government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body. including, but not limited to, all
U.S., state and foreign governmental agencies responsible for enforcing the Antitrust Laws.
(g) Material Adverse Effect shall mean an adverse effect on the business, results of
operations, or financial condition, of the General Partner and its Subsidiaries, taken as a whole,
that would have a material adverse effect on the value of the Securities, it being understood that
none of the following shall be deemed to constitute a Material Adverse Effect: (i) any effect
resulting from entering into this Agreement or the announcement of the transactions contemplated by
this Agreement, (ii) any effect resulting from changes in general economic conditions in the
industry in which any of the Partnership Entities operates, and (iii) any effect resulting from
changes in the United States or global economy as a whole, unless in the case of clause (ii) or
(iii) above such change has a disproportionately adverse effect on the Partnership Entities, taken
as a whole.
(h) Non-ETE Subsidiary means any Subsidiary of the Company other than ETE and any Subsidiary
of ETE.
(i) Organizational Documents shall mean certificates of incorporation, by-laws, certificates
of formation, limited liability company operating agreements, partnership or limited partnership
agreements or other formation or governing documents of a particular entity.
(j) Partnership Agreement means the Third Amended and Restated Agreement of Limited
Partnership of Energy Transfer Equity, L.P., dated as of February 8, 2006, as amended by Amendment
No. 1 dated effective as of November 1, 2006.
(k) Person shall mean an individual, corporation, association, trust, limited liability
company, limited partnership, limited liability partnership, partnership, incorporated
organization, other entity or group (as defined in Section 13(d)(3) of the Exchange Act).
-26-
(l) Transaction Documents shall mean the agreements, contracts, documents, instruments and
certificates provided for in this Agreement to be entered into by one or more of the parties hereto
or any of their Affiliates in connection with the transactions contemplated by this Agreement,
including without limitation the Bills of Sale.
(m) Unitholders Rights and Restrictions Agreements means the agreement dated as of the date
hereof among ETE, Buyer, Davis and NGP substantially in the form attached hereto as Exhibit 5.5.
-27-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
|
|
|
|
|
|
|
SELLING PARTIES: |
|
Ray C. Davis |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Ray C. Davis
|
|
|
|
|
Name:
|
|
Ray C. Davis |
|
|
|
|
|
|
|
|
|
|
|
Avatar Holdings, LLC |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Ray C. Davis
|
|
|
|
|
Name:
|
|
Ray C. Davis
|
|
|
|
|
Title:
|
|
President
|
|
|
|
|
|
|
|
|
|
|
|
Avatar Investments, LP |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
Avatar Holdings, LLC, its general partner |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Ray C. Davis
|
|
|
|
|
Name:
|
|
Ray C. Davis
|
|
|
|
|
Title:
|
|
President
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Partners VI, L.P. |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
G.F.W. Energy VI, L.P., general partner |
|
|
|
|
By:
|
|
GFW VI, L.L.C., general partner |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Kenneth A. Hersh
|
|
|
|
|
Name:
|
|
Kenneth A. Hersh |
|
|
|
|
Title:
|
|
Authorized Member |
|
|
|
|
|
|
|
|
|
|
|
Lon Kile |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Lon Kile
|
|
|
|
|
Name:
|
|
Lon Kile |
|
|
|
|
|
|
|
|
|
|
|
MHT Properties, Ltd. |
|
|
|
|
|
|
|
|
|
|
|
MHT Properties, Ltd. |
|
|
|
|
By: MHT Group, LLC, its general partner |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Eric R. Pitcher
|
|
|
|
|
Name:
|
|
Eric R. Pitcher |
|
|
|
|
Title:
|
|
President |
|
|
-28-
|
|
|
|
|
|
|
|
|
P. Smith Holdings LP |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
P. Brian Smith Capital Corp., its general partner |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Kenneth A. Hersh
|
|
|
|
|
Name:
|
|
Kenneth A. Hersh |
|
|
|
|
Title:
|
|
Attorney-in-Fact |
|
|
|
|
|
|
|
|
|
BUYER: |
|
Enterprise GP Holding L.P. |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
EPE HOLDINGS, LLC, its general partner |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Michael A. Creel
|
|
|
|
|
Name:
|
|
Michael A. Creel, CEO |
|
|
|
|
|
|
|
|
|
GENERAL PARTNER: |
|
LE GP, LLC |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ John W. McReynolds
|
|
|
|
|
Name:
|
|
John W. McReynolds |
|
|
|
|
Title:
|
|
President |
|
|
-29-
exv10w2
Execution Copy
EXHIBIT 10.2
AMENDED & RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
LE GP, LLC
A Delaware limited liability company
May 7, 2007
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
ARTICLE I |
|
|
|
|
|
|
DEFINITIONS |
|
|
|
|
|
|
|
|
|
|
|
Section 1.1 |
|
Definitions |
|
|
2 |
|
Section 1.2 |
|
Construction |
|
|
13 |
|
|
|
|
|
|
|
|
|
|
ARTICLE II |
|
|
|
|
|
|
ORGANIZATION |
|
|
|
|
|
|
|
|
|
|
|
Section 2.1 |
|
Formation |
|
|
14 |
|
Section 2.2 |
|
Name |
|
|
14 |
|
Section 2.3 |
|
Registered Office; Registered Agent; Principal Office; Other Offices |
|
|
14 |
|
Section 2.4 |
|
Purpose |
|
|
14 |
|
Section 2.5 |
|
Foreign Qualification |
|
|
14 |
|
Section 2.6 |
|
Term |
|
|
14 |
|
Section 2.7 |
|
Powers |
|
|
15 |
|
Section 2.8 |
|
No State-Law Partnership; Withdrawal |
|
|
15 |
|
Section 2.9 |
|
Certain Undertakings Relating to the Separateness of the MLP |
|
|
15 |
|
Section 2.10 |
|
Title to Company Property |
|
|
17 |
|
|
|
|
|
|
|
|
|
|
ARTICLE III |
|
|
|
|
|
|
MATTERS RELATING TO MEMBERS |
|
|
|
|
|
|
|
|
|
|
|
Section 3.1 |
|
Members |
|
|
17 |
|
Section 3.2 |
|
Creation of Additional Membership Interest |
|
|
17 |
|
Section 3.3 |
|
Liability to Third Parties |
|
|
17 |
|
Section 3.4 |
|
Meetings of the Members |
|
|
17 |
|
Section 3.5 |
|
Quorum; Voting Requirement |
|
|
17 |
|
Section 3.6 |
|
Notice of Meetings |
|
|
18 |
|
Section 3.7 |
|
Waiver of Notice |
|
|
18 |
|
Section 3.8 |
|
Action Without a Meeting |
|
|
18 |
|
Section 3.9 |
|
Proxies |
|
|
18 |
|
Section 3.10 |
|
Voting by Certain Holders |
|
|
18 |
|
Section 3.11 |
|
Denial of Appraisal Rights |
|
|
18 |
|
|
|
|
|
|
|
|
|
|
ARTICLE IV |
|
|
|
|
|
|
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS |
|
|
|
|
|
|
|
|
|
|
|
Section 4.1 |
|
Capital Contributions |
|
|
19 |
|
Section 4.2 |
|
Loans |
|
|
19 |
|
Section 4.3 |
|
Return of Contributions |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
ARTICLE V |
|
|
|
|
|
|
ALLOCATIONS AND DISTRIBUTIONS |
|
|
|
|
|
|
|
|
|
|
|
Section 5.1 |
|
Allocations of Profits |
|
|
19 |
|
Section 5.2 |
|
Allocations of Losses |
|
|
19 |
|
Section 5.3 |
|
Special Allocations |
|
|
19 |
|
- ii -
|
|
|
|
|
|
|
Section 5.4 |
|
Regulatory Allocations |
|
|
21 |
|
Section 5.5 |
|
Loss Limitation |
|
|
21 |
|
Section 5.6 |
|
Other Allocation Rules |
|
|
22 |
|
Section 5.7 |
|
Tax Allocations; Code Section 704(c) |
|
|
22 |
|
Section 5.8 |
|
Distributions |
|
|
23 |
|
|
|
|
|
|
|
|
|
|
ARTICLE VI |
|
|
|
|
|
|
MANAGEMENT |
|
|
|
|
|
|
|
|
|
|
|
Section 6.1 |
|
Management |
|
|
23 |
|
Section 6.2 |
|
Board of Directors |
|
|
27 |
|
Section 6.3 |
|
Officers |
|
|
30 |
|
Section 6.4 |
|
Duties of Officers and Directors |
|
|
32 |
|
Section 6.5 |
|
Compensation |
|
|
32 |
|
Section 6.6 |
|
Indemnification |
|
|
32 |
|
Section 6.7 |
|
Liability of Indemnitees |
|
|
34 |
|
Section 6.8 |
|
Amendment and Vesting of Rights |
|
|
35 |
|
Section 6.9 |
|
Severability |
|
|
35 |
|
Section 6.10 |
|
Contracts with Members or Their Affiliates |
|
|
35 |
|
Section 6.11 |
|
Other Business Ventures |
|
|
36 |
|
Section 6.12 |
|
Acknowledged and Permitted NGP Activities |
|
|
36 |
|
Section 6.13 |
|
Resolution of Conflicts of Interest; Standard of Conduct and Modification of Duties |
|
|
36 |
|
|
|
|
|
|
|
|
|
|
ARTICLE VII |
|
|
|
|
|
|
TAX MATTERS |
|
|
|
|
|
|
|
|
|
|
|
Section 7.1 |
|
Tax Returns and Information |
|
|
38 |
|
Section 7.2 |
|
Tax Matters Member |
|
|
39 |
|
Section 7.3 |
|
Tax Elections |
|
|
39 |
|
|
|
|
|
|
|
|
|
|
ARTICLE VIII |
|
|
|
|
|
|
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS |
|
|
|
|
|
|
|
|
|
|
|
Section 8.1 |
|
Maintenance of Books |
|
|
39 |
|
Section 8.2 |
|
Reports |
|
|
39 |
|
Section 8.3 |
|
Information Rights |
|
|
39 |
|
Section 8.4 |
|
Bank Accounts |
|
|
40 |
|
Section 8.5 |
|
Fiscal Year |
|
|
40 |
|
|
|
|
|
|
|
|
|
|
ARTICLE IX |
|
|
|
|
|
|
DISSOLUTION, WINDING-UP AND TERMINATION |
|
|
|
|
|
|
|
|
|
|
|
Section 9.1 |
|
Dissolution |
|
|
40 |
|
Section 9.2 |
|
Winding-Up and Termination |
|
|
41 |
|
Section 9.3 |
|
Compliance With Certain Requirements of Treasury Regulations; Deficit Capital Accounts |
|
|
41 |
|
Section 9.4 |
|
Deemed Distribution and Recontribution |
|
|
42 |
|
Section 9.5 |
|
Allocations and Distributions During Period of Liquidation |
|
|
42 |
|
Section 9.6 |
|
Character of Liquidating Distributions |
|
|
42 |
|
- iii -
|
|
|
|
|
|
|
|
|
ARTICLE X |
|
|
|
|
|
|
MERGER, CONSOLIDATION OR CONVERSION |
|
|
|
|
|
|
|
|
|
|
|
Section 10.1 |
|
Authority |
|
|
42 |
|
Section 10.2 |
|
Procedure for Merger, Consolidation or Conversion |
|
|
42 |
|
Section 10.3 |
|
Approval by Members of Merger or Consolidation |
|
|
44 |
|
Section 10.4 |
|
Certificate of Merger or Conversion |
|
|
45 |
|
|
|
|
|
|
|
|
|
|
ARTICLE XI |
|
|
|
|
|
|
TRANSFERS |
|
|
|
|
|
|
|
|
|
|
|
Section 11.1 |
|
Restriction on Transfers |
|
|
46 |
|
Section 11.2 |
|
Permitted Transfers |
|
|
46 |
|
Section 11.3 |
|
Conditions to Permitted Transfers |
|
|
46 |
|
Section 11.4 |
|
Prohibited Transfers |
|
|
47 |
|
Section 11.5 |
|
Rights of Unadmitted Assignees |
|
|
47 |
|
Section 11.6 |
|
Admission of Substituted Members |
|
|
47 |
|
Section 11.7 |
|
Distributions and Allocations in Respect of Transferred Member Interests |
|
|
48 |
|
|
|
|
|
|
|
|
|
|
ARTICLE XII |
|
|
|
|
|
|
PREEMPTIVE RIGHTS |
|
|
|
|
|
|
|
|
|
|
|
Section 12.1 |
|
Rights to Participate in Issuance of Additional Membership Interests |
|
|
49 |
|
Section 12.2 |
|
Rights of First Refusal |
|
|
49 |
|
Section 12.3 |
|
Rights to Compel Participation in Certain Transfers |
|
|
50 |
|
Section 12.4 |
|
Rights to Participate in Transfer |
|
|
51 |
|
Section 12.5 |
|
Purchase Option |
|
|
52 |
|
Section 12.6 |
|
Put Right |
|
|
53 |
|
|
|
|
|
|
|
|
|
|
ARTICLE XIII |
|
|
|
|
|
|
GENERAL PROVISIONS |
|
|
|
|
|
|
|
|
|
|
|
Section 13.1 |
|
Notices |
|
|
54 |
|
Section 13.2 |
|
Entire Agreement; Supersedure |
|
|
54 |
|
Section 13.3 |
|
Effect of Waiver or Consent |
|
|
54 |
|
Section 13.4 |
|
Amendment or Restatement |
|
|
54 |
|
Section 13.5 |
|
Binding Effect |
|
|
55 |
|
Section 13.6 |
|
Governing Law; Severability |
|
|
55 |
|
Section 13.7 |
|
Further Assurances |
|
|
55 |
|
Section 13.8 |
|
Offset |
|
|
55 |
|
Section 13.9 |
|
Counterparts |
|
|
55 |
|
- iv -
AMENDED & RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
LE GP, LLC
THIS AMENDED & RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of LE GP, LLC,
a Delaware limited liability company (the Company), executed on May 7, 2007 (the Effective
Date), is adopted, executed and agreed to, by and among Ray C. Davis (Davis), and Kelcy Warren
(Warren), each of whom is an individual residing in Texas, Natural Gas Partners VI, L.P., a
Delaware limited partnership (NGP), Enterprise GP Holdings L.P., a Delaware limited partnership
(EPE), and LE GP-Tax, LLC, a Delaware limited liability company. The parties hereto shall be
referenced individually as a Member or Party and collectively as Members or Parties.
RECITALS
WHEREAS, the Company was originally formed as a limited liability company under the laws of
the State of Texas, on and as of September 5, 2002 by the filing with the Secretary of State of the
State of Texas of the Articles of Organization of the Company;
WHEREAS, in connection with the formation of the Company, effective as of September 4, 2002,
the Regulations of the Company were executed (the Original Regulations), and, effective as of
October 10, 2002, the Original Regulations were amended and restated in their entirety (the
Amended Regulations);
WHEREAS, effective as of August 23, 2005, the Company was converted from a Texas limited
liability company to a Delaware limited liability company, and, effective as of February 8, 2006,
the Limited Liability Company Agreement of the Company was executed (the Existing Agreement);
WHEREAS, pursuant to the Securities Purchase Agreement by and among Davis, Avatar Holdings,
L.L.C., Avatar Investments, L.P., NGP, Lon Kile, MHT Properties, Ltd., P. Brian Smith Holdings LP,
and EPE, dated as of the date hereof, Davis and NGP collectively sold to EPE 877,251 Equity Units
and the existing Members of the Company agreed to admit EPE as a member of the Company with respect
to such Transferred Interests;
WHEREAS, immediately following the admission of EPE, the Company has distributed to EPE
392,020 Common Units held by the Company in redemption of 501,461 of the Equity Units held by EPE;
and
WHEREAS, the Members desire to amend and restate in its entirety the Existing Agreement to
reflect the admission of EPE and LE GP-Tax, LLC as Members of the Company, and to make such
additional amendments to the Existing Agreement as agreed to by the Parties.
NOW, THEREFORE, for and in consideration of the premises, the covenants and agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is
hereby acknowledged, the Members hereby amend and restate the Existing Agreement in its entirety as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
Accepting Offerees has the meaning assigned to such term in Section 12.2(d).
Act means the Delaware Limited Liability Company Act and any successor statute, as amended
from time to time.
Adjusted Capital Account Deficit means, with respect to any Member, the deficit balance, if
any, in such Members Capital Account as of the end of the relevant Allocation Year, after giving
effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such Member is deemed obligated to
restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
Affiliate means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common control with, the
Person in question. As used herein, the term control means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
Agreement means this Amended and Restated Limited Liability Company Agreement of the
Company, as the same may be amended, modified, supplemented or restated from time to time.
Allocation Year means (i) the period commencing on January 1, 2007 and ending on December
31, 2007, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on
December 31, or (iii) any portion of the period described in clauses (i) or (ii) for which the
Company is required to allocate Profits, Losses and other items of Company income, gain, loss or
deduction pursuant to Article V.
Applicable Law means any Law to which a specified Person or property is subject.
- 2 -
Audit and Conflicts Committee has the meaning assigned to such term in Section 6.2(e)(ii).
Bankruptcy means, with respect to any Person, (a) such Person (i) makes a general assignment
for the benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii) becomes the subject
of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency
proceedings; (iv) files a petition or answer seeking for such Person a reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any Law; (v) files an
answer or other pleading admitting or failing to contest the material allegations of a petition
filed against such Person in a proceeding of the type described in subclauses (i) through (iv) of
this clause (a); or (vi) seeks, consents to, or acquiesces in the appointment of a trustee,
receiver, or liquidator of such Person or of all or any substantial part of such Persons
properties; or (b) a proceeding against such Person seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any Law has been
commenced and 120 days have expired without dismissal thereof or with respect to which, without
such Persons consent or acquiescence, a trustee, receiver, or liquidator of such Person or of all
or any substantial part of such Persons properties has been appointed and 90 days have expired
without the appointment having been vacated or stayed, or 90 days have expired after the date of
expiration of a stay, if the appointment has not previously been vacated.
Board of Directors or Board has the meaning assigned to such term in Section 6.1.
Business Day means Monday through Friday of each week, except that a legal holiday
recognized as such by the government of the United States of America or the states of New York or
Texas shall not be regarded as a Business Day.
Capital Account means, with respect to any Member, the Capital Account maintained for such
Member in accordance with the following provisions:
(a) To each Members Capital Account there shall be credited (i) such Members Capital
Contributions, (ii) such Members distributive share of Profits and any items in the nature
of income or gain which are specially allocated to such Membership Interest pursuant to
Section 5.3 or Section 5.4, and (iii) the amount of any Company liabilities assumed by such
Member or that are secured by any Property distributed to such Member;
(b) To each Members Capital Account there shall be debited (i) the amount of money and
the Gross Asset Value of any Property distributed to such Member pursuant to any provision
of this Agreement, (ii) such Members distributive share of Losses and any items in the
nature of expenses or losses which are specially allocated to such Membership Interest
pursuant to Section 5.3 or Section 5.4, and (iii) the amount of any liabilities of such
Member assumed by the Company or that are secured by any Property contributed by such Member
to the Company;
(c) In the event a Membership Interest is Transferred in accordance with the terms of
this Agreement, the transferee shall succeed to the Capital Account of the transferor to the
extent it relates to the Transferred Membership Interest; and
- 3 -
(d) In determining the amount of any liability for purposes of subparagraphs (a) and
(b) above, there shall be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations; and
The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and
shall be interpreted and applied in a manner consistent with such Regulations. In the event the
Tax Matters Member shall determine that it is prudent to modify the manner in which the Capital
Accounts, or any debits or credits thereto are computed in order to comply with such Regulations,
the Tax Matters Member may make such modification. The Tax Matters Member also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between the aggregate Capital
Accounts of the Members and the amount of capital reflected on the Companys balance sheet, as
computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii)
make any appropriate modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b). The Tax Matters Member shall provide
each Member with written notice of any such adjustments or modifications.
Capital Contribution has the meaning assigned to such term in Section 4.1(b).
Certificate of Conversion means the Certificate of Conversion of the Company filed with the
Secretary of State of the State of Delaware as referenced in Section 2.1, as such Certificate of
Conversion may be amended, supplemented or restated from time to time.
Code means the United States Internal Revenue Code of 1986, as amended from time to time.
Common Unit has the meaning assigned to such term in the ETE Agreement.
Company has the meaning assigned to such term in the initial paragraph.
Company Minimum Gain has the same meaning as partnership minimum gain set forth in
Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
Compelled Sale has the meaning assigned to such term in Section 12.3(a).
Compelled Sale Notice has the meaning assigned to such term in Section 12.3(a).
Compelled Sale Notice Period has the meaning assigned to such term in Section 12.3(a).
Compelled Sale Price has the meaning assigned to such term in Section 12.3(a).
Compensation Committee has the meaning assigned to such term in Section 6.2(e)(iii).
Davis has the meaning assigned to such term in the initial paragraph.
- 4 -
Delaware General Corporation Law has the meaning assigned to such term in Title 8 of the
Delaware Code, as amended from time to time.
Depreciation means, for each Allocation Year, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable with respect to a depreciable or
amortizable asset for such Allocation Year for federal income tax purposes, except that (i) with
respect to any depreciable or amortizable asset whose Gross Asset Value differs from its adjusted
tax basis for federal income tax purposes and which difference is being eliminated by use of the
remedial allocation method defined by Regulations Section 1.704-3(d), Depreciation for such
Allocation Year shall be the amount of book basis recovered for such Allocation Year under the
rules prescribed by Regulations Section 1.704-3(d)(2), and (ii) with respect to any other
depreciable or amortizable asset whose Gross Asset Value differs from its adjusted basis for
federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such
beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax
purposes of a depreciable or amortizable asset at the beginning of such Allocation Year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Board. If the Gross Asset Value of a depreciable or amortizable
asset is adjusted pursuant to subparagraphs (b) or (d) of the definition of Gross Asset Value
during an Allocation Year, following such adjustment, Depreciation shall thereafter be calculated
under clause (i) or (ii) immediately above, whichever the case may be, based upon such Gross Asset
Value, as so adjusted.
Director means each member of the Board of Directors elected as provided in Section 6.2.
Dispose, Disposing or Disposition means, with respect to any asset, any
sale,
assignment, transfer, conveyance, gift, exchange or other disposition of such asset, whether such
disposition be voluntary, involuntary or by operation of Law.
Dissolution Event has the meaning assigned to such term in Section 9.1(a).
Drag-Along Portion means, with respect to any Member, (i) the Sharing Ratio of such Member
multiplied by (ii) the number of Equity Units proposed to be sold in the applicable Compelled Sale
under Section 12.3(a).
Effective Date has the meaning assigned to such term in the initial paragraph.
Energy Transfer Entities means ETE, the MLP and their subsidiaries.
EPE has the meaning assigned to such term in the initial paragraph.
EPE Representative has the meaning assigned to such term in Section 3.12.
- 5 -
Equity Units means, with respect to each Member, the Equity Units held by such Member as set
forth opposite such Members name on Exhibit A attached hereto. Such Equity Units
represent the Membership Interest held by such Member.
ETE means Energy Transfer Equity, L.P., a Delaware limited partnership.
ETE Agreement means the Third Amended and Restated Agreement of Limited Partnership of
Energy Transfer Equity, as amended.
Excluded Business Opportunity shall mean a business opportunity other than a business
opportunity: (i) that (A) has come to the attention of a Person solely in, and as a direct result
of, its or his capacity as a Member, Director or principal of, or advisor to the Company or a
subsidiary of the Company, or (B) was developed with the use or benefit of the personnel or assets
of the Company or a subsidiary of the Company, and (ii) that has not been independently brought to
the attention of the subject Person from a source that is not affiliated (other than through such
subject Person) with the Company or a subsidiary of the Company.
Existing Agreement has the meaning assigned to such term in the Recitals.
Firm Offer has the meaning assigned to such term in Section 12.2(b).
Governmental Authority means a federal, state, local or foreign governmental authority; a
state, province, commonwealth, territory or district thereof; a county or parish; a city, town,
township, village or other municipality; a district, ward or other subdivision of any of the
foregoing; any executive, legislative or other governing body of any of the foregoing; any agency,
authority, board, department, system, service, office, commission, committee, council or other
administrative body of any of the foregoing; any court or other judicial body; and any officer,
official or other representative of any of the foregoing.
Gross Asset Value means with respect to any asset, the assets adjusted basis for federal
income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Member to the Company
shall be the gross fair market value of such asset;
(b) The Gross Asset Values of all items of Property shall be adjusted to equal their
respective fair market values, as determined by the Board (taking Code Section 7701(g) into
account) as of the following times: (i) the acquisition of an additional Membership
Interest in the Company by any new or existing Member in exchange for more than a de minimis
Capital Contribution, (ii) in connection with the grant of a Membership Interest in the
Company (other than a de minimis Membership Interest) as consideration for the provision of
services to or for the benefit of the Company by an existing Member acting in a member
capacity, or by a new Member acting in a member capacity in anticipation of being a Member;
(iii) the distribution by the Company to a Member of more than a de minimis amount of
Property as consideration for a Membership Interest in the Company, and (iv) the liquidation
of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided that
an adjustment
- 6 -
described in clauses (i), (ii) and (iii) of this paragraph shall be made only
if the Board reasonably determines that such adjustment is necessary to reflect the relative
economic interests of the Members in the Company;
(c) The Gross Asset Value of any item of Property distributed to any Member (other than
as consideration for a Membership Interest in the Company as described in clause (iii) of
subparagraph (b) above) shall be adjusted to equal the fair market value of such Property on
the date of distribution, as determined by the Board (taking Code Section 7701(g) into
account); and
(d) The Gross Asset Values of each item of Property shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section
734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m) and subparagraph (f) of the definition of Profits and Losses or
Section 5.3(g); provided, however, that Gross Asset Values shall not be adjusted pursuant to
this subparagraph (d) to the extent that an adjustment pursuant to subparagraph (b) is
required in connection with a transaction that would otherwise result in an adjustment
pursuant to this subparagraph (d).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph
(a), (b), or (d), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset, for purposes of computing Profits and Losses.
Gross Liability Value means with respect to any Liability of the Company described in
Treasury Regulations Section 1.752-7(b)(3)(i), the amount of cash that a willing assignor would pay
to a willing assignee to assume such Liability in an arms-length transaction. The Gross Liability
Value of each Liability of the Company described in Treasury Regulations Section 1.752-7(b)(3)(i)
shall be adjusted at such times as provided in this Agreement for an adjustment to Gross Asset
Values.
Group Member has the meaning assigned to such term in the ETE Agreement.
Indemnitee means each of (a) any Person who is or was an Affiliate of the Company, (b) any
Person who is or was a member, director, officer, fiduciary or trustee of the Company, (c) any
Person who is or was an officer, member, partner, director, employee, agent or trustee of the
Company or any Affiliate of the Company, or any Affiliate of any such Person, and (d) any Person
who is or was serving at the request of the Company or any such Affiliate as a director, officer,
employee, member, partner, agent, fiduciary or trustee of another Person; provided, that a Person
shall not be an Indemnitee by reason of providing, on a fee-for- services basis, trustee, fiduciary
or custodial services and (e) any Person the Company designates as an Indemnitee for purposes of
this Agreement.
Independent Director has the meaning assigned to such term in Section 6.2(a).
Issuance Items has the meaning assigned to such term in Section 5.3(h).
- 7 -
Law means any applicable constitutional provision, statute, act, code (including the Code),
law, regulation, rule, ordinance, order, decree, ruling, proclamation, resolution, judgment,
decision, declaration or interpretative or advisory opinion or letter of a Governmental Authority
having valid jurisdiction.
Liability means any liability or obligation, whether known or unknown, asserted or
unasserted, absolute or contingent, matured or unmatured, conditional or unconditional, latent or
patent, accrued or unaccrued, liquidated or unliquidated, or due or to become due.
Member means any Person executing this Agreement as of the date of this Agreement as a
member or hereafter admitted to the Company as a member as provided in this Agreement, but such
term does not include any Person who has ceased to be a member in the Company.
Member Majority means the Members holding a majority of the Membership Interests held by all
Members.
Member Nonrecourse Debt has the same meaning as the term partner nonrecourse debt set
forth in Regulations Section 1.704-2(b)(4).
Member Nonrecourse Debt Minimum Gain means an amount, with respect to each Member
Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section
1.704-2(i)(3).
Member Nonrecourse Deductions has the same meaning as the term partner nonrecourse
deductions set forth in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).
Membership Interest means any interest in the Company representing the Capital Contributions
made by a Member or its predecessors in interest, including any and all benefits to which the
holder of a limited liability company interest may be entitled as provided in this Agreement,
together with all obligations of such Person to comply with the terms and provisions of this
Agreement. The Membership Interest of each Member shall be represented by the number of Equity
Units held by such Member as set forth on Exhibit A attached hereto.
Merger Agreement has the meaning assigned to such term in Section 10.1.
MLP means Energy Transfer Partners, L.P., a Delaware limited partnership.
National Securities Exchange means an exchange registered with the SEC under Section 6(a) of
the Securities Exchange Act or the Nasdaq National Market or any successor thereto.
NGP has the meaning assigned to such term in the initial paragraph.
Non-ETE Subsidiary means any Subsidiary of the Company other than ETE and any Subsidiary of
ETE.
- 8 -
Nonrecourse Deductions has the meaning set forth in Regulations Sections 1.704-2(b)(1) and
1.704-2(c).
Nonrecourse Liability has the meaning set forth in Regulations Section 1.704-2(b)(3).
Offer Notice has the meaning assigned to such term in Section 12.2(b).
Offer Period has the meaning assigned to such term in Section 12.2(c).
Offer Price has the meaning assigned to such term in Section 12.2(a).
Offered Amount has the meaning assigned to such term in Section 12.5(a).
Offered Units has the meaning assigned to such term in Section 12.2.
Offerees has the meaning assigned to such term in Section 12.2(b).
Officers has the meaning assigned to such term in Section 6.2(a).
Opinion of Counsel means a written opinion of counsel (who may be regular counsel to ETE or
the Company or any of its Affiliates) in a form acceptable to the Company.
Other Enterprise includes any other limited liability company, limited partnership,
partnership, corporation, joint venture, trust, employee benefit plan or other entity, in which a
Person is serving at the request of the Company.
Permitted Transfer has the meaning assigned to such term in Section 11.2.
Person means an individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity.
Profits and Losses mean, for each Allocation Year, an amount equal to the Companys
taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a)
(for this purpose, all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following
adjustments (without duplication):
(a) Any income of the Company that is exempt from federal income tax and not otherwise taken
into account in computing Profits or Losses pursuant to this definition of Profits and Losses
shall be added to such taxable income or loss;
(b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing Profits or Losses pursuant to this definition of
Profits and Losses shall be subtracted from such taxable income or loss;
- 9 -
(c) In the event the Gross Asset Value of any item of Property is adjusted pursuant to
subparagraphs (b) or (c) of the definition of Gross Asset Value, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the item
of Property) or an item of loss (if the adjustment decreases the Gross Asset Value of the item of
Property) from the Disposition of such item of Property and shall be taken into account for
purposes of computing Profits or Losses;
(d) In the event the Gross Liability Value of any Liability of the Company described in
Treasury Regulations Section 1.752-7(b)(3)(i) is adjusted as required by this Agreement, the amount
of such adjustment shall be treated as an item of loss (if the adjustment increases the Gross
Liability Value of such Liability of the Company) or an item of gain (if the adjustment decreases
the Gross Liability Value of such Liability of the Company) and shall be taken into account for
purposes of computing Profits or Losses;
(e) Gain or loss resulting from any Disposition of Property with respect to which gain or loss
is recognized for federal income tax purposes shall be computed by reference to the Gross Asset
Value of the Property Disposed of, notwithstanding that the adjusted tax basis of such Property
differs from its Gross Asset Value;
(f) In lieu of the depreciation, amortization, and other cost recovery deductions taken into
account in computing such taxable income or loss, there shall be taken into account Depreciation
for such Allocation Year, computed in accordance with the definition of Depreciation;
(e) To the extent an adjustment to the adjusted tax basis of any item of Property pursuant to
Code Section 734(b) is required, pursuant to Treasury Regulations Section 1.704-(b)(2)(iv)(m)(4),
to be taken into account in determining Capital Accounts as a result of a distribution other than
in liquidation of a Members Membership Interest, the amount of such adjustment shall be treated as
an item of gain (if the adjustment increases the basis of the item of Property) or loss (if the
adjustment decreases such basis) from the Disposition of such item of Property and shall be taken
into account for purposes of computing Profits or Losses; and
(g) Notwithstanding any other provision of this definition, any items that are specially
allocated pursuant to Section 5.3 or Section 5.4 shall not be taken into account in computing
Profits or Losses.
The amounts of the items of Company income, gain, loss, or deduction available to be specially
allocated pursuant to Sections 5.3 and 5.4 shall be determined by applying rules analogous to those
set forth in subparagraphs (a) through (g) above.
Property means all real and personal property acquired by the Company, including cash, and
any improvements on real or personal property, and shall include both tangible and intangible
property.
Purchase Offer has the meaning assigned to such term in Section 12.2(a).
Purchase Option has the meaning assigned to such term in Section 12.5(a).
- 10 -
Purchase Option Notice has the meaning assigned to such term in Section 12.5(b).
Purchase Option Notice Period has the meaning assigned to such term in Section 12.5(b).
Purchase Option Portion means, with respect to any Member exercising its Purchase Option
pursuant to Section 12.5, (i) the Sharing Ratio of such Member divided by the sum of the Sharing
Ratios of all Members eligible to exercise their Purchase Option under Section 12.5 at such time
multiplied by (ii) the Offered Amount.
Purchase Option Price has the meaning assigned to such term in Section 12.5(b).
Purchaser has the meaning assigned to such term in Section 12.2(a).
SEC means the United States Securities and Exchange Commission.
Securities Exchange Act means the Securities Exchange Act of 1934, as amended, supplemented
or restated from time to time and any successor to such statute.
Seller has the meaning assigned to such term in Section 12.2.
Shared Services Agreement means the Shared Services Agreement, dated as of August 26, 2005,
by and among the Company and the MLP.
Sharing Ratio shall mean for any Member, the proportion that such Members Equity Units bear
to the total number of Equity Units outstanding as of the date of such determination.
Special Approval means approval by a majority of the members of the Audit and Conflicts
Committee.
Subject Member has the meaning assigned to such term in Section 12.5(a).
Subsidiary means, with respect to any Person, (a) a corporation of which more than 50% of
the voting power of shares entitled (without regard to the occurrence of any contingency) to vote
in the election of directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (b) a partnership (whether general or limited) in which such
Person or a Subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if more than 50% of the partnership interests of such
partnership (considering all of the partnership interests of the partnership as a single class) is
owned, directly or indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a
corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a
combination thereof, directly or indirectly, at the date of determination, has (i) at least a
majority ownership
- 11 -
interest or (ii) the power to elect or direct the election of a majority of the
directors or other governing body of such Person.
Super-Majority Interest means, as to any agreement, election, vote or other action of the
Members, those Members whose combined Sharing Ratios exceed eighty percent (80%).
Surviving Business Entity has the meaning assigned to such term in Section 10.2(a)(ii).
Tag-Along Notice has the meaning assigned to such term in Section 12.4(a).
Tag-Along Notice Period has the meaning assigned to such term in Section 12.4(b).
Tag-Along Offer has the meaning assigned to such term in Section 12.4(a).
Tag-Along Portion means with respect to any Tagging Person, the product of (i) the Sharing
Ratio of such Tagging Person immediately prior to such Transfer to which Section 12.4 applies and
(ii) a fraction the numerator of which is the maximum number of Equity Units that the buyer in the
Tag-Along Sale is willing to purchase, and the denominator of which is the number of Equity Units
held by all Members electing to participate in the Tag-Along Sale.
Tag-Along Response Notice has the meaning assigned to such term in Section 12.4(b).
Tag-Along Right has the meaning assigned to such term in Section 12.4(b).
Tag-Along Sale has the meaning assigned to such term in Section 12.4(a).
Tagging Person has the meaning assigned to such term in Section 12.4(b).
Tax Matters Member means LE GP Tax, LLC so long as it continues to serve in such capacity,
provided that LE GP Tax, LLC will be deemed to have withdrawn as a member upon the withdrawal of
Warren or if at any time LE GP Tax, LLC shall cease to be a direct or indirect wholly-owned
subsidiary of Warren (and in such event the Members shall designate a successor Tax Matters
Member), or (ii) any Person that is admitted to the Company as a successor Tax Matters Member of
the Company or any Member deemed to replace the Tax Matters Member in accordance with this
Agreement. The Membership Interest of LE GP Tax, LLC is a noneconomic and non-voting interest in
the Company and, as such, LE GP Tax, LLC (i) will not receive allocations or distributions, (ii)
has no obligation or right to make Capital Contributions, (iii) will have no Capital Account, (iv)
has no right to vote or consent to any matter hereunder, and (v) has no other rights or obligations
except as expressly provided in this Agreement.
Taxable Year means (i) the period commencing on January 1, 2007 and ending on December 31,
2007, (ii) any subsequent twelve-month period commencing on January 1 and ending on December 31,
and (iii) the period commencing on the immediately preceding
- 12 -
January 1 and ending on the date on
which all Property is distributed to the Members pursuant to Article IX.
Transfer when used in this Agreement with respect to a Membership Interest, shall be deemed
to refer to a transaction by which a Member assigns its Membership Interest to another Person, and
includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange, or any
other disposition by law or otherwise.
Treasury Regulations means the Income Tax Regulations, including Temporary Regulations,
promulgated under the Code, as such regulations are amended from time to time.
Trigger Amount means the amount of Common Units equal to 10% of the amount of Common Units
held directly or indirectly by such Member on the date hereof, and which (i) with respect to Davis,
NGP and EPE, is described on Schedule 3.01 of the Unitholder Rights and Restrictions Agreement, and
(ii) with respect to Warren, is 38,976,090 Common Units (which excludes Common Units owned directly
by the Company).
Trigger Event means the completion of the sale, transfer or disposition by any Member of an
amount of Common Units held directly or indirectly by such Member equal to or greater than the
Trigger Amount since (i) the date of this Agreement or (ii) once a Trigger Event has occurred, the
date of the previous Trigger Event.
Two-Thirds Interest means, as to any agreement, election, vote or other action of the
Members, those Members whose combined Sharing Ratios exceed 66.67%.
Unitholder Rights and Restrictions Agreement means the Unitholder Rights and Restrictions
Agreement by and among ETE, EPE, Davis and NGP, dated as of the date hereof.
Warren has the meaning assigned to such term in the initial paragraph.
Wholly Owned Affiliate of any Person means (i) an Affiliate of such Person one hundred
percent (100%) of the voting stock or beneficial ownership of which is owned directly or indirectly
by such Person, or by any Person who, directly or indirectly, owns one hundred percent (100%) of
the voting stock or beneficial ownership of such Person, (ii) an Affiliate of such Person who,
directly or indirectly, owns one hundred percent (100%) of the voting stock or beneficial ownership
of such Person, and (iii) any Wholly Owned Affiliate of any Affiliate described in clause (i) or
clause (ii).
Withdraw, Withdrawing and Withdrawal means the withdrawal, resignation or
retirement of
a Member from the Company as a Member.
Section 1.2 Construction. Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to
Articles and Sections refer to Articles and Sections of this Agreement; and (c) the term include
or includes means includes including or words of like import shall be deemed to be followed by
the words without limitation; and the terms hereof, herein or hereunder
- 13 -
refer to this
Agreement as a whole and not to any particular provision of this Agreement. The table of contents
and headings contained in this Agreement are for reference purposes only, and shall not affect in
any way the meaning or interpretation of this Agreement.
ARTICLE II
ORGANIZATION
Section 2.1 Formation. The Company was formed as of August 23, 2005 pursuant to the
Certificate of Conversion and Certificate of Formation converting LE GP, LLC, a Texas limited
liability company, into LE GP, LLC, a Delaware limited liability company. The Members ratify the
organization and formation of the Company and continue the Company, pursuant to the terms and
conditions of this Agreement. This Agreement amends and restates in its entirety and supersedes the
Existing Agreement, which shall have no further force or effect. Except as expressly provided to
the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and
obligations of the Members and the administration, dissolution and termination of the Company shall
be governed by the Act.
Section 2.2 Name. The name of the Company is and shall continue to be LE GP, LLC and all
Company business must be conducted in that name or such other names that comply with Law as the
Board of Directors may select.
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices. Unless and
until changed by the Board of Directors, the registered office of the Company in the State of
Delaware shall continue to be located at 1209 Orange Street, Suite 400, Wilmington, Delaware 19801,
and the registered agent for service of process on the Company in the State of Delaware at such
registered office shall continue to be The Corporation Trust Company. The principal office of the
Company shall continue to be located at 2828 Woodside Street, Dallas, Texas 75204 or such other
place as the Board of Directors may from time to time designate. The Company may maintain offices
at such other place or places within or outside the State of Delaware as the Board of Directors
deems necessary or appropriate.
Section 2.4 Purpose. The purposes of the Company are the transaction of any or all lawful
business for which limited liability companies may be organized under the Act.
Section 2.5 Foreign Qualification. Prior to the Companys conducting business in any
jurisdiction other than the State of Delaware, the Board shall cause the Company to comply, to the
extent procedures are available and those matters are reasonably within the control of the Board,
with all requirements necessary to qualify the Company as a foreign limited liability company in
that jurisdiction. At the request of the Board, the Members shall execute, acknowledge, swear to
and deliver all certificates and other instruments conforming with this Agreement that are
necessary or appropriate to qualify, continue and terminate the Company as a foreign limited
liability company in all such jurisdictions in which the Company may conduct business.
Section 2.6 Term. The Company shall continue until terminated in accordance with Section 9.2.
- 14 -
Section 2.7 Powers. The Company is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment
of the purposes and business described in Section 2.4 and for the protection and benefit of the
Company.
Section 2.8 No State-Law Partnership; Withdrawal. It is the intent that the Company shall be a
limited liability company formed under the Laws of the State of Delaware and shall not be a
partnership (including a limited partnership) or joint venture, and that the Members not be a
partner or joint venturer of any other party for any purposes other than federal and state tax
purposes, and this Agreement may not be construed to suggest otherwise. A Member does not have the
right to Withdraw from the Company; provided, however, that a Member shall have the power to
Withdraw at any time in violation of this Agreement. If a Member exercises such power in violation
of this Agreement, (a) such Member shall be liable to the Company and its Affiliates for all
monetary damages suffered by them as a result of such Withdrawal; and (b) such Member shall not
have any rights under Section 18.604 of the Act. In no event shall the Company have the right,
through specific performance or otherwise, to prevent a Member from Withdrawing in violation of
this Agreement.
Section 2.9 Certain Undertakings Relating to the Separateness of the MLP.
(a) Separateness Generally. The Company shall, and shall cause ETE to, conduct their
respective businesses and operations separate and apart from those of any other Person, except the
Company and ETE, in accordance with this Section 2.9.
(b) Separate Records. The Company shall, and shall cause ETE to, (i) maintain their respective
books and records and their respective accounts separate from those of any other Person, (ii)
maintain their respective financial records, which will be used by them in their ordinary course of
business, showing their respective assets and liabilities separate and apart from those of any
other Person, except their consolidated Subsidiaries, (iii) not have their respective assets and/or
liabilities included in a consolidated financial statement of any Affiliate of the Company (other
than the inclusion of the assets and/or liabilities of ETE and its Subsidiaries in the consolidated
financial statements of the Company) unless appropriate notation shall be made on such Affiliates
consolidated financial statements to indicate the separateness of the Company and ETE and their
assets and liabilities from such Affiliate and the assets and liabilities of such Affiliate, and to
indicate that the assets and liabilities of the Company and ETE are not available to satisfy the
debts and other obligations of such Affiliate, and (iv) file their respective own tax returns
separate from those of any other Person, except (A) to the extent that ETE or the Company (x) is
treated as a disregarded entity for tax purposes or (y) is not otherwise required to file tax
returns under Applicable Law or (B) as may otherwise be required by Applicable Law.
(c) Separate Assets. The Company shall not commingle or pool, and shall cause ETE not to
commingle or pool, their respective funds or other assets with those of any other Person, and shall
maintain their respective assets in a manner that is not costly or difficult to segregate,
ascertain or otherwise identify as separate from those of any other Person.
- 15 -
(d) Separate Name. The Company shall, and shall cause ETE to, (i) conduct their respective
businesses in their respective own names, (ii) use separate stationery, invoices, and checks, (iii)
correct any known misunderstanding regarding their respective separate identities from that of any
other Person, and (iv) generally hold itself out as an entity separate from any other Person.
(e) Separate Credit. The Company shall, and shall cause ETE to, (i) pay their respective
obligations and liabilities from their respective own funds (whether on hand or borrowed), (ii)
maintain adequate capital in light of their respective business operations, (iii) not guarantee or
become obligated for the debts of any other Person, other than the Company and ETE, (iv) not hold
out their respective credit as being available to satisfy the obligations or liabilities of any
other Person, (v) not acquire debt obligations or debt securities of the MLP or its Affiliates
(other than ETE and/or the Company), (vi) not pledge their assets for the benefit of any Person or
make loans or advances to any Person, or (vii) use its commercially reasonable efforts to cause the
operative documents under which ETE borrows money, is an issuer of debt securities, or guarantees
any such borrowing or issuance after the Effective Date, to contain provisions to the effect that
(A) the lenders or purchasers of debt securities, respectively, acknowledge that they have advanced
funds or purchased debt securities, respectively, in reliance upon the separateness of the Company
and ETE from each other and from any other Persons and (B) the Company and ETE have assets and
liabilities that are separate from those of other Persons; provided that the Company and ETE may
engage in any transaction described in clauses (v)-(vi) of this Section 2.9(e) if prior Special
Approval has been obtained for such transaction and either (A) the Audit and Conflicts Committee
has determined that the borrower or recipient of the credit support is not then insolvent and will
not be rendered insolvent as a result of such transaction or (B) in the case of transactions
described in clause (v), such transaction is completed through a public auction or a National
Securities Exchange.
(f) Separate Formalities. The Company shall, and shall cause ETE to, (i) observe all limited
liability company or partnership formalities and other formalities required by their respective
organizational documents, the laws of the jurisdiction of their respective formation, or other
laws, rules, regulations and orders of Governmental Authorities exercising jurisdiction over it,
(ii) engage in transactions with the MLP and its Affiliates (other than the Company or ETE) in
conformity with the requirements of Section 7.6 of the ETE Agreement, and (iii) subject to the
terms of the Shared Services Agreement, promptly pay, from their respective own funds and on a
timely basis, their respective allocable shares of general and administrative expenses, capital
expenditures, and costs for shared services performed by the MLP or Affiliates of the MLP (other
than the Company or ETE). Each material contract between the Company or ETE, on the one hand, and
the MLP or Affiliates of the MLP (other than the Company or ETE), on the other hand, shall be
subject to the requirements of Section 7.6 of the ETE Agreement, and must be (x) approved by
Special Approval or (y) on terms objectively demonstrable to be no less favorable to ETE than those
generally being provided to or available from unrelated third parties, and in any event must be in
writing.
(g) No Effect. Failure by the Company to comply with any of the obligations set forth above
shall not affect the status of the Company as a separate legal entity, with its separate assets and
separate liabilities.
- 16 -
Section 2.10 Title to Company Property. All property owned by the Company, whether real or
personal, tangible or intangible, shall be deemed to be owned by the Company as an entity, and no
Member, individually, shall have any ownership of such property. The Company may hold its property
in its own name or in the name of a nominee which may be the Board or any of its Affiliates or any
trustee or agent designated by it.
ARTICLE III
MATTERS RELATING TO MEMBERS
Section 3.1 Members. Each Member owns a Membership Interest in the Company as represented by
the Equity Units held by such the Member as set forth in Exhibit A attached hereto.
Section 3.2 Creation of Additional Membership Interest. Subject to Article XI, the Company may
issue additional Membership Interests in the Company pursuant to this Section 3.2. The terms of
admission or issuance may provide for the creation of different classes or groups of Members having
different rights, powers, and duties. The creation of any new class or group of Members approved as
required herein may be reflected in an amendment to this Agreement executed in accordance with
Section 13.4 indicating the different rights, powers, and duties thereof. Any such admission is
effective only after the new Member has executed and delivered to the Members an instrument
containing the notice address of the new Member and the new Members ratification of this Agreement
and agreement to be bound by it.
Section 3.3 Liability to Third Parties. Except as may be expressly provided in another
separate, written guaranty or other agreement executed by a Member, no Member shall be liable for
the Liabilities of the Company, including under a judgment, decree or order of a court. Except as
otherwise provided in this Agreement, no Member has the authority or power to act for or on behalf
of or bind the Company or to incur any expenditures on behalf of the Company.
Section 3.4 Meetings of the Members. Meetings of the Members will not be required to be held
at any regular frequency, but, instead, will be held upon the call of any Member. All meetings of
the Members will be held at the principal office of the Company or at such other place, either
within or without the State of Delaware, as is designated by the Person calling the meeting and
stated in the notice of the meeting or in a duly executed waiver of notice thereof. Members may
participate in a meeting of the Members by means of conference telephone or video equipment or
similar communications equipment whereby all participants in the meeting can hear each other, and
participation in a meeting in this manner will constitute presence in person at the meeting.
Section 3.5 Quorum; Voting Requirement.
(a) The presence, in person or by proxy, of a Member Majority will constitute a quorum for the
transaction of business by the Members. If less than a Member Majority is represented at a meeting,
then any Member may adjourn the meeting to a specified date not longer than 90 days after such
adjournment, without further notice. At such adjourned meeting at which a quorum is present or
represented by proxy, any business may be transacted that might have been transacted at the meeting
as originally noticed.
- 17 -
(b) Each Member has the right to vote in accordance with its Membership Interest. A Member
Majority will constitute a valid decision of the Members, except where a larger vote is required by
the Act or this Agreement.
Section 3.6 Notice of Meetings. Notice stating the place, day, hour and the purpose for which
the meeting is called will be given, not less than three days nor more than 60 days before the date
of the meeting, by or at the direction of the Member or Members calling the meeting, to each Member
entitled to vote at such meeting. A Members attendance at a meeting:
(a) waives objection to lack of notice or defective notice of the meeting, unless such Member,
at the beginning of the meeting, objects to holding the meeting or transacting business at the
meeting; and
(b) waives objection to consideration of a particular matter at the meeting that is not within
the purpose or purposes described in the notice of meeting, unless such Member objects to
considering the matter when it is presented.
Section 3.7 Waiver of Notice. Whenever any notice is required to be given to any Member under
the provisions of this Agreement, a waiver thereof in writing signed by such Member, whether before
or after the time stated therein, will be deemed equivalent to the giving of such notice.
Section 3.8 Action Without a Meeting. Any action that is required to or may be taken at a
meeting of the Members may be taken without a meeting if consents in writing, setting forth the
action so taken, are signed by a Member Majority. Such consents will have the same force and effect
as a vote at a meeting duly held.
Section 3.9 Proxies. At any meeting of the Members, every Member having the right to vote
thereat will be entitled to vote in person or by proxy appointed by an instrument in writing signed
by such Member and bearing a date not more than three years prior to such meeting.
Section 3.10 Voting by Certain Holders. In the case of a Member that is a corporation, its
Membership Interest may be voted by such officer, agent or proxy as the bylaws of such corporation
may prescribe, or, in the absence of such provision, as the board of directors of such corporation
may determine. In the case of a Member that is a general or limited partnership, its Membership
Interest may be voted, in person or by proxy, by such Person as is designated by such Member. In
the case of a Member that is another limited liability company, its Membership Interest may be
voted, in person or by proxy, by such Person as is designated by the governing agreements of such
other limited liability company, or, in the absence of such designation, by such Person as is
designated by the limited liability company. In the case of a Member that is a trust, its
Membership Interest may be voted by the trustee of such trust.
Section 3.11 Denial of Appraisal Rights. No Member will have any appraisal rights or
dissenters rights with respect to any merger, consolidation, conversion or dissolution of the
Company, any sale of assets by the Company or any amendment to this Agreement, the Members rights
with respect to such matters being limited to those rights, if any, expressly set forth in this
Agreement.
- 18 -
ARTICLE IV
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
Section 4.1 Capital Contributions.
(a) No Member shall be required to make any Capital Contributions to the Company except as
agreed to by a Super-Majority Interest.
(b) The amount of money and the fair market value (as of the date of contribution) of any
property (other than money) contributed to the Company by a Member in respect of the issuance of a
Membership Interest to such Member shall constitute a Capital Contribution. Any reference in this
Agreement to the Capital Contribution of a Member shall include a Capital Contribution of its
predecessors in interest.
Section 4.2 Loans. If the Company does not have sufficient cash to pay its obligations, any
Member that may agree to do so may, upon approval of a Super-Majority Interest, advance all or part
of the needed funds for such obligation to or on behalf of the Company. An advance described in
this Section 4.2 constitutes a loan from the Member to the Company, may bear interest at a rate
comparable to the rate the Company could obtain from third parties, and is not a Capital
Contribution.
Section 4.3 Return of Contributions. A Member is not entitled to the return of any part of its
Capital Contributions or to be paid interest in respect of its Capital Contributions. An unrepaid
Capital Contribution is not a liability of the Company or of any Member. No Member will be required
to contribute or to lend any cash or property to the Company to enable the Company to return any
Members Capital Contributions.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
Section 5.1 Allocations of Profits. After giving effect to the special allocations set forth
in Section 5.3 and Section 5.4, Profits for any Allocation Year shall be allocated to the Members
in proportion to their Sharing Ratios.
Section 5.2 Allocations of Losses. After giving effect to the special allocations set forth in
Section 5.3 and Section 5.4 and subject to Section 5.5, Losses for any Allocation Year shall be
allocated to the Members in proportion to their Sharing Ratios.
Section 5.3 Special Allocations. The following special allocations shall be made in the
following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section
1.704-2(f), notwithstanding any other provision of this Article V, if there is a net decrease in
Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company
income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an
amount equal to such Members share of the net decrease in Company Minimum Gain, determined in
accordance with Treasury Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective
- 19 -
amounts required to be allocated to each
Member pursuant thereto. The items to be so allocated shall be determined in accordance with
Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.3(a) is intended to
comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and
shall be interpreted consistently therewith.
(b) Member Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations
Section 1.704-2(i)(4), notwithstanding any other provision of this Article V, if there is a net
decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during
any Allocation Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704-2(i)(5), shall be allocated items of Company income and gain for such Allocation Year
(and, if necessary, subsequent Allocation Years) in an amount equal to such Members share of the
net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt,
determined in accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts required to be
allocated to each Member pursuant thereto. The items to be so allocated shall be determined in
accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.3(b)
is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section
1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event that any Member unexpectedly receives any
adjustments, allocations, or distributions described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6), items of Company
income and gain shall be allocated to such Member in an amount and manner sufficient to eliminate,
to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such
Member as quickly as possible; provided that an allocation pursuant to this Section 5.3(c) shall be
made only if and to the extent that such Member would have an Adjusted Capital Account Deficit
after all other allocations provided for in this Article V have been tentatively made as if this
Section 5.3(c) were not in this Agreement.
(d) Gross Income Allocation. In the event that any Member has an Adjusted Capital Account
Deficit at the end of any Allocation Year, each such Member shall be allocated items of Company
income and gain in the amount of such deficit as quickly as possible; provided that an allocation
pursuant to this Section 5.3(d) shall be made only if and to the extent that such Member would have
an Adjusted Capital Account Deficit in excess of such sum after all other allocations provided for
in this Article V have been tentatively made as if Section 5.3(c) and this Section 5.3(d) were not
in this Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Year shall be allocated
to the Members in proportion to their respective Sharing Ratios.
(f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Allocation Year
shall be allocated to the Member who bears the economic risk of loss with respect to the Member
Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with
Treasury Regulations Section 1.704-2(i)(1).
- 20 -
(g) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any
Company asset, pursuant to Code Sections 734(b) or 743(b) is required, pursuant to Treasury
Regulations Sections 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account
in determining Capital Accounts as the result of a distribution to a Member in complete liquidation
of such Members interest in the Company, the amount of such adjustment to Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) and such gain or loss shall be allocated to the Members in
accordance with their interests in the Company in the event Treasury Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the event
Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
(h) Allocations Relating to Taxable Issuance of Equity Units. Any income, gain, loss, or
deduction realized as a direct or indirect result of the issuance of Equity Units by the Company to
a Member (the Issuance Items) shall be allocated among the Members so that, to the extent
possible, the net amount of such Issuance Items, together with all other allocations under this
Agreement to each Member shall be equal to the net amount that would have been allocated to each
such Member if the Issuance Items had not been realized.
Section 5.4 Regulatory Allocations. The allocations set forth in Sections 5.3(a), 5.3(b),
5.3(c), 5.3(d), 5.3(e), 5.3(f) and 5.3(g), and 5.5 (the Regulatory Allocations) are intended to
comply with certain requirements of the Treasury Regulations. It is the intent of the Members
that, to the extent possible, the Regulatory Allocations shall be offset either with special
allocations of other items of Company income, gain, loss, or deduction pursuant to this Section
5.4. Therefore, notwithstanding any other provision of this Article V (other than the Regulatory
Allocations), the Board shall make such offsetting special allocations of Company income, gain,
loss, or deduction in whatever manner it determines appropriate so that, after such offsetting
allocations are made, each Members Capital Account balance is, to the extent possible, equal to
the Capital Account balance such Member would have had if the Regulatory Allocations were not part
of this Agreement and all Company items were allocated pursuant to Section 5.1, Section 5.2, and
Section 5.3(h). In exercising its discretion under this Section 5.4, the Board shall take into
account future Regulatory Allocations under Sections 5.3(a) and 5.3(b) that, although not yet made,
are likely to offset other Regulatory Allocations previously made under Sections 5.3(e) and 5.3(f).
Section 5.5 Loss Limitation. Losses allocated pursuant to Section 5.2 shall not exceed the
maximum amount of Losses that can be allocated without causing any Member to have an Adjusted
Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the
Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses
pursuant to Section 5.2, the limitation set forth in this Section 5.5 shall be applied on a Member
by Member basis and Losses not allocable to any Member as a result of such limitation shall be
allocated to the other Members in accordance with the positive balances in such Members Capital
Accounts so as to allocate the maximum permissible Losses to each Member under Treasury Regulations
Section 1.704-1(b)(2)(ii)(d).
- 21 -
Section 5.6 Other Allocation Rules.
(a) Profits, Losses, and any other items of income, gain, loss, or deduction will be allocated
to the Members pursuant to this Article V as of the last day of each Taxable Year; provided that
Profits, Losses, and such other items shall also be allocated at such times as the Gross Asset
Values of Property are adjusted pursuant to subparagraph (b) of the definition of Gross Asset
Value.
(b) For purposes of determining the Profits, Losses, or any other items allocable to any
period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other
basis, as determined by the Board using any permissible method under Code Section 706 and the
Treasury Regulations thereunder.
(c) The Members are aware of the income tax consequences of the allocations made by this
Article V and hereby agree to be bound by the provisions of this Article V in reporting their
shares of Company income and loss for income tax purposes, except as otherwise required by law.
Section 5.7 Tax Allocations; Code Section 704(c).
(a) Except as otherwise provided in this Section 5.7, each item of income, gain, loss and
deduction of the Company for federal income tax purposes shall be allocated among the Members in
the same manner as such items are allocated for book purposes under this Article V.
(b) In accordance with Code Section 704(c) and the Treasury Regulations thereunder, income,
gain, loss, and deduction with respect to any Property contributed to the capital of the Company
shall, solely for tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of such Property to the Company for federal income tax
purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross
Asset Value) using the remedial allocation method described in Treasury Regulations Section
1.704-3(d).
(c) In the event the Gross Asset Value of any Company asset is adjusted pursuant to
subparagraph (b) of the definition of Gross Asset Value, subsequent allocations of income, gain,
loss, and deduction with respect to such asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Treasury Regulations thereunder applying the remedial
allocation method described in Treasury Regulations Section 1.704-3(d).
(d) Any elections or other decisions relating to such allocations shall be made by the Board
in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations
pursuant to this Section 5.7 are solely for purposes of federal, state, and local taxes and shall
not affect, or in any way be taken into account in computing, any Members Capital Account or share
of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.
- 22 -
Section 5.8 Distributions. Except as otherwise provided in Article IX and subject to Section
6.1(c), the Board of Directors may cause the Company to distribute funds of the Company which the
Board of Directors reasonably determines are not needed for the payment of existing or foreseeable
Company obligations and expenditures to the Members; provided, however, that the Company shall make
quarterly tax distributions sufficient and in time for Members to make quarterly estimated federal
tax payments, subject to availability of sufficient cash, utilizing to the maximum extent possible
funds available to be drawn under credit facilities of the Company and its Affiliates, and subject
to the terms and restrictions imposed by such credit facilities. All such distributions made
pursuant to this Section 5.8 shall be made to the Members in accordance with their respective
Sharing Ratios.
ARTICLE VI
MANAGEMENT
Section 6.1 Management.
(a) Generally.
(i) Subject to the provisions of Section 6.1(b) and Section 6.1(c), all
management powers over the business and affairs of the Company shall be exclusively
vested in a Board of Directors (Board of Directors or Board) and, subject to the
direction of the Board of Directors, the Officers. The Officers and Directors shall
each constitute a manager of the Company within the meaning of the Act. Except as
otherwise specifically provided in this Agreement, no Member, by virtue of having
the status of a Member, shall have or attempt to exercise or assert any management
power over the business and affairs of the Company or shall have or attempt to
exercise or assert actual or apparent authority to enter into contracts on behalf
of, or to otherwise bind, the Company. Except as otherwise specifically provided in
this Agreement, the authority and functions of the Board of Directors on the one
hand and of the Officers on the other shall be identical to the authority and
functions of the board of directors and officers, respectively, of a corporation
organized under the Delaware General Corporation Law. Except as otherwise
specifically provided in this Agreement, the business and affairs of the Company
shall be managed under the direction of the Board of Directors, and the day-to-day
activities of the Company shall be conducted on the Companys behalf by the
Officers, who shall be agents of the Company.
(ii) In addition to the powers that now or hereafter can be granted to managers
under the Act and to all other powers granted under any other provision of this
Agreement, except as otherwise provided in this Agreement, the Board of Directors
and the Officers shall have full power and authority to do all things as are not
restricted by this Agreement, the ETE Agreement, the Act or Applicable Law, on such
terms as they may deem necessary or appropriate to conduct, or cause to be
conducted, the business and affairs of the Company.
- 23 -
(b) Limitations with Respect to ETE and Matters Relating to ETE. Management powers over the
business and affairs of the Company with respect to management and control of ETE (in the Companys
capacity as general partner of ETE) shall be vested exclusively in the Board of Directors;
provided, notwithstanding anything herein to the contrary:
(i) without obtaining approval of a Super-Majority Interest, the Company shall
not, and shall not take any action to cause ETE to:
(A). make or consent to a general assignment for the benefit of the
creditors of the ETE;
(B). file or consent to the filing of any bankruptcy, insolvency or
reorganization petition for relief under the United States Bankruptcy Code
naming ETE, or otherwise seek, with respect to ETE, relief from debts or
protection from creditors generally;
(C). file or consent to the filing of a petition or answer seeking for
ETE a liquidation, dissolution, arrangement, or similar relief under any
law;
(D). file an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against the Company or ETE in a
proceeding of the type described in any of clauses (A) (C) of this Section
6.1(b)(i);
(E). seek, consent to or acquiesce in the appointment of a receiver,
liquidator, conservator, assignee, trustee, sequestrator, custodian or any
similar official for ETE or for all or any substantial portion of such
entitys properties;
(F). sell all or substantially all of the assets of ETE;
(G). dissolve or liquidate ETE, other than in accordance with Article
VIII of the ETE Agreement;
(H). merge or consolidate ETE;
(I). amend the ETE Agreement in a manner that would reasonably be
expected to have a material adverse effect on the Company (including in its
capacity as the general partner of ETE); or
(J). declare or make the payment of any material extraordinary
distribution on the Common Units; and
(ii) without obtaining approval of a Two-Thirds Interest, the Company shall
not, and shall not take any action to cause ETE to exercise the rights of the
Company as general partner of ETE (or those exercisable after the Company
- 24 -
ceases to
be the general partner of ETE) pursuant to the following provisions of the ETE
Agreement:
(A). Sections 4.6(a) and (b) (Transfer of the General Partner
Interest) solely with respect to the decision by the Company to transfer
its general partner interest in ETE;
(B). Section 5.2 (Continuation of General Partner and Limited Partner
Interests; Initial Offering; Contributions by the General Partner and its
Affiliates), solely with respect to the decision to make additional capital
contributions to ETE;
(C). Section 5.9 (Limited Preemptive Right);
(D). Section 7.5(d) (relating to the right of the Company and its
Affiliates to purchase Units or other Partnership Securities and exercise
rights related thereto) and Section 7.11 (Purchase and Sale of Partnership
Securities), solely with respect to decisions by the Company or its
Affiliates to purchase or otherwise acquire and sell Partnership Securities
for their own account;
(E). Section 7.6(a) (Loans from the General Partner; Loans or
Contributions from the Partnership; Contracts with Affiliates; Certain
Restrictions on the General Partner), solely with respect to the decision
by the Company to lend funds to a Group Member, subject to the provisions of
Section 7.9 of the ETE Agreement;
(F). Section 7.7 (Indemnification), solely with respect to any
decision by the Company to exercise its rights as an Indemnitee;
(G). Section 7.12 (Registration Rights of the General Partner and its
Affiliates), solely with respect to any decision to exercise registration
rights and to take actions in connection therewith;
(H). Section 11.1 (Withdrawal of the General Partner), solely with
respect to the decision by Company to withdraw as general partner of ETE and
to giving notices required thereunder;
(I). Section 11.3(a) and (b) (Interest of Departing General Partner
and Successor General Partner); and
(J). Section 15.1 (Right to Acquire Limited Partner Interests).
(c) Limitations with Respect to the Company. The full power and authority over the business
and affairs of the Company and its Non-ETE Subsidiaries that do not relate to management and
control of ETE and its subsidiaries shall be exclusively vested in the Members; provided, however,
that:
- 25 -
(i) without obtaining approval of a Two-Thirds Interest, the Members shall not
cause the Company to, or permit any Non-ETE Subsidiary to:
(A). make any distributions to the Members or refrain from making
distributions to the Members requested by such Super-Majority Interest,
(B). issue or repurchase any equity interests in the Company or any
Non-ETE Subsidiary;
(C). prosecute, settle or manage any claim made directly against the
Company or any Non-ETE Subsidiary,
(D). sell, convey, transfer or pledge any asset of the Company or any
Non-ETE Subsidiary,
(E). amend, modify or waive any rights relating to the assets of the
Company or any Non-ETE Subsidiary,
(F). enter into any agreement to incur an obligation of the Company
other than an agreement entered into for and on behalf of ETE for which the
Company is liable exclusively by virtue of the Companys capacity as general
partner of ETE or of any of its affiliates;
(G). without the approval of the Audit and Conflicts Committee of the
Board of Directors of the Company and such Members constituting a
Super-Majority Interest, take any action that would result in the Company
engaging in any business or activity or incurring any debts or liabilities
except in connection with or incidental to (A) its performance as general
partner of ETE or (B) the acquiring, owning or disposing of debt of equity
securities of ETE; or
(H). form, create or otherwise obtain a subsidiary other than ETE and
its subsidiaries; and
(ii) without obtaining approval of a Super-Majority Interest, the Members shall
not cause the Company to, or permit any Non-ETE Subsidiary to:
(A). make or consent to a general assignment for the benefit of the
creditors of the Company;
(B). file or consent to the filing of any bankruptcy, insolvency or
reorganization petition for relief under the United States Bankruptcy Code
naming the Company, or otherwise seek, with respect to the Company, relief
from debts or protection from creditors generally;
- 26 -
(C). file or consent to the filing of a petition or answer seeking for
the Company a liquidation, dissolution, arrangement, or similar relief under
any law;
(D). file an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against the Company in a
proceeding of the type described in any of clauses (ix) (xi) of this
Section 6.1(c);
(E). seek, consent to or acquiesce in the appointment of a receiver,
liquidator, conservator, assignee, trustee, sequestrator, custodian or any
similar official for the Company or for all or any substantial portion of
such entitys properties;
(F).
sell all or substantially all of the assets of the Company;
(G).
dissolve or liquidate the Company; or
(H).
merge or consolidate the Company.
Section 6.2 Board of Directors.
(a) Generally. The Board of Directors shall consist of not less than five nor more than ten
natural persons. The members of the Board of Directors shall be appointed by the Members
constituting a Two-Thirds Interest, provided that at least three of such Directors shall meet the
independence, qualification and experience requirements of the New York Stock Exchange and Section
10A(m)(3) of the Securities Exchange Act of 1934 (or any successor Law), the rules and regulations
of the SEC, other Applicable Law and the charter of the Audit and Conflicts Committee (each, an
Independent Director); provided, however, that if at any time at least three of the Directors are
not Independent Directors, the Board of Directors shall still have all powers and authority granted
to it hereunder, the Members acting with the approval of a Two-Thirds Interest shall endeavor to
elect additional Independent Directors to come into compliance with this Section 6.2(a).
(b) Term; Resignation; Vacancies; Removal. Each Director shall hold office until his successor
is appointed and qualified or until his earlier resignation or removal. Any Director may resign at
any time upon written notice to the Board, to the President or to any other Officer. Such
resignation shall take effect at the time specified therein, and unless otherwise specified therein
no acceptance of such resignation shall be necessary to make it effective. Vacancies and newly
created directorships resulting from any increase in the authorized number of Directors or from any
other cause shall be filled by the Members acting with the approval of a Two-Thirds Interest. Any
Director may be removed, with or without cause, by the Members constituting a Two-Thirds Interest
at any time, and the vacancy in the Board caused by any such removal shall be filled by the Members
acting with the approval of a Two-Thirds Interest.
(c) Voting; Quorum; Required Vote for Action. Unless otherwise required by the Act, other Law
or the provisions hereof,
- 27 -
(i) each member of the Board of Directors shall have one vote;
(ii) except for matters requiring Special Approval, the presence at a meeting
of a majority of the members of the Board of Directors shall constitute a quorum at
any such meeting for the transaction of business; and
(iii) except for matters requiring Special Approval, the act of a majority of
the members of the Board of Directors present at a meeting duly called in accordance
with Section 6.2(d) at which a quorum is present shall be deemed to constitute the
act of the Board of Directors.
(d) Meetings. Regular meetings of the Board of Directors shall be held at such times and
places as shall be designated from time to time by resolution of the Board of Directors. Special
meetings of the Board of Directors or meetings of any committee thereof may be called by written
request authorized by any member of the Board of Directors or a committee thereof on at least 48
hours prior written notice to the other members of such Board or committee. Any such notice, or
waiver thereof, need not state the purpose of such meeting, except as may otherwise be required by
law. Attendance of a Director at a meeting (including pursuant to the last sentence of this Section
6.2(d)) shall constitute a waiver of notice of such meeting, except where such Director attends the
meeting for the express purpose of objecting to the transaction of any business on the ground that
the meeting is not lawfully called or convened. Subject to Article 11, any action required or
permitted to be taken at a meeting of the Board of Directors or any committee thereof may be taken
without a meeting, without prior notice and without a vote if a consent or consents in writing,
setting forth the action so taken, are signed by at least as many members of the Board of Directors
or committee thereof as would have been required to take such action at a meeting of the Board of
Directors or such committee. Members of the Board of Directors or any committee thereof may
participate in and hold a meeting by means of conference telephone, video conference or similar
communications equipment by means of which all Persons participating in the meeting can hear each
other, and participation in such meetings shall constitute presence in person at the meeting.
(e) Committees.
(i) Subject to compliance with this Article 6, committees of the Board of
Directors shall have and may exercise such of the powers and authority of the Board
of Directors with respect to the management of the business and affairs of the
Company as may be provided in a resolution of the Board of Directors. Any committee
designated pursuant to this Section 6.2(e) shall choose its own chairman, shall keep
regular minutes of its proceedings and report the same to the Board of Directors
when requested, and, subject to Section 6.2(d), shall fix its own rules or
procedures and shall meet at such times and at such place or places as may be
provided by such rules or by resolution of such committee or resolution of the Board
of Directors. At every meeting of any such committee, the presence of a majority of
all the members thereof shall constitute a quorum and the affirmative
- 28 -
vote of a
majority of the members present shall be necessary for the adoption by it of any
resolution (except for obtaining Special Approval at meetings of the Audit and
Conflicts Committee, which requires the affirmative vote of a majority of the
members of such committee). The Board of Directors may designate one or more
Directors as alternate members of any committee who may replace any absent or
disqualified member at any meeting of such committee; provided, however, that any
such designated alternate of the Audit and Conflicts Committee must meet the
standards for an Independent Director. In the absence or disqualification of a
member of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the place
of the absent or disqualified member; provided, however, that any such replacement
member of the Audit and Conflicts Committee must meet the standards for an
Independent Director.
(ii) In addition to any other committees established by the Board of Directors
pursuant to Section 6.2(e)(i), the Board of Directors shall maintain an Audit and
Conflicts Committee, which shall be composed of at least three Independent
Directors. The Audit and Conflicts Committee shall be responsible for (A) approving
or disapproving, as the case may be, any matters regarding the business and affairs
of the Company and ETE required to be considered by, or submitted to, such Audit and
Conflicts Committee pursuant to the terms of the ETE Agreement, (B) assisting the
Board in monitoring (1) the integrity of ETEs and the Companys financial
statements, (2) the qualifications and independence of ETEs and the Companys
independent accountants, (3) the performance of ETEs and the Companys internal
audit function and independent accountants, and (4) ETEs and the Companys
compliance with legal and regulatory requirements, (C) preparing the report required
by the rules of the SEC to be included in ETEs annual report on Form 10-K, (D)
approving any material amendments to the Shared Services Agreement, (E) approving or
disapproving, as the case may be, the entering into of any material transaction with
a Member or any Affiliate of a Member, other than transactions in the ordinary
course of business to the extent that the Board of Directors requests the Audit and
Conflicts Committee to make such determination, (F) approving any of the actions
described in Section 6.1(a) (g) and Section (c)(v) to be taken on behalf of the
Company or ETE, (G) amending (1) Section 2.9, (2) the definition of Independent
Director in Section 6.2(a), (3) the requirement that at least three of the
directors be Independent Directors, (4) Sections 6.1(a) (g) or 6.2 (c)(v) or (5)
this Section 6.2(e)(ii), and (H) performing such other functions as the Board may
assign from time to time, or as may be specified in a written charter of the Audit
and Conflicts Committee. In acting or otherwise voting on the matters referred to in
this Section 6.2(e)(ii), to the fullest extent permitted by law, including Section
18-1101(c) of the Act and Section 17-1101(c) of the Delaware Revised Uniform Limited
Partnership Act, as amended from time to time, the Directors constituting the Audit
and Conflicts Committee shall consider only the interest of the Company or ETE, as
applicable, including their respective creditors.
(iii) In addition to any other committees established by the Board of Directors
pursuant to Section 6.2(e)(i), the Board of Directors shall maintain a
- 29 -
Compensation
Committee, which shall be composed of at least two Independent Directors. The
Compensation Committee shall be responsible for setting the compensation for
officers of the Company as well as administering any incentive plans adopted by the
Company. The Compensation Committee shall perform such other functions as the Board
may assign from time to time or as may be specified in a written charter for the
Compensation Committee adopted by the Board.
Section 6.3 Officers.
(a) Generally. The Board may appoint agents of the Company, which agents shall be referred to
as Officers of the Company, having the titles, power, authority and duties described in this
Section 6.3 or as otherwise granted by the Board. Subject to the foregoing, the Officers shall have
the full authority to and shall manage, control and oversee the day-to-day business and affairs of
the Company and shall perform all other acts as are customary or incident to the management of such
business and affairs, which will include the general and administrative affairs of the Company and
the operation and maintenance of the Company Assets, all in accordance with the provisions of
Section 6.3.
(b) Titles and Number. The Officers may include a Chairman, a Chief Executive Officer (or
Co-Chief Executive Officers), a President, one or more Vice Presidents, a Secretary, a Treasurer,
and one or more Assistant Secretaries and Assistant Treasurers, and any other officer position or
title as the Board may approve. Any person may hold two or more offices.
(c) Appointment and Term of Office. The Officers may be appointed by the Board at such times
and for such terms as the Board shall determine. Any Officer may be removed, with or without cause,
only by the Board. Vacancies in any office may be filled only by the Board.
(d) Chairman of the Board. The Chairman of the Board shall preside at all meetings of the
Board of Directors and of the unitholders of ETE; and he shall have such other powers and duties as
from time to time may be assigned to him by the Board of Directors. There may be more than one
person holding the office of Chairman, in which case they shall act as Co-Chairmen and shall share
the duties of such office.
(e) Chief Executive Officer. In accordance with and subject to the limitations imposed by this
Agreement or any direction of the Board, the Chief Executive Officer (or Co-Chief Executive
Officers), as such, shall (i) supervise generally the other Officers, (ii) be responsible for the
management and day-to-day business and affairs of the Company, its other Officers, employees and
agents and shall supervise generally the affairs of the Company, (iii) have full authority to
execute all documents and take all actions that the Company may legally take and (iv) have the
power and authority to delegate the Chief Executive Officers powers and authority to any proper
Officer.
(f) President. Subject to the limitations imposed by this Agreement, any employment agreement,
any employee plan or any determination of the Board of Directors, the
- 30 -
President, subject to the
direction of the Board of Directors, shall be the chief executive officer of the Company in the
absence of a Chief Executive Officer and shall be responsible for the management and direction of
the day-to-day business and affairs of the Company, its other Officers, employees and agents, shall
supervise generally the affairs of the Company and shall have full authority to execute all
documents and take all actions that the Company may legally take. In the absence of the Chairman of
the Board or a Chief Executive Officer, the President shall preside at all meetings of the
unitholders of ETE and (should he be a director) of the Board of Directors. The President shall
exercise such other powers and perform such other duties as
may be assigned to him by this Agreement or the Board of Directors, including any duties and
powers stated in any employment agreement approved by the Board of Directors.
(g) Vice Presidents. In the absence of the President, each Vice President appointed by the
Board shall have all of the powers and duties conferred upon the President, including the same
power as the President to execute documents on behalf of the Company. Each such Vice President
shall perform such other duties and may exercise such other powers as may from time to time be
assigned to him by the Board. Vice Presidents may be designated Executive Vice Presidents, Senior
Vice Presidents, or any other title determined by the Board.
(h) Secretary and Assistant Secretaries. The Secretary shall record or cause to be recorded in
books provided for that purpose the minutes of the meetings or actions of the Board of Directors,
shall see that all notices are duly given in accordance with the provisions of this Agreement and
as required by law, shall be custodian of all records (other than financial), shall see that the
books, reports, statements, certificates and all other documents and records required by law are
properly kept and filed, and, in general, shall perform all duties incident to the office of
Secretary and such other duties as may, from time to time, be assigned to him by this Agreement,
the Board of Directors or the President. The Assistant Secretaries shall exercise the powers of the
Secretary during that Officers absence or inability or refusal to act.
(i) Chief Financial Officer. The Chief Financial Officer shall keep and maintain, or cause to
be kept and maintained, adequate and correct books and records of account of the Company and ETE.
He shall receive and deposit all moneys and other valuables belonging to the Company in the name
and to the credit of the Company and shall disburse the same and only in such manner as the Board
of Directors or the appropriate Officer of the Company may from time to time determine. He shall
receive and deposit all moneys and other valuables belonging to ETE in the name and to the credit
of ETE and shall disburse the same and only in such manner as the Board of Directors or the
President may require. He shall render to the Board of Directors and the President, whenever any of
them request it, an account of all his transactions as Chief Financial Officer and of the financial
condition of the Company, and shall perform such further duties as the Board of Directors or the
President may require. The Chief Financial Officer shall have the same power as the President to
execute documents on behalf of the Company.
(j) Treasurer and Assistant Treasurers. The Treasurer shall have such duties as may be
specified by the Chief Financial Officer in the performance of his duties. The Assistant Treasurers
shall exercise the power of the Treasurer during that Officers absence or inability or refusal to
act. Each of the Assistant Treasurers shall possess the same power as the Treasurer to sign all
certificates, contracts, obligations and other instruments of the Company. If
- 31 -
no Treasurer or
Assistant Treasurer is appointed and serving or in the absence of the appointed Treasurer and
Assistant Treasurer, the Senior Vice President, or such other Officer as the Board of Directors
shall select, shall have the powers and duties conferred upon the Treasurer.
(k) Powers of Attorney. The Company may grant powers of attorney or other authority as
appropriate to establish and evidence the authority of the Officers and other persons.
(l) Delegation of Authority. Unless otherwise provided by resolution of the Board of
Directors, no Officer shall have the power or authority to delegate to any person such Officers
rights and powers as an Officer to manage the business and affairs of the Company.
(m) Officers. The Board of Directors shall appoint Officers of the Company to serve from the
date hereof until the death, resignation or removal by the Board of Directors with or without cause
of such officer.
Section 6.4 Duties of Officers and Directors. Except as otherwise specifically provided in
this Agreement, the duties and obligations owed to the Company and to the Board of Directors by the
Officers of the Company and by members of the Board of Directors of the Company shall be the same
as the respective duties and obligations owed to a corporation organized under the Delaware General
Corporation Law by its officers and directors, respectively.
Section 6.5 Compensation. The members of the Board of Directors who are neither Officers nor
employees of the Company shall be entitled to compensation as directors and committee members as
approved by the Board and shall be reimbursed for out-of-pocket expenses incurred in connection
with attending meetings of the Board of Directors or committees thereof.
Section 6.6 Indemnification.
(a) To the fullest extent permitted by Law but subject to the limitations expressly provided
in this Agreement, each Indemnitee shall be indemnified and held harmless by the Company from and
against any and all losses, claims, damages, liabilities, joint or several, expenses (including
reasonable legal fees and expenses), judgments, fines, penalties, interest, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil,
criminal, administrative or investigative, in which any such Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, by reason of such persons status as an
Indemnitee; provided, however that the Indemnitee shall not be indemnified and held harmless if
there has been a final and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter for which the Indemnitee is seeking indemnification
pursuant to this Section 6.6, the Indemnitee acted in bad faith or engaged in fraud, willful
misconduct, or in the case of a criminal matter, acted with knowledge that the Indemnitees conduct
was unlawful; provided, further, no indemnification pursuant to this Section 6.6 shall be available
to the Members or their Affiliates (other than the MLP and any Group Member) with respect to its or
their obligations incurred pursuant to the Underwriting Agreement. The termination of any action,
suit or proceeding by judgment, order,
- 32 -
settlement, conviction or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that the Indemnitee acted in a manner contrary to
that specified above. Any indemnification pursuant to this Section 6.6 shall be made only out of
assets of the Company, it being agreed that a Member shall not be personally liable for such
indemnification and shall have no obligation to contribute or loan any monies or property to the
Company to enable it to effectuate such indemnification.
(i) To the fullest extent permitted by law, expenses (including reasonable
legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 6.6(a) in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Company prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Company of an
undertaking by or on behalf of the Indemnitee to repay such amount if it shall be
determined that the Indemnitee is not entitled to be indemnified as authorized in
this Section 6.6.
(ii) The Company shall, to the fullest extent permitted under the Act, pay or
reimburse expenses incurred by an Indemnitee in connection with the Indemnitees
appearance as a witness or other participation in a proceeding involving or
affecting the Company at a time when the Indemnitee is not a named defendant or
respondent in the proceeding.
(b) The indemnification provided by this Section 6.6 shall be in addition to any other rights
to which an Indemnitee may be entitled under any agreement, as a matter of law or otherwise, both
as to actions in the Indemnitees capacity as an Indemnitee and as to actions in any other
capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.
(c) The Company may purchase and maintain insurance, on behalf of the members of the Board of
Directors, the Officers and such other Persons as the Board of Directors shall determine, against
any liability that may be asserted against or expense that may be incurred by such Person in
connection with the Companys activities, regardless of whether the Company would have the power to
indemnify such Person against such liability under the provisions of this Agreement.
(d) For purposes of this Section 6.6, the Company shall be deemed to have requested an
Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by the
Indemnitee of such Indemnitees duties to the Company also imposes duties on, or otherwise involves
services by, the Indemnitee to the plan or participants or beneficiaries of the plan; excise taxes
assessed on an Indemnitee with respect to an employee benefit plan pursuant to Applicable Law shall
constitute fines within the meaning of Section 6.6(a); and action taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of such Indemnitees duties
for a purpose reasonably believed by such Indemnitee to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is in, or not opposed to, the
best interests of the Company.
- 33 -
(e) An Indemnitee shall not be denied indemnification in whole or in part under this Section
6.6 because the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
(f) The provisions of this Section 6.6 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit
of any other Persons.
(g) No amendment, modification or repeal of this Section or any provision hereof shall in any
manner terminate, reduce or impair either the right of any past, present or future Indemnitee to be
indemnified by the Company or the obligation of the Company to indemnify any such Indemnitee under
and in accordance with the provisions of this Section 6.6 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted, provided such Person became an Indemnitee hereunder prior to
such amendment, modification or repeal.
(h) Any act or omission performed or omitted by an Indemnitee on advice of legal counsel or an
independent consultant who has been employed or retained by the Company shall be presumed to have
been performed or omitted in good faith without gross negligence or willful misconduct.
(i) THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 6.6 ARE INTENDED BY THE
PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF EXCULPATING THE INDEMNITEE FROM LEGAL
RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSONS NEGLIGENCE, FAULT OR OTHER CONDUCT.
Section 6.7 Liability of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall
be liable for monetary damages to the Company, the Members or any other Person for losses sustained
or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a
final and non-appealable judgment entered by a court of competent jurisdiction determining that, in
respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful
misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitees conduct
was criminal.
(b) Subject to its obligations and duties as set forth in this Article 6, the Board of
Directors and any committee thereof may exercise any of the powers granted to it by this Agreement
and perform any of the duties imposed upon it hereunder either directly or by or through the
Companys Officers or agents, and neither the Board of Directors nor any committee thereof shall be
responsible for any misconduct or negligence on the part of any such Officer or agent appointed by
the Board of Directors or any committee thereof in good faith.
(c) Any amendment, modification or repeal of this Section 6.7 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on
- 34 -
liability under this Section
6.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims
arising from or relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may be asserted.
Section 6.8 Amendment and Vesting of Rights. The rights granted or created hereby will be
vested in each Person entitled to indemnification hereunder as a bargained-for, contractual
condition of such Persons being or serving or having served as a Director, officer or
representative of the Company or serving at the request of the Company as a director, officer or in
any other comparable position of any Other Enterprise and, while this Article VI may be amended or
repealed, no such amendment or repeal will release, terminate or adversely affect the rights of
such Person under this Article VI with respect to any (a) act taken or the failure to take any act
by such Person prior to such amendment or repeal or (b) action, suit or proceeding concerning such
act or failure to act filed after such amendment or repeal.
Section 6.9 Severability. If any provision of this Article VI or the application of any such
provision to any Person or circumstance is held invalid, illegal or unenforceable for any reason
whatsoever, the remaining provisions of this Article VI and the application of such provision to
other Persons or circumstances will not be affected thereby and, to the fullest extent possible,
the court finding such provision invalid, illegal or unenforceable must modify and construe the
provision so as to render it valid and enforceable as against all Persons and to give the maximum
possible protection to Persons subject to indemnification hereby within the bounds of validity,
legality and enforceability. Without limiting the generality of the foregoing, if any Member,
Director, officer or representative of the Company or any Person who is or was serving at the
request of the Company as a director, officer or in any other comparable position of any Other
Enterprise, is entitled under any provision of this Article VI to indemnification by the Company
for some or a portion of the judgments, amounts paid in settlement, attorneys fees, penalties,
ERISA excise taxes, fines or other expenses actually and reasonably incurred by any such Person in
connection with any threatened, pending or completed action, suit or proceeding (including the
investigation, defense, settlement or appeal of such action, suit or proceeding), whether civil,
criminal, administrative, investigative or appellate, but not, however, for all of the total amount
thereof, the Company will nevertheless indemnify such Person for the portion thereof to which such
Person is entitled.
Section 6.10 Contracts with Members or Their Affiliates.
(a) All contracts or transactions not involving ETE that are between the Company and its
Members, Directors or officers or between the Company and another Person in which a Member,
Director or officer has a financial interest or with which a Member, Director or officer is
affiliated are permissible if such contract or transaction, and such Members, Directors or
officers interest therein, are fully disclosed to the Members and approved by a Two-Thirds
Interest.
(b) All contracts or transactions involving ETE and the Members, Directors or officers of the
Company in which a Member, Director or officer has a financial interest that is not proportionate
to such Members ownership interest in ETE or with which a Member, Director or officer is
affiliated are permissible if such contract or transaction, and such
- 35 -
Members, Directors or
officers interest therein, are fully disclosed to and approved by a Audit and Conflicts Committee
of the Board of Directors.
Section 6.11 Other Business Ventures. Any Member may engage in, or possess an interest in,
other business ventures of every nature and description, independently or with others,
whether or not similar or identical to the business of the Company or ETE, and neither the
Company nor any Member will have any right by virtue of this Agreement in or to such other business
ventures or to the income or profits derived therefrom. The Members and their representatives are
not required to devote all of their time or business efforts to the affairs of the Company, but
will devote so much of their time and attention to the Company as is reasonably necessary and
advisable to manage the affairs of the Company to the best advantage of the Company. The foregoing
will not supersede any employment, confidentiality, noncompetition or other specific agreement that
may exist between the Company (or an affiliate of the Company) and any Member (or an affiliate of
any Member).
Section 6.12 Acknowledged and Permitted NGP Activities. The Company and the Members recognize
that: (i) NGP and its Affiliates own and will in the future acquire substantial equity interests in
other companies that participate in the energy industry (NGP Portfolio Companies), (ii) NGP will
enter into advisory service agreements with those NGP Portfolio Companies, and representatives of
NGP who serve as Director of the Company and provide services to the Company and ETE, also serve in
similar capacities and provide similar services to other NGP Portfolio Companies, (iii) that at any
given time, other NGP Portfolio Companies may be in direct or indirect competition with the Company
and ETE, and/or their subsidiaries; and (iv) Davis and Warren own and will own equity interests in
companies or properties which participate in the energy industry that are Affiliated with ETE but
in which the partners of ETE do not own an interest. The Company and the Members acknowledge and
agree that: (i) NGP and its Affiliates: (A) shall not be prohibited or otherwise restricted by
their relationship with the Company and its subsidiaries from engaging in the business of investing
in NGP Portfolio Companies, entering into agreements to provide services to such companies or
acting as managers, directors or advisors to, or other principals of, such NGP Portfolio Companies,
regardless of whether such activities are in direct or indirect competition with the business or
activities of the Company or its subsidiaries, and (B) shall not have any obligation to offer the
Company or its subsidiaries any Excluded Business Opportunity, (ii) the Company and the Members
hereby renounce any interest or expectancy in any Excluded Business Opportunity pursued by NGP
and/or its Affiliates, NGP representatives or another NGP Portfolio Company and waive any claim
that any such business opportunity constitutes a business opportunity of the Company or any of its
subsidiaries; and (iii) Davis and Warren shall similarly not be prohibited or otherwise restricted
from engaging in other endeavors in the energy industry that are otherwise permitted under the
terms of the Confidentiality and Non-Compete Agreements entered into as of the date hereof.
Section 6.13 Resolution of Conflicts of Interest; Standard of Conduct and Modification of
Duties.
(a) Unless otherwise expressly provided in this Agreement, whenever a potential conflict of
interest exists or arises between the Members or any of their Affiliates (other than the MLP or any
Group Member), on the one hand, and ETE or any Group Member,
- 36 -
on the other hand, any resolution or
course of action by the Board of Directors in respect of such conflict of interest shall be
permitted and deemed approved by all Members, and shall not constitute a breach of this Agreement
or of any agreement contemplated herein or therein, or of any duty stated or implied by law or
equity, if the resolution or course of action in respect of such conflict of interest is (i)
approved by Special Approval, (ii) approved by the vote of a
majority of the Common Units excluding Common Units owned by the Members and their Affiliates,
(iii) on terms no less favorable to ETE or a Group Member, as the case may be, than those generally
being provided to or available from unrelated third parties or (iv) fair and reasonable to ETE or
Group Member, as the case may be, taking into account the totality of the relationships between the
parties involved (including other transactions that may be particularly favorable or advantageous
to ETE or Group Member, as the case may be). The Board of Directors shall be authorized but not
required in connection with its resolution of such conflict of interest to seek Special Approval of
such resolution, and the Board of Directors may also adopt a resolution or course of action that
has not received Special Approval. If Special Approval is not sought and the Board of Directors
determines that the resolution or course of action taken with respect to a conflict of interest
satisfies either of the standards set forth in clauses (iii) or (iv) above, then it shall be
presumed that, in making its decision, the Board of Directors acted in good faith, and in any
proceeding brought by any Member or by or on behalf of such Member or ETE or Group Member, as the
case may be, challenging such approval, the Person bringing or prosecuting such proceeding shall
have the burden of overcoming such presumption.
(b) Whenever the Company makes a determination or takes or declines to take any other action,
or any of its Affiliates causes it to do so, in its capacity as the general partner of ETE as
opposed to in its individual capacity, whether under this Agreement, or any other agreement
contemplated hereby or otherwise, then unless another express standard is provided for in this
Agreement, the Company, or such Affiliates causing it to do so, shall make such determination or
take or decline to take such other action in good faith and shall not be subject to any other or
different standards imposed by this Agreement, any other agreement contemplated hereby or under the
Act or any other law, rule or regulation or at equity. In order for a determination or other action
to be in good faith for purposes of any action taken or delivered to be taken by the Company in
its capacity as the general partner of ETE, the Person or Persons making such determination or
taking or declining to take such other action must believe that the determination or other action
is in the best interests of ETE.
(c) Whenever the Company (including the Board of Directors or any committee thereof acting on
behalf of the Company) makes a determination or takes or declines to take any other action, or any
of its Affiliates causes it to do so, in its individual capacity as opposed to in its capacity as a
general partner of ETE, whether under this Agreement or any other agreement contemplated hereby or
otherwise, then the Company (including the Board of Directors or any committee thereof acting on
behalf of the Company), or such Affiliates causing it to do so, are entitled to make such
determination or to take or decline to take such other action free of any fiduciary duty or
obligation whatsoever to ETE or any partner thereof, and the Company (including the Board of
Directors or any committee thereof acting on behalf of the Company), or such Affiliates causing it
to do so, shall not be required to act in good faith or pursuant to any other standard imposed by
this Agreement, any other agreement contemplated hereby or under the Act or any other law, rule or
regulation. By way of illustration and not of
- 37 -
limitation, whenever the phrase, at the option of
the Company, or some variation of that phrase, is used in this Agreement, it indicates that the
Company is acting in its individual capacity. For the avoidance of doubt, whenever the Company
votes or transfers its Common Units, or refrains from voting or transferring its Common Units, it
shall be acting in its individual capacity.
(d) Notwithstanding anything to the contrary in this Agreement, none of the Company, nor the
Board or any committee thereof and the Affiliates of the Company shall have any duty or obligation,
express or implied, to (i) sell or otherwise Dispose of any asset of ETE or any Group Member or
(ii) permit ETE or any Group Member to use any facilities or assets of the Company and its
Affiliates, except as may be provided in contracts entered into from time to time specifically
dealing with such use. Any determination by the Company or any of its Affiliates to enter into such
contracts shall be at its option.
(e) Whenever a particular transaction, arrangement or resolution of a conflict of interest is
required under this Agreement to be fair and reasonable to any Person, the fair and reasonable
nature of such transaction, arrangement or resolution shall be considered in the context of all
similar or related transactions.
ARTICLE VII
TAX MATTERS
Section 7.1 Tax Returns and Information.
(a) The Board of Directors shall cause to be prepared and timely filed (on behalf of the
Company) all federal, state and local tax returns required to be filed by the Company, including
making all elections on such tax returns and to provide all Members, upon request, access to
accounting and tax information and schedules as shall be necessary for the preparation by such
Member of its income tax returns and such Members tax information reporting requirements. The
Company shall bear the costs of the preparation and filing of its returns.
(b) Not less than 60 days prior to the date (as extended) on which the Company intends to file
its federal income tax return or any state income tax return but in any event no earlier than March
1 of each year, the return proposed to be filed by the Company shall be furnished to the Members
for review.
(c) The Board of Directors shall cause to be prepared and timely filed (for the Company, and
on behalf of ETE) all federal, state and local tax returns required to be filed by the Company or
ETE. The Company shall deliver a copy of each such tax return to the Members within ten days
following the date on which any such tax return is filed, together with such additional information
as may be required by the Members.
(d) The Board of Directors shall cause to be prepared and delivered or provide access to such
information reasonably required by Members from time to time with respect to qualifying income
(within the meaning of Section 7704(d) of the Code) of the Company, ETE, and its subsidiaries.
- 38 -
Section 7.2 Tax Matters Member. The Tax Matters Member is authorized to take such actions and
to execute and file all statements and forms on behalf of the Company which may be permitted or
required by the applicable provisions of the Code or Regulations issued thereunder. The Tax
Matters Member shall have full and exclusive power and authority on behalf of the Company to
represent the Company (at the Companys expense) in connection with all examinations of the
Companys affairs by tax authorities, including resulting administrative and
judicial proceedings, and to expend Company funds for professional services and costs
associated therewith. The Tax Matters Member shall keep the Members informed as to the status of
any audit of the Companys tax affairs, and shall take such action as may be necessary to cause any
Member so requesting to become a notice partner within the meaning of Section 6223 of the
Internal Revenue Code. Without first obtaining the approval of a Super-Majority Interest of the
Members, the Tax Matters Member shall not, with respect to Company tax matters: (i) enter into a
settlement agreement with respect to any tax matter which purports to bind Members other than the
Tax Matters Member, (ii) intervene in any action pursuant to Code Section 6226(b)(5), (iii) enter
into an agreement extending the statute of limitations, or (iv) file a petition pursuant to Code
Section 6226(a) or 6228. If an audit of any of the Companys tax returns shall occur, the Tax
Matters Member shall not settle or otherwise compromise assertions of the auditing agent which may
be adverse to any Member as compared to the position taken on the Companys tax returns without the
prior written consent of each such affected Member.
Section 7.3 Tax Elections. The Company shall make the election under Section 754 of the Code
in accordance with the Treasury Regulations thereunder. Except as otherwise provided herein, the
Board of Directors shall determine whether the Company should make any other elections under the
Code.
ARTICLE VIII
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
Section 8.1 Maintenance of Books. The Board of Directors shall keep or cause to be kept at the
principal office of the Company or at such other location approved by the Board of Directors
complete and accurate books and records of the Company, supporting documentation of the
transactions with respect to the conduct of the Companys business and minutes of the proceedings
of the Board of Directors and any other books and records that are required to be maintained by
Applicable Law.
Section 8.2 Reports. The Board of Directors shall cause to be prepared and delivered to each
Member such reports, forecasts, studies, budgets and other information as the Members may
reasonably request from time to time.
Section 8.3 Information Rights. At the request of any Member, the Company shall deliver
copies of any information or documents provided to the Board of Directors if and when so delivered
to the Board of Directors including, without limitation, annual, quarterly and monthly financial
reports. Notwithstanding the foregoing, the Board of Directors, acting by a majority vote, may
refrain from disclosing specific information to any Member who may have information rights pursuant
to this Section 8.3 if (i) the Board of Directors reasonably determines it is not in the best
interests of ETE or any of its subsidiaries to disclose such specific information to any such
Member, (ii) such information does not relate to an adverse change
- 39 -
regarding the business,
management, operations, financial condition, results of operations or prospects of ETE or any of
its subsidiaries and (iii) such information is not otherwise reasonably required by such Member in
connection with the preparation of its filings with the SEC, and the failure to provide such
information would not constitute a material omission or cause a material misstatement with respect
to other information provided to the Member in light of the circumstances in which such information
is made.
Section 8.4 Bank Accounts. Funds of the Company shall be deposited in such banks or other
depositories as shall be designated from time to time by the Board of Directors. All withdrawals
from any such depository shall be made only as authorized by the Board of Directors and shall be
made only by check, wire transfer, debit memorandum or other written instruction.
Section 8.5 Fiscal Year. For financial accounting purposes, the fiscal year of the Company
will end on August 31 of each year unless a different year is adopted by the Members.
ARTICLE IX
DISSOLUTION, WINDING-UP AND TERMINATION
Section 9.1 Dissolution.
(a) The Company shall dissolve and its affairs shall be wound up on the first to occur of the
following events (each a Dissolution Event):
(i) the unanimous consent of the Board of Directors;
(ii) the entry of a decree of judicial dissolution of the Company under Section
18-802 of the Act; and
(iii) at any time there are no Members of the Company, unless the Company is
continued in accordance with the Act or this Agreement.
(b) No other event shall cause a dissolution of the Company.
(c) Upon the occurrence of any event that causes there to be no Members of the Company, to the
fullest extent permitted by law, the personal representative of the last remaining Member is hereby
authorized to, and shall, within 90 days after the occurrence of the event that terminated the
continued membership of such Member in the Company, agree in writing (i) to continue the Company
and (ii) to the admission of the personal representative or its nominee or designee, as the case
may be, as a substitute Member of the Company, effective as of the occurrence of the event that
terminated the continued membership of such Member in the Company.
(d) Notwithstanding any other provision of this Agreement, the Bankruptcy of a Member shall
not cause such Member to cease to be a member of the Company and, upon the occurrence of such an
event, the Company shall continue without dissolution.
- 40 -
Section 9.2 Winding-Up and Termination.
(a) On the occurrence of a Dissolution Event, the Board of Directors shall select one or more
Persons to act as liquidator. The liquidator shall proceed diligently to wind up the affairs of the
Company and make final distributions as provided herein and in the Act. The costs of winding up
shall be borne as a Company expense. Until final distribution, the liquidator shall continue to
operate the Company properties with all of the power and authority of the Board of Directors. The
steps to be accomplished by the liquidator are as follows:
(i) as promptly as possible after dissolution and again after final winding up,
the liquidator shall cause a proper accounting to be made by a recognized firm of
certified public accountants of the Companys assets, liabilities, and operations
through the last calendar day of the month in which the dissolution occurs or the
final winding up is completed, as applicable;
(ii) the liquidator shall discharge from Company funds all of the debts,
liabilities and obligations of the Company or otherwise make adequate provision for
payment and discharge thereof (including the establishment of a cash escrow fund for
contingent liabilities in such amount and for such term as the liquidator may
reasonably determine);
(iii) the liquidator may sell any or all Company property, including to
Members; and
(iv) all remaining assets of the Company (including cash) shall be distributed
to the Members in accordance with the positive balance in their Capital Accounts
after giving effect to all contributions, distributions, and allocations for all
periods.
(b) The distribution of cash or property to a Member in accordance with the provisions of this
Section 9.2 constitutes a complete return to the Member of its Capital Contributions and a complete
distribution to the Member of its share of all the Companys property and constitutes a compromise
to which all Members have consented within the meaning of Section 18-502(b) of the Act. No Member
shall be required to make any Capital Contribution to the Company to enable the Company to make the
distributions described in this Section 9.2.
(c) On completion of such final distribution, the liquidator shall file a Certificate of
Cancellation with the Secretary of State of the State of Delaware and take such other actions as
may be necessary to terminate the existence of the Company.
Section 9.3 Compliance With Certain Requirements of Treasury Regulations; Deficit Capital
Accounts. In the event the Company is liquidated within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to Section 9.2 to the Members
who have positive Capital Accounts in compliance with Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(2). If any Member has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions, and allocations for all Allocation Years, including the
Allocation Year during which such liquidation occurs), such Member shall
- 41 -
have no obligation to make
any contribution to the capital of the Company with respect to such deficit, and such deficit shall
not be considered a debt owed to the Company or to any other Person for any purpose whatsoever.
Section 9.4 Deemed Distribution and Recontribution. Notwithstanding any other provision of
this Article IX, in the event the Company is liquidated within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred, the Property shall not be
liquidated, the Companys Debts and other Liabilities shall not be paid or
discharged, and the Companys affairs shall not be wound up. Instead, solely for federal
income tax purposes, the Company shall be deemed to have contributed all its Property and
Liabilities to a new limited liability company in exchange for an interest in such new company and,
immediately thereafter, the Company will be deemed to liquidate by distributing interests in the
new company to the Members.
Section 9.5 Allocations and Distributions During Period of Liquidation. During the period
commencing on the first day of the Taxable Year during which a Dissolution Event occurs and ending
on the date on which all of the assets of the Company have been distributed to the Members pursuant
to Section 9.2, the Members shall continue to share Profits, Losses and other items of Company
income, gain, loss, or deduction in the manner provided in Article V but no distributions shall be
made pursuant to Section 5.8 after the day on which the Dissolution Event occurs.
Section 9.6 Character of Liquidating Distributions. All payments made in liquidation of the
Membership Interest of a Member in the Company shall be made in exchange for the Membership
Interest of such Member in Property pursuant to Section 736(b)(1) of the Code, including the
interest of such Member in Company goodwill.
ARTICLE X
MERGER, CONSOLIDATION OR CONVERSION
Section 10.1 Authority. Subject to Section 6.1, the Company may merge, consolidate with or
convert to one or more corporations, limited liability companies, statutory trusts or associations,
real estate investment trusts, common law trusts or unincorporated businesses, including a
partnership (whether general or limited (including a limited liability partnership)) or convert
into any such entity, whether such entity is formed under the laws of the State of Delaware or any
other state of the United States of America, pursuant to a written agreement of merger or
consolidation (Merger Agreement) or a written plan of conversion (Plan of Conversion), as the
case may be, in accordance with this Article X.
Section 10.2 Procedure for Merger, Consolidation or Conversion.
(a) Merger, consolidation or conversion of the Company pursuant to this Article X requires the
prior consent of the Board of Directors. Upon such approval, the Merger Agreement shall set forth:
(i) The names and jurisdictions of formation or organization of each of the
business entities proposing to merge, consolidate or convert;
- 42 -
(ii) The name and jurisdiction of formation or organization of the business
entity that is to survive the proposed merger or consolidation (Surviving Business
Entity);
(iii) The terms and conditions of the proposed merger or consolidation;
(iv) The manner and basis of exchanging or converting the equity securities of
each constituent business entity for, or into, cash, property or general
or limited partnership or limited liability company interests, rights,
securities or obligations of the Surviving Business Entity; and (i) if any general
or limited partnership or limited liability company interests, rights, securities or
obligations of any constituent business entity are not to be exchanged or converted
solely for, or into, cash, property or general or limited partnership or limited
liability company interests, rights, securities or obligations of the Surviving
Business Entity, the cash, property or general or limited partnership or limited
liability company interests, rights, securities or obligations of any general or
limited partnership, limited liability company, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such interests,
rights, securities or obligations of the constituent business entity are to receive
in exchange for, or upon conversion of, their interests, rights, securities or
obligations and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partnership or limited liability company interests, rights, securities or
obligations of the Surviving Business Entity or any general or limited partnership,
limited liability company, corporation, trust or other entity (other than the
Surviving Business Entity), or evidences thereof, are to be delivered;
(v) A statement of any changes in the constituent documents or the adoption of
new constituent documents (the articles or certificate of incorporation, articles of
trust, declaration of trust, certificate or agreement of limited partnership or
limited liability company or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or consolidation;
(vi) The effective time of the merger or consolidation, which may be the date
of the filing of the certificate of merger pursuant to Section 10.4 or a later date
specified in or determinable in accordance with the Merger Agreement (provided, that
if the effective time of the merger or consolidation is to be later than the date of
the filing of the certificate of merger or consolidation, the effective time shall
be fixed no later than the time of the filing of the certificate of merger or
consolidation and stated therein); and
(vii) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the Board of Directors.
(viii) If the Board of Directors shall determine to consent to the conversion,
the Board of Directors may approve and adopt a Plan of Conversion
- 43 -
containing such
terms and conditions that the Board of Directors determines to be necessary or
appropriate.
Section 10.3 Approval by Members of Merger or Consolidation.
(a) Except as provided in Section 10.3(d), the Board of Directors, upon its approval of the
Merger Agreement or Plan of Conversion, as the case may be, shall direct that the Merger Agreement
or the Plan of Conversion, as applicable, be submitted to a vote of the Members, whether at a
special meeting or by written consent, in either case in accordance with
the requirements of Section 3.5. A copy or a summary of the Merger Agreement or the Plan of
Conversion, as applicable, shall be included in or enclosed with the notice of a special meeting or
the written consent.
(b) Except as provided in Section 10.3(d), the Merger Agreement or the Plan of Conversion, as
applicable, shall be approved upon receiving the affirmative vote or consent of the Super-Majority
Interest.
(c) Except as provided in Section 10.3(d), after such approval by vote or consent of the
Members, and at any time prior to the filing of the certificate of merger or a certificate of
conversion pursuant to Section 10.4, the merger, consolidation or conversion may be abandoned
pursuant to provisions therefor, if any, set forth in the Merger Agreement or the Plan of
Conversion, as the case may be.
(d) Notwithstanding anything else contained in this Article X or in this Agreement, the Board
of Directors is permitted without Member approval, to convert the Company into a new limited
liability entity, to merge the Company into, or convey all of the Companys assets to, another
limited liability entity which shall be newly formed and shall have no assets, liabilities or
operations at the time of such conversion, merger or conveyance other than those it receives from
the Company if (i) the Board of Directors has received an Opinion of Counsel that the merger or
conveyance, as the case may be, would not result in the loss of the limited liability of any Member
or cause the Company or ETE to be treated as an association taxable as a corporation or otherwise
to be taxed as an entity for federal income tax purposes (to the extent not previously treated as
such), (ii) the sole purpose of such conversion, merger or conveyance is to effect a mere change in
the legal form of the Company into another limited liability entity and (iii) the governing
instruments of the new entity provide the Members and the Board of Directors with the same rights
and obligations as are herein contained.
(e) Additionally, notwithstanding anything else contained in this Article X or in this
Agreement, the Board of Directors is permitted, without Member approval, to merge, consolidate or
convert the Company with or into another entity if (A) the Board of Directors has received an
Opinion of Counsel that the merger or consolidation, as the case may be, would not result in the
loss of the limited liability of any Member or cause the Company to be treated as an association
taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to
the extent not previously treated as such), (B) the merger or consolidation would not result in an
amendment to this Agreement, other than any amendments that could be adopted pursuant to Section
13.4, (C) the Company is the Surviving Business Entity in such merger or consolidation and (D) the
Membership Interests outstanding immediately prior to the effective
- 44 -
date of the merger or
consolidation are to be identical Membership Interests of the Company after the effective date of
the merger or consolidation.
Section 10.4 Certificate of Merger or Conversion.
(a) Upon the required approval, if any, by the Board of Directors and the Members of a Merger
Agreement or a Plan of Conversion, as the case may be, a certificate of merger or certificate of
conversion, as applicable, shall be executed and filed with the Secretary of State of the State of
Delaware in conformity with the requirements of the Delaware Act.
(b) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business entities
that has merged or consolidated, and all property, real, personal and mixed, and all
debts due to any of those business entities and all other things and causes of
action belonging to each of those business entities, shall be vested in the
Surviving Business Entity and after the merger or consolidation shall be the
property of the Surviving Business Entity to the extent they were of each
constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any of those
constituent business entities shall not revert and is not in any way impaired
because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests in
property of any of those constituent business entities shall be preserved
unimpaired; and
(iv) all debts, liabilities and duties of those constituent business entities
shall attach to the Surviving Business Entity and may be enforced against it to the
same extent as if the debts, liabilities and duties had been incurred or contracted
by it.
(c) At the effective time of the certificate of conversion:
(i) the Company shall continue to exist, without interruption, but in the
organizational form of the converted entity rather than in its prior organizational
form;
(ii) all rights, title, and interests to all real estate and other property
owned by the Company shall continue to be owned by the converted entity in its new
organizational form without reversion or impairment, without further act or deed,
and without any transfer or assignment having occurred, but subject to any existing
liens or other encumbrances thereon;
(iii) all liabilities and obligations of the Company shall continue to be
liabilities and obligations of the converted entity in its new organizational form
without impairment or diminution by reason of the conversion;
- 45 -
(iv) all rights of creditors or other parties with respect to or against the
prior interest holders or other owners of the Company in their capacities as such in
existence as of the effective time of the conversion will continue in existence as
to those liabilities and obligations and may be pursued by such creditors and
obligees as if the conversion did not occur;
(v) a proceeding pending by or against the Company or by or against any of
Members in their capacities as such may be continued by or against the
converted entity in its new organizational form and by or against the prior
members without any need for substitution of parties; and
(vi) the Membership Interests that are to be converted into partnership
interests, shares, evidences of ownership, or other securities in the converted
entity as provided in the Plan of Conversion or certificate of conversion shall be
so converted, and Members shall be entitled only to the rights provided in the Plan
of Conversion or certificate of conversion.
A merger, consolidation or conversion effected pursuant to this Article shall not be deemed to
result in a transfer or assignment of assets or liabilities from one entity to another.
ARTICLE XI
TRANSFERS
Section 11.1 Restriction on Transfers. Except as otherwise permitted by this Agreement, no
Member shall Transfer all or any portion of its Membership Interest; provided, however, that a
Member may pledge or otherwise encumber all or any part of its Membership Interest as security for
the payment of a debt, subject to any such pledge or hypothecation being made pursuant to a pledge
or hypothecation agreement that requires the pledgee or secured party to be bound by all of the
terms and conditions of this Article XI.
Section 11.2 Permitted Transfers. Subject to the conditions and restrictions set forth in
Section 11.3, a Member may at any time Transfer all or any portion of its Membership Interest to
(a) any Wholly Owned Affiliate of the transferor, (b) the transferors administrator or trustee to
whom such Membership Interest is transferred involuntarily by operation of law, or (c) any
Purchaser in accordance with Section 12.2 (any such Transfer being referred to in this Agreement as
a Permitted Transfer).
Section 11.3 Conditions to Permitted Transfers. A Transfer shall not be treated as a
Permitted Transfer under Section 11.2 hereof unless and until the following conditions are
satisfied:
(a) The transferor and transferee shall execute and deliver to the Company such documents and
instruments of conveyance as may be necessary or appropriate to effectuate such Transfer and to
confirm the agreement of the transferee to be bound by the provisions of this Agreement.
(b) Such Transfer will be exempt from all applicable registration requirements and will not
violate any applicable laws regulating the Transfer of securities, and, except in the
- 46 -
case of a
Transfer of a Membership Interest to another Member or to a Wholly Owned Affiliate of any Member,
including the transferor, the transferor shall provide an opinion of nationally recognized counsel
to such effect.
(c) Such Transfer will not cause the Company to be deemed to be an investment company under
the Investment Company Act of 1940, as amended and the transferor shall provide an opinion of
nationally recognized counsel to such effect. The
Company and the other Members shall provide to such counsel any information available to the
Company or to such other Members, as the case may be, and relevant to such opinion.
(d) No notice or request initiating the procedures contemplated by Article XII may be given by
any Member, while any notice, purchase or Transfer is pending under Article XII, as the case may
be, or after a Dissolution Event has occurred. No Member may sell any portion of its Membership
Interest pursuant to Article XII during any period that, as provided above, it may not give the
notice initiating the procedures contemplated by such Article or thereafter until it has given such
notice and otherwise complied with the provisions of such Article.
Section 11.4 Prohibited Transfers.
(a) Any purported Transfer of a Membership Interest that is not a Permitted Transfer shall, to
the fullest extent permitted by law, be null and void and of no force or effect whatever; provided
that, if the Company is required to recognize a Transfer that is not a Permitted Transfer, the
rights with respect to the Transferred Membership Interest shall be strictly limited to the
transferors rights to allocations and distributions as provided by this Agreement with respect to
the Transferred Membership Interest, which allocations and distributions may be applied (without
limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or
Liabilities for damages that the transferor or transferee of such Membership Interest may have to
the Company.
(b) In the case of a Transfer or attempted Transfer of a Membership Interest that is not a
Permitted Transfer, the parties engaging or attempting to engage in such Transfer shall be liable
to indemnify and hold harmless the Company and the other Members from all Liability and damages
that the Company or any of such indemnified Members may incur (including incremental tax
liabilities, lawyers fees and expenses) as a result of such Transfer or attempted Transfer and
efforts to enforce the indemnity granted hereby.
Section 11.5 Rights of Unadmitted Assignees. A Person who acquires a Membership Interest but
who is not admitted as a substituted Member pursuant to Section 11.6 shall be entitled only to
allocations and distributions with respect to such Membership Interest in accordance with this
Agreement, and, to the fullest extent permitted by law, shall have no right to any information or
accounting of the affairs of the Company, shall not be entitled to inspect the books or records of
the Company, and shall not have any of the rights of a Member under the Act or this Agreement.
Section 11.6 Admission of Substituted Members. Subject to the other provisions of this
Article XI, a transferee of a Membership Interest may be admitted to the
- 47 -
Company as a substituted
Member only upon satisfaction of the conditions set forth in this Section 11.6:
(a) The Membership Interest with respect to which the transferee is being admitted was
acquired by means of a Permitted Transfer;
(b) The transferee of a Membership Interest (other than, with respect to clauses (i) and (ii)
below, a transferee that was a Member prior to the Transfer) shall, by written
instrument, (i) accept and adopt the terms and provisions of this Agreement, including this
Article XI and Article XII, and (ii) assume the obligations of the transferor Member under this
Agreement with respect to the Transferred Membership Interest. The transferor Member shall be
released from all such assumed obligations except (x) those obligations or Liabilities of the
transferor Member arising out of a breach of this Agreement by the transferor Member and (y) in the
case of a Transfer to any Person other than a Member, those obligations or Liabilities of the
transferor Member based on events occurring, arising, or maturing prior to the date of Transfer;
and
(c) The transferee and transferor shall each execute and deliver such other instruments as the
Members acting with the approval of a Two-Thirds Interest reasonably deem necessary or appropriate
to effect, and as a condition to, such Transfer, including amendments to the Certificate or any
other instrument filed with the State of Delaware or any other state or Governmental Authority.
Section 11.7 Distributions and Allocations in Respect of Transferred Member Interests. If any
Membership Interest is Transferred during any Allocation Year in compliance with the provisions of
this Article XI, Profits, Losses, each item thereof, and all other items attributable to the
Transferred Membership Interest for such Allocation Year shall be divided and allocated between the
transferor and the transferee by taking into account their varying Membership Interests during the
Taxable Year in accordance with Code Section 706(d), using any conventions permitted by law and
agreed to by the transferor and transferee. All distributions on or before the date of such
Transfer shall be made to the transferor, and all distributions thereafter shall be made to the
transferee. Solely for purposes of making such allocations and distributions, the Company shall
recognize such Transfer not later than the end of the calendar month during which it is given
notice of such Transfer; provided that, if the Company is given notice of a Transfer at least ten
(10) Business Days prior to the Transfer, the Company shall recognize such Transfer as of the date
of such Transfer; and provided, further that if the Company does not receive a notice stating the
date such Membership Interest was Transferred and such other information as the Members may
reasonably require within thirty (30) days after the end of the Allocation Year during which the
Transfer occurs, then all such items shall be allocated, and all distributions shall be made, to
the Person who, according to the books and records of the Company, was the owner of the Membership
Interest on the last day of such Allocation Year. To the fullest extent permitted by law, neither
the Company nor the Members shall incur any Liability for making allocations and distributions in
accordance with the provisions of this Section 11.7, whether or not any of the Members or the
Company has knowledge of any Transfer of ownership of any Membership Interest.
- 48 -
ARTICLE XII
PREEMPTIVE RIGHTS
Section 12.1 Rights to Participate in Issuance of Additional Membership Interests. If any
additional Membership Interests are issued in accordance with Section 3.2, each Member shall have
the right to acquire any such additional Membership Interests issued by the Company pro rata in
accordance with such Members Sharing Ratio.
Section 12.2 Rights of First Refusal. In addition to the other limitations and restrictions
set forth in Article XI, (i) no Member shall Transfer, other than (A) pursuant to a Permitted
Transfer pursuant to Section 11.2(a) or (b), or (B) pursuant to Section 12.3, all or any portion of
its Equity Units and (ii) Davis, Warren, NGP or EPE shall not transfer an interest in any Wholly
Owned Affiliate that owns Equity Units and has been admitted as a Member, unless such Member (the
Seller) first offers to sell the Equity Units described in clauses (i) or (ii), as the case may
be (the Offered Units), pursuant to the terms of this Section 12.2.
(a) Limitation on Transfers. No Transfer may be made under this Section 12.2 unless the Seller
has received a bona fide written offer (the Purchase Offer) from a Person (the Purchaser) to
purchase, directly or indirectly, the Offered Units for a purchase price (the Offer Price)
denominated and payable in United States dollars at closing or according to specified terms, with
or without interest, which offer shall be in writing signed by the Purchaser and shall be
irrevocable for a period ending no sooner than the Business Day following the end of the Offer
Period, as hereinafter defined.
(b) Offer Notice. Prior to making any Transfer that is subject to the terms of this Section
12.2, the Seller shall give to the Company and each other Member written notice (the Offer
Notice) that shall include a copy of the Purchase Offer and an offer (the Firm Offer) to sell
the Offered Units to the other Members (the Offerees) for the Offer Price, payable according to
the same terms as (or more favorable terms than) those contained in the Purchase Offer, provided
that the Firm Offer shall be made without regard to the requirement of any earnest money or similar
deposit required of the Purchaser prior to closing, and without regard to any security (other than
the Offered Units) to be provided by the Purchaser for any deferred portion of the Offer Price.
(c) Offer Period. The Firm Offer shall be irrevocable for a period (the Offer Period) ending
at 11:59 p.m., local time at the Companys principal place of business, on the ninetieth
(90th) day following the day of the Offer Notice.
(d) Acceptance of Firm Offer. At any time during the Offer Period, any Offeree may accept the
Firm Offer as to all or any portion of the Offered Units, by giving written notice of such
acceptance to the Seller and each other Offeree, which notice shall indicate the maximum number of
Equity Units that such Offeree is willing to purchase, such number not to exceed the product of (i)
a fraction, the numerator of which is the Sharing Ratio of such Offeree, and the denominator of
which is the aggregate Sharing Ratios of all of the Offerees, multiplied by (ii) the number of
Offered Units. If at the end of the Offer Period, the Offerees accepting the initial Firm Offer
(the Accepting Offerees), in the aggregate, accept the Firm Offer with respect to less than all
of the Offered Units, such remaining portion of the Offered Units shall be
- 49 -
offered to the Accepting
Offerees for an additional 30-day period. If there are two or more Accepting Offerees who accept
this second offer and they desire to acquire in the aggregate a total number of Offered Units in
excess of the remaining portion available, then the remaining portion of the Offered Units shall be
allocated to such Accepting Offerees pro rata based on the number of Offered Units such Accepting
Offerees elected to purchase in the initial Firm Offer, or in such manner as otherwise agreed to
among the Accepting Offerees. Offerees do not accept the Firm Offer as to all of the Offered Units
during the Offer Period, including such additional 30-day period, then the Firm Offer shall be
deemed to be rejected.
(e) Closing of Purchase Pursuant to Firm Offer. In the event that the Firm Offer is accepted,
the closing of the sale of the Offered Units shall take place within thirty (30) days after the
Firm Offer is accepted or, if later, the date of closing set forth in the Purchase Offer. The
Seller and all Accepting Offerees shall execute such documents and instruments as may be necessary
or appropriate to effect the sale of the Offered Units pursuant to the terms of the Firm Offer,
Article XI and this Article XII.
(f) Sale Pursuant to Purchase Offer if Firm Offer Rejected. If the Firm Offer is not accepted
in the manner hereinabove provided, the Seller may sell the Offered Units to the Purchaser at any
time within sixty (60) days after the last day of the Offer Period, provided that such sale shall
be made on terms no more favorable to the Purchaser than the terms contained in the Purchase Offer
and, provided, further, that such sale complies with other terms, conditions, and restrictions of
this Agreement that are not expressly made inapplicable to sales occurring under this Section 12.2.
In the event that the Offered Units are not sold in accordance with the terms of the preceding
sentence, the Offered Units shall again become subject to all of the conditions and restrictions of
this Section 12.2.
Section 12.3 Rights to Compel Participation in Certain Transfers.
(a) If any Members with an aggregate Sharing Ratio of 80% or more propose to Transfer Equity
Units to a Third Party in a bona fide sale representing at least 80% of the Equity Units held by
all Members (a Compelled Sale), such Members may at their option require all Members to Transfer
their Drag-Along Portion for the same consideration per Equity Unit and otherwise on the same terms
and conditions. The Members proposing such Transfer shall provide written notice of such Compelled
Sale to the other Members (a Compelled Sale Notice) at least thirty (30) days prior to the
proposed Closing of Compelled Sale. The Compelled Sale Notice shall identify the transferee, the
number of Equity Units subject to the Compelled Sale, the consideration for which a Transfer is
proposed to be made (the Compelled Sale Price), the Drag-Along Portion of such other Member and
all other material terms and conditions of the Compelled Sale. The number of Equity Units to be
sold by each other Member will be the Drag-Along Portion of the Equity Units that such other Member
owns. Each other Member shall be required to participate in the Compelled Sale on the terms and
conditions set forth in the Compelled Sale Notice and to tender the Drag-Along Portion of its
Equity Units as set forth below. The price payable in such Transfer shall be the Compelled Sale
Price. Not later than the fifteenth (15th) day following the date of the Compelled Sale
Notice (the Compelled Sale Notice Period), each of the other Members shall execute and deliver to
the Company such documents and instruments of conveyance as may be necessary or appropriate to
effectuate such Transfer. If any other Member should fail to deliver such documents and
instruments to the
- 50 -
Company, the Company (subject to reversal under Section 12.3(b)) shall cause the
books and records of the Company to show that such Equity Units are bound by the provisions of this
Section 12.3(a) and that such Equity Units shall be Transferred to the third party immediately upon
surrender for Transfer by the holder thereof.
(b) The Members proposing the Compelled Sale shall have a period of one hundred twenty (120)
days from the date of the Compelled Sale Notice to consummate the Compelled Sale on the terms and
conditions set forth in such Compelled Sale Notice, provided that, if such Compelled Sale is
subject to regulatory approval, such 120-day period shall be
extended until the earlier of (x) one hundred fifty (150) days from the date of the Compelled
Sale Notice and (y) the expiration of five Business Days after all such approvals have been
received. If the Compelled Sale shall not have been consummated during such period, the Company
immediately shall return to each of the other Members any documents in the possession of Company
executed by the other Members in connection with such proposed Compelled Sale, and all the
restrictions on Transfer contained in this Agreement or otherwise applicable at such time with
respect to such Equity Units owned by the other Members shall again be in effect.
(c) The provisions of this Section 12.3 shall not apply to any proposed Transfer of any Equity
Units by a Member pursuant to Section 12.4.
Section 12.4 Rights to Participate in Transfer.
(a) If, after compliance with Section 12.2, any Members propose to Transfer Equity Units held
by such Members to a Third Party in a bona fide sale representing at least fifty percent (50%) of
the Equity Units held by all Members (a Tag-Along Sale), then each Member may elect at its
option, to transfer its Tag-Along Portion in the manner provided in this Section 12.4. In the
event of such a proposed Transfer, the prospective selling Members shall provide each other Member
written notice of the terms and conditions of such proposed transfer (Tag-Along Notice) and offer
each other Member the opportunity to participate in such sale. The Tag-Along Notice shall identify
the number of Equity Units subject to the offer (the Tag-Along Offer), and the Tag-Along Portion
of such other Member assuming that all other Members exercise their Tag-Along Rights, the
consideration at which the Transfer is proposed to be made and all other material terms and
conditions including copies of definitive agreements of the Tag-Along Offer, including the form of
the proposed agreement, if any.
(b) From the date of the receipt of the Tag-Along Notice, each other Member shall have the
right (a Tag-Along Right), exercisable by written notice (Tag-Along Response Notice) given to
the prospective selling Members within ten (10) Business Days of its receipt of the Tag-Along
Notice (the Tag-Along Notice Period), to request that the prospective selling Members include in
the proposed Transfer the number of Equity Units held by such other Member (each such other Member
a Tagging Person) not to exceed such other Members Tag-Along Portion as is specified in such
Tag-Along Response Notice. Each Tagging Person may include in the Tag-Along Sale all or any
portion of such Tagging Persons Tag-Along Portion of Equity Units. Delivery of
the Tag-Along
Response Notice shall constitute an irrevocable acceptance of the Tag-Along Offer by such Tagging
Persons. Each Tag-Along Response Notice shall include wire transfer instructions for payment or
delivery of
- 51 -
the consideration for the Equity Units to be sold in such Tag-Along Sale. Each Tagging
Person that exercises its Tag-Along Rights hereunder shall deliver to the Company, no later than
three (3) Business Days prior to the closing of the Tag-Along Sale, such documents and instruments
of conveyance as may be necessary or appropriate to effectuate such Transfer.
(c) If, at the end of a 120-day period after the expiration of the Tag-Along Notice Period
(which 120-day period shall be extended if any of the transactions contemplated by the Tag-Along
Offer are subject to regulatory approval until the earlier of (x) one hundred fifty (150) days
after the expiration of Tag-Along Notice Period and (y) the expiration of five
(5) Business Days after all such approvals have been received), the prospective selling
Members have not completed the Transfer of all such Equity Units on the same terms and conditions
set forth in the Tag-Along Notice, the Company immediately shall return to each of the other
Members any documents in the possession of the Company executed by the other Members in connection
with such proposed Tag-Along Sale, and all the restrictions on Transfer contained in this Agreement
or otherwise applicable at such time with respect to such Equity Units owned by the other Members
shall again be in effect.
(d) If, at the termination of the Tag-Along Notice Period, any Member shall not have elected
to participate in the Tag-Along Sale, such Member will be deemed to have waived any and all of its
rights under this Section 12.4 with respect to the Transfer of its securities pursuant to such
Tag-Along Sale.
Section 12.5 Purchase Option.
(a) Upon the occurrence of a Trigger Event by any Member (the Subject Member), the Subject
Member shall offer to sell to each other Member a number of Equity Units (the Offered Amount)
equal to:
(i) (A) the aggregate number of Common Units sold, transferred or disposed of
after the date hereof through and including the date of the Trigger Event, divided
by the Trigger Amount; multiplied by (B) 10% of the total amount of Equity Units
held by the Member on the date hereof; minus
(ii) the total number of Equity Units previously sold by the Subject Member
pursuant to the provisions of this Section 12.5 or otherwise.
In the event the Offered Amount is zero, the Subject Member shall not extend any offer to the other
Members, and the other Members shall have no right to purchase any Equity Units from the Subject
Member pursuant to this Section 12.5 until the occurrence of a subsequent Trigger Event.
(b) The purchase price of each Equity Unit offered and sold pursuant to this Section 12.5
shall be equal to (i) the value of the interests in ETE held by the Company at such time divided by
(ii) the aggregate number of Equity Units outstanding at such time (the Purchase Option Price).
For purposes of this Section 12.5, the general partner interest in ETE held by the Company shall be
valued based on its equivalent Common Units and such equivalent Common Units and the other Common
Units held by the Company shall be valued based on the average of the reported closing prices of
Common Units on the principal stock
- 52 -
exchange on which the Common Units are then traded on each
trading day during the 10 trading day period ending immediately prior to the date of the
determination.
(c) Immediately upon the occurrence of a Trigger Event, the Subject Member shall give the
other Members written notice (the Purchase Option Notice) that shall include the Offered Amount
and the Purchase Option Price. Each other Member shall have the right to exercise its Purchase
Option and acquire its Purchase Option Portion of the Offered Amount of Equity Units pursuant to
the terms of the Purchase Option Notice for a period of thirty (30) days (the Purchase Option
Notice Period). If, at the termination of the Purchase Option Notice
Period, any Member shall not have elected to exercise its rights under this Section 12.5, such
Member will be deemed to have waived any and all of its rights under this Section 12.5 and such
portion of the Purchasable Units not purchased by such Member shall be offered to the other Members
pursuant to the terms set forth in this Section 12.5(c) for an additional thirty (30) day period.
Section 12.6 Put Right.
(a) At any time during the twelve-month period following the date on which Warren holds Equity
Units representing less than twenty percent (20%) of the Equity Units held by all Members or is no
longer a Member, Davis shall have the right to cause the Company to purchase all of his Equity
Units for the purchase price set forth in Section 12.6(c).
(b) If (i) a Member has sold all of the Common Units owned, directly or indirectly, by such
Member, (ii) the Purchase Option Notice Period and the additional 30-day period set forth in
Section 12.5(b) has expired, and (iii) such Member continues to hold Equity Units, then at any time
during the twelve-month period following the expiration of the 30-day period set forth in Section
12.5(b), such Member shall have the right to cause the Company to purchase all of its Equity Units
for the purchase price set forth in Section 12.6(c).
(c) The purchase price of each Equity Unit offered and sold pursuant to this Section 12.6
shall be equal to (i) the value of the interests in ETE held by the Company at such time divided by
(ii) the aggregate number of Equity Units outstanding at such time. For purposes of this Section
12.6, the general partner interest in ETE held by the Company shall be valued based on its
equivalent Common Units and such equivalent Common Units and the other Common Units held by the
Company shall be valued based on the average of the reported closing sale prices of Common Units on
the principal stock exchange on which the Common Units are then traded on each trading day during
the 10 trading-day period ending immediately prior to the date of the determination.
(d) The Company shall be required to purchase all of the Equity Units held by a Member
exercising its rights under this Section 12.6 for cash within sixty (60) days of deliver by such
Member to the Company of written notice that such Member is exercising such rights. The Members
hereby agree that the Company may require the other Members to make additional Capital
Contributions to the Company in amount not to exceed the purchase price of the Equity Units sold
pursuant to this Section 12.6.
- 53 -
ARTICLE XIII
GENERAL PROVISIONS
Section 13.1 Notices. Except as expressly set forth to the contrary in this Agreement, all
notices, requests or consents provided for or permitted to be given under this Agreement must be in
writing and must be delivered to the recipient in person, by courier or mail or by facsimile or
other electronic transmission and a notice, request or consent given under this Agreement is
effective on receipt by the Person to receive it; provided, however, that a facsimile or other
electronic transmission that is transmitted after the normal business hours of the recipient shall
be deemed effective on the next Business Day. All notices, requests and consents to be sent to a
Member must be sent to or made at the addresses given for that Member as that Member may
specify by notice to the other Members. Any notice, request or consent to the Company must be given
to all of the Members. Whenever any notice is required to be given by Applicable Law, the
Organizational Certificate or this Agreement, a written waiver thereof, signed by the Person
entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Whenever any notice is required to be given by Law, the Organizational
Certificate or this Agreement, a written waiver thereof, signed by the Person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to the giving of such
notice.
Section 13.2 Entire Agreement; Supersedure. This Agreement constitutes the entire agreement of
the Members and their respective Affiliates relating to the subject matter hereof and supersedes
all prior contracts or agreements with respect to such subject matter, whether oral or written.
Section 13.3 Effect of Waiver or Consent. Except as provided in this Agreement, a waiver or
consent, express or implied, to or of any breach or default by any Person in the performance by
that Person of its obligations with respect to the Company is not a consent or waiver to or of any
other breach or default in the performance by that Person of the same or any other obligations of
that Person with respect to the Company. Except as provided in this Agreement, failure on the part
of a Person to complain of any act of any Person or to declare any Person in default with respect
to the Company, irrespective of how long that failure continues, does not constitute a waiver by
that Person of its rights with respect to that default until the applicable statute-of-limitations
period has run.
Section 13.4 Amendment or Restatement. This Agreement may be amended or restated only by a
written instrument executed by all Members; provided, however, that notwithstanding anything to the
contrary contained in this Agreement, each Member agrees that the Board of Directors, without the
approval of any Member, may amend any provision of the Certificate of Formation and this Agreement,
and may authorize any Officer to execute, swear to, acknowledge, deliver, file and record any such
amendment and whatever documents may be required in connection therewith, to reflect any change
that does not require consent or approval (or for which such consent or approval has been obtained)
under this Agreement or does not materially adversely affect the rights of the Members; provided,
further, that any amendment to Section 2.4 of this Agreement shall be deemed to materially affect
the Members.
- 54 -
Section 13.5 Binding Effect. This Agreement is binding on and shall inure to the benefit of
the Members and their respective heirs, legal representatives, successors and assigns.
Section 13.6 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR
PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF
ANOTHER JURISDICTION. In the event of a direct conflict between the provisions of this Agreement
and (a) any provision of the Organizational Certificate, or (b) any mandatory, non-waivable
provision of the Act, such provision of the Organizational Certificate or the Act shall control. If
any provision of the Act provides that it may be varied or superseded
in the limited liability company agreement (or otherwise by agreement of the members or
managers of a limited liability company), such provision shall be deemed superseded and waived in
its entirety if this Agreement contains a provision addressing the same issue or subject matter. If
any provision of this Agreement or the application thereof to any Person or circumstance is held
invalid or unenforceable to any extent, (a) the remainder of this Agreement and the application of
that provision to other Persons or circumstances is not affected thereby and that provision shall
be enforced to the greatest extent permitted by Law, and (b) the Members or Directors (as the case
may be) shall negotiate in good faith to replace that provision with a new provision that is valid
and enforceable and that puts the Members in substantially the same economic, business and legal
position as they would have been in if the original provision had been valid and enforceable.
Section 13.7 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each Member shall execute and deliver any additional documents and instruments
and perform any additional acts that may be necessary or appropriate to effectuate and perform the
provisions of this Agreement and those transactions.
Section 13.8 Offset. Whenever the Company is to pay any sum to any Member, any amounts that a
Member owes the Company may be deducted from that sum before payment.
Section 13.9 Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if all signing parties had signed the same document. All counterparts shall be
construed together and constitute the same instrument.
[Signature page follows.]
- 55 -
IN WITNESS WHEREOF, the Members have executed this Agreement as of the date first set forth
above.
|
|
|
|
|
|
|
|
|
COMPANY: |
|
|
|
|
|
|
|
|
|
|
|
LE GP, LLC |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ John W. McReynolds |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
John W. McReynolds |
|
|
|
|
Title:
|
|
President |
|
|
|
|
|
|
|
|
|
|
|
MEMBERS: |
|
|
|
|
|
|
|
|
|
|
|
/s/ Ray C. Davis |
|
|
|
|
|
|
|
|
|
RAY C. DAVIS |
|
|
|
|
|
|
|
|
|
|
|
/s/ Kelcy L. Warren |
|
|
|
|
|
|
|
|
|
KELCY L. WARREN |
|
|
|
|
|
|
|
|
|
|
|
NATURAL GAS PARTNERS VI, L.P. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: |
|
G.F.W. Energy VI, L.P., |
|
|
|
|
|
|
its general partner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: |
|
GFW VI, L.L.C., |
|
|
|
|
|
|
|
|
its general partner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Kenneth Hersh |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
An Authorized Member |
|
|
|
|
|
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P. |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Michael A. Creel |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Michael A. Creel, CEO |
|
|
|
|
Title: |
|
|
|
|
|
|
|
|
|
|
|
|
|
LE GP-TAX, LLC |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Kelcy L. Warren |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Kelcy L. Warren |
|
|
|
|
Title:
|
|
Sole Member |
|
|
- 56 -
EXHIBIT A
|
|
|
|
|
Name and Address of Member: |
|
Number of Equity Units: |
Ray C. Davis
2828 Woodside Street
Dallas, Texas 75204
|
|
|
174,538 |
|
|
|
|
|
|
Kelcy L. Warren
2828 Woodside Street
Dallas, Texas 75204
|
|
|
375,790 |
|
|
|
|
|
|
Natural Gas Partners VI, L.P.
125 East John Carpenter Frwy.
Suite 600
Irving, Texas 75062
|
|
|
151,370 |
|
|
|
|
|
|
Enterprise GP Holdings L.P.
1100 Louisiana Street, 18th Floor
Houston, Texas 77002
|
|
|
375,790 |
|
|
|
|
|
|
LE GP-Tax, LLC
2828 Woodside Street
Dallas, Texas 75204
|
|
|
-0- |
|
- 57 -
exv10w3
EXHIBIT 10.3
Execution Copy
UNITHOLDER RIGHTS AND RESTRICTIONS AGREEMENT
by and among
ENERGY TRANSFER EQUITY, L.P.,
and
ENTERPRISE GP HOLDINGS, L.P.,
RAY C. DAVIS
and
NATURAL GAS PARTNERS VI, L.P.
UNITHOLDER RIGHTS AND RESTRICTIONS AGREEMENT
THIS UNITHOLDER RIGHTS AND RESTRICTIONS AGREEMENT (this Agreement) is made and
entered into as of May 7, 2007, by and among ENERGY TRANSFER EQUITY, L.P., a Delaware limited
partnership (ETE), ENTERPRISE GP HOLDINGS, L.P. (Investor), RAY C. DAVIS
(Davis) and NATURAL GAS PARTNERS VI, L.P. (NGP).
This Agreement is made in connection with the sale of 38,976,090 common units of ETE (the
Purchased Units) to the Investor pursuant to the Securities Purchase Agreement, dated as
of May 7, 2007, by and among Davis, Avatar Holdings LLC, Avatar Investments LP, Natural Gas
Partners VI, L.P., Lon Kile, MHT Properties, Ltd., P. Brian Smith Holdings LP, LE GP, LLC and the
Investor (the Purchase Agreement). ETE has agreed to enter into this Agreement pursuant
to Section 5.5 of the Purchase Agreement.
In consideration of the mutual covenants and agreements set forth herein and for good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party
hereto, the parties hereby agree (in the case of the Investors, severally and not jointly) as
follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions. The terms set forth below are used herein as so defined:
Agreement has the meaning specified therefor in the introductory paragraph.
Affiliate means any Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, the Person
specified. The term control (including the terms controlling, controlled by, and under
common control with) means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
Antitrust Investigation means any investigation, inquiry, review, proceeding, action
or threatened action taken by a Governmental Authority in enforcing the Antitrust Laws solely in
connection with: (i) the acquisition by Investor of the Purchased Units and membership interests
in the general partner of ETE pursuant to the Purchase Agreement, (ii) the resulting ownership by
Investor of the Purchased Units or membership units in the general partner of ETE as of the date of
this Agreement or (iii) the possession of rights and powers of Investor provided by this Agreement
or otherwise related to the ownership of the membership units in the general partner of ETE or the
Purchased Units; provided, in the case of clauses (ii) and (iii), solely with respect to
the assets, business and operations of ETE, the Investor and their Affiliates as of the date of
this Agreement and not with respect to any subsequent acquisitions by, or changes to the assets,
business or operations of, ETE, Investor or their respective Affiliates.
Antitrust Laws shall include the Sherman Act, as amended, the Clayton Act, as
amended, the HSR Act, the Federal Trade Commission Act, as amended, and all other federal,
1
state and foreign statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade or lessening of competition.
Commercially Sensitive Information has the meaning specified therefor in the
Statement of Policies Relating to Relationship with Enterprise Holdings GP, L.P., a copy of which
is attached to this Agreement as Exhibit A and incorporated herein for all purposes, as
such Statement may be amended from time to time.
Commission means the Securities and Exchange Commission.
Common Units means the common units of ETE.
Confidential Information has the meaning specified therefor in Section 4.03 of this
Agreement.
Demand Registration has the meaning specified therefor in Section 2.01(a) of this
Agreement.
Demand Registration Statement has the meaning specified therefor in Section 2.01(a)
of this Agreement.
Disposition has the meaning specified therefor in Section 3.01 of this Agreement.
Divestiture Losses has the meaning specified therefor in Section 6.01(d) of this
Agreement
Effectiveness Period has the meaning specified therefor in Section 2.01(a) of this
Agreement.
ETE has the meaning specified therefor in the introductory paragraph.
ETP means Energy Transfer Partners, L.P., a Delaware limited partnership.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Final Restricted Period means the twelve-month period beginning on the date
immediately after the end of the Initial Restricted Period.
GAAP has the meaning specified therefor in Section 4.01(a) of this Agreement.
Governmental Authority means any federal, national, supranational, state,
provincial, local or other government, governmental, regulatory or administrative authority, agency
or commission or any court, tribunal or judicial or arbitral body, including but not limited to all
U.S., state and foreign governmental agencies responsible for enforcing the Antitrust Laws.
Holder means the record holder of any Registrable Securities.
2
Included Registrable Securities has the meaning specified therefor in Section
2.02(a) of this Agreement.
Initial Restricted Period means the period from the date of this Agreement through
the date six months after the date of this Agreement.
Investor has the meaning specified therefor in the introductory paragraph.
Losses has the meaning specified therefor in Section 2.07(a) of this Agreement.
Managing Underwriter means, with respect to any Underwritten Offering, a
book-running lead manager of such Underwritten Offering.
Notice has the meaning specified therefor in Section 3.04 of this Agreement.
NYSE has the meaning specified therefor in Section 3.02 of this Agreement.
Person means an individual, corporation, association, trust, limited liability
company, limited partnership, limited liability partnership, partnership, incorporated
organization, or other entity or group (as defined in Section 13(d)(3) of the Exchange Act).
Piggyback Registration has the meaning specified therefor in Section 2.02(a) of this
Agreement.
Purchase Agreement has the meaning specified therefor in the Recital of this
Agreement.
Purchased Units has the meaning specified therefor in the Recital of this Agreement.
Registrable Securities means (i) the Purchased Units and (ii) any Common Units
issued as (or issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, the Purchased Units, in each case until such time as such securities described in
clause (i) or (ii) above cease to be Registrable Securities pursuant to Section 1.02 hereof.
Registration Expenses has the meaning specified therefor in Section 2.06(a) of this
Agreement.
Restricted Periods means the Initial Restricted Period and the Final Restricted
Period.
Securities Act means the Securities Act of 1933, as amended.
Selling Expenses has the meaning specified therefor in Section 2.07(a) of this
Agreement.
Selling Holder means a Holder who is selling Registrable Securities pursuant to a
registration statement.
3
Standstill Period means the period from the date of this Agreement through the date
three years from the date of this Agreement.
Underwritten Offering means an offering (including an offering pursuant to a Demand
Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis
for reoffering to the public or an offering that is a bought deal with one or more investment
banks.
Section 1.02 Registrable Securities. Any Registrable Security will cease to be a
Registrable Security when (a) a registration statement covering such Registrable Security has been
declared effective by the Commission and such Registrable Security has been sold or disposed of
pursuant to such effective registration statement; (b) such Registrable Security has been disposed
of pursuant to any section of Rule 144 (or any similar provision then in force under the Securities
Act); (c) such Registrable Security is held by ETE or one of its Subsidiaries; or (d) (i) such
Registrable Security is eligible for resale under Rule 144(k) under the Securities Act and (ii) the
Holder of such Registrable Security is able to utilize Rule 144(k) under the Securities Act.
ARTICLE II.
REGISTRATION RIGHTS
Section 2.01 Demand Registration.
(a) Demand Registration. At any time following the last day of the Initial
Restricted Period (Initial Restriction Expiration Date), any Holder or Holders
holding an aggregate of not less than 50% of the then outstanding Registrable Securities
(Initial Holders) may request, by written notice (a Demand) to ETE,
specifying the number of Registrable Securities desired to be sold (which shall not be less
than 10% of the Registrable Securities, and which may not exceed the limits set forth in
Section 3.01 during the Final Restricted Period), that ETE prepare and file a registration
statement under the Securities Act (Demand Registration Statement) to permit the
public resale of Registrable Securities either (a) in an Underwritten Offering or (b) from
time to time as permitted by Rule 415 under the Securities Act (either, a Demand
Registration). Promptly upon receipt of a Demand, ETE shall give written notice
thereof to all other Holders. All such Holders who notify ETE in writing within fifteen
(15) days after the date of such notice that they desire to include Registrable Securities
in the Demand Registration Statement shall be permitted to do so. ETE shall use its
commercially reasonable efforts to cause a Demand Registration Statement to become effective
no later than 180 days after the date of the Demand. A Demand Registration Statement filed
pursuant to this Section 2.01(a) shall be on such appropriate registration form of the
Commission as shall be selected by ETE; provided, however, that if a
prospectus or a prospectus supplement will be used in connection with the marketing of an
Underwritten Offering from the Demand Registration Statement and the Managing Underwriter
selected by the Selling Holders at any time shall notify ETE in writing that, in the sole
judgment of such Managing Underwriter, inclusion of detailed information to be used in such
prospectus or prospectus supplement is of material importance to the success of the
Underwritten Offering of such Registrable Securities, ETE shall use its commercially
4
reasonable efforts to include such information in such a prospectus or prospectus
supplement. In the case of a shelf registration, ETE will cause a Demand Registration
Statement filed pursuant to this Section 2.01(a) to be continuously effective under the
Securities Act until all Registrable Securities covered by the Demand Registration Statement
have been distributed in the manner set forth and as contemplated in the Demand Registration
Statement or there are no longer any Registrable Securities outstanding covered by such
Demand Registration Statement (the Effectiveness Period). The Demand Registration
Statement when declared effective (including the documents incorporated therein by
reference) will comply as to form with all applicable requirements of the Securities Act and
will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading.
As soon as practicable following the date a Demand Registration Statement becomes effective,
but in any event within two Business Days after such date, ETE shall provide the Selling
Holders with written notice thereof. ETE is obligated to effect only three (3) Demand
Registrations pursuant to this Section 2.01.
(b) Delay Rights. Notwithstanding anything to the contrary contained herein,
ETE may, upon written notice to any Selling Holder whose Registrable Securities are included
in a Demand Registration Statement, suspend such Selling Holders use of any prospectus
which is a part of the Demand Registration Statement (in which event the Selling Holder
shall discontinue sales of the Registrable Securities pursuant to the Demand Registration
Statement other than the closing of sales already committed for prior to receipt of such
notice to suspend) if ETE (i) is pursuing a financing, acquisition, merger, reorganization,
disposition or other similar transaction and determines in good faith that its ability to
pursue or consummate such a transaction would be materially adversely affected by any
required disclosure of such transaction in the Demand Registration Statement or (ii) has
experienced some other material non-public event the disclosure of which at such time, in
the good faith judgment of ETE, would materially adversely affect ETE; provided,
however, that in no event shall the Selling Holders be suspended for a period
exceeding an aggregate of 90 days (exclusive of days covered by any lock-up agreement
executed by a Holder in connection with any Underwritten Offering by ETE or the Holders) in
any 365-day period. Upon disclosure of such information or the termination of the condition
described above, ETE shall provide prompt notice to the Selling Holders whose Registrable
Securities are included in the Demand Registration Statement, and shall promptly terminate
any suspension of sales it has put into effect and shall take such other actions to permit
registered sales of Registrable Securities as contemplated in this Agreement.
Section 2.02 Piggyback Registration.
(a) Participation. If ETE at any time proposes to file a registration
statement or a prospectus supplement to an effective registration statement with respect to
an Underwritten Offering of Common Units for its own account or to register any Common Units
for its own account for sale to the public in an Underwritten Offering other than (x) a
registration relating solely to employee benefit plans, (y) a registration relating solely
to a Rule 145 transaction, or (z) a registration on any registration form which does not
permit secondary sales or does not include substantially the same information as
5
would be required to be included in a registration statement covering the sale of
Registrable Securities, then, as soon as practicable following the engagement of counsel to
ETE to prepare the documents to be used in connection with an Underwritten Offering, ETE
shall give notice of such proposed Underwritten Offering to the Holders and such notice
shall offer the Holders the opportunity to include in such Underwritten Offering such number
of Registrable Securities as each such Holder may request in writing (a Piggyback
Registration); provided, however, that ETE shall not be required to
offer such opportunity to Holders if ETE has been advised by a Managing Underwriter that the
inclusion of Registrable Securities for sale for the benefit of the Holders will have a
material adverse effect on the price, timing or distribution of the Common Units. Subject to
the preceding sentence and subject to Section 2.02(b), ETE shall include in such
Underwritten Offering all such Registrable Securities (Included Registrable
Securities) with respect to which ETE has received requests within ten days after ETEs
notice has been delivered in accordance with Section 7.01. If no request for inclusion from
a Holder is received within the specified time, such Holder shall have no further right to
participate in such Piggyback Registration. If, at any time after giving written notice of
its intention to undertake an Underwritten Offering and prior to the closing of such
Underwritten Offering, ETE shall determine for any reason not to undertake or to delay such
Underwritten Offering, ETE may, at its election, give written notice of such determination
to the Selling Holders and, (x) in the case of a determination not to undertake such
Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable
Securities in connection with such terminated Underwritten Offering, and (y) in the case of
a determination to delay such Underwritten Offering, shall be permitted to delay offering
any Included Registrable Securities for the same period as the delay in the Underwritten
Offering. Any Selling Holder shall have the right to withdraw such Selling Holders request
for inclusion of such Selling Holders Registrable Securities in such offering by giving
written notice to ETE of such withdrawal up to and including the time of pricing of such
offering. Notwithstanding the foregoing, any Holder may deliver written notice to ETE
requesting that such Holder not receive notice from ETE of any proposed Underwritten
Offering; provided, that such Holder may later revoke any such notice.
(b) Priority of Piggyback Registration. If the Managing Underwriter or
Underwriters of any proposed Underwritten Offering of Common Units included in a Piggyback
Registration advises ETE that the total amount of Common Units which the Selling Holders and
any other Persons intend to include in such offering exceeds the number which can be sold in
such offering without being likely to have a material adverse effect on the price, timing or
distribution of the Common Units offered or the market for the Common Units, then the Common
Units to be included in such Underwritten Offering shall include the number of Registrable
Securities that such Managing Underwriter or Underwriters advises ETE can be sold without
having such material adverse effect, with such number to be allocated pro rata among the
Selling Holders who have requested participation in the Piggyback Registration (based, for
each such Selling Holder, on the percentage derived by dividing (A) the number of
Registrable Securities proposed to be sold by such Selling Holder in such offering; by (B)
the aggregate number of Common Units proposed to be sold by the Selling Holders and any
other Persons with registration rights that are pari passu with the rights
of the Holders
6
participating in the Piggyback Registration to be included in such offering). If there
are to be any Included Registrable Securities in the proposed Underwritten Offering of
Common Units, then the Selling Holders representing a majority of the Registrable Securities
to be sold in the Underwritten Offering shall be entitled to approve one Managing
Underwriter with respect to the Registrable Securities to be sold in that Underwritten
Offering.
(c) Termination of Piggyback Registration Rights. The Piggyback Registration
rights granted pursuant to this Section 2.02 shall terminate two years following the
Restriction Expiration Date.
Section 2.03 Underwritten Offering. In the event that a Selling Holder elects to
dispose of Registrable Securities under a Demand Registration Statement pursuant to an Underwritten
Offering, ETE shall enter into an underwriting agreement in customary form with the Managing
Underwriter, which shall include, among other provisions, indemnities to the effect and to the
extent provided in Section 2.07, and shall take all such other reasonable actions as are requested
by a Managing Underwriter in order to expedite or facilitate the registration and disposition of
the Registrable Securities. In connection with any Underwritten Offering under this Agreement, a
majority of the Selling Holders shall be entitled to select the Managing Underwriter with respect
to the Registrable Securities to be sold in that Underwritten Offering. In connection with an
Underwritten Offering under Section 2.01 or 2.02 hereof, each Selling Holder and ETE shall be
obligated to enter into an underwriting agreement which contains such representations, covenants,
indemnities and other rights and obligations as are customary in underwriting agreements for firm
commitment offerings of securities. No Selling Holder may participate in such Underwritten
Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided
in such underwriting agreement and completes and executes all questionnaires, powers of attorney,
indemnities, lock-up agreements and other documents reasonably required under the terms of such
underwriting agreement. Each Selling Holder may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, ETE to and for the
benefit of such underwriters also be made to and for such Selling Holders benefit and that any or
all of the conditions precedent to the obligations of such underwriters under such underwriting
agreement also be conditions precedent to its obligations. No Selling Holder shall be required to
make any representations or warranties to or agreements with ETE or the underwriters other than
representations, warranties or agreements regarding such Selling Holder and its ownership of the
securities being registered on its behalf and its intended method of distribution and any other
representation required by law. If any Selling Holder disapproves of the terms of an underwriting,
such Selling Holder may elect to withdraw therefrom by notice to ETE and a Managing Underwriter;
provided, however, that such withdrawal must be made at or prior to the time of
pricing of such offering to be effective. No such withdrawal or abandonment shall affect ETEs
obligation to pay Registration Expenses.
Section 2.04 Registration Procedures. In connection with its obligations contained in
Sections 2.01 and 2.02, ETE will, as expeditiously as possible:
(a) prepare and file with the Commission such amendments and supplements to the Demand
Registration Statement and the prospectus used in connection therewith as may be necessary
to keep a Demand Registration Statement that is a shelf registration
7
effective for the Effectiveness Period and as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all securities covered
by the Demand Registration Statement;
(b) furnish to each Selling Holder (i) as far in advance as reasonably practicable
before filing any registration statement contemplated by this Agreement or any supplement or
amendment thereto, upon request, copies of reasonably complete drafts of all such documents
proposed to be filed (including furnishing or making available exhibits and each document
incorporated by reference therein to the extent then required by the rules and regulations
of the Commission), and provide each such Selling Holder the opportunity to object to any
information pertaining to such Selling Holder and its plan of distribution that is contained
therein and make the corrections reasonably requested by such Selling Holder with respect to
such information prior to filing such registration statement or supplement or amendment
thereto, and (ii) such number of copies of such registration statement and the prospectus
included therein and any supplements and amendments thereto as such Persons may reasonably
request in order to facilitate the public sale or other disposition of the Registrable
Securities covered by such registration statement;
(c) if applicable, use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by any registration statement contemplated by this Agreement
under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in
the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request,
provided that ETE will not be required to qualify generally to transact business in
any jurisdiction where it is not then required to so qualify or to take any action which
would subject it to general service of process or taxation in any such jurisdiction where it
is not then so subject;
(d) promptly notify each Selling Holder and each underwriter, at any time when a
prospectus relating thereto is required to be delivered under the Securities Act, of (i) the
filing of any registration statement contemplated by this Agreement or any prospectus or
prospectus supplement to be used in connection therewith, or any amendment or supplement
thereto, and, with respect to such registration statement contemplated by this Agreement,
when the same has become effective; and (ii) any written comments from the Commission with
respect to any filing referred to in clause (i) and any written request by the Commission
for amendments or supplements to any registration statement contemplated by this Agreement
or any prospectus or prospectus supplement thereto;
(e) immediately notify each Selling Holder and each underwriter, at any time when a
prospectus relating thereto is required to be delivered under the Securities Act, of (i) the
happening of any event as a result of which the prospectus or prospectus supplement
contained in any registration statement contemplated by this Agreement, as then in effect,
includes an untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing; (ii) the issuance or threat of issuance by the
Commission of any stop order suspending the effectiveness of any
8
registration statement contemplated by this Agreement, or the initiation of any
proceedings for that purpose; or (iii) the receipt by ETE of any notification with respect
to the suspension of the qualification of any Registrable Securities for sale under the
applicable securities or blue sky laws of any jurisdiction. Following the provision of such
notice, ETE agrees to as promptly as practicable amend or supplement the prospectus or
prospectus supplement or take other appropriate action so that the prospectus or prospectus
supplement does not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and to take such other action as
is necessary to remove a stop order, suspension, threat thereof or proceedings related
thereto;
(f) furnish to each Selling Holder copies of any and all transmittal letters or other
correspondence with the Commission or any other governmental agency or self-regulatory body
or other body having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering of Registrable Securities;
(g) furnish within 30 days of a written request, which may be made from time to time,
whether in the case of an Underwritten Offering or otherwise in connection with the sale or
resale of the Registrable Securities, (i) an opinion of counsel for ETE, dated the effective
date of the applicable registration statement or the date of any amendment or supplement
thereto, and a letter of like kind dated the date of the closing under the underwriting
agreement, if any, and (ii) a comfort letter, dated the effective date of the applicable
registration statement or the date of any amendment or supplement thereto and a letter of
like kind dated the date of the closing under the underwriting agreement, if any, in each
case, signed by the independent public accountants who have certified ETEs financial
statements included or incorporated by reference into the applicable registration statement,
and each of the opinion and the comfort letter shall be in customary form and covering
substantially the same matters with respect to such registration statement (and the
prospectus and any prospectus supplement included therein) and as are customarily covered in
opinions of issuers counsel and in accountants letters delivered to the underwriters in
Underwritten Offerings of securities, and such other matters as such underwriters may
reasonably request;
(h) otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security holders, as soon
as reasonably practicable, an earnings statement covering the period of at least 12 months,
but not more than 18 months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(i) make available to the appropriate representatives of the Managing Underwriter and
Selling Holders access to such information and ETE personnel as is reasonable and customary
to enable such parties to establish a due diligence defense under the Securities Act;
provided that ETE need not disclose any information to any
9
such representative unless and until such representative has entered into a
confidentiality agreement with ETE;
(j) cause all such Registrable Securities registered pursuant to this Agreement to be
listed on each securities exchange or nationally recognized quotation system on which
similar securities issued by ETE are then listed;
(k) use its commercially reasonable efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of ETE to enable the Selling Holders to
consummate the disposition of such Registrable Securities;
(l) provide a transfer agent and registrar for all Registrable Securities covered by
such registration statement not later than the effective date of such registration
statement;
(m) enter into customary agreements and take such other actions as are reasonably
requested by the Selling Holders or the underwriters, if any, in order to expedite or
facilitate the disposition of such Registrable Securities; and
(n) notify the Selling Holders in advance of ETEs or any affiliates intent to conduct
any repurchase of Common Units, whether in the open market, through privately negotiated
transactions, by tender offer or otherwise.
Each Selling Holder, upon receipt of notice from ETE of the happening of any event of the kind
described in subsection (e) of this Section 2.04, shall forthwith discontinue disposition of the
Registrable Securities until such Selling Holders receipt of the copies of the supplemented or
amended prospectus contemplated by subsection (e) of this Section 2.04 or until it is advised in
writing by ETE that the use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings incorporated by reference in the prospectus, and, if so directed
by ETE, such Selling Holder will, or will request the managing underwriter or underwriters, if any,
to deliver to ETE (at ETEs expense) all copies in their possession or control, other than
permanent file copies then in such Selling Holders possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
Section 2.05 Cooperation by Holders. ETE shall have no obligation to include in any
Demand Registration units of a Holder or in a Piggyback Registration units of a Selling Holder who
has failed to timely furnish all such information which, in the opinion of counsel to ETE, is
reasonably required in order for the registration statement or any prospectus or prospectus
supplement thereto, as applicable, to comply with the Securities Act.
Section 2.06 Expenses.
(a) Certain Definitions. Registration Expenses means all expenses
incident to ETEs performance under or compliance with this Agreement to effect the
registration of Registrable Securities in a Demand Registration or a Piggyback Registration,
and the disposition of such securities, including, without limitation, all registration,
filing, securities exchange listing and NYSE fees, all registration, filing, qualification
and other
10
fees and expenses of complying with securities or blue sky laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes and fees of transfer agents and
registrars, all word processing, duplicating and printing expenses, the fees and
disbursements of counsel and independent public accountants for ETE, including the expenses
of any special audits or comfort letters required by or incident to such performance and
compliance. Except as otherwise provided in Section 2.07 hereof, ETE shall not be
responsible for legal fees incurred by Holders in connection with the exercise of such
Holders rights hereunder. In addition, ETE shall not be responsible for any Selling
Expenses, which means all underwriting fees, discounts and selling commissions
allocable to the sale of the Registrable Securities.
(b) Expenses. ETE will pay all Registration Expenses in connection with any
Demand Registration Statement filed pursuant to Section 2.01(a) of this Agreement and ETE
will pay all Registration Expenses in connection with a Piggyback Registration, whether or
not the Demand Registration Statement becomes effective or any sale is made pursuant to a
Demand Registration or Piggyback Registration. Each Selling Holder shall pay all Selling
Expenses in connection with any sale of its Registrable Securities hereunder.
Section 2.07 Indemnification.
(a) By ETE. In the event of a registration of any Registrable Securities under
the Securities Act pursuant to this Agreement, ETE will indemnify and hold harmless each
Selling Holder thereunder, its directors and officers and each underwriter, pursuant to the
applicable underwriting agreement with such underwriter of Registrable Securities thereunder
and each Person, if any, who controls such Selling Holder or underwriter within the meaning
of the Securities Act and the Exchange Act, against any losses, claims, damages, expenses or
liabilities (including reasonable attorneys fees and expenses) (collectively,
Losses), joint or several, to which such Selling Holder, director, officer,
underwriter or controlling Person may become subject under the Securities Act, the Exchange
Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any registration statement
contemplated by this Agreement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, and will reimburse each such
Selling Holder, its directors and officers, each such underwriter and each such controlling
Person for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss or actions or proceedings; provided,
however, that ETE will not be liable in any such case if and to the extent that any
such Loss arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by such
Selling Holder, such underwriter or such controlling Person in writing specifically for use
in any registration statement contemplated by this Agreement or any prospectus contained
therein or any amendment or supplement thereof,
11
as applicable. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Selling Holder or any such director, officer,
underwriter or controlling Person, and shall survive the transfer of such securities by such
Selling Holder.
(b) By Each Selling Holder. Each Selling Holder agrees severally and not
jointly to indemnify and hold harmless ETE, its directors and officers, and each Person, if
any, who controls ETE within the meaning of the Securities Act or of the Exchange Act to the
same extent as the foregoing indemnity from ETE to the Selling Holders, but only with
respect to information regarding such Selling Holder furnished in writing by or on behalf of
such Selling Holder expressly for inclusion in any registration statement contemplated by
this Agreement or any prospectus contained therein or any amendment or supplement thereof
relating to the Registrable Securities; provided, however, that the
liability of each Selling Holder shall not be greater in amount than the dollar amount of
the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of
the Registrable Securities giving rise to such indemnification.
(c) Notice. Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the indemnifying
party in writing thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party other than under
this Section 2.07. In any action brought against any indemnified party, it shall notify the
indemnifying party of the commencement thereof. The indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel reasonably satisfactory to such indemnified party and, after notice from the
indemnifying party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified party under
this Section 2.07 for any legal expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, (i) if the
indemnifying party has failed to assume the defense and employ counsel or (ii) if the
defendants in any such action include both the indemnified party and the indemnifying party
and counsel to the indemnified party shall have concluded that there may be reasonable
defenses available to the indemnified party that are different from or additional to those
available to the indemnifying party, or if the interests of the indemnified party reasonably
may be deemed to conflict with the interests of the indemnifying party, then the indemnified
party shall have the right to select a separate counsel and to assume such legal defense and
otherwise to participate in the defense of such action, with the reasonable expenses and
fees of such separate counsel and other reasonable expenses related to such participation to
be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of
this Agreement, no indemnifying party shall settle any action brought against an indemnified
party with respect to which such indemnified party is entitled to indemnification hereunder
without the consent of the indemnified party, unless the settlement thereof imposes no
liability or obligation on, and includes a complete and unconditional release from all
liability of, the indemnified party.
12
(d) Contribution. If the indemnification provided for in this Section 2.07 is
held by a court or government agency of competent jurisdiction to be unavailable to ETE or
any Selling Holder in respect of any Losses, then each such 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 as between ETE on the one hand and such Selling
Holder on the other, in such proportion as is appropriate to reflect the relative fault of
ETE on the one hand and of such Selling Holder on the other in connection with the
statements or omissions which resulted in such Losses, as well as any other relevant
equitable considerations; provided, however, that in no event shall such
Selling Holder be required to contribute an aggregate amount in excess of the dollar amount
of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of
Registrable Securities giving rise to such indemnification. The relative fault of ETE on
the one hand and each Selling Holder on the other 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 has been made by, or relates to,
information supplied by such party, and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant to this
paragraph were to be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the first
sentence of this paragraph. The amount paid by an indemnified party as a result of the
Losses referred to in the first sentence of this paragraph shall be deemed to include any
legal and other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any Loss which is the subject of this paragraph. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who is not guilty of such fraudulent
misrepresentation.
(e) Other Indemnification. The provisions of this Section 2.07 shall be in
addition to any other rights to indemnification or contribution which an indemnified party
may have pursuant to law, equity, contract or otherwise.
Section 2.08 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the Registrable
Securities to the public without registration, ETE agrees to use its commercially reasonable
efforts to:
(a) Make and keep public information regarding ETE available, as those terms are
understood and defined in Rule 144 of the Securities Act, at all times from and after the
date hereof;
(b) File with the Commission in a timely manner all reports and other documents
required of ETE under the Securities Act and the Exchange Act at all times from and after
the date hereof; and
(c) So long as a Holder owns any Registrable Securities, furnish to such Holder
forthwith upon request a copy of the most recent annual or quarterly report of
13
ETE, and such other reports and documents so filed as such Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing such Holder
to sell any such securities without registration.
Section 2.09 Transfer or Assignment of Registration Rights. The rights to cause ETE
to register Registrable Securities granted to the Investor by ETE under this Article II may be
transferred or assigned by the Investor to one or more transferee(s) or assignee(s) of such
Registrable Securities that is an Affiliate of Investor, provided that (a) ETE is given
written notice prior to any said transfer or assignment, stating the name and address of each such
transferee and identifying the securities with respect to which such registration rights are being
transferred or assigned, (b) each such transferee agrees to be bound by the terms of this
Agreement, and (c) such transferee would own Registrable Securities at the time of such transfer
that have a market value of not less than $25 million.
Section 2.10 Information by Holder. Any Holder or Holders of Registrable Securities
included in any registration shall promptly furnish to ETE all such information regarding such
Holder or Holders and the distribution proposed by such Holder or Holders as ETE may reasonably
request and as shall be required in connection with any registration, qualification or compliance
referred to herein.
Section 2.11 Limitation on Subsequent Registration Rights. From and after the date
hereof until the termination of the Investors piggyback registration rights pursuant to Section
2.02(c) hereof, ETE shall not, without the prior written consent of the Holders of a majority of
the then outstanding Registrable Securities, enter into any agreement with any current or future
holder of any securities of ETE that would allow such current or future holder to require ETE to
include securities in any registration statement filed by ETE on a basis that would give such
holder priority in any way over the piggyback rights granted to the Investor under Section 2.02
hereof.
ARTICLE III.
TRANSFER RESTRICTIONS
Section 3.01 Restricted Period. Except as permitted under Section 3.04, Investor,
Davis and NGP each agrees that (i) during the Initial Restricted Period, with respect to 100
percent of the Common Units owned by such party or its Affiliates set forth on Schedule
3.01 hereto, and (ii) during the Final Restricted Period, with respect to 50 percent of the
Common Units owned by such party or its Affiliates set forth on Schedule 3.01 hereto, it
will not (a) loan, offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, such Common Units or any security
convertible into or exchangeable for such Common Units, or (b) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences of
ownership of such Common Units, whether any such transaction described in clause (a) or (b) above
is settled by delivery of such Common Units or other securities, in cash or otherwise (any
disposition or arrangement described in clause (a) or (b) above being referred to herein as a
Disposition), or publicly disclose any intent to make any Disposition, without, in each
case, the prior written consent of ETE.
14
Section 3.02 Orderly Market. Investor acknowledges that the maintenance of an orderly
market in the Common Units is in the best interests of ETE, Investor and other holders of Common
Units. Investor agrees, unless (a) it shall have the prior written consent of ETE or (b) such
offer(s) and sale(s) are pursuant to an Underwritten Offering, Investor shall not sell, or offer to
sell, after the Initial Restriction Expiration Date, Common Units on the New York Stock Exchange
(NYSE) or any other public market upon which the Common Units are then traded, on any
trading day in an amount in excess of 10% of the average daily trading volume of the Common Units
on the NYSE, or such other market, for the previous ten trading days, or such other amount as may
be mutually agreed upon in writing by ETE and Investor.
Section 3.03 Lock-up Agreement. Investor agrees that so long as Investor and its
Affiliates own 5% or more of the outstanding Common Units, Investor and any Affiliate of Investor
owning Common Units will, upon request of a Managing Underwriter in connection with an Underwritten
Offering, enter into a lock-up agreement with such Managing Underwriter, the terms of which shall
provide that Investor and such Affiliates will not, for a period of no more than 90 days following
the closing of such Underwritten Offering: (a) loan, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any
Common Units or any securities convertible into or exchangeable for Common Units, or (b) enter into
any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Units, whether any such transaction described in clause (a) or
(b) above is settled by delivery of Common Units or other securities, in cash or otherwise. The
foregoing provision of this Section 3.03 shall only be applicable to Investor and its Affiliates if
(i) all other holders of more than 5% of the outstanding Common Units that are Affiliates of ETE
and (ii) all executive officers and directors of ETE also agree to a similar lock-up agreement.
Section 3.04 Permitted Dispositions. Notwithstanding the provisions of Section 3.01,
during the Restricted Periods, Investor, Davis and NGP may (a) sell, transfer or otherwise dispose
of such Common Units in a private transaction, without the prior written consent of ETE, to its
respective Affiliate that agrees in writing with ETE to be bound by the terms of this Agreement,
(b) pledge the Purchased Units as security for bona fide loans, letters of credit, interest rate or
other hedging transactions and related fees, costs, indemnities and other obligations from one or
more third parties who are not Affiliates of such party, (c) sell all or a portion of such Common
Units, as a result of any divestiture ordered by, or agreed to with, a Governmental Authority. In
addition, Article III shall also not restrict or affect the manner of sale or other disposition of
any Common Units in connection with any foreclosure or other disposition after default of a lender
or other counterparty in connection with the pledge of such securities for bona fide loans, letters
of credit, interest rate or other hedging transactions and related fees, costs, indemnities and
other obligations from one or more third parties who are not Affiliates of such party and shall not
apply to any permitted transferee who does not assume the rights and obligations of Investor, Davis
or NGP in accordance with Section 7.12 of this Agreement.
Section 3.05 Legends. Investor, Davis and NGP acknowledge that the certificates
representing the Common Units subject to Section 3.01 of this Agreement may bear, in addition to a
customary legend relating to restrictions under the Securities Act, the restrictive legend set
15
forth below evidencing the terms of this Agreement and that stop transfer instructions may be
imposed with respect to the certificates representing the applicable Common Units during the
Restricted Periods. EPE shall remove the following restrictive legend after the end of the
applicable Restricted Periods upon exchange of the existing certificates.
The Common Units evidenced by this certificate are subject to restrictions on
transfer set forth in Section 3.01 of the Unitholder Rights and Restrictions
Agreement dated as of May ___, 2007. A copy of this agreement will be furnished by
the Partnership upon request.
ARTICLE IV.
INFORMATION RIGHTS AND CONFIDENTIALITY
Section 4.01 Information Rights. Investor shall be entitled to obtain, upon request,
any of the following information from ETE, for the sole purpose of monitoring Investors investment
in the Purchased Units:
(a) as soon as practicable, but in any event within 120 days after the end of each
fiscal year of ETE, a consolidated audited financial statement of ETE consisting of a
balance sheet, a statement of operations, a statement of partners capital and a statement
of cash flows, together with appropriate notes to such financial statements, prepared in
accordance with general accepted accounting principals (GAAP);
(b) as soon as practicable, but in any event within 60 days after the end of each
fiscal quarter of ETE, an unaudited consolidated financial statement of ETE, consisting of a
balance sheet, statement of operations, statement of partners capital and a statement of
cash flows, together with appropriate notes to such financial statements, prepared in
accordance with GAAP; and
(c) such other information relating to the financial condition, business or corporate
affairs of ETE as Investor may reasonably request; provided, however, ETE
shall not be obligated to provide any information pursuant to this clause (c) that (i) ETE
reasonably determines in good faith to be Commercially Sensitive Information or (ii) would
adversely affect the attorney-client privilege between ETE and its counsel.
Section 4.02 Reporting Company Exception. The rights granted to Investor to obtain
information described in clauses (a) and (b) of Section 4.01 shall not be applicable so long as ETE
is subject to the reporting requirements of Section 15(d) of the Exchange Act or the Common Units
are registered under Section 12 of the Exchange Act.
Section 4.03 Confidentiality. Investor agrees that it will keep confidential and will
not disclose, divulge or use for any purpose, other than to monitor its investment in ETE, any
Confidential Information (as defined below) obtained from ETE pursuant to the terms of this
Agreement; provided, however, Investor may disclose Confidential Information: (i)
to its attorneys, accountants and other professional advisors who have a need to know such
information in connection with monitoring of Investors investment in ETE (subject to each such
authorized recipient of such confidential information agreeing to keep such information
confidential and provided that Investors shall be liable for any breach of confidentiality
by any
16
such recipient); (ii) in its periodic reports required under the Exchange Act or any
registration statement or prospectus under the Securities Act to the extent, and only to the
extent: (A) Investor is advised by legal counsel that such disclosure is required to comply with
the Securities Act or the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, (B) Investor takes reasonable steps to minimize the extent of any such required
disclosure, and (C) Investor advises ETE of any such proposed disclosure prior to its filing and
consults with ETE as to the nature and extent of such disclosure; or (iii) as may otherwise be
required by law, provided that Investor takes reasonable steps to minimize the extent of
any such required disclosure. Confidential Information shall mean any confidential
information regarding ETE excluding information that (a) is known or becomes known to the public in
general (other than as a result of a breach of this Section 4.02 by Investor), (b) is or has been
independently developed or conceived by the Investor without the use of ETEs confidential
information, or (c) is or has been made known or disclosed to the Investor by a third party without
a breach of any obligation of confidentiality such third party may have to ETE.
Section 4.04 Trading. Investor acknowledges that the receipt of material non-public
information pursuant to this Agreement may restrict the ability of Investor to trade in securities
of ETE, ETP or their respective Affiliates.
Section 4.05 Investors SEC Reporting. Nothing in this Agreement shall obligate ETE,
ETP or any of their respective subsidiaries to (a) make any representations or warranties, or
otherwise provide any indemnification, in connection with any report filed by Investor or any of
its Affiliates (other than ETE) pursuant to the Exchange Act or any registration statement or
prospectus of Investor or any of its Affiliates (other than of ETE) under the Securities Act, (b)
deliver any comfort letter to any underwriter, placement agent or purchaser in connection with
any offering by Investor or any of its Affiliates (other than ETE) of securities issued by them, or
(c) otherwise subject ETE, ETP or any of their subsidiaries to liability for any report filed by
Investor or any of its Affiliates (other than ETE) pursuant to the Exchange Act or any registration
statement or prospectus of the Investor or any of its Affiliates (other than ETE) under the
Securities Act.
ARTICLE V.
STANDSTILL
Investor agrees that during the Standstill Period, it shall not, and agrees to cause its
Affiliates not to, directly or indirectly without the prior written consent of the Board of
Directors of LE GP, LLC: (a) in any manner acquire, agree to acquire or make a proposal to acquire
any Common Units or other securities or other property of ETE, ETP or any of their respective
Affiliates if such acquisition would cause Investor and its Affiliates to collectively own Common
Units in excess of 49.9% of the then outstanding Common Units, or (b) form or join or in any way
participate in a group (within the meaning of Section 13(d)(3) of the Exchange Act) with respect
to any voting securities of ETE, ETP or any of their respective Affiliates, other than a group
consisting of one or more of the members of the general partner of ETE or ETP or Investor and its
Affiliates.
17
ARTICLE VI.
GOVERNMENTAL APPROVAL
Section 6.01 Consents and Approvals.
(a) Investor and ETE shall each use all commercially reasonable efforts to obtain all
necessary consents, waivers, authorizations and approvals of all Governmental Authorities
and of all other Persons required in connection with the execution and delivery by such
party of this Agreement and the Purchase Agreement and the consummation of the transactions
contemplated by this Agreement and the Purchase Agreement, and the Investor and ETE will
cooperate fully with each other in promptly seeking to obtain all such authorizations,
consents, orders and approvals, to give such notices and to make such filings.
(b) Investor and ETE shall, in connection with their efforts to obtain all requisite
material approvals and authorizations for the transactions contemplated by this Agreement
and the Purchase Agreement, use commercially reasonable best efforts to (i) supply promptly
any information and documentary materials requested by, and cooperate with, any Antitrust
Investigation, (ii) promptly inform the other party of any communication received from, or
given to, any Governmental Authority and of any material communication received or given in
connection with any Antitrust Investigation, and (iii) permit the other party to review any
communication given by it to, and consult with other parties in advance of, any meeting or
conference with, any Governmental Authority and give the other parties the opportunity to
attend and participate in such meetings and conferences.
(c) Notwithstanding anything to the contrary in Section 6.01(a) or elsewhere in this
Agreement, nothing in this Agreement shall obligate ETE, ETP or any of their respective
subsidiaries to divest, accept any condition, take any action or agree to any limitation
with respect to any of its business, operations or assets, each, a Divestiture
Action, in order to resolve any Antitrust Investigation or otherwise.
(d) In the event any Governmental Authority requires ETE, ETP, or any of their
respective subsidiaries to take any Divestiture Action and ETE, ETP or any of their
respective subsidiaries takes any such actions to resolve any Antitrust Investigation,
Investor hereby agrees to indemnify and hold harmless ETE, ETP and their respective
subsidiaries against any and all fines, penalties, expenses, damages and losses incurred by
ETE, ETP or any of their respective subsidiaries (including all consequential damages, but
excluding any punitive or exemplary damages) in connection with such Divestiture Action
(Divestiture Losses). Projected cash flows obtained in connection with the
acquisition of alternative assets directly or indirectly with the proceeds of any such
Divestiture Action compared to the projected cash flows of the assets divested may be
considered in connection with the determination of the amount of damages and losses. In
addition, the strategic value of any asset subject to a Divestiture Action by ETE, ETP or
any of their respective subsidiaries, including any consequential diminution in value of any
other assets of ETE, ETP or any of their respective subsidiaries, may be considered in
determining the amount of damages or loss incurred by ETE, ETP and their respective
18
subsidiaries in connection with any such Divestiture Action. ETE shall not be entitled
to multiple recovery for any Divestiture Losses, including any indirect Losses to ETE for
which EPE has compensated ETP or its subsidiaries directly.
ARTICLE VII.
MISCELLANEOUS
Section 7.01 Communications. All notices and other communications provided for or
permitted hereunder shall be made in writing by facsimile, courier service or personal delivery:
(a) if to the Investor, 1100 Louisiana, 10th Floor, Houston, Texas 77002, Attn:
President;
(b) if to ETE, at 2828 Woodside Street, Dallas, Texas 75204, or
(c) such other address as a party hereto may specify in writing, notice of which is
given in accordance with the provisions of this Section 3.01.
All such notices and communications shall be deemed to have been received at the time delivered by
hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via
Internet electronic mail; and when actually received, if sent by any other means.
Section 7.02 Successor and Assignees. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assignees of each of the parties, including
subsequent Holders of Registrable Securities to the extent permitted herein.
Section 7.03 Recapitalization, Exchanges, etc. Affecting the Common Units. The
provisions of this Agreement shall apply to the full extent set forth herein with respect to any
and all units of ETE or any successor or assignee of ETE (whether by merger, consolidation, sale of
assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the
Registrable Securities, and shall be appropriately adjusted for combinations, unit splits,
recapitalizations and the like occurring after the date of this Agreement.
Section 7.04 Specific Performance. Damages in the event of breach of this Agreement
by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed
that each such party, in addition to and without limiting any other remedy or right it may have,
will have the right to an injunction or other equitable relief in any court of competent
jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions
hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground
of lack of jurisdiction or competence of the court to grant such an injunction or other equitable
relief. The existence of this right will not preclude any such party from pursuing any other
rights and remedies at law or in equity which such party may have.
Section 7.05 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
19
Section 7.06 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
Section 7.07 Governing Law. The laws of the State of New York shall govern this
Agreement without regard to principles of conflict of laws.
Section 7.08 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting or impairing the validity or enforceability of such provision in any other
jurisdiction.
Section 7.09 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the rights granted by ETE set forth herein. This
Agreement supersedes all prior agreements and understandings between the parties with respect to
such subject matter.
Section 7.10 Amendment. This Agreement may be amended only by means of a written
amendment signed by ETE and the Holders of a majority of the then outstanding Registrable
Securities.
Section 7.11 No Presumption. In the event any claim is made by a party relating to
any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or
persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular party or its counsel.
Section 7.12 Successors and Assigns; Third-Party Beneficiaries. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their respective successors
and permitted assigns. Except as expressly permitted herein, no party shall be entitled to assign
its rights or benefits hereunder to any other person without the consent of each of the other
parties hereto. Nothing in this Agreement shall confer upon any person not a party to this
Agreement, or its legal representatives, any rights or remedies of any nature or kind whatsoever
under or by reason of this Agreement. The rights and remedies expressly provided to ETE for Losses
that may be incurred by ETE and the subsidiaries of ETE and ETP pursuant to Section 6.01 hereof,
ETE shall be enforceable solely by ETE any not by any other party.
[The remainder of this page is intentionally left blank.]
20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
|
|
|
|
|
|
|
|
|
ETE: |
|
|
|
|
|
|
|
|
|
|
|
ENERGY TRANSFER EQUITY, L.P. |
|
|
|
|
|
|
|
|
|
|
|
By: LE GP, LLC, its general partner |
|
|
|
|
|
|
|
|
|
|
|
By: |
|
/s/ John W. McReynolds |
|
|
|
|
|
|
|
|
|
|
|
Name: John W. McReynolds |
|
|
|
|
Title: President |
|
|
|
|
|
|
|
|
|
|
|
INVESTOR: |
|
|
|
|
|
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS, L.P. |
|
|
|
|
By: EPE Holdings, LLC, its general partner |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Michael A. Creel |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Michael A. Creel, CEO |
|
|
|
|
|
|
|
|
|
|
|
DAVIS: |
|
|
|
|
|
|
|
|
|
|
|
/s/ Ray C. Davis |
|
|
|
|
|
|
|
|
|
Ray C. Davis |
|
|
|
|
|
|
|
|
|
|
|
NGP: |
|
|
|
|
|
|
|
|
|
|
|
NATURAL GAS PARTNERS VI, L.P. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: |
|
G.F.W. Energy VI, L.P., |
|
|
|
|
|
|
its general partner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: |
GFW VI, L.L.C., |
|
|
|
|
|
|
|
|
its general partner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Kenneth Hersh |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
An Authorized Member |
|
|
Schedule 3.01
(Common Units beneficially owned, excluding Common Units owned directly by the Company)
|
|
|
Investor:
|
|
38,976,090 Common Units |
Davis:
|
|
18,184,531 Common Units |
NGP:
|
|
15,631,777 Common Units |
EXHIBIT A
STATEMENT OF POLICIES RELATING TO RELATIONSHIP
WITH ENTERPRISE HOLDINGS GP, L.P.
This Statement of Policies Related to Relationship with Enterprise GP Holdings, L.P. (the
Statement) specifies the policies and procedures that have been adopted by Energy
Transfer Equity, L.P. (ETE) and Energy Transfer Partners, L.P. (ETP), as
authorized and approved by their respective general partners, to address potential conflicts among,
and protect the confidential information of, ETE, ETP and their subsidiaries (collectively, the
Energy Transfer Entities), on the one hand, and Enterprise GP Holdings L.P. and its
affiliates (collectively, the Enterprise Entities), on the other hand.
Corporate Governance
Independent Directors. Each of LE GP, LLC, in its capacity as the general partner of
ETE (ETE GP) or Energy Transfer Partners, L.L.C., in its capacity as the general partner
of Energy Transfer Partners GP, L.P., the general partner of ETP (ETP GP), will have at
least three Independent Directors on its board of directors.
No Overlapping Directors. No director or employee of ETE GP or ETP GP will serve on
the board of directors of EPE Holdings, LLC, the general partner of Enterprise GP Holdings L.P., or
any successor thereto (EPE GP), and no director or employee of any of the Enterprise
Entities will serve on the board of directors of ETE GP or ETP GP.
Separate Employees
None of the Energy Transfer Entities will employ any person who is, or was within the prior
six months, an employee of any of the Enterprise Entities.
Transactions Between Enterprise Entities and Energy Transfer Entities
Any material transaction between any of the Enterprise Entities, on the one hand, and the
Energy Transfer Entities, on the other hand, will require the prior approval of the Conflicts
Committee of the boards of directors of each of ETE GP and ETP GP.
Screening of Commercially Sensitive Information
The Energy Transfer Entities will take reasonable precautions to ensure that the Energy
Transfer Entities do not provide information to any of the Enterprise Entities that the Screening
Officers of the Energy Transfer Entities reasonably determine in good faith to be Commercially
Sensitive Information.
Definitions
For purposes of this statement, capitalized terms used but not defined above shall have the
following meanings:
Commercial Information shall mean information about Commercial Development Activities or
other competitively sensitive information of any Energy Transfer Entities related to the business,
operations or strategies of any of the Energy Transfer Entities or any of their competitors.
Commercial Information includes information regarding prices, costs, margins, volumes and
contractual terms for any particular customer, any method, tool or computer program used to
determine prices for any asset or service; all plans or strategies used or adopted to negotiate,
target or identify a particular customer or group of customers for any asset or service or expand
existing service offerings or offer a new service; all information regarding plans and prospective
budgets to expand or build a new facility; all information regarding a proposal to buy an existing
facility, and information related to the capacity and capacity utilization of any facility.
Commercial Development Activities shall mean Confidential Information with respect to (i)
proposed changes to any Potentially Overlapping Assets, (ii) the plans and strategies dealing with
the business of the Potentially Overlapping Assets and (iii) commercial development activities
related to opportunities to construct or acquire, directly or indirectly (including, without
limitation, by means of joint venture or by means of acquisition of assets, equity interest in an
entity, contractual rights to capacity or use, or otherwise), any interstate or intrastate natural
gas pipeline, interstate or intrastate natural gas liquids pipeline, natural gas gathering system,
natural gas treating, processing or fractionating facilities, other midstream natural gas assets or
facilities and any wholesale or retail propane facility or business.
Commercially Sensitive Information means Confidential Information with respect to (i)
Commercial Information related to Potentially Overlapping Assets and (ii) Commercial Development
Activities.
Confidential Information shall mean any confidential information regarding the Energy
Transfer Entities excluding information that (a) is known or becomes known to the public in general
(other than as a result of a breach by any person of its confidentiality agreements with the Energy
Transfer Entities), (b) is or has been independently developed or conceived by any person without
the use of the Energy Transfer Entities confidential information, or (c) is or has been made known
or disclosed to any person by a third party without a breach of any obligation of confidentiality
such third party may have to the Energy Transfer Entities.
Independent Director shall mean an individual director who meets the independence,
qualification and experience requirements established by the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange Commission thereunder, and by
The New York Stock Exchange applied to
such director as if he or she were a director of any of the Enterprise Entities and either ETE GP
(if such director is a director of ETE GP) or ETP GP (if such director is a director of ETP GP).
Potential Overlapping Assets shall mean such assets of the Energy Transfer Entities as
determined by ETE or ETP, from time to time, to be significantly competitive with assets or
operations of the Enterprise Entities.
Screening Officer shall mean any of the Chief Executive Officer, President, Chief Financial
Officer, General Counsel or Chief Compliance Officer of either ETE or ETP, or their respective
designees.
exv10w4
Execution Copy
EXHIBIT 10.4
SECURITIES PURCHASE AGREEMENT
By and Between
ENTERPRISE GP HOLDINGS L.P.,
and
DFI GP HOLDINGS, L.P.
and
DUNCAN FAMILY INTERESTS, INC.,
as the Sellers
May 7, 2007
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page |
ARTICLE I
DEFINITIONS |
|
|
1 |
|
|
|
|
|
|
Section 1.1 Definitions |
|
|
1 |
|
Section 1.2 Rules of Construction |
|
|
7 |
|
|
|
|
|
|
ARTICLE II
PURCHASE AND SALE |
|
|
8 |
|
|
|
|
|
|
Section 2.1 Closing |
|
|
8 |
|
|
|
|
|
|
ARTICLE III
REPRESENTATIONS AND WARRANTIES |
|
|
9 |
|
|
|
|
|
|
Section 3.1 Representations and Warranties of the Sellers |
|
|
9 |
|
Section 3.2 Representations and Warranties of EPE |
|
|
12 |
|
Section 3.3 Representations and Warranties Concerning TEPPCO GP and TEPPCO MLP |
|
|
15 |
|
|
|
|
|
|
ARTICLE IV
COVENANTS AND AGREEMENTS |
|
|
27 |
|
|
|
|
|
|
Section 4.1 Commercially Reasonable Efforts; Further Assurances |
|
|
27 |
|
Section 4.2 No Public Announcement |
|
|
27 |
|
Section 4.3 Expenses |
|
|
27 |
|
Section 4.4 Tax Matters |
|
|
27 |
|
Section 4.5 Unitholder Approval of Amendment to EPE Partnership Agreement |
|
|
27 |
|
|
|
|
|
|
ARTICLE V
REMEDIES FOR DEFAULT |
|
|
27 |
|
|
|
|
|
|
Section 5.1 Indemnity Regarding Section 3.1 and Section 3.3 Representations and Covenants |
|
|
27 |
|
Section 5.2 Indemnity Regarding Section 3.2 Representations and Covenants |
|
|
28 |
|
Section 5.3 Survival of Representations |
|
|
28 |
|
Section 5.4 Calculation of Damages |
|
|
29 |
|
Section 5.5 Enforcement of this Agreement |
|
|
29 |
|
Section 5.6 Exclusive Remedy |
|
|
29 |
|
Section 5.7 Limitation on Damages |
|
|
29 |
|
Section 5.8 No Waiver Relating to Claims for Fraud/Willful Misconduct |
|
|
29 |
|
|
|
|
|
|
ARTICLE VI
MISCELLANEOUS |
|
|
30 |
|
|
|
|
|
|
Section 6.1 Notices |
|
|
30 |
|
Section 6.2 Governing Law; Jurisdiction; Waiver of Jury Trial |
|
|
31 |
|
Section 6.3 Entire Agreement; Amendments and Waivers |
|
|
31 |
|
Section 6.4 Binding Effect and Assignment |
|
|
31 |
|
Section 6.5 Severability |
|
|
32 |
|
i
|
|
|
|
|
|
|
Page |
Section 6.6 Execution |
|
|
32 |
|
Section 6.7 Disclosure Letters |
|
|
32 |
|
Exhibits
Exhibit A Form of Amendment to EPE Partnership Agreement
ii
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this Agreement), dated as of May 7, 2007 (the Execution
Date), is entered into by and among Enterprise GP Holdings L.P., a Delaware limited partnership
(EPE), DFI GP Holdings, L.P., a Delaware limited partnership (DFIGP), and Duncan Family
Interests, Inc. (DFI and together with DFIGP, the Sellers).
W I T N E S S E T H:
WHEREAS, DFIGP owns 100% of the membership interests in Texas Eastern Products Pipeline
Company, LLC, a Delaware limited liability company (TEPPCO GP), and TEPPCO GP is the sole general
partner of, and owns 100% of the 2% general partner interest in, TEPPCO Partners, L.P., a Delaware
limited partnership (TEPPCO MLP); and
WHEREAS, DFI owns in excess of 4,400,000 Common Units representing limited partner interests
of TEPPCO MLP (Common Units); and
WHEREAS, subject to the terms and conditions set forth herein, the Sellers desires to sell to
EPE, and EPE desires to purchase from the Sellers, 100% of the membership interests in TEPPCO GP
(the Membership Interest) and 4,400,000 Common Units of TEPPCO MLP (the Offered Units), in
exchange for an aggregate of 14,173,304 Class B Units of EPE (the Class B Units) and 16,000,000
Class C Units of EPE (the Class C Units), in each case having the rights and privileges
desginated in the Amendment No. 1 to the First Amended and Restated Agreement of Limited
Partnership of EPE, the form of which is set forth as Exhibit A to this Agreement.
NOW, THEREFORE, in consideration of the premises and the respective representations,
warranties, covenants, agreements and conditions contained herein, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. In this Agreement, unless the context otherwise requires, the
following terms shall have the following meanings respectively:
2006 10-K has the meaning set forth in Section 3.3(g)(ii).
affiliate has the meaning set forth in Rule 405 of the rules and regulations under the
Securities Act, unless otherwise expressly stated herein.
Agreement has the meaning set forth in the Preamble.
Amendment to EPE Partnership Agreement means the Amendment No. 1 to the First Amended and
Restated Agreement of Limited Partnership of EPE set forth as Exhibit A to this Agreement.
Business Day means any day on which commercial banks are generally open for business in New
York, New York or Houston, Texas other than a Saturday, a Sunday or a day observed as a holiday in
New York, New York or Houston, Texas under the Laws of the State of New York or the State of Texas
or the federal Laws of the United States of America.
Closing has the meaning set forth in Section 2.1(a).
Class B Units has the meaning set forth in the Recitals.
Class C Units has the meaning set forth in the Recitals.
Closing Date has the meaning set forth in Section 2.1(a).
Code means the Internal Revenue Code of 1986, as amended.
Common Units has the meaning set forth in the Recitals.
Damages means claims, liabilities, damages, penalties, judgments, assessments, losses,
costs, expenses, including reasonable attorneys fees and expenses, incurred by the party seeking
indemnification under this Agreement.
DFIGP has the meaning set forth in the Preamble.
DFI Indemnified Parties has the meaning set forth in Section 5.2.
Encumbrances means pledges, restrictions on transfer, rights or options to purchase, rights
of first refusal, proxies and voting or other agreements, liens, claims, charges, mortgages,
security interests or other legal or equitable encumbrances, limitations or restrictions of any
nature whatsoever.
Enterprise GP means Enterprise Products GP, LLC, a Delaware limited liability company.
Enterprise Material Adverse Effect means any change, effect, event or occurrence that
materially and adversely affects the ability of Enterprise to consummate the transactions
contemplated by this Agreement.
Enterprise MLP means Enterprise Products Partners L.P., a Delaware limited partnership.
Enterprise Partnership Group Entities means EPE, EPE Holdings, Enterprise MLP, Enterprise GP
and the subsidiaries of Enterprise MLP.
Environmental Laws means any and all applicable laws, statutes, regulations, rules, orders,
ordinances, and legally enforceable directives of and agreements between a person that is subject
to the applicable representation and any Governmental Entity and rules of common law pertaining to
protection of human health (to the extent arising from exposure to Hazardous Substances) or the
environment (including any generation, use, storage, treatment, or Release of
2
Hazardous Substances into the environment) including the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Oil Pollution Act of
1990, 33 U.S.C. Section 2701 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq., the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., the Occupational Safety and
Health Act, 29 U.S.C. Section 651 et seq., the Atomic Energy Act, 42 U.S.C. Section 2014 et seq.,
the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et seq., and the
Federal Hazardous Materials Transportation Law, 49 U.S.C. Section 5101 et seq., as each has been
amended from time to time, and all other environmental conservation and protection laws, in each
case as in effect prior to or as of the Closing Date.
EPCO means EPCO, Inc., a Texas corporation.
EPE has the meaning set forth in the Preamble.
EPE Holdings means EPE Holdings, LLC, a Delaware limited liability company and the sole
general partner of EPE.
EPE Indemnified Parties has the meaning set forth in Section 5.1.
EPE Partnership Agreement means the First Amended and Restated Agreement of Limited
Partnership of EPE, dated as of August 29, 2005.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Execution Date has the meaning set forth in the Preamble.
GAAP has the meaning set forth in Section 1.2.
governing documents means, with respect to any person, the certificate or articles of
incorporation, by-laws, articles of organization, limited liability company agreement, partnership
agreement, formation agreement, joint venture agreement, shareholder agreement or declaration or
other similar governing documents of such person.
Governmental Entity means any (a) multinational, federal, provincial, territorial, state,
regional, municipal, local or other government, governmental or public department, central bank,
court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign, (b)
subdivision, agent, commission, board, or authority of any of the foregoing, or (c) quasi
governmental or private body exercising any regulatory, expropriation or taxing authority under, or
for the account of, any of the foregoing.
Hazardous Substances means any (a) chemical, product, substance, waste, material, pollutant,
or contaminant that is defined or listed as hazardous or toxic or that is otherwise regulated under
any Environmental Law; (b) friable asbestos containing materials, polychlorinated biphenyls,
naturally occurring radioactive materials or radon; and (c) any oil or
3
gas exploration or production waste or any petroleum, petroleum hydrocarbons, petroleum
products or crude oil and any components, fractions, or derivatives thereof.
holders means, when used with reference to the TEPPCO Limited Partner Units, the holders of
such units shown from time to time in the registers maintained by or on behalf of TEPPCO MLP.
Individual Threshold has the meaning set forth in Section 5.1.
Investments has the meaning set forth in Section 2.1(d).
IRS means the Internal Revenue Service.
knowledge, known or words of similar import mean (a) with respect to the Sellers, the
actual knowledge of the officers and directors of the Sellers and TEPPCO GP, and (b) with respect
to EPE, the actual knowledge of the officers and directors of EPE Holdings.
Laws means all statutes, regulations, statutory rules, orders, judgments, decrees and terms
and conditions of any grant of approval, permission, authority, permit or license of any court,
Governmental Entity, statutory body (including the NYSE) or self-regulatory authority, but does not
include Environmental Laws.
LP Units has the meaning set forth in the TEPPCO Partnership Agreement.
Materiality Requirement means any requirement in a representation or warranty that a
condition, event or state of fact be material, correct or true in all material respects, have a
Material Adverse Effect or be or not be reasonably expected to have a Material Adverse Effect
(or other words or phrases of similar effect or impact) in order for such condition, event or state
of facts to cause such representation or warranty to be inaccurate.
Membership Interest has the meaning set forth in the Recitals.
Notice has the meaning set forth in Section 6.1.
NYSE means the New York Stock Exchange.
Offered Units has the meaning set forth in the Recitals.
Open TEPPCO Position has the meaning set forth in Section 3.3(w).
Partially Owned Entity means, with respect to a specified person, any other person that is
not a subsidiary of such specified person but in which such specified person, directly or
indirectly, owns 10% or more of the equity interests thereof (whether voting or non-voting and
including beneficial interests).
Permitted Encumbrances means any liens, title defects, preferential rights or other
encumbrances upon any of the relevant persons property, assets or revenues, whether now owned or
hereafter acquired, that are (i) carriers, warehousemens, mechanics, materialmens,
4
repairmens or other like liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in good faith by appropriate
proceeding, (ii) pledges or deposits in connection with workers compensation, unemployment
insurance and other social security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements, (iii) for Taxes not yet due or which are
being contested in good faith by appropriate proceedings (provided that adequate reserves with
respect thereto are maintained on the books of such person or its subsidiaries, as the case may be,
in conformity with GAAP), (iv) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of business, (v) easements,
rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business by such person and its subsidiaries and (vi) created pursuant to
construction, operating and maintenance agreements, space lease agreements and other similar
agreements, in each case having ordinary and customary terms and entered into in the ordinary
course of business by such person and its subsidiaries.
person includes any individual, firm, partnership, joint venture, venture capital fund,
limited liability company, association, trust, estate, group, body corporate, corporation,
unincorporated association or organization, Governmental Entity, syndicate or other entity, whether
or not having legal status.
Purchase Price has the meaning set forth in Section 2.1(b).
Release means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, emptying, discharging, migrating, injecting, escaping, leaching, dumping, or disposing.
Representative means, with respect to any person, such persons officers, directors or
employees, or any investment banker, financial advisor, attorney, accountant or other
representative retained by such person.
SEC means the United States Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Sellers has the meaning set forth in the Preamble.
subsidiary means with respect to a specified person, any other person (a) that is a
subsidiary as defined in Rule 405 of the Rules and Regulations under the Securities Act of such
specified person or (b) of which such specified person or another of its subsidiaries owns
beneficially 50% or more of the equity interests.
Tax or Taxes means any taxes, assessments, fees and other governmental charges imposed by
any Governmental Entity, including without limitation income, profits, gross receipts, net
proceeds, alternative or add-on minimum, ad valorem, value added, turnover, sales, use, property,
personal property (tangible and intangible), environmental, stamp, leasing, lease,
5
user, excise, duty, franchise, capital stock, transfer, registration, license, withholding,
social security (or similar), unemployment, disability, payroll, employment, fuel, excess profits,
occupational, premium, windfall profit, severance, estimated, or other charge of any kind
whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.
Tax Return means any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
TEPPCO Disclosure Letter means the disclosure letter for this Agreement dated the Execution
Date.
TEPPCO Easements has the meaning set forth in Section 3.3(p)(iii).
TEPPCO Environmental Permits has the meaning set forth in Section 3.3(j).
TEPPCO GP has the meaning set forth in the Recitals.
TEPPCO GP Financial Statements has the meaning set forth in Section 3.3(g)(iv).
TEPPCO GP Balance Sheet means the audited condensed consolidated balance sheet of TEPPCO GP
as of December 31, 2006 filed with the SEC on Form 8-K on March 20, 2007.
TEPPCO GP LLC Agreement means that certain Limited Liability Company Agreement of Texas
Eastern Products Pipeline Company, LLC prior to giving effect to the transactions contemplated by
this Agreement.
TEPPCO Intellectual Property Rights has the meaning set forth in Section 3.3(o)(i).
TEPPCO Limited Partner Units means the LP Units of TEPPCO MLP issued pursuant to the TEPPCO
Partnership Agreement.
TEPPCO Material Adverse Effect means any change, effect, event or occurrence with respect to
the condition (financial or otherwise), properties, assets, earnings, liabilities, obligations
(whether absolute, accrued, conditional or otherwise), businesses, operations or results of
operations of the TEPPCO Partnership Group Entities (taken as a whole), that is, or could
reasonably be expected to be, material and adverse to the TEPPCO Partnership Group Entities (taken
as a whole), material and adverse to TEPPCO GP or that materially and adversely affects the ability
of either of the Sellers or TEPPCO GP to consummate the transactions contemplated hereby; provided,
however, that a TEPPCO Material Adverse Effect shall not include any change, effect, event or
occurrence with respect to the condition (financial or otherwise), properties, assets, earnings,
financial condition, liabilities, obligations (whether absolute, accrued, conditional or
otherwise), businesses, operations or results of operations of any TEPPCO Partnership Group Entity
(or any TEPPCO Partially Owned Entity) directly or indirectly arising out of or attributable to (a)
changes in the general state of the industries in which the TEPPCO Partnership Group Entities and
the TEPPCO Partially Owned Entities operate to the extent that such changes would have the same
general effect on all other companies operating in such industries, or (b) changes in general
economic conditions (including
6
changes in commodity prices) that would have the same general effect on companies engaged in
the same lines of business as those conducted by the TEPPCO Partnership Group Entities and the
TEPPCO Partially Owned Entities.
TEPPCO MLP has the meaning set forth in the Recitals.
TEPPCO MLP Balance Sheet means the consolidated balance sheet of TEPPCO MLP as of December
31, 2006 filed with the SEC in the 2006 10-K.
TEPPCO MLP Partially Owned Entities means the Partially Owned Entities held, directly or
indirectly, by TEPPCO MLP.
TEPPCO Operating Partnerships means TE Products Pipeline Company, Limited Partnership, a
Delaware limited partnership, TCTM, L.P., a Delaware limited partnership, and TEPPCO Midstream
Companies, L.P., a Delaware limited partnership, collectively.
TEPPCO Parties means TEPPCO MLP and TEPPCO GP.
TEPPCO Partnership Agreement means that certain Fourth Amended and Restated Agreement of
Limited Partnership of TEPPCO MLP, dated as of December 8, 2006.
TEPPCO Partnership Group Entities means TEPPCO GP, TEPPCO MLP and the subsidiaries of TEPPCO
MLP.
TEPPCO Permits has the meaning set forth in Section 3.3(j)(ii).
TEPPCO Pipeline Assets means the pipelines, equipment and other tangible personal property
used in connection with the TEPPCO Partnership Group Entities pipeline operations.
TEPPCO Plans means all employee benefit plans (as defined in Section 3(3) of ERISA, whether
or not subject to ERISA), all employment, change of control and severance agreements (or consulting
agreements with natural persons) and any employee compensation plan, including any pension,
retirement, profit sharing, stock or unit option, stock or unit purchase, restricted stock or unit,
bonus, incentive compensation, health, life, disability or fringe benefit plan, contract or
arrangement sponsored or maintained by, participated in or contributed to by or required to be
contributed to by, any of the TEPPCO Partnership Group Entities with respect to any current or
former employees or independent contractors of any of the TEPPCO Partnership Group Entities.
TEPPCO SEC Reports has the meaning set forth in Section 3.3(g)(i).
Texas Courts has the meaning set forth in Section 6.2.
Units means the Units of EPE as defined in the EPE Partnership Agreement.
Section 1.2 Rules of Construction. The division of this Agreement into articles, sections and other portions and the insertion of
headings are for convenience of reference only and shall not affect the construction or
interpretation hereof. Unless otherwise indicated, all
7
references to an Article or Section
followed by a number or a letter refer to the specified Article or Section of this Agreement. The
terms this Agreement, hereof, herein and hereunder and similar expressions refer to this
Agreement (including the Disclosure Letter hereto) and not to any particular Article, Section or
other portion hereof. Unless otherwise specifically indicated or the context otherwise requires,
(a) all references to dollars or $ mean United States dollars, (b) words importing the singular
shall include the plural and vice versa and words importing any gender shall include all genders,
(c) include, includes and including shall be deemed to be followed by the words without
limitation, and (d) all words used as accounting terms shall have the meanings assigned to them
under United States generally accepted accounting principles applied on a consistent basis during
the periods involved (GAAP). In the event that any date on which any action is required to be
taken hereunder by any of the parties hereto is not a Business Day, such action shall be required
to be taken on the next succeeding day that is a Business Day. Reference to any party hereto is
also a reference to such partys permitted successors and assigns. The Exhibits attached to this
Agreement are hereby incorporated by reference into this Agreement and form a part hereof. Unless
otherwise indicated, all references to an Exhibit followed by a number or a letter refer to the
specified Exhibit to this Agreement. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto
by virtue of the authorship of any of the provisions of this Agreement.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Closing.
(a) Closing Date. The closing (the Closing) of the transactions contemplated under
this Section 2.1 shall be held at the offices of Andrews Kurth LLP at 600 Travis, Suite
4200, Houston, Texas 77002 on the Execution Date. The Execution Date is also referred to herein as
the Closing Date.
(b) Purchase of Membership Interest and Offered Units; Issuance of Class B and Class C
Units. At the Closing, subject to the terms and conditions of this Agreement:
(i) EPE Holdings, as the general partner and attorney-in-fact on behalf of the limited
partners of EPE, shall execute and deliver the Amendment to EPE Partnership Agreement, authorizing
the issuance of the Class B Units and the Class C Units.
(ii) DFIGP shall convey to EPE the Membership Interest (such conveyance or assignment to be in
a form mutually acceptable to DFIGP and EPE), free and clear of all Encumbrances, except to the
extent created under federal and state securities laws and
the Delaware Limited Liability Company Act, in consideration for the issuance by EPE to DFIGP
of an aggregate of 11,819,722 Class B Units and 13,343,082 Class C Units;
(iii) DFI shall convey to EPE the Offered Units (such conveyance or assignment to be in a form
mutually acceptable to DFI and EPE), free and clear of all
8
Encumbrances, except to the extent
created under federal and state securities laws and the DRULPA in consideration for the issuance by
EPE to DFI of an aggregate of 2,353,582 Class B Units and 2,656,918 Class C Units (such Class B and
Class C Units issued to DFIGP and DFI collectively, the Purchase Price); and.
(iv) EPE shall issue to DFIGP and DFI certificates evidencing the Class B Units and the
Class
C Units.
(v) Concurrently with such conveyance, DFIGP shall cease to have any interest in TEPPCO GP
with respect to the Membership Interest sold hereunder, including the cessation of any rights to
receive allocations of income, gain, loss, deduction or credit from, the capital account balance of
or distributions from TEPPCO GP with respect to the Membership Interest, and DFI shall cease to
have any interest in the Offered Units sold hereunder.
(c) FIRPTA Certificate. At the Closing, DFIGP shall provide EPE with a FIRPTA
certificate certifying that neither TEPPCO GP nor TEPPCO MLP is a foreign person within the
meaning of Treasury Regulation 1.1445 2(b).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Sellers. Each of the Sellers, severally
and not jointly, represents and warrants to EPE that:
(a) Formation and Standing. Such Seller has been duly formed and is validly existing
under the Laws of the State of Delaware with full legal or corporate or limited partnership power
and authority to own, lease and operate its properties and to conduct its businesses as currently
owned and conducted except where, individually or in the aggregate, the failure to be so organized,
formed or existing or to have such power or authority could not reasonably be expected to have a
material adverse effect on the ability of such Seller to close the transactions contemplated under
this Agreement. Such Seller is duly qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing of its properties requires it to
so qualify, except where, individually or in the aggregate, the failure to be so qualified could
not reasonably be expected to have a material adverse effect on the ability of such Seller to close
the transactions contemplated under this Agreement.
(b) Authority and No Conflicts.
(i) Such Seller has all requisite corporate or limited partnership power and authority to
enter into this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement by such Seller and
the consummation by such Seller of the transactions contemplated
by this Agreement have been duly and validly authorized by all necessary corporate or limited
partnership action on the part of such Seller and its members or partners and no other corporate or
partnership proceedings on the part of such Seller or its members or partners, as applicable, are
necessary to authorize this Agreement or to consummate the transactions contemplated hereby.
9
(ii) This Agreement has been duly executed and delivered by such Seller and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency and other applicable Laws affecting creditors
rights generally, and by general principles of equity.
(iii) Neither the execution and delivery of this Agreement by such Seller nor the performance
by such Seller of its obligations hereunder and the completion of the transactions contemplated
hereby will:
(A) conflict with, or violate any provision of, the governing
documents of such Seller;
(B) other than obtaining or making, as applicable, any consents,
approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or made, could not,
individually or in the aggregate, reasonably be expected to have a TEPPCO Material Adverse Effect,
violate or breach any Laws applicable to such Seller; or
(C) other than obtaining or making, as applicable, any consents,
approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or made, could not,
individually or in the aggregate, reasonably be expected to have a TEPPCO Material Adverse Effect,
violate or conflict with or result in the breach of, or constitute a default (or an event that with
the giving of notice, the passage of time, or both would constitute a default) under, or entitle
any party (with the giving of notice, the passage of time or both) to terminate, accelerate, modify
or call any obligations or rights under any credit agreement, note, bond, mortgage, indenture, deed
of trust, contract, agreement, lease, license, franchise, permit, concession, easement or other
instrument to which such Seller is a party, or by or to which such Seller or any of its properties
are bound or subject.
(c) No Consents. No consent, approval, authorization or order of, or notice to, any
court or person is required for the consummation by such Seller of the transactions contemplated by
this Agreement except those as have already been obtained or given or those, the failure of which
to obtain or give, could not reasonably be expected to have a TEPPCO Material Adverse Effect.
(d) Membership Interest and General Partner Interest; Offered Units.
(i) DFIGP is the sole owner of the Membership Interest. The Membership Interest has been duly
authorized, validly issued, fully paid and non-assessable (except as set forth in the TEPPCO GP LLC
Agreement and to the extent such non-assessability may be affected by the Delaware Limited
Liability Company Act). Except to the extent created under the federal and state securities Laws
and the Delaware Limited Liability Company Act, the Membership Interest is held of record by DFIGP,
free and clear of Encumbrances, except for
Encumbrances the would not affect the transactions contemplated by this Agreement and the
ability of DFIGP to perform its obligations hereunder. TEPPCO GP owns or holds no assets or
interests other than the general partner interest in TEPPCO MLP and has not since the date of its
formation engaged in any business activities whatsoever other than acting as the general partner
10
of
TEPPCO MLP, other than activities that have not violated, and would not violate, the TEPPCO
Partnership Agreement in any material respect.
(ii) General Partner Interest. TEPPCO GP is the sole general partner of TEPPCO MLP.
TEPPCO GP is the sole record owner of the general partner interest in TEPPCO MLP, and such general
partner interest has been duly authorized and validly issued in accordance with the TEPPCO
Partnership Agreement. Except for any Encumbrances arising under the governing documents of any
TEPPCO Party, applicable securities Laws or this Agreement, TEPPCO GP owns such general partner
interest free and clear of any Encumbrances.
(e) No Defaults. Such Seller is not in default under or violation of, and there has
been no event, condition or occurrence which, after notice or lapse of time or both, would
constitute such a default or violation of, or permit the termination of, any term, condition or
provision of (i) its governing documents, (ii) any credit agreement, note, bond, mortgage,
indenture, contract, agreement, lease, license, franchise, permit, concession, easement or other
instrument to which such Seller is a party or by which such Seller or any of its property is bound
or subject, except, in the case of clause (ii), defaults, violations and terminations which,
individually or in the aggregate, could not reasonably be expected to have a TEPPCO Material
Adverse Effect.
(f) Brokerage and Finders Fee. None of the Sellers, TEPPCO GP, TEPPCO MLP or any of
their affiliates, nor any of their respective partners, shareholders, directors, officers or
employees, has incurred or will incur on behalf of the Sellers, TEPPCO GP, TEPPCO MLP or any
affiliate thereof any brokerage, finders or similar fee in connection with the transactions
contemplated by this Agreement.
(g) Independent Investigation. Such Seller has conducted its own independent
investigation, review and analysis of the business, operations, assets, liabilities, results of
operations, financial condition and prospects of the Enterprise Partnership Group Entities, which
investigation, review and analysis was done by such Seller and its affiliates and, to the extent
such Seller deemed necessary or appropriate, by its Representatives (it being understood that such
Seller is also relying on the representations, warranties, covenants and conditions in this
Agreement).
(h) Investment Intent; Investment Experience; Restricted Securities.
In acquiring the Class B Units or Class C Units, such Seller is not offering or selling, and
shall not offer or sell the Class B Units or Class C Units, for such Seller in connection with any
distribution of any of such Class B Units or Class C Units, and such Seller does not have a
participation and shall not participate in any such undertaking or in any underwriting of such an
undertaking except in compliance with applicable federal and state securities laws. Such Seller
acknowledges that it can bear the economic risk of its investment in the Class B Units and Class C
Units and has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Class B Units and Class C
Units. Such Seller is an accredited investor as such term is defined in Regulation D under the
Securities Act. Such Seller understands that neither the Class B Units nor Class C Units have been
registered pursuant to the Securities Act or any applicable state securities laws, that the
11
Class B
Units and Class C Units shall be characterized as restricted securities under federal securities
laws and that, under such laws and applicable regulations, the Class B Units and the Class C Units
cannot be sold or otherwise disposed of without registration under the Securities Act or an
exemption therefrom.
Section 3.2 Representations and Warranties of EPE. EPE represents and warrants to each of
the Sellers that:
(a) Organization and Standing. EPE has been duly organized and is validly existing
under the Laws of its jurisdiction of organization with full legal power and authority to own,
lease and operate its properties and to conduct its businesses as currently owned and conducted
except where, individually or in the aggregate, the failure to be so organized or existing or to
have such power or authority could not reasonably be expected to have an Enterprise Material
Adverse Effect. EPE is duly qualified to do business in each jurisdiction in which the nature of
the business conducted by it or the ownership or leasing of its properties requires it to so
qualify, except where, individually or in the aggregate, the failure to be so qualified could not
reasonably be expected to have an Enterprise Material Adverse Effect.
(b) Authority and No Conflicts.
(i) EPE has all requisite partnership power and authority to enter into this Agreement and to
perform its obligations hereunder and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement by EPE and the consummation of the
transactions contemplated by this Agreement have been duly and validly authorized by all necessary
corporate, partnership or limited liability company action, and no other proceedings on the part of
EPE or its general partner are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.
(ii) This Agreement has been duly executed and delivered by EPE and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency and other applicable Laws affecting creditors rights
generally, and by general principles of equity.
(iii) Neither the execution and delivery of this Agreement by EPE or of EPE Holdings of the
Amendment to EPE Partnership Agreement, nor the performance by EPE of its obligations hereunder and
the completion of the transactions contemplated hereby, will:
(A) conflict with, or violate any provision of, the EPE
Partnership Agreement or other
governing documents of EPE;
(B) other than obtaining or making, as applicable, any consents,
approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or
made, could not, individually or in the aggregate, reasonably be expected to have an
Enterprise Material Adverse Effect or violate or breach any Laws applicable to EPE;
(C) other than obtaining or making, as applicable, any consents,
approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or made, could not,
individually or in the aggregate, reasonably be expected to have an Enterprise
12
Material Adverse
Effect, violate or conflict with or result in the breach of, or constitute a default (or an event
that with the giving of notice, the passage of time, or both would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or both) to terminate,
accelerate, modify or call any obligations or rights under any credit agreement, note, bond,
mortgage, indenture, deed of trust, contract, agreement, lease, license, franchise, permit,
concession, easement or other instrument to which EPE is a party or by which EPE or its property is
bound or subject; or
(D) except as could not, individually or in the aggregate,
reasonably be expected to have an
Enterprise Material Adverse Effect, result in the imposition of any Encumbrance upon or require the
sale or give any person the right to acquire any of the assets of EPE or restrict, hinder, impair
or limit the ability of EPE to carry on its business as and where it is now being carried on.
(c) No Consents. No consent, approval, authorization or order of, or notice to, any
court or person is required for the consummation of the transactions contemplated by this Agreement
except those as have been obtained or given or those, the failure of which to obtain or give, could
not reasonably be expected to have an Enterprise Material Adverse Effect.
(d) No Defaults. EPE is not in default under or violation of, and there has been no
event, condition or occurrence which, after notice or lapse of time or both, would constitute such
a default or violation of, or permit the termination of, any term, condition or provision of (i)
its governing documents, (ii) any credit agreement, note, bond, mortgage, indenture, contract,
agreement, lease, license, franchise, permit, concession, easement or other instrument to which EPE
is a party or by which EPE or its property is bound or subject, except, in the case of clause (ii),
defaults, violations and terminations which, individually or in the aggregate, could not reasonably
be expected to have an Enterprise Material Adverse Effect.
(e) Brokerage and Finders Fee. No agent, broker, finder, investment banker,
financial advisor or similar person will be entitled to any fee, commission or other compensation
in connection with this Agreement on the basis of any action or statement made by EPE or any of its
affiliates, or any of their respective partners, shareholders, directors, officers or employees
acting on behalf of EPE.
(f) Independent Investigation. EPE has conducted its own independent investigation,
review and analysis of the business, operations, assets, liabilities, results of operations,
financial condition and prospects of the TEPPCO Partnership Group Entities, which investigation,
review and analysis was done by EPE and its affiliates and, to the extent EPE deemed necessary or
appropriate, by its Representatives (it being understood that EPE is also relying on the
representations, warranties, covenants and conditions in this Agreement).
(g) Investment Intent; Investment Experience; Restricted Securities.
(i) In acquiring the Membership Interest, EPE is not offering or selling, and shall not offer
or sell the Membership Interest, for EPE in connection with any distribution of any of such
Membership Interest, and EPE does not have a participation and shall not participate in any such
undertaking or in any underwriting of such an undertaking except in
13
compliance with applicable
federal and state securities laws. EPE acknowledges that it can bear the economic risk of its
investment in the Membership Interest and has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an investment in the
Membership Interest. EPE is an accredited investor as such term is defined in Regulation D under
the Securities Act. EPE understands that the Membership Interest shall not have been registered
pursuant to the Securities Act or any applicable state securities laws, that the Membership
Interest shall be characterized as restricted securities under federal securities laws and that
under such laws and applicable regulations the Membership Interest cannot be sold or otherwise
disposed of without registration under the Securities Act or an exemption therefrom.
(ii) In acquiring the Offered Units, EPE is not offering or selling, and shall not offer or
sell the Offered Units, for EPE in connection with any distribution of any of such Offered Units,
and EPE does not have a participation and shall not participate in any such undertaking or in any
underwriting of such an undertaking except in compliance with applicable federal and state
securities laws. EPE acknowledges that it can bear the economic risk of its investment in the
Offered Units and has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Offered Units. EPE is an
accredited investor as such term is defined in Regulation D under the Securities Act. EPE
understands that the Offered Units shall not have been registered pursuant to the Securities Act or
any applicable state securities laws, that the Offered Units shall be characterized as restricted
securities under federal securities laws and that under such laws and applicable regulations the
Offered Units cannot be sold or otherwise disposed of without registration under the Securities Act
or an exemption therefrom.
(h) Amendment to EPE Partnership Agreement; Class B Units; Class C Units.
(i) The Amendment to EPE Partnership Agreement has been duly authorized, executed and
delivered by all necessary partnership action by EPE, on behalf of EPE by EPE Holdings as its
general partner, and by the limited partners of EPE.
(ii) The Class B Units and the limited partner interests represented thereby have been
duly
authorized and validly issued in accordance with applicable Laws and the EPE Partnership Agreement,
and when issued as consideration in accordance with this Agreement, will be fully paid (to the
extent required under the EPE Partnership Agreement) and non-assessable (except to the extent such
non-assessability may be affected by Section 17-607 of the Delaware Revised Uniform Limited
Partnership Act). The Class B Units will not be issued in violation of pre-emptive or similar
rights or any other agreement or understanding binding on EPE.
(iii) The Class C Units and the limited partner interests represented thereby have been
duly
authorized and validly issued in accordance with applicable Laws and the EPE Partnership Agreement,
and when issued as consideration in accordance with this Agreement, will be fully paid (to the
extent required under the EPE Partnership Agreement) and non-assessable (except to the extent such
non-assessability may be affected by Section 17-607 of the Delaware Revised Uniform Limited
Partnership Act). The Class C Units will not be issued
14
in violation of pre-emptive or similar
rights or any other agreement or understanding binding on EPE.
(iv) EPE has authorized and reserved a sufficient number of EPE Units issuable upon conversion
of the Class B Units and the Class C Units.
(v) EPE has applied to list the Units issuable upon conversion of the Class B Units and
the
Class C Units on the NYSE.
Section 3.3 Representations and Warranties Concerning TEPPCO GP and TEPPCO MLP. Each of
the Sellers, jointly and severally, hereby represents and warrants to EPE that:
(a) Organization and Standing. Each of the TEPPCO Partnership Group Entities has been
duly organized or formed and is validly existing under the Laws of its jurisdiction of organization
or formation with full corporate or legal power and authority to own, lease and operate its
properties and to conduct its businesses as currently owned and conducted. Each of the TEPPCO
Partnership Group Entities is duly qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing of its properties requires it to
so qualify, except where, individually or in the aggregate, the failure to be so qualified could
not reasonably be expected to have a TEPPCO Material Adverse Effect. TEPPCO GP was formed on March
31, 2000.
(b) No Defaults. None of the TEPPCO Partnership Group Entities is in default under or
violation of, and there has been no event, condition or occurrence which, after notice or lapse of
time or both, would constitute such a default or violation of, or permit the termination of, any
term, condition or provision of (i) their respective governing documents, (ii) any credit
agreement, note, bond, mortgage, indenture, contract, agreement, lease, license, franchise, permit,
concession, easement or other instrument to which any of the TEPPCO Partnership Group Entities is a
party or by which any of the TEPPCO Partnership Group Entities or any of their respective property
is bound or subject, except, in the case of clause (ii), defaults, violations and terminations
which, individually or in the aggregate, could not reasonably be expected to have a TEPPCO Material
Adverse Effect.
(c) No Conflicts. Neither the execution and delivery of this Agreement by the Sellers
nor the performance by the Sellers of its obligations hereunder and the completion of the
transactions contemplated hereby will:
(i) conflict with, or violate any provision of, the governing documents of the TEPPCO
Partnership Group Entities or the TEPPCO Partially Owned Entities;
(ii) other than obtaining or making, as applicable, any consents, approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or made, could not,
individually or in the aggregate, reasonably be expected to have a TEPPCO Material Adverse Effect,
violate or breach any Laws applicable to the TEPPCO Partnership Group Entities or the TEPPCO
Partially Owned Entities;
15
(iii) other than obtaining or making, as applicable, any consents, approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or made, could not,
individually or in the aggregate, reasonably be expected to have a TEPPCO Material Adverse Effect,
violate or conflict with or result in the breach of, or constitute a default (or an event that with
the giving of notice, the passage of time, or both would constitute a default) under, or entitle
any party (with the giving of notice, the passage of time or both) to terminate, accelerate, modify
or call any obligations or rights under any credit agreement, note, bond, mortgage, indenture, deed
of trust, contract, agreement, lease, license, franchise, permit, concession, easement or other
instrument to which any of the TEPPCO Partnership Group Entities or the TEPPCO Partially Owned
Entities is a party or by which any of the TEPPCO Partnership Group Entities or the TEPPCO
Partially Owned Entities or their respective properties are bound or subject; or
(iv) except as could not, individually or in the aggregate, reasonably be expected to have a
TEPPCO Material Adverse Effect, result in the imposition of any Encumbrance upon or require the
sale or give any person the right to acquire any of the assets of any of the TEPPCO Partnership
Group Entities or the TEPPCO Partially Owned Entities or restrict, hinder, impair or limit the
ability of any of the TEPPCO Partnership Group Entities or the TEPPCO Partially Owned Entities to
carry on their respective businesses as and where they are now being carried on.
(d) Capitalization of TEPPCO MLP and Subsidiaries. As of the Execution Date, TEPPCO
MLP has no limited partner interests issued and outstanding other than 89,804,829 TEPPCO Limited
Partner Units. Each of such TEPPCO Limited Partner Units and the limited partner interests
represented thereby have been duly authorized and validly issued in accordance with applicable Laws
and the TEPPCO Partnership Agreement, and are fully paid (to the extent required under the TEPPCO
Partnership Agreement) and non-assessable (except to the extent such non-assessability may be
affected by Section 17-607 of the Delaware Revised Uniform Limited Partnership Act). Such TEPPCO
Limited Partner Units were not issued in violation of pre-emptive or similar rights or any other
agreement or understanding binding on TEPPCO MLP. TEPPCO GP and TEPPCO MLP are the sole record and
beneficial owners of the general partner interest and limited partner interest, respectively, of
each of the TEPPCO Operating Partnerships. All of the outstanding equity interests of the
subsidiaries of TEPPCO MLP and the TEPPCO MLP Partially Owned Entities owned, directly or
indirectly, by TEPPCO MLP have been duly authorized and are validly issued (in accordance with
their respective governing documents), fully paid (to the extent required under the applicable
governing documents) and non-assessable (except (1) with respect to general partner interests, (2)
as set forth to the contrary in the applicable governing documents and (3) to the extent such
non-assessability may be affected by the Delaware Revised Uniform Limited Partnership Act or the
Delaware Limited Liability Company Act) and were not issued in violation of pre-emptive or similar
rights; and all such equity interests are owned, directly or indirectly, by TEPPCO MLP,
free and clear of all Encumbrances, except for applicable securities Laws, restrictions on
transfers contained in governing documents and as described in the TEPPCO SEC Reports.
(e) Subsidiaries. Exhibit 21.1 of the 2006 10-K sets forth a list of all of the
material subsidiaries of TEPPCO MLP and all of the TEPPCO MLP Partially Owned Entities, together
with their respective jurisdictions of organization or formation, types of entity,
16
percentages of
equity ownership by TEPPCO MLP or its subsidiaries and record owner or owners of such equity.
TEPPCO MLP has no material subsidiaries or TEPPCO MLP Partially Owned Entities other than those set
forth in Exhibit 21.1 of the 2006 10-K.
(f) Derivative Securities; Rights. Except as described in the 2006 10-K and the other
TEPPCO SEC Reports: (i) there are no outstanding options, warrants, subscriptions, puts, calls or
other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise)
obligating any of the TEPPCO Partnership Group Entities to offer, issue, sell, redeem, repurchase,
otherwise acquire or transfer, pledge or Encumber any equity interest in any of the TEPPCO
Partnership Group Entities; (ii) there are no outstanding securities or obligations of any kind of
any of the TEPPCO Partnership Group Entities which are convertible into or exercisable or
exchangeable for any equity interest in any of the TEPPCO Partnership Group Entities or any other
person, and none of the TEPPCO Partnership Group Entities has any obligation of any kind to issue
any additional securities or to pay for or repurchase any securities; (iii) there are no
outstanding stock appreciation rights, phantom equity or similar rights, agreements, arrangements
or commitments based on the book value, income or any other attribute of any of the TEPPCO
Partnership Group Entities; (iv) there are no outstanding bonds, debentures or other evidence of
indebtedness of any of the TEPPCO Partnership Group Entities having the right to vote (or that are
exchangeable for or convertible or exercisable into securities having the right to vote) with the
holders of the TEPPCO Limited Partner Units on any matter; (v) except as described in the TEPPCO
Partnership Agreement, there are no unitholder agreements, proxies, voting trusts, rights to
require registration under securities Laws or other arrangements or commitments to which any of the
TEPPCO Partnership Group Entities is a party or by which any of their respective securities are
bound with respect to the voting, disposition or registration of any outstanding securities of any
of the TEPPCO Partnership Group Entities (provided that the foregoing shall not apply to any such
restriction on voting or disposition that any holder of TEPPCO Limited Partner Units (other than
affiliates of the Sellers) may have imposed upon such TEPPCO Limited Partner Units); and (vi) there
are no outstanding registration rights with respect to any TEPPCO Limited Partner Units or any
other equity securities of any of the TEPPCO Partnership Group Entities.
(g) Reports; Financial Statements.
(i) Since January 1, 2007, TEPPCO MLP has filed or furnished all forms, reports,
schedules,
statements and other documents required by Law to be filed or furnished with the SEC by any of the
TEPPCO Partnership Group Entities under applicable securities statutes, regulations, policies and
rules (collectively, together with all other documents filed by TEPPCO MLP with the SEC since
January 1, 2007 and prior to the Execution Date, the TEPPCO SEC Reports). The TEPPCO SEC Reports
at the time filed or furnished (x) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the statements
contained therein not misleading in
light of the circumstances under which they were made, (y) complied in all material respects
with the requirements of applicable Laws (including the Securities Act, the Exchange Act and the
rules and regulations thereunder) and (z) complied in all material respects with the then
applicable accounting standards. The TEPPCO SEC Reports included all certificates required to be
included therein pursuant to Section 13a-14(a) and Section 13a-14(b) of the Exchange Act. Other
than (i) filings by TE Products Pipeline Company, Limited Partnership and (ii) filings in
17
connection with Rule 144A offerings with respect to wholly owned subsidiaries of TEPPCO MLP, no
subsidiary of TEPPCO MLP is required to file periodic reports with the SEC, either pursuant to the
requirements of the Exchange Act or by contract.
(ii) The TEPPCO MLP Annual Report on Form 10-K for the year ended December 31, 2006 (the
2006
10-K) has been filed with the SEC.
(iii) Except for this Agreement and the TEPPCO Plans described or listed in the TEPPCO SEC
Reports, the exhibit list included in the 2006 10-K sets forth a true and complete list of (x) any
contracts, agreements, documents and other instruments not yet filed by TEPPCO MLP with the SEC but
that are currently in effect and that any of the TEPPCO Partnership Group Entities will be required
to or expect to file with or furnish to the SEC as exhibits in an annual or periodic report after
the Execution Date and (y) any amendments and modifications that have not been filed by TEPPCO MLP
with the SEC but are currently in effect to all agreements, documents and other instruments that
have been filed by any of the TEPPCO Partnership Group Entities with the SEC since January 1, 2007.
All such exhibits have been made available to EPE, as requested.
(iv) Copies of the audited financial statements for the years ended December 31, 2004,
2005
and 2006 of TEPPCO GP (the TEPPCO GP Financial Statements) as included in the TEPPCO SEC Reports.
The consolidated financial statements (including, in each case, any related notes thereto) of
TEPPCO MLP contained in any TEPPCO SEC Reports and in the 2006 10-K and the TEPPCO GP Financial
Statements (x) have been prepared in accordance with GAAP (subject, in the case of unaudited
financial statements, to the absence of footnote disclosures required by GAAP), (y) complied in all
material respects with the requirements of applicable securities Laws, and (z) fairly present, in
all material respects, the consolidated financial positions, results of operations, cash flows,
partners capital and comprehensive income and changes in accumulated other comprehensive income,
as applicable, of the applicable TEPPCO Partnership Group Entities as of the respective dates
thereof and for the respective periods covered thereby, subject, in the case of unaudited financial
statements, to normal, recurring audit adjustments none of which will be material. Except as
disclosed on the TEPPCO MLP Balance Sheet or the TEPPCO GP Balance Sheet, none of the TEPPCO
Partnership Group Entities has any indebtedness or liability, absolute or contingent, other than
(A) in the case of TEPPCO MLP, liabilities as of December 31, 2006 that are not required by GAAP to
be included in the TEPPCO MLP Balance Sheet, (B) in the case of TEPPCO GP, liabilities as of
December 31, 2006 that are not required by GAAP to be included in the TEPPCO GP Balance Sheet, (C)
liabilities incurred or accrued in the ordinary course of business consistent with past practice
since December 31, 2006 in the case of TEPPCO MLP and TEPPCO GP and that are not material,
individually or in the aggregate, or (D) liabilities disclosed in the 2006 10-K or any TEPPCO SEC
Reports filed since December 31, 2006.
(h) Controls.
(i) The management of TEPPCO GP has (x) implemented disclosure controls and procedures (as
defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to
TEPPCO MLP, including its consolidated subsidiaries, is made known to the management of TEPPCO GP
by others within those entities, and (y) disclosed,
18
based on its most recent evaluation, to TEPPCO
MLPs outside auditors and the audit committee of the board of directors of TEPPCO GP (A) all
significant deficiencies and material weaknesses in the design or operation of internal controls
over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably
likely to adversely affect TEPPCO MLPs ability to record, process, summarize and report financial
data and (B) any fraud, whether or not material, that involves management or other employees who
have a significant role in TEPPCO MLPs internal controls over financial reporting. For any period
since January 1, 2007, any material change in internal control over financial reporting required to
be disclosed in any TEPPCO SEC Report has been so disclosed.
(ii) Since January 1, 2007, (x) to the knowledge of the Sellers, none of the TEPPCO
Partnership Group Entities, or any Representative of a TEPPCO Partnership Group Entity, has
received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or
claim, whether written or oral, regarding the accounting or auditing practices, procedures,
methodologies or methods of the TEPPCO Partnership Group Entities or their respective internal
accounting controls relating to periods after January 1, 2007, including any material complaint,
allegation, assertion or claim that any of the TEPPCO Partnership Group Entities has engaged in
questionable accounting or auditing practices, and (y) no attorney representing the TEPPCO
Partnership Group Entities, whether or not employed by the TEPPCO Partnership Group Entities, has
reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar
violation, relating to periods after January 1, 2007, by the officers, directors, employees or
agents of any of the TEPPCO Partnership Group Entities to the board of directors of TEPPCO GP or
any committee thereof or, to the knowledge of the Sellers, to any director or officer of TEPPCO GP.
(i) Absence of Certain Changes or Events.
(i) Except as disclosed in any TEPPCO SEC Report, between December 31, 2006 and the
Execution
Date, the business of the TEPPCO Partnership Group Entities, taken as a whole, has been conducted
in the ordinary course consistent with past practices, except in connection with entering into this
Agreement.
(ii) Since December 31, 2006, except as disclosed in any TEPPCO SEC Report, there have not
been any events or conditions that have had, or could reasonably be expected to have, a TEPPCO
Material Adverse Effect.
(j) Compliance; Permits. Except as set forth, in the case of clauses (i) and (iii)
below, in the SEC Reports :
(i) The TEPPCO Partnership Group Entities are in compliance, and at all times since January 1,
2007 have complied, with all applicable Laws, including all applicable
Laws relating to the ownership, use and operation of their properties and assets, other than
non-compliance which could not, individually or in the aggregate, reasonably be expected to have a
TEPPCO Material Adverse Effect.
19
(ii) TEPPCO GP is in compliance, and at all times that it has been the general partner of the
TEPPCO MLP has complied, in all material respects with all of its obligations under the TEPPCO
Partnership Agreement.
(iii) The TEPPCO Partnership Group Entities are in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate their properties and to lawfully carry on
their businesses as they are now being conducted (collectively, the TEPPCO Permits), except as
would not, individually or in the aggregate, reasonably be expected to have a TEPPCO Material
Adverse Effect. None of the TEPPCO Partnership Group Entities is in conflict with, or in default
or violation of any of the TEPPCO Permits, except for any such conflicts, defaults or violations
which could not, individually or in the aggregate, reasonably be expected to have a TEPPCO Material
Adverse Effect.
(k) Litigation. Except as disclosed in the TEPPCO SEC Reports or for matters that
could not reasonably be expected to have, individually or in the aggregate, a TEPPCO Material
Adverse Effect, (i) there are no claims, actions, proceedings (public or private) investigations or
reviews pending or, to the knowledge of the Sellers, threatened against any of the TEPPCO
Partnership Group Entities by or before any Governmental Entity, and (ii) the Sellers have no
knowledge of any facts that such persons reasonably believe are likely to give rise to any such
claim, action, proceeding, investigation or review. None of the TEPPCO Partnership Group Entities,
nor any of their respective assets and properties, is subject to any outstanding judgment, order,
writ, injunction or decree that has had or could reasonably be expected to have, individually or in
the aggregate, a TEPPCO Material Adverse Effect.
(l)
Environmental Matters. Except as disclosed in the TEPPCO SEC Reports or for
matters or claims that would not reasonably be expected to have, individually or in the aggregate,
a TEPPCO Material Adverse Effect: (a) the TEPPCO Partnership Group Entities and their respective
businesses, operations, and properties have been in compliance for all applicable statutes of
limitations and are in compliance with all Environmental Laws and all permits, registrations,
licenses, approvals, exemptions, variances, and other authorizations required of the TEPPCO
Partnership Group Entities under Environmental Laws (
TEPPCO Environmental Permits); (b) the
TEPPCO Partnership Group Entities have obtained or filed for all TEPPCO Environmental Permits
required for their respective businesses, operations, and properties as they currently exist and
all such TEPPCO Environmental Permits are currently in full force and effect; (c) the TEPPCO
Partnership Group Entities and their respective businesses, operations, and properties are not
subject to any pending or, to the knowledge of the Sellers, threatened claims, actions, suits,
investigations, inquiries or proceedings under Environmental Laws; (d) there have been no Releases
of Hazardous Substances on, under or from the properties of the TEPPCO Partnership Group Entities
that have given or may give rise to any obligations within the applicable statutes of limitations
under Environmental Laws; (e) none of the TEPPCO Partnership Group Entities has, to the knowledge
of the Sellers, received any written notice that remains unresolved asserting an alleged liability
or obligation under any Environmental Laws
against the TEPPCO Partnership Group Entities with respect to the actual or alleged Hazardous
Substance contamination of any property offsite of the properties of the TEPPCO Partnership Group
Entities; (f) to the knowledge of the Sellers, there has been no exposure of any person or property
to Hazardous Substances in connection with the TEPPCO Partnership Group Entities
20
businesses,
operations, or properties that could reasonably be expected to form the basis for any tort claims
by third parties for damages or compensation; (g) the TEPPCO Partnership Group Entities have made
available to EPE all documents requested by EPE that are in the possession of the TEPPCO
Partnership Group Entities and relating to their respective businesses, operations, or properties
and relating to the TEPPCO Partnership Group Entities compliance with or obligations under
Environmental Laws; and (h) none of the TEPPCO Partnership Group Entities is a potentially
responsible party under Environmental Laws at any site that is on the National Priorities List, and
no real property owned by any of the TEPPCO Partnership Group Entities is on the Comprehensive
Environmental Response, Compensation and Liability Information System list.
(m) Contracts. Except for contracts filed as exhibits to the TEPPCO SEC Reports and
TEPPCO Plans (other than with respect to clause (viii)), as of the date of this Agreement there are
no written or oral contracts, agreements, guarantees, leases and executory commitments to which any
of the TEPPCO Partnership Group Entities are a party or by which their assets are bound and which
fall within any of the following categories: (i) contracts which would have the effect of limiting
the freedom of any of the Enterprise Partnership Group Entities or the TEPPCO Partnership Group
Entities to compete in any line of business or in any geographic area, (ii) contracts relating to
any outstanding commitment for capital expenditures in excess of $15,000,000 which are not included
in AFEs for projects reflected in the TEPPCO MLP capital budget for 2007, a copy of which has been
provided to EPE; (iii) contracts with any labor union or organization, (iv) indentures, mortgages,
liens, promissory notes, loan agreements, guarantees or other arrangements relating to the
borrowing of money by any of the TEPPCO Partnership Group Entities, (v) contracts providing for the
acquisition or disposition of assets or businesses with a purchase price of $30,000,000 or more;
(vi) contracts containing provisions triggered by change of control of any of the TEPPCO
Partnership Group Entities or other similar provisions, (vii) contracts in favor of directors or
officers that provide rights to indemnification, and (viii) contracts (including those filed as
exhibits to the TEPPCO SEC Reports and TEPPCO Plans) between one or more TEPPCO Partnership Group
Entities and the Sellers or one or more affiliates of the Sellers (other than the TEPPCO
Partnership Group Entities and EPE and its subsidiaries). Except as disclosed in the SEC Reports,
(x) all such contracts (including those filed as exhibits to the TEPPCO SEC Reports) and all other
contracts that are individually material to the business or operations of the TEPPCO Partnership
Group Entities taken as a whole are valid and binding obligations of the TEPPCO Partnership Group
Entities that are parties thereto and, to the knowledge of the Sellers, the valid and binding
obligation of each other party thereto except such contracts which if not so valid and binding
could not, individually or in the aggregate, reasonably be expected to have a TEPPCO Material
Adverse Effect and (y) no TEPPCO Partnership Group Entity and, to the knowledge of the Sellers, no
other party to any such contract is in breach of or in default under or has the right to terminate
(upon notice or otherwise) any such contract except for such breaches, defaults that, and rights to
terminate which, if exercised, could not reasonably be expected to have, individually or in the
aggregate, a TEPPCO Material Adverse Effect. True and complete copies of all such contracts have
been delivered or have been made available to EPE as requested by EPE.
(n) Restrictions on Business Activities. Except as set forth in the TEPPCO SEC
Reports, there is no agreement, judgment, injunction, order or decree binding upon any of the
TEPPCO Partnership Group Entities that has or could be reasonably expected to have the
21
effect of
prohibiting, restricting or materially impairing any business practice of any of the TEPPCO
Partnership Group Entities, any acquisition of property by any of the TEPPCO Partnership Group
Entities, the purchase of goods or services from any party, the hiring of any individual or groups
of individuals or the conduct of business by any of the TEPPCO Partnership Group Entities as
currently conducted.
(o) Intellectual Property.
(i) Except for the items shared with EPCO under the Administrative Services Agreement, the
TEPPCO Partnership Group Entities, directly or indirectly, own, license or otherwise have legally
enforceable rights to use all patents, patent rights, trademarks, trade names, service marks,
copyrights and any applications therefore, technology, know-how, computer software and applications
and tangible or intangible proprietary information or materials, that are used in the business of
the TEPPCO Partnership Group Entities as presently conducted (the TEPPCO Intellectual Property
Rights) and each such ownership, license, and right to use will not be adversely affected by the
transactions contemplated by this Agreement. Except for intellectual property shared with EPCO
under the Administrative Services Agreement, TEPPCO MLP owns, licenses or otherwise has legally
enforceable rights to use intellectual property of the type described in this Section
3.3(o) sufficient to operate the business of the TEPPCO Partnership Group Entities consistent
with past practices.
(ii) In the case of TEPPCO Intellectual Property Rights owned by any of the TEPPCO Partnership
Group Entities, such TEPPCO Partnership Group Entities own such TEPPCO Intellectual Property Rights
free and clear of any Encumbrances (other than Permitted Encumbrances). One or more of the TEPPCO
Partnership Group Entities have an adequate right to the use of the TEPPCO Intellectual Property
Rights or the material covered thereby in connection with the services or products in respect of
which such TEPPCO Intellectual Property Rights are being used except where the lack of any such
right could not reasonably be expected to have, individually or in the aggregate, a TEPPCO Material
Adverse Effect. None of the TEPPCO Partnership Group Entities has received any written notice or
claim, or any other information, stating that the manufacture, sale, licensing, or use of any of
the services or products of any of the TEPPCO Partnership Group Entities as now manufactured, sold,
licensed or used or proposed for manufacture, sale, licensing or use by any of the TEPPCO
Partnership Group Entities in the ordinary course of their business as presently conducted
infringes on any copyright, patent, trade mark, service mark or trade secret of a third party
except where such infringement could not reasonably be expected to have, individually or in the
aggregate, a TEPPCO Material Adverse Effect. None of the TEPPCO Partnership Group Entities has
received any written notice or claim, or any other information, stating that the use by any of the
TEPPCO Partnership Group Entities of any trademarks, service marks, trade names, trade secrets,
copyrights, patents, technology or know-how and applications used in their business as presently
conducted infringes on any other persons trademarks, service marks, trade names, trade secrets,
copyrights, patents, technology or know-how and applications, except where such infringement could
not reasonably be expected to have, individually or in the aggregate, a TEPPCO Material Adverse
Effect. None of the TEPPCO Partnership Group Entities has
received any written notice or claim, or any other information, challenging the ownership by
any of the TEPPCO Partnership Group Entities or the validity of any of the TEPPCO Intellectual
Property Rights except where the absence of any such ownership could not reasonably be
22
expected to
have, individually or in the aggregate, a TEPPCO Material Adverse Effect. All registered patents,
trademarks, service marks and copyrights held by any of the TEPPCO Partnership Group Entities are
subsisting, except to the extent any failure to be subsisting could not reasonably be expected to
have, individually or in the aggregate, a TEPPCO Material Adverse Effect. To the knowledge of the
Sellers, there is no unauthorized use, infringement or misappropriation of any of the TEPPCO
Intellectual Property Rights by any third party, including any employee or former employee of any
of the TEPPCO Partnership Group Entities. No TEPPCO Intellectual Property Right is subject to any
known outstanding decree, order, judgment, or stipulation restricting in any manner the licensing
thereof by any of the TEPPCO Partnership Group Entities.
(p) Property.
(i) Immediately after the Closing, TEPPCO MLP will own or have the right to use (or EPCO will
have the right to use in connection with its obligations to TEPPCO MLP under the Administrative
Services Agreement) tangible personal property sufficient to operate the businesses of the TEPPCO
Partnership Group Entities consistent with past practices.
(ii) Except for Permitted Encumbrances, failures that could not reasonably be expected to
have, individually or in the aggregate, a TEPPCO Material Adverse Effect, the TEPPCO Partnership
Group Entities have good and indefeasible title or enforceable rights to use (or, with respect to
the TEPPCO Pipeline Assets, title to or interest in the applicable TEPPCO Pipeline Assets
sufficient to enable the TEPPCO Partnership Group Entities to conduct their businesses with respect
thereto without interference as it is currently being conducted) all their properties and assets,
whether tangible or intangible, real, personal or mixed, free and clear of all liens.
(iii) Except for violations that could not reasonably be expected to have, individually or in
the aggregate, a TEPPCO Material Adverse Effect or set forth in the TEPPCO SEC Reports, the
businesses of the TEPPCO Partnership Group Entities have been and are being operated in a manner
which does not violate the terms of any easements, rights of way, permits, servitudes, licenses,
leasehold estates and similar rights relating to real property (collectively, TEPPCO Easements)
used by the TEPPCO Partnership Group Entities in such businesses. All TEPPCO Easements are valid
and enforceable in accordance with their terms, except as the enforceability thereof may be
affected by bankruptcy, insolvency or other Laws of general applicability affecting the rights of
creditors generally or principles of equity, and grant the rights purported to be granted thereby
and all rights necessary thereunder for the current operation of such businesses, except where the
failure of any such TEPPCO Easement to be valid and enforceable or to grant the rights purported to
be granted thereby or necessary thereunder would not have a TEPPCO Material Adverse Effect. There
are no gaps in the TEPPCO Easements that would impair the conduct of such businesses in a manner
that could reasonably be expected to have, individually or in the aggregate, a TEPPCO Material
Adverse Effect, and no part of the TEPPCO Pipeline Assets is located on property that is not owned
in fee by a TEPPCO Partnership Group Entity or subject to an easement in favor of a TEPPCO
Partnership Group
Entity, where the failure of such TEPPCO Pipeline Asset to be so located could reasonably be
expected to have, individually or in the aggregate, a TEPPCO Material Adverse Effect.
23
(q) [Intentionally Omitted].
(r) Labor Matters; Employees.
(i) All individuals who work substantially full time on TEPPCO Partnership Group Entities
matters are employees of EPCO who perform such services under the Administrative Services
Agreement, and no TEPPCO Employee is included in a unit of employees covered by a collective
bargaining agreement. None of the TEPPCO Partnership Group Entities is a party to or subject to a
collective bargaining agreement. No union certification petition has been filed (with service of
process having been made on a TEPPCO Partnership Group Entity), or to the knowledge of the Sellers,
any union organization activity threatened, that relates to TEPPCO Employees.
(ii) Except as disclosed in the TEPPCO SEC Reports, each of the TEPPCO Partnership Group
Entities is in compliance with all laws, rules, regulations and orders relating to the employment
of labor, including all such laws, rules, regulations and orders relating to wages, hours,
collective bargaining, discrimination, civil rights, safety and health, workers compensation and
the collection and payment of withholding or social security taxes and similar taxes, except where
the failure to comply would not, individually or in the aggregate, reasonably be expected to have a
TEPPCO Material Adverse Effect.
(s) Insurance. Each of the TEPPCO Partnership Group Entities and their respective
businesses and properties are, and have been continuously since January 1, 2007, insured by
reputable and financially responsible insurers in amounts and against risks and losses as are
customary for companies conducting their respective businesses. The insurance policies covering
the TEPPCO Partnership Group Entities and their respective businesses and properties are in all
material respects in full force and effect in accordance with their terms, no notice of
cancellation or termination has been received, and there is no existing default or event which,
with the giving of notice or lapse of time or both would constitute a default thereunder. There
are no outstanding claims made by any of the insured parties in excess of the deductibles and
similar amounts and retentions that are not covered under the existing policies, and, to the
knowledge of the Sellers, there has not occurred any event that might reasonably form the basis of
any claim in excess of the deductibles and similar amounts and retentions that is not covered under
such policies.
(t) Taxes.
(i) (A) Except as disclosed on Schedule 3.3(t), each of the TEPPCO Partnership
Group
Entities has filed when due, after giving effect to applicable extensions, all Tax Returns required
to be filed with the IRS or other applicable Governmental Entity through the date hereof; (B) all
items of income, gain, loss, deduction and credit or other items required to be included in each
such Tax Return have been so included and each such Tax Return is true, complete and correct in all
material respects; (C) each of the TEPPCO Partnership Group Entities has timely paid or has
provided an adequate accrual for all Taxes for which such entity
has liability and are or have become due (whether or not shown on any such Tax Return), and
has withheld and paid to the appropriate Governmental Entity any Tax that it is required by
Applicable Law to withhold and pay to a Governmental Entity on or before the date hereof; (D)
24
no
claim has been made by any Governmental Entity in a jurisdiction in which any of the TEPPCO
Partnership Group Entities does not currently file a Tax Return that it is or may be subject to Tax
by such jurisdiction; (E) none of the TEPPCO Partnership Group Entities has entered into any
agreement or arrangement with any Governmental Entity that requires any of the TEPPCO Partnership
Group Entities to take or refrain from taking any action; (F) none of the TEPPCO Partnership Group
Entities is a party to any agreement or arrangement, whether written or unwritten, providing for
the payment of Taxes, payment of Tax losses, payment of Tax indemnification payments, the sharing
or allocation of Taxes, entitlements to refunds or similar Tax matters, and no payments are due or
will become due by any of the TEPPCO Partnership Group Entities pursuant to any such agreement or
arrangement; (G) none of the TEPPCO Partnership Group Entities has elected to be treated as a
corporation for Tax purposes; (H) there is no written claim against any of the TEPPCO Partnership
Group Entities for any Taxes, and no assessment, deficiency or adjustment has been asserted,
proposed, or threatened in writing with respect to any Tax Return of or with respect to any of the
TEPPCO Partnership Group Entities; (I) there is not in force any extension of time with respect to
the due date for the filing of any Tax Return of or with respect to any of the TEPPCO Partnership
Group Entities or any waiver or agreement for any extension of time for the assessment or payment
of any Tax of or with respect to any of the TEPPCO Partnership Group Entities; (J) none of the
TEPPCO Partnership Group Entities will be required to include any amount in income for any taxable
period beginning after December 31, 2003 as a result of a change in accounting method for any
taxable period ending on or before the Closing Date or pursuant to any agreement with any
Governmental Entity with respect to any such taxable period; (K) none of the TEPPCO Partnership
Group Entities has been a member of an affiliated group filing a consolidated federal income Tax
Return or has any liability for the Taxes of any person under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local, or foreign Law), as a transferee or successor, by
contract, or otherwise; (L) at least 90% of the gross income of TEPPCO MLP for each taxable year
since its formation has been from sources that constitute qualifying income within the meaning of
section 7704(d) of the Code, (M) none of the TEPPCO Partnership Group Entities has any material
liability for Taxes other than those incurred in the ordinary course of business and in respect of
which adequate reserves are being maintained in accordance with GAAP; (N) There are no Encumbrances
related to Taxes upon any asset of any of a TEPPCO Partnership Group Entities except for liens
arising as a matter of applicable Law relating to current Taxes not yet due; (O) TEPPCO GP is
properly disregarded as an entity separate from its owner pursuant to Treas. Reg. § 301.7701-3; and
(P) none of the TEPPCO Partnership Group Entities has entered into any transaction that is subject
to the reporting requirements of Treas. Reg. § 1.6011-4 or any predecessor thereto.
(ii) None of the TEPPCO Partnership Group Entities has made any payment, is obligated to make
any payment, or is a party to any agreement that under certain circumstances could obligate it to
make any payment that will not be deductible under Section 280G of the Code.
(iii) Each of the TEPPCO Partnership Group Entities treated as partnerships for federal income
tax purposes have currently effective elections under Section 754 of the Code.
25
(u) Regulatory Proceedings. None of the TEPPCO Partnership Group Entities, all or
part of whose rates or services are regulated by a Governmental Entity, is a party to any
proceeding before a Governmental Entity which could reasonably be expected to result in orders
having a TEPPCO Material Adverse Effect (except to the extent that such orders would have the same
general effect on other companies operating in the industries in which the TEPPCO Partnership Group
Entities operate), nor has written notice of any such proceeding been received by any of the TEPPCO
Partnership Group Entities.
(v) Regulation as an Investment Company. None of the TEPPCO Partnership Group
Entities is (i) an investment company as such terms is defined in the Investment Company Act.
(w) Futures Trading and Fixed Price Exposure. Prior to the Execution Date and in the
ordinary course of business, TEPPCO MLP has established risk parameters to restrict the level of
risk that the TEPPCO Partnership Group Entities are authorized to take with respect to the open
position resulting from all physical commodity transactions, exchange traded futures and options
and over-the-counter derivative instruments (the Open TEPPCO Position) and monitors the
compliance by the TEPPCO Partnership Group Entities with such risk parameters.
(x) Customers and Suppliers. To the knowledge of the Sellers, neither Seller nor any
of the TEPPCO Partnership Group Entities has received any written notice that any shipper or
customer will discontinue its business relationship with any of the TEPPCO Partnership Group
Entities and no such action has been threatened by any shipper or customer, which discontinuation
would reasonably be expected to have a TEPPCO Material Adverse Effect.
(y) Books and Records.
(i) TEPPCO GP (A) makes and keeps books, records and accounts, which, in reasonable
detail,
accurately and fairly reflect the transactions and dispositions of assets and (B) maintains systems
of internal accounting controls sufficient to provide reasonable assurances that (I) transactions
are executed in accordance with managements general or specific authorization; (II) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and
to maintain accountability for assets; (III) access to assets is permitted only in accordance with
managements general or specific authorization; and (IV) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(ii) The minute books and other similar records of the TEPPCO Partnership Group Entities
contain true and complete copies of all actions taken at all meetings of the board of directors of
TEPPCO GP, and any committees thereof, and the limited partners of TEPPCO MLP and all written
consents executed in lieu of any such meetings. True and
complete copies of all such minute books and other similar records have been made available to
EPE.
26
ARTICLE IV
COVENANTS AND AGREEMENTS
Section 4.1 Commercially Reasonable Efforts; Further Assurances. Upon the terms and
subject to the conditions hereof, each party hereto shall use its commercially reasonable efforts
to take, or cause to be taken, all appropriate action, and to do or cause to be done, all things
necessary, proper or advisable under applicable Laws to consummate and make effective the
transactions contemplated under this Agreement. Without limiting the foregoing but subject to the
other terms of this Agreement, the parties hereto agree that, from time to time, each of them will
execute and deliver, or cause to be executed and delivered, such instruments of assignment,
transfer, conveyance, endorsement, direction or authorization as may be necessary to consummate and
make effective such transactions.
Section 4.2 No Public Announcement. No party hereto shall issue any other press release or
make any other public announcement concerning this Agreement and the transactions contemplated
hereby without consulting with the other parties hereto.
Section 4.3 Expenses. All costs and expenses incurred in connection with this Agreement,
including legal fees, accounting fees, financial advisory fees and other professional and
non-professional fees and expenses, shall be paid by the party hereto incurring such expenses.
Section 4.4 Tax Matters. EPE shall cause TEPPCO GP to provide a copy of the TEPPCO MLP
2007 federal income Tax Returns to each of the Sellers for its review and comment on or before the
tenth Business Day prior to the due date (including extensions) for such Tax Returns and use
reasonable efforts to consult with each of the Sellers with respect to the preparation of the
schedules K-1 relating to such Tax Returns.
Section 4.5 Unitholder Approval of Amendment to EPE Partnership Agreement. As reasonably
practicable after the issuance of the Class B Units and Class C Units, EPE shall seek unitholder
approval of the conversion, at the applicable time set forth in the Amendment to EPE Partnership
Agreement, of the Class B Units and Class C Units into Units representing limited partner interests
of EPE. Such unitholder approval shall be conducted in the manner required for the conversion of
the Class B Units and Class C Units and the issuance of Units upon conversion thereof, to be made
in accordance with the EPE Partnership Ageement and applicable NYSE rules.
ARTICLE V
REMEDIES FOR DEFAULT
Section 5.1 Indemnity Regarding Section 3.1 and Section 3.3 Representations and Covenants.
Subject to the provisions of this Article V, each of the Sellers, jointly and severally, shall
indemnify and hold harmless EPE, EPE Holdings and EPE Holdings members and Representatives (the
EPE Indemnified Parties) from any and all Damages incurred by any such person in connection with
the breach of (a) a representation or warranty by such Seller set forth in Section 3.1 or
by either Seller set forth in Section 3.3 or (b) a covenant or agreement made by the
Sellers hereunder; provided that, for purposes of calculating the amount of any
27
Damages pursuant to
Section 5.1(a), such representations and warranties shall be read and interpreted as if any
Materiality Requirement contained therein were not contained therein. Notwithstanding the
forgoing, neither Seller will have any obligation to indemnify any EPE Indemnified Party for
Damages arising pursuant to Section 5.1(a) for individual claims that do not exceed
$250,000 (the Individual Threshold) and then only for such claims exceeding the Individual
Threshold that, in the aggregate, exceed $10,000,000, in which event the Sellers shall be liable
for all Damages only in excess of $10,000,000 (provided, however, that the Individual Threshold and
$10,000,000 limitation shall not apply to Damages arising pursuant to Section 5.1(a)
resulting from a breach of the representations and warranties set forth in Section 3.1);
and the liability of the Sellers under Section 5.1(a) shall not exceed $200,000,000 in the
aggregate. For the avoidance of doubt, the Sellers shall have no obligation to indemnify and hold
harmless any member of the TEPPCO Partnership Group Entities or the TEPPCO MLP Partially Owned
Entities pursuant to Section 5.1 except and to the extent that the EPE Indemnified Parties
incur or suffer Damages from the breach of a representation or warranty set forth in Section
3.1 or Section 3.3 or a covenant or agreement made by such Seller hereunder, in which
case such Seller shall be obligated to indemnify and hold harmless the EPE Indemnified Parties to
the extent of such Damages. To the extent that a claim for indemnification under this Section
5.1 includes a claim for remediation costs to address a Release of Hazardous Substance at or
from any of the TEPPCO Pipeline Assets, such remediation costs shall be limited to remediations
that are performed in a manner consistent with the current use of the property and consistent with
then prevailing laws and contracts and leases existing as of the Closing Date.
Section 5.2 Indemnity Regarding Section 3.2 Representations and Covenants. Subject to the
provisions of this Article V, EPE shall indemnify and hold harmless each of the Sellers and its
members, partners and Representatives (collectively, the DFI Indemnified Parties) from any and
all Damages incurred by any such person in connection with the breach of (a) a representation or
warranty set forth in Section 3.2 or (b) a covenant or agreement made by such party
hereunder; provided that, for purposes of calculating the amount of any Damages pursuant to
Section 5.2(a), such representations and warranties shall be read and interpreted as if any
Materiality Requirement contained therein were not contained therein. Notwithstanding the
forgoing, the liability of EPE under Section 5.2(a) shall not exceed $200,000,000 in the
aggregate.
Section 5.3 Survival of Representations. The representations, warranties, covenants and agreements contained in this Agreement or made
in
any certificate or document delivered pursuant hereto shall survive the Closing regardless of any
investigation made by the parties hereto, any person controlling such party or any of their
Representatives and regardless of any knowledge acquired or capable of being acquired whether
before or after the Closing. The representations and warranties of the parties contained in
Section 3.1, Section 3.2 and Section 3.3 shall survive the Closing and any
investigation by the parties with respect thereto until the expiration of 12 months after the
Closing Date; provided, however, that (i) the representations and warranties of the Sellers set
forth in Section 3.1(d) shall survive indefinitely, and (ii) the representations and
warranties of the Seller set forth in Section 3.3(l) shall survive until the expiration of
36 months after the Closing Date and (iii) the representations and warranties in Section
3.3(q), and Section 3.3(t) shall survive for the applicable statute of limitations,
including all periods of extension thereof, whether automatic or permissive. The expiration of any
survival period under this Agreement will not affect the liability of any party under Section
5.1 or Section 5.2,
28
as the case may be, for any Damages as to which a bona fide claim
relating thereto is asserted prior to the termination of such survival period.
Section 5.4 Calculation of Damages.
(a) Any calculation of Damages for purposes of this Article V shall be net of any insurance
proceeds or other payments received by or on behalf of such indemnified party with respect thereto
after taking into account retrospective premium adjustments, experience-based premium adjustments
and indemnification obligations. If an indemnified party hereunder shall have received an
indemnity payment in respect of Damages and shall subsequently receive, directly or indirectly,
insurance or other proceeds in respect of the claims or losses giving rise to such Damages then
such indemnified party shall promptly reimburse the indemnifying party an amount equal to the
amount of such proceeds provided the same does not exceed the amount of the indemnity payment
received.
(b) For the avoidance of doubt, any calculation of Damages for purposes of this Article V
shall be net of amounts reflected as reserves on the TEPPCO MLP Balance Sheet.
Section 5.5 Enforcement of this Agreement. The parties hereto acknowledge and agree that
an award of money damages would be inadequate for any breach of this Agreement by any party and any
such breach would cause the non-breaching parties irreparable harm. Accordingly, the parties
hereto agree that, in the event of any breach or threatened breach of this Agreement by one of the
parties, the parties will also be entitled, without the requirement of posting a bond or other
security, to equitable relief, including injunctive relief and specific performance, provided such
party is not in material default hereunder. Such remedies will not be the exclusive remedies for
any breach of this Agreement but will be in addition to all other remedies available at law or
equity to each of the parties.
Section 5.6 Exclusive Remedy. Except as set forth in Section 5.5 and Section 5.8, the parties agree that the
indemnification provisions in this Article V shall be the exclusive remedy of the parties with
respect to breaches of representations and warranties and failures to perform covenants or
agreements hereunder.
Section 5.7 Limitation on Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, IN NO EVENT SHALL ANY PARTY HERETO BE LIABLE TO ANY OTHER PARTY HERETO, OR TO SUCH OTHER
PARTYS INDEMNITEES, UNDER THIS AGREEMENT FOR ANY EXEMPLARY OR PUNITIVE DAMAGES; PROVIDED THAT, IF
ANY INDEMNIFIED PARTY HEREUNDER IS HELD LIABLE TO A THIRD PARTY FOR ANY SUCH DAMAGES AND THE
INDEMNIFYING PARTY HEREUNDER IS OBLIGATED TO INDEMNIFY SUCH INDEMNIFIED PARTY FOR THE MATTER THAT
GAVE RISE TO SUCH DAMAGES, THE INDEMNIFYING PARTY SHALL BE LIABLE FOR, AND OBLIGATED TO REIMBURSE
SUCH INDEMNIFIED PARTY FOR SUCH DAMAGES.
Section 5.8 No Waiver Relating to Claims for Fraud/Willful Misconduct. The liability of any
party under this Article V shall be in addition to, and not exclusive of, any other liability that
such party may have at law or in equity based on such partys (a) fraudulent acts or
29
omissions or
(b) willful misconduct. None of the provisions set forth in this Agreement shall be deemed to be a
waiver by or release of any party of any right or remedy which such party may have at law or equity
based on any other partys fraudulent acts or omissions or willful misconduct nor shall any such
provisions limit, or be deemed to limit, (i) the amounts of recovery sought or awarded in any such
claim for fraud or willful misconduct, (ii) the time period during which a claim for fraud or
willful misconduct may be brought, or (iii) the recourse which any such party may seek against
another party with respect to a claim for fraud or willful misconduct.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices. Any notice, request, instruction, correspondence or other document to
be given hereunder by any party to another party (each, a Notice) shall be in writing and
delivered in person or by courier service requiring acknowledgment of receipt of delivery or mailed
by U.S. registered or certified mail, postage prepaid and return receipt requested, or by
telecopier, as follows; provided, that copies to be delivered below shall not be required for
effective notice and shall not constitute effective notice:
If to DFIGP, addressed to:
DFI GP Holdings, L.P.
c/o EPCO, Inc.
1100 Louisiana, 10th Floor
Houston, Texas 77002
Attention: Richard H. Bachmann
Telecopy: (713) 381-6568
If to DFI, addressed to:
Duncan Family Interests, Inc.
c/o EPCO, Inc.
1100 Louisiana, 10th Floor
Houston, Texas 77002
Attention: President
Telecopy: (713) 381-6568
If to EPE, addressed to:
Enterprise GP Holdings L.P.
c/o EPE Holdings, LLC, general partner
1100 Louisiana, 10th Floor
Houston, Texas 77002
Attention: President and CEO
Telecopy: (713) 381-6529
30
Notice given by personal delivery, courier service or mail shall be effective upon actual
receipt. Notice given by telecopier shall be confirmed by appropriate answer back and shall be
effective upon actual receipt if received during the recipients normal business hours, or at the
beginning of the recipients next Business Day after receipt if not received during the recipients
normal business hours. All Notices by telecopier shall be confirmed promptly after transmission in
writing by certified mail or personal delivery. Any party may change any address to which Notice
is to be given to it by giving Notice as provided above of such change of address.
Section 6.2 Governing Law; Jurisdiction; Waiver of Jury Trial. To the maximum extent
permitted by applicable Law, the provisions of this agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Texas, without regard to principles of
conflicts of law. Each party thereto hereby irrevocably and unconditionally (a) consents and
submits to the exclusive jurisdiction of any federal or state court located in Houston, Texas (the
Texas Courts) for any actions, suits or proceedings arising out of or relating to this Agreement
or the transactions contemplated by this Agreement (and agrees not to commence any litigation
relating thereto except in such courts), (b) waives any objection to the laying of venue of any
such litigation in the Texas Courts and agrees not to plead or claim in any Texas Court that such
litigation brought therein has been brought in any inconvenient forum and (c) acknowledges and
agrees that any controversy which may arise under this Agreement is likely to involve complicated
and difficult issues, and therefore each such party hereby irrevocably and unconditionally waives
any right such party may have to a trial by jury in respect of any litigation directly or
indirectly arising or relating to this Agreement or the transactions contemplated by this
Agreement.
Section 6.3 Entire Agreement; Amendments and Waivers. This Agreement constitutes the
entire agreement between and among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties, and there are no warranties, representations or other agreements between
or among the parties in connection with the subject matter hereof except as set forth specifically
herein. No supplement, modification or waiver of this Agreement shall be binding unless executed
in writing by the party to be bound thereby. The failure of a party to exercise any right or
remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
Section 6.4 Binding Effect and Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted successors and assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any person other than the
parties hereto and their respective permitted successors and assigns, any rights, benefits or
obligations hereunder. No party hereto may assign, transfer, dispose of or otherwise alienate this
Agreement or any of its rights, interests or obligations under this Agreement (whether by operation
of law or otherwise). Any attempted assignment, transfer, disposition or alienation in violation
of this Agreement shall be null, void and ineffective.
31
Section 6.5 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any rule of applicable Law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions contemplated herein are not affected in
any manner materially adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties hereto as
closely as possible in a mutually acceptable manner in order that the transactions contemplated
herein are consummated as originally contemplated to the fullest extent possible.
Section 6.6 Execution. This Agreement may be executed in multiple counterparts each of
which shall be deemed an original and all of which shall constitute one instrument.
Section 6.7 Disclosure Letters. Each disclosure identified in the TEPPCO Disclosure Letter
or elsewhere in this Agreement constitutes a disclosure by the disclosing party with respect to the
specific section of this Agreement identified in the TEPPCO Disclosure Letter as applicable, and
with respect to any other section of this Agreement reasonably related thereto.
[The remainder of this page is blank]
32
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date first
written above.
ENTERPRISE GP HOLDINGS L.P.
By: EPE Holdings, LLC, its general partner
|
|
|
|
|
|
|
|
|
By: |
/s/ Michael A. Creel
|
|
|
|
Name: |
Michael A. Creel |
|
|
|
Title: |
President and Chief Executive Officer |
|
|
|
DUNCAN FAMILY INTERESTS, INC.
|
|
|
By: |
/s/ Darryl E. Smith
|
|
|
|
Name: |
Darryl E. Smith |
|
|
|
Title: |
Treasurer |
|
|
DFI GP HOLDINGS, L.P.
By: DFI Holdings, LLC, its general partner
By: Dan Duncan LLC, its sole member
|
|
|
|
|
|
|
|
|
By: |
/s/ Richard H. Bachmann
|
|
|
|
Name: |
Richard H. Bachmann |
|
|
|
Title: |
Executive Vice President |
|
|
exv10w5
Exhibit 10.5
Execution Version
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
$200,000,000 Revolving Credit Facility
$1,200,000,000 Term Loan
$500,000,000 Term Loan
dated as of
May 1, 2007
among
ENTERPRISE GP HOLDINGS L.P.
The Lenders Party Hereto,
CITICORP NORTH AMERICA, INC.,
as Administrative Agent,
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent,
CITIBANK, N.A.,
as Issuing Bank
and
THE BANK OF NOVA SCOTIA, SUNTRUST BANK and
MIZUHO CORPORATE BANK, LTD.
as Co-Documentation Agents
CITIGROUP GLOBAL MARKETS INC.
and
LEHMAN BROTHERS INC.
as Co-Arrangers and Joint Bookrunners
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page |
|
ARTICLE I DEFINITIONS |
|
|
1 |
|
|
|
|
|
|
Section 1.01 Defined Terms |
|
|
1 |
|
Section 1.02 Classification of Loans and Borrowings |
|
|
15 |
|
Section 1.03 Terms Generally |
|
|
15 |
|
Section 1.04 Accounting Terms; GAAP |
|
|
16 |
|
Section 1.05 Annualized Financial Information |
|
|
16 |
|
|
|
|
|
|
ARTICLE II THE CREDITS |
|
|
16 |
|
|
|
|
|
|
Section 2.01 Commitments |
|
|
16 |
|
Section 2.02 Loans and Borrowings |
|
|
17 |
|
Section 2.03 Requests for Borrowing |
|
|
18 |
|
Section 2.04 Reserved |
|
|
18 |
|
Section 2.05 Existing Credit Agreement |
|
|
18 |
|
Section 2.06 Letters of Credit |
|
|
19 |
|
Section 2.07 Funding of Borrowings |
|
|
23 |
|
Section 2.08 Interest Elections |
|
|
23 |
|
Section 2.09 Termination and Reduction of Commitments |
|
|
25 |
|
Section 2.10 Repayment of Loans; Evidence of Debt |
|
|
25 |
|
Section 2.11 Prepayment of Loans |
|
|
26 |
|
Section 2.12 Fees |
|
|
27 |
|
Section 2.13 Interest |
|
|
28 |
|
Section 2.14 Alternate Rate of Interest |
|
|
29 |
|
Section 2.15 Illegality; Increased Costs |
|
|
30 |
|
Section 2.16 Break Funding Payments |
|
|
31 |
|
Section 2.17 Taxes |
|
|
31 |
|
Section 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs |
|
|
33 |
|
Section 2.19 Mitigation Obligations; Replacement of Lenders |
|
|
34 |
|
|
|
|
|
|
ARTICLE III REPRESENTATIONS AND WARRANTIES |
|
|
35 |
|
|
|
|
|
|
Section 3.01 Organization; Powers |
|
|
35 |
|
Section 3.02 Authorization; Enforceability |
|
|
36 |
|
Section 3.03 Governmental Approvals; No Conflicts |
|
|
36 |
|
Section 3.04 Financial Condition; No Material Adverse Change |
|
|
36 |
|
Section 3.05 Reserved |
|
|
36 |
|
Section 3.06 Litigation and Environmental Matters |
|
|
36 |
|
Section 3.07 Compliance with Laws; No Default |
|
|
37 |
|
Section 3.08 Investment and Holding Company Status |
|
|
37 |
|
Section 3.09 Taxes |
|
|
37 |
|
Section 3.10 ERISA |
|
|
37 |
|
Section 3.11 Disclosure |
|
|
37 |
|
Section 3.12 Subsidiaries |
|
|
37 |
|
Section 3.13 Margin Securities |
|
|
38 |
|
Section 3.14 Reserved |
|
|
38 |
|
Section 3.15 Not a Reportable Transaction |
|
|
38 |
|
Section 3.16 Priority; Security Matters |
|
|
38 |
|
Section 3.17 Foreign Assets Control Regulation |
|
|
38 |
|
|
|
|
|
|
ARTICLE IV CONDITIONS |
|
|
38 |
|
|
|
|
|
|
Section 4.01 Effective Date |
|
|
38 |
|
Section 4.02 Each Credit Event |
|
|
40 |
|
- i -
|
|
|
|
|
|
|
Page |
|
|
|
|
|
|
ARTICLE V AFFIRMATIVE COVENANTS |
|
|
40 |
|
|
|
|
|
|
Section 5.01 Financial Statements and Other Information |
|
|
40 |
|
Section 5.02 Notices of Material Events |
|
|
41 |
|
Section 5.03 Existence; Conduct of Business |
|
|
41 |
|
Section 5.04 Further Assurances |
|
|
41 |
|
Section 5.05 Maintenance of Properties; Insurance |
|
|
42 |
|
Section 5.06 Books and Records; Inspection Rights |
|
|
42 |
|
Section 5.07 Compliance with Laws |
|
|
42 |
|
Section 5.08 Use of Proceeds and Letters of Credit |
|
|
42 |
|
Section 5.09 Environmental Matters |
|
|
42 |
|
Section 5.10 ERISA Information |
|
|
43 |
|
Section 5.11 Taxes |
|
|
43 |
|
|
|
|
|
|
ARTICLE VI NEGATIVE COVENANTS |
|
|
43 |
|
|
|
|
|
|
Section 6.01 Indebtedness |
|
|
44 |
|
Section 6.02 Liens |
|
|
44 |
|
Section 6.03 Fundamental Changes |
|
|
44 |
|
Section 6.04 Reserved |
|
|
45 |
|
Section 6.05 Restricted Payments |
|
|
45 |
|
Section 6.06 Restrictive Agreements |
|
|
45 |
|
Section 6.07 Financial Condition Covenant |
|
|
46 |
|
|
|
|
|
|
ARTICLE VII EVENTS OF DEFAULT |
|
|
46 |
|
|
|
|
|
|
ARTICLE VIII THE AGENTS |
|
|
49 |
|
|
|
|
|
|
ARTICLE IX MISCELLANEOUS |
|
|
51 |
|
|
|
|
|
|
Section 9.01 Notices |
|
|
51 |
|
Section 9.02 Waivers; Amendments |
|
|
53 |
|
Section 9.03 Expenses; Indemnity; Damage Waiver |
|
|
54 |
|
Section 9.04 Successors and Assigns |
|
|
55 |
|
Section 9.05 Survival |
|
|
57 |
|
Section 9.06 Counterparts; Integration; Effectiveness |
|
|
58 |
|
Section 9.07 Severability |
|
|
58 |
|
Section 9.08 Right of Setoff |
|
|
58 |
|
Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process |
|
|
58 |
|
Section 9.10 WAIVER OF JURY TRIAL |
|
|
59 |
|
Section 9.11 Headings |
|
|
59 |
|
Section 9.12 Confidentiality |
|
|
59 |
|
Section 9.13 Interest Rate Limitation |
|
|
60 |
|
Section 9.14 Reserved |
|
|
60 |
|
Section 9.15 Separateness |
|
|
60 |
|
Section 9.16 USA Patriot Act Notice |
|
|
61 |
|
|
|
|
|
|
SCHEDULES: |
|
|
|
|
|
|
|
|
|
Schedule 2.01 Commitments |
|
|
|
|
Schedule 3.06 Disclosed Matters |
|
|
|
|
Schedule 3.12 Subsidiaries |
|
|
|
|
Schedule 6.02 Permitted Liens |
|
|
|
|
Schedule 6.06 Restrictive Agreements |
|
|
|
|
- ii -
|
|
|
EXHIBITS: |
|
|
|
|
|
Exhibit A
|
|
Form of Assignment and Acceptance |
Exhibit B
|
|
Form of Borrowing Request |
Exhibit C
|
|
Form of Interest Election Request |
Exhibit D
|
|
Reserved |
Exhibit E
|
|
Form of Compliance Certificate |
Exhibit F-1
|
|
Form of Revolving Credit Note |
Exhibit F-2
|
|
Form of Term Note (Debt Bridge) |
Exhibit F-3
|
|
Form of Term Note (Equity Bridge) |
Exhibit G
|
|
List of Security Instruments |
- iii -
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this Agreement) dated as of May
1, 2007, among ENTERPRISE GP HOLDINGS L.P., a Delaware limited partnership; the LENDERS party
hereto; CITICORP NORTH AMERICA, INC., as Administrative Agent; LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent; CITIBANK, N.A., as Issuing Bank; and THE BANK OF NOVA SCOTIA, SUNTRUST BANK and
MIZUHO CORPORATE BANK, LTD. as Co-Documentation Agents.
The Borrower, the lenders party thereto, the Administrative Agent and certain other parties
thereto entered into the Existing Credit Agreement (hereinafter defined). The Borrower now
requests that the Administrative Agent, the Issuing Bank and the Lenders amend and restate the
Existing Credit Agreement and provide the Borrower with a credit facility pursuant to which the
Lenders will commit to make revolving credit loans in a principal amount of up to $200,000,000
outstanding at any time and term loans in an original principal amount of up to $1,700,000,000.
In connection therewith, the Administrative Agent has agreed to serve in such capacity for the
Lenders and the Administrative Agent, the Syndication Agent, the Co-Documentation Agents, the
Issuing Bank and the Lenders are agreeable to the Borrowers request, subject to the terms of this
Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein,
the Borrower, the Administrative Agent, the Syndication Agent, the Co-Documentation Agents, the
Issuing Bank and the Lenders agree to amend and restate the Existing Credit Agreement in its
entirety as follows:
ARTICLE I
Definitions
Section 1.01 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:
ABR, when used in reference to any Loan or Borrowing, refers to a Loan, or Loans, in
the case of a Borrowing, which bear interest at a rate determined by reference to the Alternate
Base Rate.
Administrative Agent means Citicorp North America, Inc., in its capacity as
administrative agent for the Lenders hereunder.
Administrative Questionnaire means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
Affiliate means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.
Agreement means this Second Amended and Restated Credit Agreement dated as of May 1,
2007, among Enterprise GP Holdings L.P., a Delaware limited partnership; the Lenders
party hereto; Citicorp North America, Inc., as Administrative Agent; Lehman Commercial Paper
Inc. as Syndication Agent; Citibank, N.A., as Issuing Bank; and The Bank of Nova Scotia, SunTrust
Bank and Mizuho Corporate Bank, Ltd., as Co-Documentation Agents.
Alternate Base Rate means for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 0.50%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate, as applicable.
Applicable Percentage means, with respect to any Lender, the percentage of the total
amount of outstanding Loans (or if no Loans are outstanding, Commitments) represented by the amount
of such Lenders outstanding Loans (or if no Loans are outstanding, Commitments), as modified from
time to time to reflect any assignments permitted by Section 9.04.
Applicable Rate means, for any day, with respect to the Loans, or with respect to
the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth
below under the caption Eurodollar Spread, ABR Spread, or Commitment Fee, as the case may be:
|
|
|
|
|
|
|
|
|
|
|
|
|
Pricing Grid |
|
|
ABR |
|
Eurodollar |
|
|
Class |
|
Spread |
|
Spread |
|
Commitment Fee |
Revolving Credit Loans (first
105 days after Effective Date)
|
|
|
0.25 |
% |
|
|
1.75 |
% |
|
|
0.375 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving Credit Loans
(106th day after
Effective Date through Maturity
Date)
|
|
|
0.25 |
% |
|
|
2.00 |
% |
|
|
0.375 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans (Debt Bridge) (first
105 days after Effective Date)
and Term Loans (Equity Bridge)
(all dates)
|
|
|
0.25 |
% |
|
|
1.75 |
% |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans (Debt Bridge)
(106th day after
Effective Date through Maturity
Date)
|
|
|
0.25 |
% |
|
|
2.00 |
% |
|
|
N/A |
|
Assignment and Acceptance means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section
9.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A
or any other form approved by the Administrative Agent.
Availability Period means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Revolving Credit
Commitments.
- 2 -
Available Cash has the meaning set forth in the Partnership Agreement in effect on
the date of this Agreement.
Board means the Board of Governors of the Federal Reserve System of the United
States of America.
Borrower means Enterprise GP Holdings L.P., a Delaware limited partnership.
Borrowers IPO means the initial public offering in January, 2006, of units
representing limited partner interests in the Borrower.
Borrowing means Loans of the same Class and Type, made, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in
effect.
Borrowing Request means a request by the Borrower for a Borrowing in accordance with
Section 2.03 and being in the form attached hereto as Exhibit B.
Business Day means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City or Houston are authorized or required by law to remain closed;
provided that, when used in connection with a Eurodollar Loan, the term Business Day shall also
exclude any day on which banks are not open for dealings in dollar deposits in the London interbank
market.
Capital Lease Obligations of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
CERCLA means the Comprehensive Environmental, Response, Compensation, and Liability
Act of 1980, as amended.
Change in Control means Duncan shall cease to own or Control, directly or
indirectly, at least a majority (on a fully converted, fully diluted basis) of the economic
interest in the partnership interests of the Borrower.
Change in Law means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any
lending office of such Lender or by such Lenders or the Issuing Banks holding company, if any)
with any request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
Class, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Credit Loans, Term Loans (Debt
- 3 -
Bridge) or Term Loans (Equity Bridge) and, when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Credit Commitment, Term Commitment (Debt Bridge) or Term
Commitment (Equity Bridge).
Code means the Internal Revenue Code of 1986, as amended from time to time.
Co-Documentation Agents means The Bank of Nova Scotia, SunTrust Bank and Mizuho
Corporate Bank, Ltd., each in its capacity as co-documentation agent for the Lenders hereunder.
Collateral means all of the assets described in the Security Instruments.
Commitment means, with respect to each Lender, such Lenders Revolving Credit
Commitment, Term Commitment (Debt Bridge) or Term Commitment (Equity Bridge), as applicable.
Consolidated EBITDA means for any period, without duplication, the sum (without
duplication) of (i) the amount of the distributions payable with respect to such period by
Enterprise, TEPPCO or ETE to the Borrower or any wholly-owned Subsidiary of the Borrower which owns
any Enterprise Common Units, TEPPCO Common Units or ETE Common Units, with respect to such
Enterprise Common Units, TEPPCO Common Units or ETE Common Units and which are actually made on or
prior to the date the financial statements with respect to such period referred to in Section
5.01 are required to be delivered by the Borrower, plus (ii) the amount of the distributions
payable with respect to such period by Enterprise GP, TEPPCO GP, ETE GP or any Subsidiary of the
Borrower to the Borrower or any wholly-owned Subsidiary of the Borrower which are actually made on
or prior to the date the financial statements with respect to such period referred to in
Section 5.01 are required to be delivered by the Borrower, plus (iii) operating income of
the Borrower and its consolidated Subsidiaries for such period, plus (iv) depreciation and
amortization for such period, plus (v) cash distributions or dividends received by the Borrower
during such period from entities not consolidated with the Borrower, plus (vi) other cash income
received by the Borrower and its consolidated Subsidiaries during such period, minus (vii)
operating lease expense for such period to the extent not already deducted in the calculation of
operating income, determined in each case, on a consolidated basis in accordance with GAAP.
Consolidated EBITDA will not include any extraordinary, unusual or non-recurring gains or losses
from asset sales.
Consolidated Indebtedness means the Indebtedness of the Borrower and its
consolidated Subsidiaries determined on a consolidated basis as of any date.
Consolidated Net Worth means as to any Person, at any date of determination, the
sum of preferred stock (if any), par value of common stock, capital in excess of par value of
common stock, partners capital or equity, and retained earnings, less treasury stock (if any), of
such Person, all as determined on a consolidated basis.
Control means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. Controlling and Controlled have meanings
correlative thereto.
- 4 -
Default means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
Disclosed Matters means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 3.06.
dollars or $ refers to lawful money of the United States of America.
Duncan means, collectively, individually or in any combination, Dan L. Duncan, his
wife, descendants, heirs and/or legatees and/or distributees of Dan L. Duncans estate, and/or
trusts established for the benefit of his wife, descendants, such legatees and/or distributees
and/or their respective descendants, heirs, legatees and distributees.
EDGAR means the Electronic Data Gathering, Analysis, and Retrieval computer system
for the receipt, acceptance, review and dissemination of documents submitted to the SEC in
electronic format.
Effective Date means the date on or before May 31, 2007 specified in the notice
referred to in the penultimate sentence of Section 4.01.
Enterprise means Enterprise Products Partners L.P., a Delaware limited partnership.
Enterprise Common Units mean the common units representing limited partner interests
in Enterprise.
Enterprise GP means Enterprise Products GP, LLC, a Delaware limited liability
company and a wholly owned subsidiary of Borrower and the sole general partner of Enterprise.
Environmental Laws means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.
Environmental Liability means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
EOLP means Enterprise Products Operating L.P., a Delaware limited partnership.
EPE Holdings means EPE Holdings, LLC, a Delaware limited liability company.
- 5 -
Equity Bridge Lenders means Citicorp North America, Inc. and Lehman Commercial Paper
Inc.
Equity Interest means shares of the capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity interests
in any Person, or any warrants, options or other rights to acquire such interests.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from
time to time.
ERISA Affiliate means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
ERISA Event means (a) any reportable event, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an accumulated funding
deficiency (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
ETE means Energy Transfer Equity, L.P., a Delaware limited partnership.
ETE Common Units means the common units representing limited partner interests in
ETE.
ETE GP means LE GP, LLC, a Delaware limited liability company and the sole general
partner of ETE.
ETP means Energy Transfer Partners, L.P., a Delaware limited partnership.
Eurocurrency Liabilities has the meaning assigned to that term in Regulation D of
the Board, as in effect from time to time.
Eurodollar when used in reference to any Loan or Borrowing, refers to a Loan, or
Loans, in the case of a Borrowing, which bear interest at a rate determined by reference to the
LIBO Rate.
- 6 -
Eurodollar Rate Reserve Percentage of any Lender for any Interest Period for each
Eurodollar Borrowing means the reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average of such percentages for
those days in such Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal reserve requirement)
for such Lender with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
Event of Default has the meaning assigned to such term in Article VII.
Excluded Taxes means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income or
revenue by the United States of America, by any state thereof or the District of Columbia or by the
jurisdiction under the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office is located, (b)
any branch profits taxes imposed by the United States of America, any state thereof or the District
of Columbia or any similar tax imposed by any other jurisdiction in which the recipient is located
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lenders failure to comply with
Section 2.17(e).
Existing Credit Agreement means that certain $200,000,000 Amended and Restated
Credit Agreement dated as of January 11, 2006, among Borrower, Citicorp North America, Inc., as
Administrative Agent, and the lenders and other agents party thereto.
Federal Funds Effective Rate means, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business Day, the average
of the quotations for such day for such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
Financial Officer means the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower.
Foreign Lender means any Lender that is organized under the laws of a jurisdiction
other than the United States of America, any state thereof or the District of Columbia.
GAAP means generally accepted accounting principles in the United States of America.
Governmental Authority means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
- 7 -
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of
or pertaining to government.
Hazardous Materials means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature, in each case
regulated pursuant to any Environmental Law.
Indebtedness of any Person means, without duplication, (a) all obligations of such
Person for the repayment of money borrowed which are or should be shown on a balance sheet as debt
in accordance with GAAP, (b) obligations of such Person as lessee under leases which, in accordance
with GAAP, are capital leases, (c) guaranties of such Person of payment or collection of any
obligations described in clauses (a) and (b) of other Persons; provided, that clauses (a) and (b)
include, in the case of obligations of the Borrower or any Subsidiary, only such obligations as are
or should be shown as debt or capital lease liabilities on a consolidated balance sheet of the
Borrower in accordance with GAAP, and (d) all obligations of such Person under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing if the
obligation under such synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing, as the case may be, is considered indebtedness for borrowed
money for tax purposes but is classified as an operating lease in accordance with GAAP; provided,
further, that the liability of any Person as a general partner of a partnership for Indebtedness of
such partnership, if such partnership is not a subsidiary of such Person, shall not constitute
Indebtedness.
Indemnified Taxes means Taxes other than Excluded Taxes.
Interest Election Request means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.08, and being in the form of attached Exhibit
C.
Interest Payment Date means (a) with respect to any ABR Loan, each Quarterly Date,
and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three (3) months duration, the day that occurs three months after the first
day of such Interest Period.
Interest Period means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the Borrower may elect;
provided, that (a) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in the case of a
Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing initially
- 8 -
shall be the date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.
Issuing Bank means Citibank, N.A., in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in Section 2.06(i). The
Issuing Bank may arrange for one or more Letters of Credit to be issued by Affiliates of
the Issuing Bank if the Borrower (in its sole discretion) approves such arrangement in writing, in
which case the term Issuing Bank shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate.
LC Disbursement means a payment made by the Issuing Bank pursuant to a Letter of
Credit.
LC Exposure means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.
Lenders means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.
Letter of Credit means any letter of credit issued hereunder pursuant to Section
2.06.
Leverage Ratio means the ratio of Consolidated Indebtedness as of the last day of a
fiscal quarter divided by Consolidated EBITDA for the four fiscal quarter period then ended. The
Leverage Ratio will be re-calculated as of the end of each quarter and shall be effective upon the
delivery date of the compliance certificate as provided for in Section 5.01.
LIBO Rate means, with respect to any Eurodollar Borrowing for any Interest Period,
(a) the rate per annum appearing at Reuters Reference LIBOR01 page (or on any successor thereto or
substitute therefor provided by Reuters, providing rate quotations comparable to those currently
provided on such page, as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest
Period; (b) if for any reason the rate specified in clause (a) of this definition does not so
appear at Reuters Reference LIBOR01 page (or any successor thereto or substitute therefor provided
by Reuters), the rate per annum appearing on Bloomberg Financial Markets Service (or any successor
thereto) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest Period for a maturity
comparable to such Interest Period; and (c) if the rate specified in clause (a) of this definition
does not so appear at Reuters Reference LIBOR01 page (or any successor thereto or substitute
therefor provided by Reuters) and if no rate specified in clause (b) of this definition so appears
on Bloomberg Financial Markets Service (or any successor thereto), the average of the interest
rates per annum at which dollar deposits of $5,000,000 and
- 9 -
for a maturity comparable to such Interest Period are offered by the respective principal London
offices of the Reference Banks in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest
Period.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities. For avoidance of doubt,
operating leases are not Liens. For avoidance of doubt, (i) transfer restrictions that do not
prevent the valid creation of security interests in the Collateral pursuant to the Security
Instruments and do not prevent foreclosure on such security interests, and (ii) operating leases,
shall not constitute Liens.
Loan Documents means this Agreement, all promissory notes executed and delivered
pursuant to Section 2.10(e), all Letters of Credit and any letter of credit agreements
executed in connection therewith, the Security Instruments and the Borrowing Requests, together
with any other document, instrument or agreement (other than participation, agency or similar
agreements among the Lenders or between any Lender and any other bank or creditor with respect to
any Indebtedness or obligations of the Borrower or its Subsidiaries hereunder) now or hereafter
entered into in connection with the Loans or any other Indebtedness under this Agreement, as such
documents, instruments or agreements may be amended, supplemented, restated, or otherwise modified
from time to time.
Loans means the Term Loans (Debt Bridge), Term Loans (Equity Bridge) and Revolving
Credit Loans made pursuant to this Agreement.
Material Adverse Change means a material adverse change, from that in effect on the
date of formation of the Borrower, in the financial condition or results of operations of the
Borrower and its consolidated Subsidiaries, taken as a whole, as indicated in the most recent
quarterly or annual financial statements.
Material Adverse Effect means a material adverse effect on financial condition or
results of operations of the Borrower and its Subsidiaries, taken as a whole.
Material Indebtedness means Indebtedness (other than the Loans and Letters of
Credit), in an aggregate principal amount exceeding $25,000,000.
Material Subsidiary means each Subsidiary that, as of the last day of the fiscal
year of the Borrower most recently ended prior to the relevant determination of Material
Subsidiaries, has a net worth determined in accordance with GAAP that is greater than 10% of the
Consolidated Net Worth of the Borrower as of such day.
Maturity Date means the date that is 364 days after the Effective Date.
Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
- 10 -
Obligations means all obligations (monetary or otherwise) of the Borrower and each
of its Subsidiaries arising under or in connection with this Agreement and each other Loan Document
and the obligations of Borrower or any Subsidiary under any Swap Agreements owing to the Lenders or
their Affiliates.
Other Taxes means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with respect to, this Agreement.
Partnership Agreement means the First Amended and Restated Agreement of Limited
Partnership of the Borrower, a form of which is attached as Appendix A to the Borrowers Prospectus
dated August 15, 2005.
PBGC means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.
Permitted Liens means:
(a) liens existing on the Effective Date which are approved by the Administrative Agent and
listed on Schedule 6.02 on property other than the Collateral;
(b) any statutory or governmental lien or lien arising by operation of law, or any mechanics,
repairmens, materialmens, suppliers, carriers, landlords, warehousemens or similar lien
incurred in the ordinary course of business which is not yet due or which is being contested in
good faith by appropriate proceedings and any undetermined lien which is incidental to
construction, development, improvement or repair; or any right reserved to, or vested in, any
municipality or public authority by the terms of any right, power, franchise, grant, license,
permit or by any provision of law, to purchase or recapture or to designate a purchaser of, any
property;
(c) liens for taxes and assessments which are (i) for the then current year, (ii) not at the
time delinquent, or (iii) delinquent but the validity or amount of which is being contested at the
time by the Borrower or any Subsidiary in good faith by appropriate proceedings;
(d) liens of, or to secure performance of, leases, other than capital leases, or any lien
securing industrial development, pollution control or similar revenue bonds;
(e) any lien upon property or assets acquired or sold by the Borrower or any Subsidiary
resulting from the exercise of any rights arising out of defaults on receivables;
(f) any lien in favor of the Borrower or any Subsidiary;
(g) any lien in favor of the United States of America or any state thereof, or any department,
agency or instrumentality or political subdivision of the United States of America or any state
thereof, to secure partial, progress, advance, or other payments pursuant to any contract or
statute, or any debt incurred by the Borrower or any Subsidiary for the purpose of financing all or
any part of the purchase price of, or the cost of constructing, developing, repairing or improving,
the property or assets subject to such lien;
- 11 -
(h) any lien incurred in the ordinary course of business in connection with workmens
compensation, unemployment insurance, temporary disability, social security, retiree health or
similar laws or regulations or to secure obligations imposed by statute or governmental
regulations;
(i) liens in favor of any Person to secure obligations under provisions of any letters of
credit, bank guarantees, bonds or surety obligations required or requested by any governmental
authority in connection with any contract or statute; or any lien upon or deposits of any assets to
secure performance of bids, trade contracts, leases or statutory obligations;
(j) any lien upon any property or assets created at the time of acquisition of such property
or assets by the Borrower or any Subsidiary or within one year after such time to secure all or a
portion of the purchase price for such property or assets or debt incurred to finance such purchase
price, whether such debt was incurred prior to, at the time of or within one year after the date of
such acquisition; or any lien upon any property or assets to secure all or part of the cost of
construction, development, repair or improvements thereon or to secure debt incurred prior to, at
the time of, or within one year after completion of such construction, development, repair or
improvements or the commencement of full operations thereof (whichever is later), to provide funds
for any such purpose;
(k) any lien upon any property or assets existing thereon at the time of the acquisition
thereof by the Borrower or any Subsidiary and any lien upon any property or assets of a Person
existing thereon at the time such Person becomes a Subsidiary by acquisition, merger or otherwise;
provided that, in each case, such lien (i) does not encumber the Collateral, and (ii) with respect
to other property or assets, only encumbers the property or assets so acquired or owned by such
Person at the time such Person becomes a Subsidiary;
(l) liens imposed by law or order as a result of any proceeding before any court or regulatory
body that is being contested in good faith, and liens which secure a judgment or other
court-ordered award or settlement as to which the Borrower or the applicable Subsidiary has not
exhausted its appellate rights;
(m) any extension, renewal, refinancing, refunding or replacement (or successive extensions,
renewals, refinancing, refunding or replacements) of liens, in whole or in part, referred to in
clauses (a) through (l) above; provided, however, that any such extension, renewal, refinancing,
refunding or replacement lien shall be limited to the property or assets covered by the lien
extended, renewed, refinanced, refunded or replaced and that the obligations secured by any such
extension, renewal, refinancing, refunding or replacement lien shall be in an amount not greater
than the amount of the obligations secured by the lien extended, renewed, refinanced, refunded or
replaced and any expenses of the Borrower and its Subsidiaries (including any premium) incurred in
connection with such extension, renewal, refinancing, refunding or replacement; and
(n) any lien resulting from the deposit of moneys or evidence of indebtedness in trust for the
purpose of defeasing debt of the Borrower or any Subsidiary.
- 12 -
Person means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.
Plan means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of
ERISA.
Prime Rate means the rate of interest per annum publicly announced from time to time
by Citibank, N.A. as its base rate in effect at its principal office in New York, New York; each
change in the Prime Rate shall be effective from and including the date such change is publicly
announced as being effective.
Principal Property means, whether owned or leased on the date hereof or thereafter
acquired, any processing or manufacturing plant or terminal owned or leased by the Borrower or any
Subsidiary that is located in the United States or any territory or political subdivision thereof,
excluding, however:
(i) any such assets consisting of inventories, furniture, office fixtures and equipment
(including data processing equipment), vehicles and equipment used on, or useful with,
vehicles; and
(ii) any such asset, plant or terminal which, in the opinion of the board of directors
of the Borrower, is not material in relation to the activities of the Borrower and its
Subsidiaries taken as a whole.
Quarterly Date means the last day of each March, June, September and December, in
each year, the first of which shall be June 30, 2007; provided, however, that if any such day is
not a Business Day, such Quarterly Date shall be the next succeeding Business Day.
Reference Banks means Citibank, N.A. and The Bank of Nova Scotia.
Register has the meaning set forth in Section 9.04.
Related Parties means, with respect to any specified Person, such Persons
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Persons Affiliates.
Required Lenders means, at any time, Lenders having Loans, LC Exposure and unused
Commitments representing more than 50% of the sum of the total Loans, LC Exposure and unused
Commitments at such time.
Restricted Payment means any dividend or other distribution (whether in cash,
securities or other property) with respect to any class of Equity Interests of the Borrower and any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Equity Interests of the Borrower or any Subsidiary or any
- 13 -
option, warrant or other right to acquire any Equity Interests of the Borrower or any
Subsidiary (other than any such option, warrant or other right granted to an officer, director or
employee of the Borrower, any Subsidiary, EPE Holdings, Enterprise GP, TEPPCO or TEPPCO GP).
Revolving Credit Commitment means, with respect to each Lender, the commitment of
such Lender to make Revolving Credit Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum aggregate amount of such Lenders
Revolving Credit Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.09, and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of each
Lenders Revolving Credit Commitment is set forth on Schedule 2.01 under Revolving Credit
Commitment, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Revolving Credit Commitment, as applicable.
Revolving Credit Exposure means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lenders Revolving Credit Loans and its LC Exposure at
such time.
Revolving Credit Loans means Loans made pursuant to Section 2.01(a).
SEC means the U.S. Securities and Exchange Commission.
Security Instruments means the agreements or instruments described or referred to in
Exhibit G, and any and all other agreements or instruments now or hereafter executed and
delivered by the Borrower or any other Person (other than participation or similar agreements
between any Lender and any other lender or creditor with respect to any Indebtedness pursuant to
this Agreement) pursuant to Section 5.04 to secure the payment or performance of any such
Indebtedness.
subsidiary means, with respect to any Person (the parent) at any date, any
corporation, limited liability company, association or other entity (other than a partnership) of
which securities or other ownership interests representing more than 50% of the equity or more than
50% of the ordinary voting power or, in the case of a partnership, more than 50% of the partnership
interests, are, as of such date, owned, controlled or held by the parent and one or more
subsidiaries of the parent.
Subsidiary means any subsidiary of the Borrower other than Enterprise, Enterprise
GP, ETE, ETE GP, ETP, TEPPCO, TEPPCO GP and their respective subsidiaries.
Swap Agreement means any interest rate or currency swap, rate cap, rate floor, rate
collar, forward rate agreement or other exchange or rate protection agreement or any option with
respect to any of the foregoing.
Syndication Agent means Lehman Commercial Paper Inc., in its capacity as syndication
agent for the Lenders hereunder.
Taxes means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
- 14 -
Term Commitment (Debt Bridge) means, as to each Lender, the commitment of such
Lender to make a Term Loan (Debt Bridge) in the amount set forth opposite such Lenders name under
Term Commitment (Debt Bridge) on Schedule 2.01, as the same may be modified from time to
time to reflect any assignment permitted by Section 9.04.
Term Commitment (Equity Bridge) means, as to each Equity Bridge Lender, the
commitment of such Equity Bridge Lender to make a Term Loan (Equity Bridge) in the amount set forth
opposite such Equity Bridge Lenders name under Term Commitment (Equity Bridge) on Schedule
2.01, as the same may be modified from time to time to reflect any assignment permitted by
Section 9.04.
Term Loans (Debt Bridge) means the term loans made pursuant to Section
2.01(b).
Term Loans (Equity Bridge) means the term loans made pursuant to Section
2.01(c).
TEPPCO means TEPPCO Partners, L.P., a Delaware limited partnership.
TEPPCO Common Units means the common units representing limited partner interests in
TEPPCO.
TEPPCO GP means Texas Eastern Products Pipeline Company, LLC, a Delaware limited
liability company.
Termination Date means the earlier to occur of (i) the Maturity Date or (ii) the
date that the Revolving Credit Commitments are terminated pursuant to Section 2.09 or
Article VII.
Transactions means the execution, delivery and performance by the Borrower of this
Agreement and the Security Instruments, the borrowing of Loans and the use of the proceeds thereof
and the issuance of Letters of Credit hereunder, and the execution, delivery and performance by the
Borrower pursuant to each of the Security Instruments.
Type, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
LIBO Rate or the Alternate Base Rate.
Withdrawal Liability means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
Section 1.02 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Class (e.g., a Revolving Credit Loan) or by Type
(e.g., a Eurodollar Loan or an ABR Loan) or by Class and Type (e.g., a Eurodollar Revolving
Credit Loan). Borrowings also may be classified and referred to by Class (e.g., a Revolving
Credit Borrowing) or by Type (e.g., a Eurodollar Borrowing or an ABR Borrowing) or by Class
and Type (e.g., a Eurodollar Revolving Credit Borrowing).
Section 1.03 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any
- 15 -
pronoun shall include the corresponding masculine, feminine and neuter forms. The words include,
includes and including shall be deemed to be followed by the phrase without limitation. The
word will shall be construed to have the same meaning and effect as the word shall. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Persons successors and assigns, (c) the words herein,
hereof and hereunder, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words asset and property shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
Section 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with (i) except for
purposes of Section 6.07, GAAP, as in effect from time to time; provided that, if the Borrower
notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof
to eliminate the effect of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower
that the Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such notice shall have
been withdrawn or such provision amended in accordance herewith; and (ii) for purposes of Section
6.07, GAAP as in effect on December 31, 2006.
Section 1.05 Annualized Financial Information. Until the expiration of four fiscal
quarters following March 31, 2007, compliance with Section 6.07 shall be computed on an
annualized basis.
ARTICLE II
The Credits
Section 2.01 Commitments.
(a) Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving
Credit Loans to the Borrower from time to time during the Availability Period
in an aggregate principal amount that will not result in such Lenders Revolving Credit
Exposure exceeding such Lenders Revolving Credit Commitment. All amounts outstanding under the
Revolving Credit Loans shall, at the option of the Borrower, be made and maintained as ABR
Borrowings or Eurodollar Borrowings, or a combination thereof, bearing interest in accordance with
Section 2.13(a) or (b), as applicable. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay and re-borrow Revolving
Credit Loans.
- 16 -
(b) Subject to the terms and conditions set forth herein, each Lender agrees to make a Term
Loan (Debt Bridge) to the Borrower not to exceed its Term Commitment (Debt Bridge). Such Term
Loans (Debt Bridge) shall be made by way of a single Borrowing funded pursuant to a Borrowing
Request made on or before the Effective Date. Any portion of each Lenders Term Commitment (Debt
Bridge) not utilized by such Borrowing on such date shall be permanently canceled. All amounts
outstanding under the Term Loan (Debt Bridge) shall, at the option of the Borrower, be made and
maintained as ABR Borrowings or Eurodollar Borrowings, or a combination thereof, bearing interest
in accordance with Section 2.13(a) or (b), as applicable. Any amount repaid under
the Term Loan (Debt Bridge) may not be reborrowed.
(c) Subject to the terms and conditions set forth herein, each Equity Bridge Lender agrees to
make a Term Loan (Equity Bridge) to the Borrower not to exceed its Term Commitment (Equity Bridge).
Such Term Loans (Equity Bridge) shall be made by way of a single Borrowing funded pursuant to a
Borrowing Request made on or before the Effective Date. Any portion of each Equity Bridge Lenders
Term Commitment (Equity Bridge) not utilized by such Borrowing on such date shall be permanently
canceled. All amounts outstanding under the Term Loan (Equity Bridge) shall, at the option of the
Borrower, be made and maintained as ABR Borrowings or Eurodollar Borrowings, or a combination
thereof, bearing interest in accordance with Section 2.13(a) or (b), as applicable.
Any amount repaid under the Term Loan (Equity Bridge) may not be reborrowed.
Section 2.02 Loans and Borrowings.
(a) Each Loan of any Class shall be made as part of a Borrowing consisting of Loans of such
Class made by the Lenders ratably in accordance with their respective Commitments of such Class.
The failure of any Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and
no Lender shall be responsible for any other Lenders failure to make Loans as required.
(b) Subject to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans
or Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option
may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender
to make such Loan; provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $1,000,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total
Revolving Credit Commitments, or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e). Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any time be more than a
total of ten Eurodollar Borrowings outstanding.
- 17 -
(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request or elect to continue any Eurodollar Borrowing, or elect to convert any ABR Borrowing to
a Eurodollar Borrowing if the Interest Period requested with respect thereto would end after the
Maturity Date.
Section 2.03 Requests for Borrowing. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of
the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York
City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Borrowing Request signed by the Borrower. Each such Borrowing Request shall
specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) the Class of such Borrowing and whether such Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
Interest Period; and
(v) the location and number of the Borrowers account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.
If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one months
duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lenders Loan to be made as part of the requested Borrowing.
Section 2.04 Reserved.
Section 2.05 Existing Credit Agreement. In connection with the amendment and
restatement of the Existing Credit Agreement pursuant hereto, Borrower, Administrative Agent and
Lenders shall as of the Effective Date make adjustments to the outstanding principal amount of the
Loans under the Existing Credit Agreement (as such term is defined therein) (but not any interest
accrued thereon prior to the Effective Date or any accrued commitment fees under the Existing
Credit Agreement prior to the Effective Date), including the borrowing of additional Revolving
Credit Loans hereunder and the repayment of Loans under the Existing Credit Agreement (as such
term is defined therein) plus all applicable accrued interest, fees and expenses as shall be
necessary to provide for Revolving Credit Loans by each Lender in proportion to, and in any event
not in excess of, the amount of its Revolving Credit Commitment as of the Effective Date, but in no
event shall such adjustment of any Eurodollar Loans entitle
- 18 -
any Lender to any reimbursement under
Section 2.16 hereof; provided that the foregoing is not intended to relieve Borrower for
paying any such costs to lenders under the Existing Credit Agreement to the extent such lenders are
not Lenders under this Agreement, and each Lender shall be deemed to have made an assignment of its
outstanding Loans and commitments under the Existing Credit Agreement, and assumed outstanding
Loans and commitments under the Existing Credit Agreement, and assumed outstanding Loans and
commitments of other Lenders under the Existing Credit Agreement as may be necessary to effect the
foregoing. In addition, (i) each Letter of Credit outstanding under the Existing Credit Agreement
shall be deemed to have been issued under this Agreement without further consideration or any fees
under the Existing Credit Agreement; (ii) Borrower acknowledges and affirms the security interests
and Liens granted by it under each of the Security Instruments; (iii) the Existing Credit Agreement
and the Commitments thereunder shall terminate and be superseded by this Agreement, and (iv) the
Obligations of the Borrower hereunder are in renewal and extension of the obligations and
indebtedness of the Borrower under the Existing Credit Agreement.
Section 2.06 Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, the Borrower may
request the issuance of Letters of Credit under the Revolving Credit Commitments for its own
account or for the account of any Subsidiary, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In
the event of any inconsistency between the terms and conditions of this Agreement and the terms and
conditions of any form of letter of credit application or other agreement submitted by the Borrower
to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent three Business Days (or such shorter
period as may be acceptable to the Issuing Bank in advance of the requested date of issuance,
amendment, renewal or extension), a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount
of such Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit, as
applicable. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit
application on the Issuing Banks standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended if and only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment, renewal or extension
(i) the LC Exposure shall not exceed $25,000,000 and (ii) the total Revolving Credit Exposures
shall not exceed the total Revolving Credit Commitments.
- 19 -
(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lenders
Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.
In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lenders Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or
the occurrence and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative
Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on the
date that such LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York
City time, on the Business Day immediately following the day that the Borrower receives such
notice; provided that the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 that such payment be
financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the
Borrowers obligation to make such payment shall be discharged and replaced by the resulting ABR
Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lenders Applicable Percentage thereof. Promptly following receipt of
such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that
Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant
to this paragraph to reimburse the Issuing Bank for any LC
- 20 -
Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of
its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrowers obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a right of setoff against,
the Borrowers obligations hereunder. Neither the Administrative Agent, the Lenders nor the
Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the
Borrower to the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Banks failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made
or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the
Lenders with respect to any such LC Disbursement.
- 21 -
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date of payment by any
Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by
written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement
of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall
pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter and (ii) references herein to the term
Issuing Bank shall be deemed to refer to such successor or to any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context shall require. After the replacement
of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be continuing and
if the maturity of the Loans has been accelerated pursuant to Article VII, on the Business
Day that the Borrower receives notice from the Administrative Agent upon written request of the
Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, the Borrower
shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus
any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i)
of Article VII. Such deposit shall be held by the Administrative Agent as collateral for
the payment and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the Administrative Agent and
at the Borrowers risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such account shall be applied
by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of
the Loans has been accelerated (but subject to the consent of
- 22 -
Lenders with LC Exposure
representing greater than 51% of the total LC Exposure), be applied to satisfy other obligations of
the Borrower under this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the
extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
Section 2.07 Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 1:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by promptly crediting the
amounts so received, in like funds, to an account designated by the Borrower in the applicable
Borrowing Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing
Bank.
(b) Unless the Administrative Agent shall have received notice from a Lender on or prior to
the proposed date of any Borrowing that such Lender will not make available to the Administrative
Agent such Lenders share of such Borrowing, the Administrative Agent may assume that such Lender
has made such share available on such date in accordance with paragraph (a) of this Section and
may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In
such event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to
such Borrowing. If such Lender pays such amount to the Administrative Agent, then such amount
shall constitute such Lenders Loan included in such Borrowing.
Section 2.08 Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request or, if no Interest Period is so specified, of one months
duration. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
- 23 -
(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone by (i) 11:00 a.m., New York City time, three Business Days
before the date of the proposed election, or (ii) in the case of a conversion to an ABR Borrowing,
not later than 11:00 a.m., New York City time, on the date of the proposed conversion. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election Request signed by
the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term Interest Period.
If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one
months duration.
(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lenders portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the request of the Required
Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
-24-
Section 2.09 Termination and Reduction of Commitments.
(a) Unless previously terminated, the Revolving Credit Commitments shall terminate on the
Maturity Date.
(b) The Borrower may at any time terminate, or from time to time reduce, the Revolving Credit
Commitments; provided that (i) each reduction of the Revolving Credit Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
Borrower shall not terminate or reduce the Revolving Credit Commitments if, after giving effect to
any concurrent prepayment of the Revolving Credit Loans in accordance with Section 2.11,
the total Revolving Credit Exposures would exceed the total Revolving Credit Commitments.
(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Revolving Credit Commitments under paragraph (b) of this Section at least three Business Days
prior to the effective date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall
advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable; provided that a notice of termination of the Revolving Credit
Commitments delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Each reduction of the Revolving Credit Commitments shall be made
ratably among the Lenders in accordance with their respective Revolving Credit Commitments.
(d) The Term Commitments (Debt Bridge) shall permanently terminate upon the funding of the
initial Term Borrowing (Debt Bridge) or if the Borrowing Request for such initial Term Borrowing
(Debt Bridge) has not been made by the close of business on May 31, 2007, upon such close of
business. The Term Commitments (Equity Bridge) shall permanently terminate upon the funding of the
initial Term Borrowing (Equity Bridge) or if the Borrowing
Request for such initial Term Borrowing (Equity Bridge) has not been made by the close of
business on May 31, 2007, upon such close of business.
(e) Any termination of the Commitments pursuant to this Section 2.09 or ARTICLE
VII shall be permanent.
Section 2.10 Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the Administrative Agent, for the
ratable account of the holders of each of the Loans, the then unpaid principal amount of the Loans
(and all accrued and unpaid interest thereon and any other amounts outstanding hereunder) on the
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
-25-
(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lenders share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to such Lender promissory notes in the
amount of such Lenders Revolving Credit Commitment, Term Commitment (Debt Bridge) or Term
Commitment (Equity Bridge), as applicable, payable to the order of such Lender (or, if requested by
such Lender, to such Lender and its registered assigns) and in substantially the form of
Exhibit F-1, Exhibit F-2 or Exhibit F-3, as appropriate. Thereafter, the
Loans evidenced by such promissory notes and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory notes in such
form payable to the order of the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).
Section 2.11 Prepayment of Loans.
(a) The Borrower shall have the right at any time and from time to time to prepay any
Borrowing in whole or in part, subject to prior notice and other limitations set forth in this
Section.
(b) Each prepayment pursuant to Section 2.11(a) shall be applied to reduce pro rata
all Loans comprising the designated Borrowing being prepaid. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the
case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing,
not later than 11:00 a.m., New York City time, on the date of prepayment. Each such notice shall
be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Revolving Credit Commitments as contemplated by
Section 2.09, then such notice of prepayment may be revoked if such notice of termination
is revoked in accordance with Section 2.09. Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.
Each partial prepayment of any Borrowing pursuant to Section 2.11(a) shall be in an amount
that is an integral multiple of $1,000,000 and not less than $1,000,000 in the case of an ABR
Borrowing and not less than $3,000,000 in the case of a Eurodollar Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
-26-
(c) If at any time the total Revolving Credit Exposures would exceed the total Revolving
Credit Commitments, except as a result of termination of Revolving Credit Commitments pursuant to
Article VII, the Borrower shall prepay the Revolving Credit Loans in an amount equal to
such excess.
(d) Upon the receipt by the Borrower or any Subsidiary of the net cash proceeds from (i) any
issuance of Indebtedness and/or equity by the Borrower and/or any such Subsidiary (other than
Indebtedness permitted pursuant to Section 6.01 (a), (b), (c) or
(d)) or (ii) any asset sale by the Borrower (other than sales of assets having an aggregate
fair market value (for all asset sales by the Borrower during the term of this Agreement) not
exceeding $25,000,000), the Borrower shall prepay the outstanding amount of the Loans in the full
amount of such net cash proceeds (or in the case of any such issuance by a Subsidiary that is not
wholly-owned by the Borrower, a percentage of such net cash proceeds equal to the Borrowers direct
and indirect percentage ownership in such Subsidiary). Each prepayment required to be made
pursuant to this Section 2.11(d) shall be applied, (x) if such prepayment is required as a
result of the issuance of Indebtedness, first, to reduce pro rata all Term Loans (Debt
Bridge), second, to reduce pro rata all Term Loans (Equity Bridge) and third, to
reduce pro rata all Revolving Credit Loans; (y) if such prepayment is required as a result of the
issuance of equity, first, to reduce pro rata all Term Loans (Equity Bridge),
second, to reduce pro rata all Term Loans (Debt Bridge) and third, to reduce pro
rata all Revolving Credit Loans; and (z) if such prepayment is required as a result of an asset
sale, first to reduce pro rata all Term Loans (Debt Bridge) and all Term Loans (Equity
Bridge), and second, to reduce pro rata all Revolving Credit Loans.
(e) All prepayments shall be payable without premium or penalty, except for compensation
required by Section 2.16 and/or any other provision of this Agreement.
Section 2.12 Fees.
(a) The Borrower shall pay to the Administrative Agent for the account of the Lenders a
commitment fee on the daily average unused amount of the total Revolving Credit Commitments for the
period from and including the Effective Date up to, but excluding, the Termination Date at the
Applicable Rate for commitment fees. Accrued commitment fees shall be payable quarterly in arrears
on each Quarterly Date and on the earlier of the date the total Revolving Credit Commitments are
terminated or the Termination Date. All commitment fees shall be computed on the basis of a year
of 365 days (or 366 days in leap year) and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender
a participation fee with respect to its participations in Letters of Credit, which shall accrue at
the same Applicable Rate as interest on Eurodollar Loans on the average daily amount of such
Lenders LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 1/8% per annum, on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period from and including
the Effective Date to but excluding the date on which there ceases to be any LC Exposure, as well
as the Issuing Banks standard fees with respect to the issuance,
-27-
amendment, renewal or extension
of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and December of each year
shall be payable quarterly on the third Business Day following the last day of March, June,
September and December of each year, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which the Revolving
Credit Commitments terminate and any such fees accruing after the date on which the Revolving
Credit Commitments terminate shall be payable on demand. Any other fees payable to the Issuing
Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of 365 days (or 366 days in leap
year) and shall be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.
(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of commitment fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.
Section 2.13 Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate
plus the Applicable Rate for ABR Loans.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the LIBO Rate for
the Interest Period in effect for such Borrowing plus the Applicable Rate for Eurodollar Loans.
(c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus
the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and, in the case of Revolving Credit Loans, upon termination of the Revolving Credit
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of
such conversion.
-28-
(e) All interest determined by reference to the LIBO Rate or clause (b) of the definition of
Alternate Base Rate shall be computed on the basis of a year of 360 days, and all other interest
shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case
shall be payable for the actual number of days elapsed (including the first day but excluding the
last day). The applicable Alternate Base Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest error.
(f) The Borrower shall pay to each Lender, so long as such Lender shall be required under
regulations of the Board to maintain reserves with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each
Borrowing of such Lender during such periods as such Borrowing is a Eurodollar Borrowing, from the
date of such Borrowing until such principal amount is paid in full, at an interest rate per annum
equal at all times to the remainder obtained by subtracting (i) the LIBO Rate for the Interest
Period in effect for such Eurodollar Borrowing from (ii) the rate obtained by dividing such LIBO
Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for
such Interest Period. Such additional interest shall be determined by such Lender. The Borrower
shall from time to time, within 15 days after demand (which demand shall be accompanied by a
certificate comporting with the requirements set forth in Section 2.15(d)) by such Lender
(with a copy of such demand and certificate to the Administrative Agent) pay to the Lender giving
such notice such additional interest; provided, however, that the Borrower shall not be required to
pay to such Lender any portion of such
additional interest that accrued more than 90 days prior to any such demand, unless such
additional interest was not determinable on the date that is 90 days prior to such demand.
Section 2.14 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the LIBO Rate, as
applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly reflect the cost to such
Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing
for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing; provided that if the circumstances giving rise to such notice affect only one Type of
Borrowing, then the other Type of Borrowing shall be permitted.
-29-
Section 2.15 Illegality; Increased Costs.
(a) If any Change in Law shall make it unlawful or impossible for any Lender to make, maintain
or fund its Eurodollar Loans, such Lender shall so notify the Administrative Agent. Upon receipt
of such notice, the Administrative Agent shall immediately give notice thereof to the other Lenders
and to the Borrower, whereupon until such Lender notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist, the obligation of such
Lender to make Eurodollar Loans shall be suspended. If such Lender shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Eurodollar Loans to maturity and
shall so specify in such notice, the Borrower shall immediately prepay (which prepayment shall not
be subject to Section 2.11) in full the then outstanding principal amount of such
Eurodollar Loans, together with the accrued interest thereon.
(b) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in Section 2.13(f)) or the
Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of
Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or
the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(c) If any Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lenders or the
Issuing Banks capital or on the capital of such Lenders or the Issuing Banks holding company, if
any, as a consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below
that which such Lender or the Issuing Bank or such Lenders or the Issuing Banks holding company
could have achieved but for such Change in Law (taking into consideration such Lenders or the
Issuing Banks policies and the policies of such Lenders or the Issuing Banks holding company
with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lenders or the Issuing Banks holding company for any such
reduction suffered.
-30-
(d) A certificate of a Lender or the Issuing Bank setting forth, in reasonable detail showing
the computation thereof, the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph (b) or (c) of this
Section shall be delivered to the Borrower and shall be conclusive absent manifest error. Such
certificate shall further certify that such Lender or the Issuing Bank is making similar demands of
its other similarly situated borrowers. The Borrower shall pay such Lender or the Issuing Bank, as
the case may be, the amount shown as due on any such certificate within 10 days after receipt
thereof, if such certificate complies herewith.
(e) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lenders or the Issuing Banks right
to demand such compensation; provided that the Borrower shall not be required to compensate
a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 90 days prior to the date that such Lender or the Issuing Bank, as the case may
be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lenders or the Issuing Banks intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 90-day period referred to above shall be extended to include
the period of retroactive effect thereof (to the extent that such period of retroactive effect is
not already included in such 90-day period).
Section 2.16 Break Funding Payments. In the event of (a) the payment of any principal
of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default, but excluding any mandatory prepayment made as and
when required by Section 2.11(d)), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.11(b) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the
loss, cost and expense (excluding loss of anticipated profits) attributable to such event. A
certificate of any Lender setting forth, in reasonable detail showing the computation thereof, any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after receipt thereof,
if such certificate complies herewith.
Section 2.17 Taxes.
(a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be
made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Borrower shall make such
deductions, and
-31-
(iii) the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority; provided that the Borrower shall not be required
to indemnify or reimburse a Lender pursuant to this Section for any Indemnified Taxes or Other
Taxes imposed or asserted more than 90 days prior to the date that such Lender notifies the
Borrower of the Indemnified Taxes or Other Taxes imposed or asserted and of such Lenders intention
to claim compensation therefor;
provided further that, if the Indemnified Taxes or Other Taxes imposed or asserted giving rise
to such claims are retroactive, then the 90-day period referred to above shall be extended to
include the period of retroactive effect thereof (to the extent that such period of retroactive
effect is not already included in such 90-day period). A certificate setting forth, in reasonable
detail showing the computation thereof, the amount of such payment or liability delivered to the
Borrower by a Lender, the Administrative Agent or the Issuing Bank on its own behalf or on behalf
of a Lender or the Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without withholding or at such
reduced rate.
(f) Should any Lender, the Issuing Bank or the Administrative Agent during the term of this
Agreement receive any refund, credit or deduction from any taxing authority to which such Lender,
the Issuing Bank or the Administrative Agent would not be entitled but for the payment by the
Borrower of Taxes (it being understood that the decision as to whether or not to claim, and if
claimed, as to the amount of any such refund, credit or deduction shall be made by such Lender, the
Issuing Bank or the Administrative Agent in its sole discretion), such Lender, the Issuing Bank or
the Administrative Agent, as the case may be, thereupon shall repay
-32-
to the Borrower an amount with
respect to such refund, credit or deduction equal to any net reduction in taxes actually obtained
by such Lender, the Issuing Bank or the Administrative Agent, as the case may be, and determined by
such Lender, the Issuing Bank or the Administrative Agent, as the case may be, to be attributable
to such refund, credit or deduction.
(g) Except for a request by the Borrower under Section 2.19(b), no Foreign Lender
shall be entitled to the benefits of Section 2.17(a) or Section 2.17(c) if
withholding tax is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or designates a new lending office.
Section 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it hereunder (whether of
principal, interest, fees, or reimbursement of LC Disbursements, or of amounts payable under
Section 2.15, Section 2.16 or Section 2.17, or otherwise) prior to 1:00
p.m., New York City time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the Administrative
Agent at its offices at 399 Park Avenue, New York, New York 10043, except payments to be made
directly to the Issuing Bank as expressly provided herein and except that payments pursuant to
Section 2.15, Section 2.16, Section 2.17 and Section 9.03 shall be
made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then
due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal, unreimbursed LC
Disbursements, and cash collateral as such collateral is required by Section 2.06(j) then
due hereunder and toward the payment of the Borrowers or its Subsidiaries obligations under any
Swap Agreements, if any, owing to the Lenders or their Affiliates, ratably among the parties
entitled thereto in accordance with the amounts of principal, unreimbursed LC Disbursements and
obligations under Swap Agreements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the
-33-
Loans and participations in LC
Disbursements of other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC Disbursements; provided that
(i) if any such participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations in LC Disbursements
to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing
and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such Lender were a
direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or the Issuing Bank, as the case
may be, with interest thereon, for each day from and including the date such amount is distributed
to it to but excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.06(d), 2.06(e), 2.07(b), Section 2.18(d) or Section
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lenders obligations under such Sections until all such
unsatisfied obligations are fully paid.
Section 2.19 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.13(f) or Section 2.15,
or if the Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall
use reasonable efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.13(f), Section 2.15 or Section
2.17, as the case
-34-
may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment. Subject to the foregoing, Lenders agree to use
reasonable efforts to select lending offices which will minimize taxes and other costs and expenses
for the Borrower.
(b) If any Lender requests compensation under Section 2.13(f) or Section 2.15,
or if the Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or if any Lender defaults
in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the prior written
consent of the Administrative
Agent (and if a Revolving Credit Commitment is being assigned, the Issuing Bank), which
consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting
from a claim for compensation under Section 2.13(f) or Section 2.15 or payments
required to be made pursuant to Section 2.17, such assignment will result in a reduction in
such compensation or payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation cease to apply. If
any Lender refuses to assign and delegate all its interests, rights and obligations under this
Agreement after the Borrower has required such Lender to do so as a result of a claim for
compensation under Section 2.13(f) or Section 2.15 or payments required to be made
pursuant to Section 2.17, such Lender shall not be entitled to receive such compensation or
required payments.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
Section 3.01 Organization; Powers. The Borrower and each of its Subsidiaries is duly
formed, validly existing and (if applicable) in good standing (except, with respect to Subsidiaries
other than Material Subsidiaries, where the failure to be in good standing, individually or in the
aggregate, could not reasonably be expected, to the best of Borrowers knowledge, to result in a
Material Adverse Effect) under the laws of the jurisdiction of its organization, has all requisite
power and authority to carry on its business in all material respects as now conducted and, except
where the failure to do so, individually or in the aggregate, could not reasonably be expected, to
the best of Borrowers knowledge, to result in a Material Adverse Effect, is qualified to do
business in, and (if applicable) is in good standing in, every jurisdiction where such
qualification is required.
-35-
Section 3.02 Authorization; Enforceability. The Transactions are within the
Borrowers limited partnership powers and have been duly authorized by all necessary partnership
action. This Agreement has been duly executed and delivered by the Borrower and constitutes a
legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors rights generally and subject to general principles of equity, regardless
of whether considered in a proceeding in equity or at law.
Section 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except (i) such as have been obtained or made and are in full force and
effect, and (ii) filings and recordings required to perfect the
Liens created under the Security Instruments, (b) will not violate any law or regulation
applicable to the Borrower or the limited partnership agreement, charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority to which the Borrower or any of its Subsidiaries is subject, (c) will not
violate or result in a default under any material indenture, agreement or other instrument binding
upon the Borrower or any of its Subsidiaries or assets of Borrower or any of its Subsidiaries, or
give rise to a right thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries that is prohibited hereby.
Section 3.04 Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders the Borrowers consolidated balance
sheet and statements of income and cash flows as of and for the fiscal year ended December 31,
2006. Such financial statements present fairly, in all material respects, the financial position
and results of operations and cash flows of the Borrower and its consolidated subsidiaries as of
such dates and for such periods in accordance with GAAP.
(b) No Material Adverse Change exists.
Section 3.05 Reserved.
Section 3.06 Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the
Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected, to the best of
Borrowers knowledge, individually or in the aggregate, to result in a Material Adverse Effect
(other than the Disclosed Matters) or (ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected, to the best of Borrowers
knowledge, to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries
(i) has failed to comply with any Environmental Law or to obtain, maintain or
-36-
comply with any
permit, license or other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental Liability.
(c) To the best of Borrowers knowledge, since the date of this Agreement, there has been no
change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted
in a Material Adverse Effect.
Section 3.07 Compliance with Laws; No Default. The Borrower and each of its
Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so, individually or in the
aggregate, could not, to the best of Borrowers knowledge, reasonably be expected to result in a
Material Adverse Effect. No Default has occurred and is continuing.
Section 3.08 Investment and Holding Company Status. Neither the Borrower nor any of
its Subsidiaries is (a) an investment company as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) subject to regulation under the Public Utility Holding
Company Act of 2005.
Section 3.09 Taxes. The Borrower and each of its Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable,
has set aside on its books adequate reserves or (b) to the extent that the failure to do so could
not, to the best of Borrowers knowledge, reasonably be expected to result in a Material Adverse
Effect.
Section 3.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could, to the best of Borrowers knowledge, reasonably be expected to result in
a Material Adverse Effect.
Section 3.11 Disclosure. None of the reports, financial statements, certificates or
other information furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to state any material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial information, the
Borrower represents only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.
Section 3.12 Subsidiaries. As of the Effective Date, Borrower has no Subsidiaries other than those listed on
Schedule 3.12 hereto. As of the Effective Date, Schedule 3.12 sets forth the jurisdiction
of incorporation or organization of each such Subsidiary, the percentage of Borrowers ownership of
the outstanding Equity Interests of each Subsidiary directly owned by Borrower, and the percentage
of each Subsidiarys ownership of the outstanding Equity Interests
-37-
of each other Subsidiary. As of
the Effective Date, Schedule 3.12 hereto lists the correct ownership of Enterprise.
Section 3.13 Margin Securities. Neither the Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulations U or X of the
Board), and no part of the proceeds of any Loan will be used to purchase or carry any margin stock
in violation of said Regulations U or X or to extend credit to others for the purpose of purchasing
or carrying margin stock in violation of said Regulations U or X.
Section 3.14 Reserved.
Section 3.15 Not a Reportable Transaction. The Borrower does not intend to treat the
Borrowings and related Transactions as being a reportable transaction (within the meaning of
Treasury Regulation Section 1.6011-4). In the event the Borrower determines to take any action
inconsistent with such intention, it will promptly notify each Administrative Agent thereof. If
the Borrower so notifies each Administrative Agent, the Borrower acknowledges that one or more of
the Lenders may treat its Loans as part of a transaction that is subject to Treasury Regulation
Section 1.6011-4 or Section 301.6112-1, and the Borrower shall cooperate in good faith with each
Administrative Agent and such Lender or Lenders, as applicable, in connection with any action such
parties reasonably determine is necessary to comply with such Treasury Regulations.
Section 3.16 Priority; Security Matters. The Security Instruments create valid
security interests in the Collateral described therein in favor of each Administrative Agent for
the benefit of the Lenders securing the Obligations and constitute perfected first priority
security interests in such Collateral described therein subject to no Liens other than those
permitted by subclauses (a), (b), (c), (g), (i) and (l) of the definition of Permitted Liens,
except to the extent such security interests are not perfected or do not have first priority status
solely as a result of any action or inaction by either Administrative Agent or any Lender occurring
after the execution and delivery of the Loan Documents.
Section 3.17 Foreign Assets Control Regulation. Borrowers use of the proceeds of the
Loans will not violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.
ARTICLE IV
Conditions
Section 4.01 Effective Date. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit hereunder shall not become effective until the Effective
Date which is scheduled to occur when each of the following conditions is satisfied.
(a) The Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy transmission of a
-38-
signed
signature page of this Agreement) that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of Richard H. Bachmann,
Executive Vice President and Chief Legal Officer of the Borrower, and Bracewell & Giuliani LLP,
substantially in form and substance satisfactory to the Administrative Agent.
(c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization and
existence of the Borrower and its Subsidiaries, the authorization of the Transactions and any other
legal matters relating to the Borrower and its Subsidiaries, this Agreement or the Transactions,
all in form and substance reasonably satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received each promissory note requested by a Lender
pursuant to Section 2.10(e), each duly completed and executed by the Borrower.
(e) The Administrative Agent shall have received the Security Instruments in form and
substance satisfactory to the Lenders.
(f) The Administrative Agent shall have received a certificate, dated the Effective Date and
signed by the President, an Executive Vice President or a Financial Officer of the Borrower,
confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section
4.02.
(g) The Administrative Agent shall have received all fees and other amounts due and payable on
or prior to the Effective Date, including, to the extent invoiced five (5) Business Days prior to
closing, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid
by the Borrower hereunder.
(h) The Administrative Agent shall have received satisfactory evidence that the Loans (as
that term is defined in the Existing Credit Agreement) under the Existing Credit Agreement have
been irrevocably refinanced by the Loans.
(i) The Lenders shall have received the Borrowers consolidated balance sheet and statements
of income and cash flows as of and for the fiscal year ended December 31, 2006.
(j) All necessary governmental and third-party approvals, if any, required to be obtained by
the Borrower in connection with the Transactions and otherwise referred to herein shall have been
obtained and remain in effect (except where failure to obtain such approvals will not have a
Material Adverse Effect), and all applicable waiting periods shall have expired without any action
being taken by any applicable authority.
The date on which all of the foregoing conditions have been satisfied (or waived pursuant to
Section 9.02) shall be the Effective Date. The Administrative Agent shall notify the
Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
-39-
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank
to issue Letters of Credit hereunder and the changes effected by this Agreement and the documents
delivered in connection herewith shall not become effective until the Effective Date, and if the
Effective Date has not occurred at or prior to 3:00 p.m., New York City time, on May 31, 2007, (a)
this Agreement and the documents delivered in connection herewith shall permanently be of no force
or effect and (b) the Existing Credit Agreement and the Security Instruments (as that term is
defined in the Existing Credit Agreement) shall remain in effect as they existed immediately prior
to the execution hereof.
Section 4.02 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing (exclusive of continuations and conversions of a Borrowing), and of the
Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction
of the following conditions:
(a) The representations and warranties of the Borrower set forth in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit,
as applicable (other than those representations and warranties that expressly relate to a specific
earlier date, which shall be true and correct in all material respects as of such earlier date).
(b) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of
Default shall have occurred and be continuing.
Each Borrowing (exclusive of continuations and conversions of a Borrowing) and each issuance,
amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall
have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
Section 5.01 Financial Statements and Other Information. The Borrower will furnish,
or cause to be furnished to the Administrative Agent:
(a) Promptly after becoming available and in any event within 120 days after the close of each
fiscal year of the Borrower, on EDGAR or by transmission or delivery in accordance with Section
9.01, (i) the audited consolidated balance sheet of the Borrower and its consolidated
subsidiaries as at the end of such year and (ii) the audited consolidated statements of income,
equity and cash flow of the Borrower and its consolidated subsidiaries for such year setting forth
in each case in comparative form the corresponding figures for the preceding fiscal
-40-
year, which
report shall be to the effect that such statements have been prepared in accordance with GAAP;
(b) Promptly after their becoming available and in any event within 60 days after the close of
each fiscal quarter (except after the close of each fiscal year) of the Borrower, on EDGAR or by
transmission or delivery in accordance with Section 9.01, (i) the unaudited consolidated
balance sheet of the Borrower and its consolidated subsidiaries as at the end of such quarter and
(ii) the unaudited consolidated statements of income, equity and cash flow of the Borrower and its
consolidated subsidiaries for such quarter, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, all of the foregoing certified by a Financial
Officer of the Borrower to have been prepared in accordance with GAAP subject to normal changes
resulting from year-end adjustments; and
(c) Within 60 days after the end of each fiscal quarter of each fiscal year of the Borrower
(or 120 days, in the case of the last fiscal quarter of a fiscal year), a certificate of a
Financial Officer of the Borrower substantially in the form of Exhibit E (i) certifying as
to whether a Default has occurred that is then continuing and, if a Default has occurred that is
then continuing, specifying the details thereof and any action taken or proposed to be taken with
respect thereto, and (ii) setting forth in reasonable detail calculations demonstrating compliance
with Section 6.07.
Section 5.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Event of Default; and
(b) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial
Officer or other executive officer of the Borrower setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken with respect
thereto.
Section 5.03 Existence; Conduct of Business. The Borrower will do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its and its Subsidiaries
legal existence and the rights, licenses, permits, privileges and franchises material to the
conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution not prohibited under Section 6.03.
Section 5.04 Further Assurances. The Borrower will and will cause each Subsidiary to
cure promptly any defects in the creation and issuance of any promissory note created and issued
pursuant to Section 2.10(e) and the execution and delivery of the Security Instruments and
this Agreement. The Borrower at its expense will and will cause each Subsidiary to promptly
execute and deliver to the Administrative Agent upon reasonable request all such other documents,
agreements and instruments necessary to comply with or accomplish the covenants and agreements of
the Borrower or any Subsidiary, as the case may be, in the Security Instruments and this Agreement,
or to further evidence and more fully describe the
-41-
Collateral intended as security for all
indebtedness, obligations and liabilities of the Borrower to the Agent and/or the Lenders under any
of the Loan Documents, or to correct any unintended omissions in the Security Instruments, or to
state more fully the security obligations set out herein or in any of the Security Instruments, or
to perfect, protect or preserve any Liens created pursuant to any of the Security Instruments, or
to make any recordings, to file any notices or obtain any consents, all as may be necessary in
connection therewith.
Section 5.05 Maintenance of Properties; Insurance. The Borrower will, and will cause
each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.
Section 5.06 Books and Records; Inspection Rights. The Borrower will, and will cause
each of its Subsidiaries to, keep in accordance with GAAP proper books of record and account in
which full, true and correct entries are made in all material respects of all dealings and
transactions in relation to its business and activities. The Borrower will, and will cause each of
its Subsidiaries to, permit any representatives designated by the Administrative Agent or any
Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make
extracts from its books and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often as reasonably
requested.
Section 5.07 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.
Section 5.08 Use of Proceeds and Letters of Credit.
(a) All or a portion of the proceeds of the Loans made on the Effective Date will be used to
fully and irrevocably refinance all amounts outstanding under the Loans (as that term is defined
in the Existing Credit Agreement) under the Existing Credit Agreement. All other proceeds of the
Loans made on or after the Effective Date will be used for the refinancing referred to in the prior
sentence, to fund the acquisition of approximately 38,976,090 million ETE Common Units and an
approximate 35% membership interest in ETE GP, to pay related fees and expenses or for other
general partnership and limited liability company purposes of the Borrower and its subsidiaries.
No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose
that entails a violation of any of the Regulations of the Board, including Regulations U and X.
(b) Letters of Credit may be issued for such lawful purposes as the Borrower may elect.
Section 5.09 Environmental Matters. The Borrower has established and implemented, or
will establish and implement, and will cause each of its Subsidiaries to establish
-42-
and implement,
such procedures as may be necessary to assure that any failure of the following does not have a
Material Adverse Effect: (i) all property of the Borrower and its Subsidiaries and the operations
conducted thereon are in compliance with and do not violate the requirements of any Environmental
Laws, (ii) no oil or solid wastes are disposed of or otherwise released on or to any property owned
by the Borrower or its Subsidiaries except in compliance with Environmental Laws, (iii) no
Hazardous Materials will be released on or to any such property in a quantity equal to or exceeding
that quantity which requires reporting pursuant to Section 103 of CERCLA, and (iv) no oil or
Hazardous Materials is released on or to any such property so as to pose an imminent and
substantial endangerment to public health or welfare or the environment.
Section 5.10 ERISA Information. The Borrower will furnish to the Administrative
Agent:
(a) within 15 Business Days after the institution of or the withdrawal or partial withdrawal
by the Borrower, any Subsidiary or any ERISA Affiliate from any Multiemployer Plan which would
cause the Borrower, any Subsidiary or any ERISA Affiliate to incur Withdrawal Liability in excess
of $5,000,000 (in the aggregate for all such withdrawals), a
written notice thereof signed by an executive officer of the Borrower stating the applicable
details; and
(b) within 15 Business Days after an officer of the Borrower becomes aware of any material
action at law or at equity brought against the Borrower, any of its Subsidiaries, any ERISA
Affiliate, or any fiduciary of a Plan in connection with the administration of any Plan or the
investment of assets thereunder, a written notice signed by an executive officer of the Borrower
specifying the nature thereof and what action the Borrower is taking or proposes to take with
respect thereto.
Section 5.11 Taxes. Pay and discharge, or cause to be paid and discharged, promptly
or make, or cause to be made, timely deposit of all taxes (including Federal Insurance Contribution
Act payments and withholding taxes), assessments and governmental charges or levies imposed upon
the Borrower or any Subsidiary or upon the income or any property of the Borrower or any
Subsidiary; provided, however, that neither the Borrower nor any Subsidiary shall be required to
pay any such tax, assessment, charge, levy or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings diligently conducted
by or on behalf of the Borrower or its Subsidiary, and if the Borrower or its Subsidiary shall have
set up reserves therefor adequate under GAAP or if no Material Adverse Effect shall be occasioned
by all such failures in the aggregate.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
-43-
Section 6.01 Indebtedness. The Borrower shall not, and shall not permit any
Subsidiary, TEPPCO GP or Enterprise GP to create, incur or assume any Indebtedness on or after the
date hereof, except:
(a) Indebtedness incurred under this Agreement;
(b) With respect to the Borrower and its Subsidiaries (and TEPPCO GP and Enterprise GP, but
only so long as the Borrower is the lender with respect to such indebtedness) intercompany
Indebtedness;
(c) other Indebtedness in an aggregate principal amount not exceeding $25,000,000 at any time
outstanding;
(d) with respect to Enterprise GP, Indebtedness incurred by it solely as a result of its
status as general partner of Enterprise, so long as such Indebtedness is not a contractual
obligation of Enterprise GP, whether contingent or otherwise, and with respect to TEPPCO GP,
Indebtedness incurred by it solely as a result of its status as general partner of TEPPCO, so
long as such Indebtedness is not a contractual obligation of TEPPCO GP, whether contingent or
otherwise; and
(e) Indebtedness the net proceeds of which are used to prepay the Loans pursuant to
Section 2.11(d) contemporaneously with the issuance of such Indebtedness; provided that the
amount of such Indebtedness permitted under this subclause (e) shall not, in the aggregate, exceed
the amount necessary to fully pay any amounts outstanding under the Term Loan (Debt Bridge) and the
Term Loan (Equity Bridge);
provided, however, that neither the Borrower nor any Subsidiary shall create, incur or assume
any Indebtedness pursuant to any provision of this Section 6.01 if an Event of Default
shall have occurred and be continuing or would result from such creation, incurrence or assumption.
Section 6.02 Liens. The Borrower shall not, and shall not permit any Subsidiary to,
create, assume, incur or suffer to exist any Lien, other than a Permitted Lien and Liens to secure
Indebtedness permitted under Section 6.01(c), on any Principal Property or upon any Equity
Interests of any Subsidiary owning or leasing any Principal Property, now owned or hereafter
acquired by the Borrower or such Subsidiary to secure any Indebtedness of the Borrower, any
Subsidiary, Enterprise or any other Person (other than the Indebtedness under this Agreement),
without in any such case making effective provision whereby any and all Indebtedness under this
Agreement then outstanding will be secured by a Lien equally and ratably with, or prior to, such
Indebtedness for so long as such Indebtedness shall be so secured. Notwithstanding anything in
this Agreement or any other Loan Document to the contrary, the Borrower shall not, and shall not
permit any Subsidiary to, create, assume, incur or suffer to exist any Lien on any of the
Collateral other than (i) to secure the Obligations and (ii) those described in Section
3.16.
Section 6.03 Fundamental Changes. The Borrower will not merge into or consolidate
with any other Person, or permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all of its assets, or all or substantially all of the Equity Interests of any of its
-44-
Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing (i) any Person may merge into or consolidate with the Borrower in a
transaction in which the Borrower is the surviving entity and (ii) Borrower may sell or otherwise
dispose of all or any portion of the Equity Interests of any of its Subsidiaries except to the
extent such Equity Interests constitute Collateral.
Section 6.04
Reserved.
Section 6.05
Restricted Payments. The Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payments, except that:
(i) any Subsidiary may make Restricted Payments to the Borrower, any Subsidiary and other
owners of Equity Interests in such Subsidiary making the Restricted Payment; and
(ii) so long as no Event of Default shall have occurred and be continuing and provided that no
Event of Default would result from the making of such Restricted Payment, the Borrower may make
Restricted Payments from Available Cash cumulative from the date of the Borrowers IPO through the
date of such Restricted Payment.
Section 6.06 Restrictive Agreements. The Borrower will not, and will not permit any
of its Subsidiaries, Enterprise, Enterprise GP, TEPPCO, TEPPCO GP or EOLP to, directly or
indirectly, enter into, incur or permit to exist any agreement or other arrangement with any
Person, other than the Lenders pursuant hereto or restrictions or conditions existing on the date
hereof and identified on Schedule 6.06 (or any other restriction or condition substantially
the same as those listed on Schedule 6.06), which prohibits, restricts or imposes any
conditions upon the ability of any Subsidiary to (a) pay dividends or make other distributions or
pay any Indebtedness owed to the Borrower, Enterprise, Enterprise GP, TEPPCO, TEPPCO GP, EOLP, or
any Subsidiary, or (b) make subordinate loans or advances to or make other investments in the
Borrower, Enterprise, Enterprise GP, TEPPCO, TEPPCO GP, EOLP or any Subsidiary, in each case, other
than restrictions or conditions contained in, or existing by reasons of, any agreement or
instrument (i) existing on the date hereof and identified on Schedule 6.06, (ii) relating
to property existing at the time of the acquisition thereof, so long as the restriction or
condition relates only to the property so acquired, (iii) relating to any Indebtedness of, or
otherwise to, any subsidiary of Enterprise, Enterprise GP, TEPPCO, TEPPCO GP or EOLP at the time
such subsidiary was merged or consolidated with or into, or acquired by, Enterprise, Enterprise GP,
TEPPCO, TEPPCO GP or EOLP or a subsidiary of any of them or became a subsidiary of Enterprise,
Enterprise GP, TEPPCO, TEPPCO GP or EOLP and not created in contemplation thereof, (iv) effecting a
renewal, extension, refinancing, refund or replacement (or successive extensions, renewals,
refinancings, refunds or replacements) of Indebtedness issued under an agreement referred to in
clauses (i) through (iii) above, so long as the restrictions and conditions contained in any such
renewal, extension, refinancing, refund or replacement agreement, taken as a whole, are not
materially more restrictive than the restrictions and conditions contained in the original
agreement, as determined in good faith by the board of directors, or equivalent, of the Borrower,
the relevant Subsidiary, Enterprise, Enterprise GP, TEPPCO, TEPPCO GP or EOLP,
-45-
(v) constituting
customary provisions restricting subletting or assignment of any leases of Enterprise, Enterprise
GP, EOLP, TEPPCO, TEPPCO GP or any subsidiary of any of them or provisions in agreements that
restrict the assignment of such agreement or any rights thereunder, (vi) constituting restrictions
on the sale or other disposition of any property securing Indebtedness as a result of a Lien on
such property permitted hereunder, (vii) constituting any temporary encumbrance or restriction with
respect to a subsidiary of Enterprise, Enterprise GP, TEPPCO, TEPPCO GP or EOLP under an agreement
that has been entered into for the disposition of all or substantially all of the outstanding
Equity Interests of or assets of such subsidiary, provided that
such disposition is otherwise permitted hereunder, (viii) constituting customary restrictions
on cash, other deposits or assets imposed by customers and other persons under contracts entered
into in the ordinary course of business, (ix) constituting provisions contained in agreements or
instruments relating to Indebtedness that prohibit the transfer of all or substantially all of the
assets of the obligor under that agreement or instrument unless the transferee assumes the
obligations of the obligor under such agreement or instrument or such assets may be transferred
subject to such prohibition, (x) constituting a requirement that a certain amount of Indebtedness
be maintained between a subsidiary of Enterprise, Enterprise GP, TEPPCO, TEPPCO GP or EOLP and
Enterprise GP, Enterprise, TEPPCO, TEPPCO GP or EOLP or another subsidiary of any of them, (xi)
constituting any restriction or condition with respect to property under an agreement that has been
entered into for the disposition of such property, provided that such disposition is otherwise
permitted hereunder, or (xii) constituting any restriction or condition with respect to property
under a charter, lease or other agreement that has been entered into for the employment of such
property.
Section 6.07 Financial Condition Covenant. The Borrower shall not permit its Leverage
Ratio in each case for the four full fiscal quarters most recently ended to exceed 7.50 to 1.00.
For purposes of this Section 6.07, if during any period of four fiscal quarters the
Borrower or any Subsidiary acquires any Person (or any interest in any Person) or all or
substantially all of the assets of any Person, the EBITDA attributable to such assets or an amount
equal to the percentage of ownership of the Borrower in such Person times the EBITDA of such
Person, for such period determined on a pro forma basis (which determination, in each case, shall
be subject to approval of each Administrative Agent, not to be unreasonably withheld) may be
included as Consolidated EBITDA for such period; provided that during the portion of such period
that follows such acquisition, the computation in respect of the EBITDA of such Person or such
assets, as the case may be, shall be made on the basis of actual (rather than pro forma) results.
ARTICLE VII
Events of Default
If any of the following events (Events of Default) shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or fail to pay any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under this
-46-
Agreement, when
and as the same shall become due and payable, and such failure shall continue unremedied for a
period of five (5) Business Days;
(c) any representation or warranty made or deemed made by or on behalf of the Borrower, any
party to a Loan Document (other than Administrative Agent, the Administrative Agent or any Lender),
or any Material Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any Security Instrument, report,
certificate, financial statement or other document furnished pursuant to or in connection with this
Agreement or any amendment or modification hereof or waiver hereunder, shall prove to have been
incorrect in any material respect when made or deemed made and such materiality is continuing;
(d) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02, Section 5.03 (with respect to the Borrowers existence)
or Section 5.08 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article)
or in any Security Instrument, and such failure shall continue unremedied for a period of 30 days
after written notice thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender);
(f) the Borrower, Enterprise, Enterprise GP, EOLP, TEPPCO, TEPPCO GP or any Material
Subsidiary shall fail to make any payment of principal or interest (regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due and payable, (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any, specified in the agreement or instrument
relating to such Material Indebtedness; for the avoidance of doubt the parties acknowledge and
agree that any payment required to be made under a guaranty of payment or collection described in
clause (c) of the definition of Indebtedness shall be due and payable at the time such payment is
due and payable under the terms of such guaranty (taking into account any applicable grace period)
and to the extent of any applicable grace period only, such payment shall be deemed not to have
been accelerated or required to be prepaid prior to its stated maturity as a result of the
obligation guaranteed having become due;
(g) the Borrower, Enterprise, Enterprise GP, EOLP, TEPPCO, TEPPCO GP or any Material
Subsidiary shall default in the observance or performance of any covenant or obligation contained
in any agreement or instrument relating to any such Material Indebtedness that in substance is
customarily considered a default in loan documents (in each case, other than a failure to pay
specified in subsection (f) of this Article VII) and such default shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if the effect thereof
is to accelerate the maturity of such Material Indebtedness or require such Material Indebtedness
to be prepaid prior to the stated maturity thereof;
(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed, or
any Person referenced below shall otherwise become subject to such proceeding or petition seeking
(i) liquidation, reorganization or other relief in respect of the Borrower, any
-47-
party to a Loan
Document (other than Administrative Agent, the Administrative Agent or any Lender), Enterprise,
Enterprise GP, EOLP, TEPPCO, TEPPCO GP or any Material Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower, any party to a Loan Document (other
than Administrative Agent, the Administrative Agent or any
Lender), Enterprise, Enterprise GP, EOLP, TEPPCO, TEPPCO GP or any Material Subsidiary or for
a substantial part of its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower, any party to a Loan Document (other than Administrative Agent, the
Administrative Agent or any Lender), Enterprise, Enterprise GP, EOLP, TEPPCO, TEPPCO GP or any
Material Subsidiary shall (i) voluntarily commence any proceeding, file any petition or any such
Person shall otherwise subject itself to any proceeding, seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower, any party to a Loan Document (other than
Administrative Agent, the Administrative Agent or any Lender), Enterprise, Enterprise GP, EOLP,
TEPPCO, TEPPCO GP or any Material Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose
of effecting any of the foregoing;
(j) the Borrower, any party to a Loan Document (other than Administrative Agent, the
Administrative Agent or any Lender), Enterprise, Enterprise GP, EOLP, TEPPCO, TEPPCO GP or any
Material Subsidiary shall become unable, admits in writing its inability or fails generally to pay
its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate uninsured amount equal to
or greater than $25,000,000 shall be rendered against the Borrower or any Material Subsidiary or
any combination thereof and the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any Material Subsidiary to
enforce any such judgment;
(l) an ERISA Event shall have occurred that, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding (i) $5,000,000 in any year or (ii) $10,000,000 for
all periods;
(m) the Security Instruments after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid, binding and
enforceable in accordance with their terms, or cease to create a valid and perfected first
-48-
priority
Lien on any of the Collateral purported to be covered thereby, except to the extent permitted by
the terms of this Agreement, or the Borrower shall so state in writing;
(n) a Change in Control shall occur;
(o) this Agreement or any other Loan Document ceases to be valid and binding on the Borrower
or any of its Subsidiaries party thereto in any material respect or is declared, by a
court of competent jurisdiction, null and void in any material respect, or the validity or
enforceability thereof is contested by Borrower or any Subsidiary or Borrower or any Subsidiary
denies it has any or further liability under this Agreement or under the other Loan Documents to
which it is a party or there shall occur a Default or Event of Default as defined in any Loan
Document;
then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent at the request of the Required Lenders shall, by notice to the Borrower, take
either or both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans
then outstanding to be due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the Borrower described in
clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by the
Borrower.
ARTICLE VIII
The Agents
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not
serving in such agency capacity, and such Person and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with the Borrower, any Subsidiary or
Enterprise GP or other Affiliate thereof as if it were not an agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether a Default has
-49-
occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to exercise in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02), and (c) except as expressly set forth
herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for
the failure to disclose, any information relating to the Borrower, any of its Subsidiaries or
Enterprise GP that is communicated to or obtained by any of them while serving as
Administrative Agent, as applicable, or by any of their respective Affiliates in any capacity. The
Administrative Agent shall not be liable to the Lenders for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or
in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until written notice thereof is given to
the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents of any certificate,
report or other document delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv)
the validity, enforceability, effectiveness or genuineness of this Agreement or any other
agreement, instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to them.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by such Person. The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, with the Borrowers approval (which will not be unreasonably withheld or
-50-
delayed, and the
Borrowers approval shall not be required if an Event of Default has occurred which is continuing),
to appoint a successor. If no successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, with the Borrowers approval
(which will not be unreasonably withheld or delayed, and the Borrowers approval shall not be
required if an Event of Default has occurred which is continuing), on behalf of the Lenders and the
Issuing Bank, appoint a successor Administrative
Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such
bank and such bank, or its Affiliate, as applicable, shall have capital and surplus equal to or
greater than $500,000,000. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After such agents resignation
hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties
in respect of any actions taken or omitted to be taken by any of them while it was acting as
Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder or thereunder.
Neither the Co-Documentation Agents nor the Syndication Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than those applicable to
all Lenders as such. Without limiting the foregoing, neither the Co-Documentation Agents nor the
Syndication Agent shall have or be deemed to have a fiduciary relationship with any Lender. Each
Lender hereby makes the same acknowledgements with respect to each of the Co-Documentation Agents
and the Syndication Agent as it makes with respect to the Administrative Agent in the immediately
preceding paragraph of this Article VIII.
ARTICLE IX
Miscellaneous
Section 9.01 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 1100 Louisiana Building, Suite 1000, Houston, Texas 77002,
Attention of Treasurer (for delivery) (Telecopy No. 713/381-8200);
-51-
(b) if to the Administrative Agent, to Citicorp North America, Inc., 2 Penns Way, Suite 200,
New Castle, Delaware 19720, Attention of Enterprise GP Holdings L.P. Account Officer (Telecopy No.
212.994.0961), with a copy to Citicorp North America, Inc., 333 Clay
Street, Suite 3700, Houston, Texas 77002, Attention of Enterprise GP Holdings L.P. Account
Officer (Telecopy No. 713.481.0247); and
(c) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.
(d) The Borrower will have the option to provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the Administrative Agent pursuant
to the Loan Documents, including, without limitation, all notices, requests, financial statements,
financial and other reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an existing, Borrowing or
other extension of credit (including any election of an interest rate or Interest Period relating
thereto) or relates to the issuance, amendment, renewal or extension of any Letter of Credit, (ii)
relates to the payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (iii) provides notice of any Default or Event of Default, or (iv) other
than the requirements set forth in Sections 3.04(a), 4.01(i) and 5.01, is
required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement
and/or any Borrowing, any issuance, amendment, renewal or extension of any Letter of Credit or any
other extension of credit hereunder (all such non-excluded communications being referred to herein
collectively as Communications), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to . The Borrower further agrees that
the Administrative Agent may make the Communications available to the Lenders and the Issuing Bank
by posting the Communications on Intralinks or a substantially similar electronic transmission
system (the Platform). The Borrower acknowledges that the distribution of material
through an electronic medium is not necessarily secure and that there are confidentiality and other
risks associated with such distribution. The Platform is provided as is and as available.
The Agent Parties (as defined below) do not warrant the accuracy or completeness of the
Communications, or the adequacy of the Platform and expressly disclaim liability for errors or
omissions in the Communications. No warranty of any kind, express, implied or statutory,
including, without limitation, any warranty of merchantability, fitness for a particular purpose,
non-infringement of third party rights or freedom from viruses or other code defects, is made by
the Agent Parties in connection with the Communications or the Platform. In no event shall the
Administrative Agent or any of its affiliates or any of their respective officers, directors,
employees, agents, advisors or representatives (collectively, Agent Parties) have any liability
to the Borrower, any Lender or any other Person or entity for damages of any kind, including,
without limitation, direct or indirect, special, incidental or consequential damages, losses or
expenses (whether in tort, contract or otherwise) arising out of the Borrowers or the
Administrative Agents transmission of Communications through the internet, except to the extent
the liability of any Agent Party is found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted primarily from such Agent Partys gross negligence or
willful misconduct. The Administrative Agent agrees that the receipt of the Communications by
the Administrative Agent at its e-mail address set forth above shall constitute effective delivery
of the Communications to the Administrative Agent for purposes of
-52-
the Loan Documents. Each of the
Issuing Bank and the Lenders agrees that notice to it (as provided in the next sentence) specifying
that the Communications have been posted to the Platform shall constitute effective delivery of the
Communications to such Issuing Bank or
Lender, as the case may be, for purposes of the Loan Documents. Each of the Issuing Bank and
the Lenders agrees to notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Issuing Banks or Lenders, as the case may be, e-mail
address to which the foregoing notice may be sent by electronic transmission, and (ii) that the
foregoing notice may be sent to such e-mail address. Nothing herein shall prejudice the right of
the Administrative Agent or any Lender to give any notice or other communication pursuant to any
Loan Document in any other manner specified in such Loan Document.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case of any Lender, to
the Borrower and the Administrative Agent). All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed to have been given
on the date of receipt.
Section 9.02 Waivers; Amendments.
(a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Administrative Agent, the Lenders and the
Issuing Bank hereunder are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or consent to any departure by
the Borrower therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing
Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase or extend any Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan (including without
limitation any LC Disbursement) or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment,
or postpone the scheduled date of expiration of any Commitment, without the written consent of each
Lender affected thereby, (iv) release any party from its obligations under the Security Instruments
or release all or substantially all of the property covered by the Security Instruments except as
otherwise provided therein, without the prior written consent of all Lenders, (v) change
Section 2.18(b) or Section 2.18(c) in a
-53-
manner that would alter the pro rata
sharing of payments required thereby, or any other
Section of this Agreement that requires pro rata treatment of the Lenders, without the written
consent of each Lender, or (vi) change any of the provisions of this Section or the definition of
Required Lenders or any other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent
or the Issuing Bank hereunder without the prior written consent of the Administrative Agent or the
Issuing Bank, as the case may be.
Section 9.03 Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements
of one law firm as counsel for the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the negotiation, preparation and administration of this
Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses reasonably incurred during the existence of an Event of Default by the
Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements
of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an Indemnitee) against, and hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the
performance by the parties hereto of their respective obligations hereunder or the consummation of
the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by the Borrower, any of
its Subsidiaries or Enterprise GP, or any Environmental Liability related in any way to the
Borrower, any of its Subsidiaries or Enterprise GP, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto and
whether brought by a third party or by the Borrower or any Subsidiary; provided that such indemnity
shall not, as to any Indemnitee, be available (x) to the extent that such losses, claims,
damages,
-54-
liabilities or related expenses resulted from the gross negligence or willful misconduct
of such Indemnitee or any Related Party of such Indemnitee, or (y) in connection with disputes
among or between the Administrative Agent, the Lenders, the Issuing Bank and/or their respective
Related Parties.
(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent or the Issuing Bank under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent or Issuing Bank, as the case may be, such
Lenders Applicable Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent or the Issuing Bank in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter
of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than 30 days after written
demand therefor, such demand to be in reasonable detail setting forth the basis for and method of
calculation of such amounts.
Section 9.04 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of
Credit) and, to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments and the Loans at
the time owing to it); provided that (i) except in the case of an assignment to a Lender, each of
the Borrower (except during the continuance of an Event of Default in which case Borrowers consent
shall not be required) and the Administrative Agent (and, in the case of an assignment of all or a
portion of a Revolving Credit Commitment or any Lenders obligations in
respect of its LC Exposure, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed), (ii) except in the case
of an assignment to a Lender or an assignment of the entire remaining amount of the assigning
-55-
Lenders Commitments, the amount of each Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect to such assignment
is delivered to the Administrative Agent) shall not be less than $10,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) each partial assignment shall result
in each of the assignor and the assignee retaining a Commitment, for each Class of Commitments
assigned, of not less than $10,000,000 and shall be made as an assignment of a proportionate part
of all the assigning Lenders rights and obligations under this Agreement, (iv) the parties (other
than the Borrower) to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of $3,500, (v) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and (vi) no assignment to a Foreign Bank shall be made hereunder unless, at the time
of such assignment, there is no withholding tax applicable with respect to such Foreign Bank for
which the Borrower would be or become responsible under Section 2.17; and provided further
that any consent of the Borrower otherwise required under this paragraph shall not be required if
an Event of Default has occurred and is continuing. Subject to acceptance and recording thereof
pursuant to paragraph (d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall, with respect to the interest assigned, be
a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all
of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Section 2.15,
Section 2.16, Section 2.17 and Section 9.03 as to matters occurring on or
prior to date of assignment). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and obligations in accordance
with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in New York, New York (the address of which shall be made available
to any party to this Agreement upon request) a copy of each Assignment and Acceptance delivered to
it and a register for the recordation of the names and addresses of the Lenders and principal
amount of the Loans and the LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the Register). The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee, the assignees completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required
-56-
by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, or the Administrative Agent sell
participations to one or more banks or other entities (a Participant) in all or a portion of such
Lenders rights and obligations under this Agreement (including all or a portion of its Commitments
and the Loans owing to it); provided that (i) such Lenders obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lenders rights and obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment, modification or
waiver described in the first proviso to Section 9.02(b) that affects such Participant.
(f) A Participant shall not be entitled to receive any greater payment under Section
2.15 or Section 2.17 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrowers prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the Borrower is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender and has zero withholding at the time of participation.
(g) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
Section 9.05 Survival. All covenants, agreements, representations and warranties made
by the Borrower herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by any such other party
or on its
behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may
have had notice or knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement
is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of
-57-
Section 2.15, Section 2.16,
Section 2.17 and Section 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments
or the termination of this Agreement or any provision hereof.
Section 9.06 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement, the other Loan Documents, and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the parties relating to
the subject matter hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. This Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.07 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing and the Required Lenders have directed the Administrative Agent to accelerate under
Article VII, each Lender and each of its Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit or the account of
the Borrower against any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law of the State
of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of
-58-
any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement against the Borrower or its properties
in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by law.
Section 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
Section 9.11 Headings. Article and Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.
Section 9.12 Confidentiality. Each of the Administrative Agent, the Issuing Bank, the
Syndication Agent, the Co-Documentation Agents and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (a)
to its and its Affiliates directors, officers, employees and agents, including accountants, legal
counsel and other advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority, (c) to the
extent required by applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement of
-59-
rights
hereunder, (f) subject to an agreement containing provisions substantially the same as those of
this Section, to any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (g) with the consent of the Borrower or
(h) to the extent such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Administrative Agent, the Syndication
Agent, the Co-Documentation Agents, the Issuing Bank or any Lender on a non-confidential basis from
a source other than the Borrower and its Related Parties. Notwithstanding anything herein to the
contrary, Information shall not include, and the Administrative Agent, the Issuing Bank, the
Syndication Agent, the Co-Documentation Agents and each Lender may disclose without limitation of
any kind, any Information with respect to the tax treatment and tax structure (in each case,
within the meaning of Treasury Regulation Section 1.6011-4) of the Transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that are provided to the
Administrative Agent or such Person relating to such tax treatment and tax structure; provided that
with respect to any document or similar item that in either case contains Information concerning
the tax treatment or tax structure of the Transactions as well as other Information, this sentence
shall only apply to such portions of the document or similar item that relate to the tax treatment
or tax structure of the Loans and Transactions contemplated hereby. For the purposes of this
Section, Information means all information received from the Borrower relating to the Borrower or
its business, other than any such information that is available to the Administrative Agent, the
Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrower.
Section 9.13 Interest Rate Limitation. Notwithstanding anything herein or in any
other Loan Document to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest on such Loan under
applicable law (collectively the Charges), shall exceed the maximum lawful rate (the Maximum
Rate) which may be contracted for, charged, taken, received or reserved by the Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect of such Loan
hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and,
to the extent lawful, the interest and Charges that would have been payable in respect of such
Loan but were not payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together (to the extent
lawful) with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall
have been received by such Lender.
Section 9.14 Reserved.
Section 9.15 Separateness. The Lenders acknowledge (i) the separateness as of the
date hereof of the Borrower, TEPPCO, TEPPCO GP, ETE, ETE GP, ETP, EPE Holdings, Enterprise and
Enterprise GP from each other and from other Persons, (ii) that the lenders and noteholders under
credit agreements with Enterprise, TEPPCO, TEPPCO GP, ETE, ETE GP, ETP, EPE Holdings or Enterprise
GP, or any one or more of them, have likely advanced funds thereunder in reliance upon the
separateness of the Borrower, TEPPCO, TEPPCO GP, ETE, ETE GP, ETP, EPE Holdings, Enterprise and
Enterprise GP from each other and from other Persons, (iii) that each of the Borrower, TEPPCO,
TEPPCO GP, ETE, ETE GP, ETP, EPE Holdings, Enterprise and Enterprise GP have assets and liabilities
that are separate from those of each other
-60-
and from those of other Persons, (iv) that the Loans and
other obligations owing under the Loan Documents have not been guaranteed by Enterprise, Enterprise
GP, TEPPCO, TEPPCO GP, ETE, ETE GP, ETP, EPE Holdings or any of their respective subsidiaries, and
(v) that, except as other Persons may expressly assume or guarantee any of the Loan Documents or
obligations thereunder, the Lenders shall look solely to the Borrower and its property and assets,
and any property pledged as collateral with respect to the Loan Documents, for the repayment of any
amounts payable pursuant to the Loan Documents and for satisfaction of any obligations owing to the
Lenders under the Loan Documents and that none of TEPPCO, TEPPCO GP, ETE, ETE GP, ETP, EPE
Holdings, Enterprise, Enterprise GP or any of their respective subsidiaries is personally liable to
the Lenders for any amounts payable, or any liability, under the Loan Documents.
Section 9.16 USA Patriot Act Notice. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56) signed into law
October 26, 2001 (the USA Patriot Act), it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in accordance with the USA
Patriot Act.
[Signature pages follow.]
-61-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.
|
|
|
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P.,
a Delaware limited partnership |
|
|
|
|
|
|
|
|
|
|
|
By: EPE Holdings, LLC,
a Delaware limited liability company,
its general partner |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ W. Randall Fowler |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
W. Randall Fowler |
|
|
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
CITICORP NORTH AMERICA, INC.,
as Administrative Agent and as a Lender and an Equity
Bridge Lender |
|
|
|
|
|
|
|
|
|
|
|
By: |
|
/s/ J. Christopher Lyons |
|
|
|
|
|
|
|
|
|
|
|
Name: |
|
J. Christopher Lyons |
|
|
|
|
Title: |
|
Director |
|
|
|
|
|
|
|
|
|
|
|
CITIBANK, N.A., as
Issuing Bank |
|
|
|
|
|
|
|
|
|
|
|
By: |
|
/s/ J. Christopher Lyons |
|
|
|
|
|
|
|
|
|
|
|
Name: |
|
J. Christopher Lyons |
|
|
|
|
Title: |
|
Director |
|
|
|
|
|
|
|
|
|
|
|
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent and as a Lender and an Equity
Bridge Lender |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Laurie Perper |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Laurie Perper |
|
|
|
|
Title:
|
|
Senior Vice President |
|
|
|
|
|
|
|
|
|
|
|
THE BANK OF NOVA SCOTIA,
as Co-Documentation Agent and as a Lender |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Andrew Ostrov |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Andrew Ostrov |
|
|
|
|
Title:
|
|
Director |
|
|
|
|
|
|
|
|
|
|
|
SUNTRUST BANK,
as Co-Documentation Agent and as a Lender |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Peter Panos |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Peter Panos |
|
|
|
|
Title:
|
|
Vice President |
|
|
|
|
|
|
|
|
|
|
|
MIZUHO CORPORATE BANK, LTD.,
as Co-Documentation Agent and as a Lender |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Leon Mo |
|
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Leon Mo |
|
|
|
|
Title:
|
|
Senior Vice President |
|
|
SCHEDULE 2.01
COMMITMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving Credit |
|
|
Term Commitment |
|
|
Term Commitment |
|
Lender |
|
Commitment |
|
|
(Debt Bridge) |
|
|
(Equity Bridge) |
|
|
Citicorp North America, Inc. |
|
|
57,142,857.14 |
|
|
|
342,857,142.86 |
|
|
|
250,000,000 |
|
Lehman Commercial Paper Inc. |
|
|
57,142,857.15 |
|
|
|
342,857,142.85 |
|
|
|
250,000,000 |
|
The Bank of Nova Scotia |
|
|
28,571,428.57 |
|
|
|
171,428,571.43 |
|
|
|
0 |
|
SunTrust Bank |
|
|
28,571,428.57 |
|
|
|
171,428,571.43 |
|
|
|
0 |
|
Mizuho Corporate Bank, Ltd. |
|
|
28,571,428.57 |
|
|
|
171,428,571.43 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
200,000,000 |
|
|
$ |
1,200,000,000 |
|
|
$ |
500,000,000 |
|
SCHEDULE 3.06
DISCLOSED MATTERS
None.
SCHEDULE 3.12
SUBSIDIARIES
I. Subsidiaries
Enterprise Products GP, LLC
II. Ownership of Enterprise
|
|
|
|
|
|
|
|
|
|
|
Ownership* |
|
|
Enterprise Products Partners L.P. |
|
|
DFI Delaware Holdings L.P. -- 27.18% |
|
|
|
|
|
Duncan Family 2000 Trust -- 1.53% |
|
|
|
|
|
Duncan Family 1998 Trust -- 1.34% |
|
|
|
|
|
Enterprise GP Holdings L.P. -- 3.05% |
|
|
|
|
|
Dan Duncan (personally) -- 0.21% |
|
|
|
|
|
Public Unit holders -- 64.69% |
|
|
|
|
|
Enterprise Products GP, LLC -- 2.00% |
|
|
* The ownership values in this column reflect such values as of March 31, 2007
SCHEDULE 6.02
PERMITTED LIENS
None.
SCHEDULE 6.06
RESTRICTIVE AGREEMENTS
1. Section 6.05 of the Credit Agreement dated as of August 25, 2004 (as amended, the
Multi-Year Agreement), among Enterprise Products Operating L.P., Wachovia Bank, National
Association, as Administrative Agent, Issuing Bank and Swingline Lender, the Lenders party thereto,
Citibank, N.A. and JPMorgan Chase Bank, as Co-Syndication Agents for such Lenders, and Mizuho
Corporate Bank, Ltd., SunTrust Bank and The Bank of Nova Scotia, as Co-Documentation Agents for
such Lenders, provides that (capitalized terms not defined herein shall have the meanings assigned
to such terms in the Multi-Year Agreement):
The Borrower [Enterprise Products Operating L.P.] will not, and will not permit any
of its Subsidiaries (other than Project Finance Subsidiaries) to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, except as
long as no Event of Default has occurred and is continuing or would result
therefrom, (i) the Borrower and the Subsidiaries may make Restricted Payments
necessary to fund the Program, (ii) the Borrower may make Restricted Payments from
Available Cash (as defined in the Partnership Agreement) from Operating Surplus (as
defined in the Partnership Agreement) cumulative from January 1, 1999 through the
date of such Restricted Payment, (iii) in connection with the consummation of the
GulfTerra Merger Transactions, the Borrower may distribute its 50% membership
interest in GT Energy Company LLC and its 10.9 million Series C units and 2.9
million common units in GT Energy Partners, L.P. to the Limited Partner, (iv) any
Subsidiary may buy back any of its own Equity Interests, and (v) the Borrower and
its Subsidiaries may make payments or other distributions to officers, directors or
employees with respect to the exercise by any such Persons of options, warrants or
other rights to acquire Equity Interests in the Borrower or such Subsidiary issued
pursuant to an employment, equity award, equity option or equity appreciation
agreement or plans entered into by the Borrower or such Subsidiary in the ordinary
course of business; provided, that even if an Event of Default shall have occurred
and is continuing, no Subsidiary shall be prohibited from upstreaming dividends or
other payments to the Borrower or any Subsidiary (which is not a Project Finance
Subsidiary) or making, in the case of any Subsidiary that is not wholly-owned
(directly or indirectly) by the Borrower, ratable dividends or payments, as the case
may be, to the other owners of Equity Interests in such Subsidiary.
2. Section 6.05 of the Credit Agreement dated as of May 1, 2007 (the EPCO Holdings
Agreement), among EPCO Holdings, Inc., the Lenders party thereto, Citicorp North America, Inc., as
Administrative Agent, provides that (capitalized terms not defined herein shall have the meanings
assigned to such terms in the EPCO Holdings Agreement):
The Borrower [EPCO Holdings, Inc.] will not, and will not permit any of its
Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly,
any Restricted Payment, except as long as no Event of Default has occurred and is
continuing or would result therefrom and no Default of the nature described in
ARTICLE VII(a), (b), (h), or (k) has occurred and is continuing or would result
therefrom, the Borrower may declare and make, and agree to pay and make, Restricted
Payments that do not (i) with respect to any Restricted Payments made on or after
the Effective Date and prior to the date that the certificate pursuant to
Section 5.01(c) for the quarter ended June 30, 2007 is delivered, exceed
Twenty-Five Million and No/100 Dollars ($25,000,000) in the aggregate (and,
notwithstanding anything in this Agreement to the contrary, no Intermediate Excess
Cash Flow Payments will be required in connection with any Restricted Payments made
during such period), and (ii) with respect to any Restricted Payments made on or
after the date that the certificate pursuant to Section 5.01(c) for the
quarter ended June 30, 2007 is delivered, exceed the Excess Distributable Amount at
the time such Restricted Payments are made.
EXHIBIT A
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Second Amended and Restated Credit Agreement dated as of May 1, 2007
(as amended and in effect on the date hereof, the Credit Agreement), among Enterprise GP Holdings
L.P., the Lenders named therein, Citicorp North America, Inc, as Administrative Agent and Citibank,
N.A, as Issuing Bank. Terms defined in the Credit Agreement are used herein with the same
meanings.
The Assignor named herein hereby sells and assigns, without recourse, to the Assignee named
herein, and the Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Assignment Date set forth herein the interests set forth herein (the Assigned
Interest) in the Assignors rights and obligations under the Credit Agreement, including, without
limitation, the interests set forth herein in the Commitment(s) of the Assignor on the Assignment
Date and Loans owing to the Assignor which are outstanding on the Assignment Date, together with
the participations in Letters of Credit and LC Disbursements held by the Assignor on the Assignment
Date, but excluding accrued interest and fees to and excluding the Assignment Date. The Assignee
hereby acknowledges receipt of a copy of the Credit Agreement. From and after the Assignment Date
(i) the Assignee shall be a party to and be bound by the provisions of the Credit Agreement and, to
the extent of the Assigned Interest, have the rights and obligations of a Lender thereunder and
(ii) the Assignor shall, to the extent of the Assigned Interest, relinquish its rights and be
released from its obligations under the Credit Agreement.
This Assignment and Acceptance is being delivered to the Administrative Agent together with
(i) if the Assignee is a Foreign Lender, any documentation required to be delivered by the Assignee
pursuant to Section 2.17(e) of the Credit Agreement, duly completed and executed by the
Assignee, and (ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by
the Assignee. The [Assignee/Assignor] shall pay the fee payable to the Administrative Agent
pursuant to Section 9.04(b) of the Credit Agreement.
This Assignment and Acceptance shall be governed by and construed in accordance with the laws
of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignees Address for Notices:
Effective Date of Assignment (Assignment Date):
|
|
|
|
|
|
|
|
|
|
Facility
|
|
|
Principal Amount Assigned
|
|
|
Percentage Assigned
of Facility/Commitment(s)
(set
forth, for each
assigned Commitment,
to at least 8
decimals, as a
percentage of the
aggregate
Commitments of the
relevant Class) |
|
|
|
|
|
|
|
|
|
|
|
Commitment(s) |
|
|
|
|
|
|
|
|
Assigned: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The terms set forth above are hereby agreed to:
|
|
|
|
|
|
[Name of Assignor] , as Assignor
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
[Name of Assignee] , as Assignee
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
The undersigned hereby consent to the within assignment:
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P.,
a Delaware limited partnership
|
|
|
By: |
EPE Holdings, LLC,
|
|
|
|
a Delaware limited liability company |
|
|
|
|
|
|
|
|
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
|
|
|
By: |
|
|
|
|
Name: |
|
|
|
|
Title: |
|
|
|
|
EXHIBIT B
FORM OF BORROWING REQUEST
Dated , 200
Citicorp North America, Inc.,
as Administrative Agent
2 Penns Way, Suite 200
New Castle, Delaware 19720
Attn: Enterprise GP Holdings L.P. Account Officer
Ladies and Gentlemen:
This Borrowing Request is delivered to you by Enterprise GP Holdings L.P., a Delaware limited
partnership (the Borrower), under Section 2.03 of the Second Amended and Restated Credit
Agreement dated as of May 1, 2007 (as further restated, amended, modified, supplemented and in
effect, the Credit Agreement), by and among the Borrower, the Lenders party thereto, Citicorp
North America, Inc., as Administrative Agent, and Citibank, N.A., as Issuing Bank.
1. The Borrower hereby requests that the Lenders make a Loan or Loans in the aggregate
principal amount of $ (the Loan or the Loans).1 The Class of the Loan
or Loans is .
2. The Borrower hereby requests that the Loan or Loans be made on , 200 :
3. The Borrower hereby requests that the Loan or Loans bear interest at the following interest
rate, plus the Applicable Rate, as set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last day of |
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
Interest |
|
|
|
|
|
Principal |
|
|
|
|
|
Period (if |
|
|
Period (if |
|
|
Type of Loan |
|
|
Amount |
|
|
Interest Rate |
|
|
applicable) |
|
|
applicable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. The Borrower hereby requests that the funds from the Loan or Loans be disbursed to the
following bank account: .
|
|
|
1 |
|
Complete with an amount in accordance with Section 2.03 of the Credit Agreement. |
5. After giving effect to the requested Loan or Loans, the amounts of the various Loans (as
defined in the Credit Agreement) outstanding do not exceed the respective maximum amounts permitted
to be outstanding pursuant to the terms of the Credit Agreement.
6. All of the conditions applicable to the Loan or Loans requested herein as set forth in the
Credit Agreement will be satisfied on or before the date of such Loan or Loans, but if such
conditions are not satisfied by such date and as a result the Loan or Loans are not funded as
requested herein, the Borrower confirms its obligation to compensate the Lenders for breakage costs
pursuant to Section 2.16 of the Credit Agreement.
7. All capitalized undefined terms used herein have the meanings assigned thereto in the
Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Borrowing Request this day of
, 200 .
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P., a Delaware limited partnership
|
|
|
By: |
EPE Holdings, LLC,
|
|
|
|
a Delaware limited liability company, |
|
|
|
its general partner |
|
|
|
|
cc:
|
|
Citicorp North America, Inc. |
|
|
333 Clay Street, Suite 3700 |
|
|
Houston, Texas 77002 |
|
|
Attn: Enterprise GP Holdings L.P. Account Officer |
EXHIBIT C
FORM OF
INTEREST ELECTION REQUEST
Dated
Citicorp North America, Inc.,
as Administrative Agent
2 Penns Way, Suite 200
New Castle, Delaware 19720
Attn: Enterprise GP Holdings L.P. Account Officer
Ladies and Gentlemen:
This irrevocable Interest Election Request (the Request) is delivered to you under
Section 2.08 of the Second Amended and Restated Credit Agreement dated as of May 1, 2007
(as further restated, amended, modified, supplemented and in effect from time to time, the Credit
Agreement), by and among Enterprise GP Holdings L.P., a Delaware limited partnership (the
Company), the Lenders party thereto (the Lenders), Citicorp North America, Inc., as
Administrative Agent, and Citibank, N.A., as Issuing Bank.
1. This Interest Election Request is submitted for the purpose of:
(a) [Converting] [Continuing] a Loan [into] [as] a
Loan.1
(b) The aggregate outstanding principal balance of such Loan is $ .
(c) The last day of the current Interest Period for such Loan is
.2
(d) The principal amount of such Loan to be [converted] [continued] is
$ .3
(e) The requested effective date of the [conversion] [continuation] of such Loan is
.4
(f) The requested Interest Period applicable to the [converted] [continued] Loan is
.5
|
|
|
1 |
|
Delete the bracketed language and insert Alternate Base Rate or LIBO Rate, as applicable, in
each blank. |
|
2 |
|
Insert applicable date for any Eurodollar Loan being converted or continued. |
|
3 |
|
Complete with an amount in compliance with Section 2.08 of the Credit Agreement. |
|
4 |
|
Complete with a Business Day in compliance with Section 2.08 of the Credit Agreement. |
|
5 |
|
Complete with an Interest Period in compliance with the Credit Agreement. |
2. With respect to a Borrowing to be converted to or continued as a Eurodollar Borrowing, no
Event of Default exists, and none will exist upon the conversion or continuation of the Borrowing
requested herein.
3. All capitalized undefined terms used herein have the meanings assigned thereto in the
Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Interest Election Request this ___day
of , .
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P.,
a Delaware limited partnership
|
|
|
By: |
EPE Holdings, LLC,
|
|
|
|
a Delaware limited liability company, |
|
|
|
its general partner |
|
|
|
|
cc:
|
|
Citicorp North America, Inc. |
|
|
333 Clay Street, Suite 3700 |
|
|
Houston, Texas 77002 |
|
|
Attn: Enterprise GP Holdings L.P. Account Officer |
EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the of Enterprise GP
Holdings L.P., a Delaware limited partnership (the Borrower), and that as such he is authorized
to execute this certificate on behalf of the Borrower. With reference to the Second Amended and
Restated Credit Agreement dated as of May 1, 2007 (as further restated, amended, modified,
supplemented and in effect from time to time, the Agreement), among the Borrower, the lenders
that are or become a party thereto (the Lenders), Citicorp North America, Inc. as Administrative
Agent, and Citibank, N.A. as Issuing Bank, the undersigned represents and warrants as follows (each
capitalized term used herein having the same meaning given to it in the Agreement unless otherwise
specified);
(a) [There currently does not exist any Default under the Agreement.] [Attached hereto is a
schedule specifying the reasonable details of [a] certain Default[s] which exist under the
Agreement and the action taken or proposed to be taken with respect thereto.]
(b) Attached hereto are the reasonably detailed computations necessary to determine whether
the Borrower is in compliance with Section 6.07 of the Agreement as of the end of the
[fiscal quarter][fiscal year] ending .
(c) Attached hereto are the reasonably detailed computations which demonstrate cumulative
Excess Distributable Amount through the fiscal quarter ending .
EXECUTED AND DELIVERED this day of , 200.
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P.,
a Delaware limited partnership
|
|
|
By: |
EPE Holdings, LLC,
|
|
|
|
a Delaware limited liability company, |
|
|
|
its general partner |
|
EXHIBIT F-1
FORM OF REVOLVING CREDIT NOTE
Enterprise GP Holdings L.P., a Delaware limited partnership (the Borrower), for value
received, promises and agrees to pay to (the Lender), or to its order, at
the payment office of Citicorp North America, Inc., as Administrative Agent, at
[ ], the principal sum of AND NO/100 DOLLARS
($ ), or such lesser amount as shall equal the aggregate unpaid principal amount of the
Revolving Credit Loans owed to the Lender under the Credit Agreement, as hereafter defined, in
lawful money of the United States of America and in immediately available funds, on the dates and
in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount as provided in the Credit Agreement for such Revolving Credit Loans, at such
office, in like money and funds, for the period commencing on the date of each such Revolving
Credit Loan until such Revolving Credit Loan shall be paid in full, at the rates per annum and on
the dates provided in the Credit Agreement.
This note evidences the Revolving Credit Loans owed to the Lender under that certain Second
Amended and Restated Credit Agreement dated as of May 1, 2007, by and among the Borrower, Citicorp
North America, Inc., individually and as Administrative Agent, Citibank, N.A., as Issuing Bank and
the other financial institutions parties thereto (including the Lender) (such Second Amended and
Restated Credit Agreement, together with all amendments or supplements thereto, being the Credit
Agreement), and shall be governed by the Credit Agreement. Capitalized terms used in this note
and not defined in this note, but which are defined in the Credit Agreement, have the respective
meanings herein as are assigned to them in the Credit Agreement.
The Lender is hereby authorized by the Borrower to endorse on Schedule A (or a
continuation thereof) attached to this note, the Type of each Revolving Credit Loan owed to the
Lender, the amount and date of each payment or prepayment of principal of each such Revolving
Credit Loan received by the Lender and the Interest Periods and interest rates applicable to each
Revolving Credit Loan, provided that any failure by the Lender to make any such endorsement shall
not affect the obligations of the Borrower under the Credit Agreement or under this note in respect
of such Revolving Credit Loans.
This note may be held by the Lender for the account of its applicable lending office and,
except as otherwise provided in the Credit Agreement, may be transferred from one lending office of
the Lender to another lending office of the Lender from time to time as the Lender may determine.
Except only for any notices which are specifically required by the Credit Agreement or the
other Loan Documents, the Borrower and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including but not limited to notice of intent to accelerate and notice of
acceleration, notice of protest and notice of dishonor), demand, presentment for
payment, protest, diligence in collecting and the filing of suit for the purpose of fixing
liability, and consent that the time of payment hereof may be extended and re-extended from time to
time without notice to any of them. Each such Person agrees that his, her or its liability on or
with respect to this note shall not be affected by any release of or change in any guaranty or
security at any time existing or by any failure to perfect or maintain perfection of any lien
against or security interest in any such security or the partial or complete unenforceability of
any guaranty or other surety obligation, in each case in whole or in part, with or without notice
and before or after maturity.
The Credit Agreement provides for the acceleration of the maturity of this note upon the
occurrence of certain events and for prepayment of Revolving Credit Loans upon the terms and
conditions specified therein. Reference is made to the Credit Agreement for all other pertinent
purposes.
This note is issued pursuant to and is entitled to the benefits of the Credit Agreement and is
secured by the Security Instruments.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P.,
a Delaware limited partnership
|
|
|
By: |
EPE Holdings, LLC,
|
|
|
|
a Delaware limited liability company, |
|
|
|
its general partner |
|
SCHEDULE A
TO
REVOLVING CREDIT NOTE
This note evidences each Revolving Credit Loan owed to the Lender under the Credit Agreement,
in the principal amount set forth below and the applicable Interest Periods and rates for each such
Revolving Credit Loan, subject to the payments of principal set forth below:
SCHEDULE
OF
REVOLVING CREDIT LOANS AND PAYMENTS OF PRINCIPAL AND INTEREST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of |
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
Interest |
|
|
|
|
|
|
|
|
Interest |
|
|
|
Amount of |
|
Paid or |
|
Interest |
|
Balance |
|
Notation |
Date |
|
Period |
|
Rate |
|
Loan |
|
Prepaid |
|
Paid |
|
of Loans |
|
Made by |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT F-2
FORM OF TERM NOTE (DEBT BRIDGE)
Enterprise GP Holdings L.P., a Delaware limited partnership (the Borrower), for value
received, promises and agrees to pay to (the Lender), or to its order, at
the payment office of Citicorp North America, Inc., as Administrative Agent, at
[ ], the principal sum of AND NO/100 DOLLARS
($ ), or such lesser amount as shall equal the aggregate unpaid principal amount of the
Term Loans (Debt Bridge) owed to the Lender under the Credit Agreement, as hereafter defined, in
lawful money of the United States of America and in immediately available funds, on the dates and
in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount as provided in the Credit Agreement for such Term Loans (Debt Bridge), at such
office, in like money and funds, for the period commencing on the date of each such Term Loan (Debt
Bridge) until such Term Loan (Debt Bridge) shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
This note evidences the Term Loans (Debt Bridge) owed to the Lender under that certain Second
Amended and Restated Credit Agreement dated as of May 1, 2007, by and among the Borrower, Citicorp
North America, Inc., individually and as Administrative Agent, Citibank, N.A., as Issuing Bank and
the other financial institutions parties thereto (including the Lender) (such Second Amended and
Restated Credit Agreement, together with all amendments or supplements thereto, being the Credit
Agreement), and shall be governed by the Credit Agreement. Capitalized terms used in this note
and not defined in this note, but which are defined in the Credit Agreement, have the respective
meanings herein as are assigned to them in the Credit Agreement.
The Lender is hereby authorized by the Borrower to endorse on Schedule A (or a
continuation thereof) attached to this note, the Type of each Term Loan (Debt Bridge) owed to the
Lender, the amount and date of each payment or prepayment of principal of each such Term Loan (Debt
Bridge) received by the Lender and the Interest Periods and interest rates applicable to each Term
Loan (Debt Bridge), provided that any failure by the Lender to make any such endorsement shall not
affect the obligations of the Borrower under the Credit Agreement or under this note in respect of
such Term Loans (Debt Bridge).
This note may be held by the Lender for the account of its applicable lending office and,
except as otherwise provided in the Credit Agreement, may be transferred from one lending office of
the Lender to another lending office of the Lender from time to time as the Lender may determine.
Except only for any notices which are specifically required by the Credit Agreement or the
other Loan Documents, the Borrower and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including but not limited to notice of intent to accelerate and notice of
acceleration, notice of protest and notice of dishonor), demand, presentment for
payment, protest, diligence in collecting and the filing of suit for the purpose of fixing
liability, and consent that the time of payment hereof may be extended and re-extended from time to
time without notice to any of them. Each such Person agrees that his, her or its liability on or
with respect to this note shall not be affected by any release of or change in any guaranty or
security at any time existing or by any failure to perfect or maintain perfection of any lien
against or security interest in any such security or the partial or complete unenforceability of
any guaranty or other surety obligation, in each case in whole or in part, with or without notice
and before or after maturity.
The Credit Agreement provides for the acceleration of the maturity of this note upon the
occurrence of certain events and for prepayment of Term Loans (Debt Bridge) upon the terms and
conditions specified therein. Reference is made to the Credit Agreement for all other pertinent
purposes.
This note is issued pursuant to and is entitled to the benefits of the Credit Agreement and is
secured by the Security Instruments.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P.,
a Delaware limited partnership
|
|
|
By: |
EPE Holdings, LLC,
|
|
|
|
a Delaware limited liability company, |
|
|
|
its general partner |
|
SCHEDULE A
TO
TERM NOTE (DEBT BRIDGE)
This note evidences each Term Loan (Debt Bridge) owed to the Lender under the Credit
Agreement, in the principal amount set forth below and the applicable Interest Periods and rates
for each such Term Loan (Debt Bridge), subject to the payments of principal set forth below:
SCHEDULE
OF
TERM LOANS (DEBT BRIDGE) AND PAYMENTS OF PRINCIPAL AND INTEREST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of |
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
Interest |
|
|
|
|
|
|
|
|
Interest |
|
|
|
Amount of |
|
Paid or |
|
Interest |
|
Balance |
|
Notation |
Date |
|
Period |
|
Rate |
|
Loan |
|
Prepaid |
|
Paid |
|
of Loans |
|
Made by |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT F-3
FORM OF TERM NOTE (EQUITY BRIDGE)
Enterprise GP Holdings L.P., a Delaware limited partnership (the Borrower), for value
received, promises and agrees to pay to (the Lender), or to its order, at
the payment office of Citicorp North America, Inc., as Administrative Agent, at
[ ], the principal sum of AND NO/100 DOLLARS
($ ), or such lesser amount as shall equal the aggregate unpaid principal amount of the
Term Loans (Equity Bridge) owed to the Lender under the Credit Agreement, as hereafter defined, in
lawful money of the United States of America and in immediately available funds, on the dates and
in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount as provided in the Credit Agreement for such Term Loans (Equity Bridge), at such
office, in like money and funds, for the period commencing on the date of each such Term Loan
(Equity Bridge) until such Term Loan (Equity Bridge) shall be paid in full, at the rates per annum
and on the dates provided in the Credit Agreement.
This note evidences the Term Loans (Equity Bridge) owed to the Lender under that certain
Second Amended and Restated Credit Agreement dated as of May 1, 2007, by and among the Borrower,
Citicorp North America, Inc., individually and as Administrative Agent, Citibank, N.A., as Issuing
Bank and the other financial institutions parties thereto (including the Lender) (such Second
Amended and Restated Credit Agreement, together with all amendments or supplements thereto, being
the Credit Agreement), and shall be governed by the Credit Agreement. Capitalized terms used in
this note and not defined in this note, but which are defined in the Credit Agreement, have the
respective meanings herein as are assigned to them in the Credit Agreement.
The Lender is hereby authorized by the Borrower to endorse on Schedule A (or a
continuation thereof) attached to this note, the Type of each Term Loan (Equity Bridge) owed to the
Lender, the amount and date of each payment or prepayment of principal of each such Term Loan
(Equity Bridge) received by the Lender and the Interest Periods and interest rates applicable to
each Term Loan (Equity Bridge), provided that any failure by the Lender to make any such
endorsement shall not affect the obligations of the Borrower under the Credit Agreement or under
this note in respect of such Term Loans (Equity Bridge).
This note may be held by the Lender for the account of its applicable lending office and,
except as otherwise provided in the Credit Agreement, may be transferred from one lending office of
the Lender to another lending office of the Lender from time to time as the Lender may determine.
Except only for any notices which are specifically required by the Credit Agreement or the
other Loan Documents, the Borrower and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including but not limited to notice of intent to accelerate and notice of
acceleration, notice of protest and notice of dishonor), demand, presentment for
payment, protest, diligence in collecting and the filing of suit for the purpose of fixing
liability, and consent that the time of payment hereof may be extended and re-extended from time to
time without notice to any of them. Each such Person agrees that his, her or its liability on or
with respect to this note shall not be affected by any release of or change in any guaranty or
security at any time existing or by any failure to perfect or maintain perfection of any lien
against or security interest in any such security or the partial or complete unenforceability of
any guaranty or other surety obligation, in each case in whole or in part, with or without notice
and before or after maturity.
The Credit Agreement provides for the acceleration of the maturity of this note upon the
occurrence of certain events and for prepayment of Term Loans (Equity Bridge) upon the terms and
conditions specified therein. Reference is made to the Credit Agreement for all other pertinent
purposes.
This note is issued pursuant to and is entitled to the benefits of the Credit Agreement and is
secured by the Security Instruments.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
|
|
|
|
|
|
ENTERPRISE GP HOLDINGS L.P.,
a Delaware limited partnership
|
|
|
By: |
EPE Holdings, LLC,
|
|
|
|
a Delaware limited liability company, |
|
|
|
its general partner |
|
SCHEDULE A
TO
TERM NOTE (EQUITY BRIDGE)
This note evidences each Term Loan (Equity Bridge) owed to the Lender under the Credit
Agreement, in the principal amount set forth below and the applicable Interest Periods and rates
for each such Term Loan (Equity Bridge), subject to the payments of principal set forth below:
SCHEDULE
OF
\ TERM LOANS (EQUITY BRIDGE) AND PAYMENTS OF PRINCIPAL AND INTEREST
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of |
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
Interest |
|
|
|
|
|
|
|
|
Interest |
|
|
|
Amount of |
|
Paid or |
|
Interest |
|
Balance |
|
Notation |
Date |
|
Period |
|
Rate |
|
Loan |
|
Prepaid |
|
Paid |
|
of Loans |
|
Made by |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT G
LIST OF SECURITY INSTRUMENTS
1. |
|
Second Amended and Restated Pledge and Security Agreement (EPD) by Borrower of
13,454,498 uncertificated Enterprise Products Partners L.P. common units. |
|
2. |
|
Second Amended and Restated Pledge and Security Agreement (EPD GP) by Borrower of 100%
uncertificated membership interest in Enterprise Products GP, LLC. |
|
3. |
|
Pledge and Security Agreement (ETE) by Borrower of 38,976,090 Energy Transfer Equity,
L.P. certificated common units. |
|
4. |
|
Pledge and Security Agreement (TEPPCO) by Borrower of 4,400,000 units of TEPPCO
certificated common units. |
|
5. |
|
Pledge and Security Agreement (TEPPCO GP) by Borrower of 100% uncertificated membership
interest in Texas Eastern Products Pipeline Company, LLC. |
exv10w6
Exhibit
10.6
Execution Copy
AGREEMENT OF LIMITED PARTNERSHIP
OF
EPE UNIT III, L.P.
Dated as of
May 7, 2007
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
ARTICLE I
|
DEFINITIONS
|
|
|
|
|
|
|
|
|
|
1.01 Certain Definitions |
|
|
1 |
|
|
|
|
|
1.02 Other Definitions |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE II
|
ORGANIZATIONAL MATTERS
|
|
|
|
|
|
|
|
|
|
2.01 Formation |
|
|
6 |
|
|
|
|
|
2.02 Name |
|
|
6 |
|
|
|
|
|
2.03 Registered Office; Registered Agent; Other Offices |
|
|
6 |
|
|
|
|
|
2.04 Purposes |
|
|
6 |
|
|
|
|
|
2.05 Certificate; Foreign Qualification |
|
|
6 |
|
|
|
|
|
2.06 Term |
|
|
7 |
|
|
|
|
|
2.07 Merger or Consolidation |
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE III
|
PARTNERS; DISPOSITIONS OF INTERESTS
|
|
|
|
|
|
|
|
|
|
3.01 Partners |
|
|
7 |
|
|
|
|
|
3.02 Representations and Warranties |
|
|
7 |
|
|
|
|
|
3.03 Restrictions on the Disposition of an Interest |
|
|
7 |
|
|
|
|
|
3.04 Additional Partners |
|
|
9 |
|
|
|
|
|
3.05 Interests in a Partner |
|
|
9 |
|
|
|
|
|
3.06 Spouses of Partners |
|
|
9 |
|
|
|
|
|
3.07 Vesting of Limited Partners |
|
|
9 |
|
|
|
|
|
3.08 Services Provided by the Partners |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE IV
|
CAPITAL CONTRIBUTIONS
|
|
|
|
|
|
|
|
|
|
4.01 Initial and Additional Capital Contributions |
|
|
10 |
|
|
|
|
|
4.02 Return of Contributions |
|
|
10 |
|
|
|
|
|
4.03 Advances by General Partner |
|
|
11 |
|
|
|
|
|
4.04 Capital Accounts |
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE V
|
ALLOCATIONS AND DISTRIBUTIONS
|
|
|
|
|
|
|
|
|
|
5.01 Allocations |
|
|
11 |
|
|
|
|
|
5.02 Income Tax Allocations |
|
|
14 |
|
|
|
|
|
5.03 Distributions of Cashflow from EPE Units |
|
|
14 |
|
|
|
|
|
5.04 Distributions of Proceeds from Sales of EPE Units |
|
|
15 |
|
|
|
|
|
5.05 Restrictions on Distributions of EPE Units |
|
|
15 |
|
|
|
|
|
- i -
|
|
|
|
|
|
|
|
|
ARTICLE VI
|
MANAGEMENT AND OPERATION
|
|
|
|
|
|
|
|
|
|
6.01 Management of Partnership Affairs |
|
|
15 |
|
|
|
|
|
6.02 Duties and Obligations of General Partner |
|
|
16 |
|
|
|
|
|
6.03 Release and Indemnification |
|
|
16 |
|
|
|
|
|
6.04 Power of Attorney |
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE VII
|
RIGHTS OF OTHER PARTNERS
|
|
|
|
|
|
|
|
|
|
7.01 Information |
|
|
18 |
|
|
|
|
|
7.02 Limitations |
|
|
19 |
|
|
|
|
|
7.03 Limited Liability |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE VIII
|
TAXES
|
|
|
|
|
|
|
|
|
|
8.01 Tax Returns |
|
|
19 |
|
|
|
|
|
8.02 Tax Elections |
|
|
19 |
|
|
|
|
|
8.03 Tax Matters Partner |
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE IX
|
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
|
|
|
|
|
|
|
|
|
|
9.01 Maintenance of Books |
|
|
20 |
|
|
|
|
|
9.02 Financial Statements |
|
|
20 |
|
|
|
|
|
9.03 Bank Accounts |
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE X
|
WITHDRAWAL, BANKRUPTCY, REMOVAL, ETC.
|
|
|
|
|
|
|
|
|
|
10.01 Withdrawal, Bankruptcy, Etc. of General Partner |
|
|
20 |
|
|
|
|
|
10.02 Conversion of Interest |
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE XI
|
DISSOLUTION, LIQUIDATION, AND TERMINATION
|
|
|
|
|
|
|
|
|
|
11.01 Dissolution |
|
|
21 |
|
|
|
|
|
11.02 Liquidation and Termination |
|
|
22 |
|
|
|
|
|
11.03 Cancellation of Certificate |
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE XII
|
GENERAL PROVISIONS
|
|
|
|
|
|
|
|
|
|
12.01 Offset |
|
|
23 |
|
|
|
|
|
12.02 Notices |
|
|
24 |
|
|
|
|
|
12.03 Entire Agreement; Supersedure |
|
|
24 |
|
|
|
|
|
- ii -
|
|
|
|
|
|
|
|
|
12.04 Effect of Waiver or Consent |
|
|
24 |
|
|
|
|
|
12.05 Amendment or Modification |
|
|
24 |
|
|
|
|
|
12.06 Binding Effect; Joinder of Additional Parties |
|
|
24 |
|
|
|
|
|
12.07 Construction |
|
|
24 |
|
|
|
|
|
12.08 Further Assurances |
|
|
25 |
|
|
|
|
|
12.09 Indemnification |
|
|
25 |
|
|
|
|
|
12.10 Waiver of Certain Rights |
|
|
25 |
|
|
|
|
|
12.11 Counterparts |
|
|
25 |
|
|
|
|
|
12.12 Dispute Resolution |
|
|
25 |
|
|
|
|
|
12.13 No Effect on Employment Relationship |
|
|
28 |
|
|
|
|
|
12.14 Legal Representation |
|
|
28 |
|
|
|
|
|
- iii -
AGREEMENT OF LIMITED PARTNERSHIP
OF
EPE UNIT III, L.P.
This Agreement of Limited Partnership (this Agreement) of EPE Unit III, L.P., a
Delaware limited partnership (the Partnership), is made and entered into effective as of
May 7, 2007 by and among the Partners (as defined below).
RECITALS
FOR AND IN CONSIDERATION OF the mutual covenants, rights, and obligations set forth herein,
the benefits to be derived therefrom, and other good and valuable consideration, the receipt and
sufficiency of which each Partner acknowledges and confesses, the Partners hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Definitions. As used in this Agreement, the following terms have the
following respective meanings:
Act means the Delaware Revised Uniform Limited Partnership Act and any successor
statute, as amended from time to time.
Adjusted Capital Account means, with respect to any Partner, the balance in such
Partners Capital Account after giving effect to the following adjustments:
|
(a) |
|
Credit to such Capital Account of any amounts that such Partner is obligated or
deemed obligated to contribute pursuant to the penultimate sentences of Sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and |
|
|
(b) |
|
Debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the
Regulations. |
The foregoing definition of Adjusted Capital Account is intended to comply with the provisions
of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.
Adjustment Date means the (i) the fifth Business Day following the payment date with
respect to each distribution made by EPE with respect to EPE Units, and (ii) the fifth Business Day
following the receipt of any proceeds by the Partnership from the disposition of EPE Units.
Affiliate means with respect to any Person any other Person that directly or
indirectly through one or more intermediaries, controls or is controlled by, or is under common
control with, the Person specified. For the purpose of this definition, control shall mean
the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
Agreement has the meaning given it in the introductory paragraph hereof.
Applicable Percentage means with respect to a disposition of less than all the EPE
Units owned by the Partnership, the quotient (expressed as a percentage) of the number of EPE Units
held by the Partnership immediately after such disposition divided by the number of EPE Units held
by the Partnership immediately before such disposition.
Bankrupt Partner means any Partner (whether a General Partner or a Limited Partner)
with respect to which an event of the type described in Section 17-402(a)(4) or (5) of the Act (or
any equivalent successor provision) shall have occurred, subject to the lapsing of any period of
time therein specified.
Assigned EPE Units means those 4,421,326 EPE Units of which Beneficial Ownership was
assigned to the Partnership by the Class A Limited Partner pursuant to the Assignment.
Assignment means the irrevocable assignment under the Contribution Agreement
pursuant to which Beneficial Ownership of the Assigned EPE Units has been assigned by the Class A
Limited Partner to the Partnership.
Contribution Agreement means that agreement by and between Duncan Family Interests,
Inc. and EPE Unit III, L.P., dated as of May 7, 2007.
Beneficial Ownership means, with respect to the Assigned EPE Units, dominion and
control (within the meaning of Treasury Regulation Section 1.704-1(e)(2)) representing all the
rights and obligations held by the Class A Limited Partner with respect to the Assigned EPE Units
prior to the Assignment as well as such residual rights exercised on behalf of the Assigned EPE
Units after the Assignment.
Business Day means any day other than a Saturday, Sunday, or day on which commercial
banks in the State of Texas are authorized or required to be closed for business.
Capital Account means the account maintained for each Partner pursuant to
Section 4.04.
Capital Contribution means any contribution by a Partner to the capital of the
Partnership.
Certificate means the Certificate of Limited Partnership of the Partnership referred
to in Section 2.05, as it may be amended or restated from time to time.
Change of Control means Duncan shall (i) cease to own, directly or indirectly, at
least a majority of the equity interests in the General Partner or the general partner of EPE, or
(ii) shall cease to have the ability to elect, directly or indirectly, at least a majority of the
directors of the general partner of EPD.
- 2 -
Class A Capital Base means (i) the Contributed Unit Fair Market Value multiplied by
(ii) the number of Assigned EPE Units, adjusted on each Adjustment Date as follows:
|
(a) |
|
increased by the Class A Preference Return that has accrued since the previous
Adjustment Date (or in the case of the first Adjustment Date, since the Closing Date);
and |
|
|
(b) |
|
decreased by all distributions made to the Class A Limited Partner since the
previous Adjustment Date (or in the case of the first Adjustment Date, since the
Closing Date). |
Class A Limited Partner means Duncan Family Interests, Inc., a Delaware corporation,
and its successors and assigns.
Class A Preference Return means the sum of the amounts determined for each day,
equal to the Class A Preference Return Rate multiplied by the Class A Capital Base.
Class A Preference Return Amount means the aggregate Class A Preference Return minus
all prior distributions to the Class A Limited Partner pursuant to Sections 5.03(a) and
5.04(a).
Class A Preference Return Rate means a percent per annum equal to 3.797% ((i) $1.46
(the per annum distribution rate based on the distribution announced with respect to the April 30,
2007 Record Date for Units of EPE) divided by (ii) the Contributed Unit Fair Market Value), divided
by 365 or 366 days, as the case may be during such calendar year.
Class B Limited Partner means any Person executing (by power of attorney or
otherwise) this Agreement as of the date hereof as a Class B Limited Partner or hereafter admitted
to the Partnership as a Class B Limited Partner as herein provided, but shall not include any
Person who has ceased to be a Class B Limited Partner in the Partnership.
Class B Percentage Interest means with respect to each Class B Limited Partner the
quotient (expressed as a percentage) of (i) such Class B Limited Partners Sharing Points, divided
by (ii) the Sharing Points of all Class B Limited Partners. For purposes of calculating the Class
B Percentage Interest, Sharing Points attributable to interests in the Partnership that are
forfeited pursuant to Section 3.07 shall be ignored.
Closing Date means May 7, 2007, the date on which the Class A Limited Partner
contributed Beneficial Ownership of the Assigned EPE Units to the Partnership pursuant to the
Contribution Agreement.
Contributed Unit Fair Market Value means $38.45 (the closing sales price per EPE
Unit on the New York Stock Exchange on May 4, 2007).
Code means the Internal Revenue Code of 1986, and any successor statute, as amended
from time to time.
- 3 -
Default Interest Rate means a varying per annum rate equal at any given time to the
lesser of (a) four percentage points in excess of the General Interest Rate and (b) the maximum
rate permitted by applicable law.
Disability means the event whereby a Limited Partner becomes entitled to receive
long-term disability benefits under the long-term disability plan of the General Partner or any of
its Affiliates.
Dispose, Disposing, or Disposition means a sale, assignment,
transfer, exchange, mortgage, pledge, grant of a security interest, or other disposition or
encumbrance, or the acts thereof, other than by divorce, legal separation or other dissolution of a
Partners marriage.
Duncan means, collectively, individually or in any combination, Dan L. Duncan, his
wife, descendants, heirs and/or legatees and/or distributees of Dan L. Duncans estate, and/or
trusts established for the benefit of his wife, descendants, such legatees and/or distributees
and/or their respective descendants, heirs, legatees and distributees.
EPCO means EPCO, Inc., a Texas corporation.
EPD means Enterprise Products Partners L.P., a Delaware limited partnership.
EPE means Enterprise GP Holdings L.P., a Delaware limited partnership.
EPE Units means (1) the Assigned EPE Units for so long as the Contribution Agreement
is effective, and (2) thereafter, the partnership units representing limited partner interests in
EPE.
General Interest Rate means a varying per annum rate equal at any given time to the
lesser of (a) the interest rate publicly quoted by J.P. Morgan Chase from time to time as its prime
commercial or similar reference interest rate, and (b) the maximum rate permitted by applicable
law.
General Partner means EPCO, Inc., a Texas corporation, or any Person hereafter
admitted to the Partnership as a general partner as herein provided, but shall not include any
Person who has ceased to be a general partner in the Partnership.
Limited Partner means the Class A Limited Partner or any Class B Limited Partner.
Net Income and Net Loss mean, respectively, subject to Section
4.04, an amount equal to the Partnerships taxable income or loss taking the Assignment into
account determined in accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall
be included in taxable income or loss), with the following adjustments:
(a) Any income of the Partnership that is exempt from federal income tax and not otherwise
taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income
and Net Loss shall be added to such taxable income or loss;
- 4 -
(b) Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as
Code Section 705(a)(2)(B) expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations,
and not otherwise taken into account in computing Net Income or Net Loss pursuant to this
definition of Net Income and Net Loss, shall be subtracted from such taxable income or loss;
(c) In the event the value of any Partnership property is adjusted pursuant to Section
4.04 (i) such adjustment shall be taken into account as gain or loss from the disposition of
such Partnership property for purposes of computing Net Income or Net Loss, (ii) if such property
is subject to depreciation, cost recovery, depletion or amortization, any further deductions for
such depreciation, cost recovery, depletion or amortization attributable to such property shall be
determined taking into account such adjustment, and (ii) in determining the amount of any income,
gain or loss attributable to the taxable disposition of such property such adjustment (and the
related adjustments for depreciation, cost recovery, depletion or amortization) shall be taken into
account;
(d) To the extent an adjustment to the adjusted tax basis of any Partnership Property pursuant
to Code Section 734(b) is required, pursuant to Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations,
to be taken into account in determining Capital Accounts as a result of a Distribution other than
in liquidation of a Partners interest in the Partnership, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) from the disposition of such Partnership Property and shall be
taken into account for purposes of computing Net Income or Net Loss; and
(e) Any items that are allocated pursuant to Section 5.01(b) shall not be taken into
account in computing Net Income or Net Loss.
Partner means the General Partner, the Class A Limited Partner or any Class B
Limited Partner.
Partnership has the meaning given it in the introductory paragraph.
Person has the meaning given it in the Act.
Qualifying Termination means the termination of a Class B Limited Partners
employment with the General Partner and its Affiliates due to (i) death, (ii) receiving long-term
disability benefits under the long-term disability plan of the General Partner or any of its
Affiliates or (iii) retirement with the approval of the General Partner on or after reaching age
60.
Regulations means the regulations promulgated under Section 704 of the Code.
Required Interest means one or more Class B Limited Partners having among them more
than 50% of the Class B Percentage Interests of all Limited Partners in its or their capacities as
such.
Sharing Points means, with respect to each Class B Limited Partner, the number of
Sharing Points granted by the General Partner to such Class B Limited Partner (which number is set
forth on the Power of Attorney executed by the Class B Limited Partner and delivered to the
- 5 -
General Partner), as the same may be amended from time to time pursuant to the terms of this
Agreement.
Vesting Date means the earliest of (i) the fifth anniversary of the date of this
Agreement, (ii) a Change of Control or (iii) dissolution of the Partnership.
1.02 Other Definitions. Other terms defined herein have the meanings so given them.
ARTICLE II
ORGANIZATIONAL MATTERS
2.01 Formation. The Partnership has been previously formed as a Delaware limited
partnership for the purposes hereinafter set forth under and pursuant to the provisions of the Act.
2.02 Name. The name of the Partnership is EPE Unit III, L.P. and all Partnership
business shall be conducted in such name or such other name or names that comply with applicable
law as the General Partner may designate from time to time.
2.03 Registered Office; Registered Agent; Other Offices. The registered office of the
Partnership in the State of Delaware shall be at such place as the General Partner may designate
from time to time. The registered agent for service of process on the Partnership in the State of
Delaware or any other jurisdiction shall be such Person or Persons as the General Partner may
designate from time to time. The Partnership may have such other offices as the General Partner
may designate from time to time.
2.04 Purposes. The purposes of the Partnership are to acquire, own, sell, exchange or
otherwise dispose of EPE Units, and to enter into, make and perform all contracts and other
undertakings and to engage in any other business, activity or transaction that now or hereafter may
be necessary, incidental, proper, advisable, or convenient, as determined by the General Partner,
to accomplish the foregoing purposes.
2.05 Certificate; Foreign Qualification. The General Partner has previously executed
and caused to be filed with the Secretary of State of the State of Delaware a Certificate of
Limited Partnership, effective as of April 26, 2007, containing information required by the Act and
such other information as the General Partner deemed appropriate. Prior to conducting business in
any jurisdiction other than Delaware, the General Partner shall cause the Partnership to comply, to
the extent such matters are reasonably within the control of the General Partner, with all
requirements necessary to
qualify the Partnership as a foreign limited partnership (or a partnership in which the
Limited Partners have limited liability) in such jurisdiction. Upon the request of the General
Partner, each Partner shall execute, acknowledge, swear to, and deliver all certificates and other
instruments conforming with this Agreement that are necessary or appropriate as determined by the
General Partner to qualify, continue, and terminate the Partnership as a limited partnership under
the laws of the State of Delaware and to qualify, continue, and terminate the Partnership as a
foreign limited partnership (or a partnership in which the Limited Partners have limited liability)
in all other jurisdictions in which the Partnership may conduct business, and to this end the
General Partner may use the power of attorney described in Section 6.04.
- 6 -
2.06 Term. The term of this Partnership shall continue in existence until the close
of Partnership business on the earliest to occur of (i) the fiftieth anniversary of the date of
this Agreement, and (ii) such earlier time as this Agreement may specify.
2.07 Merger or Consolidation. The Partnership may merge or consolidate with or into
another business entity, or enter into an agreement to do so, with the consent of the General
Partner and a Required Interest.
ARTICLE III
PARTNERS; DISPOSITIONS OF INTERESTS
3.01 Partners. The General Partner, the Class A Limited Partner and the Class B
Limited Partners of the Partnership are the Persons executing (by power of attorney or otherwise)
this Agreement as of the date hereof as the General Partner, the Class A Limited Partner and the
Class B Limited Partners, respectively, each of which is admitted to the Partnership as the General
Partner, Class A Limited Partner or a Class B Limited Partner, as the case may be, effective as of
the date hereof.
3.02 Representations and Warranties. Each Partner hereby represents and warrants to
the Partnership and each other Partner that (a) if such Partner is a corporation, it is duly
organized, validly existing, and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified and in good standing as a foreign corporation in the
jurisdiction of its principal place of business (if not incorporated therein), (b) if such Partner
is a trust, estate or other entity, it is duly formed, validly existing, and (if applicable) in
good standing under the laws of the jurisdiction of its formation, and if required by law is duly
qualified to do business and (if applicable) in good standing in the jurisdiction of its principal
place of business (if not formed therein), (c) such Partner has full corporate, trust, or other
applicable right, power and authority to enter into this Agreement and to perform its obligations
hereunder and all necessary actions by the board of directors, trustees, beneficiaries, or other
Persons necessary for the due authorization, execution, delivery, and performance of this Agreement
by such Partner have been duly taken, and such authorization, execution, delivery, and performance
do not conflict with any other agreement or arrangement to
which such Partner is a party or by which it is bound, and (d) such Partner is acquiring its
interest in the Partnership for investment purposes and not with a view to distribution thereof.
3.03 Restrictions on the Disposition of an Interest. (a) No Class B Limited Partner
may Dispose of all or part of its interest in the Partnership without the prior written consent
(which may be given or withheld in its sole discretion) of the General Partner, and then only after
Sections 3.03(c), (d) and (e) have been complied with, except that Class B
Limited Partners may Dispose of all of its interest upon the death of such Class B Limited Partner
or upon becoming a Bankrupt Partner, but in each case only after compliance with Sections
3.03(c), (d) and (e). Neither the General Partner nor the Class A Limited
Partner may Dispose of all or a part of its interest in the Partnership to a Person who is not an
Affiliate of Duncan without the prior written consent of a Required Interest, and then only after
Sections 3.03(c), (d) and (e) have been complied with.
- 7 -
(b) Subject to the provisions of Sections 3.03(c), (d) and (e), a
permitted transferee of all or a part of a Partners interest in the Partnership shall be admitted
to the Partnership as a General Partner or a Limited Partner (as applicable) with, in the case of
Class B Limited Partners, such Sharing Points (no greater than the Sharing Points of the Class B
Limited Partners effecting such Disposition immediately prior thereto) as the Partner effecting
such Disposition and such permitted transferee may agree.
(c) The Partnership shall not recognize for any purpose any purported Disposition of an
interest in the Partnership or distributions therefrom unless and until the provisions of this
Section 3.03 shall have been satisfied and there shall have been delivered to the General
Partner a document (i) executed by both the Partner effecting such Disposition and the Person to
which such interest or interest in distributions are to be Disposed, (ii) including the written
acceptance by any Person to be admitted to the Partnership of all the terms and provisions of this
Agreement, such Persons notice address, and an agreement by such Person to perform and discharge
timely all of the obligations and liabilities in respect of the interest being obtained, (iii)
setting forth, in the case of the Class B Limited Partners, the Sharing Points of the Class B
Limited Partners effecting such Disposition and the Person to which such interest is Disposed after
such Disposition (which together shall total the Sharing Points of the Class B Limited Partners
effecting such Disposition prior thereto), (iv) containing a representation and warranty that such
Disposition complied with all applicable laws and regulations (including securities laws) and a
representation and warranty by such Person that the representations and warranties in Section
3.02 are true and correct with respect to such Person. Each such Disposition and, if
applicable, admission shall be effective as of the first day of the calendar month immediately
succeeding the month in which the General Partner shall receive such notification of Disposition
and the other requirements of this Section 3.03 shall have been met unless the General
Partner and the Partner affecting such Disposition agree to a different effective date; provided,
however, that if there shall be only one General Partner and such Disposition or admission and, as
a result of such Disposition such General Partner would cease to be a General Partner, such
permitted transferee shall be deemed admitted as a General Partner immediately prior to such
cessation.
(d) Notwithstanding any provision of this Agreement to the contrary, the right of any Partner
to Dispose of an interest in the Partnership or distributions therefrom or of any Person to
be admitted to the Partnership in connection therewith shall not exist or be exercised (i)
unless and until the Partnership shall have received a favorable opinion of the Partnerships legal
counsel or of other legal counsel acceptable to the General Partner to the effect that such
Disposition or admission is not required to be registered under the Securities Act of 1933 or any
other applicable securities laws, and such Disposition or admission would not cause the Partnership
to become an investment company required to register under the Investment Company Act of 1940,
and (ii) unless such Disposition or admission would not result in the Partnership being treated as
an association taxable as a corporation for federal income tax purposes or as a publicly traded
partnership as defined in Section 7704 of the Code. The General Partner, however, may waive the
requirements of Section 3.03(d)(i).
(e) All costs (including, without limitation, the legal fees incurred in connection with the
obtaining of the legal opinions referred to in Section 3.03(d)) incurred by the Partnership
in connection with any Disposition or admission of a Person to the Partnership pursuant to this
- 8 -
Section 3.03 shall be borne and paid by the Partner effecting such Disposition within 10
days after the receipt by such Person of the Partnerships invoice for the amount due.
(f) In the event of a Disposition of an interest in the Partnership pursuant to the death of a
Limited Partner that would, in the opinion of the Partnerships legal counsel, result in the
Partnership becoming an investment company required to register under the Investment Company Act
of 1940, the General Partner shall have the right to purchase such interest from the estate (or
beneficiaries) of such deceased Partner for a price equal to the amount that the deceased Partners
estate (or beneficiaries) would receive if all of the EPE Units held by the Partnership were sold
at a price equal to the closing sale price per EPE Unit as reported by the New York Stock Exchange
(or such other applicable trading market) on the day prior to the exercise of such right by the
General Partner and the proceeds from such sale were distributed to the Partners in accordance with
the provisions of Section 5.04. The determination by the General Partner of the foregoing
purchase price of such deceased Partners interest in the Partnership shall be conclusive and
binding on the deceased Partners estate and beneficiaries.
(g) Any attempted Disposition by a Person of an interest or right, or any part thereof, in or
in respect of the Partnership other than in accordance with this Section 3.03 shall be, and
is hereby declared, null and void ab initio.
3.04 Additional Partners. Subject to the provisions of Section 12.05 and
3.03, additional Persons may be admitted to the Partnership as General Partners or Limited
Partners, only to the extent that, and on such terms and conditions as, the General Partner shall
consent at the time of such admission or issuance. Such admission or issuance shall, in the case
of a Class B Limited Partners, specify the Sharing Points applicable thereto. Any such admission
must comply with the provisions of Section 3.03(d) and shall not be effective until such
new Partner shall have executed and delivered to the General Partner a document including such new
Partners notice address, acceptance of all the terms and provisions of this Agreement, an
agreement to perform and discharge timely all of its obligations and liabilities hereunder, and a
representation and warranty that the representations and warranties in Section 3.02 are
true and correct with respect to such new Partner.
3.05 Interests in a Partner. No Partner that is not a natural person shall cause or
permit an interest, direct or indirect, in itself to be Disposed of such that, on account of such
Disposition, the Partnership would become an association taxable as a corporation for federal
income tax purposes.
3.06 Spouses of Partners. A spouse of a Partner does not become a Partner as a result
of such marital relationship or by reason of a divorce, legal separation or other dissolution of
marriage. If, in the event of a divorce, legal separation or other dissolution of marriage of a
Partner, a former spouse of a Partner is awarded ownership of, or an interest in, all or part of a
Partners interest in the Partnership (the Awarded Interest), the Awarded Interest shall
automatically and immediately be forfeited and cancelled without payment on such date.
3.07 Vesting of Limited Partners. One hundred percent (100%) of the Class B Limited
Partners interest in the Partnership shall vest on the Vesting Date, but only if (i) on such date
the Class B Limited Partner continues to be an active, full-time employee of the General Partner or
- 9 -
any of its Affiliates or (ii) prior to the Vesting Date a Qualifying Termination has occurred with
respect to the Class B Limited Partner. At such time as the Class B Limited Partner ceases, for
any reason other than a Qualifying Termination, to be an active, full-time employee of the General
Partner or any of its Affiliates prior to the Vesting Date, his unvested interest in the
Partnership shall be forfeited. If the Class B Limited Partner ceases to be an active, full-time
employee prior to the Vesting Date, as determined by the General Partner in its sole discretion,
without regard as to how his status is treated by the General Partner or any of its Affiliates for
any of its other compensation or benefit plans or programs, the Class B Limited Partner will be
deemed to have terminated employment with the General Partner and its Affiliates and forfeited his
unvested interest in the Partnership for purposes of this Agreement. The Capital Account
attributable to any Class B Limited Partners interest in the Partnership that is forfeited
pursuant to Section 3.06, this Section 3.07 or otherwise hereunder shall be
allocated to the remaining Class B Limited Partners in accordance with their respective Class B
Participation Interests.
3.08 Services Provided by the Partners. The interests in the Partnership held by the
Partners are for the benefit of certain employees in connection with services rendered or to be
rendered by the Partners. EPCO shall be an express third party beneficiary of the services
provided by the Partners.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01 Initial and Additional Capital Contributions. In connection with the formation
of the Partnership, the General Partner contributed $1,700 to the Partnership and on the Closing
Date, the Class A Limited Partner contributed to the Partnership $169,999,985 worth of EPE Units
(equal to 4,421,326 EPE Units based on the $38.45 last reported sales price of the
EPE Units on the New York Stock Exchange on May 4,
2007). No Class B Limited Partners is obligated to make a contribution to the Partnership. Subject
to the provisions of applicable law or except as otherwise provided for herein, no Partner shall be
liable for or obligated to make an additional Capital Contribution to the Partnership, whether for
the purpose of enabling the Partnership to meet its obligations under Section 6.03 or for
any other purpose. The initial Capital Account of the General Partner is $1,700, the initial
Capital Account of the Class A Limited Partner as of the Closing Date is 169,999,985, and the
initial Capital Account of each Class B Limited Partner is zero.
4.02 Return of Contributions. No Partner shall be entitled to the return of any
part of its Capital Contributions or to be paid interest in respect of either its Capital Account
or any Capital Contribution made by it. No unrepaid Capital Contribution shall be deemed or
considered to be a liability of the Partnership or of any Partner. No Partner shall be required to
contribute, advance or lend any cash or property to the Partnership to enable the Partnership to
return any Partners Capital Contributions to the Partnership. To the extent, however, any Partner
(by mistake, overpayment or otherwise) advances funds to the Partnership in excess of the Capital
Contributions called for under Section 4.01, such excess amounts shall not be Capital
Contributions and (other than advances made by the General Partner pursuant to Section 4.03
below) shall be promptly returned by the Partnership to the Partner so advancing such funds.
- 10 -
4.03 Advances by General Partner. At any time that the Partnership shall not have
sufficient cash to pay its obligations, the General Partner may, but shall not be obligated to,
advance such funds for or on behalf of the Partnership. Each such advance shall constitute a loan
from the General Partner to the Partnership and shall bear interest from the date of the advance
until the date of repayment at the General Interest Rate. Any advances made by the General Partner
pursuant to this Section 4.03 shall not be considered to be Capital Contributions. All
advances shall be repaid out of the next available funds of the Partnership, including Capital
Contributions received.
4.04 Capital Accounts. A Capital Account shall be established and maintained for each
Partner. Each Partners Capital Account (a) shall be increased by (i) the amount of money
contributed by that Partner to the Partnership, (ii) the fair market value of property, if any,
contributed by that Partner to the Partnership (net of liabilities secured by such contributed
property that the Partnership is considered to assume or take subject to under Section 752 of the
Code), and (iii) allocations to that Partner of Partnership income and gain (or items thereof),
including income and gain exempt from tax and income and gain described in Regulation Section
1.704-1(b)(2)(iv)(g), but excluding income and gain described in Regulation Section
1.704-1(b)(4)(i), and (b) shall be decreased by (i) the amount of money distributed to that Partner
by the Partnership, (ii) the fair market value of property distributed to that Partner by the
Partnership (net of liabilities secured by such distributed property that such Partner is
considered to assume or take subject to under Section 752 of the Code), (iii) allocations to that
Partner of expenditures of the Partnership described in Section 705(a)(2)(B) of the Code, and (iv)
allocations of Partnership loss and
deduction (or items thereof), including loss and deduction described in Regulation Section
1.704-1(b)(2)(iv)(g), but excluding items described in clause (b)(iii) above and loss or
deduction described in Regulation Section 1.704-1(b)(4)(i). The Partners Capital Accounts also
shall be maintained and adjusted as permitted by the provisions of Regulation Section
1.704-1(b)(2)(iv)(f) and as required by the other provisions of Regulation Sections
1.704-1(b)(2)(iv) and 1.704-1(b)(4), including adjustments to reflect the allocations to the
Partners of depreciation, amortization, and gain or loss as computed for book purposes rather than
the allocation of the corresponding items as computed for tax purposes, as required by Regulation
Section 1.704-1(b)(2)(iv)(g). A Partner that has more than one interest in the Partnership shall
have a single Capital Account that reflects all such interests, regardless of the class of
interests owned by such Partner and regardless of the time or manner in which such interests were
acquired; provided, that Partners that are Affiliates but nevertheless separate legal entities
shall have separate Capital Accounts. Upon the transfer of all or part of an interest in the
Partnership, the Capital Account of the transferor that is attributable to the transferred interest
in the Partnership shall carry over to the transferee Partner in accordance with the provisions of
Regulation Section 1.704-1(b)(2)(iv)(l).
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.01 Allocations.
(a) Net Income and Net Loss. For purposes of maintaining the Capital Accounts, Net
Income or Net Loss (and all items included in the computation thereof) shall be allocated among the
Partners as follows:
- 11 -
(i) Net Income:
(A) First, to the Class A Limited Partner until the Class A Limited Partners
Adjusted Capital Account equals the Class A Capital Base; and
(B) Thereafter, to the Class B Limited Partners in accordance with the Class B
Percentage Interests.
(ii) Net Loss:
(A) First, to the Class B Limited Partners in accordance with the Class B
Percentage Interests until the Adjusted Capital Accounts of the Class B Limited
Partners are reduced to zero; and
(B) Thereafter, to the Class A Limited Partner.
(b) Special Allocations. Notwithstanding any other provision of this Section
5.01, the following special allocations shall be made for such taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision
of this Section 5.01, if there is a net decrease in Partnership Minimum Gain during
any Partnership taxable period, each Partner shall be allocated items of Partnership income
and gain for such period (and, if necessary, subsequent periods) in the manner and amounts
provided in Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any
successor provision. For purposes of this Section 5.01(b), each Partners Adjusted
Capital Account balance shall be determined, and the allocation of income or gain required
hereunder shall be effected, prior to the application of any other allocations pursuant to
this Section 5.01(b) with respect to such taxable period (other than an allocation
pursuant to Sections 5.01(b)(vi) and 5.01(b)(vii)). This Section
5.01(b)(i) is intended to comply with the Partnership Minimum Gain chargeback
requirement in Regulation Section 1.704-2(f) and shall be interpreted consistently
therewith.
(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the
other provisions of this Section 5.01 (other than Section 5.01(b)(i)),
except as provided in Regulation Section 1.704-2(i)(4), if there is a net decrease in
Partner Nonrecourse Debt Minimum Gain during any Partnership taxable period, any Partner
with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of such taxable
period shall be allocated items of Partnership income and gain for such period (and, if
necessary, subsequent periods) in the manner and amounts provided in Regulation Sections
1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section 5.01(b), each Partners Adjusted Capital Account balance shall be
determined, and the allocation of income or gain required hereunder shall be effected, prior
to the application of any other allocations pursuant to this Section 5.01(b), other
than Section 5.01(b)(i) and other than an allocation pursuant to Sections
5.01(b)(vi) and 5.01(b)(vii), with respect to such taxable period. This
Section 5.01(b)(ii) is intended to comply with the chargeback of items of income and
gain requirement in Regulation Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.
- 12 -
(iii) Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of
Partnership income and gain shall be specially allocated to such Partner in an amount and
manner sufficient to eliminate, to the extent required by the Regulations, the deficit
balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or
distributions as quickly as possible unless such deficit balance is otherwise eliminated
pursuant to Section 5.01(b)(i) or (ii).
(iv) Gross Income Allocations. In the event any Partner has a deficit balance
in its Capital Account at the end of any Partnership taxable period in excess of the sum of
(A) the amount such Partner is required to restore pursuant to the provisions of this
Agreement and (B) the amount such Partner is deemed obligated to restore pursuant to
Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be specially allocated
items of Partnership gross income and gain in the amount of such excess as quickly as
possible; provided, that an allocation pursuant to this Section 5.01(b)(iv) shall be
made only if and to the extent that such Partner would have a deficit balance in its
Capital Account as adjusted after all other allocations provided for in this
Section 5.01 have been tentatively made as if this Section 5.01(b)(iv) were
not in this Agreement.
(v) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period
shall be allocated to the Partners in accordance with their respective Percentage Interests.
If the General Partner determines that the Partnerships Nonrecourse Deductions should be
allocated in a different ratio to satisfy the safe harbor requirements of the Regulations
promulgated under Section 704(b) of the Code, the General Partner is authorized, upon notice
to the other Partners, to revise the prescribed ratio to the numerically closest ratio that
does satisfy such requirements.
(vi) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
taxable period shall be allocated 100% to the Partner that bears the Economic Risk of Loss
with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions
are attributable in accordance with Regulation Section 1.704-2(i). If more than one Partner
bears the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, such Partner
Nonrecourse Deductions attributable thereto shall be allocated between or among such
Partners in accordance with the ratios in which they share such Economic Risk of Loss.
(vii) Nonrecourse Liabilities. For purposes of Regulation Section
1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the Partnership in excess
of the sum of (A) the amount of Partnership Minimum Gain and (B) the total amount of
Nonrecourse Built-in Gain shall be allocated among the Partners in accordance with their
respective Percentage Interests.
(viii) Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code
is required, pursuant to Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account
in determining Capital Accounts, the amount of such adjustment to the Capital
- 13 -
Accounts shall
be treated as an item of gain (if the adjustment increases the basis of the asset) or loss
(if the adjustment decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their Capital
Accounts are required to be adjusted pursuant to such Section of the Regulations.
(c) Allocations Caused by Transfer of Interest. All items of income, gain, loss,
deduction, and credit allocable to any interest in the Partnership that may have been transferred
shall be allocated between the transferor and the transferee based upon that portion of the
calendar year during which each was recognized as owning such interest, without regard to the
results of Partnership operations during any particular portion of such calendar year and without
regard to distributions made to the transferor and the transferee during such calendar year;
provided, however, that such allocation shall be made in accordance with a method permissible under
Section 706 of the Code and the regulations thereunder.
5.02 Income Tax Allocations.
(a) Except as provided in this Section 5.02, each item of income, gain, loss and
deduction of the Partnership for federal income tax purposes shall be allocated among the Partners
in the same manner as such items are allocated for purposes of maintaining Capital Account under
Section 5.01.
(b) For federal and state income tax purposes, income, gain, loss, and deduction with respect
to property contributed to the Partnership by a Partner or revalued pursuant to Regulation Section
1.704-1(b)(2)(iv)(f) shall be allocated among the Partners in a manner that takes into account the
variation between the adjusted tax basis of such property and its book value, as required by
Section 704(c) of the Code and Regulation Section 1.704-1(b)(4)(i), using any allocation method
permitted by Regulation Section 1.704-3.
(c) The Partnership will follow the proposed Treasury Regulations that were issued on May 24,
2005, regarding the issuance of partnership equity for services (including Prop. Treas. Reg.
Sections 1.83-3, 1.83-6, 1.704-1, 1.706-3, 1.721-1 and 1.761-1), as such regulations may be
subsequently amended, upon the issuance of equity membership interests or options issued for
services rendered or to be rendered, until final Treasury Regulations regarding these matters are
issued. In furtherance of the foregoing, the definition of Capital Account and the allocations of
Net Income and Net Loss of the Partnership shall be made in a manner that is consistent with the
proposed Treasury Regulations and the proposed Revenue Procedure described in IRS Notice 2005-43,
or provisions similar thereto, are adopted as final (or temporary) rules (the New Rules),
and the General Partner is authorized to make such amendments to this Agreement (including
provision for any safe harbor election authorized by the New Rules) as the General Partner may
determine to be necessary or advisable.
5.03 Distributions of Cashflow from EPE Units. Promptly following the receipt of any
distributions with respect to EPE Units, the General Partner shall cause to be distributed to the
Partners such receipts (and any income from the temporary investment thereof) in the manner set
forth below, provided, that the General Partner may withhold and not distribute such portion of any
such receipts that the General Partner has determined in its sole but good faith discretion
- 14 -
should
be withheld to pay expenses of the Partnership. Distribution to the Partners pursuant to this
Section 5.03 shall be made as follows:
(a) First, to the Class A Limited Partner until the Class A Limited Partners Class A
Preference Return Amount has been reduced to zero; and
(b) Thereafter, to the Class B Limited Partners in accordance with the Class B Percentage
Interests.
5.04 Distributions of Proceeds from Sales of EPE Units. Promptly
following the receipt of any proceeds from the sale of any EPE Units by the
Partnership, the General Partner shall cause to be distributed to the Partners such receipts in the
manner set forth below, provided that the General Partner may withhold and not distribute such
portion of any such receipts that the General Partner has determined in its sole but good faith
discretion should be withheld to pay expenses of the Partnership. Distribution to the Partners
pursuant to this Section 5.04 shall be made as follows:
(a) First, to the Class A Limited Partner until the Class A Preference Return Amount has been
reduced to zero;
(b) Next, to the Class A Limited Partner until the Class A Capital Base is reduced to zero;
and
(c) Thereafter, to the Class B Limited Partners in accordance with the Class B Percentage
Interests.
5.05 Restrictions on Distributions of EPE Units. The Partners and the Partnership
hereby agree that they shall not cause the Partnership to offer for sale, sell, pledge or otherwise
transfer, distribute or dispose of the EPE Units held by the Partnership prior to the Vesting Date.
ARTICLE VI
MANAGEMENT AND OPERATION
6.01 Management of Partnership Affairs. Except for situations in which the approval
of the Limited Partners is expressly required by this Agreement or by non-waivable provisions of
applicable law, the General Partner shall have full, complete, and exclusive authority to manage
and control the business, affairs, and properties of the Partnership, to make all decisions
regarding the same, and to perform any and all other acts or activities customary or incident to
the management of the Partnerships business. The General Partner shall receive no compensation
for its services as such. Subject to the other express provisions hereof, the General Partner
shall make or take all decisions and actions for the Partnership not otherwise provided for herein,
including, without limitation, the following:
(a) acquiring, holding, managing, selling, Disposing of, and otherwise dealing with and
investing in (i) the Partnerships EPE Units, or (ii) temporary investments of Partnership capital
in U.S. government securities, certificates of deposit with maturities of less than one year,
commercial paper (rated or unrated), and other highly liquid securities;
- 15 -
(b) entering into, making, and performing all contracts, agreements, and other undertakings
binding the Partnership, as may be necessary, appropriate, or advisable in furtherance of the
purposes of the Partnership and making all decisions and waivers thereunder;
(c) opening and maintaining bank and investment accounts and drawing checks and other orders
for the payment of monies;
(d) maintaining the assets of the Partnership in compliance with applicable securities laws
and protecting and preserving the Partnerships title thereto;
(e) collecting all sums due the Partnership;
(f) to the extent that funds of the Partnership are available therefor, paying as they become
due all debts and obligations of the Partnership;
(g) causing securities owned by the Partnership to be registered in the Partnerships name or
in the name of a nominee or to be held in street name, as the General Partner may elect;
(h) selecting, removing, and changing the authority and responsibility of lawyers,
accountants, brokers, and other advisors and consultants;
(i) obtaining insurance for the Partnership to the extent the General Partner deems
appropriate; and
(j) determining distributions of Partnership cash as provided in Sections 5.03 and
5.04.
6.02 Duties and Obligations of General Partner. The General Partner shall endeavor to
conduct the affairs of the Partnership in the best interests of the Partnership and the mutual best
interests of the Partners, including, without limitation, the safekeeping and use of all
Partnership funds and assets and the use thereof for the benefit of the Partnership. The General
Partner at all times shall act in good faith in all activities relating to the conduct of the
business of the Partnership. The General Partner shall devote such time as it deems necessary to
conduct the business and affairs of the Partnership in an appropriate manner.
6.03 Release and Indemnification. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
PARTNERSHIP AND EACH OTHER PARTNER ON BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS HEREBY
RELEASES, ACQUITS, AND FOREVER DISCHARGES THE GENERAL PARTNER AND THE CLASS A LIMITED PARTNER,
THEIR PARTNERS OR SHAREHOLDERS, AND THEIR DIRECTORS, OFFICERS, EMPLOYEES, PARTNERS,
REPRESENTATIVES, AND AGENTS AND EACH OTHER PERSON, IF ANY, CONTROLLING OR EMPLOYING SUCH PERSONS OR
ENTITIES (COLLECTIVELY, THE INDEMNITEES) FROM ALL CLAIMS, DEMANDS, OR CAUSES OF ACTION OF
ANY CHARACTER THAT SUCH PARTY MAY HAVE, WHETHER KNOWN OR UNKNOWN, AGAINST ANY INDEMNITEE IN
CONNECTION WITH THE PARTNERSHIP AND/OR THE BUSINESS CONDUCTED BY THE PARTNERSHIP; PROVIDED,
HOWEVER, THAT SUCH RELEASE SHALL NOT APPLY TO ACTIONS CONSTITUTING WILLFUL
- 16 -
MISCONDUCT OR BAD FAITH.
TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTNERSHIP SHALL INDEMNIFY AND HOLD HARMLESS EACH
INDEMNITEE FROM AND AGAINST ALL LOSSES, COSTS, CLAIMS, LIABILITIES, DAMAGES, EXPENSES
(INCLUDING, WITHOUT LIMITATION, COSTS OF SUIT AND ATTORNEYS FEES) SUCH INDEMNITEE MAY INCUR
IN CONNECTION WITH THE GENERAL PARTNERS PERFORMING ITS OBLIGATIONS HEREUNDER (INCLUDING WITHOUT
LIMITATION LOSSES, COSTS, CLAIMS, LIABILITIES, DAMAGES AND EXPENSES ARISING FROM, OR ALLEGED TO
ARISE FROM, THE INDEMNITEES ACTIVE OR PASSIVE, SOLE OR CONCURRENT, NEGLIGENCE OR GROSS
NEGLIGENCE), AND THE PARTNERSHIP SHALL ADVANCE EXPENSES ASSOCIATED WITH THE DEFENSE OF ANY ACTION
RELATED THERETO; PROVIDED, HOWEVER, THAT SUCH INDEMNITY SHALL NOT APPLY TO ACTIONS WHICH HAVE BEEN
FINALLY, WITHOUT FURTHER RIGHT TO APPEAL, JUDICIALLY DETERMINED TO CONSTITUTE WILLFUL MISCONDUCT OR
BAD FAITH. IF THE INDEMNIFICATION PROVIDED FOR ABOVE IS NOT PERMITTED OR ENFORCEABLE UNDER
APPLICABLE LAW OR IS OTHERWISE UNAVAILABLE OR INSUFFICIENT TO HOLD HARMLESS THE INDEMNITEES AS
CONTEMPLATED ABOVE, THEN THE PARTNERSHIP SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY THE
INDEMNITEES AS A RESULT OF SUCH LOSSES, COSTS, CLAIMS, LIABILITIES, DAMAGES AND EXPENSES REFERRED
TO ABOVE IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT THE RELATIVE BENEFITS CONTEMPLATED TO BE
RECEIVED BY THE PARTNERSHIP AND THE INDEMNITEES, RESPECTIVELY, FROM THE ACTIONS GIVING RISE TO SUCH
LOSSES, COSTS, CLAIMS, LIABILITIES, DAMAGES OR EXPENSES.
6.04 Power of Attorney.
(a) Each Limited Partner hereby constitutes and appoints the General Partner and, if a
liquidator (other than the General Partner) shall have been selected pursuant to Section
11.02, the liquidator, severally (and any successor to either thereof by merger, transfer,
assignment, election or otherwise) and each of their authorized officers and attorneys-in-fact, as
the case may be, with full power of substitution, as his true and lawful agent and
attorney-in-fact, with full power and authority in his name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the appropriate public
offices (A) all certificates, documents and other instruments (including this Agreement and
the Certificate of Limited Partnership and all amendments or restatements hereof or thereof)
that the General Partner or the liquidator deems necessary or appropriate to form, qualify
or continue the existence or qualification of the Partnership as a limited partnership (or a
partnership in which the Limited Partners have limited liability) in the State of Delaware
and in all other jurisdictions in which the Partnership may conduct business or own
property; (B) all certificates, documents and other instruments that the General Partner or
the liquidator deems necessary or appropriate to reflect, in accordance with its terms, any
amendment, change, modification or restatement of this Agreement; (C) all certificates,
documents and other instruments
- 17 -
(including conveyances and a certificate of cancellation)
that the General Partner or the liquidator deems necessary or appropriate to reflect the
dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement; and (D) all certificates,
documents and other instruments relating to the admission, withdrawal, removal or
substitution of any Partner; and
(ii) execute, swear to, acknowledge, deliver, file and record all ballots, consents,
approvals, waivers, certificates, documents and other instruments necessary or appropriate,
in the discretion of the General Partner or the liquidator, to make, evidence, give, confirm
or ratify any vote, consent, approval, agreement or other action that is made or given by
the Partners hereunder or is consistent with the terms of this Agreement or is necessary or
appropriate, in the discretion of the General Partner or the liquidator, to effectuate the
terms or intent of this Agreement; provided, that when required by any provision of this
Agreement that establishes a percentage of the Limited Partners required to take any action,
the General Partner and the liquidator may exercise the power of attorney made in this
Section 6.04 only after the necessary vote, consent or approval of the Limited
Partners.
This Section 6.04 shall be construed as authorizing the General Partner to amend this
Agreement in any manner subject to any provision of this Agreement that establishes a percentage of
the Limited Partners required to take any action.
(b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled
with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or
termination of any Limited Partner and the transfer of all or any portion of such Limited Partners
Percentage Interest and shall extend to such Limited Partners heirs, successors, assigns and
personal representatives. Each such Limited Partner hereby agrees to be bound by any
representation made by the General Partner or the liquidator acting in good faith pursuant to such
power of attorney; and each such Limited Partner, to the maximum extent permitted by law, hereby
waives any and all defenses that may be available to contest, negate or disaffirm the action of the
General Partner or the liquidator taken in good faith under such power of attorney. Each Limited
Partner shall execute and deliver to the General Partner or the liquidator, within 15 days after
receipt of the request therefor, such further designation, powers of attorney and other instruments
as the General Partner or the liquidator deems necessary to effectuate this Agreement and the
purposes of the Partnership.
ARTICLE VII
RIGHTS OF OTHER PARTNERS
7.01 Information. In addition to the other rights specifically set forth herein, each
Partner shall have access to all information to which such Partner is entitled to have access
pursuant to Section 17-305 of the Act under the circumstances and subject to the conditions therein
stated. Without limiting the provisions of Section 17-305(b) of the Act, the Partners agree that
if the General Partner from time to time enters into on behalf of the Partnership or the General
Partner contractual obligations regarding the confidentiality of information received with respect
to the Partnerships business or assets, it shall not be reasonable for any other
- 18 -
Partner or
assignee or representative thereof to examine or copy such information unless such Partner agrees to
comply with the terms of such contractual obligations including without limitation executing a
counterpart of any applicable confidentiality agreements.
7.02 Limitations. No Limited Partner shall have the authority or power in its
capacity as such to act for or on behalf of the Partnership or any other Partner, to do any act
that would be binding on the Partnership or any other Partner, or to incur any expenditures on
behalf of or with respect to the Partnership. No Limited Partner shall have the right or power to
withdraw from the Partnership.
7.03 Limited Liability. No Limited Partner shall be liable for the losses, debts,
liabilities, contracts, or other obligations of the Partnership except to the extent required by
law or otherwise set forth herein.
ARTICLE VIII
TAXES
8.01 Tax Returns. The General Partner shall cause to be prepared and filed all
necessary federal and state income tax returns for the Partnership, including making the elections
described in Section 8.02. Each Partner shall furnish to the General Partner all pertinent
information in its possession relating to Partnership operations that is necessary to enable such
income tax returns to be prepared and filed.
8.02 Tax Elections. The following elections shall be made on the appropriate returns
of the Partnership:
(a) to adopt the calendar year as the Partnerships fiscal year;
(b) unless the accrual method is required under the applicable sections of the Code, to adopt
the cash method of accounting and to keep the Partnerships books and records on the income-tax
method;
(c) if there shall be a distribution of Partnership property as described in Section 734 of
the Code or if there shall be a transfer of a Partnership interest as described in Section 743 of
the Code, upon written request of any Partner, to elect, pursuant to Section 754 of the Code, to
adjust the basis of Partnership properties;
(d) to elect to amortize the organizational expenses of the Partnership ratably over a period
of 60 months as permitted by Section 709(b) of the Code; and
(e) any other election the General Partner may deem appropriate and in the best interests of
the Partners.
No election shall be made by the Partnership or any Partner to be treated as an association taxable
as a corporation or to be excluded from the application of the provisions of Subchapter K of
Chapter 1 of Subtitle A of the Code or any similar provisions of applicable state laws.
- 19 -
8.03 Tax Matters Partner. The General Partner shall be the tax matters partner of
the Partnership pursuant to Section 6231(a)(7) of the Code. The General Partner shall take such
action as may be necessary to cause each other Partner to become a notice partner within the
meaning of Section 6223 of the Code. The General Partner shall inform each other Partner of all
significant matters that may come to its attention in its capacity as tax matters partner by giving
notice thereof within ten Business Days after becoming aware thereof and, within such time, shall
forward to each other Partner copies of all significant written communications it may receive in
such capacity. The General Partner shall not take any action contemplated by Sections 6222 through
6232 of the Code without the consent of a Required Interest. This provision is not intended to
authorize the General Partner to take any action left to the determination of an individual Partner
under Sections 6222 through 6232 of the Code.
ARTICLE IX
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
9.01 Maintenance of Books. The books of account for the Partnership shall be
maintained on a cash basis in accordance with the terms of this Agreement except that the Capital
Accounts of the Partners shall be maintained in accordance with Section 4.04. The calendar
year shall be the accounting year of the Partnership.
9.02 Financial Statements. Within 120 days after the end of each fiscal year during
the term of the Partnership, the General Partner shall cause each other Partner to be furnished
with an unaudited balance sheet, an income statement, and a statement of changes in Partners
capital of the Partnership for, or as of the end of, such period. All financial statements shall
be prepared in accordance with accounting principles generally employed for cash-basis records
consistently applied (except as therein noted).
9.03 Bank Accounts. The General Partner shall establish and maintain one or more
separate accounts for Partnership funds in the Partnership name at such financial institutions as
it may designate. The General Partner may not commingle the Partnerships funds with other funds
of any Partner.
ARTICLE X
WITHDRAWAL, BANKRUPTCY, REMOVAL, ETC.
10.01 Withdrawal, Bankruptcy, Etc. of General Partner.
(a) The General Partner covenants and agrees that it will not withdraw from the Partnership as
the general partner within the meaning of Section 17-602 of the Act. If the General Partner shall
so withdraw from the Partnership in violation of such covenant and agreement, such withdrawal shall
be effective only upon 90 days prior notice to all other Partners.
(b) The General Partner shall not cease to be a general partner on the occurrence of an event
of the type described in Section 17-402(a)(4) through (10) of the Act, but shall cease to be a
general partner 90 days thereafter. The General Partner shall notify each other Partner that an
event of the type described in Section 17-402(a)(4) through (10) of the Act has occurred
- 20 -
(without
regard to the lapse of any time periods therein) with respect to it within five Business Days after
such occurrence.
(c) Following any notice pursuant to Section 10.01(a) that the General Partner shall
be withdrawing, or following the occurrence of an event of the type described in Section
17-402(a)(4) through (10) of the Act with respect to the General Partner (without regard to the
lapse of any time periods therein), and unless there shall be one other General Partner remaining,
the greater of the Class A Limited Partner plus a Required Interest of the Class B Limited Partners
or a majority in interest as defined in Internal Revenue Service Procedure 94-46 (or any successor
thereof) by written consent may select a new General Partner, which shall be admitted to the
Partnership as a general partner effective immediately prior to the existing General Partners
ceasing to be a general partner with such general partner interest as the Limited Partners making
such selection may specify, but only if such new General Partner shall have made such Capital
Contribution as such Limited Partners may specify and shall have executed and delivered to the
Partnership a document including such new General Partners notice address, acceptance of all the
terms and provisions of this Agreement, an agreement to perform and discharge timely all of its
obligations and liabilities hereunder, and a representation and warranty that the representation
and warranties in Section 3.02 are true and correct with respect to such new General
Partner. Notwithstanding the foregoing provisions of this Section 10.01(c), the right to
select such new General Partner shall not exist or be exercised unless the Partnership shall have
received the favorable opinion of the Partnerships legal counsel or of other legal counsel
acceptable to the Limited Partners making such selection to the effect that such selection and
admission will not result in (i) the loss of limited liability of any Limited Partner (except to
the extent a Limited Partner has consented to become the General Partner) or (ii) in the
Partnership being treated as an association taxable as a corporation for federal income tax
purposes. Notwithstanding the foregoing provisions of this Section 10.01(c), no such new
General Partner shall be admitted (and the existing General Partner shall continue as such) if the
event that permitted the selection of a new General Partner shall have been an event of the type
described in Section 17-402(a)(5) of the Act that with the passage of time would cause the existing
General Partner to become a Bankrupt Partner but, due to the failure of such situation to continue,
such General Partner does not become a Bankrupt Partner.
10.02 Conversion of Interest. Immediately upon the General
Partners ceasing to be General Partner following the
admission of a new General Partner pursuant to Section 10.01(c), the former General
Partners interest in the Partnership as a General Partner shall be converted into the interest of
a Limited Partner in the Partnership having the same economic rights as specified for the General
Partner herein immediately prior to its ceasing to be a General Partner, and such General Partner
shall automatically and without further action be admitted to the Partnership as a Limited Partner.
ARTICLE XI
DISSOLUTION, LIQUIDATION, AND TERMINATION
11.01 Dissolution. The Partnership shall be dissolved and its affairs shall be wound
up upon the first to occur of any of the following:
- 21 -
(a) the written consent of the General Partner, the Class A Limited Partner and a Required
Interest;
(b) unless otherwise agreed to by the General Partner, the Class A Limited Partner and a
Required Interest 30 days following the occurrence of the Vesting Date;
(c) the end of the term of the Partnership as set forth in Section 2.06;
(d) the General Partners ceasing to be the General Partner as described in Section
10.01(b) with no new General Partner having been selected and admitted as provided in
Section 10.01(c); or
(e) any other event causing dissolution as described in Section 17-801 of the Act (other than
an event described in Section 17-402(a)(4) through (10) of the Act, except as provided in
Sections 10.01(b) and 11.01(d));
it being understood that if an event of withdrawal of a general partner (as defined in Section
17-101(3) of the Act) shall occur with respect to the General Partner and at least one other
General Partner shall have been or is about to be admitted pursuant to Section 3.03(b),
10.01(c), or 10.02, the Partnership shall not dissolve but shall continue and the
remaining General Partner shall, and hereby agrees to, carry on the business of the Partnership.
11.02 Liquidation and Termination. Upon dissolution of the Partnership, unless it is
continued as provided in Section 11.01, the General Partner shall act as liquidator or may
appoint one or more other Persons as liquidator; provided, however, that if the Partnership shall
be dissolved on account of an event of the type described in Section 17-402(a)(4) through (10) of
Act with respect to the General Partner, the liquidator shall be one or more Persons selected in
writing by the Class A Limited Partner and a Required Interest. The liquidator shall proceed
diligently to wind up the affairs of the Partnership and make final distributions as provided
herein, and shall file any amendments to the Certificate as may be required by applicable law. The
costs of liquidation shall be borne as a Partnership expense. Until final distribution, the
liquidator shall continue to manage the
Partnership assets with all of the power and authority of the General Partner. The steps to
be accomplished by the liquidator are as follows:
(a) as promptly as possible after dissolution and again after final liquidation, the
liquidator shall cause a proper accounting to be made by a recognized firm of certified public
accountants of the Partnerships assets, liabilities, and operations through the last day of the
calendar month in which the dissolution shall have occurred or the final liquidation shall be
completed, as applicable;
(b) the liquidator shall pay all of the debts and liabilities of the Partnership (including,
without limitation, all expenses incurred in liquidation and any advances made by the General
Partner pursuant to Section 4.03) or otherwise make adequate provision therefor (including,
without limitation, the establishment of a cash escrow fund for contingent liabilities in such
amount and for such term as the liquidator may reasonably determine); and
(c) all remaining assets of the Partnership shall be distributed to the Partners as follows:
- 22 -
(i) the fair market value of the property shall be determined and the capital accounts
of the Partners shall be adjusted to reflect the manner in which the unrealized income,
gain, loss, and deduction inherent in such property (that has not been reflected in the
capital accounts previously) would be allocated among the Partners if there were a taxable
disposition of such property for the fair market value of such property on the Vesting Date;
and
(ii) the Partnership property shall be distributed among the Partners in accordance
with the positive capital account balances of the Partners, as determined after taking into
account all capital account adjustments for the taxable year of the Partnership during which
the liquidation of the Partnership occurs (other than those made by reason of this clause);
and such distributions shall be made by the end of the taxable year of the Partnership
during which the liquidation of the Partnership occurs (or, if later, within 90 days after
the date of such liquidation). While the General Partner has the right to sell EPE Units as
noted in Section 5.04, and subject to the restrictions set forth in Section
5.05, it is the intent of the General Partner upon liquidation and termination of the
Partnership to distribute EPE Units to the Partners rather than sell the EPE Units and
distribute the cash proceeds of such sale to the Partners.
For purposes of this Section 11.02(c), the fair market value of each EPE Unit held by the
Partnership on the Vesting Date shall be equal to the average of the closing sale prices per EPE
Unit for the 20 trading days ending on the Vesting Date (or, if no closing sale price is reported,
the average of the bid and asked prices) as reported in the composite transactions for the
principal United States securities exchange on which the EPE Units are traded or if the EPE Units
are not listed on a national or regional stock exchange, as reported by The NASDAQ National Market.
All distributions in kind to the Partners shall be made subject to the liability of each
distributee for costs, expenses, and liabilities theretofore incurred or for which the Partnership
shall have committed prior to the date of termination and such costs, expenses, and liabilities
shall be allocated to such distributee pursuant to this Section 11.02. The distribution of
property to a Partner in accordance with the provisions of this Section 11.02 shall
constitute a complete return to the Partner of its Capital Contributions and a complete
distribution to the Partner of its interest in the Partnership and all the Partnerships property
and shall constitute a compromise to which all Partners have consented within the meaning of
Section 17-502(b) of the Act.
11.03 Cancellation of Certificate. Upon completion of the distribution of Partnership
assets as provided herein, the Partnership shall be terminated, and the General Partner (or, if
there shall be no General Partner, the Limited Partners) shall cause the cancellation of the
Certificate and any other filings made pursuant to Section 2.05 and shall take such other
actions as may be necessary to terminate the Partnership.
ARTICLE XII
GENERAL PROVISIONS
12.01 Offset. In the event that any sum is payable to any Partner pursuant to this
Agreement, any amounts owed by such Partner to the Partnership shall be deducted from said sum
before payment to said Partner.
- 23 -
12.02 Notices. All notices or requests or consents provided for or permitted to be
given pursuant to this Agreement must be in writing and must be given (a) by depositing same in the
United States mail, addressed to the Person to be notified, postpaid, and registered or certified
with return receipt requested or (b) by delivering such notice by courier or in person to such
party. Notices given or served pursuant hereto shall be effective two Business Days after such
deposit, or upon receipt if delivered in person to the person to be notified. All notices to be
sent to a Partner shall be sent to or made at the address given on the Power of Attorney executed
by the Partner and delivered to the General Partner on the date hereof or in the instrument
described in Section 3.03(c), 3.04, or 10.01(c), or such other address as
such Partner may specify by notice to the General Partner. Any notice to the Partnership shall be
given to the General Partner.
12.03 Entire Agreement; Supersedure. This Agreement constitutes the entire agreement
of the Partners relating to the matters contained herein and supersedes all prior contracts or
agreements, whether oral or written, among the parties hereto with respect to such matters.
12.04 Effect of Waiver or Consent. No waiver or consent, express or implied, by any
Person with respect to any breach or default by any other Person of its obligations hereunder shall
be deemed or construed to be a consent or waiver with respect to any other breach or default by
such other Person of the same or any other obligations of such other Person hereunder. Failure on
the part of any Person to
complain of any act or omission of any other Person, or to declare any other Person in
default, irrespective of how long such failure continues, shall not constitute a waiver by such
Person of its rights hereunder until the applicable limitation period has run.
12.05 Amendment or Modification. This Agreement may be amended or modified from time
to time only by a written instrument executed by the General Partner; provided, however, that (a)
the vesting and distribution provisions of this Agreement may be amended or modified only by a
written instrument executed by the General Partner, the Class A Limited Partner and a Required
Interest, and (b) no amendment or modification reducing a Partners Sharing Points (other than to
reflect changes otherwise provided hereby) or increasing its duties or adversely affecting its
limited liability shall be effective without such Partners consent.
12.06 Binding Effect; Joinder of Additional Parties. Subject to the restrictions on
Dispositions set forth herein, this Agreement shall be binding upon and shall inure to the benefit
of the Partners, as well as the respective heirs, legal representatives, successors, and assigns of
such Partners.
12.07 Construction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICTS-OF-LAW RULE OR PRINCIPLE THAT MIGHT
REFER THE GOVERNANCE OR CONSTRUCTION OF THIS AGREEMENT TO THE LAWS OF ANOTHER JURISDICTION. The
headings in this Agreement are inserted for convenience and identification only and are not
intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or
any provision hereof. Whenever the context requires, the gender of all words used in this
Agreement shall include the masculine, feminine, and neuter. All references to Articles and
Sections refer to articles and sections of this Agreement. All sums and amounts payable or to be
payable pursuant to the provisions of this Agreement shall be payable
- 24 -
in coin or currency of the
United States of America that, at the time of payment, is legal tender for the payment of public
and private debts in the United States of America. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provision to other Persons or
circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted
by law.
12.08 Further Assurances. In connection with this Agreement, as well as all
transactions contemplated by this Agreement, each Partner agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as may be necessary or
appropriate to effectuate, carry out, and perform all of the terms, provisions, and conditions of
this Agreement and all such transactions.
12.09 Indemnification. To the fullest
extent permitted by law, each Partner shall indemnify the Partnership and
each other Partner and hold them harmless from and against all losses, costs, liabilities, damages,
and expenses (including, without limitation, costs of suit and attorneys fees) they may incur on
account of any breach by such indemnifying Partner of this Agreement.
12.10 Waiver of Certain Rights. Each Partner irrevocably waives any right it might
have to maintain any action for dissolution of the Partnership or to maintain any action for
partition of the property of the Partnership.
12.11 Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if all signatory parties had signed the same document. All counterparts shall
be construed together and shall constitute one and the same instrument.
12.12 Dispute Resolution. (a) If the General Partner and one or more Limited Partners
are unable to resolve any controversy, dispute, claim or other matter in question arising out of,
or relating to, this Agreement, any provision hereof, the alleged breach hereof, or in any way
relating to the subject matter of this Agreement, or the relationship between the parties created
by this Agreement, including questions concerning the scope and applicability of this Section
12.12, whether sounding in contract, tort or otherwise, at law or in equity, under state or
federal law, whether provided by statute or common law, for damages or any other relief (any such
controversy, dispute, claim or other matter in question, a Dispute), on or before the
30th day following the receipt by the General Partner or such Limited Partners of written notice of
such Dispute from the other party, which notice describes in reasonable detail the nature of the
Dispute and the facts and circumstances relating thereto, the General Partner or such Limited
Partners may, by delivery of written notice to the other party, require that a representative of
the General Partner and of such Limited Partners meet at a mutually agreeable time and place in an
attempt to resolve such Dispute. Such meeting shall take place on or before the 15th day following
the date of the notice requiring such meeting, and if the Dispute has not been resolved within 15
days following such meeting, the General Partner or such Limited Partners may cause such Dispute to
be resolved by binding arbitration in Houston, Texas, by submitting such Dispute for arbitration
within 30 days following the expiration of such 15-day period. This agreement to arbitrate shall
be specifically enforceable against the parties.
- 25 -
(b) It is the intention of the parties that the arbitration shall be governed by and conducted
pursuant to the Federal Arbitration Act, as such Act is modified by this Section 12.12. If
it is determined the Federal Arbitration Act is not applicable to this Agreement (e.g., this
Agreement does not evidence a transaction involving interstate commerce), this agreement to
arbitrate shall nevertheless be enforceable pursuant to applicable State law. While the
arbitrators may refer to the Commercial Arbitration Rules of the American Arbitration Association
(the Rules) for guidance with respect to procedural matters, the arbitration proceeding
shall not be administered by the American Arbitration Association but instead shall be
self-administered by
the parties until the arbitrators are selected and then the proceeding shall be administered
by the arbitrators.
(c) The validity, construction, and interpretation of this agreement to arbitrate, and all
procedural aspects of the arbitration conducted pursuant to this agreement to arbitrate, including
but not limited to, the determination of the issues that are subject to arbitration (i.e.,
arbitrability), the scope of the arbitrable issues, allegations of fraud in the inducement to
enter into this Agreement or this arbitration provision, allegations of waiver, laches, delay or
other defenses to arbitrability, and the rules governing the conduct of the arbitration (including
the time for filing an answer, the time for the filing of counterclaims, the times for amending the
pleadings, the specificity of the pleadings, the extent and scope of discovery, the issuance of
subpoenas, the times for the designation of experts, whether the arbitration is to be stayed
pending resolution of related litigation involving third parties not bound by this arbitration
agreement, the receipt of evidence, and the like), shall be decided by the arbitrators.
(d) The rules of arbitration of the Federal Arbitration Act, as modified by this Agreement,
shall govern procedural aspects of the arbitration; to the extent the Federal Arbitration Act as
modified by this Agreement does not address a procedural issue, the arbitrators may refer for
guidance to the Commercial Arbitration Rules then in effect with the American Arbitration
Association. The arbitrators may refer for guidance to the Federal Rules of Civil Procedure, the
Federal Rules of Civil Evidence, and the federal law with respect to the discovery process,
applicable legal privileges, and admissible evidence. In deciding the substance of the parties
Dispute, the arbitrators shall refer to the substantive laws of the State of Delaware for guidance
(excluding Delawares conflict-of-law rules or principles that might call for the application of
the law of another jurisdiction); provided, however, IT IS EXPRESSLY AGREED THAT NOTWITHSTANDING
ANY OTHER PROVISION IN THIS SECTION 12.12 TO THE CONTRARY, THE ARBITRATORS SHALL HAVE
ABSOLUTELY NO AUTHORITY TO AWARD CONSEQUENTIAL DAMAGES (SUCH AS LOSS OF PROFIT), TREBLE, EXEMPLARY
OR PUNITIVE DAMAGES OF ANY TYPE UNDER ANY CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE
AVAILABLE UNDER DELAWARE LAW, THE LAW OF ANY OTHER STATE, OR FEDERAL LAW, OR UNDER THE FEDERAL
ARBITRATION ACT, OR UNDER THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION.
The arbitrators shall have the authority to assess the costs and expenses of the arbitration
proceeding (including the arbitrators fees and expenses) against either or both parties. However,
each party shall bear its own attorneys fees and the arbitrators shall have no authority to award
attorneys fees.
- 26 -
(e) When a Dispute has been submitted for arbitration, within 30 days of such submission, the
General Partner will choose an arbitrator, and such Limited Partners will choose an arbitrator.
The two arbitrators shall select a third arbitrator, failing agreement on which within 90 days of
the original notice, the General Partner and such Limited Partners (or either of them) shall apply
to any United States District Judge for the Southern District of Texas, who shall appoint the third
arbitrator. While the third arbitrator shall be neutral, the two party-appointed arbitrators are
not required to be neutral and it shall not be grounds for removal of either of the two
party-appointed arbitrators or for vacating the arbitrators award that either of such arbitrators
has past or present minimal relationships with the party that appointed such
arbitrator. Evident partiality on the part of an arbitrator exists only where the
circumstances are such that a reasonable person would have to conclude there in fact existed actual
bias and a mere appearance or impression of bias will not constitute evident partiality or
otherwise disqualify an arbitrator. Minimal or trivial past or present relationships between the
neutral arbitrator and the party selecting such arbitrator or any of the other arbitrators, or the
failure to disclose such minimal or trivial past or present relationships, will not by themselves
constitute evident partiality or otherwise disqualify any arbitrator. Upon selection of the third
arbitrator, each of the three arbitrators shall agree in writing to abide faithfully by the terms
of this agreement to arbitrate. The three arbitrators shall make all of their decisions by
majority vote. If one of the party-appointed arbitrators refuses to participate in the proceedings
or refuses to vote, the decision of the other two arbitrators shall be binding. If an arbitrator
dies or becomes physically incapacitated and is unable to fulfill his or her duties as an
arbitrator, the arbitration proceeding shall continue with a substitute arbitrator selected as
follows: if the incapacitated arbitrator is a party-appointed arbitrator, the party shall promptly
select a new arbitrator, and if the incapacitated arbitrator is the neutral arbitrator, the
two-party appointed arbitrators shall select a substitute neutral arbitrator, failing agreement on
which the General Partner and such Limited Partners (or either of them) shall apply to any United
States District Judge for the Southern District of Texas, who shall appoint the substitute neutral
arbitrator.
(f) The final hearing shall be conducted within 120 days of the selection of the third
arbitrator. The final hearing shall not exceed ten working days, with each party to be granted
one-half of the allocated time to present its case to the arbitrators. There shall be a transcript
of the hearing before the arbitrators. The arbitrators shall render their ultimate decision within
20 days of the completion of the final hearing completely resolving all of the Disputes between the
parties that are the subject of the arbitration proceeding. The arbitrators ultimate decision
after final hearing shall be in writing, but shall be as brief as possible, and the arbitrators
shall assign their reasons for their ultimate decision. In the case the arbitrators award any
monetary damages in favor of either party, the arbitrators shall certify in their award that they
have not included any treble, exemplary or punitive damages.
(g) The arbitrators award shall, as between the parties to this Agreement and those in
privity with them, be final and entitled to all of the protections and benefits of a final
judgment, e.g., res judicata (claim preclusion) and collateral estoppel (issue preclusion), as to
all Disputes, including compulsory counterclaims, that were or could have been presented to the
arbitrators. The arbitrators award shall not be reviewable by or appealable to any court, except
to the extent permitted by the Federal Arbitration Act.
- 27 -
(h) It is the intent of the parties that the arbitration proceeding shall be conducted
expeditiously, without initial recourse to the courts and without interlocutory appeals of the
arbitrators decisions to the courts. However, if a party refuses to honor its obligations under
this agreement to arbitrate, the other party may obtain appropriate relief compelling arbitration
in any court having jurisdiction over the parties; the order compelling arbitration shall require
that the arbitration proceedings take place in Houston, Texas, as specified above. The parties may
apply to any court for orders requiring witnesses to obey subpoenas issued by the arbitrators.
Moreover, any and all of the arbitrators orders and decisions may be enforced if necessary by any
court. The arbitrators award may be confirmed in, and judgment upon the award entered by, any
federal or State court having jurisdiction over the parties.
(i) To the fullest extent permitted by law, this arbitration proceeding and the arbitrators
award shall be maintained in confidence by the parties. However, a violation of this covenant
shall not affect the enforceability of this arbitration agreement or of the arbitrators award.
(j) A partys breach of this Agreement shall not affect this agreement to arbitrate.
Moreover, the parties obligations under this arbitration provision are enforceable even after this
Agreement has terminated. The invalidity or unenforceability of any provision of this arbitration
agreement shall not affect the validity or enforceability of the parties obligation to submit
their Disputes to binding arbitration or the other provisions of this agreement to arbitrate.
12.13 No Effect on Employment Relationship. Nothing in this Agreement shall confer
upon any employee of the General Partner or any Affiliate thereof any right to continued employment
nor shall it interfere in any way with the right of the General Partner or any of its Affiliates to
terminate the employment of any employee at any time.
12.14 Legal Representation. This Agreement and related documents have been prepared
by Andrews Kurth LLP, as counsel for the General Partner, and not as counsel for any other Partner
or the Partnership. Each party other than the General Partner has been advised to seek independent
counsel in connection with this Agreement and the related documents.
[Signature Pages to Follow.]
- 28 -
IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first set forth
above.
|
|
|
|
|
GENERAL PARTNER: |
EPCO, INC.
|
|
|
By: |
/s/ Richard H. Bachmann
|
|
|
|
Richard H. Bachmann |
|
|
|
Executive Vice President |
|
|
CLASS A LIMITED PARTNER: |
DUNCAN FAMILY INTERESTS, INC.
|
|
|
By: |
/s/ Mary S. Stawikey
|
|
|
|
Mary S. Stawikey |
|
|
|
Secretary |
|
|
CLASS B LIMITED PARTNERS: |
All Class B Limited Partners initially admitted as Class B Limited Partners of the Partnership, pursuant to Powers of Attorney executed in favor of, and granted and delivered to the General Partner
By: EPCO, INC.
(As attorney-in-fact for the Class B Limited
Partners pursuant to powers of attorney)
|
|
|
|
|
|
By: |
/s/ Richard H. Bachmann
|
|
|
|
Richard H. Bachmann |
|
|
|
Executive Vice President |
|
|
Agreement of Limited Partnership of EPE Unit III, L.P.
Exhibit A
FORM OF POWER OF ATTORNEY
For Executing Agreement of Limited Partnership of EPE Unit III, L.P.
Know all by these presents, that the undersigned hereby constitutes and appoints EPCO, Inc.
and its authorized representatives the undersigneds true and lawful attorney-in-fact to:
|
(1) |
|
execute for and on behalf of the undersigned as a limited partner thereunder
that certain Agreement of Limited Partnership of EPE Unit III, L.P. (the
Partnership Agreement); |
|
|
(2) |
|
take any other action of any type whatsoever in connection with the foregoing
that, in the opinion of each such attorney-in-fact, may be of benefit to, in the best
interest of, or legally required of the undersigned, it being understood that the
documents executed by the attorney-in-fact on behalf of the undersigned pursuant to
this Power of Attorney shall be in such form and shall contain such terms and
conditions as the attorney-in-fact may approve in the attorney-in-facts discretion. |
The undersigned hereby grants to each attorney-in-fact full power and authority to do and
perform all and every act and thing whatsoever requisite, necessary or proper to be done in the
exercise of any of the rights and powers herein granted, as fully to all intents and purposes as
the undersigned might or could do if personally present, with full power of substitution or
revocation, hereby ratifying and confirming all that the attorney-in-fact, or the attorney-in-facts
substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of
Attorney and the rights and powers herein granted.
The undersigned acknowledges and agrees by execution of this Power of Attorney that the
undersigneds initial Sharing Points (as defined in the Partnership Agreement) under the
Partnership Agreement equal , which represents % of the
total initial Sharing Points
granted by the General Partner pursuant to the Partnership Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of the
date written below.
|
|
|
|
|
|
|
|
Signature |
|
|
|
|
|
|
|
|
Type or Print Name |
|
|
|
|
|
|
|
|
Date |
exv99w1
EXHIBIT 99.1
P.O. Box 4323
Houston, TX 77210
(713) 381-6500
Enterprise GP Holdings Acquires Ownership Interests in
Two Publicly Traded Partnerships
Houston, Texas (May 7, 2007) Enterprise GP Holdings L.P. (NYSE: EPE), which owns the
general partner of Enterprise Products Partners L.P. (NYSE: EPD), today announced the completion of
two separate transactions totaling approximately $2.8 billion that involve the
purchase of equity interests in the general partners and limited partner interests in each of
TEPPCO Partners, L.P. (NYSE: TPP) and Energy Transfer Equity, L.P. (NYSE: ETE). With these
transactions, Enterprise GP Holdings becomes the first publicly traded partnership to own
interests, either directly or indirectly, in the general partners of multiple publicly traded
partnerships: Enterprise Products Partners, TEPPCO Partners, Energy Transfer Equity, Energy
Transfer Partners, L.P. (NYSE: ETP) and Duncan Energy Partners L.P. (NYSE: DEP). Enterprise GP
Holdings now has one of the most diversified cash flow streams of any publicly traded energy
partnership and its long-term growth prospects have been further enhanced. These transactions are
expected to be immediately accretive and increase distributable cash flow per unit in 2008 by more
than 10 percent.
Enterprise GP Holdings has purchased all of the member interests in Texas Eastern Products
Pipeline Company, LLC, the general partner of TEPPCO, and 4.4 million TEPPCO common
units, or approximately 4 percent of TEPPCOs outstanding common units, from affiliates of
privately held EPCO, Inc. (EPCO). In exchange, EPCO received approximately 14.2 million Class B
units and 16.0 million Class C units, together valued at approximately $1.1 billion. The Class B
units have the same attributes as Enterprise GP Holdings common units except these units do not
currently have voting rights on general matters as the
2
holders of Enterprise GP Holdings units do.
The Class C units do not currently have voting rights on general matters as the holders of
Enterprise GP Holdings units do, and will not receive or accrue quarterly cash
distributions until the cash distribution declared with respect to the first quarter of 2009,
which is expected to be paid in May 2009. The transaction was reviewed and unanimously approved by
Enterprise GP Holdings Audit, Conflicts and Governance Committee.
In the second transaction, Enterprise GP Holdings acquired approximately 39 million
common units, or approximately 17.6 percent of the outstanding common units of Energy Transfer
Equity, a publicly traded partnership that owns 100 percent of the general partner of Energy
Transfer Partners and approximately 62.5 million common units of Energy Transfer Partners. In
addition, Enterprise GP Holdings purchased an approximate 34.9 percent, non-controlling interest in
LE GP, LLC, the general partner of Energy Transfer Equity. The total value of this transaction was
approximately $1.65 billion.
These acquisitions reflect our ongoing strategy of pursuing attractive investments in general
partners that offer long-term distribution growth, increase the value of Enterprise GP Holdings and
add multiple streams of cash flow, said Michael A. Creel, president and CEO of Enterprise GP
Holdings L.P. Through our interests in TEPPCO, we gain exposure to the stable and growing cash
flows from its refined products and crude oil transportation and terminaling businesses, and
through our interests in Energy Transfer Equity, we have achieved one of our long-stated objectives
of investing in interstate natural gas pipelines. Based on current distribution rates, Enterprise
GP Holdings will now receive over $260 million of distributions per year originating from five
publicly traded partnerships.
The aggregated assets of the five separate partnerships consist of approximately 59,500 miles
of pipelines that transport natural gas, NGLs, refined products, crude oil and petrochemicals; 103
billion cubic feet of working natural gas storage capacity; 168 million barrels of NGL storage
capacity; 27 million barrels of refined products and crude oil terminal capacity; 39 natural gas
processing and treating facilities; 14 NGL and petrochemical fractionation and butane isomerization
plants; and a world-class NGL import/export facility.
3
Enterprise GP Holdings purchased the common units of Energy Transfer Equity from Ray C. Davis,
co-CEO and co-chairman of Energy Transfer Partners, Natural Gas Partners VI, L.P. and certain of
their respective affiliates. The selling unitholders continue to have a significant ownership
interest in Energy Transfer Equity as this purchase represents approximately one-half of their
respective holdings in the partnership. Enterprise GP Holdings and Kelcy L.Warren, Energy Transfer
Partners other co-CEO and co-chairman, now hold the largest interests in Energy Transfer Equity,
with each owning approximately 39 million common units and 34.9% of LE GP.
We have admired the partnership that Kelcy Warren and Ray Davis have built, especially their
recent acquisition of the Transwestern interstate natural gas pipeline, Creel continued. The
purchase of the Energy Transfer Equity units was an attractive opportunity to make a meaningful
investment in the general partner of Energy Transfer Partners, which has been one of the
best-performing partnerships. ETP has a number of significant pipeline projects under construction
that are expected to support its distribution growth over the next several years, and it also has
one of the best distribution coverage ratios in the partnership sector. We are pleased to invest
alongside Kelcy and Ray.
These transactions have no effect on the management teams or operations of TEPPCO, Energy
Transfer Equity or Energy Transfer Partners. Jerry E. Thompson will continue to serve as president
and CEO of TEPPCO, and Mr. Davis and Mr. Warren will continue to serve as co-chairmen of the boards
of the general partner of both Energy Transfer Equity and Energy Transfer Partners, as well as
co-CEOs of Energy Transfer Partners.
Enterprise GP Holdings executed a $1.9 billion, interim credit facility to purchase the common
units of Energy Transfer Equity and to prepay and terminate approximately $155 million of
borrowings under its existing credit facility. The interim financing was arranged by Citi and
Lehman Brothers Inc. with Scotia Capital, SunTrust Bank and Mizuho Corporate Bank, Limited serving
as documentation agents.
4
Citi advised Enterprise GP Holdings with respect to the purchase of Energy Transfer Equity
common units. Lehman Brothers Inc. advised EPCO on the disposition of TEPPCOs general partner and
common units.
Robert G. Phillips, a director, CEO and president of the general partner of Enterprise
Products Partners, has resigned from the board of directors of the general partner of Enterprise GP
Holdings to avoid any potential future conflicts of interests and to focus on the operations of
Enterprise Products Partners and its subsidiaries. Randa Duncan Williams will succeed Mr. Phillips
as a director on the board of the general partner of Enterprise GP Holdings. Ms. Williams is a
director, CEO and president of EPCO, Inc. and formerly served as a director on the board of the
general partner of Enterprise Products Partners.
Enterprise GP Holdings will host a conference call on Tuesday, May 8, 2007, at 8 a.m. CDT to
discuss these transactions with security analysts and investors. You may access the call, which
will be broadcast live on the Internet, through the companys website at
www.enterprisegp.com.
Enterprise GP Holdings is one of the largest publicly traded GP partnerships with an
enterprise value of approximately $6.4 billion. It owns the general partner and limited partner
interests in Enterprise Products Partners L.P., TEPPCO Partners, L.P. and Energy Transfer Equity,
L.P. For more information on Enterprise GP Holdings L.P., visit its website.
Enterprise Products Partners L.P. is one of the largest publicly traded partnerships with an
enterprise value of approximately $18 billion, and is a North American provider of midstream energy
services to producers and consumers of natural gas, NGLs, crude oil and petrochemicals. Enterprise
transports natural gas, NGLs and crude oil through more than 35,000 miles of onshore and offshore
pipelines. Services include natural gas transportation, gathering, processing and storage; NGL
fractionation (or separation), transportation, storage, and import and export terminaling; crude
oil transportation and offshore production platform services. For more information, visit
Enterprise on the web at www.epplp.com. Enterprise Products Partners L.P. is managed by
its general partner, Enterprise Products GP LLC, which is wholly owned by Enterprise GP Holdings
L.P.
5
TEPPCO Partners, L.P. is a publicly traded partnership with an enterprise value of more than
$5 billion, which conducts business through various subsidiary operating companies. TEPPCO owns
and operates one of the largest common carrier pipelines of refined products and LPGs in the United
States; owns and operates petrochemical and NGL pipelines; is engaged in transportation, storage,
gathering and marketing of crude oil; owns and operates natural gas gathering systems; and has
ownership interests in Jonah Gas Gathering Company, Seaway Crude Pipeline Company, Centennial
Pipeline LLC and an undivided ownership interest in the Basin Pipeline. Texas Eastern Products
Pipeline Company, LLC, a subsidiary of Enterprise GP Holdings L.P., is the general partner of
TEPPCO Partners, L.P. For more information, visit TEPPCOs web site at www.teppco.com.
Energy Transfer Equity, L.P. owns the general partner of Energy Transfer Partners and
approximately 62.5 million ETP limited partner units. Together ETP and ETE have a combined
enterprise value approaching $20 billion.
This press release contains various forward-looking statements and information that are based
on Enterprise GP Holdings beliefs and those of its general partner, as well as assumptions made by
and information currently available to Enterprise GP Holdings. When used in this press release,
words such as anticipate, project, expect, plan, goal, forecast, intend, could,
believe, may, and similar expressions and statements regarding the plans and objectives of
Enterprise GP Holdings or Enterprise Products Partners, TEPPCO Partners, Energy Transfer Equity or
Energy Transfer Partners (collectively, the Related Companies) for future operations, are
intended to identify forward-looking statements. Although Enterprise GP Holdings and its general
partner believe that such expectations reflected in such forward-looking statements are reasonable,
neither Enterprise GP Holdings nor its general partner can give assurances that such expectations
will prove to be correct. Such statements are subject to a variety of risks, uncertainties and
assumptions. If one or more of these risks or uncertainties materialize, or if underlying
assumptions prove incorrect, Enterprise GP Holdings actual results may vary materially from those
it anticipated, estimated, projected or expected. Among the key risk factors that may have a
direct bearing on the Related Companies, and, in turn, Enterprise GP Holdings results of
operations and financial condition are:
|
|
|
fluctuations in oil, natural gas and NGL prices and production due to weather
and other natural and economic forces; |
|
|
|
|
the effects of the Related Companies debt level on its future financial and
operating flexibility; |
|
|
|
|
a reduction in demand for the Related Companies products by the petrochemical,
refining or heating industries; |
6
|
|
|
a decline in the volumes of NGLs delivered by the Related Companies
facilities; |
|
|
|
|
the failure of the Related Companies credit risk management efforts to
adequately protect it against customer non-payment; |
|
|
|
|
terrorist attacks aimed at Related Companies facilities; and |
|
|
|
|
the failure of any Related Company to successfully integrate operations with
companies, if any, that they may acquire in the future. |
Enterprise GP Holdings has no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
|
|
|
Contacts:
|
|
Randy Burkhalter, Investor Relations, (713) 381-6812 or (866) 230-0745 |
|
|
Rick Rainey, Media Relations (713) 381-3635 |
###