EXHIBIT No. 10.2
GULF SOUTH PIPELINE COMPANY,
LP
$275,000,000
5.05% Notes due 2015
PURCHASE AGREEMENT
January 12, 2005
Citigroup Global Markets Inc.
Lehman Brothers Inc.
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Gulf South Pipeline Company, LP, a
limited partnership organized under the laws of Delaware (the
“ Issuer” ”), proposes to issue and sell
to the several Initial Purchasers named in Schedule 1 hereto
(the “ Initial Purchasers ”) $275,000,000 in
aggregate principal amount of its 5.05% Notes due 2015 (the “
Notes ”), pursuant to the terms of an indenture (the
“ Indenture ”), to be dated as of January 18,
2005, between the Issuer and The Bank of New York, as trustee (the
“ Trustee ”).
The Notes will be offered and sold to you
pursuant to an exemption from the registration requirements under
the Securities Act of 1933, as amended (the “ Securities
Act ”). The Issuer has prepared a preliminary
offering memorandum, dated January 12, 2005 (as amended or
supplemented, the “ Preliminary Offering Memorandum
”), and will prepare a final offering memorandum (as amended
or supplemented, the “ Offering Memorandum ”),
to be dated January 12, 2005, relating to the Issuer and the Notes.
Upon original issuance thereof, and until
such time as the same is no longer required under the applicable
requirements of the Securities Act, the Notes (and all securities
issued in exchange therefor or in substitution therefor) shall bear
substantially the following legend:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR OTHER SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS
THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS
SECURITY BY ITS
ACCEPTANCE HEREOF (1) REPRESENTS
THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B) IT IS NOT A U.S. PERSON AND IS ACQUIRING ITS NOTE IN AN
“OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE
SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF
THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF
THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS
NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION
DATE”), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A INSIDE THE UNITED STATES, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT
THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO
CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT
A CERTIFICATION OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THIS NOTE IS COMPLETED AND DELIVERED BY THIS TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED
HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED
STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
You have advised the Issuer that you will
make offers and sales (the “ Exempt Resales ”)
of the Notes purchased hereunder on the terms set forth in the
Offering Memorandum solely to (i) persons whom you reasonably
believe to be “qualified institutional buyers” as
defined in Rule 144A under the Securities Act (“ QIBs
”) and (ii) outside the United States to persons other than
U.S. Persons in offshore transactions meeting the requirements of
Regulation S under the Securities Act (“ Regulation S
”) (such persons specified in clauses (i) and (ii) being
referred to herein as the “ Eligible Purchasers
”). As used herein, the terms “offshore
transaction,” “United States” and “U.S.
person” have the respective meanings given to them in
Regulation S. You will offer the Notes to Eligible Purchasers
initially at a price equal to 99.702% of the principal amount
thereof. Thereafter, the offering price may be changed at any
time without notice. The Notes will not be registered for
resale nor will the Issuer conduct a registered exchange offer for
the Notes.
This Agreement, the Notes and Indenture
are hereinafter referred to collectively as the “
Operative Documents .” This is to confirm the
agreements concerning the purchase of the Notes from the Issuer by
the Initial Purchasers.
SECTION 1.
Payment
and Delivery.
(a) Payment for the Notes shall be
made by wire transfer of immediately available funds to accounts
designated by the Issuer at the time and place set forth herein,
upon delivery to the Initial Purchasers of Notes in amounts set
forth opposite each Initial Purchaser’s name in Schedule
1 hereto. The time and date of such payment and delivery
with respect to the Notes are herein referred to as the “
Closing Date .” Each Initial Purchaser will
purchase such aggregate principal amount of Notes at an aggregate
purchase price equal to 99.052% of the principal amount thereof
(the “ Purchase Price ”). The obligation
of the Issuer to sell the Notes and of the Initial Purchasers to
purchase the Notes are conditioned on the consummation of the
offering of the Notes and of the offering by the parent company of
the Issuer, TGT Pipeline, LLC, of its $300,000,000 aggregate
principal amount of 5.50% Notes due 2017, on the Closing Date.
(b)
Delivery of and payment
for the Notes shall be made at the offices of Weil, Gotshal &
Manges LLP, 767 Fifth Avenue, New York, New York 10153 or at such
other date or place as shall be determined by agreement between
Citigroup Global Markets Inc. and the Issuer. The Closing
Date shall be 9:00 A.M., New York City time, on the third full
business day following the date of this Agreement or at such other
date as shall be determined by agreement between Citigroup Global
Markets Inc. and the Issuer.
(c)
On the Closing Date, one
or more Notes in global form, registered in the name of Cede &
Co., as nominee of The Depository Trust Company (“ DTC
”), having an aggregate principal amount corresponding to the
aggregate principal amount of Notes sold pursuant to Exempt Resales
(collectively, the “ Global Notes ”), shall be
delivered by the Issuer to the Initial Purchasers against payment
by the Initial Purchasers of the purchase price thereof. The
Global Notes in definitive form shall be made available to the
Initial Purchasers for inspection not later than 2:00 p.m. on the
business day prior to the Closing Date.
SECTION 2.
Certain
Covenants of the Issuer . The Issuer agrees:
(a)
To furnish to you,
without charge, as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments or
supplements thereto, as you may reasonably request. The
Issuer consents to the use of the Preliminary Offering Memorandum
and the Offering Memorandum, and any amendments and supplements
thereto required pursuant to this Agreement, by you in connection
with the Exempt Resales that are in compliance with this
Agreement.
(b)
Before amending or
supplementing the Offering Memorandum, during such period as in the
opinion of counsel to the Initial Purchasers the Offering
Memorandum is required by law to be delivered in connection with
Exempt Resales and in connection with market-making activities of
the Initial Purchasers for so long as any Notes are outstanding, to
furnish the Initial Purchasers a copy of each such proposed
amendment or supplement and to effect no such proposed amendment or
supplement to which the Initial Purchasers reasonably object in
writing within a reasonable time after being furnished a copy
thereof.
(c)
If, in connection with
any Exempt Resales or market-making transactions after the date of
this Agreement, any event shall occur that, in the judgment of the
Issuer or in your judgment or the judgment of counsel to you, makes
any statement of a material fact in the Offering Memorandum untrue
or that requires the making of any additions to or changes in the
Offering Memorandum in order to make the statements in the Offering
Memorandum, in the light of the circumstances at the time that the
Offering Memorandum is delivered to prospective Eligible
Purchasers, not misleading, or if it is necessary to amend or
supplement the Offering Memorandum to comply with applicable law,
the Issuer will promptly notify you of any such event coming to the
attention of the Issuer and prepare an appropriate amendment or
supplement to the Offering Memorandum so that, at the time that the
Offering Memorandum is delivered to prospective Eligible
Purchasers, (i) the statements in the Offering Memorandum as
amended or supplemented, in the light of the circumstances under
which they were made, will not be misleading and (ii) the Offering
Memorandum will comply with applicable law.
(d) To endeavor to qualify the
Notes for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Initial Purchasers shall reasonably
request and to pay all expenses (including fees and disbursements
of counsel) in connection therewith and the determination of the
eligibility of the Notes for investment under the laws of such
jurisdictions as the Initial Purchasers may designate.
(e) Not to sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) that would be
integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the sale to
you or the Eligible Purchasers of the Notes.
(f) Not to, and to not permit any
of its affiliates or any person acting on its behalf to, (i) resell
any Notes that have been acquired by any of them; or (ii) engage
in
any form of general solicitation or
general advertising (within the meaning of Regulation D) in
connection with the offering of the Notes.
(g) Not to, and to not permit any
of its affiliates or any person acting on its behalf to, engage in
any directed selling efforts within the meaning of Rule 902(b) of
Regulation S with respect to the Notes, and to, and require its
affiliates or any person acting on its behalf to, comply with the
offering restrictions requirements of Regulation S in connection
with the offering of the Notes outside of the United
States.
(h) Not to take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the Notes to
facilitate the sale or resale of the Notes.
(i) For so long as any Notes
remain outstanding and during any period in which the Issuer is not
subject to Section 13 or 15(d) of the Exchange Act, to make
available to any registered holder or beneficial owner of Notes in
connection with any sale thereof and any prospective purchaser of
Notes from such registered holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities
Act.
SECTION 3.
Reimbursement of Initial Purchasers’ Expenses.
If this Agreement shall be terminated by the Initial
Purchasers or any of them, because of any failure or refusal on the
part of the Issuer to comply with the terms or to fulfill any of
the conditions of this Agreement in any material respect, or if for
any reason the Issuer shall be unable to perform its obligations
under this Agreement in any material respect, the Issuer agrees to
reimburse the Initial Purchasers or such Initial Purchasers as have
so terminated this Agreement, with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Initial
Purchasers in connection with the Notes.
SECTION 4.
Certain
Covenants, Representations and Warranties of the Initial
Purchasers . Each of the Initial Purchasers, severally
and not jointly, represents and warrants to, and agrees with, the
Issuer, that:
(a)
Such Initial Purchaser is
a QIB with such knowledge and experience in financial and business
matters as are necessary in order to evaluate the merits and risks
of an investment in the Notes.
(b)
Such Initial Purchaser
(i) is not acquiring the Notes with a view to any distribution
thereof or with any present intention of offering or selling any of
the Notes, in either case, in a transaction that would violate the
Securities Act or any state securities laws or any other applicable
jurisdiction; (ii) in connection with the Exempt Resales, will
solicit offers to buy the Notes only from, and will offer to sell
the Notes only to, Eligible Purchasers in accordance with this
Agreement and on the terms contemplated by the Offering Memorandum;
and (iii) will not offer or sell the Notes, nor has it offered or
sold the Notes by, or otherwise engaged in, any form of general
solicitation in connection with the offering of the
Notes.
(c)
Each Initial Purchaser
represents that it has not offered, sold or delivered the Notes,
and will not offer, sell or deliver the Notes (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering of the Notes and the
Closing Date (such period, the “ Distribution Compliance
Period ”), within the United States or to, or for the
account or benefit of U.S. persons, except in accordance with Rule
144A under the Securities Act. Accordingly, such Initial
Purchaser represents and agrees that neither it, its affiliates nor
any persons acting on its behalf have engaged or will engage in any
directed selling efforts within the meaning of Rule 902(c) of
Regulation S with respect to the Notes, and its affiliates and all
persons acting on its behalf have complied and will comply with the
offering restrictions requirements of Regulation S.
(d)
Such Initial Purchaser
agrees that, at or prior to confirmation of a sale of Notes (other
than a sale pursuant to Rule 144A), it will have sent to each
distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Notes from them during the
Distribution Compliance Period a confirmation or notice
substantially to the following effect:
“The Notes covered hereby have not
been registered under the Securities Act of 1933 (the
“Securities Act”) and may not be offered and sold
within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering or the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Securities
Act, and in connection with any subsequent sale by you of the Notes
covered hereby in reliance on Regulation S during the period
referred to above to any distributor, dealer or person receiving a
selling concession, fee or other remuneration, you must deliver a
notice substantially to the foregoing effect. Terms used
above have the meanings assigned to them in Regulation
S.”
(e)
Such Initial Purchaser
(i) has not offered or sold, and, prior to the six months after the
date of the issue of the Notes, will not offer or sell, any Notes
to persons in the United Kingdom, except to persons whose ordinary
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for purposes of
their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (ii) has complied with and will comply
with all applicable provisions of the Financial Services and
Markets Act 2000 (the “FSMA” ) with respect to
anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom, and (iii) has only communicated or
caused to be communicated and will only communicate and cause to be
communicated any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the FSMA) received by
it in connection with the issue or sale of any Notes in
circumstances in which Section 21(1) of the FSMA would not apply to
the Issuer.
Such
Initial Purchaser understands that the Issuer and, for purposes of
the opinions to be delivered to you pursuant to Section 7 hereof,
counsel to the Issuer and counsel to the Initial Purchasers will
rely upon the accuracy and truth of the foregoing representations
and hereby consents to such reliance.
The terms used in this Section 4 that
have meanings assigned to them in Regulation S are used herein as
so defined.
SECTION 5.
Conditions of Initial Purchasers’ Obligations .
The several obligations of the Initial Purchasers to purchase
and pay for any issue of Initial Purchasers’ Notes hereunder
are subject to the following conditions:
(a) That, at the Closing Date, the
Issuer shall furnish to the Initial Purchasers an opinion of
Dickstein Shapiro Morin & Oshinsky LLP, as special counsel to
the Issuer (or of such other counsel to the Issuer, including
in-house counsel, as is reasonably acceptable to the Initial
Purchasers) dated the Closing Date, in substantially the forms
attached hereto as Exhibit A-1 and Exhibit A-2
.
(b) That, at the Closing Date, the
Initial Purchasers shall receive an opinion of Weil, Gotshal &
Manges LLP, counsel for the Initial Purchasers, dated the Closing
Date, with respect to the issuance and sale of the Notes, the
Offering Memorandum and other related matters as the Initial
Purchasers may reasonably require.
(c) At the time of execution of
this Agreement, the Initial Purchasers shall have received from
Ernst & Young LLP a letter, in form and substance satisfactory
to the Initial Purchasers, addressed to the Initial Purchasers and
dated the date hereof (i) confirming that they are independent
auditors, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Offering Memorandum, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants’ “comfort letters” to
initial purchasers.
(d) With respect to the letter of
Ernst & Young LLP, referred to in the preceding paragraph and
delivered to the Initial Purchasers concurrently with the execution
of this Agreement (the “ initial letter ”), the
Initial Purchasers shall have received a letter (the “
bring-down letter ”) of such accountants, addressed to
the Initial Purchasers and dated as of the Closing Date
(i) confirming that they are independent auditors,
(ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is
given in the Offering Memorandum, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions
and findings of such firm with respect to the financial information
and other matters covered by the initial letter and
(iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(e) That, at the Closing Date, the
Issuer shall have furnished to the Initial Purchasers a certificate
dated the Closing Date and signed by an officer of the
general
partner of the Issuer, to the effect set
forth below. The officer signing and delivering such
certificate may rely upon the best of his knowledge as to
proceedings threatened.
(A)
the representations and
warranties of the Issuer contained herein are true and correct in
all material respects as if on and as of the Closing Date, and the
Issuer has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied thereunder, to
the extent a party thereto, at or prior to the Closing
Date;
(B) The issuance and sale of the Notes by
the Issuer hereunder has not been enjoined (temporarily or
permanently) by any court or governmental body or
agency;
(C) Subsequent to the execution and
delivery of this Agreement and prior to the Closing Date, there
shall not have occurred any downgrading, nor shall any notice have
been given of (A) any intended or potential downgrading or (B) any
review for a possible change that does not indicate the direction
of a possible change, in the rating accorded any of the
Issuer’s securities by any “nationally recognized
statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the Act; and
(D) there has not occurred any material
adverse change, or any development which could reasonably be
expected to result in a prospective material adverse change, in the
financial condition, or in the earnings, business or operations, of
the Issuer, taken as a whole, from that set forth in the Offering
Memorandum.
(f) That, the Issuer shall have
performed in all material respects such of its obligations under
this Agreement as are to be performed by the terms hereof at or
before the time of purchase.
(g) The Offering Memorandum shall
have been printed and copies distributed to you not later than 9:00
A.M., New York City time, on January 18, 2005, or at such later
date and time as you may approve in writing, and no stop order
suspending the qualification or exemption from qualification of the
Notes in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
All opinions, letters, evidence and
certificates mentioned above or elsewhere in this Agreement shall
be deemed to be in compliance with the provisions hereof only if
they are in form and substance reasonably satisfactory to counsel
for the Initial Purchasers.
SECTION 6.
Defaulting Initial Purchasers. If any Initial
Purchaser or Initial Purchasers shall default in its or their
obligation to take up and pay for the Notes to be purchased by it
or them hereunder, the non-defaulting Initial Purchasers shall take
up and pay for (in addition to the principal amount of Notes they
are obligated to purchase hereunder) the principal amount of Notes
agreed to be purchased by all such
