MARTIN MIDSTREAM PARTNERS
L.P.
New York, New York
January 10, 2006
Citigroup
Global Markets Inc.
Raymond James & Associates, Inc.
RBC Capital Markets Corporation
A.G. Edwards & Sons, Inc.
KeyBanc Capital Markets, a division of McDonald Investments
Inc.
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Martin Midstream
Partners L.P., a Delaware limited partnership (the
“Partnership”), proposes to sell to the several
underwriters named in Schedule II hereto (the
“Underwriters”) the number of common units representing
limited partner interests (“Common Units”) in the
Partnership set forth in Schedule I hereto (said Common Units
to be issued and sold by the Partnership being hereinafter called
the “Underwritten Units”). The Partnership also
proposes to grant to the Underwriters an option to purchase up to
the number of additional Common Units set forth in Schedule I
hereto to cover over-allotments (the “Option Units”
and, together with the Underwritten Units, the
“Units”). Citigroup Global Markets Inc. is acting as
the Representative of the several Underwriters and in such capacity
is referred to in this Agreement as the
“Representative.” Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on
or before the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus, as the case may be, deemed to be incorporated
therein by reference. Certain terms used herein are defined in
Section 19 hereof.
Martin Midstream
GP LLC, a Delaware limited liability company (the “General
Partner”), is an indirect, wholly owned subsidiary of Martin
Resource Management Corporation, a Texas corporation
(“MRMC”), and the sole general partner of the
Partnership. Martin Operating GP LLC, a Delaware limited liability
company and a wholly owned subsidiary of the Partnership
(“Operating GP”), is the sole general partner of Martin
Operating Partnership L.P., a Delaware limited partnership (the
“Operating Partnership”), and the Partnership is the
sole limited partner of the Operating Partnership. The Operating
Partnership owns, among other
things, all of
the outstanding limited partnership interests in CF Martin Sulphur,
L.P., a Delaware limited partnership (“CFMSLP”), all of
the outstanding common stock of Martin Sulphur Holding, Inc., a
Texas corporation (“MSHI”), 90% of the outstanding
membership interests in CF Martin Sulphur LLC, a Delaware limited
liability company (“CF GP”) and the general partner of
CFMSLP, all of the outstanding limited partnership interests in
Prism Gas Systems I, L.P., a Texas limited partnership
(“Prism Gas”), and all of the outstanding membership
interests in Prism Gas Systems GP, LLC, a Texas limited liability
company (“PGSGP”) and the general partner of Prism Gas.
MSHI owns 10% of the outstanding membership interests in CF GP. CF
GP owns all of the outstanding general partnership interests in
CFMSLP. PGSGP owns all of the outstanding general partnership
interests in Prism Gas. Prism Gas owns a 49% partnership interest
in Waskom Gas Processing Company, a Texas general partnership
(“Waskom”), and all of the outstanding common stock of
Prism Gas Systems Inc., a Texas corporation (“PGSI”).
PGSI owns a 1% general partnership interest in Waskom.
The General
Partner, the Partnership, Operating GP, the Operating Partnership,
CFMSLP and Prism Gas collectively constitute the “Partnership
Entities.” The Partnership Entities (other than Prism Gas),
MRMC and Martin Resource LLC, a Delaware limited liability company
(“Martin LLC” and collectively, the “Martin
Parties”) wish to confirm as follows their agreement with you
and the other several Underwriters, on whose behalf you are acting,
in connection with the several purchases of the Units from the
Partnership.
For the purposes
of this Agreement, the term “Permitted Liens” shall
mean liens, encumbrances and/or security interests (i) granted
by MRMC to JP MorganChase and the other lenders (collectively the
“MRMC Lenders”), named in MRMC’s Fourth Amended
and Restated Credit Agreement dated October 21, 2005, (the
“MRMC Credit Agreement”), (ii) granted by any
Partnership Entity to Royal Bank of Canada and the other lenders
(collectively, the “MLP Lenders”), named in the
Operating Partnership’s Second Amended and Restated Credit
Agreement dated as of November 10, 2005 (the “MLP Credit
Agreement”) and (iii) liens granted by CFMSLP pursuant
to U.S. Government Guaranteed Ship Financing Bonds with respect to
two vessels.
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Representations and Warranties of the Martin Parties . Each
of the Martin Parties, jointly and severally, hereby represents and
warrants to each Underwriter that:
(a) The
Partnership meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration
statement (the file number of which is set forth on Schedule I
hereto), including a related basic prospectus, for registration
under the Act of the offering and sale of the Units. Such
Registration Statement, including any amendments thereto filed
prior to the Execution Time, has become effective. The Partnership
may have filed with the Commission, as part of an amendment to the
Registration Statement or pursuant to Rule 424(b), one or more
amendments thereto, Preliminary Final Prospectuses, each of which
has previously been furnished to you. The Partnership will file
with the Commission a final prospectus supplement relating to the
Units in accordance with Rule 424(b). As filed, such final
prospectus supplement shall contain all information, and, except to
the extent the Representative shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained
in
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the Basic
Prospectus and any Preliminary Final Prospectus) as the Partnership
has advised you, prior to the Execution Time, will be included or
made therein. The Registration Statement, at the Execution Time,
meets the requirements set forth in
Rule 415(a)(1)(x).
(b) On the
Effective Date, the Registration Statement did, and when the Final
Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined herein) and on any date
on which Option Units are purchased, if such date is not the
Closing Date (a “settlement date”), the Final
Prospectus (and any supplement thereto) will, comply in all
material respects with the applicable requirements of the Act and
the Exchange Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading; and, on the date of any filing pursuant to Rule
424(b) and on the Closing Date and any settlement date, the Final
Prospectus (together with any supplement thereto) will not include
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided , however , that the Partnership
makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Final Prospectus (or any supplement thereto) in reliance upon and
in conformity with information furnished in writing to the
Partnership by or on behalf of any Underwriter through the
Representative specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto), it
being understood and agreed that the only such information
furnished by or on behalf of any Underwriters consists of the
information described as such in Section 8 hereof.
(c) The
Disclosure Package and the final term sheet prepared and filed
pursuant to Section 5(b) hereof when taken together as a whole, do
not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package based upon
and in conformity with written information furnished to the Company
by any Underwriter through the Representative specifically for use
therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists
of the information described as such in Section 8
hereof.
(d) (i) At
the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2)) of the
Units and (ii) as of the Execution Time (with such date being
used as the determination date for purposes of this clause (ii)),
the Partnership was not and is not an Ineligible Issuer (as defined
in Rule 405), without taking account of any determination by
the Commission pursuant to Rule 405 that it is not necessary
that the Partnership be considered an Ineligible Issuer.
(e) Each
Issuer Free Writing Prospectus and the final term sheet prepared
and filed pursuant to Section 5(b) hereto do not include any
information that conflicts with the information contained in the
Registration Statement, including any document incorporated therein
and any prospectus supplement deemed to be a part thereof that has
not been superseded or modified.
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The foregoing
sentence does not apply to statements in or omissions from the
Disclosure Package based upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representative specifically for use therein, it being understood
and agreed that the only such information furnished by or on behalf
of any Underwriter consists of the information described as such in
Section 8 hereof.
(f) Any
certificate signed by an officer of any of the Martin Parties and
delivered to the Representative or counsel for the Underwriters in
connection with the offering of the Units shall be deemed a
representation and warranty by such Martin Party, as to matters
covered thereby, to each Underwriter.
(g) The
Registration Statement has become effective under the Act; no stop
order suspending the effectiveness of the Registration Statement is
in effect; and no proceedings for such purpose are pending before
or, to the knowledge of the Martin Parties, threatened by the
Commission.
(h) To the
best knowledge of the Partnership, the Preliminary Final Prospectus
and the Final Prospectus, if filed by electronic transmission
pursuant to EDGAR (except as may be permitted by
Regulation S-T under the Act), was or will be identical to the
copy thereof delivered to the Underwriters for use in connection
with the offer and sale of the Units.
(i) Each of
the Partnership and the Operating Partnership has been duly formed
and is validly existing in good standing as a limited partnership
under the Delaware Revised Uniform Limited Partnership Act (the
“Delaware LP Act”), with full partnership power and
authority to own or lease and operate its properties and to conduct
its business as presently conducted and as described in the
Registration Statement and the Final Prospectus (and any amendment
or supplement thereto), in each case in all material respects. Each
of the Partnership and the Operating Partnership is duly registered
or qualified as a foreign limited partnership for the transaction
of business under the laws of each jurisdiction in which the
character of the business conducted by it at the Closing Date and
each Option Closing Date or the nature or location of the
properties to be owned or leased by it at the Closing Date and each
Option Closing Date makes such registration or qualification
necessary, except where the failure so to register or qualify would
not (i) have a material adverse effect on the condition
(financial or otherwise), business, properties, net worth or
results of operations of the Partnership Entities (a
“Material Adverse Effect”) or (ii) subject the
limited partners of the Partnership to any material liability or
disability.
(j) Each of
Martin LLC, the General Partner and Operating GP has been duly
formed and is validly existing in good standing as a limited
liability company under the Delaware Limited Liability Company Act
(the “Delaware LLC Act”), with full limited liability
company power and authority to own or lease and operate its
properties and to conduct its business as presently conducted and
as described in the Registration Statement and the Final Prospectus
(and any amendment or supplement thereto), and (i) with
respect to the General Partner, to act as general partner of the
Partnership, and (ii) with respect to Operating GP, to act as
general partner of the Operating Partnership, in each case in all
material respects. Each of Martin LLC, the General Partner and
Operating GP is duly registered or qualified as a foreign limited
liability company for the transaction of business under the laws of
each jurisdiction in which the
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character of
the business conducted by it at the Closing Date and each Option
Closing Date or the nature or location of the properties owned or
leased by it at the Closing Date and each Option Closing Date makes
such registration or qualification necessary, except where the
failure so to register or qualify would not (i) have a
Material Adverse Effect or (ii) subject the limited partners
of the Partnership to any material liability or
disability.
(k) CFMSLP
has been duly formed and is validly existing in good standing as a
limited partnership under the Delaware LP Act with full partnership
power and authority to own or lease and operate its properties and
to conduct its business as presently conducted and as described in
the Registration Statement and the Final Prospectus (and any
amendment or supplement thereto), in each case in all material
respects. CFMSLP is duly registered or qualified as a foreign
limited partnership for the transaction of business under the laws
of each jurisdiction in which the character of the business
conducted by it at the Closing Date and each Option Closing Date or
the nature or location of the properties owned or leased by it at
the Closing Date and each Option Closing Date makes such
registration or qualification necessary, except where the failure
so to register or qualify would not (i) have a Material
Adverse Effect or (ii) subject the Operating Partnership, as
the limited partner of CFMSLP, to any material liability or
disability.
(l) Prism Gas
has been duly formed and is validly existing in good standing as a
limited partnership under the Texas Revised Limited Partnership Act
(the “Texas LP Act”) with full partnership power and
authority to own or lease and operate its properties and to conduct
its business as presently conducted and as described in the
Registration Statement and the Final Prospectus (and any amendment
or supplement thereto), in each case in all material respects.
Prism Gas is duly registered or qualified as a foreign limited
partnership for the transaction of business under the laws of each
jurisdiction in which the character of the business conducted by it
at the Closing Date and each Option Closing Date or the nature or
location of the properties owned or leased by it at the Closing
Date and each Option Closing Date makes such registration or
qualification necessary, except where the failure so to register or
qualify would not (i) have a Material Adverse Effect or
(ii) subject the Operating Partnership, as the limited partner
of Prism Gas, to any material liability or disability.
(m) Waskom
has been duly formed and is validly existing as a general
partnership under the Texas Revised Partnership Act (the
“Texas Partnership Act”) with full partnership power
and authority to own or lease and operate its properties and to
conduct its business as presently conducted and as described in the
Registration Statement and the Final Prospectus (and any amendment
or supplement thereto), in each case in all material respects.
Waskom is duly registered or qualified as a foreign partnership for
the transaction of business under the laws of each jurisdiction in
which the character of the business conducted by it at the Closing
Date and each Option Closing Date or the nature or location of the
properties owned or leased by it at the Closing Date and each
Option Closing Date makes such registration or qualification
necessary, except where the failure so to register or qualify would
not (i) have a Material Adverse Effect or (ii) subject
the Operating Partnership, as the limited partner of Waskom, to any
material liability or disability.
(n) The
General Partner is the sole general partner of the Partnership with
a 2% general partner interest in the Partnership; such general
partner interest has been duly authorized
5
and validly
issued in accordance with the First Amended and Restated Agreement
of Limited Partnership of the Partnership (the “Partnership
Agreement”); and the General Partner owns such general
partner interest free and clear of all liens, encumbrances,
security interests, charges or claims, except for Permitted Liens,
applicable securities laws and any restrictions set forth in the
Partnership Agreement.
(o) Martin
Product Sales LLC, a Texas limited liability company
(“MPS”), owns 1,235,038 subordinated units representing
limited partner interests in the Partnership (the
“Subordinated Units”) and 769,730 Common Units,
Midstream Fuel Service LLC, an Alabama limited liability company
(“Midstream”), owns 469,515 Subordinated Units and
124,129 Common Units and Martin LLC owns 1,671,137 Subordinated
Units and 417,784 Common Units (all such Subordinated Units and
Common Units being collectively referred to herein as the
“Sponsor Units”); all of such Sponsor Units and the
limited partner interests represented thereby have been duly
authorized and validly issued in accordance with the Partnership
Agreement, are fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-303 or
Section 17-607 of the Delaware LP Act and as otherwise
described in the Final Prospectus under the caption “The
Partnership Agreement—Limited Liability”); the General
Partner owns all of the Incentive Distribution Rights (as such
rights are defined in the Partnership Agreement (the
“Incentive Distribution Rights”)), and such Incentive
Distribution Rights have been duly authorized and validly issued in
accordance with the Partnership Agreement, are fully paid (to the
extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by
Section 17-303 or Section 17-607 of the Delaware LP Act
and as otherwise described in the Final Prospectus under the
caption “The Partnership Agreement—Limited
Liability”); and the Sponsor Units and the Incentive
Distribution Rights are owned free and clear of all liens,
encumbrances, security interests, charges or claims, except for
Permitted Liens, applicable securities laws, any restrictions set
forth in the Partnership Agreement and, with respect to the
Incentive Distribution Rights, any restrictions on transferability
set forth in the governing documents of the other Partnership
Entities.
(p) On the
Closing Date and each Option Closing Date, as the case may be, the
Underwritten Units and the Option Units, as the case may be, and
the limited partner interests represented thereby, will be duly
authorized by the Partnership Agreement and, when issued and
delivered to the Underwriters against payment therefore in
accordance with the terms hereof, will be validly issued, fully
paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by
Section 17-303 or Section 17-607 of the Delaware LP Act
and as otherwise described in the Final Prospectus under the
caption “The Partnership Agreement—Limited
Liability”).
(q) MRMC owns
a 100% member interest in Martin LLC; such member interest has been
duly authorized and validly issued in accordance with the limited
liability company agreement of Martin LLC (as the same may be
amended and restated at or prior to the Closing Date and each
Option Closing Date, the “Martin LLC Agreement”), is
fully paid (to the extent required under the Martin LLC Agreement)
and nonassessable (except as such nonassessability may be affected
by Section 18-607 of the Delaware LLC Act); and MRMC owns such
member interest free and clear of all liens, encumbrances, security
interests, charges or claims, except for Permitted Liens and
applicable securities laws and any restrictions set forth in the
Martin LLC Agreement.
6
(r) The
Partnership owns a 100% member interest in Operating GP; such
member interest has been duly authorized and validly issued in
accordance with the limited liability company agreement of
Operating GP (as the same may be amended and restated at or prior
to the Closing Date and each Option Closing Date, the
“Operating GP Agreement”), is fully paid (to the extent
required under the Operating GP Agreement) and nonassessable
(except as such nonassessability may be affected by
Section 18-607 of the Delaware LLC Act); and the Partnership
owns such member interest free and clear of all liens,
encumbrances, security interests, charges or claims, except for
Permitted Liens, applicable securities laws and any restrictions
set forth in the Operating GP Agreement.
(s) Operating
GP is the sole general partner of the Operating Partnership with a
0.1% general partner interest in the Operating Partnership; such
general partner interest has been duly authorized and validly
issued in accordance with the partnership agreement of the
Operating Partnership (as the same may be amended and restated at
or prior to the Closing Date and each Option Closing Date, the
“Operating Partnership Agreement”), is fully paid (to
the extent required under the Operating Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by
Section 17-607 of the Delaware LP Act); Operating GP owns such
general partner interest free and clear of all liens, encumbrances
(except any restrictions on transferability as described in the
Final Prospectus), security interests, charges or claims, except
for Permitted Liens, applicable securities laws and any
restrictions set forth in the Operating Partnership Agreement; the
Partnership is the sole limited partner of the Operating
Partnership with a 99.9% limited partner interest in the Operating
Partnership; such limited partner interest has been duly authorized
and validly issued in accordance with the Operating Partnership
Agreement, is fully paid (to the extent required under the
Operating Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 17-303 and 17-607
of the Delaware LP Act); and the Partnership owns such limited
partner interest free and clear of all liens, encumbrances,
security interests, charges or claims, except for Permitted Liens,
applicable securities laws and any restrictions set forth in the
Operating Partnership Agreement.
(t) Martin
LLC owns a 100% member interest in the General Partner; such member
interest has been duly authorized and validly issued in accordance
with the limited liability company agreement of the General Partner
(as the same may be amended and restated at or prior to the Closing
Date and each Option Closing Date, the “General Partner LLC
Agreement”), is fully paid (to the extent required under the
General Partner LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the
Delaware LLC Act); and Martin LLC owns such member interest free
and clear of all liens, encumbrances, security interests, charges
or claims, except for Permitted Liens, applicable securities laws
and any restrictions in the General Partner LLC
Agreement.
(u) The
Operating Partnership owns, directly or indirectly through its
ownership in CF GP and MSHI, 100% of the partnership interests in
CFMSLP; such partnership interests have been duly authorized and
validly issued in accordance with the partnership agreement, as
amended, of CFMSLP (the “CFMSLP Partnership
Agreement”), are fully paid (to the extent required under the
partnership agreement, as amended, of CFMSLP) and nonassessable
(except
7
as such
nonassessability may be affected by Sections 17-303 and 17-607
of the Delaware LP Act); and the Operating Partnership owns,
directly or indirectly through its ownership in CF GP and MSHI,
such partnership interests free and clear of all liens,
encumbrances, security interests, charges or claims except for
Permitted Liens, applicable securities laws and any restrictions
set forth in the CFMSLP Partnership Agreement.
(v) The
Operating Partnership owns, directly or indirectly through its
ownership in PGSGP, 100% of the outstanding partnership interests
in Prism Gas; such partnership interests have been duly authorized
and validly issued in accordance with the partnership agreement, as
amended, of Prism Gas (the “Prism Gas Partnership
Agreement”), are fully paid (to the extent required under the
Prism Gas Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 3.03 and 6.07 of
the Texas LP Act); and the Operating Partnership owns, directly or
indirectly through its ownership in PGSGP, such partnership
interests directly or indirectly free and clear of all liens,
encumbrances, security interests, charges or claims except for
Permitted Liens, applicable securities laws and any restrictions
set forth in the Prism Gas Partnership Agreement.
(w) Prism Gas
owns, directly or indirectly through its ownership in PGSI, 50% of
the outstanding partnership interests in Waskom; such partnership
interests have been duly authorized and validly issued in
accordance with the partnership agreement, as amended, of Waskom
(the “Waskom Partnership Agreement”), and are fully
paid (to the extent required under the Waskom Partnership
Agreement); and Prism Gas owns such partnership interests, directly
or indirectly through its ownership of PGSI free and clear of all
liens, encumbrances, security interests, charges or claims except
for Permitted Liens, applicable securities laws and any
restrictions set forth in the Waskom Partnership
Agreement.
(x) Other
than (i) the Partnership’s ownership of a 100% member
interest in Operating GP and a 99.9% limited partner interest in
the Operating Partnership, (ii) Operating GP’s ownership
of a 0.1% general partner interest in the Operating Partnership,
(iii) the Operating Partnership’s ownership of 100% of
the outstanding limited partnership interests in CFMSLP,
(iv) the Operating Partnership’s ownership of 100% of
the outstanding membership interests in CF GP, (v) CF
GP’s ownership of 100% of the outstanding general partnership
interest in CFMSLP, (vi) the Operating Partnership’s
ownership of all of the outstanding common stock of MSHI,
(vii) the Operating Partnership’s ownership of all of
the outstanding limited partnership interests in Prism Gas,
(viii) the Operating Partnership’s ownership of all of
the outstanding membership interests in PGSGP, (ix) Prism
Gas’ ownership of 49% of the outstanding partnership
interests in Waskom, and (x) Prism Gas’ ownership of all of
the outstanding common stock of PGSI, none of the Partnership,
Operating GP, or the Operating Partnership will own, directly or
indirectly, any equity or long-term debt securities of any
corporation, partnership, limited liability company, joint venture,
association or other entity. Other than its ownership of its
partnership interests in the Partnership, the General Partner will
not own, directly or indirectly, any equity or long-term debt
securities of any corporation, partnership, limited liability
company, joint venture, association or other entity.
(y) Except
for rights described in the Final Prospectus, or for rights that
have been waived, there are no preemptive rights or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any partnership or member interests in the
Partnership
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Entities or
Waskom, in each case pursuant to the organizational documents or
any agreement or other instrument to which any Partnership Entity
or Waskom is a party or by which any of them may be bound. Neither
the filing of the Registration Statement nor the offering or sale
of the Units as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any Units or other
securities of any Partnership Entity, except for such rights as
have been waived. Except as described in the Final Prospectus,
there are not outstanding options or warrants to purchase any
partnership or member interests in any Partnership Entity or
Waskom.
(z) The
Partnership has all necessary limited partnership power and
authority to issue, sell and deliver the Units, in accordance with
and upon the terms and conditions set forth in this Agreement, the
Partnership Agreement, the Registration Statement and the Final
Prospectus. All corporate, partnership and limited liability
company action, as the case may be, required to be taken by the
Martin Parties, Prism Gas or any of their stockholders, partners or
members for the authorization, issuance, sale and delivery of the
Units and the consummation of the transactions contemplated by this
Agreement has been, or prior to the Closing will be, validly
taken.
(aa) This
Agreement has been duly authorized and validly executed and
delivered by each of the Martin Parties and constitutes the valid
and legally binding agreement of each of them, enforceable against
each of them in accordance with its terms; provided that the
enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws
relating to or affecting creditors’ rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing; and
provided further, that the indemnity and contribution provisions
hereunder may be limited by federal or state securities
laws.
(bb) The
Units, when issued and delivered against payment therefor as
provided herein, will conform in all material respects to the
description thereof contained in the Final Prospectus.
(cc) The
General Partner LLC Agreement has been duly authorized, executed
and delivered by Martin LLC and is a valid and legally binding
agreement of Martin LLC enforceable against Martin LLC in
accordance with its terms; the Partnership Agreement has been duly
authorized, executed and delivered by the General Partner and is a
valid and legally binding agreement of the General Partner,
enforceable against the General Partner in accordance with its
terms; the Operating GP Agreement has been duly authorized,
executed and delivered by the Partnership and is a valid and
legally binding agreement of the Partnership, enforceable against
the Partnership in accordance with its terms; the Operating
Partnership Agreement has been duly authorized, executed and
delivered by Operating GP and the Partnership and is a valid and
legally binding agreement of Operating GP and the Partnership,
enforceable against Operating GP and the Partnership in accordance
with its terms; the Prism Gas Partnership Agreement is a valid and
legally binding agreement of PGSGP and the Operating Partnership,
enforceable against PGSGP and the Operating Partnership in
accordance with its terms; assuming that the Waskom Partnership
Agreement has been duly authorized, executed and delivered by
CenterPoint Energy Gas Processing Company
(“CenterPoint”), the Waskom Partnership Agreement is a
valid and legally binding agreement of Prism Gas and CenterPoint,
enforceable against Prism Gas and CenterPoint in accordance with
its terms; provided that , with
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respect to each
agreement described in this Section 1(cc), the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws relating to or
affecting creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and provided
further, that the indemnity and contribution provisions contained
in any of such agreements may be limited by applicable laws and
public policy. The General Partner LLC Agreement, the Partnership
Agreement, the Operating GP Agreement, and the Operating
Partnership Agreement are herein collectively referred to as the
“Operative Agreements.”
(dd) There
are no legal or governmental proceedings pending or, to the best
knowledge of the Martin Parties, threatened, against any of the
Partnership Entities or Waskom or to which any of the Partnership
Entities or Waskom or any of their respective properties are
subject, that are required to be described in the Registration
Statement or the Final Prospectus (or any amendment or supplement
thereto) but are not described as required. Except as described in
the Final Prospectus, there is no action, suit, inquiry, proceeding
or investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to
the best knowledge of the Martin Parties, threatened, against or
involving any of the Partnership Entities or Waskom, or to which
any of their properties are subject, which might individually or in
the aggregate prevent or adversely affect the transactions
contemplated by this Agreement or result in a Material Adverse
Effect.
(ee) There
are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration
Statement or the Final Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement
that are not described, filed or incorporated by reference in the
Registration Statement and the Final Prospectus as required by the
Act. All such contracts to which any of the Partnership Entities or
Waskom is a party that are described in the Registration Statement
or the Final Prospectus or are filed as exhibits to the
Registration Statement have been duly authorized, executed and
delivered by the Partnership Entity or Waskom that are parties
thereto, constitute valid and binding agreements of the Partnership
Entity or Waskom that are parties thereto and are enforceable
against the Partnership Entity or Waskom that are parties thereto
in accordance with the terms thereof, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws relating to or
affecting creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). None of the
Partnership Entities, Waskom nor the Martin Parties, as applicable,
has received notice or been made aware that any other party is in
breach of or violation of, or in default under, any of such
contracts.
(ff) None of
the Martin Parties or Prism Gas is (i) in violation of
(A) its certificate or agreement of limited partnership,
certificate of formation, limited liability company agreement,
certificate or articles of incorporation or bylaws, or other
organizational documents, (B) any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it,
the violation of which would have a Material Adverse Effect or
could materially impair the ability of any of the Martin Parties to
perform their obligations under this Agreement, or (C) any
judgment, decree or injunction of any court or governmental agency
or body having jurisdiction over it, the violation of which would
have a Material Adverse Effect or could materially impair the
ability of any of the Martin Parties to perform their obligations
under this Agreement; or (ii)
10
in breach or
default in any material respect in the performance of any
obligation, agreement or condition contained in (A) any bond,
debenture, note or any other evidence of indebtedness or
(B) any agreement, contract, indenture, lease or other
document or instrument (each of (A) and (B), an
“Existing Instrument”) to which it is a party or by
which any of its properties may be bound, which breach or default
would have a Material Adverse Effect or could materially impair the
ability of any of the Martin Parties to perform their obligations
under this Agreement. To the knowledge of the Martin Parties, no
third party to any Existing Instrument is in default under any such
Existing Instrument, which default would, if continued, have a
Material Adverse Effect.
(gg) None of
the offering, issuance and sale of the Units by the Partnership,
the execution, delivery or performance of this Agreement by the
Martin Parties, or the consummation of the transactions
contemplated hereby (i) requires any consent, approval,
authorization or other order of or registration, qualification or
filing with, any court, regulatory body, administrative agency or
other governmental body, agency or official (except (a) such
as may be required for the registration of the Units under the Act,
the inclusion of the Units on the NASDAQ National Market, and
compliance with the securities or Blue Sky laws of various
jurisdictions, all of which will be, or have been, effected in
accordance with this Agreement and (b) as disclosed in the
Registration Statement, (ii) conflicts with or will conflict
with or constitutes or will constitute a breach or violation of, or
a default under, the certificate or agreement of limited
partnership, certificate of formation, limited liability company
agreement, certificate or articles of incorporation or bylaws or
other organizational documents of any of the Martin Parties, Prism
Gas or Waskom, (iii) conflicts with or will conflict with or
constitute or will constitute a breach or violation of, or a
default under, any Existing Instrument to which any of the Martin
Parties, Prism Gas or Waskom is a party or by which any of their
respective properties may be bound, (iv) violates or will
violate any statute, law, regulation, ruling, filing, judgment,
injunction, order or decree applicable to any of the Martin
Parties, Prism Gas or Waskom or any of their properties, or
(v) results in or will result in the creation or imposition of
any lien, encumbrance, security interest, equity, charge or claim
upon any property or assets of any of the Martin Parties, Prism Gas
or Waskom (other than the Permitted Liens, applicable securities
laws and any restrictions set forth in the governing documents of
the Martin Parties, Prism Gas or Waskom) pursuant to, or requires
the consent of any other party to, any Existing Instrument (except
as noted above), except in case of (i), (iii), (iv) or
(v) above, for such conflicts, breaches, defaults, liens,
encumbrances, security interests, charges or claims that will not,
individually or in the aggregate, result in a Material Adverse
Effect.
(hh) KPMG
LLP, the certified public accountants who have certified the
financial statements (including the related notes thereto and
supporting schedules) filed as part of the Registration Statement
and the Final Prospectus (or any amendment or supplement thereto),
are independent public accountants as required by the Act and the
Exchange Act. Deloitte & Touche LLP, the certified public
accountants who have certified the financial statements (including
the related notes thereto and supporting schedules) with respect to
Prism Gas and Waskom filed as part of the Registration Statement
and the Final Prospectus (or any amendment or supplement thereto),
are independent public accountants as required by the Act and the
Exchange Act.
(ii) On
September 30, 2005, the Partnership had, on the consolidated
basis indicated in the Final Prospectus (and any amendment or
supplement thereto), a capitalization as set forth therein. The
historical financial statements, together with related schedules
and notes, included
11
in the
Registration Statement and the Final Prospectus (and any amendment
or supplement thereto), present fairly in all material respects the
financial condition, results of operations, cash flows and changes
in financial position of the entities purported to be shown thereby
on the basis stated in the Registration Statement at the respective
dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as
disclosed therein. The summary and selected historical and pro
forma financial information set forth in the Registration
Statement, the Preliminary Final Prospectus, and the Final
Prospectus (and any amendment or supplement thereto) under the
captions “Summary Historical and Pro Forma Financial
Data” and “Selected Historical and Pro Forma Financial
Data” is accurately presented in all material respects and
prepared on a basis consistent with the audited and unaudited
historical combined and consolidated financial statements and pro
forma financial statements from which such information has been
derived. The pro forma financial statements of the Partnership
included in the Registration Statement, the Preliminary Final
Prospectus and the Final Prospectus (and any amendment or
supplement thereto) have been prepared in all material respects in
accordance with the applicable accounting requirements of
Article 11 of Regulation S-X of the Commission; the
assumptions used in the preparation of such pro forma financial
statements are, in the opinion of the management of the Partnership
Entities, reasonable; and the pro forma adjustments reflected in
such pro forma financial statements have been properly applied to
the historical amounts in compilation of such pro forma financial
statements. No other financial statements or schedules are required
to be included in the Registration Statement.
(jj) Except
as disclosed in the Registration Statement and the Final Prospectus
(or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the
Registration Statement and the Final Prospectus (or any amendment
or supplement thereto), (i) none of the Partnership Entities
or Waskom has incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any transaction
that is not in the ordinary course of business, (ii) none of
the Partnership Entities or Waskom has sustained any material loss
or interference with its business or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by
insurance, (iii) the Partnership has not paid or declared any
distributions with respect to its general or limited partner
interests, (iv) none of the Partnership Entities or Waskom is
in default under the terms of any outstanding debt obligations,
(v) there has not been any change in the capitalization or any
material change in the indebtedness of any of the Partnership
Entities or Waskom (other than in the ordinary course of business)
and (vi) there has not been any material adverse change, or
any development involving or that may reasonably be expected to
result in a Material Adverse Effect, in the condition (financial or
otherwise), business, prospects, properties, net worth or result of
operations of the Partnership Entities or Waskom taken as a
whole.
(kk) All
offers and sales of securities of the Partnership or any of the
other Partnership Entities prior to the date hereof were made in
compliance with or were the subject of an available exemption from
the Act and all other applicable state and federal laws or
regulations.
(ll) The
Common Units are registered pursuant to Section 12(g) of the
Exchange Act and are listed on the NASDAQ National Market, and the
Partnership has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common
Units
12
under the
Exchange Act or delisting the Common Units from the NASDAQ National
Market, nor have any of the Martin Parties or Prism Gas received
any notification that the Commission or the NASD is contemplating
terminating such registration or listing.
(mm) None of
the Martin Parties, Prism Gas or Waskom has distributed and will
not distribute, and has not authorized the Underwriters to
distribute, any offering material in connection with the offering
and sale of the Units other than the Preliminary Final Prospectus,
the Final Prospectus or other offering material, if any, as
permitted by the Act.
(nn) Other
than excepted activity pursuant to Regulation M under the
Exchange Act, none of the Martin Parties, Prism Gas or Waskom has
taken and will not take, directly or indirectly, any action that
constituted, or any action designed to, or that might reasonably be
expected to cause or result in or constitute, under the Act or
otherwise, stabilization or manipulation of the price of any
security of the Partnership to facilitate the sale or resale of the
Units or for any other purpose.
(oo) At the
Closing Date and each Option Closing Date, each of the Partnership
Entities and Waskom will have filed all tax returns required to be
filed, which returns will be complete and correct in all material
respects, and none of the Partnership Entities or Waskom will be in
default in the payment of any taxes that are payable pursuant to
such returns or any assessments with respect thereto.
(pp) Except
as set forth in the Final Prospectus, there are no transactions
with “affiliates” (as defined in Rule 405
promulgated under the Act) or any officer, director or security
holder of the Martin Parties, Prism Gas or Waskom (whether or not
an affiliate) that are required by the Act to be disclosed in the
Registration Statement. Additionally, no relationship, direct or
indirect, exists between any of the Martin Parties, Prism Gas or
Waskom on the one hand, and the directors, officers, stockholders,
customers or suppliers of any of the Martin Parties, Prism Gas or
Waskom on the other hand, that is required by the Act to be
disclosed in the Registration Statement and the Final Prospectus
that is not so disclosed.
(qq) None of
the Martin Parties, Prism Gas or Waskom is now, and after the sale
of the Units to be sold by the Partnership hereunder and
application of the net proceeds from such sale as described in the
Final Prospectus under the caption “Use of Proceeds”
none of them will be, (i) an “investment company”
or an “affiliated person” of, or “promoter”
or “principal underwriter” for, an investment company
within the meaning of the Investment Company Act of 1940, as
amended, or (ii) a “public utility company,”
“holding company” or a “subsidiary company”
of a “holding company” or an “affiliate”
thereof, under the Public Utility Holding Company Act of 1935, as
amended.
(rr) Each of
the Partnership Entities and Waskom has good and valid title to all
property (real and personal) described in the Final Prospectus as
being owned by it, free and clear of all liens, claims, security
interests or other encumbrances except (i) such as are
described in the Final Prospectus, (ii) Permitted Liens,
(iii) applicable securities laws, (iv) restrictions set
forth in the governing documents of the Partnership Entities or
(v) such as are not materially burdensome and do not have or
will not result in a Material Adverse Effect. All property (real
and personal) held under lease by the Partnership Entities or
Waskom is held by them under
13
valid,
enforceable leases with only such exceptions as in the aggregate
are not materially burdensome and do not have and will not result
in a Material Adverse Effect.
(ss) Each of
the Partnership Entities and Waskom has all permits, licenses,
franchises, approvals, consents and authorizations of governmental
or regulatory authorities (hereinafter “permit” or
“permits”) as are necessary to own or lease its
properties and to conduct its business in the manner described in
the Final Prospectus, subject to such qualifications as may be set
forth in the Final Prospectus, except where the failure to have
obtained any such permit has not had and will not have a Material
Adverse Effect.
(tt) The
Partnership Entities and Waskom maintain a system of internal
accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with
management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance
with management’s general or specific authorizations and
(iv) the recorded amount of assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(uu) The
principal executive officer and the principal financial officer of
the General Partner of the Partnership have made all certifications
relating to the Partnership required by the Sarbanes-Oxley Act or
any related rules and regulations promulgated by the Commission,
and the statements contained in any such certification were
complete and correct when made. The Partnership maintains
“disclosure controls and procedures” (as defined in
Rule 13a-15 under the Exchange Act), and such controls and
procedures are designed (i) to ensure that information
required to be disclosed by the Partnership in the reports that it
files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the
Commission’s rules and forms and (ii) to ensure that
information required to be disclosed by the Partnership in the
reports that it files or submits under the Exchange Act is
accumulated and communicated to the Partnership’s management,
including the principal executive officer and principal financial
officer of the General Partner of the Partnership, as appropriate
to allow timely decisions regarding required disclosure. The
Partnership does not have any material weaknesses in internal
controls, and there has been no fraud, whether or not material,
that involves management or other employees who have a significant
role in the Partnership’s internal controls. The Partnership
is otherwise in compliance in all material respects with all
applicable effective provisions of the Sarbanes-Oxley Act and the
rules and regulations promulgated by the Commission.
(vv) Except
as described in the Final Prospectus, the Partnership Entities and
Waskom (i) are in compliance with any and all applicable
federal, state, local and foreign laws and regulations relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or other
approvals
14
would not,
individually or in the aggregate, have a Material Adverse Effect.
None of the Partnership Entities or Waskom has been named as a
“potentially responsible party” under the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as
amended, in regard to any unresolved matter or claim. None of the
Partnership Entities or Waskom owns, leases or occupies any
property requiring remediation that appears on any list of
hazardous sites compiled by any state or local governmental agency.
In the ordinary course of its business, each of the Partnership
Entities and Waskom conducts a periodic review of the effect of
Environmental Laws on its business, operations and properties, in
the course of which it identifies and evaluates associated costs
and liabilities (including any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities
to third parties). On the basis of such review and amount of its
established reserves, each of the Partnership Entities and Waskom
has reasonably concluded that such associated costs and liabilities
would not, individually or in the aggregate, result in a Material
Adverse Effect.
(ww) The
Partnership has procured lock-up agreements, in the form of
Exhibit A attached hereto (“Lock-Up Agreements”),
from MRMC, Midstream, MPS and each of the executive officers and
directors of the General Partner.
(xx) No
officer, director, manager or nominee for any of the Pa
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