TARGA RESOURCES PARTNERS
LP
16,800,000 Common Units
Representing Limited Partner Interests
New York, New York
February 8, 2007
Citigroup Global
Markets Inc.
Goldman Sachs &
Co.
UBS Securities
LLC
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
As Representatives of the several Underwriters,
c/o Citigroup
Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Targa
Resources Partners LP, a limited partnership organized under the
laws of Delaware (the “ Partnership ”), proposes
to sell to the several underwriters named in Schedule I
hereto (the “ Underwriters ”), for whom you (the
“ Representatives ”) are acting as
representatives, 16,800,000 Common Units (the “ Firm
Units ”), each representing a limited partner interest in
the Partnership (the “ Common Units ”). The
Partnership also proposes to grant to the Underwriters an option to
purchase up to 2,520,000 additional Common Units to cover
over-allotments, if any (the “ Option Units ”;
the Option Units, together with the Firm Units, being hereinafter
called the “ Units ”). Certain terms used herein
are defined in Section 20 hereof.
It
is understood and agreed to by all parties that the Partnership was
formed by subsidiaries of Targa Resources, Inc., a Delaware
corporation (“ Targa ”), to acquire, own,
operate and develop a diversified portfolio of complementary
midstream energy assets that were previously owned and operated
directly or indirectly by Targa (the “ North Texas
Assets ”), as described more particularly in the
Preliminary Prospectus (as defined herein).
It
is further understood and agreed to by all parties that as of the
date hereof:
(a) Targa
indirectly owns 100% of the issued and outstanding shares of
capital stock of each of Targa GP Inc., a Delaware corporation
(“ TGPI ”), and Targa LP Inc., a Delaware
corporation (“ TLPI ”);
(b) TGPI directly
owns a 100% membership interest in Targa Resources GP LLC, a
Delaware limited liability company and the sole general partner of
the Partnership with a 2.0% general partner interest in the
Partnership (the “ General Partner
”);
(c) TGPI and TLPI
each directly own a 49.0% limited partner interest in the
Partnership;
(d) The
Partnership directly owns (i) a 99.999% limited partner
interest in Targa Resources Operating LP, a Delaware limited
partnership (the “ Operating Partnership ”), and
(ii) a 100% membership interest in Targa Resources Operating
GP LLC, a Delaware limited liability company and the sole general
partner of the Operating Partnership with a 0.001% general partner
interest in the Operating Partnership (the “ Operating
GP ”);
(e) TLPI directly
owns a 50% limited partner interest in Targa North Texas LP, a
Delaware limited partnership (“ North Texas LP
”);
(f) TGPI directly
owns a 100% membership interest in Targa North Texas GP LLC, a
Delaware limited liability company and the sole general partner of
North Texas LP with a 50% general partner interest in North Texas
LP (“ North Texas GP ”);
(g) North Texas LP
directly or indirectly owns all of the North Texas Assets;
and
(h) North
Texas LP directly owns a 100% membership interest in Targa
Intrastate Pipeline LLC, a Delaware limited liability company
(“ Targa Intrastate ”).
On
or prior to the date hereof, the Partnership, as borrower, and
certain subsidiaries of the Partnership, as Guarantors, will enter
into a $500 million Senior Secured Credit Agreement with Bank
of America, N.A., and other lenders (together with the agreements,
exhibits, and attachments contemplated or included therein, “
Credit Agreement ”).
It
is further understood and agreed to by the parties hereto that the
following transactions will occur on the Closing Date:
(a) TGPI, TLPI,
the General Partner, the Partnership, the Operating Partnership,
the Operating GP, North Texas GP and North Texas LP will enter into
a Contribution, Conveyance and Assumption Agreement (the “
Contribution Agreement ”) pursuant to which
(i) TGPI will contribute a portion of its interest in North
Texas GP to the General Partner, (ii) TGPI will contribute the
remainder of its interest in North Texas GP to the Partnership in
exchange for 5,475,052 Subordinated Units representing limited
partner interests in the Partnership, (iii) TLPI will
contribute its interest in North Texas LP to the Partnership in
exchange for 6,053,179 Subordinated Units and (iv) the General
Partner will contribute its interest in North Texas GP to the
Partnership in exchange for a continuation of its 2% general
partner interest in the Partnership and the Incentive Distribution
Rights in the Partnership;
(b) the public
offering of the Firm Units contemplated hereby will be
consummated;
(c) the
Partnership will contribute the net proceeds of the offering of
$322.9 million to North Texas LP;
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(d) the
Partnership will convey its interests in North Texas GP and North
Texas LP to the Operating Partnership;
(e) the
Partnership will borrow $342.5 million under the Credit
Agreement and will contribute this amount to North Texas LP as a
capital contribution;
(f) North Texas LP
will use the funds contributed to it to retire intercompany
indebtedness;
(g) Targa, Targa
Resources LLC, the General Partner and the Partnership will enter
into an omnibus agreement (the “ Omnibus Agreement
”), which will address the provision by Targa and its
affiliates of general and administrative services to the
Partnership and certain indemnification matters;
(h) North Texas LP
will enter into a natural gas purchase agreement (the “
Natural Gas Purchase Agreement ”) with Targa Gas
Marketing LLC, a Delaware limited liability company (“
TGM ”), pursuant to which North Texas LP will sell all
of its processed natural gas to TGM for a term of 15 years;
and
(i) North Texas LP
will enter into a products purchase agreement (the “ NGL
and Condensate Purchase Agreement ”) with Targa Liquids
Marketing and Trade, a Delaware general partnership (“
Targa Liquids ”), pursuant to which all natural gas
liquids produced by North Texas LP will be dedicated for sale to
Targa Liquids for a term of 15 years.
The
transactions contemplated in subsections (a) through
(i) above are referred to herein as the “
Transactions .” In connection with the Transactions,
the parties to the Transactions will enter into various transfer
agreements, conveyances, contribution agreements and related
documents (collectively, and together with the Contribution
Agreement, the “ Contribution Documents ”). The
Contribution Documents, the Omnibus Agreement, the Credit
Agreement, the Natural Gas Purchase Agreement and the NGL and
Condensate Purchase Agreement shall be collectively referred to as
the “ Transaction Documents .” Targa, the
Partnership, the General Partner, the Operating Partnership and
Operating GP are hereinafter collectively referred to as the
“ Targa Parties .” The Partnership, the General
Partner, the Operating Partnership, the Operating GP, North Texas
LP and North Texas GP are herein collectively referred to as the
“ Partnership Entities ” and, together with
Targa, TGPI and TLPI, the “ Targa Entities
.”
This
is to confirm the agreement among the Targa Parties and the
Underwriters concerning the purchase of the Units from the
Partnership by the Underwriters.
1.
Representations and Warranties . Each of the Partnership
Entities, jointly and severally, represents and warrants to, and
agrees with, each Underwriter as set forth below in this
Section 1.
(a)
Registration . The Partnership has prepared and filed with
the Commission a registration statement (file number 333-138747) on
Form S-1, including a related preliminary 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
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Execution Time,
has become effective. The Partnership may have filed one or more
amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Partnership
will file with the Commission a final prospectus in accordance with
Rule 424(b). As filed, such final prospectus shall contain all
information required by the Act and the rules thereunder and,
except to the extent the Representatives 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
the latest Preliminary Prospectus) as the Partnership has advised
you, prior to the Execution Time, will be included or made
therein.
(b)
No Material Misstatements or Omissions in Registration Statement
or Prospectus . Each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder, and did 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, in the
light of the circumstances under which they were made, not
misleading. On the Effective Date, the Registration Statement did,
and when the Prospectus is first filed in accordance with Rule
424(b) and on the Closing Date and on any date on which Option
Units are purchased, if such date is not the Closing Date (a
“ settlement date ”), the Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the
Effective Date and at the Execution Time, the Registration
Statement did not and 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
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; each of the statements made by the Partnership in the
Registration Statement and in any Preliminary Prospectus provided
to the Underwriters for use in connection with the public offering
of the Units, and to be made in the Prospectus and any further
amendments or supplements to the Registration Statement or
Prospectus within the coverage of Rule 175(b) of the rules and
regulations under the Act, including (but not limited to) any
statements with respect to projected results of operations,
estimated available cash and future cash distributions of the
Partnership, and any statements made in support thereof or related
thereto under the heading “Our Cash Distribution Policy and
Restrictions on Distributions” or the anticipated ratio of
taxable income to distributions, was made or will be made with a
reasonable basis and in good faith; provided ,
however , that the Partnership makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement, the Preliminary Prospectus or the
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 Representatives
specifically for inclusion in the Registration Statement, the
Preliminary Prospectus or the Prospectus (or any
supplement
4
thereto), it
being understood and agreed that the only such information
furnished by any Underwriter consists of the information described
as such in Section 8 hereof.
(c) No
Material Misstatements or Omissions in Disclosure Package .
(i) The Disclosure Package and the price to the public, the
number of Firm Units and the number of Option Units to be included
on the cover page of the Prospectus, when taken together as a
whole, and (ii) each electronic road show when taken together
as a whole with the Disclosure Package, and the price to the
public, the number of Firm Units and the number of Option Units to
be included on the cover page of the Prospectus, did not, as of the
Applicable Time, 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 Partnership by any Underwriter through the Representatives
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)
Eligible Issuer . (i) At the time of filing the
Registration Statement 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)
Issuer Free Writing Prospectuses . Each Issuer Free Writing
Prospectus does not include any information that conflicts with the
information contained in the Registration Statement or the
Prospectus. The foregoing sentence does not apply to statements in
or omissions from any Issuer Free Writing Prospectus based upon and
in conformity with written information furnished to the Partnership
by any Underwriter through the Representatives 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)
Formation and Qualification . Each of the Targa Entities has
been duly formed or incorporated and is validly existing as a
limited partnership, limited liability company or corporation, as
applicable, in good standing under the laws of the State of
Delaware with full power and authority to enter into and perform
its obligations under the Transaction Documents to which it is a
party, to own or lease and to operate its properties currently
owned or leased or to be owned or leased on the Closing Date and
each settlement date and conduct its business as currently
conducted or as to be conducted on the Closing Date and each
settlement date, in each case as described in the Disclosure
Package and the Prospectus. Each of the Partnership Entities is, or
at the Closing Date and each settlement date will be, duly
qualified to do business as a foreign limited partnership, limited
liability company or corporation, as applicable and is in good
standing under the laws of each jurisdiction which requires, or at
the Closing Date and each settlement date will require, such
qualification, except where the failure to be so
5
qualified or
registered would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business
or properties, taken as a whole, whether or not arising from
transactions in the ordinary course of business of the Partnership
Entities (a “ Material Adverse Effect ”), or
subject the limited partners of the Partnership to any material
liability or disability.
(g) Power
and Authority to Act as a General Partner . The General Partner
has, and, on the Closing Date and each settlement date, will have,
full power and authority to act as general partner of the
Partnership in all material respects as described in the Disclosure
Package and Prospectus. The Operating GP has, and, as of the
Closing Date and each settlement date, will have, full power and
authority to act as general partner of the Operating Partnership in
all material respects as described in the Disclosure Package and
Prospectus.
(h)
Ownership of the General Partner . TGPI owns, and on the
Closing Date and each settlement date, will own, all of the issued
and outstanding membership interests of the General Partner; such
membership interests have been duly and validly authorized and
issued in accordance with the limited liability company agreement
of the General Partner (as the same may be amended or restated at
or prior to the Closing Date, the “ GP LLC Agreement
”), and are fully paid (to the extent required by the GP LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by Sections 18-607 and 18-804 of the Delaware
Limited Liability Company Act (the “ Delaware LLC Act
”)); and TGPI owns such membership interests free and clear
of all liens, encumbrances, security interests, charges or other
claims (“ Liens ”) (except restrictions on
transferability and other Liens as described in the Disclosure
Package and the Prospectus and arising under the Credit Agreement
dated October 31, 2005, by and between Targa Resources, Inc.
and the lenders named therein (the “ Targa Credit
Agreement ”)).
(i)
Ownership of the General Partner Interest in the Partnership
. The General Partner is, and on the Closing Date and each
settlement date, will be, the sole general partner of the
Partnership with a 2.0% general partner interest in the
Partnership; such general partner interest has been duly and
validly authorized and issued in accordance with the partnership
agreement of the Partnership (as the same may be amended or
restated at or prior to the Closing Date, the “
Partnership Agreement ”); and the General Partner will
own such general partner interest free and clear of all Liens
(except restrictions on transferability and other Liens as
described in the Disclosure Package and the Prospectus or arising
under the Credit Agreement or the Targa Credit
Agreement).
(j)
Ownership of Sponsor Units and Incentive Distribution Rights
. On the Closing Date and each settlement date, after giving effect
to the Transactions, TLPI will own 5,821,930 Subordinated Units
(the “TLPI Units”) and TGPI will own 5,706,301
Subordinated Units (the “TGPI Units”; and together with
the TGPI Units, the “Sponsor Units”), and the General
Partner will own 100% of the Incentive Distribution Rights; all of
such Sponsor Units and Incentive Distribution Rights and the
limited partner interests represented thereby will be duly and
validly authorized and issued in accordance with the
6
Partnership
Agreement, and will be fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 17-607 and 17-804
of the Delaware Limited Partnership Act (the “Delaware LP
Act”)); and TLPI will own the TLPI units, TGPI will own the
TGPI units and the General Partner will own the Incentive
Distribution Rights, in each case free and clear of all Liens
(except restrictions on transferability and other Liens as
described in the Disclosure Package and the Prospectus or arising
under the Credit Agreement or the Targa Credit
Agreement).
(k) Valid
Issuance of the Units . The Units to be purchased by the
Underwriters from the Partnership have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Partnership pursuant to this
Agreement against payment of the consideration set forth herein,
will be validly issued and fully paid (to the extent required under
the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in
Sections 17-607 and 17-804 of the Delaware LP Act).
(l)
Capitalization . At the Closing Date, after giving effect to
the Transactions and the offering of the Firm Units as contemplated
by this Agreement, the issued and outstanding partnership interests
of the Partnership will consist of 16,800,000 Common Units,
11,528,231 Subordinated Units and 578,127 General Partner Units.
Other than the Sponsor Units and the Incentive Distribution Rights,
the Units will be the only limited partner interests of the
Partnership issued and outstanding on the Closing Date and each
settlement date.
(m)
Ownership of Operating GP . On the Closing Date and each
settlement date, after giving effect to the Transactions, the
Partnership will own all of the issued and outstanding membership
interests of the Operating GP; such membership interests will be
duly and validly authorized and issued in accordance with the
limited liability company agreement of the Operating GP (as the
same may be amended or restated at or prior to the Closing Date,
the “ Operating GP LLC Agreement ”) and will be
fully paid (to the extent required by the Operating GP LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by Sections 18-607 and 18-804 of the Delaware LLC
Act); and the Partnership will own such membership interests free
and clear of all Liens, other than those arising under the Credit
Agreement.
(n)
Ownership of the General Partner Interest in the Operating
Partnership . The Operating GP is and, on the Closing Date and
each settlement date, will be, the sole general partner of the
Operating Partnership with a 0.001% general partner interest in the
Operating Partnership; such general partner interest has been duly
authorized and validly issued in accordance with the Operating
Partnership’s partnership agreement (the “ OLP
Partnership Agreement ”) ; and the Operating GP owns such
general partner interest free and clear of all Liens, other than
those arising under the Credit Agreement.
(o)
Ownership of the Limited Partner Interest in the Operating
Partnership . On the Closing Date and each settlement date,
after giving effect to the Transactions, the Partnership will own a
99.999% limited partner interest in the Operating
Partnership;
7
such limited
partner interest has been duly authorized and validly issued in
accordance with the OLP Partnership Agreement and is fully paid (to
the extent required under the OLP Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by
matters described in Sections 17-607 and 17-804 of the
Delaware LP Act); and the Partnership will own such limited partner
interest free and clear of all Liens, other than those arising
under the Credit Agreement.
(p)
Ownership of North Texas GP . On the Closing Date and each
settlement date, after giving effect to the Transactions, the
Operating Partnership will own all of the issued and outstanding
membership interests of North Texas GP; such membership interests
will be duly and validly authorized and issued in accordance with
the limited liability company agreement of North Texas GP (as the
same may be amended or restated at or prior to the Closing Date,
the “ North Texas GP LLC Agreement ”) and will
be fully paid (to the extent required by the North Texas GP LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by Sections 18-607 and 18-804 of the Delaware LLC
Act); and the Operating Partnership will own such membership
interests free and clear of all Liens, other than those arising
under the Credit Agreement.
(q)
Ownership of the General Partner Interest in North Texas LP
. North Texas GP is, and on the Closing Date and each settlement
date, will be, the sole general partner of North Texas LP with a
50% general partner interest in North Texas LP; such general
partner interest has been duly authorized and validly issued in
accordance with the partnership agreement of North Texas LP (as the
same may be amended or restated at or prior to the Closing Date,
the “ North Texas LP Partnership Agreement ”);
and the North Texas GP owns such general partner interest free and
clear of all Liens, other than those arising under the Credit
Agreement.
(r)
Ownership of the Limited Partner Interest in North Texas LP
. On the Closing Date and each settlement date, after giving effect
to the Transactions, the Operating Partnership will own a 50%
limited partner interest in North Texas LP; such limited partner
interest has been duly authorized and validly issued in accordance
with the North Texas LP Partnership Agreement and is fully paid (to
the extent required under the North Texas LP Partnership Agreement)
and nonassessable (except as such nonassessability may be affected
by matters described in Sections 17-607 and 17-804 of the
Delaware LP Act); and the Operating Partnership owns such limited
partner interest free and clear of all Liens, other than those
arising under the Credit Agreement.
(s)
Ownership of Targa Intrastate . On the Closing Date and each
settlement date, after giving effect to the Transactions, North
Texas LP will own all of the issued and outstanding membership
interests of Targa Intrastate; such membership interests will be
duly and validly authorized and issued in accordance with the
limited liability company agreement of Targa Intrastate (as the
same may be amended or restated at or prior to the Closing Date,
the “ Targa Intrastate LLC Agreement ”) and will
be fully paid (to the extent required by the Targa Intrastate LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by Sections 18-607 and 18-804 of the Delaware LLC
Act); and North Texas will own such membership interests free and
clear of all Liens, other than those arising under the Credit
Agreement.
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(t) No
Other Subsidiaries . Other than its ownership of its 2.0%
general partner interest in the Partnership and the Incentive
Distribution Rights, the General Partner will not, on the Closing
Date and each settlement date, 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 (i) the Partnership’s
ownership of a 99.999% limited partner interest in the Operating
Partnership and a 100% membership interest in the Operating GP,
(ii) the Operating Partnership’s ownership of a 50%
limited partner interest in North Texas LP and 100% membership
interest in North Texas GP, (iii) North Texas GP’s
ownership of a 50% general partner interest in North Texas LP and
(iv) North Texas LP’s 100% membership interest in Targa
Intrastate, neither the Partnership, the Operating Partnership,
North Texas GP, North Texas LP nor Targa Intrastate will, on the
Closing Date and each settlement date, own, directly or indirectly,
any equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association
or other entity.
(u) No
Preemptive Rights, Registration Rights or Options . Except for
preemptive rights provided to the General Partner in the OLP
Partnership Agreement and as identified in the Disclosure Package
and the Prospectus, there are no (i) preemptive rights or
other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any equity securities of the
Partnership Entities or (ii) outstanding options or warrants
to purchase any securities of the Partnership Entities. Except for
such rights that have been waived or as described in the Disclosure
Package and the Prospectus, 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 the
Partnership.
(v)
Authority and Authorization . Each of the Targa Parties has
all requisite power and authority to execute and deliver this
Agreement and perform its respective obligations hereunder. The
Partnership has all requisite partnership power and authority to
issue, sell and deliver (i) the Units, in accordance with and
upon the terms and conditions set forth in this Agreement, the
Partnership Agreement, the Registration Statement, the Disclosure
Package and the Prospectus and (ii) the Sponsor Units and
Incentive Distribution Rights, in accordance with and upon the
terms and conditions set forth in the Partnership Agreement and the
Contribution Agreement. On the Closing Date and each settlement
date, all corporate, partnership and limited liability company
action, as the case may be, required to be taken by the Targa
Entities or any of their stockholders, members or partners for the
authorization, issuance, sale and delivery of the Units, the
Sponsor Units and the Incentive Distribution Rights, the execution
and delivery by the Targa Entities of the Operative Agreements (as
defined herein) and the consummation of the transactions (including
the Transactions) contemplated by this Agreement and the Operative
Agreements, shall have been validly taken.
(w)
Authorization of this Agreement . This Agreement has been
duly authorized, executed and delivered by each of the Targa
Parties.
(x)
Enforceability of Operative Agreements . At or before the
Closing Date:
9
(i) the
Partnership Agreement will have been duly authorized, executed and
delivered by the General Partner and TGPI and will be a valid and
legally binding agreement of the General Partner and TGPI,
enforceable against the General Partner and TGPI in accordance with
its terms;
(ii) the GP LLC
Agreement will have been duly authorized, executed and delivered by
TGPI and will be a valid and legally binding agreement of TGPI,
enforceable against TGPI in accordance with its terms;
(iii) the OLP
Partnership Agreement will have been duly authorized, executed and
delivered by the Operating GP and the Partnership and will be a
valid and legally binding agreement of the Operating GP and the
Partnership, enforceable against the Operating GP and the
Partnership in accordance with its terms;
(iv) the Operating
GP LLC 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;
(v) the North
Texas LP Partnership Agreement, as amended, will have been duly
authorized, executed and delivered by North Texas GP and the
Operating Partnership and will be a valid and legally binding
agreement of North Texas GP and the Operating Partnership,
enforceable against North Texas GP and the Operating Partnership in
accordance with its terms;
(vi) the North
Texas GP LLC Agreement, as amended, will have been duly authorized,
executed and delivered by the Operating Partnership and will be a
valid and legally binding agreement of the Operating Partnership,
enforceable against the Operating Partnership in accordance with
its terms;
(vii) the Omnibus
Agreement will have been duly authorized, executed and delivered by
each of the parties thereto and will be a valid and legally binding
agreement of each of them, enforceable against each of them in
accordance with its terms;
(viii) the Credit
Agreement will have been duly authorized, executed and delivered by
the Partnership and will be a valid and legally binding agreement
of the Partnership, enforceable against the Partnership, in
accordance with its terms;
(ix) the Natural
Gas Purchase Agreement will have been duly authorized, executed and
delivered by North Texas LP and TGM and will be a valid and legally
binding agreement of North Texas LP and TGM,
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enforceable
against North Texas LP and TGM, in accordance with its
terms;
(x) the NGL and
Condensate Purchase Agreement will have been duly authorized,
executed and delivered by North Texas LP and Targa Liquids and will
be a valid and legally binding agreement of the North Texas LP and
Targa Liquids, enforceable against North Texas LP and Targa
Liquids, in accordance with its terms; and
(xi) the
Contribution Documents will have been duly authorized, executed and
delivered by the parties thereto and will be valid and legally
binding agreements of such parties thereto, enforceable against
such parties thereto in accordance with their respective
terms;
provided that, with respect to each agreement described
in this Section 1(w), the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or
affecting creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); provided
further ; that the indemnity, contribution and exoneration
provisions contained in any of such agreements may be limited by
applicable laws and public policy.
The Partnership
Agreement, the GP LLC Agreement, the OLP Partnership Agreement, the
Operating GP LLC Agreement, the North Texas LP Partnership
Agreement, the North Texas GP LLC Agreement, the Targa Intrastate
LLC Agreement and the Transaction Documents are herein collectively
referred to as the “ Operative Agreements
.”
(y) No
Conflicts . None of (i) the offering, issuance or sale by
the Partnership of the Units, (ii) the execution, delivery and
performance of this Agreement and the Operative Agreements by the
Targa Entities that are parties hereto or thereto, as the case may
be, or (iii) the consummation of the Transactions and any
other transactions contemplated by this Agreement or the Operative
Agreements, (A) conflicts or will conflict with or constitutes
or will constitute a violation of the partnership agreement,
limited liability company agreement, certificate of formation or
conversion, certificate or articles of incorporation, bylaws or
other constituent document (collectively, the “
Organizational Documents ”) of any of the Targa
Entities, (B) conflicts or will conflict with or constitutes
or will constitute a breach or violation of, or a default (or an
event that, with notice or lapse of time or both, would constitute
such a default) under any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which any of
the Targa Entities is a party or by which any of them or any of
their respective properties may be bound, (C) violates or will
violate any statute, law or regulation or any order, judgment,
decree or injunction of any court or governmental agency or body
directed to any of the Targa Entities or any of their properties in
a proceeding to which any of them or their property is a party or
(D) results or will result in the creation or imposition of
any Lien upon any property or assets of any of the Partnership
Entities (other than Liens created pursuant to the Credit Agreement
or the
11
Targa Credit
Agreement), which conflicts, breaches, violations, defaults or
Liens, in the case of clauses (B), (C) or (D), would,
individually or in the aggregate, have a Material Adverse Effect or
materially impair the ability of the Targa Entities to consummate
the Transactions or any other transactions provided for in this
Agreement or the Operative Agreements.
(z) No
Consents . No permit, consent, approval, authorization, order,
registration, filing or qualification of or with any court,
governmental agency or body having jurisdiction over any of the
Targa Entities or any of their properties or assets is required in
connection with the offering, issuance or sale by the Partnership
of the Units, the execution, delivery and performance of this
Agreement by the Targa Parties, the execution, delivery and
performance by the Targa Entities that are parties thereto of their
respective obligations under the Operative Agreements or the
consummation of the Transactions or any other transactions
contemplated by this Agreement or the Operative Agreements except
(i) for such permits, consents, approvals and similar
authorizations required under the Act, the Exchange Act and blue
sky laws of any jurisdiction, (ii) for such consents that have
been, or prior to the Closing Date will be, obtained,
(iii) for such consents that, if not obtained, would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and (iv) as disclosed in the
Disclosure Package and the Prospectus.
(aa) No
Defaults . None of the Targa Entities is in (i) violation
of its Organizational Documents, or of any statute, law, rule or
regulation, or any judgment, order, injunction or decree of any
court, governmental agency or body or arbitrator having
jurisdiction over any of the Targa Entities or any of their
properties or assets or (ii) breach, default (or an event
which, with notice or lapse of time or both, would constitute such
an event) or violation in the performance of any obligation,
agreement or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument
relating to the North Texas Assets to which it is a party or by
which it or any of its properties may be bound, which in the case
of either (i) or (ii) would, if continued, have a
Material Adverse Effect.
(bb)
Conformity of Units to Description . The Units, when issued
and delivered in accordance with the terms of the Partnership
Agreement and this Agreement against payment therefor as provided
therein and herein, will conform in all material respects to the
description thereof contained in the Disclosure Package and the
Prospectus.
(cc) No
Labor Dispute . No labor problem or dispute with the Targa
Entities’ employees who are engaged in the business
associated with the North Texas Assets exists or is threatened or
imminent, that could have a Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package and the
Prospectus.
(dd)
Sufficiency of the Transaction Documents . The Transaction
Documents will be legally sufficient to transfer or convey to the
Partnership and its subsidiaries satisfactory title to, or valid
rights to use or manage all properties not already held by it that
are, individually or in the aggregate, required to enable the
Partnership and its subsidiaries to conduct their operations in all
material respects as contemplated by the
12
Disclosure
Package and the Prospectus, subject to the conditions,
reservations, encumbrances and limitations described therein or
contained in the Transaction Documents. The Partnership and it
subsidiaries, upon execution and delivery of the Transaction
Documents, will succeed in all material respects to the business,
assets, properties, liabilities and operations reflected by the pro
forma financial statements of the Partnership.
(ee)
Financial Statements . The consolidated historical financial
statements and schedules of the Partnership and its consolidated
subsidiaries included in the Preliminary Prospectus, the Prospectus
and the Registration Statement present fairly the financial
condition, results of operations and cash flows of the Partnership
as of the dates and for the periods indicated, comply as to form
with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The summary
historical and pro forma financial and operating information set
forth in the Preliminary Prospectus, the Prospectus and the
Registration Statement under the caption
“Summary—Summary Historical and Pro Forma Financial and
Operating Data” and the selected historical and pro forma
financial and operating information set forth under the caption
“Selected Historical and Pro Forma Financial and Operating
Data” in the Preliminary Prospectus, the Prospectus and
Registration Statement is accurately presented in all material
respects and prepared on a basis consistent with the audited and
unaudited historical financial statements and pro forma financial
statements, as applicable, from which it has been derived, unless
expressly noted otherwise. The pro forma financial statements
included in the Preliminary Prospectus, the Prospectus and the
Registration Statement include assumptions that provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma adjustments reflect the proper
application of those adjustments to the historical financial
statement amounts in the pro forma financial statements included in
the Preliminary Prospectus, the Prospectus and the Registration
Statement. The pro forma financial statements included in the
Preliminary Prospectus, the Prospectus and the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the
Act and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those
statements.
(ff)
Independent Public Accountants . PricewaterhouseCoopers LLP,
who has certified certain financial statements of the Partnership
and its consolidated subsidiaries and delivered their report with
respect to the audited consolidated financial statements and
schedules included in the Disclosure Package and the Prospectus, is
an independent registered public accounting firm with respect to
the Partnership within the meaning of the Act and the applicable
published rules and regulations thereunder.
(gg)
Litigation . Except as described in the Disclosure Package
and the Prospectus, there is (i) no action, suit or proceeding
before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the knowledge of
any of the Targa Parties, threatened, to which any of the
Partnership
13
Entities is or
may be a party or to which the business or property of any of the
Partnership Entities is or may be subject, (ii) no statute,
rule, regulation or order that has been enacted, adopted or issued
by any governmental agency and (iii) no injunction,
restraining order or order of any nature issued by a federal or
state court or foreign court of competent jurisdiction to which any
of the Partnership Entities is or may be subject, that, in the case
of clauses (i), (ii) and (iii) above, is reasonably expected
to (A) individually or in the aggregate reasonably be expected
to have a Material Adverse Effect, (B) prevent or result in
the suspension of the offering and issuance of the Units, or
(C) draw into question the validity of this
Agreement.
(hh)
Title to Properties . Following consummation of the
Transactions and on the Closing Date and each settlement date, the
Partnership Entities will have good and marketable title to all
real property and good title to all personal property described in
the Disclosure Package or the Prospectus as owned by the
Partnership Entities, free and clear of all Liens except (i) as
described, and subject to limitations contained, in the Disclosure
Package and the Prospectus, (ii) that arise under the Credit
Agreement or (iii) such as do not materially interfere with
the use of such properties taken as a whole as they have been used
in the past and are proposed to be used in the future as described
in the Disclosure Package and the Prospectus; provided that,
with respect to any real property and buildings held under lease by
the Partnership Entities, such real property and buildings are held
under valid and subsisting and enforceable leases with such
exceptions as do not materially interfere with the use of the
properties of the Partnership Entities taken as a whole as they
have been used in the past as described in the Disclosure Package
and the Prospectus and are proposed to be used in the future as
described in the Disclosure Package and the Prospectus.
(ii)
Rights-of-Way . Following consummation of the Transactions
and on the Closing Date and each settlement date, the Partnership
Entities will have such easements or rights-of-way from each person
(collectively, “ rights-of-way ”) as are
necessary to conduct their business in the manner described, and
subject to the limitations contained, in the Disclosure Package and
the Prospectus, except for (i) qualifications, reservations
and encumbrances that would not have, individually or in the
aggregate, a Material Adverse Effect and (ii) such
rights-of-way that, if not obtained, would not have, individually
or in the aggregate, a Material Adverse Effect; other than as set
forth, and subject to the limitations contained, in the Disclosure
Package and the Prospectus, the Partnership Entities have, or
following consummation of the Transactions will have, fulfilled and
performed all their material obligations with respect to such
rights-of-way and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination
thereof or would result in any impairment of the rights of the
holder of any such rights-of-way, except for such revocations,
terminations and impairments that would not have a Material Adverse
Effect; and, except as described in the Disclosure Package and the
Prospectus, none of such rights-of-way contains any restriction
that is materially burdensome to the Partnership Entities, taken as
a whole.
(jj)
Transfer Taxes . There are no transfer taxes or other
similar fees or charges under Federal law or the laws of any state,
or any political subdivision thereof,
14
required to be
paid in connection with the execution and delivery of this
Agreement or the issuance by the Partnership or sale by the
Partnership of the Units.
(kk) Tax
Returns . Each of the Partnership Entities has filed all
foreign, federal, state and local tax returns that are required to
be filed or has requested extensions thereof, except in any case in
which the failure so to file would not have a Material Adverse
Effect except as set forth in or contemplated in the Disclosure
Package and the Prospectus, and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently
being contested in good faith or as would not have a Material
Adverse Effect, except as set forth in or contemplated in the
Disclosure Package and the Prospectus.
(ll)
Insurance . The Targa Entities carry or are entitled to the
benefits of insurance relating to the North Texas Assets, with
financially sound and reputable insurers, in such amounts and
covering such risks as is commercially reasonable, and all such
insurance is in full force and effect. The Targa Entities have no
reason to believe that they will not be able (i) to renew
their existing insurance coverage relating to the North Texas
Assets as and when such policies expire or (ii) to obtain
comparable coverage relating to the North Texas Assets from similar
institutions as may be necessary or appropriate to conduct such
business as now conducted and at a cost that would not reasonably
be expected to have a Material Adverse Effect.
(mm)
Distribution Restrictions . No subsidiary of the Partnership
is currently prohibited, directly or indirectly, from paying any
distributions to the Partnership, from making any other
distribution on such subsidiary’s equity interests, from
repaying to the Partnership any loans or advances to such
subsidiary from the Partnership or from transferring any of such
subsidiary’s property or assets to the Partnership or any
other subsidiary of the Partnership, except as described in or
contemplated by the Disclosure Package and the Prospectus or
arising under the Credit Facility.
(nn)
Possession of Licenses and Permits . The Targa Entities
possess such permits, licenses, approvals, consents and other
authorizations (collectively, “ Governmental Licenses
”) issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business
associated with the North Texas Assets, except where the failure so
to possess would not, singly or in the aggregate, result in a
Material Adverse Effect; the Targa Entities are in compliance with
the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the
aggregate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, result in a Material
Adverse Effect; and the Targa Entities have not received any notice
of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
15
(oo)
Environmental Laws . With respect to the North Texas Assets,
each of the Targa Entities (i) is in compliance with applicable
federal, state and local laws and regulations relating to the
prevention of pollution or protection of the environment or
imposing liability or standards of conduct concerning any Hazardous
Materials (as defined below) (“ Environmental Laws
”), (ii) has received all permits required of them under
applicable Environmental Laws to conduct their respective
businesses as presently conducted, (iii) is in compliance with
all terms and conditions of any such permits and (iv) does not
have any liability in connection with the release into the
environment of any Hazardous Material, except where such
noncompliance with Environmental Laws, failure to receive required
permits, failure to comply with the terms and conditions of such
permits or liability in connection with such releases would not,
individually or in the aggregate, have a Material Adverse Effect.
The term “ Hazardous Material ” means
(A) any “hazardous substance” as defined in the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, (B) any “hazardous waste”
as defined in the Resource Conservation and Recovery Act, as
amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant
or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any applicable
Environmental Law. In the ordinary course of business, the Targa
Entities periodically review the effect of Environmental Laws on
their business, operations and properties, in the course of which
they identify and evaluate costs and liabilities that are
reasonably likely to be incurred pursuant to such Environmental
Laws (including, without limitation, 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, the Targa Entities have reasonably concluded that such
associated costs and liabilities relating to the North Texas Assets
would not, singly or in the aggregate, have a Material Adverse
Effect.
(pp) Possession
of Intellectual Property . Except for such exceptions that
would not reasonably be expected to result in a Material Adverse
Effect, (i) the Targa Entities own or possess, or can acquire
or use on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know how (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property
(collectively, “ Intellectual Property ”)
necessary to carry on the business associated with the North Texas
Assets, and (ii) the Targa Entities have not received any
notice and are not otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances that would
render any Intellectual Property invalid or inadequate to protect
the interest of the Targa Entities.
(qq) Certain
Relationships and Related Transactions . No relationship,
direct or indirect, exists between or among any Partnership Entity,
on the one hand, and the directors, officers, stockholders,
affiliates, customers or suppliers of any Partnership Entity, on
the other hand, that is required to be described in the Preliminary
Prospectus or the Prospectus and is not so described.
16
(rr) ERISA
. On the Closing Date and each settlement date, each Partnership
Entity will be in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (“ ERISA
” ); no “reportable event” (as defined in
ERISA) has occurred with respect to any “pension plan”
(as defined in ERISA) for which any Partnership Entity (after
giving effect to the Transactions) would have any liability,
excluding any reportable event for which a waiver could apply; no
Partnership Entity (after giving effect to the Transactions)
expects to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “pension
plan” or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the “
Code ” ). None of the Partnership Entities
maintain a “pension plan.”
(ss)
Description of Legal Proceedings and Contracts; Filing of
Exhibits . There are no legal or governmental proceedings
pending or, to the knowledge of the Targa Parties, threatened or
contemplated, against any of the Partnership Entities, or to which
any of the Partnership Entities is a party, or to which any of
their properties or assets, or to which the North Texas Assets, is
subject, that are required to be described in the Registration
Statement or the Disclosure Package that are not described as
required, and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in
the Registration Statement or the Disclosure Package or to be filed
as an exhibit to the Registration Statement that are not described
or filed as required by the Act or the Exchange Act or the rules
and regulations thereunder. The statements included in the
Registration Statement and the Disclosure Package, insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate summaries of such legal
matters, agreements, documents or proceedings.
(tt)
Sarbanes-Oxley Act of 2002 . On and after the Closing Date,
the Partnership will be in compliance in all material respects with
all applicable provisions of the Sarbanes-Oxley Act of 2002, the
rules and regulations promulgated in connection therewith and the
rules of the Nasdaq Global Market (the “ Nasdaq
”) that are effective and applicable to the
Partnership.
(uu) Investment
Company . None of the Partnership Entities is nor, after giving
effect to the offering and sale of the Units and the application of
the proceeds thereof as described in the Disclosure Package and the
Prospectus, will any of the Partnership Entities be an
“investment company” or a company “controlled
by” an “investment company,” each as defined in
the Investment Company Act of 1940, as amended (the “
Investment Company Act ”).
(vv) Books and
Records . Each Partnership Entity maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with
17
management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Each
Partnership Entity’s internal controls over financial
reporting are effective and none of the Partnership Entities is
aware of any material weakness in their internal control over
financial reporting.
(ww) Disclosure
Controls and Procedures . (i) Each Partnership Entity has
established and maintains disclosure controls and procedures (to
the extent required by and as such term is defined in
Rule 13a-15 under the Exchange Act), (ii) such disclosure
controls and procedures are designed to ensure that the information
required to be disclosed by the Partnership in the reports it files
or will file or submit under the Exchange Act, as applicable, is
accumulated and communicated to management of the General Partner,
including their respective principal executive officers and
principal financial officers, as appropriate, to allow timely
decisions regarding required disclosure to be made and
(iii) such disclosure controls and procedures are effective in
all material respects to perform the functions for which they were
established to the extent required by Rule 13a-15 of the
Exchange Act.
(xx) Market
Stabilization . None of the Targa Entities has taken, directly
or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the
price of any security of the Partnership to facilitate the sale or
resale of the Units.
(yy) Loans to
Directors and Officers . The Partnership Entities have provided
true, correct and complete copies of all documentation pertaining
to any extension of credit in the form of a personal loan made,
directly or indirectly, by any of the Partnership Entities to any
director or executive officer of any of the Partnership Entities or
to any family member or affiliate of any director or executive
officer of any of the Partnership Entities.
(zz) Foreign
Corrupt Practices Act . No Partnership Entity nor, to the
knowledge of the Targa Parties, any director, officer, agent,
employee or affiliate of any Partnership Entity is aware of or has
taken any action, directly or indirectly, that would result in a
violation by such Persons of the Foreign Corrupt Practices Act of
1977, as amended, and the rules and regulations thereunder
(collectively, the “ FCPA ”), including, without
limitation, making use of the mails or any means or instrumentality
of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization
of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA and the
Partnership Entities and, to the knowledge of the Targa Parties,
their affiliates have conducted their businesses in compliance with
the FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.
18
(aaa) Money
Laundering Laws . The operations of the Partnership Entities
are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “ Money Laundering
Laws ”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving any of the Partnership Entities with respect
to the Money Laundering Laws is pending or, to the best knowledge
of the Targa Parties, threatened.
(bbb) Office of
Foreign Assets Control . Neither the Partnership nor any of its
subsidiaries nor, to the knowledge of the Targa Parties, any
director, officer, agent, employee or affiliate of the Partnership
or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“ OFAC ”); and the
Partnership will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(ccc) Lending
Relationship . Except as disclosed in the Disclosure Package
and the Prospectus, the Partnership (i) does not have any
material lending or other relationship with any bank or lending
affiliate of any of the Underwriters and (ii) does not intend
to use any of the proceeds from the sale of the Units hereunder to
repay any outstanding debt owed to any affiliate of the
Underwriters.
(ddd) Private
Placement . The sale and issuance of the Sponsor Units to TGPI
and TLPI and the Incentive Distribution Rights to the General
Partner are exempt from the registration requirements of the Act,
the rules and regulations and the securities laws of any state
having jurisdiction with respect thereto, and none of the
Partnership Entities has taken or will take any action that would
cause the loss of such exemption.
(eee)
Statistical Data . Any statistical and market-related data
included in the Registration Statement, the Preliminary Prospectus
or the Prospectus are based on or derived from sources that the
Partnership believes to be reliable and accurate, and the
Partnership has obtained the written consent to the use of such
data from such sources to the extent required.
(fff) Directed
Unit Sales . None of the Directed Units distributed in
connection with the Directed Unit Program (each as defined in
Section 4 hereof) will be offered or sold outside the United
States. All sales of the Directed Units will comply with the rules
of the National Association of Securities Dealers (the “
NASD ”), including Conduct Rule 2790. The Targa
Parties have not offered, or caused the Underwriters to offer, any
of the Units to any person pursuant to the Directed Unit Program
with the specific intent to unlawfully influence (i) a
customer or supplier of the Partnership Entities, to alter the
customer’s or supplier’s level or type of business with
the Partnership Entities, or (ii) a
19
trade
journalist or publication to write or publish favorable information
about the Partnership Entities or their operations.
(ggg) No
Distribution of Other Offering Materials . None of the
Partnership Entities has distributed and, prior to the later to
occur of the Closing Date or any settlement date and completion of
the distribution of the Units, will distribute any offering
material in connection with the offering and sale of the Units
other than any Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectus to which the Representative has consented
in accordance with this Agreement, any other materials, if any,
permitted by the Act, including Rule 134, and, in connection
with the Directed Unit Program described in Section 4 hereof,
the enrollment materials prepared by UBS Securities LLC.
(hhh) Listing
on the Nasdaq . The Units have been approved to be listed on
the Nasdaq, subject to official notice of issuance.
Any
certificate signed by any officer of any of the Targa Parties and
delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Units shall be deemed a
representation and warranty by such entity, as to matters covered
thereby, to each Underwriter.
2. Purchase and
Sale . (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth,
the Partnership agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the
Partnership, at a purchase price of $19.7925 per unit, the amount
of the Firm Units set forth opposite such Underwriter’s name
in Schedule I hereto.
(b) Subject to the
terms and conditions and in reliance upon the representations and
warranties herein set forth, the Partnership hereby grants an
option to the several Underwriters to purchase, severally and not
jointly, up to 2,520,000 Option Units at the same purchase price
per unit as the Underwriters shall pay for the Firm Units. Said
option may be exercised only to cover over-allotments in the sale
of the Firm Units by the Underwriters. Said option may be exercised
in whole or in part at an
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