DCP MIDSTREAM PARTNERS,
LP
Representing Limited Partner
Interests
Lehman Brothers
Inc.
Citigroup Global Markets
Inc.
As Representatives of the several
Underwriters named in Schedule 1
hereto
c/o Lehman
Brothers Inc.
745 Seventh Avenue
New York, New York 10019
DCP
Midstream Partners, LP, a Delaware limited partnership (the “
Partnership ”), proposes to sell 9,000,000 common
units (the “ Firm Units ”), each representing a
limited partner interest in the Partnership (the “ Common
Units ”). In addition, the Partnership proposes to grant
to the Underwriters named in Schedule 1 hereto (the
“ Underwriters ”) an option to purchase up to an
additional 1,350,000 Common Units on the terms and for the purposes
set forth in Section 2 (the “ Option Units
”). The Firm Units and the Option Units, if purchased, are
hereinafter collectively called the “ Units .”
This is to confirm the agreement with you (the “
Representatives ”) and the other several Underwriters
on whose behalf you are acting concerning the purchase of the Units
from the Partnership by the Underwriters.
It
is understood and agreed to by all parties that the Partnership was
formed to own, operate, acquire and develop a diversified portfolio
of complementary midstream energy assets that historically have
been owned and operated directly or indirectly by Duke Energy Field
Services, LLC, a Delaware limited liability company (“
DEFS ”), as described more particularly in the
Prospectus (as defined in Section 1(a) hereof). It is
further understood and agreed to by all parties that at the time of
each Delivery Date (as defined in Section 4 hereof),
(i) DCP Midstream GP, LP, a Delaware limited partnership (the
“ General Partner ”), will be the sole general
partner of the Partnership, (ii) DCP Midstream GP, LLC, a
Delaware limited liability company and direct wholly owned
subsidiary of DEFS (“ DCP Midstream GP, LLC ”),
will be the sole general partner of the General Partner and DEFS
will be the sole limited partner of the General Partner,
(iii) the Partnership will operate its business through DCP
Midstream Operating, LP, a Delaware limited partnership (the
“ Operating Partnership ”), (iv) DCP
Midstream Operating, LLC, a Delaware limited liability company and
direct wholly owned subsidiary of the Partnership (the “
OLP GP ”), will be the sole general partner of the
Operating Partnership and the Partnership will be the sole limited
partner of the Operating Partnership, and
(v) each
of the entities listed on Schedule 2 hereto
(collectively, the “ Operating Subsidiaries ”
and each individually an “ Operating Subsidiary
”) will be wholly owned, directly or indirectly, by the
Operating Partnership (except as otherwise indicated on
Schedule 2 hereto). DEFS, the Partnership, the General
Partner, DCP Midstream GP, LLC and the Operating Partnership are
hereinafter collectively referred to as the “ DCP
Parties .” The Partnership, the General Partner, DCP
Midstream GP, LLC, the Operating Partnership, the OLP GP and the
Operating Subsidiaries are herein collectively referred to as the
“ Partnership Entities. ”
Furthermore,
as of the date hereof:
(a) DEFS,
either directly or indirectly through one or more wholly owned
subsidiaries, owns all of the outstanding partnership interests in
DCP Assets Holdings, LP, a Delaware limited partnership (
“DCP Assets Holdings” );
(b) DCP
Assets Holdings owns (i) all of the outstanding capital stock
or member interests, as applicable, of Associated Louisiana
Intrastate Pipe Line, LLC, a Delaware limited liability company (
“Associated” ), Duke Energy Intrastate Pipeline,
LLC, a Delaware limited liability company (
“Intrastate” ), and PanEnergy Louisiana
Intrastate LLC, a Delaware limited liability company (
“PanEnergy” ), and (ii) certain assets
relating to the Minden natural gas processing plant and gathering
system (collectively, “Minden” ), the Ada
natural gas processing plant and gathering system (collectively,
“Ada” ), the PanEnergy Louisiana Intrastate
pipeline system ( “PELICO” ), and the Seabreeze
natural gas liquids pipeline;
(c) Associated
owns certain assets relating to Minden;
(d) Intrastate
owns certain assets relating to Minden;
(e) PanEnergy
owns certain assets relating to PELICO;
(f) DEFS
indirectly owns all of the outstanding partnership interests in
Duke Energy NGL Services, LP, a Delaware limited partnership (
“DENGL” );
(g) DENGL
owns a 50% equity interest in Black Lake Pipe Line Company, a Texas
general partnership ( “Black Lake” ) and
directly owns all of the outstanding membership interest in DCP
Black Lake Holdings, LLC, a Delaware limited liability company (
“Black Lake Holdings ”).
Furthermore,
on or prior to the First Delivery Date (as defined below), DEFS,
the General Partner, the Partnership, the Operating Partnership and
certain other parties will enter into a Contribution and Conveyance
Agreement (the “ Contribution Agreement ”)
pursuant to which the following transactions will occur as set
forth in the Contribution Agreement:
(a) DCP
Assets Holdings will distribute to DEFS the stock and member
interests in certain subsidiaries of DCP Assets Holdings that are
not intended to be contributed to the Partnership;
(b) DCP
Assets Holdings and all remaining subsidiaries of DCP Assets
Holdings will distribute all their cash and accounts receivable to
DEFS;
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(c) DEFS
Holding, LLC, a Delaware limited liability company ( “DEFS
Holding” ), will convey its 0.5% general partner interest
in DCP Assets Holdings to DCP Assets Holdings GP, LLC, a Delaware
limited liability company ( “DCP Assets Holdings
GP” ), as a capital contribution.
(d) DENGL
will convey a 45% partnership interest in Black Lake to Black Lake
Holdings.
(e) DENGL
will distribute its member interest in Black Lake Holdings to DEFS
Holdings 1 LLC, a Delaware limited liability company (
“DEFS Holdings 1” ), and DEFS Holding, on a pro
rata basis based on their respective ownership interests in DENGL
(99.5% and 0.5% for DEFS Holdings 1 and DEFS Holding,
respectively); and DEFS Holdings 1 will distribute all of its
interest in Black Lake Holdings to DEFS; and DEFS and DEFS Holding
will convey all of their respective interests in Black Lake
Holdings to DCP Assets Holdings as a capital
contribution.
(f) DEFS
will convey a limited partner interest in DCP Assets Holdings plus
the amount of any cash distributed to the General Partner by the
Partnership as a capital contribution (of which 0.001% of such
contribution will be made to DEFS on behalf of DCP Midstream GP,
LLC).
(g) DEFS
will convey its remaining limited partner interest in DCP Assets
Holdings (the “Interest” ) to DCP LP Holdings,
LP, a Delaware limited partnership ( “DCP LP
Holdings” ), as a capital contribution.
(h) DEFS
Holding will convey its member interests in DCP Assets Holdings GP
to DCP LP Holdings as a capital contribution and in exchange for a
limited partner interest in DCP LP Holdings.
(i) The
General Partner will contribute the Interest to the Partnership in
exchange for (i) 357,143 general partner units representing a
continuation of its 2% general partner interest in the Partnership,
(ii) the Incentive Distribution Rights (as defined in the
Partnership Agreement (as defined herein)) (the “
Incentive Distribution Rights ”), (iii) the right
to receive approximately $3.447 million to reimburse the
General Partner for certain capital expenditures, and (iv) the
right to receive $183.0 million from the net proceeds of
borrowings under the Credit Agreement (as defined
below);
(j) DCP
LP Holdings will contribute to the Partnership all of (i) its
limited partner interest in DCP Assets Holdings, (ii) all of
its member interest in DCP Assets Holdings GP, and (iii) all
of its member interests in Duke Energy Guadalupe Pipeline, LLC, a
Delaware limited liability company, in exchange for
(x) 1,357,143 Common Units, (y) 7,142,857 subordinated
units (the “ Subordinated Units ”), and
(z) the right to receive approximately $5.153 million to
reimburse it for certain capital expenditures;
(k) The
public, through the Underwriters, will contribute $193,500,000 in
cash to the Partnership, less the Underwriters’ discount of
$12,330,000, in exchange for 9,000,000 Common Units; and
3
(l) The
Partnership will (i) pay transaction expenses, estimated to be
$4.7 million, (ii) distribute approximately
$3.447 million to the General Partner to reimburse it for
certain capital expenditures, (iii) distribute approximately
$5.153 million to DCP LP Holdings to reimburse it for certain
capital expenditures, (iv) contribute $53.9 million in
the aggregate to DCP Assets Holdings (.001% on behalf of DCP Assets
Holdings GP) to replenish working capital, and (v) contribute
$113.7 million in cash and its interests in DCP Assets Holdings GP
and DCP Assets Holdings to the Operating Partnership as a capital
contribution (.001% on behalf of the OLP GP).
The
transactions described directly above in clauses (a)-(l) of the
immediately preceding paragraph or otherwise provided for in the
Contribution Documents (as defined below) are referred to
collectively as the “ Transactions .” In
connection with the Transactions, the parties to the Transactions
entered or will enter into various bills of sale, assignments,
conveyances, contribution agreements and related documents
(collectively, with the Contribution Agreement, the “
Contribution Documents ”).
In
addition, on or before the First Delivery Date, the Operating
Partnership, the Partnership and the Operating Subsidiaries that
are parties thereto will have entered into a Credit Agreement and
related financing documents (collectively, the “ Credit
Agreement ”) providing for a $400 million credit
facility consisting of up to a $175 million term loan facility
and up to a $250 million revolving credit facility.
1.
Representations, Warranties and Agreements of the DCP
Parties . Each of the DCP Parties, jointly and severally,
represents, warrants and agrees that:
(a)
Definitions; No Stop Order . A registration statement on
Form S-1 (File No. 333-128378) with respect to the Units has
(i) been prepared by the Partnership in conformity with the
requirements of the Securities Act of 1933, as amended (the “
Securities Act ”), and the rules and regulations (the
“ Rules and Regulations ”) of the Securities and
Exchange Commission (the “ Commission ”)
thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities
Act. Copies of such registration statement and each of the
amendments thereto have been delivered by the Partnership to you.
As used in this Agreement, “Applicable Time”
means 5:15 p.m. (New York City time) on the date of this Agreement;
“ Effective Time ” means the date and the time
as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by
the Commission; “ Effective Date ” means the
date of the Effective Time; “ Preliminary Prospectus
” means each prospectus included in such registration
statement, or amendments thereof, before it became effective under
the Securities Act and any prospectus filed with the Commission by
the Partnership with the consent of the Representatives pursuant to
Rule 424(a) of the Rules and Regulations; “ Registration
Statement ” means such registration statement, as amended
at the Effective Time, including all information contained in the
final prospectus filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations and deemed to be a part of the
registration statement as of the Effective Time pursuant to
Rule 430A of the Rules and Regulations; and “
Prospectus ” means such final prospectus, as first
filed with the Commission pursuant to paragraph (1) or
(4) of Rule 424(b) of the Rules and
4
Regulations. If
the Partnership has filed an abbreviated registration statement to
register additional Common Units pursuant to Rule 462(b) under the
Rules and Regulations (the “ Rule 462 Registration
Statement ”), then any reference herein to the term
“ Registration Statement ” shall be deemed to
include such Rule 462 Registration Statement. The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or suspending the
effectiveness of the Registration Statement, and no proceeding for
such purpose has been instituted or, to the knowledge of DCP
Parties, threatened by the Commission.
(b)
No Material Misstatements or Omissions . The Registration
Statement conforms, and the Prospectus and any further amendments
or supplements to the Registration Statement or the Prospectus
will, when they become effective or are filed with the Commission
and on the applicable Delivery Date, as the case may be, conform in
all material respects to the requirements of the Securities Act and
the Rules and Regulations and do not and will not, as of the
applicable Effective Date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date and as of
the applicable Delivery Date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading (in the case of the Prospectus, in light of the
circumstances under which the statements were made). The
Preliminary Prospectus dated November 23, 2005 provided to the
Underwriters for use in connection with the public offering of the
Units conforms in all material respects to the requirements of the
Securities Act and the Rules and Regulations as of its date and as
of the date hereof; and, as of the Applicable Time, such
Preliminary Prospectus 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
light of the circumstances under which they were made, not
misleading, except, that the price of the Units and disclosures
directly relating thereto and derived therefrom will be included on
the cover page of the Prospectus or under the captions “Use
of Proceeds,” “Capitalization” or
“Underwriting” in the Prospectus or in the unaudited
pro forma financial information included therein. 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.
Notwithstanding the foregoing, no representation or warranty is
made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with information furnished to the Partnership in writing
by or on behalf of any Underwriter through the Representatives
expressly for inclusion therein, which information consists solely
of the information specified in Section 8(e).
5
(c)
Formation and Qualification of DEFS, the Partnership, the
General Partner, the Operating Partnership, DCP Midstream GP, LLC,
the OLP GP and the Operating Subsidiaries . DEFS has been duly
formed and is validly existing in good standing as a limited
liability company under the laws of the State of Delaware with full
limited liability company power and authority necessary to enter
into and perform its obligations under this Agreement. Each of the
Partnership, the General Partner, the Operating Partnership, DCP
Midstream GP, LLC and the OLP GP, and each of the Operating
Subsidiaries has been duly formed or incorporated and is validly
existing in good standing as a limited partnership, limited
liability company or corporation under the laws of the State of
Delaware with full partnership, limited liability company or
corporate power and authority, as the case may be, necessary to own
or lease its properties currently owned or leased or to be owned or
leased at each Delivery Date, to assume the liabilities assumed or
to be assumed by it pursuant to the Contribution Documents and to
conduct its business as currently conducted or to be conducted at
each Delivery Date, in each case in all material respects as
described in the Registration Statement and the Prospectus, and
each of them is, or at each Delivery Date will be, duly registered
or qualified to do business and is in good standing as a foreign
limited partnership, limited liability company or corporation in
each jurisdiction in which its ownership or lease of property or
the conduct of its businesses requires such registration or
qualification, except where the failure so to register or qualify
would not, individually or in the aggregate, (i) have a
material adverse effect on the condition (financial or otherwise),
partners’ equity, stockholders’ equity, members’
equity, results of operations, properties, business or prospects of
the Partnership Entities taken as a whole (a “ Material
Adverse Effect ”) or (ii) subject the limited
partners of the Partnership to any material liability or
disability.
(d)
Power and Authority to Act as a General Partner . The
General Partner has, and as of each Delivery Date will have, full
limited partnership power and authority to act as general partner
of the Partnership in all material respects as described in the
Registration Statement and Prospectus. DCP Midstream GP, LLC has,
and as of each Delivery Date will have, full limited liability
company power and authority to act as general partner of the
General Partner in all material respects as described in the
Registration Statement and Prospectus.
(e)
Ownership of the General Partner Interest in the Partnership
. At each Delivery Date, after giving effect to the Transactions,
the General Partner will be the sole general partner of the
Partnership and, at the First Delivery Date, will have a 2.0%
general partner interest in the Partnership; such general partner
interest will be duly authorized and validly issued in accordance
with the partnership agreement of the Partnership (as the same may
be amended or restated at or prior to each Delivery Date, the
“ Partnership Agreement ”); and the General
Partner will own such general partner interest free and clear of
all liens, encumbrances, security interests, charges and other
claims (collectively, “ Liens ”) (except
restrictions on transferability as described in the Prospectus or
the Partnership Agreement).
(f)
Ownership of the Sponsor Units and the Incentive Distribution
Rights . Assuming no purchase by the Underwriters of Option
Units on the First Delivery Date, at the First Delivery Date, after
giving effect to the Transactions, DCP LP Holdings
6
will own
1,357,143 Common Units and 7,142,857 Subordinated Units
(collectively, 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
authorized and validly issued in accordance with the 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 matters described in the
Prospectus under the caption “The Partnership
Agreement—Limited Liability”); and DCP LP Holdings will
own such Sponsor Units, and the General Partner will own such
Incentive Distribution Rights, free and clear of all Liens except
restrictions on transferability described in the Prospectus or
contained in the Partnership Agreement.
(g)
Valid Issuance of the Units . At the First Delivery Date,
there will be issued to the Underwriters the Firm Units (assuming
no purchase by the Underwriters of Option Units on the First
Delivery Date); at the First Delivery Date or the Second Delivery
Date (as defined in Section 4 hereof), as the case may
be, the Firm Units and the Option Units, as the case may be, and
the limited partner interests represented thereby, will be duly and
validly authorized by the Partnership Agreement and, when issued
and delivered against payment therefor in accordance with this
Agreement, will be duly and validly issued, fully paid (to the
extent required under the Partnership Agreement) and non-assessable
(except as such nonassessability may be affected by matters
described in the Prospectus under the caption “The
Partnership Agreement—Limited Liability”). 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 at each Delivery Date.
(h)
Ownership of the General Partner . At each Delivery Date,
after giving effect to the Transactions, DCP Midstream GP, LLC will
be the sole general partner of the General Partner and DEFS will be
the sole limited partner of the General Partner; such partnership
interests will be duly authorized and validly issued in accordance
with the partnership agreement of the General Partner (as the same
may be amended or restated at or prior to each Delivery Date, the
“ GP Partnership Agreement ”) and, with respect
to DCP LP Holdings’ limited partnership interest in the
General Partner, will be fully paid (to the extent required under
the GP Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-607 of the
Delaware Revised Uniform Limited Partnership Act (the “
Delaware LP Act ”)); and DCP Midstream GP, LLC and
DEFS shall each own their respective partnership interests free and
clear of all Liens (except restrictions on transferability as
described in the Prospectus or contained in the GP Partnership
Agreement).
(i)
Ownership of DCP Midstream GP, LLC . DEFS is the sole member
of DCP Midstream GP, LLC with a 100% membership interest in DCP
Midstream GP, LLC; such membership interest has been duly
authorized and validly issued in accordance with the limited
liability company agreement of DCP Midstream GP, LLC (as the same
may be amended or restated at or prior to each Delivery Date, the
“DCP Midstream GP, LLC Limited Liability Company
Agreement” ) and is fully
7
paid (to the
extent required by the DCP Midstream GP, LLC Limited Liability
Company Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware
Limited Liability Company Act (the “Delaware LLC
Act” )); and DEFS owns such member interest free and
clear of all Liens (except restrictions on transferability
contained in the DCP Midstream GP, LLC Limited Liability Company
Agreement).
(j)
Ownership of the OLP GP . The Partnership is the sole member
of the OLP GP with a 100% membership interest in the OLP GP; such
membership interest has been duly authorized and validly issued in
accordance with the limited liability company agreement of the OLP
GP (as the same may be amended or restated at or prior to each
Delivery Date, the “OLP GP Limited Liability Company
Agreement” ) and is fully paid (to the extent required by
the OLP GP Limited Liability Company 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 (except for
restrictions on transferability contained in the OLP GP Limited
Liability Company Agreement).
(k)
Ownership of the Operating Partnership . At each Delivery
Date, after giving effect to the Transactions, the OLP GP will be
the sole general partner of the Operating Partnership and the
Partnership will be the sole limited partner of the Operating
Partnership; such partnership interests will be duly authorized and
validly issued in accordance with the partnership agreement of the
Operating Partnership (as the same may be amended or restated at or
prior to each Delivery Date, the “ OLP Partnership
Agreement ”) and, with respect to the Partnership’s
limited partner interest in the Operating Partnership, will be
fully paid (to the extent required under the OLP Partnership
Agreement) and nonassessable (except as such nonassessability may
be affected by Section 17-607 of the Delaware LP Act); and the
OLP GP and the Partnership shall each own their respective
partnership interests free and clear of all Liens (except
restrictions on transferability as described in the Prospectus or
the OLP Partnership Agreement and Liens created pursuant to the
Credit Agreement).
(l)
Ownership of the Operating Subsidiaries . At each Delivery
Date, after giving effect to the Transactions, the Operating
Partnership will directly or indirectly own 100% of the outstanding
capital stock, membership interests or partnership interests, as
the case may be, of each of the Operating Subsidiaries other than
Black Lake; all such stock, membership interests or partnership
interests, will be duly authorized and validly issued in accordance
with the certificate of incorporation and bylaws, certificate of
formation and limited liability company agreement or certificate of
limited partnership and partnership agreement of each Operating
Subsidiary, as the case may be (collectively, the “
Operating Subsidiaries Operative Documents ” and, as
to each individual Operating Subsidiary, the “ Operating
Subsidiary Operative Document ”) and will be fully paid
(to the extent required in the applicable Operating Subsidiaries
Operative Documents) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the
Delaware LLC Act or Section 17-607 of the Delaware LP Act, as
the case may be); at each Delivery Date, after giving effect to the
Transactions, the Operating Partnership will directly or indirectly
own 45% of the
8
partnership
interests of Black Lake; and the owners of the Operating
Subsidiaries will own all such stock, membership interests or
partnership interests listed on Schedule 2 free and clear of
all Liens, except for Liens created pursuant to the Credit
Agreement.
(m)
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 does not own, and at each
Delivery Date 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.
Other than (i) the Partnership’s ownership of a 99.999%
limited partnership interest in the Operating Partnership and a
100% membership interest in the OLP GP, (ii) the Operating
Partnership’s 100% direct or indirect ownership of the
outstanding capital stock membership interest or partnership
interest in each Operating Subsidiary other than Black Lake, and
(iii) the Operating Partnership’s direct or indirect
ownership of a 45% interest in Black Lake, neither the Partnership
nor the Operating Partnership owns, and at each Delivery Date,
neither 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.
(n)
No Preemptive Rights, Registration Rights or Options .
Except as described in the Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of any equity securities
of, any of the Partnership Entities. 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 of the Partnership Entities other than as provided in the
Prospectus and the Partnership Agreement or as have been waived.
Except as described in the Prospectus, there are no outstanding
options or warrants to purchase (A) any Common Units,
Subordinated Units or other interests in the Partnership,
(B) any partnership interests in the General Partner or the
Operating Partnership, (C) any membership interests in DCP
Midstream GP, LLC or the OLP GP, or (D) any shares of stock,
membership interests or partnership interests, as applicable, in
any Operating Subsidiary.
(o)
Capitalization . As of September 30, 2005, the
Partnership would have had, on the consolidated pro forma basis
indicated in the Prospectus (and any amendment or supplement
thereto), a capitalization as set forth therein.
(p)
Authority and Authorization . 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 and the Partnership
Agreement, 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. At each Delivery Date, all corporate,
partnership and limited liability company action, as the case may
be, required to be taken by the Partnership 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
Partnership Entities of the Operative Agreements (as
9
defined in
Section 1(r) hereof) and the consummation of the
transactions (including the Transactions) contemplated by this
Agreement and the Operative Agreements, shall have been validly
taken.
(q)
Authorization of this Agreement . This Agreement has been
duly authorized and validly executed and delivered by each of the
DCP Parties.
(r)
Enforceability of Other Agreements . At or before the First
Delivery Date:
(i)
the Partnership Agreement will have been duly authorized, executed
and delivered by the General Partner and the Organizational Limited
Partner (as defined in the Partnership Agreement) and will be a
valid and legally binding agreement of the General Partner and the
Organizational Limited Partner, enforceable against the General
Partner and the Organizational Limited Partner in accordance with
its terms;
(ii)
the GP Partnership Agreement will have been duly authorized,
executed and delivered by DCP Midstream GP, LLC and DEFS and will
be a valid and legally binding agreement of DCP Midstream GP, LLC
and DEFS, enforceable against DCP Midstream GP, LLC and DEFS in
accordance with its terms;
(iii)
the OLP Partnership Agreement will have been duly authorized,
executed and delivered by the OLP GP and the Partnership and will
be a valid and legally binding agreement of the OLP GP and the
Partnership, enforceable against the Partnership in accordance with
its terms;
(iv)
the DCP Midstream GP, LLC Limited Liability Company Agreement has
been duly authorized, executed and delivered by DEFS and is a valid
and legally binding agreement of DEFS, enforceable against DEFS in
accordance with its terms;
(v)
the OLP GP Limited Liability Company 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;
(vi)
each of the Operating Subsidiaries Operative Documents will have
been duly authorized, executed and delivered by the Operating
Partnership and any other necessary parties, as applicable, and
will be a valid and legally binding agreement of the respective
parties, enforceable against the respective parties in accordance
with its terms;
(vii)
the Omnibus Agreement will have been duly authorized, executed and
delivered by each of the General Partner, the Partnership, the
Operating Partnership, OLP GP and DEFS and will be a valid and
legally binding
10
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 Operating Partnership, the Partnership and the
Operating Subsidiaries that are parties thereto and will be a valid
and legally binding agreement of the Operating Partnership, the
Partnership and the Operating Subsidiaries that are parties
thereto, enforceable against the Operating Partnership, the
Partnership and the Operating Subsidiaries that are parties
thereto, in accordance with its terms;
(ix)
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(r) 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 Partnership Agreement, the OLP Partnership
Agreement, the DCP Midstream GP, LLC Limited Liability Company
Agreement, the OLP GP Limited Liability Company Agreement, and the
Operating Subsidiaries Operative Documents, in each case, as they
may be amended or restated at or prior to the First Delivery Date,
the Omnibus Agreement, the Credit Agreement, and the Contribution
Documents are herein collectively referred to as the “
Operative Agreements .”
(s)
No Conflicts . None of the offering, issuance and sale by
the Partnership of the Units and the application of the net
proceeds therefrom as described under “Use of Proceeds”
in the Prospectus, the execution, delivery and performance of this
Agreement and the Operative Agreements by the Partnership Entities,
that are parties hereto and thereto, and the consummation of the
transactions contemplated hereby and thereby (including the
Transactions) (i) conflicts or will conflict with or
constitutes or will constitute a violation of the certificate of
partnership or agreement of limited partnership, certificate of
formation or limited liability company agreement, certificate of
incorporation or bylaws, or other organizational documents of any
of the Partnership Entities, (ii) conflicts or will conflict
with or constitutes or will constitute a breach or violation of, or
a default under (or an event which, with notice or lapse of time or
both, would constitute such a default), any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or
instrument to which any of the Partnership Entities is a party or
by which any of them or any of their respective properties may be
bound, (iii) violates
11
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 Partnership Entities or any of their properties in a
proceeding to which any of them or their property is or was a
party, or (iv) 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), which conflicts, breaches, violations, defaults
or Liens, in the case of clauses (ii), (iii) or (iv), would
have, individually or in the aggregate, a Material Adverse
Effect.
(t)
No Consents . Except for (i) the registration of the
Units under the Securities Act, (ii) such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Securities Exchange Act of 1934, as amended (the “
Exchange Act ”) and applicable state securities laws
in connection with the purchase and distribution of the Units by
the Underwriters, (iii) such consents that have been, or prior
to each Delivery Date will be, obtained, or, if not obtained, would
not result in a Material Adverse Effect and (iv) as disclosed
in the Prospectus, no consent, approval, authorization or order of,
or filing or registration with, any court or governmental agency or
body having jurisdiction over the Partnership Entities or any of
their respective properties is required in connection with the
offering, issuance and sale by the Partnership of the Units and the
application of the net proceeds therefrom as described under
“Use of Proceeds” in the Prospectus, the execution,
delivery and performance of this Agreement and the Operative
Agreements by the Partnership Entities and the consummation of the
transactions contemplated hereby and thereby (including the
Transactions).
(u)
No Default . None of the Partnership Entities (i) is in
violation of its certificate or agreement of limited partnership,
limited liability company agreement, certificate of incorporation
or bylaws or other organizational documents, (ii) is in
default, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which
it is bound or to which any of its properties or assets is subject,
or (iii) is in violation of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it
or of any order, judgment, decree or injunction of any court or
governmental agency or body having jurisdiction over it, or which
default, violation or failure in the case of clause (ii) or
(iii) would, if continued, have a Material Adverse Effect, or
could materially impair the ability of any of the Partnership
Entities to perform their obligations under this Agreement or the
Operative Agreements. To the knowledge of the DCP Parties, no third
party to any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which any of the Partnership
Entities is a party or by which any of them is bound or to which
any of their properties is subject, is in default under any such
agreement, which default would, if continued, have a Material
Adverse Effect.
(v)
Conformity to Description of Units, Sponsor Units and Incentive
Distribution Rights . The Units, when issued and delivered in
accordance with the terms of the Partnership Agreement against
payment therefor as provided herein, the Sponsor
12
Units and the
Incentive Distribution Rights, when issued and delivered in
accordance with the terms of the Partnership Agreement, will
conform in all material respects to the descriptions thereof
contained in the Prospectus.
(w)
No Material Adverse Change . No Partnership Entity has
sustained, since the date of the latest audited financial
statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order, investigation or
decree, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any material
change in the capitalization or long-term debt of any Partnership
Entity or any material adverse change, or any development
involving, or which may reasonably be expected to involve,
individually or in the aggregate, a prospective material adverse
change in or affecting the general affairs, properties, management,
condition (financial or otherwise), stockholders’ equity,
partners’ equity, members’ equity, results of
operations, properties business or prospects of the Partnership
Entities, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus. Since the date of the latest
audited financial statements included in the Prospectus, none of
the Partnership Entities has incurred any liability or obligation,
direct, indirect or contingent, or entered into any transactions,
not in the ordinary course of business, that, individually or in
the aggregate, is material to the Partnership Entities, taken as a
whole otherwise than as set forth or contemplated in the
Prospectus.
(x)
Financial Statements . The historical financial statements
(including the related notes and supporting schedules) filed as
part of the Registration Statement or included in the Prospectus
(and any amendment or supplement thereto) comply in all material
respects with the applicable requirements under the Securities Act
and present fairly in all material respects the financial
condition, results of operations and cash flows of the entities
purported to be shown thereby on the basis stated therein, at the
dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved. The summary
historical and pro forma financial and operating information set
forth in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) 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” 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. The pro forma financial
statements of the Partnership (excluding the table captioned
“DCP Midstream Partners, LP Unaudited Pro Forma Available
Cash” under the caption “Our Cash Distribution Policy
and Restrictions on Distributions – Unaudited Pro Forma
Available Cash for Year Ended December 31, 2004 and Twelve
Months Ended September 30, 2005”) included in the
Registration Statement and Prospectus (and any amendment or
supplement thereto) (i) comply as to form in all material
respects with the applicable requirements of Regulation S-X,
(ii) have been prepared in accordance with the
Commission’s rules and guidelines with respect to pro forma
financial
13
statements and
(iii) have been properly computed on the bases described
therein. The assumptions used in the preparation of such pro forma
financial statements are reasonable, and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein. The other historical financial
and statistical information and data included in the Prospectus
are, in all material respects, fairly presented.
(y)
Independent Public Accountants . Deloitte & Touche LLP,
who has certified or shall certify certain financial statements of
the Partnership Entities and the Partnership’s predecessor,
whose report appears in the Prospectus and who has delivered the
letters referred to in Section 7(h) hereof, were the
independent public accountants as required by the Securities Act
and the Rules and Regulations during the periods covered by the
financial statements on which they reported.
(z)
Title to Properties . At each Delivery Date, the Operating
Partnership and the Operating Subsidiaries will have good and
marketable title to all real property and good title to all
personal property (excluding easements or rights-of-way) described
in the Prospectus to be owned by the Operating Partnership and the
Operating Subsidiaries, in each case free and clear of all Liens
except (i) as described, and subject to the limitations
contained, in the Prospectus, (ii) that arise under the Credit
Agreement, and (iii) as do not materially affect the value of
such property taken as a whole and 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 Prospectus; provided that, with respect to any real
property and buildings held under lease by the Operating
Partnership and the Operating Subsidiaries, 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 Prospectus
and are proposed to be used in the future as described in the
Prospectus.
(aa)
Rights-of-Way . Following consummation of the Transactions
and at each Delivery Date, each of the Partnership Entities will
have such easements or rights-of-way from each person
(collectively, “ rights-of-way ”) as are
necessary to conduct its business in the manner described, and
subject to the limitations contained, in the Prospectus, except for
(i) qualifications, reservations and encumbrances as may be
set forth in the Prospectus that would not have 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 Prospectus, each of the Partnership
Entities has, or at the time of purchase following consummation of
the Transactions will have, fulfilled and performed all its
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 Prospectus, none of such rights-of-way
contains any restriction that is materially burdensome to the
Partnership Entities, taken as a whole.
14
(bb)
Insurance . DEFS maintains insurance covering the
properties, operations, personnel and businesses of the Partnership
Entities against such losses and risks and in such amounts as is
reasonably adequate for the conduct of their respective businesses
and the value of their respective properties and generally
consistent with the insurance coverage maintained by DEFS with
respect to its businesses and properties. Neither DEFS nor any of
the Partnership Entities has received notice from any insurer or
agent of such insurer that substantial capital improvements or
other expenditures will have to be made in order to continue such
insurance (including after giving effect to the Transactions), and
all such insurance is outstanding and duly in force on the date
hereof and will be outstanding and duly in force on each Delivery
Date.
(cc)
Intellectual Property . Each of the Partnership Entities
owns or possesses adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their
respective businesses and have no reason to believe that the
conduct of their respective businesses will conflict with, and have
not received any notice of any claim of conflict with, any such
rights of others.
(dd)
Legal Proceedings or Contracts to be Described or Filed .
There are no legal or governmental proceedings pending or, to the
knowledge of the DCP Parties, threatened against any of the
Partnership Entities, or to which any of the Partnership Entities
is a party, or to which any of their respective properties is
subject, that are required to be described in the Registration
Statement or Prospectus and 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 Prospectus or to be filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations that have not been described in the Registration
Statement or Prospectus as required or filed as exhibits to the
Registration Statement as required.
(ee)
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
Prospectus and is not so described.
(ff)
Sarbanes-Oxley Act of 2002 . On and after the First Delivery
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 thereunder and the rules of the
New York Stock Exchange (the “ NYSE ”) that are
effective and applicable to the Partnership.
(gg)
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
15
Entities or to
any family member or affiliate of any director or executive officer
of any of the Partnership Entities.
(hh)
Statistical Data . Any statistical and market-related data
included in the Registration Statement and 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.
(ii)
No Labor Dispute . No labor dispute with the employees of
DEFS or its affiliates or any Partnership Entity exists or, to the
knowledge of each DCP Party, is imminent or threatened and none of
the DCP Parties is aware of any existing, imminent or threatened
labor disturbance by the employees of any of its lessors that
would, individually or in the aggregate, be reasonably likely to
result in a Material Adverse Effect.
(jj)
Tax Returns . Each of the Partnership Entities has filed (or
has obtained extensions with respect to) all material federal,
state and local income and franchise tax returns required to be
filed through the date of this Agreement, which returns are correct
and complete in all material respects, and has timely paid all
taxes due thereon, other than those (i) that are being
contested in good faith and for which adequate reserves have been
established in accordance with generally accepted accounting
principles or (ii) that, if not paid, would not have a
Material Adverse Effect.
(kk)
Books and Records . Each Partnership Entity (i) makes
and keeps books and records which, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of assets and
(ii) maintains internal accounting controls sufficient to
provide reasonable assurance that (A) transactions are
executed in accordance with management’s general or specific
authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for its assets, (C) access to its assets is
permitted only in accordance with management’s general or
specific authorization and (D) the reported accountability for
its assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
(ll)
Foreign Corrupt Practices Act, Etc. No Partnership Entity,
nor, to the knowledge of the DCP Parties, any director, officer,
agent, employee or other person associated with or acting on behalf
of any Partnership Entity, has used any partnership, limited
liability company or corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from
partnership, limited liability company or corporate funds; violated
or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other payment in violation of law.
(mm)
Environmental Compliance . Except as disclosed in the
Prospectus, the Partnership Entities (i) are in compliance
with any and all applicable federal, state and
16
local laws and
regulations relating to the protection of human health and safety
and the environment or imposing liability or standards of conduct
concerning any Hazardous Materials (as defined below) (“
Environmental Laws ”), (ii) have received all
permits required of them under applicable Environmental Laws to
conduct their respective businesses, (iii) are in compliance with
all terms and conditions of any such permits and (iv) do 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 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 other Environmental
Law.
(nn)
Effect of Environmental Laws . In the ordinary course of
business, each Partnership Entity periodically reviews 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, without limitation, any capital or
operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permits, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such
review, each Partnership Entity has reasonably concluded that such
associated costs and liabilities would not, individually or in the
aggregate, have a Material Adverse Effect.
(oo)
Sufficiency of the Contribution Documents . The Contribution
Documents were or will be legally sufficient to transfer or convey
to the Partnership, the Operating Partnership and to the Operating
Subsidiaries satisfactory title to, or valid rights to use or
manage, all properties not already held by them that are,
individually or in the aggregate, required to enable the
Partnership, the Operating Partnership and the Operating
Subsidiaries to conduct their operations (in all material respects
as contemplated by the Prospectus), subject to the conditions,
reservations and limitations contained in the Contribution
Documents and those set forth in the Prospectus, and all third
party consents required to effect such transfers and conveyances
have been obtained or will be obtained by the First Delivery Date
other than any consent which, if not obtained, would not have a
Material Adverse Effect. The Partnership, the Operating Partnership
and each Operating Subsidiary, as the case may be, upon execution
and delivery of the Contribution Documents, succeeded or will
succeed in all material respects to the business, assets,
properties, liabilities and operations reflected by the pro forma
financial statements of the Partnership included in the Prospectus,
except as disclosed in the Prospectus and the Contribution
Documents.
(pp)
Permits . Each of the Partnership Entities has, or at each
Delivery Date will have, such permits, consents, licenses,
franchises, certificates and authorizations of governmental or
regulatory authorities (“ permits ”) as are
necessary to
17
own or lease
its properties and to conduct its business in the manner described
in the Prospectus, subject to such qualifications as may be set
forth in the Prospectus and except for such permits that, if not
obtained, would not, individually or in the aggregate, have a
Material Adverse Effect; each of the Partnership Entities has, or
at each Delivery Date will have, fulfilled and performed all its
material obligations with respect to such permits which are or will
be due to have been fulfilled and performed by such date and no
event has occurred that would prevent the permits from being
renewed or reissued or which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in
any impairment of the rights of the holder of any such permit,
except for such non-renewals, non-issues, revocations, terminations
and impairments that would not, individually or in the aggregate,
have a Material Adverse Effect; and none of such permits contains,
or at each Delivery Date will contain, any restriction that is
materially burdensome to the Partnership Entities considered as a
whole.
(qq)
ERISA. As of each Delivery Date, and after giving effect to
the Transactions, 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” ); and each “pension plan”
for which any Partnership Entity would have any liability that is
intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified and
nothing has occurred, whether by action or by failure to act, which
could reasonably be expected to cause the loss of such
qualification.
(rr)
Private Placement . The sale and issuance of the Sponsor
Units to DCP LP Holdings and the Incentive Distribution Rights to
the General Partner are exempt from the registration requirements
of the Securities 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.
(ss)
No Distribution of Other Offering Materials . The
Partnership Entities have not distributed and, prior to the later
to occur of (i) the First Delivery Date and (ii) completion of
the distribution of the Units, will not distribute, any prospectus
(as defined under the Securities Act), including any free writing
prospectus (as defined in Rule 405 of the Rules and
Regulations effective as of December 1, 2005), in connection
with the offering and sale of the Units other than the Registration
Statement, any Preliminary Prospectus, the Prospectus or other
materials, if any, permitted by the Securities Act (other than a
free writing prospectus as defined in Rule 405 of the
Rules
18
and Regulations
effective as of December 1, 2005, unless permitted under
Section 5(n) ), including Rule 134 of the Rules
and Regulations.
(tt)
NYSE Listing . The Units have been approved for listing on
the NYSE, subject only to official notice of issuance.
(uu)
Investment Company; Public Utility Holding Company . None of
the Partnership Entities is now, and after the sale of the Units to
be sold by the Partnership hereunder and the application of the net
proceeds from such sale as described in the Prospectus under the
caption “Use of Proceeds” will be, (i) an
“investment company” or a company “controlled
by” an “investment company” within the meaning of
the Investment Company Act of 1940, as amended or (ii) a
“public utility company,” a “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.
(vv)
Directed Unit Sales . None of the Directed Units distributed
in connection with the Directed Unit Program (each as defined in
Section 3 hereof) will be offered or sold outside the
United States. The DCP Parties have not offered, or caused the
Underwriters to offer, Units to any person pursuant to the Directed
Unit Program with the specific intent to unlawfully influence
(i) a customer or supplier of the DCP Parties, to alter the
customer’s or supplier’s level or type of business with
the DCP Parties, or (ii) a trade journalist or publication to
write or publish favorable information about the DCP Parties or
their operations.
(ww)
Brokers . Except for this Agreement and any engagement
letters with the Representatives, there are no contracts,
agreements or understandings between any DCP Party and any person
that would give rise to a valid claim against any DCP Party or any
Underwriter for a brokerage commission, finder’s fee or other
like payment in connection with this offering of the
Units.
(xx)
NASD Affiliations . To the Partnership’s knowledge,
there are no affiliations or associations between any member of the
National Association of Securities Dealers, Inc. (“
NASD ”) and any of the General Partner’s or DCP
Midstream GP, LLC’s officers or directors, or the
Partnership’s 5% or greater securityholders, except as set
forth in the Prospectus.
(yy)
Market Stabilization . The Partnership has not 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.
2.
Purchase of the Units by the Underwriters . On the basis of
the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Partnership agrees to
sell Firm Units to the several Underwriters, and each of
Underwriters, severally and not jointly, agrees to purchase the
number of Firm Units set forth opposite that Underwriter’s
name in Schedule 1 hereto. The respective purchase
obligations of
19
the
Underwriters with respect to the Firm Units shall be rounded among
the Underwriters to avoid fractional Units, as the Representatives
may determine.
In
addition, the Partnership grants to the Underwriters an option to
purchase up to 1,350,000 Option Units. Such option is exercisable
in the event that the Underwriters sell more than the number of
Firm Units in the offering and is exercisable as provided in
Section 4 hereof. Each Underwriter agrees, severally
and not jointly, to purchase the number of Option Units (subject to
such adjustments to eliminate fractional units as the
Representatives may determine) that bears the same proportion to
the total number of Option Units to be sold on such Delivery Date
as the number of Firm Units set forth in Schedule 1
hereto opposite the name of such Underwriter bears to the total
number of Firm Units.
The
price of both the Firm Units and any Option Units shall be $20.13
per Common Unit.
The
Partnership shall not be obligated to deliver any of the Units to
be delivered on any Delivery Date, except upon payment for all the
Units to be purchased on such Delivery Date as provided
herein.
3.
Offering of Units by the Underwriters . Upon authorization
by the Representatives of the release of the Firm Units, the
several Underwriters propose to offer the Firm Units for sale upon
the terms and conditions set forth in the Prospectus.
As
part of the offering contemplated by this Agreement, Citigroup
Global Markets Inc. has agreed to reserve out of the Firm Units set
forth opposite its name on Schedule 1 to this Agreement, up to
900,000 Firm Units, for sale to the employees, officers, and
directors of the Partnership Entities and other parties associated
with the Partnership Entities (collectively, the “Directed
Unit Participants” ), as described in the Prospectus
under the heading “Underwriting” (the
“Directed Unit Program” ). The Firm Units to be
sold by Citigroup Global Markets Inc. pursuant to the Directed Unit
Program (the “Directed Units” ) will be sold by
Citigroup Global Markets Inc. pursuant to this Agreement at the
public offering price. Any Directed Units not orally confirmed for
purchase by any Directed Unit Participants by 8:00 A.M. New York
City time on the business day following the date on which this
Agreement is executed will be offered to the public by Citigroup
Global Markets Inc. upon the terms and conditions set forth in the
Prospectus. Under no circumstances will Citigroup Global Markets
Inc. or any Underwriter be liable to the DCP Parties or to any
Directed Unit Participants for any action taken or omitted in good
faith in connection with such Directed Unit Program. It is further
understood that any Firm Units which are not purchased by Directed
Unit Participants will be offered by Citigroup Global Markets Inc.
to the public upon the terms and conditions set forth in the
Prospectus.
4.
Delivery of and Payment for the Units . Delivery of and
payment for the Firm Units shall be made at the offices of Vinson
& Elkins L.L.P., 2300 First City Tower, 1001 Fannin Street,
Houston, Texas 77002-6760, at 10:00 A.M., New York City time,
on December 7, 2005 or at such other date or place as shall be
determined by agreement between the Representatives and the
Partnership. This date and time are sometimes referred to as the
“ First Delivery Date .” Delivery of Firm Units
shall be made to Lehman Brothers Inc. for the account
20
of each
Underwriter against payment by the several Underwriters through
Lehman Brothers Inc. of the respective aggregate purchase prices of
the Firm Units being sold by the Partnership to or upon the order
of the Partnership by wire transfer in immediately available funds
to the account specified by the Partnership. Time shall be of the
essence, and delivery at the time and place specified pursuant to
this Agreement is a further condition of the obligation of each
Underwriter hereunder. Delivery of Firm Units shall be made through
the facilities of The Depository Trust Company (“ DTC
”) unless Lehman Brothers Inc. shall otherwise
instruct.
The
option granted in Section 2 will expire 30 days
after the date of this Agreement and may be exercised in whole or
in part from time to time by written notice being given to the
Partnership by the Representatives; provided that if such
date falls on a day that is not a business day, the option granted
in Section 2 will expire on the next succeeding
business day. Such notice shall set forth the aggregate number of
Option Units as to which the option is being exercised, the names
in which the Option Units are to be registered, the denominations
in which the Option Units are to be issued and the date and time,
as determined by the Representatives, when the Option Units are to
be delivered; provided, however , that this date and time
shall not be earlier than the First Delivery Date nor earlier than
the second business day after the date on which the option shall
have been exercised nor later than the fifth business day after the
date on which the option shall have been exercised. The date and
time the Option Units are delivered are sometimes referred to as a
“ Second Delivery Date ” and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as
a “ Delivery Date .”
Delivery
of and payment for the Option Units shall be made at the place
specified in the first sentence of the first paragraph of this
Section 4 (or at such other place as shall be
determined by agreement between the Representatives and the
Partnership) at 10:00 A.M., New York City time, on such Second
Delivery Date. Delivery of the Option Units shall be made to Lehman
Brothers Inc. for the account of each Underwriter against payment
by the several Underwriters through Lehman Brothers Inc. of the
respective aggregate purchase prices of the Option Units being sold
by the Partnership to or upon the order of the Partnership by wire
transfer in immediately available funds to the account specified by
the Partnership. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Delivery
of Option Units shall be made through the facilities of DTC unless
Lehman Brothers Inc. shall otherwise instruct.
5.
Further Agreements of the DCP Parties . Each of the DCP
Parties, jointly and severally, covenants and agrees to cause the
Partnership:
(a)
Preparation of Prospectus and Registration Statement . To
prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of
business on the second business day following the execution and
delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Securities Act;
to make no further amendment or any supplement to the Registration
Statement or to the Prospectus prior to the last Delivery Date
except as permitted herein; to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been
filed
21
and to furnish
the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the Units
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification,
to use promptly commercially reasonable efforts to obtain its
withdrawal.
(b)
Signed Copies of Registration Statements . To furnish
promptly to the Underwriters and to counsel for the Underwriters a
signed copy of the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith.
(c)
Copies of Documents to Underwriters . To deliver promptly to
the Underwriters such number of the following documents as the
Representatives shall reasonably request: (i) conformed copies of
the Registration Statement as originally filed with the Commission
and each amendment thereto (in each case excluding exhibits) and
(ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus; and, if the delivery of a
prospectus is required at any time after the Effective Time in
connection with the offering or sale of the Units and if at such
time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an 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 when such Prospectus
is delivered, not misleading, or, if for any other reason it shall
be necessary to amend or supplement the Prospectus in order to
comply with the Securities Act, to notify the Representatives and,
upon their request, to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to
time reasonably request of an amended or supplemented Prospectus
which will correct such statement or omission or effect such
compliance.
(d)
Filing of Amendment or Supplement . To file promptly with
the Commission any amendment to the Registration Statement or the
Prospectus or any supplement to the Prospectus that may, in the
judgment of the Partnership or the Representatives, be required by
the Securities Act or requested by the Commission. Prior to filing
with the Commission any amendment to the Registration Statement or
supplement to the Prospectus or any Prospectus pursuant to
Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Underwriters and counsel for the Underwriters and
obtain the consent of the Representatives to the filing.
(e)
Reports to Security Holders . As soon as practicable after
the Effective Date, to make generally available to the
Partnership’s security holders and to deliver to the
Underwriters an earnings statement of the Partnership and its
subsidiaries
22
(which need not
be audited) complying with Section 11(a) of the Securities Act and
the Rules and Regulations (including, at the option of the
Partnership, Rule 158).
(f)
Copies of Reports . For a period of two years following the
Effective Date, to furnish or to make available to the
Un
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