AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 9, 2003
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ENTERPRISE PRODUCTS OPERATING L.P.
ENTERPRISE PRODUCTS PARTNERS L.P.
(exact name of registrant as specified in its charter)
DELAWARE 1321 76-0568220
DELAWARE 1321 76-0568219
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Classification Identification No.)
Incorporation or Code Number)
Organization)
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2727 NORTH LOOP WEST RICHARD H. BACHMANN
HOUSTON, TEXAS 77008-1037 2727 NORTH LOOP WEST
(713) 880-6500 HOUSTON, TEXAS 77008-1037
(Address, Including Zip Code, (713) 880-6500
and Telephone Number, Including Area (Name, Address, Including Zip Code,
Code, and Telephone Number, Including
of Registrant's Principal Executive Area Code, of Agent for Service)
Offices)
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COPY TO:
MICHAEL P. FINCH
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
1001 FANNIN STREET
HOUSTON, TEXAS 77002-6760
713-758-2222
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER NOTE(1) PRICE(1) REGISTRATION FEE
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6.875% Series B Senior Notes due
2033.......................... $500,000,000 100% $500,000,000 $40,450
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Guarantee by Enterprise Products
Partners L.P. ................ -- -- -- --(2)
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f) under the Securities Act of 1933.
(2) The guarantee relates to the notes being registered, and no separate fee is
payable pursuant to Rule 457(n) under the Securities Act of 1933.
EACH REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 9, 2003
PROSPECTUS
ENTERPRISE PRODUCTS OPERATING L.P.
OFFER TO EXCHANGE UP TO
$500,000,000 OF 6.875% SERIES B SENIOR NOTES DUE 2033
[ENTERPRISE THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
LOGO]
FOR
$500,000,000 OF 6.875% SERIES A SENIOR NOTES DUE 2033
THAT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
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PLEASE READ "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF FACTORS YOU
SHOULD CONSIDER BEFORE PARTICIPATING IN THE EXCHANGE OFFER.
THE EXCHANGE NOTES WILL RANK EQUALLY IN CONTRACTUAL RIGHT OF PAYMENT WITH ALL OF
OUR OTHER MATERIAL INDEBTEDNESS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this prospectus is , 2003.
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission, or the Commission. In making your investment
decision, you should rely only on the information contained in this prospectus
and in the accompanying letter of transmittal included in this prospectus as
Annex A. We have not authorized anyone to provide you with any other
information. If you receive any unauthorized information, you must not rely on
it. We are not making an offer to sell these securities in any state where the
offer is not permitted. You should not assume that the information contained in
this prospectus, or the documents incorporated by reference into this
prospectus, is accurate as of any date other than the date on the front cover of
this prospectus or the date of such document, as the case may be.
This prospectus incorporates by reference business and financial
information about our company that has not been included in or delivered with
this prospectus. We will provide without charge to each person to whom this
prospectus is delivered, upon written or oral request, a copy of any document
incorporated by reference in this prospectus. Requests for such copies should be
directed to Investor Relations, Enterprise Products Partners L.P., 2727 North
Loop West, Suite 700, Houston, Texas 77008-1038; telephone number: (713)
880-6812. TO OBTAIN TIMELY DELIVERY, YOU SHOULD REQUEST THE DOCUMENTS AND
INFORMATION NO LATER THAN , 2003.
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TABLE OF CONTENTS
SUMMARY..................................................... 1
The Company............................................... 1
Exchange Offer............................................ 1
Terms of the Exchange Notes............................... 3
Risk Factors.............................................. 4
RISK FACTORS................................................ 5
A decrease in the difference between NGL product prices
and natural gas prices results in lower margins on volumes
processed, which would adversely affect our
profitability............................................. 5
A reduction in demand for our products and services by the
petrochemical, refining or heating industries, could
adversely affect our results of operations................ 5
A decline in the volume of NGLs delivered to our
facilities could adversely affect our results of
operations................................................ 6
Our business requires extensive credit risk management
that may not be adequate to protect against customer
nonpayment................................................ 6
Acquisitions and expansions may affect our business by
substantially increasing the level of our indebtedness and
contingent liabilities and increasing our risks of being
unable to effectively integrate these new operations...... 6
We have leverage that may restrict our future financial
and operating flexibility................................. 6
War, terrorist attacks, threats of war or terrorist
attacks or political or other disruptions that limit crude
oil production could have a material adverse effect on our
business.................................................. 7
Our ability to make payments on the exchange notes depends
upon the performance of our subsidiaries, which conduct
our operations and own our operating assets............... 7
We do not have the same flexibility as other types of
organizations to accumulate cash, which may limit cash
available to service the exchange notes or repay them at
maturity.................................................. 7
We do not intend to develop a trading market for the
exchange notes; therefore, you may be unable to sell the
exchange notes or to sell the exchange notes at a price
that you deem sufficient.................................. 8
USE OF PROCEEDS............................................. 8
RATIO OF EARNINGS TO FIXED CHARGES.......................... 8
EXCHANGE OFFER.............................................. 10
Purpose and Effect of the Exchange Offer.................. 10
i
Resale of Exchange Notes.................................. 12
Terms of the Exchange Offer............................... 13
Expiration Date........................................... 13
Extensions, Delays in Acceptance, Termination or
Amendment.............................................. 13
Conditions to the Exchange Offer.......................... 14
Procedures for Tendering.................................. 15
Withdrawal of Tenders..................................... 16
Fees and Expenses......................................... 16
Transfer Taxes............................................ 17
Consequences of Failure to Exchange....................... 17
Accounting Treatment...................................... 17
Other..................................................... 17
DESCRIPTION OF EXCHANGE NOTES............................... 18
General................................................... 18
Further Issuances......................................... 19
Optional Redemption....................................... 19
Ranking................................................... 20
Guarantee................................................. 21
No Sinking Fund........................................... 21
Certain Covenants......................................... 21
Events of Default......................................... 25
Amendments and Waivers.................................... 26
Defeasance................................................ 27
Book-Entry System......................................... 28
No Recourse Against General Partner....................... 29
Concerning the Trustee.................................... 30
Governing Law............................................. 30
MATERIAL FEDERAL INCOME TAX CONSEQUENCES.................... 30
PLAN OF DISTRIBUTION........................................ 31
LEGAL MATTERS............................................... 32
EXPERTS..................................................... 32
WHERE YOU CAN FIND MORE INFORMATION......................... 32
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS............ 33
LETTER OF TRANSMITTAL....................................... ANNEX A
Our parent, Enterprise Products Partners L.P., is a publicly traded limited
partnership that conducts all of its business through us. Unless the context
requires otherwise, references in this prospectus to "we," "us" or "our" are
intended to refer to Enterprise Products Partners L.P., Enterprise Products
Operating L.P. and our subsidiaries. When we use "Enterprise Products Partners"
or "guarantor," we are referring to the guarantor of the outstanding notes and
the exchange notes, Enterprise Products Partners L.P.
ii
SUMMARY
This summary highlights information included or incorporated by reference
in this prospectus. It may not contain all of the information that is important
to you. This prospectus includes information about the exchange offer and
includes or incorporates by reference information about our business and our
financial and operating data. Before deciding to participate in the exchange
offer, you should read this entire prospectus carefully, including the financial
data and related notes incorporated by reference in this prospectus and the
"Risk Factors" section beginning on page 5 of this prospectus.
THE COMPANY
We are a leading North American midstream energy company that provides a
wide range of services to producers and consumers of natural gas and natural gas
liquids, or NGLs. NGLs are used by the petrochemical and refining industries to
produce plastics, motor gasoline and other industrial fuels. Our asset platform
in the Gulf Coast region, combined with our recently acquired Mid-America and
Seminole pipeline systems, creates the only integrated natural gas and NGL
transportation, fractionation, processing, storage and import/export network in
North America. We provide integrated services to our customers and generate
fee-based cash flow from multiple sources along our natural gas and NGL "value
chain."
We do not have any employees. All of our management, administrative and
operating functions are performed by employees of EPCO, our ultimate parent
company, pursuant to the EPCO Agreement. For a discussion of the EPCO Agreement,
please read Item 13 of our Annual Report on Form 10-K/A for the year ended
December 31, 2002.
Our executive offices are located at 2727 North Loop West, Houston, Texas
77008, and our telephone number is (713) 880-6500.
EXCHANGE OFFER
On February 14, 2003, we completed a private offering of the outstanding
notes. As part of the private offering, we entered into a registration rights
agreement with the initial purchasers of the outstanding notes in which we
agreed, among other things, to deliver this prospectus to you and to use our
reasonable efforts to complete the exchange offer within 210 days plus 45
business days after the date we issued the outstanding notes. The following is a
summary of the exchange offer.
Exchange Offer................ We are offering to exchange exchange notes for
outstanding notes.
Expiration Date............... The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2003, unless
we decide to extend it.
Condition to the Exchange
Offer......................... The registration rights agreement does not
require us to accept outstanding notes for
exchange if the exchange offer or the making of
any exchange by a holder of outstanding notes
would violate any applicable law or
interpretation of the staff of the Commission.
A minimum aggregate principal amount of
outstanding notes being tendered is not a
condition to the exchange offer.
Procedures for Tendering
Outstanding Notes............. To participate in the exchange offer, you must
follow the automatic tender offer program, or
ATOP, procedures established by The Depository
Trust Company, or DTC, for tendering notes held
in book-entry form. The ATOP procedures require
that the exchange agent receive, prior to the
expiration date of the exchange offer, a
computer generated message known as an
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"agent's message" that is transmitted through
ATOP and that DTC confirm that:
- DTC has received instructions to exchange
your notes; and
- you agree to be bound by the terms of the
letter of transmittal.
For more details, please read "Exchange
Offer -- Terms of the Exchange Offer" and
"Exchange Offer -- Procedures for Tendering."
Guaranteed Delivery
Procedures.................... None.
Withdrawal of Tenders......... You may withdraw your tender of outstanding
notes at any time prior to the expiration date.
To withdraw, you must submit a notice of
withdrawal to exchange agent using ATOP
procedures before 5:00 p.m., New York City
time, on the expiration date of the exchange
offer. Please read "Exchange
Offer -- Withdrawal of Tenders."
Acceptance of Outstanding
Notes and Delivery of Exchange
Notes......................... If you fulfill all conditions required for
proper acceptance of outstanding notes, we will
accept any and all outstanding notes that you
properly tender in the exchange offer on or
before 5:00 p.m., New York City time, on the
expiration date. We will return any outstanding
note that we do not accept for exchange to you
without expense promptly after the expiration
date. We will deliver the exchange notes
promptly after the expiration date and
acceptance of the outstanding notes for
exchange. Please read "Exchange Offer -- Terms
of the Exchange Offer."
Fees and Expenses............. We will bear all expenses related to the
exchange offer. Please read "Exchange
Offer -- Fees and Expenses."
Use of Proceeds............... The issuance of the exchange notes will not
provide us with any new proceeds. We are making
this exchange offer solely to satisfy our
obligations under our registration rights
agreement.
Consequences of Failure to
Exchange Outstanding Notes.... If you do not exchange your outstanding notes
in this exchange offer, you will no longer be
able to require us to register the outstanding
notes under the Securities Act, except in the
limited circumstances provided under our
registration rights agreement. In addition, you
will not be able to resell, offer to resell or
otherwise transfer the outstanding notes unless
we have registered the outstanding notes under
the Securities Act, or unless you resell, offer
to resell or otherwise transfer them under an
exemption from the registration requirements
of, or in a transaction not subject to, the
Securities Act.
U.S. Federal Income Tax
Consequences.................. The exchange of exchange notes for outstanding
notes in the exchange offer should not be a
taxable event for U.S. federal income tax
purposes. Please read "Material Federal Income
Tax Consequences."
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Exchange Agent................ We have appointed Wachovia Bank, National
Association as exchange agent for the exchange
offer. You should direct questions and requests
for assistance and requests for additional
copies of this prospectus (including the letter
of transmittal) to the exchange agent addressed
as follows:
Wachovia Bank, National Association
Attn: Marsha Rice
Corporate Trust Operations -- NC1153
1525 West W.T. Harris Blvd., 3C3
Charlotte, North Carolina 28288.
Telephone: (704) 590-7413
Eligible institutions may make requests by
facsimile at (704) 590-7628.
TERMS OF THE EXCHANGE NOTES
The exchange notes will be identical to the outstanding notes, except that
the exchange notes are registered under the Securities Act and will not have
restrictions on transfer, registration rights or provisions for additional
interest. The exchange notes will evidence the same debt as the outstanding
notes, and the same indenture will govern the exchange notes and the outstanding
notes.
The following summary contains basic information about the exchange notes
and is not intended to be complete. It does not contain all the information that
is important to you. For a more complete understanding of the exchange notes,
please read "Description of Exchange Notes."
Issuer........................ Enterprise Products Operating L.P.
Securities Offered............ $500,000,000 principal amount of 6.875% Series
B Senior Notes due 2033.
Interest Payment Dates........ Interest on the exchange notes will be paid
semi-annually in arrears on March 1 and
September 1 of each year, commencing September
1, 2003.
Maturity...................... March 1, 2033.
Guarantee..................... The exchange notes will be fully and
unconditionally guaranteed by Enterprise
Products Partners, as guarantor, on an
unsecured and unsubordinated basis.
Optional Redemption........... We may redeem the exchange notes for cash, in
whole, at any time, or in part, from time to
time, prior to maturity, at a redemption price
that includes accrued and unpaid interest and a
make-whole premium. Please read "Description of
Exchange Notes -- Optional Redemption."
Ranking....................... The exchange notes will be our unsecured and
unsubordinated obligations and will rank
equally with all of our other existing and
future senior unsubordinated indebtedness.
Please read "Description of Exchange
Notes -- Ranking."
Certain Covenants............. We issued the outstanding notes, and will issue
the exchange notes, under an indenture with
Wachovia Bank, National Association, as
trustee. The indenture covenants include a
limitation on liens and a restriction on
sale-leasebacks. Each covenant is subject to a
number of important exceptions,
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limitations and qualifications that are
described under "Description of Exchange
Notes -- Certain Covenants."
Transfer Restrictions; Absence
of a Public Market for the
Notes......................... The exchange notes generally will be freely
transferable, but will also be new securities
for which there will not initially be a market.
We do not intend to make a trading market in
the exchange notes after the exchange offer,
and it is therefore unlikely that such a market
will exist for the exchange notes.
Form of Exchange Notes........ The exchange notes will be represented by one
global note. The global exchange note will be
deposited with the trustee, as custodian for
DTC.
The global exchange note will be shown on, and
transfers of such global exchange note will be
effected only through, records maintained in
book-entry form by DTC and its direct and
indirect participants.
Same-Day Settlement........... The exchange notes will trade in DTC's Same Day
Funds Settlement System until maturity or
redemption. Therefore, secondary market trading
activity in the exchange notes will be settled
in immediately available funds.
Trading....................... We do not expect to list the exchange notes for
trading on any securities exchange.
Trustee, Registrar and
Exchange Agent................ Wachovia Bank, National Association.
Governing Law................. The exchange notes and the indenture will be
governed by, and construed in accordance with,
the laws of the State of New York.
RISK FACTORS
Please read "Risk Factors," beginning on page 5 of this prospectus, for a
discussion of certain factors that you should consider before participating in
the exchange offer.
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RISK FACTORS
In addition to the other information set forth elsewhere or incorporated by
reference in this prospectus, you should consider carefully the risks described
below before deciding whether to participate in the exchange offer.
A DECREASE IN THE DIFFERENCE BETWEEN NGL PRODUCT PRICES AND NATURAL GAS PRICES
RESULTS IN LOWER MARGINS ON VOLUMES PROCESSED, WHICH WOULD ADVERSELY AFFECT
OUR PROFITABILITY.
The profitability of our operations depends upon the spread between NGL
product prices and natural gas prices. NGL product prices and natural gas prices
are subject to fluctuations in response to changes in supply, market uncertainty
and a variety of additional factors that are beyond our control. These factors
include:
- the level of domestic production;
- the availability of imported oil and gas
- actions taken by foreign oil and gas producing nations;
- the availability of transportation systems with adequate capacity;
- the availability of competitive fuels;
- fluctuating and seasonal demand for oil, gas and NGLs; and
- conservation and the extent of governmental regulation of production and
the overall economic environment.
Our Processing segment is directly exposed to commodity price risks, as we
take title to NGLs and are obligated under certain of our gas processing
contracts to pay market value for the energy extracted from the natural gas
stream. We are exposed to various risks, primarily that of commodity price
fluctuations in response to changes in supply, market uncertainty and a variety
of additional factors that are beyond our control. These pricing risks cannot be
completely hedged or eliminated, and any attempt to hedge pricing risks may
expose us to financial losses.
A REDUCTION IN DEMAND FOR OUR PRODUCTS AND SERVICES BY THE PETROCHEMICAL,
REFINING OR HEATING INDUSTRIES, COULD ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS.
A reduction in demand for our products and services by the petrochemical,
refining or heating industries, whether because of general economic conditions,
reduced demand by consumers for the end products made with NGL products,
increased competition from petroleum-based products due to pricing differences,
adverse weather conditions, government regulations affecting prices and
production levels of natural gas or the content of motor gasoline or other
reasons, could adversely affect our results of operations. For example:
Ethane. If natural gas prices increase significantly in relation to
ethane prices, it may be more profitable for natural gas processors to
leave the ethane in the natural gas stream to be burned as fuel than to
extract the ethane from the mixed NGL stream for sale.
Propane. The demand for propane as a heating fuel is significantly
affected by weather conditions. Unusually warm winters will cause the
demand for propane to decline significantly and could cause a significant
decline in the volumes of propane that we extract and transport.
Isobutane. Any reduction in demand for motor gasoline in general or
MTBE in particular may similarly reduce demand for isobutane. During
periods in which the difference in market prices between isobutane and
normal butane is low or inventory values are high relative to current
prices for normal butane or isobutane, our operating margin from selling
isobutane will be reduced.
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MTBE. A number of states have either banned or currently are
considering legislation to ban MTBE. In addition, Congress is contemplating
a federal ban on MTBE, and several oil companies have taken an early
initiative to phase out the production of MTBE. If MTBE is banned or if its
use is significantly limited, the revenues and equity earnings we record
may be materially reduced or eliminated. For additional information
regarding MTBE, please read "Business and Properties -- Regulation and
Environmental Matters -- Impact of the Clean Air Act's oxygenated fuels
programs on our BEF investment" in our Annual Report on Form 10-K for the
year ended December 31, 2002.
Propylene. Any downturn in the domestic or international economy
could cause reduced demand for propylene, which could cause a reduction in
the volumes of propylene that we produce and expose our investment in
inventories of propane/propylene mix to pricing risk due to requirements
for short-term price discounts in the spot or short-term propylene markets.
Please read Items 1 and 2. "Business and Properties -- The Company's
Operations" in our Annual Report on Form 10-K/A for the year ended December 31,
2002 for a more detailed discussion of our operations.
A DECLINE IN THE VOLUME OF NGLS DELIVERED TO OUR FACILITIES COULD ADVERSELY
AFFECT OUR RESULTS OF OPERATIONS.
Our profitability is materially impacted by the volume of NGLs processed at
our facilities. A material decrease in natural gas production of crude oil
refining, as a result of depressed commodity prices or otherwise, or a decrease
in imports of mixed butanes, could result in a decline in the volume of NGLs
delivered to our facilities for processing, thereby reducing revenue and
operating income.
OUR BUSINESS REQUIRES EXTENSIVE CREDIT RISK MANAGEMENT THAT MAY NOT BE
ADEQUATE TO PROTECT AGAINST CUSTOMER NONPAYMENT.
As a result of business failures, revelations of material
misrepresentations and related financial restatements by several large,
well-known companies in various industries over the last year, there have been
significant disruptions and extreme volatility in the financial markets and
credit markets. Because of the credit intensive nature of the energy industry
and troubling disclosures by some large, diversified energy companies, the
energy industry has been especially impacted by these developments, with the
rating agencies downgrading a number of large energy-related companies.
Accordingly, in this environment we are exposed to an increased level of credit
and performance risk with respect to our customers. If we fail to adequately
assess the creditworthiness of existing or future customers, unanticipated
deterioration in their creditworthiness could have an adverse impact on us.
ACQUISITIONS AND EXPANSIONS MAY AFFECT OUR BUSINESS BY SUBSTANTIALLY
INCREASING THE LEVEL OF OUR INDEBTEDNESS AND CONTINGENT LIABILITIES AND
INCREASING OUR RISKS OF BEING UNABLE TO EFFECTIVELY INTEGRATE THESE NEW
OPERATIONS.
From time to time, we evaluate and acquire assets and businesses that we
believe complement our existing operations. We may encounter difficulties
integrating these acquisitions with our existing businesses without a loss of
employees or customers, a loss of revenues, an increase in operating or other
costs or other difficulties. In addition, we may not be able to realize the
operating efficiencies, competitive advantages, cost savings or other benefits
expected from these acquisitions. Future acquisitions may require substantial
capital or the incurrence of substantial indebtedness. As a result, our
capitalization and results of operations may change significantly following an
acquistion, and you will not have the opportunity to evaluate the economic,
financial and other relevant information that we will consider in determining
the application of these funds and other resources.
WE HAVE LEVERAGE THAT MAY RESTRICT OUR FUTURE FINANCIAL AND OPERATING
FLEXIBILITY.
At March 31, 2003, our total outstanding debt, which represented
approximately 57% of our total capitalization, was approximately $2.0 billion.
As of March 31, 2003, we had $1.5 billion of senior
6
indebtedness ranking equal in right of payment to the notes that are subject to
this exchange offer. As to the assets of our subsidiary, Seminole Pipeline
Company, our $2.0 billion in senior indebtedness is structurally subordinated
and ranks junior in right of payment to $45 million of indebtedness of Seminole
Pipeline Company.
Debt service obligations, restrictive covenants and maturities resulting
from this leverage may adversely affect our ability to finance future
operations, pursue acquisitions and fund other capital needs, and may make our
results of operations more susceptible to adverse economic or operating
conditions. Our ability to repay, extend or refinance our existing debt
obligations and the notes and to obtain future credit will depend primarily on
our operating performance, which will be affected by general economic,
financial, competitive, legislative, regulatory, business and other factors,
many of which are beyond our control. Our ability to access the capital markets
for future offerings may be limited by adverse market conditions resulting from,
among other things, general economic conditions, contingencies and uncertainties
that are difficult to predict and beyond our control.
WAR, TERRORIST ATTACKS, THREATS OF WAR OR TERRORIST ATTACKS OR POLITICAL OR
OTHER DISRUPTIONS THAT LIMIT CRUDE OIL PRODUCTION COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS.
The war in Iraq, increasing military tension with regard to North Korea, as
well as the terrorist attacks of September 11, 2001 and subsequent terrorist
attacks have caused instability in the world's financial and commercial markets
and have contributed to volatility in prices for crude oil. The war in Iraq or
threats of war or other armed conflict elsewhere may cause further uncertainties
and disruption to financial and commercial markets. Any of these conditions
could have a material adverse effect on us and therefore on our ability to make
cash distributions to our unitholders.
Since the September 11, 2001 terrorist attacks, the United States
government has issued warnings that energy assets, including our nation's
pipeline infrastructure and refineries, may be a target of future terrorist
attacks. The war in Iraq or other developments could increase the risk of
terrorist attacks. A terrorist attack on our pipelines and, in some cases,
pipelines owned by third parties, or on our facilities or our customers'
facilities, could result in the loss of personnel or assets and could have a
material adverse effect on our business.
OUR ABILITY TO MAKE PAYMENTS ON THE EXCHANGE NOTES DEPENDS UPON THE
PERFORMANCE OF OUR SUBSIDIARIES, WHICH CONDUCT OUR OPERATIONS AND OWN OUR
OPERATING ASSETS.
We are a holding company, and our subsidiaries conduct substantially all of
our operations and own substantially all of our operating assets. We have no
significant assets other than the partnership interests and the equity in our
subsidiaries. As a result, our ability to make required payments on the exchange
notes depends on the performance of our subsidiaries and their ability to
distribute funds to us. The ability of our subsidiaries to make distributions to
us may be restricted by, among other things, credit facilities and applicable
state partnership laws and other laws and regulations. Pursuant to the credit
facilities, we may be required to establish cash reserves for the future payment
of principal and interest on the amounts outstanding under the credit
facilities. If we are unable to obtain the funds necessary to pay the principal
amount at maturity of the exchange notes, we may be required to adopt one or
more alternatives, such as a refinancing of the exchange notes. Our ability to
finance the notes will depend upon our operating performance at that time,
which, in turn, will depend upon general economic and financial conditions and
other factors beyond our control.
WE DO NOT HAVE THE SAME FLEXIBILITY AS OTHER TYPES OF ORGANIZATIONS TO
ACCUMULATE CASH, WHICH MAY LIMIT CASH AVAILABLE TO SERVICE THE EXCHANGE NOTES
OR TO REPAY THEM AT MATURITY.
Unlike a corporation, our partnership agreement requires us to distribute,
on a quarterly basis, 100% of our available cash to our unitholders of record
and our general partner. Available cash is generally all of our cash receipts
adjusted for cash distributions and net changes to reserves. Our general partner
will determine the amount and timing of such distributions and has broad
discretion to establish and make
7
additions to our reserves or the reserves of our operating partnership in
amounts the general partner determines in its reasonable discretion to be
necessary or appropriate:
- to provide for the proper conduct of our business and the businesses of
our operating partnership (including reserves for future capital
expenditures and for our anticipated future credit needs),
- to provide funds for distributions to our unitholders and the general
partner for any one or more of the next four calendar quarters, or
- to comply with applicable law or any of our loan or other agreements.
The value of our units will decrease in direct correlation with decreases in the
amount we distribute per unit. Accordingly, if we experience a liquidity problem
in the future, we may not be able to issue equity to recapitalize, to service
the exchange notes or repay them at maturity.
WE DO NOT INTEND TO DEVELOP A TRADING MARKET FOR THE EXCHANGE NOTES; THEREFORE
YOU MAY BE UNABLE TO SELL THE EXCHANGE NOTES OR TO SELL THE EXCHANGE NOTES AT
A PRICE THAT YOU DEEM SUFFICIENT.
The exchange notes will be new securities for which there currently is no
established trading market, and we do not intend to develop a trading market for
the exchange notes. If a large number of holders of outstanding notes do not
tender outstanding notes or tender outstanding notes improperly, the limited
amount of exchange notes that would be issued and outstanding after we
consummate the exchange offer could adversely affect future development of a
market for these exchange notes.
USE OF PROCEEDS
The exchange offer is intended to satisfy our obligations under the
registration rights agreement. We will not receive any cash proceeds from the
issuance of the exchange notes in the exchange offer. In consideration for
issuing the exchange notes as contemplated by this prospectus, we will receive
outstanding notes in a like principal amount. The form and terms of the exchange
notes are identical in all respects to the form and terms of the outstanding
notes, except the exchange notes do not include certain transfer restrictions,
registration rights or provisions for additional interest. Outstanding notes
surrendered in exchange for the exchange notes will be retired and cancelled and
will not be reissued. Accordingly, the issuance of the exchange notes will not
result in any change in our outstanding indebtedness.
We received net proceeds of approximately $489.1 million from the sale of
the outstanding notes on February 14, 2003. We used the net proceeds from that
offering to repay the remaining portion of the indebtedness outstanding under
the senior unsecured 364-day term loan, which we incurred to finance the
Mid-America and Seminole acquisitions, and to repay a portion of the
indebtedness outstanding under our 364-day credit facility, which we incurred to
fund the purchase of several acquisitions and for working capital.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for each of the periods indicated
are as follows:
YEARS ENDED DECEMBER 31,
---------------------------------
COMPANY 1998 1999 2000 2001 2002
------- ---- ---- ---- ---- -----
Enterprise Products Partners L.P............................ 1.16 5.84 6.40 5.10 2.07
Enterprise Products Operating L.P........................... 1.16 5.90 6.46 5.14 2.08
These computations include us and our subsidiaries, and 50% or less equity
companies. For these ratios, "earnings" is the amount resulting from adding and
subtracting the following items.
8
Add the following:
- pre-tax income from continuing operations before adjustment for minority
interests in consolidated subsidiaries or income or loss from equity
investees;
- fixed charges;
- amortization of capitalized interest;
- distributed income of equity investees; and
- our share of pre-tax losses of equity investees for which charges arising
from guarantees are included in fixed charges.
From the total of the added items, subtract the following:
- interest capitalized;
- preference security dividend requirements of consolidated subsidiaries;
and
- minority interest in pre-tax income of subsidiaries that have not
incurred fixed charges.
The term "fixed charges" means the sum of the following:
- interest expensed and capitalized;
- amortized premiums, discounts and capitalized expenses related to
indebtedness;
- an estimate of the interest within rental expenses (equal to one-third of
rental expense); and
- preference security dividend requirements of consolidated subsidiaries.
9
EXCHANGE OFFER
We sold the outstanding notes on February 14, 2003, pursuant to the
purchase agreement dated as of February 7, 2003, by and among Enterprise
Products Operating, Enterprise Products Partners, Enterprise Products GP, LLC
and the initial purchasers named therein. The outstanding notes were
subsequently offered by the initial purchasers to qualified institutional buyers
pursuant to Rule 144A and Regulation S under the Securities Act.
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the issuance of the outstanding notes, we and the
initial purchasers entered into a registration rights agreement dated as of
February 14, 2003. Pursuant to the registration rights agreement, we agreed to:
- file with the Commission, no later than 120 days after the closing date
of the offering of the outstanding notes, an exchange offer registration
statement under the Securities Act for the exchange notes; and
- use our reasonable efforts to cause the exchange offer registration
statement for the exchange notes to become effective no later than 210
days after the closing date.
When the exchange offer registration statement is effective, we will offer
the holders of the outstanding notes who are able to make certain
representations described below the opportunity to exchange their notes for the
exchange notes in the exchange offer. The exchange offer will be open for a
period of at least 20 business days, ending no later than 45 business days after
the exchange offer registration statement becomes effective. During the exchange
offer period, we will exchange the exchange notes for all outstanding notes
properly surrendered and not withdrawn before the expiration date. The exchange
notes will be registered and the transfer restrictions, registration rights and
provisions for additional interest relating to the outstanding notes will not
apply to the exchange notes.
Under existing interpretations by the staff of the Commission, the exchange
notes generally will be freely transferable after the exchange offer without
further registration under the Securities Act, except that broker-dealers
receiving exchange notes in the exchange offer will be subject to a prospectus
delivery requirement with respect to resales of those exchange notes. The staff
of the Commission has taken the position that participating broker-dealers may
fulfill their prospectus delivery requirements with respect to the exchange
notes (other than a resale of an unsold allotment from the original sale of the
notes) by delivery of the prospectus contained in the exchange offer
registration statement. Under the registration rights agreement, we are required
to allow participating broker-dealers and other persons, if any, subject to
similar prospectus delivery requirements, to use this prospectus in connection
with the resale of such exchange notes. We have agreed to keep the exchange
offer registration statement effective for up to 210 days following consummation
of the exchange offer to permit resales of exchange notes acquired by
broker-dealers in after-market transactions.
If you wish to participate in the exchange offer, you will be required to
make certain representations, including representations that:
- any exchange notes received by you will be acquired in the ordinary
course of your business;
- you have no arrangement or understanding with any person to participate
in the distribution, within the meaning of the Securities Act, of the
outstanding notes or of the exchange notes; and
- you are not an affiliate, as defined in Rule 405 under the Securities
Act, of us, or if you are an affiliate, you will comply with the
registration and prospectus delivery requirements of the Securities Act
to the extent applicable.
If you are not a broker-dealer, you will be required to represent that you
are not engaged in, and do not intend to engage in, the distribution of the
exchange notes. If you are a broker-dealer that will receive exchange notes for
your own account in exchange for outstanding notes that you acquired as a result
of
10
market-making activities or other trading activities, you will be required to
acknowledge that you will deliver this prospectus in connection with any resale
of the exchange notes.
We have agreed that if:
- we are not permitted to consummate the exchange offer because it is not
permitted by applicable law or Commission policy;
- because of any changes in law or in currently prevailing interpretations
of the staff of the Commission, any holder (other than an initial
purchaser holding outstanding notes acquired directly from us) advises us
within 20 business days after the consummation of the exchange offer that
it is not permitted to participate in the exchange offer;
- any holder that participates in the exchange offer does not receive
exchange notes that may be sold without restriction under state and
federal securities laws (other than due solely to the status of such
holder as an affiliate of us or the guarantor) and requests us to include
the notes in a shelf registration statement within 20 business days after
the consummation of the exchange offer; or
- any of the initial purchasers at the time of the exchange offer holds
notes having, or likely to be determined to have, the status of an unsold
allotment in the initial distribution and requests us to include those
notes in a shelf registration statement within 20 business days after the
consummation of the exchange offer,
then we will file with the Commission a shelf registration statement covering
resales of the outstanding notes within 90 days of the request by any affected
holder of the outstanding notes. Holders who wish to sell their outstanding
notes under the shelf registration statement must satisfy certain conditions
relating to the provision of information in connection with the shelf
registration statement.
We will use our reasonable efforts to cause the shelf registration
statement to become effective on or prior to 180 days after the receipt of the
shelf registration request and to remain effective for a period ending on the
earlier of:
- the second anniversary of the closing date; or, if Rule 144(k) under the
Securities Act is amended to provide a shorter restrictive period, such
shorter period; or
- until there are no longer outstanding any securities eligible for
registration under the registration rights agreement.
A holder of the outstanding notes that sells the outstanding notes pursuant
to the shelf registration statement:
- generally will be required to be named as a selling securityholder in the
related prospectus and to deliver a prospectus to the purchaser of the
outstanding notes;
- will be subject to certain of the civil liability provisions of the
Securities Act in connection with such sales; and
- will be bound by the provisions of the registration rights agreement
applicable to that holder, including indemnification obligations.
We will pay additional interest on the outstanding notes, over and above
the stated interest rate, at a rate of 0.25% per year during the period any of
the following conditions exist:
- we have not filed the exchange offer registration statement or a shelf
registration statement within 120 days following the closing date of the
offering of the outstanding notes;
- we have not filed a shelf registration statement within 90 days following
a request to do so;
- the exchange offer registration statement is not declared effective by
the Commission within 210 days following the closing date of the offering
of the outstanding notes;
11
- a shelf registration statement is not declared effective within 180 days
following the request to file it;
- we have not issued exchange notes for all outstanding notes validly
tendered in accordance with the terms of the exchange offer on or prior
to 45 business days after the date on which the exchange offer
registration statement was declared effective; or
- the shelf registration statement has been declared effective but ceases
to be effective.
The foregoing circumstances under which we may be required to pay
additional interest are not cumulative. In no event will the additional interest
on the outstanding notes exceed 0.25% per year. Further, any additional interest
will cease to accrue when all of the events described above have been cured or
upon the expiration of the second anniversary of the closing date, or, if Rule
144(k) under the Securities Act is amended to provide a shorter restrictive
period, the applicable shorter period. Any additional interest shall cease to
accrue at any time that there are no notes outstanding that are subject to any
registration rights under the registration rights agreement. The receipt of
additional interest will be the sole monetary remedy available to a holder if we
fail to meet these obligations.
The description of the registration rights agreement contained in this
section is a summary only. For more information, you should review the
provisions of the registration rights agreement that we filed with the
Commission as an exhibit to the exchange offer registration statement of which
this prospectus is a part.
We have an effective shelf registration statement on Form S-3 (File No.
333-102778) on file with the Commission covering the offer and sale of common
units and debt securities, which shelf registration statement does not satisfy
the requirement that we file a shelf registration statement under the
circumstances described above.
RESALE OF EXCHANGE NOTES
Based on no-action letters of the Commission staff issued to third parties,
we believe that exchange notes may be offered for resale, resold and otherwise
transferred by you without further compliance with the registration and
prospectus delivery provisions of the Securities Act if:
- you are not our "affiliate" within the meaning of Rule 405 under the
Securities Act;
- such exchange notes are acquired in the ordinary course of your business;
and
- you do not intend to participate in a distribution of the exchange notes.
The Commission, however, has not considered the exchange offer for the
exchange notes in the context of a no-action letter, and the Commission staff
may not make a similar determination as in the no-action letters issued to these
third parties.
If you tender in the exchange offer with the intention of participating in
any manner in a distribution of the exchange notes, you
- cannot rely on such interpretations by the Commission staff; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
Unless an exemption from registration is otherwise available, any security
holder intending to distribute exchange notes should be covered by an effective
registration statement under the Securities Act. The registration statement
should contain the selling security holder's information required by Item 507 of
Regulation S-K under the Securities Act.
This prospectus may be used for an offer to resell, resale or other
transfer of exchange notes only as specifically described in this prospectus. If
you are a broker-dealer, you may participate in the exchange offer only if you
acquired the outstanding notes as a result of market-making activities or other
trading
12
activities. Each broker-dealer that receives exchange notes for its own account
in exchange for outstanding notes, where such outstanding notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge by way of the letter of transmittal that it will
deliver this prospectus in connection with any resale of the exchange notes.
Please read "Plan of Distribution" for more details regarding the transfer of
exchange notes.
TERMS OF THE EXCHANGE OFFER
Subject to the terms and conditions described in this prospectus and in the
letter of transmittal, we will accept for exchange any outstanding notes
properly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the expiration date. We will issue exchange notes in principal amount equal to
the principal amount of outstanding notes surrendered in the exchange offer.
Outstanding notes may be tendered only for exchange notes and only in
denominations of $1,000 and integral multiples of $1,000.
The exchange offer is not conditioned upon any minimum aggregate principal
amount of outstanding notes being tendered in the exchange offer.
As of the date of this prospectus, $500,000,000 in aggregate principal
amount of the outstanding notes are outstanding. This prospectus is being sent
to DTC, the sole registered holder of the outstanding notes, and to all persons
that we can identify as beneficial owners of the outstanding notes. There will
be no fixed record date for determining registered holders of outstanding notes
entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions
of the registration rights agreement, the applicable requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission. Outstanding notes whose holders do not
tender for exchange in the exchange offer will remain outstanding and continue
to accrue interest. These outstanding notes will be entitled to the rights and
benefits such holders have under the indenture relating to the outstanding notes
and the registration rights agreement.
We will be deemed to have accepted for exchange properly tendered
outstanding notes when we have given oral or written notice of the acceptance to
the exchange agent and complied with the applicable provisions of the
registration rights agreement. The exchange agent will act as agent for the
tendering holders for the purposes of receiving the exchange notes from us.
If you tender outstanding notes in the exchange offer, you will not be
required to pay brokerage commissions or fees or, subject to the letter of
transmittal, transfer taxes with respect to the exchange of outstanding notes.
We will pay all charges and expenses, other than certain applicable taxes
described below, in connection with the exchange offer. Please read "-- Fees and
Expenses" for more details regarding fees and expenses incurred in connection
with the exchange offer.
We will return any outstanding notes that we do not accept for exchange for
any reason without expense to their tendering holder promptly after the
expiration or termination of the exchange offer.
EXPIRATION DATE
The exchange offer will expire at 5:00 p.m., New York City time, on
, 2003, unless, in our sole discretion, we extend it.
EXTENSIONS, DELAYS IN ACCEPTANCE, TERMINATION OR AMENDMENT
We expressly reserve the right, at any time or various times, to extend the
period of time during which the exchange offer is open. We may delay acceptance
of any outstanding notes by giving oral or written notice of such extension to
their holders at any time until the exchange offer expires or terminates. During
any such extensions, all outstanding notes previously tendered will remain
subject to the exchange offer, and we may accept them for exchange.
13
To extend the exchange offer, we will notify the exchange agent orally or
in writing of any extension. We will notify the registered holders of
outstanding notes of the extension no later than 9:00 a.m., New York City time,
on the business day after the previously scheduled expiration date.
If any of the conditions described below under "-- Conditions to the
Exchange Offer" have not been satisfied, we reserve the right, in our sole
discretion
- to delay accepting for exchange any outstanding notes,
- to extend the exchange offer, or
- to terminate the exchange offer,
by giving oral or written notice of such delay, extension or termination to the
exchange agent. Subject to the terms of the registration rights agreement, we
also reserve the right to amend the terms of the exchange offer in any manner at
any time prior to termination or expiration of the exchange offer.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to holders
of outstanding notes. If we amend the exchange offer in a manner that we
determine to constitute a material change, we will promptly disclose such
amendment by means of a prospectus supplement. The supplement will be
distributed to holders of the outstanding notes. Depending upon the significance
of the amendment and the manner of disclosure to holders, we will extend the
exchange offer if the exchange offer would otherwise expire during such period.
If an amendment constitutes a material change to the exchange offer, including
the waiver of a material condition, we will extend the exchange offer, if
necessary, to remain open for at least five business days after the date of the
amendment. In the event of any increase or decrease in the price of the notes or
in the percentage of outstanding notes being sought by us, we will extend the
exchange offer to remain open for at least 10 business days after the date we
provide notice of such increase or decrease to the registered holders of
outstanding notes.
CONDITIONS TO THE EXCHANGE OFFER
We will not be required to accept for exchange, or exchange any exchange
notes for, any outstanding notes if the exchange offer, or the making of any
exchange by a holder of outstanding notes, would violate applicable law or any
applicable interpretation of the staff of the Commission. Similarly, we may
terminate the exchange offer as provided in this prospectus before accepting
outstanding notes for exchange in the event of such a potential violation.
We will not be obligated to accept for exchange the outstanding notes of
any holder that has not made to us the representations described under
"-- Purpose and Effect of the Exchange Offer," "-- Procedures for Tendering" and
"Plan of Distribution" and such other representations as may be reasonably
necessary under applicable Commission rules, regulations or interpretations to
allow us to use an appropriate form to register the exchange notes under the
Securities Act.
Additionally, we will not accept for exchange any outstanding notes
tendered, and will not issue exchange notes in exchange for any such outstanding
notes, if at such time any stop order has been threatened or is in effect with
respect to the exchange offer registration statement of which this prospectus
constitutes a part or the qualification of the indenture under the Trust
Indenture Act of 1939, or the TIA.
We expressly reserve the right to amend or terminate the exchange offer,
and to reject for exchange any outstanding notes not previously accepted for
exchange, upon the occurrence of any of the conditions to the exchange offer
specified above. We will give oral or written notice of any extension,
amendment, non-acceptance or termination to the holders of the outstanding notes
as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or waive
them in whole or in part at any time or at various times prior to expiration of
the exchange offer in our sole discretion. If we fail at any time to exercise
any of these rights, this failure will not mean that we have waived our rights.
Each
14
such right will be deemed an ongoing right that we may assert at any time or at
various times prior to expiration of the exchange offer.
PROCEDURES FOR TENDERING
To participate in the exchange offer, you must properly tender your
outstanding notes to the exchange agent as described below. We will only issue
exchange notes in exchange for outstanding notes that you timely and properly
tender. Therefore, you should allow sufficient time to ensure timely delivery of
the outstanding notes, and you should follow carefully the instructions on how
to tender your outstanding notes. It is your responsibility to properly tender
your outstanding notes. We have the right to waive any defects. However, we are
not required to waive defects, and neither we, nor the exchange agent are
required to notify you of any defects or irregularities with respect to your
tender.
If you have any questions or need help in exchanging your outstanding
notes, please call the exchange agent whose address and phone number are
described in the section of this prospectus entitled "Where You Can Find More
Information."
All of the outstanding notes were issued in book-entry form, and all of the
outstanding notes are currently represented by a global certificate held by Cede
& Co. for the account of DTC. We have confirmed with DTC that the outstanding
notes may be tendered using ATOP. The exchange agent will establish an account
with DTC for purposes of the exchange offer promptly after the commencement of
the exchange offer, and DTC participants may electronically transmit their
acceptance of the exchange offer by causing DTC to transfer their outstanding
notes to the exchange agent using the ATOP procedures. In connection with the
transfer, DTC will send an "agent's message" to the exchange agent. The agent's
message will state that DTC has received instructions from the participant to
tender outstanding notes and that the participant agrees to be bound by the
terms of the letter of transmittal.
By using the ATOP procedures to exchange outstanding notes, you will not be
required to deliver a letter of transmittal to the exchange agent. However, you
will be bound by its terms just as if you had signed it.
There is no procedure for guaranteed late delivery of the outstanding
notes.
Determinations Under the Exchange Offer. We will determine in our sole
discretion all questions as to the validity, form, eligibility, time of receipt,
acceptance of tendered outstanding notes and withdrawal of tendered outstanding
notes. Our determination will be final and binding. We reserve the absolute
right to reject any outstanding notes not properly tendered or any outstanding
notes our acceptance of which would, in the opinion of our counsel, be unlawful.
We also reserve the right to waive any defect, irregularities or conditions of
tender as to particular outstanding notes. Our interpretation of the terms and
conditions of the exchange offer, including the instructions in the letter of
transmittal, will be final and binding on all parties. Unless waived, all
defects or irregularities in connection with tenders of outstanding notes must
be cured within such time as we shall determine. Although we intend to notify
holders of defects or irregularities with respect to tenders of outstanding
notes, neither we, the exchange agent nor any other person will incur any
liability for failure to give such notification. Tenders of outstanding notes
will not be deemed made until such defects or irregularities have been cured or
waived. Any outstanding notes received by the exchange agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned to the tendering holder as soon as practicable
following the expiration date of the exchange offer.
When We Will Issue Exchange Notes. In all cases, we will issue exchange
notes for outstanding notes that we have accepted for exchange under the
exchange offer only after the exchange agent receives, prior to 5:00 p.m., New
York City time, on the expiration date,
- a book-entry confirmation of such outstanding notes into the exchange
agent's account at DTC; and
- a properly transmitted agent's message.
15
Return of Outstanding Notes Not Accepted or Exchanged. If we do not accept
any tendered outstanding notes for exchange or if outstanding notes are
submitted for a greater principal amount than the holder desires to exchange,
the unaccepted or non-exchanged outstanding notes will be returned without
expense to their tendering holder. Such non-exchanged outstanding notes will be
credited to an account maintained with DTC. These actions will occur as promptly
as practicable after the expiration or termination of the exchange offer.
Your Representations to Us. By agreeing to be bound by the letter of
transmittal, you will represent to us that, among other things:
- any exchange notes that you receive will be acquired in the ordinary
course of your business;
- you have no arrangement or understanding with any person or entity to
participate in the distribution of the exchange notes;
- you are not engaged in and do not intend to engage in the distribution of
the exchange notes;
- if you are a broker-dealer that will receive exchange notes for your own
account in exchange for outstanding notes, you acquired those outstanding
notes as a result of market-making activities or other trading activities
and you will deliver this prospectus, as required by law, in connection
with any resale of the exchange notes; and
- you are not our "affiliate," as defined in Rule 405 under the Securities
Act.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw your
tender at any time prior to 5:00 p.m., New York City time, on the expiration
date. For a withdrawal to be effective you must comply with the appropriate ATOP
procedures. Any notice of withdrawal must specify the name and number of the
account at DTC to be credited with withdrawn outstanding notes and otherwise
comply with the ATOP procedures.
We will determine all questions as to the validity, form, eligibility and
time of receipt of notice of withdrawal. Our determination shall be final and
binding on all parties. We will deem any outstanding notes so withdrawn not to
have been validly tendered for exchange for purposes of the exchange offer.
Any outstanding notes that have been tendered for exchange but that are not
exchanged for any reason will be credited to an account maintained with DTC for
the outstanding notes. This return or crediting will take place as soon as
practicable after withdrawal, rejection of tender, expiration or termination of
the exchange offer. You may retender properly withdrawn outstanding notes by
following the procedures described under "-- Procedures for Tendering" above at
any time on or prior to the expiration date.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, we may make additional solicitation by
telegraph, telephone or in person by our officers and regular employees and
those of our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses.
We will pay the cash expenses to be incurred in connection with the
exchange offer. They include:
- Commission registration fees;
- fees and expenses of the exchange agent and trustee;
16
- accounting and legal fees and printing costs; and
- related fees and expenses.
TRANSFER TAXES
We will pay all transfer taxes, if any, applicable to the exchange of
outstanding notes under the exchange offer. The tendering holder, however, will
be required to pay any transfer taxes, whether imposed on the registered holder
or any other person, if a transfer tax is imposed for any reason other than the
exchange of outstanding notes under the exchange offer.
CONSEQUENCES OF FAILURE TO EXCHANGE
If you do not exchange your outstanding notes for exchange notes pursuant
to the exchange offer, the outstanding notes you hold will continue to be
subject to the existing restrictions on transfer. In general, you may not offer
or sell the outstanding notes except under an exemption from, or in a
transaction not subject to the Securities Act and applicable state securities
laws. We do not intend to register outstanding notes under the Securities Act
unless the registration rights agreement requires us to do so.
ACCOUNTING TREATMENT
We will record the exchange notes in our accounting records at the same
carrying value as the outstanding notes. This carrying value is the aggregate
principal amount of the outstanding notes less any bond discount, as reflected
in our accounting records on the date of exchange. Accordingly, we will not
recognize any gain or loss for accounting purposes in connection with the
exchange offer.
OTHER
Participation in the exchange offer is voluntary, and you should consider
carefully whether to accept. You are urged to consult your financial and tax
advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered outstanding notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. We have no present plans to acquire any outstanding notes that are
not tendered in the exchange offer or to file a registration statement to permit
resales of any untendered outstanding notes.
17
DESCRIPTION OF EXCHANGE NOTES
The exchange notes will be issued and the outstanding notes were issued
under an Indenture dated as of March 15, 2000 among Enterprise Products
Operating L.P., as issuer (the "Issuer"), Enterprise Products Partners L.P., as
guarantor (the "Guarantor"), and Wachovia Bank, National Association (formerly
known as First Union National Bank), as trustee (the "Trustee"), as supplemented
by a supplemental indenture creating the exchange notes (the "Indenture").
This Description of Exchange Notes is a summary of the material provisions
of the exchange notes, the guarantee and the Indenture. Since this Description
of Exchange Notes is only a summary, you should refer to the exchange notes, the
guarantee and the Indenture, forms of which are available from us, for a
complete description of our obligations and your rights.
References in this Description of Exchange Notes to the "Issuer," "we" or
"us" mean only Enterprise Products Operating L.P. and not its subsidiaries.
References to the "Guarantor" mean only Enterprise Products Partners L.P. and
not its subsidiaries. References to the "notes" in this section of the
prospectus include both the outstanding notes issued on February 14, 2003 and
the exchange notes.
The exchange notes, together with the outstanding notes, will constitute a
single series of debt securities under the Indenture for voting purposes. If the
exchange offer is consummated, holders of outstanding notes who do not exchange
their notes for exchange notes will vote together with the holders of the
exchange notes for all relevant purposes under the Indenture. In that regard,
the Indenture requires that certain actions by the holders under the Indenture
(including acceleration after an Event of Default) must be taken, and certain
rights must be exercised, by specified minimum percentages of the aggregate
principal amount of all outstanding debt securities issued under the Indenture
or of a specified series of debt securities issued under the Indenture, as
described below under "-- Events of Default." In determining whether holders of
the requisite percentage in principal amount have given any notice, consent or
waiver or taken any other action permitted under the Indenture, any outstanding
notes that remain outstanding after the exchange offer will be aggregated with
the exchange notes, and the holders of the outstanding notes and the exchange
notes shall vote together as a single series for all such purposes. Accordingly,
all references in this Description of Exchange Notes to specified percentages in
aggregate principal amount of the outstanding notes shall be deemed to mean, at
any time after the exchange offer for the outstanding notes is consummated, such
percentage in aggregate principal amount of the outstanding notes and the
exchange notes then outstanding. In addition to the outstanding notes, there are
currently outstanding under the Indenture $350 million in aggregate principal
amount of 8.25% Senior Notes due 2005, $450 million in aggregate principal
amount of 7.50% Senior Notes due 2011 and $350 million in aggregate principal
amount of 6.375% Senior Notes due 2013.
GENERAL
The Notes. The notes:
- are general unsecured, senior obligations of the Issuer;
- constitute a new series of debt securities issued under the Indenture and
will be initially limited to an aggregate principal amount of $500
million;
- mature on March 1, 2033;
- are issued in denominations of $1,000 and integral multiples of $1,000;
- are represented by one or more notes in global form registered initially
in the name of Cede & Co., as nominee of DTC, or such other name as may
be requested by an authorized representative of DTC, and deposited with
the Trustee as custodian for DTC. In certain circumstances the notes may
be represented in definitive form; and
- are fully and unconditionally guaranteed on an unsecured, unsubordinated
basis by the Guarantor. See "-- Guarantee."
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Interest. Interest on the notes will:
- accrue at the rate of 6.875% per annum;
- accrue from February 14, 2003 or the most recent interest payment date;
- be payable in cash semi-annually in arrears on March 1 and September 1 of
each year, commencing September 1, 2003;
- be payable to holders of record on the February 15 and August 15
immediately preceding the related interest payment dates; and
- be computed on the basis of a 360-day year consisting of twelve 30-day
months.
Payment and Transfer. Beneficial interests in notes in global form will be
shown on, and transfers of interests in notes in global form will be made only
through, records maintained by DTC and its participants. Notes in definitive
form, if any, may be registered, exchanged or transferred at the office or
agency maintained by us for such purpose (which initially will be the corporate
trust office of the Trustee).
Payment of principal of, premium, if any, and interest on notes in global
form registered in the name of or held by DTC or its nominee will be made in
immediately available funds to DTC or its nominee, as the case may be, as the
registered holder of such global note. If any of the notes are no longer
represented by global notes, payment of interest on the notes in definitive form
may, at our option, be made at the principal corporate trust office of the
Trustee or by check mailed directly to registered holders at their registered
addresses or by wire transfer to an account designated by a registered holder.
No service charge will be made for any registration of transfer or exchange
of the notes, but we may require payment of a sum sufficient to cover any
transfer tax or other similar governmental charge payable in connection
therewith. We are not required to transfer or exchange any note selected for
redemption or for a period of 15 days before a selection of notes to be
redeemed.
The registered holder of a note will be treated as the owner of it for all
purposes, and all references in this Description of Exchange Notes to "holders"
mean holders of record, unless otherwise indicated.
Replacement of Notes. We will replace any mutilated, destroyed, stolen or
lost notes at the expense of the holder upon surrender of the mutilated notes to
the Trustee or evidence of destruction, loss or theft of a note satisfactory to
us and the Trustee. In the case of a destroyed, lost or stolen note, we may
require an indemnity satisfactory to the Trustee and to us before a replacement
note will be issued.
FURTHER ISSUANCES
We may from time to time, without notice or the consent of the holders of
the notes, create and issue further notes ranking equally and ratably with the
notes in all respects (or in all respects except for the payment of interest
accruing prior to the issue date of such further notes), so that such further
notes shall be consolidated and form a single series with the notes and shall
have the same terms as to status, redemption or otherwise as the notes.
OPTIONAL REDEMPTION
The notes will be redeemable, at our option, at any time in whole, or from
time to time in part, at a price equal to the greater of:
- 100% of the principal amount of the notes to be redeemed; or
- the sum of the present values of the remaining scheduled payments of
principal and interest (at the rate in effect on the date of calculation
of the redemption price) on the notes (exclusive of interest accrued to
the date of redemption) discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the applicable Treasury Yield plus 30 basis points;
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- plus, in either case, accrued interest to the date of redemption.
Notes called for redemption become due on the date fixed for redemption
(the "Redemption Date"). Notices of redemption will be mailed at least 30 but
not more than 60 days before the Redemption Date to each holder of the notes to
be redeemed at its registered address. The notice of redemption for the notes
will state, among other things, the amount of notes to be redeemed, the
Redemption Date, the redemption price (or the method of calculating it) and the
place(s) that payment will be made upon presentation and surrender of notes to
be redeemed. Unless we default in payment of the redemption price, interest will
cease to accrue on any notes that have been called for redemption at the
Redemption Date. If less than all the notes are redeemed at any time, the
Trustee will select the notes to be redeemed on a pro rata basis or by any other
method the Trustee deems fair and appropriate.
For purposes of determining the optional redemption price, the following
definitions are applicable:
"Treasury Yield" means, with respect to any Redemption Date applicable to
the notes, the rate per annum equal to the semi-annual equivalent yield to
maturity (computed as of the third business day immediately preceding such
Redemption Date) of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the applicable Comparable Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining terms of the
notes; provided, however, that if no maturity is within three months before or
after the maturity date for the notes, yields for the two published maturities
most closely corresponding to such United States Treasury security will be
determined and the treasury rate will be interpolated or extrapolated from those
yields on a straight line basis rounding to the nearest month.
"Independent Investment Banker" means Wachovia Securities, Inc. (and its
successors), or, if such firm is unwilling or unable to select the applicable
Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee and reasonably acceptable to the
Issuer.
"Comparable Treasury Price" means, with respect to any Redemption Date, (a)
the bid price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) at 4:00 p.m. on the third business day preceding such
Redemption Date, as set forth on "Telerate Page 500" (or such other page as may
replace Telerate Page 500), or (b) if such page (or any successor page) is not
displayed or does not contain such bid prices at such time, the average of the
Reference Treasury Dealer Quotations obtained by the Trustee for such Redemption
Date.
"Reference Treasury Dealer" means (a) Wachovia Securities, Inc. (and its
successors) and (b) one other primary U.S. government securities dealer in New
York City selected by the Independent Investment Banker (each, a "Primary
Treasury Dealer"); provided, however, that if either of the foregoing shall
cease to be a Primary Treasury Dealer, the Issuer will substitute therefor
another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date for the notes, an average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue for the notes (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third business day preceding
such Redemption Date.
RANKING
The notes will be unsecured, unless we are required to secure them pursuant
to the limitations on liens covenant described below under "-- Certain
Covenants -- Limitation on Liens." The notes will also be the unsubordinated
obligations of the Issuer and will rank equally with all other existing and
future
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unsubordinated indebtedness of the Issuer. The guarantee will be an unsecured
and unsubordinated obligation of the Guarantor and will rank equally with all
other existing and future unsubordinated indebtedness of the Guarantor. The
notes and the guarantee will effectively rank junior to any future indebtedness
of the Issuer and the Guarantor that is both secured and unsubordinated to the
extent of the assets securing such indebtedness, and the notes will effectively
rank junior to all indebtedness and other liabilities of the Issuer's
subsidiaries.
GUARANTEE
The Guarantor will fully and unconditionally guarantee to each holder and
the Trustee, on an unsecured and unsubordinated basis, the full and prompt
payment of principal of, premium, if any, and interest on the notes, when and as
the same become due and payable, whether at maturity, upon redemption, by
declaration of acceleration or otherwise.
NO SINKING FUND
We are not required to make mandatory redemption or sinking fund payments
with respect to the notes.
CERTAIN COVENANTS
Except as set forth below, neither the Issuer nor the Guarantor is
restricted by the Indenture from incurring any type of indebtedness or other
obligation, from paying dividends or making distributions on its partnership
interests or from purchasing or redeeming its partnership interests. The
Indenture does not require the maintenance of any financial ratios or specified
levels of net worth or liquidity. In addition, the Indenture does not contain
any provisions that would require the Issuer to repurchase or redeem or
otherwise modify the terms of any of the debt securities upon a change in
control or other events involving the Issuer which may adversely affect the
creditworthiness of the debt securities.
Limitations on Liens. The Guarantor will not, nor will it permit any
Subsidiary (as defined below) to, create, assume, incur or suffer to exist any
mortgage, lien, security interest, pledge, charge or other encumbrance ("liens")
other than Permitted Liens (as defined below) upon any Principal Property (as
defined below) or upon any shares of capital stock of any Subsidiary owning or
leasing any Principal Property, whether owned or leased on the date of the
Indenture or thereafter acquired, to secure any indebtedness for borrowed money
("debt") of the Guarantor or the Issuer or any other person (other than the
notes), without in any such case making effective provision whereby all of the
notes and other debt securities outstanding under the Indenture shall be secured
equally and ratably with, or prior to, such debt so long as such debt shall be
so secured.
In the Indenture, the term "Subsidiary" means:
(1) the Issuer; or
(2) any corporation, association or other business entity of which
more than 50% of the total voting power of the equity interests entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof or any partnership of
which more than 50% of the partners' equity interests (considering all
partners' equity interests as a single class) is, in each case, at the time
owned or controlled, directly or indirectly, by the Guarantor, the Issuer
or one or more of the other Subsidiaries of the Guarantor or the Issuer or
combination thereof.
"Permitted Liens" means:
(1) liens upon rights-of-way for pipeline purposes;
(2) any statutory or governmental lien or lien arising by operation of
law, or any mechanics', repairmen's, materialmen's, suppliers', carriers',
landlords', warehousemen's or similar lien incurred in the ordinary course
of business which is not yet due or which is being contested in good faith
by appropriate proceedings and any undetermined lien which is incidental to
construction, development,
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improvement or repair; or any right reserved to, or vested in, any
municipality or public authority by the terms of any right, power,
franchise, grant, license, permit or by any provision of law, to purchase
or recapture or to designate a purchaser of, any property;
(3) liens for taxes and assessments which are (a) for the then current
year, (b) not at the time delinquent, or (c) delinquent but the validity or
amount of which is being contested at the time by the Guarantor or any
Subsidiary in good faith by appropriate proceedings;
(4) liens of, or to secure performance of, leases, other than capital
leases; or any lien securing industrial development, pollution control or
similar revenue bonds;
(5) any lien upon property or assets acquired or sold by the Guarantor
or any Subsidiary resulting from the exercise of any rights arising out of
defaults on receivables;
(6) any lien in favor of the Guarantor or any Subsidiary; or any lien
upon any property or assets of the Guarantor or any Subsidiary in existence
on the date of the execution and delivery of the Indenture;
(7) any lien in favor of the United States of America or any state
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any state thereof, to secure
partial, progress, advance, or other payments pursuant to any contract or
statute, or any debt incurred by the Guarantor or any Subsidiary for the
purpose of financing all or any part of the purchase price of, or the cost
of constructing, developing, repairing or improving, the property or assets
subject to such lien;
(8) any lien incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance, temporary disability,
social security, retiree health or similar laws or regulations or to secure
obligations imposed by statute or governmental regulations;
(9) liens in favor of any person to secure obligations under
provisions of any letters of credit, bank guarantees, bonds or surety
obligations required or requested by any governmental authority in
connection with any contract or statute; or any lien upon or deposits of
any assets to secure performance of bids, trade contracts, leases or
statutory obligations;
(10) any lien upon any property or assets created at the time of
acquisition of such property or assets by the Guarantor or any Subsidiary
or within one year after such time to secure all or a portion of the
purchase price for such property or assets or debt incurred to finance such
purchase price, whether such debt was incurred prior to, at the time of or
within one year after the date of such acquisition; or any lien upon any
property or assets to secure all or part of the cost of construction,
development, repair or improvements thereon or to secure debt incurred
prior to, at the time of, or within one year after completion of such
construction, development, repair or improvements or the commencement of
full operations thereof (whichever is later), to provide funds for any such
purpose;
(11) any lien upon any property or assets existing thereon at the time
of the acquisition thereof by the Guarantor or any Subsidiary and any lien
upon any property or assets of a person existing thereon at the time such
person becomes a Subsidiary by acquisition, merger or otherwise; provided
that, in each case, such lien only encumbers the property or assets so
acquired or owned by such person at the time such person becomes a
Subsidiary;
(12) liens imposed by law or order as a result of any proceeding
before any court or regulatory body that is being contested in good faith,
and liens which secure a judgment or other court-ordered award or
settlement as to which the Guarantor or the applicable Subsidiary has not
exhausted its appellate rights;
(13) any extension, renewal, refinancing, refunding or replacement (or
successive extensions, renewals, refinancing, refunding or replacements) of
liens, in whole or in part, referred to in clauses (1) through (12) above;
provided, however, that any such extension, renewal, refinancing, refunding
or replacement lien shall be limited to the property or assets covered by
the lien extended,
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renewed, refinanced, refunded or replaced and that the obligations secured
by any such extension, renewal, refinancing, refunding or replacement lien
shall be in an amount not greater than the amount of the obligations
secured by the lien extended, renewed, refinanced, refunded or replaced and
any expenses of the Guarantor and its Subsidiaries (including any premium)
incurred in connection with such extension, renewal, refinancing, refunding
or replacement; or
(14) any lien resulting from the deposit of moneys or evidence of
indebtedness in trust for the purpose of defeasing debt of the Guarantor or
any Subsidiary.
"Principal Property" means, whether owned or leased on the date of the
Indenture or thereafter acquired:
(1) any pipeline assets of the Guarantor or any Subsidiary, including
any related facilities employed in the transportation, distribution,
storage or marketing of refined petroleum products, natural gas liquids,
and petrochemicals, that are located in the United States of America or any
territory or political subdivision thereof; and
(2) any processing or manufacturing plant or terminal owned or leased
by the Guarantor or any Subsidiary that is located in the United States or
any territory or political subdivision thereof,
except, in the case of either of the foregoing clauses (1) or (2):
(a) any such assets consisting of inventories, furniture, office
fixtures and equipment (including data processing equipment), vehicles
and equipment used on, or useful with, vehicles; and
(b) any such assets, plant or terminal which, in the opinion of the
board of directors of the General Partner, is not material in relation
to the activities of the Issuer or of the Guarantor and its Subsidiaries
taken as a whole.
Notwithstanding the preceding, under the Indenture, the Guarantor may, and
may permit any Subsidiary to, create, assume, incur, or suffer to exist any lien
upon any Principal Property to secure debt of the Guarantor, the Issuer or any
other person (other than debt securities issued under the Indenture) other than
a Permitted Lien without securing the debt securities, provided that the
aggregate principal amount of all debt then outstanding secured by such lien and
all similar liens, together with all Attributable Indebtedness from
Sale-Leaseback Transactions (excluding Sale-Leaseback Transactions permitted by
clauses (1) through (4), inclusive, of the first paragraph of the restriction on
sale-leasebacks covenant described below) does not exceed 10% of Consolidated
Net Tangible Assets.
"Consolidated Net Tangible Assets" means, at any date of determination, the
total amount of assets of the Guarantor and its Consolidated Subsidiaries after
deducting therefrom:
(1) all current liabilities (excluding (A) any current liabilities
that by their terms are extendable or renewable at the option of the
obligor thereon to a time more than 12 months after the time as of which
the amount thereof is being computed, and (B) current maturities of
long-term debt); and
(2) the value (net of any applicable reserves) of all goodwill, trade
names, trademarks, patents and other like intangible assets, all as set
forth, or on a pro forma basis would be set forth, on the consolidated
balance sheet of the Guarantor and its consolidated subsidiaries for the
Guarantor's most recently completed fiscal quarter, prepared in accordance
with generally accepted accounting principles.
Restriction on Sale-Leasebacks. The Guarantor will not, and will not
permit any Subsidiary to, engage in the sale or transfer by the Guarantor or any
Subsidiary of any Principal Property to a person (other than the Issuer or a
Subsidiary) and the taking back by the Guarantor or any Subsidiary, as the case
may be, of a lease of such Principal Property (a "Sale-Leaseback Transaction"),
unless:
(1) such Sale-Leaseback Transaction occurs within one year from the
date of completion of the acquisition of the Principal Property subject
thereto or the date of the completion of construction,
23
development or substantial repair or improvement, or commencement of full
operations on such Principal Property, whichever is later;
(2) the Sale-Leaseback Transaction involves a lease for a period,
including renewals, of not more than three years;
(3) the Guarantor or such Subsidiary would be entitled to incur debt
secured by a lien on the Principal Property subject thereto in a principal
amount equal to or exceeding the Attributable Indebtedness from such
Sale-Leaseback Transaction without equally and ratably securing the notes;
or
(4) the Guarantor or such Subsidiary, within a one-year period after
such Sale-Leaseback Transaction, applies or causes to be applied an amount
not less than the Attributable Indebtedness from such Sale-Leaseback
Transaction to (a) the prepayment, repayment, redemption, reduction or
retirement of any debt of the Guarantor or any Subsidiary that is not
subordinated to the notes, or (b) the expenditure or expenditures for
Principal Property used or to be used in the ordinary course of business of
the Guarantor or its Subsidiaries. "Attributable Indebtedness," when used
with respect to any Sale-Leaseback Transaction, means, as at the time of
determination, the present value (discounted at the rate set forth or
implicit in the terms of the lease included in such transaction) of the
total obligations of the lessee for rental payments (other than amounts
required to be paid on account of property taxes, maintenance, repairs,
insurance, assessments, utilities, operating and labor costs and other
items that do not constitute payments for property rights) during the
remaining term of the lease included in such Sale-Leaseback Transaction
(including any period for which such lease has been extended). In the case
of any lease that is terminable by the lessee upon the payment of a penalty
or other termination payment, such amount shall be the lesser of the amount
determined assuming termination upon the first date such lease may be
terminated (in which case the amount shall also include the amount of the
penalty or termination payment, but no rent shall be considered as required
to be paid under such lease subsequent to the first date upon which it may
be so terminated) or the amount determined assuming no such termination.
Notwithstanding the preceding, under the Indenture the Guarantor may, and
may permit any Subsidiary to, effect any Sale-Leaseback Transaction that is not
excepted by clauses (1) through (4), inclusive, of the first paragraph under
"-- Restriction on Sale-Leasebacks," provided that the Attributable Indebtedness
from such Sale-Leaseback Transaction, together with the aggregate principal
amount of outstanding debt (other than debt securities issued under the
Indenture) secured by liens other than Permitted Liens upon Principal Property,
do not exceed 10% of Consolidated Net Tangible Assets.
Merger, Consolidation or Sale of Assets. The Indenture provides that each
of the Guarantor and the Issuer may, without the consent of the holders of any
of the notes, consolidate with or sell, lease, convey all or substantially all
of its assets to, or merge with or into, any partnership, limited liability
company or corporation if:
(1) the partnership, limited liability company or corporation formed
by or resulting from any such consolidation or merger or to which such
assets shall have been transferred (the "successor") is either the
Guarantor or the Issuer, as applicable, or assumes all the Guarantor's or
the Issuer's, as the case may be, obligations and liabilities under the
Indenture and the notes (in the case of the Issuer) and the Guarantee (in
the case of the Guarantor);
(2) the successor is organized under the laws of the United States,
any state or the District of Columbia;
(3) immediately after giving effect to the transaction no Default or
Event of Default shall have occurred and be continuing; and
(4) the Issuer and the Guarantor have delivered to the Trustee an
officers' certificate and an opinion of counsel, each stating that such
consolidation, merger or transfer complies with the Indenture.
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The successor will be substituted for the Guarantor or the Issuer, as the
case may be, in the Indenture with the same effect as if it had been an original
party to the Indenture. Thereafter, the successor may exercise the rights and
powers of the Guarantor or the Issuer, as the case may be, under the Indenture,
in its name or in its own name. If the Guarantor or the Issuer sells or
transfers all or substantially all of its assets, it will be released from all
liabilities and obligations under the Indenture and under the notes (in the case
of the Issuer) and the Guarantee (in the case of the Guarantor) except that no
such release will occur in the case of a lease of all or substantially all of
its assets.
EVENTS OF DEFAULT
Each of the following is an Event of Default under the Indenture with
respect to the notes:
(1) default in any payment of interest on the notes when due,
continued for 30 days;
(2) default in the payment of principal of or premium, if any, on the
notes when due at its stated maturity, upon optional redemption, upon
declaration, upon required repurchase or otherwise;
(3) failure by the Guarantor or the Issuer to comply for 60 days after
notice with its other agreements contained in the Indenture;
(4) certain events of bankruptcy, insolvency or reorganization of the
Issuer or the Guarantor (the "bankruptcy provisions"); or
(5) the Guarantee ceases to be in full force and effect or is declared
null and void in a judicial proceeding or the Guarantor denies or
disaffirms its obligations under the Indenture or the Guarantee.
However, a default under clause (3) of this paragraph will not constitute an
Event of Default until the Trustee or the holders of 25% in principal amount of
the outstanding notes notify the Issuer and the Guarantor of the default and
such default is not cured within the time specified in clause (3) of this
paragraph after receipt of such notice.
If an Event of Default (other than an Event of Default described in clause
(4) above) occurs and is continuing, the Trustee by notice to the Issuer, or the
holders of at least 25% in principal amount of the outstanding notes by notice
to the Issuer and the Trustee, may, and the Trustee at the request of such
holders shall, declare the principal of, premium, if any, and accrued and unpaid
interest, if any, on all the notes to be due and payable. Upon such a
declaration, such principal, premium and accrued and unpaid interest will be due
and payable immediately. If an Event of Default described in clause (4) above
occurs and is continuing, the principal of, premium, if any, and accrued and
unpaid interest on all the notes will become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any holders.
The holders of a majority in principal amount of the outstanding notes may waive
all past defaults (except with respect to nonpayment of principal, premium or
interest) and rescind any such acceleration with respect to the notes and its
consequences if rescission would not conflict with any judgment or decree of a
court of competent jurisdiction and all existing Events of Default, other than
the nonpayment of the principal of, premium, if any, and interest on the notes
that have become due solely by such declaration of acceleration, have been cured
or waived.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, if an Event of Default occurs and is continuing, the Trustee will be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the holders unless such holders have
offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium, if any, or interest when due, no holder may pursue any
remedy with respect to the Indenture or the notes unless:
(1) such holder has previously given the Trustee notice that an Event
of Default is continuing;
(2) holders of at least 25% in principal amount of the outstanding
notes have requested the Trustee to pursue the remedy;
25
(3) such holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee has not complied with such request within 60 days
after the receipt of the request and the offer of security or indemnity;
and
(5) the holders of a majority in principal amount of the outstanding
notes have not given the Trustee a direction that, in the opinion of the
Trustee, is inconsistent with such request within such 60-day period.
Subject to certain restrictions, the holders of a majority in principal
amount of the outstanding notes are given the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee with respect to the
notes. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee will be
entitled to such reasonable indemnification as it may require against all losses
and expenses caused by taking or not taking such action.
The Indenture provides that if a Default (that is, an event that is, or
after notice or the passage of time would be, an Event of Default) occurs and is
continuing and is known to the Trustee, the Trustee must mail to each holder
notice of the Default within 90 days after it occurs. Except in the case of a
Default in the payment of principal of, premium, if any, or interest on the
notes, the Trustee may withhold notice if and so long as a committee of trust
officers of the Trustee in good faith determines that withholding notice is in
the interests of the holders. In addition, the Issuer is required to deliver to
the Trustee, within 120 days after the end of each fiscal year, a certificate
indicating whether the signers thereof know of any Default that occurred during
the previous year. The Issuer also is required to deliver to the Trustee, within
30 days after the occurrence thereof, an officers' certificate specifying any
events which would constitute certain Defaults, their status and what action the
Issuer is taking or proposes to take in respect thereof.
AMENDMENTS AND WAIVERS
Modifications and amendments of the Indenture may be made by the Issuer,
the Guarantor and the Trustee with the consent of the holders of a majority in
principal amount of all debt securities of each series affected thereby then
outstanding under the Indenture (including consents obtained in connection with
a tender offer or exchange offer for the notes). However, without the consent of
each holder of notes, no amendment may, among other things:
(1) reduce the amount of notes whose holders must consent to an
amendment;
(2) reduce the stated rate of or extend the stated time for payment of
interest on any note;
(3) reduce the principal of or extend the stated maturity of any note;
(4) reduce the premium payable upon the redemption of any note or
change the time at which any note may be redeemed as described above under
"-- Optional Redemption" or any similar provision;
(5) make any notes payable in money other than that stated in the
notes;
(6) impair the right of any holder to receive payment of, premium, if
any, principal of and interest on such holder's note on or after the due
dates therefor or to institute suit for the enforcement of any payment on
or with respect to such holder's note;
26
(7) make any change in the amendment provisions which require each
holder's consent or in the waiver provisions;
(8) release any security that may have been granted in respect of the
notes; or
(9) release the Guarantor or modify the guarantee in any manner
adverse to the holders.
The holders of a majority in aggregate principal amount of the notes, on
behalf of all such holders, may waive compliance by the Issuer and the Guarantor
with certain restrictive provisions of the Indenture. Subject to certain rights
of the Trustee as provided in the Indenture, the holders of a majority in
aggregate principal amount of the notes, on behalf of all such holders, may
waive any past default under the Indenture (including any such waiver obtained
in connection with a tender offer or exchange offer for the notes), except a
default in the payment of principal, premium or interest or a default in respect
of a provision that under the Indenture cannot be modified or amended without
the consent of all holders of the notes.
Without the consent of any holder, the Issuer, the Guarantor and the
Trustee may amend the Indenture to:
(1) cure any ambiguity, omission, defect or inconsistency;
(2) provide for the assumption by a successor corporation,
partnership, trust or limited liability company of the obligations of the
Guarantor or the Issuer under the Indenture;
(3) provide for uncertificated notes in addition to or in place of
certificated debt securities (provided that the uncertificated notes are
issued in registered form for purposes of Section 163(f) of the Internal
Revenue Code of 1986, or in a manner such that the uncertificated notes are
described in Section 163(f)(2)(B) of the Code);
(4) add additional guarantees with respect to the notes;
(5) secure the notes;
(6) add to the covenants of the Guarantor or the Issuer for the
benefit of the holders or surrender any right or power conferred upon the
Guarantor or the Issuer;
(7) make any change that does not adversely affect the rights of any
holder; or
(8) comply with any requirement of the Commission in connection with
the qualification of the Indenture under the TIA.
The consent of the holders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment. After an amendment under the
Indenture becomes effective, the Issuer is required to mail to the holders a
notice briefly describing such amendment. However, the failure to give such
notice to all the holders, or any defect therein, will not impair or affect the
validity of the amendment.
DEFEASANCE
The Issuer at any time may terminate all its obligations in respect of the
notes and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register the
transfer or exchange of the notes, to replace mutilated, destroyed, lost or
stolen notes and to maintain a registrar and paying agent in respect of the
notes. If the Issuer exercises its legal defeasance option, the guarantee will
terminate with respect to the notes.
The Issuer at any time may terminate its obligations under covenants
described under "-- Certain Covenants" (other than "Merger, Consolidation or
Sale of Assets"), the bankruptcy provisions with respect to the Guarantor and
the guarantee provision described under "-- Events of Default" above with
respect to the notes ("covenant defeasance").
27
The Issuer may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Issuer exercises its
legal defeasance option, payment of the notes may not be accelerated because of
an Event of Default with respect thereto. If the Issuer exercises its covenant
defeasance option, payment of the notes may not be accelerated because of an
Event of Default specified in clause (3), (4) (with respect only to the
Guarantor) or (5) under "-- Events of Default" above.
In order to exercise either defeasance option, the Issuer must irrevocably
deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations (as defined in the Indenture) for the payment of
principal, premium, if any, and interest on the notes to redemption or maturity,
as the case may be, and must comply with certain other conditions, including
delivery to the Trustee of an opinion of counsel (subject to customary
exceptions and exclusions) to the effect that holders of the notes will not
recognize income, gain or loss for Federal income tax purposes as a result of
such deposit and defeasance and will be subject to Federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred. In the case of legal
defeasance only, such opinion of counsel must be based on a ruling of the
Internal Revenue Service or other change in applicable Federal income tax law.
BOOK-ENTRY SYSTEM
We will issue the exchange notes in the form of one or more global notes in
fully registered form initially in the name of Cede & Co., as nominee of DTC, or
such other name as may be requested by an authorized representative of DTC. The
global notes will be deposited with the Trustee as custodian for DTC and may not
be transferred except as a whole by DTC to a nominee of DTC or by a nominee of
DTC to DTC or another nominee of DTC or by DTC or any nominee to a successor of
DTC or a nominee of such successor.
DTC has advised us as follows:
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
- DTC holds securities that its participants deposit with DTC and
facilitates the settlement among direct participants of securities
transactions, such as transfers and pledges, in deposited securities,
through electronic computerized book-entry changes in direct
participants' accounts, thereby eliminating the need for physical
movement of securities certificates.
- Direct participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations.
- DTC is owned by a number of its direct participants and by the New York
Stock Exchange, Inc., the American Stock Exchange LLC and the National
Association of Securities Dealers, Inc.
- Access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either
directly or indirectly.
- The rules applicable to DTC and its direct and indirect participants are
on file with the Commission.
Purchases of notes under the DTC system must be made by or through direct
participants, which will receive a credit for the notes on DTC's records. The
ownership interest of each actual purchaser of notes is in turn to be recorded
on the direct and indirect participants' records. Beneficial owners of the notes
will not receive written confirmation from DTC of their purchase, but beneficial
owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owner entered into the
transaction. Transfers of ownership interests in the notes are to be
accomplished by entries made on the books of direct
28
and indirect participants acting on behalf of beneficial owners. Beneficial
owners will not receive certificates representing their ownership interests in
the notes, except in the event that use of the book-entry system for the notes
is discontinued.
To facilitate subsequent transfers, all notes deposited by direct
participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of notes with DTC and their registration in
the name of Cede & Co. or such other nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual beneficial owners of
the notes; DTC's records reflect only the identity of the direct participants to
whose accounts such notes are credited, which may or may not be the beneficial
owners. The direct and indirect participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote
with respect to the global notes. Under its usual procedures, DTC mails an
omnibus proxy to the issuer as soon as possible after the record date. The
omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct
participants to whose accounts the notes are credited on the record date
(identified in the listing attached to the omnibus proxy).
All payments on the global notes will be made to Cede & Co., as holder of
record, or such other nominee as may be requested by an authorized
representative of DTC. DTC's practice is to credit direct participants' accounts
upon DTC's receipt of funds and corresponding detail information from us or the
Trustee on payment dates in accordance with their respective holdings shown on
DTC's records. Payments by participants to beneficial owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such participant and not of DTC, us or
the Trustee, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal, premium, if any, and interest to
Cede & Co. (or such other nominee as may be requested by an authorized
representative of DTC) shall be the responsibility of us or the Trustee.
Disbursement of such payments to direct participants shall be the responsibility
of DTC, and disbursement of such payments to the beneficial owners shall be the
responsibility of direct and indirect participants.
DTC may discontinue providing its service as securities depositary with
respect to the notes at any time by giving reasonable notice to us or the
Trustee. In addition, we may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor securities depositary). Under
such circumstances, in the event that a successor securities depositary is not
obtained, note certificates in fully registered form are required to be printed
and delivered to beneficial owners of the global notes representing such notes.
Neither we nor the Trustee will have any responsibility or obligation to
direct or indirect participants, or the persons for whom they act as nominees,
with respect to the accuracy of the records of DTC, its nominee or any
participant with respect to any ownership interest in the notes, or payments to,
or the providing of notice to participants or beneficial owners.
So long as the notes are in DTC's book-entry system, secondary market
trading activity in the notes will settle in immediately available funds. All
payments on the notes issued as global notes will be made by us in immediately
available funds.
NO RECOURSE AGAINST GENERAL PARTNER
Our general partner and its directors, officers, employees and members, as
such, shall have no liability for any obligations of the Guarantor or the Issuer
under the notes, the Indenture or the guarantee or for
29
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder by accepting a note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the notes. Such waiver may not be effective to waive liabilities under the
federal securities laws, and it is the view of the Commission that such a waiver
is against public policy.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become our creditor, to obtain payment of claims in certain cases, or
to realize for its own account on certain property received in respect of any
such claim as security or otherwise. The Trustee is permitted to engage in
certain other transactions. However, if it acquires any conflicting interest
within the meaning of the TIA, it must eliminate the conflict or resign as
Trustee.
The holders of a majority in principal amount of all notes (or if more than
one series of debt securities under the Indenture is affected thereby, all
series so affected, voting as a single class) will have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy or
power available to the Trustee for the notes or all such series so affected.
If an Event of Default occurs and is not cured under the Indenture and is
known to the Trustee, the Trustee shall exercise such of the rights and powers
vested in it by the Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs. Subject to such provisions, the Trustee will not
be under any obligation to exercise any of its rights or powers under the
Indenture at the request of any of the holders of notes unless they shall have
offered to such Trustee reasonable security and indemnity.
Wachovia Bank, National Association is the Trustee under the Indenture and
has been appointed by the Issuer as Registrar and Paying Agent with regard to
the notes. Wachovia Bank, National Association is the Administrative Agent and a
lender under the Issuer's credit facilities and was the Administrative Agent and
a lender under the 364-day term loan. Wachovia Bank, National Association is
also an affiliate of Wachovia Securities, Inc., an initial purchaser of the
outstanding notes. Wachovia Securities, Inc. is also the sole arranger and sole
book manager under the Issuer's credit facilities and was the lead manager and
joint bookrunner under the 364-day term loan.
GOVERNING LAW
The Indenture, the notes and the guarantee are governed by, and will be
construed in accordance with, the laws of the State of New York.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of material federal income tax
consequences relevant to the exchange of exchange notes for outstanding notes
and represents the opinion of our counsel, Vinson & Elkins L.L.P. The discussion
is based upon the Internal Revenue Code of 1986, as amended, Treasury
Regulations, Internal Revenue Service rulings and pronouncements and judicial
decisions now in effect, all of which may be subject to change at any time by
legislative, judicial or administrative action. These changes may be applied
retroactively in a manner that could adversely affect a holder of exchange
notes. The description does not consider the effect of any applicable foreign,
state, local or other tax laws or estate or gift tax considerations.
The exchange of exchange notes for outstanding notes will not be an
exchange or otherwise a taxable event to a holder for United States federal
income tax purposes. Accordingly, a holder will have the same adjusted issue
price, adjusted basis and holding period in the exchange notes as it had in the
outstanding notes immediately before the exchange.
30
PLAN OF DISTRIBUTION
Based on interpretations by the staff of the Commission in no-action
letters issued to third parties, we believe that you may transfer exchange notes
issued under the exchange offer in exchange for the outstanding notes if:
- you acquire the exchange notes in the ordinary course of your business;
and
- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of such exchange notes.
You may not participate in the exchange offer if you are:
- our "affiliate" within the meaning of Rule 405 under the Securities Act;
or
- a broker-dealer that acquired outstanding notes directly from us.
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver this
prospectus in connection with any resale of such exchange notes. To date, the
staff of the Commission has taken the position that broker-dealers may fulfill
their prospectus delivery requirements with respect to transactions involving an
exchange of securities such as this exchange offer, other than a resale of an
unsold allotment from the original sale of the outstanding notes, with the
prospectus contained in the exchange offer registration statement. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of exchange notes received in
exchange for outstanding notes where such outstanding notes were acquired as a
result of market-making activities or other trading activities. We have agreed
that, for a period of up to 180 days after the effective date of the exchange
offer registration statement, we will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until such date, all dealers effecting transactions in
exchange notes may be required to deliver this prospectus.
If you wish to exchange exchange notes for your outstanding notes in the
exchange offer, you will be required to make representations to us as described
in "Exchange Offer -- Purpose and Effect of the Exchange Offer" and "Exchange
Offer -- Procedures for Tendering -- Your Representations to Us" in this
prospectus. As indicated in the letter of transmittal, you will be deemed to
have made these representations by tendering your outstanding notes in the
exchange offer. In addition, if you are a broker-dealer who receives exchange
notes for your own account in exchange for outstanding notes that were acquired
by you as a result of market-making activities or other trading activities, you
will be required to acknowledge, in the same manner, that you will deliver this
prospectus in connection with any resale by you of such exchange notes.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market:
- in negotiated transactions;
- through the writing of options on the exchange notes or a combination of
such methods of resale;
- at market prices prevailing at the time of resale; and
- at prices related to such prevailing market prices or negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such exchange
notes. Any broker-dealer that resells exchange notes that were received by it
for its own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act. The letter of
transmittal states that by acknowledging that it will deliver and by delivering
31
this prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the effective date of this exchange offer
registration statement, we will promptly send additional copies of this
prospectus and any amendment or supplement to this prospectus to any
broker-dealer that requests such documents in the letter of transmittal. We have
agreed to pay all expenses incident to the exchange offer (including the
expenses of one counsel for the holders of the outstanding notes) other than
commissions or concessions of any broker-dealers and will indemnify the holders
of the outstanding notes (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Vinson & Elkins L.L.P. has issued an opinion about the legality of the
exchange notes.
EXPERTS
The (i) consolidated financial statements and the related consolidated
financial statement schedules of Enterprise Products Partners L.P. and of
Enterprise Products Operating L.P. and subsidiaries as of December 31, 2002 and
2001, and for each of the three years in the period ended December 31, 2002,
incorporated by reference in this prospectus, and (ii) the balance sheet of
Enterprise Products GP, LLC as of December 31, 2002, incorporated by reference
in this prospectus, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports, which are incorporated by reference herein
(each such report expresses an unqualified opinion and the reports for
Enterprise Products Partners L.P. and Enterprise Products Operating L.P. each
include an explanatory paragraph referring to a change in method of accounting
for goodwill in 2002 and derivative instruments in 2001 as discussed in Notes 8
and 1, respectively, to Enterprise Products Partners L.P.'s and Enterprise
Products Operating L.P.'s consolidated financial statements, respectively) and
have been so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
The financial statements of Mid-America Pipeline System and Seminole
Pipeline Company as of December 31, 2000 and 2001 and for each of the three
years in the period ended December 31, 2001 appearing in Enterprise Products
Partners L.P. and Enterprise Products Operating L.P.'s Current Report on Form
8-K filed May 9, 2003, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included therein and
incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such reports given on the authority of such
firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Enterprise Products Partners L.P. and Enterprise Products Operating L.P.
file combined annual, quarterly and current reports and other information with
the Commission. You may read and copy any document we file at the Commission's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Commission at (800) SEC-0330 for further information on the public
reference room. Our filings are also available to the public at the Commission's
web site at http://www.sec.gov. In addition, documents filed by us can be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10002.
32
We incorporate by reference in this prospectus the following documents we
filed with the Commission pursuant to the Securities Exchange Act:
- Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002,
Commission File Nos. 1-14323 and 333-93239-01;
- Current Report on Form 8-K filed with the Commission on January 10, 2003,
Commission File Nos. 1-14323 and 333-93239-01; and
- Current Report on Form 8-K filed with the Commission on May 9, 2003,
Commission File Nos. 1-14323 and 333-93239-01.
We also incorporate by reference any future filings made by us with the
Commission pursuant to Sections 12(a), 13(c), 14 or 15(s) of the Exchange Act
(other than Current Reports furnished under Item 9 and Item 12 of Form 8-K)
until the termination of the offering made by this prospectus. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for all purposes to the extent that a statement contained
in this prospectus, or in any other subsequently filed document which is also
incorporated or deemed to be incorporated by reference, modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
We intend to furnish or make available to our unitholders within 90 days
following the close of our fiscal year end annual reports containing audited
financial statements prepared in accordance with generally accepted accounting
principles and furnish or make available within 45 days following the close of
each fiscal quarter quarterly reports containing unaudited interim financial
information, including the information required by Form 10-Q, for the first
three fiscal quarters of each of our fiscal years. Our annual report will
include a description of any transactions with the general partner or its
affiliates, and of fees, commissions, compensation and other benefits paid, or
accrued to the general partner or its affiliates for the fiscal year completed,
including the amount paid or accrued to each recipient and the services
performed.
This prospectus, which is a part of the exchange offer registration
statement, does not contain all of the information found in the exchange offer
registration statement. You should refer to the exchange offer registration
statement, including its exhibits and schedules, for further information. You
may obtain a copy of any or all of this information, the exchange offer
registration statement and the Commission filings without charge, by request
directed to us at the following address and telephone number: Enterprise
Products Operating L.P., 2727 North Loop West, Suite 700, Houston, Texas
77008-1038; telephone number: (713) 880-6812.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains various forward-looking statements and information
that are based on our belief and those of our general partner, as well as
assumptions made by and information currently available to us. When used in this
prospectus, words such as "anticipate," "project," "expect," "plan," "goal,"
"forecast," "intend," "could," "believe," "may," and similar expressions and
statements regarding our plans and objectives for future operations, are
intended to identify forward-looking statements. Although we and our general
partner believe that such expectations reflected in such forward-looking
statements are reasonable, neither we nor our general partner can give
assurances that such expectations will prove to be correct. Such statements are
subject to a variety of risks, uncertainties and assumptions. If one or more of
these risks or uncertainties materialize, or if underlying assumptions prove
incorrect, our actual results may vary materially from those we anticipate,
estimate, project or expect.
You should not put undue reliance on forward-looking statements. When
considering forward-looking statements, please review carefully the risk factors
described under "Risk Factors" in this prospectus and the documents incorporated
by reference herein.
33
ANNEX A
LETTER OF TRANSMITTAL
TO TENDER
OUTSTANDING 6.875% SERIES A SENIOR NOTES DUE 2033
OF
ENTERPRISE PRODUCTS OPERATING L.P.
PURSUANT TO THE EXCHANGE OFFER AND PROSPECTUS DATED , 2003
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON , 2003 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE OFFER IS
EXTENDED BY THE COMPANY.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
WACHOVIA BANK, NATIONAL ASSOCIATION
Attn: Marsha Rice
Corporate Trust Operations -- NC1153
1525 West W.T. Harris Blvd., 3C3
Charlotte, North Carolina 28288.
Telephone: (704) 590-7413
Facsimile: (704) 590-7628.
IF YOU WISH TO EXCHANGE CURRENTLY OUTSTANDING 6.875% SERIES A SENIOR NOTES
DUE 2033 (THE "OUTSTANDING NOTES") FOR AN EQUAL AGGREGATE PRINCIPAL AMOUNT OF
6.875% SERIES B SENIOR NOTES DUE 2033 PURSUANT TO THE EXCHANGE OFFER, YOU MUST
VALIDLY TENDER (AND NOT WITHDRAW) OUTSTANDING NOTES TO THE EXCHANGE AGENT PRIOR
TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE BY CAUSING AN AGENT'S
MESSAGE TO BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO SUCH TIME.
---------------------
The undersigned hereby acknowledges receipt of the prospectus, dated
, 2003 (the "Prospectus"), of Enterprise Products Operating L.P., a
Delaware limited partnership (the "Operating Partnership"), and this Letter of
Transmittal (the "Letter of Transmittal"), which together describe the Operating
Partnership's offer (the "Exchange Offer") to exchange its 6.875% Series B
Senior Notes due 2033 (the "Exchange Notes") that have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like principal
amount of its issued and outstanding 6.875% Series A Senior Notes due 2033 (the
"Outstanding Notes"). Capitalized terms used but not defined herein have the
respective meaning given to them in the Prospectus.
The Operating Partnership reserves the right, at any time or from time to
time, to extend the Exchange Offer at its discretion, in which event the term
"Expiration Date" shall mean the latest date to which the Exchange Offer is
extended. The Operating Partnership shall notify the Exchange Agent and each
registered holder of the Outstanding Notes of any extension by oral or written
notice prior to 9:00 a.m., New York City time, on the next business day after
the previously scheduled Expiration Date.
This Letter of Transmittal is to be used by holders of the Outstanding
Notes. Tender of Outstanding Notes is to be made according to the Automated
Tender Offer Program ("ATOP") of the Depository Trust Company ("DTC") pursuant
to the procedures set forth in the prospectus under the caption "The Exchange
Offer -- Procedures for Tendering." DTC participants that are accepting the
Exchange Offer must transmit their acceptance to DTC, which will verify the
acceptance and execute a book-entry delivery to the Exchange Agent's DTC
account. DTC will then send a computer generated message known as an "agent's
message" to the exchange agent for its acceptance. For you to validly tender
your Outstanding Notes in the Exchange Offer, the Exchange Agent must receive,
prior to the Expiration Date, an agent's message under the ATOP procedures that
confirms that:
- DTC has received your instructions to tender your Outstanding Notes; and
- You agree to be bound by the terms of this Letter of Transmittal.
BY USING THE ATOP PROCEDURES TO TENDER OUTSTANDING NOTES, YOU WILL NOT BE
REQUIRED TO DELIVER THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT. HOWEVER,
YOU WILL BE BOUND BY ITS TERMS, AND YOU WILL BE DEEMED TO HAVE MADE THE
ACKNOWLEDGMENTS AND THE REPRESENTATIONS AND WARRANTIES IT CONTAINS, JUST AS IF
YOU HAD SIGNED IT.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
1. By tendering Outstanding Notes in the Exchange Offer, you acknowledge
receipt of the Prospectus and this Letter of Transmittal.
2. By tendering Outstanding Notes in the Exchange Offer, you represent and
warrant that you have full authority to tender the Outstanding Notes described
above and will, upon request, execute and deliver any additional documents
deemed by the Operating Partnership to be necessary or desirable to complete the
tender of Outstanding Notes.
3. The tender of the Outstanding Notes pursuant to all of the procedures
set forth in the Prospectus will constitute an agreement between you and the
Operating Partnership as to the terms and conditions set forth in the
Prospectus.
4. The Exchange Offer is being made in reliance upon interpretations
contained in no-action letters issued to third parties by the staff of the
Securities and Exchange Commission (the "Commission"), including Exxon Capital
Holdings Corp., Commission No-Action Letter (available May 13, 1988), Morgan
Stanley & Co., Inc., Commission No-Action Letter (available June 5, 1991) and
Shearman & Sterling, Commission No-Action Letter (available July 2, 1993), that
the Exchange Notes issued in exchange for the Outstanding Notes pursuant to the
Exchange Offer may be offered for resale, resold and otherwise transferred by
holders thereof (other than a broker-dealer who purchased Outstanding Notes
exchanged for such Exchange Notes directly from the Operating Partnership to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act of 1933, as amended (the "Securities Act") and any such holder
that is an "affiliate" of the Operating Partnership or Enterprise Products
Partners L.P. (the "Partnership") within the meaning of Rule 405 under the
Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Exchange Notes are
acquired in the ordinary course of such holders' business and such holders are
not participating in, and have no arrangement with any person to participate in,
the distribution of such Exchange Notes.
5. By tendering Outstanding Notes in the Exchange Offer, you represent and
warrant that:
a. the Exchange Notes acquired pursuant to the Exchange Offer are
being obtained in the ordinary course of your business, whether or not you
are the holder;
b. neither you nor any such other person is engaging in or intends to
engage in a distribution of such Exchange Notes;
c. neither you nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such
Exchange Notes; and
d. neither the holder nor any such other person is an "affiliate," as
such term is defined under Rule 405 promulgated under the Securities Act,
of the Operating Partnership or the Partnership.
6. You may, if you are unable to make all of the representations and
warranties contained in paragraph 5 above and as otherwise permitted in the
Registration Rights Agreement (as defined below), elect to have your Outstanding
Notes registered in the shelf registration statement described in the
Registration Rights Agreement, dated as of February 14, 2003 (the "Registration
Rights Agreement"), by and among the Operating Partnership, the Partnership and
the Initial Purchasers (as defined therein). Such election may be made only by
notifying the Operating Partnership in writing at 2727 North Loop West, Houston,
Texas 77008-1037, Attention: Chief Financial Officer. By making such election,
you agree, as a holder of Outstanding Notes participating in a shelf
registration, to indemnify and hold harmless the Operating Partnership, each of
the directors of Enterprise Products GP, LLC, the general partner of the
Operating Partnership (the "General Partner"), each of the officers of the
General Partner who signs such shelf registration statement on behalf of the
Operating Partnership, each person who controls the Operating Partnership within
the meaning of either the Securities Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and each other holder of Outstanding
Notes, from and against any and all losses, claims, damages or liabilities
caused by any untrue statement or alleged untrue statement of a material fact
contained in any shelf registration statement or prospectus, or in any
supplement thereto or amendment thereof, or caused by the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; but only with respect to information
relating to you furnished in writing by or on behalf of you expressly for use in
a shelf registration statement, a prospectus or any amendments or supplements
thereto. Any such indemnification shall be governed by the terms and subject to
the conditions set forth in the Registration Rights Agreement, including,
without limitation, the provisions regarding notice, retention of counsel,
contribution and payment of expenses set forth therein. The above summary of the
indemnification provision of the Registration Rights Agreement is not intended
to be exhaustive and is qualified in its entirety by the Registration Rights
Agreement.
7. If you are a broker-dealer that will receive Exchange Notes for your own
account in exchange for Outstanding Notes that were acquired as a result of
market-making activities or other trading activities, you acknowledge, by
tendering Outstanding Notes in the Exchange Offer, that you will deliver a
prospectus in connection with any resale of such Exchange Notes; however, by so
acknowledging and by delivering a prospectus, you will not be deemed to admit
that you are an "underwriter" within the meaning of the Securities Act. If you
are a broker-dealer and Outstanding Notes held for your own account were not
acquired as a result of market-making or other trading activities, such
Outstanding Notes cannot be exchanged pursuant to the Exchange Offer.
8. Any of your obligations hereunder shall be binding upon your successors,
assigns, executors, administrators, trustees in bankruptcy and legal and
personal representatives.
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. BOOK-ENTRY CONFIRMATIONS.
Any confirmation of a book-entry transfer to the Exchange Agent's account
at DTC of Outstanding Notes tendered by book-entry transfer (a "Book-Entry
Confirmation"), as well as an agent's message, and any other documents required
by this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date.
2. PARTIAL TENDERS.
Tenders of Outstanding Notes will be accepted only in denominations of
$1,000 and integral multiples of $1,000. THE ENTIRE PRINCIPAL AMOUNT OF
OUTSTANDING NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN
TENDERED UNLESS OTHERWISE COMMUNICATED TO THE EXCHANGE AGENT. IF THE ENTIRE
PRINCIPAL AMOUNT OF ALL OUTSTANDING NOTES IS NOT TENDERED, THEN OUTSTANDING
NOTES FOR THE PRINCIPAL AMOUNT OF OUTSTANDING NOTES NOT TENDERED AND EXCHANGE
NOTES ISSUED IN EXCHANGE FOR ANY OUTSTANDING NOTES ACCEPTED WILL BE DELIVERED TO
THE HOLDER VIA THE FACILITIES OF DTC PROMPTLY AFTER THE OUTSTANDING NOTES ARE
ACCEPTED FOR EXCHANGE.
3. VALIDITY OF TENDERS.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance, and withdrawal of tendered Outstanding Notes will be
determined by the Operating Partnership, in its sole discretion, which
determination will be final and binding. The Operating Partnership reserves the
absolute right to reject any or all tenders not in proper form or the acceptance
for exchange of which may, in the opinion of counsel for the Operating
Partnership, be unlawful. The Operating Partnership also reserves the absolute
right to waive any of the conditions of the Exchange Offer or any defect or
irregularity in the tender of any Outstanding Notes. The Operating Partnership's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions on this Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Outstanding Notes must be cured within such time as the Operating Partnership
shall determine. Although the Operating Partnership intends to notify holders of
defects or irregularities with respect to tenders of Outstanding Notes, neither
the Operating Partnership, the Exchange Agent, nor any other person shall be
under any duty to give notification of any defects or irregularities in tenders
or incur any liability for failure to give such notification. Tenders of
Outstanding Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Outstanding Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders via the facilities of DTC, as soon as practicable
following the Expiration Date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
UNTIL , 2003, ALL DEALERS THAT EFFECT TRANSACTIONS IN THE
EXCHANGE NOTES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
[ENTERPRISE PRODUCTS PARTNERS L.P. LOGO]
ENTERPRISE PRODUCTS OPERATING L.P.
OFFER TO EXCHANGE
REGISTERED
$500,000,000 6.875% SENIOR NOTES DUE 2033
FOR
OUTSTANDING
$500,000,000 6.875% SENIOR NOTES DUE 2033
, 2003
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 17-108 of the Delaware Revised Uniform Limited Partnership Act
empowers a Delaware limited partnership to indemnify and hold harmless any
partner or other person from and against all claims and demands whatsoever.
Enterprise Products Partners' partnership agreement provides that Enterprise
Products Partners will indemnify (i) Enterprise Products GP, (ii) any departing
general partner, (iii) any person who is or was an affiliate of Enterprise
Products GP or any departing general partner, (iv) any person who is or was a
member, partner, officer director, employee, agent or trustee of Enterprise
Products GP or any departing general partner or any affiliate of Enterprise
Products GP or any departing general partner or (v) any person who is or was
serving at the request of Enterprise Products GP or any departing general
partner or any affiliate of any such person, any affiliate of Enterprise
Products GP or any fiduciary or trustee of another person (each, a "Partnership
Indemnitee"), to the fullest extent permitted by law, from and against any and
all losses, claims, damages, liabilities (joint or several), expenses
(including, without limitation, legal fees and expenses), judgments, fines,
penalties, interest, settlements and other amounts arising from any and all
claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Partnership Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, by reason of
its status as a Partnership Indemnitee; provided that in each case the
Partnership Indemnitee acted in good faith and in a manner that such Partnership
Indemnitee reasonably believed to be in or not opposed to the best interests of
Enterprise Products Partners and, with respect to any criminal proceeding, had
no reasonable cause to believe its conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere, or its equivalent, shall not create an assumption that
the Partnership Indemnitee acted in a manner contrary to that specified above.
Any indemnification under these provisions will be only out of the assets of
Enterprise Products Partners, and Enterprise Products GP shall not be personally
liable for, or have any obligation to contribute or lend funds or assets to
Enterprise Products Partners to enable it to effectuate, such indemnification.
Enterprise Products Partners is authorized to purchase (or to reimburse
Enterprise Products GP or its affiliates for the cost of) insurance against
liabilities asserted against and expenses incurred by such persons in connection
with Enterprise Products Partners' activities, regardless of whether Enterprise
Products Partners would have the power to indemnify such person against such
liabilities under the provisions described above.
Enterprise Products Operating's partnership agreement provides that
Enterprise Products Operating will indemnify (i) Enterprise Products GP, (ii)
any departing general partner, (iii) any person who is or was an affiliate of
Enterprise Products GP or any departing general partner, (iv) any person who is
or was a member, partner, officer director, employee, agent or trustee of
Enterprise Products GP or any departing general partner or any affiliate of
Enterprise Products GP or any departing general partner or (v) any person who is
or was serving at the request of Enterprise Products GP or any departing general
partner or any affiliate of any such person, any affiliate of Enterprise
Products GP or any fiduciary or trustee of another person (each, an "Operating
Partnership Indemnitee"), to the fullest extent permitted by law, from and
against any and all losses, claims, damages, liabilities (joint or several),
expenses (including, without limitation, legal fees and expenses), judgments,
fines, penalties, interest, settlements and other amounts arising from any and
all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Operating Partnership Indemnitee
may be involved, or is threatened to be involved, as a party or otherwise, by
reason of its status as an Operating Partnership Indemnitee; provided that in
each case the Operating Partnership Indemnitee acted in good faith and in a
manner that such Operating Partnership Indemnitee reasonably believed to be in
or not opposed to the best interests of Enterprise Products Operating and, with
respect to any criminal proceeding, had no reasonable cause to believe its
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere, or
its equivalent, shall not create an assumption that the Operating Partnership
Indemnitee acted in a manner contrary to that
II-1
specified above. Any indemnification under these provisions will be only out of
the assets of Enterprise Products Operating, and Enterprise Products GP shall
not be personally liable for, or have any obligation to contribute or lend funds
or assets to Enterprise Products Operating to enable it to effectuate, such
indemnification. Enterprise Products Operating is authorized to purchase (or to
reimburse Enterprise Products GP or its affiliates for the cost of) insurance
against liabilities asserted against and expenses incurred by such persons in
connection with Enterprise Products Operating's activities, regardless of
whether Enterprise Products Operating would have the power to indemnify such
person against such liabilities under the provisions described above.
Section 18-108 of the Delaware Limited Liability Company Act provides that,
subject to such standards and restrictions, if any, as are set forth in its
limited liability company agreement, a Delaware limited liability company may,
and shall have the power to, indemnify and hold harmless any member or manager
or other person from and against any and all claims and demands whatsoever. The
limited liability company agreement of Enterprise Products GP provides for the
indemnification of (i) present or former members of the Board of Directors
Enterprise Products GP or any committee thereof, (ii) present or former
officers, employees, partners, agents or trustees of the Enterprise Products GP
or (iii) persons serving at the request of the Enterprise Products GP in another
entity in a similar capacity as that referred to in the immediately preceding
clauses (i) or (ii) (each, a "General Partner Indemnitee") to the fullest extent
permitted by law, from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including reasonable legal fees and
expenses), judgments, fines, penalties, interest, settlements and other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which any such person may
be involved, or is threatened to be involved, as a party or otherwise, by reason
of such person's status as a General Partner Indemnitee; provided, that in each
case the General Partner Indemnitee acted in good faith and in a manner which
such General Partner Indemnitee believed to be in, or not opposed to, the best
interests of the Enterprise Products GP and, with respect to any criminal
proceeding, had no reasonable cause to believe such General Partner Indemnitee's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that the General Partner
Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to these provisions shall be made only out of the
assets of Enterprise Products GP. Enterprise Products GP is authorized to
purchase and maintain insurance, on behalf of the members of its Board of
Directors, its officers and such other persons as the Board of Directors may
determine, against any liability that may be asserted against or expense that
may be incurred by such person in connection with the activities of Enterprise
Products GP, regardless of whether Enterprise Products GP would have the power
to indemnify such person against such liability under the provisions of its
limited liability company agreement.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers or persons
controlling Enterprise Products Partners, Enterprise Products Operating or
Enterprise Products GP as set forth above, Enterprise Products Partners,
Enterprise Products Operating and Enterprise Products GP have been informed that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
Reference is made to the Index to Exhibits following the signature pages
hereto, which Index to Exhibits is hereby incorporated into this item.
(b) Financial Statement Schedules:
Incorporated herein by reference to Item 8 of the combined Annual Report on
Form 10-K/A for the year ended December 31, 2002 of Enterprise Products Partners
L.P. and Enterprise Products Operating L.P.
II-2
ITEM 22. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants, we have been advised that in the opinion of the Commission such
indemnification is against public policy and is, therefore, unenforceable. If a
claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, such Registrants will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Each Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(b) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act if,
in the aggregate, the changes in volume and price represent no more than
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form
S-4, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
(6) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in this Registration Statement
when it became effective.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrants
certify that they have reasonable grounds to believe that they meet all of the
requirements for filing on Form S-4 and have duly caused this Registration
Statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on May 9, 2003.
ENTERPRISE PRODUCTS PARTNERS L.P.
By: ENTERPRISE PRODUCTS GP, LLC
As General Partner
By: /s/ O. S. ANDRAS
------------------------------------
O. S. Andras
President and Chief Executive
Officer
ENTERPRISE PRODUCTS OPERATING L.P.
By: ENTERPRISE PRODUCTS GP, LLC
As General Partner
By: /s/ O. S. ANDRAS
------------------------------------
O. S. Andras
President and Chief Executive
Officer
II-4
SIGNATURES
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below and constitutes and appoints Richard H. Bachmann and Michael A.
Creel and each of them his true and lawful attorneys-in-fact and agents, with
full power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her substitute
or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-4 has been signed below by the following
persons in the capacities indicated on the 9th day of May, 2003.
SIGNATURE TITLE
--------- -----
(OF ENTERPRISE PRODUCTS GP, LLC)
/s/ DAN L. DUNCAN Chairman of the Board and Director
--------------------------------------------------
Dan L. Duncan
/s/ O. S. ANDRAS President, Chief Executive Officer and Director
-------------------------------------------------- (Principal Executive Officer)
O. S. Andras
/s/ RICHARD H. BACHMANN Executive Vice President, Chief Legal Officer
-------------------------------------------------- and Director
Richard H. Bachmann
/s/ MICHAEL A. CREEL Executive Vice President and Chief Financial
-------------------------------------------------- Officer (Principal Financial Officer)
Michael A. Creel
/s/ MICHAEL J. KNESEK Vice President, Controller and Principal
-------------------------------------------------- Accounting Officer
Michael J. Knesek
/s/ RANDA D. WILLIAMS Director
--------------------------------------------------
Randa D. Williams
Director
--------------------------------------------------
Jorn A. Berget
/s/ RALPH S. CUNNINGHAM Director
--------------------------------------------------
Dr. Ralph S. Cunningham
Director
--------------------------------------------------
Jerelyn R. Eagan
Director
--------------------------------------------------
Augustus Y. Noojin, III
/s/ LEE W. MARSHALL, SR. Director
--------------------------------------------------
Lee W. Marshall, Sr.
/s/ RICHARD S. SNELL Director
--------------------------------------------------
Richard S. Snell
II-5
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION*
------- ------------
2.1 -- Purchase and Sale Agreement between Coral Energy, LLC and
Enterprise Products Operating L.P. dated September 22, 2000
(incorporated by reference to Exhibit 10.1 to Form 8-K filed
September 26, 2000).
2.2 -- Purchase and Sale Agreement dated January 16, 2002 by and
between Diamond-Koch, L.P. and Diamond-Koch III, L.P. and
Enterprise Products Texas Operating L.P. (incorporated by
reference to Exhibit 10.1 to Form 8-K filed February 8,
2002).
2.3 -- Purchase and Sale Agreement dated January 31, 2002 by and
between D-K Diamond-Koch, L.L.C., Diamond-Koch, L.P. and
Diamond-Koch III, L.P. as Sellers and Enterprise Products
Operating L.P. as Buyer (incorporated by reference to
Exhibit 10.2 to Form 8-K filed February 8, 2002).
2.4 -- Purchase Agreement by and between E-Birchtree, LLC and
Enterprise Products Operating L.P. dated July 31, 2002
(incorporated by reference to Exhibit 2.2 to Form 8-K filed
August 12, 2002).
2.5 -- Purchase Agreement by and between E-Birchtree, LLC and
E-Cypress, LLC dated July 31, 2002 (incorporated by
reference to Exhibit 2.1 to Form 8-K filed August 12, 2002).
3.1 -- First Amended and Restated Limited Liability Company
Agreement of Enterprise Products GP, LLC dated as of
September 17, 1999 (incorporated by reference to Exhibit
99.8 to Form 8-K/A-1 filed October 27, 1999).
3.2 -- Amendment No. 1 to the First Amended and Restated Limited
Liability Company Agreement of the General Partner dated as
of September 19, 2002 (incorporated by reference to Exhibit
3.2 to Form 10-K filed March 31, 2003).
3.3 -- Third Amended and Restated Agreement of Limited Partnership
of Enterprise Products Partners L.P. dated as of May 15,
2002 (incorporated by reference to Exhibit 3.3 to Form 10-Q
filed August 13, 2002).
3.4 -- Amendment No. 1 to Third Amended and Restated Agreement of
Limited Partnership of Enterprise Products Partners L.P.
dated August 7, 2002 (incorporated by reference to Exhibit
3.4 to Form 10-Q filed August 13, 2002).
3.5 -- Amendment No. 2 to Third Amended and Restated Agreement of
Limited Partnership of Enterprise Products Partners L.P.
dated December 17, 2002 (incorporated by reference to
Exhibit 3.5 to Form 8-K filed December 17, 2002).
3.6 -- Amended and Restated Agreement of Limited Partnership of
Enterprise Products Operating L.P. dated as of July 31, 1998
(incorporated by reference to Exhibit 3.2 to Registration
Statement on Form S-1/A filed July 21, 1998).
4.1 -- Indenture dated as of March 15, 2000, among Enterprise
Products Operating L.P., as Issuer, Enterprise Products
Partners L.P., as Guarantor, and First Union National Bank,
as Trustee (incorporated by reference to Exhibit 4.1 to Form
8-K filed March 10, 2000).
4.2 -- First Supplemental Indenture dated as of January 22, 2003,
among Enterprise Products Operating L.P., Enterprise
Products Partners L.P. and Wachovia Bank, National
Association (incorporated by reference to Exhibit 4.2 to
Registration Statement on Form S-4, Reg. No. 333-102776,
filed January 28, 2003).
4.3 -- Global Note representing $350 million principal amount of
6.375% Series A Senior Notes due 2013 with attached
Guarantee (incorporated by reference to Exhibit 4.3 to
Registration Statement on Form S-4, Reg. No. 333-102776,
filed January 28, 2003).
4.4 -- Form of Global Note representing $350 million principal
amount of 6.375% Series B Senior Notes due 2013 with
attached Guarantee (incorporated by reference to Exhibit 4.4
to Registration Statement on Form S-4, Reg. No. 333-102776,
filed January 28, 2003).
4.5 -- Registration Rights Agreement dated as of January 22, 2003,
by and among Enterprise Products Operating L.P., Enterprise
Products Partners L.P. and the Initial Purchasers named
herein (incorporated by reference to Exhibit 4.5 to
Registration Statement on Form S-4, Reg. No. 333-102776,
filed January 28, 2003).
4.6 -- Second Supplemental Indenture dated as of February 14, 2003,
among Enterprise Products Operating L.P., as Issuer,
Enterprise Products Partners L.P., as Guarantor, and
Wachovia Bank, National Association, as Trustee
(incorporated by reference to Exhibit 4.3 to Form 10-K filed
March 31, 2003).
EXHIBIT
NO. DESCRIPTION*
------- ------------
4.7 -- Rule 144A Global Note representing $499.2 million principal
amount of 6.875% Series A Senior Notes due 2033 with
attached Guarantee (incorporated by reference to Exhibit 4.5
to Form 10-K filed March 31, 2003).
4.8 -- Regulation S Global Note representing $800,000 principal
amount of 6.875% Series A Senior Notes due 2033 with
attached Guarantee (incorporated by reference to Exhibit 4.6
to Form 10-K filed March 31, 2003).
4.9 -- Form of Global Note representing $500 million principal
amount of 6.875% Series B Senior Notes due 2033 with
attached Guarantee (incorporated by reference to Exhibit 4.8
to Form 10-K filed March 31, 2003).
4.10 -- Registration Rights Agreement dated as of February 14, 2003,
among Enterprise Products Operating L.P., Enterprise
Products Partners L.P. and the Initial Purchasers named
therein (incorporated by reference to Exhibit 4.10 to Form
10-K filed March 31, 2003).
4.11 -- Global Note representing $350 million principal amount of
8.25% Senior Notes due 2005 (incorporated by reference to
Exhibit 4.2 to Form 8-K filed March 10, 2000).
4.12 -- Global Note representing $400 million principal amount of
7.50% Senior Notes due 2011. Global Note representing $50
million principal amount of 7.50% Senior Notes due 2011
(incorporated by reference to Exhibit 4.1 to Form 8-K filed
January 25, 2001).
4.13 -- $250 Million Multi-Year Revolving Credit Facility dated
November 17, 2000, among Enterprise Products Operating L.P.,
First Union National Bank, as Administrative Agent, Bank
One, NA, as Documentation Agent, the Chase Manhattan Bank,
as Syndication Agent, and the several banks from time to
time parties thereto, with First Union Securities, Inc. and
Chase Securities Inc. as Joint Lead Arrangers and Joint Book
Managers (incorporated by reference to Exhibit 4.2 to Form
8-K filed January 24, 2001).
4.14 -- $150 Million 364-Day Revolving Credit Facility dated
November 17, 2000, among Enterprise Products Operating L.P.,
First Union National Bank, as Administrative Agent, Bank
One, NA, as Documentation Agent, the Chase Manhattan Bank,
as Syndication Agent, and the several banks from time to
time parties thereto, with First Union Securities, Inc. and
Chase Securities Inc. as Joint Lead Arrangers and Joint Book
Managers (incorporated by reference to Exhibit 4.3 to Form
8-K filed January 24, 2001).
4.15 -- Guaranty Agreement dated November 17, 2000, by Enterprise
Products Partners L.P. in favor of First Union National
Bank, as Administrative Agent, with respect to the $250
Million Multi-Year Revolving Credit Facility (incorporated
by reference to Exhibit 4.4 to Form 8-K filed January 24,
2001).
4.16 -- Guaranty Agreement dated November 17, 2000, by Enterprise
Products Partners L.P. in favor of First Union National
Bank, as Administrative Agent, with respect to the $150
Million 364-Day Revolving Credit Facility (incorporated by
reference to Exhibit 4.5 to Form 8-K filed January 24,
2001).
4.17 -- First Amendment to Multi-Year Revolving Credit Facility
dated April 19, 2001 (incorporated by reference to Exhibit
4.12 to Form 10-Q filed May 14, 2001).
4.18 -- Second Amendment to Multi-Year Revolving Credit Facility
dated April 14, 2002 (incorporated by reference to Exhibit
4.14 to Form 10-Q filed May 14, 2002).
4.19 -- Third Amendment to Multi-Year Revolving Credit Facility
dated July 31, 2002 (incorporated by reference to Exhibit
4.1 to Form 8-K filed August 12, 2002).
4.20 -- Fourth Amendment to Multi-Year Revolving Credit Facility
dated effective as of November 15, 2002 (incorporated by
reference to Exhibit 4.21 to Form 10-Q filed November 13,
2002).
4.21 -- First Amendment to 364-Day Revolving Credit Facility dated
November 6, 2001 to be effective as of November 16, 2001
(incorporated by reference to Exhibit 4.13 to Form 10-K
filed March 21, 2002).
4.22 -- Second Amendment to 364-Day Revolving Credit Facility dated
April 24, 2002 (incorporated by reference to Exhibit 4.15 to
Form 10-K filed May 14, 2002).
4.23 -- Third Amendment to 364-Day Revolving Credit Facility dated
July 31, 2002 (incorporated by reference to Exhibit 4.2 to
Form 8-K filed August 12, 2002).
4.24 -- Contribution Agreement dated September 17, 1999
(incorporated by reference to Exhibit "B" to Schedule 13D
filed September 27, 1999 by Tejas Energy, LLC).
4.25 -- Registration Rights Agreement dated September 17, 1999
(incorporated by reference to Exhibit "E" to Schedule 13D
filed September 27, 1999 by Tejas Energy, LLC).
EXHIBIT
NO. DESCRIPTION*
------- ------------
4.26 -- Unitholder Rights Agreement dated September 17, 1999
(incorporated by reference to Exhibit "C" to Schedule 13D
filed September 27, 1999 by Tejas Energy, LLC).
5.1** -- Opinion of Vinson & Elkins L.L.P. as to the legality of the
securities being registered.
8.1** -- Opinion of Vinson & Elkins L.L.P. relating to tax matters
(included in Exhibit 5.1).
10.1 -- $1.2 Billion 364-Day Term Credit Facility dated as of July
31, 2002, among Enterprise Products Operating Partnership
L.P., Wachovia Bank, National Association, as Administrative
Agent, Lehman Commercial Paper Inc., as Co-Syndication
Agent, Royal Bank of Canada, as Co-Syndication Agent and
Arranger, with Wachovia Securities, Inc. and Lehman Brothers
Inc., as Lead Arrangers and Joint Bookrunners and RBC
Capital Markets, as Arranger (incorporated by reference to
Exhibit 4.3 to Form 8-K filed August 12, 2002).
10.2 -- Guaranty Agreement dated as of July 31, 2002 by Enterprise
Products Partners L.P. in favor of Wachovia Bank, National
Association, as Administrative Agent, with respect to the
$1.2 Billion 364-Day Term Credit Facility (incorporated by
reference to Exhibit 4.4 to Form 8-K filed August 12, 2002).
10.3 -- EPCO Agreement among Enterprise Products Partners L.P.,
Enterprise Products Operating L.P., Enterprise Products GP,
LLC and Enterprise Products Company dated July 31, 1998
(incorporated by reference to Exhibit 10.3 to Registration
Statement on Form S-4, Reg. No. 333-102776, filed January
28, 2003).
10.4 -- Transportation Contract between Enterprise Products
Operating L.P. and Enterprise Transportation Company dated
June 1, 1998 (incorporated by reference to Exhibit 10.3 to
Registration Statement Form S-1/A filed July 8, 1998).
10.5 -- Partnership Agreement among Sun BEF, Inc., Liquid Energy
Fuels Corporation and Enterprise Products Company dated May
1, 1992 (incorporated by reference to Exhibit 10.5 to
Registration Statement on Form S-1 filed May 13, 1998).
10.6 -- Propylene Facility and Pipeline Agreement between Enterprise
Petrochemical Company and Hercules Incorporated dated
December 13, 1978 (incorporated by reference to Exhibit 10.9
to Registration Statement on Form S-1 filed May 13, 1998).
10.7 -- Restated Operating Agreement for the Mont Belvieu
Fractionation Facilities Chambers County, Texas among
Enterprise Products Company, Texaco Producing Inc., El Paso
Hydrocarbons Company and Champlin Petroleum Company dated
July 17, 1985 (incorporated by reference to Exhibit 10.10 to
Registration Statement on Form S-1/A filed July 8, 1998).
10.8 -- Amendment to Propylene Facility and Pipeline Agreement and
Propylene Sales Agreement between HIMONT U.S.A., Inc. and
Enterprise Products Company dated January 1, 1993
(incorporated by reference to Exhibit 10.12 to Registration
Statement on Form S-1/A filed July 8, 1998).
10.9 -- Amendment to Propylene Facility and Pipeline Agreement and
Propylene Sales Agreement between HIMONT U.S.A., Inc. and
Enterprise Products Company dated January 1, 1995
(incorporated by reference to Exhibit 10.13 to Registration
Statement on Form S-1/A filed July 8, 1998).
10.10 -- Fourth Amendment to Conveyance of Gas Processing Rights
among Tejas Natural Gas Liquids, LLC and Shell Oil Company,
Shell Exploration & Production Company, Shell Offshore Inc.,
Shell Deepwater Development Inc., Shell Land & Energy
Company and Shell Frontier Oil & Gas Inc. dated August 1,
1999 (incorporated by reference to Exhibit 10.14 to Form
10-Q filed November 15, 1999).
10.11 -- Fifth Amendment to Conveyance of Gas Processing Rights dated
as of April 1, 2001 among Enterprise Gas Processing, LLC,
Shell Oil Company, Shell Exploration & Production Company,
Shell Offshore Inc., Shell Consolidated Energy Resources,
Inc., Shell Land & Energy Company and Shell Frontier Oil &
Gas, Inc. (incorporated by reference to Exhibit 10.13 to
Form 10-Q filed August 13, 2001).
10.12 -- Enterprise Products 1998 Long-Term Incentive Plan
(incorporated by reference to Exhibit 4.1 to Post-Effective
Amendment No. 1 to Registration Statement on Form S-8 filed
March 13, 2003).
10.13 -- Form of Option Grant Award under the 1998 Long-Term
Incentive Plan (incorporated by reference to Exhibit 4.2 to
Post-Effective Amendment No. 1 to Registration Statement on
Form S-8 filed March 13, 2003).
EXHIBIT
NO. DESCRIPTION*
------- ------------
10.14*** -- Sixth Amendment to Conveyance of Gas Processing Rights dated
as of March 1, 2003 among Enterprise Gas Processing, LLC,
Shell Oil Company, Shell Exploration & Producing Company,
Shell Offshore Inc., Shell Consolidated Energy Resources
Inc., Shell Land & Energy Company, Shell Frontier Oil & Gas
Inc. and Shell Gulf of Mexico Inc. (incorporated by
reference to Exhibit 10.1 to Form 8-K filed May 9, 2003).
10.15 -- Letter Agreement dated April 9, 2003, relating to Sixth
Amendment to Conveyance of Gas Processing Rights
(incorporated by reference to Exhibit 10.2 to Form 8-K filed
May 9, 2003).
12.1 -- Computation of ratio of earnings to fixed charges for each
of the five years ended December 31, 2002, 2001, 2000, 1999
and 1998 for Enterprise Products Partners L.P. (incorporated
by reference to Exhibit 12.1 to Form 10-K filed March 31,
2003).
12.2 -- Computation of ratio of earnings to fixed charges for each
of the five years ended December 31, 2002, 2001, 2000, 1999
and 1998 for Enterprise Products Operating L.P.
(incorporated by reference to Exhibit 12.2 to Form 10-K
filed March 31, 2003).
21.1 -- List of Subsidiaries of the Registrants (incorporated by
reference to Exhibit 21.1 to Form 10-K filed March 31,
2003).
23.1** -- Consent of Deloitte & Touche LLP.
23.2** -- Consent of Ernst & Young LLP.
23.3** -- Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
24.1** -- Power of Attorney for Enterprise Products Operating L.P.
(included on signature page).
24.2** -- Power of Attorney for Enterprise Products Partners L.P.
(included on signature page).
25.1** -- Form T-1 Statement of Eligibility of Trustee.
---------------
* With respect to any exhibits incorporated by reference to any Exchange Act
filings, the Commission file number for Enterprise Products Partners is
1-14323, and the Commission file number for Enterprise Products Operating is
333-93239-01.
** Filed herewith.
*** Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment.