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Exhibit 1.1

 

Executed Version

 

KINDER MORGAN ENERGY PARTNERS, L.P.

 

Common Units Representing Limited Partner Interests
Having an Aggregate Offering Price of up to
$600,000,000

 

 

AMENDED AND RESTATED

EQUITY DISTRIBUTION AGREEMENT

 

October 1, 2009

 

UBS Securities LLC
299 Park Avenue
New York, New York 10171-0026

 

Ladies and Gentlemen:

 

This Agreement amends and restates in its entirety that certain Equity Distribution Agreement, dated January 16, 2009 (the “ Original Agreement ”), by and between Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the “ Partnership ”) and UBS Securities LLC (the “ Manager ”), which contemplated the issuance and sale of Common Units having an aggregate offering price of up to $300,000,000 to or through the Manager, of which Common Units having an aggregate offering price of $237,957,266 were issued and sold pursuant to the Original Agreement. As of the date hereof, Common Units having an aggregate offering price of $62,042,734 remain authorized for issuance and sale pursuant to the terms of the Original Agreement.  This Agreement provides for the issuance of Common Units having an aggregate offering price of up to $600,000,000, which amount includes the Common Units having an aggregate offering price of up to $300,000,000 authorized for issuance and sale under the Original Agreement and additional Common Units having an aggregate offering price of up to $300,000,000.

 

The Partnership confirms its agreement (this “ Agreement ”) with the Manager as follows:

 

SECTION 1.  Description of Securities .  The Partnership proposes to issue and sell through or to the Manager, as sales agent and/or principal, common units representing limited partner interests in the Partnership (the “ Common Units ”) having an aggregate offering price of up to $600,000,000 (the “ Units ”) on the terms set forth in Section 3 of this Agreement.  The Partnership agrees that whenever it determines to sell the Units directly to the Manager as principal, it will enter into a separate agreement (each, a “ Terms Agreement ”) in form and substance satisfactory to the Partnership and the Manager, relating to such sale in accordance with Section 3 of this Agreement.

 



 

SECTION 2.  Representations and Warranties of the Partnership .  The Company represents and warrants to and agrees with the Manager that:

 

(a)  The Partnership has prepared and filed with the Securities and Exchange Commission (the “ Commission ”), pursuant to the Securities Act of 1933, as amended (the “ Act ”) and the rules and regulations adopted by the Commission thereunder (the “ Rules ”), a registration statement on Form S-3 (Registration Statement No. 333-153598), including a prospectus, relating to the Units, and such registration statement has become effective.  Such registration statement, as amended to the date of this Agreement, and including (1) financial statements, exhibits and Incorporated Documents (as hereinafter defined), (2) any information contained or incorporated by reference in a prospectus filed with the Commission pursuant to Rule 424(b) of the Rules, to the extent such information is deemed, pursuant to Rule 430B or Rule 430C of the Rules, to be part of the registration statement at the time of such registration statement’s effectiveness for purposes of Section 11 of the Act, as such section applies to the Manager, and (3) any registration statement filed to register the offer and sale of Units pursuant to Rule 462(b) of the Rules, is hereinafter referred to as the “ Registration Statement ,” and includes any new registration statement, post-effective amendment to such registration statement or new shelf registration statement as may have been filed pursuant to Section 4(f)  of this Agreement.  The prospectus dated December 15, 2008 filed as part of the Registration Statement is hereinafter referred to as the “ Base Prospectus ,” unless a new registration statement has been filed under Section 4(f)  of this Agreement and become effective, in which case the “Base Prospectus” shall be the final prospectus first filed with the Commission pursuant to Rule 424(b) after the effectiveness of such new registration statement.  Except with respect to Section 7 , the most recent prospectus supplement relating to the Units filed with the Commission pursuant to Rule 424(b) of the Rules is hereinafter referred to as the “ Prospectus Supplement .”  The Base Prospectus, as supplemented by the Prospectus Supplement, is hereinafter referred to as the “ Prospectus .”  Any reference herein to the Registration Statement, the Base Prospectus, any Prospectus Supplement or the Prospectus shall be deemed to include all documents incorporated, or deemed to be incorporated, therein by reference pursuant to the requirements of Item 12 of Form S-3 under the Act (the “ Incorporated Documents ”). For purposes of this Agreement, all references to the Registration Statement, the Base Prospectus, the Prospectus Supplement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“ EDGAR ”), which EDGAR copy is substantially identical to the other copies of such material, except to the extent permitted by Regulation S-T.

 

(b)  The Partnership has reasonable grounds to believe that it meets the requirements for the use of Form S-3 under the Act.  For purposes of

 

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each offering of the Units pursuant to transactions under this Agreement that are not firm commitment underwritings, the Partnership will be an “ineligible issuer” (as defined in Rule 405 under the Act) as of each relevant eligibility determination date for purposes of Rules 164 and 433 under the Act.

 

(c)  The Commission has not issued an order preventing or suspending the use of the Base Prospectus, the Prospectus Supplement or the Prospectus, or the effectiveness of the Registration Statement, and no proceeding for that purpose or pursuant to Section 8A of the Act has been instituted or, to the Partnership’s knowledge, threatened by the Commission.

 

(d)  The Registration Statement, at the time it originally became effective, as of the date hereof, as of the time of each sale of Units pursuant to this Agreement (each, a “ Time of Sale ”), at each Settlement Date (as defined in Section 3(a)(vi) ) and at all times during which a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 of the Rules or through compliance with Rule 172 of the Rules or any similar rule) in connection with any sale of Units, will comply, in all material respects, with the applicable requirements of the Act and the Rules; the Incorporated Documents, when they were or are filed with the Commission, conformed or will conform as of their respective dates in all material respects with the applicable requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the applicable rules and regulations adopted by the Commission thereunder; and the Prospectus will comply, as of the date that each Prospectus Supplement is filed with the Commission, each Time of Sale, each Settlement Date, and at all times during which a prospectus is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 of the Rules or through compliance with Rule 172 of the Rules or any similar rule) in connection with any sale of Units, in all material respects, with the requirements of the Act (including, without limitation, Section 10(a) of the Act).

 

(e)  (i) Each part of the Registration Statement and any amendment thereto, at the time it became or becomes effective did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) the Registration Statement meets, and the offering and sale of the Units as contemplated hereby complies with, the requirements of Rule 415 of the Rules; (iii) the Base Prospectus and any amendment thereto, at the time it was filed or will be filed with the Commission, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) the Prospectus and any amendment or supplement thereto, at the time it was filed or will be filed with the Commission pursuant to Rule 424 of the Rules, did not and will not contain an untrue statement of a material fact necessary in

 

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order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (v) as of each Time of Sale, each related Settlement Date and at the time a prospectus relating to the Units is required by the Act to be delivered (whether physically, deemed to be delivered pursuant to Rule 153 of the Rules or through compliance with Rule 172 of the Rules or any similar rule), the Prospectus, as then amended or supplemented, did not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the Partnership makes no representation or warranty with respect to any statement contained in the Registration Statement or the Prospectus in reliance upon and in conformity with information furnished in writing by or on behalf of the Manager expressly for use in the Registration Statement or the Prospectus.

 

(f)  Prior to the execution of this Agreement, the Partnership has not, directly or indirectly, offered or sold any Units by means of any “prospectus” (within the meaning of the Act) or used any “prospectus” (within the meaning of the Act) in connection with the offer or sale of the Units, in each case other than the Base Prospectus; the Partnership has not, directly or indirectly, prepared, used or referred to any issuer free writing prospectus, as defined in Rule 433 of the Rules, with respect to the Units, although the Partnership makes no representation with respect to actions taken by the Manager.

 

(g)  The consolidated financial statements included or incorporated by reference in the Registration Statement and the Prospectus present fairly the financial position of the Partnership and its consolidated subsidiaries as of the dates shown and their results of operations, partners’ capital and cash flows for the periods shown, and, except as otherwise disclosed in the Registration Statement and the Prospectus, such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis; any schedules included in the Registration Statement present fairly the information required to be stated therein; any summary or selected financial data included in the Registration Statement and the Prospectus present fairly the information shown therein and, to the extent based upon or derived from the financial statements, have been compiled on a basis consistent with the financial statements presented therein except as otherwise stated therein or in the notes thereto; and as to any pro forma financial statements included or incorporated by reference in the Registration Statement and the Prospectus, the assumptions used in preparing the pro forma financial statements so included or incorporated by reference in the Registration Statement and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma

 

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adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts.

 

(h)  The Partnership is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware, with all necessary partnership power and authority to own its properties and conduct its business as described in the Prospectus and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the consolidated financial condition, results of operations or business of the Partnership and its subsidiaries, taken as a whole (a “ Material Adverse Effect ”).

 

(i)  All of the outstanding shares of capital stock, limited partner interests, general partner interests, or limited liability company interests, as applicable, of each of the Partnership’s subsidiaries that is a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X, and Trailblazer Pipeline Company and TransColorado Gas Transmission Company (collectively, the “ Significant Subsidiaries ”), have been duly and validly authorized and issued and are fully paid and (except (A) as required to the contrary by the Delaware Limited Liability Company Act (the “ Delaware LLC Act ”) and the Delaware Revised Uniform Limited Partnership Act (the “ Delaware LP Act ”) and (B) with respect to any general partner interests) non-assessable, and are owned by the Partnership directly or indirectly through one or more wholly-owned subsidiaries or Kinder Morgan G.P., Inc., a Delaware corporation (the “ General Partner ”).  All of such shares or interests owned directly or indirectly by the Partnership or the General Partner are owned free and clear of any lien, encumbrance, security interest, equity or charge (except for such liens, encumbrances, security interests, equities or charges as are not, individually or in the aggregate, material to such ownership or as described in the Prospectus).

 

(j)  Each of the Significant Subsidiaries has been duly incorporated or formed and is validly existing as a corporation, limited partnership, general partnership, or limited liability company, as the case may be, in good standing under the laws of the jurisdiction in which it is chartered or organized, with full entity power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Prospectus, and is duly qualified to do business as a corporation, limited partnership, general partnership, or limited liability company, as the case may be, and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect.

 

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(k)  The General Partner is the sole general partner of the Partnership and Kinder Morgan Operating L.P. “A,” a Delaware limited partnership (“ OLP-A ”), Kinder Morgan Operating L.P. “B,” a Delaware limited partnership (“ OLP-B ”), Kinder Morgan Operating L.P. “C,” a Delaware limited partnership (“ OLP-C ”), Kinder Morgan Operating L.P. “D,” a Delaware limited partnership (“ OLP-D ”), and Kinder Morgan CO2 Company, L.P., a Texas limited partnership (“ CO2 ”, and together with OLP-A, OLP-B, OLP-C, and OLP-D, the “ Operating Partnerships ”); the General Partner owns general partner interests in the Partnership and the Operating Partnerships; each such general partner interest is duly authorized by the Agreement of Limited Partnership of the Partnership, as amended and restated, or the agreement of limited partnership, as amended and restated, of the respective Operating Partnership, as the case may be, and was validly issued to or acquired by the General Partner; and the General Partner owns such general partner interests free and clear of any lien, encumbrance, security interest, equity or charge (except for such liens, encumbrances, security interests, equities or charges as are not, individually or in the aggregate, material to such ownership or as described in the Prospectus).

 

(l)  The General Partner has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware; the General Partner is an indirect subsidiary of Kinder Morgan, Inc., a Kansas corporation; and the General Partner has all necessary corporate power and authority to own its properties and conduct its business as described in the Prospectus and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect.

 

(m)     Kinder Morgan Management, LLC, a Delaware limited liability company (the “ Company ”), all of the shares of which that may vote for the election of directors are owned by the General Partner, is the delegate of the General Partner pursuant to that certain Delegation of Control Agreement among the General Partner, the Company, the Partnership and the Operating Partnerships dated as of May 18, 2001, as amended from time to time (the “ Delegation of Control Agreement ”); the Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware; and the Company has all the necessary limited liability company power and authority to perform its functions as the delegate of the General Partner.

 

(n)  The Partnership has all necessary partnership power and authority to authorize, issue and sell the Units as contemplated by this Agreement; and all action required to be taken by the Partnership for the due

 

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and proper authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby has been duly and validly taken.

 

(o)  The Units have been duly and validly authorized and when issued and delivered against payment therefor pursuant to this Agreement on each Settlement Date such Units will be validly issued, fully paid and (except as required to the contrary by the Delaware LP Act) non-assessable and will conform in all material respects to the description thereof contained in the Prospectus; and the common unitholders of the Partnership have no preemptive rights with respect to the Units.

 

(p)  The execution, delivery and performance of this Agreement, and the issuance and sale of the Units hereunder, will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the General Partner, the Company, the Partnership or any of the Significant Subsidiaries is a party or by which the General Partner, the Company, the Partnership or any of the Significant Subsidiaries is bound or to which any of the property of the General Partner, the Company, the Partnership or any of the Significant Subsidiaries is subject, except where any such foregoing occurrence will not prevent the consummation of the transactions contemplated herein or would not have a Material Adverse Effect, nor will such action result in any violation of the provisions of the certificate of incorporation, bylaws, partnership agreement or other formation document, as the case may be, of the General Partner, the Company, the Partnership or any of the Significant Subsidiaries, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the General Partner, the Company, the Partnership or any of the Significant Subsidiaries or any of the properties of any such entities, and no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over the General Partner, the Company, the Partnership or any of the Significant Subsidiaries or any of the properties of such entities is required for the issuance and sale of the Units by the Partnership, except such as have been obtained or made under the Act, and such consents, approvals, authorizations, registrations or qualifications as may be required under the state securities or Blue Sky laws.

 

(q)  Other than as set forth or incorporated by reference in the Prospectus, there are no legal or governmental proceedings pending to which the Partnership or any of its subsidiaries is a party or of which any property of the Partnership or any of its subsidiaries is the subject which would be reasonably likely to, individually or in the aggregate, have a Material Adverse Effect; and, to the Partnership’s knowledge, no such proceedings are threatened or contemplated.

 

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(r)  Except as disclosed (including by means of incorporation by reference) in the Prospectus, none of the Partnership or any of its subsidiaries has violated any federal or state law or regulation relating to the protection of human health or the environment, except for any violations and remedial actions as would not be reasonably likely to, individually or in the aggregate, have a Material Adverse Effect.

 

(s)  Except as disclosed in or contemplated by the Prospectus, (i) since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, there has been no change, nor any development or event involving a prospective change, that would have a Material Adverse Effect, (ii) the Partnership and its subsidiaries have not sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree that could reasonably be expected to have a Material Adverse Effect, and (iii) since the respective dates as of which information is given in the Prospectus, there has not been any change, or any development involving a prospective change, in the partnership interests, capital stock or long-term debt of the Partnership or any of its subsidiaries that would constitute a material adverse change to the Partnership and its subsidiaries taken as a whole, or any material adverse change in the general affairs, management, financial position or results of operations of the Partnership and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business.

 

(t)  Each of the Partnership and the Significant Subsidiaries owns or leases all properties as are necessary to the conduct of its operations as described in the Prospectus, except where the failure to own or lease any of such properties would not, individually or in the aggregate, have a Material Adverse Effect.

 

(u)  The Partnership is, and after giving effect to the offering and sale of the Units and the application of the proceeds thereof as described in the Prospectus, will be, exempt from regulation as an “investment company,” as defined in the Investment Company Act of 1940, as amended.

 

(v)  None of the Partnership, KMGP Services Company, Inc., the General Partner, the Company or any of the Significant Subsidiaries is involved in any labor dispute and, to the knowledge of the Partnership, no such dispute has been threatened, except for such disputes as would not, individually or in the aggregate, have a Material Adverse Effect.

 

(w)  To the Partnership’s knowledge, PricewaterhouseCoopers LLP, who has certified certain financial statements of the Partnership and its

 

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subsidiaries, is an independent registered public accounting firm as required by the Act and the Rules.

 

(x)  The offering and sale of Units, as contemplated by this Agreement, does not give rise to any rights, other than those which have been waived or satisfied, for or relating to the registration of any securities of the Partnership (except as otherwise described in the Prospectus); and except as described in the Prospectus, or provided in the various employee or director stock or unit based benefit or compensation plans, there are no outstanding options or warrants to purchase any Units, Common Units or other securities of the Partnership.

 

(y)  None of the General Partner, Kinder Morgan, Inc., the Company, the Partnership or any of the Significant Subsidiaries, nor any of their respective directors and officers has taken any action that is or was designed to or that has constituted or that might have reasonably been expected to cause or result in the stabilization or manipulation of the price of any security of the Partnership to facilitate the offer or sale of the Units.

 

(z)  The Partnership maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Partnership’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and the Partnership believes that its internal control over financial reporting is effective.

 

(aa)  Since the date of the Partnership’s latest financial statements (audited or unaudited) included or incorporated by reference in the Prospectus, there h


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