exv4w1



 






Exhibit 4.1
















UNITS PURCHASE AGREEMENT




by and among




ENERGY TRANSFER PARTNERS, L.P.




AND




THE PURCHASERS NAMED HEREIN




Dated January 14, 2005
















 









 








UNITS PURCHASE AGREEMENT




     THIS UNITS PURCHASE AGREEMENT, dated January 14, 2005 (this “Agreement”), is made by Energy
Transfer Partners, L.P., a limited partnership formed under the laws of the State of Delaware (the
“Seller” or “Partnership”), on the one hand, and each of the parties that is a signatory hereto
(each, a “Purchaser”, and together, the “Purchasers”), on the other hand.



     WHEREAS, the Seller desires to issue and sell to the Purchasers, and each of the Purchasers
desires to purchase, common units, representing limited partner interests of the Partnership (the
“Partnership Common Units”).



     NOW, THEREFORE, in consideration of the premises, warranties, covenants and agreements
contained herein, the parties agree as follows:



     1. Purchase and Sale.



     (a) Subject to the terms and conditions of this Agreement, the Seller shall issue and sell to
each Purchaser, and such Purchaser shall purchase from the Seller, such number of Partnership
Common Units as are set forth next to such Purchaser’s name on the applicable signature page at the
end of this Agreement (such Partnership Common Units, the “Purchased Units”) at a price of
US$54.00, per Partnership Common Unit (the aggregate price for the Purchased Units purchased by
each Purchaser, the “Purchase Price”), upon the terms set forth in this Agreement (each such
transaction, the “Purchase”, and such transactions collectively, the “Purchases”) ; provided, that,
if the closing price of the Partnership Common Units on the New York Stock Exchange (the “NYSE”) on
any Business Day (as defined herein) is less than $50.00, each Purchaser may terminate this
Agreement on written notice provided to the Seller within three (3) Business Days; provided
further, that, if any Purchaser does not provide such notice to the Seller within such three (3)
Business Day period (or any subsequent three (3) Business Day period as described in this proviso),
and the closing price of the Partnership Common Units on the NYSE on any Business Day thereafter is
$50.00 or higher, such Purchaser may terminate this Agreement on written notice provided to the
Seller within three (3) Business Days of any subsequent Business Day when the closing price of the
Partnership Common Units on the NYSE is less than $50.00.



     (b) The Purchased Units will be registered with the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “Act”), unless the Seller
determines, in its sole discretion, that it would not be able to register the Purchased Units due
to its inability to satisfy registration requirements of the Commission on a timely basis, in which
case the Purchased Units will be issued pursuant to an exemption from the registration requirements
of the Act and the Seller shall comply with Section 15 hereof.



     2. Several Nature of Obligations. The obligations of the Purchasers in this Agreement are
several and not joint. Breach or default by any Purchaser of any of its obligations hereunder
shall not relieve any other Purchaser of any of its obligations hereunder.



 









 





     3. Conditions Precedent to the Purchase.



     (a) The obligations of each Purchaser to complete its Purchase are subject to the following
conditions:




     (i) that the Seller shall have notified such Purchaser on or prior to January 27, 2005
(the “Notice Date”) that it will enter into a binding, definitive agreement with a company
engaged in the transportation of natural gas relating to the acquisition of the assets of or
interests in such company in an amount exceeding $500,000,000 (Five Hundred Million
Dollars); provided, that, if the Seller has not provided such notice to such Purchaser, such
Purchaser may, in its sole discretion, elect to extend the Notice Date for up to thirty (30)
days in increments of ten (10) days each.




     (ii) the Purchased Units shall have been registered under the Act and the Seller shall
have filed the Prospectus (as defined herein) with the Commission pursuant to Rule 424(b)
under the Act (the “Registration Condition”).




     (iii) that (A) the Partnership Common Units shall be listed on the NYSE, and (B) if the
Registration Condition is applicable, the Purchased Units shall be listed and available for
trading on the NYSE.




     (iv) the accuracy of the representations and warranties of the Seller contained in
Section 5 hereof on the date hereof, the Notice Date and the Closing Date.



     (b) The obligations of the Seller to sell the Purchased Units pursuant to this Agreement are
subject to the following conditions:




     (i) that the Seller has entered into a binding, definitive agreement with a company
engaged in the transportation of natural gas relating to the acquisition of the assets of or
interests in such company in an amount exceeding $500,000,000 (Five Hundred Million
Dollars).




     (ii) the accuracy of the representations and warranties of such Purchaser contained in
Section 6 hereof on the date hereof and the Closing Date.



     4. Closing and Delivery of Purchased Units.



     (a) Subject to the ability of any Purchaser to terminate this Agreement as set forth in
Section 1(a) hereof, the closing of the several transactions constituting the purchase and sale of
the Purchased Units (the “Closing”) shall take place at the offices of the Seller, 2838 Woodside
Street, Dallas, Texas 75204, at 9:00 a.m. on the first business day following the satisfaction or
waiver of all of the conditions to the obligations of the Seller and the Purchasers specified in
Section 3 hereof (the “Closing Date”); provided that the obligations of the parties hereto shall
terminate if the Closing shall not have occurred on or prior to February 25, 2005, unless the
Seller and the Purchasers otherwise mutually agree.



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     (b) The number of Purchased Units to be sold to each Purchaser under this Agreement shall be
delivered by or on behalf of the Seller to such Purchaser at the Closing (i) in book-entry form
through the facilities of The Depository Trust Company if the Registration Condition is applicable,
or (ii) in the form of one or more certificates, registered in the names requested by such
Purchaser if the Registration Condition is not applicable, in each case, against payment of the
Purchase Price therefor by wire transfer of United States dollars in immediately available funds to
such bank account of the Seller designated by the Seller in writing no later than the Business Day
immediately preceding the Closing Date. “Business Day” means any day other than (a) a Saturday,
Sunday or legal holiday in New York City, or (b) a day on which the commercial banks in New York
City are authorized or required by law or executive order to close.



     (c) Each Purchaser, at its sole option, provided that such Purchaser has delivered to Seller
the Purchase Price for the Purchased Units at Closing, may request postponement of the delivery to
such Purchaser of the Purchased Units until Seller is able to deliver Purchased Units that satisfy
the Registration Condition, which date Seller agrees shall be the earliest possible date.




     (i) In the event that Seller is not able to deliver Purchased Units that satisfy the
Registration Condition by April 1, 2005, then on April 1, 2005, the Seller shall pay to each
Purchaser liquidated damages in the amount of 2.0% of the Purchase Price of the Purchased
Units purchased by such Purchaser pursuant to this Agreement, and an additional liquidated
damages payment of 1.0% of the Purchase Price of the Purchased Units purchased by such
Purchaser pursuant to this Agreement for each 30-day period thereafter (payable within three
business days of the end of such period) until such time as the Seller delivers Purchased
Units that satisfy the Registration Condition.




     (ii) In the event that Seller is not able to deliver Purchased Units that satisfy the
Registration Condition by July 1, 2005, then on July 1, 2005, the Seller shall deliver
Purchased Units to each Purchaser in the manner described in Section 4(b)(ii) hereof, and,
the Seller shall continue to pay to each Purchaser liquidated damages in the amount of 1% of
the Purchase Price of the Purchased Units purchased by such Purchaser pursuant to this
Agreement for each 30-day period thereafter (payable within three business days of the end
of such period) until such time as the Seller registers the Purchased Units under the Act.




     (iii) If and when Seller delivers Purchase Units that satisfy the Registration
Condition under this Section 4(c), such Purchased Units shall be listed and available for
trading on the NYSE.



     5. Representations, Warranties and Covenants of Seller. The Seller represents and warrants,
and agrees with, each Purchaser that:



          (a) The Seller is an entity duly organized and validly existing under the laws of the state of
Delaware and has the requisite power and authority, and has taken all actions necessary, to
execute, deliver and perform its obligations under this Agreement. This Agreement is a valid and
binding obligation of the Seller, enforceable in accordance with its terms, subject



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to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles. The execution and
delivery of this Agreement, the compliance by the Seller with all the provisions of, and the
performance by the Seller of its obligations under, this Agreement, and the consummation of the
transactions contemplated in this Agreement will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under, (i) the constitutive
documents of the Seller, (ii) any instrument, contract or other agreement to which the Seller is a
party or by which the Seller is bound or to which any of its properties or assets may be bound or
subject, in each case, the breach or violation of which or default under which would be reasonably
expected to have a material adverse effect on the ability of the Seller to comply with its
obligations hereunder, or (iii) any law or statute or any order, rule or regulation of any court or
governmental agency or body or any stock exchange authority or self-regulatory organization (each,
a “Governmental Authority”), in each case having jurisdiction over the Seller or any of its
subsidiaries or any of their properties; and, other than the listing of the Purchased Units and the
filing of the Prospectus if the condition in Section 3(a)(i)(A) is applicable, and the filings
required by Section 15 hereof if the condition in Section 3(a)(i)(A) is not applicable, no consent,
approval, authorization, order, registration, clearance or qualification or notification of, with
or to any Governmental Authority is required for the sale and delivery of the Purchased Units being
sold by the Seller to such Purchaser under this Agreement;




          (b) Such Purchaser, when such Purchased Units are delivered as provided in this Agreement,
will be entitled to the rights of a unitholder of limited partners interests of the Seller
conferred by the Amended and Restated Agreement of Limited Partnership as amended (the “Partnership
Agreement”);



          (c) Such Purchased Units are not subject to any conflicting sale, transfer, assignment, or any
agreement (other than this Agreement) to assign, convey, or transfer, in whole or in part, any of
such Purchased Units, and upon consummation of such Purchase, such Purchaser will receive valid
title to such Purchased Units, free and clear of any encumbrance, liens, claims, charges, security
interests, or other interests of others;



          (d) There are no legal or governmental proceedings pending to which the Seller is a party or
of which any property of the Seller is the subject that, if determined adversely to the Seller,
would individually or in the aggregate have a material adverse effect on the Seller’s ability to
perform its obligations under this Agreement, and, to the best of the Seller’s knowledge, no such
proceedings are threatened or contemplated by any such Governmental Authority or threatened by
others;



          (e) The documents filed by the Partnership under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and regulations thereunder, and none
of such documents contained any untrue statement of material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein not misleading.



          (f) In the event that the Registration Condition is applicable, (i) a registration statement
on Form S-3 (File No. 333-107324) with respect to the Purchased Units (A) has been



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prepared by the Seller in conformity with the requirements of the Act and the rules and regulations
thereunder; (B) has been filed with the Commission under the the Act; and (C) has become effective
under the Act, (ii) the Commission has not issued any order preventing or suspending the use of the
Registration Statement or any prospectus relating thereto, and (iii) copies of such Registration
Statement and each of the amendments thereto, if any, have been delivered by the Seller to the
Purchasers. As used in this Agreement, “Effective Time” means the date and the time as of which
such registration statement, or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; “Effective Date” means the date of the Effective Time;
“Registration Statement” means the registration statement referred to above, as amended at the
Effective Time: and “Prospectus” means the final prospectus supplement relating to the Purchased
Units and the offering thereof, including the accompanying base prospectus, as first filed with the
Commission pursuant to Rule 424(b) under the Act after the date and time this Agreement is
executed. Reference made herein to the Prospectus shall be deemed to refer to and include any
information incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the date the Prospectus, and any reference to any amendment or supplement to the
Prospectus shall be deemed to refer to and include any document filed under the Exchange Act, after
the date of the Prospectus and incorporated by reference in the Prospectus. The Registration
Statement, and the Prospectus and any further amendments or supplements to the Registration
Statement or the Prospectus do not and will not, as of the applicable Effective Date (as to the
Registration Statement and any amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading (in the case of the Prospectus, in the light of the circumstances under
which the statements were made).




     (g) Within three (3) Business Days after the Closing Date, the Seller shall issue a press
release or file a Current Report on Form 8-K with the Commission that describes the material terms
and conditions of the transactions contemplated by this Agreement.



     6. Representations and Warranties of the Purchasers.



     (a) Each Purchaser severally represents and warrants in respect of itself to the Seller that:




     (i) Such Purchaser is an entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and has all the requisite right, power
and authority, and has taken all actions necessary, to execute, deliver and perform its
obligations under this Agreement. This Agreement is a legal, valid and binding obligation
of such Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general applicability relating to
or affecting creditors’ rights and to general equity principles. The execution and delivery
of this Agreement by such Purchaser, the compliance by such Purchaser with all of the
provisions of, and the performance by such Purchaser of its obligations under, this
Agreement and the consummation of the transactions contemplated in this Agreement will not
conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, (A) the constitutive


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documents of such Purchaser, (B) any instrument, contract or other agreement to which
such Purchaser is a party or by which such Purchaser is bound or to which any of its
properties or assets may be bound or subject, in each case, the breach or violation of which
or default under which would be reasonably expected to have a material adverse effect on the
ability of such Purchaser to comply with its obligations hereunder, or (C) any law or
statute or any order, rule or regulation of any Governmental Authority having jurisdiction
over such Purchaser or any of its subsidiaries or any of their properties and no consent,
approval, authorization, order, registration, clearance or qualification or notification of,
with or to any such Governmental Authority is required for the purchase of such Purchased
Units by such Purchaser under this Agreement.




     (ii) There are no legal or governmental proceedings pending to which such Purchaser is
a party or of which any property of such Purchaser is the subject that, if determined
adversely to such Purchaser, would individually or in the aggregate have a material adverse
effect on such Purchaser’s ability to perform its obligations under this Agreement, and, to
the best of such Purchaser’s knowledge, no such proceedings are threatened or contemplated
by any such Governmental Authority or threatened by others.




     (iii) No fees or commissions are or will be payable by such Purchaser to brokers,
finders, or investment bankers with respect to the purchase of the Purchased Units or the
consummation of the transactions contemplated by this Agreement. Such Purchaser agrees that
it will indemnify and hold harmless the Seller from and against any and all claims, demands,
or liabilities for broker’s, finder’s, placement, or other similar fees or commissions
incurred by such Purchaser or alleged to have been incurred by such Purchaser in connection
with the purchase of the Purchased Units or the consummation of the transactions
contemplated by this Agreement.




     (iv) There are no other agreements by, among or between such Purchaser and any of its
affiliates, on the one hand, and the Seller or any of its affiliates, on the other hand,
with respect to the transactions contemplated hereby nor promises or inducements for future
transactions between or among any of such parties.



     (b) In the event that the Registration Condition is not applicable, each Purchaser severally
represents and warrants in respect of itself to the Seller that:




     (i) Such Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation
D promulgated under the Act of 1933, as amended (the “Securities Act”).




     (ii) Such Purchaser is acquiring the Purchased Units for its own account, and not with
a view to any distribution, resale, subdivision, or fractionalization thereof in violation
of the Securities Act or any other applicable domestic or foreign securities law, and such
Purchaser has no present plans to enter into any contract, undertaking, agreement or
arrangement for any such distribution, resale, subdivision, or fractionalization of such
Purchased Units.




     (iii) Such Purchaser acknowledges that the Seller has provided to such Purchaser or its
representatives all agreements, documents, records and books that such


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Purchaser or its representatives have requested relating to an investment in the
Seller. Such Purchaser has had a full opportunity to ask questions of and receive answers
from the Seller or its representatives concerning the Seller and the terms and conditions of
this investment, and all questions asked by such Purchaser have been adequately answered to
the full satisfaction of such Purchaser.




     (iv) Such Purchaser is able to bear the economic risk of losing its entire investment
in the Seller. Such Purchaser has knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of this investment.




     (v) Such Purchaser acknowledges and agrees that, based in part upon its representations
contained herein and in reliance upon applicable exemptions, the purchase and sale of the
Purchased Units has not been registered under the Securities Act or the securities laws of
any other domestic or foreign jurisdiction. Accordingly, the Purchased Units may not be
offered for sale, sold, pledged, hypothecated, or otherwise transferred in whole or in part
except in accordance with the terms of the Partnership Agreement and in compliance with all
applicable laws, including securities laws. Such Purchaser acknowledges that it has been
advised that the Seller has no obligation to register the Purchased Units under the
Securities Act or any other securities laws or to comply with any exemption under the
Securities Act or any other securities law which would permit such Purchaser to sell such
Purchaser’s Purchased Units except as set forth in Section 15 hereof.



     7. Information.
If the Registration Condition is applicable, each Purchaser shall supply such
information with respect to itself, its directors, officers and shareholders as the Seller may
reasonably request for the purpose of preparation of the Prospectus. The Seller shall supply to a
Purchaser such information with respect to itself, its directors, officers and unitholders and such
other matters as such Purchaser may reasonably request for the purpose of preparation of any
notice, form or other documents required to be filed with any Governmental Authority.



     8. Confidentiality. The parties acknowledge and agree that the Confidentiality Agreements
between the Seller and each of the Purchasers relating to the transactions that are the subject of
this Agreement remain in full force and effect.



     9. Further Assurances. Each party agrees to execute, acknowledge and deliver such further
instruments and to do all such other acts as may be necessary or appropriate to carry out the
purposes and intent of this Agreement.



     10. Costs and Expenses. Each party to this Agreement shall be responsible for such party’s
own expenses in connection with this Agreement, except that the Seller agrees to reimburse the
Purchasers for the reasonable fees and expenses of one firm acting as counsel for the Purchasers in
connection with the execution, delivery and performance of this Agreement and the transactions
contemplated hereby up to a maximum amount of $30,000.



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     11. Notices. All statements, requests, notices and agreements hereunder shall be in writing,
and shall be delivered or sent by mail or facsimile transmission to the address or facsimile number
set forth below:



	 	(a)  	to the Seller, at:





                  Energy Transfer Partners, L.P.

                  8801 S. Yale, Suite 310

                  Facsimile: 918/493-7290

                  Attention: Robert A. Burk




                  with a copy to:




                  Tom Mason

                  Vinson & Elkins

                  1001 Fannin Street

                  2300 First City Tower

                  Houston, TX 77002

                  Facsimile: 713/615-5320





	 	(b)  	to a Purchaser, at the address or facsimile number set forth below such
Purchaser’s signature on the applicable signature page at the end of this Agreement,




or to such other address or facsimile number as is notified in writing by that party to the other
parties.




     12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.



     13. Entire Agreement. This Agreement shall constitute the binding agreement of the parties
with respect to the subject matter hereof and, except as provided in Section 8, shall constitute
the entire agreement of the parties with respect to the subject matter hereof.



     14. Counterparts. This Agreement may be executed by the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.



     15. Registration of Purchased Units; Compliance with the Act. The provisions set forth in
this Section 15 shall only apply to the extent the Seller delivers Unregistered Units pursuant to
this Agreement.



     (a) Registration Procedures and Expenses. The Seller shall:




     (i) Subject to receipt of a registration statement questionnaire from each Purchaser,
use commercially reasonable best efforts to prepare and file with the Commission, within 75
days after the Closing Date, a registration statement (the “Shelf Registration Statement”)
to enable the resale of the Registrable Units by such Purchaser. “Registrable Units” means
each Unregistered Unit until the earlier of: (A) the date on which such Unit has been resold
or otherwise transferred pursuant to the Shelf Registration Statement; (B) the date on which
such Unit is transferred in compliance with



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Rule 144 under the Act or may be sold or transferred by a person who is not an affiliate of
the Seller pursuant to Rule 144 under the Securities Act (or any other similar provisions
then in force) without any volume or manner of sale restrictions thereunder; and (C) the
date on which such Unit ceases to be outstanding (whether as a result of redemption,
repurchase and cancellation or otherwise);




     (ii) use commercially reasonable best efforts, subject to receipt of necessary
information from each Purchaser, including a registration statement questionnaire, to cause
the Shelf Registration Statement to become effective within 90 days of the Closing Date;




     (iii) use commercially reasonable best efforts to prepare and file with the Commission
such amendments and supplements to the Shelf Registration Statement and the Resale
Prospectus (as defined herein) used in connection therewith and take all such other actions
as may be necessary to keep the Shelf Registration Statement current and effective for a
period (the “Registration Period”) not exceeding, with respect to each Purchaser’s
Registrable Units, the earliest of (A) the second anniversary of the Closing Date, (B) the
date on which all Registrable Units then held by such Purchaser may be sold or transferred
in compliance with Rule 144 under the Act or may be sold or transferred by a person who is
not an affiliate of the Seller pursuant to Rule 144 of the Act (or any other similar
provisions then in force) without any volume or manner of sale restrictions thereunder, and
(Ci) such time as all Registrable Units held by such Purchaser have been sold (x) pursuant
to a registration statement, (y) to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (z) in a transaction exempt from the
registration and prospectus delivery requirements of the Act under Section 4(1) thereof so
that all transfer restrictions and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale;




     (iv) promptly furnish to each Purchaser with respect to the Registrable Units
registered under the Registration Statement such reasonable number of copies of the
Registration Statement and Prospectus, including any supplements to or amendments of the
Prospectus or Registration Statement, in order to facilitate the public sale or other
disposition of all or any of the Registrable Units by the Investor;




     (v) promptly take such action as may be necessary to qualify, or obtain, an exemption
for the Registrable Units under such of the state securities laws of United States
jurisdictions as shall be necessary to qualify, or obtain an exemption for, the sale of the
Registrable Units in states specified in writing by each Purchaser; provided, however, that
the Seller shall not be required to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or has not so consented;




     (vi) bear all expenses in connection with the procedures in paragraph (i) through (v)
of this Section 15(a) and the registration of the Registrable Units pursuant to the Shelf
Registration Statement, regardless of whether a Shelf Registration Statement becomes
effective, including without limitation: (A) all registration and filing fees and expenses
(including filings made with the NYSE or any other applicable stock exchange);



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(B) fees and expenses of compliance with federal securities and state “blue sky” or
securities laws; (C) expenses of printing (including printing certificates for the
Registrable Units and Resale Prospectuses); (D) all application and filing fees in
connection with listing of the Registrable Units on the NYSE; and (E) all fees and
disbursements of counsel of the Seller and independent certified public accountants of the
Seller; provided, however, that each Purchaser shall be responsible for paying the
underwriting commissions or brokerage fees, and taxes of any kind (including, without
limitation, transfer taxes) applicable to any disposition, sale or transfer of such
Purchaser’s Registrable Units. The Seller shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties); and



     (vii) advise the Purchasers, within two Business Days by e-mail, fax or other type of
communication, and, if requested by such person, confirm such advice in writing: (A) after
it shall receive notice or obtain knowledge of the issuance of any stop order by the
Commission delaying or suspending the effectiveness of the Shelf Registration Statement or
of the initiation or threat of any proceeding for that purpose, or any other order issued by
any state securities commission or other regulatory authority suspending the qualification
or exemption from qualification of such Registrable Units under state securities or “blue
sky” laws; and it will promptly use its commercially reasonable best efforts to prevent the
issuance of any stop order or other order or to obtain its withdrawal at the earliest
possible moment if such stop order or other order should be issued; and (B) when the Resale
Prospectus or any supplements to or amendments of the Resale Prospectus have been filed,
and, with respect to the Shelf Registration Statement or any post-effective amendment
thereto, when the same has become effective.



(b) Delay in Effectiveness of Shelf Registration Statement. The Seller further
agrees that, unless the failure to become effective is due to the fault of any Purchaser, in
the event the Shelf Registration Statement has not been declared effective by the Commission
within 90 days after the Closing Date, the Seller shall pay to each Investor liquidated
damages in the amount of 1.0% of the Purchase Price of the Purchased Units purchased by such
Purchaser pursuant to this Agreement and an additional liquidated damages payment of 1.0% of
the Purchase Price of the Purchased Units purchased by such Purchaser pursuant to this
Agreement for each 30-day period thereafter until the Shelf Registration Statement has been
declared effective; provided, that, in no event shall the aggregate penalty
under this Section 15(b) in any 30-day period exceed 1.0% of the Purchase Price of the
Purchased Units purchased by such Purchaser. The Seller shall deliver the cash payments
described in the preceding sentence to each Purchaser by the fifth business day after the
occurrence of the event described in the preceding sentence. Notwithstanding anything to
the contrary in this Agreement, payment of cash as provided in this Section 15(b) shall be
each Purchaser’s sole and exclusive remedy in the event of the occurrence of an event
described herein.



(c) Transfer of Shares; Suspension.





     (i) Each Purchaser agrees that it will not effect any sale or other disposition of the
Registrable Units that would constitute a sale within the meaning of the Act, except



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as contemplated in the Shelf Registration Statement referred to in Section 15(a) or
otherwise in accordance with the Act, and that it will promptly notify the Seller of any
changes in the information set forth in such Shelf Registration Statement regarding such
Purchaser or its plan of distribution.




     (ii) Except in the event that paragraph (iii) below applies, the Seller shall, at all
times during the Registration Period, promptly (A) prepare and file from time to time with
the Commission a post-effective amendment to the Shelf Registration Statement or a
supplement to the related Resale Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document so that the Shelf
Registration Statement will not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading, and so that,
as thereafter delivered to purchasers of the Registrable Units being sold thereunder, such
Resale Prospectus 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, in
light of the circumstances under which they were made, not misleading; (B) provide each
Purchaser with copies of any documents filed pursuant to clause (A) hereof; and (C) inform
each Purchaser that the Seller has complied with its obligations in clause (A) hereof (or
that, if the Seller has filed a post-effective amendment to the Shelf Registration Statement
which has not yet been declared effective, the Seller will notify each Purchaser to that
effect, will use its commercially reasonable efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify each Purchaser
pursuant to clause (C) hereof when the amendment has become effective).




     (iii) Subject to paragraph (iv) below, in the event of (A) any request by the
Commission or any other federal or state governmental authority during the period of
effectiveness of the Shelf Registration Statement for amendments or supplements to the Shelf
Registration Statement or related Resale Prospectus or for additional information; (B) the
issuance by the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Shelf Registration Statement or the initiation of
any proceedings for that purpose; (C) the receipt by the Seller of any notification with
respect to the suspension of the qualification or exemption from qualification of any of the
Registrable Units for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; or (D) any event or circumstance which necessitates the making
of any changes in the Shelf Registration Statement or the Resale Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the case of the
Shelf Registration Statement, it will not contain any 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, and that in the case of the Resale Prospectus, it will
not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading, then the Seller shall deliver a notice in writing to each
Purchaser (the “Suspension Notice”) to the effect of the foregoing and, upon receipt of such
Suspension Notice, such Purchaser will refrain from selling any Registrable Units pursuant
to the Shelf Registration Statement (a “Suspension”) until such Purchaser’s receipt of
copies of a supplemented or amended



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Resale Prospectus prepared and filed by the Seller, or until it is advised in writing by the
Seller that the current Resale Prospectus may be used. In the event of any Suspension, the
Seller will use its commercially reasonable efforts, consistent with the best interests of
the Seller and its shareholders, to cause the use of the Resale Prospectus so suspended to
be resumed as soon as reasonably practicable after the delivery of a Suspension Notice to
such Purchaser.




     (iv) Notwithstanding the foregoing paragraphs of this Section 15(c), each Purchaser
shall not be prohibited from selling Registrable Units under the Shelf Registration
Statement as a result of Suspensions on more than two occasions of not more than 45 days
each in any twelve-month period.



(d) Indemnification. For the purpose of this Section 15(d), the term “Registration
Statement” shall include any preliminary or final prospectus, exhibit, supplement or
amendment included in or relating to the Shelf Registration Statement referred to in Section
15(a) and the term “Rules and Regulations” means the rules and regulations promulgated under
the Act.




     (i) Indemnification by the Seller. The Seller agrees to indemnify and hold
harmless each Purchaser and each person, if any, who controls such Purchaser within the
meaning of the Act, against any losses, claims, damages, liabilities or expenses to which
such Purchaser or such controlling person may become subject, under the Act, the Exchange
Act, or any other federal or state statutory law or regulation insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the Shelf Registration Statement, including the Resale
Prospectus, financial statements and schedules, and all other documents filed as a part
thereof, as amended at the time of effectiveness of the Shelf Registration Statement,
including any information deemed to be a part thereof as of the time of effectiveness
pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434 of the Rules and
Regulations, or the prospectus, in the form first filed with the SEC pursuant to Rule 424(b)
of the Rules and Regulations, or filed as part of the Shelf Registration Statement at the
time of effectiveness if no Rule 424(b) filing is required (the “Resale Prospectus”), or any
amendment or supplement thereto, or the omission or alleged omission to state in any of them
a material fact required to be stated therein or necessary to make the statements in any of
them, in light of the circumstances under which they were made, not misleading, and will
reimburse such Purchaser and each such controlling person for any legal and other expenses
as such expenses are reasonably incurred by such Purchaser or such controlling person in
connection with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Seller will not be
liable in any such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Shelf Registration Statement, the Resale Prospectus
or any amendment or supplement of the Shelf Registration Statement or the Resale Prospectus
in reliance upon and in conformity with written information furnished to the Seller by or on
behalf of any Purchaser expressly for use in the Shelf Registration Statement or the Resale
Prospectus.



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     (ii) Indemnification by the Purchasers. Each Purchaser, severally and not
jointly, will indemnify and hold harmless the Seller, each of its directors, each of its
officers who sign the Shelf Registration Statement and each person, if any, who controls the
Seller within the meaning of the Act, against any losses, claims, damages, liabilities or
expenses to which the Seller, each of its directors, each of its officers who sign the Shelf
Registration Statement or controlling person may become subject, under the Act, the Exchange
Act, or any other federal or state statutory law or regulation insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue or alleged untrue statement of any material
fact contained in the Shelf Registration Statement, the Resale Prospectus, or any amendment
or supplement to the Shelf Registration Statement or the Resale Prospectus, or the omission
or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Shelf Registration Statement, the Resale Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written information
furnished to the Seller by or on behalf of such Purchaser expressly for use therein;
provided, however, that such Purchaser shall not be liable for any such untrue or alleged
untrue statement or omission or alleged omission of which such Purchaser has delivered to
the Seller in writing a correction at least five Business Days before the occurrence of the
transaction from which such loss was incurred, and such Purchaser will reimburse the Seller,
each of its directors, each of its officers who signed the Shelf Registration Statement or
controlling person for any legal and other expense reasonably incurred by the Seller, each
of its directors, each of its officers who signed the Shelf Registration Statement or
controlling person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action for which such person is
entitled to be indemnified in accordance with this Section 15(d). Notwithstanding anything
to the contrary contained herein, each Purchaser shall be liable under this Section 15(d)
for only that amount as does not exceed the net proceeds to such Purchaser as a result of
the sale of Registrable Units pursuant to the Shelf Registration Statement.




     (iii) Indemnification Procedure.




     (A) Promptly after receipt by an indemnified party under this Section 15(d) of
notice of the threat or commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party under this
Section 15(d), promptly notify the indemnifying party in writing of the claim; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or otherwise
under the indemnity agreement contained in this Section 15(d) or to the extent it is
not prejudiced as a result of such failure.




     (B) In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that it
may wish, jointly with all other indemnifying parties similarly



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notified, to assume the defense thereof; provided, however, if the defendants
in any such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it or other indemnified parties that are different from or additional
to those available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action, the
indemnifying party will not be liable to such indemnified party under this Section
6.5 for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof unless (x) the indemnified party shall have
employed such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by such indemnifying party representing all of the
indemnified parties who are parties to such action), or (y) the indemnifying party
shall not have counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
action, in each of which cases the reasonable fees and expenses of counsel shall be
at the expense of the indemnifying party. Notwithstanding the provisions of this
Section 15(d), each Purchaser shall not be liable for any indemnification obligation
under this Agreement in excess of the amount of net proceeds received by such
Purchaser from the sale of the Registrable Units.




     (iv) Contribution. If a claim for indemnification under this Section 15(d) is
unavailable to an indemnified party (by reason of public policy or otherwise), then each
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of any losses, claims, damages,
liabilities or expenses referred to in this Agreement, in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and indemnified party in connection
with the actions, statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such indemnifying
party or indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any losses, claims, damages, liabilities or
expenses shall be deemed to include, subject to the limitations set forth in this Section
15(d), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party
in connection with any proceeding to the extent such party would have been indemnified for
such fees or expenses if the indemnification provided for in



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this Section was available to such party in accordance with its terms. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this Section 15(d)
were determined by pro rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 15(d), no Purchaser shall be
required to contribute, in the aggregate, any amount in excess of the amount by which the
net proceeds from the sale of Registrable Units by such Purchaser exceeds the amount of any
damages that such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No party to this Agreement guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any other party to this Agreement who was not guilty of such
fraudulent misrepresentation.




(e) Rule 144. For a period of two years following the Closing Date, the Seller
agrees with each holder of Registrable Units to comply with the requirements of Rule 144(c)
under the Act with respect to current public information about the Seller and file with the
Commission in a timely manner all reports and other documents required of the Seller under
the Act and the Exchange Act (at any time it is subject to such reporting requirements).




(f) Grant of Subsequent Registration Rights; Limitation on Filing Other Registration
Statements. The Seller shall not, without the prior written consent of the holders of a
majority of the Registrable Units, (i) enter into any agreement with any holder or
prospective holder of any equity securities of the Seller giving such holder or prospective
holder the right to include any equity securities of the Seller held by such holder under
the Shelf Registration Statement required under Section 15(a) and (ii) file any other
registration statement under the Act with respect to any equity securities of the Seller
until the Shelf Registration Statement required under Section 15(a) is declared effective by
the Commission.



[Signature Page Follows]




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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of
the date and year first above written.



ENERGY TRANSFER PARTNERS, L.P.




By: U.S. Propane, L.P., General Partner




By: U.S. Propane, L.L.C., General Partner




By: _________________________

Name: H. Michael Krimbill

Title: President and Chief Financial Officer



PURCHASER: ZLP Opportunity Fund, L.P.




Purchased Units: 2,407,407

Purchase Price: US$129,999,978.00



By: _________________________

Name:

Title:



Notice information required by Section 12:




Zimmer Lucas Partners, LLC

45 Broadway—28th Floor

New York, New York 10006

Attention: John Lee, Chief Financial Officer

212-440-0740



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PURCHASER: Brahman Partners II, L.P.




Purchased Units: 206,019

Purchase Price: US$11,125,026.00



By: _________________________

Name:

Title:



PURCHASER: BY Partners, L.P.



Purchased Units: 394,074

Purchase Price: US$21,279,996.00



By: _________________________

Name:

Title:



PURCHASER: Brahman C.P.F. Partners, L.P.




Purchased Units: 115,648

Purchase Price: US$6,244,992.00



By: _________________________

Name:

Title:



PURCHASER: Brahman Partners III, L.P.



Purchased Units: 210,185

Purchase Price: US$11,349,990.00



By: _________________________

Name:

Title:



Notice information required by Section 12:



Brahman Capital Corp.

350 Madison Avenue, 22nd Floor

New York, New York 10017

Attention: William D’Eredita, Chief Financial Officer

212-681-9797




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