EXHIBIT 1.1
5,500,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
TEPPCO PARTNERS, L.P.
UNDERWRITING AGREEMENT
November 14, 2001
XXXXXX BROTHERS INC .
XXXXXXX, SACHS & CO.
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXXX & SONS, INC.
RBC XXXX XXXXXXXX INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TEPPCO Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to sell common units representing limited partner
interests in the Partnership (the "Common Units") to the several underwriters
(the "Underwriters") listed on Schedule 1 hereto for whom Xxxxxx Brothers Inc.,
Xxxxxxx, Xxxxx & Co., UBS Warburg LLC, Banc of America Securities LLC, X.X.
Xxxxxxx & Sons, Inc. and RBC Xxxx Xxxxxxxx Inc. shall act as representatives
(the "Representatives") in an aggregate amount of 5,500,000 Common Units (the
"Firm Units"). The Partnership has also agreed to grant to the Underwriters an
option (the "Option") to purchase up to an additional 825,000 Common Units
representing limited partner interests (the "Option Units") on the terms and for
the purposes set forth in Section 1(b). The Firm Units and the Option Units are
hereinafter referred to as the "Units."
The public offering price per Common Unit for the Units and
the purchase price per Common Unit for the Units to be paid by the Underwriters
shall be agreed upon by the Partnership and the Underwriters, and such agreement
shall be set forth in a separate written instrument substantially in the form of
Exhibit A hereto (the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form of written
telecommunication among the Partnership and the Underwriters and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering of
the Units will be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the execution and delivery
of the Price Determination Agreement, this Agreement shall be deemed to
incorporate, and, unless the context otherwise indicates, all
references contained herein to "this Agreement" and to the phrase "herein" shall
be deemed to include the Price Determination Agreement.
Each of (i) the Partnership, (ii) Texas Eastern Products
Pipeline Company, LLC, a Delaware limited liability company (both in its
capacity as general partner of the Partnership and in its individual capacity,
the "General Partner"), (iii) TE Products Pipeline Company, Limited Partnership,
a Delaware limited partnership ("TE Products OLP"), (iv) TEPPCO Midstream
Companies, L.P., a Delaware limited partnership ("TEPPCO Midstream OLP"), (v)
TCTM, L.P., a Delaware limited partnership ("TCTM OLP" and together with TE
Products OLP and TEPPCO Midstream OLP, the "Operating Partnerships") and (vi)
TEPPCO GP, Inc., a Delaware corporation (both in its individual capacity and as
general partner of the Operating Partnerships, "TEPPCO GP") confirms as follows
its agreements with the Underwriters. All of such entities shall be referred to
collectively as the "TEPPCO Entities."
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the TEPPCO Entities herein contained and subject to all the terms
and conditions of this Agreement, the Partnership agrees to sell to the
Underwriters, and the Underwriters severally agree to purchase from the
Partnership, at the purchase price per Common Unit for the Units to be agreed
upon by the Underwriters and the Partnership in accordance with Section 1(c)
hereof and set forth in the Price Determination Agreement, the Firm Units.
(b) Subject to all the terms and conditions of this
Agreement, the Partnership grants the Option to the Underwriters to purchase up
to 825,000 Option Units from the Partnership at the same price per Common Unit
as the Underwriters shall pay for the Firm Units. The Option may be exercised
only to cover over-allotments in the sale of the Firm Units by the Underwriters
and may be exercised in whole or in part at any time (but not more than once) on
or before the 30th day after the date of the Price Determination Agreement, upon
written or telegraphic notice (the "Option Units Notice") by the Underwriters to
the Partnership no later than 12:00 noon, New York City time, at least two and
no more than five business days before the date specified for closing in the
Option Units Notice (the "Option Closing Date") setting forth the aggregate
number of Option Units to be purchased and the time and date for such purchase.
On the Option Closing Date, the Partnership will issue and sell to the
Underwriters the number of Option Units set forth in the Option Units Notice.
(c) The public offering price per Common Unit for the
Firm Units and the purchase price per Common Unit for the Firm Units to be paid
by the Underwriters shall be agreed upon and set forth in the Price
Determination Agreement.
2. Delivery and Payment. The Firm Units to be purchased by the
Underwriters hereunder, shall be issued in book entry form, and in such
authorized denominations and registered in such names as the Underwriters may
request, and will be represented by one or more definitive global certificates
which will be deposited by or on behalf of the Partnership with The Depository
Trust Company ("DTC") or its designated custodian. Delivery to the Underwriters
of the Firm Units shall be made by or on behalf of the Partnership by causing
DTC to credit the Firm Units to the account or accounts designated by the
Underwriters at DTC,
against payment of the purchase price by wire transfer of Federal Funds or
similar same day funds to an account designated in writing by the Partnership to
the Underwriters at least one business day prior to the Closing Date (as
hereinafter defined). Such payment shall be made at 10:00 a.m., New York City
time, on the third business day (or fourth business day, if the Price
Determination Agreement is executed after 4:30 p.m.) after the date on which the
first bona fide offering of the Units to the public is made by the Underwriters
or at such time on such other date, not later than ten business days after such
date, as may be agreed upon by the Partnership and the Underwriters (such date
is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option
Units against payment by the Underwriters (in the manner specified above) will
take place at the offices specified above for the Closing Date at the time and
date (which may be the Closing Date) specified in the Option Units Notice.
The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Units by the Partnership to the respective
Underwriters shall be borne by the Partnership. The Partnership will pay and
save the Underwriters and any subsequent holder of the Units harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to the Underwriters of the Firm Units and Option Units.
3. Representations and Warranties of the TEPPCO Entities. Each
of the TEPPCO Entities, jointly and severally, represent, warrant and covenant
to the Underwriters that:
(a) Compliance with Registration Requirements. The
Partnership meets the requirements for use of Form S-3 and a registration
statement (Registration No. 333-66102) on Form S-3 relating to the Units (and
such amendments to such registration statement as may have been required to the
date of this Agreement) has been prepared by the Partnership and complies in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (collectively referred to as
the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. Such
registration statement has been declared effective by the Commission. Copies of
such registration statement and amendments and of each related prospectus have
been delivered to the Underwriters. The term "Registration Statement" means the
registration statement, including all financial statements, exhibits and
documents incorporated by reference therein, as from time to time amended or
supplemented pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), Rule 415 and Rule 434 of the Rules and Regulations, or
otherwise, any registration statement filed under Rule 462 of the Rules and
Regulations as such registration statement may be amended from time to time and
all information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations. The term "Prospectus"
means the prospectus constituting a part of the Registration Statement and any
amendments or supplements to such prospectus, including without limitation the
prospectus supplement filed with the Commission in connection with the proposed
sale of Units contemplated by this Agreement (the "Prospectus Supplement"),
through the date of such Prospectus Supplement. Any reference herein to the
Registration Statement or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the date hereof or are so filed
hereafter. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include any such document filed or to be filed under
the Exchange Act after the date of the Prospectus, and deemed to be incorporated
therein by reference.
On the date the Registration Statement was declared effective
by the Commission (the "Effective Date"), at all times subsequent to and
including the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Partnership shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included or incorporated by
reference in the Prospectus or the Registration Statement, did or will comply in
all material respects with all applicable provisions of the Act, the Exchange
Act, the rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and the Rules and Regulations and will contain all statements
required to be stated therein in accordance with the Act, the Exchange Act, the
Exchange Act Rules and Regulations and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement or any such
amendment did or will contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is or was filed with
the Commission and at the Closing Date and, if later, the Option Closing Date,
the Prospectus did not or 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.
The foregoing representations and warranties in this Section 3(a) do not apply
to any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Partnership
by the Underwriters specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Partnership has not
distributed any offering material in connection with the offering or sale of the
Units other than the Registration Statement and the Prospectus. No order
preventing or suspending the use of the Prospectus has been issued by the
Commission.
(b) Incorporated Documents. The documents which are
incorporated by reference in the Registration Statement and the Prospectus or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied and
will comply in all material respects with the requirements of the Act or the
Exchange Act, as applicable, the Exchange Act Rules and Regulations and the
Rules and Regulations and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference subsequent to the
Closing Date shall, when they are filed with the Commission, conform in all
material respects with the requirements of the Act and the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and Regulations
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.
(c) Independent Accountants. The accountants who
certified the financial statements and supporting schedules of the Partnership
included or incorporated by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) are independent public
accountants of the Partnership as required by the Act and the Exchange Act. The
statements included or incorporated by reference in the Registration Statement
with respect to the accountants pursuant to Rule 509 of Regulation S-K of the
Rules and Regulations are true and correct in all material respects.
(d) Financial Statements. The financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, present fairly the
consolidated financial position of the Partnership at the dates indicated and
the consolidated statement of operations and cash flows of the Partnership for
the periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting schedules, if
any, included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The pro forma financial
statements and other pro forma financial information included or incorporated by
reference in the Registration Statement or the Prospectus (i) present fairly in
all material respects the information shown therein, (ii) have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements and (iii) have been properly computed on the bases
described therein. The assumptions used in the preparation of the pro forma
financial statements and other pro forma financial information included or
incorporated by reference in the Registration Statement or Prospectus are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein. No other financial
statements or schedules of the Partnership are required by the Act or the
Exchange Act or the Rules and Regulations to be included in the Registration
Statement or the Prospectus.
(e) Internal Accounting Controls. The Partnership
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(f) No Material Adverse Change in Business. Subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus and prior to the Closing Date, except as set forth
in or contemplated by the Registration Statement and the Prospectus, (i) there
has not been and will not have been any material adverse change in, and no
development which could reasonably be expected to result in a material adverse
change in, the capitalization of the TEPPCO Entities, or in the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the
TEPPCO Entities and their subsidiaries, taken as a whole (a "Material Adverse
Effect"), arising for any reason whatsoever, (ii) none of the TEPPCO Entities
nor any of their subsidiaries has incurred nor will it incur any material
liabilities or obligations, direct or contingent, nor has it entered into nor
will it enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein, and (iii) none of the TEPPCO
Entities nor any of their subsidiaries has sustained any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus.
(g) Formation and Good Standing of the Partnership, the
Operating Partnerships, and the Subsidiary Partnerships. Each of the
Partnership, the Operating Partnerships and TEPPCO Crude Pipeline, L.P., TEPPCO
Seaway L.P., TEPPCO Crude Oil, L.P. and Lubrication Services, L.P.
(collectively, the "Subsidiary Partnerships") has been duly formed and is, and
at the Closing Date will be, validly existing as a limited partnership in good
standing under the Delaware Revised Uniform Limited Partnership Act, as amended
(the "Delaware Act"). Each of the Partnership, the Operating Partnerships and
the Subsidiary Partnerships has, and at the Closing Date will have, full power
and authority to conduct all the activities conducted by it, to own, lease and
operate its properties and to conduct its business in all material respects as
described in the Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement. Each of the Partnership, the
Operating Partnerships and the Subsidiary Partnerships is, and at the Closing
Date will be, duly qualified or registered and in good standing as a foreign
limited partnership to transact business in each other jurisdiction in which
such qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to register (i) would not result in a Material Adverse
Effect , or (ii) would not subject the limited partners of such partnership to
any material liability or disability. The Partnership is the sole limited
partner of each of the Operating Partnerships, in each case with a limited
partner interest of 99.999%. Such limited partner interests have been duly
authorized by the respective Agreements of Limited Partnership of the Operating
Partnerships (the "Operating Partnership Agreements"), have been validly issued
in accordance with the respective Operating Partnership Agreements and, are
fully paid and non-assessable, except to the extent such non-assessability may
be affected by Section 17-607 of the Delaware Act, and are the only outstanding
limited partner interests of all of the Operating Partnerships. TCTM OLP is the
sole limited partner of each of the Subsidiary Partnerships, in each case with a
limited partner interest of 99.99%. Such limited partner interests have been
duly authorized by the respective agreements of limited partnership of the
Subsidiary Partnerships (the "Subsidiary Partnership Agreements"), have been
validly issued in accordance with the respective Subsidiary Partnership
Agreements, are fully paid and non-assessable, except to the extent such
non-assessability may be affected by Section 17-607 of the Delaware Act, and are
the only outstanding limited partner interests of all of the Subsidiary
Partnerships. The Partnership owns such limited partner interests in the
Operating Partnerships and TCTM OLP owns such limited partner interests in the
Subsidiary Partnerships either directly or indirectly and free and clear of all
liens, encumbrances, security interests, equities, charges or claims, except for
such liens, encumbrances, security interests, equities, charges or claims as are
not, individually or in the aggregate, material or except as described in the
Prospectus. TEPPCO Seaway, L.P. owns a 50% general partner interest in Seaway
Crude Pipeline Company. Such general partner interest has been duly authorized
and
validly issued and is owned of record free and clear of all liens, encumbrances,
security interests, equities, charges or claims, except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material. TEPPCO Midstream OLP owns a 99.999%
general partner interest in Jonah Gas Gathering Company ("Jonah"). Such general
partner interest has been duly authorized and validly issued and is owned of
record free and clear of all liens, encumbrances, security interests, equities,
charges or claims, except for such liens, encumbrances, security interests,
equities, charges or claims as are not, individually or in the aggregate,
material. TE Products OLP is the sole member of TEPPCO Colorado, LLC, and TCTM
OLP is the sole member of TEPPCO Crude GP, LLC. Such member interests have been
duly authorized and validly issued and are owned of record free and clear of all
liens, encumbrances, security interests, equities, charges or claims, except for
such liens, encumbrances, security interests, equities, charges or claims as are
not, individually or in the aggregate, material or except as described in the
Prospectus. Complete and correct copies of (i) the agreement of limited
partnership of the Partnership (the "Partnership Agreement"), (ii) the Operating
Partnership Agreements, (iii) the Subsidiary Partnership Agreements, (iv) the
agreement of limited partnership of TEPPCO Seaway, L.P. and (v) the limited
liability company agreements of each of TEPPCO Colorado, LLC and TEPPCO Crude
GP, LLC have been delivered to the Underwriters, and no changes therein will be
made subsequent to the date hereof and prior to the Closing Date.
(h) Formation and Good Standing of the General Partner.
The General Partner has been duly organized and is, and at the Closing Date will
be, validly existing as a limited liability company in good standing under the
Delaware Limited Liability Company Act ("Delaware LLC Act") and has full power
and authority to conduct all the activities conducted by it, to own, lease and
operate its properties and to conduct its business and to act as general partner
of the Partnership, in each case in all material respects, as described in the
Registration Statement and the Prospectus and to enter into and perform its
obligations under this Agreement; and the General Partner is, and at the Closing
Date will be, duly qualified or registered and in good standing as a foreign
limited liability company to transact business in each other jurisdiction in
which such qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to register (i) would not result in a Material Adverse
Effect, or (ii) would not subject its members to any material liability or
disability. The General Partner is the sole general partner of the Partnership
with a general partner interest of 2%. Such general partner interest has been
duly authorized by the Partnership Agreement, has been validly issued in
accordance with the Partnership Agreement, and is owned of record by the General
Partner, free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or except as described in the Prospectus. Complete and
correct copies of the certificate of formation and the limited liability company
agreement of the General Partner and all amendments thereto have been delivered
to the Underwriters, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
(i) Formation and Good Standing of TEPPCO GP. TEPPCO GP
has been duly incorporated and is, and at the Closing Date and the Option
Closing Date will be, validly existing as a corporation in good standing under
the Delaware General Corporation Law ("DGCL") and has full corporate power and
authority to conduct all the activities conducted by
it, to own, lease and operate its properties and to conduct its business and to
act as general partner of the Operating Partnership, in each case in all
material respects, as described in the Registration Statement and the Prospectus
and to enter into and perform its obligations under this Agreement; and TEPPCO
GP is, and at the Closing Date and the Option Closing Date will be, duly
qualified or registered and in good standing as a foreign corporation to
transact business in each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to register (i) would not result in a Material Adverse Effect, or (ii) would not
subject its stockholders to any material liability or disability or (iii) would
not subject the Partnership, as the sole limited partner of each of the
Operating Partnerships to any liability by reason of such failure. All of the
capital stock of TEPPCO GP is owned of record by the Partnership, free and clear
of all liens, encumbrances, security interests, equities, charges, or claims,
except as set forth in the Prospectus or as are not, individually or in the
aggregate, material. TEPPCO GP is the sole general partner of each of the
Operating Partnerships, in each case with a general partner interest of 0.001%.
Such general partner interests have been duly authorized by the respective
Operating Partnership Agreements, have been validly issued in accordance with
the respective Operating Partnership Agreements, and are owned of record by
TEPPCO GP, free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or except as described in the Prospectus. TEPPCO GP owns a
0.001% general partner interest in Jonah. Such general partner interest has been
duly authorized, validly issued and is owned of record by TEPPCO GP, free and
clear of all liens, encumbrances, security interests, equities, charges or
claims, except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or
except as described in the Prospectus. Complete and correct copies of the
certificate of incorporation and the bylaws of TEPPCO GP and all amendments
thereto have been delivered to the Underwriters, and no changes therein will be
made subsequent to the date hereof and prior to the Closing Date (and, in the
case of any sale of the Option Units, the Option Closing Date).
(j) Formation and Good Standing of TEPPCO Crude GP, LLC.
TEPPCO Crude GP, LLC has been duly organized and is, and at the Closing Date
will be, validly existing as a limited liability company in good standing under
the Delaware LLC Act and has full power and authority to conduct all the
activities conducted by it, to own, lease and operate its properties and to
conduct its business and to act as general partner of the Subsidiary
Partnerships, in each case in all material respects, as described in the
Registration Statement and the Prospectus; and TEPPCO Crude GP, LLC is, and at
the Closing Date will be, duly qualified or registered and in good standing as a
foreign limited liability company to transact business in each other
jurisdiction in which such qualification or registration is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to register (i) would not result in a
Material Adverse Effect, or (ii) would not subject its members to any material
liability or disability. TEPPCO Crude GP, LLC is the sole general partner of the
Subsidiary Partnerships, in each case with a general partner interest of 0.01%.
Such general partner interests have been duly authorized by the respective
subsidiary partnership agreements, have been validly issued in accordance with
the respective subsidiary partnership agreements, and are owned of record by
TEPPCO Crude GP, LLC, free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except for such liens, encumbrances,
security interests, equities, charges or claims as are not, individually or in
the
aggregate, material or except as described in the Prospectus. Complete and
correct copies of the certificate of formation and the limited liability company
agreement of TEPPCO Crude GP, LLC and all amendments thereto have been delivered
to the Underwriters, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
(k) Formation and Good Standing of TEPPCO Colorado,
L.L.C. TEPPCO Colorado, L.L.C. has been duly organized and is, and at the
Closing Date will be, validly existing as a limited liability company in good
standing under the Colorado Limited Liability Company Act and has full power and
authority to conduct all the activities conducted by it, to own, lease and
operate its properties and to conduct its business, in each case in all material
respects; and TEPPCO Colorado, L.L.C. is, and at the Closing Date will be, duly
qualified or registered and in good standing as a foreign limited liability
company to transact business in each other jurisdiction in which such
qualification or registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to register (i) would not result in a Material Adverse Effect, or
(ii) would not subject its members to any material liability or disability.
(l) Capitalization. The Partnership's capital as of
September 30, 2001 is as set forth in the Prospectus Supplement in the column
entitled "Actual" under the heading "Capitalization." The adjustments to the
Partnership's capital as of September 30, 2001, as set forth in the Prospectus
Supplement under the column entitled "As Adjusted" under the heading
"Capitalization," represent a reasonable estimate by the General Partner of the
pro forma effects on the Partnership's capital of the offer and sale of the Firm
Units and the application of the estimated net proceeds therefrom in the manner
set forth in the Prospectus Supplement under the heading "Use of Proceeds" and
the related capital contribution by the General Partner.
(m) Partnership Interests. The limited partners of the
Partnership hold limited partner interests in the Partnership aggregating a 98%
interest in the Partnership, such limited partner interests being represented by
34,950,000 Common Units and 3,916,547 units representing Class B limited partner
interests ("Class B Units") (the Common Units and the Class B Units are
collectively referred to as the "Limited Partner Units"); the Limited Partner
Units are the only limited partner interests of the Partnership that are issued
and outstanding; the Limited Partner Units have been, and the Units to be issued
and sold by the Partnership will be, duly authorized and validly issued under
the Partnership Agreement, fully paid and nonassessable, except as such
nonassessability may be affected by Section 17-607 of the Delaware Act, and will
not be subject to any preemptive or similar right or voting or transfer
restriction. The description of the Common Units in the Registration Statement
and the Prospectus is, and at the Closing Date will be, complete and accurate in
all material respects. Except as set forth in the Prospectus, the Partnership
does not have outstanding, and at the Closing Date will not have outstanding,
any options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any limited partner interests or other interests in the
Partnership, the Operating Partnerships, the Subsidiary Partnerships or any of
their respective subsidiaries.
(n) Capitalization of the General Partner. All of the
membership interests of the General Partner are registered on its books in the
name of Duke Energy Field Services Assets, LLC, free and clear of all liens,
encumbrances, security interests, equities, charges or
claims, except as set forth in the Prospectus or as are not, individually or in
the aggregate, material.
(o) Authorization of Agreement; Absence of Defaults and
Conflicts. Each of the TEPPCO Entities has full power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by each of the TEPPCO Entities and constitutes a valid and binding
agreement of each of the TEPPCO Entities and is enforceable against each of the
TEPPCO Entities in accordance with the terms hereof. The performance of this
Agreement, the consummation of the transactions contemplated hereby and the
application of the net proceeds from the offering and sale of the Units in the
manner set forth in the Prospectus under "Use of Proceeds" will not result in
the creation or imposition of any lien, charge or encumbrance upon any of the
assets of any of the TEPPCO Entities or any of their subsidiaries pursuant to
the terms or provisions of, result in a breach or violation of any of the terms
or provisions of, constitute a default under, give any other party a right to
terminate any of its obligations under or result in the acceleration of any
obligation under, the limited partnership agreement or certificate of limited
partnership or limited liability company agreement or articles or certificate of
formation of any of the TEPPCO Entities or any of their subsidiaries, any
indenture, mortgage, deed of trust, loan agreement, contract or other agreement
or instrument to which any of the TEPPCO Entities or any of their subsidiaries
is a party or by which any of the TEPPCO Entities or any of their subsidiaries
or any of their properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
any of the TEPPCO Entities or any of their subsidiaries.
(p) Absence of Labor Dispute. No labor dispute with the
employees of any of the TEPPCO Entities or any of their subsidiaries exists or,
to the knowledge of any of the TEPPCO Entities, is imminent or threatened, and
none of the TEPPCO Entities has any actual knowledge of an existing, imminent or
threatened labor disturbance by the employees of any of its or any of its
affiliates' principal suppliers, manufacturers, customers or contractors, which,
in either case, could reasonably be expected to result in a Material Adverse
Effect. Each of the TEPPCO Entities and their subsidiaries is in compliance with
all federal, state and local employment labor laws, including, but not limited
to, laws relating to non-discrimination in hiring, promotion and pay of
employees, except for any noncompliance that could not reasonably be expected to
result in a Material Adverse Effect.
(q) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Partnership, the Operating Partnerships or the General Partner,
threatened, against or affecting the Partnership, the Operating Partnerships or
the General Partner, or any of their respective officers in their capacity as
such, which is required to be disclosed in the Registration Statement (other
than as disclosed therein), or wherein an unfavorable ruling, decision or
finding would result in a Material Adverse Effect; the aggregate of all pending
legal or governmental proceedings to which any of the TEPPCO Entities or any of
their subsidiaries is a party or of which any of their respective property or
assets is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, are not
reasonably expected by the General Partner to result in a Material Adverse
Effect.
(r) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(s) Possession of Intellectual Property. Each of the
TEPPCO Entities and their subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business now
operated by them, and none of the TEPPCO Entities nor any of their subsidiaries
has received any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property invalid
or inadequate to protect the interest of any of the TEPPCO Entities or their
subsidiaries, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
(t) Absence of Further Requirements. No consent,
approval, authorization or order of, or any filing or declaration with, any
court or governmental agency or body is required in connection with the
authorization, issuance, transfer, sale or delivery of the Units by the
Partnership, in connection with the execution, delivery and performance of this
Agreement by any of the TEPPCO Entities or in connection with the taking by any
of the TEPPCO Entities of any action contemplated hereby, except such as have
been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws.
(u) Possession of Licenses and Permits. Each of the
TEPPCO Entities and each of their subsidiaries has, and at the Closing Date will
have, (i) all governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to carry on its business as contemplated in the
Prospectus except for such certificates, permits or authorizations which, if not
obtained, would not reasonably be expected to have a Material Adverse Effect
and, except as described in the Prospectus, none of the TEPPCO Entities has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse Effect, (ii) complied in all
material respects with all laws, regulations and orders applicable to it or its
business and (iii) performed in all material respects all its obligations
required to be performed by it, and is not, and at the Closing Date will not be,
in default, under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease, contract or
other agreement or instrument (collectively, a "contract or other agreement") to
which it is a party or by which its property is bound or affected which default,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. To the knowledge of each of the TEPPCO Entities, no
other party under any contract or other agreement to which it is a party is in
default in any material respect thereunder. None of the TEPPCO Entities nor any
of their subsidiaries is, nor at the Closing Date will any of them be, in
violation of any provision of its limited partnership
agreement, certificate of limited partnership, limited liability company
agreement or articles or certificate of formation.
(v) Listing. The Common Units (including the Units to be
sold pursuant to this Agreement) are duly authorized for listing, subject to
official notice of issuance, on the New York Stock Exchange.
(w) Title to Property. Each of the Partnership, the
Operating Partnerships, the Subsidiary Partnerships, the General Partner, and
their respective subsidiaries have satisfactory and marketable title to all
properties and assets owned by such entities, in each case free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (i) are described in the Prospectus or
(ii) do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by such entities; and all of the leases and subleases material to the
business of such entities, and under which such entities hold properties
described in the Prospectus, are in full force and effect, and none of such
entities has any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of such entities under any of the leases or
subleases mentioned above, or affecting or questioning the rights of such
entities to the continued possession of the leased or subleased premises under
any such lease or sublease.
(x) Compliance with Cuba Act. Each of the TEPPCO Entities
has complied with, and are and will be in compliance with, the provisions of
that certain Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(y) Investment Company Act. None of the TEPPCO Entities
is, and upon the issuance and sale of the Common Units as herein contemplated
and the application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act").
(z) Public Utility Holding Company Act. None of the
TEPPCO Entities is a "holding company" as such term is defined in the Public
Utility Holding Company Act of 1935, as amended ("PUHCA"); neither the TEPPCO
Entities nor the issue and sale of the Common Units by the Partnership is
subject to regulation under PUHCA; and none of the TEPPCO Entities is a "public
utility" as such term is defined in the Federal Power Act, as amended.
(aa) Environmental Laws. Each of the TEPPCO Entities and
its subsidiaries (i) is in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or imposing liability or standards of
conduct concerning any Hazardous Material (as hereinafter defined)
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of it under Environmental Laws to conduct its business and
(iii) is in compliance with all terms and conditions of any such permit, license
or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, individually or in the
aggregate, result in a Material Adverse Effect. The term "Hazardous Material"
means (A) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, (B)
any "hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl and (E) any pollutant or contaminant or hazardous, dangerous, or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.
In the ordinary course of its business, the Partnership
conducts a periodic review of the effect of Environmental Laws on the business,
operations and properties of the TEPPCO Entities and their subsidiaries, in the
course of which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). Except as set forth in the
Registration Statement and the Prospectus, there are no costs and liabilities
associated with or arising in connection with Environmental Laws as currently in
effect (including without limitation, costs of compliance therewith) which
would, singly or in the aggregate, have a Material Adverse Effect.
(bb) Insurance. Each of the TEPPCO Entities maintains
insurance with respect to its properties and business of the types and in
amounts generally deemed adequate for its business and consistent with insurance
coverage maintained by similar companies and businesses, all of which insurance
is in full force and effect.
(cc) Tax Returns and Payments. Each of the TEPPCO
Entities has filed all federal, state and foreign income and franchise tax
returns required by law to be filed by them and have paid all taxes, assessments
and other governmental charges levied upon them or any of their properties,
assets, income or franchises which are due and payable, other than (i) those
which are not past due or are presently being contested in good faith by
appropriate proceedings diligently conducted for which such reserves or other
appropriate provisions, if any, as shall be required by generally accepted
accounting principles have been made and (ii) with respect to state and local
taxes, such as will not result in a Material Adverse Effect. There are no tax
returns of any of the TEPPCO Entities that are currently being audited by state,
local or federal taxing authorities or agencies (and with respect to which any
of the TEPPCO Entities has received notice), where the findings of such audit,
if adversely determined, would result in a Material Adverse Effect.
(dd) Benefit Plans. With respect to each employee benefit
plan, program and arrangement (including, without limitation, any "employee
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) maintained or contributed to by any
of the TEPPCO Entities, or with respect to which any of the TEPPCO Entities
could incur any liability under ERISA (collectively, the "Benefit Plans"), no
event has occurred and, to the best knowledge of each of the TEPPCO Entities,
there exists no condition or set of circumstances, in connection with which any
of the TEPPCO Entities could be subject to any liability under the terms of such
Benefit Plan,
applicable law (including, without limitation, ERISA and the Internal Revenue
Code of 1986, as amended) or any applicable agreement that could have a Material
Adverse Effect.
(ee) Registration Rights. No holder of securities of the
Partnership has rights to the registration of any securities of the Partnership
because of the filing of the Registration Statement that have not been waived.
(ff) Officer's Certificates. Any certificate signed on
behalf of the Partnership by the President or Vice President of the General
Partner and on behalf of the General Partner by a President or Vice President
thereof delivered to the Underwriters or to counsel for the Underwriters shall
be deemed a representation and warranty by each of the TEPPCO Entities to the
Underwriters as to the matters covered thereby.
(gg) Partnership Agreement. The Partnership Agreement is
a valid and legally binding agreement of the General Partner, enforceable
against the General Partner in accordance with its terms, and each of the
Operating Partnership Agreements is a valid and legally binding agreement of the
parties thereto, enforceable against the General Partner and the Partnership in
accordance with its terms, except as the enforceability of such agreements may
be affected by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and general equitable
principles.
(hh) Stabilization. None of the TEPPCO Entities, nor any
of their directors, officers or controlling persons has taken, directly or
indirectly, any action intended, or which might reasonably be expected, to cause
or result, under the Act or otherwise, in or which has constituted,
stabilization or manipulation of the price of any security of the Partnership to
facilitate the sale or resale of the Units.
(ii) Disclosure. Neither this Agreement, the Registration
Statement, nor any other document, certificate or instrument delivered to the
Underwriters by or on behalf of the Partnership in connection with the
transactions contemplated by this Agreement, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading. There is no fact known to the
Partnership or the General Partner which would result in a Material Adverse
Effect or in the future may (so far as the Partnership can now foresee) result
in a Material Adverse Effect which has not been set forth or referred to in this
Agreement or the Registration Statement.
4. Agreements of the TEPPCO Entities. The TEPPCO Entities
agree with the Underwriters as follows:
(a) The Partnership will not, either prior to the Closing
Date or thereafter, during such period as the Prospectus is required by law to
be delivered in connection with sales of the Units by an Underwriter or any
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Underwriters within a reasonable period of time prior to the filing thereof and
the Underwriters shall not have objected thereto in good faith.
(b) The Partnership will notify the Underwriters
promptly, and will confirm such advice in writing, (i) when any post-effective
amendment to the Registration
Statement becomes effective, (ii) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose or the threat thereof, (iv) of
the happening of any event during the period mentioned in the second sentence of
Section 4(e) that in the judgment of the Partnership makes any statement made in
the Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading and (v) of receipt by the Partnership or any representative
or attorney of the Partnership of any other communication from the Commission
relating to the Partnership, the Registration Statement or the Prospectus. If at
any time the Commission shall issue any order suspending the effectiveness of
the Registration Statement, the Partnership will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible moment.
(c) The Partnership will furnish to the Underwriters,
without charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto (including any document filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus).
(d) The Partnership will comply with all the provisions
of any undertakings contained in the Registration Statement.
(e) The Partnership will deliver to the Underwriters,
without charge, as many copies of the Prospectus or any amendment or supplement
thereto as the Underwriters may reasonably request. The Partnership consents to
the use of the Prospectus or any amendment or supplement thereto by the
Underwriters and by all dealers to whom the Units may be sold, both in
connection with the offering or sale of the Units and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the judgment of the Partnership or counsel to the Underwriters should be set
forth in the Prospectus in order to make any statement therein, in the light of
the circumstances under which it was made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with law, the Partnership will
forthwith prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to the Underwriters, without charge, such
number of copies thereof as the Underwriters may reasonably request. The
Partnership shall not file any document under the Exchange Act before the
completion of the distribution of the Units by the Underwriters (which includes
the distribution of any Option Units pursuant to the Option, if exercised), if
such document would be deemed to be incorporated by reference into the
Prospectus unless the Underwriters have been given reasonable notice thereof.
(f) Prior to any public offering of the Units by the
Underwriters, the Partnership will cooperate with the Underwriters and counsel
to the Underwriters in connection with the registration or qualification of the
Units for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters may request; provided, that in no event shall
the Partnership be obligated to qualify to do business in any jurisdiction where
it is not now so
qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
(g) During the period of three years commencing on the
Closing Date, the Partnership will, upon request, furnish to the Underwriters a
copy of such financial statements and other periodic and special reports as the
Partnership may from time to time distribute generally to the holders of any
class of its limited partnership interests, and will furnish to the Underwriters
who so request a copy of each annual or other report it shall be required to
file with the Commission.
(h) The Partnership will make generally available to
holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which need not
be audited but shall be in reasonable detail) for a period of twelve months
ended commencing after the Effective Date, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Partnership will
pay, or reimburse if paid by the Underwriters, all costs and expenses incident
to the performance of the obligations of the TEPPCO Entities under this
Agreement, including but not limited to costs and expenses of or relating to (i)
the preparation, printing and filing of the Registration Statement and exhibits
thereto and the Prospectus and any amendment or supplement thereto, (ii) the
preparation and delivery of certificates representing the Units, (iii) the
printing and reproduction of this Agreement and any Dealer Agreements, (iv)
furnishing (including costs of shipping, mailing and courier) such copies of the
Registration Statement, the Prospectus and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Units by the Underwriters or by dealers to whom Units may be sold, (v) the
listing of the Units on the New York Stock Exchange, (vi) any filings required
to be made by the Underwriters with the NASD, if any, and the fees,
disbursements and other charges of counsel for the Underwriters in connection
therewith, (vii) the registration or qualification of the Units for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 4(f), if any are so required, including the fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (viii) the costs and expenses of the TEPPCO Entities
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Units, including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Partnership, travel and lodging
expenses of the representatives and officers of the TEPPCO Entities and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, (ix) counsel to the TEPPCO Entities, (x) the transfer agent for the Units
and (xi) KPMG LLP and PriceWaterhouseCoopers LP, accountants for the TEPPCO
Entities and for Arco Pipe Line Company, Seaway Crude Pipeline Company and
Jonah, respectively.
(j) If (i) this Agreement shall be terminated by the
Partnership pursuant to any of the provisions hereof, (ii) for any reason the
Partnership shall be unable to perform its
obligations hereunder, (iii) any other condition of the Underwriters'
obligations hereunder required to be fulfilled by any of the TEPPCO Entities is
not fulfilled or (iv) this Agreement shall be terminated pursuant to Section 7,
the Partnership will reimburse the Underwriters for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by the Underwriters in connection herewith;
provided, however, that if this Agreement is terminated pursuant to Section 8 by
reason of the default of one or more Underwriters, the TEPPCO Entities shall not
be obligated to reimburse any defaulting Underwriter on account of those
expenses.
(k) The Partnership will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
Common Units to facilitate the sale or resale of any of the Units.
(l) The Partnership will apply the net proceeds from the
offering and sale of the Units to be sold by the Partnership in the manner set
forth in the Prospectus Supplement under "Use of Proceeds."
(m) During the period of 90 days commencing on the date
of this Agreement, each of the TEPPCO Entities will not, without the prior
written consent of the Underwriters, (i) directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of, any Common
Units, Class B Units or securities convertible into Common Units or Class B
Units other than to the Underwriters pursuant to this Agreement and other than
pursuant to employee option plans or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Units or Class B Units, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Units, Class B Units or such other securities, in cash or otherwise;
provided, however, that nothing herein shall prohibit any of the TEPPCO Entities
from issuing or agreeing to issue within such 90-day period, in transactions
exempt from the registration requirements of the Securities Act, Common Units,
Class B Units or securities convertible into Common Units or units representing
limited partner interests in connection with the acquisition of businesses or
assets by any of the TEPPCO Entities in an amount not to exceed $100,000,000.
(n) The Partnership shall have caused each of the
executive officers and directors of the General Partner and each beneficial
owner of more than 5% of the outstanding Common Units or Class B Units, to enter
into agreements with the Underwriters in the form set forth in Exhibit B to the
effect that they will not, for a period of 90 days after the commencement of the
public offering of the Units, without the prior written consent of the
Underwriters, sell, contract to sell or otherwise dispose of any Common Units,
Class B Units or rights to acquire such Units (other than pursuant to employee
option plans or in connection with other employee incentive compensation
arrangements).
5. Conditions of the Obligations of the Underwriters. In
addition to the execution and delivery of the Price Determination Agreement, the
obligations of the Underwriters hereunder are subject to the following
conditions:
(a) Notification that all filings required by Rule 424 of
the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Units under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Underwriters and the Underwriters did not
object thereto in good faith, and the Underwriters shall have received
certificates, dated the Closing Date and the Option Closing Date signed by the
Chief Executive Officer or the Chairman of the Board of Directors of the General
Partner and the Chief Financial Officer of the General Partner (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) none of
the TEPPCO Entities shall have sustained any loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus, if in the judgment of the
Underwriters any such development described in clause (i) or (ii) makes it
impracticable or inadvisable to consummate the sale and delivery of the Units by
the Underwriters at the public offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against any of the TEPPCO Entities or
any of their respective officers or directors in their capacities as such,
before or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would have a
Material Adverse Effect.
(e) Each of the representations and warranties of the
TEPPCO Entities contained herein shall be true and correct in all material
respects at the Closing Date, and with respect to the Option Units, at the
Option Closing Date as if made at the Option Closing Date, and all covenants and
agreements herein contained to be performed on the part of the TEPPCO Entities
and all conditions herein contained to be fulfilled or complied with by the
TEPPCO Entities at or prior to the Closing Date, and with respect to the Option
Units, at the Option Closing Date, shall have been duly performed, fulfilled or
complied with; provided, however, that if any such representation or warranty is
already qualified by materiality, for purposes of
determining whether this condition has been satisfied, such representation or
warranty as so qualified must be true and correct in all respects.
(f) The Underwriters shall have received an opinion,
dated the Closing Date, and with respect to the Option Units, at the Option
Closing Date, and satisfactory in form and substance to counsel for the
Underwriters, from Fulbright & Xxxxxxxx L.L.P., counsel to the TEPPCO Entities,
to the effect set forth in Exhibit C.
(g) The Underwriters shall have received an opinion,
dated the Closing Date, and with respect to the Option Units, at the Option
Closing Date, from Xxxxxxx & Xxxxx L.L.P., counsel to the Underwriters which
opinion shall be satisfactory in all respects to the Underwriters.
(h) On the date of this Agreement, KPMG LLP shall have
furnished to the Underwriters a letter, dated the date of its delivery,
addressed to the Underwriters and in form and substance satisfactory to the
Underwriters, confirming that they are independent accountants with respect to
the TEPPCO Entities as required by the Act and the Rules and Regulations, and
with respect to the financial and other statistical and numerical information
contained in the Registration Statement or incorporated by reference therein. At
the Closing Date and, with respect to the Option Units, at the Option Closing
Date, KPMG LLP shall have furnished to the Underwriters a letter, dated the date
of its delivery, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letter from KPMG LLP, that nothing has come
to their attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the letter) not more than five days
prior to the Closing Date and the Option Closing Date which would require any
change in their letter dated the date hereof, if it were required to be dated
and delivered at the Closing Date and the Option Closing Date. KPMG LLP shall
have furnished to the Underwriters a review report with respect to the interim
financial statements for the nine-month period ended September 30, 2001.
PricewaterhouseCoopers LLP shall deliver similar letters to the Underwriters,
dated the date of this Agreement and the Closing Date, and the Option Closing
Date (if any), with respect to the financial information of ARCO Pipe Line
Company, Seaway Crude Pipeline Company and Jonah incorporated by reference in
the Registration Statement.
(i) At the Closing Date and, with respect to the Option
Units, at the Option Closing Date, there shall be furnished to the Underwriters
an accurate certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer and the Chief Financial Officer of the General Partner,
in form and substance satisfactory to the Underwriters, to the effect that:
(i) Each signer of such certificate has
carefully examined the Registration Statement, the Prospectus (including
any documents filed under the Exchange Act and deemed to be incorporated
by reference into the Prospectus) and (A) as of the date of such
certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue
or misleading and (B) since the Effective Date, no event has occurred as
a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or
misleading in any material respect and there has been no document
required to be filed under the Exchange Act and the Exchange Act Rules
and Regulations that upon such filing would be deemed to be incorporated
by reference into the Prospectus that has not been so filed;
(ii) Each of the representations and warranties
of the TEPPCO Entities contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true and
correct in all material respects;
(iii) Each of the covenants required herein to
be performed by the TEPPCO Entities on or prior to the delivery of such
certificate has been duly, timely and fully performed and each condition
herein required to be complied with by the TEPPCO Entities on or prior
to the date of such certificate has been duly, timely and fully complied
with; and
(iv) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(A) there has not been a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and
the Prospectus and (B) none of the TEPPCO Entities nor any of their
subsidiaries has sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree,
which is not set forth in the Registration Statement and the Prospectus;
and such other matters as the Underwriters may reasonably request.
(j) On or prior to the Closing Date, the Underwriters
shall have received the executed agreements referred to in Section 4(n).
(k) The Units shall be qualified for sale in such states
as the Underwriters may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(l) Prior to the Closing Date, the Units shall have been
duly authorized for listing by the New York Stock Exchange upon official notice
of issuance.
6. Indemnification.
(a) The TEPPCO Entities will, jointly and severally,
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, liabilities, expenses
and damages (including, but not limited to, any and all investigative, legal and
other expenses reasonably incurred in connection with, and any and all amounts
paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted), as and when
incurred, to which any Underwriter, or any such person, may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, or
in any application or other document executed by or on behalf of any of the
TEPPCO Entities or based on written information furnished by or on behalf of any
of the TEPPCO Entities filed in any jurisdiction in order to qualify the Units
under the Securities Laws thereof or filed with the Commission, (ii) the
omission or alleged omission to state in such document, referenced in subclause
(i) above, a material fact required to be stated in it or necessary to make the
statements in it not misleading or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Units or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, liability, expense or
damage arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the TEPPCO Entities shall not be liable under this clause (iii)
to the extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by any Underwriter through its gross negligence or willful misconduct); provided
that the TEPPCO Entities will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Units in the public
offering to any person by an Underwriter and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Partnership through the Representatives by or on behalf of that Underwriter
expressly for inclusion in the Registration Statement or the Prospectus, which
information consists solely of the information specified in Section 6(f). This
indemnity agreement will be in addition to any liability that the TEPPCO
Entities might otherwise have.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the TEPPCO Entities, each person, if any, who
controls the TEPPCO Entities within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each director of the TEPPCO Entities and each
officer of the TEPPCO Entities who signed the Registration Statement to the same
extent as the foregoing indemnity from the TEPPCO Entities to the Underwriters,
but only insofar as losses, claims, liabilities, expenses, or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission of a material fact made in reliance on and in conformity with
information relating to such Underwriter furnished in writing through the
Representatives by or on behalf of that Underwriter expressly for use in the
Registration Statement or the Prospectus. This indemnity will be in addition to
any liability that any Underwriter might otherwise have; provided, however, that
in no case shall any Underwriter be liable or responsible for any amount in
excess of the underwriting discounts and commissions received by such
Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will
not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm (in addition to local counsel) admitted to practice in such jurisdiction at
any one time for all such indemnified party or parties. All such fees,
disbursements and other charges will be reimbursed by the indemnifying party
promptly as they are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent (which
consent will not be unreasonably withheld). No indemnifying party shall, without
the prior written consent of each indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action
or proceeding relating to the matters contemplated by this Section 6 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding. Notwithstanding any other provision of this Section 6(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with its
terms but for any reason is held to be unavailable from the TEPPCO Entities or
the Underwriters, the TEPPCO Entities and the Underwriters will contribute to
the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the TEPPCO
Entities from persons other than the Underwriters, such as persons who control
the TEPPCO Entities within the meaning of the Act, officers of the TEPPCO
Entities who signed the Registration Statement and directors of the TEPPCO
Entities, who also may be liable for contribution) to which the TEPPCO Entities
and any one or more of the Underwriters may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the TEPPCO
Entities on the one hand and the Underwriters on the other. The relative
benefits received by the TEPPCO Entities on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Partnership bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus Supplement. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the TEPPCO Entities, on the one hand, and the Underwriters, on the
other, with respect to the statements or omissions which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the TEPPCO Entities or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The TEPPCO Entities and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 6(d) shall be deemed to include, for purpose of this Section 6(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6(d), any person who controls a
party to this Agreement within the meaning of the Act will have the same rights
to contribution as that party, and each officer of the TEPPCO Entities who
signed the Registration Statement will have the same rights to contribution as
the TEPPCO Entities, subject in each case to the provisions hereof. Any party
entitled to contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for contribution may
be made under this Section 6(d), will notify any such party or parties from whom
contribution
may be sought, but the omission so to notify will not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have under this Section 6(d). Except for a settlement entered into
pursuant to the last sentence of Section 6(c) hereof, no party will be liable
for contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained
in this Section 6 and the representations and warranties of the TEPPCO Entities
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Underwriters,
(ii) acceptance of the Units and payment therefore or (iii) any termination of
this Agreement.
(f) The Underwriters severally confirm and the
Partnership acknowledges that the statement with respect to the delivery of the
Units by the Underwriters set forth on the cover page of the Prospectus, the
table included in the first paragraph and the information contained in the
fifth, seventh and eighth paragraphs appearing under the caption "Underwriting,"
in the Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Partnership by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
7. Termination. The obligations of the Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Units, on or prior to the Option Closing Date), by
notice to the Partnership from the Underwriters, without liability on the part
of the Underwriters to the TEPPCO Entities, if, prior to delivery and payment
for the Firm Units (or the Option Units, as the case may be), the Underwriters
shall decline to purchase the Units for any reason permitted under this
Agreement or, in the sole judgment of the Underwriters, (i) there has been,
since the respective dates as of which information is given in the Registration
Statement, any Material Adverse Effect, (ii) trading in any of the equity
securities of the Partnership shall have been suspended by the Commission, the
NASD or by the New York Stock Exchange, (iii) trading in securities generally on
the New York Stock Exchange or the Nasdaq Stock Market shall have been suspended
or limited or the settlement or clearance services of such trading generally
shall have been materially disrupted, or minimum or maximum prices shall have
been generally established on such exchange or over the counter market, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or the NASD or any court or other
governmental authority, (iv) a general banking moratorium shall have been
declared by either Federal or New York State authorities or a material
disruption in commercial banking, (v) on or after the date of the Price
Determination Agreement relating to the Units (1) no downgrading shall have
occurred in the rating accorded the Partnership's or TE Products OLP's debt
securities by any "nationally recognized statistics/rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (2) no such organization shall have publicly announced that it was
under surveillance or review, with possible negative implications, its rating of
any of the Partnership's or TE Products OLP's debt securities, or (vi) any
material adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United States or
any outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred, including without limitation as a result of terrorist activities after
the date hereof, the effect of any of which is such as to make it, in the sole
judgment of the Underwriters, impracticable or inadvisable to market the Units
on the terms and in the manner contemplated by the Prospectus.
8. Defaulting Underwriters. If, on the Closing Date, and with
respect to the Option Units, on the Option Closing Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the Units
which the defaulting Underwriter agreed but failed to purchase on such Closing
Date in the respective proportions which the number of Firm Units set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of Firm Units set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Units on such Closing Date or Option Closing Date if the total number of
Units which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 9.09% of the total number of Units to be purchased
on such Closing Date or Option Closing Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
Units which it agreed to purchase on such Closing Date pursuant to the terms of
Section 1. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Units to be purchased
on such Closing Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
Closing Date, this Agreement (or, with respect to the Option Closing Date, the
obligation of the Underwriters to purchase, and of the Partnership to sell, the
Option Units) shall terminate without liability on the part of any
non-defaulting Underwriter or the TEPPCO Entities, except that the TEPPCO
Entities will continue to be liable for the payment of expenses to the extent
set forth in Section 4. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement, unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 8, purchases those Units which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the TEPPCO Entities for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Units of a defaulting or withdrawing Underwriter, either the Representatives
or the TEPPCO Entities may postpone the Closing Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for
the TEPPCO Entities or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.
If this Agreement is terminated pursuant to this Section 8 by reason of the
default of one or more Underwriters, the TEPPCO Entities shall not be obligated
to reimburse any defaulting Underwriter on account of those expenses.
9. Miscellaneous. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the TEPPCO Entities, at the
office of TEPPCO Partners, L.P., 0000 Xxxxx Xxxxxxx, X.X. Xxx 0000 Xxxxxxx,
Xxxxx 00000-0000, Attention: Xxxxx X. Xxxx or (b) if to the Underwriters, at the
offices of Xxxxxx Brothers Inc., 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx
00000, Attention: Equity Syndicate, with a copy, in the case of any notice
pursuant to Section 6(c), to the Director of Litigation, Office of the General
Counsel, Xxxxxx Brothers Inc., 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000.
Any such notice shall be effective only upon receipt. Any notice under Section 7
hereof may be made by telex or telephone, but if so made shall be subsequently
confirmed in writing.
This Agreement has been and is made solely for the benefit of
the Underwriters, the TEPPCO Entities and of the controlling persons, directors
and officers referred to in Section 6, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of Units from the
Underwriters.
All representations, warranties and agreements of the TEPPCO
Entities contained herein or in certificates or other instruments delivered
pursuant hereto, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Underwriters or any of their
respective controlling persons and shall survive delivery of and payment for the
Units hereunder.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The TEPPCO Entities and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the TEPPCO
Entities and the Underwriters.
Please confirm that the foregoing correctly sets forth the
agreement among the TEPPCO Entities and the Underwriters.
Very truly yours,
TEPPCO PARTNERS, L.P.
By: TEXAS EASTERN PRODUCTS
PIPELINE COMPANY, LLC,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
TCTM, L.P.
TE PRODUCTS PIPELINE COMPANY,
LIMITED PARTNERSHIP
TEPPCO MIDSTREAM COMPANIES,
L.P.
By: TEPPCO GP, INC.,
General Partner of each of the above
entities
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
TEXAS EASTERN PRODUCTS
PIPELINE COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
Accepted:
XXXXXX BROTHERS INC.
XXXXXXX, SACHS & CO.
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXXX & SONS, INC.
RBC XXXX XXXXXXXX INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
SCHEDULE 1
Number of Firm Units to be
Underwriters Purchased
------------ --------------------------
Xxxxxx Brothers Inc....................... 1,100,001
Xxxxxxx, Xxxxx & Co....................... 1,100,000
UBS Warburg LLC........................... 1,100,000
Banc of America Securities LLC............ 733,333
X.X. Xxxxxxx & Sons, Inc.................. 733,333
RBC Xxxx Xxxxxxxx Inc. 733,333
--------------------------
Total..................................... 5,500,000
==========================
EXHIBIT A
TEPPCO PARTNERS, L.P.
PRICE DETERMINATION AGREEMENT
November 14, 2001
XXXXXX BROTHERS INC .
XXXXXXX, XXXXX & CO.
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXXX & SONS, INC.
RBC XXXX XXXXXXXX INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the
Underwriting Agreement, dated
November 14, 2001 (the "
Underwriting Agreement"), among the TEPPCO Entities and
the Underwriters. The
Underwriting Agreement provides for the purchase by the
Underwriters from the Partnership, subject to the terms and conditions set forth
therein, of an aggregate of 5,500,000 Firm Units. This Agreement is the Price
Determination Agreement referred to in the
Underwriting Agreement. Capitalized
terms used herein but not defined shall have the meanings assigned to such terms
in the
Underwriting Agreement.
Pursuant to Section 1 of the
Underwriting Agreement, the
undersigned agree as follows:
The public offering price per Common Unit for the Firm Units
shall be $34.25.
The purchase price per Common Unit for the Firm Units to be
paid by the Underwriters shall be $32.79 representing an amount equal to the
public offering price set forth above, less $1.46 per Common Unit.
The TEPPCO Entities represent and warrant to the Underwriters
that the representations and warranties of the TEPPCO Entities set forth in
Section 3 of the
Underwriting Agreement are accurate, as though expressly made
at and as of the date hereof.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE.
If the foregoing is in accordance with your understanding of
the agreement among the TEPPCO Entities and the Underwriters, please sign and
return to the Partnership a counterpart hereof, whereupon this instrument along
with all counterparts and together with the
Underwriting Agreement shall be a
binding agreement among the TEPPCO Entities and the Underwriters in accordance
with its terms and the terms of the
Underwriting Agreement.
Very truly yours,
TEPPCO PARTNERS, L.P.
By: TEXAS EASTERN PRODUCTS
PIPELINE COMPANY, LLC,
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
TCTM, L.P.
TE PRODUCTS PIPELINE COMPANY,
LIMITED PARTNERSHIP
TEPPCO MIDSTREAM COMPANIES,
L.P.
By: TEPPCO GP, INC.,
General Partner of each of the above
entities
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
TEXAS EASTERN PRODUCTS
PIPELINE COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
Accepted:
XXXXXX BROTHERS INC.
XXXXXXX, SACHS & CO.
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXXX & SONS, INC.
RBC XXXX XXXXXXXX INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
EXHIBIT B
November 8, 2001
XXXXXX BROTHERS INC .
XXXXXXX, XXXXX & CO.
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXXX & SONS, INC.
RBC XXXX XXXXXXXX INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In consideration of the agreement of Xxxxxx Brothers Inc.,
Xxxxxxx, Sachs & Co ., UBS Warburg LLC, Banc of America Securities LLC, X.X.
Xxxxxxx & Sons, Inc. and RBC Xxxx Xxxxxxxx Inc., as representatives of several
underwriters, to underwrite a proposed public offering (the "Offering") of up to
6,325,000 Common Units (the "Common Units") of TEPPCO Partners, L.P., a Delaware
limited partnership (the "Partnership"), as contemplated by a registration
statement with respect to such Common Units filed with the Securities and
Exchange Commission on Form S-3 (Registration No. 333-66102), the undersigned
hereby agrees that the undersigned will not, for a period of 90 days after the
commencement of the public offering of such Units, without the prior written
consent of Xxxxxx Brothers Inc., (i) directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of, any Common
Units, units representing Class B limited partner interests ("Class B Units") or
securities convertible into Common Units other than pursuant to employee option
plans, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of the Common
Units or Class B Units, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Units, Class B Units or such
other securities, in cash or otherwise or (iii) require the Partnership to file
with the Securities and Exchange Commission a registration statement under the
Securities Act of 1933 to register any Common Units or Class B Units or
securities convertible into or exchangeable for Common Units or Class B Units or
warrants or other rights to acquire Common Units or Class B Units of which the
undersigned is now, or may in the future become, the beneficial owner within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934) (other than
pursuant to employee unit option plans or in connection with other employee
incentive compensation arrangements).
Very truly yours,
By:
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Print Name:
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EXHIBIT C
OPINION OF COMPANY COUNSEL
We have acted as special counsel to the TEPPCO Entities in
connection with the sale to you of the Units pursuant to an Underwriting
Agreement dated November 14, 2001 (the "Agreement"), among you and the TEPPCO
Entities. Capitalized terms used but not defined herein have the same meanings
herein as such terms have in the Agreement. The opinions expressed herein are
being furnished to you at the request of the Partnership pursuant to Section
5(f) of the Agreement.
We have participated in the preparation of, and have examined,
the Prospectus Supplement, dated November 14, 2001, and have examined the
Registration Statement on Form S-3 (Registration No. 333-66102) filed by the
Partnership under the Securities Act, which became effective on August 9, 2001
(the "Effective Date"), and Prospectus.
We have also examined originals or copies of such records of
the TEPPCO Entities, certificates and other communications of public officials,
certificates of officers of the General Partner, certificates of the transfer
agent for the Units and such other documents as we have deemed necessary for the
purpose of rendering the opinions expressed herein. As to questions of fact
material to those opinions, we have, to the extent we deemed appropriate, relied
on certificates of officers of the General Partner, certificates and other
communications of public officials, certificates of the transfer agent for the
Units and on the factual representations of the General Partner contained in the
Agreement. We have assumed the genuineness of all signatures on, and the
authenticity of, all documents submitted to us as originals, the conformity to
authentic original documents of all documents submitted to us as copies, the due
authorization, execution and delivery by the parties thereto, other than the
TEPPCO Entities, of all documents examined by us, and the legal capacity of each
individual who signed any of those documents.
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. Each of the Partnership and the Operating Partnerships has
been duly formed and is validly existing as a limited partnership in good
standing under the Delaware Act, with partnership power and authority to own or
lease its properties and conduct its business as described in the Prospectus.
2. The General Partner is a limited liability company duly
organized and validly existing in good standing under the laws of the State of
Delaware, with power and authority to own or lease its properties, to conduct
its businesses and to act as the general partner of the Partnership, in each
case as described in the Prospectus.
3. TEPPCO GP has been duly incorporated and is validly
existing as a corporation in good standing under the DGCL, with power and
authority to own or lease its properties, to conduct its business and to act as
the general partner of each of the Operating Partnerships, in each case as
described in the Prospectus.
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4. The General Partner is the sole general partner of the
Partnership with a general partner interest in the Partnership of 2.0%; such
general partner interests are duly authorized by the Partnership Agreement and
are validly issued, and the General Partner to our knowledge beneficially owns
such general partner interests free and clear of any security interest, lien,
encumbrance or adverse claim.
5. TEPPCO GP is the sole general partner of each of the
Operating Partnerships with a general partner interest in each of the Operating
Partnerships of 0.001%; such general partner interests are duly authorized by
the Operating Partnership Agreements, and are validly issued, and TEPPCO GP to
our knowledge beneficially owns such general partner interests free and clear of
any security interest, lien, encumbrance or adverse claim.
6. The Partnership is the sole limited partner of each of the
Operating Partnerships, with a limited partner interest of 99.999%; such limited
partner interests are duly authorized by the Operating Partnership Agreements
and are validly issued, fully paid and non-assessable; the Partnership to our
knowledge beneficially owns such limited partner interests in the Operating
Partnerships free and clear of any security interest, lien, encumbrance or
adverse claim.
7. The authorized partnership interests of the Partnership
conform in all material respects as to legal matters to the description thereof
set forth under the captions "Cash Distributions" and "Tax Considerations" in
the Prospectus.
8. All the partnership interests of the Partnership have been
duly authorized and validly issued, and are fully paid and non-assessable, and
there are no preemptive or other rights to subscribe for or to purchase
partnership interests of the Partnership pursuant to any statute, the
Partnership Agreement or any agreement or other instrument to which the
Partnership is a party filed as an exhibit to, or incorporated by reference in,
the Registration Statement.
9. All of the general partner interests of each of the
Subsidiary Partnerships are duly authorized, validly issued and are owned of
record and, to our knowledge, beneficially by TEPPCO Crude GP, LLC, free and
clear of any perfected security interest and, to our knowledge, any other
security interest, lien, encumbrance, right to purchase or other claim.
10. All of the limited partner interests of each of the
Subsidiary Partnerships are duly authorized, validly issued and nonassessable,
and are owned of record and, to our knowledge, beneficially by TCTM OLP (or,
with respect to Lubrication Services, L.P., by TEPPCO Crude Oil, L.P.), free and
clear of any perfected security interest and, to our knowledge, any other
security interest, lien, encumbrance, right to purchase or other claim.
11. All of the member interests of TEPPCO Colorado, LLC are
duly authorized, validly issued and nonassessable and are owned of record and,
to our knowledge, beneficially by TE Products OLP, free and clear of any
perfected security interest and, to our knowledge, any other security interest,
lien, encumbrance, right to purchase or other claim.
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12. All of the member interests of TEPPCO Crude GP, LLC are
duly authorized, validly issued and nonassessable and are owned of record and,
to our knowledge, beneficially by TCTM OLP, free and clear of any perfected
security interest and, to our knowledge, any other security interest, lien,
encumbrance, right to purchase or other claim.
13. All of the general partner interests of Jonah Gas
Gathering Company are duly authorized, validly issued and are owned of record
and, to our knowledge, beneficially by TEPPCO GP and TEPPCO Midstream OLP free
and clear of any perfected security interest, and, to our knowledge, any other
security interest, lien, encumbrance, right to purchase or other claim.
14. The Units have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance with the
terms of the Agreement, will be validly issued, fully paid and non-assessable,
and free of any preemptive, or to the knowledge of such counsel, similar rights
that entitle or will entitle any person to acquire any partnership interest in
the Partnership upon the issuance thereof by the Partnership.
15. The form of certificates for the Units conforms in all
material respects to the requirements of the Partnership Agreement.
16. The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to our knowledge
after due inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are threatened by the Commission; and any required filing of
the Prospectus pursuant to Rule 424(b) has been made in accordance with Rule
424(b).
17. The Agreement has been duly authorized, executed and
delivered by each of the TEPPCO Entities.
18. Each of the Partnership Agreement and the Operating
Partnership Agreements has been duly authorized, executed and delivered by the
parties thereto and is a valid and legally binding agreement of the parties
thereto, enforceable against the parties thereto in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other similar laws affecting creditors rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and to the extent that rights to indemnity and
contribution under the Partnership Agreement and the Operating Partnership
Agreements may be limited by federal or state securities laws or the public
policy underlying such laws.
19. Neither the offer, sale or delivery of the Units by the
Partnership, the execution, delivery or performance of the Agreement, nor
performance by the TEPPCO Entities of their obligations under the Agreement
constitutes or will constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which any of the TEPPCO Entities is a
party or by which any of them or any of their respective properties is bound
that has been filed as an exhibit to the Registration Statement, or will result
in the creation or imposition of any lien, charge or encumbrance under the terms
thereof upon any property or assets of any of the
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TEPPCO Entities, nor will any such action result in any violation of (a) the
partnership agreement, member agreement or other organizational documents of any
of the TEPPCO Entities, as the case may be, (b) any statutory law, regulation or
ruling (assuming compliance with all applicable state securities and Blue Sky
laws), or (c) any judgment, injunction, order or decree of any court,
governmental agency or arbitrator that is known to us to be applicable to any of
the TEPPCO Entities or any of their respective properties.
20. To our knowledge, except for Duke Energy Corporation and
certain of its affiliates who have waived their rights, no holder of any
interest in or security of the Partnership or any other person has any right to
require registration of Units or any other partnership interest or other
security of the Partnership because of the filing of the Registration Statement
or consummation of the transactions contemplated by the Agreement.
21. No consent, approval, authorization or waiver of, or
notice to or filing with, or other action by, any governmental authority is
required by any statutory law, regulation or ruling as a condition to the
execution and delivery by the TEPPCO Entities of the Agreement, or the
performance by the TEPPCO Entities of their obligations under the Agreement,
except such as have been obtained under the Act and the Exchange Act (and except
such as may be required under state securities or Blue Sky laws governing the
purchase and distribution of the Units by the Underwriters, as to which we
express no opinion).
22. The Registration Statement, and the Prospectus and any
supplements or amendments thereto (except for the financial statements and the
notes thereto and the schedules and other financial data included therein, as to
which we express no opinion) comply as to form in all material respects with the
requirements of the Act; and each of these documents incorporated by reference
into the Registration Statement (except for the financial statements and the
notes thereto and the schedules and other financial data included therein, as to
which we express no opinion) complies as to form in all material respects with
the Exchange Act and the rules and regulations of the Commission thereunder.
23. To our knowledge (a) other than as disclosed in the
Prospectus (or any supplement thereto), there are no legal or governmental
proceedings pending to which any of the TEPPCO Entities, or any of their
subsidiaries, is a party or threatened against any of the TEPPCO Entities, or
any of their subsidiaries, which are required to be disclosed in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) and (b) there are no contracts or leases that are required to be
described in the Registration Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the Registration Statement
or any documents incorporated therein that are not described or filed as
required, as the case may be.
24. None of the TEPPCO Entities 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 not be an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act or a "public utility company" or a "holding company," or
a "subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended; none of
the TEPPCO
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Entities is subject to regulation under the Public Utility Holding Company Act
of 1935, as amended.
25. The Firm Units and the Option Units are duly authorized
for listing, subject only to official notice of issuance, on the New York Stock
Exchange.
Although we have not undertaken, except as otherwise indicated
in our opinion, to determine independently, and are not passing upon and do not
assume any responsibility for, the accuracy, completeness or fairness of any of
the statements in the Registration Statement, we have participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof (including review and discussion of the
contents of all documents incorporated by reference therein), and nothing has
come to our attention that has caused us to believe that the Registration
Statement (including the documents incorporated by reference therein) at the
time the Registration Statement became effective, or the Prospectus, as of its
date and as of the date hereof, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that any amendment or
supplement to the Prospectus, as of its respective date, and as of the date
hereof, as the case may be, contained any untrue statement of a material fact or
omitted 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 (it being understood that we express no opinion with respect to the
financial statements and the notes thereto and the schedules and other financial
data included in the Registration Statement or the Prospectus or any documents
incorporated by reference therein).
The opinions expressed herein are limited exclusively to the
laws of the State of Texas, the Limited Liability Company Act of the State of
Delaware, the Revised Uniform Limited Partnership Act of the State of Delaware
and the federal laws of the United States of America.
As used herein, the phrase "to our knowledge" or words of
similar import means conscious awareness of facts or other information by the
lawyers in our firm who, based on our records as of November 14, 2001, have
devoted substantive attention to legal matters on behalf of the TEPPCO Entities
since January 1, 2001.
The opinions expressed herein are furnished to you for your
sole benefit in connection with the transactions contemplated by the Agreement.
The opinions expressed herein may not be relied upon by you for any other
purpose and may not be relied upon for any purpose by any other person without
our prior written consent, except that the transfer agent for the Units may rely
upon this opinion in connection with those transactions.
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