EXECUTION COPY
KANEB PIPE LINE PARTNERS, L.P.
2,000,000 UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
November 4, 2002
XXXXXXX XXXXX XXXXXX INC.
as Representative of the several Underwriters listed on Schedule I
c/o XXXXXXX XXXXX BARNEY INC.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Kaneb Pipe Line Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to sell an aggregate of 2,000,000 units (the "Firm
Units") representing limited partner interests in the Partnership, to the
several Underwriters named in Schedule I hereto (the "Underwriters"). The
Partnership also proposes to sell to the Underwriters, upon the terms and
conditions set forth in Section 2 hereof, up to an additional 300,000 units (the
"Additional Units"). The Firm Units and the Additional Units are hereinafter
collectively referred to as the "Offered Units," and the Offered Units and each
unit representing a limited partner interest in the Partnership outstanding on
the date hereof are collectively referred to as the "Units." The term
"Representative" as used herein means Xxxxxxx Xxxxx Xxxxxx Inc. and the term
"Underwriters" means either the singular or the plural as the context requires.
The Partnership, the General Partner, Kaneb Pipe Line Operating
Partnership, L.P., a Delaware limited partnership (the "Operating Partnership"),
Support Terminals Operating Partnership, L.P., a Delaware limited partnership
("STOP"), Support Terminal Services, Inc., a Delaware corporation ("STS"),
StanTrans, Inc., a Delaware corporation ("STI"), StanTrans Holding, Inc., a
Delaware corporation ("STH"), StanTrans Partners, L.P., a Delaware limited
partnership ("STP"), ST/Center Chillicothe Terminal, LLC, a Delaware limited
liability company ("STC"), ST Linden Terminal, LLC, a Delaware limited liability
company ("STL"), ST Services Ltd., a United Kingdom corporation ("STK"), ST
Eastham Ltd., a United Kingdom corporation ("STE"), Shore Terminals LLC, a
Delaware limited liability company ("Shore"), Kaneb Pipe Line Holding Company
LLC, a Delaware limited liability company ("KPH"), Statia Terminals
International N.V., a Netherlands Antilles limited liability company ("Statia
International"), Statia Technology, Inc., a Delaware corporation ("Statia
Technology"), and Statia Marine, Inc., a Cayman Islands company ("Statia Marine"
and, together with Statia International and Statia Technology, collectively the
"Statia Companies"), (the Operating
Partnership, STOP, STS, STI, STH, STP, STL, STC, STK, STE, Shore, KPH and the
Statia Companies are collectively referred to herein as the "Operating
Entities," and individually referred to herein as an "Operating Entity"), are
sometimes collectively referred to herein as the "Companies."
Each of the Partnership and Kaneb Pipe Line Company LLC, a Delaware
limited liability company and the general partner of the Partnership (the
"General Partner"), confirms as follows its agreement with you, as the
Representative of the Underwriters, and each of the other Underwriters, on whose
behalf you are acting, in connection with the purchases of the Offered Units by
the Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Partnership has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 (Registration No. 333-98621) under
the Act (the "registration statement"), including a prospectus subject to
completion relating to the Offered Units. Such registration statement has been
declared effective by the Commission. The term "Registration Statement" as used
in this Agreement means the registration statement (including all financial
schedules and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed with the
Commission and must be declared effective before the offering of the Offered
Units may commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective amendment. If
it is contemplated, at the time this Agreement is executed, that a registration
statement will be filed pursuant to Rule 462(b) under the Act before the
offering of the Offered Units may commence, the term "Registration Statement" as
used in this Agreement includes such registration statement. "Basic Prospectus"
means the prospectus in the form included in the Registration Statement at the
time that the Registration Statement was declared effective or in the form in
which it has been most recently filed with the Commission on or prior to the
date of this Agreement. "Final Prospectus" means the prospectus supplement
relating to the Offered Units and the offering thereof that is first filed
pursuant to Rule 424(b) under the Act after the date and time this Agreement is
executed and delivered by the parties hereto, together with the Basic
Prospectus.
All references in this Agreement to financial statements and schedules
and other information that is "contained," "included" or "stated" in the
registration statement, the Registration Statement, the Basic Prospectus, or the
Final Prospectus (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
that is filed as a part of or incorporated by reference in the registration
statement, Registration Statement, the Basic Prospectus, or the Final
Prospectus, as the case may be. Any reference in this Agreement to the
registration statement, the Registration Statement, the Basic Prospectus, or the
Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act,
as of the date of the registration statement, the Registration Statement, the
Basic Prospectus, or the Final Prospectus, as the case may be, and any reference
to any amendment or supplement to the
-2-
registration statement, the Registration Statement, the Basic Prospectus, or the
Final Prospectus shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") which, upon filing, are incorporated by reference therein, as
required by paragraph (b) of Item 12 of Form S-3. As used herein, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the registration statement, the Registration Statement, the
Basic Prospectus, the Final Prospectus, or any amendment or supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE. The Partnership hereby agrees,
subject to all the terms and conditions set forth herein, to sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Partnership and the General Partner herein contained and
subject to all the terms and conditions set forth herein, each Underwriter,
severally and not jointly, agrees to purchase from the Partnership, at a
purchase price of $31.942 per Unit (the "Purchase Price Per Unit"), the number
of Firm Units set forth opposite the name of such Underwriter in Schedule I
hereto (or such number of Firm Units increased as set forth in Section 10
hereof).
Over-Allotment. The Partnership also agrees, subject to all the terms
and conditions set forth herein, to sell to the Underwriters, and, upon the
basis of the representations, warranties and agreements of the Partnership and
the General Partner herein contained and subject to all the terms and conditions
set forth herein, the Underwriters shall have the right to purchase from the
Partnership, at the per unit purchase price described below, pursuant to an
option (the "over-allotment option") which may be exercised at any time and from
time to time prior to 9:00 P.M., New York City time, on the 30th day after the
date of the Final Prospectus (or, if such 30th day shall be a Saturday or Sunday
or a holiday, on the next business day thereafter when the New York Stock
Exchange is open for trading), up to an aggregate of 300,000 Additional Units.
If the Option Closing Date (as defined below) occurs prior to or on the record
date for the Partnership's quarterly cash distribution with respect to the
quarter ended December 31, 2002 (the "Record Date"), then the per Unit purchase
price for each Additional Unit purchased pursuant to the over-allotment option
shall equal the Purchase Price Per Unit. If the Option Closing Date occurs after
the Record Date, then the per Unit purchase price for each Additional Unit
purchased pursuant to the over-allotment option shall be an amount equal to (x)
the Purchase Price Per Unit less (y) the per Unit amount of the Partnership's
quarterly cash distribution with respect to the quarter ended December 31, 2002.
Additional Units may be purchased only for the purpose of covering
over-allotments made in connection with the offering of the Firm Units. Upon any
exercise of the over-allotment option, each Underwriter, severally and not
jointly, agrees to purchase from the Partnership the number of Additional Units
(subject to such adjustments as you may determine in order to avoid fractional
units) which bears the same proportion to the number of Additional Units to be
purchased by the Underwriters as the number of Firm Units set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Units
increased as set forth in Section 10 hereof) bears to the aggregate number of
Firm Units.
3. TERMS OF PUBLIC OFFERING. It is understood that the several
Underwriters propose to offer the Offered Units for sale to the public as set
forth in the Final Prospectus.
-3-
4. DELIVERY OF THE OFFERED UNITS AND PAYMENT THEREFOR. The Offered
Units to be purchased hereunder will be represented by one or more definitive
global certificates in book-entry form that 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, against payment of the
purchase price therefor in immediately available funds, shall be made by causing
DTC to credit the Firm Units to the account or accounts designated by Xxxxxxx
Xxxxx Xxxxxx Inc. on behalf of the Underwriters at DTC. The time and date of
such delivery shall be no later than 11:00 A.M., New York City time, on November
7, 2002 (the "Closing Date"). The other documents to be delivered at the Closing
Date by or on behalf of the parties hereto shall be delivered at such time and
date at the offices of Xxxxxxx & Xxxxx L.L.P., 000 Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000. The place of closing for the Firm Units and the Closing Date may be
varied by agreement between you and the Partnership.
Delivery to the Underwriters of any Additional Units to be purchased by
the Underwriters, against payment of the purchase price therefor in immediately
available funds, shall be made by causing DTC to credit the Additional Units to
the account or accounts designated by Xxxxxxx Xxxxx Xxxxxx Inc. on behalf of the
Underwriters at DTC at such time on such date (the "Option Closing Date"), which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Partnership of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Units. The other documents to be delivered at the Option Closing Date
by or on behalf of the parties hereto shall be delivered at such time and date
at the offices of Xxxxxxx & Xxxxx L.L.P., 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000. The place of closing for any Additional Units and the Option Closing Date
for such Additional Units may be varied by agreement between you and the
Partnership.
The global certificates for the Offered Units to be purchased hereunder
shall be made available to you at the offices of DTC or its custodian for
inspection not later than 9:30 A.M., New York City time, on the business day
preceding the Closing Date or any Option Closing Date, as the case may be.
5. AGREEMENTS OF THE PARTNERSHIP AND THE GENERAL PARTNER. Each of the
Partnership and the General Partner agrees with the several Underwriters as
follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Offered Units may commence,
the Partnership will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and will advise
you promptly and, if requested by you, will confirm such advice in writing, when
the Registration Statement or such post-effective amendment has become
effective.
(b) Prior to the end of the period of time referred to in the second
sentence of paragraph (e) below, the Partnership will advise you promptly and,
if requested by you, will
-4-
confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, the Basic
Prospectus, or the Final Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Offered
Units for offering or sale in any jurisdiction or the initiation of any
proceeding for such purpose; and (iii) of any change in any of the Companies'
financial condition, business, properties, net worth or results of operations,
or of the happening of any event, which makes any statement of a material fact
made in the Registration Statement, the Basic Prospectus or the Final Prospectus
(as then amended or supplemented) untrue or which requires the making of any
additions to or changes in the Registration Statement, the Basic Prospectus or
the Final Prospectus (as then amended or supplemented) in order to state a
material fact required by the Act to be stated therein or necessary in order to
make the statements therein not misleading, or of the necessity to amend or
supplement, the Basic Prospectus or the Final Prospectus (as then amended or
supplemented) to comply with the Act, the Exchange Act or any other applicable
securities laws. If at any time prior to the end of the period of time referred
to in the second sentence of paragraph (e) below, the Commission shall issue any
stop 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 time.
(c) The Partnership will furnish to you, without charge (i) six
copies of the manually signed copy of the Registration Statement corresponding
to the XXXXX version as filed with the Commission and of each amendment thereto,
including financial statements and all exhibits to the registration statement,
(ii) such number of conformed copies of the Registration Statement as originally
filed and of each amendment thereto, but without exhibits, as you may reasonably
request, (iii) such number of copies of the Incorporated Documents, without
exhibits, as you may reasonably request, and (iv) such number of copies of the
exhibits to the Incorporated Documents as you may reasonably request.
(d) Prior to the end of the period of time referred to in the second
sentence of paragraph (e) below, the Partnership will not file any amendment to
the Registration Statement or make any amendment or supplement to the Final
Prospectus or any Rule 462(b) registration statement or file any document which,
upon filing becomes an Incorporated Document, of which you shall not previously
have been advised or to which, after you shall have received a copy of the
document proposed to be filed, you shall reasonably object.
(e) The Partnership shall cause the Final Prospectus to be filed
pursuant to, and in compliance with, Rule 424(b) under the Act. As soon after
the execution and delivery of this Agreement as possible and thereafter from
time to time for such period as in the opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection with sales by
any Underwriter or dealer, the Partnership will expeditiously deliver to each
Underwriter and each dealer, without charge, as many copies of the Final
Prospectus (and of any amendment or supplement thereto) as you may reasonably
request. The Partnership consents to the use of the Final Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Offered Units are offered by the several Underwriters and by all dealers to whom
Offered Units may be sold, both in connection with the offering and sale of the
Offered Units and for such period of time thereafter as the Final Prospectus is
required by the Act to be
-5-
delivered in connection with sales by any Underwriter or dealer. If during such
period of time any event shall occur that in the judgment of the Partnership or
in the opinion of counsel for the Underwriters is required to be set forth in
the Final Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Final Prospectus (or to file under the Exchange Act
any document which, upon filing, becomes an Incorporated Document) in order to
comply with the Act or any other law, the Partnership will forthwith prepare
and, subject to the provisions of paragraph (d) above, file with the Commission
an appropriate supplement or amendment thereto (or to such document), and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Partnership and you, as Representative of
the several Underwriters, agree that the Final Prospectus should be amended or
supplemented, the Partnership, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(f) The Partnership will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Offered
Units for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; 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 service of process in suits, other than those arising out of the
offering or sale of the Offered Units, in any jurisdiction where it is not now
so subject.
(g) The Partnership will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(h) During the period of five years hereafter, the Partnership will
furnish to you (i) as soon as available, a copy of each report of the
Partnership mailed to unitholders or filed with the Commission, and (ii) from
time to time such other information concerning the Partnership as you may
request.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second sentence of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Partnership or the General Partner to comply with the terms or
fulfill any of the conditions of this Agreement, the Partnership and the General
Partner, jointly and severally, agree to reimburse the Underwriters for all
out-of-pocket expenses (including reasonable fees and expenses of counsel for
the Underwriters) incurred by them in connection herewith.
-6-
(j) Except as provided in this Agreement, neither the Partnership
nor the General Partner will sell, contract to sell or otherwise dispose of or
hedge any Units or any securities substantially similar to, convertible into or
exercisable or exchangeable for Units, or grant any options or warrants to
purchase any securities substantially similar to, convertible into or
exercisable or exchangeable for Units, for a period of 90 days after the date of
the Final Prospectus (the "Lock-Up Period"), without the prior written consent
of Xxxxxxx Xxxxx Xxxxxx Inc. Notwithstanding the foregoing, the Partnership may
issue Units to sellers of terminalling facilities or pipelines in connection
with acquisitions from such sellers of such terminalling facilities or pipelines
by the Partnership; provided that the Partnership has received assurance from
such sellers that they will not sell or otherwise dispose of such units in
contravention of this paragraph (j) during the Lock-Up Period.
(k) The Partnership has furnished to you "lock-up" letters, in form
and substance satisfactory to you, signed by each of the current officers and
directors of the General Partner set forth on Schedule II hereto and by Kaneb
Services LLC ("KSL") (on behalf of itself and its affiliates).
(l) Except as stated in this Agreement and in the Final Prospectus,
the Partnership and the General Partner have not taken, nor will they take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Units to facilitate the sale or resale of the Offered Units.
(m) The Partnership and the General Partner will use their best
efforts to have the Offered Units listed, subject to notice of issuance, on the
New York Stock Exchange on or before the Closing Date.
(n) The Partnership will apply the net proceeds from the sale of the
Offered Units substantially in accordance with the description set forth in the
Final Prospectus.
(o) The Partnership, during the period of time referred to in the
second sentence in paragraph (e) above, will file all documents required to be
filed with the Commission pursuant to the Exchange Act within the time periods
required by the Exchange Act.
6. REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND THE GENERAL
PARTNER. Each of the Partnership and the General Partner represents and warrants
to each Underwriter that:
(a) Disclosure. The Basic Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, and the Final Prospectus filed pursuant to Rule 424(b) under
the Act, complied when so filed in all material respects with the provisions of
the Act and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and the statements made in such documents within the
coverage of Rule 175(b) under the Act were made with a reasonable basis and in
good faith, except that this representation and warranty does not apply to
statements in or omissions from the Basic Prospectus or the Final Prospectus
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the
-7-
Partnership in writing by or on behalf of any Underwriter expressly for use
therein. The Commission has not issued any order preventing or suspending the
use of the Basic Prospectus or the Final Prospectus.
(b) Compliance with Registration Requirements. The Partnership and
the offering of the Offered Units contemplated by this Agreement meet the
requirements for using Form S-3 under the Act, and the Registration Statement
meets the requirements set forth in Rule 415(a)(1)(x) under the Act. The
Registration Statement in the form in which it became effective and also in such
form as it may be when any post-effective amendment thereto shall become
effective and the Final Prospectus and any supplement or amendment thereto when
filed with the Commission under Rule 424(b) under the Act, complied or will
comply in all material respects with the provisions of the Act and will not at
any such times 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, and the statements made or to be made in such documents
within the coverage of Rule 175(b) under the Act were made or will be made with
a reasonable basis and in good faith, except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement or the Final Prospectus made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Partnership in writing
by or on behalf of any Underwriter through you expressly for use therein.
(c) Incorporated Documents. The Incorporated Documents heretofore
filed, when they were filed (or, if any amendment with respect to any such
document was filed, when such amendment was filed), conformed in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, any further Incorporated Documents so filed will, when they are
filed, conform in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder; no such document when it was filed
(or, if an amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and no such further
document, when it is filed, will contain an untrue statement of a material fact
or will omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(d) Capitalization of the Partnership and Authorization of
Partnership Interests. The capitalization of the Partnership is as set forth in
the Registration Statement and the Final Prospectus under "Capitalization." All
the outstanding Units and the limited partner interests represented thereby have
been duly authorized and validly issued, are fully paid and nonassessable
(except as provided in the Delaware Revised Uniform Limited Partnership Act (the
"Delaware Act") and are free of any preemptive or similar rights; the Offered
Units and the limited partner interests represented thereby have been duly
authorized and, when issued, delivered and paid for in accordance with Section 4
hereof, will be validly issued, fully paid and nonassessable except as provided
in the Delaware Act and free of any preemptive or similar rights and the
Underwriters will acquire the Offered Units free and clear of any lien, adverse
claim, security interest, equity, or other encumbrance; and the Units and the
Amended and Restated Agreement of Limited Partnership of the Partnership dated
as of July 23, 1998 (the "Partnership Agreement") conform to the descriptions
thereof in the Registration Statement and the Final Prospectus.
-8-
(e) Formation, Authority and Good Standing of the Partnership. The
Partnership 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 in each case
as described in the Final Prospectus and the Incorporated Documents and to enter
into and perform its obligations under this Agreement, and is duly qualified or
registered and is in good standing as a foreign limited partnership for the
transaction of business under the laws of the State of Texas, and there are no
other jurisdictions in which the failure so to qualify or register would subject
it to any liability or disability which is material to the financial condition,
business, properties, net worth or results of operations of the General Partner
or the Partnership and the Operating Entities considered as a whole or would
subject the limited partners of the Partnership to any material liability or
disability.
(f) Formation, Authority and Good Standing of the Partnership
Operating Entities. Each of the Operating Partnership, STOP and STP 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 Final Prospectus and is
duly qualified or registered and in good standing as a foreign limited
partnership for the transaction of business under the laws of each jurisdiction
in which it owns or leases properties or conducts any business so as to require
such qualification or registration, other than any jurisdiction in which the
failure so to qualify or register would not subject it to any liability or
disability which is material to the financial condition, business, properties,
net worth or results of operations of the General Partner or the Partnership and
the Operating Entities considered as a whole or would subject the limited
partners of the Partnership to any material liability or disability.
(g) General Partner Interest in the Partnership. The General Partner
is the sole general partner of the Partnership with a general partner interest
in the Partnership of 1%; such general partner interest is duly authorized by
the Partnership Agreement, and has been validly issued to the General Partner
and is fully paid; the General Partner owns such general partner interest free
and clear of any lien, adverse claim, security interest, equity, or other
encumbrance.
(h) General Partner Interest in the Operating Partnership. The
General Partner is the sole general partner of the Operating Partnership with a
general partner interest in the Operating Partnership of 1%; such general
partner interest is duly authorized by the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership dated as of September 27, 1989
(the "Operating Partnership Agreement"), by and between the General Partner and
the Partnership, and has been validly issued to the General Partner and is fully
paid; and the General Partner owns such general partner interest free and clear
of any lien, adverse claim, security interest, equity, or other encumbrance.
(i) General Partner Interest in STOP. STS is the sole general
partner of STOP with a general partner interest in STOP of 1%; such general
partner interest is duly authorized by the Agreement of Limited Partnership of
STOP dated as of February 10, 1993 (the "STOP Partnership Agreement"), by and
between STS and the Operating Partnership, and has been validly issued to STS
and is fully paid; and STS owns such general partner interest free and clear of
any lien, adverse claim, security interest, equity, or other encumbrance.
-9-
(j) General Partner Interest in STP. STI is the sole general partner
of STP with a general partner interest in STP of 1%; such general partner
interest is duly authorized by the Agreement of Limited Partnership of STP dated
as of March 11, 1996 (the "STP Partnership Agreement" and, together with the
Partnership Agreement, the Operating Partnership Agreement and the STOP
Partnership Agreement, the "Kaneb Partnership Agreements"), by and between STI
and STH, and has been validly issued to STI and is fully paid; and STI owns such
general partner interest free and clear of any lien, adverse claim, security
interest, equity, or other encumbrance.
(k) Limited Partner Interest in the Operating Partnership. The
Partnership is the sole limited partner of the Operating Partnership, with a
limited partner interest in the Operating Partnership of 99%; such limited
partner interest is authorized by the Operating Partnership Agreement, has been
validly issued and is fully paid and nonassessable (except as provided in the
Delaware Act); and the Partnership owns such limited partner interest in the
Operating Partnership free and clear of any lien, adverse claim, security
interest, equity, or other encumbrance.
(l) Limited Partner Interest in STOP. The Operating Partnership is
the sole limited partner of STOP, with a limited partner interest in STOP of
99%; such limited partner interest is authorized by the STOP Partnership
Agreement, has been validly issued and is fully paid and nonassessable (except
as provided in the Delaware Act); and the Operating Partnership owns such
limited partner interest in STOP free and clear of any lien, adverse claim,
security interest, equity, or other encumbrance.
(m) Limited Partner Interest in STP. STH is the sole limited partner
of STP, with a limited partner interest in STP of 99%; such limited partner
interest is authorized by the STP Partnership Agreement, has been validly issued
and is fully paid and nonassessable (except as provided in the Delaware Act);
and STH owns such limited partner interest free and clear of any lien, adverse
claim, security interest, equity, or other encumbrance.
(n) Formation, Authority and Good Standing of the General Partner
and the Non-Partnership Operating Entities. The General Partner and each of the
Operating Entities that is a United States or foreign corporation or limited
liability company has been duly organized and is validly existing as a
corporation or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, with corporate or
limited liability company, as the case may be, power and authority to own or
lease its properties, to conduct its business and, in the case of the General
Partner, to act as general partner of the Partnership and the Operating
Partnership and to enter into and perform its obligations under this Agreement
and, in the case of STS, to act as general partner of STOP and, in the case of
STI, to act as general partner of STP, in each case as described in the Final
Prospectus, and is duly qualified or registered and in good standing as a
foreign corporation or limited liability company, as the case may be, for the
transaction of business under the laws of each jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such qualification
or registration, other than any jurisdiction in which the failure so to qualify
or register would not subject it to any liability or disability which is
material to the financial condition, business, properties, net worth or results
of operations of the General Partner or the Partnership and the
-10-
Operating Entities considered as a whole or would subject the limited partners
of the Partnership to any material liability or disability.
(o) Member Interests and Capital Stock of the General Partner and
the Corporate Operating Entities. All of the issued and outstanding member
interests or shares of capital stock, as the case may be, of each of the General
Partner, STS, STI, STH, STK and STE have been duly authorized and validly issued
and are fully paid and nonassessable and are free of any preemptive or similar
rights; all of the issued and outstanding member interests of the General
Partner are owned by KSL, free and clear of any lien, adverse claim, security
interest, equity, or other encumbrance; all of the issued and outstanding shares
of capital stock of STS, STI, STH, STK and STE are owned directly or indirectly
by the Operating Partnership, free and clear of any lien, adverse claim,
security interest, equity, or other encumbrance, except as described in the
Final Prospectus.
(p) Member Interests of STL and STC. All of the issued and
outstanding member interests of each of STL and STC have been duly authorized
and validly issued and are fully paid and nonassessable and are free of any
preemptive or similar rights; STOP owns a 50% managing member interest in each
of STL and STC, free and clear of any lien, adverse claim, security interest,
equity, or other encumbrance.
(q) Member Interests of Shore. All of the issued and outstanding
member interests of Shore have been duly authorized and validly issued and are
fully paid and nonassessable and are free of any preemptive or similar rights;
and all of the issued and outstanding member interests of Shore are owned by the
Operating Partnership free and clear of any lien, adverse claim, security
interest, equity or other encumbrance.
(r) Capital Stock of Statia Companies. All of the issued and
outstanding shares of capital stock or member interests, as the case may be, of
each of the Statia Companies have been duly authorized and validly issued and
are fully paid and nonassessable and are free of any preemptive or similar
rights; and all of the issued and outstanding shares of capital stock or member
interests, as the case may be, of each of the Statia Companies are owned by the
Operating Partnership free and clear of any lien, adverse claim, security
interest, equity or other encumbrance.
(s) Kaneb Partnership Agreements. Each of the Kaneb 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, subject,
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general equitable principles.
(t) Subsidiaries. All the Partnership's subsidiaries (collectively,
the "Subsidiaries") are listed in an exhibit to the Partnership's Annual Report
on Form 10-K for the year ended December 31, 2001, which is incorporated by
reference into the Registration Statement except for STC, which was not listed,
and KPH, Statia International, Statia Technology and Statia Marine, which were
not Subsidiaries at the time. The Partnership has no Subsidiaries other than the
Operating Entities.
-11-
(u) Sufficiency of Disclosure. There are no legal or governmental
proceedings pending or, to the knowledge of the Partnership or the General
Partner, threatened against any of the Companies, or to which any of the
Companies, or to which any of their respective properties is subject, that are
required to be described in the Registration Statement or the Final Prospectus
but are not described as required, and there are no agreements, contracts,
indentures, leases or other instruments, and there are no affiliate
transactions, that are required to be described in the Registration Statement or
the Final Prospectus or to be filed as an exhibit to the Registration Statement
or any Incorporated Document that are not described or filed as required by the
Act or the Exchange Act.
(v) Absence of Violations and Defaults; Absence of Proceedings. None
of the Companies is (i) in violation of (1) its partnership agreement,
certificate or articles of incorporation, bylaws, member agreement, or other
organizational documents, as the case may be, or (2) any law, ordinance,
administrative or governmental rule or regulation applicable to any of the
Companies or of any decree of any court or governmental agency or body having
jurisdiction over any of the Companies, which violation would subject any of
them to any liability or disability which is material to the financial
condition, business, properties, net worth or results of operations of the
General Partner or the Partnership and the Operating Entities considered as a
whole or would subject the Partnership or the limited partners of the
Partnership to any material liability or disability, or (ii) in default in any
respect in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which any of the Companies is
a party or by which any of them or any of their respective properties may be
bound which default would subject any of them to any liability or disability
which is material to the financial condition, business, properties, net worth or
results of operations of the General Partner or the Partnership and the
Operating Entities considered as a whole or would subject the Partnership or the
limited partners of the Partnership to any material liability or disability.
Except as disclosed in the Prospectus, there are no actions, suits, claims,
investigations or proceedings pending or threatened to which any of the
Companies or any of their respective officers is a party or of which any of
their respective properties is subject, at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency which could result in a judgment, decree or order that
would subject any of the Companies to any liability or disability which is
material to the financial condition, business, properties, net worth or results
of operations of the General Partner or the Partnership and the Operating
Entities considered as a whole or would subject the limited partners of the
Partnership to any material liability or disability or prevent consummation of
the transactions contemplated hereby.
(w) Absence of Consents, Conflicts and Violations. Neither the
issuance and sale of the Units, the execution, delivery or performance of this
Agreement by the Partnership or the General Partner nor the consummation by the
Partnership or the General Partner of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Offered Units under the Act and the Exchange Act, which have
been or will be effected in accordance with this Agreement and except as may be
required for compliance with the securities or Blue Sky laws of various
jurisdictions), or (ii) conflicts or will conflict with or
-12-
constitutes or will constitute a breach of, or a default under, the partnership
agreement, the certificate or articles of incorporation, bylaws, member
agreement, or other organizational documents, as the case may be, of any of the
Companies, or (iii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any material agreement, indenture,
lease or other material instrument to which any of the Companies is a party or
by which any of them or any of their respective properties may be bound, or (iv)
violates or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to any of the Companies or any of their
respective properties, or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of any of the Companies
pursuant to the terms of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any of the property or
assets of any of them is subject.
(x) Independent Accountants. The accountants, KPMG LLP and Xxxxxx
Xxxxxxxx LLP, who have certified or shall certify the financial statements
audited by it included or incorporated by reference in the Registration
Statement and the Final Prospectus (or any amendment or supplement thereto) are
independent public accountants as required by the Act. After reasonable efforts,
the Partnership has not been able to obtain Xxxxxx Xxxxxxxx LLP's consent to the
incorporation by reference into the Registration Statement of its audit report
with respect to the Partnership's Form 8-K/A filed with the Commission on May 9,
2002.
(y) Financial Statements. The historical financial statements,
together with related schedules and notes, included or incorporated by reference
in the Registration Statement and the Final Prospectus (and any amendment or
supplement thereto), present fairly (i) the consolidated financial position,
results of operations and cash flows of the Partnership and the Operating
Entities, and (ii) the financial position of the General Partner and the
Partnership, in each case on the basis stated in the Registration Statement at
the respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data included or incorporated by
reference in the Registration Statement and the Final Prospectus (and any
amendment or supplement thereto) are accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Partnership, the Operating Entities and the General Partner, as the case may be.
The pro forma financial data included in the Final Prospectus include
assumptions that provide a reasonable basis for presenting the significant
effects directly attributable to the acquisition of the Statia Companies and the
other transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to the
historical financial statement amounts in the pro forma data included in the
Final Prospectus. The pro forma financial data included in the Final Prospectus
comply as to form in all material respects with the applicable accounting
requirements of Regulation S-X under the Act and the pro forma adjustments have
been properly applied to the historical amounts in the compilation of this data.
(z) Authorization of Underwriting Agreement. The execution and
delivery of, and the performance by each of the Partnership and the General
Partner of its obligations under this Agreement have been duly and validly
authorized by each of the Partnership and the General Partner, as the case may
be, and this Agreement has been duly executed and delivered by each of
-13-
the Partnership and the General Partner and constitutes the valid and legally
binding agreement of each of the Partnership and the General Partner,
enforceable against each of the Partnership and the General Partner in
accordance with its terms, except (i) as rights to indemnification and
contribution hereunder may be limited by federal or state securities laws and
(ii) as to enforcement generally may be subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors rights and to general equitable principles.
(aa) No Material Adverse Change. Except as disclosed in the
Registration Statement and the Final Prospectus (or any amendment or supplement
thereto), subsequent to the respective dates as of which such information is
given in the Registration Statement and the Final Prospectus (or any amendment
or supplement thereto), none of the Companies has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the limited partners of the
Partnership, the General Partner or the Partnership and the Operating Entities
taken as a whole, and there has not been any change in the capital stock, member
interests or partners' capital, or material increase in the short-term debt or
long-term debt, of any of the Companies, or any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the financial condition, business,
properties, net worth or results of operations of the General Partner or the
Partnership and the Operating Entities taken as a whole or which is material to
the limited partners of the Partnership.
(bb) Title to Property. Each of the Companies has good and
marketable title to all property (real and personal) described in the Final
Prospectus as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances except such as are described or referred to in
the Registration Statement and the Final Prospectus or in a document filed as an
exhibit to the Registration Statement or except as do not materially interfere
with the ownership or benefits of ownership of such property, taken as a whole,
provided that with respect to the "Transmission Assets" (defined as all
pipelines, easements, rights of way, leases and appurtenant facilities for the
transmission and distribution of refined petroleum products), the Operating
Partnership has sufficient title to enable it to use the Transmission Assets in
its business and that any lack of title has not had, and to their best
knowledge, will not have any material adverse effect on the Operating
Partnership's ability to use the Transmission Assets, and all the property
described in the Final Prospectus as being held under lease by each of the
Companies is held by it under valid, subsisting and enforceable leases.
(cc) Environmental Laws. Except as disclosed in the Registration
Statement and the Final Prospectus and except as would not, individually or in
the aggregate, result in a liability or disability that is material to the
financial condition, business, properties, net worth or results of operations of
the General Partner or the Partnership and the Operating Entities considered as
a whole or would subject the Partnership or the limited partners of the
Partnership to any material liability or disability, (i) none of the Companies
is in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations
-14-
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (ii) none
of the Companies fails to possess any permit, authorization or approval required
under any applicable Environmental Laws or to be in compliance with their
requirements, (iii) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating to
any Environmental Law against the Companies, and (iv) there are no events or
circumstances that might reasonably be expected to form the basis of an order or
claim for cost recovery, contribution, natural resource damages, clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Companies relating to
Hazardous Materials or any Environmental Laws.
(dd) Absence of Offering Material. None of the Companies has
distributed and, prior to the later to occur of (i) the Closing Date and (ii)
completion of the distribution of the Offered Units, will distribute any
offering material in connection with the offering and sale of the Offered Units
other than the Registration Statement, the Basic Prospectus, the Final
Prospectus or other materials, if any, permitted by the Act.
(ee) Possession of Licenses and Permits. Each of the Companies has
such permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("Permits") as are necessary to own its respective
properties and to conduct its business in the manner described in the Final
Prospectus, subject to such qualifications as may be set forth in the Final
Prospectus, the lack of which would subject any of them to any liability or
disability which is material to the financial condition, business, properties,
net worth or results of operations of the General Partner or the Partnership and
the Operating Entities considered as a whole or would subject the Partnership or
the limited partners of the Partnership to any material liability or disability;
each of the Companies has fulfilled and performed all its material obligations
with respect to such Permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any such
Permit, subject in each case to such qualification as may be set forth in the
Final Prospectus, the revocation or termination of which would subject any of
them to any liability or disability which is material to the financial
condition, business, properties, net worth or results of operations of the
General Partner or the Partnership and the Operating Entities considered as a
whole or would subject the limited partners of the Partnership to any material
liability or disability; and, except as described in the Final Prospectus, none
of such Permits contains any restriction that is materially burdensome to any of
the Companies.
(ff) Internal Accounting Controls. The Companies maintain a system
of internal accounting controls sufficient to provide reasonable assurances 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.
-15-
(gg) Absence of NASD Conflict of Interest. No more than ten percent
of the net proceeds from the sale of the Offered Units are intended to be or
will be paid to members of the National Association of Securities Dealers or
associated or affiliated persons of such members, or members of the immediate
family of such members.
(hh) Tax Returns and Payments. Each of the Companies has filed all
tax returns required to be filed, the failure of which to file would subject any
of them to any liability or disability which is material to the financial
condition, business, properties, net worth or results of operations of the
General Partner or the Partnership and the Operating Entities considered as a
whole or would subject the limited partners of the Partnership to any material
liability or disability, which returns are complete and correct, and none of the
Companies is in default in the payment of any taxes which were due and payable
pursuant to said returns or any interest, penalties or assessments with respect
thereto, which default would subject any of them to any liability or disability
which is material to the financial condition, business, properties, net worth or
results of operations of the General Partner or the Partnership and the
Operating Entities considered as a whole or would subject the limited partners
of the Partnership to any material liability or disability. There are no tax
returns of any of the Companies that are currently being audited by state, local
or federal taxing authorities or agencies (and with respect to which any of the
Companies has received notice), where the findings of such audit, if adversely
determined, would subject any of the Companies to any liability or disability
which is material to the financial condition, business, properties, net worth or
results of operations of the General Partner or the Partnership and the
Operating Entities considered as a whole or would subject the limited partners
of the Partnership to any material liability or disability.
(ii) Absence of Registration Rights. Except for the General Partner
who has waived its 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 in or other security of the Partnership
because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement.
(jj) Possession of Intellectual Property. Each of the Companies owns
or possesses all patents, trademarks, trademark registrations, service marks,
service xxxx registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Final Prospectus as being owned by them or
any of them or necessary for the conduct of their respective businesses, and
neither the Partnership nor the General Partner is aware of any claim to the
contrary or any challenge by any other person to the rights of any of the
Companies with respect to the foregoing.
(kk) Investment Company Act. None of the Companies is, or as of the
Closing Date will be, an "investment company" as that term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act"), or
subject to regulation under the Investment Company Act.
(ll) Public Utility Holding Company Act. None of the Companies is 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
Company Act of 1935, as amended; none of the
-16-
Companies is subject to regulation under the Public Utility Holding Company Act
of 1935, as amended.
(mm) Net Worth of the General Partner. For all taxable years
beginning before December 31, 1997, the General Partner had (excluding its
interests in the Partnership and the Operating Partnership and any notes or
receivables due from the Operating Partnership) a net worth of at least $5
million.
(nn) Net Worth of STS. For all taxable years beginning before
December 31, 1997, STS had (excluding its interests in STOP and any notes or
receivables due from STOP) a net worth of at least $5 million.
(oo) Qualifying Income. For each taxable year of the Partnership,
less than 10% of the gross income of the Partnership has been derived from
sources other than (i) the exploration, development, production, processing,
refining, transportation or marketing of any mineral or natural resource,
including oil, gas or products thereof, or (ii) other items of qualifying income
within the meaning of Section 7704(d) of the Code.
(pp) Absence of Restrictions. Except as described in the Final
Prospectus, there are no preemptive rights or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any interests
in the Partnership or any Operating Entity pursuant to any agreement or other
instrument to which the Partnership or any Operating Entity is a party or by
which any one of them may be bound. Neither the filing of the Registration
Statement nor the offering or sale of the Units as contemplated by this
Agreement gives rise to any rights for or relating to the registration of any
Units or other securities of the Partnership or any Operating Entity, except
such rights as have been waived or satisfied. The Offered Units, when issued and
delivered against payment therefor as provided herein, will conform in all
material respects to the description thereof contained in the Final Prospectus.
(qq) No Business Interruptions. None of the Companies has sustained
since the date of the latest audited financial statements included in the Final
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, investigation, order or
decree, otherwise than as set forth or contemplated in the Final Prospectus.
(rr) Absence of Labor Dispute; Compliance with Labor Laws. No labor
dispute with the employees of any of the Companies exists or, to the knowledge
of the Companies, is imminent or threatened, which might reasonably be expected
to subject any of them to any liability or disability which is material to the
financial condition, business, properties, net worth or results of operations of
the General Partner or the Partnership and the Operating Entities considered as
a whole. Each of the Companies 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 subject any of the
Companies to any liability or disability which is material to the financial
condition, business, properties, net worth or results of operations of the
General Partner or the Partnership and the Operating Entities considered as a
-17-
whole or would subject the limited partners of the Partnership to any material
liability or disability.
(ss) Insurance. The Companies maintain insurance covering their
properties, operations, personnel and businesses against such losses and risks
as are reasonably adequate to protect them and their businesses in a manner
consistent with other businesses similarly situated. None of the Companies has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be made in order to
continue such insurance, and all such insurance is outstanding and duly in force
on the date hereof and will be outstanding and duly in force on the Closing
Date.
(tt) Absence of Notice. None of the Companies have sent or received
any communication regarding termination of, or intent not to renew, any of the
contracts or agreements referred to or described in, or filed as an exhibit to,
the Registration Statement or Base Prospectus, and no such termination or
non-renewal has been threatened by the Partnership or, to the knowledge of the
Partnership after due inquiry, any other party to any such contract or
agreement, which termination or non-renewal would subject any of the Companies
to any liability or disability which is material to the financial condition,
business, properties, net worth or results of operations of the General Partner
or the Partnership and the Operating Entities considered as a whole or would
subject the limited partners of the Partnership to any material liability or
disability.
(uu) Stabilization. None of the Companies, 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.
(vv) Violations. None of the Companies, nor to the Partnership's
knowledge after due inquiry, any employee or agent of the Companies, has made
any payment of funds of the Companies or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or retention of
funds is of a character required to be disclosed in the Registration Statement
or Base Prospectus.
(ww) 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
Companies, or with respect to which any of the Companies could incur any
liability under ERISA (collectively, the "Benefit Plans"), no event has occurred
and, to the best knowledge of each of the Companies, there exists no condition
or set of circumstances, in connection with which any of the Companies could be
subject to any liability under the terms of such Benefit Plans, applicable law
(including, without limitation, ERISA and the Internal Revenue Code of 1986, as
amended) or any applicable agreement that would subject any of the Companies to
any liability or disability which is material to the financial condition,
business, properties, net worth or results of operations of the General Partner
or the Partnership and the Operating Entities considered as a whole or would
subject the limited partners of the Partnership to any material liability or
disability.
-18-
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Each of the Partnership and the General Partner, jointly and
severally, agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls any 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,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Basic Prospectus, the Final Prospectus or the
Registration Statement or in any amendment or supplement thereto, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
such Underwriter furnished in writing to the Partnership by or on behalf of any
Underwriter through the Representative expressly for use in connection
therewith.
The foregoing indemnity agreement shall be in addition to any liability which
the Partnership or the General Partner may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter, any director, officer, employee or agent of any Underwriter or any
person controlling any Underwriter in respect of which indemnification may be
sought against the Partnership or the General Partner, such Underwriter or such
director, officer, employee, agent or controlling person shall promptly notify
the Partnership and the Partnership and the General Partner shall assume the
defense thereof, including the employment of counsel and payment of all fees and
expenses. Such Underwriter or any such director, officer, employee, agent or
controlling person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter or
such director, officer, employee, agent or controlling person unless (i) the
Partnership and the General Partner have agreed in writing to pay such fees and
expenses, (ii) the Partnership and the General Partner have failed to assume the
defense and employ counsel, or (iii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include both such Underwriter or
such director, officer, employee, agent or controlling person and the
Partnership or the General Partner and such Underwriter or such director,
officer, employee, agent or controlling person shall have been advised by its
counsel that representation of such indemnified party and the Partnership or the
General Partner by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential differing interests
between them (in which case the Partnership and the General Partner shall not
have the right to assume the defense of such action, suit or proceeding on
behalf of such Underwriter or such controlling person). It is understood,
however, that the Partnership and the General Partner shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such
-19-
Underwriters, directors, officers, employees, agents and controlling persons not
having actual or potential differing interests with you or among themselves,
which firm shall be designated in writing by Xxxxxxx Xxxxx Xxxxxx Inc., and that
all such fees and expenses shall be reimbursed as they are incurred. The
Partnership and the General Partner shall not be liable for any settlement of
any such action, suit or proceeding effected without its written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, each of the Partnership and
the General Partner jointly and severally, agrees to indemnify and hold harmless
any Underwriter, to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless each of the Partnership and the General Partner, the directors
of the General Partner, the officers of the General Partner who sign the
Registration Statement, and any person who controls the Partnership or the
General Partner within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Partnership
and the General Partner to each Underwriter, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf of
such Underwriter through the Representative expressly for use in the
Registration Statement or the Final Prospectus or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the
Partnership or the General Partner, any of the directors of the General Partner,
any such officer of the General Partner, or any such controlling person based on
the Registration Statement or the Final Prospectus or any amendment or
supplement thereto, and in respect of which indemnification may be sought
against any Underwriter pursuant to this paragraph (c), such Underwriter shall
have the rights and duties given to the Partnership and the General Partner by
paragraph (b) above (except that if the Partnership or the General Partner shall
have assumed the defense thereof such Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense), and the Partnership and the General Partner, the
directors of the General Partner, any such officer of the General Partner, and
any such controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be
in addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Partnership and the General Partner on the one hand and the Underwriters on the
other hand from the offering of the Offered Units, or (ii) if the allocation
provided by clause (i) immediately above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) immediately above but also the relative fault of the
Partnership and the General Partner on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Partnership and
the General
-20-
Partner 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 Final Prospectus. The relative fault
of the Partnership and the General Partner on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Partnership and the General Partner on the one hand or by the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Partnership, the General Partner and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by a pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Offered Units underwritten by it and distributed
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective numbers of Firm Units set
forth opposite their names in Schedule I hereto (or such numbers of Firm Units
increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Partnership and the General Partner set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter, any
director, officer, employee or agent of any Underwriter or any person
controlling any Underwriter, the Partnership or the General Partner, the
directors of the General Partner or officers of the General Partner, or any
person controlling the Partnership or the General Partner, (ii) acceptance of
any Offered Units and payment therefor
-21-
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, any director, officer, employee or agent of any Underwriter or any
person controlling any Underwriter, or to the Partnership or the General
Partner, directors or officers of the General Partner, or any person controlling
the Partnership or the General Partner, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
7. The term "successor" as used in this Agreement shall not include a purchaser
from any Underwriter of any Offered Units in his status as such purchaser.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Firm Units hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post effective amendment thereto
to be declared effective before the offering of the Offered Units may commence,
the registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rule 424 under the Act shall have been timely made;
no stop order suspending the effectiveness of the registration statement shall
have been issued and no proceeding for that purpose shall have been instituted
or, to the knowledge of the Partnership, the General Partner, threatened by the
Commission, and any request of the Commission for additional information (to be
included in the Registration Statement or the Final Prospectus or otherwise)
shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the financial condition, business, properties, net
worth, or results of operations of the Companies not contemplated by the Final
Prospectus, which in your opinion, as Representative of the several
Underwriters, would materially, adversely affect the market for the Offered
Units, or (ii) any event or development relating to or involving any of the
Companies or any officer or director of the General Partner which makes any
statement made in the Final Prospectus untrue or which, in the opinion of the
Partnership and its counsel or the Underwriters and their counsel, requires the
making of any addition to or change in the Final Prospectus in order to state a
material fact required by the Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending or
supplementing the Final Prospectus to reflect such event or development would,
in your opinion, as Representative of the several Underwriters, adversely affect
the market for the Offered Units.
(c) You shall have received on the Closing Date, an opinion of
Fulbright & Xxxxxxxx L.L.P., special counsel for the Partnership and the General
Partner, dated the Closing Date and addressed to the several Underwriters,
substantially in the form of Exhibit A attached hereto. In addition, such
special counsel shall have furnished to you their written opinion, dated such
Closing Date, in form and substance satisfactory to you in your reasonable
judgment, with respect to the legal conclusions described in the Final
Prospectus under the caption "Tax Considerations."
-22-
(d) You shall have received on the Closing Date, an opinion of
Xxxxxxx X. Xxxx, special corporate counsel for the Partnership and the General
Partner, dated the Closing Date and addressed to the several Underwriters,
substantially in the form of Exhibit B attached hereto.
(e) You shall have received on the Closing Date an opinion of
Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, dated the Closing Date and
addressed to the several Underwriters, with respect to the matters referred to
in clauses (16), (18), (19), (24) (but only with respect to the Registration
Statement and the Final Prospectus and any supplements or amendments thereto)
and the first paragraph following clause (29) of Exhibit A and such other
related matters as you may reasonably request.
(f) You shall have received letters addressed to the several
Underwriters, and dated the date hereof and the Closing Date from KPMG LLP,
independent certified public accountants, substantially in the forms heretofore
approved by you.
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Companies, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the partnership interests, member interests or
capital stock of the Companies nor any material increase in the short term or
long term debt of the Companies (other than in the ordinary course of business)
from that set forth or contemplated in the Registration Statement or the Final
Prospectus; (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Final
Prospectus, except as may otherwise be stated in the Registration Statement and
Final Prospectus, any material adverse change in the financial condition,
business, properties, net worth or results of operations of the General Partner
or the Partnership and the Operating Entities taken as a whole; (iv) none of the
Companies shall have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
limited partners of the Partnership, or the General Partner or the Partnership
and the Operating Entities, taken as a whole, other than those reflected in the
Registration Statement or the Final Prospectus (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Partnership and
the General Partner contained in this Agreement shall be true and correct on and
as of the Closing Date as if made on and as of the Closing Date, and you shall
have received certificates, dated the Closing Date and signed by the chief
executive officer (or other comparable officers) and the chief financial officer
of the General Partner for and on behalf of the General Partner and the
Partnership (or such other officers as are acceptable to you), to the effect set
forth in this Section 8(g) and in Section 8(h) hereof.
(h) None of the Partnership or the General Partner shall have failed
at or prior to the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(i) Prior to commencement of the offering of the Offered Units, the
Offered Units shall have been listed, subject to notice of issuance, on the New
York Stock Exchange.
-23-
(j) Each of the Partnership and the General Partner shall have
furnished or caused to be furnished to you such further certificates and
documents as you shall have reasonably requested that are customary in closing
transactions of the nature contemplated by this Agreement. All such opinions,
certificates, letters and other documents will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to you and your counsel. Any certificate or document signed by any officer of
the General Partner, for its own account or on behalf of the Partnership and
delivered to you pursuant to the terms or requirements of this Agreement, as
Representative of the Underwriters, or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Partnership and the General Partner
to each Underwriter as to the statements made therein. The several obligations
of the Underwriters to purchase Additional Units hereunder are subject to the
satisfaction on and as of any Option Closing Date of the conditions set forth in
this Section 8, except that, if any Option Closing Date is other than the
Closing Date, the certificates, opinions and letters referred to in paragraphs
(c) through (j) shall be dated the Option Closing Date in question and the
opinions called for by paragraphs (c), (d) and (e) shall be revised to reflect
the sale of Additional Units.
9. EXPENSES. Each of the Partnership and the General Partner, jointly
and severally, agrees to pay the following costs and expenses and all other
costs and expenses incident to the performance by the Partnership and the
General Partner of any of their obligations hereunder: (i) the preparation,
printing or reproduction, and filing with the Commission of the registration
statement (including financial statements and exhibits thereto), the Final
Prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, the Final Prospectus, the Incorporated Documents, and all amendments
or supplements to any of them, as may be reasonably requested for use in
connection with the offering and sale of the Offered Units; (iii) the
preparation, printing, authentication, issuance and delivery of certificates for
the Offered Units, including any stamp taxes in connection with the original
issuance and sale of the Offered Units; (iv) the reproduction and delivery of
this Agreement, the preliminary and supplemental Blue Sky Memoranda and all
other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Offered Units; (v) the listing of the
Offered Units on the New York Stock Exchange; (vi) the registration or
qualification of the Offered Units for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 5(f) hereof
(including the reasonable fees, expenses and disbursements of counsel for the
Underwriters relating to the preparation, reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees in connection with any filings required to
be made with the National Association of Securities Dealers, Inc.; (viii) the
transportation and other expenses incurred by or on behalf of the Partnership's,
the General Partner's or any Operating Entities' representatives in connection
with presentations to prospective purchasers of the Offered Units; (ix) the fees
and expenses of the Partnership's and General Partner's accountants and the fees
and expenses of counsel (including local and special counsel) for the
Partnership and the General Partner; and (x) any fees payable to DTC. It is
understood, however, that, except as provided in Section 5(i), Section 7 and
this Section 9 hereof, the Underwriters will pay all of their own costs and
expenses associated with the offering of the Offered Units, including the fees
of their counsel, transfer taxes on resale of any of the Offered Units by them,
and any advertising expenses connected with any offers they may make.
-24-
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Offered Units may commence, when
notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the
Partnership, by notifying you, or by you, as the Representative of the several
Underwriters, by notifying the Partnership. If any one or more of the
Underwriters shall fail or refuse to purchase Offered Units which it or they
have agreed to purchase hereunder, and the aggregate number of Offered Units
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of the Offered
Units, each non-defaulting Underwriter shall be obligated, severally, in the
proportion which the number of Offered Units set forth opposite its name in
Schedule I hereto bears to the aggregate number of Offered Units set forth
opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among Underwriters of Xxxxxxx Xxxxx Barney Inc., to purchase the
Offered Units which such defaulting Underwriter or Underwriters agreed, but
failed or refused, to purchase. If any Underwriter or Underwriters shall fail or
refuse to purchase Offered Units and the aggregate number of Offered Units with
respect to which such default occurs is more than one-tenth of the aggregate
number of Offered Units and arrangements satisfactory to you and the Partnership
for the purchase of such Offered Units by one or more non-defaulting
Underwriters or other party or parties approved by you and the Partnership are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the
Partnership. In any such case which does not result in termination of this
Agreement, either you or the Partnership shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Final Prospectus
or any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any such default of any such Underwriter under this Agreement. The
term "Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule I hereto who, with your approval and
the approval of the Partnership, purchases Offered Units which a defaulting
Underwriter agreed, but failed or refused, to purchase. Any notice under this
Section 10 may be given by telegram, telecopy or telephone but shall be
subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination without liability on the part of any Underwriter to the Partnership
or the General Partner by notice to the Partnership, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Units), as the case may be, (i) trading in the Units
shall have been suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange, American Stock
Exchange or the Nasdaq National Market shall have been suspended or materially
limited or minimum prices shall have been established on any such exchange or
the Nasdaq National Market, (ii) a general moratorium on commercial banking
activities in New York or Texas shall have been declared by either federal or
state authorities, or (iii) there shall have occurred any material disruption in
securities settlement or clearance services or (iv) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a
national emergency
-25-
or war, or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in the sole
judgment of the Representative, impracticable or inadvisable to commence or
continue the offering or delivery of the Offered Units as contemplated by the
Final Prospectus (exclusive of any supplement thereto) or to enforce contracts
for the resale of the Offered Units by the Underwriters. Notice of such
termination may be given to the Partnership by telegram, telecopy or telephone
and shall be subsequently confirmed by letter.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the third, ninth and tenth paragraphs under the caption "Underwriting" in the
Final Prospectus, constitute the only information furnished by or on behalf of
the Underwriters through you as such information is referred to in Sections 6(b)
and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Partnership or the General Partner,
at the office of the Partnership at 0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxx 00000 c/o Kaneb Pipe Line Company, Attention: Xxxxxx X.
Xxxxxxx, Chairman of the Board; or (ii) if to you, as the Representative of the
several Underwriters, in care of Xxxxxxx Xxxxx Barney Inc., 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel. This Agreement has
been and is made solely for the benefit of the several Underwriters, the
Partnership, the General Partner and the directors, officers, employees and
agents of the Underwriters, the directors and officers of the General Partner,
and the other controlling persons referred to in Section 7 hereof and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Offered Units in his status as such purchaser. As the National Association of
Securities Dealers, Inc. ("NASD") views the Units as interests in a direct
participation program, each Underwriter agrees that it will offer the Offered
Units in compliance with Rule 2810 of the NASD's Conduct Rules.
14. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. REPRESENTATIONS, AGREEMENTS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities and other
statements of the Partnership, the General Partner and its officers and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Partnership or any of the officers, directors, employees,
agents or controlling persons referred to in Section 7 hereof, and will survive
delivery of and payment for the Offered Units. The provisions of Sections 5(i)
and 7 hereof shall survive the termination or cancellation of this Agreement.
This Agreement may be signed in various counterparts which together constitute
one and the same instrument. If signed in counterparts, this Agreement shall not
become effective unless at least one counterpart hereof shall have been executed
and delivered on behalf of each party hereto.
-26-
16. SECTION HEADINGS; COUNTERPARTS. The section headings in this
Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement. This Agreement may be signed in various counterparts
which together constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least one
counterpart hereof shall have been executed and delivered on behalf of each
party hereto.
[Signatures to Follow]
-27-
Please confirm that the foregoing correctly sets forth the agreement
between the Partnership, the General Partner and the several Underwriters.
Very truly yours,
KANEB PIPE LINE PARTNERS, L.P.
BY: KANEB PIPE LINE COMPANY LLC,
its General Partner
By: /s/ XXXXXX X. XXXXXXX
---------------------------------
Xxxxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
KANEB PIPE LINE COMPANY LLC
By: /s/ XXXXXX X. XXXXXXX
---------------------------------
Xxxxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
Confirmed as of the date first above mentioned on behalf of itself and on behalf
of the other several Underwriters named in Schedule I hereto as their
Representative.
XXXXXXX XXXXX XXXXXX INC.,
as Representative of the Several Underwriters
By: XXXXXXX XXXXX BARNEY INC.
By: /s/ ABNAY X. XXXXX
--------------------------------
Abnay X. Xxxxx
Vice President
EXHIBIT A
FORM OF OPINION OF ISSUER'S COUNSEL
We have acted as special counsel to the Companies in connection with
the sale to you an aggregate 2,000,000 Units pursuant to an Underwriting
Agreement dated November 4, 2002 (the "Agreement"), among the Underwriters, the
Partnership and the General Partner. 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 8(c) of the Agreement.
We have participated in the preparation of, and have examined, the
Registration Statement on Form S-3 (Registration No. 333-98621) filed by the
Partnership under the Act, which became effective on September 3, 2002 (the
"Effective Date"), the Basic Prospectus and the Final Prospectus.
We have also examined originals or copies of such partnership records
of the Partnership, limited liability company records of the General Partner,
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
Partnership and the General Partner, 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, the Operating Partnership, STOP and STP 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,
lease and operate its properties and to conduct its business as described in the
Final Prospectus and, with respect to the Partnership, to perform its
obligations pursuant to the Agreement and to issue, sell and deliver the Firm
Units as contemplated by the Agreement.
2. The Unitholders are not liable under the laws of the States of
California and Texas for the liabilities of the Partnership or the Operating
Entities, except in each case to the same extent as under the Delaware Act or as
otherwise described in the Final Prospectus.
3. The General Partner has been duly formed and is validly existing as
a limited liability company in good standing under the Delaware Limited
Liability Company Act (the "Delaware LLC Act"), with limited liability company
power and authority to own, lease and operate its properties, to conduct its
businesses, to act as the general partner of the Partnership
A-1
and the Operating Partnership and to perform its obligations pursuant to the
Agreement in each case, as described in the Final Prospectus; the outstanding
member interests of the General Partner have been duly authorized and validly
issued and are fully paid and nonassessable and are owned of record by KSL, free
and clear, to our knowledge, of any security interest, lien, encumbrance or
adverse claim.
4. Each of STH, STI and STS has been duly organized and is validly
existing as a corporation in good standing under the General Corporation Law of
the State of Delaware (the "DGCL"), with corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Final Prospectus; all of the outstanding shares of capital stock of each of STH,
STI and STS have been duly authorized, validly issued and are nonassessable; and
all of the outstanding shares of capital stock of STH are owned of record by
STI, all of the outstanding shares of capital stock of STI are owned of record
by STS and all of the outstanding shares of capital stock of STS are owned of
record by the Operating Partnership, in each case, free and clear, to our
knowledge, of any security interest, lien, encumbrance or adverse claim.
5. The General Partner is the sole general partner of the Partnership
and the Operating Partnership with a general partner interest in the Partnership
of 1% and a general partner interest in the Operating Partnership of 1%; such
general partner interests have been duly authorized and validly issued, and the
General Partner owns of record and, 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 the Operating
Partnership, with a limited partner interest of 99%; such limited partner
interest has been duly authorized and validly issued, and is fully paid and
nonassessable, except as provided in the Delaware Act; the Partnership owns of
record and, to our knowledge, beneficially owns such limited partner interest in
the Operating Partnership free and clear of any security interest, lien,
encumbrance or adverse claim.
7. STS is the sole general partner of STOP with a general partner
interest in STOP of 1%; such general partner interest has been duly authorized
and validly issued and STS owns of record and, to our knowledge, beneficially
owns such general partner interest free and clear of any security interest,
lien, encumbrance or adverse claim.
8. The Operating Partnership is the sole limited partner of STOP, with
a limited partner interest of 99%; such limited partner interest has been duly
authorized and validly issued and is fully paid and nonassessable, except as
provided in the Delaware Act; the Operating Partnership owns of record, and, to
our knowledge, beneficially owns such limited partner interest in STOP free and
clear of any security interest, lien, encumbrance or adverse claim.
9. Each of KPH, STL and STC has been duly formed and is validly
existing as a limited liability company in good standing under the Delaware LLC
Act, with limited liability company power and authority to own, lease and
operate its properties and conduct its business as described in the Final
Prospectus; all the outstanding member interests of KPH, STL and STC have been
duly authorized and validly issued, are fully paid and nonassessable, and a 50%
A-2
managing member interest in each of STL and STC is owned of record by STOP, free
and clear, to our knowledge, of any security interest, lien, encumbrance or
adverse claim.
10. STI is the sole general partner of STP with a general partner
interest in STP of 1%; such general partner interest has been duly authorized
and validly issued and STI owns of record and, to our knowledge, beneficially
owns such general partner interest free and clear of any security interest,
lien, encumbrance or adverse claim.
11. STH is the sole limited partner of STP, with a limited partner
interest of 99%; such limited partner interest has been duly authorized and
validly issued, and is fully paid and nonassessable, except as provided in the
Delaware Act; STH owns of record and, to our knowledge, beneficially owns such
limited partner interest in STP free and clear of any security interest, lien,
encumbrance or adverse claim.
12. Shore has been duly formed and is validly existing as a limited
liability company in good standing under the Delaware LLC Act, with limited
liability company power and authority to own, lease and operate its properties
and conduct its business as described in the Final Prospectus; all the
outstanding member interests of Shore have been duly authorized and validly
issued and are fully paid and nonassessable and are owned of record by the
Operating Partnership, free and clear, to our knowledge, of any security
interests, lien, encumbrance or adverse claim.
13. Statia Technology has been duly organized and is validly existing
in good standing as a corporation under the laws of the DGCL, with power and
authority to own, lease and operate its properties and conduct its business as
described in the Final Prospectus; all of the issued and outstanding shares of
capital stock of Statia Technology have been duly authorized and validly issued
and are fully paid and nonassessable and are owned of record by the Operating
Partnership, free and clear, to our knowledge, of any security interests, lien,
encumbrance or adverse claim.
14. KSL is the sole member of the General Partner and has been duly
formed and is validly existing as a limited liability company in good standing
under the Delaware LLC Act, with limited liability company power and authority
to own, lease and operate its properties and conduct its business as described
in the Final Prospectus.
15. The authorized and outstanding partnership interests of the
Partnership are as set forth under the caption "Kaneb Partners" in the Final
Prospectus; and 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
Final Prospectus.
16. All the partnership interests of the Partnership have been duly
authorized and validly issued, and are fully paid and nonassessable, except as
provided in the Delaware Act 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.
A-3
17. The Offered 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 nonassessable,
except as provided in the Delaware Act 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.
18. The form of certificates for the Units conforms in all material
respects to the requirements of the Partnership Agreement.
19. The Registration Statement and all post-effective amendments, if
any, have become effective under the Act and, to our knowledge, 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 Basic Prospectus and the Final
Prospectus pursuant to Rule 424(b) of the Act has been made in the manner and
within the time period required by Rule 424(b).
20. The Agreement has been duly authorized, executed and delivered by
each of the Partnership and the General Partner.
21. Each of the Kaneb 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
Agreements may be limited by federal or state securities laws or the public
policy underlying such laws.
22. Neither the offer, sale or delivery of the Offered Units by the
Partnership, the execution, delivery or performance of the Agreement, nor
performance by the Partnership and the General Partner 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
Companies is a party or by which any of them or any of their respective
properties is bound or affected that has been filed as an exhibit to the
Registration Statement or to any Incorporated Document, 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 Companies, nor will any such
action result in any violation of (a) the partnership agreement, certificate or
articles of incorporation, bylaws, member agreement or other organizational
documents of any of the Companies, 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 Companies or any of their respective properties.
23. To our knowledge, except for the General Partner who has waived its
rights, no holder of any interest in or security of the Partnership or any other
person has any right to require
A-4
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.
24. No consent, approval, authorization or waiver of, or notice to or
filing with, or other action by, any court or governmental authority is required
to be obtained or made by the Partnership or General Partner by any material
statutory law, regulation or ruling as a condition to the issuance or sale of
the Offered Units by the Partnership, the execution and delivery by the
Partnership or the General Partner of the Agreement, or the performance by the
Partnership or the General Partner of their obligations under the Agreement,
except such others as have been obtained or taken or are in full force and
effect and except such as may be required under state securities or Blue Sky
laws governing the purchase and distribution of the Offered Units by the
Underwriters, as to which we express no opinion.
25. The Registration Statement and the Final 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 the Incorporated Documents (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.
26. To our knowledge (a) other than as disclosed in the Final
Prospectus (or any supplement thereto), there are no legal or governmental
proceedings pending to which any of the Companies is a party or threatened
against any of the Companies which are required to be disclosed in the
Registration Statement or the Final Prospectus (or any amendment or supplement
thereto) and (b) there are no contracts, licenses, agreements, leases or other
documents of a character that are required to be described in the Registration
Statement or the Final Prospectus (or any amendment or supplement thereto) or to
be filed as an exhibit to the Registration Statement or any Incorporated
Document that are not described or filed as required, as the case may be.
27. The statements in the Registration Statement and the Final
Prospectus, under the captions "Cash Distributions," "Conflicts of Interest and
Fiduciary Responsibilities -- Fiduciary Responsibility of the General Partner"
and "Investment in Kaneb Partners by Employee Benefit Plans," insofar as they
are descriptions of contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate in all material respects
and present fairly the information required to be shown.
28. None of the Companies is or will be, after giving effect to the
offering and sale of the Offered Units and the application of the proceeds
thereof as described in the Final Prospectus, an "investment company" or a
company "controlled" by an "investment company" or a "promoter" or "principal
underwriter" for a "registered 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
A-5
the Public Utility Holding Company Act of 1935, as amended; none of the
Companies is subject to regulation under the Public Utility Holding Company Act
of 1935, as amended.
29. Upon delivery of the Offered Units to the Underwriters pursuant to
the Agreement and payment therefor as contemplated therein, the Underwriters
will acquire the Offered Units free and clear of any liens, encumbrances,
security interests, charges or claims of record (a) in respect of which a
financing statement under the Uniform Commercial Code of the State of Delaware
naming the General Partner or the Partnership as debtor is on file in the office
of the Secretary of State of the State of Delaware or (b) otherwise known (based
solely upon our participation as special counsel in matters relating to the
offering of the Offered Units and without having conducted an independent
investigation) to us, except as created by the Agreement or by the Underwriters
or any person who acquires an interest in the Offered Units through the
Underwriters or as provided by the Delaware Act.
30. The Offered 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 Final Prospectus, including
review and discussion of the contents thereof (including review and discussion
of the contents of all Incorporated Documents), and nothing has come to our
attention that has caused us to believe that the Registration Statement
(including the Incorporated Documents) at the time the Registration Statement
became effective and as of the signing of the Agreement, or the Final
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 Final 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
Final Prospectus or any Incorporated Document).
In rendering the opinions expressed in paragraphs ___ through ___,
terms used therein that are defined in the UCC shall have the meanings assigned
therein. In rendering the opinion expressed in paragraphs ___ through ___, we
have relied, without investigation, upon the accuracy and completeness of the
certification from the office of the Secretary of State of Delaware dated
______________, 2002, for each of KSL, the General Partner, the Parent
Partnership, the Partnership, KPH, STI, STS, STH, STOP, STL, and STC that there
are no presently effective financing statements, federal tax liens, or utility
security instruments filed in the office of the Delaware Secretary of State that
name such respective entities as debtor and cover as collateral any of the
ownership interests identified in paragraphs ___ through ___, and further, we
have assumed that at all times from and including the date through which each
UCC Search Certificate conducted its search and to and through the date of the
delivery of this opinion letter, there have been no filings made in the Office
of the Secretary of State of the State of
A-6
Delaware in which the applicable entities are named as a debtor and which
covers, in whole or in part, or any proceeds thereof, any interests in the
applicable entities.
To our knowledge, there are no material legal or governmental
proceedings pending or threatened against any of the Operating Entities, by or
before the Federal Energy Regulatory Commission ("FERC") or on appeal from the
FERC, except as set forth in or contemplated by the Final Prospectus.
The opinions expressed herein are limited exclusively to the laws of
the State of Texas, the DGCL, the Delaware Act, the Delaware LLC Act and the
federal statutory laws, rules and regulations 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 3:00 p.m. on November __, 2002, have
devoted substantive attention to legal matters on behalf of the Companies since
January 1, 2001. With your consent, we have not examined any records of any
court, administrative tribunal or similar entity.
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.
A-7
EXHIBIT B
FORM OF OPINION OF XXXXXXX X. XXXX
(1) The Partnership has been duly qualified or registered as a foreign
limited partnership for the transaction of business under the laws of the State
of Texas, and to the knowledge of such counsel, such jurisdiction is the only
jurisdiction in which the Partnership owns or leases property, or conducts any
business, so as to require qualification or registration to conduct business as
a foreign limited partnership, and in which the failure so to qualify or
register would be likely, in the judgment of such counsel, to subject it to any
liability or disability which is material to the financial condition, business,
properties, net worth or results of operations of the General Partner, the
Partnership and the Operating Entities considered as a whole or would be likely,
in the judgment of such counsel, to subject the limited partners of the
Partnership to any material liability or disability;
(2) The Operating Partnership has been duly qualified or registered as
a foreign limited partnership for the transaction of business under the laws of
the States of Colorado, Iowa, Kansas, Nebraska, Xxxxx Xxxxxx, Xxxxxx, Xxxxx
Xxxxxx, Xxxxx, Washington and Wyoming, and to the knowledge of such counsel,
such jurisdictions are the only jurisdictions in which the Operating Partnership
owns or leases property, or conducts any business, so as to require
qualification or registration to conduct business as a foreign limited
partnership, and in which the failure so to qualify or register would be likely,
in the judgment of such counsel, to subject it to any liability or disability
which is material to the financial condition, business, properties, net worth or
results of operations of the Operating Partnership or the General Partner, the
Partnership and the Operating Entities considered as a whole or would be likely,
in the judgment of such counsel, to subject the limited partners of the
Partnership to any material liability or disability;
(3) STOP has been duly qualified or registered as a foreign limited
partnership for the transaction of business under the laws of the States of
Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Louisiana,
Maryland, Minnesota, New Jersey, New Mexico, Oklahoma, Texas and Wisconsin, and
to the knowledge of such counsel, such jurisdictions are the only jurisdictions
in which STOP owns or leases property, or conducts any business, so as to
require qualification or registration to conduct business as a foreign limited
partnership, and in which the failure so to qualify or register would be likely,
in the judgment of such counsel, to subject it to any liability or disability
which is material to the financial condition, business, properties, net worth or
results of operations of STOP or the General Partner, the Partnership and the
Operating Entities considered as a whole or would be likely, in the judgment of
such counsel, to subject the limited partners of the Partnership to any material
liability or disability;
(4) STP has been duly qualified or registered as a foreign limited
partnership for the transaction of business under the laws of the State of
Texas, and to the knowledge of such counsel, such jurisdiction is the only
jurisdiction in which STP owns or leases property, or conducts any business, so
as to require qualification or registration to conduct business as a foreign
limited partnership, and in which the failure so to qualify or register would be
likely, in the judgment of such counsel, to subject it to any liability or
disability which is material to the financial condition, business, properties,
net worth or results of operations of STP or the General
B-1
Partner, the Partnership and the Operating Entities considered as a whole or
would be likely, in the judgment of such counsel, to subject the limited
partners of the Partnership to any material liability or disability;
(5) The General Partner is not required to qualify or register as a
foreign limited liability company under the laws of any jurisdiction, and to the
knowledge of such counsel, there are no jurisdictions in which the General
Partner owns or leases property, or conducts any business, so as to require
qualification or registration to conduct business as a foreign limited liability
company, and in which the failure so to qualify or register would be likely, in
the judgment of such counsel, to subject the General Partner to any liability or
disability which is material to the financial condition, business, properties,
net worth or results of operations of the General Partner or the Partnership and
the Operating Entities considered as a whole or would be likely, in the judgment
of such counsel, to subject the limited partners of the Partnership to any
material liability or disability;
(6) STS has been duly qualified or registered as a foreign corporation
and is in good standing under the laws of the States of Alabama, Arizona,
California, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Minnesota,
New Mexico, Oklahoma, Texas, Virginia, Washington and Wisconsin, and to the
knowledge of such counsel, such jurisdictions are the only jurisdictions in
which STS owns or leases property, or conducts any business, so as to require
qualification or registration to conduct business as a foreign corporation, and
in which the failure so to qualify or register would be likely, in the judgment
of such counsel, to subject STS to any liability or disability which is material
to the financial condition, business, properties, net worth or results of
operations of STS or the General Partner, the Partnership and the Operating
Entities considered as a whole or would be likely, in the judgment of such
counsel, to subject the limited partners of the Partnership to any material
liability or disability;
(7) STI has been duly qualified or registered as a foreign corporation
and is in good standing under the laws of the State of Texas, and to the
knowledge of such counsel, such jurisdiction is the only jurisdiction in which
STI owns or leases property, or conducts any business, so as to require
qualification or registration to conduct business as a foreign corporation, and
in which the failure so to qualify or register would be likely, in the judgment
of such counsel, to subject STI to any liability or disability which is material
to the financial condition, business, properties, net worth or results of
operations of STI or the General Partner, the Partnership and the Operating
Entities considered as a whole or would be likely, in the judgment of such
counsel, to subject the limited partners of the Partnership to any material
liability or disability;
(8) STH is not required to qualify or register as a foreign corporation
under the laws of any jurisdiction, and to the knowledge of such counsel, there
are no jurisdictions in which STH owns or leases property, or conducts any
business, so as to require qualification or registration to conduct business as
a foreign limited liability company, and in which the failure so to qualify or
register would be likely, in the judgment of such counsel, to subject STH to any
liability or disability which is material to the financial condition, business,
properties, net worth or results of operations of STH or the General Partner,
Partnership and the Operating Entities considered as a whole or would be likely,
in the judgment of such counsel, to subject the limited partners of the
Partnership to any material liability or disability;
B-2
(9) STL has been duly qualified or registered as a foreign limited
liability company and is in good standing under the laws of the State of New
Jersey, and to the knowledge of such counsel, such jurisdiction is the only
jurisdiction in which STL owns or leases property, or conducts any business, so
as to require qualification or registration to conduct business as a foreign
limited liability company, and in which the failure so to qualify or register
would be likely, in the judgment of such counsel, to subject STL to any
liability or disability which is material to the financial condition, business,
properties, net worth or results of operations of STL or the General Partner,
the Partnership and the Operating Entities considered as a whole or would be
likely, in the judgment of such counsel, to subject the limited partners of the
Partnership to any material liability or disability;
(10) STC has been duly qualified or registered as a foreign limited
liability company and is in good standing under the laws of the State of
Illinois, and to the knowledge of such counsel, such jurisdiction is the only
jurisdiction in which STC owns or leases property, or conducts any business, so
as to require qualification or registration to conduct business as a foreign
limited liability company, and in which the failure so to qualify or register
would be likely, in the judgment of such counsel, to subject STC to any
liability or disability which is material to the financial condition, business,
properties, net worth or results of operations of STC or the General Partner,
the Partnership and the Operating Entities considered as a whole or would be
likely, in the judgment of such counsel, to subject the limited partners of the
Partnership to any material liability or disability;
(11) STK is a corporation duly organized and validly existing in good
standing under the laws of the United Kingdom, with corporate power and
authority to own or lease its properties and to conduct its business as
described in the Final Prospectus; STK is not required to qualify or register as
a foreign corporation under the laws of any jurisdiction, and to the knowledge
of such counsel, there are no jurisdictions in which STK owns or leases
property, or conducts any business, so as to require qualification or
registration to conduct business as a foreign limited liability company, and in
which the failure so to qualify or register would be likely, in the judgment of
such counsel, to subject STK to any liability or disability which is material to
the financial condition, business, properties, net worth or results of
operations of STK or the General Partner, Partnership and the Operating Entities
considered as a whole or would be likely, in the judgment of such counsel, to
subject the limited partners of the Partnership to any material liability or
disability;
(12) STE is a corporation duly organized and validly existing in good
standing under the laws of the United Kingdom, with corporate power and
authority to own or lease its properties and to conduct its business as
described in the Final Prospectus; STE is not required to qualify or register as
a foreign corporation under the laws of any jurisdiction, and to the knowledge
of such counsel, there are no jurisdictions in which STE owns or leases
property, or conducts any business, so as to require qualification or
registration to conduct business as a foreign limited liability company, and in
which the failure so to qualify or register would be likely, in the judgment of
such counsel, to subject STE to any liability or disability which is material to
the financial condition, business, properties, net worth or results of
operations of STE or the General Partner, Partnership and the Operating Entities
considered as a whole or would be likely, in the judgment of such counsel, to
subject the limited partners of the Partnership to any material liability or
disability;
B-3
(13) Shore has been duly qualified and registered as a foreign limited
liability company and is in good standing under the laws of the States of
California, Nevada, Oregon and Washington, and to the knowledge of such counsel,
such jurisdiction is the only jurisdiction in which Shore owns or leases
property, or conducts any business, so as to require qualification or
registration to conduct business as a foreign limited liability company, and in
which the failure so to qualify or register would be likely, in the judgment of
such counsel, to subject Shore to any liability or disability which is material
to the financial condition, business, properties, net worth or results of
operations of STL or the General Partner, the Partnership and the Operating
Entities considered as a whole or would be likely, in the judgment of such
counsel, to subject the limited partners of the Partnership to any material
liability or disability;
(14) KPH is not required to qualify or register as a foreign limited
liability company under the laws of any jurisdiction, and to the knowledge of
such counsel, there are no jurisdictions in which KPH owns or leases property,
or conducts any business, so as to require qualification or registration to
conduct business as a foreign limited liability company, and in which the
failure so to qualify or register would be likely, in the judgment of such
counsel, to subject KPH to any liability or disability which is material to the
financial condition, business, properties, net worth or results of operations of
KPH or the General Partner, the Partnership and the Operating Entities
considered as a whole or would be likely, in the judgment of such counsel, to
subject the limited partners of the Partnership to any material liability or
disability;
(15) Statia Technology is not required to qualify or register as a
foreign corporation under the laws of any jurisdiction, and to the knowledge of
such counsel, there are no jurisdictions in which Statia Technology owns or
leases property, or conducts any business, so as to require qualification or
registration to conduct business in such foreign jurisdictions, and in which the
failure so to qualify or register would be likely, in the judgment of such
counsel, to subject Statia Technology to any liability or disability which is
material to the financial condition, business, properties, net worth or results
of operations of Statia Technology or the General Partner, the Partnership and
the Operating Entities considered as a whole or would be likely, in the judgment
of such counsel, to subject the limited partners of the Partnership to any
material liability or disability; and
(16) None of the Companies is in violation of its respective
partnership agreement, certificate or articles of incorporation or bylaws,
member agreement or other organizational documents, or to the knowledge of such
counsel, is in default in the performance of any material obligation, agreement
or condition contained in any bond, debenture, note or other evidence of
indebtedness, except as may be disclosed in the Final Prospectus, except for
such defaults which, individually or in the aggregate, would not have a material
adverse effect on the financial condition, business, properties, net worth or
results of operations of the General Partner, the Partnership and the Operating
Entities considered as a whole.
B-4
SCHEDULE I
NUMBER OF
UNDERWRITER FIRM UNITS
Xxxxxxx Xxxxx Xxxxxx Inc............................................... 700,000
UBS Warburg LLC........................................................ 700,000
X.X. Xxxxxxx & Sons, Inc............................................... 400,000
McDonald Investments Inc............................................... 200,000
-------------
Total............................................................. 2,000,000
=============
SCHEDULE II
OFFICERS AND DIRECTORS
Officers Directors
-------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx - Chairman of the Board and Chief Executive Officer Xxxxxxx Xxx
-------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx - President Xxxx X. Xxxxxx
-------------------------------------------------------------------------------------------------------
L. Xxxxx Xxxxxxxx, Jr. - Vice President, Regulatory Affairs Xxxxxx X. Xxxxx
-------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxx - Vice President, Operations Xxxxx X. Xxxxx, Xx.
-------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxx - Senior Vice President Xxxxxxx X. Xxx
-------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx - Vice President, Treasurer and Secretary Xxxx Xxxxxxx
-------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxx - Vice President, Transportation Xxxxx X. Xxxxxxx
-------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx - President of ST Services
-------------------------------------------------------------------------------------------------------
J. Xxxx Xxxxx - Acquisition and Planning Manager
-------------------------------------------------------------------------------------------------------
Xxx X. Childres - Vice President, Engineering
-------------------------------------------------------------------------------------------------------
