EXHIBIT 1.1
Execution Copy
TEPPCO PARTNERS, L.P.
1,700,000
Common Units
representing Limited Partner Interests
UNDERWRITING AGREEMENT
March 18, 2002
UNDERWRITING AGREEMENT
March 18, 2002
UBS Warburg LLC
Xxxxxxx Xxxxx Xxxxxx, Inc.
as Co-Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
TEPPCO Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to issue and sell units representing limited partner
interests in the Partnership (the "Common Units") to the underwriters named in
Schedule A annexed hereto (the "Underwriters") in an aggregate amount of
1,700,000 common units (the "Firm Units"). In addition, solely for the purpose
of covering over-allotments, the Partnership proposes to grant to the
Underwriters the option to purchase from the Partnership up to an additional
220,000 Common Units (the "Additional Units"). The Firm Units and the Additional
Units are hereinafter collectively sometimes referred to as the "Units". The
Units are described in the Prospectus which is referred to below.
Each of (i) the Partnership, (ii) Texas Eastern Products
Pipeline Company, LLC, a Delaware limited liability company (both in its
capacity as general partner of the Partnership and in its individual capacity,
the "General Partner"), (iii) TEPPCO GP, Inc., a Delaware corporation (both in
its individual capacity and as general partner of the Operating Partnerships (as
defined below) and Jonah (as defined below), "TEPPCO GP"), (iv) TE Products
Pipeline Company, Limited Partnership, a Delaware limited partnership ("TE
Products"), (v) TCTM, L.P., a Delaware limited partnership ("TCTM"), (vi) TEPPCO
Midstream Companies, L.P., a Delaware limited partnership ("TEPPCO Midstream"
and together with TE Products and TCTM, the "Operating Partnerships"), are
referred to collectively as the "TEPPCO Entities".
The Partnership has filed, in accordance with the provisions
of the Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Rules and Regulations" and together, with the Securities Act of
1933, as amended, the "Securities Act"), with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-74286) including a prospectus, relating to the Units, which incorporates by
reference documents which the Partnership and TE Products have filed or will
file in accordance with the provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder (collectively the "Exchange
Act"). Except where the context otherwise requires, the registration statement,
as amended when it became effective, including all financial statements,
exhibits and all documents filed as a part thereof or incorporated by reference
therein, and including any information contained in a prospectus subsequently
filed with the Commission pursuant to Rule 424(b) under the Securities Act and
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430(A) under the Securities Act and also including any
registration statement filed or to be filed pursuant to Rule 462(b) under the
Securities Act, is herein called the "Registration Statement". The prospectus,
including the base
prospectus and prospectus supplement (the "Prospectus Supplement"), and all
documents incorporated therein by reference, in the form filed by the
Partnership with the Commission pursuant to Rule 424(b) under the Securities Act
on or before the second business day after the date hereof (or such earlier time
as may be required under the Securities Act) or, if no such filing is required,
the form of final prospectus included in the Registration Statement at the time
it became effective, is herein called the "Prospectus". Any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include any such
document filed or to be filed under the Exchange Act after the date of the
Prospectus, and deemed to be incorporated therein by reference.
The Partnership and the Underwriters agree as follows:
1. Sale and Purchase Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Partnership agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Partnership
the aggregate number of Firm Units set forth opposite the name of such
Underwriter in Schedule A attached hereto, in each case at a purchase price of
$29.85 per Unit. The Partnership is advised by you that the Underwriters intend
initially to offer the Firm Units upon the terms set forth in the Prospectus and
Prospectus Supplement. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
Over-Allotment. In addition, the Partnership hereby grants to
the several Underwriters the option to purchase, and upon the basis of the
warranties and representations and subject to the terms and conditions herein
set forth, the Underwriters shall have the right to purchase, severally and not
jointly, from the Partnership, ratably in accordance with the number of Firm
Units to be purchased by each of them, all or a portion of the Additional Units
as may be necessary to cover over-allotments made in connection with the
offering of the Firm Units, at the same purchase price per unit to be paid by
the Underwriters to the Partnership for the Firm Units. This option may be
exercised by you on behalf of the several Underwriters at any time and from time
to time on or before the thirtieth (30th) day following the date hereof, by
written notice to the Partnership. Such notice shall set forth the aggregate
number of Additional Units as to which the option is being exercised, and the
date and time when the Additional Units are to be delivered (such date and time
being herein referred to as the "additional time of purchase"); provided,
however, that the additional time of purchase shall not be earlier than the time
of purchase (as defined below) nor earlier than the second business day(1) after
the date on which the option shall have been exercised nor later than the tenth
(10th) business day after the date on which the option shall have been
exercised. The number of Additional Units to be sold to each Underwriter shall
be the number which bears the same proportion to the aggregate number of
Additional Units being purchased as the number of Firm Units set forth opposite
the name of such Underwriter on Schedule A hereto bears to the total number of
Firm Units (subject, in each case, to such adjustment as you may determine to
eliminate fractional units).
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(1) As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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2. Payment and Delivery Payment of the purchase price for the Firm
Units shall be made to the Partnership by Federal Funds wire transfer, against
delivery of the certificates for the Firm Units to you through the facilities of
the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on March 22, 2002 (unless another time shall be agreed to by you and
the Partnership or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called "the time of purchase". Electronic transfer of the
Firm Units shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Units shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the Firm Units. Electronic transfer of the Additional Units shall be
made to you at the time of purchase in such names and in such denominations as
you shall specify.
Deliveries of the documents described in Section 6 below with respect
to the purchase of the Units shall be made at the offices of Xxxxxxx & Xxxxx
Mayor, Day, Xxxxxxxx & Xxxxxx L.L.P. at 8:00 a.m. Houston time, on the date of
the closing of the purchase of the Firm Units or the Additional Units, as the
case may be.
3. Representations and Warranties of the Partnership The Partnership
represents and warrants to each of the Underwriters that:
(a) Compliance with Registration Requirements. On the date the
Registration Statement was initially declared effective by the Commission (the
"Effective Date"), at all times subsequent to and including the time of purchase
or the additional time of purchase, as the case may be, and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Partnership or the Operating Partnerships shall have filed with the Commission
any amendment or supplement thereto), including the financial statements
included or incorporated by reference in the Prospectus or the Registration
Statement, did or, when so filed, will comply in all material respects with all
applicable provisions of the Securities Act, the Rules and Regulations, the
Exchange Act and the rules and regulations thereunder (the "Exchange Act Rules
and Regulations") and did or, when filed, will contain all statements required
to be stated therein in accordance with the Securities Act, the Rules and
Regulations, the Exchange Act and the Exchange Act Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement (or any registration statement filed pursuant to Rule 462(b) under the
Securities Act that constitutes part of the Registration Statement) becomes
effective, no part of the Registration Statement or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. At the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is or was filed with the Commission
and at the time of purchase or the additional time of purchase, as the case may
be, the Prospectus did not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this
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Section 3(a) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to any Underwriter furnished in writing
to the Partnership by the Underwriters specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. For
all purposes of this Agreement, (i) the amounts of the selling concession and
reallowance set forth in the Prospectus, (ii) the paragraphs regarding
stabilization and (iii) the number of Units which each Underwriter commits to
purchase on the time of purchase or the additional time of purchase, as the case
may be, each as set forth in the section captioned "Underwriting" in the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Partnership by the Underwriters specifically for inclusion in
the Registration Statement or the Prospectus. The Partnership has not
distributed any written offering material in connection with the offering or
sale of the Units other than the Registration Statement and the Prospectus. No
order preventing or suspending the use of the Prospectus has been issued by the
Commission.
(b) Incorporated Documents. The documents that are incorporated by
reference in the Registration Statement and the Prospectus or from which
information is so incorporated by reference, when they became effective or were
filed with the Commission, as the case may be, complied and will comply in all
material respects with the requirements of the Securities Act or the Exchange
Act, as applicable, the Rules and Regulations and the Exchange Act Rules and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents so filed
and incorporated by reference subsequent to the time of purchase or the
additional time of purchase, as the case may be, shall, when they are filed with
the Commission, conform in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, the Rules and Regulations
and the Exchange Act Rules and Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statement therein not misleading.
(c) Capitalization. The Partnership's capital as of December 31, 2001
is as set forth in the Prospectus Supplement in the column entitled "Historical"
under the heading "Capitalization". The adjustments to the Partnership's capital
as of December 31, 2001, as set forth in the Prospectus Supplement under the
column entitled "Pro Forma" under the heading "Capitalization," represent the
pro forma effects on the Partnership's capital of the transactions described
therein, and as set forth in "Pro Forma As Adjusted" under the heading
"Capitalization," represent the pro forma effects on the Partnership's capital
of the offer and sale of the Units and the application of the estimated net
proceeds from such offer and sale in the manner set forth in the Prospectus
Supplement under the heading "Use of Proceeds", the related capital contribution
by the General Partner and the other transactions described therein.
(d) Formation and Good Standing of the Partnership, the Operating
Partnerships and the Subsidiary Partnerships. Each of the Partnership, the
Operating Partnerships and TEPPCO Crude Pipeline, L.P., TEPPCO Seaway L.P.,
TEPPCO Crude Oil, L.P. and Lubrication Services, L.P. (collectively, each of the
subsidiary partnerships of TCTM, the "TCTM Subsidiary Partnerships") and
Chaparral Pipeline Company, L.P. and Quanah Pipeline Company, L.P.
(collectively, each of the subsidiary partnerships of TEPPCO Midstream, the
"Midstream Subsidiary Partnerships" and together with the TCTM Subsidiary
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Partnerships, the "Subsidiary Partnerships") has been duly formed and is, and at
the time of purchase or the additional time of purchase, as the case may be,
will be, validly existing as a limited partnership in good standing under the
Delaware Act. Each of the Partnership, the Operating Partnerships and the
Subsidiary Partnerships has, and at the time of purchase or the additional time
of purchase, as the case may be, will have, full power and authority to conduct
all the activities conducted by it, to own, lease and operate its properties and
to conduct its business in all material respects as described in the
Registration Statement and the Prospectus and to enter into and perform its
obligations under this Agreement. Each of the Partnership, the Operating
Partnerships and the Subsidiary Partnerships is, and at the time of purchase or
the additional time of purchase, as the case may be, will be, duly qualified or
registered and in good standing as a foreign limited partnership to transact
business in each other jurisdiction in which such qualification or registration
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to register (i)
would not result in a material adverse effect on the business, properties,
financial condition or results of operations of each entity taken as a whole (a
"Material Adverse Effect"), and (ii) would not subject the limited partners of
such partnership to any material liability or disability. The Partnership is the
sole limited partner of each of the Operating Partnerships, in each case owning
a limited partner interest of 99.999%. These limited partner interests have been
duly authorized by the respective agreements of limited partnership of the
Operating Partnerships (the "Operating Partnership Agreements"), have been
validly issued in accordance with the respective Operating Partnership
Agreements, are fully paid and non-assessable, except to the extent such
non-assessability may be affected by Section 17-607 of the Delaware Act, and are
the only outstanding limited partner interests of all of the Operating
Partnerships. TCTM is the sole limited partner of each of the TCTM Subsidiary
Partnerships, in each case with a limited partner interest of 99.99%. TEPPCO
Midstream is the sole limited partner of each of the Midstream Subsidiary
Partnerships, in each case with a limited partner interest of 99.99%. These
limited partner interests have been duly authorized by the respective agreements
of limited partnership of the Subsidiary Partnerships (the "Subsidiary
Partnership Agreements"), have been validly issued in accordance with the
respective Subsidiary Partnership Agreements, are fully paid and non-assessable,
except to the extent such non-assessability may be affected by Section 17-607 of
the Delaware Act, and are the only outstanding limited partner interests of all
of the Subsidiary Partnerships. The Partnership owns the limited partner
interests in the Operating Partnerships, TCTM owns the limited partner interests
in the TCTM Subsidiary Partnerships and TEPPCO Midstream owns the limited
partner interests in the Midstream Subsidiary Partnerships either directly or
indirectly and free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or except as described in the Prospectus. TEPPCO Seaway,
L.P. owns a 50% general partner interest in Seaway Crude Pipeline Company. This
general partner interest has been duly authorized and validly issued and is
owned of record free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material. TEPPCO Midstream also owns a 99.999% general partner
interest in Jonah. This general partner interest has been duly authorized and
validly issued and is owned of record free and clear of all liens, encumbrances,
security interests, equities, charges or claims, except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or except as described in
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the Prospectus. TE Products is the sole member of TEPPCO Colorado, L.L.C., and
TCTM is the sole member of TEPPCO Crude GP, LLC. These member interests have
been duly authorized and validly issued and are owned of record free and clear
of all liens, encumbrances, security interests, equities, charges or claims,
except for such liens, encumbrances, security interests, equities, charges or
claims as are not, individually or in the aggregate, material. Complete and
correct copies, as of the date hereof, of (i) the agreement of limited
partnership of the Partnership (the "Partnership Agreement"), (ii) the Operating
Partnership Agreements, (iii) the Subsidiary Partnership Agreements, (iv) the
agreement of limited partnership of TEPPCO Seaway, L.P. and (v) the limited
liability company agreements of each of TEPPCO Colorado, LLC and TEPPCO Crude
GP, LLC have been delivered to the Underwriters, and no changes therein will be
made subsequent to the date hereof and prior to the time of purchase or the
additional time of purchase, as the case may be.
(e) Formation and Good Standing of the General Partner. The General
Partner has been duly organized and is, and at the time of purchase or the
additional time of purchase, as the case may be, will be, validly existing as a
limited liability company in good standing under the Delaware Limited Liability
Company Act ("Delaware LLC Act") and has full power and authority to conduct all
the activities conducted by it, to own, lease and operate its properties and to
conduct its business and to act as general partner of the Partnership, in each
case in all material respects, as described in the Registration Statement and
the Prospectus and to enter into and perform its obligations under this
Agreement; and the General Partner is, and at the time of purchase or the
additional time of purchase, as the case may be, will be, duly qualified or
registered and in good standing as a foreign limited liability company to
transact business in each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to register (i) would not result in a Material Adverse Effect, (ii) would not
subject its members to any material liability or disability and (iii) would not
subject any limited partner of the Partnership to any liability by reason of
such failure. The General Partner is the sole general partner of the Partnership
with a general partner interest in the Partnership of 2%. This general partner
interest has been duly authorized by the Partnership Agreement, has been validly
issued in accordance with the Partnership Agreement, and is owned of record by
the General Partner, free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except for such liens, encumbrances,
security interests, equities, charges or claims as are not, individually or in
the aggregate, material or except as described in the Prospectus. Complete and
correct copies of the certificate of formation and the limited liability company
agreement of the General Partner and all amendments thereto have been delivered
to the Underwriters, and no changes therein will be made subsequent to the date
hereof and prior to the time of purchase or the additional time of purchase, as
the case may be.
(f) Formation and Good Standing of TEPPCO GP. TEPPCO GP has been duly
incorporated and is, and at the time of purchase or the additional time of
purchase, as the case may be, will be, validly existing as a corporation in good
standing under the Delaware General Corporation Law ("DGCL") and has full
corporate power and authority to conduct all the activities conducted by it, to
own, lease and operate its properties and to conduct its business and to act as
general partner of the Operating subsidiaries, in each case in all material
respects, as described in the Registration Statement and the Prospectus and to
enter into and perform its obligations under this Agreement; and TEPPCO GP is,
and at the time of purchase or the
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additional time of purchase, as the case may be, will be, duly qualified or
registered and in good standing as a foreign corporation to transact business in
each other jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to register (i) would not
result in a Material Adverse Effect, (ii) would not subject its secruityholders
to any material liability or disability and (iii) would not subject the
Partnership, as the sole limited partner of each of the Operating Partnerships
to any liability by reason of such failure. All of the capital stock of TEPPCO
GP is owned of record by the Partnership, free and clear of all liens,
encumbrances, security interests, equities, charges, or claims, except as set
forth in the Prospectus or as are not, individually or in the aggregate, not
material. TEPPCO GP is the sole general partner of each of the Operating
Partnerships and the Midstream Subsidiary Partnerships and, with respect to
Jonah, the sole managing general partner, in each case with a general partner
interest of 0.001%. These general partner interests have been duly authorized by
the respective Operating Partnership Agreements, Subsidiary Partnership
Agreements or, in the case of Jonah, by its agreement of general partnership,
have been validly issued in accordance with the respective Operating Partnership
Agreements, the Subsidiary Partnership Agreements, or, in the case of Jonah, by
its agreement of general partnership, and are owned of record by TEPPCO GP, free
and clear of all liens, encumbrances, security interests, equities, charges or
claims, except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or
except as described in the Prospectus. Complete and correct copies of the
articles of incorporation and the bylaws of TEPPCO GP and all amendments thereto
have been delivered to the Underwriters, and no changes therein will be made
subsequent to the date hereof and prior to the time of purchase or the
additional time of purchase, as the case may be.
(g) Formation and Good Standing of TEPPCO Crude GP, LLC. TEPPCO Crude
GP, LLC has been duly organized and is, and at the time of purchase or the
additional time of purchase, as the case may be, will be, validly existing as a
limited liability company in good standing under the Delaware LLC Act and has
full power and authority to conduct all the activities conducted by it, to own,
lease and operate its properties and to conduct its business and to act as
general partner of each of the Subsidiary Partnerships, in each case in all
material respects, as described in the Registration Statement and the
Prospectus; and TEPPCO Crude GP, LLC is, and at the time of purchase or the
additional time of purchase, as the case may be, will be, duly qualified or
registered and in good standing as a foreign limited liability company to
transact business in each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to register (i) would not result in a Material Adverse Effect and (ii) would not
subject its members to any material liability or disability. TEPPCO Crude GP,
LLC is the sole general partner of the TCTM Subsidiary Partnerships, in each
case with a general partner interest of 0.01%. These general partner interests
have been duly authorized by the respective subsidiary partnership agreements,
have been validly issued in accordance with the respective subsidiary
partnership agreements, and are owned of record by TEPPCO Crude GP, LLC, free
and clear of all liens, encumbrances, security interests, equities, charges or
claims, except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or
except as described in the Prospectus. Complete and correct copies of the
certificate of formation and the limited liability company agreement of TEPPCO
Crude GP, LLC and all amendments thereto have been delivered to the
Underwriters,
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and no changes therein will be made subsequent to the date hereof and prior to
the time of purchase or the additional time of purchase, as the case may be.
(h) Formation and Good Standing of TEPPCO Colorado, L.L.C. TEPPCO
Colorado, L.L.C. has been duly organized and is, and at the time of purchase or
the additional time of purchase, as the case may be, will be, validly existing
as a limited liability company in good standing under the Delaware LLC Act and
has full power and authority to conduct all the activities conducted by it, to
own, lease and operate its properties and to conduct its business, in each case
in all material respects; and TEPPCO Colorado, L.L.C. is, and at the time of
purchase or the additional time of purchase, as the case may be, will be, duly
qualified or registered and in good standing as a foreign limited liability
company to transact business in each other jurisdiction in which such
qualification or registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to register (i) would not result in a Material Adverse Effect and
(ii) would not subject its members to any material liability or disability.
(i) Formation and Good Standing of Jonah. Jonah, a Wyoming general
partnership, has been duly formed and is, and at the time of purchase or the
additional time of purchase, as the case may be, will be, validly existing as a
general partnership in good standing under the Wyoming Uniform Partnership Act,
as amended (the "Wyoming Act"). Jonah has, and at the time of purchase or the
additional time of purchase, as the case may be, will have, full power and
authority to conduct all the activities conducted by it, to own, lease and
operate its properties and to conduct its business in all material respects as
described in the Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement. Jonah is not, and at the time of
purchase or the additional time of purchase, as the case may be, will not be,
required to register or qualify as a foreign general partnership to transact
business in any other jurisdiction in which such qualification or registration
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to register (i)
would not result in a Material Adverse Effect and (ii) would not subject the
partners of such partnership to any material liability or disability.
(j) Partnership Interests. The limited partners of the Partnership hold
limited partner interests in the Partnership aggregating a 98% interest in the
Partnership, such limited partner interests being represented by 40,450,000
Common Units and 3,916,547 units representing Class B limited partner interests
("Class B Units") (the Common Units and the Class B Units are collectively
referred to as the "Limited Partner Units"); the Limited Partner Units are the
only limited partner interests of the Partnership that are issued and
outstanding; all of the issued and outstanding Limited Partner Units of the
Partnership have been (1) duly authorized and validly issued under the
Partnership Agreement and are fully paid and non-assessable, except as such
nonassessability may be affected by Section 17-607 of the Delaware Revised
Uniform Limited Partnership Act, as amended (the "Delaware Act"), and (2) issued
in compliance with all applicable federal and state laws and were not issued in
violation of any preemptive right, resale right, right of first refusal or
similar right.
(k) Capitalization of the General Partner. All of the membership
interests of the General Partner are registered on its books in the name of Duke
Energy Field Services, L.P.,
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free and clear of all liens, encumbrances, security interests, equities, charges
or claims, except as set forth in the Prospectus or as are not, individually or
in the aggregate, material.
(l) Absence of Defaults and Conflicts. None of the TEPPCO Entities nor
any of their subsidiaries is in breach of, or in default under (nor has any
event occurred which with notice, lapse of time, or both would result in any
breach of, or constitute a default under), the respective partnership agreement
or certificate of limited partnership or limited liability company agreement or
articles or certificate of formation, as the case may be, or in the performance
or observance of any obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which any of the TEPPCO Entities or any of their subsidiaries is a
party or by which any of them or any of their properties is bound, and the
execution, delivery and performance of this Agreement and the issuance of the
Units and consummation of the transactions contemplated hereby and thereby will
not conflict with, or result in any breach of or constitute a default under (or
constitute any event which with notice, lapse of time, or both would result in
any breach of, or constitute a default under), any provisions of the respective
partnership agreement or certificate of limited partnership or limited liability
company agreement or articles or certificate of formation, as the case may be,
of any of the TEPPCO Entities or any of their subsidiaries or under any
provision of any license, indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any lease, contract or
other agreement or instrument to which any of the TEPPCO Entities or any of
their subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
any of the TEPPCO Entities or any of their subsidiaries.
(m) Authorization of Underwriting Agreement. This Agreement has been
duly authorized, executed and delivered by the Partnership and is a legal, valid
and binding agreement of the Partnership enforceable in accordance with its
terms.
(n) Accuracy of Disclosure. The Common Units conform in all material
respects to the descriptions thereof contained in the Registration Statement,
Prospectus and Prospectus Supplement. All legal or governmental proceedings,
affiliate transactions, contracts, leases or documents of a character required
to be described in the Registration Statement, the Prospectus, the Prospectus
Supplement or the documents incorporated by reference therein or to be filed as
an exhibit thereto have been so described or filed as required. There are no
contracts or documents which are required to be described in the Registration
Statement, the Prospectus, the Prospectus Supplement or the documents
incorporated by reference therein or to be filed as exhibits thereto which have
not been so described and filed as required.
(o) Authorization of Units. The Units to be issued and sold by the
Partnership have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued and
fully paid and non-assessable, except as such nonassessability may be affected
by Section 17-607 of the Delaware Act and will not be subject to any preemptive
or similar right or voting or transfer restriction.
(p) Absence of Further Requirements. No approval, authorization,
consent or order of or filing with any national, state or local governmental or
regulatory commission, board,
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body, authority or agency is required in connection with the issuance and sale
of the Units or the consummation of the transactions as contemplated hereby
other than registration of the Units under the Securities Act, which has been or
will be completed, and any necessary qualification under the Securities or blue
sky laws of the various jurisdictions in which the Units are being offered by
the Underwriters or under the rules and regulations of the National Association
of Securities Dealers, Inc. ("NASD").
(q) Absence of Restrictions on Units. Except as set forth in the
Registration Statement and the Prospectus and except for any such rights which
have been effectively complied with or waived, (i) no person has the right,
contractual or otherwise, to cause the Partnership to issue or sell to it any
units representing limited partner interests in the Partnership, (ii) no person
has any preemptive rights, resale rights, rights of first refusal or other
rights to purchase any units representing limited partner interests in the
Partnership, and (iii) no person has the right to act as an underwriter, or as a
financial advisor to the Partnership, in connection with the offer and sale of
the Units, in the case of each of the foregoing clauses (i), (ii) and (iii),
whether as a result of the filing or effectiveness of the Registration Statement
or the sale of the Units as contemplated thereby or otherwise; no person has the
right, contractual or otherwise, to cause the Partnership to register under the
Securities Act any units representing limited partner interests in the
Partnership, or to include any units representing limited partner interests in
the Partnership in the Registration Statement or the offering contemplated
thereby whether as a result of the filing or effectiveness of the Registration
Statement or the sale of the Units as contemplated thereby or otherwise, except
for such rights as have been complied with or waived.
(r) Independent Accountants. KPMG, LLP ("KPMG") whose reports on the
consolidated financial statements of the Partnership and its subsidiaries are
filed with the Commission as part of the Registration Statement and Prospectus,
are independent public accountants as required by the Securities Act and
Exchange Act. The statements included in the Registration Statement with respect
to the accountants pursuant to Rule 509 of Regulation S-K of the Rules and
Regulations are true and correct in all material respects.
(s) Possession of Licenses and Permits. Each of the TEPPCO Entities and
their subsidiaries has all necessary licenses, authorizations, consents and
approvals and has made all necessary filings required under any federal, state,
local or foreign law, regulation or rule, and has obtained all necessary
authorizations, consents and approvals from other persons, in order to conduct
its respective business; none of the TEPPCO Entities or their subsidiaries is in
violation of, or in default under, any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to any of the TEPPCO Entities or their
subsidiaries, the effect of which, individually or in the aggregate, could have
a Material Adverse Effect.
(t) Absence of Proceedings. Except as disclosed in the Prospectus,
there are no actions, suits, claims, investigations or proceedings pending or
threatened to which any of the TEPPCO Entities or their subsidiaries 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
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could result in a judgment, decree or order having a Material Adverse Effect or
prevent consummation of the transactions contemplated hereby.
(u) Financial Statements. The financial statements included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and Units, present fairly the consolidated
financial position of the Partnership and its subsidiaries at the dates
indicated and the consolidated results of operations, cash flows and changes in
financial position of the Partnership and its subsidiaries for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the information
required to be stated therein. The pro forma financial statements and other pro
forma financial information included or incorporated by reference in the
Registration Statement or the Prospectus (i) present fairly in all material
respects the information shown therein, (ii) have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma financial
statements and (iii) have been properly computed on the bases described therein.
The assumptions used in the preparation of the pro forma financial statements
and other pro forma financial information included or incorporated by reference
in the Registration Statement or Prospectus are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or circumstances
referred to therein. No other financial statements or schedules of the
Partnership are required by the Securities Act, the Rules and Regulations, the
Exchange Act or the Exchange Act Rules and Regulations to be included in the
Registration Statement or the Prospectus.
(v) No Material Adverse Change in Business. Subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus and prior to the time of purchase or the additional time of
purchase, as the case may be, and except as described in or contemplated by the
Prospectus, there has not been and will not have been (i) any material adverse
change, or any development which is likely to cause a material adverse change,
in the capitalization of any of the TEPPCO Entities, or in the business,
properties or assets described or referred to in the Registration Statement, or
the results of operations, condition (financial or otherwise), business or
operations of any of the TEPPCO Entities and their subsidiaries taken as a
whole, (ii) any transaction which is material to any of the TEPPCO Entities or
their subsidiaries, except transactions contemplated in this Agreement or in the
ordinary course of business, (iii) any obligation, direct or contingent, which
is material to the TEPPCO Entities or their subsidiaries taken as a whole,
incurred by any of the TEPPCO Entities or their subsidiaries, except obligations
contemplated in this Agreement or incurred in the ordinary course of business,
(iv) any material change in the capital stock, equity interests or outstanding
indebtedness of any of the TEPPCO Entities or their subsidiaries or (v) any
dividend or distribution of any kind declared, paid or made by the Partnership.
None of the TEPPCO Entities nor any of their subsidiaries has any material
contingent obligation which is not disclosed in the Registration Statement.
(w) Lock-Up Agreements. The Partnership has obtained for the benefit of
the Underwriters the agreement, in the form set forth as Exhibit A hereto (a
"Lock-Up Agreement"), of each of the General Partner's directors and officers
and Duke Energy Corporation, on its behalf and on behalf of its affiliates that
may own Common Units; the Partnership will not
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release or purport to release any person from any Lock-Up Agreement without the
prior written consent of UBS Warburg.
(x) Investment Company Act. None of the TEPPCO Entities or their
subsidiaries is, and upon the issuance and sale of the Units as herein
contemplated and the application of the net proceeds therefrom as described in
the Prospectus will not be, an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended.
(y) Public Utility Holding Company Act. None of the TEPPCO Entities or
their subsidiaries is a "holding company" as such term is defined in the Public
Utility Holding Company Act of 1935, as amended ("PUHCA"); neither the TEPPCO
Entities nor the issue and sale of the Units by the Partnership is subject to
regulation under PUHCA; and none of the TEPPCO Entities is a "public utility" as
such term is defined in the Federal Power Act, as amended.
(z) Tax Returns and Payments. Each of the TEPPCO Entities has filed all
federal, state and foreign income and franchise tax returns required by law to
be filed by them and have paid all taxes, assessments and other governmental
charges, including any interest, additions to tax or penalties applicable
thereto, levied upon them or any of their properties, assets, income or
franchises which are due and payable, other than (i) those which are not past
due or are presently being contested in good faith by appropriate proceedings
diligently conducted for which such reserves or other appropriate provisions, if
any, as shall be required by generally accepted accounting principles have been
made and (ii) with respect to state and local taxes, such as will not result in
a Material Adverse Effect. There are no tax returns of any of the TEPPCO
Entities that are currently being audited by state, local or federal taxing
authorities or agencies (and with respect to which any of the TEPPCO Entities
has received notice), where the findings of such audit, if adversely determined,
would result in a Material Adverse Effect.
(aa) Insurance. Each of the TEPPCO Entities and their subsidiaries
maintains insurance with respect to its properties and business of the types and
in amounts generally deemed adequate for its business and consistent with
insurance coverage maintained by similar companies and businesses, all of which
insurance is in full force and effect.
(bb) No Business Interruptions. None of the TEPPCO Entities nor any of
their subsidiaries has sustained since the date of the last financial statements
included in the Prospectus any material loss or interference with their
respective business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree.
(cc) Absence of Notice. None of the TEPPCO Entities nor any of their
subsidiaries 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 any
document incorporated by reference therein, 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 have a Material Adverse
Effect.
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(dd) Internal Accounting Controls. The TEPPCO Entities and their
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ee) Validity of Data. Any statistical and market-related data included
in the Prospectus are based on or derived from sources that the Partnership
believes to be reliable and accurate, and the Partnership has obtained the
written consent to the use of such data from such sources to the extent the
General Partner believes is required.
(ff) Stabilization. None of the TEPPCO Entities, nor any of their
directors, officers or controlling persons has taken, directly or indirectly,
any action intended, or which might reasonably be expected, to cause or result,
under the Securities 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.
(gg) Violations. None of the TEPPCO Entities nor any of their
subsidiaries, nor to the Partnership's knowledge after due inquiry, any employee
or agent of the TEPPCO Entities, has made any payment of funds of the TEPPCO
Entities 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 Prospectus.
(hh) Possession of Intellectual Property. Each of the TEPPCO Entities
and their subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and none of
the TEPPCO Entities nor any of their subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of any of the TEPPCO Entities or their subsidiaries, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
(ii) Absence of Labor Dispute. No labor dispute with the employees of
any of the TEPPCO Entities or any of their subsidiaries exists or, to the
knowledge of any of the TEPPCO Entities, is imminent or threatened, and none of
the TEPPCO Entities has any actual knowledge of an existing, imminent or
threatened labor disturbance by the employees of any of its, or any of its
affiliates', principal suppliers, manufacturers, customers or contractors,
which, in either case, could reasonably be expected to result in a Material
Adverse Effect. Each of the TEPPCO Entities and their subsidiaries is in
compliance with all federal, state and local employment labor
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laws, including, but not limited to, laws relating to non-discrimination in
hiring, promotion and pay of employees, except for any noncompliance that could
not reasonably be expected to result in a Material Adverse Effect.
(jj) Benefit Plans. With respect to each employee benefit plan, program
and arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to by any of the TEPPCO Entities
or their subsidiaries, or with respect to which any of the TEPPCO Entities could
incur any liability under ERISA (collectively, the "Benefit Plans"), no event
has occurred and, to the best knowledge of each of the TEPPCO Entities or their
subsidiaries, there exists no condition or set of circumstances, in connection
with which any of the TEPPCO Entities or their subsidiaries 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 could have a Material Adverse Effect.
(kk) Environmental Laws. Each of the TEPPCO Entities and their
subsidiaries (i) is in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or imposing liability or standards of conduct
concerning any Hazardous Material (as hereinafter defined) ("Environmental
Laws"), (ii) has received all permits, licenses or other approvals required of
it under Environmental Laws to conduct its business and (iii) is in compliance
with all terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, individually or in
the aggregate, result in a Material Adverse Effect. The term "Hazardous
Material" means (A) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, (B)
any "hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl and (E) any pollutant or contaminant or hazardous, dangerous, or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.
In the ordinary course of its business, the Partnership conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the TEPPCO Entities and their subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). Except as set forth in the Registration
Statement and the Prospectus, there are no costs and liabilities associated with
or arising in connection with Environmental Laws as currently in effect
(including without limitation, costs of compliance therewith) which would,
singly or in the aggregate, have a Material Adverse Effect.
(ll) Title to Property. Each of the TEPPCO Entities and their
subsidiaries have satisfactory and marketable title to all properties and assets
owned by such entities, in each case free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or
-14-
encumbrances of any kind except such as (i) are described in the Prospectus or
(ii) do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by such entities; and all of the leases and subleases material to the
business of such entities, and under which such entities hold properties
described in the Prospectus, are in full force and effect, and none of such
entities has any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of such entities under any of the leases or
subleases mentioned above, or affecting or questioning the rights of such
entities to the continued possession of the leased or subleased premises under
any such lease or sublease.
(mm) Partnership Agreements. The Partnership Agreement is a valid and
legally binding agreement of the General Partner, enforceable against the
General Partner in accordance with its terms, and each of the Operating
Partnership Agreements is a valid and legally binding agreement of the parties
thereto, enforceable against the General Partner and the Partnership in
accordance with its terms, except as the enforceability of such agreements may
be affected by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and general equitable
principles.
(nn) Disclosure. Neither this Agreement, the Registration Statement,
nor any other document, certificate or instrument delivered to the Underwriters
by or on behalf of the Partnership in connection with the transactions
contemplated by this Agreement, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained therein not misleading. There is no fact known to the Partnership or
the General Partner which would result in a Material Adverse Effect or in the
future may (so far as the Partnership can now foresee) result in a Material
Adverse Effect which has not been set forth or referred to in this Agreement or
the Registration Statement.
In addition, any certificate signed by any officer of the TEPPCO Entities and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Units shall be deemed to be a representation and
warranty by the TEPPCO Entities, as to matters covered thereby, to each
Underwriter.
4. Certain Covenants of the Partnership The Partnership hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Units for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect as long as required for the distribution of the Units,
provided that none of the TEPPCO Entities shall be required to qualify as a
foreign corporation or to consent to the service of process under the laws of
any such state (except service of process with respect to the offering and sale
of the Units); and to promptly advise you of the receipt by the TEPPCO Entities
of any notification with respect to the suspension of the qualification of the
Units for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(b) to make available to the Underwriters in New York City, without
charge, as many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Partnership shall have made any amendments or supplements
thereto after the Effective Date of
-15-
the Registration Statement) as the Underwriters may reasonably request for the
purposes contemplated by the Securities Act; in case any Underwriter is required
to deliver a prospectus within the nine-month period referred to in Section
10(a)(3) of the Securities Act in connection with the sale of the Units, the
Partnership will prepare promptly upon request such amendment or amendments to
the Registration Statement and such prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities Act.
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing (i) when any post-effective amendment to the Registration
Statement becomes effective and (ii) if Rule 430A under the Securities Act is
used, when the Prospectus is filed with the Commission pursuant to Rule 424(b)
under the Securities Act (which the Partnership agrees to file in a timely
manner under such Rules).
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or Prospectus
including by filing any documents that would be incorporated therein by
reference, to furnish you with a draft of such proposed amendment in advance of
such filing and to file no such amendment or supplement to which you shall
object in writing.
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Partnership or TE Products
with the Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Units, and to promptly
notify you of such filing.
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Securities Act.
(g) to furnish or otherwise make available to you and, upon request, to
each of the other Underwriters for a period of three years from the date of this
Agreement the following documents, provided such documents are not otherwise
publicly available via XXXXX: (i) copies of any reports or other communications
which the Partnership shall send to the holders of any class of its limited
partnership interests or debt securities or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
form as may be designated by the Commission, (iii) copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Partnership is listed, and (iv) such other information as you
may reasonably request regarding the TEPPCO Entities or their subsidiaries, in
each case as soon as such communications, documents or information become
available.
(h) to advise the Underwriters promptly of the happening of any event
known to the Partnership or its subsidiaries within the time during which a
Prospectus relating to the
-16-
Units is required to be delivered under the Securities Act which, in the
judgment of the Partnership, would require the making of any change in the
Prospectus then being used, or in the information incorporated therein by
reference, so that the Prospectus would not include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, and, during such time, to prepare and furnish, at the Partnership's
expense, to the Underwriters promptly such amendments or supplements to such
Prospectus as may be necessary to reflect any such change and to furnish to you
a copy of such proposed amendment or supplement before filing any such amendment
or supplement with the Commission.
(i) to make generally available to holders of its securities as soon as
may be practicable but in no event later than the last day of the fifteenth full
calendar month following the calendar quarter in which the Effective Date falls,
and to deliver to you, an earnings statement of the Partnership (which will
satisfy the provisions of Section 11(a) of the Securities Act, including Rule
158 of the Rules and Regulations) for a period of twelve months beginning after
the Effective Date of the Registration Statement (as defined in Rule 158(c) of
the Securities Act) as soon as is reasonably practicable after the termination
of such twelve-month period.
(j) to furnish to you, upon request and without charge, two copies of
the Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all financial statements, schedules and exhibits
thereto and documents incorporated by reference therein), which are certified by
an officer of the General Partner to be true and correct, and sufficient
conformed copies of the foregoing (other than exhibits) for distribution to each
of the other Underwriters.
(k) to furnish to you as early as practicable prior to the time of
purchase, but no later than two business days prior thereto, a copy of the
latest available unaudited interim consolidated financial statements, if any, of
the TEPPCO Entities and their subsidiaries which have been read by the
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 6(b)hereof.
(l) to apply the net proceeds from the sale of the Units in the manner
set forth under the caption "Use of Proceeds" in the Prospectus.
(m) to pay all costs, expenses, fees and taxes (other than any transfer
taxes and fees and disbursements of counsel for the Underwriters except as set
forth under Section 5 hereof and (iii), (iv) and (vi) below) in connection with
(i) the preparation and filing of the Registration Statement, the Prospectus,
and any amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including costs of
mailing and shipment), (ii) the registration, issuance and delivery of the
Units, (iii) the producing, word processing and/or printing of this Agreement,
an Agreement Among Underwriters, any dealer agreements, any Powers of Attorney
and any closing documents (including compilations thereof), and the reproduction
and/or printing and furnishing of copies of each thereof to the Underwriters and
(except closing documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Units for offering and sale under state laws and
the determination of their eligibility for investment under state law as
aforesaid (including the legal fees and filing fees and other disbursements of
counsel for the Underwriters) and the
-17-
printing and furnishing of copies of any blue sky surveys or legal investment
surveys to the Underwriters and to dealers, (v) any listing of the Units on any
securities exchange and any registration thereof under the Exchange Act, (vi)
any fees payable to investment rating agencies with respect to the Units, (vii)
any filing for review of the public offering of the Units by the NASD and (viii)
the performance of the Partnership's other obligations hereunder.
(n) to furnish to you, before filing with the Commission subsequent to
the Effective Date of the Registration Statement and during the period referred
to in paragraph (e) above, a copy of any document proposed to be filed pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
(o) to comply with all the provisions of any undertakings contained in
the Registration Statement.
(p) not to sell, offer or agree to sell, contract to sell, hypothecate,
pledge, grant any option to sell or otherwise dispose of, directly or
indirectly, Common Units or securities convertible into or exchangeable or
exercisable for Common Units or warrants or other rights to purchase Common
Units or any other securities of the Partnership that are substantially similar
to Units, or file or cause to be declared effective a registration statement
under the Securities Act relating to the offer and sale of any Common Units or
securities convertible into or exercisable or exchangeable for Common Units or
other rights to purchase Units or any other securities of the Partnership that
are substantially similar to Common Units for a period of 90 days after the date
hereof (the "Lock-Up Period"), without the prior written consent of UBS Warburg
LLC, except for (i) the registration of the Common Units and the sales to the
Underwriters pursuant to this Agreement, (ii) issuances of Units upon the
exercise of options or warrants disclosed as outstanding in the Registration
Statement and the Prospectus, and (iii) the issuance of employee options not
exercisable during the Lock-Up Period pursuant to option plans described in the
Registration Statement and the Prospectus.
(q) not, at any time, directly or indirectly, take any action intended,
or which might reasonably be expected, to cause or result in, which will
constitute, stabilization of the price of the Common Units to facilitate the
sale or resale of any of the Units.
5. Reimbursement of Underwriters' Expenses If the Units are not
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 8 hereof or the default by one or more of
the Underwriters in its or their respective obligations hereunder, the
Partnership shall, in addition to paying the amounts described in Section 4(m)
hereof, reimburse the Underwriters for all of their out-of-pocket expenses
reasonably incurred, including the fees and disbursements of their counsel;
provided, however, that if this Agreement is terminated pursuant to Section 8 by
reason of the default of one or more Underwriters, the Partnership shall not be
obligated to reimburse any defaulting Underwriter on account of these expenses.
6. Conditions of Underwriters' Obligations The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the TEPPCO Entities on the date hereof and at the
time of purchase (and the several obligations of the Underwriters at the
additional time of purchase are subject to the accuracy of
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the representations and warranties on the part of the TEPPCO Entities on the
date hereof and at the time of purchase (unless previously waived) and at the
additional time of purchase, as the case may be, the performance by the
Partnership of its obligations hereunder and to the following additional
conditions precedent:
(a) The Partnership shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be (i) opinions of Xxxxxx &
Xxxxxx, L.L.P., counsel for the Partnership, addressed to the Underwriters and
dated the time of purchase, as set forth in Exhibit B and (ii) opinions of Xxxxx
X. Xxxx, general counsel of the Partnership, addressed to the Underwriters and
dated the time of purchase, as set forth in Exhibit C, with reproduced copies of
each for the other Underwriters and each in a form satisfactory to Xxxxxxx &
Xxxxx Mayor, Day, Xxxxxxxx and Xxxxxx L.L.P., counsel for the Underwriters.
(b) You shall have received from KPMG a "comfort letter" and
"bring-down comfort letter" dated respectively as of the date of this Agreement
and the time of purchase or the additional time of purchase, as the case may be,
respectively, and addressed to the Underwriters (with reproduced copies for each
of the other Underwriters) in the forms heretofore approved by UBS Warburg LLC.
(c) You shall have received at the at the time of purchase and at the
additional time of purchase, as the case may be, the opinions of Xxxxxxx & Xxxxx
Mayor, Day, Xxxxxxxx & Xxxxxx L.L.P., counsel for the Underwriters, dated the
time of purchase, as set forth in Exhibit D.
(d) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed prior to the time of purchase or additional time of purchase to
which you object in writing.
(e) Notification that all filings required by Rule 424 of the Rules and
Regulations shall have been made.
(f) Prior to the time of purchase and at the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under the
Securities Act or proceedings initiated under Section 8(d) or 8(e) of the
Securities Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto, or modifications thereof,
if any, shall not contain an untrue statement of 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 are made,
not misleading.
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change or any development involving a material adverse change,
financial or otherwise (other than as specifically identified in the
Registration Statement and Prospectus as of the date hereof), in the business,
properties, financial condition, results of operation or prospects of the TEPPCO
-19-
Entities and their subsidiaries taken as a whole shall occur or become known and
(ii) no transaction which is material to any of the TEPPCO Entities or their
subsidiaries shall have been entered into by any of the TEPPCO Entities, except
transactions contemplated in this Agreement or in the ordinary course of
business.
(h) The Partnership will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of two of the General
Partner's executive officers to the effect that the representations and
warranties of the TEPPCO Entities and their subsidiaries set forth in this
Agreement are true and correct as of such date, that the TEPPCO Entities or
their subsidiaries shall perform such of their obligations under this Agreement
as are to be performed at or before the time of purchase, the conditions set
forth in paragraphs (f) and (g) of this Section 6 have been met and such other
matters as the Underwriters may reasonably request.
(i) You shall have received signed Lock-Up Agreements referred to in
Section 3(w).
(j) The Partnership shall have furnished to you such other documents
and certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably request.
(k) The Units shall have been approved for listing on the New York
Stock Exchange subject only to notice of issuance at or prior to the time of
purchase or the additional time of purchase, as the case may be.
(l) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement have been
given or made of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of, or securities guaranteed by, the Partnership or any of its
subsidiaries by any "nationally recognized statistical rating organization," as
that term is defined in Rule 436(g)(2) under the Securities Act (other than one
downgrading by Xxxxx'x Investors Service, Inc. of the Partnership or TE
Products).
(m) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against any of the TEPPCO Entities or their
subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any Federal, state or local court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding would have a Material Adverse Effect.
(n) Each of the representations and warranties of the Partnership
contained herein shall be true and correct in all material respects at the time
of purchase or the additional time of purchase, as the case may be, as if made
at the time of purchase or the additional time of purchase, as the case may be,
and all covenants and agreements herein contained to be performed
-20-
on the part of the Partnership and all conditions herein contained to be
fulfilled or complied with by the Partnership at or prior to the time of
purchase or additional time of purchase, as the case may be, shall have been
duly performed, fulfilled or complied with; provided, however, that if any such
representation or warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied, such representation or
warranty as so qualified must be true and correct in all respects.
(o) The Units shall be qualified for sale in such states as the
Underwriters may reasonably request, each such qualification shall be in effect
and not subject to any stop order or other proceeding at the time of purchase or
additional time of purchase, as the case may be.
7. Effective Date of Agreement; Termination This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Units if, (x) since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, there has been any material adverse change, financial or
otherwise (other than as referred to in the Registration Statement and
Prospectus as of the date hereof), in the operations, business, condition or
prospects of the TEPPCO Entities or their subsidiaries taken as a whole, which
would, in your judgment or in the judgment of such group of Underwriters, make
it impracticable or inadvisable to market the Units on the terms and in the
manner contemplated in the Registration Statement and the Prospectus, or (y)
there shall have occurred any downgrading, or any notice shall have been given
of (i) any intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement in the rating accorded any notes
of, or notes guaranteed by, the Partnership or any of its subsidiaries by any
"nationally recognized statistical rating organization," as that term is defined
in Rule 436(g)(2) under the Securities Act (other than one downgrading by
Xxxxx'x Investors Service, Inc. of the Partnership or TE Products) or, (z) if,
at any time prior to the time of purchase or additional time of purchase, as the
case may be, there shall have occurred: (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange, American
Stock Exchange or NASDAQ; (ii) a suspension or material limitation in trading in
Common Units of the Partnership on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market or minimum prices shall have been
established on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared either by the United States, Texas or New York State
authorities, a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) the outbreak or
escalation of hostilities or acts of terrorism involving the United States or
the declaration by the United States of a national emergency or war; or (v) the
occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in your judgment or in the judgment
of such group of Underwriters, to make it impracticable or inadvisable to market
the Units on the terms and in the manner contemplated in the Registration
Statement and the Prospectus.
-21-
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Partnership and each other Underwriter shall
be notified promptly by letter or telegram.
If the sale to the Underwriters of the Units, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because any of the Partnership
shall be unable to comply with any of the terms of this Agreement, the
Partnership shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(m), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Partnership under
this Agreement (except to the extent provided in Section 9 hereof) or to one
another hereunder.
8. Increase in Underwriters' Commitments Subject to Sections 6 and 7,
if any Underwriter shall default in its obligation to take up and pay for the
Units to be purchased by it hereunder (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Units which all Underwriters so defaulting shall
have agreed but failed to take up and pay for does not exceed 10% of the total
number of Units, the non-defaulting Underwriters shall take up and pay for (in
addition to the aggregate number of Units they are obligated to purchase
pursuant to Section 1 hereof) the number aggregate of Units agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Units shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated, or in the event no such designation is made,
such Units shall be taken up and paid for by all non-defaulting Underwriters pro
rata in proportion to the aggregate number of Units set opposite the names of
such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Partnership agrees with the non-defaulting Underwriters that it
will not sell any Units hereunder unless all of the Units are purchased by the
Underwriters (or by substituted Underwriters selected by you with the approval
of the Partnership or selected by the Partnership with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Partnership for a defaulting Underwriter or Underwriters
in accordance with the foregoing provision, the Partnership or you shall have
the right to postpone the time of purchase for a period not exceeding five
business days in order that any necessary changes in the Registration Statement
and Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Units which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total of Units which all
Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Partnership shall make arrangements within the five
business day period stated above for the purchase of all the Units which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
-22-
Agreement shall be terminated without further act or deed and without any
liability on the part of the Partnership to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Partnership. Nothing in this paragraph, and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
9. Indemnity and Contribution The Partnership agrees to indemnify,
defend and hold harmless each Underwriter, its partners, directors, officers,
employees, agents and any person who controls any Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
successors and assigns of all the foregoing persons from and against any loss,
damage, expense, liability or claim (including, but not limited to, the
reasonable cost of investigation, legal representation and other expenses
incurred in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted) which, jointly or severally, any such
Underwriter or person may incur under the Securities Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Partnership), in a Prospectus (the term "Prospectus" for the purpose of this
Section 9 being deemed to include any preliminary prospectus filed as part of
the Registration Statement, the Prospectus (as previously defined) and the
Prospectus as amended or supplemented by the Partnership), or in any documents
filed under the Exchange Act and deemed to be incorporated by reference into the
Prospectus, or in any application or other document executed by or on behalf of
any of the TEPPCO Entities or their subsidiaries or based on written information
furnished by or on behalf of any of the TEPPCO Entities or their subsidiaries
filed in any jurisdiction in order to qualify the Units under the securities
laws thereof or filed with the Commission, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
such Registration Statement, Prospectus or other such documents or necessary to
make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of any
Underwriter through you to the Partnership expressly for use with reference to
such Underwriter in such Registration Statement or such Prospectus (which
comprises only such information referred to in the second paragraph of Section
3(a) of this Agreement) or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement or Prospectus or necessary
to make such information not misleading. This indemnity agreement will be in
addition to any liability that the Partnership might otherwise have.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Partnership pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the General Partner in writing
of the institution of such Proceeding and the Partnership shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses,
provided, however,
-23-
that the omission to so notify the General Partner (or any omission of notice
under Section 9(c)) shall not relieve the Partnership from any liability which
the Partnership may have to any Underwriter or any such person or otherwise.
Such Underwriter or controlling person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
the employment of such counsel shall have been authorized in writing by the
General Partner in connection with the defense of such Proceeding or the
Partnership shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded (based on
advice of counsel) that there may be defenses available to it or them which are
different from, additional to or in competition with those available to the
Partnership (in which case the Partnership shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties),
in any of which events such fees and expenses shall be borne by the Partnership
and paid as incurred (it being understood, however, that the Partnership shall
not be liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Partnership shall not be liable for any settlement of any such
claim or Proceeding effected without its written consent but if settled with the
written consent of the General Partner, the Partnership agrees to indemnify and
hold harmless any Underwriter and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened 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 Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Partnership, each director and officer and any person who controls
the Partnership within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all the
foregoing persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Partnership or any such person may incur under the Securities Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of such Underwriter
through you to the Partnership expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration Statement as
amended by any post-effective
-24-
amendment thereof by the Partnership) or in a Prospectus (which comprises only
such information referred to in the second paragraph of Section 3(a) of this
Agreement), or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or such Prospectus or necessary to make
such information not misleading. This indemnity will be in addition to any
liability that each Underwriter might otherwise have; provided, however, that in
no case shall any Underwriter be liable or responsible for any amount in excess
of the underwriting discounts and commissions received by such Underwriter.
If any Proceeding is brought against the Partnership or any such person
in respect of which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Partnership or such person shall promptly notify
such Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter (or any omission of notice under Section 9(c)) shall not
relieve such Underwriter, from any liability which such Underwriter may have to
the Partnership or any such person or otherwise. The Partnership or such person
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Partnership or such
person unless the employment of such counsel shall have been authorized in
writing by such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different from or
additional to or in conflict with those available to such Underwriter (in which
case such Underwriter shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but such Underwriter
may employ counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), in any of
which events such fees and expenses shall be borne by such Underwriter and paid
as incurred (it being understood, however, that such Underwriter shall not be
liable for the expenses of more than one separate counsel in addition to any
local counsel in any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to such
Proceeding). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Partnership and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding
-25-
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 Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable 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, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Partnership on the one hand and the
Underwriters on the other hand from the offering of the Units or (ii) if the
allocation provided by clause (i) 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) above but also the relative fault of the Partnership
on the one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable considerations.
The relative benefits received by the Partnership on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Partnership and the underwriting discounts and commissions received by the
Underwriters. The relative fault of the Partnership on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Partnership or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to in this subsection shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with investigating, preparing to defend or defending any
Proceeding.
(d) The Partnership and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
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 subsection (c) above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Units underwritten by such Underwriter and distributed to the
public were offered to the public exceeds the amount of any damage which such
Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriter's obligations
to contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and not joint.
The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Partnership contained
in this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any
-26-
Underwriter, its partners, directors, officers, employees, agents or any person
(including each partner, officer or director of such person) who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, or by or on behalf of the Partnership, the directors and
officers of the General Partner or any person who controls any of the
Partnership within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Units. The Partnership and each Underwriter agree
promptly to notify each other of the commencement of any Proceeding against it
and, in the case of the Partnership, against any of the General Partner's
officers or directors, in connection with the issuance and sale of the Units, or
in connection with the Registration Statement or Prospectus.
10. Notices Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department and, if to the Partnership, shall be sufficient in all
respects if delivered or sent to the Partnership at the offices of the General
Partner at 0000 Xxxxx Xxxxxxx, X.X. Xxx 0000, Xxxxxxx, Xxxxx 00000-0000,
Attention: Xxxxx X. Xxxx
11. Governing Law; Construction This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Partnership
consents to the jurisdiction of such courts and personal service with respect
thereto. The Partnership hereby consents to personal jurisdiction, service and
venue in any court in which any Claim arising out of or in any way relating to
this Agreement is brought by any third party against UBS Warburg LLC or any
indemnified party. Each of UBS Warburg LLC and the Partnership (on its behalf
and, to the extent permitted by applicable law, on behalf of its holders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Partnership agrees that a final
judgment in any such action, proceeding or counterclaim brought in any such
court shall be conclusive and binding upon the Partnership and may be enforced
in any other courts in the jurisdiction of which the Partnership is or may be
subject, by suit upon such judgment.
13. Parties at Interest The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Partnership and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by
-27-
virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Units from the
Underwriters.
14. Counterparts This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
15. Successors and Assigns This Agreement shall be binding upon the
Underwriters and the Partnership and its successors and assigns and any
successor or assign of any substantial portion of the Partnerships' and any of
the Underwriters' respective businesses and/or assets.
16. Miscellaneous UBS Warburg LLC, an indirect, wholly owned
subsidiary of UBSAG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS Warburg LLC. Because UBS Warburg LLC
is a separately incorporated entity, it is solely responsible for its own
contractual obligations and commitments, including obligations with respect to
sales and purchases of securities. Securities sold, offered or recommended by
UBS Warburg LLC are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending relationships
with issuers of securities underwritten or privately placed by UBS Warburg LLC.
To the extent required under the securities laws, prospectuses and other
disclosure documents for securities underwritten or privately placed by UBS
Warburg LLC will disclose the existence of any such lending relationships and
whether the proceeds of the issue will be used to repay debts owed to affiliates
of UBS Warburg LLC.
If the foregoing correctly sets forth the understanding among the
Partnership and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Partnership and the Underwriters, severally.
[Signatures to follow]
-28-
Very truly yours,
TEPPCO PARTNERS, L.P.
By: TEXAS EASTERN PRODUCTS
PIPELINE COMPANY, LLC,
its General Partner
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President, Chief
Financial Officer and Treasurer
Accepted and agreed to as of the date first
above written, on behalf of itself and the
Underwriters named in Schedule A
UBS WARBURG LLC
By: UBS WARBURG LLC
By: /s/ XXXXX XXXXX
--------------------------------------------------
Name: Xxxxx Xxxxx
------------------------------------------------
Title: Director
-----------------------------------------------
By: /s/ XXXXXX XXXX
--------------------------------------------------
Name: Xxxxxx Xxxx
------------------------------------------------
Title: Associate Director
-----------------------------------------------
SCHEDULE A
Number of
Underwriter Firm Units
----------- ----------
UBS Warburg LLC.................................................... 850,000
Xxxxxxx Xxxxx Xxxxxx Inc. ......................................... 850,000
----------
Total 1,700,000
Schedule A-1
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
Units representing Limited Partner
Interests in TEPPCO Partners, L.P.
March 18, 2002
UBS Warburg LLC
Xxxxxxx Xxxxx Barney, Inc.
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed Underwriting Agreement (the "Underwriting Agreement") to be
entered into by TEPPCO Partners, L.P. (the "Partnership") and UBS Warburg LLC
and Xxxxxxx Xxxxx Xxxxxx, Inc. (the "Underwriters"), with respect to the public
offering (the "Offering") of units representing limited partner interests in the
Partnership (the "Common Units").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period of 90 days after the date of the final
prospectus relating to the Offering the undersigned will not, without the prior
written consent of UBS Warburg LLC (i) sell, offer to sell, contract to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of,
directly or indirectly, contract to dispose of, file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the "Commission") in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any
Common Units of the Partnership or any securities convertible into or
exercisable or exchangeable for Common Units, or warrants or other rights to
purchase Common Units, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Common Units or any securities convertible into or exercisable or
exchangeable for Common Units, or warrants or other rights to purchase Common
Units, whether any such transaction is to be settled by delivery of Common Units
or such other securities, in cash or otherwise, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii). The
foregoing sentence shall not apply to (a) the registration of or sale to the
Underwriters of any Common Units pursuant to the Offering and the Underwriting
Agreement, (b) bona fide gifts, provided the recipient or recipients thereof
agree in writing to be bound by the terms of this Lock-Up Letter Agreement and
confirm that he, she or it has been in compliance with the terms of this Lock-Up
Letter Agreement since the date hereof or
Exhibit A-1
(c) dispositions to any trust for the direct or indirect benefit of the
undersigned and/or the immediate family of the undersigned, provided that such
trust agrees in writing to be bound by the terms of this Lock-Up Letter
Agreement and confirms that it has been in compliance with the terms of this
Lock-Up Letter Agreement since the date hereof.
If (i) the Partnership notifies you in writing that it does not intend
to proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
-------------------------------------------
Name:
Exhibit A-2
EXHIBIT B
FORM OF OPINIONS OF XXXXXX & XXXXXX L.L.P.
(1) Each of the Partnership, the Operating Partnerships, TEPPCO Crude Pipeline,
L.P., TEPPCO Seaway, L.P. and TEPPCO Crude Oil, L.P. 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 Registration
Statement and the Prospectus and, with respect to the Partnership, to issue,
sell and deliver the Units as contemplated in the Underwriting Agreement.
(2) The General Partner has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, with limited liability company power and authority to own, lease and
operate its properties and to conduct its business and to act as the general
partner of the Partnership, in each case as described in the Registration
Statement and Prospectus.
(3) TEPPCO GP has been duly incorporated and is validly existing as a
corporation in good standing under the DGCL, with corporate power and authority
to own, lease and operate its properties, to conduct its business and to act as
the general partner of each of the Operating Partnerships, in each case as
described in the Registration Statement and Prospectus.
(4) The General Partner is the sole general partner of the Partnership with a
general partner interest in the Partnership of 2.0%; such general partner
interest is duly authorized by the Partnership Agreement, is validly issued, and
the General Partner beneficially owns such general partner interest free and
clear of any security interest, lien, encumbrance, right to purchase or adverse
claim (except as provided in the Partnership Agreement or pursuant to the
Delaware Act) (A) in respect of which a financing statement under the Uniform
Commercial Code ("UCC") has been filed in the State of Delaware naming the
General Partner as debtor is on file in the offices of the Secretary of State of
the State of Delaware or (B) otherwise known to such counsel.
(5) TEPPCO GP is the sole general partner of each of the Operating Partnerships
and the Midstream Subsidiary Partnerships with a general partner interest in
each of the Operating Partnerships and Midstream Subsidiary Partnerships of
0.001%; such general partner interests are duly authorized by the Operating
Partnership Agreements or the Midstream Subsidiary Partnerships, as the case may
be, and are validly issued, and TEPPCO GP beneficially owns such general partner
interests free and clear of any security interest, lien, encumbrance, right to
purchase or adverse claim (except as provided in the respective limited
partnership agreement of each of the Operating Partnerships or the Midstream
Subsidiary Partnerships or pursuant to the Delaware Act) (A) in respect of which
a financing statement under the UCC has been filed in the State of Delaware
naming the TEPPCO GP as debtor is on file in the offices of the Secretary of
State of the State of Delaware or (B) otherwise known to such counsel.
(6) The Partnership is the sole limited partner of each of the Operating
Partnerships with a limited partner interest in each of the Operating
Partnerships of 99.999%; such limited partner interests are duly authorized by
the Operating Partnership Agreements and are validly issued, fully paid and
non-assessable (except as provided in the Delaware Act). The Partnership
Exhibit B-1
beneficially owns such limited partner interests in the Operating Partnerships
free and clear of any security interest, lien, encumbrance, right to purchase or
adverse claim (except as provided in the respective limited partnership
agreement of each of the Operating Partnerships or pursuant to the Delaware Act)
(A) in respect of which a financing statement under the UCC has been filed in
the State of Delaware naming the Partnership as debtor is on file in the offices
of the Secretary of State of the State of Delaware or (B) otherwise known to
such counsel.
(7) All of the capital stock of TEPPCO GP is duly authorized, validly issued and
nonassessable and is owned of record and, to our knowledge, beneficially by the
Partnership, free and clear of any security interest, lien, encumbrance, right
to purchase or adverse claim (A) in respect of which a financing statement under
the UCC has been filed in the State of Delaware naming the Partnership as debtor
is on file in the offices of the Secretary of State of the State of Delaware or
(B) otherwise known to such counsel.
(8) All of the general partner interests of each of the TCTM Subsidiary
Partnerships are duly authorized, validly issued and beneficially owned by
TEPPCO Crude GP, LLC, free and clear of any security interest, lien,
encumbrance, or other adverse claim (A) in respect of which a financing
statement under the UCC has been filed in the State of Delaware naming the
TEPPCO Crude GP, LLC as debtor is on file in the offices of the Secretary of
State of the State of Delaware or (B) otherwise known to such counsel.
(9) All of the limited partner interests of each of the TCTM Subsidiary
Partnerships are duly authorized, validly issued and nonassessable (except as
provided in the Delaware Act), and are beneficially owned by TCTM (or, with
respect to Lubrication Services, L.P., by TEPPCO Crude Oil, L.P. and with
respect to TEPPCO Seaway, L.P., by TEPPCO Crude Pipeline, L.P.), free and clear
of any security interest, lien, encumbrance, or other adverse claim (A) in
respect of which a financing statement under the UCC has been filed in the State
of Delaware naming the respective limited partner as debtor is on file in the
offices of the Secretary of State of the State of Delaware or (B) otherwise
known to such counsel.
(10) All of the limited partner interests of each of the Midstream Subsidiary
Partnerships are duly authorized, validly issued and nonassessable (except as
provided in the Delaware Act), and are beneficially owned by TEPPCO Midstream,
free and clear of any security interest, lien, encumbrance, or other adverse
claim (A) in respect of which a financing statement under the UCC has been filed
in the State of Delaware naming the respective limited partner as debtor is on
file in the offices of the Secretary of State of the State of Delaware or (B)
otherwise known to such counsel.
(11) All of the member interests of TEPPCO Colorado, LLC are duly authorized,
validly issued and nonassessable and are beneficially owned by TE Products, free
and clear of any security interest, lien, encumbrance, or other adverse claim
(A) in respect of which a financing statement under the UCC has been filed in
the State of Delaware naming TE Products as debtor is on file in the offices of
the Secretary of State of the State of Delaware or (B) otherwise known to such
counsel.
(12) All of the member interests of TEPPCO Crude GP, LLC are duly authorized,
validly issued and nonassessable and are beneficially owned by TCTM, free and
clear of any security
Exhibit B-2
interest, lien, encumbrance, right to purchase or other claim (A) in respect of
which a financing statement under the UCC has been filed in the State of
Delaware naming TCTM as debtor is on file in the offices of the Secretary of
State of the State of Delaware or (B) otherwise known to such counsel.
(13) The Underwriting Agreement has been duly authorized, executed and delivered
by the Partnership.
(14) The Units have been duly authorized by the board of directors of the
General Partner and the Partnership Agreement on behalf of the Partnership and,
when issued and delivered to the Underwriters against payment therefor in
accordance with the terms of the Underwriting Agreement, will be validly issued,
fully paid and non-assessable, and free of any preemptive or, to the knowledge
of such counsel, similar rights that entitle or will entitle any person to
acquire any partnership interest in the Partnership upon the issuance thereof by
the Partnership.
(15) The Common Units conform in all material respects as to legal matters to
the description thereof set forth under the captions "Cash Distributions" and
"Tax Considerations" in the Prospectus.
(16) The form of certificates for the Units conforms in all material respects to
the requirements of the Partnership Agreement.
(17) The Registration Statement and all post-effective amendments, if any, have
become effective under the Securities Act and, to our knowledge, no stop order
proceedings with respect thereto are pending or threatened under the Securities
Act; and any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424 under the Act has been made in the manner and within the
time period required by such Rule 424.
(18) Each of the Partnership Agreement and the Operating Partnership Agreements
has been duly authorized, executed and delivered by the parties thereto and is a
valid and legally binding agreement of the parties thereto, enforceable against
the parties thereto in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, fraudulent transfer, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and general principles of equity.
(19) The execution, delivery and performance of the Underwriting Agreement by
the Partnership and the issuance of the Units by the Partnership and the
consummation by the Partnership of the transactions contemplated pursuant to the
Underwriting Agreement do not and will not conflict with, or result in any
breach or violation of, or constitute a default (nor constitute any event which
with notice, lapse of time, or both would result in any breach of or constitute
a default) under (i) any provisions of the partnership agreement, member
agreement or other organizational documents of any of the TEPPCO Entities or any
of their subsidiaries or (ii) any provision of any license, indenture, mortgage,
deed of trust, bank loan, credit agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument to which any of the TEPPCO
Entities or any of their subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, which in each case is
either (a) filed or incorporated by reference as exhibits to the Partnership's
most recently filed Annual Report on
Exhibit B-3
Form 10-K or (b) is identified in a certificate (a copy of which shall have been
furnished to you and your counsel) from an authorized officer of the General
Partner as material to the business, operations or properties of the Partnership
and its subsidiaries, taken as a whole, or (iii) any Federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
any of the TEPPCO Entities or any of their subsidiaries, except, in the case of
each of clauses (i), (ii) and (iii), for conflicts, breaches, violations or
defaults which, individually or in the aggregate, would not have a Material
Adverse Effect.
(20) To such counsel's knowledge, except for Duke Energy Corporation and certain
of its affiliates each of whom 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 or other security of the
Partnership because of the filing of the Registration Statement or consummation
of the transactions contemplated by the Underwriting Agreement.
(21) No approval, authorization, consent, waiver, notice or order of or filing
with, or other action by, any national, state or local governmental or
regulatory commission, board, body, authority or agency is required in
connection with the issuance or sale of the Units by the Partnership as
contemplated hereby other than registration of the Units under the Securities
Act (except we express no opinion as to any necessary qualification under the
state securities or blue sky laws of the various jurisdictions in which the
Units are being offered by the Underwriters).
(22) The Registration Statement, and the Prospectus and any supplements or
amendments thereto (except as to the financial statements and schedules and
other financial and statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Securities Act.
(23) The documents incorporated by reference in the Registration Statement and
Prospectus, when they were filed (or, if an amendment with respect to any such
document was filed, when such amendment was filed) with the Commission, appear
on their face to have been appropriately responsive in all material respects
with the requirements of the Exchange Act (except as to the financial statements
and schedules and other financial and statistical data contained or incorporated
by reference therein, as to which such counsel need express no opinion).
(24) None of the TEPPCO Entities nor any of their subsidiaries is or will be,
upon consummation of the transactions contemplated by the Underwriting
Agreement, an "investment company," or a "promoter" or "principal underwriter"
for, a "registered investment company," as such terms are defined in the
Investment Company Act of 1940, as amended, or a "public utility company" or a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended; none of the Partnership, TEPPCO Entities is subject to
regulation under the Public Utility Holding Company Act of 1935, as amended.
(25) To such counsel's knowledge, there are no contracts, licenses, agreements,
leases or documents of a character which are required to be filed as exhibits to
the Registration Statement
Exhibit B-4
or to be summarized or described in the Registration Statement or Prospectus (or
any amendment or supplement thereto) which have not been so filed, summarized or
described.
(26) The Firm Units and the Option Units are duly authorized for listing,
subject only to official notice of issuance, on the New York Stock Exchange.
Such counsel shall state that although it has not undertaken, except as
otherwise indicated in such counsel's opinion, to determine independently, and
is not passing upon and does not assume any responsibility for, the accuracy,
completeness or fairness of any of the statements in the Registration Statement
(except as and to the extent stated in subparagraph 15 above) or any documents
incorporated therein, such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and discussion of
the contents thereof (including review and discussion of the contents of all
documents incorporated by reference therein) with officers and representatives
of the General Partner, representatives of the independent public accountants of
the Partnership and representatives of and counsel for the Underwriters, and
based upon this participation, no information has come to such counsel's
attention that has caused such counsel to believe that the Registration
Statement (including the documents incorporated by reference therein at the time
the Registration Statement became effective), or the Prospectus, as of its date
and as of the applicable time of purchase, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that any amendment
or supplement to the Prospectus, as of its respective date, and as of the
applicable time of purchase, 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 (such counsel need not express any opinion with
respect to the financial statements and the notes thereto and the schedules and
other financial data included in the Registration Statement or the Prospectus or
any documents incorporated by reference therein).
Exhibit X-0
XXXXXXX X
XXXX XX XXXXXXXX XX XXXXX X. XXXX, GENERAL COUNSEL TO THE GENERAL PARTNER
(1) Jonah has been duly formed and is validly existing in good standing
as a general partnership under the Wyoming Uniform Partnership Act. All of the
general partner interests of Jonah are duly authorized and are beneficially
owned by TEPPCO GP and TEPPCO Midstream free and clear of any security interest,
lien, encumbrance, right to purchase or other claim, except as disclosed in the
Prospectus or as provided in the agreement of partnership of Jonah or pursuant
to the Wyoming Uniform Partnership Act (A) in respect of which a financing
statement under the Uniform Commercial Code ("UCC") has been filed in the State
of Wyoming naming TEPPCO GP or TEPPCO Midstream as debtor is on file in the
offices of the Secretary of State of the State of Wyoming or (B) otherwise known
to such counsel.
(2) To such counsel's knowledge, there are no actions, suits, claims,
investigations or proceedings pending or threatened or contemplated to which any
of the TEPPCO Entities or any of their subsidiaries is subject 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 are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) but are not so described.
(3) To such counsel's knowledge, none of the TEPPCO Entities nor any of
their subsidiaries is in violation of its partnership agreement, member
agreement or other organizational documents, or is in breach of, or in default
under (nor has any event occurred which with notice, lapse of time, or both
would result in any breach of, or constitute a default under), any license,
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which any of the TEPPCO Entities or any of their subsidiaries is a
party or by which any of them or their respective properties may be bound or
affected or under any Federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to any of the TEPPCO Entities or any
of their subsidiaries, except where such violation, breach or default would not,
individually or in the aggregate, have a Material Adverse Effect.
Exhibit C-1
EXHIBIT D
FORM OF OPINIONS OF UNDERWRITERS' COUNSEL
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Partnership.
2. The Units to be issued and sold by the Partnership are authorized by
the Partnership Agreement and, when issued and delivered to and paid
for by the Underwriters pursuant to the Underwriting Agreement, will be
validly issued, fully paid and nonassessable (except as disclosed in
the Prospectus and except to the extent such nonassessability may be
affected by Section 17-607 of the Delaware Revised Uniform Limited
Partnership Act).
3. The Units to be issued and sold by the Partnership conform in all
material respects as to legal matters to the description thereof set
forth under the captions "Cash Distributions" in the Prospectus; the
statements in the Prospectus under the caption "Tax Considerations,"
insofar as such statements constitute a summary of the legal matters
referred to therein, fairly present the information disclosed therein
in all material respects.
4. The Registration Statement and the Prospectus as of their respective
effective or issue dates (except as to the financial statements and
schedules and other financial and statistical data contained or
incorporated by reference therein, as to which we do not express any
opinion) appear on their face to have been appropriately responsive in
all material respects with the requirements of the Securities Act.
5. The Registration Statement has been declared effective under the
Securities Act and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Securities Act, and no proceedings for that purpose have been
instituted or threatened by the Commission and any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424 of the
Securities Act has been made in the manner and within the time period
required by such Rule 424.
In addition, such counsel shall state that they have participated in
conferences with certain officers and other representatives of the General
Partner and the Partnership and its affiliates, representatives of the
independent public accountants of the Partnership, counsel for the Partnership,
and representatives of the Underwriters, at which conferences the contents of
the Registration Statement, the Prospectus and related matters were discussed.
Such counsel shall state that although they are not passing upon and do not
assume any responsibility for and shall not be deemed to have independently
verified the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus or incorporated by reference
therein, on the basis of the foregoing (relying as to materiality to the extent
such counsel deems appropriate upon the statements of facts of the officers of
the General Partner and other representatives of the Partnership), no facts have
come to such counsel's attention that lead such counsel to believe that the
Registration Statement, at the time such Registration Statement or any amendment
thereto became effective prior to the applicable time of purchase (other than
(i) the operating statistics, financial statements and schedules contained
therein or incorporated by
Exhibit D-1
reference (including the notes thereto and auditors' report thereon) and (ii)
the other historical, pro forma and projected financial or statistical
information contained therein or incorporated by reference, as to which such
counsel need not comment) 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, as of its date, the
Prospectus (other than (i) the operating statistics, financial statements and
schedules contained therein or incorporated by reference (including the notes
thereto and auditors' report thereon) and (ii) the other historical, pro forma
and projected financial or statistical information contained therein or
incorporated by reference, as to which such counsel need not comment) contained
an 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.
Exhibit D-2
