EXHIBIT 1.1
EXECUTION COPY
TEPPCO PARTNERS, L.P.
3,425,000
Common Units
representing Limited Partner Interests
UNDERWRITING AGREEMENT
April 2, 2003
UNDERWRITING AGREEMENT
April 2, 2003
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx Brothers Inc.
UBS Warburg LLC
Xxxxxxx, Xxxxx & Co.
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 (collectively, the "Underwriters"), in an aggregate
amount of 3,425,000 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
513,750 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 and general partner
of the Partnership (the "General Partner"), (iii) TEPPCO GP, Inc., a Delaware
corporation and general partner of each 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"), (vii)
Jonah Gas Gathering Company, a Wyoming general partnership ("Jonah"), (viii) Val
Verde Gas Gathering Company, L.P., a Delaware limited partnership ("Val Verde"),
and (ix) TEPPCO NGL Pipelines, L.L.C. ("TEPPCO NGL") 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.
333-100494) 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 issue and sell to each of the respective Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Partnership, at a purchase price of $29.06 per unit, the aggregate number of
Firm Units set forth opposite the name of such Underwriter in Schedule A
attached hereto. The Partnership is advised by Xxxxxxx Xxxxx Xxxxxx Inc. that
the Underwriters intend initially to offer the Firm Units upon the terms set
forth in the Prospectus and Prospectus Supplement. The Underwriters may from
time to time increase or decrease the public offering price after the initial
public offering to such extent as they may determine.
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 Xxxxxxx Xxxxx Barney Inc. on behalf of the several Underwriters in
whole or in part at any time but not more than once on or before the thirtieth
(30th) calendar 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
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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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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
Xxxxxxx Xxxxx Xxxxxx Inc. may determine to eliminate fractional units).
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 the Underwriters
through the facilities of The Depository Trust Company ("DTC") for the
respective accounts of the Underwriters. Such payment and delivery shall be made
by 11:00 a.m., New York City time, on April 8, 2003 (unless another time shall
be agreed to by Xxxxxxx Xxxxx Barney Inc. 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 the Underwriters at the time of purchase in such names and in such
denominations as they 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 the Underwriters at the time of purchase in such names
and in such denominations as they 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 L.L.P. by 8:30 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
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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
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 the third to the last paragraph in the section captioned
"Underwriting" in the Prospectus, 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, 2002 is as set forth in the Prospectus Supplement in the column entitled
"Actual" under the heading "Capitalization". The adjustments to the
Partnership's capital as of December 31, 2002, 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 under the column
entitled "Pro Forma As Adjusted" represent the adjusted effects on the
Partnership's pro forma 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,
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L.P. and Lubrication Services, L.P. (collectively, each of TEPPCO Crude
Pipeline, L.P., TEPPCO Seaway L.P., TEPPCO Crude Oil, L.P. and Lubrication
Services, L.P., the "TCTM Subsidiary Partnerships") and Chaparral Pipeline
Company, L.P., Quanah Pipeline Company, L.P., Xxxx Pipeline Company, L.P.,
Panola Pipeline Company, L.P., Val Verde and Xxxxxx Pipeline Company, L.P.
(collectively, each of Chaparral Pipeline Company, L.P., Quanah Pipeline
Company, L.P., Xxxx Pipeline Company, L.P., Panola Pipeline Company, L.P., Val
Verde and Xxxxxx Pipeline Company, L.P., the "Midstream Subsidiary Partnerships"
and together with the TCTM Subsidiary 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 Revised Uniform Limited
Partnership Act, as amended (the "Delaware LP 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, assets, financial condition or results of operations of
the TEPPCO Entities and their subsidiaries taken as a whole or invalidate this
Agreement (a "Material Adverse Effect"), or (ii) would not subject the limited
partners of such partnership to any material liability or disability. The
Partnership is the sole limited partner of each of the Operating Partnerships,
in each case owning a limited partner interest of 99.999%. These limited partner
interests of the Operating Partnerships 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 LP Act, and are the only outstanding limited
partner interests of each of the Operating Partnerships. TCTM is the sole
limited partner of TEPPCO Crude Oil, L.P. and TEPPCO Crude Pipeline, L.P., in
each case with a limited partner interest of 99.99%. TEPPCO Crude Oil, L.P. is
the sole limited partner of Lubrication Services, L.P.; and TEPPCO Crude
Pipeline, L.P. is the sole limited partner of TEPPCO Seaway, L.P., in each case
with a limited partner interest of 99.99%, respectively. TEPPCO Midstream is the
sole limited partner of each of the Midstream Subsidiary Partnerships, in each
case with a limited partner interest of 99.999%. The limited partner interests
of the Subsidiary Partnerships 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 LP Act, and are the only outstanding limited
partner interests of each of the Subsidiary Partnerships. The Partnership owns
such limited partner interests in the Operating Partnerships; TCTM owns such
limited partner interests in TEPPCO Crude Oil, L.P. and TEPPCO Crude Pipeline,
L.P.; TEPPCO Crude Oil, L.P. owns such limited partner interests in Lubrication
Services, L.P.; TEPPCO Crude Pipeline, L.P. owns
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such limited partner interests in TEPPCO Seaway, L.P.; and TEPPCO Midstream owns
such 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. Such
general partner interest has been duly authorized and validly issued and is
owned of record free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material. TEPPCO Midstream also owns a 99.999% general partner
interest in Jonah. Such general partner interest has been duly authorized and
validly issued and is owned of record free and clear of all liens, encumbrances,
security interests, equities, charges or claims, except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or except as described in the
Prospectus. TEPPCO Midstream is the sole member of each of TEPPCO NGL and TEPPCO
Colorado, L.L.C. ("TEPPCO Colorado"), 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 NGL, TEPPCO Colorado and TEPPCO Crude GP, LLC have been delivered to
counsel 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 or (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%. Such
general partner interest has been duly authorized by the Partnership Agreement,
has been validly issued in accordance with the Partnership Agreement, and is
owned of record by the General Partner, free and clear of all liens,
encumbrances, security interests, equities, charges or claims, except for such
liens, encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or except as described in the
Prospectus. Complete
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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 Partnerships, 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 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 securityholders to any material liability or
disability, or (iii) would not subject the Partnership, as the sole limited
partner of each of the Operating Partnerships to any liability by reason of such
failure. All of the capital stock of TEPPCO GP is owned of record by the
Partnership, free and clear of all liens, encumbrances, security interests,
equities, charges, or claims, except as set forth in the Prospectus or as are
not, individually or in the aggregate, material. TEPPCO GP is the sole general
partner of each of the Operating Partnerships 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 (or, in the case of Jonah, by its
agreement of general partnership), have been validly issued in accordance with
the respective Operating 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
certificate of incorporation and the bylaws of TEPPCO GP and all amendments
thereto have been delivered to counsel 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 NGL. TEPPCO NGL 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
limited liability company 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 Midstream Subsidiary
Partnerships, in each case in all material respects, as described in the
Registration Statement and the Prospectus; and TEPPCO NGL 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 or
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(ii) would not subject its members to any material liability or disability.
TEPPCO NGL is the sole general partner of each of the Midstream Subsidiary
Partnerships, in each case with a general partner interest of 0.001%. 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
NGL, 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 NGL 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.
(h) 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 limited liability company 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 TCTM
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 or (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, 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.
(i) Formation and Good Standing of TEPPCO Colorado. TEPPCO
Colorado 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 limited liability company 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 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
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leasing of property or the conduct of business, except where the failure so to
qualify or to register (i) would not result in a Material Adverse Effect or (ii)
would not subject its members to any material liability or disability.
(j) Formation and Good Standing of Jonah. Jonah 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 partnership 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. 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 or (ii) would not subject the
partners of such partnership to any material liability or disability.
(k) Partnership Interests. As of the date of this Agreement,
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 53,812,697 Common Units, including 2,500,000
Common Units held by an affiliate of Duke Energy Corporation, and 3,916,547
units representing Class B limited partner interests ("Class B Units") held by
Duke Energy Transport and Trading Company, L.L.C., a Colorado limited liability
company ("DETTCO"). 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
non-assessability may be affected by Section 17-607 of the Delaware LP 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.
(l) 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., a Delaware limited partnership
("DEFS"), 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.
(m) 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 incorporation or formation, or any other
organizational document, 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
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which any of them or any of their properties is bound, and the execution,
delivery and performance of this Agreement and that certain Class B Unit
Purchase Agreement of even date herewith by and between the Partnership and
DETTCO (the "Class B Purchase 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 incorporation or formation, or
any other organizational document, 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.
(n) Authorization of Underwriting Agreement and the Class B
Purchase Agreement. Each of this Agreement and the Class B Purchase 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, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity.
(o) 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.
(p) 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 non-assessability may
be affected by Section 17-607 of the Delaware LP Act and will not be subject to
any preemptive or similar right or voting or transfer restriction.
(q) Absence of Further Requirements. No approval,
authorization, consent or order of or filing with any national, state or local
governmental or regulatory commission, board, 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").
-10-
(r) 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.
(s) 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, or incorporated by reference into, the
Registration Statement and Prospectus, are independent public accountants as
required by the Securities Act and Exchange Act. PricewaterhouseCoopers, LLP
("PWC") whose reports on the combined financial statements of the Burlington
Resources Gathering Inc., Val Verde Gathering and Processing System are filed
with the Commission as part of the Partnership's Current Report on Form 8-K
filed with the Commission on July 2, 2002, as amended by Form 8-K/A filed with
the Commission on August 12, 2002 and Form 8-K/A filed with the Commission on
October 8, 2002 incorporated by reference into the Registration Statement and
Prospectus, are independent public accountants as required by the Securities Act
and Exchange Act. The statements included in, or incorporated by reference by,
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.
(t) 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.
(u) 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.
(v) Financial Statements. The financial statements included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the consolidated
financial position of the Partnership 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.
(w) 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, (v) any
dividend or distribution of any kind declared, paid or made by the Partnership,
or (vi) any event that has invalidated or could invalidate the Agreement. None
of the TEPPCO Entities nor any of their subsidiaries has any material contingent
obligation which is not disclosed in the Registration Statement.
(x) Lock-Up Agreements. The Partnership has obtained for the
benefit of the Underwriters the agreement, in the form set forth as Exhibit A-1
hereto, of each of the General Partner's directors and officers as set forth on
Schedule C, and the agreement, in the form set forth as Exhibit A-2 hereto, of
Duke Energy Corporation, on behalf of itself and its subsidiaries
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that own Common Units (collectively, the agreements set forth in Exhibits A-1
and A-2, the "Lock-Up Agreements"); the Partnership will not release or purport
to release any person from any Lock-Up Agreement without the prior written
consent of Xxxxxxx Xxxxx Xxxxxx Inc.
(y) 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.
(z) 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; 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.
(aa) 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.
(bb) 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.
(cc) 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.
(dd) 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.
-13-
(ee) 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.
(ff) 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.
(gg) 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.
(hh) 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.
(ii) 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.
(jj) Absence of Labor Dispute. No labor dispute with the
employees of any of the TEPPCO Entities or any of their subsidiaries exists or,
to the knowledge of any of the TEPPCO Entities, is imminent or threatened, and
none of the TEPPCO Entities has any actual knowledge of an existing, imminent or
threatened labor disturbance by the employees of any of its, or any of its
affiliates', principal suppliers, manufacturers, customers or contractors,
which, in either case, could reasonably be expected to result in a Material
Adverse Effect. Each of the TEPPCO Entities and their subsidiaries is in
compliance with all federal, state and local employment labor laws, including,
but not limited to, laws relating to non-discrimination in
-14-
hiring, promotion and pay of employees, except for any noncompliance that could
not reasonably be expected to result in a Material Adverse Effect.
(kk) 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.
(ll) 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.
(mm) 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 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
-15-
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.
(nn) 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 and Subsidiary Partnership Agreements 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 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.
(oo) 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.
(pp) Significant Subsidiaries. The subsidiaries listed on
Schedule B attached hereto are the only significant subsidiaries of the
Partnership as defined by Rule 1-02 of Regulation S-X.
(qq) Registration Rights. No holder of securities of the
Partnership has rights to the registration of any securities of the Partnership
because of the filing of the Registration Statement that have not been waived.
(rr) Officers' Certificates. Any certificate signed on behalf
of the Partnership or the General Partner by any President or Vice President of
the General Partner and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by each of the TEPPCO
Entities to each Underwriter as to the matters covered thereby.
In addition, any certificate signed by any officer of the TEPPCO
Entities and delivered to the Underwriters 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 the Underwriters may designate and
to maintain such qualifications in effect as long as required
-16-
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 the
Underwriters 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 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 the Underwriters 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 the Underwriters 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 the
Underwriters 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 the Underwriters with a draft of
such proposed amendment in advance of such filing and to file no such amendment
or supplement to which the Underwriters 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 the Underwriters 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 the Underwriters
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
-17-
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 the Underwriters 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 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 the Underwriters 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 the Underwriters, 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 the Underwriters, 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 the Underwriters 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
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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 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, (viii) the performance of the Partnership's other obligations
hereunder and (ix) the costs and expenses of the TEPPCO Entities relating to
investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Units, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Partnership, travel and lodging
expenses of the representatives and officers of the TEPPCO Entities and any such
consultants, and the cost of any aircraft chartered in connection with the road
show.
(n) to furnish to the Underwriters, 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 (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise)), 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 or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act, or publicly announce an intention
to effect any such transaction for a period of ninety (90) days after the date
hereof (the "Lock-Up Period"), without the prior written consent of Xxxxxxx
Xxxxx Xxxxxx Inc., 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
-19-
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.
(r) to timely file any financial statements required by Rule
3-05(b)(2) of Regulation S-X.
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
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, to the accuracy of the
statements of the Partnership made in any certificates pursuant to the
provisions hereof, to the performance by the Partnership of its obligations
hereunder and to the following additional conditions precedent:
(a) The Partnership shall furnish to the Underwriters 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 L.L.P., counsel for the Underwriters.
(b) The Underwriters shall have received from each of KPMG and
PWC a "comfort letter" and "bring-down comfort letter" dated the date of this
Agreement and the time of purchase or the additional time of purchase, as the
case may be, and addressed to the Underwriters (with reproduced copies for each
of the other Underwriters) in the forms heretofore approved by Xxxxxxx Xxxxx
Barney Inc.
(c) The Underwriters 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 L.L.P.,
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counsel for the Underwriters, with respect to the issuance and sale of the
Units, the Registration Statement, the Prospectus and other related matters as
the Underwriters may reasonably require.
(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 the Underwriters 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 operations or prospects of the
TEPPCO Entities and their subsidiaries taken as a whole shall occur or become
known, (ii) no event shall occur or become known that could invalidate the
Agreement, and (iii) 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 the Underwriters 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) Xxxxxxx Xxxxx Barney Inc. shall have received signed
Lock-Up Agreements referred to in Section 3(x).
(j) The Partnership shall have furnished to the Underwriters
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 the
Underwriters may reasonably request.
-21-
(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.
(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
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 Xxxxxxx Xxxxx Xxxxxx Inc.
or any group of Underwriters (which may include Xxxxxxx Xxxxx Barney Inc.) 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
-22-
the Registration Statement and the Prospectus, or (y) since the time of
execution of this Agreement 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 or, (z) if,
between the time of execution of this Agreement and 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, or minimum prices with regard to the
Common Units of the Partnership shall have been established on the New York
Stock Exchange; (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.
If Xxxxxxx Xxxxx Xxxxxx Inc. 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 Xxxxxxx Xxxxx Barney Inc. 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.
-23-
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
Xxxxxxx Xxxxx Xxxxxx Inc. with the approval of the Partnership or selected by
the Partnership with the approval of Xxxxxxx Xxxxx Barney Inc.).
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 Xxxxxxx Xxxxx
Xxxxxx Inc. 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 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.
(a) 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
-24-
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
Xxxxxxx Xxxxx Barney Inc. 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, Prospectus or other such
documents or necessary to make such information not misleading; provided
however, that with respect to any untrue statement or omission of material fact
made in any preliminary prospectus, the indemnity agreement contained in this
Section 9(a) shall not inure to the benefit of any Underwriter from whom the
person asserting any such loss, claim, damage or liability purchased the
securities concerned, to the extent that any such loss, claim, damage or
liability of such Underwriter occurs under the circumstance where it shall have
been determined by a court of competent jurisdiction by final and nonappealable
judgment that (w) the Partnership had previously furnished copies of the
Prospectus to the Underwriters, (x) delivery of the Prospectus was required by
the Securities Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the preliminary prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus. 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, 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
-25-
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 sixty (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 thirty (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 Xxxxxxx Xxxxx Xxxxxx Inc. 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 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
-26-
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 sixty (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 thirty (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.
(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
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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 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 in care of Xxxxxxx Xxxxx Barney Inc., 388 Greenwich, 00xx Xxxxx, Xxx Xxxx,
X.X. 00000, Xxxxxxxxx: General Counsel (fax: (000) 000-0000) 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.
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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 Xxxxxxx Xxxxx
Xxxxxx Inc. or any indemnified party. Each of Xxxxxxx Xxxxx Barney Inc. 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 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 Partnership's and any of
the Underwriters' respective businesses and/or assets.
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]
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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 and
Chief Financial Officer
Accepted and agreed to as of the date first
above written, on behalf of itself and the
Underwriters named in Schedule A
XXXXXXX XXXXX XXXXXX INC.
By: /s/ Xxxx Xxxxx
------------------------------------------
Name: Xxxx Xxxxx
----------------------------------------
Title: Vice President
---------------------------------------
Underwriting Agreement Signature Page
SCHEDULE A
UNDERWRITERS NUMBER OF FIRM UNITS
------------ --------------------
Xxxxxxx Xxxxx Barney Inc.......................................... 993,250
X.X. Xxxxxxx & Sons, Inc.......................................... 633,625
Xxxxxx Brothers Inc............................................... 633,625
UBS Warburg LLC................................................... 633,625
Xxxxxxx, Xxxxx & Co............................................... 530,875
============
Total ............................................ 3,425,000
Schedule A
SCHEDULE B
SIGNIFICANT SUBSIDIARIES
TE Products Pipeline Company, Limited Partnership
TEPPCO Midstream Companies, L.P.
TCTM, L.P.
Jonah Gas Gathering Company
Val Verde Gas Gathering Company, L.P.
TEPPCO Crude Pipeline, L. P.
TEPPCO Seaway, L.P.
TEPPCO Crude Oil, L.P.
Chaparral Pipeline Company, L.P.
Schedule B
SCHEDULE C
PERSONS SUBJECT TO LOCK UP AGREEMENTS
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxx
J. Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxx
Xxxx X. XxxXxxxxx
Xxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxx X. Xxxx
Xxxxx X. Xxxx
Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxx
Xxxxxxx X. Xxxxxxxxx
X. X. Xxxxxx
Xxxx Energy Corporation
Schedule C
