EXHIBIT 1.1
Execution Copy
TEPPCO PARTNERS, L.P.
3,000,000
Common Units
representing Limited Partner Interests
UNDERWRITING AGREEMENT
July 11, 2002
UNDERWRITING AGREEMENT
July 11, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
UBS Warburg LLC
Xxxxxxx, Sachs & Co.
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Xxxxx & Associates, Inc.
as Representatives of the Underwriters
000 Xxxxxxxxx Xxxxxx
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 (the "Underwriters"), for whom Xxxxxxx Xxxxx Barney
Inc., UBS Warburg LLC, Xxxxxxx Xxxxx & Co., X.X. Xxxxxxx & Sons, Inc. and
Xxxxxxx Xxxxx & Associates, Inc. are acting as representatives (the
"Representatives"), in an aggregate amount of 3,000,000 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 450,000 Common Units (the "Additional
Units"). The Firm Units and the Additional Units are hereinafter collectively
sometimes referred to as the "Units". The Units are described in the Prospectus
which is referred to below.
Each of (i) the Partnership, (ii) Texas Eastern Products Pipeline
Company, LLC, a Delaware limited liability company (both in its capacity as
general partner of the Partnership and in its individual capacity, the "General
Partner"), (iii) TEPPCO GP, Inc., a Delaware corporation (both in its individual
capacity and as general partner of 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"), 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. 333-86650)
including a prospectus, relating to the Units, which incorporates by reference
documents which the Partnership and TE Products have filed or will file in
accordance with the provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively the "Exchange
Act"). Except where the context otherwise requires, the registration statement,
as amended when it became effective, including all financial statements,
exhibits and all documents filed as a part thereof or incorporated by reference
therein, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Securities Act and deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430(A) under the Securities Act and also including any registration statement
filed or to be filed pursuant to Rule 462(b) under the Securities Act, is herein
called the "Registration Statement". The prospectus, including the base
prospectus and prospectus supplement (the "Prospectus Supplement"), and all
documents incorporated therein by reference, in the form filed by the
Partnership with the Commission pursuant to Rule 424(b) under the Securities Act
on or before the second business day after the date hereof (or such earlier time
as may be required under the Securities Act) or, if no such filing is required,
the form of final prospectus included in the Registration Statement at the time
it became effective, is herein called the "Prospectus". Any reference herein to
the terms "amend," "amendment" or "supplement' with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include any such
document filed or to be filed under the Exchange Act after the date of the
Prospectus, and deemed to be incorporated therein by reference.
The Partnership and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Partnership agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Partnership
the aggregate number of Firm Units set forth opposite the name of such
Underwriter in Schedule A attached hereto, in each case at a purchase price of
$28.87 per Unit. The Partnership is advised by you that the Underwriters intend
initially to offer the Firm Units upon the terms set forth in the Prospectus and
Prospectus Supplement. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
Over-Allotment. In addition, the Partnership hereby grants to the
several Underwriters the option to purchase, and upon the basis of the
warranties and representations and subject to the terms and conditions herein
set forth, the Underwriters shall have the right to purchase, severally and not
jointly, from the Partnership, ratably in accordance with the number of Firm
Units to be purchased by each of them, all or a portion of the Additional Units
as may be necessary to cover over-allotments made in connection with the
offering of the Firm Units, at the same purchase price per unit to be paid by
the Underwriters to the Partnership for the Firm Units. This option may be
exercised by you on behalf of the several Underwriters in whole or in part at
any time (but not more than once) on or before the thirtieth (30th) day
following the date hereof, by written notice to the Partnership. Such notice
shall set forth the aggregate number of Additional Units as to which the option
is being exercised, and the date and time when the Additional Units are to be
delivered (such date and time being herein referred to as the "additional time
of purchase"); provided, however, that the additional time of purchase shall not
be earlier than the time of purchase (as defined below) nor earlier than the
second business day1 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
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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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proportion to the aggregate number of Additional Units being purchased as the
number of Firm Units set forth opposite the name of such Underwriter on Schedule
A hereto bears to the total number of Firm Units (subject, in each case, to such
adjustment as you may determine to eliminate fractional units).
2. Payment and Delivery. Payment of the purchase price for the Firm
Units shall be made to the Partnership by Federal Funds wire transfer, against
delivery of the certificates for the Firm Units to you through the facilities of
the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 a.m., New York
City time, on July 16, 2002 (unless another time shall be agreed to by you and
the Partnership or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called "the time of purchase". Electronic transfer of the
Firm Units shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Units shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the Firm Units. Electronic transfer of the Additional Units shall be
made to you at the time of purchase in such names and in such denominations as
you shall specify.
Deliveries of the documents described in Section 6 below with respect
to the purchase of the Units shall be made at the offices of Xxxxxxx & Xxxxx
Mayor, Day, Xxxxxxxx & Xxxxxx L.L.P. at [8:00] a.m. Houston time, on the date of
the closing of the purchase of the Firm Units or the Additional Units, as the
case may be.
3. Representations and Warranties of the Partnership. The Partnership
represents and warrants to each of the Underwriters that:
(a) Compliance with Registration Requirements. On the date the
Registration Statement was initially declared effective by the Commission (the
"Effective Date"), at all times subsequent to and including the time of purchase
or the additional time of purchase, as the case may be, and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Partnership or the Operating Partnerships shall have filed with the Commission
any amendment or supplement thereto), including the financial statements
included or incorporated by reference in the Prospectus or the Registration
Statement, did or, when so filed, will comply in all material respects with all
applicable provisions of the Securities Act, the Rules and Regulations, the
Exchange Act and the rules and regulations thereunder (the "Exchange Act Rules
and Regulations") and did or, when filed, will contain all statements required
to be stated therein in accordance with the Securities Act, the Rules and
Regulations, the Exchange Act and the Exchange Act Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement (or any registration statement filed pursuant to Rule 462(b) under the
Securities Act that constitutes part of the Registration Statement) becomes
effective, no part of the Registration Statement or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. At the Effective Date, the date
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the Prospectus or any amendment or supplement to the Prospectus is or was filed
with the Commission and at the time of purchase or the additional time of
purchase, as the case may be, the Prospectus did not or will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The foregoing representations and warranties in
this Section 3(a) do not apply to any statements or omissions made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Partnership by the Underwriters specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. For
all purposes of this Agreement, (i) the amounts of the selling concession and
reallowance set forth in the Prospectus, (ii) the paragraphs regarding
stabilization and (iii) the number of Units which each Underwriter commits to
purchase on the time of purchase or the additional time of purchase, as the case
may be, each as set forth in the section captioned "Underwriting" in the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Partnership by the Underwriters specifically for inclusion in
the Registration Statement or the Prospectus. The Partnership has not
distributed any written offering material in connection with the offering or
sale of the Units other than the Registration Statement and the Prospectus. No
order preventing or suspending the use of the Prospectus has been issued by the
Commission.
(b) Incorporated Documents. The documents that are incorporated by
reference in the Registration Statement and the Prospectus or from which
information is so incorporated by reference, when they became effective or were
filed with the Commission, as the case may be, complied and will comply in all
material respects with the requirements of the Securities Act or the Exchange
Act, as applicable, the Rules and Regulations and the Exchange Act Rules and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents so filed
and incorporated by reference subsequent to the time of purchase or the
additional time of purchase, as the case may be, shall, when they are filed with
the Commission, conform in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, the Rules and Regulations
and the Exchange Act Rules and Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statement therein not misleading.
(c) Capitalization. The Partnership's capital as of March 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
March 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 in "Pro Forma As Adjusted" under the heading "Capitalization,"
represent the pro forma effects on the Partnership's capital of the offer and
sale of the Units and the application of the estimated net proceeds from such
offer and sale in the manner set forth in the Prospectus Supplement under the
heading "Use of Proceeds", the related capital contribution by the General
Partner and the other transactions described therein.
(d) Formation and Good Standing of the Partnership, the Operating
Partnerships and the Subsidiary Partnerships. Each of the Partnership, the
Operating
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Partnerships and TEPPCO Crude Pipeline, L.P., TEPPCO Seaway L.P.,
TEPPCO Crude Oil, 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 Gas Gathering Company, L.P. 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 Gas Gathering Company, L.P. 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 Act"). Each of the Partnership, the Operating
Partnerships and the Subsidiary Partnerships has, and at the time of purchase
or, the additional time of purchase, as the case may be, will have, full power
and authority to conduct all the activities conducted by it, to own, lease and
operate its properties and to conduct its business in all material respects as
described in the Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement. Each of the Partnership, the
Operating Partnerships and the Subsidiary Partnerships is, and at the time of
purchase or, the additional time of purchase, as the case may be, will be, duly
qualified or registered and in good standing as a foreign limited partnership to
transact business in each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to register (i) would not result in a material adverse effect on the business,
properties, financial condition or results of operations of each entity taken as
a whole (a "Material Adverse Effect"), and (ii) would not subject the limited
partners of such partnership to any material liability or disability. The
Partnership is the sole limited partner of each of the Operating Partnerships,
in each case owning a limited partner interest of 99.999%. The limited partner
interests of the Subsidiary 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 Act, and are the only outstanding limited partner
interests of all 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%. These limited partner interests have been duly
authorized by the respective agreements of limited partnership of the Subsidiary
Partnerships (the "Subsidiary Partnership Agreements"), have been validly issued
in accordance with the respective Subsidiary Partnership Agreements, are fully
paid and non-assessable, except to the extent such non-assessability may be
affected by Section 17-607 of the Delaware Act, and are the only outstanding
limited partner interests of all of the Subsidiary Partnerships. The Partnership
owns the limited partner interests in the Operating Partnerships, TCTM owns the
limited partner interests in TEPPCO Crude Oil, L.P. and TEPPCO Crude Pipeline,
L.P., TEPPCO Crude Oil, L.P. owns the limited partner
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interests in Lubrication Services, L.P., TEPPCO Crude Pipeline, L.P. owns the
limited partner interests in TEPPCO Seaway, L.P. and TEPPCO Midstream owns the
limited partner interests in the Midstream Subsidiary Partnerships, either
directly or indirectly, and free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except for such liens, encumbrances,
security interests, equities, charges or claims as are not, individually or in
the aggregate, material or except as described in the Prospectus. TEPPCO Seaway,
L.P. owns a 50% general partner interest in Seaway Crude Pipeline Company. This
general partner interest has been duly authorized and validly issued and is
owned of record free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material. TEPPCO Midstream also owns a 99.999% general partner
interest in Jonah Gas Gathering Company, a Wyoming general partnership
("Jonah"). This general partner interest has been duly authorized and validly
issued and is owned of record free and clear of all liens, encumbrances,
security interests, equities, charges or claims, except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or except as described in the
Prospectus. TEPPCO Midstream is the sole member of each of TEPPCO NGL Pipelines,
L.L.C. and TEPPCO Colorado, L.L.C., and TCTM is the sole member of TEPPCO Crude
GP, LLC. These member interests have been duly authorized and validly issued and
are owned of record free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except for such liens, encumbrances,
security interests, equities, charges or claims as are not, individually or in
the aggregate, material. Complete and correct copies, as of the date hereof, of
(i) the agreement of limited partnership of the Partnership (the "Partnership
Agreement"), (ii) the Operating Partnership Agreements, (iii) the Subsidiary
Partnership Agreements, (iv) the agreement of limited partnership of TEPPCO
Seaway, L.P. and (v) the limited liability company agreements of each of TEPPCO
NGL Pipelines, L.L.C., TEPPCO Colorado, LLC and TEPPCO Crude GP, LLC have been
delivered to the Underwriters, and no changes therein will be made subsequent to
the date hereof and prior to the time of purchase or the additional time of
purchase, as the case may be.
(e) Formation and Good Standing of the General Partner. The General
Partner has been duly organized and is, and at the time of purchase or the
additional time of purchase, as the case may be, will be, validly existing as a
limited liability company in good standing under the Delaware Limited Liability
Company Act ("Delaware LLC Act") and has full power and authority to conduct all
the activities conducted by it, to own, lease and operate its properties and to
conduct its business and to act as general partner of the Partnership, in each
case in all material respects, as described in the Registration Statement and
the Prospectus and to enter into and perform its obligations under this
Agreement; and the General Partner is, and at the time of purchase or the
additional time of purchase, as the case may be, will be, duly qualified or
registered and in good standing as a foreign limited liability company to
transact business in each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to register (i) would not result in a Material Adverse Effect, (ii) would not
subject its members to any material liability or disability and (iii) would not
subject any limited partner of the Partnership to any liability by reason of
such failure. The General Partner is the sole general partner of the Partnership
with a general partner interest in the Partnership of 2%. This general partner
interest has been duly authorized by the Partnership Agreement, has been validly
issued in accordance with the Partnership Agreement, and is owned of record by
the
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General Partner, free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or except as described in the Prospectus. Complete and
correct copies of the certificate of formation and the limited liability company
agreement of the General Partner and all amendments thereto have been delivered
to the Underwriters, and no changes therein will be made subsequent to the date
hereof and prior to the time of purchase or the additional time of purchase, as
the case may be.
(f) Formation and Good Standing of TEPPCO GP. TEPPCO GP has been duly
incorporated and is, and at the time of purchase or the additional time of
purchase, as the case may be, will be, validly existing as a corporation in good
standing under the Delaware General Corporation Law ("DGCL") and has full
corporate power and authority to conduct all the activities conducted by it, to
own, lease and operate its properties and to conduct its business and to act as
general partner of the Operating 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 secruityholders to any material liability or disability
and (iii) would not subject the Partnership, as the sole limited partner of each
of the Operating Partnerships to any liability by reason of such failure. All of
the capital stock of TEPPCO GP is owned of record by the Partnership, free and
clear of all liens, encumbrances, security interests, equities, charges, or
claims, except as set forth in the Prospectus or as are not, individually or in
the aggregate, not material. TEPPCO GP is the sole general partner of each of
the Operating Partnerships and, with respect to Jonah, the sole managing general
partner, in each case with a general partner interest of 0.001%, respectively.
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 articles of incorporation and the
bylaws of TEPPCO GP and all amendments thereto have been delivered to the
Underwriters, and no changes therein will be made subsequent to the date hereof
and prior to the time of purchase or the additional time of purchase, as the
case may be.
(g) Formation and Good Standing of TEPPCO NGL Pipelines, L.L.C. TEPPCO
NGL Pipelines, L.L.C. has been duly organized and is, and at the time of
purchase or the additional time of purchase, as the case may be, will be,
validly existing as a limited liability company in good standing under the
Delaware LLC Act and has full power and authority to conduct all the activities
conducted by it, to own, lease and operate its properties and to conduct its
business 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;
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and TEPPCO NGL Pipelines, L.L.C. is, and at the time of purchase or the
additional time of purchase, as the case may be, will be, duly qualified or
registered and in good standing as a foreign limited liability company to
transact business in each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to register (i) would not result in a Material Adverse Effect and (ii) would not
subject its members to any material liability or disability. TEPPCO NGL
Pipelines, L.L.C. 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 Pipelines, L.L.C., 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 Pipelines, L.L.C. 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 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 and (ii) would not
subject its members to any material liability or disability. TEPPCO Crude GP,
LLC is the sole general partner of the TCTM Subsidiary Partnerships, in each
case with a general partner interest of 0.01%. These general partner interests
have been duly authorized by the respective Subsidiary Partnership Agreements,
have been validly issued in accordance with the respective Subsidiary
Partnership Agreements, and are owned of record by TEPPCO Crude GP, LLC, free
and clear of all liens, encumbrances, security interests, equities, charges or
claims, except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or
except as described in the Prospectus. Complete and correct copies of the
certificate of formation and the limited liability company agreement of TEPPCO
Crude GP, LLC and all amendments thereto have been delivered to the
Underwriters, 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, L.L.C. TEPPCO
Colorado, L.L.C. has been duly organized and is, and at the time of purchase or
the additional time of purchase, as the case may be, will be, validly existing
as a limited liability company in
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good standing under the Delaware LLC Act and has full power and authority to
conduct all the activities conducted by it, to own, lease and operate its
properties and to conduct its business, in each case in all material respects;
and TEPPCO Colorado, L.L.C. is, and at the time of purchase or the additional
time of purchase, as the case may be, will be, duly qualified or registered and
in good standing as a foreign limited liability company to transact business in
each other jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to register (i) would not
result in a Material Adverse Effect and (ii) would not subject its members to
any material liability or disability.
(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 power and authority to conduct all the activities
conducted by it, to own, lease and operate its properties and to conduct its
business in all material respects as described in the Registration Statement and
the Prospectus and to enter into and perform its obligations under this
Agreement. Jonah is not, and at the time of purchase or the additional time of
purchase, as the case may be, will not be, required to register or qualify as a
foreign general partnership to transact business in any other jurisdiction in
which such qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to register (i) would not result in a Material Adverse
Effect and (ii) would not subject the partners of such partnership to any
material liability or disability.
(k) Partnership Interests. The limited partners of the Partnership hold
limited partner interests in the Partnership aggregating a 98% interest in the
Partnership, such limited partner interests being represented by 42,461,597
Common Units and 3,916,547 units representing Class B limited partner interests
("Class B Units") (the Common Units and the Class B Units are collectively
referred to as the "Limited Partner Units"); the Limited Partner Units are the
only limited partner interests of the Partnership that are issued and
outstanding; all of the issued and outstanding Limited Partner Units of the
Partnership have been (1) duly authorized and validly issued under the
Partnership Agreement and are fully paid and non-assessable, except as such
nonassessability may be affected by Section 17-607 of the Delaware 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 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
-9-
agreement or articles or certificate of formation, as the case may be, or in the
performance or observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which any of the TEPPCO Entities or any of their
subsidiaries is a party or by which any of them or any of their properties is
bound, and the execution, delivery and performance of this Agreement and the
issuance of the Units and consummation of the transactions contemplated hereby
and thereby will not conflict with, or result in any breach of or constitute a
default under (or constitute any event which with notice, lapse of time, or both
would result in any breach of, or constitute a default under), any provisions of
the respective partnership agreement or certificate of limited partnership or
limited liability company agreement or articles or certificate of formation, as
the case may be, of any of the TEPPCO Entities or any of their subsidiaries or
under any provision of any license, indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which any of the TEPPCO Entities or
any of their subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
any of the TEPPCO Entities or any of their subsidiaries.
(n) Authorization of Underwriting Agreement. This Agreement has been
duly authorized, executed and delivered by the Partnership and is a legal, valid
and binding agreement of the Partnership enforceable in accordance with its
terms.
(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 nonassessability may be affected
by Section 17-607 of the Delaware Act and will not be subject to any preemptive
or similar right or voting or transfer restriction.
(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").
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(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. The statements included in the
Registration Statement with respect to the accountants pursuant to Rule 509 of
Regulation S-K of the Rules and Regulations are true and correct in all material
respects. PricewatershouseCoopers, 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 Form 8-K and 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 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 Units, present fairly the consolidated
financial position of the Partnership and its subsidiaries at the dates
indicated and the consolidated results of operations, cash flows and changes in
financial position of the Partnership and its subsidiaries for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the information
required to be stated therein. The pro forma financial statements and other pro
forma financial information included or incorporated by reference in the
Registration Statement or the Prospectus (i) present fairly in all material
respects the information shown therein, (ii) have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma financial
statements and (iii) have been properly computed on the bases described therein.
The assumptions used in the preparation of the pro forma financial statements
and other pro forma financial information included or incorporated by reference
in the Registration Statement or Prospectus are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or circumstances
referred to therein. No other financial statements or schedules of the
Partnership are required by the Securities Act, the Rules and Regulations, the
Exchange Act or the Exchange Act Rules and Regulations to be included in the
Registration Statement or the Prospectus.
(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 or (v) any
dividend or distribution of any kind declared, paid or made by the Partnership.
None of the TEPPCO Entities nor any of their subsidiaries has any material
contingent obligation which is not disclosed in the Registration Statement.
(x) Lock-Up Agreements. The Partnership has obtained for the benefit of
the Underwriters the agreement, in the form set forth as Exhibit A hereto (a
"Lock-Up Agreement"), of each of the General Partner's directors and officers
and Duke Energy Corporation, on its behalf and on behalf of its affiliates that
may own Common Units, as listed on Schedule C; the
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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 ("PUHCA"); neither the TEPPCO
Entities nor the issue and sale of the Units by the Partnership is subject to
regulation under PUHCA; and none of the TEPPCO Entities is a "public utility" as
such term is defined in the Federal Power Act, as amended.
(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
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Partnership after due inquiry, any other party to any such contract or
agreement, which termination or non-renewal would have a Material Adverse
Effect.
(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
-14-
its, or any of its affiliates', principal suppliers, manufacturers, customers or
contractors, which, in either case, could reasonably be expected to result in a
Material Adverse Effect. Each of the TEPPCO Entities and their subsidiaries is
in compliance with all federal, state and local employment labor laws,
including, but not limited to, laws relating to non-discrimination in hiring,
promotion and pay of employees, except for any noncompliance that could not
reasonably be expected to result in a Material Adverse Effect.
(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.
-15-
(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 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 is a valid and legally binding agreement of the parties
thereto, enforceable against the General Partner and the Partnership in
accordance with its terms, except as the enforceability of such agreements may
be affected by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and general equitable
principles.
(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.
In addition, any certificate signed by any officer of the TEPPCO Entities and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Units shall be deemed to be a representation and
warranty by the TEPPCO Entities, as to matters covered thereby, to each
Underwriter.
4. Certain Covenants of the Partnership. The Partnership hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Units for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect as long as required for the distribution of the Units,
provided that none of the TEPPCO Entities shall be required to qualify as a
foreign corporation or to consent to the service of process under the laws of
any such state (except service of process with respect to the offering and sale
of the Units); and to promptly
-16-
advise you of the receipt by the TEPPCO Entities of any notification with
respect to the suspension of the qualification of the Units for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(b) to make available to the Underwriters in New York City, without
charge, as many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Partnership shall have made any amendments or supplements
thereto after the Effective Date of the Registration Statement) as the
Underwriters may reasonably request for the purposes contemplated by the
Securities Act; in case any Underwriter is required to deliver a prospectus
within the nine-month period referred to in Section 10(a)(3) of the Securities
Act in connection with the sale of the Units, the Partnership will prepare
promptly upon request such amendment or amendments to the Registration Statement
and such prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing (i) when any post-effective amendment to the Registration
Statement becomes effective and (ii) if Rule 430A under the Securities Act is
used, when the Prospectus is filed with the Commission pursuant to Rule 424(b)
under the Securities Act (which the Partnership agrees to file in a timely
manner under such Rules).
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or Prospectus
including by filing any documents that would be incorporated therein by
reference, to furnish you with a draft of such proposed amendment in advance of
such filing and to file no such amendment or supplement to which you shall
object in writing.
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Partnership or TE Products
with the Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Units, and to promptly
notify you of such filing.
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Securities Act.
(g) to furnish or otherwise make available to you and, upon request, to
each of the other Underwriters for a period of three years from the date of this
Agreement the following documents, provided such documents are not otherwise
publicly available via XXXXX: (i) copies of any reports or other communications
which the Partnership shall send to the holders of any class of its limited
partnership interests or debt securities or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
form as may be designated
-17-
by the Commission, (iii) copies of documents or reports filed with any national
securities exchange on which any class of securities of the Partnership is
listed, and (iv) such other information as you may reasonably request regarding
the TEPPCO Entities or their subsidiaries, in each case as soon as such
communications, documents or information become available.
(h) to advise the Underwriters promptly of the happening of any event
known to the Partnership or its subsidiaries within the time during which a
Prospectus relating to the Units is required to be delivered under the
Securities Act which, in the judgment of the Partnership, would require the
making of any change in the Prospectus then being used, or in the information
incorporated therein by reference, so that the Prospectus would not include an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
are made, not misleading, and, during such time, to prepare and furnish, at the
Partnership's expense, to the Underwriters promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such change
and to furnish to you a copy of such proposed amendment or supplement before
filing any such amendment or supplement with the Commission.
(i) to make generally available to holders of its securities as soon as
may be practicable but in no event later than the last day of the fifteenth full
calendar month following the calendar quarter in which the Effective Date falls,
and to deliver to you, an earnings statement of the Partnership (which will
satisfy the provisions of Section 11(a) of the Securities Act, including Rule
158 of the Rules and Regulations) for a period of twelve months beginning after
the Effective Date of the Registration Statement (as defined in Rule 158(c) of
the Securities Act) as soon as is reasonably practicable after the termination
of such twelve-month period.
(j) to furnish to you, upon request and without charge, two copies of
the Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all financial statements, schedules and exhibits
thereto and documents incorporated by reference therein), which are certified by
an officer of the General Partner to be true and correct, and sufficient
conformed copies of the foregoing (other than exhibits) for distribution to each
of the other Underwriters.
(k) to furnish to you as early as practicable prior to the time of
purchase, but no later than two business days prior thereto, a copy of the
latest available unaudited interim consolidated financial statements, if any, of
the TEPPCO Entities and their subsidiaries which have been read by the
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 6(b)hereof.
(l) to apply the net proceeds from the sale of the Units in the manner
set forth under the caption "Use of Proceeds" in the Prospectus.
(m) to pay all costs, expenses, fees and taxes (other than any transfer
taxes and fees and disbursements of counsel for the Underwriters except as set
forth under Section 5 hereof and (iii), (iv) and (vi) below) in connection with
(i) the preparation and filing of the Registration Statement, the Prospectus,
and any amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including costs of
mailing and shipment), (ii) the registration, issuance and delivery of the
Units, (iii) the
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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 you, before filing with the Commission subsequent to
the Effective Date of the Registration Statement and during the period referred
to in paragraph (e) above, a copy of any document proposed to be filed pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
(o) to comply with all the provisions of any undertakings contained in
the Registration Statement.
(p) not to sell, offer or agree to sell, contract to sell, hypothecate,
pledge, grant any option to sell or otherwise dispose of, directly or indirectly
(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 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 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.
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(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 you at the time of purchase and at
the additional time of purchase, as the case may be (i) opinions of Fulbright
and Xxxxxxxx, L.L.P., counsel for the Partnership, addressed to the Underwriters
and dated the time of purchase, as set forth in Exhibit B and (ii) opinions of
Xxxxx X. Xxxx, general counsel of the Partnership, addressed to the Underwriters
and dated the time of purchase, as set forth in Exhibit C, with reproduced
copies of each for the other Underwriters and each in a form satisfactory to
Xxxxxxx & Xxxxx Mayor, Day & Xxxxxxxx L.L.P., counsel for the Underwriters.
(b) You shall have received from KPMG and PWC a "comfort letter" and
"bring-down comfort letter" dated respectively as of the date of this Agreement
and the time of purchase or the additional time of purchase, as the case may be,
respectively, and addressed to the Underwriters (with reproduced copies for each
of the other Underwriters) in the forms heretofore approved by Xxxxxxx Xxxxx
Xxxxxx Inc.
(c) You shall have received at the at the time of purchase and at the
additional time of purchase, as the case may be, the opinions of Xxxxxxx & Xxxxx
Mayor, Day & Xxxxxxxx L.L.P., 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 Representatives may reasonably require.
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(d) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed prior to the time of purchase or additional time of purchase to
which you object in writing.
(e) Notification that all filings required by Rule 424 of the Rules and
Regulations shall have been made.
(f) Prior to the time of purchase and at the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under the
Securities Act or proceedings initiated under Section 8(d) or 8(e) of the
Securities Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto, or modifications thereof,
if any, shall not contain an untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change or any development involving a material adverse change,
financial or otherwise (other than as specifically identified in the
Registration Statement and Prospectus as of the date hereof), in the business,
properties, financial condition, results of operation or prospects of the TEPPCO
Entities and their subsidiaries taken as a whole shall occur or become known and
(ii) no transaction which is material to any of the TEPPCO Entities or their
subsidiaries shall have been entered into by any of the TEPPCO Entities, except
transactions contemplated in this Agreement or in the ordinary course of
business.
(h) The Partnership will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of two of the General
Partner's executive officers to the effect that the representations and
warranties of the TEPPCO Entities and their subsidiaries set forth in this
Agreement are true and correct as of such date, that the TEPPCO Entities or
their subsidiaries shall perform such of their obligations under this Agreement
as are to be performed at or before the time of purchase, the conditions set
forth in paragraphs (f) and (g) of this Section 6 have been met and such other
matters as the Underwriters may reasonably request.
(i) You shall have received signed Lock-Up Agreements referred to in
Section 3(w).
(j) The Partnership shall have furnished to you such other documents
and certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably request.
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(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 you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Units if, (x) since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, there has been any material adverse change, financial or
otherwise (other than as referred to in the Registration Statement and
Prospectus as of the date hereof), in the operations, business, condition or
prospects of the TEPPCO Entities or their subsidiaries taken as a whole, which
would, in your judgment or in the judgment of such group of Underwriters, make
it impracticable or inadvisable to market the Units on the terms and in the
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manner contemplated in the Registration Statement and the Prospectus, or (y)
there shall have occurred any downgrading, or any notice shall have been given
of (i) any intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement in the rating accorded any notes
of, or notes guaranteed by, the Partnership or any of its subsidiaries by any
"nationally recognized statistical rating organization," as that term is defined
in Rule 436(g)(2) under the Securities Act or, (z) if, at any time prior to the
time of purchase or additional time of purchase, as the case may be, there shall
have occurred: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange, American Stock Exchange or NASDAQ;
(ii) a suspension or material limitation in trading in Common Units of the
Partnership on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market or minimum prices shall have been established on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market;
(iii) a general moratorium on commercial banking activities declared either by
the United States, Texas or New York State authorities, a material disruption in
commercial banking or securities settlement or clearance services in the United
States; (iv) the outbreak or escalation of hostilities or acts of terrorism
involving the United States or the declaration by the United States of a
national emergency or war; or (v) the occurrence of any other calamity or crisis
or any change in financial, political or economic conditions in the United
States or elsewhere, if the effect of any such event specified in clause (iv) or
(v) in your judgment or in the judgment of such group of Underwriters, to make
it impracticable or inadvisable to market the Units on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Partnership and each other Underwriter shall
be notified promptly by letter or telegram.
If the sale to the Underwriters of the Units, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because any of the Partnership
shall be unable to comply with any of the terms of this Agreement, the
Partnership shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(m), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Partnership under
this Agreement (except to the extent provided in Section 9 hereof) or to one
another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7,
if any Underwriter shall default in its obligation to take up and pay for the
Units to be purchased by it hereunder (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Units which all Underwriters so defaulting shall
have agreed but failed to take up and pay for does not exceed 10% of the total
number of Units, the non-defaulting Underwriters shall take up and pay for (in
addition to the aggregate number of Units they are obligated to purchase
pursuant to Section 1 hereof) the number aggregate of Units agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Units shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated, or in the event no such designation is made,
such Units shall be taken up and paid for by all non-defaulting Underwriters pro
rata in proportion to the
-23-
aggregate number of Units set opposite the names of such non-defaulting
Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Partnership agrees with the non-defaulting Underwriters that it
will not sell any Units hereunder unless all of the Units are purchased by the
Underwriters (or by substituted Underwriters selected by you with the approval
of the Partnership or selected by the Partnership with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Partnership for a defaulting Underwriter or Underwriters
in accordance with the foregoing provision, the Partnership or you shall have
the right to postpone the time of purchase for a period not exceeding five
business days in order that any necessary changes in the Registration Statement
and Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Units which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total of Units which all
Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Partnership shall make arrangements within the five
business day period stated above for the purchase of all the Units which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
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
-24-
any documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, or in any application or other document executed
by or on behalf of any of the TEPPCO Entities or their subsidiaries or based on
written information furnished by or on behalf of any of the TEPPCO Entities or
their subsidiaries filed in any jurisdiction in order to qualify the Units under
the securities laws thereof or filed with the Commission, or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in such Registration Statement, Prospectus or other such documents or
necessary to make the statements made therein not misleading, except insofar as
any such loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by or on
behalf of any Underwriter through you to the Partnership expressly for use with
reference to such Underwriter in such Registration Statement or such Prospectus
(which comprises only such information referred to in the second paragraph of
Section 3(a) of this Agreement) or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement, Prospectus or other such
documents or necessary to make such information not misleading. This indemnity
agreement will be in addition to any liability that the Partnership might
otherwise have.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Partnership pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the General Partner in writing
of the institution of such Proceeding and the Partnership shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses,
provided, however, that the omission to so notify the General Partner (or any
omission of notice under Section 9(c)) shall not relieve the Partnership from
any liability which the Partnership may have to any Underwriter or any such
person or otherwise. Such Underwriter or controlling person shall have the right
to employ its or their own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such Underwriter or such controlling
person unless the employment of such counsel shall have been authorized in
writing by the General Partner in connection with the defense of such Proceeding
or the Partnership shall not have, within a reasonable period of time in light
of the circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or parties shall have reasonably concluded
(based on advice of counsel) that there may be defenses available to it or them
which are different from, additional to or in competition with those available
to the Partnership (in which case the Partnership shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Partnership and paid as incurred (it being understood, however, that the
Partnership shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). The Partnership shall not be liable
for any settlement of any such claim or Proceeding effected without its written
consent but if settled with the written consent of the General Partner, the
Partnership agrees to indemnify and hold harmless any Underwriter and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then
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the indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Partnership, each director and officer and any person who controls
the Partnership within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all the
foregoing persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Partnership or any such person may incur under the Securities Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of such Underwriter
through you to the Partnership expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Partnership) or in a
Prospectus (which comprises only such information referred to in the second
paragraph of Section 3(a) of this Agreement), or arises out of or is based upon
any omission or alleged omission to state a material fact in connection with
such information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading. This indemnity
will be in addition to any liability that each Underwriter might otherwise have;
provided, however, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by such Underwriter.
If any Proceeding is brought against the Partnership or any such person
in respect of which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Partnership or such person shall promptly notify
such Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter (or any omission of notice under Section 9(c)) shall not
relieve such Underwriter, from any liability which such Underwriter may have to
the Partnership or any such person or otherwise. The Partnership or such person
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Partnership or such
person unless the employment of such counsel shall have been authorized in
writing by such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or
-26-
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to or in conflict with those
available to such Underwriter (in which case such Underwriter shall not have the
right to direct the defense of such Proceeding on behalf of the indemnified
party or parties, but such Underwriter may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Underwriter), in any of which events such fees and expenses
shall be borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses of more than
one separate counsel in addition to any local counsel in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). Anything in this
paragraph to the contrary notwithstanding, no Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Partnership and any
such person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Partnership on the one hand and the
Underwriters on the other hand from the offering of the Units or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Partnership
on the one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable considerations.
The relative benefits received by the Partnership on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Partnership and the underwriting discounts and commissions received by the
Underwriters. The relative fault of the Partnership on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue
-27-
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
to Xxxxxxx Xxxxx Xxxxxx Inc., General Counsel (fax no.: (000) 000-0000) and
confirmed to the General Counsel, Xxxxxxx Xxxxx Barney Inc., at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, X.X. 00000, Attention: General Counsel and, if to the
Partnership, shall be sufficient in all respects if delivered or sent to the
Partnership at the offices of the General Partner at 0000 Xxxxx Xxxxxxx, X.X.
Xxx 0000, Xxxxxxx, Xxxxx 00000-0000, Attention: Xxxxx X. Xxxx
11. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in
-28-
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 Partnerships' 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]
-29-
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/ XX XXXXX
---------------------------------
Name: Xxxx-Xxxxxx Xxxxx
-------------------------------
Title: Vice President
------------------------------
SCHEDULE A
Number of
Underwriters Firm Units
------------ ----------
Xxxxxxx Xxxxx Barney Inc. .......................................... 690,000
UBS Warburg LLC .................................................... 690,000
Xxxxxxx, Xxxxx & Co. ............................................... 690,000
X.X. Xxxxxxx & Sons, Inc. .......................................... 600,000
Xxxxxxx Xxxxx & Associates, Inc. ................................... 330,000
=========
Total.......................................................... 3,000,000
Schedule A-1
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-1
SCHEDULE C
Xxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxx Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxx JimW. Mogg
J. Xxxxxxx Xxxxxxxx Xxxxx X. Xxxx
Xxxxxxx Xxxx Xxxxx X. Xxxxx
Xxxx X. XxxXxxxxx Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxx Xxxxx X. Xxxx
Xxxx X. Xxxxxxxxxxx Xxxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
Xxxx Capital Corporation
Schedule C-1
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
Units representing Limited Partner
Interests in TEPPCO Partners, L.P.
July ___, 2002
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed Underwriting Agreement (the "Underwriting Agreement") to be
entered into by TEPPCO Partners, L.P. (the "Partnership") and Xxxxxxx Xxxxx
Xxxxxx Inc., UBS Warburg LLC, Xxxxxxx, Sachs & Co., X.X. Xxxxxxx & Sons, Inc.
and Xxxxxxx Xxxxx & Associates, Inc. (the "Underwriters"), with respect to the
public offering (the "Offering") of units representing limited partner interests
in the Partnership (the "Common Units").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period of 90 days after the date of the final
prospectus relating to the Offering the undersigned will not, without the prior
written consent of Xxxxxxx Xxxxx Barney (i) sell, offer to sell, contract to
sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of,
directly or indirectly, contract to dispose of, 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), file (or participate in the filing of) a
registration statement with the Securities and Exchange Commission (the
"Commission") in respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder with respect to, any Common
Units of the Partnership or any securities convertible into or exercisable or
exchangeable for Common Units, or warrants or other rights to purchase Common
Units, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Units or any securities convertible into or exercisable or exchangeable for
Common Units, or warrants or other rights to purchase Common Units, whether any
such transaction is to be settled by delivery of Common Units or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the registration of or sale to the Underwriters of any
Common Units pursuant to the Offering and the Underwriting Agreement, (b) bona
fide gifts, provided the recipient or recipients thereof agree in writing to be
bound by the terms of this Lock-Up Letter Agreement
Exhibit A-1
and confirm that he, she or it has been in compliance with the terms of this
Lock-Up Letter Agreement since the date hereof or (c) dispositions to any trust
for the direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, provided that such trust agrees in writing to be
bound by the terms of this Lock-Up Letter Agreement and confirms that it has
been in compliance with the terms of this Lock-Up Letter Agreement since the
date hereof.
If (i) the Partnership notifies you in writing that it does not intend
to proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
-----------------------------------
Name:
Exhibit A-2
EXHIBIT B
FORM OF OPINIONS OF ISSUER'S COUNSEL
(1) Each of the Partnership, the Operating Partnerships, TEPPCO Crude Pipeline,
L.P., TEPPCO Seaway, L.P., TEPPCO Crude Oil, L.P., Val Verde Gas Gathering
Company, L.P. ("Val Verde") and Chaparral Pipeline Company, L.P. has been duly
formed and is validly existing as a limited partnership in good standing under
the Delaware Act, with limited partnership power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus and, with respect to the Partnership,
to issue, sell and deliver the Units as contemplated in the Underwriting
Agreement.
(2) The General Partner has been duly formed and is validly existing as a
limited liability company in good standing under the Delaware LLC Act, with
limited liability company power and authority to own, lease and operate its
properties and to conduct its business and to act as the general partner of the
Partnership, in each case as described in the Registration Statement and
Prospectus.
(3) TEPPCO GP has been duly incorporated and is validly existing as a
corporation in good standing under the DGCL, with corporate power and authority
to own, lease and operate its properties, to conduct its business and to act as
the general partner of each of the Operating Partnerships, in each case as
described in the Registration Statement and Prospectus.
(4) Each of the General Partner, the Partnership and TE Products, TEPPCO
Midstream, TCTM, Chaparral Pipeline Company, L.P., Val Verde, TEPPCO Crude Oil,
L.P., TEPPCO Crude Pipeline, L.P. and TEPPCO Seaway, L.P. have been duly
qualified to do business as a foreign limited partnership, limited liability
company, or corporation, as the case may be, and is in good standing in the
state of Texas.
(5) The General Partner is the sole general partner of the Partnership with a
general partner interest in the Partnership of 2.0%; such general partner
interest is duly authorized by the Partnership Agreement, is validly issued. The
General Partner owns of record and, to such counsel's knowledge, beneficially
owns, such general partner interest, free and clear of (A) any security interest
that is perfected solely by the filing of a financing statement under the
Uniform Commercial Code ("UCC") in the Office of the Secretary of State of the
State of Delaware and which names the General Partner as debtor or (B) to such
counsel's knowledge, any other security interest, lien, encumbrance, right to
purchase or adverse claim.
(6) TEPPCO GP is the sole general partner of each of the Operating Partnerships
with a general partner interest in each of the Operating Partnerships of 0.001%;
such general partner interests are duly authorized by the Operating Partnership
Agreements, as the case may be, and are validly issued. TEPPCO GP owns of record
and, to such counsel's knowledge, beneficially owns, such general partner
interests, free and clear of (A) any security interest that is perfected solely
by the filing of a financing statement under the UCC in the Office of the
Secretary of State of the State of Delaware and which names TEPPCO GP as debtor
or (B) to such counsel's knowledge, any other security interest, lien,
encumbrance, right to purchase or adverse claim.
Exhibit B-1
(7) The Partnership is the sole limited partner of each of the Operating
Partnerships with a limited partner interest in each of the Operating
Partnerships of 99.999%; such limited partner interests are duly authorized by
the Operating Partnership Agreements and are validly issued, fully paid and
non-assessable (except as provided in the Delaware Act). The Partnership owns of
record and, to such counsel's knowledge, beneficially owns, such limited partner
interests in the Operating Partnerships, free and clear of (A) any security
interest that is perfected solely by the filing of a financing statement under
the UCC in the Office of the Secretary of State of the State of Delaware and
which names the Partnership as debtor or (B) to such counsel's knowledge, any
other security interest, lien, encumbrance, right to purchase or adverse claim.
(8) All of the capital stock of TEPPCO GP is duly authorized, validly issued and
nonassessable and is owned of record and, to such counsel's knowledge,
beneficially, by the Partnership, free and clear of (A) any security interest
that is perfected solely by the filing of a financing statement under the UCC in
the Office of the Secretary of State of the State of Delaware and which names
the Partnership as debtor or (B) to such counsel's knowledge, any other security
interest, lien, encumbrance, right to purchase or adverse claim.
(9) TEPPCO NGL Pipeline LLC ("TEPPCO NGL GP") is the sole general partner of Val
Verde with a general partner interest in Val Verde of 0.001%; such general
partner interest is duly authorized by the agreement of limited partnership of
Val Verde, (the "Val Verde Partnership Agreement") and is validly issued. TEPPCO
NGL GP owns of record and, to such counsel's knowledge, beneficially owns, such
general partner interests, free and clear of (A) any security interest that is
perfected solely by the filing of a financing statement under the UCC in the
Office of the Secretary of State of the State of Delaware and which names TEPPCO
NGL GP as debtor or (B) to such counsel's knowledge, any other security
interest, lien, encumbrance, right to purchase or adverse claim.
(10) TEPPCO Midstream is the sole limited partner of Val Verde with a limited
partner interest of 99.999%; such limited partner interest is duly authorized by
the Val Verde Partnership Agreement and is validly issued, fully paid and
non-assessable (except as provided in the Delaware Act). TEPPCO Midstream owns
of record and, to such counsel's knowledge, beneficially owns, such limited
partner interests in Val Verde, free and clear of (A) any security interest that
is perfected solely by the filing of a financing statement under the UCC in the
Office of the Secretary of State of the State of Delaware and which names TEPPCO
Midstream as debtor or (B) to such counsel's knowledge, any other security
interest, lien, encumbrance, right to purchase or adverse claim.
(11) All of the general partner interests of each of the TCTM Subsidiary
Partnerships are duly authorized, validly issued and owned of record and, to
such counsel's knowledge, beneficially, by TEPPCO Crude GP, LLC, free and clear
of (A) any security interest that is perfected solely by the filing of a
financing statement under the UCC in the Office of the Secretary of State of the
State of Delaware and which names TEPPCO Crude GP, LLC as debtor or (B) to such
counsel's knowledge, any other security interest, lien, encumbrance, right to
purchase or adverse claim.
(12) All of the limited partner interests of each of the TCTM Subsidiary
Partnerships are duly authorized, validly issued and nonassessable (except as
provided in the Delaware Act), and are owned of record and, to such counsel's
knowledge, beneficially, by TCTM (or, with respect to
Exhibit B-2
Lubrication Services, L.P., by TEPPCO Crude Oil, L.P. and with respect to TEPPCO
Seaway, L.P., by TEPPCO Crude Pipeline, L.P.), free and clear of (A) any
security interest that is perfected solely by the filing of a financing
statement under the UCC in the Office of the Secretary of State of the State of
Delaware and which names such respective limited partner as debtor or (B) to
such counsel's knowledge, any other security interest, lien, encumbrance, right
to purchase or adverse claim.
(13) All of the general partner interests of each of the Midstream Subsidiary
Partnerships are duly authorized, validly issued and owned of record and, to
such counsel's knowledge, beneficially, by TEPPCO NGL Pipelines, LLC, free and
clear of (A) any security interest that is perfected solely by the filing of a
financing statement under the UCC in the Office of the Secretary of State of the
State of Delaware and which names TEPPCO NGL Pipelines, LLC as debtor or (B) to
such counsel's knowledge, any other security interest, lien, encumbrance, right
to purchase or adverse claim.
(14) All of the limited partner interests of each of the Midstream Subsidiary
Partnerships are duly authorized, validly issued and nonassessable (except as
provided in the Delaware Act), and are owned of record and, to such counsel's
knowledge, beneficially, by TEPPCO Midstream, free and clear of (A) any security
interest that is perfected solely by the filing of a financing statement under
the UCC in the Office of the Secretary of State of the State of Delaware and
which names TEPPCO Midstream as debtor or (B) to such counsel's knowledge, any
other security interest, lien, encumbrance, right to purchase or adverse claim.
(15) All of the member interests of TEPPCO Colorado, LLC are duly authorized,
validly issued and nonassessable (except as provided in the Delaware LLC Act)
and are owned of record and, to such counsel's knowledge, beneficially, by
TEPPCO Midstream, free and clear of (A) any security interest that is perfected
solely by the filing of a financing statement under the UCC in the Office of the
Secretary of State of the State of Delaware and which names TEPPCO Midstream as
debtor or (B) to such counsel's knowledge, any other security interest, lien,
encumbrance, right to purchase or adverse claim.
(16) All of the member interests of TEPPCO NGL GPare duly authorized, validly
issued and nonassessable (except as provided in the Delaware LLC Act) and are
owned of record and, to such counsel's knowledge, beneficially, by TEPPCO
Midstream, free and clear of (A) any security interest that is perfected solely
by the filing of a financing statement under the UCC in the Office of the
Secretary of State of the State of Delaware and which names TEPPCO Midstream as
debtor or (B) to such counsel's knowledge, any other security interest, lien,
encumbrance, right to purchase or adverse claim.
(17) All of the member interests of TEPPCO Crude GP, LLC are duly authorized,
validly issued and nonassessable (except as provided in the Delaware LLC Act)
and are owned of record and, to such counsel's knowledge, beneficially, by TCTM,
free and clear of (A) any security interest that is perfected solely by the
filing of a financing statement under the UCC in the Office of the Secretary of
State of the State of Delaware and which names TCTM as debtor or (B) to such
counsel's knowledge, any other security interest, lien, encumbrance, right to
purchase or adverse claim.
Exhibit B-3
(18) The Underwriting Agreement has been duly authorized, executed and delivered
by the Partnership.
(19) The Units have been duly authorized by the board of directors of the
General Partner and the Partnership Agreement on behalf of the Partnership and,
when issued and delivered to the Underwriters against payment therefor in
accordance with the terms of the Underwriting Agreement, will be validly issued,
fully paid and nonassessable (except as provided in the Delaware LLC Act), and
free of any preemptive or, to the knowledge of such counsel, similar rights that
entitle or will entitle any person to acquire any partnership interest in the
Partnership upon the issuance thereof by the Partnership.
(20) To such counsel's knowledge, the Partnership's authorized and outstanding
Common Units are as set forth in the Prospectus; and, except as set forth in the
Prospectus, to such counsel's knowledge, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, partnership interests or
ownership interests in the Partnership are outstanding, other than options,
warrants or other rights to purchase, agreements or other obligations to issue,
or rights to convert any obligations into or exchange any securities for,
partnership interests or ownership interests in the Partnership included or
described in any of the Partnership Agreement and employee or non-employee
director option plans, employment agreements and other employment arrangements
to which the Partnership, the General Partner or their affiliates are party with
respect to the Partnership.
(21) The Common Units conform in all material respects as to legal matters to
the description thereof set forth under the captions "Cash Distributions" and
"Tax Considerations" in the Prospectus.
(22) The form of certificates for the Units conforms in all material respects to
the requirements of the Partnership Agreement.
(23) The Registration Statement and all post-effective amendments, if any, have
become effective under the Securities Act and, to our knowledge, no stop order
proceedings with respect thereto are pending or threatened under the Securities
Act; and any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424 under the Act has been made in the manner and within the
time period required by such Rule 424.
(24) Each of the Partnership Agreement, the Operating Partnership Agreements and
the Val Verde Partnership Agreement has been duly authorized, executed and
delivered by the parties thereto and is a valid and legally binding agreement of
the parties thereto, enforceable against the parties thereto in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
fraudulent transfer, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity and to
the extent that rights to indemnity and contribution under the Partnership
Agreement, the Operating Partnership Agreements and the Val Verde Partnership
Agreement may be limited by federal or state securities laws or the public
policy underlying such laws.
Exhibit B-4
(25) Neither the offer, sale or delivery of the Units by the Partnership, the
execution, delivery or performance of the Underwriting Agreement, nor
performance by the Partnership of its obligations under the Underwriting
Agreement constitutes or will constitute a breach of, or a default under, any
license, agreement, indenture, mortgage, deed of trust, bank loan, credit
agreement or other evidence of indebtedness, any lease, contract or other
agreement or instrument to which any of the TEPPCO Entities or any of their
subsidiaries is a party or by which any of them or any of their respective
properties is bound or affected, in each case which has been filed with or
incorporated by reference in the Registration Statement, or will result in the
creation or imposition of any lien, charge or encumbrance under the terms
thereof upon any property or assets of any of the TEPPCO Entities, nor will any
such action result in any violation of (a) the partnership agreement, member
agreement or other organization documents of any of the TEPPCO Entities or any
of their subsidiaries, as the case may be, (b) any statutory law, regulation,
rule or ruling (assuming compliance with all applicable state securities and
blue sky laws), or (c) any judgment, injunction, order or decree of any court,
governmental agency or arbitrator that is known to such counsel as applicable to
any of the TEPPCO Entities, any of their subsidiaries or any of their respective
properties.
(26) To such counsel's knowledge, except for Duke Energy Corporation and certain
of its affiliates, each of whom has waived its rights, no holder of any interest
in or security of the Partnership or any other person has any right to require
registration of Units or any other partnership interest or other security of the
Partnership because of the filing of the Registration Statement or consummation
of the transactions contemplated by the Underwriting Agreement.
(27) No approval, authorization, consent, waiver, notice or order of or filing
with, or other action by, any governmental or regulatory commission, board,
body, authority or agency is required to be obtained or made by the Partnership
by any material statutory law or regulation application to it as a condition to
the issuance or sale of the Units by the Partnership as contemplated hereby
other than registration of the Units under the Securities Act (except we express
no opinion as to any necessary qualification under the state securities or blue
sky laws of the various jurisdictions in which the Units are being offered by
the Underwriters).
(28) The Registration Statement, and the Prospectus and any supplements or
amendments thereto (except as to the financial statements and the notes thereto
and schedules and other financial and statistical data contained or incorporated
by reference therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Securities Act.
(29) The documents incorporated by reference in the Registration Statement and
Prospectus, when they were filed (or, if an amendment with respect to any such
document was filed, when such amendment was filed) with the Commission, appear
on their face to have been appropriately responsive in all material respects
with the requirements of the Exchange Act (except as to the financial statements
and the notes thereto and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
express no opinion).
(30) None of the TEPPCO Entities nor any of their subsidiaries is or will be,
upon consummation of the transactions contemplated by the Underwriting
Agreement, an "investment
Exhibit B-5
company," or a "promoter" or "principal underwriter" for, a "registered
investment company," as such terms are defined in the Investment Company Act of
1940, as amended, or a "public utility company" or a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended; none of
the Partnership, TEPPCO Entities is subject to regulation under the Public
Utility Holding Company Act of 1935, as amended.
(31) To such counsel's knowledge, there are no contracts, licenses, agreements,
leases or documents of a character which are required to be filed as exhibits to
the Registration Statement or to be summarized or described in the Registration
Statement or Prospectus (or any amendment or supplement thereto) which have not
been so filed, summarized or described.
(32) The Firm Units and the Option Units are duly authorized for listing,
subject only to official notice of issuance, on the New York Stock Exchange.
Such counsel shall state that although it has not undertaken, except as
otherwise indicated in such counsel's opinion, to determine independently, and
is not passing upon and does not assume any responsibility for, the accuracy,
completeness or fairness of any of the statements in the Registration Statement
(except as and to the extent stated in paragraphs 21 and 28 above) or any
documents incorporated therein, such counsel has participated in the preparation
of the Registration Statement and the Prospectus, including review and
discussion of the contents thereof (including review and discussion of the
contents of all documents incorporated by reference therein) with officers and
representatives of the General Partner, representatives of the independent
public accountants of the Partnership and representatives of and counsel for the
Underwriters, and based upon this participation, no information has come to such
counsel's attention that has caused such counsel to believe that the
Registration Statement (including the documents incorporated by reference
therein at the time the Registration Statement became effective), or the
Prospectus, as of its date and as of the applicable time of purchase, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that any amendment or supplement to the Prospectus, as of its
respective date, and as of the applicable time of purchase, as the case may be,
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (such counsel need not
express any opinion with respect to the financial statements and the notes
thereto and the schedules and other financial data included in the Registration
Statement or the Prospectus or any documents incorporated by reference therein).
In rendering the opinions expressed in paragraphs 5 through 17, terms
used therein which are defined in the UCC shall have the meanings assigned
therein. In rendering the opinion expressed in clause (A) of paragraphs 5
through 17, we have relied, without investigation, upon the accuracy and
completeness of the [description of the UCC search certificates] and the absence
of filings listed therein, and further, we have assumed that at all times from
and including the [date through which each UCC Search Certificate conducted its
search] and to and through the date of the delivery of this opinion letter,
there have been no filings made in the Office of the Secretary of State of the
State of Delaware in which the applicable entities are
Exhibit B-6
named as a debtor and which covers, in whole or part, or any proceeds thereof,
any interests in the applicable entities.
Such counsel may state that the opinions are limited exclusively to the
laws of the State of Texas, the Delaware Act, the Delaware LLC Act, the DGCL and
the federal laws of the United States of America.
Such counsel may state that, as used in its opinion, the phrase "to our
knowledge" or words of similar import means conscious awareness of facts or
other information by the lawyers in such firm who, based on its records as of
July 16, 2002, have devoted substantive attention to legal matters on behalf of
TEPPCO Entities since January 1, 2001.
Exhibit X-0
XXXXXXX X
XXXX XX XXXXXXXX XX XXXXX X. XXXX, GENERAL COUNSEL TO THE GENERAL PARTNER
(1) Jonah has been duly formed and is validly existing in good standing
as a general partnership under the Wyoming Uniform Partnership Act. All of the
general partner interests of Jonah are duly authorized and are beneficially
owned by TEPPCO GP and TEPPCO Midstream free and clear of any security interest,
lien, encumbrance, right to purchase or other claim, except as disclosed in the
Prospectus or as provided in the agreement of partnership of Jonah or pursuant
to the Wyoming Uniform Partnership Act (A) in respect of which a financing
statement under the Uniform Commercial Code ("UCC") has been filed in the State
of Wyoming naming TEPPCO GP or TEPPCO Midstream as debtor is on file in the
offices of the Secretary of State of the State of Wyoming or (B) otherwise known
to such counsel.
(2) To such counsel's knowledge, there are no actions, suits, claims,
investigations or proceedings pending or threatened or contemplated to which any
of the TEPPCO Entities or any of their subsidiaries is subject or of which any
of their respective properties is subject at law or in equity or before or, by
any Federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency which are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) but are not so described.
(3) To such counsel's knowledge, none of the TEPPCO Entities nor any of
their subsidiaries is in violation of its partnership agreement, member
agreement or other organizational documents, or is in breach of, or in default
under (nor has any event occurred which with notice, lapse of time, or both
would result in any breach of, or constitute a default under), any license,
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which any of the TEPPCO Entities or any of their subsidiaries is a
party or by which any of them or their respective properties may be bound or
affected or under any Federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to any of the TEPPCO Entities or any
of their subsidiaries, except where such violation, breach or default would not,
individually or in the aggregate, have a Material Adverse Effect.
Exhibit C-1
