EXHIBIT 1.1
[Draft of July 20, 1998]
ENTERPRISE PRODUCTS PARTNERS L.P.
11,250,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
Xxxxxx Brothers Inc. _____________, 1998
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Xxxxx Xxxxxx Inc.
Xxxx Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
As Representatives of the Several
Underwriters named in Schedule 1
c/x Xxxxxx Brothers Inc.
3 World Financial Center
New York, New York 10285
Dear Sirs:
Enterprise Products Partners L.P., a Delaware limited partnership (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule 1 hereto (the "Underwriters") 11,250,000 Common Units (the "Firm
Units"), each representing a limited partner interest in the Company (the
"Common Units"). In addition, the Company proposes to grant to the Underwriters
an option to purchase up to an additional 1,687,500 Common Units, on the terms
and for the purposes set forth in Section 2 (the "Option Units"). The Firm
Units and the Option Units, if purchased, are hereinafter collectively called
the "Units." Capitalized terms used but not defined herein shall have the same
meanings given them in the Partnership Agreement or the Prospectus (each as
defined herein).
It is understood and agreed to by all parties that the Company was
formed to acquire, own and operate certain of the business and assets of
Enterprise Products Company, a Texas corporation ("EPCO"). Enterprise Products
GP, LLC, a Delaware limited liability company, will serve as the general partner
(the "General Partner") of both the Company and Enterprise Products Operating
L.P., a Delaware limited partnership (the "Operating Partnership").
Pursuant to a Consolidation Agreement dated as of April 30, 1998 (the
"Consolidation Agreement") by and among EPCO, certain stockholders of EPC
Partners II, Inc., a Delaware corporation and wholly-owned subsidiary of EPCO
("Partners II"), certain members of EPC Partners, I, LLC, a Delaware limited
liability company ("Partners I"), the members of DADA Interests LLC, a Texas
limited liability company ("DADA"), and certain limited partners of JMRS
Holdings, Ltd., a Texas limited partnership ("JMRS"), as amended by that certain
First Amendment to Consolidation Agreement dated June 30, 1998, (i) the
stockholders of Partners II other than EPCO contributed their shares in Partners
II to EPCO in exchange for shares of Class B Common Stock, $.50 par value
("Class B Stock"), of EPCO, (ii) certain members of Partners I contributed their
interests in Partners I to EPCO in exchange for shares of Class B Stock, (iii)
the members of DADA contributed their interests in DADA to EPCO in exchange for
shares of Class B Stock, (iv) certain members of JMRS contributed their
partnership interests in JMRS to EPCO in exchange for shares of Class B Stock
and (v) EPCO contributed its member interests in Partners I and DADA and its
partnership interest in JMRS to Partners II as a capital contribution
(collectively, the "Consolidation").
Pursuant to a Plan of Merger dated June 1, 1998 (the "Split-Up Merger
Agreement") by and among EPCO, HSC Pipeline Partnership, L.P., a Texas limited
partnership ("HSC"), Chunchula Pipeline Company, LLC, a Texas limited liability
company ("Chunchula"), Propylene Pipeline Partnership, L.P., a Texas limited
partnership ("Propylene"), Cajun Pipeline Company, LLC, a Texas limited
liability company ("Cajun"), and Enterprise Products Texas Operating L.P., a
Texas limited partnership ("Enterprise Texas"), as amended by that certain First
Amendment to Plan of Merger dated ___________, 1998 by and among such parties, a
merger (the "Split-Up Merger") occurred effective June 1, 1998 pursuant to which
(i) certain assets and liabilities of EPCO (the "Retained Assets and
Liabilities") were retained by EPCO, (ii) the assets of EPCO related to its
Houston Ship Channel Pipeline System (the "HSC Assets") were allocated to and
vested in HSC, (iii) the assets of EPCO related to its Chunchula Pipeline System
(the "Chunchula Assets") were allocated to and vested in Chunchula, (iv) the
assets of EPCO related to its Propylene Pipeline System (the "Propylene Assets")
were allocated to and vested in Propylene, (v) the assets of EPCO related to its
Cajun Pipeline System (the "Cajun Assets") were allocated to and vested in
Cajun, (vi) 98% of EPCO's rights to distributions, profits, losses and capital
in respect of its 50% interest in Mont Belvieu Associates, a Texas general
partnership ("MBA"), and XXXX's undivided 12.5% interest in the Seminole
Fractionator and the West Texas Fractionator (collectively, the "Enterprise
Texas Assets") were allocated to and vested in Enterprise Texas and (vii) all of
the other assets of EPCO (the "TOC Assets") were allocated to and vested in, and
all of the other liabilities of EPCO were assumed by, Transitional Operating
Company, Inc., a Texas corporation ("TOC"). Effective June __, 1998, XXXX
executed and delivered a General Assignment, Bill of Sale and Conveyance (the
"EPCO Conveyance") in favor of HSC, Chunchula, Propylene, Cajun, Enterprise
Texas and TOC with respect to the HSC Assets, the Chunchula Assets, the
Propylene Assets, the Cajun Assets, the Enterprise Texas Assets and the TOC
Assets, respectively.
Pursuant to a Plan of Merger dated June 1, 1998 (the "TOC Merger
Agreement") by and between TOC and the Operating Partnership, as amended by that
certain First Amendment to Plan of Merger dated ___________, 1998 by and among
such parties, TOC was merged with and into the Operating Partnership (the "TOC
Merger"), with the Operating Partnership being the surviving entity. Effective
June __, 1998, TOC executed and delivered a General Assignment, Bill of Sale and
Conveyance (the "TOC Conveyance") in favor of the Operating Partnership with
respect to its assets.
-2-
Pursuant to a General Assignment, Bill of Sale and Conveyance dated ______,
1998, EPCO transferred and conveyed to Sorrento Pipeline Company, LLC, a Texas
limited liability company ("Sorrento"), the assets of EPCO related to its
Sorrento Pipeline System (the "Sorrento Assets" and, collectively with the HSC
Assets, the Chunchula Assets, the Propylene Assets, the Cajun Assets, the
Enterprise Texas Assets and the TOC Assets, the "Transferred Assets" ).
Effective __, 1998, XXXX executed and delivered a General Assignment, Bill of
Sale and Conveyance (the "Sorrento Conveyance") in favor of Sorrento with
respect to the Sorrento Assets.
Pursuant to an Assignment Agreement dated effective as of June 2, 1998,
Partners II contributed its membership interests in Partners I, DADA and
EnterPart LLC and its limited partner interests in JMRS and EPC Partners, Ltd.
to the Operating Partnership in exchange for a limited partner interest in the
Operating Partnership. Pursuant to separate assignment documents, XXXX
contributed its general partner interest in each of HSC, Propylene and
Enterprise Texas to the Operating Partnership in exchange for an interest in the
Operating Partnership.
Prior to or concurrently with the execution hereof, the Operating
Partnership will enter into a bank credit agreement (the "Bank Credit
Agreement") providing for a $50 million working capital facility and a $150
million revolving term loan facility.
The following transactions will occur at the Closing Date: (i) EPCO will
contribute to Partners II all of its limited partner interest in the Operating
Partnership; (ii) Partners II will contribute to the Company all of its limited
partner interest in the Operating Partnership in exchange for 34,004,974 Common
Units and 21,269,838 Subordinated Units; (iii) the public offering of Firm Units
contemplated hereby will be consummated; (iv) as a capital contribution, the
Company will contribute the net proceeds to the Company of the sale of Firm
Units to the Operating Partnership; (v) the closing under the Bank Credit
Agreement will occur; (vi) the Operating Partnership will use the proceeds
contributed to it by the Company to (A) repay indebtedness assumed in the Split-
Up Merger, (B) purchase a participation interest in the indebtedness of MBA and
Belvieu Environmental Fuels, a Texas general partnership ("BEF"), pursuant to
participation agreements (the "Participation Agreements"), (C) invest in new
joint venture projects and (D) pay expenses of the sale of the Firm Units; and
(ix) EPCO, the Company, the Operating Partnership and the General Partner will
enter into an agreement (the "EPCO Agreement") pursuant to which EPCO will
manage the business and affairs of the Company.
The Consolidation, the Split-Up Merger, the EPCO Conveyance, the TOC
Merger, the TOC Conveyance, the Sorrento Conveyance and the other transactions
described in the preceding seven paragraphs are collectively referred to as the
"Transactions." The Company, the Operating Partnership, the subsidiaries of the
Operating Partnership and the General Partner are sometimes referred to herein
collectively as the "Company Entities." EPCO and its subsidiaries (including
MBA and BEF) and the Company Entities are sometimes referred to herein
collectively as the "Enterprise Entities." In connection with the consummation
of the Transactions, the Enterprise Entities have entered into or will enter
into various agreements and certificates of merger, bills of sale, conveyances,
deeds and other assignments in connection with the Split-Up Merger, the TOC
Merger and the Sorrento Conveyance (collectively with the Split-Up Merger
Agreement, the EPCO Conveyance, the TOC Merger Agreement, the TOC Conveyance and
the Sorrento Conveyance, the "Merger and Conveyance Documents").
-3-
This is to confirm the agreement among EPCO, the Company, the
Operating Partnership, the General Partner (both in its capacity as general
partner of the Company and the Operating Partnership and individually) and
Partners II (collectively, the "Enterprise Parties") and the Underwriters
concerning the purchase of the Firm Units and the Option Units from the Company
by the Underwriters.
1. Representations, Warranties and Agreements of the Enterprise
Entities. Each of the Enterprise Parties, jointly and severally, represents and
warrants to, agrees with, each Underwriter that:
(a) A registration statement on Form S-1 (File No. 333-52537)
with respect to the Units (i) has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, (ii) has been
filed with the Commission under the Securities Act and (iii) either has become
effective under the Securities Act and is not proposed to be amended or is
proposed to be amended by amendment or post-effective amendment. If the Company
does not propose to amend such Registration Statement and if any post-effective
amendment to such registration statement has been filed with the Commission
prior to the execution and delivery of this Agreement, the most recent such
amendment has been declared effective by the Commission. Copies of such
registration statement as amended to date have been delivered by the Company to
you as the representatives (the "Representatives") of the Underwriters. For
purposes of this Agreement, "Effective Time" means the date and the time as of
which such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statement, as amended at the Effective Time, including,
if the Effective Date is on or before the date of this Agreement, all
information contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations ("Rule 424(b)") in accordance with
Section 8(a)(i) hereof and deemed to be a part thereof as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and
"Prospectus" means the form of prospectus relating to the Units, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) or, if the
Effective Date is after the date of this Agreement, the final prospectus in the
form heretofore delivered by the Company to the Representatives, with any
changes made thereto by the Company with the consent of the Representatives, as
the case may be.
(b) Any Preliminary Prospectus, at the date of filing thereof with the
Commission, complied in all material respects with the requirements of the
Securities Act and the Rules and Regulations and did not contain an 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, in the
light of the circumstances under which they were made, not misleading. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus. The Registration Statement
-4-
in the form in which it became or becomes effective and also in such form as it
may be when any post-effective amendment thereto shall become effective and the
Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Securities Act complied or will comply in
all material respects with the provisions of the Securities Act and the Rules
and Regulations and did not or will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. Each
of the statements made by the Company in such documents within the coverage of
Rule 175(b) of the Rules and Regulations under the Securities Act, including
(but not limited to) any statements with respect to future available cash or
future cash distributions of the Company or the anticipated ratio of taxable
income to distributions, was made or will be made with a reasonable basis and in
good faith. Notwithstanding the foregoing, no representation and warranty is
made as to statements in or omissions from the Registration Statement, the
Prospectus or any Preliminary Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by or on behalf of any
Underwriter through the Representatives expressly for use therein.
(c) The Company has been duly formed and is validly existing in good
standing as a limited partnership under the Delaware Revised Uniform Limited
Partnership Act (the "Delaware LP Act") with full partnership power and
authority to own or lease its properties to be owned or leased at each Delivery
Date (as defined in Section 4 hereof), to assume the liabilities being assumed
by it pursuant to the Merger and Conveyance Documents and to conduct its
business to be conducted at each Delivery Date, in each case in all material
respects as described in the Registration Statement and the Prospectus. The
Company is, or at each Delivery Date will be, duly registered or qualified as a
foreign limited partnership for the transaction of business under the laws of
each jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to register
or qualify would not (i) have a material adverse effect on the condition
(financial or otherwise), business, prospects, assets or results of operations
of the Company and the Operating Partnership, taken as a whole, or (ii) subject
the limited partners of the Company to any material liability or disability.
(d) The Operating Partnership has been duly formed and is validly
existing in good standing as a limited partnership under the Delaware LP Act
with full partnership power and authority to own or lease its properties to be
owned or leased at each Delivery Date, to assume the liabilities being assumed
by it pursuant to the Merger and Conveyance Documents and to conduct its
business to be conducted at each Delivery Date, in each case in all material
respects as described in the Registration Statement and the Prospectus. The
Operating Partnership is, or at each Delivery Date will be, duly registered or
qualified as a foreign limited partnership for the transaction of business under
the laws of each jurisdiction in which the character of the business conducted
by it or the nature or location of the properties owned or leased by it makes
such registration or qualification necessary, except where the failure so to
register or qualify would not (i) have a material adverse effect on the
condition (financial or otherwise), business, prospects, assets or results of
operations of the Company and the Operating Partnership, taken as a whole, or
(ii) subject the limited partners of the Company to any material liability or
disability.
-5-
(e) The General Partner has been duly formed and is validly existing
in good standing as a limited liability company under the Delaware Limited
Liability Company Act (the "Delaware LLC Act") with full limited liability
company power and authority to own or lease its properties to be owned or leased
at each Delivery Date, to conduct its business to be conducted at each Delivery
Date and to act as general partner of the Company and the Operating Partnership,
in each case in all material respects as described in the Registration Statement
and the Prospectus. The General Partner is, or at each Delivery Date will be,
duly registered or qualified as a foreign limited liability company for the
transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a material adverse effect on the condition (financial or otherwise), business,
prospects, assets or results of operations of the General Partner or the Company
and the Operating Partnership, taken as a whole, or (ii) subject the limited
partners of the Company to any material liability or disability.
(f) EPCO is a corporation duly organized and validly existing in good
standing under the laws of the State of Texas with full corporate power and
authority to own and lease its properties to be owned or leased at each Delivery
Date, to assume the liabilities being assumed by it pursuant to the Merger and
Conveyance Documents and to conduct its business to be conducted at each
Delivery Date, in each case in all material respects as described in the
Registration Statement and the Prospectus. EPCO is, or at each Delivery Date
will be, duly registered or qualified as a foreign corporation for the
transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not have a
material adverse effect on the condition (financial or otherwise), business,
prospects, assets or results of operations of the Company and the Operating
Partnership, taken as a whole.
(g) Partners II is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with full corporate
power and authority to own and lease its properties to be owned or leased at
each Delivery Date, to assume the liabilities being assumed by it pursuant to
the Merger and Conveyance Documents and to conduct its business to be conducted
at each Delivery Date, in each case in all material respects as described in the
Registration Statement and the Prospectus.
(h) HSC and Propylene have been duly formed and are validly existing
in good standing as limited partnerships under the Texas Revised Uniform Limited
Partnership Act (the "Texas LP Act") with full partnership power and authority
to own or lease their properties to be owned or leased at each Delivery Date, to
assume the liabilities being assumed by them pursuant to the Merger and
Conveyance Documents and to conduct their business to be conducted at each
Delivery Date, in each case in all material respects as described in the
Registration Statement and the Prospectus. HSC and Propylene are, or at each
Delivery Date will be, duly registered or qualified as foreign limited
partnerships for the transaction of business under the laws of each jurisdiction
in which the character of the business conducted by them or the nature or
location of the
-6-
properties owned or leased by them makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a material adverse effect on the condition (financial or otherwise), business,
prospects, assets or results of operations of the Company and the Operating
Partnership, taken as a whole, or (ii) subject the limited partners of the
Company to any material liability or disability.
(i) Sorrento, Chunchula and Cajun have been duly formed and are
validly existing in good standing as limited liability companies under the Texas
Limited Liability Company Act ) (the "Texas LLC Act") with full limited
liability company power and authority to own or lease their properties to be
owned or leased at each Delivery Date, to conduct their business to be conducted
at each Delivery Date and to assume the liabilities being assumed by them
pursuant to the Merger and Conveyance Documents, in each case in all material
respects as described in the Registration Statement and the Prospectus.
Sorrento, Chunchula and Cajun are, or at each Delivery Date will be, duly
registered or qualified as foreign limited liability companies for the
transaction of business under the laws of each jurisdiction in which the
character of the business conducted by them or the nature or location of the
properties owned or leased by them makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a material adverse effect on the condition (financial or otherwise), business,
prospects, assets or results of operations of the Company or the Operating
Partnership, taken as a whole, or (ii) subject the limited partners of the
Company to any material liability or disability.
(j) At each Delivery Date, after giving effect to the Transactions,
the General Partner will be the sole general partner of the Company with a 1%
general partner interest in the Company; such general partner interest will be
duly authorized and validly issued in accordance with the partnership agreement
of the Company (as the same may be amended and restated at or prior to each
Delivery Date, the "Partnership Agreement"); and the General Partner will own
such general partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims.
(k) At each Delivery Date, after giving effect to the Transactions,
Partners II will own limited partner interests in the Company represented by
34,004,974 Common Units and 21,269,838 Subordinated Units; all of such Common
Units and Subordinated Units and the limited partner interests represented
thereby will be duly authorized and validly issued in accordance with the
Partnership Agreement, and will be fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in the Prospectus under the caption "The
Partnership Agreement--Limited Liability"); and Partners II will hold its
respective limited partner interests represented by its Common Units and
Subordinated Units free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
-7-
(l) At the First Delivery Date, there will be issued to the
Underwriters the Firm Units (assuming no purchase by the Underwriters of Option
Units); at the First Delivery Date or the Second Delivery Date, as the case may
be, the Firm Units or the Option Units, as the case may be, and the limited
partner interests represented thereby will be duly authorized by the Partnership
Agreement and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
(to the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in the
Prospectus under the caption "The Partnership Agreement--Limited Liability");
and other than the Common Units and Subordinated Units that will be owned by
Partners II and the Incentive Distribution Rights that will be owned by the
General Partner, the Units will be the only limited partner interests of the
Company issued and outstanding at each Delivery Date.
(m) At each Delivery Date, after giving effect to the Transactions,
the General Partner will own a 1.0101% general partner interest in the Operating
Partnership, and the Company will own a 98.9899% limited partner interest in the
Operating Partnership; such interests will have been duly authorized and validly
issued in accordance with the partnership agreement of the Operating Partnership
(as the same may be amended and restated at or prior to each Delivery Date, the
"Operating Partnership Agreement") and will be fully paid (to the extent
required under the Operating Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in the Prospectus
under the caption "The Partnership Agreement -- Limited Liability"); and the
General Partner and the Company will own such interests free and clear of all
liens, encumbrances, security interests, equities, charges or claims.
(n) At each Delivery Date, after giving effect to the Transactions,
the Company will own a 1% limited partner interest in each of Propylene and HSC,
and the Operating Partnership will own a 99% general partner interest in each of
Propylene and HSC; such interests will have been duly authorized and validly
issued in accordance with the partnership agreements of each of Propylene and
HSC (as both may be amended and restated at or prior to each Delivery Date, the
"Pipeline Partnership Agreements") and will be fully paid (to the extent
required under the Pipeline Partnership Agreements) and nonassessable (except as
such nonassessability may be affected by the Texas LP Act); and the Company and
the Operating Partnership will own such interests free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(o) At each Delivery Date, the Operating Partnership will own 100% of
the member interests in Sorrento, Chunchula and Cajun; such member interests
will have been duly authorized and validly issued in accordance with the
regulations of Sorrento, Chunchula and Cajun (as the same may be amended and
restated at or prior to each Delivery Date, the "Pipeline LLC Regulations") and
will be fully paid (to the extent required under the Pipeline LLC Regulations)
and nonassessable (except as such nonassessability may be affected by the Texas
LLC Act); and the Operating Partnership will own such interests free and clear
of all liens, encumbrances, security interests, equities, charges or claims.
(p) At each Delivery Date, EPCO will own 95% of the member interests
in the General Partner and Xxx Xxxxxx LLC, a Texas limited liability company
("Xxxxxx"), will own 5% of the member interests in the General
-8-
Partner; such member interests will have been duly authorized and validly issued
in accordance with the limited liability company agreement of the General
Partner (as the same may be amended and restated at or prior to each Delivery
Date, the "General Partner Agreement" and together with the Partnership
Agreement, the Operating Partnership Agreement, the Pipeline Partnership
Agreements and the Pipeline LLC Regulations, the "Organization Agreements") and
will be fully paid (to the extent required under the General Partner Agreement)
and nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and EPCO and Xxxxxx will own such member
interests free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(q) At each Delivery Date, EPCO will own 100% of the outstanding
common stock of Partners II; such common stock will have been duly authorized
and validly issued and will be fully paid and nonassessable; and EPCO will own
such common stock free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(r) Except as described in the Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, nor any restriction upon
the voting or transfer of, any limited partner interests in the Company or the
Operating Partnership pursuant to either the Partnership Agreement or the
Operating Partnership Agreement, respectively, or any agreement or other
instrument to which the Company or the Operating Partnership is a party or by
which either of them may be bound. Neither the filing of the Registration
Statement nor the offering or sale of the Units as contemplated by this
Agreement gives rise to any rights for or relating to the registration of any
Units or other securities of the Company or the Operating Partnership. Except as
described in the Prospectus, there are no outstanding options or warrants to
purchase any Common Units or Subordinated Units or other partnership interests
in the Company or the Operating Partnership. The Units, when issued and
delivered against payment therefor as provided herein, and the Common Units and
the Subordinated Units to be issued to Partners II (the "Sponsor Units"), when
issued and delivered to Partners II in accordance with the terms of the
Partnership Agreement, will conform in all material respects to the description
thereof contained in the Prospectus. The Company has all requisite power and
authority to issue, sell and deliver (i) the Units, in accordance with and upon
the terms and conditions set forth in this Agreement, the Partnership Agreement,
the Registration Statement and Prospectus, and (ii) the Sponsor Units, in
accordance with the terms and conditions set forth in the Partnership Agreement.
At each Delivery Date, all corporate, partnership and limited liability company
action, as the case may be, required to be taken by the Enterprise Entities or
any of their shareholders, partners or members for the authorization, issuance,
sale and delivery of the Units, the Sponsor Units, the execution and delivery of
the Operative Agreements (as defined in Section 1(t)) and the consummation of
the transactions (including the Transactions) contemplated by this Agreement and
the Operative Agreements (as herein defined) shall have been validly taken.
(s) This Agreement has been duly authorized and validly executed and
delivered by each of the Enterprise Parties.
-9-
(t) At or before the First Delivery Date, the Partnership Agreement
will have been duly authorized, executed and delivered by the General Partner
and EPCO, as the organizational limited partner, and will be a valid and legally
binding agreement of the General Partner and EPCO, enforceable against the
General Partner and EPCO in accordance with its terms; at or before the First
Delivery Date, the Operating Partnership Agreement will have been duly
authorized, executed and delivered by each of the General Partner and the
Company and will be a valid and legally binding agreement of the General Partner
and the Company, enforceable against each of them in accordance with its terms;
at or before the First Delivery Date, the General Partner Agreement will have
been duly authorized, executed and delivered by the parties thereto and will be
a valid and legally binding agreement of each of them enforceable against each
of them in accordance with its terms; at or before the First Delivery Date, the
Pipeline Partnership Agreements will have been duly authorized, executed and
delivered by each of the Company and the Operating Partnership and will be valid
and legally binding agreements of the Company and the Operating Partnership,
enforceable against each of them in accordance with their terms; at or before
the First Delivery Date, the Pipeline LLC Regulations will have been duly
authorized, executed and delivered by the parties thereto and will be valid and
legally binding agreements of each of them enforceable against each of them in
accordance with their terms; at or before the First Delivery Date, each of the
Consolidation Agreement and the Merger and Conveyance Documents will have been
duly authorized, executed and delivered by the parties thereto and will be valid
and legally binding agreements of the parties thereto enforceable against such
parties in accordance with their terms; at or before the First Delivery Date,
the Participation Agreements and the Bank Credit Agreement will have been duly
authorized, executed and delivered by the Operating Partnership and will be
valid and legally binding agreements of the Operating Partnership enforceable
against the Operating Partnership in accordance with their respective terms; at
or before the First Delivery Date, the EPCO Agreement will have been duly
authorized, executed and delivered by each of the General Partner, the Company,
the Operating Partnership and EPCO and will be a valid and legally binding
agreement of each of them enforceable against each of them in accordance with
its terms; provided that, with respect to each agreement described in this
Section 1(t), the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and provided, further, that the indemnity,
contribution and exoneration provisions contained in any of such agreements may
be limited by applicable laws and public policy. The Organization Agreements,
the Consolidation Agreement, the Merger and Conveyance Documents, the
Participation Agreements, the Bank Credit Agreement and the EPCO Agreement are
herein collectively referred to as the "Operative Agreements."
(u) The Split-up Merger became effective under the Texas Business
Corporation Act (the "TBCA"), the Texas LP Act and the Texas LLC Act on June 1,
1998. The TOC Merger became effective under the TBCA and the Delaware LP Act on
or before June 2, 1998.
(v) None of the offering, issuance and sale by the Company of the
Units, the execution, delivery and performance of this Agreement or the
Operative Agreements by the Enterprise Entities which are parties hereto or
thereto, or the consummation of the transactions
-10-
contemplated hereby and thereby (including the Transactions) (i) conflicted,
conflicts or will conflict with or constituted, constitutes or will constitute a
violation of the agreement of limited partnership, limited liability company
operating agreement, certificate or articles of incorporation or bylaws or other
organizational documents of any of the Enterprise Entities, (ii) conflicted,
conflicts or will conflict with or constituted, constitutes or will constitute a
breach or violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such an event), any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which
any of the Enterprise Entities is or was a party or by which any of them or any
of their respective properties may be bound, (iii) resulted, results or will
result in any violation of any statute, law or regulation or any order,
judgment, decree or injunction of any court or governmental agency or body
directed to any of the Enterprise Entities or any of their properties in a
proceeding to which any of them or their property is or was a party, (iv)
resulted, results or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of any of the Enterprise
Entities, in the case of clauses (ii), (iii) or (iv) which conflicts, breaches,
violations or defaults would have a material adverse effect upon the condition
(financial or otherwise), business, prospects, assets or results of operations
of the Company Entities, taken as a whole.
(w) No permit, consent, approval, authorization or order of any
court, governmental agency or body is or was required in connection with the
execution and delivery of, or the consummation by the Enterprise Entities of the
transactions contemplated by, this Agreement or the Operative Agreements
(including the Transactions), except (i) for such permits, consents, approvals
and similar authorizations required under the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and state securities or
"Blue Sky" laws, (ii) for such permits, consents, approvals and similar
authorizations which have been, or prior to each Delivery Date will be,
obtained, and (iii) for such permits, consents, approvals and similar
authorizations which, if not obtained, would not, individually or in the
aggregate, have a material adverse effect upon the condition (financial or
otherwise), business, prospects, assets or results of operations of the Company
Entities, taken as a whole.
(x) None of the Enterprise Entities is in (i) violation of its
agreement of limited partnership, limited liability company agreement or
regulations, certificate or articles of incorporation or bylaws or other
organizational documents, or of any law, statute, ordinance, administrative or
governmental rule or regulation applicable to it or of any order, judgment,
decree or injunction of any court or governmental agency or body having
jurisdiction over it, or (ii) breach, default (or an event which, with notice or
lapse of time or both, would constitute such an event) or violation in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which it is a party or by which it or
any of its properties may be bound, which breach, default or violation would, if
continued, have a material adverse effect on the condition (financial or
otherwise), business, prospects, assets or results of operations of the Company
Entities, taken as a whole, or could materially impair the ability of any of the
Enterprise Entities to perform its obligations under this Agreement or the
Operative Agreements. To the knowledge of the Enterprise Parties, no third party
to any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which any of the Enterprise Entities is a party or by which any of
-11-
them is bound or to which any of their properties are subject, is in default
under any such agreement, which breach, default or violation would, if
continued, have a material adverse effect on the condition (financial or
otherwise), business, prospects, assets or results of operations of the Company
Entities, taken as a whole.
(y) The accountants, Deloitte & Touche LLP, who have certified or
shall certify the audited financial statements included in the Registration
Statement, any Preliminary Prospectus and the Prospectus (or any amendment or
supplement thereto) are independent public accountants with respect to the
Enterprise Entities as required by the Securities Act and the applicable
published Rules and Regulations.
(z) At March 31, 1998, the Company would have had, on the pro forma
basis indicated in the Prospectus (and any amendment or supplement thereto), a
capitalization as set forth therein. The financial statements (including the
related notes and supporting schedules) included in the Registration Statement,
the Preliminary Prospectus dated July 8, 1998 and the Prospectus (and any
amendment or supplement thereto) present fairly in all material respects the
financial position, results of operations and cash flows of the entities
purported to be shown thereby on the basis stated therein at the respective
dates or for the respective periods which have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except to the extent disclosed therein. The selected
historical and pro forma information set forth in the Registration Statement,
the Preliminary Prospectus dated July 8, 1998 and the Prospectus (and any
amendment or supplement thereto) under the caption "Selected Historical and Pro
Forma Financial and Operating Data" is accurately presented in all material
respects and prepared on a basis consistent with the audited and unaudited
historical consolidated financial statements and pro forma financial statements
from which it has been derived. The pro forma financial statements of the
Company included in the Registration Statement, the Preliminary Prospectus dated
July 8, 1998 and the Prospectus (and any amendment or supplement thereto) have
been prepared in all material respects in accordance with the applicable
accounting requirements of Article 11 of Regulation S-X of the Commission; the
assumptions used in the preparation of such pro forma financial statements are,
in the opinion of the management of the Enterprise Entities, reasonable; and the
pro forma adjustments reflected in such pro forma financial statements have been
properly applied to the historical amounts in compilation of such pro forma
financial statements.
(aa) Except as disclosed in the Registration Statement, the
Preliminary Prospectus dated July 8, 1998 and the Prospectus (or any amendment
or supplement thereto), subsequent to the respective dates as of which such
information is given in the Registration Statement, the Preliminary Prospectus
dated July 8, 1998 and the Prospectus (or any amendment or supplement thereto),
(i) none of the Enterprise Entities has incurred any liability or obligation,
indirect, direct or contingent, or entered into any transactions, not in the
ordinary course of business, that, singly or in the aggregate, is material to
the Company Entities, taken as a whole, (ii) there has not been any change in
the capitalization, or material increase in the short-term debt or long-term
debt, of the Enterprise Entities and (iii) there has not been any material
adverse change, or any development involving or which may reasonably be expected
to involve, singly or in the aggregate,
-12-
a prospective material adverse change, in the condition (financial or
otherwise), business, prospects, properties, net worth or results of operations
of the Company Entities taken as a whole.
(bb) There are no legal or governmental proceedings pending or, to
the knowledge of the Enterprise Parties, threatened, against any of the
Enterprise Entities, or to which any of the Enterprise Entities is a party, or
to which any of their respective properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are not described
as required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement that
are not described or filed as required by the Securities Act.
(cc) The Operating Partnership and its subsidiaries, upon
consummation of the Transactions on the each Delivery Date, will have good and
indefeasible title to all real property and good title to all personal property
described in the Prospectus to be owned by the Operating Partnership and its
subsidiaries, free and clear of all liens, claims, security interests or other
encumbrances except (i) as described in the Prospectus and (ii) such as do not
materially interfere with the use of such properties taken as a whole as they
have been used in the past and are proposed to be used in the future as
described in the Prospectus, provided that, (A) with respect to the pipelines
and right-of-way interests relating thereto (the "Pipeline Properties"), the
foregoing shall only constitute a representation that, except as described in
the Prospectus, (1) the Operating Partnership and its subsidiaries will have
sufficient title to enable them to use such Pipeline Properties in their
business as they are proposed to be used in the future as described in the
Prospectus and (2) any lack of title has not had and will not have any material
adverse effect on the ability of the Operating Partnership or such subsidiaries
to use such Pipeline Properties as they have been used in the past and are
proposed to be used in the future as described in the Prospectus, and (B) with
respect to any real property and buildings to be held under lease by the
Operating Partnership and its subsidiaries upon consummation of the Transactions
on each Delivery Date, such real property and buildings will be held under valid
and subsisting and enforceable leases with such exceptions as do not materially
interfere with the use of such properties taken as a whole as they have been
used in the past and are proposed to be used in the future as described in the
Prospectus. The Merger and Conveyance Documents were, or as of each Delivery
Date will be, legally sufficient to transfer or convey to the Operating
Partnership and its subsidiaries all properties that are, individually or in the
aggregate, required to enable the Operating Partnership and its subsidiaries to
conduct their operations (in all material respects as contemplated by the
Prospectus), subject to the conditions, reservations and limitations contained
in the Merger and Conveyance Documents and those set forth in the Prospectus.
The Operating Partnership and its subsidiaries, upon execution and delivery of
the Merger and Conveyance Documents, succeeded or will succeed in all material
respects to the business, assets, properties, liabilities and operations
reflected by the pro forma financial statements of the Company, except as
disclosed in the Prospectus and in such Merger and Conveyance Documents.
(dd) The Company has not distributed and, prior to the later to
occur of (i) the First Delivery Date and (ii) completion of the distribution of
the Units, will not distribute, any prospectus (as defined under the Securities
Act) in connection with the offering and sale of the Units other than the
Registration Statement, any Preliminary Prospectus, the Prospectus or other
materials, if any, permitted by the Securities Act, including Rule 134 of the
Rules and Regulations.
(ee) Except as described in the Registration Statement or in
connection with the consummation of the Transactions, the Company has not sold
or issued any equity securities during the six-month period preceding the date
of the Prospectus.
(ff) Each of the Enterprise Entities has, or at each Delivery Date
will have, such permits, consents, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own or
lease its properties and to conduct its business in the manner
-13-
described in the Prospectus, subject to such qualifications as may be set forth
in the Prospectus and except for such permits which, if not obtained, would not
have, individually or in the aggregate, a material adverse effect upon the
ability of the Company Entities, considered as a whole, to conduct their
businesses in all material respects as currently conducted and as contemplated
by the Prospectus to be conducted; each of the Enterprise Entities has, or at
each Delivery Date will have, fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof
or results in any impairment of the rights of the holder of any such permit,
except for such revocations, terminations and impairments that would not have a
material adverse effect upon the ability of the Company Entities considered as a
whole to conduct their businesses in all material respects as currently
conducted and as contemplated by the Prospectus to be conducted, subject in each
case to such qualification as may be set forth in the Prospectus;
(gg) The Company (i) makes and keeps books, records and accounts,
which, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets and (ii) maintains systems of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(hh) To the knowledge of the Enterprise Parties, none of the
Enterprise Entities nor any employee or agent of any of the Enterprise Entities
has made any payment of funds of an Enterprise Entity or received or retained
any funds in either case 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 Prospectus.
(ii) Each of the Enterprise Entities has filed (or has obtained
extensions with respect to) all material tax returns required to be filed
through the date hereof, which returns are complete and correct in all material
respects, and has timely paid all taxes shown to be due pursuant to such
returns, other than those (i) which, if not paid, would not have a material
adverse effect on the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the Company Entities, taken as
a whole, or (ii) which are being contested in good faith.
(jj) The Enterprise Entities own, possess or have license rights
with respect to, and at each Delivery Date the Operating Partnership and its
subsidiaries will own, possess or have license rights with respect to, all
patents, trademarks, trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights owned by them or necessary for the conduct of their respective
businesses, and none of the Enterprise Parties is aware of any claim to the
contrary or any challenge by any other person to the rights of the Enterprise
Entities with respect to the foregoing.
-14-
(kk) None of the Enterprise Entities is now, and after sale of the
Units to be sold by the Company hereunder and application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will be, (i) an "investment company" or a company "controlled by" an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or (ii) a "public utility company," "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" thereof, under the
Public Utility Holding Company Act of 1935, as amended.
(ll) None of the Enterprise Entities has sustained since the date of
the latest audited financial statements included in the Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity whether or not covered by insurance, or from any labor dispute or court
or governmental action, investigation, order or decree, otherwise than as set
forth or contemplated in the Prospectus.
(mm) None of the Enterprise Entities has violated any environmental,
safety, health or similar law or regulation applicable to its business relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
or lacks any permits, licenses or other approvals required of them under
applicable Environmental Laws to own, lease or operate their properties and
conduct their business as described in the Prospectus or is violating any terms
and conditions of any such permit, license or approval, which in each case would
have a material adverse effect on the condition (financial or otherwise),
business, prospects, assets or results of operations of the Company Entities,
taken as a whole.
(nn) Except as described in or contemplated by the Prospectus, no
material labor dispute with the employees of any of the Enterprise Entities
exists or, to the knowledge of the Enterprise Parties, is imminent.
(oo) The Enterprise Entities maintain insurance covering their
properties, operations, personnel and businesses against such losses and risks
as are reasonably adequate to protect them and their businesses in a manner
consistent with other businesses similarly situated. None of the Enterprise
Entities has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be made in
order to continue such insurance; and all such insurance is outstanding and duly
in force on the date hereof and will be outstanding and duly in force on each
Delivery Date.
(pp) Except as described in the Prospectus or the Split-Up Merger
Agreement, there is (i) no action, suit or proceeding before or by any court,
arbitrator or governmental agency, body or official, domestic or foreign, now
pending or, to the knowledge of the Enterprise Parties, threatened, to which any
of the Enterprise Entities is or may be a party or to which the business or
property of any of the Enterprise Entities is or may be subject, (ii) no
statute, rule, regulation or order that has been enacted, adopted or issued by
any governmental agency or that has been proposed by any governmental body, and
(iii) no injunction, restraining order or order of any nature issued by a
federal or state court or foreign court of competent jurisdiction to which any
of the Enterprise Entities is or may be subject, that, in the
-15-
case of clauses (i), (ii) and (iii) above, is reasonably expected to (A) singly
or in the aggregate have a material adverse effect on the condition (financial
or otherwise), business, prospects, properties, net worth or results of
operations of the Company Entities, taken as a whole, or (B) prevent or result
in the suspension of the offering and issuance of the Units.
(qq) The offer, sale and issuance of the Common Units and
Subordinated Units to Partners II pursuant to the Partnership Agreement is
exempt from the registration requirements of the Securities Act, the Rules and
Regulations and the securities laws of any state having jurisdiction with
respect thereto, and none of the Enterprise Entities has taken or will take any
action that would cause the loss of such exemption.
(rr) The Units have been approved for listing on the New York Stock
Exchange ("NYSE"), subject only to official notice of issuance.
2. Purchase of the Units by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 11,250,000 Firm Units
to the several Underwriters, and each of the Underwriters, severally and not
jointly, agrees to purchase the number of Firm Units set opposite that
Underwriter's name in Schedule 1 hereto. The respective purchase obligations of
the Underwriters with respect to the Firm Units shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,687,500 Option Units. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Units and is exercisable
as provided in Section 4 hereof. Option Units shall be purchased severally for
the account of the Underwriters in proportion to the number of Firm Units set
opposite the names of such Underwriters in Schedule 1 hereto. The respective
purchase obligations of each Underwriter with respect to the Option Units shall
be adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Units other than in 100 Unit amounts. The price of both the
Firm Units and any Option Units shall be $_____ per Unit.
The Company shall not be obligated to deliver any of the Units to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Units to be
purchased on such Delivery Date as provided herein.
3. Offering of Units by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Units, the several Underwriters
propose to offer the Firm Units for sale upon the terms and conditions set forth
in the Prospectus.
-16-
4. Delivery of and Payment for the Units. Delivery of and payment
for the Firm Units shall be made at the office of Xxxxxx Brothers Inc. at 10:00
A.M., New York City time, on the fourth full business day following the date of
this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Units to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer of immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Units shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking
and packaging of the certificates for the Firm Units, the Company shall make the
certificates representing the Firm Units available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of Option Units as to which the option is being exercised,
the names in which the Option Units are to be registered, the denominations in
which the Option Units are to be issued and the date and time, as determined by
the Representatives, when the Option Units are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the Option
Units are delivered are sometimes referred to as the "Second Delivery Date," and
the First Delivery Date and the Second Delivery Date are sometimes each referred
to as a "Delivery Date."
Delivery of and payment for the Option Units shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Units to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer of immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Units shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting
the checking and packaging of the certificates for the Option Units, the Company
shall make the certificates representing the Option Units available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Second Delivery Date.
-17-
5. Further Agreements of the Enterprise Entities. Each of the
Enterprise Entities, jointly and separately, covenants and agrees with each
Underwriter:
(a) (i) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; (ii) to make no further amendment or any
supplement to the Registration Statement or to the Prospectus except as
permitted herein; (iii) to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; (iv) to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of
the qualification of the Units for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose or of
any request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information; and
(v) in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal.
(b) To furnish to each of the Representatives and to counsel for
the Underwriters, without charge, (i) an XXXXX version of the Registration
Statement as originally filed with the Commission and of each amendment
thereto, including financial statements and all exhibits to the
Registration Statement, (ii) a manually signed copy of the Registration
Statement corresponding to the XXXXX version filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
to the Registration Statement, (iii) such number of conformed copies of the
Registration Statement as originally filed and of each amendment thereto,
but without exhibits, as the Representatives or their counsel may
reasonably request, and (iv) such number of each Preliminary Prospectus,
the Prospectus and any amended or supplemented Prospectus as the
Representatives or their counsel may reasonably request.
(c) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the
opinion of counsel for the Underwriters a Prospectus is required by the
Securities Act to be delivered in connection with sales by any Underwriter
or dealer, the Partnership will expeditiously deliver to each Underwriter
and each dealer without charge, as many copies of the Prospectus (and of
any amendment or supplement thereto) as you may reasonably request. If the
delivery of a prospectus is required at any time after the Effective Time
in connection with the offering or sale of the Units or any other
securities relating thereto and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would
-18-
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their request, to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or
effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission.
(e) The Partnership will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus of which Xxxxxx Brothers Inc. shall not previously have been
advised or to which the Representatives or their counsel shall reasonably
object in writing after being so advised or (ii) so long as, in the opinion
of counsel for the Underwriters, a Prospectus is required to be delivered
in connection with sales by any Underwriter or dealer, file any
information, documents or reports pursuant to the Exchange Act without
delivering a copy of such information, documents or reports to Xxxxxx
Brothers Inc., as Representatives of the Underwriters, prior to or
concurrently with such filing.
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the Company,
Rule 158).
(g) For a period of two years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the
Company to its security holders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange or automated quotation system upon which the Units may
be listed pursuant to requirements of or agreements with such exchange or
system or to the Commission pursuant to the Exchange Act, or any rule or
regulation of the Commission thereunder.
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Units for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Units;
provided that in no event shall the Company or the General Partner be
obligated in connection therewith to qualify as a
-19-
foreign limited partnership or as a foreign corporation, or to execute a
general consent to service of process.
(i) Without the prior written consent of Xxxxxx Brothers Inc.,
during the 180 days following the date of this Prospectus, not to (i) offer
for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result
in the disposition by any person at any time in the future of) any Common
Units or any securities that are convertible into, or exercisable or
exchangeable for, or that represent the right to receive, Common Units or
any securities that are senior to or pari passu with the Common Units, or
(ii) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or rights of
ownership of such Common Units; and to cause each officer and director of
the Company to furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, substantially in the form attached hereto as
Exhibit D.
(j) To apply the net proceeds from the sale of the Units being
sold by the Company as set forth in the Prospectus.
(k) To take such steps as shall be necessary to ensure that none
of the Enterprise Entities shall become an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the rules
and regulations of the Commission thereunder.
(l) To timely complete all required filings and otherwise fully
comply in a timely manner with all provisions of the Exchange Act,
including the rules and regulations thereunder, in connection with the
registration of the Units thereunder.
-20-
(m) To cause the Enterprise Entities to accomplish or obtain as
soon as practicable all consents, recordings and filings necessary to
perfect, preserve and protect the title of the Operating Partnership and
its subsidiaries to the properties and assets owned by them as a result of
the Transactions.
6. Expenses. The Enterprise Parties agree to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Units and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing, filing, delivery and shipping of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), each Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement and any other related documents in connection with the offering,
purchase, sale and delivery of the Units; (e) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of sale of the Units; (f) any applicable listing or other
similar fees; (g) the fees and expenses of qualifying the Units under the
securities laws of the several jurisdictions as provided in Section 5(h) and of
preparing, printing and distributing a Blue Sky Memorandum (including related
fees and expenses of counsel to the Underwriters); (h) the cost of printing
certificates representing the Units; (i) the costs and charges of any transfer
agent or registrar; and (j) all other costs and expenses incident to the
performance of the obligations of the Company; provided that, except as provided
in this Section 6 and in Section 11 the Underwriters shall pay their own costs
and expenses, including the costs and expenses of their counsel, any transfer
taxes on the Units which they may sell and the expenses of advertising any
offering of the Units made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the
Enterprise Parties contained herein, to the performance by the Enterprise
Parties of their respective obligations hereunder and to the following
additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a)(i) hereof, the Registration Statement
and all post-effective amendments to the Registration Statement shall have
become effective, all filings required by Rule 424 and Rule 430A of the Rules
and Regulations shall have been made and no such filings shall have been made
without the consent of the Representatives; no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto or suspending the qualification of the Units for offering or sale in any
jurisdiction shall have been issued; no proceedings for the issuance of any such
order shall have been initiated or threatened; and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been disclosed to the Representatives and
complied with to their satisfaction.
-21-
(b) No Underwriter shall have been advised by the Enterprise
Entities or shall have discovered and disclosed to the Company that the
Registration Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which in the opinion of the
Representatives, or in the opinion of counsel to the Underwriters, is material
or omits to state a fact, which, in the opinion of the Representatives or in the
opinion of counsel to the Underwriters, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate, partnership and limited liability company
proceedings and other legal matters incident to the authorization, form and
validity of this Agreement, the Operative Agreements, the Common Units, the
Subordinated Units, the Registration Statement and the Prospectus, and all other
legal matters relating to this Agreement and the transactions contemplated
hereby (including the Transactions) shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Xxxxxx & Xxxxxx L.L.P. shall have furnished to the
Representatives their written opinion, as counsel for the Enterprise Entities,
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Representatives, with respect to the matters set
forth in Exhibit A to this Agreement.
(e) Xxxxx & Xxxxx, X.X. shall have furnished to the
Representatives their written opinion, as counsel for the Enterprise Entities,
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Representatives, with respect to the matters set
forth in Exhibit B to this Agreement.
(f) Special Counsel for the Enterprise Entities in each of the
States of Louisiana, Mississippi and Alabama shall have furnished to the
Representatives their written opinion or opinions, dated such Delivery Date, in
form and substance satisfactory to the Representatives, with respect to the
matters set forth in Exhibit C to this Agreement.
(g) The Representatives shall have received from Xxxxx & Xxxxx,
L.L.P., counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, 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, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a letter, in form
and substance satisfactory to the Representatives, addressed to the Underwriters
and dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of
-22-
Regulation S-X of the Commission, (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(i) With respect to the letter of Deloitte & Touche LLP referred
to in the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
(j) On each Delivery Date, there shall have been furnished to
the Representatives a certificate, dated such Delivery Date and addressed to the
Representatives, signed on behalf of the Company by the chief executive officer
and the chief financial officer of the General Partner, to the effect that (i)
the representations, warranties and agreements of the Company, the Operating
Partnership and the General Partner contained in this Agreement are true and
correct, as if made at and as of such Delivery Date, and the Company, the
Operating Partnership and the General Partner have complied with all the
agreements and satisfied all the conditions on their part to be complied with or
satisfied at or prior to such Delivery Date; (ii) no stop order suspending the
effectiveness of the Registration Statement has been issued, and no proceeding
for that purpose has been initiated or threatened; (iii) the signers of said
certificate have carefully examined the Registration Statement and the
Prospectus, and any amendments or supplements thereto, and such documents
contain all statements and information required to be included therein, and do
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; (iv) since the Effective Date there has occurred no
event required to be set forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not been so set forth; and (v) no event
contemplated by subsection (l) of this Section 7 in respect of the Company, the
Operating Partnership or the General Partner shall have occurred.
(k) On each Delivery Date, there shall have been furnished to
the Representatives a certificate, dated such Delivery Date and addressed to the
Representatives, signed on behalf of EPCO and Partners II by the chief executive
officer and the chief financial officer of the EPCO to the effect that (i) the
representations, warranties and agreements of EPCO and Partners II contained in
this Agreement are true and correct, as if made at and as of such Delivery
-23-
Date, and EPCO and Partners II have complied with all the agreements and
satisfied all the conditions on their part to be complied with or satisfied at
or prior to the Delivery Date; and (ii) no event contemplated by subsection (l)
of this Section 7 in respect of EPCO and Partners II has occurred.
(l) Since the Effective Date, none of the Enterprise Entities
shall have sustained any material loss or interference with its business by
fire, flood, explosion, accident or other calamity, whether or not covered by
insurance, or shall have become a party to or the subject of any litigation,
court or governmental action, investigation, order or decree which is materially
adverse to the Enterprise Entities as a whole; nor shall there have been a
change in the partners' capital, capital stock, short-term debt or long-term
debt of the Enterprise Entities or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, operations, business, prospects, management, capitalization,
financial condition, results of operations or net worth of the Enterprise
Entities, which loss, litigation, change or development, in the judgment of the
Representatives, shall render it impractical or inadvisable to proceed with the
payment for and delivery of the Units.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the NYSE or the American Stock Exchange or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest of the
several Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Units being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(n) The NYSE shall have approved the Units for listing, subject
only to official notice of issuance and evidence of satisfactory distribution.
(o) The Enterprise Entities shall have furnished the
Representatives such additional documents and certificates as the
Representatives or counsel for the Underwriters may reasonably request.
(p) Simultaneously with the sale of the Units on the First
Delivery Date, the closing of the Bank Credit Agreement shall have ocurred as
described in the Registration Statement.
-24-
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Representatives and to counsel for the Underwriters. The
Company shall furnish to the Representatives conformed copies of such opinions,
certificates, letters and other documents in such number as they shall
reasonably request. If any of the conditions specified in this Section 7 shall
not have been fulfilled, when and as required by this Agreement, this Agreement
and all obligations of the Underwriters hereunder may be canceled at, or at any
time prior to, each Delivery Date, by the Representatives. Any such
cancellation shall be without liability of the Underwriters to the Enterprise
Entities or any of their affiliates. Notice of such cancellation shall be given
to the Company in writing, or by telegraph or telephone and confirmed in
writing.
8. Indemnification and Contribution.
(a) The Enterprise Parties, jointly and severally, shall
indemnify and hold harmless each Underwriter, its officers and employees and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Units), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Units or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Enterprise Parties shall
not be liable under this clause (iii) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Enterprise Parties shall not
be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or
-25-
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein; and
provided further that this indemnity agreement shall not inure to the benefit of
any Underwriter on account of any loss, claim, damage, liability or action
arising from the sale of Units to any person by such Underwriter if such
Underwriter failed to send or give a copy of the Prospectus, as the same may be
amended or supplemented, to such person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in the
Preliminary Prospectus was remedied or corrected in the Prospectus, unless such
failure resulted from non-compliance by the Enterprise Parties with Section 5(c)
hereof. The foregoing indemnity agreement is in addition to any liability which
the Enterprise Parties may otherwise have to any Underwriter or to any officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Enterprise Parties, their officers and employees, each of
their directors (including any person who, with his or her consent, is named in
the Registration Statement as about to become a director of the General
Partner), and each person, if any, who controls the Enterprise Parties within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Enterprise Parties or any such director, officer or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Enterprise Parties through the Representatives by or on behalf
of that Underwriter specifically for inclusion therein, and shall reimburse the
Enterprise Parties and any such director, officer or controlling person for any
legal or other expenses reasonably incurred by the Enterprise Parties or any
such director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Enterprise Parties or any such director, officer, employee or controlling
person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and,
-26-
provided further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that any indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment of
such counsel has been specifically authorized in writing by the indemnifying
party, (ii) the indemnifying party shall have failed to assume the defense and
employ counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such indemnified party and the indemnifying
party and such indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party and the fees and expenses of such separate
counsel shall be paid by the indemnifying party). No indemnifying party shall,
in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for such indemnified party, which
firm shall be designated by the indemnified party. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Enterprise Parties, on the one hand, and the Underwriters
-27-
on the other 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 Enterprise Parties, on the one hand,
and the Underwriters on the other, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Enterprise Parties, on the one hand, and the
Underwriters on the other, with respect to such offering shall be deemed to be
in the same proportion as the total net proceeds from the offering of the Units
purchased under this Agreement (before deducting expenses) received by the
Company, on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the Units purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the Units under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Enterprise Parties or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Enterprise Parties and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8 were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8 shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), 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 it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or becomes liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Enterprise
Parties acknowledge that the statements with respect to the public offering of
the Units by the Underwriters set forth on the cover page of, the stabilization
legend on the inside front cover page of, information in the chart in the first
paragraph under the caption "Underwriting", the concession and reallowance
figures appearing in the second paragraph under the caption "Underwriting" and
the statements in the seventh and fifteenth paragraphs under the caption
"Underwriting" in the Prospectus are correct and constitute the only information
concerning such Underwriters furnished in writing to the Company by or on behalf
of the Underwriters specifically for inclusion in the Registration Statement and
the Prospectus.
-28-
9. Defaulting Underwriters
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting Underwriters shall be obligated to purchase the Units which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm Units set opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total number of Firm Units set opposite the names of all the remaining non-
defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Units on such Delivery Date if the total number of Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of Units to be purchased on such Delivery
Date, and any remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the number of the Units which it agreed to purchase
on such Delivery Date pursuant to the terms of Section 2. If the foregoing
maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Units to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the Units which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Units)
shall terminate without liability on the part of any non-defaulting Underwriter
or any Enterprise Party except that the Company will continue to be liable for
the payment of expenses to the extent set forth in Sections 6 and 11. As used
in this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Units which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages, including expenses paid by
the Company pursuant to Sections 6 and 11, caused by its default. If other
underwriters are obligated or agree to purchase the Units of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Units if, prior to that
time, any of the events described in Section 7(l) or 7(m) shall have occurred or
if the Underwriters shall decline to purchase the Units for any reason permitted
under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Units for delivery to the Underwriters by reason of any
failure, refusal or inability on the
-29-
part of any Enterprise Party to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by any Enterprise Company is not fulfilled,
the Enterprise Parties will reimburse the Underwriters for all reasonable out-
of-pocket expenses (including fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Units, and upon demand the Enterprise Parties shall pay the full amount thereof
to the Representatives. If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, the Enterprise Parties shall
not be obligated to reimburse any defaulting Underwriter on account of those
expenses.
12. Notices. Any notice, consent, request, instruction, approval and
other communication provided for herein shall be in writing, shall be delivered
or sent by mail, telex or facsimile transmission and shall be deemed validly
given, made or served (i) on the date on which it is delivered personally with
receipt acknowledged, (ii) five business days after it is sent by registered or
certified mail (receipt requested and postage prepaid), (iii) one business day
after it is sent by overnight courier (charges prepaid) or (iv) on the same
business day when sent before 5:00 p.m., recipient's time (and on the next
business day when sent after 5:00 p.m., recipient's time) by telex or
telecopier, transmission confirmed and charges prepaid. Such notices shall be in
writing, and
(a) if to any of the Enterprise Parties, shall be addressed to
such Enterprise Party at 0000 Xxxxx Xxxx Xxxx, X.X. Box 4324, Houston,
Texas 77210 Attention: President;
(b) if to the Underwriters, such notice shall be addressed to
the Representatives in care of Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 10285-1100, Attention: Syndicate
Department (Fax: 212/000-0000), with a copy, in the case of any notice
pursuant to Section 8(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., 3 World Financial Center, 10th
Floor, New York, New York 10285.
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Enterprise
Parties and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the
Enterprise Parties contained in this Agreement shall also be deemed to be for
the benefit of the person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the
-30-
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the General Partner, officers of the General Partner who have
signed the Registration Statement and any person controlling any of the
Enterprise Parties within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Enterprise Parties and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Units and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the NYSE
is open for trading, and (b) "subsidiary" has the meaning set forth in Rule 405
of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
-31-
If the foregoing correctly sets forth the agreement among the
Enterprise Parties and the Underwriters, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
ENTERPRISE PRODUCTS COMPANY
By:
------------------------------------------
O. S. Xxxxxx
President and Chief Executive Officer
ENTERPRISE PRODUCTS PARTNERS L.P.
By: ENTERPRISE PRODUCTS GP, LLC
its General Partner
By:
------------------------------------------
O. S. Xxxxxx
President and Chief Executive Officer
ENTERPRISE PRODUCTS OPERATING L.P.
By: ENTERPRISE PRODUCTS GP, LLC
its General Partner
By:
------------------------------------------
O. S. Xxxxxx
President and Chief Executive Officer
ENTERPRISE PRODUCTS GP, LLC
By:
------------------------------------------
O. S. Xxxxxx
President and Chief Executive Officer
EPC PARTNERS II, INC.
By:
------------------------------------------
O. S. Xxxxxx
President and Chief Executive Officer
Accepted:
XXXXXX BROTHERS INC.
X.X. XXXXXXX & SONS, INC.
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
XXXX XXXXXXXX XXXXXXX, A DIVISION OF XXXX XXXXXXXX INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
For themselves and as
Representatives of the
several Underwriters named
in Schedule 1 hereto
By: Xxxxxx Brothers Inc.
By:
-------------------------------
Authorized Representative
-33-
EXHIBIT A
OPINION OF XXXXXX & XXXXXX L.L.P.
(a) The Company has been duly formed and is validly existing and in
good standing as a limited partnership under the Delaware LP Act with all
necessary partnership power and authority to own or lease its properties, assume
the liabilities being assumed by it pursuant to the Merger and Conveyance
Documents and conduct its business, in each case in all material respects as
described in the Registration Statement and the Prospectus.
(b) The Company has been registered or qualified as a foreign limited
partnership for the transaction of business under the laws of the State of
Texas; and, to such counsel's knowledge, such jurisdiction is the only
jurisdiction in which the character of the business conducted by the Company or
the nature or location of the properties owned or leased by it make such
registration or qualification necessary, except where the failure to so register
or so qualify would not (A) have a material adverse effect on the condition
(financial or otherwise), business or results of operations of the Company and
the Operating Partnership, taken as a whole, or (B) subject the limited partners
of the Company to any material liability or disability.
(c) The Operating Partnership has been duly formed and is validly
existing and in good standing as a limited partnership under the Delaware LP Act
with all necessary partnership power and authority to own or lease its
properties, assume the liabilities being assumed by it pursuant to the Merger
and Conveyance Documents and conduct its business, in each case in all material
respects as described in the Registration Statement and the Prospectus.
(d) The Operating Partnership is duly registered or qualified as a
foreign limited partnership for the transaction of business under the laws of
the States of Alabama, Louisiana, Mississippi and Texas; and, to such counsel's
knowledge, such jurisdictions are the only jurisdictions in which the character
of the business conducted by the Operating Partnership or the nature or location
of the properties owned or leased by it make such registration or qualification
necessary, except where the failure to so register or so qualify would not (A)
have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and the Operating Partnership,
taken as a whole, or (B) subject the limited partners of the Company to any
material liability or disability.
(e) The Operating Partnership has all requisite partnership power and
authority under the laws of the State of Texas to own or lease its properties
and to conduct its business in the State of Texas; and upon the consummation of
the Transactions (assuming that the Company will not be liable under the laws of
the State of Delaware for the liabilities of the Operating Partnership and
assuming that the Unitholders will not be liable under the laws of the State of
Delaware for liabilities of the Company or the Operating Partnership), the
Company will not be liable under the laws of the State of Texas for the
liabilities of the Operating Partnership and the Unitholders will not be liable
under the laws of the State of Texas for the liabilities of the
A-1
Company or the Operating Partnership, except in each case to the same extent as
under the laws of the State of Delaware.
(f) The General Partner has been duly formed and is validly existing
in good standing as a limited liability company under the Delaware LLC Act with
all necessary limited liability company power and authority to own or lease its
properties, to conduct its business and to act as general partner of the Company
and the Operating Partnership, in each case in all material respects as
described in the Registration Statement and the Prospectus.
(g) The General Partner is duly registered or qualified as a foreign
limited liability company for the transaction of business under the laws of the
States of Alabama, Louisiana, Mississippi and Texas; and to such counsel's
knowledge, such jurisdictions are the only jurisdictions in which the character
of the business conducted by the General Partner or the nature or location of
the properties owned or leased by it make such registration or qualification
necessary, except where the failure to so register or so qualify would not (A)
have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the General Partner or the Company and the
Operating Partnership, taken as a whole, or (B) subject the limited partners of
the Company to any material liability or disability.
(h) EPCO is a corporation that has been duly incorporated and is
validly existing in good standing under the laws of the State of Texas with full
corporate power and authority to own or lease its properties, assume the
liabilities being assumed by it pursuant to the Merger and Conveyance Documents
and conduct its business, in each case in all material respects as described in
the Registration Statement and the Prospectus.
(i) EPCO is duly registered or qualified as a foreign corporation for
the transaction of business under the laws of the States of Alabama, Louisiana,
Mississippi and Texas; and, to such counsel's knowledge, such jurisdictions are
the only jurisdictions in which the character of the business conducted by EPCO
or the nature or location of the properties owned or leased by it make such
registration or qualification necessary, except where the failure to so register
or so qualify would not have a material adverse effect on the condition
(financial or otherwise), business or results of operations of the Company and
the Operating Partnership, taken as a whole.
(j) Partners II is a corporation that has been duly incorporated and
is validly existing in good standing under the laws of the State of Delaware
with full corporate power and authority to own or lease its properties, assume
the liabilities being assumed by it pursuant to the Merger and Conveyance
Documents and conduct its business, in each case in all material respects as
described in the Registration Statement and the Prospectus.
(k) HSC and Propylene have been duly formed and are validly existing
in good standing as limited partnerships under the Texas LP Act with all
necessary partnership power and authority to own or lease their properties,
assume the liabilities being assumed by them pursuant to the Merger and
Conveyance Documents and conduct their business, in each case in all material
respects as described in the Registration Statement and the Prospectus.
A-2
(l) Propylene is duly registered or qualified as a foreign limited
partnership for the transaction of business under the laws of the State of
Louisiana; and, to such counsel's knowledge, such jurisdiction is the only
jurisdiction in which the character of the business conducted by Propylene or
the nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure to so register
or so qualify would not (A) have a material adverse effect on the condition
(financial or otherwise), business or results of operations of the Company and
the Operating Partnership, taken as a whole, or (B) subject the limited partners
of the Company to any material liability or disability.
(m) Sorrento, Chunchula and Cajun have been duly formed and are
validly existing in good standing as limited liability companies under the Texas
LLC Act, with all necessary limited liability company power and authority to own
or lease their properties, assume the liabilities being assumed by them pursuant
to the Merger and Conveyance Documents and to conduct their business, in each
case in all material respects as described in the Registration Statement and the
Prospectus.
(n) Sorrento and Cajun are duly registered or qualified as foreign
limited liability companies for the transaction of business under the laws of
the State of Louisiana, and Chunchula is duly registered or qualified as foreign
limited liability company for the transaction of business under the laws of the
States of Alabama and Mississippi; and to such counsel's knowledge, such
jurisdictions are the only jurisdictions in which the character of the business
conducted by Sorrento, Cajun and Chunchula or the nature or location of the
properties owned or leased by them make such registration or qualification
necessary, except where the failure to so register or so qualify would not (A)
have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and the Operating Partnership,
taken as a whole, or (B) subject the limited partners of the Company to any
material liability or disability.
(o) The General Partner is the sole general partner of the Company,
with a 1% general partner interest in the Company; such general partner interest
has been duly authorized and validly issued in accordance with the Partnership
Agreement; and the General Partner owns such general partner interest free and
clear of all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial Code of the
States of Texas or Delaware naming the General Partner as debtor is on file in
the office of the Secretary of State of the State of Texas or Delaware or (B)
otherwise known to such counsel, without independent investigation, other than
those created by or arising under the Delaware LP Act.
A-3
(p) The Sponsor Units issued to Partners II pursuant to the
Partnership Agreement, and the limited partner interests represented thereby
have been duly authorized and validly issued in accordance with the Partnership
Agreement and are fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in the Prospectus under "The Partnership Agreement -- Limited
Liability"); and Partners II owns the Sponsor Units free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which a
financing statement under the Uniform Commercial Code of the States of Texas or
Delaware naming Partners II as debtor is on file in the office of the Secretary
of State of the State of Texas or Delaware or (B) otherwise known to such
counsel, without independent investigation, other than those created by or
arising under the Delaware LP Act.
(q) The 11,250,000 Common Units to be issued and sold to the
Underwriters by the Company pursuant to the Underwriting Agreement and the
limited partner interests represented thereby have been duly authorized by the
Partnership Agreement and, when issued and delivered against payment therefor as
provided in the Underwriting Agreement, will be validly issued, fully paid (to
the extent required under the Partnership Agreement) and nonassessable (except
as such nonassessability may be affected by matters described in the Prospectus
under the caption "The Partnership Agreement -- Limited Liability"); other than
the Sponsor Units that will be owned by Partners II, the Units will be the only
limited partner interests of the Partnership issued and outstanding at the
Delivery Date.
(r) The General Partner owns a 1.0101% general partner interest in
the Operating Partnership, and the Company owns a 98.9899% limited partner
interest in the Operating Partnership; such interests have been duly authorized
and validly issued in accordance with the Operating Partnership Agreement and
are fully paid (to the extent required under the Operating Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
the matters described in the Prospectus under the caption "The Partnership
Agreement--Limited Liability"); and the General Partner and the Company own
such interests free and clear of all liens, encumbrances, security interests,
charges or claims (A) in respect of which a financing statement under the
Uniform Commercial Code of the States of Texas or Delaware naming the General
Partner or the Company as a debtor is on file in the office of the Secretary of
State of the State of Texas or Delaware or (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising under
the Delaware LP Act.
(s) The Company owns a 1% limited partner interest in each of
Propylene and HSC, and the Operating Partnership owns a 99% general partner
interest in each of Propylene and HSC; such interests have been duly authorized
and validly issued in accordance with the Pipeline Partnership Agreements and
are fully paid (to the extent required under the Pipeline Partnership
Agreements) and nonassessable (except as such nonassessability may be affected
by the Texas LP Act); and the Company and the Operating Partnership own such
interests free and clear of all liens, encumbrances, security interests, charges
or claims (A) in respect of which a financing statement under the Uniform
Commercial Code of the States of Texas or Delaware naming the Company or
A-4
the Operating Partnership as a debtor is on file in the office of the Secretary
of State of the State of Texas or Delaware or (B) otherwise known to such
counsel, without independent investigation, other than those created by or
arising under the Texas LP Act.
(t) The Operating Partnership owns 100% of the member interests in
Sorrento, Chunchula and Cajun; such member interests have been duly authorized
and validly issued in accordance with the Pipeline LLC Regulations and are fully
paid (to the extent required under the Pipeline LLC Regulations) and
nonassessable (except as such nonassessability may be affected by the Texas LLC
Act); and the Operating Partnership owns such interests free and clear of all
liens, encumbrances, security interests, charges or claims (A) in respect of
which a financing statement under the Uniform Commercial Code of the States of
Texas or Delaware naming the Operating Partnership as a debtor is on file in the
office of the Secretary of State of the State of Texas or Delaware or (B)
otherwise known to such counsel, without independent investigation, other than
those created by or arising under the Texas LLC Act.
(u) EPCO owns 95% of the member interests in the General Partner and
Xxxxxx owns 5% of the member interests in the General Partner; such member
interests have been duly authorized and validly issued in accordance with the
General Partner Agreement and are fully paid (to the extent required under the
General Partner Agreement) and nonassessable (except as such nonassessability
may be affected by Section 18-607 of the Delaware Act); and EPCO and Xxxxxx own
such interests fee and clear of all liens, encumbrances, security interests,
charges or claims (A) in respect of which a financing statement under the
Uniform Commercial Code of the States of Texas or Delaware naming EPCO or the
General Partner as a debtor is on file in the office of the Secretary of State
of the State of Texas or Delaware or (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising under
the Delaware LLC Act.
(v) EPCO owns 100% of the outstanding common stock of Partners II;
such common stock has been duly authorized and validly issued and is fully paid
and nonassessable; and EPCO owns such common stock free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which a
financing statement under the Uniform Commercial Code of the States of Texas or
Delaware naming EPCO as a debtor is on file in the office of the Secretary of
State of Texas or Delaware or (B) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Delaware General Corporation Law ("DGCL").
(w) Except as described in the Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, nor any restriction upon
the voting or transfer of, any limited partner interests in the Company or the
Operating Partnership pursuant to the Partnership Agreement, the Operating
Partnership Agreement or any other agreement or instrument known to such counsel
to which the Company or the Operating Partnership is a party or by which either
of them may be bound. To such counsel's knowledge and except as provided in the
Company's Partnership Agreement, neither the filing of the Registration
Statement nor the offering or sale of the Units as contemplated by the
Underwriting Agreement gives rise to any rights for or relating to the
registration of any Units or other securities of the Company or the Operating
Partnership. To such counsel's knowledge, except as described in the Prospectus,
there are no
A-5
outstanding options or warrants to purchase any Common Units or Subordinated
Units or other partnership interests in the Company or the Operating
Partnership. The Company has all requisite partnership power and authority to
issue, sell and deliver (A) the Units, in accordance with and upon the terms and
conditions set forth in this Agreement, the Partnership Agreement and the
Registration Statement and Prospectus, and (B) the Sponsor Units in accordance
with the terms and conditions set forth in the Partnership Agreement.
(x) The Underwriting Agreement has been duly authorized and validly
executed and delivered by each of the Enterprise Parties.
(y) Each of the Operative Agreements (other than the Consolidation
Agreement) to which any of the Enterprise Entities is a party have been duly
authorized and validly executed and delivered by the Enterprise Entities parties
thereto and constitutes a valid and binding obligation of the Enterprise
Entities parties thereto, enforceable against each such party in accordance with
its respective terms, subject to (A) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws from time to
time in effect affecting creditors' rights and remedies generally and general
principles of equity (regardless of whether such principles are considered in a
proceeding at law or in equity) and (B) public policy, applicable law relating
to fiduciary duties and an implied covenant of good faith and fair dealing.
(z) The offering, issuance and sale by the Company of the Units and
the execution, delivery and performance by the Enterprise Entities of this
Agreement and the Operative Agreements and the consummation of the transactions
contemplated hereby and thereby (including the Transactions) has not caused, and
will not cause, as applicable, (A) a violation of the agreement of limited
partnership, limited liability company operating agreement, certificate or
articles of incorporation or bylaws or other organizational documents of any of
the Enterprise Entities, (B) a breach or violation of, or a default under (or an
event which, with notice or lapse of time or both, would constitute such an
event), any Operative Agreement or any other indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument known to such counsel,
(C) any violation of any federal or Texas statute, law or regulation, the
Delaware LP Act, the Delaware LLC Act or the DGCL or, to the knowledge of such
counsel, any order, judgment, decree or injunction of any federal, Texas or
Delaware court or governmental agency or body directed to any of the Enterprise
Entities or any of their properties in a proceeding to which any of them or
their property is subject, or (D) the creation or imposition of any lien, charge
or encumbrance upon any property or assets of any of the Enterprise Entities,
excluding in the case of clauses (B), (C) and (D), any such matters that,
individually or in the aggregate, would not have a material adverse effect on
the financial condition, business or results of operations of the Company
Entities taken as a whole.
A-6
(aa) No permit, consent, approval, authorization, order,
registration, filing or qualification of or with any federal, Delaware or Texas
court, governmental agency or body is required in connection with the execution
and delivery of, or the consummation by the Enterprise Entities of the
transactions contemplated by, this Agreement or the Operative Agreements, except
for such permits, consents, approvals and similar authorizations (A) required
under the Securities Act and the Exchange Act, (B) required under state
securities or "Blue Sky" laws, as to which such counsel need not express any
opinion, (C) as are of a routine or administrative nature and are either (i) not
customarily obtained or made prior to the consummation of transactions such as
the Transactions or (ii) expected in our reasonable judgment to be obtained in
the ordinary course of business subsequent to the consummation of the
Transactions, (D) which relate to zoning or subdivision mapping, (E) which
relate to easements, licenses, franchises, permits or rights-of-way, as
to which we express no opinion, (F) are described in the Prospectus as not
having been obtained, and (G) that have been obtained or which, if not obtained,
would not, individually or in the aggregate, have a material adverse effect upon
the financial condition, business or results of operations of the Company
Entities taken as a whole.
(bb) The Split-Up Merger became effective under the TBCA, the Texas
LP Act and the Texas LLC Act on June 1, 1998. The TOC Merger became effective
under the TBCA and the Delaware LP Act on or before June 2, 1998.
(cc) The Merger and Conveyance Documents are in a form legally
sufficient as between the parties thereto to convey to the transferee thereunder
all of the right, title and interest of the transferor stated therein in and to
the properties located in the State of Texas, as described in the Merger and
Conveyance Documents, subject to the conditions, reservations and limitations
contained in the Merger and Conveyance Documents, except motor vehicles or other
property requiring conveyance of certificated title as to which the Merger and
Conveyance Documents are legally sufficient to obligate the transferor to
deliver certificated title.
(dd) The Certificates of Merger for the Split-up Merger are in a form
legally sufficient for recordation in the appropriate public offices of the
State of Texas, to the extent such recordation is required, and, upon proper
recordation of any of such Certificates of Merger in the appropriate records of
the applicable counties of the State of Texas, will constitute notice to all
third parties under the recordation statutes of the State of Texas concerning
record title to the Texas assets transferred by the Split-up Merger; recordation
of the Certificates of Merger in the office of the County Clerk for each county
in which the Operating Partnership or its subsidiaries owns Texas property is
the appropriate public office in the State of Texas for the recordation of
Certificates of Merger.
(ee) The statements in the Registration Statement and Prospectus
under the captions "Cash Distribution Policy," "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- General," "--
Liquidity and Capital Resources," "Business and Properties," "Relationships with
EPCO and Related Party Transactions," "Conflicts of Interest and Fiduciary
Responsibilities," "Description of the Common Units" and "The Partnership
Agreement," insofar as they constitute descriptions of contracts or legal
proceedings or refer to statements of law or legal conclusions, are accurate and
complete in all material respects, and the Units, the Common Units, the
Subordinated Units and the Incentive Distribution Rights conform in all material
respects to the descriptions thereof contained in the Registration Statement and
Prospectus under the captions "Prospectus Summary -- The
A-7
Offering," "Cash Distribution Policy," "Description of the Common Units"
and "The Partnership Agreement".
(ff) The opinion of Xxxxxx & Xxxxxx L.L.P. that is filed as Exhibit
8.1 to the Registration Statement is confirmed and the Underwriters may rely
upon such opinion as if it were addressed to them.
(gg) The Registration Statement was declared effective under the Act
on _____________, 1998; to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or threatened by the
Commission; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by such Rule.
(hh) The Registration Statement and the Prospectus (except for the
financial statements and the notes and the schedules thereto and the other
financial, statistical and accounting data included in the Registration
Statement or the Prospectus, as to which such counsel need not express any
opinion) comply as to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations.
(ii) To the knowledge of such counsel, (A) there is no legal or
governmental proceeding pending or threatened to which any of the Enterprise
Entities is a party or to which any of their respective properties is subject
that is required to be disclosed in the Prospectus and is not so disclosed and
(B) there are no agreements, contracts or other documents to which any of the
Enterprise Entities is a party that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(jj) None of the Enterprise Entities is an "investment company" or a
company "controlled by" an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(kk) Upon delivery to the Underwriters of certificates evidencing
the Units issued in the name of the Underwriters and payment by the Underwriters
of the purchase price for the Units, the Underwriters will acquire the Units
free of any adverse claim (as such term is defined in Section 8-302 of the New
York Uniform Commercial Code), assuming that the Underwriters are acting in good
faith and without notice of any adverse claim.
(ll) The Common Units have been approved for listing on the NYSE,
subject only to official notice of issuance.
(mm) The offer, sale and issuance of the Sponsor Units to Partners
II pursuant to the Partnership Agreement are exempt from the registration
requirements of the Securities Act, the Rules and Regulations and the securities
laws of any state having jurisdiction with respect thereto.
A-8
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Enterprise Parties
and the independent public accountants of the Company and your representatives,
at which the contents of the Registration Statement and the Prospectus and
related matters were discussed, and although such counsel has not independently
verified, is not passing on, and is not assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in, the
Registration Statement and the Prospectus (except to the extent specified in the
foregoing opinion), no facts have come to such counsel's attention that lead
such counsel to believe that the Registration Statement (other than (i) the
financial statements included therein, including the notes and schedules thereto
and the auditors' reports thereon and (ii) the other historical, pro forma and
projected financial information and the statistical and accounting information
included therein, as to which such counsel need not comment), as of its
effective date 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 the Prospectus (other than (i) the
financial statements included therein, including the notes and schedules thereto
and the auditors' reports thereon, and (ii) the other historical, pro forma and
projected financial information and the statistical and accounting information
included therein, as to which such counsel need not comment), as of its issue
date and the Delivery Date contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Enterprise
Entities and upon information obtained from public officials, (B) assume that
all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures on
all documents examined by them are genuine, (C) state that their opinion is
limited to federal laws, the Delaware LP Act, the Delaware LLC Act, the DGCL and
the laws of the States of New York and Texas, (D) with respect to the opinions
expressed in paragraphs (b), (d) and (f) above as to the due qualification or
registration as a foreign limited partnership or limited liability company, as
the case may be, of each of the Enterprise Entities in the States of Alabama,
Louisiana and Mississippi, state that such opinions are based upon the opinions
of Xxxxxxx, Xxxxxx, Xxxxxx & Stennis; Xxxxxx, Xxxx & XxXxxxx, LLP; and Xxxxxxxx,
Xxxxxxx, Xxxxxx, Crowe, Xxxxxx & Xxxxxx and upon certificates of foreign
qualification or registration provided by the Secretary of States of the States
of Alabama, Louisiana, Mississippi and Texas (each of which shall be dated as of
a date not more than fourteen days prior to the First Delivery Date and shall be
provided to you), (E) state that they express no opinion with respect to the
title of any of the Enterprise Entities to any of their respective real or
personal property and (F) state that they express no opinion with respect to
state or local taxes or tax statutes to which any of the limited partners of the
Company or any of the Enterprise Entities may be subject.
A-9
EXHIBIT B
OPINION OF XXXXX & XXXXX, X.X.
(a) The Consolidation Agreement has been duly authorized and validly
executed and delivered by EPCO and Partners II and constitutes a valid and
binding obligation of EPCO and Partners II, enforceable against EPCO and
Partners II in accordance with its terms, subject to (A) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar laws from
time to time in effect affecting creditor's rights and remedies generally and
general principles of equity (regardless of whether such principles are
considered in a proceeding at law or in equity) and (B) public policy,
applicable law relating to fiduciary duties and an implied covenant of good
faith and fair dealing.
(b) To the knowledge of such counsel, each of the Enterprise Entities has
such permits, consents, licenses, franchises and authorizations ("permits")
issued by the appropriate federal or Texas governmental or regulatory
authorities as are necessary to own or lease its properties and to conduct its
business in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus, and except for such
permits which, if not obtained, would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect upon the operations
conducted by the Company Entities, taken as a whole; and, to the knowledge of
such counsel, none of the Enterprise Entities has received any notice of
proceedings relating to the revocation or modification of any such permit which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to have a material adverse
effect upon the operations conducted by the Company Entities, taken as a whole.
(c) To the knowledge of such counsel, each of the Enterprise Entities
which is subject to regulation as an interstate or Texas intrastate common
carrier pipeline is conducting its business consistent with its common carrier
classification in all material respects and is in material compliance with all
applicable federal or Texas statutes, rules and regulations pertaining thereto,
including but not limited to, all tariff and rate requirements. As a result of
the conveyance of interstate or Texas intrastate common carrier pipelines
included in the Transferred Assets to the Operating Partnership and its
subsidiaries pursuant to the Merger and Conveyance Documents, the Operating
Partnership and its subsidiaries are entitled to exercise the power of eminent
domain to secure rights-of-way necessary to operate such pipelines.
(d) To the knowledge of such counsel, none of the Enterprise Entities is
in (i) violation of its agreement of limited partnership, limited liability
company agreement or regulations, certificate or articles of incorporation or
bylaws or other organizational documents, or of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it or of any
order, judgment, decree or injunction of any court or governmental agency or
body having jurisdiction over it, or (ii) breach, default (or an event which,
with notice or lapse of time or both, would constitute such an event) or
violation in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture,
B-1
lease or other instrument known to such counsel to which it is a party or by
which it or any of its properties may be bound, which breach, default or
violation would, if continued, reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the Company Entities, taken as
a whole, or could materially impair the ability of any of the Enterprise
Entities to perform its obligations under this Agreement or the Operative
Agreements.
(d) To the knowledge of such counsel after due inquiry, other than as
described or contemplated in the Prospectus (or any supplement thereto), there
is no litigation, proceeding or governmental investigation pending or
threatening against any of the Enterprise Entities or to which any of the
Enterprise Entities is a party or to which any of their respective properties is
subject, that relates to any of the Transactions or which, if adversely
determined, would reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), business or results of operations of the
Company Entities, taken as a whole, or would impair or call into question the
validity of this Agreement, the performance by any of the Enterprise Entities of
their obligations under this Agreement or the Operative Agreements.
In rendering such opinion, such counsel may (A) rely in respect of matters
of fact upon certificates of officers and employees of the Enterprise Entities
and upon information obtained from public officials, (B) assume that all
documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures on
all documents examined by them are genuine, (C) state that such opinions are
limited to federal laws and the laws of the State of Texas, (D) state that they
express no opinion with respect to the title of any of the real or personal
property purported to be transferred by the Merger and Conveyance Documents, and
(E) state that they express no opinion with respect to state or local taxes or
tax statutes to which any of the limited partners of the Company or any of the
Enterprise Entities may be subject.
B-2
EXHIBIT C
OPINION OF LOCAL COUNSEL
(a) Each of the Enterprise Entities [as applicable] has been duly
qualified or registered to the extent required in such State, as a foreign
corporation, a foreign limited partnership or foreign limited partnership, as
the case may be, for the transaction of business under the laws of such State.
(b) The Operating Partnership has all requisite power and authority
as a limited partnership under the laws of such State to own or lease its
properties and to conduct its business in such State; and upon the consummation
of the Transactions (assuming that the Company will not be liable under the laws
of the State of Delaware for the liabilities of the Operating Partnership and
assuming that the Unitholders will not be liable under the laws of the State of
Delaware for liabilities of the Company or the Operating Partnership), the
Company will not be liable under the laws of such State for the liabilities of
the Operating Partnership and the Unitholders will not be liable under the laws
of such State for the liabilities of the Company or the Operating Partnership,
except in each case to the same extent as under the laws of the State of
Delaware.
(c) The execution, delivery and performance of the Conveyance
Documents relating to the transfer of property in such State in accordance with
the terms thereof did not or will not violate any statute of such State or any
rule, regulation or, to the knowledge of such counsel, any order of any agency
of such State having jurisdiction over any of the Enterprise Entities or any of
their respective properties, except for any such violations which, individually
or in the aggregate, would not have a material adverse effect upon the holders
of Common Units or the operations conducted in such State by the Company
Entities taken as a whole.
(d) Each of the Conveyance Documents relating to the transfer of
property in such State, assuming the due authorization, execution and delivery
thereof by the parties thereto, to the extent it is a valid and legally binding
agreement under the applicable law as stated therein and that such law applies
thereto, is a valid and legally binding agreement of the parties thereto under
the laws of such State, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general application relating to or affecting creditors' rights
generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); each of the
Conveyance Documents is in a form legally sufficient as between the parties
thereto to convey to the transferee thereunder all of the right, title and
interest of the
C-1
transferor stated therein in and to the properties located in such State, as
described in the Conveyance Documents, subject to the conditions, reservations
and limitations contained in the Conveyance Documents, except motor vehicles or
other property requiring conveyance of certificated title as to which the
Conveyance Documents are legally sufficient to compel delivery of such
certificated title.
(e) Each of the Conveyance Documents (including, without
limitation, the form of the exhibits and schedules thereto) is in a form legally
sufficient for recordation in the appropriate public offices of such State, to
the extent such recordation is required, and, upon proper recordation of any of
such deeds and assignments in such State, will constitute notice to all third
parties under the recordation statutes of such State concerning record title to
the assets transferred thereby; recordation in the office of the County Clerk
for each county in which the Operating Partnership or its subsidiaries owns
property is the appropriate public office in such State for the recordation of
deeds and assignments of interests in real property located in such county.
(f) No permit, consent, approval, authorization, order,
registration, filing or qualification of or with any court, governmental agency
or body of such State having jurisdiction over the Enterprise Entities or any of
their respective properties is required for the issuance and sale of the Units
by the Company or for the conveyance of the properties located in such State
purported to be conveyed to the Operating Partnership or its subsidiaries
pursuant to the Conveyance Documents, except (A) as may be required
under state securities or "Blue Sky" laws, as to which such counsel need not
express any opinion, (B) for such permits, consents, approvals and similar
authorizations which have been obtained, and (C) for such permits, consents,
approvals and similar authorizations which, if not obtained, would not,
individually or in the aggregate, have a material adverse effect upon the
condition (financial or otherwise), business, prospects, properties, net worth
or results of operations conducted in such State by the Company Entities taken
as a whole.
(g) The following is a list of the requirements necessary for
achieving the status of an "intrastate common carrier pipeline" in such State:
Based solely upon a Certificate executed by an officer of the General Partner,
and without any independent investigation or verification of the facts described
in such Certificate, the Operating Partnership, and [its subsidiary], as
applicable, is an "intrastate common carrier pipeline in such State and is
conducting its business consistent with its common carrier classification.
Assuming such classification and such conduct of its business, as a result
C-2
common carrier pipeline included in the Transferred Assets located in such State
to the Operating Partnership and its subsidiaries pursuant to the Conveyance
Documents, the Operating Partnership and its subsidiaries are entitled to
exercise the power of eminent domain in such State to secure rights-of-way
necessary to operate such pipeline located in such State.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Enterprise
Entities and upon information obtained from public officials, (B) assume that
all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures on
all documents examined by them are genuine, (C) state that such opinions are
limited to federal laws and the laws of such State, (D) state that they express
no opinion with respect to the title of any of the real or personal property
purported to be transferred by the Conveyance Documents and (E) state that they
express no opinion with respect to state or local taxes or tax statutes to which
any of the limited partners of the Company or any of the Enterprise Entities may
be subject.
Xxxxxx & Xxxxxx, L.L.P. and Xxxxx & Xxxxx, X.X. are hereby authorized
to rely upon this opinion letter in connection with the Transactions as if such
opinion letter were addressed and delivered to them on the date hereof. Subject
to the foregoing, this opinion letter may be relied upon only by you and your
counsel in connection with the Transactions and no other use or distribution of
this opinion letter may be made without our prior written consent.
C-3
EXHIBIT X
XXXXXX BROTHERS INC. _____________, 1998
X.X. XXXXXXX & SONS, INC.
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
XXXX XXXXXXXX XXXXXXX, A DIVISION OF XXXX XXXXXXXX INCORPORATED
XXXXXXX XXXXX & ASSOCIATES, INC.
c/x Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") among Enterprise Products
Company, Enterprise Products Partners L.P. (the "Company"), Enterprise Products
Operating L.P., Enterprise Products GP, LLC and EPC Partners II, Inc. and Xxxxxx
Brothers Inc., X.X. Xxxxxxx & Sons, Inc., Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated, Prudential Securities Incorporated, Xxxxx Xxxxxx Inc., Xxxx
Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated, and Xxxxxxx Xxxxx &
Associates, Inc., as Underwriters, relating to an underwritten public offering
of common units, each representing a limited partner interest (the "Common
Units") in the Company.
To induce you to enter into the Underwriting Agreement, the undersigned agrees
that he/she will not, directly or indirectly, (1) offer for sale, sell, pledge
or otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any Common Units or any securities that are
convertible into, or exercisable or exchangeable for, or that represent the
right to receive, Common Units or any securities that are senior to or pari
passu with the Common Units or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such Common Units, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Units or other securities, in cash or otherwise, in each case for a
period of 180 days from the date of the Prospectus (as defined in the
Underwriting Agreement), without the prior written consent of Xxxxxx Brothers
Inc.
If for any reason the Underwriting Agreement is terminated before the First
Delivery Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
-----------------------------
D-1
SCHEDULE 1
ENTERPRISE PRODUCTS PARTNERS L.P.
Number of Firm
Underwriters Units to Be Purchased
------------ ---------------------
Xxxxxx Brothers Inc.
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Xxxxx Xxxxxx Inc.
Xxxx Xxxxxxxx Xxxxxxx,
a division of Xxxx Xxxxxxxx Incorporated
Xxxxxxx Xxxxx & Associates, Inc.
------------
TOTAL 11,250,000
-----
1
