Xxxxxx Xxxxxx Energy Partners, L.P.
Common Units Representing Limited Partner Interests
Underwriting Agreement
_________, 1998
Xxxxxxx, Xxxxx & Co.,
[Name(s) of Co-Representative(s),]
c/x Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
From time to time Xxxxxx Xxxxxx Energy Partners, L.P. a Delaware limited
partnership (the "Partnership"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its common units (the "Common Units")
representing limited partner interests in the Partnership specified in Schedule
II to such Pricing Agreement (with respect to such Pricing Agreement, the "Firm
Units"). If specified in such Pricing Agreement, the Partnership may grant to
the Underwriters the right to purchase at their election an additional number of
units, specified in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Units"). The Firm Units and the Optional Units, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are collectively
called the "Designated Units."
The Partnership, Xxxxxx Xxxxxx Operating L.P. "A," a Delaware limited
partnership ("OLP-A"), Xxxxxx Xxxxxx Operating L.P. "B," a Delaware limited
partnership ("OLP-B"), Xxxxxx Xxxxxx Operating L.P. "C," a Delaware limited
partnership ("OLP-C"), Xxxxxx Xxxxxx Operating L.P. "D," a Delaware limited
partnership ("OLP-D" and, together with OLP-A, OLP-B and OLP-C, the "Operating
Partnerships"), SFPP, L.P., a Delaware limited partnership ("SFPP"), Xxxxxx
Xxxxxx Bulk Terminals Corporation, a Louisiana corporation ("XXXX Corp"), Xxxxxx
Xxxxxx Natural Gas Liquids Corporation, a Delaware corporation ("KMNGL Corp."),
Xxxxxx Xxxxxx CO2, L.L.C., a Delaware limited liability company ("KM-LLC"), and
Kinder Xxxxxx X.X., Inc., a Delaware corporation (the "General Partner"), in its
individual capacity and in its capacity as the general partner of the
Partnership and each of the Operating Partnerships, are collectively referred to
herein as the "Xxxxxx Xxxxxx Entities."
The terms and rights of any particular issuance of Designated Units shall
be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Units may be made from time to time to
the Underwriters of such Common Units, for whom the firms designated as
representatives of the Underwriters of such Common Units in the Pricing
Agreement relating thereto will act as representatives (the "Representatives").
The term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to an Underwriter or Underwriters who act
without any firm being designated as its or their representatives. This
Underwriting Agreement shall not be construed as an obligation of the
Partnership to sell any of the Common Units or as an obligation of any of the
Underwriters to purchase the Common Units. The obligation of the Partnership to
issue and sell any of the Common Units and the obligation of any of the
Underwriters to purchase any of the Common Units shall be evidenced by the
Pricing Agreement with respect to the Designated Units specified therein. Each
Pricing Agreement shall specify the aggregate number of Firm Units, the maximum
number of Optional Units, if any, the initial public offering price of such Firm
and Optional Units or the manner of determining such price, the purchase price
to the Underwriters of such Designated Units, the names of the Underwriters of
such Designated Units, the names of the Representatives of such Underwriters and
the principal amount of such Designated Units to be purchased by each
Underwriter and shall set forth the date, time and manner of delivery of such
Firm and Optional Units and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the registration statement and
prospectus with respect thereto) the terms of such Designated Units. A Pricing
Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. Each of the Xxxxxx Xxxxxx Entities represents and warrants to, and
agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-....) (the
"Initial Registration Statement") in respect of the Common Units has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto (each in the
form heretofore delivered or to be delivered to the Representatives, excluding
exhibits to the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus contained therein to the
Representatives for each of the other Underwriters) have been declared effective
by the Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Act"), which became effective upon filing, no other document with respect to
the Initial Registration Statement or document incorporated by reference therein
has heretofore been filed or transmitted for filing with the Commission (other
than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
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Statement, any post-effective amendment thereto and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents incorporated
by reference in the prospectus contained in the Initial Registration Statement
at the time such part of the Initial Registration Statement became effective,
each as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Common Units, in the
form in which it has most recently been filed, or transmitted for filing, with
the Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"; any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the Act,
as of the date of such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment to the Initial Registration
Statement shall be deemed to refer to and include any annual report of the
Partnership filed pursuant to Sections 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Units in the form in which
it is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Partnership by an Underwriter of Designated Units
through Xxxxxxx, Xxxxx & Co. expressly for use in the Prospectus as amended or
supplemented relating to such Common Units;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date as to the Prospectus
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and any amendment or supplement thereto, 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; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Partnership by an Underwriter of Designated Units through Xxxxxxx, Xxxxx &
Co. expressly for use in the Prospectus as amended or supplemented relating to
such Common Units;
(d) None of the Xxxxxx Xxxxxx Entities has sustained since the
date of the latest audited financial statements included or incorporated by
reference 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, order or
decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material change in the
capitalization or long-term debt of the Xxxxxx Xxxxxx Entities or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial position,
unitholders' equity or results of operations of the Xxxxxx Xxxxxx Entities,
taken as a whole, otherwise than as set forth or contemplated in the Prospectus;
(e) Each of the Xxxxxx Xxxxxx Entities has good and marketable title
(or indefeasible title in the State of Texas) in fee simple to all real property
and good and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by the Xxxxxx Xxxxxx Entities; and any real property
and buildings held under lease by a Xxxxxx Xxxxxx Entity is held under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not materially interfere with the use made and proposed to be made of such
property and buildings by the Xxxxxx Xxxxxx Entities;
(f) The Partnership is, and at each Time of Delivery will be, a
limited partnership duly formed, validly existing and in good standing under the
laws of the State of Delaware. The Partnership has, and at each Time of Delivery
will have, all necessary partnership power and authority to conduct the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. The Partnership is, and at each Time of Delivery will be, duly
licensed or qualified to do business and in good standing as a foreign limited
partnership in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing
or qualification necessary (except where the failure to be so licensed or
qualified will not have a material adverse effect on the financial condition,
results of operations or business of the Xxxxxx Xxxxxx Entities, taken as a
whole, or subject the Partnership or the limited partners of the Partnership to
any material liability or disability). Complete and correct copies of the
Certificate of Limited Partnership of the Partnership, and all amendments
thereto, and of the Agreement of Limited Partnership of the Partnership, as
amended and restated (the "Partnership Agreement"), have been delivered to the
Underwriters;
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(g) Each of the Operating Partnerships is, and at the applicable
Time of Delivery will be, a limited partnership duly formed, validly existing
and in good standing under the laws of the State of Delaware. Each of the
Operating Partnerships has, and at the applicable Time of Delivery will have,
all necessary partnership power and authority to conduct the activities
conducted by it, to own or lease all the assets owned or leased by it and to
conduct its business as described in the Registration Statement and the
Prospectus. Each of the Operating Partnerships is, and at the applicable Time of
Delivery will be, duly licensed or qualified to do business and in good standing
as a foreign limited partnership in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased by it
makes such licensing or qualification necessary (except where the failure to be
so licensed or qualified will not have a material adverse effect on the
financial condition, results of operations or business of the Xxxxxx Xxxxxx
Entities, taken as a whole, or subject the Partnership or the limited partners
of the Partnership to any material liability or disability). Complete and
correct copies of the Certificate of Limited Partnership of each of the
Operating Partnerships, and all amendments thereto, and of the Agreement of
Limited Partnership of OLP-A, as amended and restated (the "OLP-A Agreement"),
the Agreement of Limited Partnership of OLP-B, as amended and restated (the
"OLP-B Agreement"), the Agreement of Limited Partnership of OLP-C, as amended
and restated (the "OLP-C Agreement"), and the Agreement of Limited Partnership
of OLP-D, as amended and restated (the "OLP-D Agreement" and, together with the
OLP-A Agreement, the OLP-B Agreement and the OLP-C Agreement, the "Operating
Partnership Agreements"), have been delivered to the Underwriters;
(h) SFPP is, and at the applicable Time of Delivery will be, a
limited partnership duly formed, validly existing and in good standing under the
laws of the State of Delaware. SFPP has, and at the applicable Time of Delivery
will have, all necessary partnership power and authority to conduct the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. SFPP is, and at the applicable Time of Delivery will be, duly
licensed or qualified to do business and in good standing as a foreign limited
partnership in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing
or qualification necessary (except where the failure to be so licensed or
qualified will not have a material adverse effect on the financial condition,
results of operations or business of the Xxxxxx Xxxxxx Entities, taken as a
whole, or subject the Partnership or the limited partners of the Partnership to
any material liability or disability). Complete and correct copies of the
Certificate of Limited Partnership of SFPP and of the Agreement of Limited
Partnership of SFPP, as amended and restated (the "SFPP Agreement"), and all
amendments thereto have been delivered to the Underwriters;
(i) Each of the General Partner and KMNGL Corp., is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. KM-LLC is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware. XXXX
Corp. is a corporation duly organized, validly existing and in good standing
under the laws of the State of Louisiana. Each of the General Partner, KMNGL
Corp., XXXX Corp. and KM-LLC has, and at the applicable Time of Delivery will
have, all necessary corporate or limited liability company power and authority,
as the case may be, to conduct all the activities conducted by it, to own or
lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. Each
5
of the General Partner, KMNGL Corp., XXXX Corp. and KM-LLC is, and at the
applicable Time of Delivery will be, duly licensed or qualified to do business
and in good standing as a foreign corporation or foreign limited liability
company, as the case may be, in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased by it
makes such licensing or qualification necessary (except where the failure to be
so licensed or qualified will not have a material adverse effect on the
financial condition, results of operations or business of the Xxxxxx Xxxxxx
Entities, taken as a whole, or subject the Partnership or the limited partners
of the Partnership to any material liability or disability). Complete and
correct copies of the certificate of incorporation and of the by-laws of the
General Partner, KMNGL Corp. and XXXX Corp. and the limited liability agreement
of KM-LLC and all amendments to such documents have been delivered to the
Underwriter;
(j) To the knowledge of the Xxxxxx Xxxxxx Entities, each of
Heartland Partnership ("Heartland") and Mont Belvieu Associates ("Mont Belvieu")
is, and at the applicable Time of Delivery will be, a general partnership duly
formed and validly existing under the laws of the State of Texas and Shell CO2
Company Ltd. ("Shell CO2") is, and at the applicable Time of Delivery will be, a
limited partnership duly formed, validly existing and in good standing under the
laws of the State of Delaware. To the knowledge of the Xxxxxx Xxxxxx Entities,
each of Heartland, Mont Belvieu and Shell CO2 has, and at the applicable Time of
Delivery will have, all necessary partnership power and authority, to conduct
the activities conducted by it, to own or lease all the assets owned or leased
by it and to conduct its business as described in the Registration Statement and
the Prospectus, except as would not have a material adverse effect on the
financial condition, results of operations or business of such entities. To the
knowledge of the Xxxxxx Xxxxxx Entities, each of Heartland, Mont Belvieu and
Shell CO2 is, and at the applicable Time of Delivery will be, duly licensed or
qualified to do business and in good standing as a foreign partnership in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary (except where the failure to be so licensed or qualified
will not have a material adverse effect on the financial condition, results of
operations or business of the Xxxxxx Xxxxxx Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability);
(k) The only subsidiaries (as such term is defined in the rules and
regulations of the Commission under the Act and the Exchange Act) of the
Partnership or other entities in which the Partnership, any of the Operating
Partnerships or SFPP has an equity ownership interest of 50% or more are those
listed on Schedule III hereto;
(l) Xxxxxx Xxxxxx, Inc., a Delaware corporation ("KMI"), owns, and
at the applicable Time of Delivery will own, all of the issued and outstanding
shares of capital stock of the General Partner; such shares of capital stock are
duly authorized, validly issued, fully paid and nonassessable;
(m) Xxxxxxx X. Xxxxxx, Xxxxxx Associates, Inc. ("MAI") and First
Union Corporation ("First Union") are the sole stockholders of KMI. Xxxxxxx X.
Xxxxxx owns 71.04% of the Class A voting stock of KMI. MAI owns 27.65% of the
Class A voting stock of KMI. First Union owns 1.30% of the Class A voting stock
and 100.0% of the Class B nonvoting stock of
6
KMI. All of such shares of Class A voting and Class B nonvoting stock are duly
authorized, validly issued, fully paid and nonassessable;
(n) The General Partner is the sole general partner of the Partnership
with a 1% general partner interest in the Partnership; such general partner
interest is duly authorized by the Partnership Agreement and was validly issued
to the General Partner; and, the General Partner owns such general partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or as described in the Registration Statement or the
Prospectus);;
(o) The General Partner is the sole general partner of each of the
Operating Partnerships with a 1.0101% general partner interest in each of the
Operating Partnerships; such general partner interests are duly authorized by
the respective Operating Partnership Agreement, and were validly issued to the
General Partner; and the General Partner owns such general partner interests
free and clear of all liens, encumbrances, security interests, equities, charges
or claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or as
described in the Registration Statement or the Prospectus);
(p) The Partnership is the sole limited partner of each of the
Operating Partnerships with a 98.9899% limited partner interest in each of the
Operating Partnerships; such limited partner interests, in each of such
Partnerships, are duly authorized by the respective Operating Partnership
Agreement, and were validly issued to the Partnership and are fully paid and
nonassessable (except as nonassessability may be affected by certain provisions
of the Delaware Revised Limited Partnership Act (the "Delaware Act")); and the
Partnership owns such limited partner interests free and clear of all liens,
encumbrances, security interests, equities, charges or claims (except for such
liens, encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the Registration
Statement or the Prospectus, including the security interest securing certain
debt of the Partnership and OLP-B);
(q) OLP-A owns, and at the applicable Time of Delivery will own, all
of the issued and outstanding capital stock of KMNGL Corp. and all of the issued
and outstanding member interests of KM-LLC; all of such capital stock and such
member interests are duly authorized, validly issued, fully paid and
nonassessable; and OLP-A owns such capital stock and such member interests free
and clear of all liens, encumbrances, security interests, equities, charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or as
described in the Registration Statement or the Prospectus);
(r) OLP-D is the sole general partner of SFPP with a 99.5% general
partner interest; such general partner interest is duly authorized by the SFPP
Agreement, and was validly issued to OLP-D; and OLP-D owns such general partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or as described in the Registration Statement or the
Prospectus, including the
7
security interest securing the guarantee of certain debt of OLP-D to the
Partnership); Santa Fe Pacific Pipelines, Inc. (the "SF Limited Partner") is the
sole limited partner of SFPP with a 0.5% non-voting, limited partner interest;
such limited partner interest is duly authorized by the SFPP Agreement, and
validly issued to the SF Limited Partner and fully paid and nonassessable
(except as nonassessability may be affected by certain provisions of the
Delaware Act);
(s) OLP-A is a general partner of Heartland with a 50% general partner
interest in Heartland, KMNGL Corp. is a general partner of Mont Belvieu with a
50% general partner interest in Mont Belvieu, and KM-LLC is a limited partner of
Shell CO2, with a 20% limited partner interest in Shell CO2; such general
partner interests and such limited partner interests are duly authorized by the
respective partnership agreement of Heartland, Mont Belvieu and Shell CO2, and
were validly issued by each of Heartland, Mont Belvieu and Shell CO2,
respectively, and in the case of such limited partner interests is fully paid
and nonassessable (except as such nonassessability may be affected by certain
provisions of the Delaware Act); and, OLP-A and KMNGL Corp. own such general
partner interests in Heartland and Mont Belvieu, respectively, and KM-LLC owns
such limited partner interest, free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the Registration
Statement or the Prospectus);
(t) At the Time of Delivery after giving effect to the issuance of
the Firm Units, the Common Units will be the only limited partner interests of
the Partnership that are issued and outstanding at the applicable Time of
Delivery all of the issued and outstanding Common Units of the Partnership have
been duly and validly authorized and issued, and are fully paid and
nonassessable (except as nonassessability may be affected by certain provisions
of the Delaware Act) and substantially conform to the description of the Common
Units incorporated by reference into the Prospectus; and the unissued Designated
Units to be issued and sold by the Partnership to the Underwriters hereunder
will be duly and validly authorized, and when issued against payment therefor as
provided herein and in the applicable Pricing Agreement, will be duly and
validly authorized and, fully paid and nonassessable (except as nonassessability
may be affected by certain provisions of the Delaware Act) and will
substantially conform to the description of the Common Units incorporated by
reference into the Prospectus;
(u) Each of the Xxxxxx Xxxxxx Entities has all necessary partnership,
corporate or limited liability company power and authority, as the case may be,
to enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by each of the Xxxxxx Xxxxxx Entities and constitutes a valid and
binding agreement with respect to each of such entities and is enforceable
against each of them in accordance with the terms hereof;
(v) The issue and sale of the Common Units to be sold by the
Partnership hereunder, the compliance by the Xxxxxx Xxxxxx Entities with all of
the provisions of this Agreement and any Pricing Agreement, the consummation of
the transactions contemplated herein and the application by the Partnership of
the net proceeds from the offering and sale of the Designated Units in the
manner set forth in the Prospectus under "Use of Proceeds" will not conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of the Xxxxxx Xxxxxx
Entities is a party or by which any of the Kinder
8
Xxxxxx Entities is bound or to which any of the property or assets of the Xxxxxx
Xxxxxx Entities are subject, nor will such action result in any violation of the
provisions of the certificate of incorporation, by-laws, partnership agreement
or other organizational documents, as the case may be, of any of the Xxxxxx
Xxxxxx Entities or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over any of the Xxxxxx Xxxxxx
Entities or any of the properties of any such entities, except where such
occurrence will not prevent the consummation of the transactions contemplated
herein and will not have a material adverse effect on the financial condition,
results of operations or business of the Xxxxxx Xxxxxx Entities, taken as a
whole, or subject the Partnership or the limited partners of the Partnership to
any material liability or disability; and no consent, approval, authorization,
order, registration or qualification of or with any court or governmental agency
or body having jurisdiction over any of the Xxxxxx Xxxxxx Entities or any of the
properties of such entities is required for the issuance and sale of the
Designated Units or the consummation by the Xxxxxx Xxxxxx Entities of the
transactions contemplated by this Agreement, except the registration under the
Act of the Designated Units and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Designated
Units by the Underwriters;
(w) None of the Xxxxxx Xxxxxx Entities is (a) in violation of its
Certificate of Incorporation, By-laws, Partnership Agreement or other
organizational documents, as the case may be, or (b) in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound, except for such violations and defaults as (i)
would not have a material adverse effect on the financial condition, results of
operations or business of the Xxxxxx Xxxxxx Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability and (ii) in the case of such violations, have
been disclosed in writing to Xxxxxxx, Xxxxx & Co. prior to the execution of this
Agreement;
(x) The statements set forth in the Prospectus under the captions
"Material Federal Income Tax Consideration," "Plan of Distribution" and
"Underwriting", insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate, complete and fair; provided,
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Partnership by an Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein;
(y) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which any of the Xxxxxx Xxxxxx
Entities is a party or of which any property of any Xxxxxx Xxxxxx Entity is the
subject which, if determined adversely to the respective Xxxxxx Xxxxxx Entity,
would individually or in the aggregate have a material adverse effect on the
financial condition, results of operations or business of the Xxxxxx Xxxxxx
Entities, taken as a whole, or subject the Partnership or the limited partners
of the Partnership to any material liability or disability; and, to the
knowledge of the Xxxxxx Xxxxxx Entities, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
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(z) None of the Xxxxxx Xxxxxx Entities is, nor at each Time of
Delivery will be, (i) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" thereof, within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (ii) an "investment
company," a person "controlled by" an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended;
(aa) None of the Xxxxxx Xxxxxx Entities or any of their affiliates
does business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
(bb) Xxxxxx Xxxxxxxx LLP and PricewaterhouseCoopers LLP, who have
certified certain financial statements of the Xxxxxx Xxxxxx Entities, and in the
case of PricewaterhouseCoopers LLP, who has also certified certain financial
statements of Santa Fe Pacific Pipeline Partners, L.P. ("Santa Fe"), are each
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(cc) The Partnership has reviewed its operations and that of its
subsidiaries and any third parties with which the Partnership or any of its
subsidiaries has a material relationship to evaluate the extent to which the
business or operations of the Partnership or any of its subsidiaries will be
affected by the Year 2000 Problem. As a result of such review, the Partnership
does not believe that the Year 2000 Problem will have a material adverse effect
on the financial condition, results of operation or business of the Kinder
Entities, taken as a whole, or result in any material loss or interference with
their business or operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000;
(dd) There are no preemptive rights or other rights to subscribe
for or to purchase, nor any restrictions upon the voting or transfer of, any
partnership interests or shares of stock of any of the Xxxxxx Xxxxxx Entities
pursuant to any partnership agreement, any articles or certificates of
incorporation or other governing documents or any agreement or other instrument
to which any of the Xxxxxx Xxxxxx Entities is a party or by which any of such
entities may be bound (other than (a) the General Partner's preemptive right
contained in the Partnership Agreement, (b) the restrictions on transfer arising
from the pledge of the Common Units owned by the General Partner, (c) the
restrictions on transfer under the Partnership's credit facility, and (d) as set
forth in or incorporated by reference into the Prospectus). The offering and
sale of Common Units as contemplated by this Agreement does not give rise to any
rights, other than those which have been waived or satisfied, for or relating to
the registration of any Partnership interests or other securities of the
Partnership. Except for certain grants made under the Partnership's Executive
Compensation Plan and the Common Unit Option Plan, there are no outstanding
options or warrants to purchase any Common Units or other securities of any of
the Xxxxxx Xxxxxx Entities.
10
(ee) The financial statements and schedules included or incorporated
by reference in the Registration Statement or the Prospectus present fairly the
consolidated financial condition of the Partnership, the General Partner and
Santa Fe as of the respective dates thereof and the consolidated results of
operations and cash flows of the Partnership and Santa Fe for the respective
periods covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the entire period involved,
except as otherwise disclosed in the Prospectus. No other financial statements
or schedules of the Partnership, the General Partner and Santa Fe are required
by the Act, the Exchange Act or the rules and regulations of the Commission
under such acts to be included in the Registration Statement or the Prospectus.
The statements included in the Registration Statement with respect to the
Accountants pursuant to Rule 509 of Regulation S-K of the Rules and Regulations
are true and correct in all material respects;
(ff) Each of the Xxxxxx Xxxxxx Entities maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
(gg) The pro forma financial statements included in or incorporated by
reference in the Registration Statement and the Prospectus, including the
presentation of the acquisition of SFPP contained in such pro forma financial
statements, comply as to form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the rules and
regulations of the Commission under such acts, have been prepared on a basis
consistent with the historical consolidated financial statements of the
Partnership and Santa Fe and give effect to the assumptions used in the
preparation thereof on a reasonable basis and in good faith;
(hh) Each of the Xxxxxx Xxxxxx Entities (i) is in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
imposing liability or standards of conduct concerning any Hazardous Material (as
hereinafter defined) ("Environmental Laws"), (ii) has received all permits,
licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) is in compliance with all terms
and conditions of any such permit, license or approval, except as disclosed in
the Prospectus or where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not result
in a material adverse effect on the financial condition, results of operations
or business of the Xxxxxx Xxxxxx Entities, taken as a whole, or subject the
Partnership or the limited partners of the Partnership to any material liability
or disability. The term "Hazardous Material" means (A) any "hazardous substance"
as defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (B) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (C) any petroleum or
petroleum product, (D) any polychlorinated biphenyl and
11
(E) any pollutant or contaminant or hazardous, dangerous, or toxic chemical,
material, waste or substance regulated under or within the meaning of any other
Environmental Law;
(ii) In the ordinary course of its business, each of the Xxxxxx Xxxxxx
Entities conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of such entity, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). Except as set forth in the Registration Statement
and the Prospectus, there are no costs and liabilities associated with or
arising in connection with Environmental Laws as currently in effect (including,
without limitation, costs of compliance therewith) which would have a material
adverse effect on the financial condition, results of operations or business of
the Xxxxxx Xxxxxx Entities, taken as a whole, or subject the Partnership or the
limited partners of the Partnership to any material liability or disability;
(jj) At each Time of Delivery, the Firm Units or the Optional Units,
as the case may be, will be approved for listing, subject to official notice of
issuance on The New York Stock Exchange;
(kk) Each of the Xxxxxx Xxxxxx Entities is in compliance with all
federal, state and local employment and labor laws, including, but not limited
to, laws relating to non-discrimination in hiring, promotion and pay of
employees (except where such noncompliance will not have a material adverse
effect on the financial condition, results of operations or business of the
Xxxxxx Xxxxxx Entities, taken as a whole, or subject the Partnership to any
material liability or disability); no labor dispute with the employees of any of
the Xxxxxx Xxxxxx Entities exists or, to the knowledge of any of the Xxxxxx
Xxxxxx Entities, is imminent or threatened, except as would not have a material
adverse effect on the financial condition, results of operation or business of
the Xxxxxx Xxxxxx Entities, taken as a whole, or subject the Partnership or the
limited partners of the Partnership to any material liability or disability; and
none of the Xxxxxx Xxxxxx Entities is aware of any existing, imminent or
threatened labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could result in a material adverse effect on
the financial condition, results of operations or business of the Xxxxxx Xxxxxx
Entities, taken as a whole, or subject the Partnership or the limited partners
of the Partnership to any material liability or disability;
(ll) None of the Xxxxxx Xxxxxx Entities has nor, to their knowledge,
has any employee or agent thereof made any payment of funds to any of the Xxxxxx
Xxxxxx Entities or received or retained any funds therefrom in violation of any
law, rule or regulation of a character required to be disclosed in the
Prospectus;
(mm) The Partnership maintains insurance with respect to its
properties and business of the types and in amounts generally deemed adequate
for its business and consistent with insurance coverage maintained by similar
companies and businesses, all of which insurance is in full force and effect;
12
(nn) Each of the Xxxxxx Xxxxxx Entities has filed all material
federal, state and foreign income and franchise tax returns and has paid all
taxes shown as due thereon, other than taxes which are being contested in good
faith and for which adequate reserves have been established in accordance with
generally accepted accounting principles ("GAAP"). There are no tax returns of
any of the Xxxxxx Xxxxxx Entities that are currently being audited by state,
local or federal taxing authorities or agencies (and with respect to which any
of the Xxxxxx Xxxxxx Entities has received notice), where the findings of such
audit, if adversely determined, would result in a material adverse effect on the
financial condition, results of operations or business of the Xxxxxx Xxxxxx
Entities, taken as a whole, or subject the Partnership or the limited partners
of the Partnership to any material liability or disability;
(oo) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to by the Partnership, or with
respect to which the Partnership could incur any liability under ERISA
(collectively, the "Benefit Plans"), no event has occurred, in connection with
which the Partnership could be subject to any liability under the terms of such
Benefit Plan, applicable law (including, without limitation, ERISA and the
Internal Revenue Code of 1986, as amended) or any applicable agreement that
could materially adversely affect the financial condition, results of operations
or business of the Xxxxxx Xxxxxx Entities, taken as a whole, or subject the
Partnership or the limited partners of the Partnership to any material liability
or disability.
(pp) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, 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 to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Partnership by an
Underwriter through the Representatives expressly for use therein
3. Upon the execution of the Pricing Agreement applicable to any Designated
Units and authorization by the Representatives of the release of such Designated
Units, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus as amended or supplemented.
The Partnership may specify in the Pricing Agreement applicable to any
Designated Units that the Partnership thereby grants to the Underwriters the
right (an "Overallotment Option") to purchase at their election up to the number
of Optional Units set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Units. Any such election to purchase Optional Units may be
exercised by written notice from the Representatives to the Partnership, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Units to be purchased and the date on which such Optional
Units are to be delivered, as determined by the
13
Representatives but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Representatives and the Partnership
otherwise agree in writing, earlier than or later than the respective number of
business days after the date of such notice set forth in such Pricing Agreement.
The number of Optional Units to be added to the number of Firm Units to be
purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Units shall be, in each case, the number
of Optional Units which the Partnership has been advised by the Representatives
have been attributed to such Underwriter; provided that, if the Partnership has
not been so advised, the number of Optional Units to be so added shall be, in
each case, that proportion of Optional Units which the number of Firm Units to
be purchased by such Underwriter under such Pricing Agreement bears to the
aggregate number of Firm Units (rounded as the Representatives may determine to
the nearest 100 Common Units). The total number of Designated Units to be
purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Units set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Units which the Underwriters
elect to purchase.
1. Certificates for the Firm Units and the Optional Units to be purchased
by each Underwriter pursuant to the Pricing Agreement relating thereto, in the
form specified in such Pricing Agreement, and in such authorized denominations
and registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Partnership, shall be delivered by or on
behalf of the Partnership to Xxxxxxx, Xxxxx & Co. for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Partnership to Xxxxxxx, Xxxxx & Co. at least
forty-eight hours in advance, (i) with respect to the Firm Shares, all in the
manner and at the place and time and date specified in such Pricing Agreement or
at such other place and time and date as the Representatives and the Partnership
may agree upon in writing, such time and date being herein called the "First
Time of Delivery" and (ii) with respect to the Optional Units, if any, in the
manner and at the time and date specified by the Representatives in the written
notice given by the Representatives of the Underwriters' election to purchase
such Optional Units, or at such other time and date as the Representatives and
the Partnership may agree upon in writing, such time and date, if not the First
Time of Delivery, herein called the "Second Time of Delivery". Each such time
and date for delivery is herein called a "Time of Delivery".
2. Each of the Xxxxxx Xxxxxx Entities agrees with each of the Underwriters
of any Designated Units:
(a) To prepare the Prospectus as amended or supplemented in rela-
tion to the applicable Designated Units in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement relating to the
applicable Designated Units or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after the date
of the Pricing Agreement relating to such Common Units and prior to the Time of
Delivery for such Common Units which
14
shall be disapproved by the Representatives for such Common Units promptly after
reasonable notice thereof; to advise the Representatives promptly of any such
amendment or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Partnership with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Common Units, and during such same
period 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 with the Commission, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any prospectus
relating to the Common Units, of the suspension of the qualification of such
Common 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
Prospectus or for additional information; and, in the event of the issuance of
any such stop order or of any such order preventing or suspending the use of any
prospectus relating to the Common Units or suspending any such qualification, to
promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the Representa-
tives may reasonably request to qualify such Common 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 such Common Units, provided that in connection
therewith the Partnership shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with copies of the Prospectus in New York City as amended or
supplemented in such quantities as the Representatives may reasonably request,
and, if the delivery of a prospectus is required at any time in connection with
the offering or sale of the Common Units and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would 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
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture 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 Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Partnership and
15
its subsidiaries (which need not be audited) complying with Section 11(a) of the
Act and the rules and regulations of the Commission thereunder (including, at
the option of the Partnership, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Units and continuing to and including the later of (i) the
termination of trading restrictions for such Designated Units, as notified to
the Partnership by the Representatives and (ii) the Time of Delivery for such
Designated Units, not to offer, sell, contract to sell or otherwise dispose of
any debt securities of the Partnership which mature more than one year after
such Time of Delivery and which are substantially similar to such Designated
Units, without the prior written consent of the Representatives; and
(f) If the Partnership elects to rely upon Rule 462(b), the Partner-
ship shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement, and the Partnership shall at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
3. The Xxxxxx Xxxxxx Entities covenant and agree with the several
Underwriters that the Xxxxxx Xxxxxx Entities will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Partnership's counsel
and accountants in connection with the registration of the Common Units under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Common Units; (iii) any filing fees and expenses in connection with the
qualification of the Common Units for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification; (iv) any
fees charged by securities rating services for rating the Common Units; (v) any
filing fees incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Common Units; (vi) the
cost of preparing the Common Units; (vii) the fees and expenses of any Trustee
and any agent of any Trustee and the fees and disbursements of counsel for any
Trustee in connection with any Indenture and the Common Units; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Common Units by them, and any advertising expenses connected with any offers
they may make.
4. The obligations of the Underwriters of any Designated Units under the
Pricing Agreement relating to such Designated Units shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of each of the Xxxxxx Xxxxxx Entities in or
incorporated by reference in the Pricing Agreement
16
relating to such Designated Units are, at and as of the Time of Delivery for
such Designated Units, true and correct, the condition that each of the Xxxxxx
Xxxxxx Entities shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Units shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Partnership has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the Representatives'
reasonable satisfaction;
(b) Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, shall have
furnished to the Representatives such written opinion or opinions (a draft of
each such opinion is attached as Xxxxx XX(a) hereto), dated the Time of Delivery
for such Designated Units, with respect to the matters covered in paragraphs (i)
(insofar as it relates to the due formation and good standing of the Partnership
in Delaware and the Partnership's power and authority to conduct its business as
described in the Registration Statement and the Prospectus, as amended or
supplemented), (v), (xi) (insofar as it relates to the statements set forth in
the Prospectus under the caption "Underwriting"), (xiii) and (xxii) (insofar as
it relates to the Registration Statement and the Prospectus) of subsection (c)
below and a letter substantially similar to the letter required to be delivered
by Xxxxxxxx & Xxxxxx L.L.P. pursuant to subsection (c) below as well as such
other related matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxxxx & Xxxxxx L.L.P., counsel for the Xxxxxx Xxxxxx Entities
shall have furnished to the Representatives their written opinion (a draft of
such opinion is attached as Xxxxx XX(b) hereto), dated the Time of Delivery for
such Designated Units, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each of the Xxxxxx Xxxxxx Entities has been duly formed and is
validly existing and in good standing under the laws of the State of
Delaware and each Xxxxxx Xxxxxx Entity has the partnership or corporate
power and authority, as the case may be, to conduct its business as
described in the Registration Statement and the Prospectus, as amended or
supplemented. To the knowledge of such counsel, each of the Xxxxxx Xxxxxx
Entities is duly qualified to do business and is in good standing as a
foreign corporation or foreign limited partnership, as the case may be, in
all jurisdictions in which the nature of the activities conducted by it or
the character of the assets owned or leased by it makes such licensing or
qualification necessary, except in the case where the failure to be so
qualified cannot reasonably be expected to have a material adverse effect
on the financial condition, results of operations or business of the Xxxxxx
Xxxxxx
17
Entities, taken as a whole, or subject the Partnership or the limited
partners of the Partnership to any material liability or disability;
(ii) The General Partner is the sole general partner of the
Partnership with a 1% general partner interest in the Partnership; such
general partner interest is duly authorized by the Partnership Agreement
and was validly issued to the General Partner; and, to the knowledge of
such counsel, the General Partner owns such general partner interest free
and clear of all liens, encumbrances, security interests, equities, charges
or claims (except for such liens, encumbrances, security interests,
equities, charges or claims as are not, individually or in the aggregate,
material or as described in the Registration Statement or the Prospectus,
as amended or supplemented);
(iii) The General Partner is the sole general partner of each of the
Operating Partnerships with a 1.0101% general partner interest in each of
the Operating Partnerships; such general partner interests are duly
authorized by the respective Operating Partnership Agreements and were
validly issued to the General Partner; and to the knowledge of such
counsel, the General Partner owns such general partner interests free and
clear of all liens, encumbrances, security interests, equities charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or
as described in the Registration Statement or the Prospectus, as amended or
supplemented, and except as provided in the Operating Partnership
Agreements);
(iv) OLP-D is the sole general partner of SFPP with a 99.5% general
partner interest in SFPP; such general partner interest is duly authorized
by the SFPP Agreement and was validly issued to OLP-D; and to the knowledge
of such counsel, OLP-D owns such general partner interest free and clear of
all liens, encumbrances, security interests, equities, charges or claims as
are not, individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus, as amended or supplemented, or
the OLP-D Agreement); the SF Limited Partner is the sole limited partner of
SFPP with a 0.5% non-voting, limited partner interest in SFPP; and such
limited partner interest is duly authorized by the SFPP Agreement and was
validly issued to the SF Limited Partner;
(v) At the Time of Delivery after giving effect to the issuance of the
Firm Units, to the knowledge of such counsel, the capitalization of the
Partnership will consist of ______ Common Units (______ Common Units if all
of the Optional Units are issued); to the knowledge of such counsel, such
Common Units will be the only limited partner interests of the Partnership
that are issued and outstanding at the applicable Time of Delivery; all of
such Common Units of the Partnership (including the Common Units being
delivered at such Time of Delivery) have been duly and validly authorized
and issued and are fully paid and non-assessable (except as such
nonassessability may be affected by certain provisions of the Delaware Act;
and the Common Units conform in all material respects to the description
thereof incorporated by reference in the Prospectus as amended or
supplemented;
18
(vi) The Partnership is the sole limited partner of each of the
Operating Partnerships with a 98.9899% limited partner interest in each of
the Operating Partnerships; such limited partnership interests, in the case
of each of the Operating Partnerships, are duly authorized by the
respective Operating Partnership Agreements, were validly issued to the
Partnership and are fully paid and non-assessable (except as
nonassessability may be affected by certain provisions of the Delaware
Act); and, to the knowledge of such counsel, the Partnership owns such
limited partner interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims (i) as are
not, individually or in the aggregate, material, (ii) as described in the
Registration Statement or the Prospectus, as amended or supplemented or
(iii) arising out of the pledge by the Partnership of the limited partner
interests of the Operating Partnerships to secure certain indebtedness of
the Partnership and OLP-B).
(vii) Based solely on such counsel's review of the stock transfer
records of KMNGL, OLP-A is the record owner of all of the issued and
outstanding capital stock of KMNGL Corp.; OLP-A is the sole member of
KM-LLC; all of such capital stock and such member interests are duly
authorized, validly issued, fully paid and nonassessable; and, to the
knowledge of such counsel, OLP-A owns all of such capital stock and such
member interests free and clear of all liens, encumbrances, security
interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus).
(viii)OLP-A is a general partner of Heartland with a ____% general
partner interest in Heartland, KMNGL Corp. is a general partner of Mont
Belvieu with a % general partner interest in Mont Belvieu, and KM-LLC is a
limited partner of Shell CO2, with a 20% limited partner interest in Shell
CO2; such general partner interests and such limited partner interest are
duly authorized by the respective partnership agreements of Heartland, Mont
Belvieu and Shell CO2, and were validly issued by each of Heartland, Mont
Belvieu and Shell CO2, respectively, and in the case of such limited
partner interest, is fully paid and nonassessable (except as such
nonassessability may be affected by certain provisions of the Delaware
Act); and, OLP-A and KMNGL Corp. own such general partner interests in
Heartland and Mont Belvieu, respectively, and KM-LLC owns such limited
partner interest in Shell CO2, free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus);
(ix) None of the Common Units, when paid for by the Underwriters in
accordance with the terms of this Agreement, will be subject to any
preemptive or similar right under (i) the Delaware Act, (ii) the
Partnership Agreement (except for the General Partner's preemptive right
contained in Section 4.5 of the Partnership Agreement, which has been
waived with respect to the issuance and sale of the Common Units to the
Underwriters) or (iii) any instrument, document, contract or agreement
filed as an exhibit to or incorporated by reference in the Registration
Statement. Except as (i) described in the Registration Statement or the
Prospectus, (ii) the Partnership's Executive
19
Compensation Plan, and (iii) the Common Unit Option Plan, to the knowledge
of such counsel, there is no commitment or arrangement to issue, and there
are no outstanding options, warrants or other rights calling for the
issuance of, any Common Units or any partnership interest or share of
capital stock of any of the Xxxxxx Xxxxxx Entities to any person or any
security or other instrument that by its terms is convertible into,
exercisable for and exchangeable into Common Units.
(x) No consent, approval, authorization, order, registration or
qualification of or with any federal, Delaware or New York court or
governmental agency or body is required under Federal or New York law or
the Delaware Act for the issue and sale of the Common Units being delivered
at such Time of Delivery or the consummation by the Partnership of the
transactions contemplated by this Agreement, except such as have been
obtained under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws or by the Bylaws and rules of the National Association of
Securities Dealers, Inc. in connection with the purchase and distribution
of the Common Units by the Underwriters;
(xi) To the knowledge of such counsel, any instrument, document,
lease, license or other agreement required to be described or referred to
in the Registration Statement or the Prospectus, as amended or
supplemented, has been described or referred to therein and any such
instrument, document, lease, license or other agreement required to be
filed as an exhibit to the Registration Statement has been filed as an
exhibit thereto or has been incorporated as an exhibit by reference in the
Registration Statement;
(xii) To the knowledge of such counsel, except as disclosed in the
Registration Statement or the Prospectus, as amended or supplemented, no
person or entity has the right to require the registration under the Act of
Common Units or other securities of the Partnership by reason of the filing
or effectiveness of the Registration Statement, which has not been waived;
(xiii)Upon delivery of the certificates evidencing the Common Units
against payment therefor as provided in this Agreement, the Underwriters
will acquire the Common Units free of all adverse claims (as such term is
defined in Section 8-302 of the Uniform Commercial Code as in effect in the
State of Delaware (the "UCC"), assuming (i) the Underwriters are acting in
good faith, (ii) the Underwriters have no notice of any adverse claim (as
such term is used in Section 8-302 of the UCC) and (iii) the certificates
evidencing the Common Units are registered in the names of the Underwriters
or endorsed to the Underwriters or nominees of the Underwriters;
(xiv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Xxxxxx Xxxxxx Entities or any of its subsidiaries is a
party or of which any property of the Xxxxxx Xxxxxx Entities or any of its
subsidiaries is the subject which, if determined adversely to the Xxxxxx
Xxxxxx Entities or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated
20
financial position, unitholders' equity or results of operations of the
Xxxxxx Xxxxxx Entities and their subsidiaries; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xv) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by each of the Xxxxxx Xxxxxx Entities;
(xvi) The issue and sale of the Common Units being delivered at such
Time of Delivery and the compliance by the Xxxxxx Xxxxxx Entities with all
of the provisions of this Agreement and the consummation of the
transactions herein and therein contemplated will not (a) result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument filed as an exhibit to the Registration
Statement or filed as an exhibit to any document incorporated by reference
in the Registration Statement, (b) result in any violation of the
provisions of the Certificate of Incorporation, by-laws or other formation
document, as applicable, of any of the Xxxxxx Xxxxxx Entities, Mont
Belvieu, Heartland or Shell CO2, (c) breach or otherwise violate an
existing obligation of any of the Xxxxxx Xxxxxx Entities under any court or
administrative order, judgment or decree of which such counsel has
knowledge, or (d) violate any applicable provisions of the federal laws of
the United States, the laws of the State of New York, or the Delaware Act;
(xvii)(A) The statements set forth in the Partnership's Annual Report
on Form 10-K for the year ended December 31, 1997 under the caption "Item
1: Business-Regulation" and (B) the statements set forth in the Prospectus
under the captions "Description of Common Units," "Material Federal Income
Tax Considerations," and under the caption "Plan of Distribution," insofar
as they purport to constitute a summary of the terms of the Designated
Units or describe the provisions of federal law, New York law and the
Delaware Act and documents referred to therein, in each case, are accurate
summaries and fairly and correctly present in all material respects the
information called for with respect to such matters; provided, however,
that such counsel's opinion need not cover any statements or omissions made
in reliance upon and in conformity with information furnished in writing to
the Partnership by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly
for use therein;
(xviii) The Designated Units have been approved for listing on the New
York Stock Exchange, subject only to official notice of issuance;
(xix) None of the Xxxxxx Xxxxxx Entities is (a) a "holding company" or
a "subsidiary company" of a "holding company" or an "affiliate" thereof,
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or (b) an "Investment Company" or an entity "controlled" by an
"Investment Company," as such terms are defined in the Investment Company
Act;
(xx) The Registration Statement was declared effective under the Act
by the Commission and to the knowledge of such counsel no order suspending
the
21
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or is pending, threatened
or contemplated. Any required filing of the Prospectus relating the sale of
the Designated Units pursuant to Rule 424(b) under the Act has been made in
the manner and within the time period required by such rule and;
(xxi) The Registration Statement and the Prospectus (including any
documents incorporated by reference in the Prospectus, when such documents
became effective or were filed with the Commission), as amended or
supplemented, comply in all material respects as to form with the
requirements of the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder (other than the financial
statements and related schedules and other financial data contained
therein, as to which such counsel need express no opinion).
Such counsel shall also deliver a letter to the effect that they have
participated in conferences with officers and other representatives of the
Partnership, representatives of the Partnership's accountants, representatives
of the Underwriters and counsel for the Underwriters, at which conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing on and does not assume any
responsibility for and shall not be deemed to have independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to in the
opinion in subsection (xvii) of this Section 7(c), and relying as to facts
necessary to the determination as to materiality, to the extent such counsel may
do so in the exercise of its professional responsibility, upon statements of the
officers and other representatives of the Partnership, on the basis of the
foregoing, no facts have come to such counsel's attention that lead it to
believe that, as of its effective date, the Registration Statement or any
further amendment thereto made by the Partnership prior to such Time of Delivery
(other than the financial statements and related schedules and other financial
data contained therein, as to which such counsel need not comment) contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
or that, as of its date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Partnership prior to such
Time of Delivery (other than the financial statements and related schedules and
other financial data contained therein, as to which such counsel need not
comment) 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; or that, as of such
Time of Delivery, either the Registration Statement or the Prospectus as amended
or supplemented or any further amendment or supplement thereto made by the
Partnership to such Time of Delivery (other than the financial statements and
related schedules and other financial data contained therein, as to which such
counsel need express no opinion) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
such counsel have no reason to believe that any documents incorporated by
reference in the Prospectus, when such documents became effective or were so
filed, as the case may be, contained, in the case of a registration statement
which became effective under the Act, 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, in the case of other documents
which were filed under the
22
Act or the Exchange Act with the Commission, an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading; and they do not know of any
contracts or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by reference into
the Prospectus as amended or supplemented or required to be described in the
Registration Statement or the Prospectus as amended or supplemented which are
not filed or incorporated by reference or described as required.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than federal law, New York law
and the Delaware Act.
(a) On the date of the Pricing Agreement for such Designated Units
at a time prior to the execution of the Pricing Agreement with respect to such
Designated Units and at each Time of Delivery for such Designated Units, the
independent accountants of the Partnership who have certified the financial
statements of the Partnership and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the effective date of the Registration Statement
or the date of the most recent report filed with the Commission containing
financial statements and incorporated by reference in the Registration
Statement, if the date of such report is later than such effective date, and a
letter dated such Time of Delivery, respectively, to the effect set forth in
Annex II hereto, and with respect to such letter dated such Time of Delivery, as
to such other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives (the executed copy of the
letter delivered prior to the execution of this Agreement is attached as Xxxxx
X(a) hereto and a draft of the form of letter to be delivered on the effective
date of any post-effective amendment to the Registration Statement and as of
each Time of Delivery is attached as Annex I(b) hereto);
(b) (i) None of the Xxxxxx Xxxxxx Entities shall have sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus as amended prior to the date of the Pricing
Agreement relating to the Designated Units any 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, order
or decree, otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the Designated
Units, and (ii) since the respective dates as of which information is given in
the Prospectus as amended prior to the date of the Pricing Agreement relating to
the Designated Units there shall not have been any change in the capital stock
or long-term debt of the Partnership (or any of the other Xxxxxx Xxxxxx
Entities) or any change, or any development involving a prospective change, in
or affecting the general affairs, management, financial position, unitholders'
equity or results of operations of the Partnership (or any of the other Xxxxxx
Xxxxxx Entities), otherwise than as set forth or contemplated in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the Designated
Units, the effect of which, in any such case described in Clause (i) or (ii), is
in the judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Designated Units on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated Units;
23
(c) On or after the date of the Pricing Agreement relating to the
Designated Units (i) no downgrading shall have occurred in the rating accorded
any of the Xxxxxx Xxxxxx Entities debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the
Partnership's debt securities or preferred stock;
(d) On or after the date of the Pricing Agreement relating to the
Designated Units there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
Partnership's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal or New
York or Texas State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Units on the terms and in the manner contemplated in the Prospectus
as first amended or supplemented relating to the Designated Units;
(e) The Partnership shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of the Pricing Agreement relating to
the Designated Units; and
(f) The Xxxxxx Xxxxxx Entities shall have furnished or caused to be
furnished to the Representatives at the Time of Delivery for the Designated
Units a certificate or certificates of officers of the General Partner
satisfactory to the Representatives as to the accuracy of the representations
and warranties of the Xxxxxx Xxxxxx Entities herein at and as of such Time of
Delivery, as to the performance by the Xxxxxx Xxxxxx Entities of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsections (a) and (e) of this Section and as to
such other matters as the Representatives may reasonably request.
(g) Each of the Xxxxxx Xxxxxx Entities will indemnify and hold harm-
less each Underwriter against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Designated
Units, or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Xxxxxx Xxxxxx Entities shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
24
omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Units, or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Partnership by any Underwriter of Designated Units
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Designated Units.
(h) Each Underwriter will indemnify and hold harmless the Xxxxxx
Xxxxxx Entities against any losses, claims, damages or liabilities to which the
Xxxxxx Xxxxxx Entities may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Units, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Designated Units, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Partnership by such
Underwriter through the Representatives expressly for use therein; and will
reimburse the Xxxxxx Xxxxxx Entities for any legal or other expenses reasonably
incurred by the Xxxxxx Xxxxxx Entities in connection with investigating or
defending any such action or claim as such expenses are incurred.
(i) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does
25
not include a statement as to or an admission of fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(j) If the indemnification provided for in this Section 8 is unavail-
able to or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Partnership on the one hand and the Underwriters of the
Designated Units on the other from the offering of the Designated Units to which
such loss, claim, damage or liability (or action in respect thereof) relates.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Partnership on the one hand and the Underwriters of
the Designated Units on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Partnership on the one hand and such
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from such offering (before deducting expenses) received by
the Partnership bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Partnership on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Xxxxxx Xxxxxx Entities and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include 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
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable Designated
Units underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Units in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Designated Units and not joint.
(k) The obligations of the Xxxxxx Xxxxxx Entities under this Section
8 shall be in addition to any liability which the Xxxxxx Xxxxxx Entities may
otherwise have and shall
26
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the General Partner and to
each person, if any, who controls the Xxxxxx Xxxxxx Entities within the meaning
of the Act.
(l) If any Underwriter shall default in its obligation to purchase
the Firm Units or Optional Units which it has agreed to purchase under the
Pricing Agreement relating to such Designated Units, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Units on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Firm Units or Optional Units, as the case
may be, then the Partnership shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Units on such terms. In the event
that, within the respective prescribed period, the Representatives notify the
Partnership that they have so arranged for the purchase of such Designated
Units, or the Partnership notifies the Representatives that it has so arranged
for the purchase of such Designated Units, the Representatives or the
Partnership shall have the right to postpone the Time of Delivery for such
Designated Units for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus as amended or supplemented, or in any other documents or
arrangements, and the Partnership agrees to file promptly any amendments or
supplements to the Registration Statement or the Prospectus which in the opinion
of the Representatives may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Units.
(m) If, after giving effect to any arrangements for the purchase
of the Firm Units or Optional Units, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Partnership as
provided in subsection (a) above, the aggregate number of such Designated Units
which remains unpurchased does not exceed one-eleventh of the aggregate number
of the Firm Units or Optional Units, then the Partnership shall have the right
to require each non-defaulting Underwriter to purchase the number of Firm Units
or Optional Units which such Underwriter agreed to purchase under the Pricing
Agreement relating to such Designated Units and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Firm Units or Optional Units which such Underwriter agreed to purchase under
such Pricing Agreement) of the Firm Units or Optional Units of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(n) If, after giving effect to any arrangements for the purchase
of the Designated Units of a defaulting Underwriter or Underwriters by the
Representatives and the Partnership as provided in subsection (a) above, the
aggregate principal amount of Firm Units or Optional Units, as the case may be,
which remains unpurchased exceeds one-eleventh of the aggregate number of the
Firm Units or Optional Units, as the case may be, as referred to in subsection
(b)
27
above, or if the Partnership shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Firm
Units or Optional Units, as the case may be, of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Firm Units or the
Over-allotment Option relating to such Optional Units, as the case may be, shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Partnership, except for the expenses to be borne by the
Partnership and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
2. The respective indemnities, agreements, representations, warranties and
other statements of the Xxxxxx Xxxxxx Entities and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, any of
the Xxxxxx Xxxxxx Entities, or any officer or director or controlling person of
the Xxxxxx Xxxxxx Entities, and shall survive delivery of and payment for the
Designated Units.
3. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, the Xxxxxx Xxxxxx Entities shall not then be under
any liability to any Underwriter with respect to the Designated Units covered by
such Pricing Agreement except as provided in Sections 6 and 8 hereof; but, if
for any other reason Designated Units are not delivered by or on behalf of the
Partnership as provided herein, the Xxxxxx Xxxxxx Entities will reimburse the
Underwriters through the Representatives for all out-of-pocket expenses approved
in writing by the Representatives, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of such Designated Units, but the Xxxxxx Xxxxxx Entities shall
then be under no further liability to any Underwriter with respect to such
Designated Units except as provided in Sections 6 and 8 hereof.
4. In all dealings hereunder, the Representatives of the Underwriters of
Designated Units shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to any of the Xxxxxx Xxxxxx Entities shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Partnership set forth in the Registration Statement: Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Partnership by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
1. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, each of the Xxxxxx Xxxxxx
Entities and, to the extent provided in Sections 8 and 10 hereof, the officers
and directors of the General Partner and each
28
person who controls the any of the Xxxxxx Xxxxxx Entities or any Underwriter,
and their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Common Units
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
2. Time shall be of the essence of each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
3. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
4. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Xxxxxx Xxxxxx Entities and for each of the
Representatives plus one for each counsel counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters and each of the Xxxxxx Xxxxxx Entities. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Partnership for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
XXXXXX XXXXXX ENERGY PARTNERS, L.P.
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
29
XXXXXX XXXXXX OPERATING L.P. "A"
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
XXXXXX XXXXXX OPERATING L.P. "B"
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
XXXXXX XXXXXX OPERATING L.P. "C"
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
XXXXXX XXXXXX OPERATING L.P. "D"
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
30
KINDER XXXXXX X.X., INC.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
SFPP, L.P.
By: Xxxxxx Xxxxxx Operating L.P.,
"D"
By: Xxxxxx Xxxxxx Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
XXXXXX XXXXXX BULK TERMINALS
CORPORATION
By: _______________________________
Name:
Title:
XXXXXX XXXXXX NATURAL GAS LIQUIDS
CORPORATION
By: _______________________________
Name:
Title:
31
XXXXXX XXXXXX CO(2), L.L.C.
By: Xxxxxx Xxxxxx Operating L.P.,
"A"
By: Xxxxxx Xxxxxx Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
Accepted as of the date hereof:
Xxxxxxx Xxxxx & Co.
[Co-Representative(s)]
By:_____________________________
(Xxxxxxx, Xxxxx & Co.)
32
ANNEX I
Pricing Agreement
Xxxxxxx, Xxxxx & Co., [Name(s) of Co-Representative(s)] As Representatives of
the several Underwriters named in Schedule I hereto, c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
_________, 19__
Ladies and Gentlemen:
Xxxxxx Xxxxxx Energy Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes, subject to the terms and conditions stated herein and
in the Underwriting Agreement, dated____________, 1998 (the "Underwriting
Agreement"), among the Partnership and the other Xxxxxx Xxxxxx Entities (as
defined in the Underwriting Agreement) on the one hand and Xxxxxxx, Xxxxx & Co.
[and (names of Co-Representatives named therein)] on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Common Units specified in Schedule II hereto (the "Designated Units"). Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Units which are the subject of this Pricing Agreement, unless
such representation or warranty is as of a specified date. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Units pursuant to Section 12 of the Underwriting Agreement and the address of
the Representatives referred to in such Section 12 are set forth at the end of
Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Units, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Partnership
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Partnership, at the time and place and at the purchase price to the Underwriters
set forth in Schedule II hereto, the number of Firm Units set forth opposite the
name of such Underwriter in Schedule I hereto [and, (b) in the event and to the
extent that the Underwriters shall exercise the
33
election to purchase Optional Units, as provided below, the Partnership agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Partnership at the
purchase price to the Underwriters set forth in Schedule II hereto that portion
of the number of Optional Units as to which such election shall have been
exercised.
[The Partnership hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Units set forth opposite
the name of such Underwriter in Schedule I hereto on the terms referred to in
the paragraph above for the sole purpose of covering over-allotments in the sale
of the Firm Units. Any such election to purchase Optional Units may be exercised
by written notice from the Representatives to the Partnership given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Units to be purchased and the date on
which such Optional Units are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Partnership otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Partnership and each of the Representatives plus one
for each counsel counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Partnership. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is or will be pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Partnership for examination upon request, but without warranty
on the part of the Representatives as to the authority of the signers thereof.
Very truly yours,
XXXXXX XXXXXX ENERGY PARTNERS, L.P.
By: Xxxxxx Xxxxxx, G.P., Inc.
By: _______________________________
Name:
Title:
34
XXXXXX XXXXXX OPERATING L.P. "A"
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
XXXXXX XXXXXX OPERATING L.P. "B"
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
XXXXXX
XXXXXX OPERATING L.P. "C"
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
35
XXXXXX XXXXXX OPERATING L.P. "D"
By: Kinder Xxxxxx X.X., Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
KINDER XXXXXX X.X., INC.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
SFPP, L.P.
By: Xxxxxx Xxxxxx Operating L.P.,
"D"
By: Xxxxxx Xxxxxx Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
XXXXXX XXXXXX BULK TERMINALS
CORPORATION
By: _______________________________
Name:
Title:
36
XXXXXX XXXXXX NATURAL GAS LIQUIDS
CORPORATION
By: _______________________________
Name:
Title:
XXXXXX XXXXXX CO(2), L.L.C.
By: Xxxxxx Xxxxxx Operating L.P.,
"A"
By: Xxxxxx Xxxxxx Inc.
By: _______________________________
Xxxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
[Name(s) of Co-Representative(s)]
By: _______________________________
(Xxxxxxx, Xxxxx & Co.)
37
SCHEDULE I
Underwriter Number of [Maximum
[Firm] Units to Number of
be Purchased Optional Units
Which May Be
Purchased]
Xxxxxxx, Xxxxx & Co.
[Name(s) of Co-Representative(s)]
[Names of other Underwriters] ------- -------
Total ======= =======
38
SCHEDULE II
Title of Designated Units:
Number of Designated Units
Number of Firm Units:
Maximum Number of Optional Units:
Initial Offering Price to Public:
[$_________] per Unit] [Formula]
Purchase Price by Underwriters:
[$_________] per Unit] [Formula]
[Commission Payable to Underwriters:
$______ per Unit [specify same form of funds as in Specified Funds
below]]
Form of Designated Units:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The Depository
Trust Company or its designated custodian] [the Representatives]]
Specified Funds for payment of purchase price:
Federal (same day) funds
[Describe any blackout provisions with respect to the Designated Units]
Time of Delivery:
_________ a.m. (New York City time), _________, 199__
Defeasance provisions:
Closing Location:
39
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]*:
-----------------------
* A description of particular tax, accounting or other unusual features (such as
the addition of event risk provisions) of the Designated Units should be set
forth, or referenced to an attached and accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Units to be purchased and
sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
40
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Partnership and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Partnership for the
periods specified in such letter, as indicated in their reports thereon,
copies of which have been [separately] furnished to the representative or
representatives of the Underwriters (the "Representatives") such term to
include an Underwriter or Underwriters who act without any firm being
designated as its or their representatives [and are attached hereto];
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Partnership's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which [have been separately furnished to the Representatives][are
attached hereto]; and on the basis of specified procedures including
inquiries of officials of the Partnership who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the
Partnership for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Partnership's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where applicable)
in the audited consolidated financial statements for five such fiscal years
which were
1
included or incorporated by reference in the Partnership's Annual Reports
on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Partnership and its subsidiaries, inspection of
the minute books of the Partnership and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Partnership and
its subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Partnership's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Partnership's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Partnership's Annual Report on Form 10-K for the most recent fiscal
year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
2
financial statements included or incorporated by reference in the
Partnership's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and unit appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Partnership and its
subsidiaries, or any decreases in consolidated net current assets or
unitholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the general
accounting records of the Partnership and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial
3
information with the accounting records of the Partnership and its subsidiaries
and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Units for purposes
of the letter delivered at the Time of Delivery for such Designated Units.
4
