1
EXHIBIT 1.1
2,000,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
TEPPCO PARTNERS, L.P.
UNDERWRITING AGREEMENT
January 31, 2001
XXXXXXX, XXXXX & CO.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TEPPCO Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to sell common units representing limited partner
interests in the Partnership (the "Common Units") to Xxxxxxx, Sachs & Co. (the
"Underwriter") in an aggregate amount of 2,000,000 Common Units (the "Firm
Units"). The Partnership has also agreed to grant to the Underwriter an option
(the "Option") to purchase up to additional 300,000 Common Units representing
limited partner interests (the "Option Units") on the terms and for the purposes
set forth in Section 1(b). The Firm Units and the Option Units are hereinafter
referred to as the "Units."
The public offering price per Common Unit for the Units and the
purchase price per Common Unit for the Units to be paid by the Underwriter shall
be agreed upon by the Partnership and the Underwriter, and such agreement shall
be set forth in a separate written instrument substantially in the form of
Exhibit A hereto (the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form of written
telecommunication among the Partnership and the Underwriter and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering of
the Units will be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the execution and delivery
of the Price Determination Agreement, this Agreement shall be deemed to
incorporate, and, unless the context otherwise indicates, all references
contained herein to "this Agreement" and to the phrase "herein" shall be deemed
to include the Price Determination Agreement.
Each of (i) the Partnership, (ii) Texas Eastern Products Pipeline
Company, LLC, a Delaware limited liability company (both in its capacity as
general partner of the Partnership and the Operating Partnerships (defined
below) and in its individual capacity, the "General Partner"), (iii) TE Products
Pipeline Company, Limited Partnership, a Delaware limited partnership ("TE
Products OLP"), and
1
2
(iv) TCTM, L.P., a Delaware limited partnership ("TCTM OLP" and together with TE
Products OLP, the "Operating Partnerships") confirms as follows its agreements
with the Underwriter. All of such entities shall be referred to collectively as
the "TEPPCO Entities."
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the TEPPCO Entities herein contained and subject to all the terms
and conditions of this Agreement, the Partnership agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Partnership, at the
purchase price per Common Unit for the Units to be agreed upon by the
Underwriter and the Partnership in accordance with Section 1(c) hereof and set
forth in the Price Determination Agreement, the Firm Units.
(b) Subject to all the terms and conditions of this Agreement,
the Partnership grants the Option to the Underwriter to purchase up to 300,000
Option Units from the Partnership at the same price per Common Unit as the
Underwriter shall pay for the Firm Units. The Option may be exercised only to
cover over-allotments in the sale of the Firm Units by the Underwriter and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of the Price Determination Agreement, upon
written or telegraphic notice (the "Option Units Notice") by the Underwriter to
the Partnership no later than 12:00 noon, New York City time, at least two and
no more than five business days before the date specified for closing in the
Option Units Notice (the "Option Closing Date") setting forth the aggregate
number of Option Units to be purchased and the time and date for such purchase.
On the Option Closing Date, the Partnership will issue and sell to the
Underwriter the number of Option Units set forth in the Option Units Notice.
(c) The public offering price per Common Unit for the Firm
Units and the purchase price per Common Unit for the Firm Units to be paid by
the Underwriter shall be agreed upon and set forth in the Price Determination
Agreement.
2. Delivery and Payment. The Firm Units to be purchased by the
Underwriter hereunder, shall be issued in book entry form, and in such
authorized denominations and registered in such names as the Underwriter may
request, and will be represented by one or more definitive global certificates
which will be deposited by or on behalf of the Partnership with The Depository
Trust Company ("DTC") or its designated custodian. Delivery to the Underwriter
of the Firm Units shall be made by or on behalf of the Partnership by causing
DTC to credit the Firm Units to the account or accounts designated by the
Underwriter at DTC, against payment of the purchase price by wire transfer of
Federal Funds or similar same day funds to an account designated in writing by
the Partnership to the Underwriter at least one business day prior to the
Closing Date (as hereinafter defined). Such payment shall be made at 10:00 a.m.,
New York City time, on the third business day (or fourth business day, if the
Price Determination Agreement is executed after 4:30 p.m.) after the date on
which the first bona fide offering of the Units to the public is made by the
Underwriter or at such time on such other date, not later than ten business days
after such date, as may be agreed upon by the Partnership and the Underwriter
(such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Units
against payment by the Underwriter (in the manner specified above) will take
place at the offices specified above for the
2
3
Closing Date at the time and date (which may be the Closing Date) specified in
the Option Units Notice.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Units by the Partnership to the respective
Underwriter shall be borne by the Partnership. The Partnership will pay and save
the Underwriter and any subsequent holder of the Units harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
the Underwriter of the Firm Units and Option Units.
3. Representations and Warranties of the TEPPCO Entities. Each of
the TEPPCO Entities, jointly and severally, represent, warrant and covenant to
the Underwriter that:
(a) Compliance with Registration Requirements. The Partnership
meets the requirements for use of Form S-3 and a registration statement
(Registration No. 333-37112) on Form S-3 relating to the Units (and such
amendments to such registration statement as may have been required to the date
of this Agreement) has been prepared by the Partnership and complies in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (collectively referred to as
the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. Such
registration statement has been declared effective by the Commission. Copies of
such registration statement and amendments and of each related prospectus have
been delivered to the Underwriter. The term "Registration Statement" means the
registration statement, including all financial statements, exhibits and
documents incorporated by reference therein, as from time to time amended or
supplemented pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), Rule 415 and Rule 434 of the Rules and Regulations, or
otherwise, any registration statement filed under Rule 462 of the Rules and
Regulations as such registration statement may be amended from time to time and
all information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations. The term "Prospectus"
means the prospectus constituting a part of the Registration Statement and any
amendments or supplements to such prospectus, including without limitation the
prospectus supplement filed with the Commission in connection with the proposed
sale of Units contemplated by this Agreement (the "Prospectus Supplement"),
through the date of such Prospectus Supplement. Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the date hereof or are so
filed hereafter. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include any such document filed or to be filed under
the Exchange Act after the date of the Prospectus, and deemed to be incorporated
therein by reference.
On the date the Registration Statement was declared effective
by the Commission (the "Effective Date"), at all times subsequent to and
including the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Partnership shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included or incorporated by
reference in the Prospectus or the Registration Statement, did
3
4
or will comply in all material respects with all applicable provisions of the
Act, the Exchange Act, the rules and regulations thereunder (the "Exchange Act
Rules and Regulations") and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the Act, the
Exchange Act, the Exchange Act Rules and Regulations and the Rules and
Regulations. On the Effective Date and when any post-effective amendment to the
Registration Statement becomes effective, no part of the Registration Statement
or any such amendment did or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. At the Effective Date,
the date the Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission and at the Closing Date and, if later, the Option
Closing Date, the Prospectus did not or will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(a) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to the Underwriter furnished in writing
to the Partnership by the Underwriter specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. The
Partnership has not distributed any offering material in connection with the
offering or sale of the Units other than the Registration Statement and the
Prospectus. No order preventing or suspending the use of the Prospectus has been
issued by the Commission.
(b) Incorporated Documents. The documents which are
incorporated by reference in the Registration Statement and the Prospectus or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied and
will comply in all material respects with the requirements of the Act or the
Exchange Act, as applicable, the Exchange Act Rules and Regulations and the
Rules and Regulations 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 statement therein not misleading; and any
further documents so filed and incorporated by reference subsequent to the
Closing Date shall, when they are filed with the Commission, conform in all
material respects with the requirements of the Act and the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and Regulations
and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statement
therein not misleading.
(c) Independent Accountants. The accountants who certified the
financial statements and supporting schedules of the Partnership included in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants of the Partnership as required by
the Act and the Exchange Act. The statements included in the Registration
Statement with respect to the accountants pursuant to Rule 509 of Regulation S-K
of the Rules and Regulations are true and correct in all material respects.
(d) Financial Statements. The financial statements included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the consolidated
financial position of the Partnership at the dates indicated and the
consolidated statement of operations and cash flows of the Partnership for the
periods specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting
4
5
schedules, if any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The pro
forma financial statements and other pro forma financial information included or
incorporated by reference in the Registration Statement or the Prospectus (i)
present fairly in all material respects the information shown therein, (ii) have
been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and (iii) have been properly computed
on the bases described therein. The assumptions used in the preparation of the
pro forma financial statements and other pro forma financial information
included or incorporated by reference in the Registration Statement or
Prospectus are reasonable and the adjustments used therein are appropriate to
give effect to the transactions or circumstances referred to therein. No other
financial statements or schedules of the Partnership are required by the Act or
the Exchange Act or the Rules and Regulations to be included in the Registration
Statement or the Prospectus.
(e) Internal Accounting Controls. The Partnership 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.
(f) No Material Adverse Change in Business. Subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus and prior to the Closing Date, except as set forth in or
contemplated by the Registration Statement and the Prospectus, (i) there has not
been and will not have been any material adverse change in, and no development
which could reasonably be expected to result in a material adverse change in,
the capitalization of the TEPPCO Entities, or in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the TEPPCO Entities and their subsidiaries, taken as a whole (a "Material
Adverse Effect"), arising for any reason whatsoever, (ii) none of the TEPPCO
Entities nor any of their subsidiaries has incurred nor will it incur any
material liabilities or obligations, direct or contingent, nor has it entered
into nor will it enter into any material transactions other than pursuant to
this Agreement and the transactions referred to herein, and (iii) none of the
TEPPCO Entities nor any of their subsidiaries has sustained 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.
(g) Formation and Good Standing of the Partnership, the
Operating Partnerships and the Subsidiary Partnerships. Each of the Partnership,
the Operating Partnerships and TEPPCO Crude Pipeline, L.P., TEPPCO Seaway L.P.,
TEPPCO Crude Oil, L.P. and Lubrication Services, L.P. (collectively, the
"Subsidiary Partnerships") has been duly formed and is, and at the Closing Date
will be, validly existing as a limited partnership in good standing under the
Delaware Revised Uniform Limited Partnership Act, as amended (the "Delaware
Act"). Each of the Partnership, the Operating Partnerships and the Subsidiary
Partnerships has, and at the Closing Date will have, full power and authority to
conduct all the activities conducted by it, to own, lease and operate its
5
6
properties and to conduct its business in all material respects as described in
the Registration Statement and the Prospectus and to enter into and perform its
obligations under this Agreement. Each of the Partnership, the Operating
Partnerships and the Subsidiary Partnerships is, and at the Closing Date will
be, duly qualified or registered and in good standing as a foreign limited
partnership to transact business in each other jurisdiction in which such
qualification or registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to register (i) would not result in a Material Adverse Effect, or
(ii) would not subject the limited partners of such partnership to any material
liability or disability. The Partnership is the sole limited partner of TCTM OLP
and TE Products OLP, in each case with a limited partner interest of 99.0%. Such
limited partner interests have been duly authorized by the respective Agreements
of Limited Partnership of the Operating Partnerships (the "Operating Partnership
Agreements") have been validly issued in accordance with the respective
Operating Partnership Agreements and are fully paid and non-assessable, except
to the extent such non-assessability may be affected by Section 17-607 of the
Delaware Act. The Partnership owns such limited partner interests and limited
partner interests in the Subsidiary Partnerships either directly or indirectly
and free and clear of all liens, encumbrances, security interests, equities,
charges or claims, except for such liens, encumbrances, security interests,
equities, charges or claims as are not, individually or in the aggregate,
material or except as described in the Prospectus. TEPPCO Seaway, L.P. owns a
50% general partner interest in Seaway Crude Pipeline Company. Such general
partner interest has been duly authorized and validly issued and is owned of
record free and clear of all liens, encumbrances, security interests, equities,
charges or claims, except for such liens, encumbrances, security interests,
equities, charges or claims as are not, individually or in the aggregate,
material. TE Products OLP is the sole member of TEPPCO Colorado, LLC and TCTM,
L.P. is the sole member of TEPPCO Crude GP, LLC. Such member interests have been
duly authorized and validly issued and are owned of record free and clear of all
liens, encumbrances, security interests, equities, charges or claims, except for
such liens, encumbrances, security interests, equities, charges or claims as are
not, individually or in the aggregate, material. Complete and correct copies of
the Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement") and each of the Operating Partnership Agreements has been delivered
to the Underwriter, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
(h) Formation and Good Standing of the General Partner. The
General Partner has been duly organized and is, and at the Closing Date will be,
validly existing as a limited liability company in good standing under the
Delaware Limited Liability Company Act ("Delaware LLC Act") and has full power
and authority to conduct all the activities conducted by it, to own, lease and
operate its properties and to conduct its business and to act as general partner
of the Partnership, in each case in all material respects, as described in the
Registration Statement and the Prospectus and to enter into and perform its
obligations under this Agreement; and the General Partner is, and at the Closing
Date will be, duly qualified or registered and in good standing as a foreign
limited liability company to transact business in each other jurisdiction in
which such qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to register (i) would not result in a Material Adverse
Effect, or (ii) would not subject its members to any material liability or
disability. The General Partner is the sole general partner of the Partnership
and the Operating Partnerships, in each case with a general partner interest of
1%. Such general partner interests have been duly authorized by the Partnership
Agreement and the respective Operating Partnership Agreements, have been validly
issued in
6
7
accordance with the Partnership Agreement and the respective Operating
Partnership Agreements, and are owned of record by the General Partner, free and
clear of all liens, encumbrances, security interests, equities, charges or
claims, except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or
except as described in the Prospectus. Complete and correct copies of the
certificate of formation and the limited liability company agreement of the
General Partner and all amendments thereto have been delivered to the
Underwriter, and no changes therein will be made subsequent to the date hereof
and prior to the Closing Date.
(i) Formation and Good Standing of TEPPCO Crude GP, LLC.
TEPPCO Crude GP, LLC has been duly organized and is, and at the Closing Date
will be, validly existing as a limited liability company in good standing under
the Delaware LLC Act and has full power and authority to conduct all the
activities conducted by it, to own, lease and operate its properties and to
conduct its business and to act as general partner of the Subsidiary
Partnerships, in each case in all material respects, as described in the
Registration Statement and the Prospectus; and TEPPCO Crude GP, LLC is, and at
the Closing Date will be, duly qualified or registered and in good standing as a
foreign limited liability company to transact business in each other
jurisdiction in which such qualification or registration is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to register (i) would not result in a
Material Adverse Effect, or (ii) would not subject its members to any material
liability or disability. TEPPCO Crude GP, LLC is the sole general partner of the
Subsidiary Partnerships, in each case with a general partner interest of 1%.
Such general partner interests have been duly authorized by the respective
subsidiary partnership agreements, have been validly issued in accordance with
the respective subsidiary partnership agreements, and are owned of record by
TEPPCO Crude GP, LLC, free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except for such liens, encumbrances,
security interests, equities, charges or claims as are not, individually or in
the aggregate, material or except as described in the Prospectus. Complete and
correct copies of the certificate of formation and the limited liability company
agreement of TEPPCO Crude GP, LLC and all amendments thereto have been delivered
to the Underwriter, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
(j) Formation and Good Standing of TEPPCO Colorado, L.L.C.
TEPPCO Colorado, L.L.C. has been duly organized and is, and at the Closing Date
will be, validly existing as a limited liability company in good standing under
the Colorado Limited Liability Company Act and has full power and authority to
conduct all the activities conducted by it, to own, lease and operate its
properties and to conduct its business, in each case in all material respects;
and TEPPCO Colorado, L.L.C. is, and at the Closing Date will be, duly qualified
or registered and in good standing as a foreign limited liability company to
transact business in each other jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to register (i) would not result in a Material Adverse Effect, or (ii) would not
subject its members to any material liability or disability.
(k) Capitalization. The Partnership's capital as of December
31, 2000 is as set forth in the Prospectus in the column entitled "Actual" under
the heading "Capitalization". The
7
8
adjustments to the Partnership's capital as of December 31, 2000, as set forth
in the Prospectus under the column entitled "Pro Forma as Adjusted" under the
heading "Capitalization," represent a reasonable estimate by the General Partner
of the pro forma effects on the Partnership's capital of the offer and sale of
the Firm Units and the application of the estimated net proceeds from such offer
and sale in the manner set forth in the Prospectus under the heading "Use of
Proceeds."
(l) Partnership Interests. The limited partners of the
Partnership hold limited partner interests in the Partnership aggregating a 99%
interest in the Partnership, such limited partner interests being represented by
32,700,000 Common Units and 3,916,547 units representing Class B limited partner
interests ("Class B Units") (the Common Units and the Class B Units are
collectively referred to as the "Limited Partner Units"); the Limited Partner
Units are the only limited partner interests of the Partnership that are issued
and outstanding; the Limited Partner Units have been, and the Common Units to be
issued and sold by the Partnership will be, duly authorized and validly issued
under the Partnership Agreement, fully paid and nonassessable, except as such
nonassessability may be affected by Section 17-607 of the Delaware Act, and will
not be subject to any preemptive or similar right or voting or transfer
restriction. The description of the Common Units in the Registration Statement
and the Prospectus is, and at the Closing Date will be, complete and accurate in
all material respects. Except as set forth in the Prospectus, the Partnership
does not have outstanding, and at the Closing Date will not have outstanding,
any options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any limited partner interests or other interests in the
Partnership, the Operating Partnerships, the Subsidiary Partnerships or any of
their respective subsidiaries.
(m) Capitalization of the General Partner. All of the
membership interests of the General Partner are registered on its books in the
name of Duke Energy Field Services Assets, LLC, free and clear of all liens,
encumbrances, security interests, equities, charges or claims, except as set
forth in the Prospectus or as are not, individually or in the aggregate,
material.
(n) Authorization of Agreement; Absence of Defaults and
Conflicts. Each of the TEPPCO Entities has full power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by each of the TEPPCO Entities and constitutes a valid and binding
agreement of each of the TEPPCO Entities and is enforceable against each of the
TEPPCO Entities in accordance with the terms hereof. The performance of this
Agreement, the consummation of the transactions contemplated hereby and the
application of the net proceeds from the offering and sale of the Units in the
manner set forth in the Prospectus under "Use of Proceeds" will not result in
the creation or imposition of any lien, charge or encumbrance upon any of the
assets of any of the TEPPCO Entities or any of their subsidiaries pursuant to
the terms or provisions of, result in a breach or violation of any of the terms
or provisions of, constitute a default under, give any other party a right to
terminate any of its obligations under or result in the acceleration of any
obligation under, the limited partnership agreement or certificate of limited
partnership or limited liability company agreement or articles or certificate of
formation of any of the TEPPCO Entities or any of their subsidiaries, any
indenture, mortgage, deed of trust, loan agreement, contract or other agreement
or instrument to which any of the TEPPCO Entities or any of their subsidiaries
is a party or by which any of the TEPPCO Entities or any of their subsidiaries
or any of their properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or
8
9
regulation of any court or other governmental agency or body applicable to the
business or properties of any of the TEPPCO Entities or any of their
subsidiaries.
(o) Absence of Labor Dispute. No labor dispute with the
employees of any of the TEPPCO Entities or any of their subsidiaries exists or,
to the knowledge of any of the TEPPCO Entities, is imminent or threatened, and
none of the TEPPCO Entities has any actual knowledge of an existing, imminent or
threatened labor disturbance by the employees of any of its or any of its
affiliates' principal suppliers, manufacturers, customers or contractors, which,
in either case, could reasonably be expected to result in a Material Adverse
Effect. Each of the TEPPCO Entities and their subsidiaries is in compliance with
all federal, state and local employment labor laws, including, but not limited
to, laws relating to non-discrimination in hiring, promotion and pay of
employees, except for any noncompliance that could not reasonably be expected to
result in a Material Adverse Effect.
(p) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Partnership, the Operating Partnerships or the General Partner,
threatened, against or affecting the Partnership, the Operating Partnerships or
the General Partner, or any of their respective officers in their capacity as
such, which is required to be disclosed in the Registration Statement (other
than as disclosed therein), or wherein an unfavorable ruling, decision or
finding would result in a Material Adverse Effect; the aggregate of all pending
legal or governmental proceedings to which any of the TEPPCO Entities or any of
their subsidiaries is a party or of which any of their respective property or
assets is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, are not
reasonably expected by the General Partner to result in a Material Adverse
Effect.
(q) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(r) Possession of Intellectual Property. Each of the TEPPCO
Entities and their subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now operated by
them, and none of the TEPPCO Entities nor any of their subsidiaries has received
any notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of any of the TEPPCO Entities or their
subsidiaries, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
(s) Absence of Further Requirements. No consent, approval,
authorization or order of, or any filing or declaration with, any court or
governmental agency or body is required in connection with the authorization,
issuance, transfer, sale or delivery of the Units by the Partnership,
9
10
in connection with the execution, delivery and performance of this Agreement by
any of the TEPPCO Entities or in connection with the taking by any of the TEPPCO
Entities of any action contemplated hereby, except such as have been obtained
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws.
(t) Possession of Licenses and Permits. Each of the TEPPCO
Entities and each of their subsidiaries has, and at the Closing Date will have,
(i) all governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus except for such certificates, permits or authorizations which, if not
obtained, would not reasonably be expected to have a Material Adverse Effect
and, except as described in the Prospectus, none of the TEPPCO Entities has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse Effect, (ii) complied in all
material respects with all laws, regulations and orders applicable to it or its
business and (iii) performed in all material respects all its obligations
required to be performed by it, and is not, and at the Closing Date will not be,
in default, under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease, contract or
other agreement or instrument (collectively, a "contract or other agreement") to
which it is a party or by which its property is bound or affected which default,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. To the knowledge of each of the TEPPCO Entities, no
other party under any contract or other agreement to which it is a party is in
default in any material respect thereunder. None of the TEPPCO Entities nor any
of their subsidiaries is, nor at the Closing Date will any of them be, in
violation of any provision of its limited partnership agreement, certificate of
limited partnership, limited liability company agreement or articles or
certificate of formation.
(u) Listing. The Common Units (including the Units to be sold
pursuant to this Agreement) are duly authorized for listing, subject to official
notice of issuance, on the New York Stock Exchange.
(v) Title to Property. Each of the Partnership, the Operating
Partnerships, the Subsidiary Partnerships, the General Partner, and their
respective subsidiaries have satisfactory and marketable title to all properties
and assets owned by such entities, in each case free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (i) are described in the Prospectus or (ii) do not, singly
or in the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by such
entities; and all of the leases and subleases material to the business of such
entities, and under which such entities hold properties described in the
Prospectus, are in full force and effect, and none of such entities has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of such entities under any of the leases or subleases
mentioned above, or affecting or questioning the rights of such entities to the
continued possession of the leased or subleased premises under any such lease or
sublease.
(w) Compliance with Cuba Act. Each of the TEPPCO Entities has
complied with, and are and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with Cuba, codified
as Section 517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
10
11
(x) Investment Company Act. None of the TEPPCO Entities is,
and upon the issuance and sale of the Common Units as herein contemplated and
the application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act").
(y) Public Utility Holding Company Act. None of the TEPPCO
Entities is a "holding company" as such term is defined in the Public Utility
Holding Company Act of 1935, as amended ("PUHCA"); neither the TEPPCO Entities
nor the issue and sale of the Common Units by the Partnership is subject to
regulation under PUHCA; and none of the TEPPCO Entities is a "public utility" as
such term is defined in the Federal Power Act, as amended.
(z) Environmental Laws. Each of the TEPPCO Entities and its
subsidiaries (i) is in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or imposing liability or standards of conduct
concerning any Hazardous Material (as hereinafter defined) ("Environmental
Laws"), (ii) has received all permits, licenses or other approvals required of
it under Environmental Laws to conduct its business and (iii) is in compliance
with all terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, individually or in
the aggregate, result in a Material Adverse Effect. The term "Hazardous
Material" means (A) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, (B)
any "hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl and (E) any pollutant or contaminant or hazardous, dangerous, or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.
In the ordinary course of its business, the Partnership
conducts a periodic review of the effect of Environmental Laws on the business,
operations and properties of the TEPPCO Entities and their subsidiaries, in the
course of which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). Except as set forth in the
Registration Statement and the Prospectus, there are no costs and liabilities
associated with or arising in connection with Environmental Laws as currently in
effect (including without limitation, costs of compliance therewith) which
would, singly or in the aggregate, have a Material Adverse Effect.
(aa) Insurance. Each of the TEPPCO Entities maintains
insurance with respect to its properties and business of the types and in
amounts generally deemed adequate for its business and consistent with insurance
coverage maintained by similar companies and businesses, all of which insurance
is in full force and effect.
(bb) Tax Returns and Payments. Each of the TEPPCO Entities has
filed all federal, state and foreign income and franchise tax returns required
by law to be filed by them and have paid all taxes, assessments and other
governmental charges levied upon them or any of their properties,
11
12
assets, income or franchises which are due and payable, other than (i) those
which are not past due or are presently being contested in good faith by
appropriate proceedings diligently conducted for which such reserves or other
appropriate provisions, if any, as shall be required by generally accepted
accounting principles have been made and (ii) with respect to state and local
taxes, such as will not result in a Material Adverse Effect. There are no tax
returns of any of the TEPPCO Entities that are currently being audited by state,
local or federal taxing authorities or agencies (and with respect to which any
of the TEPPCO Entities has received notice), where the findings of such audit,
if adversely determined, would result in a Material Adverse Effect.
(cc) Benefit Plans. With respect to each employee benefit
plan, program and arrangement (including, without limitation, any "employee
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) maintained or contributed to by any
of the TEPPCO Entities, or with respect to which any of the TEPPCO Entities
could incur any liability under ERISA (collectively, the "Benefit Plans"), no
event has occurred and, to the best knowledge of each of the TEPPCO Entities,
there exists no condition or set of circumstances, in connection with which any
of the TEPPCO Entities 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 have a Material Adverse Effect.
(dd) Registration Rights. No holder of securities of the
Partnership has rights to the registration of any securities of the Partnership
because of the filing of the Registration Statement that have not been waived.
(ee) Officer's Certificates. Any certificate signed on behalf
of the Partnership by the President or Vice President of the General Partner and
on behalf of the General Partner by a President or Vice President thereof
delivered to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by each of the TEPPCO Entities to the Underwriter as
to the matters covered thereby.
(ff) Partnership Agreement. The Partnership Agreement is a
valid and legally binding agreement of the General Partner, enforceable against
the General Partner in accordance with its terms, and each of the Operating
Partnership Agreements is a valid and legally binding agreement of the parties
thereto, enforceable against the General Partner and the Partnership in
accordance with its terms, except as the enforceability of such agreements may
be affected by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and general equitable
principles.
(gg) Stabilization. None of the TEPPCO Entities, nor any of
their directors, officers or controlling persons has taken, directly or
indirectly, any action intended, or which might reasonably be expected, to cause
or result, under the Act or otherwise, in or which has constituted,
stabilization or manipulation of the price of any security of the Partnership to
facilitate the sale or resale of the Units.
(hh) Disclosure. Neither this Agreement, the Registration
Statement, nor any other document, certificate or instrument delivered to the
Underwriter by or on behalf of the Partnership in connection with the
transactions contemplated by this Agreement, contains any untrue statement
12
13
of a material fact or omits to state a material fact necessary in order to make
the statements contained therein not misleading. There is no fact known to the
Partnership or the General Partner which would result in a Material Adverse
Effect or in the future may (so far as the Partnership can now foresee) result
in a Material Adverse Effect which has not been set forth or referred to in this
Agreement or the Registration Statement.
4. Agreements of the TEPPCO Entities. The TEPPCO Entities agree
with the Underwriter as follows:
(a) The Partnership will not, either prior to the Closing Date
or thereafter, during such period as the Prospectus is required by law to be
delivered in connection with sales of the Units by an Underwriter or any dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Underwriter within a reasonable period of time prior to the filing thereof and
the Underwriter shall not have objected thereto in good faith.
(b) The Partnership will notify the Underwriter promptly, and
will confirm such advice in writing, (i) when any post-effective amendment to
the Registration Statement becomes effective, (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof, (iv) of the happening of any event during the period mentioned in the
second sentence of Section 4(e) that in the judgment of the Partnership makes
any statement made in the Registration Statement or the Prospectus untrue or
that requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading and (v) of receipt by
the Partnership or any representative or attorney of the Partnership of any
other communication from the Commission relating to the Partnership, the
Registration Statement or the Prospectus. If at any time the Commission shall
issue any order suspending the effectiveness of the Registration Statement, the
Partnership will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible moment.
(c) The Partnership will furnish to the Underwriter, without
charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto (including any document filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus).
(d) The Partnership will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) The Partnership will deliver to the Underwriter, without
charge, as many copies of the Prospectus or any amendment or supplement thereto
as the Underwriter may reasonably request. The Partnership consents to the use
of the Prospectus or any amendment or supplement thereto by the Underwriter and
by all dealers to whom the Units may be sold, both in connection with the
offering or sale of the Units and for any period of time thereafter during which
the Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of the
Partnership or counsel to the Underwriter should be set
13
14
forth in the Prospectus in order to make any statement therein, in the light of
the circumstances under which it was made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with law, the Partnership will
forthwith prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to the Underwriter, without charge, such
number of copies thereof as the Underwriter may reasonably request. The
Partnership shall not file any document under the Exchange Act before the
completion of the distribution of the Common Units by the Underwriter (which
includes the distribution of any Common Units pursuant to the Option, if
exercised), of the Units by the Underwriter if such document would be deemed to
be incorporated by reference into the Prospectus unless the Underwriter have
been given reasonable notice thereof.
(f) Prior to any public offering of the Units by the
Underwriter, the Partnership will cooperate with the Underwriter and counsel to
the Underwriter in connection with the registration or qualification of the
Units for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriter may request; provided, that in no event shall
the Partnership be obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so subject.
(g) During the period of three years commencing on the Closing
Date, the Partnership will, upon request, furnish to the Underwriter a copy of
such financial statements and other periodic and special reports as the
Partnership may from time to time distribute generally to the holders of any
class of its limited partnership interests, and will furnish to the Underwriter
who so request a copy of each annual or other report it shall be required to
file with the Commission.
(h) The Partnership will make generally available to holders
of its securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement (which need not be audited
but shall be in reasonable detail) for a period of twelve months ended
commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Partnership will
pay, or reimburse if paid by the Underwriter, all costs and expenses incident to
the performance of the obligations of the TEPPCO Entities under this Agreement,
including but not limited to costs and expenses of or relating to (i) the
preparation, printing and filing of the Registration Statement and exhibits
thereto and the Prospectus and any amendment or supplement thereto, (ii) the
preparation and delivery of certificates representing the Units, (iii) the
printing and reproduction of this Agreement and any Dealer Agreements, (iv)
furnishing (including costs of shipping, mailing and courier) such copies of the
Registration Statement, the Prospectus and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Units by the Underwriter or by dealers to whom Units may be sold, (v) the
listing of the Units on the New York Stock Exchange, (vi) any filings required
to be made by the Underwriter with the NASD, if any, and the fees, disbursements
and other charges of counsel for the Underwriter in connection therewith, (vii)
the registration or qualification of the Units for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
4(f), if any are so required, including the fees,
14
15
disbursements and other charges of counsel to the Underwriter in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (viii) counsel to the TEPPCO Entities, (ix) the
transfer agent for the Units and (x) the Accountants.
(j) If (i) this Agreement shall be terminated by the
Partnership pursuant to any of the provisions hereof, (ii) for any reason the
Partnership shall be unable to perform its obligations hereunder, (iii) any
other condition of the Underwriter's obligations hereunder required to be
fulfilled by any of the TEPPCO Entities is not fulfilled or (iv) this Agreement
shall be terminated pursuant to Section 7, the Partnership will reimburse the
Underwriter for all out-of-pocket expenses (including the fees, disbursements
and other charges of counsel to the Underwriter) reasonably incurred by the
Underwriter in connection herewith.
(k) The Partnership will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
Common Units to facilitate the sale or resale of any of the Units.
(l) The Partnership will apply the net proceeds from the
offering and sale of the Units to be sold by the Partnership in the manner set
forth in the Prospectus Supplement under "Use of Proceeds."
(m) During the period of 90 days commencing on the date of
this Agreement, each of the TEPPCO Entities will not, without the prior written
consent of the Underwriter, (i) directly or indirectly, sell, offer to sell,
grant any option for the sale of, or otherwise dispose of, any Common Units,
Class B Units or securities convertible into Common Units or Class B Units other
than to the Underwriter pursuant to this Agreement and other than pursuant to
employee option plans or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Units or Class B Units, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Units, Class B Units or such other securities, in cash or otherwise; provided,
however, that nothing herein shall prohibit any of the TEPPCO Entities from
issuing or agreeing to issue within such 90-day period, in transactions exempt
from the registration requirements of the Securities Act, Common Units, Class B
Units or securities convertible into Common Units or units representing limited
partner interests in connection with the acquisition of businesses or assets by
any of the TEPPCO Entities in an amount not to exceed $100,000,000.
(n) The Partnership shall have caused each of the executive
officers and directors of the General Partner and each beneficial owner of more
than 5% of the outstanding Common Units or Class B Units, to enter into
agreements with the Underwriter in the form set forth in Exhibit B to the effect
that they will not, for a period of 90 days after the commencement of the public
offering of the Units, without the prior written consent of the Underwriter,
sell, contract to sell or otherwise dispose of any Common Units, Class B Units
or rights to acquire such Units (other than pursuant to employee option plans or
in connection with other employee incentive compensation arrangements).
5. Conditions of the Obligations of the Underwriter. In addition
to the execution and delivery of the Price Determination Agreement, the
obligations of the Underwriter hereunder are subject to the following
conditions:
15
16
(a) Notification that all filings required by Rule 424 of the
Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Units under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Underwriter and the Underwriter did not
object thereto in good faith, and the Underwriter shall have received
certificates, dated the Closing Date and the Option Closing Date signed by the
Chief Executive Officer or the Chairman of the Board of Directors of the General
Partner and the Chief Financial Officer of the General Partner (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) none of
the TEPPCO Entities shall have sustained any loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus, if in the judgment of the Underwriter
any such development described in clause (i) or (ii) makes it impracticable or
inadvisable to consummate the sale and delivery of the Units by the Underwriter
at the public offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against any of the TEPPCO Entities or
any of their respective officers or directors in their capacities as such,
before or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would have a
Material Adverse Effect.
(e) Each of the representations and warranties of the TEPPCO
Entities contained herein shall be true and correct in all material respects at
the Closing Date, and with respect to the Option Units, at the Option Closing
Date as if made at the Option Closing Date, and all covenants and agreements
herein contained to be performed on the part of the TEPPCO Entities and all
conditions herein contained to be fulfilled or complied with by the TEPPCO
Entities at or prior to the Closing Date, and with respect to the Option Units,
at the Option Closing Date, shall have been duly performed, fulfilled or
complied with; provided, however, that if any such representation or warranty is
already qualified by materiality, for purposes of determining whether this
condition has been satisfied, such representation or warranty as so qualified
must be true and correct in all respects.
16
17
(f) The Underwriter shall have received an opinion, dated the
Closing Date, and with respect to the Option Units, at the Option Closing Date,
and satisfactory in form and substance to counsel for the Underwriter, from
Fulbright & Xxxxxxxx L.L.P., counsel to the TEPPCO Entities, to the effect set
forth in Exhibit C.
(g) The Underwriter shall have received an opinion, dated the
Closing Date, and with respect to the Option Units, at the Option Closing Date,
from Xxxxxx & Xxxxxx, L.L.P., counsel to the Underwriter which opinion shall be
satisfactory in all respects to the Underwriter.
(h) On the date of this Agreement, KPMG LLP shall have
furnished to the Underwriter a letter, dated the date of its delivery, addressed
to the Underwriter and in form and substance satisfactory to the Underwriter,
confirming that they are independent accountants with respect to the TEPPCO
Entities as required by the Act and the Rules and Regulations, and with respect
to the financial and other statistical and numerical information contained in
the Registration Statement or incorporated by reference therein. At the Closing
Date and, with respect to the Option Units, at the Option Closing Date, KPMG LLP
shall have furnished to the Underwriter a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from KPMG LLP, that nothing has come to their
attention during the period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than five days prior to
the Closing Date and the Option Closing Date which would require any change in
their letter dated the date hereof, if it were required to be dated and
delivered at the Closing Date and the Option Closing Date. KPMG LLP shall have
furnished to the Underwriter a review report with respect to the interim
financial statements for the nine-month period ended September 30, 2000.
PricewaterhouseCoopers LLP shall deliver similar letters to the Underwriter,
dated the date of this Agreement and the Closing Date, and the Option Closing
Date (if any), with respect to the financial information of ARCO Pipe Line
Company and Seaway Crude Pipeline Company incorporated by reference in the
Registration Statement.
(i) At the Closing Date and, with respect to the Option Units,
at the Option Closing Date, there shall be furnished to the Underwriter an
accurate certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer and the Chief Financial Officer of the General Partner,
in form and substance satisfactory to the Underwriter, to the effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement, the Prospectus (including
any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus) and (A) as of
the date of such certificate, such documents are true and
correct in all material respects and do not omit to state a
material fact required to be stated therein or necessary in
order to make the statements therein not untrue or misleading
and (B) since the Effective Date, no event has occurred as a
result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue
or misleading in any material respect and there has been no
document required to be filed under the Exchange Act and the
Exchange Act Rules and Regulations that upon such filing would
be deemed to be incorporated by reference into the Prospectus
that has not been so filed;
17
18
(ii) Each of the representations and warranties of
the TEPPCO Entities contained in this Agreement were, when
originally made, and are, at the time such certificate is
delivered, true and correct in all material respects;
(iii) Each of the covenants required herein to be
performed by the TEPPCO Entities on or prior to the delivery
of such certificate has been duly, timely and fully performed
and each condition herein required to be complied with by the
TEPPCO Entities on or prior to the date of such certificate
has been duly, timely and fully complied with; and
(iv) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, (A) there has not been a Material Adverse Effect,
whether or not arising from transactions in the ordinary
course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus
and (B) none of the TEPPCO Entities nor any of their
subsidiaries has sustained any material loss or interference
with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other
governmental action, order or decree, which is not set forth
in the Registration Statement and the Prospectus;
and such other matters as the Underwriter may reasonably request.
(j) On or prior to the Closing Date, the Underwriter shall
have received the executed agreements referred to in Section 4(n).
(k) The Units shall be qualified for sale in such states as
the Underwriter may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(l) Prior to the Closing Date, the Units shall have been duly
authorized for listing by the New York Stock Exchange upon official notice of
issuance.
6. Indemnification. (a) The TEPPCO Entities will, jointly and
severally, indemnify and hold harmless the Underwriter, the directors, officers,
employees and agents of the Underwriter and each person, if any, who controls
the Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, liabilities, expenses
and damages (including, but not limited to, any and all investigative, legal and
other expenses reasonably incurred in connection with, and any and all amounts
paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted), as and when
incurred, to which the Underwriter, or any such person, may become subject under
the Act, the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based on (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or in any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Prospectus, or in any
application or other document executed by or on behalf of any of the TEPPCO
18
19
Entities or based on written information furnished by or on behalf of any of the
TEPPCO Entities filed in any jurisdiction in order to qualify the Units under
the Securities Laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in such document, referenced in subclause (i) above, a
material fact required to be stated in it or necessary to make the statements in
it not misleading or (iii) any act or failure to act or any alleged act or
failure to act by the Underwriter in connection with, or relating in any manner
to, the Units or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, liability, expense or damage arising out
of or based upon matters covered by clause (i) or (ii) above (provided that the
TEPPCO Entities shall not be liable under this clause (iii) to the extent it is
finally judicially determined by a court of competent jurisdiction that such
loss, claim, liability, expense or damage resulted directly from any such acts
or failures to act undertaken or omitted to be taken by the Underwriter through
its gross negligence or willful misconduct); provided that the TEPPCO Entities
will not be liable to the extent that such loss, claim, liability, expense or
damage arises from the sale of the Units in the public offering to any person by
an Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to the Underwriter furnished in writing to the Partnership by the
Underwriter expressly for inclusion in the Registration Statement or the
Prospectus, which information consists solely of the information specified in
Section 3(b). This indemnity agreement will be in addition to any liability that
the TEPPCO Entities might otherwise have.
(b) The Underwriter will indemnify and hold harmless the
TEPPCO Entities, each person, if any, who controls the TEPPCO Entities within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the TEPPCO Entities and each officer of the TEPPCO Entities who
signed the Registration Statement to the same extent as the foregoing indemnity
from the TEPPCO Entities to the Underwriter, but only insofar as losses, claims,
liabilities, expenses, or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission of a material fact
made in reliance on and in conformity with information relating to the
Underwriter furnished in writing to the Partnership by the Underwriter expressly
for use in the Registration Statement or the Prospectus. This indemnity will be
in addition to any liability that the Underwriter might otherwise have;
provided, however, that in no case shall the Underwriter be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by the Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified
19
20
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm (in addition to local counsel) admitted to practice in such jurisdiction at
any one time for all such indemnified party or parties. All such fees,
disbursements and other charges will be reimbursed by the indemnifying party
promptly as they are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent (which
consent will not be unreasonably withheld). No indemnifying party shall, without
the prior written consent of each indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action
or proceeding relating to the matters contemplated by this Section 6 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding. Notwithstanding any other provision of this Section 6(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the TEPPCO Entities or the
Underwriter, the TEPPCO Entities and the Underwriter will contribute to the
total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the TEPPCO
Entities from persons other than the Underwriter, such as persons who control
the TEPPCO Entities within the meaning of the Act, officers of the TEPPCO
Entities who signed the Registration Statement and directors of the TEPPCO
Entities, who also may be liable for contribution) to which
20
21
the TEPPCO Entities and any one or more of the Underwriter may be subject in
such proportion as shall be appropriate to reflect the relative benefits
received by the TEPPCO Entities on the one hand and the Underwriter on the
other. The relative benefits received by the TEPPCO Entities on the one hand and
the Underwriter on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Partnership bear to the total underwriting discounts and commissions received by
the Underwriter, in each case as set forth in the table on the cover page of the
Prospectus Supplement. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the TEPPCO Entities, on the one hand, and the Underwriter, on the
other, with respect to the statements or omissions which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the TEPPCO Entities or the
Underwriter, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The TEPPCO Entities and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 6(d) shall be deemed to include, for purpose of this Section 6(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6(d), any person who controls a
party to this Agreement within the meaning of the Act will have the same rights
to contribution as that party, and each officer of the TEPPCO Entities who
signed the Registration Statement will have the same rights to contribution as
the TEPPCO Entities, subject in each case to the provisions hereof. Any party
entitled to contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for contribution may
be made under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). Except for a settlement entered
into pursuant to the last sentence of Section 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 6 and the representations and warranties of the TEPPCO Entities
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Underwriter,
(ii) acceptance of the Units and payment therefore or (iii) any termination of
this Agreement.
21
22
7. Termination. The obligations of the Underwriter under this Agreement
may be terminated at any time on or prior to the Closing Date (or, with respect
to the Option Units, on or prior to the Option Closing Date), by notice to the
Partnership from the Underwriter, without liability on the part of the
Underwriter to the TEPPCO Entities, if, prior to delivery and payment for the
Firm Units (or the Option Units, as the case may be), the Underwriter shall
decline to purchase the Units for any reason permitted under this Agreement or,
in the sole judgment of the Underwriter, (i) there has been, since the
respective dates as of which information is given in the Registration Statement,
any Material Adverse Effect, (ii) trading in any of the equity securities of the
Partnership shall have been suspended by the Commission, the NASD or by the New
York Stock Exchange, (iii) trading in securities generally on the New York Stock
Exchange or the Nasdaq Stock Market shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such exchange
or over the counter market, or additional material governmental restrictions,
not in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by such exchange or by order of the Commission or the
NASD or any court or other governmental authority, (iv) a general banking
moratorium shall have been declared by either Federal or New York State
authorities, (v) on or after the date of the Price Determination Agreement
relating to the Units (1) no downgrading shall have occurred in the rating
accorded the Partnership's or TE Products OLP's debt securities by any
"nationally recognized statistics/rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (2) no such
organization shall have publicly announced that it was under surveillance or
review, with possible negative implications, its rating of any of the
Partnership's or TE Products OLP's debt securities, or (vi) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred the
effect of any of which is such as to make it, in the sole judgment of the
Underwriter, impracticable or inadvisable to market the Units on the terms and
in the manner contemplated by the Prospectus.
8. Miscellaneous. Notice given pursuant to any of the provisions
of this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the TEPPCO Entities, at the office of TEPPCO
Partners, L.P., 0000 Xxxxx Xxxxxxx, X.X. Xxx 0000 Xxxxxxx, Xxxxx 00000-0000,
Attention: Xxxxx X. Xxxx or (b) if to the Underwriter, at the offices of
Xxxxxxx, Xxxxx & Co., Xxx Xxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Registration Department. Any such notice shall be effective only upon
receipt. Any notice under Section 7 hereof may be made by telex or telephone,
but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
Underwriter, the TEPPCO Entities and of the controlling persons, directors and
officers referred to in Section 6, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Units from the Underwriter.
All representations, warranties and agreements of the TEPPCO Entities
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriter or any of its controlling
persons and shall survive delivery of and payment for the Units hereunder.
22
23
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The TEPPCO Entities and the Underwriter each hereby irrevocably waive
any right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the TEPPCO
Entities and the Underwriter.
Please confirm that the foregoing correctly sets forth the agreement
among the TEPPCO Entities and the Underwriter.
23
24
Very truly yours,
TEPPCO PARTNERS, L.P.
TCTM, L.P.
TE PRODUCTS PIPELINE COMPANY,
LIMITED PARTNERSHIP
By: TEXAS EASTERN PRODUCTS
PIPELINE COMPANY, LLC,
General Partner of each of the above entities
By: /s/Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
TEXAS EASTERN PRODUCTS PIPELINE
COMPANY, LLC
By: /s/Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
24
25
Confirmed as of the date first
above mentioned:
XXXXXXX, SACHS & CO.
By: /s/ XXXXXXX, XXXXX & CO.
---------------------------------
Name: Xxxx Xxxxxx
-------------------------------
Title: Vice President
------------------------------
25
26
EXHIBIT A
TEPPCO PARTNERS, L.P.
PRICE DETERMINATION AGREEMENT
January 31, 2001
XXXXXXX, XXXXX & CO.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the Underwriting Agreement, dated January 31, 2001
(the "Underwriting Agreement"), among the TEPPCO Entities and Xxxxxxx, Sachs &
Co. (the "Underwriter"). The Underwriting Agreement provides for the purchase by
the Underwriter from the Partnership, subject to the terms and conditions set
forth therein, of an aggregate of 2,000,000 Firm Units. This Agreement is the
Price Determination Agreement referred to in the Underwriting Agreement.
Capitalized terms used herein but not defined shall have the meanings assigned
to such terms in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree as follows:
The public offering price per Common Unit for the Firm Units shall be
$25.50.
The purchase price per Common Unit for the Firm Units to be paid by the
Underwriter shall be $24.3525 representing an amount equal to the public
offering price set forth above, less $1.1475 per Common Unit.
The TEPPCO Entities represent and warrant to the Underwriter that the
representations and warranties of the TEPPCO Entities set forth in Section 3 of
the Underwriting Agreement are accurate, as though expressly made at and as of
the date hereof.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
If the foregoing is in accordance with your understanding of the
agreement among the TEPPCO Entities and the Underwriter, please sign and return
to the Partnership a counterpart hereof, whereupon this instrument along with
all counterparts and together with the Underwriting Agreement shall be a binding
agreement among the TEPPCO Entities and the
A-1
27
Underwriter in accordance with its terms and the terms of the Underwriting
Agreement.
Very truly yours,
TEPPCO PARTNERS, L.P.
TCTM, L.P.
TE PRODUCTS PIPELINE COMPANY,
LIMITED PARTNERSHIP
By: TEXAS EASTERN PRODUCTS
PIPELINE COMPANY, LLC,
General Partner of each of the above entities
By:
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
TEXAS EASTERN PRODUCTS PIPELINE
COMPANY, LLC
By:
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
Confirmed as of the date first
above mentioned:
XXXXXXX, XXXXX & CO.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
X-0
00
XXXXXXX X
[_____________, 2001]
XXXXXXX, SACHS & CO.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In consideration of the agreement of Xxxxxxx, Xxxxx & Co. to underwrite
a proposed public offering (the "Offering") of 2,000,000 Common Units (the
"Common Units") of TEPPCO Partners, L.P., a Delaware limited partnership (the
"Partnership"), as contemplated by a registration statement with respect to such
Common Units filed with the Securities and Exchange Commission on Form S-3
(Registration No. 333-37112), the undersigned hereby agrees that the undersigned
will not, for a period of 90 days after the commencement of the public offering
of such Units, without the prior written consent of Xxxxxxx, Sachs & Co., (i)
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, any Common Units, units representing Class B limited
partner interests ("Class B Units") or securities convertible into Common Units
other than pursuant to employee option plans, (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Units or Class B Units, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Units, Class B Units or such other securities, in cash or otherwise or
(iii) require the Partnership to file with the Securities and Exchange
Commission a registration statement under the Securities Act of 1933 to register
any Common Units or Class B Units or securities convertible into or exchangeable
for Common Units or Class B Units or warrants or other rights to acquire Common
Units or Class B Units of which the undersigned is now, or may in the future
become, the beneficial owner within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934) (other than pursuant to employee unit option
plans or in connection with other employee incentive compensation arrangements).
Very truly yours,
By:
--------------------------------------
Print Name:
------------------------------
B-1
29
EXHIBIT C
OPINION OF COMPANY COUNSEL
We have acted as special counsel to the TEPPCO Entities in connection
with the sale to you of the Units pursuant to an Underwriting Agreement dated
January 31, 2001 (the "Agreement"), among you and the TEPPCO Entities.
Capitalized terms used but not defined herein have the same meanings herein as
such terms have in the Agreement. The opinions expressed herein are being
furnished to you at the request of the Partnership pursuant to Section 5(f) of
the Agreement.
We have participated in the preparation of, and have examined, the
Registration Statement on Form S-3 (Registration No. 333-37112) filed by the
Partnership under the Securities Act, which became effective on October 11, 2000
(the "Effective Date"), and Prospectus.
We have also examined originals or copies of such records of the TEPPCO
Entities, certificates and other communications of public officials,
certificates of officers of the General Partner, certificates of the transfer
agent for the Units and such other documents as we have deemed necessary for the
purpose of rendering the opinions expressed herein. As to questions of fact
material to those opinions, we have, to the extent we deemed appropriate, relied
on certificates of officers of the General Partner, certificates and other
communications of public officials, certificates of the transfer agent for the
Units and on the factual representations of the General Partner contained in the
Agreement. We have assumed the genuineness of all signatures on, and the
authenticity of, all documents submitted to us as originals, the conformity to
authentic original documents of all documents submitted to us as copies, the due
authorization, execution and delivery by the parties thereto, other than the
TEPPCO Entities, of all documents examined by us, and the legal capacity of each
individual who signed any of those documents.
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. Each of the Partnership and the Operating Partnerships has been duly
formed and is validly existing as a limited partnership in good standing under
the Delaware Act, with partnership power and authority to own or lease its
properties and conduct its business as described in the Prospectus.
2. The General Partner is a limited liability company duly organized
and validly existing in good standing under the laws of the State of Delaware,
with power and authority to own or lease its properties, to conduct its
businesses and to act as the general partner of the Partnership and each of the
Operating Partnerships, in each case as described in the Prospectus.
3. The General Partner is the sole general partner of the Partnership
and each of the Operating Partnerships with a general partner interest in the
Partnership of 1% and a general partner interest in each of the Operating
Partnerships of 1%; such general partner interests are duly authorized by the
Partnership Agreement and the Operating Partnership Agreements, respectively,
and are validly issued, and the General Partner to our knowledge beneficially
owns such general partner interests free and clear, of any security interest,
lien, encumbrance or adverse claim.
C-1
30
4. The Partnership is the sole limited partner of each of the Operating
Partnerships, with a limited partner interest of 99%; such limited partner
interests are duly authorized by the Operating Partnership Agreements and are
validly issued, fully paid and non-assessable; the Partnership to our knowledge
beneficially owns such limited partner interests in the Operating Partnerships
free and clear, of any security interest, lien, encumbrance or adverse claim.
5. The authorized partnership interests of the Partnership conform in
all material respects as to legal matters to the description thereof set forth
under the captions "Cash Distributions" and "Tax Considerations" in the
Prospectus.
6. All the partnership interests of the Partnership have been duly
authorized and validly issued, and are fully paid and non-assessable, and there
are no preemptive or other rights to subscribe for or to purchase partnership
interests of the Partnership pursuant to any statute, the Partnership Agreement
or any agreement or other instrument to which the Partnership is a party filed
as an exhibit to, or incorporated by reference in, the Registration Statement.
7. All of the general and limited partner interests of each of the
Subsidiary Partnerships are duly authorized, validly issued and, with respect to
limited partner interests, nonassessable, and are owned of record and, to our
knowledge, beneficially by TCTM OLP, or a wholly owned subsidiary of TCTM OLP,
free and clear of any perfected security interest and, to our knowledge, any
other security interest, lien, encumbrance, right to purchase or other claim.
8. All of the member interests of TEPPCO Colorado, LLC are duly
authorized, validly issued and nonassessable and are owned of record and, to our
knowledge, beneficially by TE Products OLP, free and clear of any perfected
security interest and, to our knowledge, any other security interest, lien,
encumbrance, right to purchase or other claim.
9. All of the member interests of TEPPCO Crude GP, LLC are duly
authorized, validly issued and nonassessable and are owned of record and, to our
knowledge, beneficially by TCTM OLP, free and clear of any perfected security
interest and, to our knowledge, any other security interest, lien, encumbrance,
right to purchase or other claim.
10. The Units have been duly authorized and, when issued and delivered
to the Underwriter against payment therefor in accordance with the terms of the
Agreement, will be validly issued, fully paid and non-assessable, and free of
any preemptive, or to the knowledge of such counsel, similar rights that entitle
or will entitle any person to acquire any partnership interest in the
Partnership upon the issuance thereof by the Partnership.
11. The form of certificates for the Units conforms in all material
respects to the requirements of the Partnership Agreement.
12. The Registration Statement and all post-effective amendments, if
any, have become effective under the Act and, to our knowledge after due
inquiry, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
C-2
31
been instituted or are threatened by the Commission; and any required filing of
the Prospectus pursuant to Rule 424(b) has been made in accordance with Rule
424(b).
13. The Agreement has been duly authorized, executed and delivered by
each of the TEPPCO Entities.
14. Each of the Partnership Agreement and the Operating Partnership
Agreements has been duly authorized, executed and delivered by the parties
thereto and is a valid and legally binding agreement of the parties thereto,
enforceable against the parties thereto in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other similar
laws affecting creditors rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and to the extent that rights to indemnity and contribution
under the Partnership Agreement and the Operating Partnership Agreements may be
limited by federal or state securities laws or the public policy underlying such
laws.
15. Neither the offer, sale or delivery of the Units by the
Partnership, the execution, delivery or performance of the Agreement, nor
performance by the TEPPCO Entities of their obligations under the Agreement
constitutes or will constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which any of the TEPPCO Entities is a
party or by which any of them or any of their respective properties is bound
that has been filed as an exhibit to the Registration Statement, or will result
in the creation or imposition of any lien, charge or encumbrance under the terms
thereof upon any property or assets of any of the TEPPCO Entities, nor will any
such action result in any violation of (a) the partnership agreement, member
agreement or other organizational documents of any of the TEPPCO Entities, as
the case may be, (b) any statutory law, regulation or ruling (assuming
compliance with all applicable state securities and Blue Sky laws), or (c) any
judgment, injunction, order or decree of any court, governmental agency or
arbitrator that is known to us to be applicable to any of the TEPPCO Entities or
any of their respective properties.
16. To our knowledge, except for Duke Energy Corporation and certain of
its affiliates who have waived their rights, no holder of any interest in or
security of the Partnership or any other person has any right to require
registration of Units or any other partnership interest or other security of the
Partnership because of the filing of the Registration Statement or consummation
of the transactions contemplated by the Agreement.
17. No consent, approval, authorization or waiver of, or notice to or
filing with, or other action by, any governmental authority is required by any
statutory law, regulation or ruling as a condition to the execution and delivery
by the TEPPCO Entities of the Agreement, or the performance by the TEPPCO
Entities of their obligations under the Agreement, except such as have been
obtained under the Act and the Exchange Act (and except such as may be required
under state securities or Blue Sky laws governing the purchase and distribution
of the Units by the Underwriter, as to which we express no opinion).
18. The Registration Statement, and the Prospectus and any supplements
or amendments thereto (except for the financial statements and the notes thereto
and the schedules and other
C-3
32
financial data included therein, as to which we express no opinion) comply as to
form in all material respects with the requirements of the Act; and each of
these documents incorporated by reference into the Registration Statement
(except for the financial statements and the notes thereto and the schedules and
other financial data included therein, as to which we express no opinion)
complies as to form in all material respects with the Exchange Act and the rules
and regulations of the Commission thereunder.
19. To our knowledge (a) other than as disclosed in the Prospectus (or
any supplement thereto), there are no legal or governmental proceedings pending
to which any of the TEPPCO Entities, or any of their subsidiaries, is a party or
threatened against any of the TEPPCO Entities, or any of their subsidiaries,
which are required to be disclosed in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) and (b) there are no
contracts or leases that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or to be
filed as an exhibit to the Registration Statement or any documents incorporated
therein that are not described or filed as required, as the case may be.
20. None of the TEPPCO Entities is and, after giving effect to the
offering and sale of the Units and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" or a company
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act or a "public utility company" or a "holding company," or
a "subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended; none of
the Partnership, TEPPCO Entities is subject to regulation under the Public
Utility Holding Company Act of 1935, as amended.
21. The Firm Units and the Option Units are duly authorized for
listing, subject only to official notice of issuance, on the New York Stock
Exchange.
Although we have not undertaken, except as otherwise indicated in our
opinion, to determine independently, and are not passing upon and do not assume
any responsibility for, the accuracy, completeness or fairness of any of the
statements in the Registration Statement, we have participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof (including review and discussion of the
contents of all documents incorporated by reference therein), and nothing has
come to our attention that has caused us to believe that the Registration
Statement (including the documents incorporated by reference therein) at the
time the Registration Statement became effective, or the Prospectus, as of its
date and as of the date hereof, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that any amendment or
supplement to the Prospectus, as of its respective date, and as of the date
hereof, as the case may be, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that we express no opinion with respect to the
financial statements and the notes thereto and the schedules and other financial
data included in the Registration Statement or the Prospectus or any documents
incorporated by reference therein).
C-4
33
The opinions expressed herein are limited exclusively to the laws of
the State of Texas, the Limited Liability Company Act of the State of Delaware,
the Revised Uniform Limited Partnership Act of the State of Delaware and the
federal laws of the United States of America.
As used herein, the phrase "to our knowledge" or words of similar
import means conscious awareness of facts or other information by the lawyers in
our firm who, based on our records as of __________ on __________, 2001, have
devoted substantive attention to legal matters on behalf of the TEPPCO Entities
since January 1, 2000.
The opinions expressed herein are furnished to you for your sole benefit in
connection with the transactions contemplated by the Agreement. The opinions
expressed herein may not be relied upon by you for any other purpose and may not
be relied upon for any purpose by any other person without our prior written
consent, except that the transfer agent for the Units may rely upon this opinion
in connection with those transactions.
C-5
