EXHIBIT 10.1
$100,000,000
VALERO LOGISTICS OPERATIONS, L.P.
6-7/8% SENIOR NOTES DUE 2012
GUARANTEED BY
XXXXXX X.X.
Underwriting Agreement
July 10, 2002
X.X. Xxxxxx Securities Inc.
As Representative of the
several Underwriters listed
in Schedule 1 hereto
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Valero Logistics Operations, L.P., a Delaware limited partnership (the
"Operating Partnership"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the Underwriters listed in Schedule 1 hereto (the
"Underwriters"), $100.0 million in aggregate principal amount of its 6-7/8%
Senior Notes due 2012 (the "Securities") to be issued pursuant to the terms of
an Indenture (the "Base Indenture") among the Operating Partnership, Xxxxxx
X.X., a Delaware limited partnership (the "Partnership") and The Bank of New
York, as trustee (the "Trustee"), as supplemented by the First Supplemental
Indenture thereto relating to the Securities (the "Supplemental Indenture"). The
Base Indenture, as amended and supplemented by the Supplemental Indenture, is
herein referred to as the "Indenture." The Securities will be guaranteed on a
senior unsecured basis (the "Guarantee") by the Partnership (in its capacity as
such, the "Guarantor").
Riverwalk Logistics, L.P., a Delaware limited partnership, is the
general partner of the Partnership (the "General Partner"). Xxxxxx XX, LLC, a
Delaware limited liability company ("Xxxxxx XX") and an indirect wholly owned
subsidiary of Valero Energy Corporation, a Delaware corporation ("Valero
Energy"), is the general partner of the General Partner. Xxxxxx XX, Inc., a
Delaware corporation and a direct wholly owned subsidiary of the Partnership, is
the general partner of the Operating Partnership (the "OLP General Partner").
UDS Logistics, LLC, a Delaware limited liability company and an indirect wholly
owned
subsidiary of Valero Energy, is the sole limited partner of the General Partner
and a limited partner of the Partnership ("UDS Logistics"). The Partnership, the
Operating Partnership, the General Partner, Xxxxxx XX and the OLP General
Partner are hereinafter referred to collectively as the "Partnership Parties."
The Partnership Parties and Xxxxxx-Belvieu Pipeline Company, L.L.C., a Delaware
limited liability company ("Xxxxxx-Belvieu LLC"), are hereinafter referred to
collectively as the "Partnership Entities." Valero Energy, UDS Logistics and the
Partnership Entities are hereinafter referred to collectively as the "Valero
Entities."
The term "Operative Agreement" when used herein shall mean and include
any of (i) the Partnership Agreement, the Operating Partnership Agreement, the
General Partner Partnership Agreement, the Xxxxxx-Belvieu Agreement, the Xxxxxx
XX LLC Agreement, the UDS Logistics LLC Agreement (as such terms are defined
below), the certificate of incorporation of the OLP General Partner, as amended
or restated at or prior to the Closing Date (as defined below), and the bylaws
of the OLP General Partner, as amended or restated at or prior to the Closing
Date, (ii) the Credit Agreement dated as of December 15, 2000 among the
Operating Partnership, the Lenders party thereto, The Chase Manhattan Bank, as
Administrative Agent, Royal Bank of Canada, as Syndication Agent, Suntrust Bank,
as Documentation Agent and Chase Securities Inc., as Arranger, as amended or
restated at or prior to the Closing Date, (iii) the Omnibus Agreement dated as
of April 16, 2001 among the Partnership, the Operating Partnership, the General
Partner, Xxxxxx XX and Xxxxxx Energy (successor thereunder to Ultramar Diamond
Shamrock Corporation), as amended or restated at or prior to the Closing Date;
(v) the Pipelines and Terminals Usage Agreement dated as of April 16, 2001 among
Valero Energy (successor thereunder to Ultramar Diamond Shamrock Corporation),
the Partnership, the Operating Partnership, the General Partner and Xxxxxx XX,
as amended or restated at or prior to the Closing Date, (vi) the Services
Agreement dated as of July 1, 2000 among Diamond Shamrock Refining and Marketing
Company, the Partnership, the Operating Partnership, the General Partner and
Xxxxxx XX, as amended or restated at or prior to the Closing Date and (vii) the
Reorganization Agreement dated as of May 30, 2002, among the Partnership, the
Operating Partnership, the General Partner and the OLP General Partner, as
amended or restated at or prior to the Closing Date.
1. The Partnership Parties, jointly and severally, represent and
warrant to, and agree with, each of the Underwriters that:
(a) The Partnership and the Operating Partnership have prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act (Commission File No.
333-89978) (the "registration statement"), including a prospectus subject to
completion relating to the Securities. Such registration statement has been
declared effective by the Commission. The term "Registration Statement" as used
in this Agreement means the registration statement (including all financial
schedules and exhibits), as supplemented or amended prior to the execution of
this Agreement. If it is
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contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Securities may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If it is contemplated, at
the time this Agreement is executed, that a registration statement or a
post-effective amendment will be filed pursuant to Rule 462(b) or Rule 462(d)
under the Act before the offering of the Securities may commence, the term
"Registration Statement" as used in this Agreement includes such registration
statement. The term "Basic Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement at the time that
the Registration Statement was declared effective or in the form in which it has
been most recently filed with the Commission on or prior to the date of this
Agreement. "Prospectus" shall mean the prospectus supplement relating to the
Securities and the offering thereof that is first filed pursuant to Rule 424(b)
under the Act ("Rule 424(b)") after the date and time this Agreement is executed
and delivered by the parties hereto, together with the Basic Prospectus. The
term "Preliminary Prospectus" as used in this Agreement means any prospectus
relating to the Securities that omitted information to be included upon pricing
in a form of prospectus filed with the Commission pursuant to Rule 424(b) under
the Act and was used after such effectiveness and prior to the initial delivery
of the Prospectus to the Underwriters.
(b) All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, the Basic Prospectus, a Preliminary Prospectus or
the Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, the Basic
Prospectus, a Preliminary Prospectus or the Prospectus, as the case may be; any
reference in this Agreement to the Registration Statement, the Basic Prospectus,
a Preliminary Prospectus 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 under the Act, as of the date of the Registration Statement, the Basic
Prospectus, the Preliminary Prospectus or the Prospectus, as the case may be;
and any reference to any amendment or supplement to the Registration Statement,
the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") which, upon filing,
are incorporated by reference therein, as required by paragraph (b) of Item 12
of Form S-3. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto.
(c) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
3
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Operating Partnership or the Partnership by an Underwriter
through X.X. Xxxxxx Securities Inc. expressly for use therein.
(d) No stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of the Partnership Parties, no
proceeding for that purpose has been initiated or threatened by the Commission.
The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"), and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment thereto, and as of the applicable filing date and on the
Closing Date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to (i) that part of the Registration Statement that constitutes the
Statement of Eligibility and Qualification (Form T-1) of the Trustee under the
Trust Indenture Act, and (ii) any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Operating
Partnership or the Partnership by an Underwriter through XX Xxxxxx Securities
Inc. expressly for use therein; and each of the statements made by the
Partnership or the Operating Partnership in the Registration Statement, and to
be made in the Prospectus and any further amendments or supplements to the
Registration Statement or Prospectus within the coverage of Rule 175(b) of the
rules and regulations under the Act, including (but not limited to) any
statements with respect to future available cash or future cash distributions of
the Partnership or the Operating Partnership or the anticipated ratio of taxable
income to distributions was made or will be made with a reasonable basis and in
good faith.
(e) As of the applicable effective date of the Registration Statement
and on the Closing Date, the Indenture did or will conform in all material
respects with the applicable requirements of the Trust Indenture Act.
(f) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act; any further Incorporated Documents so filed will, when they
are filed, conform in all material respects with the requirements of the
Exchange Act; no such document when it was filed (or, if an amendment with
respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact
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or will omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(g) None of the Partnership Entities has sustained since the date of
the latest audited financial statements included in the Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any change in the capitalization or long-term debt of any of the
Partnership Entities or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, consolidated financial position, partners' capital,
members' equity, or results of operations of any of the Partnership Entities,
taken as a whole, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of the Partnership Entities has
entered into any transaction or agreement (whether or not in the ordinary course
of business) material to the Partnership Entities, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus.
(h) The Operating Partnership and Xxxxxx-Belvieu LLC have good and
indefeasible title to all real property and good title to all personal property
described in the Prospectus owned by the Partnership Entities, free and clear of
all liens, claims, security interests or other encumbrances except (i) as
described in the Prospectus and (ii) such as do not materially interfere with
the use of such properties taken as a whole as they have been used in the past
and as they are to be used in the future as described in the Prospectus;
provided, that, with respect to title to pipeline rights-of-way, the Partnership
Parties represent only that (A) the Operating Partnership and Xxxxxx-Belvieu LLC
have sufficient title to enable them to use and occupy the pipeline
rights-of-way as they have been used and occupied in the past and are to be used
and occupied in the future as described in the Prospectus and (B) any lack of
title to the pipeline rights-of-way will not have a material adverse effect on
the ability of the Operating Partnership and Xxxxxx-Belvieu LLC to use and
occupy the pipeline rights-of-way as they have been used and occupied in the
past and are to be used and occupied in the future as described in the
Prospectus and will not materially increase the cost of such use and occupation.
All real property and buildings held under lease or license by the Partnership
Entities are held by the Operating Partnership and Xxxxxx-Belvieu LLC under
valid and subsisting and enforceable leases or licenses with such exceptions as
do not materially interfere with the use of such properties taken as a whole as
they have been used in the past and are to be used in the future as described in
the Prospectus.
(i) Each of the Partnership and the Operating Partnership has been duly
formed and is validly existing in good standing as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act (the "Delaware LP Act")
with power and authority (partnership and other) to own or lease its properties
and to conduct its business, in each case in all respects as described in the
Registration Statement and the Prospectus. Each of
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the Partnership and the Operating Partnership is duly registered or qualified as
a foreign limited partnership for the transaction of business under the laws of
each jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to register
or qualify would not (i) have a material adverse effect on the general affairs,
management, the current or future consolidated financial position, business
prospects, partners' equity, members' equity or results of operations of the
Partnership, the Operating Partnership and Xxxxxx-Belvieu LLC, taken as a whole
(a "Material Adverse Effect") or (ii) subject the limited partners of the
Partnership or the Operating Partnership to any material liability or
disability.
(j) Each of Xxxxxx XX and Xxxxxx-Belvieu LLC has been duly formed and
is validly existing in good standing as a limited liability company under the
Delaware Limited Liability Company Act (the "Delaware LLC Act") with the limited
liability company power and authority to own or lease its properties and to
conduct its business, in each case in all respects as described in the
Registration Statement and the Prospectus. Each of Xxxxxx XX and Xxxxxx-Belvieu
LLC is duly registered or qualified as a foreign limited liability company for
the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Material Adverse Effect or (ii) subject the limited partners of the
Partnership or the Operating Partnership to any material liability or
disability.
(k) The General Partner has been duly formed and is validly existing in
good standing as a limited partnership under the Delaware LP Act with power and
authority (partnership and other) to own or lease its properties, to conduct its
business and to act as general partner of the Partnership, in each case in all
respects as described in the Registration Statement and the Prospectus. The
General Partner is duly registered or qualified as a foreign limited partnership
for the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Material Adverse Effect or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(l) The OLP General Partner has been duly incorporated and is validly
existing in good standing under the Delaware General Corporation Law (the
"DGCL") with power and authority (corporate and other) to own or lease its
properties, to conduct its business and to act as general partner of the
Operating Partnership, in each case in all respects as described in the
Registration Statement and the Prospectus. The OLP General Partner is duly
registered or qualified as a foreign corporation for the transaction of business
under the laws of each jurisdiction in which the character of the business
conducted by it or the nature or location of the properties owned or leased by
it makes such registration or qualification necessary, except where the failure
so to register or qualify would not (i) have a Material
6
Adverse Effect or (ii) subject the limited partners of the Operating Partnership
to any material liability or disability.
(m) The General Partner is the sole general partner of the Partnership
with a 2.0% general partner interest in the Partnership; such general partner
interest has been duly authorized and validly issued in accordance with the
Partnership Agreement of the Partnership (as the same may be amended or restated
at or prior to the Closing Date, the "Partnership Agreement"); and the General
Partner owns such general partner interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(n) As of the date hereof, the issued and outstanding limited partner
interests of the Partnership consist of 9,654,572 Common Units, 9,599,322
Subordinated Units and the Incentive Distribution Rights, as such term is
defined in the Partnership Agreement. UDS Logistics owns 4,424,322 Common Units
and 9,599,322 Subordinated Units (the "Sponsor Units") and the General Partner
owns all of the Incentive Distribution Rights. All outstanding Common Units,
Subordinated Units and Incentive Distribution Rights and the limited partner
interests represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement, and are fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Partnership's
registration statement on Form S-1 (No. 333-43668) under the caption "The
Partnership Agreement--Limited Liability," which is incorporated by reference
into the Partnership's registration statement on Form 8-A (File No. 1-16417)
(the "Form 8-A")). UDS Logistics owns the Sponsor Units, and the General Partner
owns the Incentive Distribution Rights, in each case, free and clear of all
liens, encumbrances, security interests, equities, charges or claims.
(o) The OLP General Partner is the sole general partner of the
Operating Partnership with a 0.01% general partner interest in the Operating
Partnership; such general partner interest has been duly authorized and validly
issued in accordance with the Partnership Agreement of the Operating Partnership
(as the same may be amended or restated at or prior to the Closing Date, the
"Operating Partnership Agreement"); and the OLP General Partner owns such
general partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(p) The Partnership is the sole limited partner of the Operating
Partnership with a 99.99% limited partner interest in the Operating Partnership;
such limited partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement and is fully paid (to the
extent required under the Operating Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described or
incorporated by reference into the Form 8-A); and the Partnership owns such
limited partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(q) The Operating Partnership owns a 50% profits interest and a 49%
capital interest in Xxxxxx-Belvieu LLC (the "Xxxxxx-Belvieu Interests"); such
interests are duly
7
authorized and validly issued in accordance with the Members Agreement of
Xxxxxx-Belvieu LLC (as the same may be amended at or prior to the Closing Date,
the "Xxxxxx-Belvieu Agreement"), and are fully paid (to the extent required
under the Xxxxxx-Belvieu Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and
the Operating Partnership owns such interests free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(r) Xxxxxx XX is the sole general partner of the General Partner with a
0.1% general partner interest in the General Partner; such general partner
interest has been duly authorized and validly issued in accordance with the
Partnership Agreement of the General Partner (as the same may be amended or
restated at or prior to the Closing Date, the "General Partner Partnership
Agreement"), and Xxxxxx XX owns such general partner interest free and clear of
all liens, encumbrances, security interests, equities, charges or claims.
(s) UDS Logistics is the sole limited partner of the General Partner
with a 99.9% limited partner interest in the General Partner; such limited
partner interest has been duly authorized and validly issued in accordance with
the General Partner Partnership Agreement and will be fully paid (to the extent
required under the General Partner Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the
Delaware LP Act) and UDS Logistics owns such limited partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(t) Valero Energy indirectly, through one or more direct or indirect
wholly owned subsidiaries, owns a 100% member interest in each of Xxxxxx XX and
UDS Logistics; such member interests are duly authorized and validly issued in
accordance with the respective limited liability company agreements of Xxxxxx XX
and UDS Logistics (in each case, as the same may be amended or restated at or
prior to the Closing Date, the "Xxxxxx XX LLC Agreement" and the "UDS Logistics
LLC Agreement", respectively), and are fully paid (to the extent required under
the Xxxxxx XX LLC Agreement and the UDS Logistics LLC Agreement, as applicable)
and nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and such member interests are owned free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(u) Other than (i) the Partnership's ownership of its limited partner
interest in the Operating Partnership and the stock of the OLP General Partner
and (ii) the Operating Partnership's ownership of the Xxxxxx-Belvieu Interests,
neither the Partnership nor the Operating Partnership owns, and at the Closing
Date, neither will own, directly or indirectly, any equity or long-term debt
securities of any corporation, partnership, limited liability company, joint
venture, association or other entity. Other than (i) the General Partner's
ownership of its partnership interests in the Partnership and (ii) the OLP
General Partner's ownership of its partnership interests in the Operating
Partnership, neither the General Partner nor the OLP General Partner owns, and
at the Closing Date neither will own, directly
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or indirectly, any equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association or other
entity.
(v) Neither the filing of the Registration Statement nor the offering
or sale of the Securities (including the related Guarantee) as contemplated by
this Agreement gives rise to any rights for or relating to the registration of
any Securities or other securities of any of the Partnership Entities other than
as have been waived.
(w) The Operating Partnership has all requisite power and authority to
execute and deliver this Agreement and the Indenture and to execute, deliver,
issue and sell the Securities and to perform its obligations hereunder and
thereunder; the Guarantor has all requisite power and authority to execute and
deliver this Agreement, the Indenture and the Guarantee and to perform its
obligations hereunder and thereunder (this Agreement, the Indenture, the
Securities and the Guarantee collectively, the "Transaction Documents"). All
corporate, partnership and limited liability company action, as the case may be,
required to be taken by the Partnership Parties or any of their stockholders,
members or partners for the authorization, execution and delivery of the
Transaction Documents (and in the case of the Securities, for their issuance and
sale) to which any of them is a party and the consummation of the transactions
contemplated hereby and thereby have been validly taken.
(x) This Agreement has been duly authorized, executed and delivered by
each of the Partnership Parties, and constitutes the valid and legally binding
agreement of each of the Partnership Parties, enforceable against each of the
Partnership Parties in accordance with its terms, provided that the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(y) The Indenture has been duly qualified under the Trust Indenture
Act, and assuming due authorization, execution and delivery thereof by the
Trustee, when executed and delivered by the Operating Partnership and the
Guarantor, will constitute the valid and legally binding agreement of each of
the Operating Partnership and the Guarantor, enforceable against each of them in
accordance with its terms; the Securities have been duly and validly authorized
by the Operating Partnership and the Guarantee has been duly and validly
authorized by the Partnership, and, when duly executed, authenticated, issued
and delivered in accordance with the provisions of the Indenture and, in the
case of the Securities, paid for as provided herein, will be duly and validly
issued and outstanding and will constitute the valid and legally binding
obligations of the Operating Partnership and the Guarantor, as the case may be,
enforceable against each of the Operating Partnership and the Guarantor, as the
case may be, in accordance with their terms and entitled to the benefits of the
Indenture; provided that, with respect to each of the Indenture, the Securities
and the Guarantee, the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting
9
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(z) None of (i) the execution, delivery and performance by each of the
Partnership Parties of each of the Transaction Documents to which it is a party,
(ii) the offering, issuance, authentication, sale and delivery of the
Securities, (iii) the issuance of the Guarantee or (iv) the consummation of the
transactions contemplated hereby and thereby (A) conflicted, conflicts or will
conflict with or constituted, constitutes or will constitute a violation of the
certificate of limited partnership, agreement of limited partnership,
certificate of formation, limited liability company agreement, certificate or
articles of incorporation or bylaws or other organizational documents of any of
the Valero Entities, (B) conflicted, conflicts or will conflict with or
constituted, constitutes or will constitute a breach or violation of, or a
default under (or an event which, with notice or lapse of time or both, would
constitute such a default), any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which any of the Valero
Entities is a party or by which any of them or any of their respective
properties may be bound, (C) violated, violates or will violate any statute, law
or regulation or any order, judgment, decree or injunction of any court or
governmental agency or body directed to any of the Valero Entities or any of
their properties in a proceeding to which any of them or their property is a
party or (D) resulted, results or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of any of the Valero
Entities, which conflicts, breaches, violations or defaults, in the case of
clauses (B), (C) or (D), would, individually or in the aggregate, have a
Material Adverse Effect.
(aa) No permit, consent, approval, authorization, order, registration,
filing or qualification ("consent") of or with any court, governmental agency or
body is required for the execution, delivery and performance by each of the
Partnership Parties of each of the Transaction Documents to which it is a party,
the offering, issuance, authentication, sale and delivery of the Securities, the
issuance of the Guarantee, or the consummation of the transactions contemplated
hereby and thereby, except (i) for such consents required under the Act, the
Exchange Act, the Trust Indenture Act and state securities or "Blue Sky" laws,
(ii) for such consents which have been, or prior to the Closing Date will be,
obtained, and (iii) for such consents which, if not obtained, would not,
individually or in the aggregate, have a Material Adverse Effect.
(bb) None of the Partnership Parties is in (i) violation of its
certificate or agreement of limited partnership, limited liability company
agreement, certificate or articles of incorporation or bylaws or other
organizational documents, (ii) violation in any material respect of any law,
statute, ordinance, administrative or governmental rule or regulation applicable
to it or of any decree of any court or governmental agency or body having
jurisdiction over it or (iii) breach, default (or an event which, with notice or
lapse of time or both, would constitute such a default) or violation in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which it is a party
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or by which it or any of its properties may be bound, which breach, default or
violation, in the case of clause (iii), would, if continued, have a Material
Adverse Effect, or could materially impair the ability of any of the Partnership
Parties to perform their obligations under the Transaction Documents. To the
knowledge of the Partnership Parties, no third party to any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which any of
the Partnership Parties is a party or by which any of them is bound or to which
any of their properties is subject, is in default under any such agreement,
which breach, default or violation would, if continued, have a Material Adverse
Effect.
(cc) The statements set forth in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes," insofar as they
purport to constitute a summary of the terms of the Securities, the Guarantee
and the Indenture, are fair summaries in all material respects. The Guarantor
has an authorized capitalization as set forth in the Prospectus under the
caption "Capitalization."
(dd) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which any of the Partnership Entities is a
party or of which any property of any of the Partnership Entities is the subject
which, if determined adversely to the Partnership Entities, could reasonably be
expected to, individually or in the aggregate have a Material Adverse Effect
and, to the best of the Partnership Parties' knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(ee) None of the Partnership Entities are, nor, after giving effect to
the offering and sale of the Securities and the application of the proceeds
thereof, will be (i) an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act"), or
(ii) a "public utility company," "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" thereof, under the Public Utility Holding
Company Act of 1935, as amended.
(ff) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Partnership, the General Partner, and the Operating
Partnership (successor to the Ultramar Diamond Shamrock Logistics Business) are
independent public accountants with respect to the Partnership Entities as
required by the Act and the rules and regulations of the Commission thereunder.
Ernst & Young LLP are independent public accountants with respect to the
Partnership Entities within the meaning of the Act and the rules and regulations
of the Commission thereunder.
(gg) At March 31, 2002, the Partnership would have had, on the
consolidated as adjusted basis indicated in the Prospectus (and any amendment or
supplement thereto), a capitalization as set forth therein. The historical
financial statements (including the related notes and supporting schedules)
included in the Registration Statement, any Preliminary Prospectus and the
Prospectus (and any amendment or supplement thereto) present fairly in all
material respects the financial position, results of operations and cash flows
of the entities purported to be shown thereby on the basis stated therein at the
respective dates or for the
11
respective periods to which they apply and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except to the extent disclosed therein. The selected
historical information included in the Registration Statement, any Preliminary
Prospectus and the Prospectus (and any amendment or supplement thereto) under
the captions "Capitalization," "Selected Financial Data," "Ratio of Earnings to
Fixed Charges" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" are accurately presented in all material respects and
prepared on a basis consistent with the audited and unaudited historical
consolidated financial statements from which they have been derived. The pro
forma financial statements included in the Registration Statement, any
Preliminary Prospectus and the Prospectus (and any amendment or supplement
thereto) have been prepared in all material respects in accordance with the
applicable accounting requirements of Article 11 of Regulation S-X of the
Commission; the assumptions used in the preparation of such pro forma financial
statements are, in the opinion of the management of the Partnership Entities,
reasonable; and the pro forma adjustments reflected in such pro forma financial
statements, if any, have been properly applied to the historical amounts in
compilation of such pro forma financial statements.
(hh) There are no legal or governmental proceedings pending or, to the
knowledge of the Partnership Parties, threatened, against any of the Partnership
Entities, or to which any of the Partnership Entities is a party, or to which
any of their respective properties is subject, that are required to be described
in the Registration Statement or the Prospectus but are not described as
required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement that are
not described or filed as required by the Act.
(ii) Each of the Partnership Entities has such permits, consents,
licenses, franchises, certificates and authorizations of governmental or
regulatory authorities ("permits") as are necessary to own its properties and to
conduct its business in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus and except for such permits
which, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect; each of the Partnership Entities has fulfilled and
performed all its material obligations with respect to such permits which are
due to have been fulfilled and performed by such date and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any impairment of the rights of the holder of
any such permit, except for such revocations, terminations and impairments that
would not, individually or in the aggregate, have a Material Adverse Effect
subject in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, none of such permits
contains any restriction that is materially burdensome to the Partnership, the
Operating Partnership and Xxxxxx-Belvieu, taken as a whole.
12
(jj) Each of the Operating Partnership and the Partnership (i) makes
and keeps books, records and accounts, which, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of assets and (ii)
maintains systems of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(kk) Each of the Partnership Entities has filed (or has obtained
extensions with respect to) all material federal, state and foreign income and
franchise tax returns required to be filed through the date hereof, which
returns are complete and correct in all material respects, and has timely paid
all taxes shown to be due pursuant to such returns, other than those (i) which,
if not paid, would not have a Material Adverse Effect, or (ii) which are being
contested in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles.
(ll) The Partnership Entities (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety and the environment or imposing
liability or standards of conduct concerning any Hazardous Material (as
hereinafter defined) ("Environmental Laws"), (ii) have received all permits
required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, except where such noncompliance with Environmental Laws, failure to
receive required permits, or failure to comply with the terms and conditions of
such permits would not, individually or in the aggregate, have a Material
Adverse Effect. The term "Hazardous Material" means (A) any "hazardous
substance" as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, (B) any "hazardous waste" as defined in
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.
(mm) The Partnership Entities maintain, or are entitled to the benefits
of, insurance covering their properties, operations, personnel and businesses
against such losses and risks as are reasonably adequate to protect them and
their businesses in a manner consistent with other businesses similarly
situated. None of the Partnership Entities has received notice from any insurer
or agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance, and all
such insurance is outstanding and duly in force on the date hereof and will be
outstanding and duly in force on the Closing Date.
13
2. Subject to the terms and conditions herein set forth, (a) the
Operating Partnership agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Operating Partnership the principal amount of Securities set forth opposite the
name of such Underwriter in Schedule 1 hereto, at a purchase price of 99.036% of
the principal amount thereof, plus accrued interest, if any, from July 15, 2002
to the Closing Date.
3. (a) Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Operating
Partnership to the Underwriters on July 15, 2002, or at such other time on the
same or such other date, not later than the fifth New York Business Day
thereafter, as the Underwriters and the Operating Partnership may agree upon in
writing. The time and date of such payment is referred to herein as the "Closing
Date". "New York Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
(b) Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of the Securities of one or more global notes
(collectively, the "Global Note") representing the Securities, with any transfer
taxes payable in connection with the transfer to the Underwriters of the
Securities duly paid by the Operating Partnership. The Global Note will be made
available for inspection by the Underwriters at the office of Xxxxxxx & Xxxxx,
Mayor, Day & Xxxxxxxx L.L.P., not later than 1:00 p.m., New York City time, on
the New York Business Day prior to the Closing Date.
(c) The documents to be delivered on the Closing Date by or on behalf
of the parties hereto pursuant to Section 6 hereof, including the cross receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 6(i) hereof, will be delivered at the offices of Xxxxxxx &
Xxxxx, Mayor, Day & Xxxxxxxx L.L.P., 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000 (the "Closing Location"), and the Securities will be delivered at the
office of The Depository Trust Company or its designated custodian, all at such
time of delivery. A meeting will be held at the Closing Location at 2:00 p.m.,
Houston time, on the New York Business Day next preceding the Closing Date, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto.
4. Each of the Partnership Parties agrees with each of the
Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement; to make no further amendment or any
supplement to the Registration Statement or Prospectus (including an amendment
or supplement to any of the documents constituting Incorporated Documents
beginning on the date of this Agreement and for so long as delivery of a
prospectus is required in connection with the offering of the Securities) which
shall be
14
disapproved by you promptly after reasonable notice thereof, unless, in the
judgment of counsel to the Partnership Parties, such amendment is required by
law; to advise you, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective
or any supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith neither the Operating
Partnership nor the Guarantor shall be required to qualify as a foreign limited
partnership or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a prospectus
is required at any time prior to the expiration of nine months after the time of
issue of the Prospectus in connection with the offering or sale of the
Securities and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend or
supplement the Prospectus or the Registration Statement (or to file under the
Exchange Act any document which, upon filing, becomes an Incorporated Document)
in order to comply with the Act, the Exchange Act or the Trust Indenture Act to
notify you and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may from time
to time reasonably request of an amended Prospectus, supplement to the
Prospectus or other amendment or supplement to the Registration Statement (or to
such document) which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Securities at any time nine months or more
after the time of issue of the Prospectus, upon your request but at the expense
of such
15
Underwriter, to prepare and deliver to such Underwriter as many copies as you
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to the Partnership's securityholders
and to the Underwriters as soon as practicable an earnings statement of the
Partnership and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations thereunder (including, at
the option of the Partnership, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date seven days after the date of the Prospectus, not to
offer, sell, hedge, contract to sell or otherwise dispose of, except as provided
hereunder, any Securities or any securities of or guaranteed by the Partnership
or the Operating Partnership that are substantially similar to the Securities,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Securities or any such
substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement or
pursuant to a bank credit agreement with commercial banks), without your prior
written consent;
(f) To furnish to you, upon request, for a period of three years from
the date of this Agreement, copies of all reports or other communications
(financial or other) furnished to holders of the Securities, provided such
documents are not otherwise publicly available via the Commission's Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX") and to deliver to you,
provided such documents are not otherwise publicly available via XXXXX (i) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Operating Partnership or the Partnership is
listed; and (ii) such additional information concerning the business and
financial condition of the Operating Partnership or the Partnership as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent they are consolidated in reports furnished to
the holders of the Securities or to the Commission);
(g) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(h) To file promptly all reports and any definitive proxy or
information statements required to be filed by the Partnership with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Securities; and
(i) If the Operating Partnership elects to rely upon Rule 462(b) under
the Act, the Operating Partnership and the Partnership shall file a Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00 a.m.,
Washington D.C. time, on the
16
business day following the date of this Agreement, and the Operating Partnership
shall at the time of filing either pay to the Commission the filing fee for such
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Act.
5. Each of the Partnership Parties covenants and agrees with one
another and with the several Underwriters that the Operating Partnership will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Partnership Parties' counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing this Agreement,
the Indenture, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 4(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses of the Trustee and any paying agent (including fees and expenses of any
counsel to such parties); (v) the fees of any agency that rates the Securities;
(vi) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vii) the cost of preparing, printing, packaging and delivering the
Securities; (viii) the cost and charges of any transfer agent or registrar and
any costs or charges payable in connection with the acceptance of the Securities
for clearance and settlement through the facilities of The Depository Trust
Company; and (ix) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, the Operating Partnership shall
bear the cost of any other matters not directly relating to the sale and
purchase of the Securities pursuant to this Agreement, and that, except as
provided in this Section, and Sections 7 and 10 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
6. The obligations of the Underwriters hereunder, as to the Securities
to be delivered at the Closing Date, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Partnership Parties herein are, at and as of such Closing Date, true and
correct, the condition that the Partnership Parties shall have performed all of
their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations
17
under the Act and in accordance with Section 4(a) hereof; if the Operating
Partnership has elected to rely upon Rule 462(b), such Registration Statement
shall have become effective by 10:00 a.m., Washington, D.C. time, on the
business day following the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxx Xxxxx L.L.P., counsel for the Underwriters, shall have
furnished to you such written opinion or opinions, dated as of the Closing Date,
with respect to the validity of the Indenture and the Securities, the
Registration Statement, the Prospectus and other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Xxxxxxx & Xxxxx, Mayor, Day & Xxxxxxxx L.L.P., counsel for the
Partnership Parties, shall have furnished to you their written opinion, dated as
of the Closing Date, in form and substance satisfactory to you, to the effect
that:
(i) Each of the Partnership and the Operating Partnership has been
duly formed and is validly existing in good standing as a limited partnership
under the Delaware LP Act with all necessary limited partnership power and
authority to own or lease its properties and to conduct its business, in each
case in all material respects as described in the Registration Statement and the
Prospectus.
(ii) Xxxxxx XX has been duly formed and is validly existing in good
standing as a limited liability company under the Delaware LLC Act with all
necessary limited liability company power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Registration Statement and the Prospectus.
(iii) The General Partner has been duly formed and is validly
existing in good standing as a limited partnership under the Delaware LP Act
with all necessary partnership power and authority to own or lease its
properties, 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.
(iv) The OLP General Partner has been duly incorporated and is
validly existing in good standing as a corporation under the DGCL with all
necessary corporate power and authority to own or lease its properties, to
conduct its business and to act as general partner of the Operating Partnership,
in each case in all material respects as described in the Registration Statement
and the Prospectus.
18
(v) The General Partner is the sole general partner of the
Partnership with a 2.0% general partner interest in the Partnership; and such
general partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement.
(vi) The OLP General Partner is the sole general partner of the
Operating Partnership with a 0.01% general partner interest in the Operating
Partnership; and such general partner interest has been duly authorized and
validly issued in accordance with the Operating Partnership Agreement.
(vii) The Partnership is the sole limited partner of the Operating
Partnership with a 99.99% limited partner interest in the Operating Partnership;
and such limited partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement and is fully paid (to the
extent required under the Operating Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described or
incorporated by reference into the Form 8-A under the caption "The Partnership
Agreement -- Limited Liability").
(viii) Xxxxxx XX is the sole general partner of the General Partner
with a 0.1% general partner interest in the General Partner; and such general
partner interest has been duly authorized and validly issued in accordance with
the General Partner Partnership Agreement.
(ix) The Operating Partnership has all requisite limited
partnership power and authority to execute and deliver this Agreement and the
Indenture and to execute, deliver, issue and sell the Securities and to perform
its obligations hereunder and thereunder; the Guarantor has all requisite
limited partnership power and authority to execute and deliver this Agreement,
the Indenture and the Guarantee and to perform its obligations hereunder and
thereunder.
(x) This Agreement has been duly executed and delivered by each of
the Partnership Parties.
(xi) The Indenture has been duly qualified under the Trust
Indenture Act and complies as to form in all material respects with the Trust
Indenture Act.
(xii) The Indenture has been duly authorized, executed and
delivered by each of the Operating Partnership and the Guarantor and, assuming
due authorization, execution and delivery thereof by the Trustee, constitutes a
valid and legally binding agreement of each of the Operating Partnership and the
Guarantor, enforceable against each of them in accordance with its terms, except
to the extent that such enforceability may be limited by (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance,
19
injunctive relief or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
(xiii) The Securities have been duly authorized by the Operating
Partnership and the Guarantee has been duly authorized by the Guarantor and,
assuming due authentication thereof by the Trustee and upon payment and delivery
in accordance with this Agreement, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of each of
the Operating Partnership and the Guarantor, as the case may be, enforceable
against each of them, as the case may be, in accordance with their terms and
entitled to the benefits of the Indenture, except to the extent that such
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally, and (ii) by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief or any other equitable
remedy and (b) concepts of materiality, reasonableness, good faith and fair
dealing.
(xiv) None of the (i) execution, delivery and performance by each
of the Partnership Parties of each of the Transaction Documents to which it is a
party, (ii) the offering, issuance, authentication, sale and delivery of the
Securities or (iii) the issuance of the Guarantee (A) constituted, constitutes
or will constitute a violation of the certificate of limited partnership,
agreement of limited partnership, certificate of formation, limited liability
company agreement, certificate or articles of incorporation or bylaws of any of
the Partnership Entities, (B) constituted, constitutes or will constitute a
breach or violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such a default), any Operative Agreement
or any other agreement filed as an exhibit to the Registration Statement or to
an Incorporated Document, (C) resulted, results or will result in any violation
of the Delaware LP Act, the Delaware LLC Act, the DGCL, the laws of the State of
Texas, or federal law, or (D) resulted, results or will result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
any of the Partnership Entities, which, in the case of clauses (B), (C) or (D),
would reasonably be expected to have a material adverse effect on the financial
condition, business or results of operations of the Partnership, the Operating
Partnership and Xxxxxx-Belvieu LLC, taken as a whole.
(xv) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any federal,
Delaware or Texas court, governmental agency or body is required for the
execution, delivery and performance by each of the Partnership Parties of each
of the Transaction Documents to which it is a party, the offering, issuance,
authentication, sale and delivery of the Securities or the issuance of the
Guarantee except (i) for such consents required under the Act, the Exchange Act,
the Trust Indenture Act and state securities or "Blue Sky" laws, as to which
such counsel need not express any opinion, (ii) for such consents which have
been obtained or made, (iii) for such consents which, if not obtained, would
not, individually or in the aggregate, have a Material Adverse Effect, or (iv)
as disclosed in the Prospectus.
20
(xvi) The statements in the Registration Statement and the
Prospectus under the captions "Tax Considerations," "Description of Debt
Securities" and "Description of Notes" insofar as they constitute descriptions
of agreements or refer to statements of law or legal conclusions, are accurate
in all material respects, and the Indenture, the Securities and the Guarantee
conform in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus under the caption "Description of Debt
Securities."
(xvii) The opinion of Xxxxxxx & Xxxxx, Mayor, Day & Xxxxxxxx L.L.P.
that is filed as Exhibit 8.1 to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to them.
(xviii) The Registration Statement was declared effective under the
Act on June 17, 2002; to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or threatened by the
Commission; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by such Rule.
(xix) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Operating Partnership and the
Partnership prior to the Closing Date (other than the financial statements,
notes or schedules included in the Registration Statement or Prospectus or other
financial data included in the Registration Statement or the Prospectus, as to
which such counsel need not express any opinion) comply as to form in all
material respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations promulgated thereunder; and the Incorporated
Documents filed prior to the Closing Date (other than the financial statements,
notes or schedules or other financial data included in such documents, as to
which such counsel need not express any opinion) comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder.
(xx) None of the Partnership Parties is an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended, or (ii)
a "public utility company" or "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(xxi) The Operating Partnership is entitled to exercise the power
of eminent domain in the State of Texas to secure rights-of-way necessary to
operate and maintain each of its common carrier pipelines.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Partnership Entities
and the independent public accountants of the Operating Partnership and the
Partnership and your representatives, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed, and although
such counsel has not independently verified, is not passing on,
21
and is not assuming any responsibility for the accuracy, completeness or
fairness of the statements contained in, the Registration Statement and the
Prospectus (except to the extent specified in the foregoing opinion), no facts
have come to such counsel's attention that lead such counsel to believe that the
Registration Statement, including the Incorporated Documents (other than (i) the
financial statements and related schedules included therein, including the notes
thereto and auditor's report thereon, (ii) the other information of a financial
or statistical nature included in the Registration Statement and (iii) the
exhibits thereto, as to which such counsel need not comment), as of its
effective date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, including the
Incorporated Documents (other than (i) the financial statements and related
schedules included therein, including the notes thereto and auditor's report
thereon, (ii) the other information of a financial or statistical nature
included in the Prospectus and (iii) the exhibits thereto, as to which such
counsel need not comment), as of its issue date and as of the Closing Date
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Valero
Entities and upon information obtained from public officials, (B) assume that
all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the authentic originals thereof, and that the
signatures on all documents examined by them are genuine, (C) state that their
opinion is limited to federal laws, the Delaware LP Act, the Delaware LLC Act,
the DGCL and the laws of the States of Texas and New York, (D) with respect to
the opinions expressed in paragraph (xix) above as to the effectiveness and
absence of stop orders state that such opinions are based upon telephone calls
to the Securities and Exchange Commission on the Closing Date and (E) state that
they express no opinion with respect to state or local taxes or tax statutes to
which any of the limited partners of the Partnership Entities may be subject.
(d) Xxxx Xxxxxx, counsel for the Operating Partnership and the
Partnership, shall have furnished to you his written opinion, dated as of the
Closing Date, in form and substance satisfactory to you, to the effect that:
(i) Xxxxxx-Belvieu LLC has been duly formed and is validly existing
in good standing as a limited liability company under the Delaware LLC Act with
all necessary limited liability company power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Registration Statement and the Prospectus.
(ii) Valero Energy indirectly, through one or more direct or
indirect wholly owned subsidiaries, owns a 100% member interest in Xxxxxx XX;
such member interest has been duly authorized and validly issued in accordance
with the Xxxxxx XX LLC Agreement, and is fully paid (to the extent required
under the Xxxxxx XX LLC Agreement and
22
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act).
(iii) The Operating Partnership owns a 50% profits interest and a
49% capital interest in Xxxxxx-Belvieu LLC; such interests have been duly
authorized and validly issued in accordance with the Xxxxxx-Belvieu Agreement
and are fully paid (to the extent required under the Xxxxxx-Belvieu Agreement)
and nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and, to the knowledge of such counsel without
independent investigation, the Operating Partnership owns such member interest
free and clear of all liens, encumbrances, security interests, charges or
claims.
(iv) To the knowledge of such counsel without independent
investigation, the General Partner owns its general partner interest in the
Partnership free and clear of all liens, encumbrances, security interests,
charges or claims.
(v) To the knowledge of such counsel without independent
investigation, the OLP General Partner owns its general partner interest in the
Operating Partnership free and clear of all liens, encumbrances, security
interests, charges or claims.
(vi) To the knowledge of such counsel without independent
investigation, the Partnership owns its limited partner interest in the
Operating Partnership free and clear of all liens, encumbrances, security
interests, charges or claims.
(vii) To the knowledge of such counsel without independent
investigation, Xxxxxx XX owns its general partner interest in the General
Partner free and clear of all liens, encumbrances, security interests, charges
or claims.
(viii) To the knowledge of such counsel without independent
investigation, the member interest in Xxxxxx XX owned indirectly by Valero
Energy through one or more direct or indirect wholly owned subsidiaries is owned
free and clear of all liens, encumbrances, security interests, charges or
claims.
(ix) None of the (i) execution, delivery and performance by each of
the Partnership Parties of each of the Transaction Documents to which it is a
party, (ii) the offering, issuance, authentication, sale and delivery of the
Securities or (iii) the issuance of the Guarantee (A) constituted, constitutes
or will constitute a violation of the certificate of formation, limited
liability company agreement, certificate or articles of incorporation or bylaws
of UDS Logistics or Valero, (B) constituted, constitutes or will constitute a
breach or violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such a default), any agreement, lease or
other instrument known to such counsel (excluding any Operative Agreement and
any agreement filed as an exhibit to the Registration Statement or to an
Incorporated Document) to which any of the Partnership Entities or any of their
properties may be bound, (C) to the knowledge of such counsel, resulted, results
or will result in any violation of any order, judgment, decree or injunction of
23
any federal, Texas or Delaware court or government agency or body binding upon
any of the Partnership Entities or any of their properties in a proceeding to
which any of them or their property is a party, or (D) resulted, results or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of UDS Logistics, which in the case of clauses (B), (C) or
(D) would reasonably be expected to have a material adverse effect on the
financial condition, business or results of operations of the Partnership and
the Operating Partnership, taken as a whole.
(x) To the knowledge of such counsel after due inquiry, none of the
Partnership Parties is in (i) violation of its certificate or agreement of
limited partnership, certificate of formation, limited liability company
agreement, certificate or articles of incorporation or bylaws or other
organizational documents, or (ii) violation of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it or of any
decree of any court or governmental agency or body having jurisdiction over it,
or in breach, default (or an event which, with notice or lapse of time or both,
would constitute such a default) or violation in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any agreement, indenture, lease or other
instrument to which it is a party or by which it or any of its properties may be
bound, which violation or breach, default or violation would, if continued, have
a material adverse effect on the financial condition, business or results of
operations of the Partnership, the Operating Partnership and Xxxxxx-Belvieu LLC,
taken as a whole, or could materially impair the ability of any of the
Partnership Parties to perform their obligations under the Transaction
Documents.
(xi) To the knowledge of such counsel after due inquiry, each of
the Partnership Entities has such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory authorities
("permits") as are necessary to own its properties and to conduct its business
in the manner described in the Prospectus, subject to such qualifications as may
be set forth in the Prospectus and except for such permits which, if not
obtained, would not, individually or in the aggregate, have a material adverse
effect upon the ability of the Partnership, the Operating Partnership and
Xxxxxx-Belvieu LLC, taken as a whole, to conduct their businesses in all
material respects as currently conducted or as contemplated by the Prospectus to
be conducted; and, to the knowledge of such counsel after due inquiry, none of
the Partnership Entities has received any notice of proceedings relating to the
revocation or modification of any such permits which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to have a material adverse effect upon the ability of the
Partnership, the Operating Partnership and Xxxxxx-Belvieu LLC, taken as a whole,
to conduct their businesses in all material respects as currently conducted or
as contemplated by the Prospectus to be conducted.
(xii) (A) There are no legal or governmental proceedings pending
or, to the knowledge of such counsel, threatened against any of the Partnership
Entities or to which any of the Partnership Entities is a party or to which any
of their respective properties is
24
subject that are required to be described in the Prospectus but are not so
described as required and (B) there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required by the Act.
(xiii) Except as described in the Prospectus, there is no
litigation, proceeding or governmental investigation pending or, to the
knowledge of such counsel after due inquiry, threatened against any of the
Partnership Entities or to which any of the Partnership Entities is a party or
to which any of their respective properties is subject, which, if adversely
determined to such Partnership Entities, would reasonably be expected to have a
material adverse effect on the financial condition, business or results of
operations of the Partnership, the Operating Partnership and Xxxxxx-Belvieu LLC,
taken as a whole.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Partnership Entities
and the independent public accountants of the Operating Partnership and the
Partnership and your representatives, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed, and although
such counsel has not independently verified, is not passing on, and is not
assuming any responsibility for the accuracy, completeness or fairness of the
statements contained in, the Registration Statement and the Prospectus, no facts
have come to such counsel's attention that lead such counsel to believe that the
Registration Statement, including the Incorporated Documents (other than (i) the
financial statements and related schedules included therein, including the notes
thereto and auditor's report thereon, (ii) the other information of a financial
or statistical nature included in the Registration Statement, and (iii) the
exhibits thereto, as to which such counsel need not comment), as of its
effective date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, including the
Incorporated Documents (other than (i) the financial statements and related
schedules included therein, including the notes thereto and auditor's report
thereon, (ii) the other information of a financial or statistical nature
included in the Prospectus, and (iii) the exhibits thereto, as to which such
counsel need not comment), as of its issue date and as of the Closing Date
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Valero
Entities and upon information obtained from public officials, (B) assume that
all documents submitted to him as originals are authentic, that all copies
submitted to him conform to the originals thereof, and that the signatures on
all documents examined by him are genuine, (C) state that his opinion is limited
to federal laws, the Delaware LP Act, the Delaware LLC Act, the DGCL and the
laws of the State of Texas and (D) state that he expresses no opinion with
respect to state or local
25
taxes or tax statutes to which any of the limited partners of the Partnership
Entities may be subject.
(e) On the date of this Agreement at a time prior to the execution of
this Agreement, and on the Closing Date, each of Xxxxxx Xxxxxxxx LLP and Ernst &
Young LLP shall have furnished to you letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you and agreed to by
Xxxxxx Xxxxxxxx LLP and Ernst & Young LLP.
(f) (i) None of the Partnership Entities or any of Valero's XxXxx,
Three Rivers or Ardmore refineries shall have sustained, since the date of the
latest audited financial statements included in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus (exclusive of any amendment or supplement
thereto on or after the date of this Agreement) there shall not have been any
change in the capitalization or long-term debt of any of the Partnership
Entities or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders'
equity or partners' equity or results of operations of the Partnership, the
Operating Partnership and Xxxxxx-Belvieu LLC, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is in the judgment of the Underwriters so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Securities or any other debt securities of any
Partnership Entity by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of the Securities or any other debt securities of any
Partnership Entity;
(h) The Operating Partnership shall have complied with the provisions
of Section 4(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement;
(i) The Operating Partnership shall have furnished or caused to be
furnished to you on the Closing Date certificates of officers of the OLP General
Partner and Xxxxxx XX satisfactory to you as to the accuracy of the
representations and warranties of the Partnership Parties herein at and as of
the Closing Date, as to the performance by the Partnership Parties all of their
obligations hereunder to be performed at or prior to the Closing Date, as to the
matters set forth in subsections (a) and (f) of this Section and as to such
other matters as you may reasonably request; and
26
(j) The Indenture shall have been duly executed and delivered by each
of the Operating Partnership, the Guarantor and the Trustee, and the Securities
(including the Guarantee endorsed thereon) shall have been duly executed and
delivered by each of the Operating Partnership and the Guarantor and duly
authenticated by the Trustee.
Notwithstanding anything herein contained, this Agreement may be terminated in
the absolute discretion of the Underwriters, by notice given to the Operating
Partnership or the Partnership, if after the execution and delivery of this
Agreement and prior to the Closing Date any of the following shall have
occurred: (i) a suspension or material limitation in trading in securities
generally on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange or the National Association of Securities Dealers, Inc.;
(ii) a suspension or material limitation in trading in any securities of or
guaranteed by the Partnership or the Operating Partnership on any exchange or in
the over-the-counter market; (iii) a suspension or material limitation in the
trading of the securities of the Partnership; (iv) a general moratorium on
commercial banking activities declared by either Federal or New York or Texas
State authorities; or (v) any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Underwriters, is material and adverse and which, in the judgment of the
Underwriters, makes it impracticable to market the Securities on the terms and
in the manner contemplated in the Prospectus.
7. (a) The Partnership Parties, jointly and severally, will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that each of
the Partnership Parties shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Operating Partnership or the Partnership by
any Underwriter through X.X. Xxxxxx Securities Inc. expressly for use therein;
provided, however, the foregoing indemnity with respect to any untrue statement
contained in or omission from any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting such loss, liability,
claim or damages purchased any of the Securities which are the subject thereof
if the untrue statement contained in or omission from any Preliminary Prospectus
or any Preliminary Prospectus supplement was corrected in a Prospectus (or any
amendment or
27
supplement thereto) but such person was not sent or given a copy of such
Prospectus (or amendment or supplement thereto) at or prior to confirmation of
the sale of such Securities to such person in any case where such delivery is
required by the Act, unless such failure to deliver such Prospectus (or
amendment or supplement thereto) was a result of non-compliance by the
Partnership Parties with the provisions of Section 4 hereof.
(b) Each Underwriter will severally indemnify and hold harmless the
Partnership Parties against any losses, claims, damages or liabilities to which
any of the Partnership Parties may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Operating
Partnership or the Partnership by such Underwriter through X.X. Xxxxxx
Securities Inc. expressly for use therein; and will reimburse the Partnership
Parties for any legal or other expenses reasonably incurred by the Partnership
Parties in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include
28
a statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Partnership Parties on the one hand and the
Underwriters on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Partnership Parties on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Partnership Parties on the one hand and the Underwriters 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 Operating Partnership bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Partnership Parties on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. Each of the
Partnership Parties and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters'
29
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Partnership Parties under this Section 7
shall be in addition to any liability which they may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act or the Exchange Act; and the
obligations of the Underwriters under this Section 7 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of Xxxxxx XX
and of the OLP General Partner (including in each case any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of Xxxxxx XX or the OLP General Partner) and to each person, if any,
who controls the Partnership Parties within the meaning of the Act or the
Exchange Act.
8. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder on the Closing Date,
you may in your discretion arrange for you or another party or other parties to
purchase such Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the purchase
of such Securities, then the Operating Partnership shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Securities on such terms. In
the event that, within the respective prescribed periods, you notify the
Operating Partnership that you have so arranged for the purchase of such
Securities, or the Operating Partnership notifies you that it has so arranged
for the purchase of such Securities, you or the Operating Partnership shall have
the right to postpone the Closing Date for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Operating Partnership and the Partnership agree to file
promptly any amendments to the Registration Statement or the Prospectus which in
your opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Operating
Partnership as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased does not exceed one-tenth of the aggregate
number of all the Securities to be purchased on the Closing Date, then the
Operating Partnership shall have the right to require each non-defaulting
Underwriter to purchase the number of Securities which such Underwriter agreed
to purchase hereunder on the Closing Date, and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Securities which such Underwriter agreed to purchase hereunder) of the
Securities of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
30
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Operating
Partnership as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased exceeds one-tenth of the aggregate number
of all the Securities to be purchased on the Closing Date, or if the Operating
Partnership shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Securities of a defaulting
Underwriter or Underwriters, then this Agreement shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Operating
Partnership, except for the expenses to be borne by the Operating Partnership
and the Underwriters as provided in Section 5 hereof and the indemnity and
contribution agreements in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Partnership Parties and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Operating Partnership or the Partnership, or any officer or director or
controlling person of the OLP General Partner or Xxxxxx XX, and shall survive
delivery of and payment for the Securities.
10. If this Agreement shall be terminated pursuant to Section 8 hereof,
the Operating Partnership shall not then be under any liability to any
Underwriter except as provided in Sections 5 and 7 hereof; but, if for any other
reason, any Securities are not delivered by or on behalf of the Operating
Partnership as provided herein, the Operating Partnership will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities not so delivered, but the Operating Partnership shall then be under
no further liability to any Underwriter except as provided in Sections 5 and 7
hereof.
11. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by X.X. Xxxxxx Securities Inc. on behalf of you as the
representative of the several Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives of the several Underwriters
in care of X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (fax: (000) 000-0000), Attention: Transaction Execution Group; and if to
the Operating Partnership and the Partnership shall be delivered or sent by mail
to the address thereof set forth in the Registration Statement, Attention:
Secretary. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
31
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Partnership Parties and, to the extent
provided in Sections 7 and 9 hereof, the officers and directors of the OLP
General Partner and Xxxxxx XX and each person who controls or any Underwriter,
and their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
32
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
each of the Partnership Parties.
Very truly yours,
VALERO LOGISTICS OPERATIONS, L.P.
By: Xxxxxx XX, Inc., its
general partner
By:
------------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive
Officer
XXXXXX X.X.
By: Riverwalk Logistics, L.P., its
general partner
By: Valero, GP, LLC, its
general partner
By:
--------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive
Officer
33
XXXXXX XX, INC.
By:
----------------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
RIVERWALK LOGISTICS, L.P.
By: Xxxxxx XX, LLC,
its general partner
By:
------------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive
Officer
XXXXXX XX, LLC
By:
----------------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Accepted as of the date hereof:
X.X. Xxxxxx Securities Inc.
--------------------------------------
(X.X. Xxxxxx Securities Inc.)
On behalf of each of the Underwriters
34
Schedule 1
----------
PRINCIPAL AMOUNT
OF SECURITIES
UNDERWRITER TO BE PURCHASED
----------- ---------------
X.X. Xxxxxx Securities Inc. .................................. $58,511,000
Xxxxxx Brothers Inc........................................... 15,957,000
Mizuho International plc...................................... 6,383,000
RBC Dominion Securities Corporation........................... 6,383,000
SunTrust Capital Markets, Inc................................. 6,383,000
Tokyo-Mitsubishi International plc............................ 6,383,000
------------
TOTAL..................................... $100,000,000
============
