EXHIBIT 1.1
Genesis Energy, L.P.
7,500,000/1/
Common Units
Representing Limited Partner Interests
Form of Underwriting Agreement
November , 1996
Salomon Brothers Inc
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
As Representatives of the several Underwriters
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Genesis Energy, L.P., a Delaware limited partnership (the
"Partnership"), proposes to sell to the underwriters named in Schedule I hereto
(the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 7,500,000 common units (the "Underwritten Units") representing
limited partner interests in the Partnership (the "Common Units"). The
Partnership also proposes to grant to the Underwriters an option to purchase up
to 1,125,000 additional Common Units (the "Option Units"; the Option Units,
together with the Underwritten Units, being hereinafter called the "Units").
It is further understood and agreed to by all parties that the
Partnership was formed to acquire and operate (a) substantially all the crude
oil gathering and marketing business, assets and operations of Basis Petroleum,
Inc., a Texas corporation ("Basis"), as more specifically described in the
Conveyance Agreement (defined below) (the "Basis Transferred Assets"), and (b)
substantially all the crude oil gathering, marketing and pipeline business,
assets and operations
______________________
/1/ Plus an option to purchase from Genesis Energy, L.P. up to 1,125,000
additional Common Units to cover over-allotments.
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of ▇▇▇▇▇▇ Corporation, a Delaware corporation ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ Crude Oil
Company, a Delaware corporation ("Howell Crude"), Howell Pipeline Texas, Inc., a
Delaware corporation ("▇▇▇▇▇▇ Texas"), Howell Pipeline U.S.A., Inc., a Delaware
corporation ("Howell Pipeline"), ▇▇▇▇▇▇ Transportation Services, Inc., a
Delaware corporation ("▇▇▇▇▇▇ Transportation"), and ▇▇▇▇▇▇ Power Systems, Inc.,
a Delaware corporation ("▇▇▇▇▇▇ Power," and, collectively with ▇▇▇▇▇▇, ▇▇▇▇▇▇
Crude, ▇▇▇▇▇▇ Texas, ▇▇▇▇▇▇ Pipeline and ▇▇▇▇▇▇ Transportation, the "Howell
Entities"), as more specifically described in the Conveyance Agreement (the
"▇▇▇▇▇▇ Transferred Assets," and together with the Basis Transferred Assets, the
"Transferred Assets"). Genesis Energy, L.L.C., a Delaware limited liability
company (the "General Partner"), will serve as a general partner of both the
Partnership and Genesis Crude Oil, L.P., a Delaware limited partnership (the
"Operating Partnership"). The General Partner is owned 54% by Basis and 46% by
▇▇▇▇▇▇.
It is further understood and agreed to by all parties that
concurrently with the closing of the offering of Units contemplated hereby and
as conditions to such closing, (a) pursuant to the Purchase & Sale and
Contribution & Conveyance Agreement among the General Partner, the Partnership,
the Operating Partnership, Basis and the ▇▇▇▇▇▇ Entities (the "Conveyance
Agreement"), (i) the Partnership will contribute the net proceeds from the sale
of the Underwritten Units and cash contributed by the General Partner to the
Operating Partnership in exchange for a 69.57% general partner interest in the
Operating Partnership, (ii) Basis will convey the Basis Transferred Assets to
the Operating Partnership in exchange for (A) 54% of the cash contributed to the
Operating Partnership by the Partnership, (B) the issuance of 1,771,200
subordinated limited partner interests in the Operating Partnership
("Subordinated OLP Units") and (C) a .3286% special general partner interest in
the Operating Partnership and (iii) the ▇▇▇▇▇▇ Entities will transfer the ▇▇▇▇▇▇
Transferred Assets to the Operating Partnership in exchange for (A) 46% of the
cash contributed to the Operating Partnership by the Partnership, (B) the
issuance of 1,508,800 Subordinated OLP Units and (C) a .2799% general partner
interest in the Operating Partnership, (b) Basis and ▇▇▇▇▇▇ Crude will
contribute their general partner interests in the Operating Partnership to the
General Partner, (c) the Operating Partnership and Salomon Inc will enter into
the Distribution Support Agreement (the "Distribution Support Agreement"), (d)
the Operating Partnership, Basis and Salomon Inc will enter into the Master
Credit Support Agreement (the "Master Credit Support Agreement"), (e) the
Partnership, the Operating Partnership, Basis and the ▇▇▇▇▇▇ Entities will enter
into the Redemption and Registration Rights Agreement (the "Redemption and
Registration Rights Agreement") and (f) the Partnership and Basis will enter
into the Corporate Services Agreement (the "Corporate Services Agreement"). The
transactions described in clauses (a) through (f) above are collectively
referred to as the "Transactions." The Partnership, the Operating Partnership
and the General Partner are collectively referred to herein as the "Genesis
Parties." The Genesis Parties, Basis, the ▇▇▇▇▇▇ Entities and Salomon Inc are
collectively referred to herein as the "Genesis Entities." In connection with
the consummation of the Transactions, certain of the Genesis Entities will enter
into various bills of sale, conveyances, deeds and other assignments pursuant to
the Conveyance Agreement (the "Conveyances").
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1. Representations and Warranties
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(a) Genesis Parties. The Genesis Parties represent and warrant to,
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and agree with, each Underwriter as set forth below in this Section 1(a).
Certain terms used in this Agreement are defined in paragraph (iii) hereof.
(i) The Partnership has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement (No. 333-11545)
on Form S-1, including a related preliminary prospectus, for the registration of
the offering and sale of the Units in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
thereunder, a copy of which has been delivered to you. The Partnership may
file, or may have filed, one or more amendments thereto, including the related
preliminary prospectus, each of which will be, or previously has been, furnished
to you and each of which when filed will conform or did conform with the Act and
the rules and regulations thereunder. The Partnership will next file with the
Commission either (A) prior to effectiveness of such registration statement, a
first or further amendment to such registration statement (including the form of
final prospectus) or (B) after effectiveness of such registration statement, a
final prospectus in accordance with Rules 430A and 424(b)(1) or (4). In the
case of clause (B), the Partnership has included in such registration statement,
as amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules and regulations thereunder to be
included in the prospectus with respect to the Units and the offering thereof.
As filed, such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other required
information, with respect to the Units and the offering thereof and, except to
the extent the Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus shown to you at the Execution
Time) as the Partnership has advised you, prior to the Execution Time, will be
included or made therein or to which you have otherwise consented.
(ii) The Preliminary Prospectus dated November 15, 1996 (A) complied
or will comply with the applicable requirements of the Act and the rules and
regulations thereunder and (B) did not or will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in accordance with
Rule 424(b), on any subsequent date any supplement is filed with the Commission
and on the Closing Date, the Prospectus (and any supplements thereto) will,
comply with the applicable requirements of the Act and the rules thereunder. On
the Effective Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading;
and, on the Effective Date, the Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b), on any subsequent date any supplement is filed with the Commission and
on the Closing
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Date, the Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the Genesis
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Parties make no representations or warranties as to the information contained in
or omitted from the Registration Statement, any Preliminary Prospectus or the
Prospectus (or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Partnership by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the
Registration Statement, any Preliminary Prospectus or the Prospectus (or any
supplement thereto). Each of the statements made by the Partnership in the
Registration Statement, any Preliminary Prospectus and the 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 anticipated ratio of taxable
income to distributions, was made or will be made with a reasonable basis and in
good faith. The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus.
(iii) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall mean the date and
time that this Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus referred to in
paragraph (i) above as amended prior to the date of the Prospectus and any
preliminary prospectus included in the Registration Statement at the Effective
Date that omits Rule 430A Information. "Prospectus" shall mean the prospectus
relating to the Units that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required, shall mean
the form of final prospectus relating to the Units included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean the
registration statement referred to in paragraph (i) above, including exhibits
and financial statements, as amended at the Execution Time (or, if not effective
at the Execution Time, in the form in which it shall become effective) and, in
the event any post-effective amendment thereto becomes effective prior to the
Option Closing Date (as hereinafter defined), or, if none, the Closing Date (as
hereinafter defined), shall also mean such registration statement as so amended.
Such term shall include any Rule 430A Information deemed to be included therein
at the Effective Date as provided by Rule 430A. If it is contemplated that the
Partnership will file a registration statement to register a portion of the
Units and rely on Rule 462(b) for such registration statement to become
effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to "Registration Statement" herein shall be
deemed to be to both the registration statement referred to above (No. 333-
11545) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the Act. "Rule 424," "Rule 430A" and "Rule
462(b)" refer to such rules under the Act. "Rule 430A Information" means
information with respect to the Units and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective pursuant to
Rule 430A.
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(iv) Each of the Partnership and the Operating Partnership is a
limited partnership duly formed and validly existing in good standing under the
Delaware Revised Uniform Limited Partnership Act (the "Delaware Act") with full
partnership power and authority to own or lease its properties to be owned or
leased by it at the Closing Date, to assume the liabilities being assumed by it
pursuant to the Conveyance Agreement and the Conveyances, to act as a general
partner of the Operating Partnership (in the case of the Partnership), and to
conduct its business to be conducted by it at the Closing Date in all material
respects as described in the Registration Statement and the Prospectus, and each
of the Partnership and the Operating Partnership is, or at the Closing Date will
be, duly registered or qualified as a foreign limited partnership for the
transaction of business and is in good standing in each jurisdiction or place
where the nature or location of its properties or the conduct of its business
requires such registration or qualification, except where the failure to so
register or qualify (A) would not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Genesis Parties considered as a whole or (B) would not subject
the limited partners of the Partnership to any material liability or disability.
(v) The General Partner is a limited liability company duly formed
and validly existing in good standing under the laws of the State of Delaware
with full limited liability company power and authority to own or lease its
properties, to conduct its business and to act as general partner of the
Partnership and the Operating Partnership in all material respects as described
in the Registration Statement and the Prospectus, and the General Partner is
duly registered or qualified as a foreign limited liability company for the
transaction of business and is in good standing in each jurisdiction or place
where the nature or location of its properties or the conduct of its business
requires such registration or qualification, except where the failure to so
register or qualify (A) would not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Genesis Parties considered as a whole or (B) would not subject
the limited partners of the Partnership to any material liability or disability.
(vi) None of the General Partner, the Partnership or the Operating
Partnership has any subsidiaries (other than the Partnership and the Operating
Partnership themselves) which, individually or considered as a whole, would be
deemed to be a significant subsidiary (as such term is defined in Section 1-02
of Regulation S-X under the Act).
(vii) The General Partner is the sole general partner of the
Partnership with a 1% general partner interest in the Partnership; at the
Closing Date the General Partner will be the sole general partner of the
Partnership with a 2% general partner interest in the Partnership; such general
partner interest is and will be duly authorized by the Agreement of Limited
Partnership of the Partnership (as the same may be amended and restated at or
prior to the Closing Date, the "Partnership Agreement") between the General
Partner and ▇▇▇▇▇ ▇▇▇▇▇▇▇, as organizational limited partner (the
"Organizational Limited Partner"), and was and will be validly issued to the
General Partner; and the General Partner owns and will own such general partner
interest in the Partnership free and clear of all liens, encumbrances, security
interests, charges or claims.
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(viii) Partnership and the General Partner are the only two
general partners of the Operating Partnership; at the Closing Date the
Partnership and the General Partner will be the only two general partners of the
Operating Partnership with a 69.57% general partner interest and a .61% general
partner interest in the Operating Partnership, respectively; such general
partner interests are and will be duly authorized by the Agreement of Limited
Partnership of the Operating Partnership (as the same may be amended and
restated at or prior to the Closing Date, the "Operating Partnership Agreement,"
and together with the Partnership Agreement, the "Partnership Agreements")
between the General Partner and the Partnership, and were and will be validly
issued to the Partnership and the General Partner, respectively; each of the
Partnership and the General Partner owns and will own its general partner
interest in the Operating Partnership free and clear of all liens, encumbrances,
security interests, charges or claims.
(ix) At the Closing Date, there will be issued to the Underwriters
all of the Underwritten Units (assuming no purchase by the Underwriters of
Option Units); at the Closing Date or the Option Closing Date, as the case may
be, the Underwritten Units or the Option Units, as the case may be, and the
limited partner interests represented thereby will be duly authorized by the
Partnership Agreement and, when issued and delivered to the Underwriters against
payment therefor as provided herein, will be validly issued, fully paid (to the
extent required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in the Prospectus
under the caption "The Partnership Agreement--Limited Liability"); and at the
Closing Date or the Option Closing Date, as the case may be, the Underwritten
Units or the Underwritten Units and the Option Units, as the case may be, will
be the only limited partner interests of the Partnership issued and outstanding.
(x) At the Closing Date (assuming no purchase by the Underwriters
of the Option Units), Basis and certain of the ▇▇▇▇▇▇ Entities will own 16.10%
and 13.72% limited partner interests in the Operating Partnership, respectively,
represented by 1,771,200 and 1,508,800 Subordinated OLP Units, respectively;
such Subordinated OLP Units will be the only limited partner interests in the
Operating Partnership issued and outstanding on the Closing Date; at the Closing
Date, all such Subordinated OLP Units and the limited partner interests
represented thereby will be duly authorized by the Operating Partnership
Agreement, will have been validly issued, fully paid (to the extent required
under the Operating Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Prospectus under
the caption "The Partnership Agreement--Limited Liability").
(xi) Basis owns a membership interest of 54% in the General Partner
and ▇▇▇▇▇▇ owns a membership interest of 46% in the General Partner; such
membership interests are duly authorized by the Limited Liability Company
Agreement of the General Partner (as the same may be amended at or prior to the
Closing Date, the "LLC Agreement") and have been validly issued in accordance
with such LLC Agreement and are fully paid and nonassessable.
(xii) Except as described in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any
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limited or general partner interests in the Partnership or the Operating
Partnership pursuant to either the Partnership Agreement or the Operating
Partnership Agreement or any agreement or other instrument to which the
Partnership or the Operating Partnership is a party or by which the Partnership
or the Operating Partnership may be bound. Neither the filing of the
Registration Statement nor the offering or sale of the Units as contemplated by
this Agreement gives rise to any rights for or relating to the registration of
any Units or other securities of the Partnership or the Operating Partnership,
except as provided in the Redemption and Registration Rights Agreement. Except
as described in the Prospectus, there are no outstanding options or warrants to
purchase any Common Units, Subordinated OLP Units or common limited partner
interests in the Operating Partnership ("Common OLP Units") or any other
securities of the Partnership or the Operating Partnership. The Units, when
issued and delivered against payment therefor as provided herein, and the
Subordinated OLP Units, when issued and delivered in accordance with the terms
of the Operating Partnership Agreement and the Conveyance Agreement, will
conform in all material respects to the description thereof contained in the
Prospectus. The Partnership has all requisite power and authority to issue,
sell and deliver the Units in accordance with and upon the terms and conditions
set forth in this Agreement, the Conveyance Agreement and the Partnership
Agreement. The Operating Partnership has all requisite power and authority to
issue, sell and deliver the Subordinated OLP Units in accordance with the terms
and conditions set forth in the Conveyance Agreement and the Operating
Partnership Agreement. At the Closing Date and the Option Closing Date,
respectively, all corporate, limited liability company and partnership action,
as the case may be, required to be taken by any of the Genesis Parties or any of
their shareholders, members or partners for the authorization, issuance, sale
and delivery of the Common Units and the Subordinated OLP Units and the
consummation of the transactions (including the Transactions) contemplated by
this Agreement and the Operative Agreements (as defined in Section 1(a)(xiv)
hereof) shall have been validly taken.
(xiii) This Agreement has been duly authorized, executed and
delivered by each of the Genesis Parties and constitutes the valid and legally
binding agreement of each of the Genesis Parties, enforceable against each of
the Genesis 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)
and except as rights to indemnity and contribution thereunder may be limited by
federal and state securities laws.
(xiv) At or before the Closing Date, the Partnership Agreement will
have been duly authorized, executed and delivered by the General Partner and the
Organizational Limited Partner and will be a valid and legally binding agreement
of the General Partner and the Organizational Limited Partner, enforceable
against the General Partner and the Organizational Limited Partner in accordance
with its terms; at or before the Closing Date, the Operating Partnership
Agreement will have been duly authorized, executed and delivered by the General
Partner and the Partnership and will be a valid and legally binding agreement of
the General Partner and the Partnership, enforceable against the General Partner
and the Partnership in accordance with
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its terms; at or before the Closing Date, the Conveyance Agreement and each of
the Conveyances will have been duly authorized, executed and delivered by each
of the Genesis Parties that are parties thereto and will be a valid and legally
binding agreement of such parties, enforceable against such parties in
accordance with its terms; at or before the Closing Date, each of the
Distribution Support Agreement, the Master Credit Support Agreement, the
Redemption and Registration Rights Agreement and the Corporate Services
Agreement will have been duly authorized, executed and delivered by the Genesis
Parties that are parties thereto and will be a valid and legally binding
agreement of each such party, enforceable against each such party in accordance
with its terms; provided, that, with respect to each agreement described in this
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Section 1(a)(xiv), 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). The Partnership Agreement, the Operating
Partnership Agreement, the LLC Agreement, the Conveyance Agreement, the
Conveyances, the Distribution Support Agreement, the Master Credit Support
Agreement, the Redemption and Registration Rights Agreement and the Corporate
Services Agreement are herein collectively referred to as the "Operative
Agreements."
(xv) None of the offering, issuance and sale by the Partnership of
the Units, the execution, delivery and performance of this Agreement and the
Operative Agreements by any of the Genesis Parties which are parties hereto and
thereto, nor the consummation of the transactions contemplated hereby and
thereby (A) conflicts or will conflict with or constitutes or will constitute a
violation of the certificate of limited partnership, agreement of limited
partnership, articles of organization, agreement of limited liability company or
other organizational documents of any of the Genesis Parties, (B) conflicts or
will conflict with or constitutes or will constitute a breach or violation of,
or a default under (or an event which, with notice or lapse of time or both,
would constitute such an event), any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which any of the Genesis
Parties is a party or by which any of them or any of their respective properties
may be bound (except for agreements and instruments that will be extinguished on
the Closing Date), (C) violates or will violate any order, judgment, decree or
injunction of any court or governmental agency or body directed to any of them
or any of their properties in a proceeding to which any of them or their
property is a party, (D) violates or will violate any statute, law, regulation
or judgment, injunction, order or decree applicable to any of the Genesis
Parties or any of their respective properties or (E) will result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
any of the Genesis Parties, except for liens created pursuant to the Master
Credit Support Agreement, in the case of clauses (B), (C), (D) or (E) which
conflicts, breaches, violations or defaults would have a material adverse effect
upon the condition (financial or other), business, properties, net worth or
results of operations of the Genesis Parties considered as a whole.
(xvi) No permit, consent, approval, authorization or order of
any court or governmental agency or body is required in connection with the
execution and delivery of, or the consummation by the Genesis Parties of the
transactions contemplated by, this Agreement or the Operative Agreements, except
(A) for such permits, consents, approvals and similar authorizations
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required under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the securities or "Blue Sky" laws of certain
jurisdictions, (B) for such permits, consents, approvals and similar
authorizations which have been, or prior to the Closing Date will be, obtained,
(C) for such permits, consents, approvals and similar authorizations which (1)
are of a routine or administrative nature, (2) are not customarily obtained or
made prior to the consummation of transactions such as those contemplated by
this Agreement and by the Operative Agreements and (3) are expected in the
reasonable judgment of the General Partner to be obtained in the ordinary course
of business subsequent to the consummation of the Transactions, (D) for such
permits, consents, approvals and similar authorizations which, if not obtained,
would not, individually or in the aggregate, have a material adverse effect upon
the condition (financial or other), business, properties, net worth or results
of operations of the Genesis Parties considered as a whole and (E) as set forth
or contemplated in the Prospectus.
(xvii) None of the Genesis Parties is in (A) violation of its
certificate of limited partnership, agreement of limited partnership, articles
of organization, agreement of limited liability company or other organizational
documents or 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 (B) breach, default (and no event
has occurred 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
breach, default or violation would, if continued, have a material adverse effect
on the condition (financial or other), business, properties, net worth or
results of operations of the Genesis Parties considered as a whole or could
materially impair the ability of any of the Genesis Parties to perform its
obligations under this Agreement or any of the Operative Agreements. To the
knowledge of the Genesis Parties, no third party to any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which any of
the Genesis Parties is a party or by which any of them is bound or to which any
of their properties are subject, is in default under any such agreement, which
breach, default or violation would, if continued, have a material adverse effect
on the condition (financial or other), business, properties, net worth or
results of operations of the Genesis Parties considered as a whole.
(xviii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have expressed their opinions on the
pro forma financial statements of the Partnership and the audited financial
statements of the Partnership and the General Partner included in the
Registration Statement and the Prospectus, are independent public accountants
with respect to the Genesis Parties as required by the Act and the rules and
regulations thereunder.
(xix) At September 30, 1996, the Partnership would have had, on the
pro forma basis indicated in the Prospectus (and any supplement thereto), a
capitalization as set forth therein. The financial statements (including the
related notes and supporting schedules) included in the Registration Statement,
the Preliminary Prospectus dated November 15, 1996 and the Prospectus (and any
supplement thereto) present fairly in all material respects the financial
position, results of
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operations and cash flows of the entities purported to be shown thereby on the
basis stated therein at the respective dates or for the respective periods 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 pro forma financial and
operating information set forth in the Registration Statement, the Preliminary
Prospectus dated November 15, 1996 and the Prospectus (and any supplement
thereto) under the caption "Selected Pro Forma Financial and Operating Data" is
accurately presented in all material respects and prepared on a basis consistent
with the audited and unaudited historical consolidated financial statements and
pro forma financial statements from which it has been derived. The selected
historical financial and operating information set forth in the Registration
Statement, the Preliminary Prospectus dated November 15, 1996 and the Prospectus
(and any supplement thereto) under the caption "Selected Historical Financial
and Operating Data" is accurately presented in all material respects and
prepared on a basis consistent with the audited and unaudited historical
consolidated financial statements from which it has been derived. The pro forma
financial statements of the Partnership included in the Registration Statement,
the Preliminary Prospectus dated November 15, 1996 and the Prospectus (and any
supplement thereto) have been prepared 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 General Partner, reasonable; and the pro
forma adjustments reflected in such pro forma financial statements have been
properly applied to the historical amounts in compilation of such pro forma
financial statements.
(xx) Except as disclosed in the Registration Statement and the
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus, (A) none of the Genesis Parties
has incurred any liabilities or obligations (indirect, direct or contingent) or
entered into any agreements or other transactions not in the ordinary course of
business that, singly or in the aggregate, could reasonably be expected to be
material to the Genesis Parties considered as a whole or that could reasonably
be expected to result in a material reduction in the earnings of the Genesis
Parties considered as a whole, (B) none of the Genesis Parties has sustained any
loss or interference with its business or properties from strike, fire, flood,
windstorm, accident or other calamity (whether or not covered by insurance), or
from any labor dispute or court or governmental action, order or decree, that,
singly or in the aggregate, could reasonably be expected to be material to the
Genesis Parties considered as a whole, (C) there has been no material change in
the indebtedness of any of the Genesis Parties, no change in the capitalization
of any Genesis Party and no distribution of any kind declared, paid or made by
any of the Genesis Parties, and (D) there has not been any material adverse
change, nor any development that would reasonably be expected, singly or in the
aggregate, to result in a material adverse change in the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties considered as a whole.
(xxi) There are no legal or governmental proceedings pending or,
to the knowledge of the Genesis Parties, threatened, against any Genesis Party,
or to which any Genesis Party is a party, or to which any of their respective
properties is subject, that are required to be
-10-
described in the Registration Statement, the Preliminary Prospectus dated
November 15, 1996 or the Prospectus (or any supplement thereto) but are not
described as required; and there are no agreements, contracts or other documents
that are required to be described in the Registration Statement, the Preliminary
Prospectus dated November 15, 1996 or the Prospectus (or any supplement thereto)
or to be filed as exhibits to the Registration Statement that are not described
or filed as required by the Act.
(xxii) The Operating Partnership will have good and indefeasible
title to all real property and good title to all personal property described in
the Prospectus to be owned by it, free and clear of all liens, claims, security
interests or other encumbrances except (A) as described in the Prospectus and
(B) such as do not materially interfere with the use of such properties taken as
a whole as they have been used in the past and are proposed to be used in the
future as described in the Prospectus; provided, that, with respect to pipeline
--------
rights of way, the Operating Partnership shall have sufficient title to enable
it to use and occupy the pipeline rights of way as they have been used and
occupied in the past and as they are proposed to be used and occupied in the
future as described in the Prospectus, and any lack of title to the pipeline
rights of way has not had and will not have a material adverse effect on the
ability of the Operating Partnership to use the pipeline rights of way as they
have been used in the past and are proposed to be used in the future as
described in the Prospectus and will not materially increase the cost of such
use; and all real property and buildings held under lease by Basis and the
▇▇▇▇▇▇ Entities, collectively, upon consummation of the Transactions on the
Closing Date, will be held by the Operating Partnership, under valid and
subsisting and enforceable leases with such exceptions as do not materially
interfere with the use of such properties considered as a whole as they have
been used in the past and are proposed to be used in the future as described in
the Prospectus. The Conveyance Agreement and the Conveyances will be, as of the
Closing Date, legally sufficient to transfer or convey to the Operating
Partnership all properties that are, individually or in the aggregate, required
to enable the Operating Partnership to conduct its operations (in all material
respects as contemplated by the Prospectus), subject to the conditions,
reservations and limitations contained in the Conveyances and those set forth in
the Prospectus.
(xxiii) None of the Genesis Parties has taken, and none of the Genesis
Parties will take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in the stabilization or manipulation
of the price of the Common Units, and the Partnership has not distributed and,
prior to the later to occur of (A) the Closing Date and (B) completion of the
distribution of the Units, will not distribute, any prospectus (as defined under
the Act) in connection with the offering and sale of the Units other than the
Registration Statement, any Preliminary Prospectus, the Prospectus or other
materials, if any, permitted by the Act, and the rules and regulations,
including Rule 134, thereunder.
(xxiv) Each of the Genesis Parties has, or at the Closing Date
will have, such permits, licenses, franchises 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
-11-
permits which, if not obtained, would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect upon the ability of
any of the Genesis Parties to conduct its businesses in all material respects as
currently conducted and as contemplated by the Prospectus to be conducted; each
of the Genesis Parties has, or at the Closing Date will have, fulfilled and
performed all its material obligations with respect to such permits and no event
has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any impairment of the rights of
the holder of any such permit, except for such revocations, terminations and
impairments that would not reasonably be expected to have a material adverse
effect upon the ability of such Genesis Party to conduct its businesses in all
material respects as currently conducted and as contemplated by the Prospectus
to be conducted, subject in each case to such qualification as may be set forth
in the Prospectus; and, except as described in the Prospectus, none of such
permits contains any restriction that is materially burdensome to such Genesis
Party.
(xxv) To the knowledge of the Genesis Parties, none of the Genesis
Parties nor any employee or agent of any of the Genesis Parties has made any
payment of funds of any of the Genesis Parties or received or retained any funds
in either case in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus.
(xxvi) No transaction has occurred between or among the Genesis
Parties and any of their respective officers, directors, members, partners,
stockholders or affiliates or, to the best knowledge of the Genesis Parties, any
affiliate of any such officer, director, member, partner or stockholder, that is
required to be described in the Registration Statement that is not so described.
(xxvii) Each of the Genesis Parties owns, possesses or has the
right to use, or at the Closing Date will own or possess or have the right to
use, all patents, trademarks, trademark registrations, service marks, service
▇▇▇▇ registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights necessary for the conduct of its respective business, and none of the
Genesis Parties is aware of any claim to the contrary or any challenge by any
other person to the rights of the Genesis Parties with respect to the foregoing.
(xxviii) None of the Genesis Parties is now, and after the sale
of the Units to be sold by the Partnership hereunder and the application of the
net proceeds from such sale as described in the Prospectus under the caption
"Use of Proceeds" will be, (A) an "investment company" or a company "controlled
by" an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or (B) (x) a "public utility company," "holding company" or
"subsidiary company" of a "holding company" or an "affiliate" thereof, within
the meaning of the Public Utility Holding Company Act of 1935, as amended, (y) a
"gas utility," "public utility" or "utility" within the meaning of Article 6050
of the Revised Civil Statutes of Texas or (z) a "public utility" or "utility"
within the meaning of the Public Utility Regulatory Act of Texas or under the
applicable laws of any state in which any such Genesis Party does business.
-12-
(xxix) None of the Genesis Parties has violated any environmental,
safety, health or similar law or regulation applicable to its business relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
or lacks any permits, licenses or other approvals required of them under
applicable Environmental Laws to own, lease or operate their properties and
conduct their business as described in the Prospectus or is violating any terms
and conditions of any such permit, license or approval, which in each case would
reasonably be expected to have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Genesis Parties considered as a whole.
(xxx) As of the Closing Date, the Genesis Parties will have
insurance covering their properties, operations, personnel and businesses. In
the reasonable judgment of the Genesis Parties, such insurance insures against
losses and risks in such amounts as are reasonably adequate to protect the
Genesis Parties and their businesses. None of the Genesis Parties 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; 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.
(xxxi) At each of the Closing Date and the Option CloSing Date, as
the case may be, the General Partner will have (excluding its interests in the
Partnership and Operating Partnership) a net worth of at least $7.5 million. For
purposes of this representation, assets will be valued at fair market value, and
the General Partner's interest in the Partnership and Operating Partnership (as
general partner) shall not be taken into account except as an offset to the
Partnership's or the Operating Partnership's liabilities that are taken into
account in computing such net worth.
(xxxii) Except as described in the Prospectus, there is (A) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to the knowledge
of the Genesis Parties, threatened or contemplated to which any of the Genesis
Parties or any of their respective subsidiaries is or may be a party or to which
the business or property of any of the Genesis Parties is or may be subject, (B)
no statute, rule, regulation or order that has been enacted, adopted or issued
by any governmental agency or that has been proposed by any governmental body
since the date of the most recent financial statements included in the
Prospectus and (C) no injunction, restraining order or order of any nature
issued by a federal or state court or foreign court of competent jurisdiction to
which any of the Genesis Parties, or any of their respective subsidiaries, is or
may be subject, that, in the case of clauses (A), (B) and (C) above, is
reasonably expected to (1) singly or in the aggregate have a material adverse
effect on the condition (financial or other), business, properties, net worth or
results of operations of the Genesis Parties considered as a whole, (2) prevent
or result in the suspension of the offering and issuance of the Units or (3) in
any manner draw into question the validity of this Agreement or any of the
Operative Agreements or the performance by any of the Genesis Parties of their
obligations under this Agreement or any of the Operative Agreements.
-13-
(xxxiii) Except as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from any of the Genesis
Parties any brokerage or finder's fee or any other fee, commission or similar
payment in connection with the Transactions.
(xxxiv) Each of the offer, sale and issuance of the Subordinated OLP
Units to Basis and certain of the ▇▇▇▇▇▇ Entities pursuant to the Conveyance
Agreement and the Operating Partnership Agreement, and the offer, sale and
issuance of APIs (as defined in the Operating Partnership Agreement) pursuant to
the Distribution Support Agreement and the Operating Partnership Agreement, are
exempt from the registration requirements of the Act and the securities laws of
any state having jurisdiction with respect thereto, and none of the Genesis
Parties has taken or will take any action that would cause the loss of such
exemption.
(xxxv) The Units have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
(b) Basis. Basis represents and warrants to, and agrees with, the
-----
several Underwriters that:
(i) On the Effective Date, the financial and other information
relating to the assets, business operations or management of Basis prior to the
Execution Time included in the Registration Statement (the "Basis Information")
did not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the Effective Date, the
Basis Information included in the Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b), on any subsequent date any supplement is filed with the Commission and
on the Closing Date, the Basis Information included in the Prospectus (together
with any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that Basis makes no representation or
-------- -------
warranty as to any statements contained in or omitted from the Registration
Statement, any Preliminary Prospectus or the Prospectus (or any supplement
thereto) other than the Basis Information.
(ii) Basis is a corporation duly organized and validly existing in
good standing under the laws of the State of Texas with full corporate power and
authority to execute and deliver this Agreement and each Operative Agreement to
which it is a party and perform any obligations it may have hereunder and
thereunder.
(iii) At the Closing Date and the Option Closing Date, respectively,
Basis will own its limited partner interest in the Operating Partnership
represented by Subordinated OLP Units and its membership interest in the General
Partner free and clear of all liens, encumbrances, security interests, charges
or claims, except for the pledge of Subordinated OLP Units contemplated in the
Conveyance Agreement.
-14-
(iv) At the Closing Date and the Option Closing Date, respectively,
all corporate action required to be taken by Basis for the consummation of the
transactions (including the Transactions) contemplated by this Agreement and
each Operative Agreement to which it is a party shall have been validly taken.
(v) The execution and delivery of, and the performance by Basis of
its obligations under, this Agreement and each of the Operative Agreements to
which it is a party have been duly and validly authorized by Basis, and each of
this Agreement and each of the Operative Agreements to which it is a party has
been duly executed and delivered by Basis, and constitutes the valid and legally
binding agreement of Basis, enforceable against Basis 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) and except as rights to indemnity and
contribution thereunder may be limited by federal and state securities laws.
(vi) Neither the execution, delivery and performance by Basis of this
Agreement and the Operative Agreements to which Basis is a party, nor the
consummation by Basis of the transactions contemplated hereby and thereby (A)
conflicts or will conflict with or constitutes or will constitute a violation of
the articles of incorporation or bylaws or other organizational documents of
Basis, (B) conflicts or will conflict with or constitutes or will constitute a
breach or violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such an event), any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which
Basis is a party or by which Basis or any of its properties may be bound, (C)
violates or will violate any order, judgment, decree or injunction of any court
or governmental agency or body directed to Basis or any of its properties in a
proceeding to which Basis or its property is a party, (D) violates or will
violate any statute, law, regulation or judgment, injunction, order or decree
applicable to Basis or its properties or (E) will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
Basis, in the case of clauses (B), (C), (D) or (E) which conflicts, breaches,
violations or defaults would reasonably be expected to have a material adverse
effect upon the condition (financial or other), business, properties, net worth
or results of operations of the Genesis Parties considered as a whole or would
reasonably be expected to materially impair the ability of Basis to perform its
obligations under this Agreement or the Operative Agreements.
(vii) No permit, consent, approval, authorization or order of any
court or governmental agency or body is required in connection with the
execution and delivery by Basis of, or the consummation by Basis of the
transactions contemplated by, this Agreement or the Operative Agreements to
which Basis is a party, except (A) for such permits, consents, approvals and
similar authorizations required under the Securities Act, the Exchange Act and
the securities or "Blue Sky" laws of certain jurisdictions, (B) for such
permits, consents, approvals and similar authorizations which have been, or
prior to the Closing Date will be, obtained, (C) for such permits, consents,
approvals and similar authorizations which (1) are of a routine or
administrative nature, (2) are not
-15-
customarily obtained or made prior to the consummation of transactions such as
those contemplated by this Agreement and by the Operative Agreements to which
Basis is a party and (3) are expected in the reasonable judgment of Basis to be
obtained in the ordinary course of business subsequent to the consummation of
the transactions contemplated by this Agreement and the Operative Agreements to
which Basis is a party, (D) for such permits, consents, approvals and similar
authorizations which, if not obtained, would not, individually or in the
aggregate, have a material adverse effect upon the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties considered as a whole and (E) as set forth or contemplated in the
Prospectus.
(viii) Basis is not in (A) violation of its articles of incorporation
or bylaws, or 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 (B) breach, default
(and no event has occurred 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 breach, default or violation would, if continued, reasonably be
expected to have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties considered as a whole or would reasonably be expected to materially
impair the ability of Basis to perform its obligations under this Agreement or
any of the Operative Agreements to which Basis is a party.
(ix) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have expressed their opinions on the
audited financial statements of Basis Petroleum, Inc. Crude Gathering Division
included in the Registration Statement and the Prospectus, are independent
public accountants with respect to Basis as required by the Act and the rules
and regulations thereunder.
(x) The financial statements of Basis Petroleum, Inc. Crude
Gathering Division (including the related notes and supporting schedules)
included in the Registration Statement, the Preliminary Prospectus dated
November 15, 1996 and the Prospectus (and any supplement thereto) present fairly
in all material respects the financial position, results of operations and cash
flows of the entities purported to be shown thereby on the basis stated therein
at the respective dates or for the respective periods 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 financial and operating information
with respect to Basis set forth in the Registration Statement, the Preliminary
Prospectus dated November 15, 1996 and the Prospectus (and any supplement
thereto) under the caption "Selected Historical Financial and Operating Data" is
accurately presented in all material respects and prepared on a basis consistent
with the audited and unaudited historical consolidated financial statements from
which it has been derived. The historical information with respect to Basis
included in the pro forma financial statements of the Partnership included in
the Registration Statement, the Preliminary Prospectus dated November 15, 1996
and the Prospectus (and any supplement thereto) is accurately
-16-
presented in all material respects and prepared on a basis consistent with the
audited and unaudited historical consolidated financial statements from which it
has been derived.
(xi) Except as disclosed in the Registration Statement and the
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus, (A) Basis has not incurred any
liabilities or obligations (indirect, direct or contingent) or entered into any
agreements or other transactions not in the ordinary course of business that,
singly or in the aggregate, could reasonably be expected to be material to the
Genesis Parties considered as a whole or that could reasonably be expected to
result in a material reduction in the earnings of the Genesis Parties considered
as a whole, (B) Basis has not sustained any loss or interference with its
business or properties from strike, fire, flood, windstorm, accident or other
calamity (whether or not covered by insurance), or from any labor dispute or
court or governmental action, order or decree, that, singly or in the aggregate,
could reasonably be expected to be material to the Genesis Parties considered as
a whole, (C) there has been no material change in the indebtedness of Basis, no
change in the capitalization of Basis and no distribution of any kind declared,
paid or made by Basis, and (D) there has not been any material adverse change,
nor any development that would reasonably be expected, singly or in the
aggregate, to result in a material adverse change in the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties considered as a whole.
(xii) Basis has good and indefeasible title to all real property and
good title to all personal property described in the Prospectus to be owned by
it, free and clear of all liens, claims, security interests or other
encumbrances except (A) as described in the Prospectus and (B) such as do not
materially interfere with the use of such properties taken as a whole as they
have been used in the past and are proposed to be used in the future as
described in the Prospectus; and all real property and buildings held under
lease by Basis are held by Basis under valid and subsisting and enforceable
leases with such exceptions as do not materially interfere with the use of such
properties considered as a whole as they have been used in the past and are
proposed to be used in the future as described in the Prospectus.
(xiii) Basis has not taken, and Basis will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause
or result in the stabilization or manipulation of the price of the Common Units.
(xiv) Basis is not now, and after sale of the Units to be sold by
the Partnership hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds" will not be, (A)
an "investment company" or a company "controlled by" an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or (B) (x)
a "public utility company," "holding company" or "subsidiary company" of a
"holding company" or an "affiliate" thereof, within the meaning of the Public
Utility Holding Company Act of 1935, as amended, (y) a "gas utility," "public
utility" or "utility" within the meaning of Article 6050 of the Revised Civil
Statutes of Texas or (z) a "public utility" or "utility"
-17-
within the meaning of the Public Utility Regulatory Act of Texas or under the
applicable laws of any state in which Basis does business.
(xv) Basis has not violated any Environmental Law, and does not lack
any permits, licenses or other approvals required of it under applicable
Environmental Laws to own, lease or operate its properties and conduct its
business as described in the Prospectus and is not violating any terms and
conditions of any such permit, license or approval, which in each case would
reasonably be expected to have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Genesis Parties considered as a whole.
(xvi) Except as described in the Prospectus, there is (A) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to the knowledge
of Basis, threatened or contemplated to which Basis or any of its subsidiaries
is or may be a party or to which the business or property of Basis is or may be
subject, (B) no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency or that has been proposed by any
governmental body and (C) no injunction, restraining order or order of any
nature issued by a federal or state court or foreign court of competent
jurisdiction to which Basis or any of its subsidiaries is or may be subject,
that, in the case of clauses (A), (B) and (C) above, is reasonably expected to
(1) singly or in the aggregate have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Genesis Parties considered as a whole, (2) prevent or result in the
suspension of the offering and issuance of the Units or (3) in any manner draw
into question the validity of this Agreement or any other Operative Agreement to
which Basis is a party.
(xvii) Basis has not taken and will not take any action that would
cause the loss of the exemption from the registration requirements of the Act of
each of the offer, sale and issuance of the Subordinated OLP Units to Basis
pursuant to the Conveyance Agreement and the Operating Partnership Agreement.
(c) ▇▇▇▇▇▇. ▇▇▇▇▇▇ represents and warrants to, and agrees with,
------
the several Underwriters that:
(i) On the Effective Date, the financial and other information
relating to the assets, business, operations or management of any ▇▇▇▇▇▇ Entity
prior to the Execution Time included in the Registration Statement (the "▇▇▇▇▇▇
Information") did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and, on the
Effective Date, the ▇▇▇▇▇▇ Information included in the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b), on any subsequent date any supplement is filed with the
Commission and on the Closing Date, the ▇▇▇▇▇▇ Information included in the
Prospectus (together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that ▇▇▇▇▇▇
-------- -------
-18-
makes no representation or warranty as to any statements contained in or omitted
from the Registration Statement, any Preliminary Prospectus or the Prospectus
(or any supplement thereto) other than the ▇▇▇▇▇▇ Information.
(ii) Each of the ▇▇▇▇▇▇ Entities is a corporation duly organized
and validly existing in good standing under the laws of the State of Delaware
with full corporate power and authority to execute and deliver this Agreement
and each Operative Agreement to which it is a party and perform any obligations
it may have hereunder and thereunder.
(iii) At the Closing Date and the Option Closing Date,
respectively, each of the ▇▇▇▇▇▇ Entities will own its limited partner interest
in the Operating Partnership represented by Subordinated OLP Units or its
membership interest in the General Partner free and clear of all liens,
encumbrances, security interests, charges or claims, except for the pledge of
Subordinated OLP Units contemplated in the Conveyance Agreement and the claim on
the Subordinated OLP Units contemplated in the Ancillary Agreement (as defined
in the Conveyance Agreement).
(iv) At the Closing Date and the Option Closing Date,
respectively, all corporate action required to be taken by any of the ▇▇▇▇▇▇
Entities for the consummation of the transactions (including the Transactions)
contemplated by this Agreement and each Operative Agreement to which any ▇▇▇▇▇▇
Entity is a party shall have been validly taken.
(v) The execution and delivery of, and the performance by each
of the ▇▇▇▇▇▇ Entities of its obligations under, this Agreement and each of the
Operative Agreements to which it is a party have been duly and validly
authorized by the ▇▇▇▇▇▇ Entities, and each of this Agreement and each of the
Operative Agreements to which a ▇▇▇▇▇▇ Entity is a party has been duly executed
and delivered by each such ▇▇▇▇▇▇ Entity, and constitutes the valid and legally
binding agreement of each such ▇▇▇▇▇▇ Entity, enforceable against each such
▇▇▇▇▇▇ Entity 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) and except as
rights to indemnity and contribution thereunder may be limited by federal and
state securities laws.
(vi) Neither the execution, delivery and performance by any of
the ▇▇▇▇▇▇ Entities of this Agreement and the Operative Agreements to which any
such ▇▇▇▇▇▇ Entity is a party, nor the consummation by the ▇▇▇▇▇▇ Entities of
the transactions contemplated hereby and thereby (A) conflicts or will conflict
with or constitutes or will constitute a violation of the certificates of
incorporation or bylaws or other organizational documents of the ▇▇▇▇▇▇
Entities, (B) conflicts or will conflict with or constitutes or will constitute
a breach or violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such an event), any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to which
any of the ▇▇▇▇▇▇ Entities is a party or by which any of the ▇▇▇▇▇▇ Entities or
any of their respective properties may be bound, (C) violates or will violate
any order, judgment, decree or injunction of any court or
-19-
governmental agency or body directed to any of the ▇▇▇▇▇▇ Entities or any of
their respective properties in a proceeding to which any of the ▇▇▇▇▇▇ Entities
or any of their property is a party, (D) violates or will violate any statute,
law, regulation or judgment, injunction, order or decree applicable to any of
the ▇▇▇▇▇▇ Entities or any of their respective properties or (E) will result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of any of the ▇▇▇▇▇▇ Entities, in the case of clauses (B), (C), (D) or
(E) which conflicts, breaches, violations or defaults would reasonably be
expected to have a material adverse effect upon the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties considered as a whole or would reasonably be expected to materially
impair the ability of the ▇▇▇▇▇▇ Entities to perform their obligations under
this Agreement or the Operative Agreements to which any of the ▇▇▇▇▇▇ Entities
is a party.
(vii) No permit, consent, approval, authorization or order of any
court or governmental agency or body is required in connection with the
execution and delivery by the ▇▇▇▇▇▇ Entities of, or the consummation by the
▇▇▇▇▇▇ Entities of the transactions contemplated by, this Agreement or the
Operative Agreements to which any of the ▇▇▇▇▇▇ Entities is a party, except (A)
for such permits, consents, approvals and similar authorizations required under
the Securities Act, the Exchange Act and the securities or "Blue Sky" laws of
certain jurisdictions, (B) for such permits, consents, approvals and similar
authorizations which have been, or prior to the Closing Date will be, obtained,
(C) for such permits, consents, approvals and similar authorizations which (1)
are of a routine or administrative nature, (2) are not customarily obtained or
made prior to the consummation of transactions such as those contemplated by
this Agreement and by the Operative Agreements to which any of the ▇▇▇▇▇▇
Entities is a party and (3) are expected in the reasonable judgment of ▇▇▇▇▇▇ to
be obtained in the ordinary course of business subsequent to the consummation of
the transactions contemplated by this Agreement or the Operative Agreements to
which any of the ▇▇▇▇▇▇ Entities is a party, (D) for such permits, consents,
approvals and similar authorizations which, if not obtained, would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect upon the condition (financial or other), business, properties,
net worth or results of operations of the Genesis Parties considered as a whole
and (E) as set forth or contemplated in the Prospectus.
(viii) None of the ▇▇▇▇▇▇ Entities is in (A) violation of its
certificate of incorporation or bylaws, or 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 (B) breach, default (and no event has occurred 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 breach, default or violation would, if continued, reasonably
be expected to have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties considered as a whole or would reasonably be expected to materially
impair the ability of any of the ▇▇▇▇▇▇ Entities to perform its obligations
under this Agreement or any of the Operative Agreements to which any of the
▇▇▇▇▇▇
-20-
Entities is a party. To the knowledge of ▇▇▇▇▇▇, each of the ▇▇▇▇▇▇ Entities
which is subject to regulation as a common carrier is conducting its business
consistent with its common carrier classification in all material respects and
is in material compliance with all applicable federal or state statutes, rules
and regulations pertaining thereto, including but not limited to all tariff and
rate requirements.
(ix) Deloitte & Touche LLP, who have expressed their opinions on
the audited financial statements of ▇▇▇▇▇▇ Crude Operations included in the
Registration Statement and the Prospectus, are independent public accountants
with respect to ▇▇▇▇▇▇ as required by the Act and the rules and regulations
thereunder.
(x) Price Waterhouse LLP, who have expressed their opinion on
the audited financial statements of ▇▇▇▇▇▇ Corporation - Predecessor Operations
of Certain Crude Oil Pipeline Businesses of Exxon Pipeline Company included in
the Registration Statement and the Prospectus, are independent public
accountants with respect to ▇▇▇▇▇▇ as required by the Act and the rules and
regulations thereunder.
(xi) The financial statements of ▇▇▇▇▇▇ Crude Operations and
▇▇▇▇▇▇ Corporation - Predecessor Operations of Certain Crude Oil Pipeline
Businesses of Exxon Pipeline Company (including the related notes and supporting
schedules) included in the Registration Statement, the Preliminary Prospectus
dated November 15, 1996 and the Prospectus (and any supplement thereto) present
fairly in all material respects the financial position, results of operations
and cash flows of the entities purported to be shown thereby on the basis stated
therein at the respective dates or for the respective periods 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 financial and operating
information with respect to ▇▇▇▇▇▇ Crude Operations set forth in the
Registration Statement, the Preliminary Prospectus dated November 15, 1996 and
the Prospectus (and any supplement thereto) under the caption "Selected
Historical Financial and Operating Data" is accurately presented in all material
respects and prepared on a basis consistent with the audited and unaudited
historical consolidated financial statements from which it has been derived. The
historical information with respect to ▇▇▇▇▇▇ Crude Operations included in the
pro forma financial statements of the Partnership included in the Registration
Statement, the Preliminary Prospectus dated November 15, 1996 and the Prospectus
(and any supplement thereto) is accurately presented in all material respects
and prepared on a basis consistent with the audited and unaudited historical
consolidated financial statements from which it has been derived. The purchase
accounting adjustments and the pro forma adjustments related to pipelines
included in the pro forma financial statements of the Partnership are, in the
opinion of ▇▇▇▇▇▇, reasonable, and such adjustments have been properly applied
to the historical amounts in compilation of such pro forma financial statements.
(xii) Except as disclosed in the Registration Statement and the
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and
-21-
Prospectus, (A) none of the ▇▇▇▇▇▇ Entities has incurred any liabilities or
obligations (indirect, direct or contingent) or entered into any agreements or
other transactions not in the ordinary course of business that, singly or in the
aggregate, could reasonably be expected to be material to the Genesis Parties
considered as a whole or that could reasonably be expected to result in a
material reduction in the earnings of the Genesis Parties considered as a whole,
(B) none of the ▇▇▇▇▇▇ Entities has sustained any loss or interference with its
business or properties from strike, fire, flood, windstorm, accident or other
calamity (whether or not covered by insurance), or from any labor dispute or
court or governmental action, order or decree, that, singly or in the aggregate,
could reasonably be expected to be material to the Genesis Parties considered as
a whole, (C) there has been no material change in the indebtedness of any of the
▇▇▇▇▇▇ Entities, no change in the capitalization of any of the ▇▇▇▇▇▇ Entities
and no distribution of any kind declared, paid or made by any of the ▇▇▇▇▇▇
Entities, and (D) there has not been any material adverse change, nor any
development that would reasonably be expected, singly or in the aggregate, to
result in a material adverse change in the condition (financial or other),
business, properties, net worth or results of operations of the Genesis Parties
considered as a whole.
(xiii) Each of the ▇▇▇▇▇▇ Entities has good and indefeasible title
to all real property and good title to all personal property described in the
Prospectus to be owned by it, free and clear of all liens, claims, security
interests or other encumbrances except (A) as described in the Prospectus and
(B) such as do not materially interfere with the use of such properties taken as
a whole as they have been used in the past and are proposed to be used in the
future as described in the Prospectus; provided, that, with respect to pipeline
--------
rights of way, each of the ▇▇▇▇▇▇ Entities has sufficient title to enable it to
use and occupy the pipeline rights of way as they have been used and occupied in
the past and as they are proposed to be used and occupied in the future as
described in the Prospectus, and any lack of title to the pipeline rights of way
has not had and will not have a material adverse effect on the ability of the
▇▇▇▇▇▇ Entities or Genesis Parties to use the pipeline rights of way as they
have been used in the past and are proposed to be used in the future as
described in the Prospectus and will not materially increase the cost of such
use; and all real property and buildings held under lease by any ▇▇▇▇▇▇ Entity
are held by such ▇▇▇▇▇▇ Entity under valid and subsisting and enforceable leases
with such exceptions as do not materially interfere with the use of such
properties considered as a whole as they have been used in the past and are
proposed to be used in the future as described in the Prospectus.
(xiv) None of the ▇▇▇▇▇▇ Entities has taken, and none of the
▇▇▇▇▇▇ Entities will take, directly or indirectly, any action designed to or
that could reasonably be expected to cause or result in the stabilization or
manipulation of the price of the Common Units.
(xv) None of the ▇▇▇▇▇▇ Entities is now, or after sale of the
Units to be sold by the Partnership hereunder and application of the net
proceeds from such sale as described in the Prospectus under the caption "Use of
Proceeds" will be, (A) an "investment company" or a company "controlled by" an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or (B) (x) a "public utility company," "holding company" or
"subsidiary company" of a "holding company" or an "affiliate" thereof, within
the meaning of the Public Utility
-22-
Holding Company Act of 1935, as amended, (y) a "gas utility," "public utility"
or "utility" within the meaning of Article 6050 of the Revised Civil Statutes of
Texas or (z) a "public utility" or "utility" within the meaning of the Public
Utility Regulatory Act of Texas or under the applicable laws of any state in
which any such ▇▇▇▇▇▇ Entity does business.
(xvi) None of the ▇▇▇▇▇▇ Entities has violated any Environmental
Law, or lacks any permits, licenses or other approvals required of them under
applicable Environmental Laws to own, lease or operate their properties and
conduct their business as described in the Prospectus or is violating any terms
and conditions of any such permit, license or approval, which in each case would
reasonably be expected to have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Genesis Parties considered as a whole.
(xvii) Except as described in the Prospectus, there is (A) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to the knowledge
of the ▇▇▇▇▇▇ Entities, threatened or contemplated to which any of the ▇▇▇▇▇▇
Entities or any of their subsidiaries is or may be a party or to which the
business or property of any of the ▇▇▇▇▇▇ Entities, is or may be subject, (B) no
statute, rule, regulation or order that has been enacted, adopted or issued by
any governmental agency or that has been proposed by any governmental body and
(C) no injunction, restraining order or order of any nature issued by a federal
or state court or foreign court of competent jurisdiction to which any of the
▇▇▇▇▇▇ Entities or any of its subsidiaries is or may be subject, that, in the
case of clauses (A), (B) and (C) above, is reasonably expected to (1) singly or
in the aggregate have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties considered as a whole, (2) prevent or result in the suspension of the
offering and issuance of the Units or (3) in any manner draw into question the
validity of this Agreement or any other Operative Agreement to which any of the
▇▇▇▇▇▇ Entities is a party.
(xviii) None of the ▇▇▇▇▇▇ Entities has taken or will take any
action that would cause the loss of the exemption from the registration
requirements of the Act of each of the offer, sale and issuance of the
Subordinated OLP Units to ▇▇▇▇▇▇ pursuant to the Conveyance Agreement and the
Operating Partnership Agreement.
(d) Salomon Inc. Salomon Inc also represents and warrants to,
-----------
and agrees with, the several Underwriters that:
(i) The selected financial information of Salomon Inc set forth
in the Registration Statement, the Preliminary Prospectus dated November 15,
1996 and the Prospectus (and any supplement thereto) under the caption "Certain
Information Concerning Salomon Inc" is accurately presented in all material
respects and prepared on a basis consistent with the audited and unaudited
historical financial statements from which it has been derived. On the Effective
Date, the information set forth in the Registration Statement under the caption
"Certain Information Concerning Salomon Inc" was, and on the Closing Date will
be, true and correct in all material respects. Salomon Inc hereby represents,
for purposes of this representation and warranty and
-23-
Salomon Inc's indemnity obligations under this Agreement, the only information
furnished by Salomon Inc is the information set forth in the Registration
Statement under the caption "Certain Information Concerning Salomon Inc."
(ii) Salomon Inc is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to execute and deliver this Agreement and each
Operative Agreement to which it is a party and perform any obligations it may
have hereunder and thereunder.
(iii) All of the issued shares of capital stock of Basis are
registered on its books in the name of Salomon Inc, and Salomon Inc owns such
shares free and clear of all liens, encumbrances, security interests, charges or
claims.
(iv) At the Closing Date and the Option Closing Date,
respectively, all corporate action required to be taken by Salomon Inc for the
consummation of the transactions contemplated by this Agreement and each
Operative Agreement to which it is a party shall have been validly taken.
(v) The execution and delivery of, and the performance by
Salomon Inc of its obligations under, this Agreement and each of the Operative
Agreements to which it is a party have been duly and validly authorized by
Salomon Inc, and each of this Agreement and each of the Operative Agreements to
which it is a party has been duly executed and delivered by Salomon Inc, and
constitutes the valid and legally binding agreement of Salomon Inc, enforceable
against Salomon Inc 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)
and except as rights to indemnity and contribution thereunder may be limited by
federal and state securities laws.
(vi) Neither the execution, delivery and performance by Salomon
Inc of this Agreement and the Operative Agreements to which Salomon Inc is a
party, nor the consummation by Salomon Inc of the transactions contemplated
hereby and thereby (A) conflicts or will conflict with or constitutes or will
constitute a violation of the certificate of incorporation or bylaws or other
organizational documents of Salomon Inc, (B) conflicts or will conflict with or
constitutes or will constitute a breach or violation of, or a default under (or
an event which, with notice or lapse of time or both, would constitute such an
event), any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which Salomon Inc is a party or by which Salomon Inc
or any of its properties may be bound, (C) violates or will violate any order,
judgment, decree or injunction of any court or governmental agency or body
directed to Salomon Inc or any of its properties in a proceeding to which
Salomon Inc or its property is a party, (D) violates or will violate any
statute, law, regulation or judgment, injunction, order or decree applicable to
Salomon Inc or its properties or (E) will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of Salomon Inc,
in the case of clauses (B), (C), (D) or (E) which conflicts,
-24-
breaches, violations or defaults would have a material adverse effect upon the
condition (financial or other), business, properties, net worth or results of
operations of Salomon Inc or could impair the ability of Salomon Inc to perform
its obligations under this Agreement or the Operative Agreements to which
Salomon Inc is a party.
(vii) No permit, consent, approval, authorization or order of any
court or governmental agency or body is required in connection with the
execution and delivery by Salomon Inc of, or the consummation by Salomon Inc of
the transactions contemplated by, this Agreement or the Operative Agreements to
which Salomon Inc is a party, except (A) for such permits, consents, approvals
and similar authorizations which have been, or prior to the Closing Date will
be, obtained, (B) for such permits, consents, approvals and similar
authorizations which, if not obtained, would not, individually or in the
aggregate, have a material adverse effect upon the condition (financial or
other), business, properties, net worth or results of operations of Salomon Inc
and (C) as set forth or contemplated in the Prospectus.
(viii) Salomon Inc is not in (A) violation of its certificate of
incorporation or bylaws, or 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 (B) breach,
default (and no event has occurred 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 breach, default or violation would, if continued, have a material
adverse effect on the condition (financial or other), business, properties, net
worth or results of operations of Salomon Inc or could impair the ability of
Salomon Inc to perform its obligations under the Underwriting Agreement or any
of the Operative Agreements to which it is a party.
(ix) Salomon Inc has not taken, and will not take, any action
designed or that could reasonably be expected to cause or result in the
stabilization or manipulation of the price of the Common Units.
(x) There is (A) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or foreign,
now pending or, to the knowledge of Salomon Inc, threatened or contemplated to
which Salomon Inc or any of its subsidiaries is or may be a party or to which
the business or property of Salomon Inc, is or may be subject and (B) no
injunction, restraining order or order of any nature issued by a federal or
state court or foreign court of competent jurisdiction to which Salomon Inc or
any of its subsidiaries is or may be subject, that, in the case of clauses (A)
and (B) above, is reasonably expected to, in any manner, draw into question the
validity of this Agreement or any other Operative Agreement.
(e) Any certificate signed by an officer of the General Partner
and delivered to the Representatives or counsel for the Underwriters on the
Closing Date or the Option Closing Date
-25-
shall be deemed a representation and warranty of each of the Genesis Parties to
each Underwriter as to the matters covered thereby.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
-----------------
reliance upon the representations and warranties herein set forth, the
Partnership agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Partnership at a purchase price
of $_____ per Unit, the amount of the Underwritten Units set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Partnership hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 1,125,000 Option Units, at the same purchase price per Unit
as the Underwriters shall pay for the Underwritten Units. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten Units by
the Underwriters. Said option may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date of the
Prospectus upon written or facsimile notice by the Representatives to the
Partnership setting forth the number of Option Units as to which the several
Underwriters are exercising the option and the time for delivery and payment for
the Option Units. Delivery of certificates for the Option Units by the
Partnership, and payment therefor to the Partnership, shall be made as provided
in Section 3 hereof. The number of Option Units to be purchased by each
Underwriter shall be the same percentage of the total number of Option Units to
be purchased by the several Underwriters as such Underwriter is purchasing of
the Underwritten Units, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
--------------------
Units and the Option Units (if the option provided for in Section 2(b) hereof
shall have been exercised on or before the third business day prior to the
Closing Date (defined below)) shall be made at 10:00 AM, New York City time, on
______________, 1996, or such later date (not later than ___________, 1996) as
the Representatives shall designate, which date and time may be postponed by
agreement among the Representatives and the General Partner or as provided in
Section 9 hereof (such date and time of delivery and payment for the Units being
herein called the "Closing Date"). Delivery of the Units shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the aggregate
purchase prices of the Units being sold by the Partnership to or upon the order
of the Partnership by wire transfer of immediately available funds. Delivery of
the Underwritten Units and the Option Units, if applicable, shall be made at
such location as the Representatives shall, at least one business day in advance
of the Closing Date, reasonably designate, and payment for such Units shall be
made at the office of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, or at such other location as agreed by the Representatives and the
General Partner. Certificates for the Units shall be registered in such names
and in such denominations as the Representatives may request not less than two
full business days in advance of the Closing Date.
-26-
The Partnership agrees to have the Units available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM, New York City time, on the business day prior to the Closing Date.
If the option provided for in Section 2(b) hereof is exercised after
the third business day prior to the Closing Date, the Partnership will deliver
(at the expense of the Partnership) to the Representatives, at ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other location
as agreed by the Representatives and the Partnership, on the date specified by
the Representatives (which shall be within three business days after exercise of
said option or on such date as the Representatives and the Partnership shall
agree) (the "Option Closing Date"), certificates for the Option Units in such
names and denominations as the Representatives shall have requested against
payment of the purchase price thereof to or upon the order of the Partnership by
wire transfer of immediately available funds. If settlement for the Option
Units occurs after the Closing Date, the Partnership will deliver to the
Representatives on the Option Closing Date, and the obligation of the
Underwriters to purchase the Option Units shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming as of such date the
opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
------------------------
Underwriters propose to offer the Units for sale to the public as set forth in
the Prospectus.
5. Agreements.
----------
(a) General. Each of the Genesis Parties jointly and severally
-------
agrees with the several Underwriters that:
(i) The Partnership and the General Partner will each use its
best efforts to cause the Registration Statement and any amendment thereof, if
not effective at the Execution Time, to become effective. Prior to the
termination of the offering of the Units, the Partnership will not file any
amendment of or supplement to the Registration Statement, any Preliminary
Prospectus or the Prospectus which is not in compliance with the Act and the
rules and regulations thereunder and which has not been consented to by the
Representatives. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or filing of
the Prospectus is otherwise required under Rule 424(b), the Partnership will
cause the Prospectus, properly completed in compliance with the Act and the
rules and regulations thereunder, and any supplement thereto, to be filed with
the Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing.
(ii) The Partnership will promptly advise the Representatives (A)
when the Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (B) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (C) when, prior to termination of the
-27-
offering of the Units, any amendment to the Registration Statement shall have
been filed or become effective, (D) of any request by the Commission for any
amendment of the Registration Statement or supplement to the Prospectus or for
any additional information, (E) of any change in the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties, considered as a whole, or of the happening of any event which makes any
statement of a material fact made in the Registration Statement, any Preliminary
Prospectus or the Prospectus (as then supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement, any
Preliminary Prospectus or the Prospectus (as then supplemented) in order to
state a material fact required by the Act or the rules and regulations
thereunder to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which such statements were made,
not misleading, or of the necessity to amend or supplement the Registration
Statement, any Preliminary Prospectus or the Prospectus (as then supplemented)
to comply with the Act, the rules and regulations thereunder or any other
applicable law, (F) of the receipt by any Genesis Party of any notification with
respect to the suspension of the qualification of the Units for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose
and (G) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose. The Partnership and the General Partner will
each use its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Units is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend or supplement the
Registration Statement, any Preliminary Prospectus or the Prospectus to comply
with the Act, the rules and regulations thereunder or any other law, the
Partnership promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a)(i) of this Section 5, an amendment or
supplement in form and substance satisfactory to counsel to the Underwriters,
which will correct such statement or omission or effect such compliance.
(iv) As soon as practicable, the Partnership will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Partnership and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act.
(v) The Partnership will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy of
the Registration Statement (without exhibits thereto) and, if delivery of a
prospectus by an Underwriter or dealer is required prior to nine months after
the time of issue of the Prospectus in connection with the offering and sale of
the Units, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representatives may reasonably request. At any
time after nine months after the time of issue of the
-28-
Prospectus, upon request but at your expense, the Partnership will deliver as
many copies of an amended Prospectus complying with Section 10(a)(3) of the Act
as you may reasonably request. The Partnership will furnish or cause to be
furnished to the Representatives copies of all reports on Form SR required by
Rule 463 under the Act. The Partnership will pay the expenses of printing or
other production of all documents relating to the offering.
(vi) The Partnership and the General Partner will arrange for the
qualification of the Units for sale under the laws of such jurisdictions as the
Representatives may designate, and will maintain such qualifications in effect
so long as reasonably required for the distribution of the Units; provided,
--------
however, that in connection therewith, the Partnership and the General Partner
-------
shall not be required to qualify to do business or to file a general consent to
service of process in any such jurisdiction. The Partnership will pay the fee
of the National Association of Securities Dealers, Inc. ("NASD") in connection
with the NASD's review of the offering.
(vii) Except as provided in this Agreement, the Genesis Parties
will not, for a period of 180 days following the Execution Time, without the
prior written consent of Salomon Brothers Inc and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., (i) offer,
sell, contract to sell or otherwise dispose of or announce the offering of any
Common Units or Subordinated OLP Units or any securities that are convertible
into, or exercisable or exchangeable for, Common Units or Subordinated OLP Units
or any securities that are senior to or pari passu with Common Units or
----------
Subordinated OLP Units (other than (A) the issuance of Common Units in
connection with Acquisitions (as defined in the Partnership Agreement) or
Capital Improvements (as defined in the Partnership Agreement) permitted under
the Partnership Agreement (provided the holder of such newly issued Common Units
agrees to be bound by this provision) and (B) the issuance of Common Units
pursuant to the Restricted Unit Plan described in the Registration Statement, or
(ii) grant any options or warrants to purchase Common Units or Subordinated OLP
Units.
(viii) The Partnership will furnish to its Unitholders annual
reports containing financial statements certified by independent public
accountants and shall also furnish or make available, after the end of each of
the first three quarters of each fiscal year, quarterly summary financial
information in reasonable detail which may be unaudited. During the period of
three years from the date hereof, the Partnership will deliver to the
Representatives and, upon request, to each of the other Underwriters, copies of
each annual report of the Partnership and each other report furnished by the
Partnership to each of its Unitholders. For three years after the Closing Date,
the Partnership will deliver to the Representatives, as soon as they are
available, any reports and financial statements furnished to or filed by the
Partnership with the Commission or the NYSE.
(ix) The Partnership will use the net proceeds received by it
from the sale of the Units in the manner specified in the Prospectus under "Use
of Proceeds."
(x) Each of the Genesis Parties will take such steps as shall be
necessary to ensure that none of them shall become an "investment company"
within the meaning of such term
-29-
under the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
(b) Basis. Basis agrees with the several Underwriters that, Basis
-----
will not, for a period of 180 days following the Execution Time, without the
prior written consent of Salomon Brothers Inc and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer,
sell, contract to sell or otherwise dispose of or announce the offering of any
Common Units or Subordinated OLP Units or any securities that are convertible
into, or exercisable or exchangeable for, Common Units or Subordinated OLP Units
or any securities that are senior to or pari passu with Common Units or
----------
Subordinated OLP Units (other than the transfer of Subordinated OLP Units to
▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to the Performance Payment described in the Registration
Statement under "Certain Relationships and Related Transactions").
(c) ▇▇▇▇▇▇. ▇▇▇▇▇▇ agrees with the several Underwriters that, ▇▇▇▇▇▇
------
will not, for a period of 180 days following the Execution Time, without the
prior written consent of Salomon Brothers Inc and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer,
sell, contract to sell or otherwise dispose of or announce the offering of any
Common Units or Subordinated OLP Units or any securities that are convertible
into, or exercisable or exchangeable for, Common Units or Subordinated OLP Units
or any securities that are senior to or pari passu with Common Units or
----------
Subordinated OLP Units.
6. Conditions to the Obligations of the Underwriters. The obligations of
-------------------------------------------------
the Underwriters to purchase the Underwritten Units and the Option Units, as the
case may be, shall be subject to the accuracy of the representations and
warranties on the part of the Genesis Entities contained herein as of the
Execution Time and the Closing Date or the Option Closing Date, as the case may
be, to the accuracy of the statements of the Genesis Entities made in any
certificates pursuant to the provisions hereof as of the Execution Time and the
Closing Date or the Option Closing Date, as the case may be, to the performance
by the Genesis Entities of their respective obligations hereunder, to the other
provisions herein to be satisfied at or prior to such date and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later time,
the Registration Statement will become effective not later than (i) 6:00 P.M.
New York City time on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 P.M. New York City time on such
date or (ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred after 3:00
P.M. New York City time on such date; if filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time period required
by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Representatives shall have received the opinion of
▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the Genesis Parties and Basis, dated the
Closing Date and addressed to the
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Underwriters, in form and substance satisfactory to the Representatives, with
respect to the matters set forth in Exhibit A attached hereto.
---------
(c) The Representatives shall have received the opinion of ▇▇▇▇▇
▇▇▇▇▇▇▇, General Counsel of Basis, dated the Closing Date and addressed to the
Underwriters, in form and substance satisfactory to the Representatives, with
respect to the matters set forth in Exhibit B attached hereto.
---------
(d) The Representatives shall have received the opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President and General Counsel of ▇▇▇▇▇▇ Corporation, dated
the Closing Date and addressed to the Underwriters, in form and substance
satisfactory to the Representatives, with respect to the matters set forth in
Exhibit C attached hereto.
---------
[(e) The Representatives shall have received the opinion of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., counsel for ▇▇▇▇▇▇ Corporation, dated the Closing
Date and addressed to the Underwriters, in form and substance satisfactory to
the Representatives, with respect to the matters set forth in Exhibit D attached
---------
hereto.]
(f) The Representatives shall have received the opinion of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, internal counsel for Salomon Inc, dated the Closing Date and
addressed to the Underwriters, in form and substance satisfactory to the
Representatives, with respect to the matters set forth in Exhibit E attached
---------
hereto.
(g) The Representatives shall have received the opinion of
Cravath, Swaine & ▇▇▇▇▇, counsel for Salomon Inc, dated the Closing Date and
addressed to the Underwriters, in form and substance satisfactory to the
Representatives, with respect to the matters set forth in Exhibit F attached
---------
hereto.
(h) The Representatives shall have received an opinion or
opinions of special counsel to the Genesis Parties in each of the States of
Alabama, Florida, Mississippi, and Texas dated the Closing Date and addressed to
the Underwriters, in form and substance satisfactory to the Representatives,
with respect to the matters set forth in Exhibit G attached hereto.
---------
(i) The Representatives shall have received from ▇▇▇▇▇ & ▇▇▇▇▇,
L.L.P., counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Units, the
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably require, and the
Genesis Entities shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(j) The General Partner shall have furnished to the
Representatives a certificate of the General Partner, signed by the President or
a Vice President and the Chief Financial Officer of the General Partner, dated
the Closing Date, to the effect that the signers of such certificate have
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carefully examined the Registration Statement, the Prospectus, any supplements
to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Genesis Parties in
this Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date and the Genesis Parties have complied with
all the agreements and satisfied all the conditions on their part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or, to their knowledge, threatened;
(iii) the Common Units have been duly listed, subject to official
notice of issuance, on the New York Stock Exchange; and
(iv) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the condition (financial
or other), earnings, business, properties, prospects, net worth or results of
operations of the Genesis Parties considered as a whole, whether or not arising
from transactions in the ordinary course of business.
(k) Basis shall have furnished to the Representatives a
certificate of Basis, signed by the President or a Vice President and the chief
financial officer or Treasurer of Basis, dated the Closing Date, to the effect
that the representations and warranties of Basis in this Agreement are true and
correct on and as of the Closing Date with the same effect as if made on the
Closing Date and Basis has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to the
Closing Date.
(l) ▇▇▇▇▇▇ shall have furnished to the Representatives a
certificate of the ▇▇▇▇▇▇ Entities, signed by the President or a Vice President
and the chief financial or accounting officer of ▇▇▇▇▇▇, dated the Closing Date,
to the effect that the representations and warranties of the ▇▇▇▇▇▇ Entities in
this Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date and the ▇▇▇▇▇▇ Entities have complied with
all the agreements and satisfied all the conditions on their part to be
performed or satisfied at or prior to the Closing Date.
(m) Salomon Inc shall have furnished to the Representatives a
certificate of Salomon Inc, signed by a Managing Director or Vice President of
Salomon Inc, dated the Closing Date, to the effect that the representations and
warranties of Salomon Inc in this Agreement are true and correct on and as of
the Closing Date with the same effect as if made on the Closing Date and Salomon
Inc has complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing Date.
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(n) At the Execution Time and at the Closing Date, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP shall have furnished to the Representatives a letter or letters,
dated respectively as of the Execution Time and as of the Closing Date, in form
and substance previously approved by the Representatives.
(o) At the Execution Time and at the Closing Date, Deloitte &
Touche LLP shall have furnished to the Representatives a letter or letters,
dated respectively as of the Execution Time and as of the Closing Date, in form
and substance previously approved by the Representatives.
(p) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraphs (m) or (n) of this Section 6, or (ii) any
change, or any development involving a prospective change, in or affecting the
condition (financial or other), business, properties, net worth or results of
operations of the Genesis Parties not contemplated by the Prospectus, the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the Units
as contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
(q) (i) There shall not have been any change in the partners'
capital or limited liability company interests of the Partnership or the General
Partner, as the case may be, nor any material increase in the short-term or the
long-term debt of the Genesis Parties (other than in the ordinary course of
business) from that set forth or contemplated in the Registration Statement or
the Prospectus (or any amendment or supplement thereto); (ii) there shall not
have been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), any material adverse
change in or affecting the condition (financial or other), business, properties,
net worth or results of operations of the Genesis Parties considered as a whole;
(iii) the Genesis Parties shall not have any liabilities or obligations, direct
or contingent (whether or not in the ordinary course of business), that are
material to the Genesis Parties, considered as a whole, other than those
reflected in the Registration Statement or the Prospectus (or any amendment or
supplement thereto); and (iv) all the representations and warranties of the
Genesis Entities contained in this Agreement shall be true and correct on and as
of the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date.
(r) The Units shall have been either listed or approved for
listing upon notice of issuance on the New York Stock Exchange.
(s) On the Closing Date, each of the Conveyance Agreement, the
Distribution Support Agreement, the Master Credit Support Agreement, the
Redemption and Registration Rights Agreement and the Corporate Services
Agreement shall be in full force and effect, enforceable
-33-
against the parties thereto 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)
and except as rights to indemnity and contribution thereunder may be limited by
federal and state securities laws.
(t) Prior to the Closing Date, the Genesis Entities shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Partnership in writing, by facsimile or
by telephone confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the Units
---------------------------------------
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied or because of
any refusal, inability or failure on the part of any of the Genesis Entities to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Genesis Entities (other than
Salomon Inc) will jointly and severally be obligated to, and will, reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Units.
8. Indemnification and Contribution.
--------------------------------
(a) Each of the Genesis Parties, jointly and severally, agrees
to indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act, against
any and all losses, claims, damages or liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same), joint or several, to which they or any of them may become subject under
the Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Units as originally filed or
in any amendment thereof, or in any Preliminary Prospectus or the Prospectus, or
in any amendment thereof 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 agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with
-34-
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Genesis Parties will 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 any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Partnership solely by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein, and
provided, further, that none of the Genesis Parties shall be liable to any
-------- -------
Underwriter under the indemnity agreement in this subsection (i) with respect to
any Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results solely from the fact that such Underwriter
sold Units to a person as to whom any of the Genesis Parties shall establish
that there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented in any case where such delivery is required by the Act, if the
Partnership has previously furnished copies thereof in sufficient quantity to
such Underwriter and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained in the
Preliminary Prospectus that was corrected in the Prospectus or in the Prospectus
as then amended or supplemented. This indemnity agreement will be in addition
to any liability which any Genesis Party may otherwise have.
(b) Basis agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act, to the same extent as the indemnity from the Genesis
Parties to each Underwriter set forth in paragraph (a) of this Section 8, but
only with reference to the Basis Information. This indemnity agreement will be
in addition to any liability which Basis may otherwise have.
(c) Each of the ▇▇▇▇▇▇ Entities agrees to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act, to the same extent as the indemnity from the
Genesis Parties to each Underwriter set forth in paragraph (a) of this Section
8, but only with reference to the ▇▇▇▇▇▇ Information. This indemnity agreement
will be in addition to any liability which the ▇▇▇▇▇▇ Entities may otherwise
have.
(d) Salomon Inc agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act of the Exchange Act, against any and all losses, claims, damages or
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same), joint or several, to which they or any of
them may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus or the Prospectus under the caption "Certain Information Concerning
Salomon Inc." This indemnity agreement will be in addition to any liability
which Salomon Inc may otherwise have.
-35-
(e) Each Underwriter severally agrees to indemnify and hold harmless
the Genesis Entities, each of their respective directors and each of their
officers who signs the Registration Statement, and each person who controls any
Genesis Party within the meaning of either the Act or the Exchange Act, to the
same extent as the indemnity from the Genesis Entities to each Underwriter set
forth in paragraph (a) of this Section 8, but only with reference to written
information relating to such Underwriter furnished to the Genesis Parties by or
on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have.
(f) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party or parties
under this Section 8, notify the indemnifying party or parties in writing of the
commencement thereof; but the failure so to notify the indemnifying party or
parties (i) will not relieve it or them from liability under paragraph (a), (b),
(c), (d) or (e) of this Section 8 unless and to the extent it or they did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party or parties of substantial rights and defenses and (ii) will
not, in any event, relieve the indemnifying party or parties from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a), (b), (c), (d) or (e) of this Section 8. If it so
elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action. The indemnifying party or parties shall be
entitled to appoint counsel of the indemnifying party's or parties' choice at
the indemnifying party's or parties' expense to represent the indemnified party
or parties in any action for which indemnification is sought (in which case the
indemnifying party or parties shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall
-------- -------
be satisfactory to the indemnified party or parties. Notwithstanding the
indemnifying party's or parties' election to appoint counsel to represent the
indemnified party or parties in an action, the indemnified party or parties
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party or parties shall bear the reasonable fees, costs and
expenses of such separate counsel if (A) the use of counsel chosen by the
indemnifying party or parties to represent the indemnified party or parties
would present such counsel with a conflict of interest, (B) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party or parties and the indemnifying party or parties and the
indemnified party or parties shall have reasonably concluded that there may be
legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party or
parties, (C) the indemnifying party or parties shall not have employed counsel
satisfactory to the indemnified party or parties to represent the indemnified
party or parties within a reasonable time after notice of the institution of
such action or (D) the indemnifying party or parties shall authorize the
indemnified party or parties to employ separate counsel at the expense of the
indemnifying party or parties. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of
-36-
any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(g) In the event that the indemnity provided in paragraph (a) , (b),
(c), (d) or (e) of this Section 8 is unavailable or insufficient to hold
harmless an indemnified party for any reason, the Genesis Entities and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Genesis Entities and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Genesis Entities and by the Underwriters from the offering of the Units;
provided, however, that in no case shall any Underwriter (except as may be
-------- -------
provided in any agreement among underwriters relating to the offering of the
Units) be responsible for any amount in excess of the underwriting discount or
commission applicable to the Units purchased by such Underwriter hereunder; and
provided, further that the liability of certain Genesis Entities under this
-------- -------
paragraph (g) shall be limited to the extent set forth in paragraph (h) of this
Section 8. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Genesis Entities and the Underwriters shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Genesis Entities and of the
Underwriters in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Genesis Entities shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by each of them,
and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Prospectus. Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to information
provided by any Genesis Entity or the Underwriters. The Genesis Entities and
the Underwriters agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (g), 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. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Partnership or the Operating Partnership within the meaning of either the
Act or the Exchange Act, each officer of the General Partner who shall have
signed the Registration Statement and each director of the General Partner shall
have the same rights to contribution as the Genesis Entities, subject in each
case to the applicable terms and conditions of this paragraph (g). The Genesis
Entities' obligations to contribute are several and not joint. The
Underwriters' obligations to contribute are several in proportion to their
respective underwriting obligations and not joint.
-37-
(h) Notwithstanding the foregoing, (i) the liability of Basis and the
▇▇▇▇▇▇ Entities under paragraphs (b), (c) and (g) of this Section 8 shall be
limited to 54% and 46%, respectively, of the total proceeds (net of underwriting
discounts and commissions but before deducting expenses) received by the
Partnership from the offering of Units under this Agreement, as derived from the
aggregate proceeds to the Partnership set forth in the table on the cover page
of the Prospectus and (ii) Salomon Inc's liability under paragraphs (d) and (g)
of this Section 8 shall be limited to Losses arising solely out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus or the Prospectus under the
caption "Certain Information Concerning Salomon Inc."
9. Default by an Underwriter. If any one or more Underwriters shall fail
-------------------------
to purchase and pay for any of the Underwritten Units agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Underwritten
Units set forth opposite their names in Schedule I hereto bears to the aggregate
amount of Underwritten Units set forth opposite the names of all the remaining
Underwriters) the Underwritten Units which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
-------- -------
that the aggregate amount of Underwritten Units which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Underwritten Units set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Underwritten Units, and if such nondefaulting
Underwriters do not purchase all the Underwritten Units, this Agreement will
terminate without liability to any nondefaulting Underwriter or the Genesis
Entities. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven business days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Genesis Entities, and any nondefaulting Underwriter for damages occasioned
by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
-----------
absolute discretion of the Representatives, by notice given to the Partnership
prior to delivery of and payment for the Underwritten Units or the Option Units,
as the case may be, if prior to such time (a) trading in the Partnership's
Common Units shall have been suspended by the Commission or the New York Stock
Exchange or trading in securities generally on the New York Stock Exchange shall
have been suspended or limited or minimum prices shall have been established on
such exchange, (b) a banking moratorium shall have been declared either by
Federal or New York State authorities or (c) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering or delivery of the
Underwritten Units or the Option Units, as applicable, as contemplated by the
Prospectus (exclusive of any supplement thereto).
-38-
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Genesis Entities or their respective officers and of the Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, the
Genesis Entities or any of their respective officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Units. The provisions of Sections 7 and 8 hereof shall survive
the termination or cancellation of this Agreement.
12. Information Furnished by the Underwriters. The statements set forth
-----------------------------------------
in the last paragraph on the cover page, the stabilization legend on the inside
cover page and the statements in the first and fifth paragraphs, the third and
fourth sentences of the second paragraph and the third sentence of the sixth
paragraph under the caption "Underwriting" in any Preliminary Prospectus and in
the Prospectus, constitute the only information furnished by or on behalf of the
Underwriters through you as such information is referred to in Section 1(a)(ii)
and Section 8 hereof.
13. Notices. All communications hereunder will be in writing and
-------
effective only on receipt. Such communications will be mailed, delivered, or
transmitted by telex or facsimile and confirmed (i) to the Underwriters, care of
Salomon Brothers Inc, at Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: _______ (facsimile number: (212) 783-____) and care of ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager,
Investment Banking Division (facsimile number: (212) 816-____), except that
notices given to an Underwriter pursuant to Section 8 hereof shall be sent to
such Underwriter at the address provided to the Representatives, which address
will be supplied to any other party hereto by the Representatives upon request;
(ii) to the Genesis Parties, at One ▇▇▇▇▇ Center, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: President (facsimile number (713): 656-____);
(iii) to Basis, at One ▇▇▇▇▇ Center, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ (facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇); (iv) to the
▇▇▇▇▇▇ Entities, at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇); and (v) to Salomon Inc, at
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
(facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇).
14. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
15. Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the laws of the State of New York applicable to contracts made
and to be performed in the State of New York.
-39-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Genesis Entities and the several Underwriters.
Very truly yours,
GENESIS ENERGY, L.P.
By: Genesis Energy, L.L.C., its
general partner
By:______________________________
Name:
Title:
GENESIS CRUDE OIL, L.P.
By: Genesis Energy, L.L.C., its
general partner
By:______________________________
Name:
Title:
GENESIS ENERGY, L.L.C.
By:______________________________
Name:
Title:
BASIS PETROLEUM, INC.
By:______________________________
Name:
Title:
-▇▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
By:______________________________
Name:
Title:
SALOMON INC
By:______________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first
above written.
Salomon Brothers Inc
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
By: Salomon Brothers Inc
By:______________________________
Vice President
By: ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By:______________________________
Authorized Representative
For themselves and the other several Underwriters
named in Schedule I to the foregoing Agreement.
-41-
SCHEDULE I
Number of
Underwritten Units
Underwriters To Be Purchased
------------ ----------------------
Salomon Brothers Inc. ............................
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ................................
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. ........................
PaineWebber Incorporated .........................
Prudential Securities Incorporated ...............
---------
Total 7,500,000
=========
-1-
EXHIBIT A
OPINION OF ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.
(i) Each of the Partnership and the Operating Partnership is a
limited partnership duly formed and validly existing in good standing under the
Delaware Act with all necessary partnership power and authority to own or lease
its properties, to assume the liabilities being assumed by it pursuant to the
Conveyance Agreement and the Conveyances, to act as a general partner of the
Operating Partnership (in the case of the Partnership) and to conduct its
business, in each case in all material respects as described in the Registration
Statement and the Prospectus.
(ii) Each of 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, and is in good standing in each of, the states
listed on Schedule I to this opinion; and, to our knowledge, such jurisdictions
are the only jurisdictions in which the nature or location of the properties of
the Partnership or the Operating Partnership or the conduct of the business of
the Partnership or the Operating Partnership requires such registration or
qualification (except where the failure to so register or so qualify (A) would
not have a material adverse effect on the financial condition, business or
results of operations of the Genesis Parties considered as a whole or (B) would
not subject the limited partners of the Partnership to any material liability or
disability).
(iii) The General Partner is a limited liability company duly
formed and validly existing in good standing under the laws of Delaware with all
necessary limited liability company power and authority to own its properties,
to conduct its business and to act as a general partner of the Partnership and
the Operating Partnership in all material respects as described in the
Registration Statement and the Prospectus.
(iv) The General Partner is duly registered or qualified as a
foreign limited liability company for the transaction of business under the laws
of, and is in good standing in each of, the states listed on Schedule I to this
opinion; and, to our knowledge, such jurisdictions are the only jurisdictions in
which the nature or location of the properties of the General Partner or the
conduct of the business of the General Partner requires such registration or
qualification (except where the failure to so register or so qualify (A) would
not have a material adverse effect on the financial condition, business or
results of operations of the Genesis Parties considered as a whole or (B) would
not subject the limited partners of the Partnership to any material liability or
disability).
(v) The General Partner is the sole general partner of the
Partnership with a 2% general partner interest in the Partnership; such general
partner interest is duly authorized by the Partnership Agreement and was validly
issued to the General Partner; and the General Partner owns such general partner
interest in the Partnership free and clear of all liens, encumbrances, security
interests, charges or claims (A) in respect of which a financing statement under
the Uniform Commercial Code of the States of Delaware or Texas naming the
General Partner as debtor is on file in the office of the Secretary
A-1
of State of the States of Delaware or Texas or (B) otherwise known to such
counsel, without independent investigation, other than those created by or
arising under the Delaware Act.
(vi) The Partnership and the General Partner are the only two
general partners of the Operating Partnership with a 69.57% general partner
interest and a .61% general partner interest in the Operating Partnership,
respectively; such general partner interests are duly authorized by the
Operating Partnership Agreement and were validly issued to the Partnership and
the General Partner, respectively; each of the Partnership and the General
Partner owns its general partner interest in the Operating Partnership free and
clear of all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial Code of the
States of Delaware or Texas naming the Partnership or the General Partner as
debtor is on file in the office of the Secretary of State of the States of
Delaware or Texas or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware Act.
(vii) The 7,500,000 Underwritten Units to be issued and sold to the
Underwriters by the Partnership pursuant to the Underwriting Agreement and the
limited partner interests represented thereby are duly authorized by the
Partnership Agreement and, when issued and delivered to the Underwriters against
payment therefor as provided in the Underwriting Agreement, will be validly
issued, fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters
described in the Prospectus under the caption "The Partnership Agreement--
Limited Liability"); and the Underwritten Units will be the only limited partner
interests of the Partnership issued and outstanding as of the Closing Date.
(viii) Upon delivery to the Underwriters of certificates evidencing
the Units issued in the name of the Underwriters and payment by the Underwriters
of the purchase price for the Units, the Underwriters will acquire the Units
free of any adverse claim (as such term is defined in Section 8-302 of the New
York Uniform Commercial Code), assuming that the Underwriters are acting in good
faith and without notice of any adverse claim.
(ix) The 1,771,200 and 1,508,800 Subordinated OLP Units to be
issued to Basis and certain of the ▇▇▇▇▇▇ Entities, respectively, pursuant to
the Conveyance Agreement and the Operating Partnership Agreement and the limited
partner interests represented thereby are duly authorized by the Operating
Partnership Agreement and, when issued and delivered pursuant to the terms of
the Conveyance Agreement and the Operating Partnership Agreement, will be
validly issued, fully paid (to the extent required under the Operating
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in the Prospectus under "The Partnership
Agreement-- Limited Liability"); the 3,280,000 Subordinated OLP Units will be
the only limited partner interests in the Operating Partnership issued and
outstanding on the Closing Date; and Basis will own its limited partner interest
in the Operating Partnership represented by the Subordinated OLP Units free and
clear of all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial Code of the
States of Delaware or Texas naming Basis as debtor is on file in the office of
the Secretary of State of the States of Delaware or Texas or (B) otherwise known
to such counsel, without independent investigation, other than those created by
or
A-2
arising under the Delaware Act, except for the pledge of Subordinated OLP Units
contemplated in the Conveyance Agreement.
(x) Basis owns a membership interest of 54% in the General
Partner and ▇▇▇▇▇▇ owns a membership interest of 46% in the General Partner;
such membership interests are duly authorized by the LLC Agreement and have been
validly issued in accordance with such LLC Agreement and are fully paid and
nonassessable; and Basis owns such membership interest free and clear of all
liens, encumbrances, security interests, charges or claims (A) in respect of
which a financing statement under the Uniform Commercial Code of the States of
Delaware or Texas naming Basis as debtor is on file in the office of the
Secretary of State of the States of Delaware or Texas or (B) otherwise known to
such counsel, without independent investigation, other than those created by or
arising under the Delaware Limited Liability Company Act.
(xi) Except as described in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any limited or general partner
interests in the Partnership or the Operating Partnership pursuant to either of
the Partnership Agreements or, to our knowledge, any agreement or other
instrument to which the Partnership or the Operating Partnership is a party or
by which the Partnership or the Operating Partnership may be bound. To our
knowledge, neither the filing of the Registration Statement nor the offering or
sale of the Units as contemplated by the Underwriting Agreement gives rise to
any rights for or relating to the registration of any Units or other securities
of the Partnership or the Operating Partnership, except as set forth in the
Redemption and Registration Rights Agreement. To our knowledge, except as
described in the Prospectus, there are no outstanding options or warrants to
purchase any Common Units, Subordinated OLP Units, Common OLP Units or any other
securities of the Partnership or the Operating Partnership. The Partnership has
all requisite power and authority under the Delaware Act and the Partnership
Agreement to issue, sell and deliver the Units in accordance with and upon the
terms and conditions set forth in the Underwriting Agreement, the Conveyance
Agreement and the Partnership Agreement. The Operating Partnership has all
requisite power and authority under the Delaware Act and the Operating
Partnership Agreement to issue, sell and deliver the Subordinated OLP Units in
accordance with and upon the terms and conditions set forth in the Conveyance
Agreement and the Operating Partnership Agreement. All corporate, limited
liability company and partnership action required to be taken by any of the
Genesis Parties or Basis or any of their shareholders, members and partners
(excluding the ▇▇▇▇▇▇ Entities, as to which such counsel need not express any
opinion) for the authorization, issuance, sale and delivery of the Units and
Subordinated OLP Units and the consummation of the transactions contemplated by
the Underwriting Agreement and the Operative Agreements has been validly taken.
(xii) The Underwriting Agreement has been duly authorized, executed
and delivered by each of the Genesis Parties and Basis.
(xiii) The Partnership Agreement has been duly authorized, executed
and delivered by the General Partner and duly executed and delivered by the
Organizational Limited Partner and constitutes a valid and legally binding
agreement of the General Partner and the Organizational Limited Partner,
enforceable against the General Partner and the Organizational Limited Partner
in accordance with its
A-3
terms, except as the enforceability thereof may be limited by (A) bankruptcy,
insolvency, fraudulent transfer, reorganization, receivership, moratorium and
similar laws of general application relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (B) public
policy, applicable law relating to fiduciary duties and an implied covenant of
good faith and fair dealing.
(xiv) The Operating Partnership Agreement has been duly authorized,
executed and delivered by the General Partner, the Partnership and Basis, and,
assuming the due authorization, execution and delivery thereof by the ▇▇▇▇▇▇
Entities that are parties thereto, constitutes a valid and legally binding
agreement of the General Partner, the Partnership, Basis and the ▇▇▇▇▇▇ Entities
that are parties thereto, enforceable against the General Partner, the
Partnership, Basis and the ▇▇▇▇▇▇ Entities that are parties thereto in
accordance with its terms, except as the enforceability thereof may be limited
by (A) bankruptcy, insolvency, fraudulent transfer, reorganization,
receivership, moratorium and similar laws of general application relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (B) public policy, applicable law relating to fiduciary
duties and an implied covenant of good faith and fair dealing.
(xv) The LLC Agreement has been duly authorized, executed and
delivered by Basis and, assuming the due authorization, execution and delivery
thereof by ▇▇▇▇▇▇, constitutes a valid and legally binding agreement of Basis
and ▇▇▇▇▇▇, enforceable against Basis and ▇▇▇▇▇▇ in accordance with its terms,
except as the enforceability thereof may be limited by (A) bankruptcy,
insolvency, fraudulent transfer, reorganization, receivership, moratorium and
similar laws of general application relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (B) public
policy, applicable law relating to fiduciary duties and an implied covenant of
good faith and fair dealing.
(xvi) Each of the Conveyance Agreement and the Conveyances has been
duly authorized, executed and delivered by each of the Genesis Parties and Basis
that are parties thereto and, assuming the due authorization, execution and
delivery thereof by the ▇▇▇▇▇▇ Entities that are parties thereto, constitutes a
valid and legally binding agreement of each of the Genesis Parties, Basis and
the ▇▇▇▇▇▇ Entities that are parties thereto, enforceable against such parties
in accordance with its terms; the Distribution Support Agreement has been duly
authorized, executed and delivered by the Operating Partnership and, assuming
the due authorization, execution and delivery thereof by Salomon Inc,
constitutes a valid and legally binding agreement of the Operating Partnership
and Salomon Inc, enforceable against the Operating Partnership and Salomon Inc
in accordance with its terms; the Master Credit Support Agreement has been duly
authorized, executed and delivered by the Operating Partnership and Basis; the
Redemption and Registration Rights Agreement has been duly authorized, executed
and delivered by the Partnership, the Operating Partnership and Basis and,
assuming the due authorization, execution and delivery thereof by the ▇▇▇▇▇▇
Entities that are parties thereto, constitutes a valid and legally binding
agreement of the Partnership, the Operating Partnership, Basis and the ▇▇▇▇▇▇
Entities, enforceable against the Partnership, the Operating Partnership, Basis
and the ▇▇▇▇▇▇ Entities in accordance with its terms; and the Corporate Services
Agreement has been duly authorized,
A-4
executed and delivered by the Partnership and Basis and constitutes a valid and
legally binding agreement of the Partnership and Basis, enforceable against the
Partnership and Basis in accordance with its terms; provided, that, with respect
--------
to each agreement described in this paragraph (xvi), the enforceability thereof
may be limited by (A) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors'
rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (B) public
policy, applicable law relating to fiduciary duties and an implied covenant of
good faith and fair dealing.
(xvii) None of the offering, issuance and sale by the Partnership of
the Units, nor the execution, delivery and performance of the Underwriting
Agreement and the Operative Agreements by any of the Genesis Parties which are
parties thereto, nor the consummation of the transactions contemplated thereby
(A) constitutes or will constitute a violation of the certificate of limited
partnership, agreement of limited partnership, articles of organization or
agreement of limited liability company or other organizational documents of any
of the Genesis Parties, (B) constitutes or will constitute a breach or violation
of, or a default under (or an event which, with notice or lapse of time or both,
would constitute such an event), any Operative Agreement or any other agreement
filed as an exhibit to the Registration Statement, (C) violates or will violate,
in any material respect, any order, judgment, decree or injunction of any court
or governmental agency or body known to us directed to any of the Genesis
Parties or any of their properties in a proceeding in which any of the Genesis
Parties or any of their properties is a party, (D) violates or will violate, in
any material respect, any federal, New York or Texas statute, law or regulation,
or the Delaware Act, the Delaware General Corporation Law or the Delaware
Limited Liability Company Act or (E) will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of any of the
Genesis Parties, except for liens created pursuant to the Master Credit Support
Agreement.
(xviii) None of the offering, issuance and sale by the Partnership of
the Units, nor the execution, delivery and performance by Basis of the
Underwriting Agreement and the Operative Agreements to which Basis is a party,
nor the consummation of the transactions contemplated thereby violates or will
violate, in any material respect, any federal, New York or Texas statute, law or
regulation applicable to Basis or its properties.
(xix) No permit, consent, approval, authorization or order of any
federal, New York, Texas or Delaware court or governmental agency or body is
required in connection with the execution and delivery by the Genesis Parties
and Basis of, or the consummation by the Genesis Parties and Basis of the
transactions contemplated by, the Underwriting Agreement or the Operative
Agreements, except (A) for such permits, consents, approvals and similar
authorizations required under the Securities Act, the Exchange Act and the
securities or "Blue Sky" laws of certain jurisdictions, (B) for such permits,
consents, approvals and similar authorizations which have been obtained, (C) for
such permits, consents, approvals and similar authorizations which (1) are of a
routine or administrative nature, (2) are not customarily obtained or made prior
to the consummation of transactions such as those contemplated by the
Underwriting Agreement and by the Operative Agreements and (3) are expected in
the reasonable judgment of the General Partner to be obtained in the ordinary
course of business subsequent to the
A-5
consummation of the Transactions, (D) for such permits, consents, approvals and
similar authorizations which, if not obtained, would not, individually or in the
aggregate, have a material adverse effect upon the condition (financial or
other), business, properties, net worth or results of operations of the Genesis
Parties considered as a whole and (E) as set forth or contemplated in the
Prospectus.
(xx) The consummation of the Transactions is not subject to the
pre- merger notification and waiting period requirements of the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Antitrust Improvements Act of 1976.
(xxi) The statements in the Registration Statement and Prospectus
under the captions "The Transactions," "Credit Support Facilities," "Cash
Distribution Policy," "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Genesis--Liquidity and Capital Resources,"
"Business--Title to Properties," "Business--Environmental Matters," "Business--
Regulation," "Certain Relationships and Related Transactions" "Conflicts of
Interest and Fiduciary Responsibilities," "Description of the Common Units,"
"The Partnership Agreement" and "Units Eligible for Future Sale," insofar as
they constitute descriptions of the Operative Agreements, or refer to statements
of law or legal conclusions, are accurate and complete in all material respects,
and the Common Units and the Subordinated OLP Units conform in all material
respects to the descriptions thereof contained in the Registration Statement and
the Prospectus.
(xxii) To our knowledge, there are no legal or governmental
proceedings pending or threatened against any Genesis Party or to which any
Genesis Party 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, to our knowledge, there are
no agreements, contracts or other documents to which any of the Genesis Parties
is a party that are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement that are
not described or filed as required by the Act.
(xxiii) The Registration Statement was declared effective under the
Act on _____________, 1996; the Prospectus was filed with the Commission on
_______, 1996 pursuant to subparagraphs ___ and ___ of Rule 424(b); and to our
knowledge, 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.
(xxiv) The Registration Statement and the Prospectus and any
amendment or supplement thereto prior to the Closing Date (except for the
financial statements and the notes and the schedules thereto and the other
financial, statistical and accounting information included in the Registration
Statement or the Prospectus, as to which we need not express any opinion) comply
as to form in all material respects with the requirements of the Act and the
rules and regulations promulgated thereunder.
(xxv) The opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. that is filed as
Exhibit 8.1 to the Registration Statement is confirmed as of the date hereof and
the Underwriters may rely upon such opinion as if it were addressed to them.
A-6
(xxvi) None of the Genesis Parties is (A) an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or (B) (x)
a "public utility company," or "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended, (y) a "gas utility,"
"public utility" or "utility" within the meaning of Article 6050 of the Revised
Civil Statutes of Texas or (z) a "public utility" or "utility" within the
meaning of the Public Utility Regulatory Act of Texas.
(xxvii) The Units have been approved for listing on the New York
Stock Exchange, subject only to official notice of issuance.
(xxviii) The offer, sale and issuance of the Subordinated OLP Units
to Basis and ▇▇▇▇▇▇, respectively, pursuant to the Conveyance Agreement and the
Operating Partnership Agreement, and the offer, sale and issuance of APIs (as
defined in the Operating Partnership Agreement) pursuant to the Distribution
Support Agreement and the Operating Partnership Agreement, are exempt from the
registration requirements of the Act and the securities laws of any state having
jurisdiction with respect thereto.
(xxviii) Following the conveyance to the Operating Partnership of the
common carrier pipelines included in the Transferred Assets (the Common Carrier
Pipeline Properties"), the Operating Partnership shall be entitled to exercise
the power of eminent domain to secure rights-of-way necessary to operate the
Common Carrier Pipeline Properties.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Genesis Entities and
the independent public accountants of the Genesis Parties and your
representatives, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although such counsel is not
passing upon, and is not assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in, the Registration
Statement and the Prospectus (except to the extent specified in the foregoing
opinion), no facts have come to such counsel's attention that lead such counsel
to believe that the Registration Statement (other than (i) the financial
statements included therein, including the notes and schedules thereto and the
auditors' reports thereon, and (ii) the other financial, statistical and
accounting information included therein, as to which such counsel need not
comment), as of its effective date contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus
(other than (i) the financial statements included therein, including the notes
and schedules thereto and the auditors' reports thereon, and (ii) the other
financial, statistical and accounting information included therein, as to which
such counsel need not comment), as of its issue date and 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 (i) rely in respect of
matters of fact upon certificates of officers and employees of the Genesis
Entities and upon information obtained from public officials, (ii) assume that
all documents submitted to them as originals are authentic, that all copies
A-7
submitted to them conform to the originals thereof and that the signatures on
all documents examined by them are genuine, (iii) state that their opinion is
limited to federal laws, the Delaware Act, the Delaware Limited Liability
Company Act, the Delaware General Corporation Law and the laws of the States of
New York and Texas, (iv) state that they express no opinion with respect to the
title of any of the Genesis Entities to any of their respective real or personal
property, (v) state that they express no opinion with respect to state or local
tax statutes to which any of the limited partners of the Partnership may be
subject and (vi) state that they express no opinion with respect to local laws
applicable to the Genesis Parties.
A-8
SCHEDULE I
FOREIGN QUALIFICATION
Genesis Energy, L.P. is duly registered or qualified as a foreign
limited partnership under the laws of the following state:
Texas
Each of Genesis Crude Oil, L.P. and Genesis Energy, L.L.C. is duly
registered or qualified as a foreign limited partnership or as a foreign limited
liability company, as the case may be, under the laws of the following states:
Alabama
Florida
Kansas
Louisiana
Mississippi
Nebraska
New Mexico
New York
Oklahoma
Texas
Wisconsin
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EXHIBIT B
OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇▇
(GENERAL COUNSEL OF BASIS PETROLEUM, INC.)
(i) Basis is a corporation duly incorporated and validly existing
in good standing under the laws of the State of Texas with all necessary
corporate power and authority to execute and deliver the Underwriting Agreement
and each Operative Agreement to which it is a party and perform any obligations
it may have thereunder.
(ii) Neither the execution, delivery and performance by Basis of the
Underwriting Agreement and the Operative Agreements to which Basis is a party,
nor the consummation by Basis of the transactions contemplated thereby (A)
constitutes or will constitute a violation of the articles of incorporation or
bylaws of Basis, (B) constitutes or will constitute a breach or violation of, or
a default under (or an event which, with notice or lapse of time or both, would
constitute such an event), any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument known to me to which Basis
is a party or by which Basis is bound, (C) violates or will violate, in any
material respect, any order, judgment, decree or injunction of any court or
governmental agency or body known to me directed to Basis or any of the Basis
Transferred Assets in a proceeding to which Basis or any of the Basis
Transferred Assets is a party or (D) will result in the creation or imposition
of any lien, charge or encumbrance upon the Basis Transferred Assets, except
pursuant to the Master Credit Support Agreement.
(iii) To my knowledge there is no litigation, proceeding or
governmental investigation pending or threatened against Basis that relates to
any of the transactions contemplated by the Prospectus or which, if adversely
determined to Basis, is reasonably likely to have a material adverse effect on
the condition (financial or other), business, properties, net worth or results
of operations of the Genesis Parties considered as a whole, or would impair or
call into question the validity of the Underwriting Agreement or any of the
Operative Agreements or the performance by Basis of its obligations under the
Underwriting Agreement or any of the Operative Agreements to which Basis is a
party.
(iv) Except as described in the Prospectus, to my knowledge, Basis
or the Genesis Parties possess all certificates, authorities or permits issued
by the appropriate local, state or federal regulatory agencies or bodies
necessary to conduct the business currently operated by Basis and to be operated
by the Genesis Parties, except for such certificates, authorizations or permits
which, if not obtained, would not have, individually or in the aggregate, a
material adverse effect upon the condition (financial or otherwise), results of
operations or business of the Genesis Parties considered as a whole; and, to my
knowledge, Basis has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to have a material
adverse effect upon the condition (financial or otherwise), results of
operations or business of the Genesis Parties considered as a whole.
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In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Genesis Entities and
the independent public accountants of the Genesis Entities and your
representatives, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although such counsel is not
passing upon, 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 (other than
(i) the financial statements included therein, including the notes and schedules
thereto and the auditors' reports thereon, (ii) the other financial, statistical
and accounting information included therein and (iii) the ▇▇▇▇▇▇ Information, as
to which such counsel need not comment), as of its effective date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus (other than (i) the financial statements included
therein, including the notes and schedules thereto and the auditors' reports
thereon, and (ii) the other financial, statistical and accounting information
included therein, as to which such counsel need not comment), as of its issue
date and 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 (i) rely in respect of
matters of fact upon certificates of officers and employees of Basis and upon
information obtained from public officials, (ii) 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 and (iii) state that his opinion is limited to
federal laws and the laws of the State of New York.
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EXHIBIT C
OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(GENERAL COUNSEL OF ▇▇▇▇▇▇ CORPORATION)
(i) Each of the ▇▇▇▇▇▇ Entities is a corporation duly incorporated
and validly existing in good standing under the laws of the State of Delaware
with full corporate power and authority to execute and deliver each of the
Underwriting Agreement and Operative Agreements to which it is a party and
perform any obligations it may have thereunder.
(ii) Each of the ▇▇▇▇▇▇ Entities that owns Subordinated OLP Units
will own its limited partner interest in the Operating Partnership represented
by the Subordinated OLP Units free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the States of Delaware or Texas
naming any ▇▇▇▇▇▇ Entity as debtor is on file in the office of the Secretary of
State of the States of Delaware or Texas or (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising under
the Delaware Act, except for the pledge of Subordinated OLP Units contemplated
in the Conveyance Agreement.
(iii) ▇▇▇▇▇▇ owns its membership interest in the General Partner free
and clear of all liens, encumbrances, security interests, charges or claims (A)
in respect of which a financing statement under the Uniform Commercial Code of
the States of Delaware or Texas naming ▇▇▇▇▇▇ as debtor is on file in the office
of the Secretary of State of the States of Delaware or Texas or (B) otherwise
known to such counsel, without independent investigation, other than those
created by or arising under the Delaware Limited Liability Company Act.
(iv) All corporate action required to be taken by any of the ▇▇▇▇▇▇
Entities or any of their Shareholders for the consummation of the transactions
contemplated by the Underwriting Agreement and the Operative Agreements has been
validly taken.
(v) Each of the Underwriting Agreement, the Operating Partnership
Agreement, the LLC Agreement, the Conveyance Agreement, the Conveyances and the
Redemption and Registration Rights Agreement has been duly authorized, executed
and delivered by each of the ▇▇▇▇▇▇ Entities that is a party thereto.
(vi) Neither the execution, delivery and performance by any of the
▇▇▇▇▇▇ Entities of the Underwriting Agreement and the Operative Agreements to
which any such ▇▇▇▇▇▇ Entity is a party, nor the consummation by the ▇▇▇▇▇▇
Entities of the transactions contemplated thereby (A) constitutes or will
constitute a violation of the certificates of incorporation or bylaws of such
▇▇▇▇▇▇ Entities, (B) constitutes or will constitute a breach or violation of, or
a default under (or an event which, with
C-1
notice or lapse of time or both, would constitute such an event), any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument known to me to which any of the ▇▇▇▇▇▇ Entities is a party or by
which any of the ▇▇▇▇▇▇ Entities is bound, (C) violates or will violate, in any
material respect, any statute, law or regulation or any order, judgment, decree
or injunction of any court or governmental agency or body known to me directed
to any of the ▇▇▇▇▇▇ Entities or any of the ▇▇▇▇▇▇ Transferred Assets in a
proceeding to which any of the ▇▇▇▇▇▇ Entities or any of the ▇▇▇▇▇▇ Transferred
Assets is a party or (D) will result in the creation or imposition of any lien,
charge or encumbrance upon the ▇▇▇▇▇▇ Transferred Assets, except pursuant to the
Master Credit Support Agreement.
(vii) No permit, consent, approval, authorization or order of any
court or governmental agency or body is required in connection with the
execution and delivery by the ▇▇▇▇▇▇ Entities of, or the consummation by the
▇▇▇▇▇▇ Entities of the transactions contemplated by, the Underwriting Agreement
or the Operative Agreements to which any of the ▇▇▇▇▇▇ Entities is a party,
except (A) for such permits, consents, approvals and similar authorizations
required under the Securities Act, the Exchange Act and the securities or "Blue
Sky" laws of certain jurisdictions, (B) for such permits, consents, approvals
and similar authorizations required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as to which such counsel need not express any opinion,
(C) for such permits, consents, approvals and similar authorizations which have
been obtained, (D) for such permits, consents, approvals and similar
authorizations which (1) are of a routine or administrative nature, (2) are not
customarily obtained or made prior to the consummation of transactions such as
those contemplated by the Underwriting Agreement and by the Operative Agreements
to which any of the ▇▇▇▇▇▇ Entities is a party, and (3) are expected in the
reasonable judgment of the General Partner to be obtained in the ordinary course
of business subsequent to the consummation of the Transactions, (E) for such
permits, consents, approvals and similar authorizations which, if not obtained,
would not individually or in the aggregate, have a material adverse effect upon
the condition (financial or other), business, properties, net worth or results
of operations of the ▇▇▇▇▇▇ Entities considered as a whole or of the Genesis
Parties considered as a whole and (F) as set forth or contemplated in the
Prospectus.
(viii) To my knowledge, other than as described or contemplated in the
Prospectus, there is no litigation, proceeding or governmental investigation
pending or overtly threatened against any of the ▇▇▇▇▇▇ Entities that relates to
any of the transactions contemplated by the Prospectus or which, if adversely
determined to such ▇▇▇▇▇▇ Entity, is reasonably likely to have a material
adverse effect on the (financial or other), business, properties, net worth or
results of operations of the Genesis Parties considered as a whole, or would
impair or call into question the validity of the Underwriting Agreement or any
of the Operative Agreements or the performance by the ▇▇▇▇▇▇ Entities of their
obligations under the Underwriting Agreement or any of the Operative Agreements
to which any of the ▇▇▇▇▇▇ Entities is a party.
(ix) To my knowledge, each of the ▇▇▇▇▇▇ Entities which is subject
to regulation as a common carrier is conducting its business consistent with its
common carrier classification in all material respects and is in material
compliance with all applicable federal or state statutes, rules and regulations
pertaining thereto, including but not limited to all tariff and rate
requirements.
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(x) Except as described in the Prospectus, to my knowledge, the
▇▇▇▇▇▇ Entities or the Genesis Parties possess all certificates, authorities or
permits issued by the appropriate local, state or federal regulatory agencies or
bodies necessary to conduct the business currently operated by the ▇▇▇▇▇▇
Entities and to be operated by the Genesis Parties, except for such
certificates, authorizations or permits which, if not obtained, would not have,
individually or in the aggregate, a material adverse effect upon the condition
(financial or otherwise), results of operations or business of the Genesis
Parties considered as a whole; and, to my knowledge, none of the ▇▇▇▇▇▇ Entities
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to have a material adverse
effect upon the condition (financial or otherwise), results of operations or
business of the Genesis Parties considered as a whole.
(xi) None of the ▇▇▇▇▇▇ Entities is (A) an "investment company" or a
company "controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or (B) a "public utility company,"
"holding company" or "subsidiary company" of a "holding company" or an
"affiliate" thereof, within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
In addition, such counsel shall state that he has participated
in conferences with officers and other representatives of the Genesis Entities
and the independent public accountants of the Genesis Entities and your
representatives, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although such counsel is not
passing upon, 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 (other than
(i) the financial statements included therein, including the notes and schedules
thereto and the auditors' reports thereon, (ii) the other financial, statistical
and accounting information included therein and (iii) the Basis Information, as
to which such counsel need not comment), as of its effective date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus (other than (i) the financial statements included
therein, including the notes and schedules thereto and the auditors' reports
thereon, and (ii) the other financial, statistical and accounting information
included therein, as to which such counsel need not comment), as of its issue
date and 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 (i) rely in respect
of matters of fact upon certificates of officers and employees of the ▇▇▇▇▇▇
Entities and upon information obtained from public officials, (ii) 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 and (iii) state that his opinion is
limited to federal laws and the laws of the State of Texas [and Delaware].
C-3
EXHIBIT D
[OPINION OF ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
(COUNSEL FOR ▇▇▇▇▇▇ CORPORATION)]
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EXHIBIT E
OPINION OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
(INTERNAL COUNSEL OF SALOMON INC)
(i) Salomon Inc is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to execute and deliver each of the Underwriting
Agreement, the Distribution Support Agreement and the Master Credit Support
Agreement and perform any obligations it may have thereunder.
(ii) Each of the Underwriting Agreement, the Distribution Support
Agreement and the Master Credit Support Agreement has been duly authorized,
executed and delivered by Salomon Inc.
(iii) Neither the execution, delivery and performance by Salomon Inc
of the Underwriting Agreement, the Distribution Support Agreement and the Master
Credit Support Agreement, nor the consummation by Salomon Inc of the
transactions contemplated thereby (A) constitutes or will constitute a violation
of the certificate of incorporation or bylaws or other organizational documents
of Salomon Inc, (B) constitutes or will constitute a breach or violation of, or
a default under (or an event which, with notice or lapse of time or both, would
constitute such an event), any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument known to me to which Salomon
Inc is a party or by which Salomon Inc or its properties may be bound, (C)
violates or will violate, in any material respect, any statute, law or
regulation or any order, judgment, decree or injunction of any court or
governmental agency or body known to us directed to Salomon Inc or its property
in a proceeding to which Salomon Inc or its property is a party or (D) will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of Salomon Inc.
(iv) To my knowledge, there is no litigation, proceeding or
governmental investigation pending or overtly threatened against Salomon Inc
that relates to any of the transactions contemplated by the Prospectus or which
would impair or call into question the validity of the Underwriting Agreement or
any of the Operative Agreements to which Salomon Inc is a party or the
performance by Salomon Inc of its obligations under the Underwriting Agreement
or any of the Operative Agreements to which Salomon Inc is a party.
(v) All corporate action required to be taken by Salomon Inc or any
of its shareholders for the consummation by Salomon Inc of the transactions
contemplated by the Underwriting Agreement and the Operative Agreements to which
Salomon Inc is a party has been validly taken.
In rendering such opinion, such counsel may (i) rely in respect
of matters of fact upon certificates of officers and employees of Salomon Inc
and upon information obtained from public officials and (ii) 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.
E-1
EXHIBIT F
OPINION OF CRAVATH, SWAINE & ▇▇▇▇▇
(COUNSEL TO SALOMON INC)
(i) Assuming the due authorization, execution and delivery of the
Master Credit Support Agreement by the Operating Partnership, Salomon Inc and
Basis, the Master Credit Support Agreement constitutes a valid and legally
binding agreement of the Operating Partnership, Salomon Inc and Basis,
enforceable against the Operating Partnership, Salomon Inc and Basis in
accordance with its terms; provided, that the enforceability of the Master
--------
Credit Support Agreement may be limited by (A) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (B) public policy, applicable law relating to fiduciary
duties and an implied covenant of good faith and fair dealing.
(ii) Neither Basis nor Salomon Inc is (A) an "investment company" or
a company "controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or (B) a "public utility company,"
"holding company" or "subsidiary company" of a "holding company" or an
"affiliate" thereof, within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
In rendering such opinion, such counsel may (i) rely in respect
of matters of fact upon certificates of officers and employees of Salomon Inc
and upon information obtained from public officials and (ii) assume that all
documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof and that the signatures on
all documents examined by them are genuine.
F-1
EXHIBIT G
FORM OPINION OF LOCAL COUNSEL
(i) Each of the Partnership, the Operating Partnership and the
General Partner has been duly qualified or registered as a foreign limited
partnership or as a foreign limited liability company, as the case may be, for
the transaction of business under the laws of the State.
(ii) The Operating Partnership has all requisite partnership power
and authority as a limited partnership under the laws of the State to own or
lease its properties and to conduct its business in the State; and upon the
consummation of the Transactions, assuming that the Unitholders will not be
liable under the laws of the State of Delaware for liabilities of the
Partnership or the Operating Partnership, the Unitholders will not be liable
under the laws of the State for the liabilities of the Partnership, except in
each case to the same extent as under the laws of the State of Delaware.
(iii) The execution, delivery and performance of the Conveyance
Agreement and each of the Conveyances relating to the transfer of property in
the State in accordance with the terms thereof will not violate any statute of
the State or any rule, regulation or, to our knowledge, any order of any agency
of the State having jurisdiction over the Partnership, the Operating Partnership
or the General Partner or any of their respective properties, except for any
such violations which, individually or in the aggregate, would not have a
material adverse effect upon the holders of Common Units or upon the operations
conducted, or to be conducted as described in the Prospectus, in the State by
the Genesis Parties considered as a whole.
(iv) The Conveyance Agreement and each of the Conveyances relating
to the transfer of property in the State, assuming the due authorization,
execution and delivery thereof by the parties thereto and assuming such
Conveyance Agreement and Conveyances are governed by the laws of the State
notwithstanding any choice of law provisions thereof, is a valid and legally
binding agreement of the parties thereto under the laws of the State,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights generally and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); each of the Conveyance Agreement and the
Conveyances is in a form legally sufficient as between the parties thereto to
convey to the transferee thereunder all of the right, title and interest of the
transferor stated therein in and to the properties located in the State, as
described in the Conveyance Agreement and Conveyances, subject to the
conditions, reservations and limitations contained in the Conveyance Agreement
and Conveyances, except motor vehicles or other property requiring conveyance of
certificated title as to which the Conveyance Agreement and the Conveyances are
legally sufficient to compel delivery of such certificated title.
(v) Each of the deeds and assignments (including, without
limitation, the form of the exhibits and schedules thereto) is in a form legally
sufficient for recordation in the appropriate public offices of
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the State, to the extent such recordation is required, and, upon proper
recordation of any of such deeds and assignments in the State, will constitute
notice to all third parties under the recordation statutes of the State
concerning record title to the assets transferred thereby; recordation in the
office of the County Clerk for each county in which the Partnership, the
Operating Partnership or the General Partner owns property is the appropriate
public office in the State for the recordation of deeds and assignments of
interests in real property located in such county.
(vi) No permit, consent, approval or similar authorization,
registration or qualification of or with any governmental agency or body of the
State having jurisdiction over the Partnership, the Operating Partnership or the
General Partner, as the case may be, or any of their respective properties is
required for the issuance and sale of the Units by the Partnership or for the
conveyance of the properties located in the State purported to be conveyed to
the Operating Partnership pursuant to the Conveyance Agreement and the
Conveyances, except such permits, consents, approvals and similar
authorizations (A) which are required under the Act and the securities or "Blue
Sky" laws of the State, (B) which have been obtained, (C) which (i) are of a
routine or administrative nature, (ii) are not customarily obtained or made
prior to the consummation of transactions such as those contemplated by the
Underwriting Agreement and by the Conveyance Agreement and the Conveyances and
(iii) are expected in our reasonable judgment to be obtained in the ordinary
course of business subsequent to the consummation of the Transactions, (D)
which, if not obtained, would not, individually or in the aggregate, have a
material adverse effect upon the operations conducted, or to be conducted as
described in the Prospectus, in the State by the Genesis Parties considered as a
whole or (E) disclosed in the Prospectus.
(vii) Following the conveyance of the common carrier pipelines
included in the Transferred Assets (the "Common Carrier Pipeline Properties")
located in the State to the Operating Partnership, the Operating Partnership
shall be entitled to exercise the power of eminent domain in the State to secure
rights-of-way necessary to operate the Common Carrier Pipeline Properties
located in the State [to the extent the laws of such State are applicable].
In rendering the foregoing opinions, we express no opinion with
respect to the title of any of the real or personal property purported to be
transferred by the Conveyance Agreement and the Conveyances, and we express no
opinion with respect to state or local taxes or tax statutes. We have not made
any review of specific properties or title files relating to any such
properties, and we express no opinion regarding the accuracy of the descriptions
or references to any real or personal property. The opinions set forth above
are limited in all respects to matters of the laws of the State, excepting
therefrom municipal and local ordinances and regulations.
▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. is hereby authorized to rely upon this
opinion letter in connection with the Transactions as if such opinion letter
were addressed and delivered to them on the date hereof. Subject to the
foregoing, this opinion letter may be relied upon only by you and your counsel
in connection with the Transactions and no other use or distribution of this
opinion letter may be made without our prior written consent.
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