EXHIBIT 1.1
▇▇▇▇▇▇ ▇.▇.
5,750,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
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▇▇▇▇▇▇ Brothers Inc. March 12, 2003
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
UBS Warburg LLC
Credit Suisse First Boston LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇ ▇.▇., a Delaware limited partnership (the
"Partnership"), proposes to issue and sell to the several Underwriters named in
Schedule 1 hereto (the "Underwriters") 5,750,000 Common Units (the "Firm
Units"), each representing a limited partner interest in the Partnership (the
"Common Units"). In addition, the Partnership proposes to grant to the
Underwriters an option to purchase up to an additional 862,500 Common Units, on
the terms and for the purposes set forth in Section 2 (the "Option Units"). The
Firm Units and the Option Units, if purchased, are hereinafter collectively
called the "Units."
This is to confirm the agreement among the Partnership,
Riverwalk Logistics, L.P., a Delaware limited partnership and the general
partner of the Partnership (the "General Partner"), ▇▇▇▇▇▇ ▇▇, LLC, a Delaware
limited liability company ("▇▇▇▇▇▇ ▇▇"), an indirect wholly owned subsidiary of
Valero Energy Corporation, a Delaware corporation ("Valero Energy"), and the
general partner of the General Partner, Valero Logistics Operations, L.P., a
Delaware limited partnership (the "Operating Partnership"), and ▇▇▇▇▇▇ ▇▇, Inc.,
a Delaware corporation, a direct wholly owned subsidiary of the Partnership and
the general partner of the Operating Partnership (the "OLP General Partner")
(collectively, the "Partnership Parties"), and the Underwriters concerning the
purchase of the Firm Units and the Option Units from the Partnership by the
Underwriters. The Partnership Parties and ▇▇▇▇▇▇-Belvieu Pipeline Company,
L.L.C., a Delaware limited liability company ("▇▇▇▇▇▇-Belvieu LLC"), are
hereinafter referred to collectively as the "Partnership Entities." Valero
Energy, UDS Logistics, LLC, a Delaware limited liability company ("UDS
Logistics"), Valero Refining Company - California, a Delaware corporation
("VRC"), Valero Refining - Texas, L.P., a Texas limited partnership ("VRLP"),
and Valero Pipeline Company, a Delaware corporation ("VPC"), are hereinafter
referred to collectively as the "Valero Entities."
Prior to the date hereof, the following transactions occurred:
(i) VRC, UDS Logistics, the Partnership, the Operating
Partnership and the OLP General Partner entered into a Contribution Agreement
(the "Benicia Tank Contribution Agreement") and VRLP, UDS Logistics, the
Partnership, the Operating Partnership and the OLP General Partner entered into
a Contribution Agreement (the "Texas Tank Contribution Agreement") whereby the
Operating Partnership will acquire specified crude oil tanks, foundations, tank
valves, tank gauges, pressure equipment, temperature equipment and related
assets in Benicia, California and Corpus Christi (West) and Texas City, Texas,
respectively, from certain affiliates of Valero Marketing and Supply Company, a
Delaware corporation ("Valero Marketing") (The Benicia Tank Contribution
Agreement and the Texas Tank Contribution Agreement are collectively referred to
herein as the "Tank Contribution Agreements").
(ii) VPC, UDS Logistics, the Partnership, the Operating
Partnership and the OLP General Partner entered into a Contribution Agreement
(the "Pipeline Contribution Agreement") whereby the Operating Partnership will
acquire specified pipeline systems and terminal assets.
(iii) The Operating Partnership entered into an Amended and
Restated Credit Agreement providing for borrowings of up to $175 million.
Concurrently with the execution hereof, the following
transactions will occur and the documents related thereto will be executed:
(iv) The Partnership Parties will enter into a purchase
agreement with the initial purchasers thereunder (the "Purchase Agreement")
providing for the issuance and sale to such initial purchasers of $250 million
aggregate principal amount of unsecured senior notes (the "Notes") under an
indenture relating to the Notes (the "Indenture") in a transaction (the "Notes
Offering") exempt from the registration requirements of the Securities Act of
1933, as amended, and the rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder, (the "Securities Act"). The Notes will
be guaranteed on an unsecured senior basis (the "Guarantees") by the Partnership
(the "Guarantor"). In connection with the Notes Offering, the Operating
Partnership will enter into a Registration Rights Agreement (the "Registration
Rights Agreement") with the initial purchasers, pursuant to which the Operating
Partnership and the Guarantor will agree to file one or more registration
statements with the Commission providing for the registration under the
Securities Act of the Notes or the senior notes to be issued by the Operating
Partnership and guaranteed by the Guarantor under the Indenture containing terms
identical to the Notes and to be offered to holders of the Notes in exchange for
the Notes pursuant to the Exchange Offer (as defined in the Registration Rights
Agreement) (the "Exchange Notes"). The Exchange Notes will be guaranteed on an
unsecured senior basis (the "Exchange Note Guarantee") by the Partnership.
On the First Delivery Date (as defined in Section 4), the
following transactions will occur:
(v) The public offering of the Firm Units contemplated hereby
will be consummated.
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(vi) The Operating Partnership will issue the Notes in the
Notes Offering and will distribute the proceeds to the Partnership.
(vii) The Operating Partnership will borrow $34,319,913 under
the Amended and Restated Credit Facility and will distribute the proceeds to the
Partnership.
(viii) The Partnership will amend the Partnership Agreement
(the "Amendment") to provide that the General Partner may be removed by the vote
of the holders of at least 58% of the outstanding Common Units and Subordinated
Units, excluding the Common Units and Subordinated Units held by affiliates of
the General Partner. The Amendment will also provide that the election of a
successor general partner upon any such removal be approved by the holders of a
majority of the Common Units, excluding the Common Units held by affiliates of
the General Partner.
(ix) Pursuant to a Common Unit Redemption Agreement (the
"Redemption Agreement"), the Partnership will redeem from UDS Logistics
3,809,750 Common Units (the "Redemption") at a price of $35.19 per unit.
(x) The contributions of assets contemplated by the Tank
Contribution Agreements and the Pipeline Contribution Agreement will be
completed after the transactions referred to in (i) - (ix) above have all been
completed.
(xi) Valero Marketing and the Operating Partnership will enter
into a Handling and Throughput Agreement (the "Handling and Throughput
Agreement") pursuant to which Valero Marketing will pay to the Operating
Partnership a specified fee during the term of the Handling and Throughput
Agreement for all volumes of Specified Feedstocks (as defined in the Handling
and Throughput Agreement) delivered to the Benicia, Corpus Christi (West) and
Texas City refineries.
(xii) The Operating Partnership will enter into (i) Lease and
Access Agreements with VRLP pursuant to which VRLP will lease certain facilities
and other improvements that are necessary or desirable for the Operating
Partnership to utilize in the Operating Partnership's operations of the tank
assets in Corpus Christi, Texas and Texas City, Texas and (ii) a Lease and
Access Agreement whereby VRC will lease certain facilities and other
improvements that are necessary or desirable for the Operating Partnership to
utilize in the Operating Partnership's operations of the tank assets in Benicia,
California (the "Lease and Access Agreements").
(xiii) The Operating Partnership will enter into (i) a
Services and Secondment Agreement with VRLP pursuant to which VRLP will provide
the Operating Partnership with the operational and maintenance resources and
services necessary to operate, manage and maintain the tank assets at the Corpus
Christi (West) and Texas City refineries which will be contributed to the
Operating Partnership through the Tank Contribution Agreements and (ii) a
Services and Secondment Agreement with VRC pursuant to which VRC will provide
the Operating Partnership with the operational and maintenance resources and
services necessary to operate, manage and maintain the tank assets at the
Benicia refinery which will be contributed to the Operating Partnership through
the Tank Contribution Agreements (the "Services Agreements").
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(xiv) The Operating Partnership, the Partnership and Valero
Marketing will enter into a Throughput Commitment Agreement (the "Throughput
Commitment Agreement") pursuant to which Valero Marketing will agree for itself
and for its affiliates to use the pipelines contributed pursuant to the Pipeline
Contribution Agreement and to pay a set fee for such usage.
(xv) The Operating Partnership and Valero Marketing will enter
into a Terminalling Agreement (the "Terminalling Agreement") pursuant to which
Valero Marketing will agree to pay to the Operating Partnership a specified fee
for storage and handling services at the terminals associated with the Pipeline
Contribution Agreement.
In connection with the contribution of assets pursuant to the
Tank Contribution Agreements and the Pipeline Contribution Agreement, the
parties to the Transactions will enter into various bills of sale, deeds,
leases, assignments, conveyances and related documents (the "Conveyances").
The transactions listed in (i) through (xv) are collectively
referred to herein as the "Transactions." The Purchase Agreement, the Indenture,
the Registration Rights Agreement, the Amended and Restated Credit Agreement,
the Redemption Agreement and the Notes are collectively referred to herein as
the "Financing Documents." The Tank Contribution Agreements, the Pipeline
Contribution Agreement, the Handling and Throughput Agreement, the Lease and
Access Agreements, the Services Agreements, the Throughput Commitment Agreement,
the Terminalling Agreement and the Conveyances are collectively referred to
herein as the "Asset Documents." The Financing Documents and the Asset Documents
are collectively referred to herein as the "Transaction Documents."
The term "Operative Agreement" when used herein shall mean and
include any of (i) the Partnership Agreement, the Operating Partnership
Agreement, the General Partner Partnership Agreement, the ▇▇▇▇▇▇-Belvieu
Agreement, the ▇▇▇▇▇▇ ▇▇ LLC Agreement, the UDS Logistics LLC Agreement (as such
terms are defined below) and (ii) the Transaction Documents.
1. Representations, Warranties and Agreements of the
Partnership Parties. Each of the Partnership Parties represents and warrants to,
and agrees with, each Underwriter that:
(a) Definitions. The Partnership and the Operating Partnership
have prepared and filed with the Commission in accordance with the provisions of
the Securities Act, a registration statement on Form S-3 under the Securities
Act (Commission File No. 333-89978) (the "registration statement"), including a
prospectus subject to completion relating to the Units. Such registration
statement has been declared effective by the Commission. The term "Registration
Statement" as used in this Agreement means the registration statement (including
all financial schedules and exhibits), as supplemented or amended prior to the
execution of this Agreement. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration statement will
be filed and must be declared effective before the offering of the Units may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. If it is
contemplated, at the time this Agreement is executed, that a registration
statement or a post-effective amendment will be filed pursuant to Rule 462(b) or
Rule 462(d) under the Securities
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Act before the offering of the Units may commence, the term "Registration
Statement" as used in this Agreement includes such registration statement. The
term "Basic Prospectus" as used in this Agreement means the prospectus in the
form included in the Registration Statement at the time that the Registration
Statement was declared effective or in the form in which it has been most
recently filed with the Commission on or prior to the date of this Agreement.
"Prospectus" shall mean the prospectus supplement relating to the Units and the
offering thereof that is first filed pursuant to Rule 424(b) under the
Securities Act ("Rule 424(b)") after the date and time this Agreement is
executed and delivered by the parties hereto, together with the Basic
Prospectus. The term "Preliminary Prospectus" as used in this Agreement means
any prospectus relating to the Units that omitted information to be included
upon pricing in a form of prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act and was used after such effectiveness and prior
to the initial delivery of the Prospectus to the Underwriters.
(b) Financial Statements and Schedules. All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement, the Basic
Prospectus, a Preliminary Prospectus or the Prospectus (or other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by reference in the
Registration Statement, the Basic Prospectus, a Preliminary Prospectus or the
Prospectus, as the case may be; any reference in this Agreement to the
Registration Statement, the Basic Prospectus, a Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as
of the date of the Registration Statement, the Basic Prospectus, the Preliminary
Prospectus or the Prospectus, as the case may be; and any reference to any
amendment or supplement to the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Exchange Act which, upon filing,
are incorporated by reference therein, as required by paragraph (b) of Item 12
of Form S-3. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto.
(c) No Stop Order. No stop order suspending the effectiveness
of the Registration Statement has been issued and, to the knowledge of the
Partnership Parties, no proceeding for that purpose has been initiated or
threatened by the Commission. The Registration Statement and the Prospectus, and
any further amendments or supplements to the Registration Statement or the
Prospectus, do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto, and as of the applicable
filing date and on the Closing Date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Operating
Partnership or the Partnership by an Underwriter through ▇▇▇▇▇▇ Brothers Inc.
expressly for use therein; and each of the statements made by the Partnership or
the Operating Partnership in the Registration Statement, and to be made in the
Prospectus and any further amendments or supplements to the Registration
Statement or Prospectus within the coverage of Rule 175(b) of the rules and
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regulations under the Securities Act, including (but not limited to) any
statements with respect to future available cash or future cash distributions or
earnings of the Partnership or the Operating Partnership or the anticipated
ratio of taxable income to distributions was made or will be made with a
reasonable basis and in good faith.
(d) Incorporated Documents. The Incorporated Documents
heretofore filed, when they were filed (or, if any amendment with respect to any
such document was filed, when such amendment was filed), conformed in all
material respects with the requirements of the Exchange Act; any further
Incorporated Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act; no such document
when it was filed (or, if an amendment with respect to any such document was
filed, when such amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and no such
further document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
(e) Formation and Qualification of the Partnership and the
Operating Partnership. Each of the Partnership and the Operating Partnership has
been duly formed and is validly existing in good standing as a limited
partnership under the Delaware Revised Uniform Limited Partnership Act (the
"Delaware LP Act") with partnership power and authority to own or lease its
properties and to conduct its business, in each case in all respects as
described in the Registration Statement and the Prospectus. Each of the
Partnership and the Operating Partnership is duly registered or qualified as a
foreign limited partnership for the transaction of business under the laws of
each jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to register
or qualify would not (i) have a material adverse effect on the general affairs,
management, consolidated financial position, business prospects, partners'
equity, members' equity or results of operations of the Partnership, the
Operating Partnership and ▇▇▇▇▇▇-Belvieu LLC, taken as a whole (a "Material
Adverse Effect"), or (ii) subject the limited partners of the Partnership or the
Operating Partnership to any material liability or disability.
(f) Formation and Qualification of ▇▇▇▇▇▇ ▇▇ and
▇▇▇▇▇▇-Belvieu. Each of ▇▇▇▇▇▇ ▇▇ and ▇▇▇▇▇▇-Belvieu LLC has been duly formed
and is validly existing in good standing as a limited liability company under
the Delaware Limited Liability Company Act (the "Delaware LLC Act") with limited
liability company power and authority to own or lease its properties and to
conduct its business and with respect to ▇▇▇▇▇▇ ▇▇, to act as the general
partner of the General Partner, in each case in all respects as described in the
Registration Statement and the Prospectus. Each of ▇▇▇▇▇▇ ▇▇ and ▇▇▇▇▇▇-Belvieu
LLC is duly registered or qualified as a foreign limited liability company for
the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Material Adverse Effect or (ii) subject the limited partners of the
Partnership or the Operating Partnership to any material liability or
disability.
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(g) Formation and Qualification of the General Partner. The
General Partner has been duly formed and is validly existing in good standing as
a limited partnership under the Delaware LP Act with partnership power and
authority to own or lease its properties, to conduct its business and to act as
general partner of the Partnership, in each case in all respects as described in
the Registration Statement and the Prospectus. The General Partner is duly
registered or qualified as a foreign limited partnership for the transaction of
business under the laws of each jurisdiction in which the character of the
business conducted by it or the nature or location of the properties owned or
leased by it makes such registration or qualification necessary, except where
the failure so to register or qualify would not (i) have a Material Adverse
Effect or (ii) subject the limited partners of the Partnership to any material
liability or disability.
(h) Formation and Qualification of the OLP General Partner.
The OLP General Partner has been duly incorporated and is validly existing in
good standing under the Delaware General Corporation Law (the "DGCL") with
corporate power and authority to own or lease its properties, to conduct its
business and to act as general partner of the Operating Partnership, in each
case in all respects as described in the Registration Statement and the
Prospectus. The OLP General Partner is duly registered or qualified as a foreign
corporation for the transaction of business under the laws of each jurisdiction
in which the character of the business conducted by it or the nature or location
of the properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Material Adverse Effect or (ii) subject the limited partners of the Operating
Partnership to any material liability or disability.
(i) Ownership of General Partner Interest in the Partnership.
The General Partner is the sole general partner of the Partnership with a 2.0%
general partner interest in the Partnership; such general partner interest has
been duly authorized and validly issued in accordance with the Partnership
Agreement of the Partnership (as the same may be amended or restated at or prior
to the Closing Date, the "Partnership Agreement"); and the General Partner owns
such general partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims.
(j) Ownership of Limited Partner Interests in the Partnership.
As of the date hereof, and immediately prior to the issuance of the Units, the
issued and outstanding limited partner interests of the Partnership consist of
9,684,572 Common Units, 9,599,322 Subordinated Units and the Incentive
Distribution Rights, as such term is defined in the Partnership Agreement. UDS
Logistics, an indirect wholly owned subsidiary of Valero Energy, owns 4,424,322
Common Units and 9,599,322 Subordinated Units (the "Sponsor Units") and the
General Partner owns 73,312 Common Units and all of the Incentive Distribution
Rights. All outstanding Common Units, Subordinated Units and Incentive
Distribution Rights and the limited partner interests represented thereby have
been duly authorized and validly issued in accordance with the Partnership
Agreement, and are fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in the Partnership's registration statement on Form S-1 (No.
333-43668) under the caption "The Partnership Agreement--Limited Liability,"
which is incorporated by reference into the Partnership's registration statement
on Form 8-A (File No. 1-16417) (the "Form 8-A")). UDS Logistics owns the Sponsor
Units, and the General Partner owns the Incentive Distribution
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Rights, in each case, free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(k) Ownership of General Partner Interest in the Operating
Partnership. The OLP General Partner is the sole general partner of the
Operating Partnership with a 0.01% general partner interest in the Operating
Partnership; such general partner interest has been duly authorized and validly
issued in accordance with the Partnership Agreement of the Operating Partnership
(as the same may be amended or restated at or prior to the Closing Date, the
"Operating Partnership Agreement"); and the OLP General Partner owns such
general partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(l) Ownership of Limited Partner Interest in the Operating
Partnership. The Partnership is the sole limited partner of the Operating
Partnership with a 99.99% limited partner interest in the Operating Partnership;
such limited partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement and will be fully paid (to
the extent required under the Operating Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described or
incorporated by reference into the Form 8-A); and the Partnership owns such
limited partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(m) Ownership of ▇▇▇▇▇▇-Belvieu LLC. The Operating Partnership
owns a 50% profits interest and a 49% capital interest in ▇▇▇▇▇▇-Belvieu LLC
(the "▇▇▇▇▇▇-Belvieu Interests"); such interests are duly authorized and validly
issued in accordance with the Members Agreement of ▇▇▇▇▇▇-Belvieu LLC (as the
same may be amended at or prior to the Closing Date, the "▇▇▇▇▇▇-Belvieu
Agreement"), and are fully paid (to the extent required under the ▇▇▇▇▇▇-Belvieu
Agreement) and nonassessable (except as such nonassessability may be affected by
Section 18-607 of the Delaware LLC Act); and the Operating Partnership owns such
interests free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(n) Ownership of General Partner Interest in the General
Partner. ▇▇▇▇▇▇ ▇▇ is the sole general partner of the General Partner with a
0.1% general partner interest in the General Partner; such general partner
interest has been duly authorized and validly issued in accordance with the
Partnership Agreement of the General Partner (as the same may be amended or
restated at or prior to the Closing Date, the "General Partner Partnership
Agreement"), and ▇▇▇▇▇▇ ▇▇ owns such general partner interest free and clear of
all liens, encumbrances, security interests, equities, charges or claims.
(o) Ownership of Limited Partner Interest in the General
Partner. UDS Logistics is the sole limited partner of the General Partner with a
99.9% limited partner interest in the General Partner; such limited partner
interest has been duly authorized and validly issued in accordance with the
General Partner Partnership Agreement and will be fully paid (to the extent
required under the General Partner Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the
Delaware LP Act), and UDS Logistics owns such limited partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
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(p) Ownership of ▇▇▇▇▇▇ ▇▇ and UDS Logistics. Valero Energy
indirectly, through one or more direct or indirect wholly owned subsidiaries,
owns a 100% membership interest in each of ▇▇▇▇▇▇ ▇▇ and UDS Logistics; such
membership interests are duly authorized and validly issued in accordance with
the respective limited liability company agreements of ▇▇▇▇▇▇ ▇▇ and UDS
Logistics (in each case, as the same may be amended or restated at or prior to
the Closing Date, the "▇▇▇▇▇▇ ▇▇ LLC Agreement" and the "UDS Logistics LLC
Agreement", respectively), and are fully paid (to the extent required under the
▇▇▇▇▇▇ ▇▇ LLC Agreement and the UDS Logistics LLC Agreement, as applicable) and
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act); and such member interests are owned free and clear of
all liens, encumbrances, security interests, equities, charges or claims.
(q) No Other Ownership. Other than (i) the Partnership's
ownership of its limited partner interest in the Operating Partnership and the
stock of the OLP General Partner and (ii) the Operating Partnership's ownership
of the ▇▇▇▇▇▇-Belvieu Interests, neither the Partnership nor the Operating
Partnership owns, and at the Closing Date, neither will own, directly or
indirectly, any equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association or other
entity. Other than (i) the General Partner's ownership of its partnership
interests in the Partnership and (ii) the OLP General Partner's ownership of its
partnership interests in the Operating Partnership, neither the General Partner
nor the OLP General Partner owns, and at the Closing Date neither will own,
directly or indirectly, any equity or long-term debt securities of any
corporation, partnership, limited liability company, joint venture, association
or other entity.
(r) Valid Issuance of Firm Units. At the First Delivery Date
or the Second Delivery Date, as the case may be, the Firm Units or the Option
Units, as the case may be, and the limited partner interests represented thereby
will be duly authorized by the Partnership and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
Section 17-607 of the Delaware LP Act and as otherwise disclosed in the
Prospectus).
(s) No Preemptive Rights, Registration Rights or Options.
Except as described in the Prospectus or for rights that have been waived, there
are no preemptive rights or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any partnership or membership
interests or capital stock in the Partnership Entities, in each case pursuant to
the organizational documents or any agreement or other instrument to which any
Partnership Entity is a party or by which any of them may be bound. Neither the
filing of the Registration Statement nor the offering or sale of the Units as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any Units or other securities of the Partnership or any of its
Subsidiaries, other than as provided in the Prospectus and the Partnership
Agreement or as have been waived. Except for options granted pursuant to
employee benefits plans, qualified unit option plans or other employee
compensation plans, there are no outstanding options or warrants to purchase any
partnership or membership interests or capital stock in any Partnership Entity.
Each of the Partnership Parties has all requisite right, power and authority to
execute and deliver this Agreement and to perform its respective obligations
hereunder. The Partnership has all requisite power and authority to issue, sell
and deliver the Units in accordance
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with and upon the terms and conditions set forth in this Agreement, the
Partnership Agreement, the Registration Statement and Prospectus. All action
required to be taken by the Partnership Parties or any of their partners,
members or stockholders for the due and proper authorization, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby has been duly and validly taken.
(t) Due Authorization of this Agreement and the Purchase
Agreement. This Agreement has been duly authorized, executed and delivered by
each of the Partnership Parties. The Purchase Agreement has been duly
authorized, executed and delivered by the Operating Partnership and the
Guarantor.
(u) Operative Documents. At or before the First Delivery Date:
(i) the Partnership Agreement will be duly authorized,
executed and delivered by the General Partner will be a valid and legally
binding agreement of the General Partner, enforceable against the General
Partner in accordance with its terms;
(ii) the Operating Partnership Agreement will be duly
authorized, executed and delivered by the OLP General Partner and the
Partnership and will be a valid and legally binding agreement of the OLP General
Partner and the Partnership in accordance with its terms;
(iii) the General Partner Partnership Agreement will be duly
authorized, executed and delivered by ▇▇▇▇▇▇ ▇▇ and UDS Logistics and will be a
valid and legally binding agreement of ▇▇▇▇▇▇ ▇▇ and UDS Logistics, enforceable
against ▇▇▇▇▇▇ ▇▇ and UDS Logistics in accordance with its terms;
(iv) the Registration Rights Agreement will be duly
authorized, executed and delivered by the Operating Partnership and the
Guarantor and, will be a valid and legally binding agreement of the Operating
Partnership and the Guarantor, enforceable against the Operating Partnership and
the Guarantor in accordance with its terms;
(v) the Indenture will be duly authorized, executed and
delivered by the Operating Partnership and the Guarantor and, when duly
authorized, executed and delivered in accordance with its terms by each of the
parties thereto, will be a valid and legally binding agreement of the Operating
Partnership and the Guarantor, enforceable against the Operating Partnership and
the Guarantor in accordance with its terms;
(vi) the Notes (and the related Guarantees) will be duly
authorized for issuance and sale to the initial purchasers thereof and, when
duly executed, issued, authenticated and delivered in accordance with the terms
of the Indenture against the delivery of payment therefor as provided in the
Purchase Agreement, will constitute the valid and binding obligations of the
Operating Partnership and the Guarantor, enforceable against the Operating
Partnership and the Guarantor and entitled to the benefits of the Indenture;
(vii) the Tank Contribution Agreement and the Pipeline
Contribution Agreement will be duly authorized, executed and delivered by the
parties thereto and will be valid and legally binding agreements of the parties
thereto, enforceable against each of them in accordance with their terms;
10
(viii) the Amended and Restated Credit Agreement will be duly
authorized, executed and delivered by the Operating Partnership and will be a
valid and legally binding agreement of the Operating Partnership, enforceable
against the Operating Partnership in accordance with its terms;
(ix) the Redemption Agreement will be duly authorized,
executed and delivered by the parties thereto and will be a valid and legally
binding agreement of the parties thereto, enforceable against each of them in
accordance with its terms;
(x) the Handling and Throughput Agreement will be duly
authorized, executed and delivered by the parties thereto and will be a valid
and legally binding agreement of the parties thereto, enforceable against each
of them in accordance with its terms;
(xi) the Lease and Access Agreements will be duly authorized,
executed and delivered by the parties thereto and will be valid and legally
binding agreements of the parties thereto, enforceable against each of them in
accordance with their terms;
(xii) the Services Agreements will be duly authorized,
executed and delivered by the parties thereto and will be valid and legally
binding agreements of the parties thereto, enforceable against each of them in
accordance with their terms;
(xiii) the Throughput Commitment Agreement will be duly
authorized, executed and delivered by the parties thereto and will be a valid
and legally binding agreement of the parties thereto, enforceable against each
of them in accordance with its terms; and
(xiv) the Terminalling Agreement will be duly authorized,
executed and delivered by the parties thereto and will be a valid and legally
binding agreement of the parties thereto, enforceable against each of them in
accordance with its terms.
provided that, with respect to each agreement described in this Section 1(u),
the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws now or hereafter in effect
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).
(v) No Violations. None of the (i) offering, issuance and sale
of the Units, (ii) execution, delivery and performance by each of the
Partnership Parties of this Agreement or the Transaction Documents to which it
is a party or (iii) consummation of the transactions contemplated hereby and
thereby (A) constituted, constitutes or will constitute a violation of the
certificate of limited partnership, agreement of limited partnership,
certificate of formation, limited liability company agreement, certificate or
articles of incorporation or bylaws or other organizational documents of any of
the Partnership Entities or Valero Entities, (B) constituted, constitutes or
will constitute a breach or violation of, or a default under (or an event which,
with notice or lapse of time or both, would constitute such a default), any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which any of the Partnership Entities or Valero Entities is a
party or by which any of them or any of their respective properties may be
bound, (C) violated, violates or will violate any statute, law or regulation or
any order, judgment, decree or injunction of any court or governmental agency or
body directed to any of
11
the Partnership Entities or Valero Entities or any of their properties in a
proceeding to which any of them or their property is a party or (D) resulted,
results or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any of the Partnership Entities or
Valero Entities, which breaches, violations or defaults, in the case of clauses
(B), (C) or (D), would, individually or in the aggregate, have a Material
Adverse Effect.
(w) No Consents. No permit, consent, approval, authorization,
order, registration, filing or qualification ("consent") of or with any court,
governmental agency or body is required for the execution, delivery and
performance by each of the Partnership Parties of this Agreement or the
Transaction Documents to which it is a party, the offering, issuance and sale
and of the Units, or the consummation of the transactions contemplated hereby
and thereby, except (i) for such consents required under the Securities Act, the
Exchange Act and state securities or "Blue Sky" laws, (ii) for such consents
which have been, or prior to the Closing Date will be, obtained, and (iii) for
such consents which, if not obtained, would not, individually or in the
aggregate, have a Material Adverse Effect.
(x) No Default. None of the Partnership Parties is in (i)
violation of its certificate or agreement of limited partnership, limited
liability company agreement, certificate or articles of incorporation or bylaws
or other organizational documents, (ii) violation in any material respect of any
law, statute, ordinance, administrative or governmental rule or regulation
applicable to it or of any decree of any court or governmental agency or body
having jurisdiction over it or (iii) breach, default (or an event which, with
notice or lapse of time or both, would constitute such a default) or violation
in the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which it is a party or by which it or
any of its properties may be bound, which breach, default or violation, in the
case of clause (iii), would, if continued, have a Material Adverse Effect, or
could materially impair the ability of any of the Partnership Parties to perform
their obligations under this Agreement or the Transaction Documents. To the
knowledge of the Partnership Parties, no third party to any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which any of
the Partnership Parties is a party or by which any of them is bound or to which
any of their properties is subject, is in default under any such agreement,
which breach, default or violation would, if continued, have a Material Adverse
Effect.
(y) Independent Public Accountants. Ernst & Young LLP, who
have certified certain audited financial statements in the Registration
Statement and the Prospectus, are independent public accountants with respect to
the Partnership Entities within the meaning of the Securities Act and the rules
and regulations of the Commission thereunder. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP were
independent public accountants with respect to the Partnership Entities as
required by the Securities Act and the rules and regulations of the Commission
thereunder.
(z) Financial Statements. The historical financial statements
(including the related notes and supporting schedules) included in the
Registration Statement, any Preliminary Prospectus and the Prospectus (and any
amendment or supplement thereto) present fairly in all material respects the
financial position, results of operations and cash flows of the entities
purported to be shown thereby on the basis stated therein at the respective
dates or for the respective periods to which they apply and have been prepared
in accordance with generally
12
accepted accounting principles consistently applied throughout the periods
involved, except to the extent disclosed therein. The selected historical
information included in the Registration Statement, any Preliminary Prospectus
and the Prospectus (and any amendment or supplement thereto) under the captions
"Capitalization," "Ratio of Earnings to Fixed Charges" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" are
accurately presented in all material respects and prepared on a basis consistent
with the audited and unaudited historical consolidated financial statements from
which they have been derived.
(aa) No Distribution of Other Offering Materials. None of the
Partnership Entities has distributed or, prior to the completion of the
distribution of the Units, will distribute, any prospectus (as defined under the
Securities Act) in connection with the offering and sale of the Units other than
the Registration Statement, any Preliminary Prospectus, the Prospectus or other
materials, if any, permitted by the Securities Act, including Rule 134 of the
Rules and Regulations.
(bb) Conformity to Description of Units. The statements set
forth in the Prospectus under the caption "Description of Common Units," insofar
as it purports to constitute a summary of the terms of the Units, is a fair
summary in all material respects.
(cc) No Omitted Descriptions. Other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which any
of the Partnership Entities is a party or of which any property of any of the
Partnership Entities is the subject which, if determined adversely to the
Partnership Entities, could reasonably be expected to, individually or in the
aggregate have a Material Adverse Effect and, to the best of the Partnership
Parties' knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(dd) Title to Property. The Operating Partnership and
▇▇▇▇▇▇-Belvieu LLC, have, and upon consummation of the Transactions will have,
good and indefeasible title to all real property and good title to all personal
property described in the Prospectus owned or to be owned by the Partnership
Entities, free and clear of all liens, claims, security interests or other
encumbrances except (i) as described in the Prospectus and (ii) such as do not
materially interfere with the use of such properties taken as a whole as they
have been used in the past and as they are to be used in the future as described
in the Prospectus; provided, that, with respect to title to pipeline
rights-of-way, the Partnership Parties represent only that (A) the Operating
Partnership and ▇▇▇▇▇▇-Belvieu LLC have sufficient title to enable them to use
and occupy the pipeline rights-of-way as they have been used and occupied in the
past and are to be used and occupied in the future as described in the
Prospectus and (B) any lack of title to the pipeline rights-of-way will not have
a material adverse effect on the ability of the Operating Partnership and
▇▇▇▇▇▇-Belvieu LLC to use and occupy the pipeline rights-of-way as they have
been used and occupied in the past and are to be used and occupied in the future
as described in the Prospectus and will not materially increase the cost of such
use and occupation. All real property and buildings held, or to be held upon
consummation of the Transactions, under lease or license by the Partnership
Entities are or will be held by the Operating Partnership and ▇▇▇▇▇▇-Belvieu LLC
under valid and subsisting and enforceable leases or licenses with such
exceptions as do not materially interfere with the use of such properties taken
as a whole as they have been used in the past and are to be used in the future
as described in the Prospectus.
13
(ee) Permits. Each of the Partnership Entities has, and upon
consummation of the Transactions will have, such permits, consents, licenses,
franchises, certificates and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its properties and to conduct
its business in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus and except for such permits
which, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect; each of the Partnership Entities has fulfilled and
performed, or will fulfill and perform, all its material obligations with
respect to such permits which are due to have been fulfilled and performed by
such date and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any impairment
of the rights of the holder of any such permit, except for such revocations,
terminations and impairments that would not, individually or in the aggregate,
have a Material Adverse Effect subject in each case to such qualification as may
be set forth in the Prospectus; and, except as described in the Prospectus, none
of such permits contains or will contain any restriction that is materially
burdensome to the Partnership, the Operating Partnership and ▇▇▇▇▇▇-Belvieu,
taken as a whole.
(ff) Books and Records. Each of the Operating Partnership and
the Partnership (i) makes and keeps books, records and accounts, which, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets and (ii) maintains systems of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(gg) Disclosure Controls. The Partnership has established and
maintains disclosure controls and procedures (as such term is defined in Rule
13a-14 under the Exchange Act), which (i) are designed to ensure that material
information relating to the Partnership, including its consolidated
subsidiaries, is made known to Valero GP's principal executive officer and its
principal financial officer by others within those entities, particularly during
the periods in which the periodic reports required under the Exchange Act are
being prepared; (ii) have been evaluated for effectiveness as of a date within
90 days prior to the filing of the Partnership's most recent annual or quarterly
report filed with the Commission; and (iii) are effective in all material
respects to perform the functions for which they were established.
(hh) No Identified Problems Resulting from Disclosure
Controls. Based on the evaluation of its disclosure controls and procedures, the
Partnership is not aware of (i) any significant deficiency in the design or
operation of internal controls which could adversely affect the Partnership's
ability to record, process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Partnership's internal controls.
(ii) No Significant Changes in Internal Controls. Since the
date of the most recent evaluation of such disclosure controls and procedures,
there have been no significant
14
changes in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
(jj) Taxes. Each of the Partnership Entities has filed (or has
obtained extensions with respect to) all material federal, state and foreign
income and franchise tax returns required to be filed through the date hereof,
which returns are complete and correct in all material respects, and has timely
paid all taxes shown to be due pursuant to such returns, other than those (i)
which, if not paid, would not have a Material Adverse Effect, or (ii) which are
being contested in good faith and for which adequate reserves have been
established in accordance with generally accepted accounting principles.
(kk) Related Party Transactions. No relationship, direct or
indirect, exists between or among the Partnership Entities on the one hand, and
the directors, officers, partners, customers or suppliers of the General Partner
and its Affiliates (other than the Partnership Entities) on the other hand,
which is required to be described in the Prospectus which is not so described.
(ll) Environmental Compliance. The Partnership Entities (i)
are in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety and
the environment or imposing liability or standards of conduct concerning any
Hazardous Material (as hereinafter defined) ("Environmental Laws"), (ii) have
received all permits required of them under applicable Environmental Laws to
conduct their respective businesses, (iii) are in compliance with all terms and
conditions of any such permit and (iv) do not have, and as a result of the
Transactions could not reasonably be expected to have, any liability in
connection with the release into the environment of any Hazardous Material,
except where such noncompliance with Environmental Laws, failure to receive
required permits, or failure to comply with the terms and conditions of such
permits or liabilities in connection with such release would not, individually
or in the aggregate, have a Material Adverse Effect. The term "Hazardous
Material" means (A) any "hazardous substance" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, (B)
any "hazardous waste" as defined in the Resource Conservation and Recovery Act,
as amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.
(mm) Insurance. The Partnership Entities maintain, or are
entitled to the benefits of, and upon the closing of the Transactions will
maintain or be entitled to the benefit of, insurance covering their properties,
operations, personnel and businesses against such losses and risks as are
reasonably adequate to protect them and their businesses in a manner consistent
with other businesses similarly situated. None of the Partnership Entities has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be made in order to
continue such insurance, and all such insurance is outstanding and duly in force
on the date hereof and will be outstanding and duly in force on the Closing
Date.
15
(nn) Material Change. None of the Partnership Entities has
sustained since the date of the latest audited financial statements included in
the Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capitalization or long-term
debt of any of the Partnership Entities or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, consolidated financial position, partners' capital,
members' equity, or results of operations of any of the Partnership Entities,
taken as a whole, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of the Partnership Entities has
entered into any transaction or agreement (whether or not in the ordinary course
of business) material to the Partnership Entities, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus.
(oo) Investment Company/Public Utility Holding Company. None
of the Partnership Entities are, nor, after giving effect to the offering and
sale of the Units and the application of the proceeds thereof, will be (i) an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"), or (ii) a "public utility
company," "holding company" or a "subsidiary company" of a "holding company" or
an "affiliate" thereof, under the Public Utility Holding Company Act of 1935, as
amended.
(pp) Other Sales. The Partnership has not sold or issued any
Common Units during the six-month period preceding the date of the Prospectus
other than Common Units issued pursuant to employee benefit plans, qualified
options plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants described in the Prospectus.
(qq) Form S-3. The conditions for the use of Form S-3, as set
forth in the General Instructions thereto, have been satisfied.
2. Purchase of the Units. On the basis of the representations
and warranties contained in, and subject to the terms and conditions of, this
Agreement, the Partnership agrees to sell 5,750,000 Firm Units to the several
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase the number of Firm Units set forth opposite that Underwriter's name in
Schedule 1 hereto. The respective purchase obligations of the Underwriters with
respect to the Firm Units shall be rounded among the Underwriters to avoid
fractional shares, as ▇▇▇▇▇▇ Brothers Inc. may determine.
In addition, the Partnership grants to the Underwriters an
option to purchase up to 862,500 Option Units. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Units and is exercisable
as provided in Section 4 hereof. Option Units shall be purchased severally for
the account of the Underwriters in proportion to the number of Firm Units set
forth opposite the names of such Underwriters in Schedule 1 hereto. The
respective purchase obligations of each Underwriter with respect to the Option
Units shall be adjusted by
16
▇▇▇▇▇▇ Brothers Inc. so that no Underwriter shall be obligated to purchase
Option Units other than in 100 Unit amounts.
The price of both the Firm Units and any Option Units shall be
$35.19 per Unit.
The Partnership shall not be obligated to deliver any of the
Units to be delivered on any Delivery Date (as hereinafter defined), as the case
may be, except upon payment for all the Units to be purchased on such Delivery
Date as provided herein.
3. Offering of Units by the Underwriters. Upon authorization
by ▇▇▇▇▇▇ Brothers Inc. of the release of the Firm Units, the several
Underwriters propose to offer the Firm Units for sale upon the terms and
conditions set forth in the Prospectus.
4. Delivery of and Payment for the Units. Delivery of and
payment for the Firm Units shall be made at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇
L.L.P. at 9:00 A.M., Houston, Texas time, on March 18, 2003 or at such other
date or place as shall be determined by agreement between ▇▇▇▇▇▇ Brothers Inc.
and the Partnership. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Partnership shall deliver or
cause to be delivered the Firm Units to ▇▇▇▇▇▇ Brothers Inc. for the account of
each Underwriter in book entry form through the facilities of The Depository
Trust Company ("DTC") against payment to or upon the order of the Partnership of
the purchase price by wire transfer of immediately available funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder.
The option granted in Section 2 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Partnership by ▇▇▇▇▇▇ Brothers Inc.
Such notice shall set forth the aggregate number of Option Units as to which the
option is being exercised, the names in which the Option Units are to be
registered, the denominations in which the Option Units are to be issued and the
date and time, as determined by ▇▇▇▇▇▇ Brothers Inc., when the Option Units are
to be delivered; provided, however, that this date and time shall not be earlier
than the First Delivery Date nor earlier than the second business day after the
date on which the option shall have been exercised nor later than the fifth
business day after the date on which the option shall have been exercised.
The date and time the Option Units are delivered are sometimes
referred to as the "Second Delivery Date," and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date."
Delivery of and payment for the Option Units shall be made at
the place specified in the first sentence of the first paragraph of this Section
4 (or at such other place as shall be determined by agreement between ▇▇▇▇▇▇
Brothers Inc. and the Partnership) at 9:00 A.M., Houston, Texas time, on the
Second Delivery Date. On the Second Delivery Date, the Partnership shall deliver
or cause to be delivered the Option Units to ▇▇▇▇▇▇ Brothers Inc. for the
account of each Underwriter in book entry form through the facilities of the DTC
against payment to or upon the order of the Partnership of the purchase price by
wire transfer of
17
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter.
5. Further Agreements of the Partnership Parties. Each of the
Partnership Parties covenants and agrees with each Underwriter:
(a) Preparation of Prospectus and Registration Statement. (i)
To prepare the Prospectus in a form approved by the Underwriters and to file
such Prospectus pursuant to Rule 424(b) under the Securities Act not later than
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Securities Act; (ii) to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; (iii) to advise the Underwriters,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Underwriters with copies thereof; (iv) to advise the Underwriters promptly after
it receives notice thereof of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus, of the suspension of the qualification of the Units for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information; and (v) in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal.
(b) Exchange Act Reports. To file promptly all reports and any
definitive proxy or information statements required to be filed by the
Partnership with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act ("Exchange Act Reports") subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Units.
(c) Copies of Documents to Underwriters. Prior to 9:00 A.M.,
Houston, Texas time, on the business day next succeeding the date of this
Agreement and from time to time, to deliver to the Underwriters such number of
the following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Units or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act or with a request from the Commission, to
notify the Underwriters immediately thereof and to promptly prepare and, subject
to Section 5(d) hereof, file with the
18
Commission an amended Prospectus or supplement to the Prospectus which will
correct such statement or omission or effect such compliance.
(d) Filing of Amendment or Supplement. To file promptly with
the Commission any amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of the Partnership or
the Underwriters, be required by the Securities Act or the Exchange Act or
requested by the Commission. Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the Underwriters
and counsel for the Underwriters and not to file any such document to which the
Underwriters shall reasonably object promptly after having been given reasonable
notice of the proposed filing thereof unless, in the judgment of counsel to the
Partnership Parties, such filing is required by law.
(e) Copies of Reports. To furnish to the Underwriters, upon
request, for a period of three years from the date of this Agreement, copies of
all reports or other communications (financial or other) furnished to holders of
the Units, provided such documents are not otherwise publicly available via the
Commission's Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇")
and to deliver to the Underwriters, provided such documents are not otherwise
publicly available via ▇▇▇▇▇ (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the
Partnership is listed; and (ii) such additional information concerning the
business and financial condition of the Partnership as the Underwriters may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent they are consolidated in reports furnished to
the holders of the Units or to the Commission).
(f) Blue Sky Laws. Promptly to take from time to time such
actions as the Underwriters may reasonably request to qualify the Units for
offering and sale under the securities or Blue Sky laws of such jurisdictions as
the Underwriters may designate and to continue such qualifications in effect for
so long as required for the resale of the Units; and to arrange for the
determination of the eligibility for investment of the Units under the laws of
such jurisdictions as the Underwriters may reasonably request; provided that no
Partnership Entity shall be obligated to qualify as a foreign limited
partnership, limited liability company or corporation in any jurisdiction in
which it is not so qualified or to file a general consent to service of process
in any jurisdiction.
(g) Earnings Statement. To make generally available to the
Partnership's securityholders and to the Underwriters as soon as practicable an
earnings statement of the Partnership and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the rules and
regulations thereunder (including, at the option of the Partnership, Rule 158).
(h) Lock-up Period; Lock-up Letters. For a period of 90 days
from the date of the Prospectus, not to, directly or indirectly, (i) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any Common Units or securities
19
convertible into, or exchangeable for Common Units, or sell or grant options,
rights or warrants with respect to any Common Units or securities convertible
into or exchangeable for Common Units (other than the grant of options pursuant
to option plans existing on the date hereof), or (ii) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such Common Units, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Units or other securities, in cash or otherwise, in each case
without the prior written consent of ▇▇▇▇▇▇ Brothers Inc. on behalf of the
Underwriters; provided, however, that the foregoing restrictions do not apply
to: (A) the sale of Common Units by the Partnership to the Underwriters in
connection with the public offering contemplated hereby; (B) Common Units to be
issued by the Partnership to non-employee directors as described in the
Prospectus or restricted units, phantom units and options issued under the
employee benefit plan of the Partnership on the date hereof or (C) Common Units
issued pursuant to currently outstanding options, warrants or rights. Each
person listed on Annex I shall furnish to the Underwriters, prior to the First
Delivery Date, a letter or letters, substantially in the form of Exhibit D
hereto, pursuant to which each such person shall agree not to, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter
into any transaction or device that is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any Common
Units or securities convertible into or exchangeable for Common Units or (2)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
Common Units, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Units or other securities, in cash or
otherwise, in each case for a period of 90 days from the date of the Prospectus,
without the prior written consent of ▇▇▇▇▇▇ Brothers Inc. on behalf of the
Underwriters.
(i) NYSE Listing. To apply for the supplemental listing of the
Units on the New York Stock Exchange, and to use its best efforts to complete
that listing, subject only to official notice of issuance, prior to the First
Delivery Date.
(j) Application of Proceeds. To apply the net proceeds from
the sale of the Units as set forth in the Prospectus.
(k) Investment Company. To take such steps as shall be
necessary to ensure that no Partnership Entity shall become an "investment
company" as defined in the Investment Company Act.
6. Expenses. The Partnership agrees to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Units and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of printing and distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), each
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of producing and
distributing this Agreement, any underwriting and selling group documents and
any other related documents in connection with the offering, purchase, sale and
delivery of the Units; (e) the filing fees incident to securing the review, if
applicable, by the National Association of Securities Dealers, Inc. of the terms
of sale of the
20
Units; (f) any applicable listing or other similar fees; (g) the fees and
expenses of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); (h) the
cost of printing certificates representing the Units; (i) the costs and charges
of any transfer agent or registrar; (j) the costs and expenses of the
Partnership relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Units, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Partnership, travel and
lodging expenses of the representatives and officers of the Partnership and any
such consultants; and (k) all other costs and expenses incident to the
performance of the obligations of the Partnership under this Agreement; provided
that, except as provided in this Section 6 and in Section 11 hereof, the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Units which they may sell
and the expenses of advertising any offering of the Units made by the
Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the
Partnership Parties contained herein, to the accuracy of the statements of the
Partnership Parties and the officers of ▇▇▇▇▇▇ ▇▇ made in any certificates
delivered pursuant hereto, to the performance by each of the Partnership Parties
of its obligations hereunder and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with to the reasonable satisfaction of the
Underwriters.
(b) None of the Underwriters shall have discovered and
disclosed to the Partnership on or prior to such Delivery Date that the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Underwriters, is material or
omits to state any fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements therein
not misleading.
(c) All corporate, partnership and limited liability company
proceedings and other legal matters incident to the authorization, form and
validity of this Agreement, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Partnership shall have furnished to such
counsel all documents and information that they or their counsel may reasonably
request to enable them to pass upon such matters.
(d) ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. shall have furnished to the
Underwriters their written opinion, as counsel for the Partnership Parties,
addressed to the Underwriters and dated such
21
Delivery Date, in form and substance reasonably satisfactory to the
Underwriters, substantially to the effect set forth in Exhibit A to this
Agreement.
(e) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have furnished to the Underwriters
his written opinion, as Corporate Secretary and Senior Counsel of ▇▇▇▇▇▇ ▇▇,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Underwriters, substantially to the
effect set forth in Exhibit B hereto.
(f) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have furnished to the Underwriters
her written opinion, as special Texas counsel for the Partnership Parties, and
California local counsel reasonably satisfactory to the Underwriters shall have
furnished to the Underwriters their written opinion, as special California
counsel for the Partnership Parties, both addressed to the Underwriters and
dated such Delivery Date, in form and substance reasonably satisfactory to the
Underwriters, substantially to the effect set forth in Exhibit C to this
Agreement.
(g) The Underwriters shall have received from ▇▇▇▇▇ ▇▇▇▇▇
L.L.P., counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to such matters as the Underwriters may reasonably
require, and the Partnership shall have furnished to such counsel such documents
and information as they may reasonably request for the purpose of enabling them
to pass upon such matters.
(h) At the time of execution of this Agreement, the
Underwriters shall have received from Ernst & Young LLP a letter, in form and
substance satisfactory to the Underwriters, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(i) With respect to the letter of Ernst & Young LLP referred
to in the preceding paragraph and delivered to the Underwriters concurrently
with the execution of this Agreement (the "initial letter"), the Partnership
shall have furnished to the Underwriters a letter (the "bring-down letter") of
such accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
22
(j) The Partnership shall have furnished to the Underwriters a
certificate, dated such Delivery Date, of the chief executive officer and the
chief financial officer of ▇▇▇▇▇▇ ▇▇ stating that (A) such officers have
carefully examined the Registration Statement and the Prospectus, (B) in their
opinion, the Registration Statement, including the documents incorporated
therein by reference, as of the Effective Time, did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, and the Prospectus, including the Incorporated Documents, as of the
date of the Prospectus and as of such Delivery Date, did not and does not
include any untrue statement of a material fact and did not and does not omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and (C)
as of such Delivery Date, the representations and warranties of the Partnership
Parties in this Agreement are true and correct, the Partnership Parties have
complied with all their agreements contained herein and satisfied all conditions
on their part to be performed or satisfied hereunder on or prior to such
Delivery Date, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the best of such officer's knowledge, are contemplated by the
Commission, and subsequent to the date of the most recent financial statements
contained in the Prospectus, there has been no material adverse change in the
financial position or results of operations of the Partnership Entities, taken
as a whole, or any change, or any development involving a prospective material
adverse change, in or affecting the condition (financial or otherwise), results
of operations or business of the Partnership Entities, taken as a whole, except
as set forth in the Prospectus.
(k) If any event shall have occurred on or prior to such
Delivery Date that requires the Partnership under Section 5(d) to prepare an
amendment or supplement to the Prospectus, such amendment or supplement shall
have been prepared, the Underwriters shall have been given a reasonable
opportunity to comment thereon as provided in Section 5(d) hereof, and copies
thereof shall have been delivered to the Underwriters reasonably in advance of
such Delivery Date.
(l) None of the Partnership Entities shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, flood, explosion or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action,
investigation, order or decree, otherwise than as set forth or contemplated in
the Prospectus; nor shall there have been a change in the partners' capital,
members' interests or long-term debt of any of the Partnership Entities or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, net worth or results of
operations of the Partnership Entities, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any case under this
Section 7(l), is, in the judgment of ▇▇▇▇▇▇ Brothers Inc., so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Units being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(m) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of such Delivery Date, prevent the
issuance or sale of the Units; and no injunction, restraining order
23
or order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of such Delivery Date which would prevent
the issuance or sale of the Units.
(n) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market or trading in any securities of the Partnership on
any exchange or in the over-the-counter market shall have been suspended, the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international conditions on
the financial markets in the United States shall be such), as to make it, in the
judgment of ▇▇▇▇▇▇ Brothers Inc., impracticable or inadvisable to proceed with
the public offering or sale of the Units being delivered on such Delivery Date
on the terms and in the manner contemplated by the Prospectus.
(o) The New York Stock Exchange shall have approved the Units
for listing, subject only to official notice of issuance.
(p) The closing of the issuance and sale of the Notes
contemplated by the Purchase Agreement shall occur contemporaneously with the
issuance and sale of the Common Units contemplated by this Agreement.
All such opinions, certificates, letters and documents mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to the Underwriters and to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) Each of the Partnership Parties, jointly and severally,
shall indemnify and hold harmless each Underwriter, its directors, officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Units), to which that Underwriter, director, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in (A) any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (B) any
written or electronically produced materials or information electronically
provided to investors by, or with the approval of, the Partnership in connection
with the marketing of the offering of the Common Units ("Marketing Materials")
24
including any road show or investor presentations made to investors by the
Partnership (whether in person or electronically), (ii) the omission or alleged
omission to state in the Registration Statement, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, (iii) the omission or alleged
omission to state in any Preliminary Prospectus, the Prospectus or in any
amendment or supplement thereto any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or (iv) any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to, the
Units or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i), (ii) or (iii) above (provided that no
Partnership Party shall be liable under this clause (iv) to the extent that it
is determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such director, officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter, director, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that no Partnership
Party shall be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement in or omission or alleged omission from
any such documents in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Partnership through the
Underwriters by or on behalf of any Underwriter specifically for inclusion
therein which information consists solely of the information specified in
Section 8(e); provided, however, that the Partnership Parties shall not be
liable to any Underwriter under the indemnity agreement in this Section 8(a) to
the extent, but only to the extent, that (x) such loss, claim, damage, or
liability of such Underwriter results from an untrue statement of a material
fact or an omission of a material fact contained in the Preliminary Prospectus,
which untrue statement or omission was completely corrected in the Prospectus
and (y) the Partnership had previously furnished sufficient quantities (as
requested by the Underwriters) of the Prospectus to the Underwriters within a
reasonable amount of time prior to such sale or such confirmation and (z) such
Underwriter failed to deliver the Prospectus, if required by law to have so
delivered it, and such delivery would have cured the defect giving rise to such
loss, claim, liability, expense or damage.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless each Partnership Party, their officers and
employees, each of their directors, and each person, if any, who controls the
Partnership Parties within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 8(b) and Section 8(d) as
the Partnership), from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which such person may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, (ii) the
omission or alleged omission to state in the
25
Registration Statement, or any amendment or supplement thereto, any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, or (iii) the omission or alleged omission to state in
any Preliminary Prospectus, the Prospectus or in any amendment or supplement
thereto any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Partnership
through the Underwriters by or on behalf of any Underwriter specifically for
inclusion therein which information consists solely of the information specified
in Section 8(e), and shall reimburse the Partnership for any legal or other
expenses reasonably incurred by the Partnership in connection with investigating
or defending or preparing to defend against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or action as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one
26
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 8(a) and 8(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement, compromise or consent to the entry of any judgment with respect to
any pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
The obligations of the Partnership Parties and the Underwriters in this Section
8 are in addition to any other liability that the Partnership Parties or the
Underwriters, as the case may be, may otherwise have, including in respect of
any breaches of representations, warranties and agreements made herein by any
such party.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Partnership, on the one hand, and the Underwriters, on the other
hand, from the offering of the Units or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Partnership on the one hand and the
Underwriters on the other with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Partnership on the one hand and the Underwriters on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Units purchased under this
Agreement (before deducting expenses) received by the Partnership, on the one
hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the Units purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Units
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Partnership or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Partnership and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 8 were to be
determined by pro rata allocation (even if the Underwriters were treated as
27
one entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage,
liability, or action in respect thereof, referred to above in this Section 8
shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Units
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Partnership
Parties acknowledge that the statements with respect to the public offering of
the Units by the Underwriters set forth on the cover page of the Prospectus
Supplement and the statements in the table in the first paragraph, the
concession and reallowance figures in the fourth paragraph, and the statements
in the seventh, eighth, ninth, tenth, eleventh, fourteenth, fifteenth,
sixteenth, seventeenth, eighteenth, nineteenth and twentieth paragraphs under
the "Underwriting" section of the Prospectus Supplement are correct and
constitute the only information concerning the Underwriters furnished in writing
to the Partnership by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Units which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm Units set opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total number of Firm Units set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Units on such Delivery Date if the total number of Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of Units to be purchased on such Delivery
Date, and any remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the number of the Units which it agreed to purchase
on such Delivery Date pursuant to the terms of Section 2. If the foregoing
maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to ▇▇▇▇▇▇ Brothers Inc. who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Units to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Underwriters do not elect to purchase the Units which the defaulting Underwriter
or Underwriters agreed but failed to purchase on such Delivery Date, this
Agreement (or, with respect to the Second Delivery Date, the obligation of the
Underwriters to
28
purchase, and of the Partnership to sell, the Option Units) shall terminate
without liability on the part of any non-defaulting Underwriter or any
Partnership Party except that the Partnership will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 11. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Units which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Partnership Parties for damages,
including expenses paid by the Partnership pursuant to Sections 6 and 11, caused
by its default. If other underwriters are obligated or agree to purchase the
Units of a defaulting Underwriter, either the non-defaulting Underwriters or the
Partnership may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Partnership
or counsel for the Underwriters may be necessary in the Registration Statement,
the Prospectus or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder
may be terminated by ▇▇▇▇▇▇ Brothers Inc. by notice given to and received by the
Partnership prior to delivery of and payment for the Firm Units if, prior to
that time, any of the events described in Sections 7(m) or (n) shall have
occurred and be continuing or if the Underwriters shall decline to purchase the
Units for any reason permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the
Partnership shall fail to tender the Units for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of any Partnership Party
to perform any agreement on its part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled by
the Partnership Parties (including, without limitation, with respect to the
Transactions) is not fulfilled, the Partnership will reimburse the Underwriters
for all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Units, and upon demand the Partnership shall pay the
full amount thereof to the Underwriters. If this Agreement is terminated
pursuant to Section 9 by reason of the default of one or more Underwriters, the
Partnership shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
12. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: Syndicate Registration Department,
Fax (▇▇▇) ▇▇▇-▇▇▇▇, with a copy, in the case of any notice pursuant to Section
8(c), to the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇
Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; and
(b) if to the Partnership Parties, shall be delivered or sent
by mail or telecopy to ▇▇▇▇▇▇ ▇.▇., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: Secretary.
29
(c) provided, however, that any notice to an Underwriter
pursuant to Section 8(c) shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its acceptance
telex to the Underwriters, which address will be supplied to any other party
hereto by the Underwriters upon request. Any such statements, requests, notices
or agreements shall take effect at the time of receipt thereof. The Partnership
Parties shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc. on
behalf of the Underwriters.
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the
Partnership Parties and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Partnership Parties contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Underwriters contained in Section 8(b) of this Agreement shall
be deemed to be for the benefit of directors, officers, employees and any
controlling persons of the Partnership Parties within the meaning of Section 15
of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
13, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Partnership Parties and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement or any certificate delivered pursuant hereto, shall
survive the delivery of and payment for the Units and shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement or
any investigation made by or on behalf of any of them or any person controlling
any of them.
15. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means any day on which the
New York Stock Exchange, Inc. is open for trading, and (b) "affiliate" and
"subsidiary" have their respective meanings set forth in Rule 405 of the Rules
and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
30
19. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
31
If the foregoing correctly sets forth the agreement among the
Partnership Parties, and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
▇▇▇▇▇▇ ▇.▇.
By: Riverwalk Logistics, L.P., its
general partner
By: Valero, GP, LLC, its
general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive
Officer
RIVERWALK LOGISTICS, L.P.
By: ▇▇▇▇▇▇ ▇▇, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
▇▇▇▇▇▇ ▇▇, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
32
VALERO LOGISTICS OPERATIONS, L.P.
By: ▇▇▇▇▇▇ ▇▇, Inc., its
general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive
Officer
▇▇▇▇▇▇ ▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
33
Accepted:
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
UBS Warburg LLC
Credit Suisse First Boston LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By: ▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
Authorized Representative
34
SCHEDULE 1
▇▇▇▇▇▇ ▇.▇.
Number of Firm
Underwriters Units to be Purchased
------------ ---------------------
▇▇▇▇▇▇ Brothers Inc. 1,437,500
▇▇▇▇▇▇▇, Sachs & Co. 805,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 805,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. 805,000
UBS Warburg LLC 805,000
Credit Suisse First Boston LLC 402,500
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. 402,500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc. 287,500
TOTAL: 5,750,000
=========
EXHIBIT A
FORM OF OPINION OF ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.
1. Each of the Partnership, the Operating Partnership and the
General Partner has been duly formed and is validly existing in good standing as
a limited partnership under the Revised Uniform Limited Partnership Act of the
State of Delaware.
2. ▇▇▇▇▇▇ ▇▇ has been duly formed and is validly existing in
good standing as a limited liability company under the Limited Liability Company
Act of the State of Delaware.
3. The OLP General Partner has been duly incorporated and is
validly existing in good standing as a corporation under the General Corporation
Law of the State of Delaware.
4. Each of the Partnership and the Operating Partnership has
all necessary limited partnership power and authority under the Revised Uniform
Limited Partnership Act of the State of Delaware (i) to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Registration Statement and the Prospectus and (ii) to execute
and deliver the Underwriting Agreement and to perform all of its obligations
thereunder.
5. ▇▇▇▇▇▇ ▇▇ has all necessary limited liability company power
and authority under the Delaware Limited Liability Company Act (i) to own or
lease its properties, to conduct its business and to act as general partner of
the General Partner, in each case in all material respects as described in the
Registration Statement and the Prospectus and (ii) to execute and deliver the
Underwriting Agreement and to perform all of its obligations thereunder.
6. The General Partner has all necessary limited partnership
power and authority under the Revised Uniform Limited Partnership Act of the
State of Delaware (i) to own or lease its properties, to conduct its business
and to act as the general partner of the Partnership, in each case in all
material respects as described in the Registration Statement and the Prospectus
and (ii) to execute and deliver the Underwriting Agreement and to perform all of
its obligations thereunder.
7. The OLP General Partner has all necessary corporate power
and authority under the General Corporation Law of the State of Delaware (i) to
own or lease its properties, to conduct its business and to act as general
partner of the Operating Partnership, in each case in all material respects as
described in the Registration Statement and the Prospectus and (ii) to execute
and deliver the Underwriting Agreement and to perform all of its obligations
thereunder.
8. The General Partner is the sole general partner of the
Partnership with a 2.0% general partner interest in the Partnership, and such
general partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement.
9. As of the date hereof, the issued and outstanding limited
partner interest of the Partnership consists of 9,654,572 Common Units,
9,599,322 Subordinated Units and the Incentive Distribution Rights; such Common
Units, Subordinated Units and Incentive
A-1
Distribution Rights and the limited partner interests represented thereby have
been duly authorized and validly issued in accordance with the Partnership
Agreement and are fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
Section 17-607 of the Delaware LP Act and as described in the Prospectus).
10. The OLP General Partner is the sole general partner of the
Operating Partnership with a 0.01% general partner interest in the Operating
Partnership, and such general partner interest has been duly authorized and
validly issued in accordance with the Operating Partnership Agreement.
11. The Partnership is the sole limited partner of the
Operating Partnership with a 99.99% limited partner interest in the Operating
Partnership; and such limited partner interest has been duly authorized and
validly issued in accordance with the Operating Partnership Agreement and is
fully paid (to the extent required under the Operating Partnership Agreement)
and nonassessable, except as such nonassessability may be affected by matters
described in the Partnership's registration statement on Form S-1 (No.
333-43668) under the caption "The Partnership Agreement--Limited Liability,"
which is incorporated by reference into the Partnership's registration statement
on Form 8-A (File No. 1-16417) (the "Form 8-A").
12. ▇▇▇▇▇▇ ▇▇ is the sole general partner of the General
Partner with a 0.1% general partner interest in the General Partner, and such
general partner interest has been duly authorized and validly issued in
accordance with the General Partner Partnership Agreement.
13. The Underwriting Agreement has been duly authorized and
validly executed and delivered by or on behalf of each of the Partnership
Parties.
14. The Partnership Agreement has been duly authorized,
executed and delivered by the General Partner and is a valid and legally binding
agreement of the General Partner, enforceable against the General Partner in
accordance with its terms; the Operating Partnership Agreement has been duly
authorized, executed and delivered by the General Partner and the Partnership
and is a valid and legally binding agreement of the General Partner and the
Partnership in accordance with its terms; the Redemption Agreement has been duly
authorized, executed and delivered by the Partnership Parties party thereto and
is a valid and legally binding agreement of the respective Partnership Parties
in accordance with its terms; provided that, with respect to each such
agreement, 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 indemnification and an implied covenant of good faith
and fair dealing.
15. The Units to be issued and sold to the Underwriters by the
Partnership pursuant to the Underwriting Agreement and the limited partner
interests represented thereby have been duly authorized by the Partnership under
the Partnership Agreement, and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms of the Underwriting
Agreement, such Units will be validly issued, fully paid (to the extent required
A-2
under the Partnership Agreement) and nonassessable, except as such
nonassessability may be affected by matters described in the Base Prospectus
under the caption "Risk Factors -- A unitholder may not have limited liability
if a state or court finds that we are not in compliance with the applicable
statutes or that unitholder action constitutes control of our business". The
issuance by the Partnership of the Units will not be subject to any preemptive
or similar rights arising under the Partnership Agreement or the Certificate of
Limited Partnership of the Partnership.
16. Neither the execution and delivery on behalf of the
Partnership Parties of the Underwriting Agreement and the other Financing
Documents nor the consummation by the Partnership Parties of the transactions
contemplated thereby, including the issuance and sale of the Units (A)
constituted, constitutes or will constitute a violation of the Formation
Documents (as defined in such counsel's opinion), (B) constituted, constitutes
or will constitute a breach or violation of, or a default (or an event which,
with notice or lapse of time or both, would constitute such a default), under
any Operative Agreement, (C) resulted, results or will result in any violation
of (i) the Applicable Laws (as defined in such counsel's opinion) of the State
of Texas, (ii) the Applicable Laws of the United States of America, (iii) the
Revised Uniform Limited Partnership Act of the State of Delaware, (iv) the
Limited Liability Company Act of the State of Delaware or (v) the General
Corporation Law of the State of Delaware or (D) resulted, results or will result
in the creation of any security interest in, or lien upon, any of the property
or assets of the Partnership Entities, which, in the case of clause (B), (C) or
(D), would reasonably be expected to have a material adverse effect on the
financial condition, business or results of operations of the Partnership, the
Operating Partnership and ▇▇▇▇▇▇-Belvieu LLC, taken as a whole.
17. No Governmental Approval (as defined in such counsel's
opinion), which has not been obtained or taken and is not in full force and
effect, is required to authorize, or is required for, the execution and delivery
by each of the Partnership Parties of the Underwriting Agreement or the
Financing Documents to which it is a party, on the date hereof, or the
incurrence or performance of its obligations thereunder, or the enforceability
of any such Financing Documents against each of the Partnership Parties that is
a party thereto on the date hereof.
18. The statements in the Registration Statement and the
Prospectus under the captions "Tax Considerations," "Description of Common
Units," and "Cash Distributions" insofar as they constitute descriptions of
agreements or refer to statements of law or legal conclusions, fairly summarize
the matters referred to therein in all material respects, subject to the
qualifications and assumptions stated therein.
19. The Units conform in all material respects to the
descriptions thereof contained in the Registration Statement and the Prospectus
under the caption "Description of Common Units."
20. The Registration Statement, as of its effective date, the
Base Prospectus, as of its issue date, and the Prospectus Supplement as of its
issue date, each appeared on its face to be appropriately responsive in all
material respects to the requirements of the Securities Act and the Rules and
Regulations, except, that in each case, we express no opinion as to the
A-3
financial statements, schedules and other financial or statistical data included
therein or excluded therefrom, or the exhibits to the Registration Statement.
Each of the Incorporated Documents filed prior to the date hereof appeared on
its face to be appropriately responsive in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or the rules and regulations promulgated under the Exchange Act, except,
that in each case, we express no opinion as to the financial statements,
schedules and other financial or statistical data included therein or excluded
therefrom, or the exhibits to any of the Incorporated Documents.
21. None of the Partnership Parties is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
22. None of the Partnership Parties is a "public utility
company," or a "holding company," as defined in PUHCA.
23. The Operating Partnership is entitled to exercise the
power of eminent domain in the State of Texas to secure rights-of-way necessary
to operate and maintain each of its common carrier pipelines situated in such
State.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Partnership Entities and the independent public accountants for the Partnership
and the Operating Partnership, your representatives and your counsel at which
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel have not independently
verified and are not passing upon, and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except and to the extent set forth in
paragraph 18 above, no facts have come to such counsel's attention that have led
them to believe that the Registration Statement, including the Incorporated
Documents, as of its effective date, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus,
including the Incorporated Documents, as of its issue date and as of the date
hereof, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, it being understood that such counsel expresses no statement or
belief with respect to (a) the financial statements and related schedules
included therein, including the notes and the auditor's report thereon, (b) the
other information of a financial or statistical nature included in the
Registration Statement or the Prospectus and (c) the exhibits to the
Registration Statement.
In addition, such counsel shall state that they have been
orally advised by the SEC that the Registration Statement was declared effective
under the Securities Act on June 17, 2002. Such counsel have also been orally
advised by the SEC that no stop order suspending the effectiveness of the
Registration Statement has been issued, and based solely on such counsel's
communications with the SEC, to such counsel's knowledge no proceedings for that
purpose have been instituted or are pending or threatened by the SEC. The
Prospectus has been filed pursuant to Rule 424(b) in the manner and within the
time period required by such Rule.
A-4
In rendering such opinion, such counsel may (A) rely in
respect of maters of fact upon certificates of officers and employees of the
Valero Entities and upon information obtained from public officials, (B) assume
that all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the authentic originals thereof, and that the
signatures on all documents examined by them are genuine, (C) state that their
opinion is limited to federal laws, the Delaware LP Act, the Delaware LLC Act,
the DGCL and the laws of the States of Texas and New York, and (D) state that
they express no opinion with respect to state or local taxes or tax statutes to
which any of the limited partners of the Partnership Entities may be subject.
A-5
EXHIBIT B
FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
1. ▇▇▇▇▇▇-Belvieu LLC has been duly formed and is validly
existing in good standing as a limited liability company under the Delaware LLC
Act with all necessary limited liability company power and authority to own or
lease its properties and to conduct its business, in each case in all material
respects as described in the Registration Statement and the Prospectus.
2. Each of the Partnership Parties has been duly registered or
qualified as a foreign limited partnership, foreign limited liability company or
foreign corporation, as the case may be, for the transaction of business under
the laws of each jurisdiction as set forth in Annex I to this opinion.
3. Valero Energy indirectly, through one or more direct or
indirect wholly owned subsidiaries, owns a 100% member interest in ▇▇▇▇▇▇ ▇▇;
such member interest has been duly authorized and validly issued in accordance
with the ▇▇▇▇▇▇ ▇▇ LLC Agreement, and is fully paid (to the extent required
under the ▇▇▇▇▇▇ ▇▇ LLC Agreement and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC Act).
4. The Operating Partnership owns a 50% profits interest and a
49% capital interest in ▇▇▇▇▇▇-Belvieu LLC; such interests have been duly
authorized and validly issued in accordance with the ▇▇▇▇▇▇-Belvieu Agreement
and are fully paid (to the extent required under the ▇▇▇▇▇▇-Belvieu Agreement)
and nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and, to the knowledge of such counsel without
independent investigation, the Operating Partnership owns such member interest
free and clear of all liens, encumbrances, security interests, charges or
claims.
5. To the knowledge of such counsel without independent
investigation, the General Partner owns its general partner interest in the
Partnership free and clear of all liens, encumbrances, security interests,
charges or claims.
6. To the knowledge of such counsel without independent
investigation, UDS Logistics owns the Sponsor Units free and clear of all liens,
encumbrances, security interests, charges or claims.
7. To the knowledge of such counsel without independent
investigation, the OLP General Partner owns its general partner interest in the
Operating Partnership free and clear of all liens, encumbrances, security
interests, charges or claims.
8. To the knowledge of such counsel without independent
investigation, the Partnership owns its limited partner interest in the
Operating Partnership free and clear of all liens, encumbrances, security
interests, charges or claims.
9. To the knowledge of such counsel without independent
investigation, ▇▇▇▇▇▇ ▇▇ owns its general partner interest in the General
Partner free and clear of all liens, encumbrances, security interests, charges
or claims.
B-1
10. To the knowledge of such counsel without independent
investigation, Valero Energy through one or more direct or indirect wholly owned
subsidiaries owns is membership interest in ▇▇▇▇▇▇ ▇▇ free and clear of all
liens, encumbrances, security interests, charges or claims.
11. To such counsel's knowledge, 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 any of its subsidiaries,
other than as provided in the Prospectus and the Partnership Agreement or as
have been waived.
12. Each of the Partnership Parties has all necessary
corporate, limited liability company or partnership power and authority to
execute and deliver the Asset Documents to which each of them is a party.
13. The Asset Documents have been duly authorized, executed
and delivered by the parties thereto, and are valid and legally binding
agreements of the parties thereto, enforceable against them, in accordance with
their terms; provided that, with respect to each such agreement, 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
indemnification and an implied covenant of good faith and fair dealing.
14. Neither the execution and delivery on behalf of the
Partnership Parties of the Underwriting Agreement and the other Transaction
Documents nor the consummation by the Partnership Parties of the transactions
contemplated thereby, including the issuance and sale of the Units (A)
constituted, constitutes or will constitute a violation of the certificate of
limited partnership, agreement of limited partnership, certificate of formation,
limited liability company agreement, certificate or articles of incorporation or
bylaws or other organizational documents of any of the Valero Entities and, with
respect to the Asset Documents and the consummation of the transactions
contemplated thereby, the certificate of limited partnership, agreement of
limited partnership, certificate of formation, limited liability company
agreement, certificate or articles of incorporation or bylaws or other
organizational documents of any of the Partnership Entities, (B) constituted,
constitutes or will constitute a breach or violation of, or a default under (or
an event which, with notice or lapse of time or both, would constitute such a
default), any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which any of the Partnership Entities or Valero
Entities is a party or by which any of them or any of their respective
properties may be bound, (C) resulted, results or will result in any violation
of any statute, law or regulation or any order, judgment, decree or injunction
of any court or governmental agency or body directed to any of the Partnership
Entities or Valero Entities or any of their properties in a proceeding to which
any of them or their property is a party or (D) resulted, results or will result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of any of the Valero Entities and, with respect to the Asset
Documents and the transactions contemplated thereby, the Partnership Entities,
which breaches, violations or defaults, in the case of clauses (B), (C) or (D),
would, individually or in the
B-2
aggregate, have a material adverse effect on the financial condition, business
or results of operations of the Partnership, the Operating Partnership and
▇▇▇▇▇▇-Belvieu, taken as a whole.
15. No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any federal,
Delaware or Texas court, governmental agency or body is required for the
execution, delivery and performance by each of the Partnership Parties of this
Agreement or the Transaction Documents to which it is a party, the offering,
issuance and sale of the Units (i) for such consents required under the
Securities Act, the Exchange Act and state securities or "Blue Sky" laws, as to
which such counsel need not express any opinion, (ii) for such consents which
have been obtained or made, (iii) for such consents which, if not obtained,
would not, individually or in the aggregate, have a material adverse effect on
the financial condition, business or results of operations of the Partnership
and the Operating Partnership and ▇▇▇▇▇▇-Belvieu LLC, taken as a whole, or (iv)
as disclosed in the Prospectus.
16. To the knowledge of such counsel after due inquiry, none
of the Partnership Parties is in (i) violation of its certificate or agreement
of limited partnership, certificate of formation, limited liability company
agreement, certificate or articles of incorporation or bylaws or other
organizational documents, or (ii) violation of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it or of any
decree of any court or governmental agency or body having jurisdiction over it,
or in breach, default (or an event which, with notice or lapse of time or both,
would constitute such a default) or violation in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any agreement, indenture, lease or other
instrument to which it is a party or by which it or any of its properties may be
bound, which violation or breach, default or violation would, if continued, have
a material adverse effect on the financial condition, business or results of
operations of the Partnership, the Operating Partnership and ▇▇▇▇▇▇-Belvieu LLC,
taken as a whole, or could materially impair the ability of any of the
Partnership Parties to perform their obligations under the Transaction
Documents.
17. To the knowledge of such counsel after due inquiry, each
of the Partnership Entities has such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory authorities
("permits") as are necessary to own its properties and to conduct its business
in the manner described in the Prospectus, subject to such qualifications as may
be set forth in the Prospectus and except for such permits which, if not
obtained, would not, individually or in the aggregate, have a material adverse
effect upon the ability of the Partnership, the Operating Partnership and
▇▇▇▇▇▇-Belvieu LLC, taken as a whole, to conduct their businesses in all
material respects as currently conducted or as contemplated by the Prospectus to
be conducted; and, to the knowledge of such counsel after due inquiry, none of
the Partnership Entities has received any notice of proceedings relating to the
revocation or modification of any such permits which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to have a material adverse effect upon the ability of the
Partnership, the Operating Partnership and ▇▇▇▇▇▇-Belvieu LLC, taken as a whole,
to conduct their businesses in all material respects as currently conducted or
as contemplated by the Prospectus to be conducted.
18. Except as described in the Prospectus, there is no
litigation, proceeding or governmental investigation pending or, to the
knowledge of such counsel after due inquiry,
B-3
threatened against any of the Partnership Entities or to which any of the
Partnership Entities is a party or to which any of their respective properties
is subject, which, if adversely determined to such Partnership Entities, would
reasonably be expected to have a material adverse effect on the financial
condition, business or results of operations of the Partnership, the Operating
Partnership and ▇▇▇▇▇▇-Belvieu LLC, taken as a whole.
19. There are no legal or governmental proceedings pending or,
to the knowledge of such counsel, threatened against any of the Partnership
Entities or to which any of the Partnership Entities is a party or to which any
of their respective properties is subject that are required to be described in
the Prospectus but are not so described as required and (B) there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not described or filed as
required by the Securities Act.
In addition, such counsel shall state that he has participated
in conferences with officers and other representatives of the Partnership
Entities and the independent public accountants of the Partnership and your
representatives, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although such counsel has not
independently verified, is not passing on, and is not assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Registration Statement and the Prospectus, no facts have come
to such counsel's attention that lead such counsel to believe that the
Registration Statement, including the Incorporated Documents (other than (i) the
financial statements and related schedules included therein, including the notes
thereto and auditor's report thereon, (ii) the other information of a financial
or statistical nature included in the Registration Statement, and (iii) the
exhibits thereto, as to which such counsel need not comment), as of its
effective date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, including the
Incorporated Documents (other than (i) the financial statements and related
schedules included therein, including the notes thereto and auditor's report
thereon, (ii) the other information of a financial or statistical nature
included in the Prospectus, and (iii) the exhibits thereto, as to which such
counsel need not comment), as of its issue date and as of the Closing Date
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in
respect of matters of fact upon certificates of officers and employees of the
Valero Entities and upon information obtained from public officials, (B) assume
that all documents submitted to her as originals are authentic, that all copies
submitted to her conform to the originals thereof, and that the signatures on
all documents examined by him are genuine, (C) state that his opinion is limited
to federal laws, the Delaware LP Act, the Delaware LLC Act, the DGCL and the
laws of the State of Texas and (D) state that he expresses no opinion with
respect to state or local taxes or tax statutes to which any of the limited
partners of the Partnership Entities may be subject.
B-4
EXHIBIT C
FORM OF LOCAL COUNSEL OPINION
1. Each of the Partnership Entities [AS APPLICABLE] has been
duly qualified or registered as a foreign limited partnership, foreign limited
liability company or foreign corporation, as the case may be, for the
transaction of business under the laws of [STATE].
2. Each of the Partnership Entities [AS APPLICABLE] has all
requisite corporate, limited liability company or limited partnership power and
authority under the laws of the State of [STATE] to own or lease its properties
and to conduct its business in the State of [STATE], in each case in all
material respects as described or otherwise disclosed in the Prospectus; and
upon the consummation of the Transactions, the Partnership will not be liable
under the laws of the State of [STATE] for the liabilities of the Operating
Partnership or the Operating Subsidiaries and the holders of Units will not be
liable under the laws of the State of [STATE] for the liabilities of the
Partnership, the Operating Partnership or the Operating Subsidiaries except in
each case to the same extent as such liability would exist under the laws of the
State of Delaware.
3. No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any court,
governmental agency or body of the State of [STATE] having jurisdiction over the
Partnership Entities or any of their respective properties is required for (i)
the offering, issuance and sale of the Units by the Partnership and the use of
such proceeds as described in the Prospectus, (ii) the execution, delivery and
performance by the Partnership Parties of the Underwriting Agreement, and the
performance by such entities of their obligations under the Underwriting
Agreement to which they are a party, or (iii) the consummation of the
Transactions, including the conveyance of the properties located in the State of
[STATE] purported to be conveyed to the [APPLICABLE PARTNERSHIP ENTITY(IES)]
pursuant to the Transaction Documents, except (A) for such consents required
under state securities or "Blue Sky" laws, as to which we express no opinion,
(B) for such consents which have been obtained or made, (C) for such consents
which, if not obtained or made, would not, individually or in the aggregate,
have a material adverse effect upon the operations conducted in the State of
[STATE] by the Partnership Entities, including such consents 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 (III) are expected in the reasonable judgment of the
General Partner to be obtained or made in the ordinary course of business
subsequent to the consummation of the Transactions, or (D) as disclosed in the
Prospectus.
4. Each of the Conveyances relating to the transfer of
property in the State of [STATE], assuming the due authorization, execution and
delivery thereof by the parties thereto, to the extent it is a valid and legally
binding agreement under the laws of the State of Texas and that such law applies
thereto, is a valid and legally binding agreement of the parties thereto under
the laws of the State of [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 Conveyances is in a form legally sufficient as between the parties
thereto to convey to the
C-1
transferee thereunder all of the right, title and interest of the transferor
stated therein in and to the properties located in the State of [STATE], as
described in the Conveyances, subject to the conditions, reservations and
limitations contained in the Conveyances, except motor vehicles or other
property requiring conveyance of certificated title as to which the Conveyances
are legally sufficient to compel delivery of such certificated title.
5. To the knowledge of such counsel after due inquiry, each of
the Partnership Entities [AS APPLICABLE] has such permits, consents, licenses,
franchises, certificates and authorizations of governmental or regulatory
authorities ("Permits") of the State of [STATE] as are necessary to own its
properties and to conduct its business in the State of [STATE] in the manner
described in the Prospectus, subject to such qualifications as may be set forth
in the Prospectus and except for such Permits which, if not obtained, would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the condition (financial or otherwise), business, assets or
results of operations of the Partnership Entities, taken as a whole and, to the
knowledge of such counsel after due inquiry, none of the Partnership Entities
has received any notice of proceedings relating to the revocation or
modification of any such Permits which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), business, assets or results of operations of the Partnership
Entities, taken as a whole.
6. Each of the Conveyances transferring real property
(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 the State of [STATE], to the extent such recordation is required to
constitute notice to third parties that title to the properties covered thereby
is in the Operating Partnership, and, upon proper recordation of the applicable
Conveyances in the State of [STATE], will constitute notice to all third parties
under the recordation statutes of the State of [STATE] concerning record title
to the assets covered thereby. Recordation in the office of the County Clerk of
each county in which each of the Operating Partnership owns property is the
appropriate public office in the State of [STATE] for the recordation of deeds,
assignments and other evidences of title evidencing interests in real property
located in such county.
In addition, such counsel shall state that (A) his opinion is
limited to the laws of the State of [STATE], excepting therefrom municipal and
local ordinances and regulations, and (B) that he intends to express no opinion
with respect to state or local taxes or tax statutes to which any of the limited
partners of the Partnership or any of the Partnership Entities may be subject.
C-2
EXHIBIT D
FORM OF LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇ Brothers Inc. March 12, 2003
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
UBS Warburg LLC
Credit Suisse First Boston LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
? ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned understands that you, as underwriters (the "Underwriters"),
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
with the Partnership Parties providing for the purchase by you and such other
Underwriters of common units, each representing a limited partner interest (the
"Common Units") in the Partnership, and that the Underwriters propose to reoffer
the Common Units to the public (the "Offering"). Capitalized terms used but not
defined herein have the meanings given to them in the Underwriting Agreement.
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of ▇▇▇▇▇▇
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
Common Units (including, without limitation, Common Units that may be deemed to
be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and Common Units that may
be issued upon exercise of any option or warrant) or securities convertible into
or exchangeable for Common Units owned by the undersigned on the date of
execution of this Lock-up Letter Agreement or on the date of the completion of
the Offering, or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such Common Units, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Units or other
securities, in cash or otherwise, for a period of 90 days from the date of the
Prospectus.
In furtherance of the foregoing, the Partnership and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
D-1
It is understood that, if the Partnership notifies you that it does not intend
to proceed with the Offering, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
that survive termination) shall terminate or be terminated prior to payment for
and delivery of the Common Units, the undersigned will be released from
[HIS/HER] obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Partnership and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to an
Underwriting Agreement, the terms of which are subject to negotiation between
the Partnership and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Lock-Up Letter Agreement and that, upon
request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the [HEIRS AND PERSONAL REPRESENTATIVES] (FOR INDIVIDUALS)
[SUCCESSORS AND ASSIGNS] (FOR NONNATURAL PERSONS) of the undersigned.
Yours very truly,
D-2
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