EXHIBIT 1.1
PLAINS ALL AMERICAN PIPELINE, L.P.
3,750,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
May 24, 2001
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Plains All American Pipeline, L.P., a Delaware limited partnership
(the "Partnership"), proposes to issue and sell an aggregate of 3,750,000 common
units (the "Firm Units") representing limited partner interests in the
Partnership (the "Common Units") to you (the "Underwriter"), upon the terms and
conditions set forth in Section 2 hereof. The Partnership also proposes to sell
to the Underwriter, upon the terms and conditions set forth in Section 2 hereof,
up to an additional 562,500 Common Units (the "Additional Units"). The Firm
Units and the Additional Units are hereinafter collectively referred to as the
"Units."
Plains All American Inc., a Delaware corporation (the "General
Partner"), is the general partner (the "General Partner") of each of the
Partnership, Plains Marketing, L.P., a Delaware limited partnership ("Plains
Marketing"), and All American Pipeline, L.P., a Texas limited partnership ("All
American"). Plains Marketing owns a 100% membership interest in Plains
Marketing Canada LLC, a Delaware limited liability company ("PMC LLC"), and a
99.99% interest in Plains Marketing Canada, L.P., an Alberta limited partnership
("PMC LP"). PMC LLC owns 100% of the issued and outstanding share capital of
PMC (Nova Scotia) Company, a Nova Scotia unlimited liability company ("PMC NS").
PMC NS owns a 0.01% general partner interest in PMC LP. Plains Marketing, All
American, PMC LLC, PMC LP and PMC NS are collectively referred to herein as the
"Subsidiaries." The General Partner owns all 1,307,190 of the outstanding Class
B Common Units (the "Class B Units") representing limited partnership interests
in the Partnership. Plains Resources Inc., a Delaware corporation ("Plains
Resources"), owns all of the issued and outstanding stock of the General
Partner. PAAI LLC, a Delaware limited liability company ("PAAI LLC"), is a
wholly owned subsidiary of the General Partner, and owns all 10,029,619 of the
outstanding subordinated limited partner interests of the Partnership (the
"Subordinated Units") and 6,791,816 Common Units representing limited partner
interests in the Partnership. The Partnership, the General Partner, PAAI LLC,
Plains Marketing and All American are collectively referred to herein as the
"Plains Parties."
The Plains Parties wish to confirm as follows their agreement with you
in connection with the purchase of the Units by the Underwriter.
1. Registration Statement and Prospectus. The Partnership has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act (Commission File No.
333-59224) (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 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 on or in the form in which it has been most
recently filed with the Commission on or prior to the date of this Agreement.
"Final 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
Act ("Rule 424(b)") after the date and time this Agreement is executed and
delivered by the parties hereto, together with the Basic Prospectus.
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 or the Final 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 or the Final
Prospectus, as the case may be; any reference in this Agreement to the
Registration Statement, the Basic Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of the
Registration Statement, the Basic Prospectus or the Final Prospectus, as the
case may be; and any reference to any amendment or supplement to the
Registration Statement, the Basic Prospectus or the Final Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (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 or the Final Prospectus or any amendment or supplement
thereto.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Partnership agrees to sell to the
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Underwriter, and the Underwriter agrees to purchase from the Partnership, at a
purchase price of $24.943 per Unit, 3,750,000 Firm Units.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Partnership hereby grants
an option to the Underwriter to purchase up to 562,500 Additional Units at the
same purchase price per Unit as the Underwriter shall pay for the Firm Units.
Said option may be exercised in whole or in part at any time and from time to
time on or before the 30th day after the date of the Final Prospectus upon
written or telegraphic notice by the Underwriter to the Partnership setting
forth the number of Additional Units as to which the Underwriter is exercising
the option and the settlement date.
3. Delivery and Payment. Delivery of and payment for the Firm Units
and the Additional Units (if the option provided for in Section 2(b) hereof
shall have been exercised on or before the third business day prior to the
Closing Date) shall be made at 10:00 AM, New York City time, on May 31, 2001, or
at such time on such later date not more than three business days after the
foregoing date as the Underwriter shall designate, which date and time may be
postponed by agreement between the Underwriter and the Partnership (such date
and time of delivery and payment for the Units being herein called the "Closing
Date"). Delivery of the Units shall be made to the Underwriter against payment
by the Underwriter of the purchase price thereof to or upon the order of the
Partnership by wire transfer payable in same-day funds to an account specified
by the Partnership. Delivery of the Firm Units and the Additional Units shall
be made through the facilities of The Depository Trust Company unless the
Underwriter shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third business day prior to the Closing Date, the Partnership will deliver
the Additional Units (at the expense of the Partnership) to ▇▇▇▇▇▇▇, Sachs &
Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the date (an "Option Closing
Date") specified by the Underwriter (which shall be within three business days
after each exercise of said option), against payment by the Underwriter of the
purchase price thereof to or upon the order of the Partnership by wire transfer
payable in same-day funds to an account specified by the Partnership. If
settlement for the Additional Units occurs after the Closing Date, the
Partnership will deliver to the Underwriter on the settlement date for the
Additional Units, and the obligation of the Underwriter to purchase the
Additional Units shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 8 hereof.
4. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Units for sale to the public as set forth in the Final
Prospectus.
5. Agreements of the Plains Parties. Each of the Plains Parties,
jointly and severally, agrees with the Underwriter as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Units may commence, the
Partnership and the General Partner will endeavor to cause the Registration
Statement or such post-effective amendment to become effective as
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soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing when the Registration Statement or such post-
effective amendment has become effective.
(b) The Partnership will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, the Basic Prospectus
or the Final Prospectus or for additional information; (ii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Units for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (e)
below, of any change in the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Plains Parties, taken as a
whole, or of the happening of any event which makes any statement of a material
fact made in the Registration Statement or the Final Prospectus (as then amended
or supplemented) untrue or which requires the making of any additions to or
changes in the Registration Statement or the Final Prospectus (as then amended
or supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Final Prospectus (as then amended or supplemented) to comply with the Act or
any other applicable law. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the
Partnership and the General Partner will make every commercially reasonable
effort to obtain the withdrawal of such order at the earliest possible time.
(c) The Partnership will furnish to you, without charge, (i) one copy
of the manually signed copy of the registration statement corresponding to the
▇▇▇▇▇ version filed with the Commission and of each amendment thereto, including
financial statements and all exhibits to the registration statement, (ii) such
number of conformed copies of the registration statement as originally filed and
of each amendment thereto, but without exhibits, as you or your counsel may
reasonably request, (iii) such number of copies of the Incorporated Documents,
without exhibits, as you may request, and (iv) such number of copies of the
exhibits to the Incorporated Documents as you may request.
(d) The Partnership will not
(i) file any amendment to the Registration Statement or make any
amendment or supplement to the Final Prospectus or
(ii) within the time period specified in (e) below, file any
information, documents or reports which, upon filing become Incorporated
Documents,
of which you shall not previously have been advised or to which you or your
counsel shall reasonably object in writing after being so advised unless the
Partnership shall have determined based on the advice of counsel that such
amendment or supplement is required by law.
(e) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriter a
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prospectus is required by the Act to be delivered in connection with sales by
the Underwriter or dealer, the Partnership will expeditiously deliver to the
Underwriter and each dealer that you may specify, without charge, as many copies
of the Final Prospectus (and of any amendment or supplement thereto) as you may
reasonably request. At any time after nine months after the time of issuance of
the Final Prospectus, upon request, but at your expense, the Partnership will
deliver as many copies of an amended or supplemented Final Prospectus complying
with Section 10(a)(3) of the Act as you may reasonably request, provided that a
prospectus is required by the Act to be delivered in connection with sales of
Units by the Underwriter or dealer. The Partnership consents to the use of the
Final Prospectus (and of any amendment or supplement thereto) in accordance with
the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Units are offered by the Underwriter and by all
dealers to whom Units may be sold, both in connection with the offering and sale
of the Units and for such period of time thereafter as the Final Prospectus is
required by the Act to be delivered in connection with sales by the Underwriter
or any dealer. If during such period of time any event shall occur that in the
judgment of the Partnership or in the opinion of counsel for the Underwriter and
the Partnership is required to be set forth in the Final Prospectus (as then
amended or supplemented) or should be set forth therein in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the Final
Prospectus (or to file under the Exchange Act any document which, upon filing,
becomes an Incorporated Document) to comply with the Act or any other law, the
Partnership will forthwith prepare and, subject to the provisions of paragraph
(d) above, file with the Commission an appropriate supplement or amendment
thereto (or to such document), and will expeditiously furnish to the Underwriter
and dealers a reasonable number of copies thereof; provided that, if any such
event necessitating a supplement or amendment to the Final Prospectus occurs at
any time after nine months after the time of issuance of the Final Prospectus,
such supplement or amendment shall be prepared at your expense. In the event
that the Partnership and you agree that the Final Prospectus should be amended
or supplemented, the Partnership, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the proposed
amendment or supplement unless the Partnership shall have determined, based on
the advice of counsel, that the issuance of such press release would not be
required by law.
(f) The Partnership and the General Partner will cooperate with you
and with counsel for the Underwriter in connection with the registration or
qualification of the Units for offering and sale by the Underwriter and by
dealers under the securities or Blue Sky laws of such jurisdictions as you may
reasonably designate and will file such consents to service of process or other
documents reasonably necessary or appropriate in order to effect such
registration or qualification; provided that in no event shall any Plains Party
be obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to service of process
in suits, other than those arising out of the offering or sale of the Units, in
any jurisdiction where it is not now so subject.
(g) The Partnership will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
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(h) During the period of two years hereafter, the Partnership will
furnish or make available to you (i) as soon as publicly available, a copy of
each report of the Partnership mailed to unitholders or filed with the
Commission or the principal national securities exchange or automated quotation
system upon which the Units may be listed, and (ii) from time to time such other
information concerning the Partnership as you may reasonably request.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than by notice given by
you terminating this Agreement pursuant to Section 10 or Section 11 hereof) or
if this Agreement shall be terminated by the Underwriter because of any failure
or refusal on the part of any of the Plains Parties to comply with the terms or
fulfill any of the conditions of this Agreement, the Plains Parties, jointly and
severally, agree to reimburse the Underwriter for all reasonable out-of-pocket
expenses (including reasonable fees and expenses of counsel for the Underwriter)
incurred by you in connection herewith.
(j) The Partnership and the Subsidiaries will apply the net proceeds
from the sale of the Units in accordance with the description set forth under
the caption "Use of Proceeds" in the Final Prospectus.
(k) The Partnership will timely file the Final Prospectus pursuant to
Rule 424(b) under the Act and will advise you of the time and manner of such
filing.
(l) Except as provided in this Agreement, the Plains Parties will not
(i) offer, sell, contract to sell or otherwise dispose of or hedge any Common
Units or any securities (other than Subordinated Units) that are convertible
into, or exercisable or exchangeable for, or that represent the right to
receive, in each case, within 90 days after the date of the Final Prospectus,
Common Units or any securities that are senior to or pari passu with Common
Units (other than transfers of Units to affiliates of the Plains Parties and the
issuance of Common Units upon the vesting of any Restricted Units or Phantom
Units as a result of the transactions contemplated by the Unit Transfer and
Contribution Agreement, dated as of May 8, 2001, among Kafu Holdings, LLC, PAAI
LLC, Plains Resources and the General Partner, the Unit Transfer and
Contribution Agreement, dated as of May 8, 2001, among Sable Investments, L.P.,
Sable Holdings, L.P., PAAI LLC, Plains Resources, the General Partner and ▇▇▇▇▇
▇. ▇▇▇▇▇▇, as Guarantor and the Unit Transfer and Contribution Agreement, dated
as of May 8, 2001, among E-Holdings III, L.P., PAAI LLC, Plains Resources and
the General Partner, and the related documents and exhibits (collectively,
together with any other unit transfer agreements entered into in connection with
such transactions, the "Unit Transfer Agreements")), or (ii) grant any options
or warrants to purchase Common Units (other than the grant of Unit Options or
Restricted Units pursuant to the Plains All American Inc. 1998 Long-Term
Incentive Plan), for a period of 90 days after the date of the Final Prospectus
without your prior written consent, except for the issuance of Units pursuant to
this Agreement and the issuance of Common Units pursuant to Section 5.7(b) of
the Second Amended and Restated Agreement of Limited Partnership of the
Partnership (as the same may be amended or restated prior to the Closing Date,
the "Partnership Agreement").
(m) Except as stated in this Agreement and the Final Prospectus, the
Plains Parties have not taken, and will not take, directly or indirectly, any
action designed to or that
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might reasonably be expected to cause or result in stabilization or manipulation
of the price of the Common Units to facilitate the sale or resale of the Units.
(n) Each of the Plains Parties will take such steps as shall be
necessary to ensure that none of them shall become an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder.
(o) Upon the issuance of the Units by the Partnership, the General
Partner shall make the additional capital contributions to the Partnership as
required by Section 5.2(b) Partnership Agreement.
(p) The Partnership, during the period when the Final Prospectus is
required to be delivered under the Act, will file all documents required to be
filed with the Commission pursuant to the Exchange Act within the time periods
required by the Exchange Act.
6. Representations and Warranties of the Plains Parties. The Plains
Parties, jointly and severally, represent and warrant to the Underwriter that:
(a) The Partnership and the offering of the Units contemplated by this
Agreement meet the requirements for using S-3 under the Act. The Basic
Prospectus included as part of the Registration Statement as originally filed or
as part of any amendment or supplement thereto at the date of filing thereof
with the Commission, complied in all material respects with the requirements of
the Act and did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The Commission has not issued any order preventing
or suspending the use of the Basic Prospectus. The Registration Statement in
the form in which it became or becomes effective and also in such form as it may
be when any post-effective amendment thereto shall become effective and the
Final Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act complied or will comply in all
material respects with the provisions of the Act and did not or will not at any
such times 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. Each of the statements made by the Partnership in such
documents within the coverage of Rule 175(b) of the rules and regulations under
the Act, including (but not limited to) any statements with respect to future
available cash or future cash distributions of the Partnership or the
anticipated ratio of taxable income to distributions was made or will be made
with a reasonable basis and in good faith. Notwithstanding the foregoing, no
representation or warranty is made as to statements in or omissions from the
Registration Statement or the Final Prospectus made in reliance upon and in
conformity with information furnished to the Partnership in writing by or on
behalf of the Underwriter through you expressly for use therein.
(b) 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
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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.
(c) Each of the Partnership and Plains Marketing 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
full partnership power and authority to own or lease its properties and to
conduct its business, in each case in all material respects as described in the
Registration Statement and the Final Prospectus. Each of the Partnership and
Plains Marketing 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 condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership
and the Subsidiaries, taken as a whole, or (ii) subject the limited partners of
the Partnership to any material liability or disability.
(d) All American has been duly formed and is validly existing in good
standing as a limited partnership under the Texas Revised Uniform Limited
Partnership Act (the "Texas LP Act") with full partnership power and authority
to own or lease its properties and to conduct its business, in each case in all
material respects as described in the Registration Statement and the Final
Prospectus. All American 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 condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership and
the Subsidiaries, taken as a whole or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(e) The General Partner has been duly incorporated and is validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own or lease its properties, to conduct its
business and to act as general partner of the Partnership, Plains Marketing and
All American, in each case in all material respects as described in the
Registration Statement and the Final Prospectus. The 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 on the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Partnership and the Subsidiaries, taken as a whole,
or the General Partner or (ii) subject the limited partners of the Partnership
to any material liability or disability.
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(f) Each of PAAI LLC and PMC 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 full 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 Final Prospectus. Each of PAAI LLC and PMC 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 on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership and
the Subsidiaries, taken as a whole or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(g) PMC NS has been duly formed and is validly existing in good
standing as an unlimited liability company under the laws of Nova Scotia with
full corporate power and authority to own or lease its properties, to conduct
its business and to act as general partner of PMC LP. PMC NS is duly registered
extra-provincially 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 condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Partnership and the Subsidiaries, taken as a whole or (ii)
subject the limited partners of the Partnership to any material liability or
disability.
(h) PMC LP has been duly formed and is validly existing in good
standing as a limited partnership under the laws of Alberta with full
partnership power and authority to own or lease its properties and to conduct
its business, in each case in all material respects as described in the
Registration Statement and the Final Prospectus. PMC LP is duly registered 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 condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership and
the Subsidiaries, taken as a whole, or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(i) The General Partner is the sole general partner of the
Partnership, with a 1% general partner interest in the Partnership; such general
partner interest has been duly authorized and validly issued in accordance with
the Partnership Agreement; the General Partner owns all of the Incentive
Distribution Rights and all of the Class B Units; such Incentive Distribution
Rights and Class B Units are 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 under the caption "The Partnership
Agreement--Limited Liability" in the Partnership's Registration Statement on
Form S-1 (No. 333-64107) which is incorporated by reference into the
Partnership's Registration Statement on Form 8-A/A (File No. 001-14569) (the
"Form 8-A")); and the General Partner owns such general partner interest,
Incentive Distribution
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Rights and Class B Units free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except as contemplated by the Unit
Transfer Agreements.
(j) PAAI LLC owns 6,791,816 Common Units and 10,029,619 Subordinated
Units (the "Sponsor Units"); all of such Sponsor Units 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 Form 8-A); and PAAI
LLC owns such Sponsor Units free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except as contemplated by the Unit
Transfer Agreements.
(k) At the Closing Date, there will be issued to the Underwriter the
Firm Units (assuming no purchase by the Underwriter of Additional Units); at the
Closing Date or at any Option Closing Date, as the case may be, the Firm Units
or the Additional Units, as the case may be, and the limited partner interests
represented thereby will be duly authorized by the Partnership Agreement and,
when issued and delivered to the Underwriters against payment therefor 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 matters described in the Form 8-A); as
of the date hereof, there are 16,257,423 Common Units (other than those which
are Sponsor Units) outstanding; all outstanding Common Units (other than those
which are Sponsor Units) and the limited partner interests represented thereby
have been duly authorized and validly issued in accordance with 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 Form 8-A); upon consummation of the transactions
contemplated in the Unit Transfer Agreements no more than an aggregate of
250,000 Restricted Units, Phantom Units and Common Units will become vested.
(l) The General Partner is the sole general partner of Plains
Marketing with a 1.0101% general partner interest in Plains Marketing; such
general partner interest has been duly authorized and validly issued in
accordance with the Amended and Restated Agreement of Limited Partnership of
Plains Marketing (the "Plains Marketing Partnership Agreement"); and the General
Partner owns such general partner interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims, except as
contemplated by the Unit Transfer Agreements.
(m) The General Partner is the sole general partner of All American
with a .001% general partner interest in All American; such general partner
interest has been duly authorized and validly issued in accordance with the
Amended and Restated Agreement of Limited Partnership of All American (the "All
American Partnership Agreement"); and the General Partner owns such general
partner interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except as contemplated by the Unit Transfer
Agreements.
(n) PMC NS is the sole general partner of PMC LP with a 0.01% general
partner interest in PMC LP; such general partner interest has been duly
authorized and validly
10
issued in accordance with the Agreement of Limited Partnership of PMC LP (the
"PMC LP Partnership Agreement" and, together with the Partnership Agreement, the
Plains Marketing Partnership Agreement and the All American Partnership
Agreement, the "Partnership Agreements"); and PMC NS owns such general partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims, except as provided in the Amended and Restated
Credit Agreement [Revolving Credit Facility] dated as of May 4, 2001 among All
American, Plains Marketing and the Partnership and the lenders named therein
(the "Plains Bank Credit Agreement") and the Amended and Restated Credit
Agreement [Letter of Credit and Hedged Inventory Facility] dated as of May 4,
2001 among All American, Plains Marketing and the Partnership and the lenders
named therein (the "Plains Letter of Credit Facility").
(o) The Partnership is the sole limited partner of Plains Marketing
with a 98.9899% limited partner interest in Plains Marketing; such limited
partner interest has been duly authorized and validly issued in accordance with
the Plains Marketing Partnership Agreement and is fully paid (to the extent
required under the Plains Marketing Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in 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,
except as provided in the Plains Bank Credit Agreement and the Plains Letter of
Credit Facility.
(p) Plains Marketing is the sole limited partner of All American with
a 99.999% limited partner interest in All American; such limited partner
interest has been duly authorized and validly issued in accordance with the All
American Partnership Agreement and is fully paid (to the extent required under
the All American Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 6.07 of the Texas LP Act); and
Plains Marketing owns such limited partner interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims, except as
provided in the Plains Bank Credit Agreement and the Plains Letter of Credit
Facility.
(q) Plains Marketing is the sole limited partner of PMC LP with a
99.99% interest in PMC LP; such interest has been duly authorized and validly
issued in accordance with the PMC LP Partnership Agreement and is fully paid (to
the extent required under the PMC LP Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in the PMC
LP Partnership Agreement); and, other than as disclosed in the Final Prospectus,
Plains Marketing owns such limited partner interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims, except as
provided in the Plains Bank Credit Agreement and the Plains Letter of Credit
Facility.
(r) Plains Resources owns 100% of the issued and outstanding capital
stock of the General Partner; such capital stock has been duly authorized and
validly issued and is fully paid and nonassessable; and Plains Resources owns
such capital stock free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(s) The General Partner owns a 100% member interest in PAAI LLC; such
member interest has been duly authorized and validly issued in accordance with
the Limited Liability Company Agreement of PAAI LLC (as the same may be amended
and restated at or prior to the Closing Date, the "PAAI LLC Agreement") and is
fully paid (to the extent required
11
under the PAAI LLC Agreement) and nonassessable (except as such nonassessability
may be affected by Section 18-607 of the Delaware LLC Act); and the General
Partner owns such member interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims.
(t) Plains Marketing owns a 100% member interest in PMC LLC; such
member interest has been duly authorized and validly issued in accordance with
the Limited Liability Company Agreement of PMC LLC (as the same may be amended
and restated at or prior to the Closing Date, the "PMC LLC Agreement") and is
fully paid (to the extent required under the PMC LLC Agreement) and
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act); and Plains Marketing owns such member interest free
and clear of all liens, encumbrances, security interests, equities, charges or
claims, except as provided in the Plains Bank Credit Agreement and the Plains
Letter of Credit Facility.
(u) PMC LLC owns 100% of the issued and outstanding capital stock of
PMC NS; such share capital has been duly authorized and validly issued in
accordance with the Memorandum and Articles of Association of PMC NS (as the
same may be amended and restated at or prior to the Closing Date, the "PMC NS
LLC Articles" and together with the PAAI LLC Agreement, the PMC LLC Agreement
and the Partnership Agreements, the "Organization Agreements") and is fully paid
(to the extent required under the PMC NS LLC Articles) and nonassessable shares
(except as such nonassessability may be affected by the laws of Nova Scotia);
and, other than as disclosed in the Final Prospectus, PMC LLC owns such shares
free and clear of all liens, encumbrances, security interests, equities, charges
or claims, except as provided in the Plains Bank Credit Agreement and the Plains
Letter of Credit Facility.
(v) None of the Plains Parties has any subsidiaries (other than a
Plains Party or PMC LP) which, individually or considered as a whole, would be
deemed to be a significant subsidiary (as such term is defined in Rule 405 under
the Act).
(w) Except as described in the Final Prospectus or in the Unit
Transfer Agreements, there are no preemptive rights or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of, any
interests in the Partnership or any Subsidiary pursuant to any of the
Organization Agreements, or any agreement or other instrument to which the
Partnership or any Subsidiary is a party or by which any one 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 Subsidiary, except such rights as have been waived or
satisfied. Except as described in the Final Prospectus or in the Unit Transfer
Agreements, there are no outstanding options or warrants to purchase any Common
Units or Subordinated Units or other partnership interests in the Partnership or
any Subsidiary. The Units, when issued and delivered against payment therefor
as provided herein, will conform in all material respects to the description
thereof contained in the Final Prospectus. The Partnership has all requisite
power and authority to issue, sell and deliver the Units, in accordance with and
upon the terms and conditions set forth in this Agreement, the Partnership
Agreement and the Registration Statement and Final Prospectus. At the Closing
Date and any Option Closing Date, all corporate and partnership action, as the
case may be, required to be taken by the Plains Parties or any of their
12
stockholders, partners or members for the authorization, issuance, sale and
delivery of the Units shall have been validly taken.
(x) The execution and delivery of, and the performance by each of the
Plains Parties of their respective obligations under, this Agreement have been
duly and validly authorized by each of the Plains Parties, and this Agreement
has been duly executed and delivered by each of the Plains Parties, and
constitutes the valid and legally binding agreement of each of the Plains
Parties, enforceable against each of the Plains Parties in accordance with its
terms, provided that the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws.
(y) The execution and delivery of, and the performance by each of the
Plains Parties of their respective obligations under, the Unit Transfer
Agreements have been duly and validly authorized by each of the Plains Parties,
and each Unit Transfer Agreement has been duly executed and delivered by each of
the Plains Parties which are parties thereto, and constitutes the valid and
legally binding agreement of each of the Plains Parties, enforceable against
each of the Plains Parties in accordance with its terms, provided that the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws.
(z) 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 Plains Marketing Partnership Agreement has been duly authorized,
executed and delivered by each of the General Partner and the Partnership, and
is a valid and legally binding agreement of the General Partner and the
Partnership, enforceable against each of them in accordance with its terms; the
All American Partnership Agreement has been duly authorized, executed and
delivered by each of the General Partner and Plains Marketing and is a valid and
legally binding agreement of the General Partner and Plains Marketing
enforceable against each of them in accordance with its terms; the PMC LP
Partnership Agreement has been duly authorized, executed and delivered by each
of PMC NS and Plains Marketing and is a valid and legally binding agreement of
PMC NS and Plains Marketing enforceable against each of them in accordance with
its terms; provided that, with respect to each such agreement, the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(aa) None of the offering, issuance and sale by the Partnership of the
Units, the execution, delivery and performance of this Agreement by the Plains
Parties which are parties hereto, the consummation of the transactions
contemplated hereby, the execution, delivery and
13
performance of the Unit Transfer Agreements by the Plains Parties which are
parties thereto or the consummation of the transactions contemplated thereby (i)
conflicts or will conflict with or constitutes or will constitute a violation of
the agreement of limited partnership, limited liability company agreement,
certificate or articles of incorporation or bylaws or other organizational
documents of any of the Plains Parties, (ii) conflicts or will conflict with or
constitutes or will constitute a breach or violation of, a change of control or
a default (or an event which, with notice or lapse of time or both, would
constitute such an event), under any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which any of the Plains
Parties is a party or by which any of them or any of their respective properties
may be bound, (iii) violates or will violate any statute, law or regulation or
any order, judgment, decree or injunction of any court or governmental agency or
body directed to any of the Plains Parties or any of their properties in a
proceeding to which any of them or their property is a party or (iv) will result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of any of the Plains Parties, which conflicts, breaches,
violations or defaults, in the case of clauses (ii), (iii) or (iv), would have a
material adverse effect upon the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership and
the Subsidiaries, taken as a whole.
(bb) No permit, consent, approval, authorization, order, registration,
filing or qualification of or with any court, governmental agency or body is
required in connection with the execution and delivery of, or the consummation
by the Plains Parties of the transactions contemplated by, this Agreement,
except for such permits, consents, approvals and similar authorizations required
under the Act, the Exchange Act and state securities or "Blue Sky" laws.
(cc) None of the Plains Parties is in (i) violation of its
Organization Agreement, certificate or articles of incorporation or bylaws or
other organizational documents, or of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it or of any
decree of any court or governmental agency or body having jurisdiction over it
or (ii) breach, default (or an event which, with notice or lapse of time or
both, would constitute such an event) or violation in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any agreement, indenture, lease or other
instrument to which it is a party or by which it or any of its properties may be
bound, which breach, default or violation would, if continued, have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Partnership and the
Subsidiaries, taken as a whole, or could materially impair the ability of any of
the Plains Parties to perform its obligations under this Agreement. To the
knowledge of the Plains Parties, no third party to any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which any of the
Plains Parties is a party or by which any of them is bound or to which any of
their properties are subject, is in default under any such agreement, which
breach, default or violation would, if continued, have a material adverse effect
on the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Partnership and the Subsidiaries, taken as
a whole.
(dd) The accountants, PricewaterhouseCoopers LLP, who have certified
or shall certify the audited financial statements included or incorporated by
reference in the Registration Statement and the Final Prospectus (or any
amendment or supplement thereto), are
14
independent public accountants with respect to the Plains Parties as required by
the Act and the applicable published rules and regulations thereunder.
(ee) At March 31, 2001, the Partnership would have had, on an as
adjusted basis as indicated in the Final Prospectus (and any amendment or
supplement thereto), a capitalization as set forth therein. The financial
statements (including the related notes and supporting schedules) included or
incorporated by reference in the Registration Statement and the Final 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, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, except to the extent disclosed therein. The selected historical
information set forth in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 2000 under the caption "Selected Financial and Operating
Data" is accurately presented in all material respects and prepared on a basis
consistent with the audited and unaudited historical consolidated financial
statements from which it has been derived, except as described therein.
(ff) Except as disclosed in the Registration Statement and the Final
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Final Prospectus (or any amendment or supplement thereto), (i)
none of the Plains Parties has incurred any liability or obligation, indirect,
direct or contingent, or entered into any transactions, not in the ordinary
course of business, that, singly or in the aggregate, is material to the Plains
Parties, taken as a whole, (ii) there has not been any material change in the
capitalization, or material increase in the short-term debt or long-term debt,
of the Plains Parties and (iii) there has not been any material adverse change,
or any development involving or which may reasonably be expected to involve,
singly or in the aggregate, a prospective material adverse change in the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Plains Parties, taken as a whole.
(gg) There are no legal or governmental proceedings pending or, to the
knowledge of the Plains Parties, threatened, against any of the Plains Parties,
or to which any of the Plains Parties is a party, or to which any of their
respective properties is subject, that are required to be described in the
Registration Statement or the Final Prospectus but are not described as
required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Final Prospectus or to be filed as an exhibit to the Registration Statement
that are not described or filed as required by the Act.
(hh) The Plains Parties have good and indefeasible title to all real
property and good title to all personal property described in the Final
Prospectus as being owned by them, free and clear of all liens, claims, security
interests or other encumbrances except (i) as described in the Final Prospectus
and (ii) such as do not materially interfere with the use of such properties
taken as a whole as described in the Final Prospectus; and all real property and
buildings held under lease by any of the Plains Parties are held under valid and
subsisting and enforceable leases with such exceptions as do not materially
interfere with the use of such properties taken as a whole as described in the
Final Prospectus.
15
(ii) The Partnership has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Units, will not distribute, any prospectus (as defined under the Act) in
connection with the offering and sale of the Units other than the Registration
Statement, the Final Prospectus or other materials, if any, permitted by the
Act, including Rule 134 of the general rules and regulations thereunder.
(jj) Each of the Plains Parties 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 Final Prospectus, subject to such
qualifications as may be set forth in the Final Prospectus and except for such
permits the failure of which to have obtained would not have, individually or in
the aggregate, a material adverse effect upon the ability of the Partnership and
the Subsidiaries considered as a whole to conduct their businesses in all
material respects as currently conducted and as contemplated by the Final
Prospectus to be conducted; each of the Plains Parties has fulfilled and
performed all its material obligations with respect to such permits and no event
has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any impairment of the rights of
the holder of any such permit, except for such revocations, terminations and
impairments that would not have a material adverse effect upon the ability of
the Partnership and the Subsidiaries considered as a whole to conduct their
businesses in all material respects as currently conducted and as contemplated
by the Final Prospectus to be conducted, subject in each case to such
qualification as may be set forth in the Final Prospectus; and, except as
described in the Final Prospectus, none of such permits contains any restriction
that is materially burdensome to the Plains Parties considered as a whole.
(kk) Each of the Plains Parties has such consents, easements, rights-
of-way or licenses from any person ("rights-of-way") as are necessary to conduct
its business in the manner described in the Final Prospectus, subject to such
qualifications as may be set forth in the Final Prospectus and except for such
rights-of-way the failure of which to have obtained would not have, individually
or in the aggregate, a material adverse effect upon the ability of the
Partnership and the Subsidiaries considered as a whole to conduct their
businesses in all material respects as currently conducted and as contemplated
by the Final Prospectus to be conducted; each of the Plains Parties has
fulfilled and performed all its material obligations with respect to such
rights-of-way and no event has occurred which allows, or after notice or lapse
of time would allow, revocation or termination thereof or would result in any
impairment of the rights of the holder of any such rights-of-way, except for
such revocations, terminations and impairments that will not have a material
adverse effect upon the ability of the Partnership and the Subsidiaries
considered as a whole to conduct their businesses in all material respects as
currently conducted and as contemplated by the Final Prospectus to be conducted,
subject in each case to such qualification as may be set forth in the Final
Prospectus; and, except as described in the Final Prospectus, none of such
rights-of-way contains any restriction that is materially burdensome to the
Plains Parties considered as a whole.
(ll) None of the Plains Parties is now, and after sale of the Units to
be sold by the Partnership hereunder and application of the net proceeds from
such sale as described in the Final Prospectus under the caption "Use of
Proceeds," none of the Plains Parties will be, (i) an "investment company" or a
company "controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, (ii) a "public utility company,"
16
"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, (iii) a "gas utility," "public utility" or "utility" within the meaning
of Article 6050 of the Revised Civil Statutes of Texas or (iv) a "public
utility" or "utility" within the meaning of the Public Utility Regulatory Act of
Texas or under the applicable laws of any state in which any such Plains Party
does business.
(mm) None of the Plains Parties has sustained since the date of the
latest audited financial statements included in the Final 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, investigation, order or decree, otherwise than as
set forth or contemplated in the Final Prospectus.
(nn) None of the Plains Parties has violated any environmental,
safety, health or similar law or regulation applicable to its business relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
or lacks any permits, licenses or other approvals required of them under
applicable Environmental Laws to own, lease or operate their properties and
conduct their business as described in the Final Prospectus or is violating any
terms and conditions of any such permit, license or approval, which in each case
would have a material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Partnership and the Subsidiaries, taken as a whole.
(oo) Except as described in the Final Prospectus, no labor dispute by
the employees of any of the Plains Parties exists or, to the knowledge of the
Plains Parties, is imminent, which might reasonably be expected to have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership and
the Subsidiaries, taken as a whole.
(pp) The Plains Parties maintain 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 Plains Parties has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be made in order to
continue such insurance, 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.
(qq) Except as described in the Final Prospectus, there is (i) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to the knowledge
of the Plains Parties, threatened, to which any of the Plains Parties, or any of
their respective subsidiaries, is or may be a party or to which the business or
property of any of the Plains Parties, or any of their respective subsidiaries,
is or may be subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that has been proposed
by any governmental body and (iii) no injunction, restraining order or order of
any nature issued by a federal or state court or foreign court of competent
jurisdiction to which any of the Plains Parties, or any of their respective
subsidiaries, is or may be subject, that, in the case of clauses (i), (ii) and
(iii) above, is reasonably expected to (A) singly or in the aggregate have a
material adverse effect on the condition
17
(financial or other), business, prospects, properties, net worth or results of
operations of the Partnership and the Subsidiaries, taken as a whole, (B)
prevent or result in the suspension of the offering and issuance of the Units or
(C) in any manner draw into question the validity of this Agreement.
(rr) The sale and issuance of Subordinated Units to each of Kafu
Holdings, LLC, Sable Holdings and E-Holdings III, L.P. pursuant to the Unit
Transfer Agreements are exempt from the registration requirements of the Act and
the securities laws of any state having jurisdiction with respect thereto, and
none of the Plains Parties has taken or will take any action that would cause
the loss of such exemption.
(ss) The Common Units are listed on the New York Stock Exchange
("NYSE"), and the Units have been approved for listing on the NYSE subject only
to official notice of issuance.
7. Indemnification and Contribution. (a) Each of the Plains
Parties, jointly and severally, agrees to indemnify and hold harmless the
Underwriter, the directors, officers, employees and agents of the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages, liabilities and expenses (including reasonable
costs of investigation) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Final Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
furnished in writing to the Partnership or the General Partner by or on behalf
of the Underwriter expressly for use in connection therewith. The foregoing
indemnity agreement shall be in addition to any liability which any Plains Party
may otherwise have.
(b) If any action, suit or proceeding shall be brought against the
Underwriter, any director, officer, employee or agent of the Underwriter or any
person controlling the Underwriter in respect of which indemnity may be sought
against a Plains Party, the Underwriter or such director, officer, employee,
agent or controlling person shall promptly notify the Partnership in writing,
and the Partnership and the General Partner shall assume the defense thereof,
including the employment of counsel and payment of all reasonable fees and
expenses. The failure to notify the indemnifying party shall not relieve it
from liability which it may have to an indemnified party unless the indemnifying
party is foreclosed by reason of such delay from asserting a defense otherwise
available to it. The Underwriter or any such director, officer, employee, agent
or controlling person shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in (but not control) the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Underwriter or such director, officer, employee, agent or
controlling person unless (i) the Partnership and General Partner has agreed in
writing to pay such fees and expenses, (ii) the Partnership and General Partner
have failed to assume the defense and employ counsel or (iii) the named parties
to any such action, suit or
18
proceeding (including any impleaded parties) include both the Underwriter or
such director, officer, employee, agent or controlling person and the
Partnership or the General Partner, and the Underwriter or such director,
officer, employee, agent or controlling person shall have been advised by its
counsel that representation of such indemnified party and the Partnership or the
General Partner by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential differing interests
between them (in which case the Partnership or the General Partner shall not
have the right to assume the defense of such action, suit or proceeding on
behalf of the Underwriter or such controlling person). It is understood,
however, that the Partnership or the General Partner shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for the Underwriter and all such directors, officers,
employees, agents and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by you, and that all such fees and expenses shall be reimbursed as
they are incurred. None of the Plains Parties shall be liable for any settlement
of any such action, suit or proceeding effected without its written consent, but
if settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the Plains Parties agree,
jointly and severally, to indemnify and hold harmless the Underwriter, to the
extent provided in the preceding paragraph, and any such controlling person from
and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) The Underwriter agrees to indemnify and hold harmless the Plains
Parties, their respective directors and the officers who sign the Registration
Statement, and any person who controls the Plains Parties within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as
the foregoing indemnity from the Plains Parties to the Underwriter, but only
with respect to information furnished in writing by or on behalf of the
Underwriter expressly for use in the Registration Statement or the Final
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against a Plains Party, any of such directors and
officers or any such controlling person based on the Registration Statement or
the Final Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against the Underwriter pursuant to this paragraph
(c), the Underwriter shall have the rights and duties given to the Plains
Parties by paragraph (b) above (except that if the Partnership or the General
Partner shall have assumed the defense thereof the Underwriter shall not be
required to do so, but may employ separate counsel therein and participate in
(but not control) the defense thereof, but the fees and expenses of such counsel
shall be at the Underwriter's expense), and the Plains Parties, any of such
directors and officers and any such controlling person shall have the rights and
duties given to the Underwriter by paragraph (b) above. The foregoing indemnity
agreement shall be in addition to any liability which the Underwriter may
otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraph (a) or (c) hereof in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then an indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
19
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Plains Parties on the one hand and the Underwriter 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 Plains Parties on the one hand and the Underwriter on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Partnership on
the one hand and the Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Partnership bear to the total underwriting discounts
and commissions received by the Underwriter, in each case as set forth in the
table on the cover page of the Final Prospectus. The relative fault of the
Plains Parties on the one hand, and the Underwriter on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Plains Parties or any
other affiliate of the Plains Parties on the one hand, or by the Underwriter on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Plains Parties and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total price of the Units underwritten by it and distributed to the public
exceeds the amount of any damages which the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or 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 includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Plains Parties set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on
20
behalf of the Underwriter or any person controlling the Underwriter, the Plains
Parties or any of their respective directors or officers or any person
controlling the Plains Parties, (ii) acceptance of any Units and payment
therefor in accordance with the terms of this Agreement, and (iii) any
termination of this Agreement. A successor to the Underwriter or any person
controlling the Underwriter, or to the Plains Parties or any of their respective
directors or officers or any person controlling a Plains Party shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
8. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase the Firm Units hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Units may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 p.m., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings required by Rule 424 under the Act shall be or have been timely made; no
stop order suspending the effectiveness of the registration statement shall have
been issued and no proceeding for that purpose shall have been instituted or, to
the knowledge of the Plains Parties or the Underwriter, threatened by the
Commission and any request of the Commission for additional information (to be
included in the Registration Statement or the Final Prospectus or otherwise)
shall have been complied with to your reasonable satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business, prospects,
properties, net worth or results of operations of any of the Plains Parties not
contemplated by the Final Prospectus, which in your opinion, would materially
adversely affect the market for the Units, or (ii) any event or development
relating to or involving any of the Plains Parties or any executive officer or
director of any of such entities which makes any statement made in the Final
Prospectus untrue or which, in the opinion of the Partnership and its counsel or
the Underwriter and its counsel, requires the making of any addition to or
change in the Final Prospectus in order to state a material fact required by the
Act or any other law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the Final
Prospectus to reflect such event or development would, in your opinion,
materially adversely affect the market for the Units.
(c) You shall have received on the Closing Date, an opinion of ▇▇▇▇▇▇
& ▇▇▇▇▇▇ L.L.P., special counsel for the Plains Parties, dated the Closing Date
and addressed to you, to the effect that:
(i) Each of the Partnership and Plains Marketing has been duly
formed and is validly existing in good standing as a limited partnership
under the Delaware LP Act with all necessary partnership power and
authority to own or lease its properties and conduct its business, in each
case in all material respects as described in the Registration Statement
and the Final Prospectus. Each of the Partnership and Plains Marketing is
duly registered or qualified as a foreign limited partnership for the
21
transaction of business and is in good standing under the laws of the
jurisdictions set forth on Exhibit A to this opinion.
(ii) All American has been duly formed and is validly existing in
good standing as a limited partnership under the Texas LP Act with all
necessary partnership power and authority to own or lease its properties
and conduct its business, in each case in all material respects as
described in the Registration Statement and the Final Prospectus. All
American is duly registered or qualified as a foreign limited partnership
for the transaction of business and is in good standing under the laws of
the jurisdictions set forth on Exhibit A to this opinion.
(iii) The General Partner has been duly incorporated and is
validly existing in good standing under the laws of the State of Delaware,
with all necessary corporate power and authority to own or lease its
properties, conduct its business and act as general partner of the
Partnership, Plains Marketing and All American, subject to the transactions
contemplated by the Unit Transfer Agreements, in each case in all material
respects as described in the Registration Statement and the Final
Prospectus. The General Partner is duly registered or qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of the jurisdictions set forth on Exhibit A to this opinion.
(iv) Each of PAAI LLC and PMC 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 conduct its business, in each
case in all material respects as described in the Registration Statement
and the Final Prospectus. Each of PAAI LLC and PMC LLC is duly registered
or qualified as a foreign limited liability company for the transaction of
business and is in good standing under the laws of the jurisdictions set
forth on Exhibit A to this opinion.
(v) The General Partner is the sole general partner of the
Partnership, with a 1% general partner interest in the Partnership; such
general partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement; the General Partner owns all of
the Incentive Distribution Rights and all of the Class B Units; such
Incentive Distribution Rights and Class B Units 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 Form 8-A); and the General Partner owns such general
partner interest, Incentive Distribution Rights and Class B Units free and
clear of all liens, encumbrances, security interests, charges or claims (A)
in respect of which a financing statement under the Uniform Commercial Code
of the State of Delaware naming the General Partner as debtor is on file in
the office of the Secretary of State of the State of Delaware or (B)
otherwise known to such counsel, without independent investigation, other
than those created by or arising under the Delaware LP Act and except as
contemplated by the Unit Transfer Agreements.
22
(vi) The Sponsor Units 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 Form 8-A);
PAAI LLC owns the Sponsor Units free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware naming
PAAI LLC as debtor is on file in the office of the Secretary of State of
the State of Delaware or (B) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Delaware LP Act and except as contemplated by the Unit Transfer Agreements.
(vii) The 3,750,000 Common Units to be issued and sold to the
Underwriter by the Partnership pursuant to this Agreement and the limited
partner interests represented thereby have been duly authorized by the
Partnership Agreement and, when issued and delivered against payment
therefor as provided in this Agreement, will be validly issued, fully paid
(to the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in
the Form 8-A); as of the date hereof, there are 16,257,423 Common Units
(other than those which are Sponsor Units) outstanding; all outstanding
Common Units (other than those which are Sponsor Units) and the limited
partner interests represented thereby have been duly authorized and validly
issued in accordance with 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 Form
8-A).
(viii) The General Partner is the sole general partner of Plains
Marketing with a 1.0101% general partner interest in Plains Marketing; such
general partner interest has been duly authorized and validly issued in
accordance with the Plains Marketing Partnership Agreement; and the General
Partner owns such general partner interest free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which
a financing statement under the Uniform Commercial Code of the State of
Delaware naming the General Partner as debtor is on file in the office of
the Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those created
by or arising under the Delaware LP Act and except as contemplated by the
Unit Transfer Agreements.
(ix) The General Partner is the sole general partner of All
American with a .001% general partner interest in All American; such
general partner interest has been duly authorized and validly issued in
accordance with the All American Partnership Agreement; and the General
Partner owns such general partner interest free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which
a financing statement under the Uniform Commercial Code of the State of
Delaware naming the General Partner as debtor is on file in the office of
the Secretary of State of the States of Delaware or Texas or (B) otherwise
known to such counsel, without independent investigation, other than those
created by or arising under the Texas LP Act and except as contemplated by
the Unit Transfer Agreements.
23
(x) The Partnership is the sole limited partner of Plains
Marketing with a 98.9899% limited partner interest in Plains Marketing;
such limited partner interest has been duly authorized and validly issued
in accordance with the Plains Marketing Partnership Agreement and is fully
paid (to the extent required under the Plains Marketing Partnership
Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in the Form 8-A); and the Partnership owns
such limited partner interest free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware naming
the Partnership as debtor is on file in the office of the Secretary of
State of the State of Delaware, (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising
under the Delaware LP Act, or (C) except as provided in the Plains Bank
Credit Agreement and the Plains Letter of Credit Facility.
(xi) Plains Marketing is the sole limited partner of All American
with a 99.999% limited partner interest in All American; such limited
partner interest has been duly authorized and validly issued in accordance
with the All American Partnership Agreement and is fully paid (to the
extent required under the All American Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Section
6.07 of the Texas LP Act); and Plains Marketing owns such limited partner
interest free and clear of all liens, encumbrances, security interests,
charge or claims (A) in respect of which a financing statement under the
Uniform Commercial Code of the States of Delaware or Texas naming Plains
Marketing as debtor is on file in the office of the Secretary of State of
the States of Delaware or Texas, (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising
under the Texas LP Act, or (C) except as provided in the Plains Bank Credit
Agreement and the Plains Letter of Credit Facility.
(xii) Plains Marketing owns its 99% limited partner interest in
PMC LP free and clear of all liens, encumbrances, security interests or
charge (A) in respect of which a financing statement under the Uniform
Commercial Code of the States of Delaware or Texas naming Plains Marketing
as debtor is on file in the office of the Secretary of State of the States
of Delaware or Texas, (B) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Delaware LP Act, or (C) except as provided in the Plains Bank Credit
Agreement and the Plains Letter of Credit Facility.
(xiii) Plains Resources owns 100% of the issued and outstanding
capital stock of the General Partner; such capital stock has been duly
authorized and validly issued and is fully paid and nonassessable; and
Plains Resources owns such capital stock free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which
a financing statement under the Uniform Commercial Code of the State of
Delaware naming Plains Resources as debtor is on file in the office of the
Secretary of State of the State of Delaware or (B) otherwise known to such
counsel, without independent investigation, other than those created by or
arising under the Delaware General Corporation Law (the "DGCL").
24
(xiv) The General Partner owns a 100% member interest in PAAI
LLC; such member interest has been duly authorized and validly issued in
accordance with the PAAI LLC Agreement and is fully paid (to the extent
required under the PAAI LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); the General Partner owns such member interest free and clear of all
liens, encumbrances, security interests, charges or claims (A) in respect
of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming the General Partner as debtor is on file in the
office of the Secretary of State of the State of Delaware or (B) otherwise
known to such counsel, without independent investigation, other than those
created by or arising under the Delaware LLC Act.
(xv) Except as described in the Final Prospectus, PMC LLC owns
its 100% ownership interest in PMC NS free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which
a financing statement under the Uniform Commercial Code of the state of
Delaware naming PMC LLC as debtor is on file in the office of the Secretary
of State of the State of Delaware, (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising
under the Delaware LLC Act, or (C) except as provided in the Plains Bank
Credit Agreement and the Plains Letter of Credit Facility.
(xvi) Plains Marketing owns a 100% member interest in PMC LLC;
such member interest has been duly authorized and validly issued in
accordance with the PMC LLC Agreement and is fully paid (to the extent
required under the PMC LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); Plains Marketing owns such member interest free and clear of all
liens, encumbrances, security interests, charges or claims (A) in respect
of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming Plains Marketing as debtor is on file in the
office of the Secretary of State of the State of Delaware, (B) otherwise
known to such counsel, without independent investigation, other than those
created by or arising under the Delaware LLC Act, or (C) except as provided
in the Plains Bank Credit Agreement and the Plains Letter of Credit
Facility.
(xvii) Except as described in the Final Prospectus or as
contemplated by the Unit Transfer Agreements, there are no preemptive
rights or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any interests in the Partnership or any
Subsidiary (other than PMC LP and PMC NS, as to which we have not been
asked to express an opinion) pursuant to any of the Organization Agreements
(other than the PMC LP Partnership Agreement and the PMC NS LLC Articles,
as to which we have not been asked to express an opinion) or any other
agreement or instrument known to such counsel to which the Partnership or
any Subsidiary (other than PMC LP and PMC NS, as to which we have not been
asked to express an opinion) is a party or by which any one of them may be
bound. 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 Subsidiary (other
than PMC LP and PMC NS, as to
25
which we have not been asked to express an opinion), except such rights as
have been waived or satisfied. To such counsel's knowledge, except as
described in the Final Prospectus or as contemplated by the Unit Transfer
Agreements, there are no outstanding options or warrants to purchase any
Common Units or Subordinated Units or other partnership interests in the
Partnership or any Subsidiary. The Partnership has all requisite power and
authority to issue, sell and deliver the Units, in accordance with and upon
the terms and conditions set forth in this Agreement, the Partnership
Agreement and the Registration Statement and Final Prospectus.
(xviii) This Agreement has been duly authorized and validly
executed and delivered by each of the Plains Parties.
(xix) 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 Plains Marketing Partnership
Agreement has been duly authorized, executed and delivered by each of the
General Partner and the Partnership, and is a valid and legally binding
agreement of the General Partner and the Partnership, enforceable against
each of them in accordance with its terms; the All American Partnership
Agreement has been duly authorized, executed and delivered by each of the
General Partner and Plains Marketing and is a valid and legally binding
agreement of the General Partner and Plains Marketing enforceable against
each of them in accordance with its terms; the PMC LP Partnership Agreement
has been duly authorized, executed and delivered by Plains Marketing;
provided that, with respect to each such agreement, the enforceability
thereof may be limited by (A) applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws from time to time in
effect affecting creditors' rights and remedies generally and by general
principles of equity (regardless of whether such principles are 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.
(xx) None of the offering, issuance and sale by the Partnership
of the Units, the execution, delivery and performance of this Agreement by
the Plains Parties or the consummation of the transactions contemplated
hereby (A) constitutes or will constitute a violation of the Organization
Agreements (other than the PMC LP Partnership Agreement and the PMC NS LLC
Articles, as to which we have not been asked to express an opinion) or the
certificate or articles of incorporation or bylaws or other organizational
documents of any of the Plains Parties, (B) constitutes or will constitute
a breach or violation of, or a default under (or an event which, with
notice or lapse of time or both, would constitute such an event), any
agreement filed or incorporated by reference as an exhibit to the
Registration Statement (other than the Plains Bank Credit Agreement and the
Plains Letter of Credit Facility), (C) results or will result in any
violation of the Delaware LP Act, the Delaware LLC Act, the DGCL, the laws
of the State of Texas or federal law, or (D) 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 or the Subsidiaries, which in the case
of clauses (B), (C) or (D) would
26
reasonably be expected to have a material adverse effect on the financial
condition, business or results of operations of the Partnership and the
Subsidiaries, taken as a whole.
(xxi) No permit, consent, approval, authorization, order,
registration, filing or qualification of or with any federal, Delaware, or
Texas court, governmental agency or body having jurisdiction over the
Plains Parties or any of their respective properties is required for the
offering, issuance and sale by the Partnership of the Units, the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated by this Agreement, except as may be required
under state securities or "Blue Sky" laws, as to which such counsel need
not express any opinion.
(xxii) The statements in the Registration Statement and Final
Prospectus under the captions "Description of Our Common Units," "Cash
Distribution Policy" and "Description of Our Partnership Agreement,"
insofar as they constitute descriptions of agreements or refer to
statements of law or legal conclusions, are accurate and complete in all
material respects, and the Units, the Common Units, the Subordinated Units,
the Class B Units and the Incentive Distribution Rights conform in all
material respects to the descriptions thereof contained in the Registration
Statement and Final Prospectus.
(xxiii) The opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. that is filed as
Exhibit 8.1 to the Registration Statement is confirmed and the Underwriter
may rely upon such opinion as if it were addressed to them.
(xxiv) The Registration Statement was declared effective under
the Act on May 8, 2001; to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or threatened by
the Commission; and any required filing of the Final Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period required
by such Rule.
(xxv) The Registration Statement and the Final Prospectus
(except for the financial statements and the notes and the schedules
thereto and the other financial information included in the Registration
Statement or the Final Prospectus, as to which such counsel need not
express any opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations promulgated
thereunder.
(xxvi) To the knowledge of such counsel, (A) there is no legal
or governmental proceeding pending or threatened to which any of the Plains
Parties is a party or to which any of their respective properties is
subject that is required to be disclosed in the Final Prospectus and is not
so disclosed and (B) there are no agreements, contracts or other documents
to which any of the Plains Parties is a party that are required to be
described in the Registration Statement or the Final Prospectus or to be
filed as exhibits to the Registration Statement that are not described or
filed as required.
(xxvii) None of the Plains Parties or PMC LLC is an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended.
27
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Plains Parties and
the independent public accountants of the Partnership and your representatives,
at which the contents of the Registration Statement and the Final Prospectus and
related matters were discussed (including review and discussion of the contents
of all Incorporated Documents), 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 Final Prospectus (except to the extent specified
in the foregoing opinion), no facts have come to such counsel's attention that
lead such counsel to believe that the Registration Statement (other than (i) the
financial statements included or incorporated by reference therein, including
the notes and schedules thereto and the auditors' reports thereon, and (ii) the
other financial information included or incorporated by reference therein, as to
which such counsel need not comment), as of its effective date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Final Prospectus (other than (i) the financial statements included
or incorporated by reference therein, including the notes and schedules thereto
and the auditors' reports thereon, and (ii) the other financial information
included or incorporated by reference therein, as to which such counsel need not
comment), as of its issue date and the Closing Date contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Plains
Parties 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 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 New York and Texas, (D) with respect to the opinions
expressed in paragraphs (i), (ii), (iii) and (iv) above as to the due
qualification or registration as a foreign limited partnership, corporation or
limited liability company, as the case may be, of each of the Plains Parties and
PMC LLC, state that such opinions are based upon certificates of foreign
qualification or registration provided by the Secretary of State of the States
listed on Exhibit A (each of which shall be dated as of a date not more than
fourteen days prior to the Closing Date and shall be provided to you) and (E)
state that they express no opinion with respect to (i) any permits to own or
operate any real or personal property or (ii) state or local taxes or tax
statutes to which any of the limited partners of the Partnership or any of the
Plains Parties may be subject.
(d) You shall have received on the Closing Date, an opinion of
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., special counsel for the Plains Parties, dated the
Closing Date and addressed to you, to the effect that none of the offering,
issuance or sale by the Partnership of the Units, the execution and delivery of
this Agreement by the Plains Parties, the consummation of the transactions
contemplated hereby, the execution and delivery of the Unit Transfer Agreements
by the Plains Parties or the consummation of the transactions contemplated
thereby, result in a breach of, or constitutes a change of control or default
under the provisions of any Credit Agreement (as defined in Annex A to such
opinion).
28
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Plains
Parties 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 originals thereof, and that the signatures on
all documents examined by them are genuine and (C) state that such opinions are
limited to federal laws and the laws of the states of Delaware and Texas,
excepting therefrom municipal and local ordinances and regulations.
In rendering such opinion, such counsel shall state that such opinion
letter may be relied upon only by the Underwriter and its counsel in connection
with the transactions contemplated by this Agreement and no other use or
distribution of this opinion letter may be made without such counsel's prior
written consent.
(e) You shall have received on the Closing Date an opinion of ▇▇▇
▇▇▇▇▇, general counsel for the General Partner, dated the Closing Date and
addressed to you, to the effect that:
(i) To the knowledge of such counsel, none of the Plains Parties,
PMC LLC, PMC LP or PMC NS is in (A) breach or violation of the provisions
of its Organizational Agreement, certificate or articles of incorporation
or bylaws or other organizational documents or (B) default (and no event
has occurred which, with notice or lapse of time or both, would constitute
such a default) or violation in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any agreement, indenture, lease or other
instrument to which it is a party or by which it or any of its properties
may be bound, which breach, default or violation would, if continued, have
a material adverse effect on the financial condition, business or results
of operations of the Partnership and the Subsidiaries, taken as a whole, or
could materially impair the ability of any of the Plains Parties to perform
their obligations under this Agreement.
(ii) Each Unit Transfer Agreement has been duly authorized,
executed and delivered by PAAI LLC and the General Partner, as applicable,
and is a valid and legally binding agreement of PAAI LLC and the General
Partner, as applicable, enforceable against each of them in accordance with
its terms; provided that, with respect to each such agreement, the
enforceability thereof may be limited by (A) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar laws
from time to time in effect affecting creditors' rights and remedies
generally and by general principles of equity (regardless of whether such
principles are 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.
(iii) None of the offering, issuance and sale by the Partnership
of the Units, the execution, delivery and performance by the Plains Parties
of this Agreement, the consummation of the transactions contemplated
hereby, the execution, delivery and performance of the Unit Transfer
Agreements by the Plains Parties or the consummation of the transactions
contemplated thereby (A) constitutes or will constitute a breach or
violation of, a change of control or a default (or an event which, with
notice or lapse of
29
time or both, would constitute such an event) under any bond, debenture,
note or any other evidence of indebtedness, indenture or any other material
agreement or instrument known to such counsel to which a Plains Party, PMC
LLC, PMC LP and PMC NS is a party or by which any one of them may be bound
(other than any other agreement filed or incorporated by reference as an
exhibit to the Registration Statement or any Credit Agreement (as defined
in Annex A to such opinion)) or (B) violates or will violate any statute,
law or regulation or any order, judgment, decree or injunction of any court
or governmental agency or body directed to any of the Plains Parties or any
of their properties in a proceeding to which any of them is a party, in the
case of either (A) or (B), which would, in the case of either (A) or (B)
reasonably be expected to have a material adverse effect on the financial
condition, business or results of operations of the Partnership and the
Subsidiaries, taken as a whole, or the General Partner.
(iv) To the knowledge of such counsel, each of the Plains Parties
and PMC LLC has such permits, consents, licenses, franchises and
authorizations ("permits") issued by the appropriate federal, state or
local governmental or regulatory authorities as are necessary to own or
lease its properties and to conduct its business in the manner described in
the Final Prospectus, subject to such qualifications as may be set forth in
the Final 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 upon the operations conducted by the Partnership
and the Subsidiaries, taken as a whole; and, to the knowledge of such
counsel, none of the Plains Parties, PMC LLC, PMC LP and PMC NS 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
operations conducted by the Partnership and the Subsidiaries, taken as a
whole.
(v) Except as described in the Final Prospectus, to the knowledge
of such counsel, there is no litigation proceeding, or governmental
investigation pending or threatened against any of the Plains Parties, PMC
LLC, PMC LP and PMC NS which is reasonably likely to have a material
adverse effect on the financial condition, business, properties, or results
of operations of the Partnership and the Subsidiaries, taken as a whole.
In addition, such counsel shall state that he has participated in
discussions with officers and other representatives of the Plains Parties and
the independent public accountants of the Partnership and your representatives,
at which the contents of the Registration Statement and the Final 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 Final Prospectus, no facts have come to such
counsel's attention that lead such counsel to believe that the Registration
Statement (other than (i) the financial statements included or incorporated by
reference therein, including the notes and schedules thereto and the auditors'
reports thereon, and (ii) the other financial information included or
incorporated by reference therein, as to which such counsel need not comment),
as of its effective date contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make
30
the statements therein not misleading, or that the Final Prospectus (other
than (i) the financial statements included or incorporated by reference therein,
including the notes and schedules thereto and the auditors' reports thereon, and
(ii) the other financial information included or incorporated by reference
therein, as to which such counsel need not comment), as of its issue date and
the Closing Date contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Plains
Parties and upon information obtained from public officials, (B) assume that all
documents submitted to him as originals are authentic, that all copies submitted
to him conform to the originals thereof, and that the signatures on all
documents examined by him are genuine, (C) state that such opinions are limited
to federal laws and the Delaware LP Act, the Delaware LLC Act and 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.
(f) You shall have received on the Closing Date, an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇ LLP with respect to the Province of Alberta, the Province of Nova Scotia
and the federal laws of Canada, dated the Closing Date and addressed to you, to
the effect that:
(i) PMC LP has been duly formed and is validly existing in good
standing as a limited partnership under the laws of Alberta with all
necessary partnership power and authority to own or lease its properties,
in all material respects as described in the Registration Statement and the
Final Prospectus, and to conduct its business as currently conducted and as
proposed in the Final Prospectus to be conducted. PMC LP is duly
registered extra-provincially for the transaction of business and is in
good standing under the laws of the jurisdictions set forth on Exhibit A to
this opinion.
(ii) PMC NS has been duly formed and is validly existing in good
standing as an unlimited liability company under the laws of Nova Scotia,
with all necessary corporate power and authority to own or lease its
properties and act as general partner of PMC LP, in each case in all
material respect as described in the Registration Statement and the Final
Prospectus, and to conduct its business as currently conducted and as
proposed in the Final Prospectus to be conducted. PMC NS is duly
registered for the transaction of business and is in good standing under
the laws of the jurisdictions set forth on Exhibit A to this opinion.
(iii) PMC NS is the sole general partner of PMC LP with a 0.01%
interest in PMC LP; such interest has been duly authorized and validly
issued in accordance with the PMC LP Partnership Agreement; and, other than
as described in the Final Prospectus, PMC NS owns such interest free and
clear of all liens, encumbrances, security interests, charges or claims in
respect of which a financing statement under the laws of Nova Scotia naming
PMC NS as debtor is on file.
(iv) Plains Marketing is the sole limited partner of PMC LP with
a 99.99% limited partner interest in PMC LP; such interest has been duly
authorized and
31
validly issued in accordance with the PMC LP Partnership Agreement and is
fully paid (to the extent required under the PMC LP Partnership Agreement)
and nonassessable (except as such nonassessability may be affected by
matters described in the Partnership Agreement).
(v) PMC LLC owns 100% of the issued and outstanding capital stock
of PMC NS; such share capital has been duly authorized and validly issued
in accordance with the PMC NS LLC Articles, as fully paid and nonassessable
shares (except as such nonassessability may be affected by the laws of Nova
Scotia).
(vi) No permit, consent, approval, authorization, order,
registration, filing or qualification of or with any court, governmental
agency or body of the federal government of Canada or the Province of
Alberta is required for the offering, issuance and sale by the Partnership
of the Units.
(vii) Subject to this Section 6(f)(vii), no material consent,
approval, authorization, order, registration or qualification of or with
the federal government of Canada or the Province of Alberta or, to our
knowledge, Saskatchewan was required for the transfer of assets located in
the Province of Alberta or, to our knowledge, Saskatchewan pursuant to the
Asset Purchase and Sale Agreement dated February 27, 2001 between ▇▇▇▇▇▇
Oil Company Ltd. and PMC LP, except such consents, approvals,
authorizations, orders, registrations or qualifications as were obtained.
There are two approvals that have been granted but are conditional upon
further events occurring. In the case of the National Energy Board's
approval of the transfer of Certificate OC-26 relating to the Wascana
pipeline, the transfer is subject to Governor in Council approval, which
has yet to be granted, and conditional on the filing of an operating
agreement with the National Energy Board by May 30, 2001. With respect to
the approval granted by Saskatchewan Energy and Mines, the approval for
transfer of the pipeline licenses is subject to ▇▇▇▇▇▇ Oil Company Ltd.
registering the pipeline plan for PL-01074 by July 31, 2001.
(viii) The PMC LP Partnership Agreement has been duly
authorized, executed and delivered by PMC NS and is a valid and legally
binding agreement of PMC NS and Plains Marketing enforceable against each
of them in accordance with its terms; provided that, with respect to each
such agreement, the enforceability thereof may be limited by (A) applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws from time to time in effect affecting creditors' rights and
remedies generally and by general principles of equity (regardless of
whether such principles are 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.
(ix) None of the offering, issuance and sale by the Partnership
of the Units, the execution, delivery and performance of this Agreement by
the Plains Parties, the consummation of the transactions contemplated
hereby, the execution, delivery and performance of the Unit Transfer
Agreements by the Plains Parties or the consummation of the transactions
contemplated thereby constitutes or will constitute a violation of the
32
PMC LP Partnership Agreement or the certificate or articles of
incorporation, memorandum of association or bylaws or other organizational
documents of PMC NS.
(x) To the knowledge of such counsel, each of PMC LP and PMC NS
has such permits, consents, licenses, franchises and authorizations
("permits") issued by the appropriate federal or provincial or regulatory
authorities as are necessary to own or lease its properties and to conduct
its business as currently conducted and as proposed in the Final Prospectus
to be conducted, subject to such qualifications as may be set forth in the
Final Prospectus, and except for such permits, consents, licenses,
franchises and authorizations which, if not obtained would not reasonably
be expected to have, individually or in the aggregate, a material adverse
effect upon the operations conducted by PMC LP and PMC NS taken as a whole.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Plains
Parties, PMC LLC, PMC LP or PMC NS 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 originals thereof,
and that the signatures on all documents examined by them are genuine, (C) state
that such opinions are limited to federal laws of Canada and the laws of the
Provinces of Alberta and Nova Scotia, excepting therefrom municipal and local
ordinances and regulations 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 or any of the Plains Parties, PMC LLC, PMC LP or PMC
NS may be subject.
In rendering such opinion, such counsel shall state that (A) ▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P. is hereby authorized to rely upon such opinion letter in
connection with the transactions contemplated by this Agreement as if such
opinion letter were addressed and delivered to them on the date hereof and (B)
subject to the foregoing, such opinion letter may be relied upon only by the
Underwriter and its counsel in connection with the transactions contemplated by
this Agreement and no other use or distribution of this opinion letter may be
made without such counsel's prior written consent.
(g) You shall have received on the Closing Date an opinion of ▇▇▇▇▇
▇▇▇▇▇ L.L.P., counsel for the Underwriter, dated the Closing Date and addressed
to you, with respect to the issuance and sale of the Units, the Registration
Statement and the Final Prospectus (together with any supplement or amendment
thereto) and other related matters you may reasonably require.
(h) You shall have received letters addressed to you, and dated the
date hereof and the Closing Date from PricewaterhouseCoopers LLP, independent
public accountants, substantially in the forms heretofore approved by you and
agreed to by PricewaterhouseCoopers LLP.
(i) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or taken or, to the knowledge of the Partnership and the General
Partner, shall be threatened by the Commission at or prior to the Closing Date;
(ii) there shall not have been any change in the
33
partners' capital or stockholder's equity of the Partnership and the
Subsidiaries, taken as a whole, or the General Partner, as the case may be, nor
any material increase in the short-term or the long-term debt of the Partnership
and the Subsidiaries, taken as a whole, or the General Partner (other than in
the ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Final Prospectus or the Unit Transfer Agreement
(or any amendment or supplement thereto); (iii) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Final Prospectus (or any amendment or supplement thereto),
except as may otherwise be stated in the Registration Statement and the Final
Prospectus (or any amendment or supplement thereto), any material adverse change
in or affecting the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Partnership and the
Subsidiaries, taken as a whole; (iv) the Partnership and the Subsidiaries shall
not have any liabilities or obligations, direct or contingent (whether or not in
the ordinary course of business), that are material to the Partnership and the
Subsidiaries taken as a whole other than those reflected in the Registration
Statement or the Final Prospectus (or any amendment or supplement thereto); and
(v) all the representations and warranties of the Plains Parties contained in
this Agreement shall be true and correct on and as of the date hereof and on and
as of the Closing Date as if made on and as of the Closing Date.
(j) The Plains Parties shall not have failed at or prior to the
Closing Date to have performed or complied in all material respects with any of
their agreements herein contained and required to be performed or complied with
by them hereunder at or prior to the Closing Date.
(k) The NYSE shall have approved the Units for listing, subject only
to official notice of issuance and evidence of satisfactory distribution.
(l) The Plains Parties shall have furnished or caused to be furnished
to you such further certificates and documents as you shall have reasonably
requested.
(m) There shall have been furnished to you at the Closing Date a
certificate reasonably satisfactory to you, signed on behalf of the Partnership
by the President or any Vice President and the Chief Financial Officer of the
General Partner to the effect that: (A) the representations and warranties of
each Plains Party contained in this Agreement are true and correct at and as of
the Closing Date as though made at and as of the Closing Date; (B) each of the
Plains Parties has in all material respects performed all obligations required
to be performed by it pursuant to the terms of this Agreement at or prior to the
Closing Date; (C) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or taken or, to the knowledge of any of the Plains Parties, threatened by the
Commission, and all requests for additional information on the part of the
Commission have been complied with or otherwise satisfied; (D) no event
contemplated by subsection (i) of this Section 8 in respect of the Partnership,
the Subsidiaries or the General Partner shall have occurred; and (E) there has
been no document required to be filed under the Exchange Act that upon such
filing would be deemed to be incorporated by reference into the Final Prospectus
that has not been so filed.
34
(n) On or prior to the date hereof, the Partnership shall have
furnished to you a letter substantially in the form of Exhibit B hereto from
each officer and each director of the General Partner.
All such opinions, certificates, letters and other documents referred
to in this Section 8 will be in compliance with the provisions hereof only if
they are reasonably satisfactory in form and substance to you and your counsel.
The Partnership shall furnish to the Underwriter conformed copies of such
opinions, certificates, letters and other documents in such number as they shall
reasonably request.
The obligation of the Underwriter to purchase Additional Units
hereunder is subject to the satisfaction on and as of any Option Closing Date of
the conditions set forth in this Section 8, except that, if any Option Closing
Date is other than the Closing Date, the certificates, opinions and letters
referred to in paragraphs (c) through (h), (l) and (m) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d),
(e), (f) and (g), as applicable, shall be revised to reflect the sale of
Additional Units.
9. Expenses. The Partnership agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Basic Prospectus, the Final Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Basic Prospectus, the Final Prospectus, the Incorporated Documents and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Units; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Units,
including any stamp taxes in connection with the original issuance and sale of
the Units; (iv) the printing (or reproduction) and delivery of this Agreement,
the preliminary and supplemental Blue Sky Memoranda, and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Units; (v) the registration of the Common Units under the Exchange Act
and the listing of the Units on the NYSE; (vi) the registration or qualification
of the Units for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 5(f) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Underwriter relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); (vii)
the filing fees in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of officers and employees of the
Partnership in connection with presentations to prospective purchasers of the
Units; and (ix) the fees and expenses of the Partnership's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Partnership.
It is understood, however, that except as otherwise provided in this
Section 9, the Underwriter will pay all of its own costs and expenses, including
the fees of its counsel, transfer taxes on any resale of the Units by the
Underwriter, any advertising expenses connected with any
35
offers it may make and the transportation and other expenses incurred by the
Underwriter on its own behalf in connection with presentations to prospective
purchasers of the Units.
10. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement or a post-effective amendment thereto to be
declared effective before the offering of the Units may commence, when
notification of the effectiveness of the Registration Statement or such post-
effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the
Partnership by notifying you, or by you, by notifying the Partnership.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriter to any Plains Party, by notice to the Partnership, if prior to the
Closing Date or any Option Closing Date (if different from the Closing Date and
then only as to the Additional Units), as the case may be, (i) trading in the
Common Units shall have been suspended by the Commission or the NYSE or trading
in securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or limited or
minimum prices shall have been established, (ii) a banking moratorium shall have
been declared either by federal or New York or Texas state authorities, or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Underwriter, impractical or inadvisable to proceed with the
offering or delivery of the Units as contemplated by the Final Prospectus
(exclusive of any supplement thereto). Notice of such termination may be given
to the Partnership by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
12. Miscellaneous. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to any of the Plains Parties, at the
office of the Partnership at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇ ▇▇▇▇▇, or (ii) if to you, ▇▇▇▇▇▇▇, Sachs & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Underwriter, the Plains Parties, their directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the
term "successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Underwriter of any of the Units in his status
as such purchaser.
36
13. Applicable Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
37
Please confirm that the foregoing correctly sets forth the agreement
among the Plains Parties and the Underwriter.
Very truly yours,
PLAINS ALL AMERICAN PIPELINE, L.P.
By: PLAINS ALL AMERICAN INC.
its General Partner
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: _________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board and Chief
Executive Officer
PLAINS MARKETING, L.P.
By: PLAINS ALL AMERICAN INC.
its General Partner
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: _________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board and Chief
Executive Officer
ALL AMERICAN PIPELINE, L.P.
By: PLAINS ALL AMERICAN INC.
its General Partner
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: _________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board and Chief
Executive Officer
PLAINS ALL AMERICAN INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: __________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board and Chief
Executive Officer
PAAI LLC
By: PLAINS ALL AMERICAN INC.
its Sole Member
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: __________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board and Chief
Executive Officer
Confirmed as of the date first
mentioned above.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
/s/ ▇▇▇▇▇▇▇, Sachs & Co.
By: ______________________________
Authorized Representative
EXHIBIT A
Entity Jurisdiction in which registered or qualified
------ ---------------------------------------------
Partnership Texas
Plains Marketing, L.P. Alabama, Arizona, California, Colorado, Florida,
Illinois, Kansas, Louisiana, Mississippi, New Mexico,
Oklahoma, Texas
All American Pipeline,
L.P. Arizona, California, New Mexico
Plains Marketing Canada,
L.P. Saskatchewan
Plains All American Inc. Alabama, Arizona, California, Colorado, Florida,
Illinois, Kansas, Louisiana, Mississippi, New Mexico,
Oklahoma, Texas
Plains Marketing Canada
LLC None
PMC (Nova Scotia)
Company Saskatchewan, Alberta
A-1
EXHIBIT B
[Letterhead of officer, director or holder of Common Units]
Plains All American Pipeline, L.P.
Public Offering of Common Units
-------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") among Plains All American
Pipeline, L.P., a Delaware limited partnership (the "Partnership"), Plains
Marketing, L.P., All American Pipeline, L.P., Plains All American Inc., PAAI LLC
and ▇▇▇▇▇▇▇, Sachs & Co., relating to an underwritten public offering of common
units representing limited partner interests (the "Common Units") of the
Partnership.
To induce you to enter into the Underwriting Agreement, the
undersigned agrees that, except for sales of Common Units (as defined in the
Underwriting Agreement) the proceeds from which will be used to pay tax
liabilities associated with the vesting of Common Units under (i) a Transaction
Grant Agreement or a Phantom Unit Grant Agreement or (ii) the Plains All
American Inc. 1998 Long-Term Incentive Plan, he or she will not offer, sell,
contract to sell or otherwise dispose of any Common Units or any securities
(other than Subordinated Units (as defined in the Underwriting Agreement)) that
are convertible into, or exercisable or exchangeable for, or that represent the
right to receive, Common Units or any securities that are senior to or pari
passu with Common Units for a period of 90 days after the date of the Final
Prospectus (as defined in the Underwriting Agreement) without the prior written
consent of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
If for any reason the Underwriting Agreement is terminated before the
Closing Date (as defined in the Underwriting Agreement), the agreement set forth
above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or common
Unitholder]
[Name and address of officer, director or common
▇▇▇▇▇▇▇▇▇▇]
▇-▇