EXHIBIT 1.1
PLAINS ALL AMERICAN PIPELINE, L.P.
5,500,000 Common Units
Representing Limited Partner Interests
UNDERWRITING AGREEMENT
August 15, 2002
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
SALOMON SMITH BARNEY INC.
UBS WARBURG LLC
A.G. EDWARDS & SONS, INC.
WACHOVIA SECURITIES, INC.
c/o GOLDMAN SACHS & CO.
85 Broad Street
New York, New York 10004
Dear Sirs:
Plains All American Pipeline, L.P., a Delaware limited
partnership (the "Partnership"), proposes to issue and sell an aggregate of
5,500,000 common units (the "Firm Units") representing limited partner interests
in the Partnership (the "Common Units") to the several underwriters named in
Schedule I hereto (the "Underwriters"), upon the terms and conditions set forth
in Section 2 hereof. The Partnership also proposes to sell to the Underwriters,
upon the terms and conditions set forth in Section 2 hereof, up to an additional
825,000 Common Units (the "Additional Units"). The Firm Units and the Additional
Units are hereinafter collectively referred to as the "Units."
Plains AAP, L.P., a Delaware limited partnership (the "General
Partner"), is the general partner of the Partnership. Plains All American GP
LLC, a Delaware limited liability company ("GP LLC"), is the general partner of
the General Partner. The Partnership owns 100% of the issued and outstanding
shares of Plains Marketing GP Inc., a Delaware corporation ("GP Inc.") and the
general partner of each of 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% limited partner 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. All American owns a 100% membership interest in Basin
Holdings GP LLC, a Delaware limited liability company ("Basin LLC"), and a
99.999% limited partner interest in Basin Pipeline Holdings, LP, a Delaware
limited partnership ("Basin LP"). Basin LLC owns a 0.001% general partner
interest in Basin LP. GP Inc., Plains Marketing, All American, PMC LLC, PMC LP,
PMC NS, Basin LLC and Basin LP
are collectively referred to herein as the "Subsidiaries." The Partnership, the
General Partner, GP LLC, GP Inc., 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 several purchases of the Units by the
Underwriters.
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. 333-68446) (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 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.
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2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Partnership agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Partnership, at a purchase price
of $22.50 per Unit, the amount of the Firm Units set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Partnership hereby
grants an option to the several Underwriters to purchase, severally and not
jointly, up to 825,000 Additional Units at the same purchase price per Unit as
the Underwriters 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
Underwriters to the Partnership setting forth the number of Additional Units as
to which the several Underwriters are exercising the option and the settlement
date. The number of Additional Units to be purchased by each Underwriter shall
be the same percentage of the total number of shares of the Additional Units to
be purchased by the several Underwriters as such Underwriter is purchasing of
the Firm Units, subject to such adjustments as you in your absolute discretion
shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the 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 August 21,
2002, or at such time on such later date not more than three business days after
the foregoing date as the Underwriters shall designate, which date and time may
be postponed by agreement between the Underwriters 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 Underwriters for the
respective accounts of the several Underwriters against payment by the several
Underwriters 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
Underwriters 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 Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004, on the date (an "Option
Closing Date") specified by the Underwriters (which shall be within three
business days after each exercise of said option), for the respective accounts
of the several Underwriters, against payment by the several Underwriters 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 Underwriters on the settlement date for the
Additional Units, and the obligation of the Underwriters 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 Underwriters. It is understood that the
several Underwriters propose to offer the Units for sale to the public as set
forth in the Final Prospectus.
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5. Agreements of the Plains Parties. Each of the Plains
Parties, jointly and severally, agrees with the Underwriters 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, the General Partner and GP LLC will endeavor to cause the
Registration Statement or such post-effective amendment to become effective as
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, the General Partner and GP LLC 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 EDGAR 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,
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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 Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the Partnership
will expeditiously deliver to each 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 any 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 Underwriters 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 any Underwriter or 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 Underwriters 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 Underwriters 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, the General Partner and GP LLC will
cooperate with you and with counsel for the Underwriters in connection with the
registration or qualification of the Units for offering and sale by the
Underwriters 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.
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(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.
(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 pursuant to
the second paragraph of Section 10 hereof or Section 11 hereof) or if this
Agreement shall be terminated by the Underwriters 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 Underwriters for all reasonable out-of-pocket
expenses (including reasonable fees and expenses of counsel for the
Underwriters) 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 subordinated limited partnership interests of the Partnership
(the "Subordinated Units"), any securities that are convertible into, or
exercisable or exchangeable for, or that represent the right to receive, Common
Units or Subordinated Units or any securities that are senior to or pari passu
with Common Units, or (ii) grant any options or warrants to purchase Common
Units or Subordinated Units (other than the grant of Unit Options or Restricted
Units pursuant to the Plains All American GP LLC 1998 Long-Term Incentive Plan
or the Performance Option Plan of Plains AAP, L.P. and Plains All American GP
LLC), for a period of 90 days after the date of the Final Prospectus without the
prior written consent of Goldman, Sachs & Co., except for the issuance of Units
pursuant to this Agreement and the issuance of Common Units pursuant to Section
5.7(b) of the Third 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 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.
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(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) of the 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 Underwriters
that:
(a) The Partnership and the offering of the Units contemplated
by this Agreement meet the requirements for using Form 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 any 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 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
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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, the General Partner, Plains
Marketing and Basin LP 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 and, in the
case of the General Partner, to act as the general partner of the Partnership,
in each case in all material respects as described in the Registration Statement
and the Final Prospectus. Each of the Partnership, the General Partner, Plains
Marketing and Basin LP 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) GP Inc. 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 Plains Marketing and All American, in each case in
all material respects as described in the Registration Statement and the Final
Prospectus. GP Inc. 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.
(f) Each of GP LLC, PMC LLC and Basin 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
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own or lease its properties and to conduct its business and, in the cases of GP
LLC and Basin LLC, to act as the general partner of the General Partner and
Basin LP, respectively, in each case in all material respects as described in
the Registration Statement and the Final Prospectus. Each of GP LLC, PMC LLC and
Basin 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) GP LLC is the sole general partner of the General Partner,
with a 1.0% general partner interest in the General Partner; such general
partner interest has been duly authorized and validly issued in accordance with
the Amended and Restated Agreement of Limited Partnership of the General Partner
(as the same may be amended or restated prior to the Closing Date, the "General
Partner Partnership Agreement"); and GP LLC owns such general partner interest
free and clear of all liens, encumbrances, security interests, equities, charges
or claims.
(j) As of the date hereof, the issued and outstanding limited
partner interests of the Partnership consist of 31,915,939 Common Units,
1,307,190 Class B Common Units representing limited partner interests in the
Partnership (the "Class B Units"), 10,029,619 Subordinated Units and the
Incentive Distribution Rights. All outstanding Common Units, Class B Units,
Subordinated Units and Incentive Distribution Rights and the limited partner
interests represented thereby have been duly authorized and validly issued in
accordance with the Partnership
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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")). The authorized limited partner interests of the Partnership
conform as to legal matters to the descriptions thereof contained in the Final
Prospectus.
(k) The General Partner is the sole general partner of the
Partnership, with a 2.0% general partner interest in the Partnership; such
general partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement; the General Partner owns 450,000
Subordinated Units and all of the Incentive Distribution Rights; and the General
Partner owns such general partner interest, Subordinated Units and Incentive
Distribution Rights free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except, with respect to the Subordinated
Units, (x) the economic interests attributable to distributions on such units as
allocated in accordance with the General Partner Partnership Agreement and (y)
the interest in such units held by grantees under the Plains 2001 Performance
Option Plan.
(l) At the Closing Date, there will be issued to the
Underwriters the Firm Units (assuming no purchase by the Underwriters 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).
(m) The Partnership owns 100% of the issued and outstanding
capital stock of GP Inc.; such capital stock has been duly authorized and
validly issued and is fully paid and nonassessable; and the Partnership owns
such capital stock free and clear of all liens, encumbrances, security
interests, equities, charges or claims, except as provided in the Second Amended
and Restated Credit Agreement [Revolving Credit Facility] dated as of July 2,
2002 among All American, Plains Marketing, PMC NS, PMC LP and the Partnership
and the lenders named therein (as amended and in effect as of the Closing Date,
the "Plains Bank Credit Agreement") and the Second Amended and Restated Credit
Agreement [Letter of Credit and Hedged Inventory Facility] dated as of July 2,
2002 among All American, Plains Marketing and the Partnership and the lenders
named therein (as amended and in effect as of the Closing Date, the "Plains
Letter of Credit Facility").
(n) GP Inc. is the sole general partner of Plains Marketing
with a .001% general partner interest in Plains Marketing; such general partner
interest has been duly authorized and validly issued in accordance with the
Second Amended and Restated Agreement of Limited Partnership of Plains Marketing
(as the same may be amended or restated prior to the Closing Date, the "Plains
Marketing Partnership Agreement"); and GP Inc. owns such general 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.
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(o) GP Inc. 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 Second
Amended and Restated Agreement of Limited Partnership of All American (as the
same may be amended or restated prior to the Closing Date, the "All American
Partnership Agreement"); and GP Inc. owns such general partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims, except as provided in the Plains Bank Credit Facility and the Plains
Letter of Credit Facility.
(p) The Partnership is the sole limited partner of Plains
Marketing with a 99.999% 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 Section 17-607
of the Delaware LP Act); 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.
(q) 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.
(r) All American owns a 100% member interest in Basin LLC;
such member interest has been duly authorized and validly issued in accordance
with the Limited Liability Company Agreement of Basin LLC (as the same may be
amended or restated prior to the Closing Date, the "Basin LLC Agreement") and is
fully paid (to the extent required under the Basin LLC Agreement) and
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act); and All American 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.
(s) All American is the sole limited partner of Basin LP with
a 99.999% limited partner interest in Basin LP; such limited partner interest
has been duly authorized and validly issued in accordance with the Agreement of
Limited Partnership of Basin LP (as the same may be amended or restated prior to
the Closing Date, the "Basin LP Partnership Agreement") and is fully paid (to
the extent required under the Basin LP Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the
Delaware LP Act); and All American 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.
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(t) Basin LLC is the sole general partner of Basin LP with a 0.001%
general partner interest in Basin LP; such general partner interest has been
duly authorized and validly issued in accordance with the Basin LP Partnership
Agreement; and Basin LLC owns such general 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.
(u) 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
or restated 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.
(v) 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 Agreement of Limited Partnership of PMC LP (as the
same may be amended or restated prior to the Closing Date, the "PMC LP
Partnership Agreement" and, together with the Partnership Agreement, the General
Partner Partnership Agreement, the Plains Marketing Partnership Agreement, the
All American Partnership Agreement and the Basin LP Partnership Agreement, the
"Partnership Agreements") 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
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.
(w) 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 issued in accordance with the PMC LP Partnership
Agreement; 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 Plains Bank Credit Agreement and the Plains Letter of Credit
Facility.
(x) 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 PMC LLC Agreement, the Basin LLC Agreement
and the Partnership Agreements, the "Organization Agreements") as fully paid and
nonassessable shares (except as such nonassessability may be affected by the
laws of Nova Scotia); and 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.
(y) None of the Plains Parties has any subsidiaries (other than Basin
LLC, Basin LP or a Plains Party) 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).
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(z) Except as described in the Final Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any 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, there are no outstanding options or warrants to purchase any Common
Units or Subordinated Units or other partnership interests from 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, limited liability company and
partnership action, as the case may be, required to be taken by the Plains
Parties or any of their stockholders, members or partners for the authorization,
issuance, sale and delivery of the Units shall have been validly taken.
(aa) 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.
(bb) 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 GP Inc. and the Partnership, and is a valid
and legally binding agreement of GP Inc. 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 GP Inc.
and Plains Marketing and is a valid and legally binding agreement of GP Inc. 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).
13
(cc) 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 (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.
(dd) 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.
(ee) 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.
(ff) 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 independent
14
public accountants with respect to the Plains Parties as required by the Act and
the applicable published rules and regulations thereunder.
(gg) At June 30, 2002, the Partnership would have had, on an as
adjusted basis as indicated in the Final Prospectus (and any amendment or
supplement thereto), a total 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, 2001 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.
(hh) 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.
(ii) 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.
(jj) 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 provided in the Plains Bank Credit
Agreement and the Plains Letter of Credit Facility or as otherwise 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
(kk) 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.
(ll) 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 of 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 failures to perform, 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.
(mm) 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 failures to perform, 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.
(nn) 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,"
"holding company"
16
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," within the meaning of Tex. Util. Code (S)121.001 or (iv) a "public
utility" or "utility" within the meaning of the Public Utility Regulatory Act of
Texas or under similar laws of any state in which any such Plains Party does
business.
(oo) 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.
(pp) Except as described in the Final Prospectus, 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.
(qq) 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.
(rr) 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.
(ss) 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 (financial or other), business,
prospects, properties,
17
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.
(tt) 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 each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls any 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, the General Partner or GP LLC by or on
behalf of any 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 any
Underwriter, any director, officer, employee or agent of any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against a Plains Party, such Underwriter or such director, officer, employee,
agent or controlling person shall promptly notify the Partnership in writing,
and the Partnership, the General Partner and GP LLC 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. Such 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 such Underwriter or such director, officer, employee, agent or
controlling person unless (i) the Partnership, the General Partner and/or GP LLC
has agreed in writing to pay such fees and expenses, (ii) the Partnership, the
General Partner and GP LLC have failed to assume the defense and employ counsel
or (iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such director, officer,
employee, agent or controlling person and the Partnership, the General Partner
or GP LLC, and such 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, the General Partner and/or GP LLC 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, the General Partner and GP LLC shall not have the
right to assume the defense of such action, suit or proceeding on behalf of
18
such Underwriter or such controlling person). It is understood, however, that
the Partnership, the General Partner and GP LLC 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 all such Underwriters and 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 Goldman, Sachs & Co., 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 any
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) Each Underwriter agrees, severally and not jointly, 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 each Underwriter, but only with respect to information furnished in
writing by or on behalf of such Underwriter through you 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 any
Underwriter pursuant to this paragraph (c), such Underwriter shall have the
rights and duties given to the Plains Parties by paragraph (b) above (except
that if the Partnership, the General Partner or GP LLC shall have assumed the
defense thereof such 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 such
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 Underwriters by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriters 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 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 Underwriters on the other hand from the
offering of the Units, or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Plains Parties on the one hand and the Underwriters 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 Plains Parties
on the one hand and the
19
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Partnership bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Final Prospectus. The relative fault of the Plains Parties on the one hand,
and the Underwriters 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 Underwriters 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 Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) 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, no Underwriter
shall 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 such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(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 behalf of any Underwriter or any person controlling
any 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 any Underwriter or any
person controlling any 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.
20
8. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters 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 Goldman,
Sachs & Co., 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 any 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 Underwriters and their 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
Vinson & Elkins 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, the General Partner, Plains
Marketing and Basin LP 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 and, in the case of the General Partner, to act as
the general partner of the Partnership, in each case in all material
respects as described in the Registration Statement and the Final
Prospectus. Each of the Partnership, the General Partner, Plains Marketing
and Basin LP 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.
(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
21
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) GP Inc. 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, to conduct its business and to act as general partner of
Plains Marketing and All American, in each case in all material
respects as described in the Registration Statement and the Final
Prospectus. GP Inc. 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 GP LLC, PMC LLC and Basin 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 and, in the cases of GP LLC and Basin LLC, to
act as the general partner of the General Partner and Basin LP,
respectively, in each case in all material respects as described in the
Registration Statement and the Final Prospectus. Each of GP LLC, PMC
LLC and Basin 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) GP LLC is the sole general partner of the General
Partner, with a 1.0% general partner interest in the General Partner;
such general partner interest has been duly authorized and validly
issued in accordance with the General Partner Partnership Agreement;
and GP LLC owns such general partner interest free and clear of all
liens, encumbrances, security interests, equities, charges or claims
(A) in respect of which a financing statement under the Uniform
Commercial Code of the States of Delaware or Texas naming the GP LLC as
debtor is on file in the office of the Secretary of State of the States
of Delaware or Texas or (B) otherwise known to such counsel, without
independent investigation, other than those created by or arising under
the Delaware LP Act.
(vi) As of the date hereof, the issued and outstanding
limited partner interests of the Partnership consist of 31,915,939
Common Units, 1,307,190 Class B Units, 10,029,619 Subordinated Units
and the Incentive Distribution Rights. All outstanding Common Units,
Class B Units, Subordinated Units and Incentive Distribution Rights and
the limited partner interests represented thereby have been duly
authorized and validly issued in accordance with the Partnership
Agreement and are fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the Form 8-A).
The authorized limited partner interests of the Partnership conform as
to legal matters to the descriptions thereof contained in the Final
Prospectus.
(vii) The General Partner is the sole general partner of the
Partnership, with a 2.0% general partner interest in the Partnership;
such general partner interest has been duly authorized and validly
issued in accordance with the Partnership Agreement; the General
22
Partner owns 450,000 Subordinated Units and all of the Incentive
Distribution Rights; and the General Partner owns such general partner
interest, Subordinated Units and Incentive Distribution Rights free and
clear of all liens, encumbrances, security interests, charges or claims
(A) in respect of which a financing statement under the Uniform
Commercial Code of the States of Delaware or Texas naming the General
Partner as debtor is on file in the office of the Secretary of State of
the States of Delaware or Texas or (B) otherwise known to such counsel,
without independent investigation, other than those created by or
arising under the Delaware LP Act, except, with respect to the
Subordinated Units, (x) the economic interests attributable to
distributions on such units as allocated in accordance with the General
Partner Partnership Agreement and (y) the interest in such units held
by grantees under the Plains 2001 Performance Option Plan.
(viii) The Firm Units to be issued and sold to the Underwriters
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).
(ix) The Partnership owns 100% of the issued and outstanding
capital stock of GP Inc.; such capital stock has been duly authorized
and validly issued and is fully paid and nonassessable; and the
Partnership owns such capital stock free and clear of all liens,
encumbrances, security interests, equities, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial
Code of the States of Delaware or Texas naming the Partnership 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 General Corporation Law, or (C) except as provided in the
Plains Bank Credit Agreement and the Plains Letter of Credit Facility.
(x) GP Inc. is the sole general partner of Plains Marketing
with a .001% 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 GP Inc.
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
States of Delaware or Texas naming GP Inc. 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.
(xi) GP Inc. 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 GP Inc. 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
23
Uniform Commercial Code of the States of Delaware or Texas naming GP
Inc. 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) The Partnership is the sole limited partner of Plains
Marketing with a 99.999% 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 Section 17-607 of the Delaware LP
Act); 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 States of Delaware or Texas naming the
Partnership 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 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, charges 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.
(xiv) All American owns a 100% member interest in Basin LLC;
such member interest has been duly authorized and validly issued in
accordance with the Basin LLC Agreement and is fully paid (to the
extent required under the Basin LLC Agreement) and nonassessable
(except as such nonassessability may be affected by Section 18-607 of
the Delaware LLC Act); and All American 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 States of Delaware or Texas naming All American
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 LLC Act, or (C) except as provided in the
Plains Bank Credit Agreement and the Plains Letter of Credit Facility.
(xv) All American is the sole limited partner of Basin LP
with a 99.999% limited partner interest in Basin LP; such limited
partner interest has been duly authorized
24
and validly issued in accordance with the Basin LP Partnership
Agreement and is fully paid (to the extent required under the Basin LP
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-607 of the Delaware LP
Act); and All American 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 States of Delaware or Texas naming All American
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.
(xvi) Basin LLC is the sole general partner of Basin LP with a
0.001% general partner interest in Basin LP; such general partner
interest has been duly authorized and validly issued in accordance with
the Basin LP Partnership Agreement; and Basin LLC 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 States of Delaware
or Texas naming Basin LLC 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.
(xvii) 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 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 LLC Act, or (C) except as provided in the Plains Bank
Credit Agreement and the Plains Letter of Credit Facility.
(xviii) Plains Marketing owns its 99% limited partner interest
in PMC LP free and clear of all liens, encumbrances, security
interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the States of Delaware
or Texas naming 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.
(xix) 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 States of Delaware or
25
Texas naming PMC LLC 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 LLC Act, or (C) except
as provided in the Plains Bank Credit Agreement and the Plains Letter
of Credit Facility.
(xx) Except as described in the Final Prospectus, there are
no preemptive rights or other rights to subscribe for or to purchase,
nor any restriction upon the voting or transfer of, any interests in
the Partnership or any Subsidiary (other than PMC LP and PMC NS, as to
which such counsel has 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 such
counsel has 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 such
counsel has 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 which such counsel has 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, 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.
(xxi) This Agreement has been duly authorized and validly
executed and delivered by each of the Plains Parties.
(xxii) 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 GP Inc. and the Partnership, and is a valid and legally
binding agreement of GP Inc. 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
GP Inc. and Plains Marketing, and is a valid and legally binding
agreement of GP Inc. 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.
26
(xxiii) 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 such
counsel has 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
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.
(xxiv) 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.
(xxv) 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.
(xxvi) The opinion of Vinson & Elkins 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.
(xxvii) The Registration Statement was declared effective under
the Act on September 4, 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.
27
(xxviii) 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.
(xxix) 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.
(xxx) None of the Plains Parties is an "investment company"
as such term is defined in the Investment Company Act of 1940, as
amended.
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,
28
as the case may be, of each of the Plains Parties, 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 & Jaworski 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 or the consummation of the transactions
contemplated hereby, result in a breach of, or constitutes a default under (or
an event which, with notice or lapse of time or both, would constitute such an
event) the provisions of any Credit Agreement (as defined in Annex A to such
opinion).
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 state of 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 Underwriters and their 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 Tim
Moore, general counsel for GP LLC, dated the Closing Date and addressed to you,
to the effect that:
(i) To the knowledge of such counsel, none of the Plains Parties
is in (A) breach or violation of the provisions of its Organization
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 reasonably be expected to, 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 would reasonably be expected to materially impair the
ability of any of the Plains Parties to perform their obligations under
this Agreement.
(ii) 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 or the consummation of the transactions
contemplated hereby (A) constitutes or will constitute a
29
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 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 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.
(iii) To the knowledge of such counsel, each of the Plains
Parties 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 has received any notice of proceedings
relating to the revocation or modification of any such permits which,
individually or in the aggregate, would reasonably be expected to have a
material adverse effect upon the operations conducted by the Partnership
and the Subsidiaries, taken as a whole.
(iv) 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 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 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
30
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
Bennett Jones 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 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 or Alberta naming PMC NS as debtor is on
file, except for the security interests registered by Fleet National Bank
and The Toronto-Dominion Bank at Alberta Personal Property Registry
(registration no. 01050402997) and Nova Scotia Personal Property Registry
(registration no. 4053623) against PMC LP and PMC NS.
(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 validly issued in accordance with the PMC LP
Partnership Agreement and is fully paid (to the extent
31
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).
(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) 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.
(viii) 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 constitutes or will constitute a violation of the PMC LP Partnership
Agreement or the certificate or articles of incorporation, memorandum of
association or bylaws or other organizational documents of PMC NS.
(ix) 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 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
32
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 may be subject.
In rendering such opinion, such counsel shall state that (A)
Vinson & Elkins L.L.P. is thereby 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 thereof and (B)
subject to the foregoing, such opinion letter may be relied upon only by the
Underwriters and their counsel in connection with the transactions contemplated
by this Agreement and no other use or distribution of such opinion letter may be
made without such counsel's prior written consent.
(g) You shall have received on the Closing Date an opinion of
Baker Botts L.L.P., counsel for the Underwriters, 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 the Underwriters 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, the General Partner or GP LLC, shall be threatened by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the partners' capital or stockholder's or members' equity of the
Partnership and the Subsidiaries, taken as a whole, or the General Partner or GP
LLC, 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 (other
than in the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Final Prospectus (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.
33
(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 GP LLC
to the effect that: (A) the representations and warranties of each of the
Partnership, the General Partner and GP LLC 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 Partnership, the General Partner and GP LLC 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 or the Subsidiaries 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.
(n) There shall have been furnished to you at the Closing Date a
certificate reasonably satisfactory to you, signed on behalf of GP Inc. by the
President or any Vice President and the Chief Financial Officer of GP Inc. to
the effect that: (A) the representations and warranties of each of GP Inc.,
Plains Marketing and All American 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 and (B) each of GP Inc., Plains Marketing and All American has in all
material respects performed all obligations and satisfied all conditions
required to be performed or satisfied by it pursuant to the terms of this
Agreement at or prior to the Closing Date.
(o) 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 the
General Partner, Plains Holdings Inc. and from each officer and each director of
GP LLC.
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 Underwriters conformed copies of
such opinions, certificates, letters and other documents in such number as they
shall reasonably request.
The several obligations of the Underwriters to purchase
Additional Units hereunder are 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) and (l) through
(n) shall be dated the
34
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 Underwriters 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 or Section 5(i) hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, transfer taxes on
any resale of the Units by any Underwriter, any advertising expenses connected
with any offers they may make and the transportation and other expenses incurred
by the Underwriters on their 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.
If any one or more of the Underwriters shall fail or refuse to
purchase Units which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Units which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of the Units which the Underwriters
are obligated to
35
purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Units set forth
opposite its name in Schedule I hereto bears to the aggregate number of Firm
Units set forth opposite the names of all non-defaulting Underwriters or in such
other proportion as you may specify in accordance with the Agreement Among
Underwriters of Goldman, Sachs & Co., to purchase the Units which such
defaulting Underwriter or Underwriters are obligated, but fail or refuse, to
purchase. If any one or more of the Underwriters shall fail or refuse to
purchase Units which it or they are obligated to purchase on the Closing Date
and the aggregate number of Units with respect to which such default occurs is
more than one-tenth of the aggregate number of Units which the Underwriters are
obligated to purchase on the Closing Date and arrangements satisfactory to you
and the Partnership for the purchase of such Units by one or more non-defaulting
Underwriters or other party or parties approved by you and the Partnership are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any party hereto (other than the defaulting
Underwriter). In any such case which does not result in termination of this
Agreement, either you or the Partnership shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Final Prospectus
or any other documents or arrangements may be effected. If any one or more of
the Underwriters shall fail or refuse to purchase Additional Units which it or
they are obligated to purchase hereunder on the Option Closing Date, each
non-defaulting Underwriter shall be obligated, severally, in the proportion
which the number of Firm Units set forth opposite its name in Schedule I hereto
bears to the aggregate number of Firm Units set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
accordance with the Agreement Among Underwriters of Goldman, Sachs & Co., to
purchase the Additional Units which such defaulting Underwriter or Underwriters
are obligated, but fail or refuse, to purchase. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any such default of any such Underwriter under this Agreement. The term
"Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule I hereto who, with your approval and
the approval of the Partnership, purchases Units which a defaulting Underwriter
is obligated, but fails or refuses, to purchase.
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 any
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 a
material disruption in commercial banking or securities settlement or clearance
services in the United States shall have occurred, 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 or any change
in financial, political or economic conditions in the United States or
elsewhere, the effect of which on financial markets is such as to make it, in
the sole judgment of the
36
Underwriters, 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. Information Furnished by the Underwriters. The statements set
forth in the fifth, seventh and eighth paragraphs under the caption
"Underwriting" in the Final Prospectus constitute the only information furnished
by or on behalf of the Underwriters through you as such information is referred
to in Sections 6(a) and 7 hereof.
13. 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 333 Clay, Suite 1600, Houston, Texas 77002,
Attention: Tim Moore, or (ii) if to you, care of Goldman, Sachs & Co., 85 Broad
Street, 15th Floor, New York, New York 10004, Attention: Registration
Department.
This Agreement has been and is made solely for the benefit of the
several Underwriters, 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 any Underwriter of any of the Units in his status
as such purchaser.
14. 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 Underwriters.
Very truly yours,
PLAINS ALL AMERICAN PIPELINE, L.P.
By: PLAINS AAP, L.P.
its General Partner
By: PLAINS ALL AMERICAN GP LLC
its General Partner
By: /s/ Phillip D. Kramer
-------------------------------------------
Name: Phillip D. Kramer
Title: Executive Vice President and
Chief Financial Officer
PLAINS AAP, L.P.
By: PLAINS ALL AMERICAN GP LLC
its General Partner
By: /s/ Phillip D. Kramer
-------------------------------------------
Name: Phillip D. Kramer
Title: Executive Vice President and
Chief Financial Officer
PLAINS ALL AMERICAN GP LLC
By: /s/ Phillip D. Kramer
-------------------------------------------
Name: Phillip D. Kramer
Title: Executive Vice President and
Chief Financial Officer
PLAINS MARKETING, L.P.
By: PLAINS MARKETING GP INC.
its General Partner
38
By: /s/ Phillip D. Kramer
------------------------------------------
Name: Phillip D. Kramer
Title: Executive Vice President and
Chief Financial Officer
ALL AMERICAN PIPELINE, L.P.
By: PLAINS MARKETING GP INC.
its General Partner
By: /s/ Phillip D. Kramer
------------------------------------------
Name: Phillip D. Kramer
Title: Executive Vice President and
Chief Financial Officer
PLAINS MARKETING GP INC.
By: /s/ Phillip D. Kramer
------------------------------------------
Name: Phillip D. Kramer
Title: Executive Vice President and
Chief Financial Officer
Confirmed as of the date first above
written on behalf of the Underwriters
named in Schedule I hereto.
Goldman, Sachs & Co.
Lehman Brothers Inc.
Salomon Smith Barney Inc.
UBS Warburg LLC
A.G. Edwards & Sons, Inc.
Wachovia Securities, Inc.
By: Goldman, Sachs & Co.
/s/ Goldman, Sachs & Co.
----------------------------------
(Goldman, Sachs & Co.)
39
SCHEDULE I
Plains All American Pipeline, L.P.
Number of Firm Units
Underwriter to be Purchased
----------- ---------------
Goldman, Sachs & Co ....................................... 1,760,000
Lehman Brothers Inc. ...................................... 935,000
Salomon Smith Barney Inc. ................................. 935,000
UBS Warburg LLC ........................................... 935,000
A.G. Edwards & Sons, Inc. ................................. 467,500
Wachovia Securities, Inc. ................................. 467,500
-----------
Total 5,500,000
===========
40
EXHIBIT A
Form of Exhibit A to Opinions in Sections 8(c) and (f)
Entity Jurisdiction in which registered or
- ------ -----------------------------------
qualified
----------
Plains All American Pipeline, L.P. Texas
Plains AAP, L.P. Texas
Plains All American GP LLC Texas
Plains Marketing GP Inc. California, Colorado, Illinois,
Kansas, Louisiana, Mississippi,
New Mexico, Oklahoma, Texas, Wyoming
Plains Marketing, L.P. California, Colorado, Florida,
Illinois, Iowa, Kansas, Louisiana,
Michigan, Minnesota, Mississippi,
Missouri, Montana, Nebraska, New
Mexico, North Dakota, Oklahoma,
Texas, Wyoming
All American Pipeline, L.P. California, Illinois, Louisiana,
Mississippi, North Dakota, Texas
Plains Marketing Canada LLC None
PMC (Nova Scotia) Company Alberta, British Columbia,
Saskatchewan, Manitoba, Ontario
Plains Marketing Canada, L.P. British Columbia, Saskatchewan,
Manitoba, Ontario
Basin Holdings GP LLC New Mexico, Oklahoma, Texas
Basin Pipeline Holdings, LP New Mexico, Oklahoma, Texas
A-1
EXHIBIT B
[Letterhead of officer, director or holder of Common Units]
Plains All American Pipeline, L.P.
Public Offering of Common Units
Goldman, Sachs & Co.
Lehman Brothers Inc.
Salomon Smith Barney Inc.
UBS Warburg LLC
A.G. Edwards & Sons, Inc.
Wachovia Securities, Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
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 AAP, L.P., Plains All American GP LLC, Plains Marketing GP Inc., Plains
Marketing, L.P., All American Pipeline, L.P., Goldman, Sachs & Co., Lehman
Brothers Inc., Salomon Smith Barney Inc., UBS Warburg LLC, A.G. Edwards & Sons,
Inc. and Wachovia Securities, Inc. relating to an underwritten public offering
of common units representing limited partner interests 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) the
Performance Option Plan of Plains AAP, L.P. and Plains All American GP LLC, (ii)
Phantom Units granted to certain former employees of Plains Resources Inc. or
(iii) the Plains All American GP LLC 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 Goldman, Sachs & Co.
B-1
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
Unitholder]
B-2