EXHIBIT 1.1
EXECUTION COPY
ENTERPRISE PRODUCTS PARTNERS L.P.
9,800,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
Lehman Brothers Inc. October 2, 2002
Goldman, Sachs & Co.
UBS Warburg LLC
RBC Dain Rauscher Inc.
Wachovia Securities, Inc.
McDonald Investments Inc.
Raymond James & Associates Inc.
Sanders Morris Harris Inc.
c/o Lehman Brothers Inc.
745 7th Avenue
New York, New York 10019
Dear Sirs:
Enterprise Partners L.P., a Delaware limited partnership (the
"Partnership"), proposes to issue and sell to the several Underwriters named in
Schedule 1 hereto (the "Underwriters") 9,800,000 Common Units (the "Firm
Units"), each representing a limited partner interest in the Partnership (the
"Common Units"). In addition, the Partnership proposes to grant to the
Underwriters an option to purchase up to an additional 1,470,000 Common Units,
on the terms and for the purposes set forth in Section 2 (the "Option Units").
The Firm Units and the Option Units, if purchased, are hereinafter collectively
called the "Units." Capitalized terms used but not defined herein shall have the
same meanings given them in the Partnership Agreement (as defined herein).
This is to confirm the agreement among Enterprise Products GP,
LLC, a Delaware limited liability company (the "General Partner"), the
Partnership and Enterprise Products Operating L.P., a Delaware limited
partnership (the "Operating Partnership"), (collectively, the "Enterprise
Parties") and the Underwriters concerning the purchase of the Firm Units and the
Option Units from the Partnership by the Underwriters.
1. Representations, Warranties and Agreements of the
Enterprise Parties. Each of the Enterprise Parties represents and warrants to,
and agrees with, each Underwriter that:
(a) Definitions. The Partnership and the Operating Partnership
have filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (file numbers 333-56082 and 333-56082-01),
including a prospectus, relating to the Units and the Partnership has filed
with, or transmitted for filing to, or shall promptly hereafter file with or
transmit for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Units pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"). The registration
statement as amended at the date of the Underwriting Agreement, including
information, if any, deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter
referred to as the "Registration Statement." The term "Basic Prospectus" means
the prospectus included in the Registration Statement. The term "Prospectus"
means the Basic Prospectus together with the Prospectus Supplement. The term
"Preliminary Prospectus" means a preliminary prospectus supplement specifically
relating to the Units, together with the Basic Prospectus. As used herein, the
terms "Registration Statement," "Basic Prospectus," "Prospectus" and
"Preliminary Prospectus" shall include in each case the documents, if any,
incorporated by reference therein (the "Incorporated Documents"). The terms
"supplement," "amendment" and "amend" as used herein shall include the filing of
all documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Underwriting Agreement by the Partnership
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). For purposes of this Agreement, "Effective Time" means the
date and time the Registration Statement became effective.
(b) Effectiveness. The Registration Statement has become
effective under the Securities Act; no stop order suspending the effectiveness
of the Registration Statement is in effect; and no proceedings for such purpose
are pending before or, to the knowledge of the Enterprise Parties, threatened by
the Commission.
(c) No Material Misstatements or Omissions. The Registration
Statement conforms, and any further amendments or supplements to the
Registration Statement will, when they become effective, conform in all material
respects to the requirements of the Securities Act and the rules and regulations
of the Commission thereunder (the "Rules and Regulations") and do not and will
not, as of the applicable effective date, 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. The Prospectus and any
supplement or amendment thereto when filed with the Commission under Rule 424(b)
will conform in all material respects to the requirements of the Securities Act
and the Rules and Regulations, and do not or will not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. Each forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) made by the Partnership in such documents, 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 information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information furnished
to the Partnership by or on behalf of any Underwriter specifically for inclusion
therein. The Incorporated Documents heretofore filed with the Commission, when
they were filed, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder and did
not, as of the time each such document was filed, 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. Any further
Incorporated Documents so filed will, when they
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are filed, conform in all material respects to the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder and will not, as
of the time each such document is filed, 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.
(d) Formation and Qualification of the Partnership. Each of
the General Partner, the Partnership, the Operating Partnership and their
respective subsidiaries listed on Schedule 2 hereto (collectively, the
"Partnership Entities," and the subsidiaries listed on Schedule 2 hereto, the
"Subsidiaries") has been duly formed and is validly existing in good standing
under the laws of their respective jurisdictions of formation with all
corporate, limited liability company or partnership power and authority
necessary to own or hold their respective properties and conduct the businesses
in which they are engaged and, in the case of the General Partner, to act as
general partner of the Partnership and the Operating Partnership, in each case
in all material respects as described in the Registration Statement and the
Prospectus. Each Partnership Entity is duly qualified to do business and is in
good standing as a foreign corporation, limited liability company or
partnership, as the case may be, in each jurisdiction in which its ownership or
lease of property or the conduct of its businesses requires such qualification,
except where the failure to so qualify would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Partnership
Entities taken as a whole (a "Material Adverse Effect") or subject the limited
partners of the Partnership to any material liability or disability.
(e) Ownership of General Partner. EPC Partners II, Inc. owns
65% of the issued and outstanding membership interests in the General Partner;
Dan Duncan LLC owns 5% of the issued and outstanding membership interests in the
General Partner; and Shell US Gas & Power, an affiliate of Shell Oil Company,
owns 30% of the issued and outstanding membership interests in the General
Partner; such membership interests have been duly authorized and validly issued
in accordance with the limited liability company agreement of the General
Partner; and each of EPC Partners II, Inc. and Dan Duncan LLC owns such
membership interests free and clear of all liens, encumbrances, security
interests, equities, charges or claims, in each case other than liens in favor
of Enterprise Products Company's lenders.
(f) Ownership of General Partner Interest in the Partnership.
The General Partner is the sole general partner of the Partnership with a 1.0%
general partner interest in the Partnership (including the right to receive
Incentive Distributions (as defined in the Partnership Agreement)); such general
partner interest has been duly authorized and validly issued in accordance with
the Amended and Restated Agreement of Limited Partnership of the Partnership, as
amended to date (as the same may be amended and restated at the Closing Date,
the "Partnership Agreement"); and the General Partner owns such general partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(g) Ownership of Operating Partnership. The General Partner is
the sole general partner of the Operating Partnership with a 1.0101% general
partner interest in the Operating Partnership; such general partner interest has
been duly authorized and validly issued in accordance with the Amended and
Restated Agreement of Limited Partnership of the Partnership, as amended to date
(as the same may be amended and restated at the Closing Date, the "Operating
Partnership Agreement"); and the General Partner owns such general partner
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interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims. The Partnership is the sole limited partner of the
Operating Partnership with a 98.9899% limited partner interest in the Operating
Partnership; such limited partner interest has been duly authorized and validly
issued in accordance with the Operating Partnership Agreement and is fully paid
(to the extent required under the Operating Partnership Agreement) and
non-assessable (except as such non-assessability may be affected by Section
17-607 of the Delaware Revised Uniform Limited Partnership Act (the "Delaware LP
Act") and as otherwise described in the Prospectus); and the Partnership owns
such limited partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims.
(h) Capitalization. As of the date hereof, the issued and
outstanding limited partner interest of the Partnership consists of 131,894,766
Common Units, 10,000,000 Special Units and 32,114,804 Subordinated Units. All
outstanding Common Units, Special Units and Subordinated Units and the limited
partner interests represented thereby have been duly authorized and validly
issued in accordance with the Partnership Agreement and are fully and (to the
extent required under the Partnership Agreement) and non-assessable (except as
such non-assessability may be affected by Section 17-607 of the Delaware LP Act
and as otherwise disclosed in the Prospectus). Enterprise Products Company
beneficially owns 80,308,802 Common Units and 32,114,804 Subordinated Units, in
each case free and clear of all liens, encumbrances, security interests,
equities, charges or claims, other than liens in favor of Enterprise Products
Company's lenders.
(i) Valid Issuance of Firm Units. At the First Delivery Date
or the Second Delivery Date, as the case may be, the Firm Units or the Option
Units, as the case may be, and the limited partner interests represented thereby
will be duly authorized by the Partnership and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid (to the extent required under the Partnership
Agreement) and non-assessable (except as such non-assessability may be affected
by Section 17-607 of the Delaware LP Act and as otherwise disclosed in the
Prospectus).
(j) No Preemptive Rights, Registration Rights or Options.
Except as described in the Prospectus or for rights that have been waived, there
are no preemptive rights or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any partnership or membership
interests or capital stock in the Partnership Entities, in each case pursuant to
the organizational documents or any agreement or other instrument to which any
Partnership Entity is a party or by which any of them may be bound. Neither the
filing of the Registration Statement nor the offering or sale of the Units as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any Units or other securities of the Partnership or any of its
Subsidiaries, other than as provided in the Prospectus and the Partnership
Agreement or as have been waived. Except for options granted pursuant to
employee benefits plans, qualified unit option plans or other employee
compensation plans, there are no outstanding options or warrants to purchase any
partnership or membership interests or capital stock in any Partnership Entity.
Each of the Enterprise Parties has all requisite right, power and authority to
execute and deliver this Agreement and to perform its respective obligations
hereunder. The Partnership has all requisite power and authority to issue, sell
and deliver the Units in accordance with and upon the terms and conditions set
forth in this Agreement, the Partnership Agreement, the Registration Statement
and Prospectus. All action
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required to be taken by the Enterprise Parties or any of their partners or
members for the due and proper authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby has been
duly and validly taken.
(k) Ownership of Subsidiaries. All of the outstanding shares
of capital stock, partnership interests or membership interests, as the case may
be, of each Subsidiary have been duly and validly authorized and issued, and are
fully paid and non-assessable (except as such non-assessability may be affected
by Section 17-607 of the Delaware LP Act, in the case of partnership interests,
or Section 18-607 of the Delaware Limited Liability Company Act (the "Delaware
LLC Act"), in the case of membership interests, and except as otherwise
disclosed in the Prospectus), except that, for each Subsidiary of which the
Operating Partnership and/or the Partnership owns 50% or less of the outstanding
capital stock, partnership interests or membership interests, as the case may
be, such representation and warranty is limited to the ownership interest set
forth on Schedule 2 hereto. The Partnership and/or the Operating Partnership, as
the case may be, owns the shares of capital stock, partnership interests or
membership interests in each Subsidiary as set forth on Schedule 2 hereto free
and clear of any lien, charge, encumbrance (other than contractual restrictions
on transfer), security interest, restriction upon voting or any other claim of
any third party. None of the Enterprise Parties has any subsidiaries other than
as set forth on Schedule 2 hereto that, individually or in the aggregate, would
be deemed to be a "significant subsidiary" as such term is defined in Rule 405
of the Act.
(l) Enforceability of Agreement. This Agreement has been duly
authorized and validly executed and delivered by each of the Enterprise Parties.
(m) Partnership Agreement. The Partnership Agreement has been
duly authorized, executed and delivered by the General Partner and is a valid
and legally binding agreement of the General Partner, enforceable against the
General Partner in accordance with its terms; the Operating Partnership
Agreement has been duly authorized, executed and delivered by the General
Partner and the Partnership and is a valid and legally binding agreement of the
General Partner and the Partnership in accordance with its terms; 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).
(n) No Conflicts. None of the offering, issuance and sale by
the Partnership of the Units, the execution, delivery and performance of this
Agreement by the Enterprise 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 Partnership Entities, (ii)
conflicts or will conflict with or constitutes or will constitute a breach or
violation of, or a default (or an event that, with notice or lapse of time or
both, would constitute such a default) under, any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which any of
the Partnership Entities 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
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court, arbitrator or governmental agency or body having jurisdiction over any of
the Partnership Entities or any of their properties or assets, or (iv) results
or will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of any of the Partnership Entities, which conflicts,
breaches, violations, defaults or liens, in the case of clauses (ii), (iii) or
(iv), would, individually or in the aggregate, have a Material Adverse Effect.
(o) No Consents. No permit, consent, approval, authorization,
order, registration, filing or qualification ("consent") of or with any court,
governmental agency or body having jurisdiction over the Partnership Entities or
any of their respective properties is required in connection with the offering,
issuance and sale by the Partnership of the Units, the execution, delivery and
performance of this Agreement by the Enterprise Parties or the consummation by
the Enterprise Parties of the transactions contemplated by this Agreement,
except (i) for such consents required under the Securities Act, the Exchange Act
and state securities or Blue Sky laws in connection with the purchase and
distribution of the Units by the Underwriters and (ii) for such consents that
have been, or prior to such Delivery Date will be, obtained.
(p) No Default. None of the Partnership Entities is (i) in
violation of its certificate or agreement of limited partnership, limited
liability company agreement, certificate or articles of incorporation or bylaws
or other organizational documents, (ii) in violation of any law, statute,
ordinance, administrative or governmental rule or regulation applicable to it or
of any order, judgment, decree or injunction of any court or governmental agency
or body having jurisdiction over it or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business, or (iii) in
breach, default (and no event that, with notice or lapse of time or both, would
constitute such a default has occurred or is continuing) or violation in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which it is a party or by which it or
any of its properties may be bound, which breach, default or violation, in the
case of clause (ii) or (iii), would, if continued, have a Material Adverse
Effect, or could materially impair the ability of any of the Partnership
Entities to perform their obligations under this Agreement.
(q) Independent Public Accountants. The accountants, Deloitte
& Touche LLP, who have certified or shall certify the audited financial
statements included in the Registration Statement, any Preliminary Prospectus
and the Prospectus (or any amendment or supplement thereto) are independent
certified public accountants with respect to the Partnership and the General
Partner as required by the Securities Act and the Rules and Regulations.
(r) Financial Statements. The historical financial statements
(including the related notes and supporting schedules) contained or incorporated
by reference in the Registration Statement and the Prospectus (and any amendment
or supplement thereto) comply in all material respects with the applicable
requirements under the Securities Act and the Exchange Act (except that certain
supporting schedules are omitted) and present fairly in all material respects
the financial position, results of operations and cash flows of the entities
purported to be shown thereby on the basis stated therein at the respective
dates or for the respective periods and have been prepared in accordance with
generally accepted accounting
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principles consistently applied throughout the periods involved, except to the
extent disclosed therein. The financial information contained or incorporated by
reference in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) under the caption "Selected Historical and Pro Forma
Financial and Operating Data" are derived from the accounting records of the
Partnership and its Subsidiaries and fairly present the information purported to
be shown thereby. The pro forma financial information contained or incorporated
by reference in the Registration Statement and the Prospectus has been prepared
on a basis consistent with the historical financial statements contained or
incorporated by reference in the Prospectus (except for the pro forma
adjustments specified therein), includes all material adjustments to the
historical financial information required by Rule 11-02 of Regulation S-X under
the Securities Act and the Exchange Act to reflect the transactions described in
the Prospectus, gives effect to assumptions made on a reasonable basis and
fairly presents the transactions described in the Prospectus. The other
historical financial and statistical information and data included or
incorporated by reference in the Prospectus are, in all material respects,
fairly presented.
(s) No Distribution of Other Offering Materials. None of the
Partnership Entities has distributed or, prior to the completion of the
distribution of the Units, will distribute, any prospectus (as defined under the
Securities Act) in connection with the offering and sale of the Units other than
the Registration Statement, any Preliminary Prospectus, the Prospectus or other
materials, if any, permitted by the Securities Act, including Rule 134 of the
Rules and Regulations.
(t) Conformity to Description of Units. The Units, when issued
and delivered against payment therefor as provided herein, will conform in all
material respects to the descriptions thereof contained in the Prospectus.
(u) Certain Transactions. Except as disclosed in the
Registration Statement and the 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 Prospectus (or any amendment or
supplement thereto), (i) none of the Partnership Entities has incurred any
liability or obligation, indirect, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that, individually or in
the aggregate, is material to the Partnership Entities, taken as a whole, or
(ii) there has not been any material change in the capitalization or material
increase in the long-term debt of the Partnership Entities or any dividend or
distribution of any kind declared, paid or made by the Partnership on any class
of its partnership interests.
(v) No Omitted Descriptions. There are no legal or
governmental proceedings pending or, to the knowledge of the Enterprise Parties,
threatened or contemplated, against any of the Partnership Entities, or to which
any of the Partnership Entities is a party, or to which any of their respective
properties or assets is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required, and
there are no agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that are not described
or filed as required by the Securities Act or the Rules and Regulations.
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(w) Title to Properties. Each Partnership Entity has (i) good
and indefeasible title to all its interests in its properties that are material
to the operations of the Partnership Entities, taken as a whole, and (ii) good
and marketable title in fee simple to, or valid rights to lease or otherwise
use, all items of other real and personal property which are material to the
business of the Partnership Entities, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except such as (1)
do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Partnership Entities, (2) could not reasonably be expected to have a Material
Adverse Effect or (3) are described, and subject to the limitations contained,
in the Prospectus.
(x) Right-of-Way. Each of the Partnership Entities 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
Prospectus, subject to such qualifications as may be set forth in the 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; each of
the Partnership Entities has fulfilled and performed all its material
obligations with respect to such rights-of-way and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or would result in any impairment of the rights of the holder of any
such rights-of-way, except for such revocations, terminations and impairments
that will not have a Material Adverse Effect, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as described in
the Prospectus, none of such rights-of-way contains any restriction that is
materially burdensome to the Partnership Entities, taken as a whole.
(y) Permits. Each of the Partnership Entities has such
material permits, consents, licenses, franchises, certificates and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own or lease its properties and to conduct its business in the
manner described in the Prospectus, subject to such qualifications as may be set
forth in the Prospectus and except for such permits that, if not obtained, would
not have, individually or in the aggregate, a Material Adverse Effect; each of
the Partnership Entities has fulfilled and performed all its material
obligations with respect to such permits in the manner described, and subject to
the limitations contained in the Prospectus, and no event has occurred that
would prevent the permits from being renewed or reissued or that allows, or
after notice or lapse of time would allow, revocation or termination thereof or
results or would result in any impairment of the rights of the holder of any
such permit, except for such non-renewals, non-issues, revocations, terminations
and impairments that would not, individually or in the aggregate, have a
Material Adverse Effect. None of the Partnership Entities has received
notification of any revocation or modification of any such permit or has any
reason to believe that any such permit will not be renewed in the ordinary
course.
(z) Books and Records. Each of the Partnership and the
Operating Partnership (i) makes and keeps books, records and accounts that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets and (ii) maintains systems of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted
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only in accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(aa) Related Party Transactions. No relationship, direct or
indirect, exists between or among the Partnership Entities on the one hand, and
the directors, officers, partners, customers or suppliers of the General Partner
and its Affiliates (other than the Partnership Entities) on the other hand,
which is required to be described in the Prospectus which is not so described.
(bb) Environmental Compliance. There has been no storage,
generation, transportation, handling, treatment, disposal or discharge of any
kind of toxic or other wastes or other hazardous substances by any of the
Partnership Entities (or, to the knowledge of the Enterprise Parties, any other
entity (including any predecessor) for whose acts or omissions any of the
Partnership Entities is or could reasonably be expected to be liable) at, upon
or from any of the property now or previously owned or leased by any of the
Partnership Entities or upon any other property, in violation of any statute or
any ordinance, rule, regulation, order, judgment, decree or permit or which
would, under any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability that could not reasonably be expected to
have, individually or in the aggregate with all such violations and liabilities,
a Material Adverse Effect; and there has been no disposal, discharge, emission
or other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which any of the Enterprise Parties has knowledge,
except for any such disposal, discharge, emission or other release of any kind
which could not reasonably be expected to have, individually or in the aggregate
with all such discharges and other releases, a Material Adverse Effect.
(cc) Insurance. The Partnership Entities 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. Except as
disclosed in the Prospectus, none of the Partnership Entities has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to continue
such insurance; all such insurance is outstanding and duly in force on the date
hereof and will be outstanding and duly in force on each Delivery Date.
(dd) Litigation. There are no legal or governmental
proceedings pending to which any Partnership Entity is a party or of which any
property or assets of any Partnership Entity is the subject that, individually
or in the aggregate, if determined adversely to such Partnership Entity, could
reasonably be expected to have a Material Adverse Effect; and to the knowledge
of the Enterprise Parties, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(ee) No Labor Dispute. Except as disclosed in the Prospectus,
no labor dispute with the employees of the Partnership Entities that are engaged
in the business of the Partnership
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exists or, to the knowledge of the Enterprise Parties, is imminent or threatened
that is reasonably likely to result in a Material Adverse Effect.
(ff) Intellectual Property. Each Partnership Entity owns or
possesses adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective businesses;
and the conduct of their respective businesses will not conflict in any material
respect with, and no Partnership Entity has received any notice of any claim of
conflict with, any such rights of others.
(gg) Investment Company/Public Utility Holding Company. None
of the Partnership Entities is now, or after sale of the Units to be sold by the
Partnership hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds" will be, (i) an
"investment company" or a company "controlled by" an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), or (ii) a "holding company" or a "subsidiary company" or
"affiliate" of a "holding company" under the Public Utility Holding Company Act
of 1935, as amended.
(hh) NYSE Listing. The Units have been approved for listing on
the New York Stock Exchange, subject only to official notice of issuance.
(ii) Absence of Certain Actions. No action has been taken and
no statute, rule, regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the issuance or sale of the Units in
any jurisdiction; no injunction, restraining order or order of any nature by any
federal or state court of competent jurisdiction has been issued with respect to
any Partnership Entity which would prevent or suspend the issuance or sale of
the Units or the use of the Preliminary Prospectus or the Prospectus in any
jurisdiction; no action, suit or proceeding is pending against or, to the
knowledge of the Enterprise Parties, threatened against or affecting any
Partnership Entity before any court or arbitrator or any governmental agency,
body or official, domestic or foreign, which could reasonably be expected to
interfere with or adversely affect the issuance of the Units or in any manner
draw into question the validity or enforceability of this Agreement or any
action taken or to be taken pursuant hereto; and the Partnership has complied
with any and all requests by any securities authority in any jurisdiction for
additional information to be included in the Preliminary Prospectus and the
Prospectus.
(jj) Other Sales. The Partnership has not sold or issued any
Common Units during the six-month period preceding the date of the Prospectus
other than Common Units issued pursuant to employee benefit plans, qualified
options plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants described in the Prospectus.
(kk) Form S-3. The conditions for the use of Form S-3, as set
forth in the General Instructions thereto, have been satisfied.
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(ll) Directed Unit Sales. None of the Directed Units (as
defined in Section 5(l) below) distributed in connection with the Directed Unit
Program (as defined in Section 5(l) below) will be offered or sold outside of
the United States.
2. Purchase of the Units. On the basis of the representations
and warranties contained in, and subject to the terms and conditions of, this
Agreement, the Partnership agrees to sell 9,800,000 Firm Units to the several
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase the number of Firm Units set forth opposite that Underwriter's name in
Schedule 1 hereto. The respective purchase obligations of the Underwriters with
respect to the Firm Units shall be rounded among the Underwriters to avoid
fractional shares, as Lehman Brothers Inc. may determine.
In addition, the Partnership grants to the Underwriters an
option to purchase up to 1,470,000 Option Units. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Units and is exercisable
as provided in Section 4 hereof. Option Units shall be purchased severally for
the account of the Underwriters in proportion to the number of Firm Units set
forth opposite the names of such Underwriters in Schedule 1 hereto. The
respective purchase obligations of each Underwriter with respect to the Option
Units shall be adjusted by Lehman Brothers Inc. so that no Underwriter shall be
obligated to purchase Option Units other than in 100 Unit amounts.
The price of both the Firm Units (other than the Affiliate
Units and the Directed Units) and any Option Units shall be $18.18 per Unit and
the price of the Affiliate Units and the Directed Units (except as otherwise
provided in Section 5(l)) shall be $18.99 per Unit.
The Partnership shall not be obligated to deliver any of the
Units to be delivered on any Delivery Date, as the case may be, except upon
payment for all the Units to be purchased on such Delivery Date as provided
herein.
3. Offering of Units by the Underwriters. Upon authorization
by Lehman Brothers Inc. of the release of the Firm Units, the several
Underwriters propose to offer the Firm Units for sale upon the terms and
conditions set forth in the Prospectus.
4. Delivery of and Payment for the Units. Delivery of and
payment for the Firm Units shall be made at the offices of Vinson & Elkins
L.L.P. at 9:00 A.M., Houston, Texas time, on October 8, 2002 or at such other
date or place as shall be determined by agreement between Lehman Brothers Inc.
and the Partnership. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Partnership shall deliver or
cause to be delivered the Firm Units to Lehman Brothers Inc. for the account of
each Underwriter in book entry form through Full Fast Program of the facilities
of The Depository Trust Company ("DTC") against payment to or upon the order of
the Partnership of the purchase price by wire transfer of immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder.
The option granted in Section 2 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being
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given to the Partnership by Lehman Brothers Inc. Such notice shall set forth the
aggregate number of Option Units as to which the option is being exercised, the
names in which the Option Units are to be registered, the denominations in which
the Option Units are to be issued and the date and time, as determined by Lehman
Brothers Inc., when the Option Units are to be delivered; provided, however,
that this date and time shall not be earlier than the First Delivery Date nor
earlier than the second business day after the date on which the option shall
have been exercised nor later than the fifth business day after the date on
which the option shall have been exercised.
The date and time the Option Units are delivered are sometimes
referred to as the "Second Delivery Date," and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date."
Delivery of and payment for the Option Units shall be made at
the place specified in the first sentence of the first paragraph of this Section
4 (or at such other place as shall be determined by agreement between Lehman
Brothers Inc. and the Partnership) at 9:00 A.M., Houston, Texas time, on the
Second Delivery Date. On the Second Delivery Date, the Partnership shall deliver
or cause to be delivered the Option Units to Lehman Brothers Inc. for the
account of each Underwriter in book entry form through the facilities of the DTC
against payment to or upon the order of the Partnership of the purchase price by
wire transfer of immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter.
5. Further Agreements of the Enterprise Parties. Each of the
Enterprise Parties covenants and agrees with each Underwriter:
(a) Preparation of Prospectus and Registration Statement. (i)
To prepare the Prospectus in a form approved by the Underwriters and to file
such Prospectus pursuant to Rule 424(b) under the Securities Act not later than
Commission's close of business on the second business day following the
execution and delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Securities Act; (ii) to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; (iii) to advise the Underwriters,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Underwriters with copies thereof; (iv) to advise the Underwriters promptly after
it receives notice thereof of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus, of the suspension of the qualification of the Units for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information; and (v) in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal.
(b) Signed Copies of Registration Statements. To furnish
promptly to each of the Underwriters and to counsel for the Underwriters a
signed copy of the Registration Statement
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as originally filed with the Commission, and each amendment thereto filed with
the Commission, including all consents and exhibits filed therewith.
(c) Exchange Act Reports. To file promptly all reports and any
definitive proxy or information statements required to be filed by the
Partnership with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act ("Exchange Act Reports") subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Units.
(d) Copies of Documents to Underwriters. To deliver promptly
to the Underwriters such number of the following documents as the Underwriters
shall reasonably request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in each case
excluding exhibits) and (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus; and, if the delivery of a prospectus is
required at any time after the Effective Time in connection with the offering or
sale of the Units or any other securities relating thereto and if at such time
any events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in order to comply
with the Securities Act or the Exchange Act or with a request from the
Commission, to notify the Underwriters immediately thereof and to promptly
prepare and, subject to Section 5(e) hereof, file with the Commission an amended
Prospectus or supplement to the Prospectus which will correct such statement or
omission or effect such compliance.
(e) Filing of Amendment or Supplement. To file promptly with
the Commission any amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of the Partnership or
the Underwriters, be required by the Securities Act or the Exchange Act or
requested by the Commission. Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the Underwriters
and counsel for the Underwriters and not to file any such document to which the
Underwriters shall reasonably object after having been given reasonable notice
of the proposed filing thereof unless the Partnership is required by law to make
such filing.
(f) Reports to Security Holders. As soon as practicable after
the Effective Date, to make generally available to the Partnership's security
holders an earnings statement of the Partnership and its Subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Partnership, Rule 158).
(g) Copies of Reports. For a period of two years following the
Effective Date, to furnish to the Underwriters copies of all materials furnished
by the Partnership to its security holders and all reports and financial
statements furnished by the Partnership to the principal
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national securities exchange upon which the Units may be listed pursuant to
requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission thereunder.
(h) Blue Sky Laws. Promptly to take from time to time such
actions as the Underwriters may reasonably request to qualify the Units for
offering and sale under the securities or Blue Sky laws of such jurisdictions as
the Underwriters may designate and to continue such qualifications in effect for
so long as required for the resale of the Units; and to arrange for the
determination of the eligibility for investment of the Units under the laws of
such jurisdictions as the Underwriters may reasonably request; provided that no
Partnership Entity shall be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to file a general consent to
service of process in any jurisdiction.
(i) Lock-up Period; Lock-up Letters. For a period of 90 days
from the date of the Prospectus, not to, directly or indirectly, (i) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any Common Units or securities
convertible into, or exchangeable for Common Units, or sell or grant options,
rights or warrants with respect to any Common Units or securities convertible
into or exchangeable for Common Units (other than the grant of options pursuant
to option plans existing on the date hereof), or (ii) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such Common Units, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Units or other securities, in cash or otherwise, in each case
without the prior written consent of Lehman Brothers Inc. on behalf of the
Underwriters; provided, however, that the foregoing restrictions do not apply
to: (A) the sale of Common Units by the Partnership to the Underwriters in
connection with the public offering contemplated hereby or (B) Common Units to
be issued by the Partnership to non-employee directors as described in the
Prospectus or restricted units, phantom units and options issued under the
Long-Term Incentive Plan of the Partnership. Enterprise Products Company, EPC
Partners II, Inc., Enterprise Products 2000 Rabbi Trust, Enterprise Products
1998 Unit Option Trust, Enterprise Products 1999 Unit Option Trust and each
executive officer and director of the General Partner shall furnish to the
Underwriters, prior to the First Delivery Date, a letter or letters,
substantially in the form of Exhibit C hereto, pursuant to which each such
person shall agree not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any Common Units (including Directed Units) or
securities convertible into or exchangeable for Common Units or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such Common Units
(including Directed Units), whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Units or other securities,
in cash or otherwise, in each case for a period of 90 days from the date of the
Prospectus, without the prior written consent of Lehman Brothers Inc. on behalf
of the Underwriters.
(j) Application of Proceeds. To apply the net proceeds from
the sale of the Units as set forth in the Prospectus.
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(k) Investment Company. To take such steps as shall be
necessary to ensure that no Partnership Entity shall become an "investment
company" as defined in the Investment Company Act.
(l) Directed Unit Program. It is understood that up to 10,000
of the Firm Units (the "Directed Units") will initially be reserved by the
Underwriters for offer and sale to senior management of the Enterprise Parties
("Directed Unit Participants") upon the terms and conditions set forth in the
Prospectus and in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc. (the "Directed Unit Program"). Under no
circumstances will Lehman Brothers Inc. ("Lehman Brothers") or any Underwriter
be liable to the Enterprise Parties or to any Directed Unit Participant for any
action taken or omitted to be taken in good faith in connection with such
Directed Unit Program. To the extent that any Directed Units are not
affirmatively reconfirmed for purchase by any Directed Unit Participant on or
immediately after the date of this Agreement, such Directed Units may be offered
to the public as part of the public offering contemplated hereby, in which case
such Directed Units shall be purchased from the Partnership by the Underwriters
at a price equal to the price of the Firm Units as set forth in Section 2. The
Underwriters will receive no discount or commission on the Directed Units.
6. Expenses. The Partnership agrees to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Units and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of printing and distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), each
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of producing and
distributing this Agreement, any underwriting and selling group documents and
any other related documents in connection with the offering, purchase, sale and
delivery of the Units; (e) the filing fees incident to securing the review, if
applicable, by the National Association of Securities Dealers, Inc. of the terms
of sale of the Units; (f) any applicable listing or other similar fees; (g) the
fees and expenses of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); (h) the
cost of printing certificates representing the Units; (i) the costs and charges
of any transfer agent or registrar; (j) the costs and expenses of the
Partnership relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Units, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Partnership, travel and
lodging expenses of the representatives and officers of the Partnership and any
such consultants; (k) expenses incurred by the Underwriters in connection with
the Directed Unit Program, including counsel fees and any stamp duties or other
taxes incurred by the Underwriters in connection with the Directed Unit Program;
and (l) all other costs and expenses incident to the performance of the
obligations of the Partnership under this Agreement; provided that, except as
provided in this Section 6 and in Section 11 hereof, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of their counsel,
any transfer taxes on the Units which they may sell and the expenses of
advertising any offering of the Units made by the Underwriters.
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7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the
Enterprise Parties contained herein, to the accuracy of the statements of the
Enterprise Parties and the officers of the General Partner made in any
certificates delivered pursuant hereto, to the performance by each of the
Enterprise Parties of its obligations hereunder and to each of the following
additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with to the reasonable satisfaction of the
Underwriters.
(b) None of the Underwriters shall have discovered and
disclosed to the Partnership on or prior to such Delivery Date that the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Underwriters, is material or
omits to state any fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements therein
not misleading.
(c) All corporate, partnership and limited liability company
proceedings and other legal matters incident to the authorization, form and
validity of this Agreement, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Partnership shall have furnished to such
counsel all documents and information that they or their counsel may reasonably
request to enable them to pass upon such matters.
(d) Vinson & Elkins L.L.P. shall have furnished to the
Underwriters their written opinion, as counsel for the General Partner,
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Underwriters, substantially to the effect set
forth in Exhibit A to this Agreement.
(e) Richard H. Bachmann, Esq., shall have furnished to the
Underwriters his written opinion, as Chief Legal Officer of the Partnership,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Underwriters, substantially to the
effect set forth in Exhibit B hereto.
(f) The Underwriters shall have received from Baker Botts
L.L.P., counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to such matters as the Underwriters may reasonably
require, and the Partnership shall have furnished to such counsel such documents
and information as they may reasonably request for the purpose of enabling them
to pass upon such matters.
(g) At the time of execution of this Agreement, the
Underwriters shall have received from each of Deloitte & Touche LLP and Ernst &
Young LLP a letter or letters, in form
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and substance satisfactory to the Underwriters, addressed to the Underwriters
and dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(h) With respect to the letter or letters of Deloitte & Touche
LLP and Ernst & Young LLP referred to in the preceding paragraph and delivered
to the Underwriters concurrently with the execution of this Agreement (the
"initial letters"), the Partnership shall have furnished to the Underwriters a
letter (the "bring-down letter") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) each confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) each
stating, as of the date of the bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date of the bring-down letter), the conclusions
and findings of such firm with respect to the financial information and other
matters covered by the initial letters and (iii) each confirming in all material
respects the conclusions and findings set forth in the initial letters.
(i) The Partnership shall have furnished to the Underwriters a
certificate, dated such Delivery Date, of the chief executive officer and the
chief financial officer of its general partner stating that (A) such officers
have carefully examined the Registration Statement and the Prospectus, (B) in
their opinion, the Registration Statement, including the documents incorporated
therein by reference, as of the Effective Time, did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, and the Prospectus, including the Incorporated Documents, as of the
date of the Prospectus and as of such Delivery Date, did not and does not
include any untrue statement of a material fact and did not and does not omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and (C)
as of such Delivery Date, the representations and warranties of the Enterprise
Parties in this Agreement are true and correct, the Enterprise Parties have
complied with all their agreements contained herein and satisfied all conditions
on their part to be performed or satisfied hereunder on or prior to such
Delivery Date, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the best of such officer's knowledge, are contemplated by the
Commission, and subsequent to the date of the most recent financial statements
contained in the Prospectus, there has been no material adverse change in the
financial position or results of operations of the Partnership Entities, taken
as a whole, or any change, or any development involving a prospective material
adverse change, in or affecting the condition (financial or otherwise), results
of operations or business of the Partnership Entities, taken as a whole, except
as set forth in the Prospectus.
-17-
(j) If any event shall have occurred on or prior to such
Delivery Date that requires the Partnership under Section 5(e) to prepare an
amendment or supplement to the Prospectus, such amendment or supplement shall
have been prepared, the Underwriters shall have been given a reasonable
opportunity to comment thereon as provided in Section 5(e) hereof, and copies
thereof shall have been delivered to the Underwriters reasonably in advance of
such Delivery Date.
(k) None of the Partnership Entities shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, flood, explosion or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action,
investigation, order or decree, otherwise than as set forth or contemplated in
the Prospectus; nor shall there have been a change in the partners' capital,
members' interests or long-term debt of any of the Partnership Entities or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, net worth or results of
operations of the Partnership Entities, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any case under this
Section 7(k), is, in the judgment of Lehman Brothers Inc., so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Units being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(l) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of such Delivery Date, prevent the
issuance or sale of the Units; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction shall
have been issued as of such Delivery Date which would prevent the issuance or
sale of the Units.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market or trading in any securities of the Partnership on
any exchange or in the over-the-counter market shall have been suspended, the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international conditions on
the financial markets in the United States shall be such), as to make it, in the
judgment of Lehman Brothers Inc., so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or sale of the
Units being delivered on such Delivery Date on the terms and in the manner
contemplated by the Prospectus.
(n) The New York Stock Exchange shall have approved the Units
for listing, subject only to official notice of issuance.
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(o) The Underwriters shall have received from each of O.S.
Andras and EPC Partners II, Inc. a letter agreement in the form of Exhibit E
hereto; provided, however, that notwithstanding anything to the contrary in this
Agreement, (a) if EPC Partners II, Inc. does not purchase 1,300,000 Affiliate
Units as set forth on Exhibit D hereto, the number of Firm Units that the
Underwriters shall be obligated to purchase from the Partnership shall be
reduced by 1,300,000 and all references to the Firm Units in this Agreement
shall refer to such lesser number of Common Units; and (b) if O.S. Andras does
not purchase 500,000 Affiliate Units as set forth on Exhibit D hereto, the
number of Firm Units that the Underwriters shall be obligated to purchase from
the Partnership shall be reduced by 500,000 and all references to the Firm Units
in this Agreement shall refer to such lesser number of Common Units.
All such opinions, certificates, letters and documents
mentioned above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form and substance
reasonably satisfactory to the Underwriters and to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) Each of the Enterprise Parties, jointly and severally,
shall indemnify and hold harmless each Underwriter, its officers and employees
and each person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Units), to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in (A)
any Preliminary Prospectus, the Registration Statement or the Prospectus or in
any amendment or supplement thereto or (B) any written or electronically
produced materials or information electronically provided to investors by, or
with the approval of, the Partnership in connection with the marketing of the
offering of the Common Units ("Marketing Materials") including any road show or
investor presentations made to investors by the Partnership (whether in person
or electronically), (ii) the omission or alleged omission to state in the
Registration Statement, or in any amendment or supplement thereto, any material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) the omission or alleged omission to state in any
Preliminary Prospectus, the Prospectus or in any amendment or supplement thereto
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (iv) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Units or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i), (ii) or (iii) above (provided that no Enterprise Party
shall be liable under this clause (iv) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or
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preparing to defend against or appearing as a third-party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that no Enterprise Party shall be liable in any
such case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement in or omission or alleged omission from any such documents in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Partnership through the Underwriters by or on behalf of any
Underwriter specifically for inclusion therein which information consists solely
of the information specified in Section 8(e); provided, however, that the
Enterprise Parties shall not be liable to any Underwriter under the indemnity
agreement in this Section 8(a) to the extent, but only to the extent, that (x)
such loss, claim, damage, or liability of such Underwriter results from an
untrue statement of a material fact or an omission of a material fact contained
in the Preliminary Prospectus, which untrue statement or omission was completely
corrected in the Prospectus dated the Effective Date (the "Final Prospectus")
and (y) the Partnership had previously furnished sufficient quantities (as
requested by the Underwriters) of the Final Prospectus to the Underwriters
within a reasonable amount of time prior to such sale or such confirmation and
(z) such Underwriter failed to deliver the Final Prospectus, if required by law
to have so delivered it, and such delivery would have been a complete defense
against the person asserting such loss, claim, liability, expense or damage.
In connection with the offer and sale of the Directed Units,
the Enterprise Parties, jointly and severally, agree, promptly upon a request in
writing, to indemnify and hold harmless Lehman Brothers and the other
Underwriters from and against any loss, claim, damage, expense, liability or
action which (i) arises out of, or is based upon, any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the approval of the Enterprise Parties for distribution to Directed
Unit Participants in connection with the Directed Unit Program or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (ii) arises out of the
failure of any Directed Unit Participant to pay for and accept delivery of
Directed Units that the Directed Unit Participant agreed to purchase or (iii) is
otherwise related to the Directed Unit Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted directly from the bad faith or gross
negligence or willful misconduct of Lehman Brothers.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless each Enterprise Party, the respective officers of
the General Partner who signed the Registration Statement, the directors of the
General Partner, and each person, if any, who controls the Enterprise Parties
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 8(b) and Section 8(d) as the
Partnership), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which such person may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, (ii) the
omission or alleged omission to state in the Registration Statement, or any
amendment or supplement thereto, any material fact required to be stated
-20-
therein or necessary in order to make the statements therein not misleading, or
(iii) the omission or alleged omission to state in any Preliminary Prospectus,
the Prospectus or in any amendment or supplement thereto any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Partnership through the
Underwriters by or on behalf of any Underwriter specifically for inclusion
therein which information consists solely of the information specified in
Section 8(e), and shall reimburse the Enterprise Parties for any legal or other
expenses reasonably incurred by the Enterprise Parties in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such
-21-
indemnified party or parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 8(a) and 8(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement, compromise or consent to the entry of any judgment with respect to
any pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
The obligations of the Enterprise Parties and the Underwriters
in this Section 8 are in addition to any other liability that the Enterprise
Parties or the Underwriters, as the case may be, may otherwise have, including
in respect of any breaches of representations, warranties and agreements made
herein by any such party.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Partnership, on the one hand, and the Underwriters, on the other
hand, from the offering of the Units or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Partnership on the one hand and the
Underwriters on the other with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Partnership on the one hand and the Underwriters on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Units purchased under this
Agreement (before deducting expenses) received by the Partnership, on the one
hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the Units purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Units
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Partnership or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Partnership and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 8 were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into
-22-
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage,
liability, or action in respect thereof, referred to above in this Section 8
shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Units
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Enterprise
Parties acknowledge that the statements with respect to the public offering of
the Units by the Underwriters set forth on the cover page of the Prospectus
Supplement and the statements in the table in the first paragraph, the
concession and reallowance figures in the sixth paragraph, and the statements in
the ninth, tenth, eleventh, twelfth, thirteenth, sixteenth, seventeenth,
eighteenth, nineteenth, twentieth, twenty-first and twenty-second paragraphs
under the "Underwriting" section of the Prospectus are correct and constitute
the only information concerning the Underwriters furnished in writing to the
Partnership by or on behalf of the Underwriters specifically for inclusion in
the Registration Statement and the Prospectus.
9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Units which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm Units set opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total number of Firm Units set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Units on such Delivery Date if the total number of Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of Units to be purchased on such Delivery
Date, and any remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the number of the Units which it agreed to purchase
on such Delivery Date pursuant to the terms of Section 2. If the foregoing
maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to Lehman Brothers Inc. who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Units to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Underwriters do not elect to purchase the Units which the defaulting Underwriter
or Underwriters agreed but failed to purchase on such Delivery Date, this
Agreement (or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Partnership to sell, the Option Units)
shall terminate without liability on the
-23-
part of any non-defaulting Underwriter or any Enterprise Party except that the
Partnership will continue to be liable for the payment of expenses to the extent
set forth in Sections 6 and 11. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 9, purchases Firm Units which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Enterprise Parties for damages,
including expenses paid by the Partnership pursuant to Sections 6 and 11, caused
by its default. If other underwriters are obligated or agree to purchase the
Units of a defaulting Underwriter, either the non-defaulting Underwriters or the
Partnership may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Partnership
or counsel for the Underwriters may be necessary in the Registration Statement,
the Prospectus or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder
may be terminated by Lehman Brothers Inc. by notice given to and received by the
Partnership prior to delivery of and payment for the Firm Units if, prior to
that time, any of the events described in Sections 7(l) or (m) shall have
occurred and be continuing or if the Underwriters shall decline to purchase the
Units for any reason permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the
Partnership shall fail to tender the Units for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of any Enterprise Party
to perform any agreement on its part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled by
the Enterprise Parties (including, without limitation, with respect to the
transactions) is not fulfilled, the Partnership will reimburse the Underwriters
for all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Units, and upon demand the Partnership shall pay the
full amount thereof to the Underwriters. If this Agreement is terminated
pursuant to Section 9 by reason of the default of one or more Underwriters, the
Partnership shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
12. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail
or telecopy transmission to Lehman Brothers Inc., 745 7th Avenue, New York, New
York 10019, Attention: Syndicate Department (Fax: 212-526-6588) with a copy, in
the case of any notice pursuant to Section 8(c), to the Director of Litigation,
Office of the General Counsel, Lehman Brothers Inc., 745 7th Avenue, New York,
New York 10019 (Fax: 212-526-0943); and
(b) if to the Enterprise Parties, shall be delivered or sent
by mail or telecopy transmission to Enterprise Products Partners L.P., 2727
North Loop West, Suite 700, Houston, Texas 77008-1038, Attention: Chief Legal
Officer (telecopier no.: 713-880-6570).
-24-
(c) provided, however, that any notice to an Underwriter
pursuant to Section 8(c) shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its acceptance
telex to the Underwriters, which address will be supplied to any other party
hereto by the Underwriters upon request. Any such statements, requests, notices
or agreements shall take effect at the time of receipt thereof. The Enterprise
Parties shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by Lehman Brothers Inc. on
behalf of the Underwriters.
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the
Enterprise Parties and their respective successors. This Agreement and the terms
and provisions hereof are for the sole benefit of only those persons, except as
provided in Section 8 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Partnership,
the Operating Partnership and the Underwriters. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Enterprise Parties and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement or any certificate delivered pursuant hereto, shall
survive the delivery of and payment for the Units and shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement or
any investigation made by or on behalf of any of them or any person controlling
any of them.
15. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means any day on which the
New York Stock Exchange, Inc. is open for trading, and (b) "affiliate" and
"subsidiary" have their respective meanings set forth in Rule 405 of the Rules
and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
19. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
-25-
If the foregoing correctly sets forth the agreement among the
Enterprise Parties, and the Underwriters, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
ENTERPRISE PRODUCTS GP, LLC
By: /s/ RICHARD H. BACHMANN
-------------------------------------------------
Name: Richard H. Bachmann
Title: Executive Vice President
ENTERPRISE PRODUCTS PARTNERS L.P.
By: Enterprise Products GP, LLC, its general
partner
/s/ RICHARD H. BACHMANN
-------------------------------------------------
Name: Richard H. Bachmann
Title: Executive Vice President
ENTERPRISE PRODUCTS OPERATING L.P.
By: Enterprise Products GP, LLC, its general
partner
/s/ RICHARD H. BACHMANN
-------------------------------------------------
Name: Richard H. Bachmann
Title: Executive Vice President
Accepted:
Lehman Brothers Inc.
Goldman, Sachs & Co.
UBS Warburg LLC
RBC Dain Rauscher Inc.
Wachovia Securities, Inc.
McDonald Investments Inc.
Raymond James & Associates Inc.
Sanders Morris Harris Inc.
By: LEHMAN BROTHERS INC.
By: /s/ ROBERT R. PIERCE
-------------------------------------------
Authorized Representative
SCHEDULE 1
ENTERPRISE PRODUCTS PARTNERS L.P.
<Table>
<Caption>
Number of Firm
Underwriters Units to be Purchased
- ------------ ---------------------
Lehman Brothers Inc. 2,940,000
Goldman, Sachs & Co. 1,715,000
UBS Warburg LLC 1,715,000
RBC Dain Rauscher Inc. 980,000
Wachovia Securities, Inc. 980,000
McDonald Investments Inc. 490,000
Raymond James & Associates Inc. 490,000
Sanders Morris Harris Inc. 490,000
TOTAL: 9,800,000
=========
</Table>
SCHEDULE 2
SUBSIDIARIES OF THE PARTNERSHIP AND/OR THE OPERATING PARTNERSHIP
<Table>
<Caption>
SUBSIDIARY OWNERSHIP INTEREST PERCENTAGE (IN %)
- ---------- ------------------------------------
Enterprise Products Operating L.P. 98.9899
Sorrento Pipeline Company, LLC 100.00
Enterprise Lou-Tex Propylene Pipeline L.P. 100.00
Enterprise Lou-Tex NGL Pipeline L.P. 100.00
Sailfish Pipeline Company, LLC 100.00
Neptune Pipeline Company, LLC 25.67
Enterprise Gas Processing, LLC 100.00
Enterprise Products Texas Operating L.P. 100.00
E-Cypress, LLC 100.00
E-Oaktree, LLC 98.00
Seminole Pipeline Company 78.40
Mapletree, LLC 98.00
Mid-America Pipeline Company, LLC 98.00
Acadian Gas, LLC 100.00
</Table>
EXHIBIT A
FORM OF OPINION OF VINSON & ELKINS L.L.P.
1. Each of the General Partner, the Partnership and the
Operating Partnership has been duly formed and is validly existing in good
standing as a limited liability company or limited partnership under the laws of
the State of Delaware with all necessary limited liability company or limited
partnership power and authority to own or lease its properties and conduct its
businesses and, in the case of the General Partner, to act as the general
partner of the Partnership and the Operating Partnership, in each case in all
material respects as described in the Registration Statement and the Prospectus.
Each of the General Partner, the Partnership and the Operating Partnership is
duly registered or qualified as a foreign limited partnership for the
transaction of business under the laws of the jurisdictions set forth under its
name on Annex 1 attached hereto.
2. The General Partner is the sole general partner of the
Partnership with a 1.0% general partner interest in the Partnership (including
the right to receive Incentive Distributions); such general partner interest has
been duly authorized and validly issued in accordance with the Partnership
Agreement; and the General Partner owns such general partner interest free and
clear of all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming the General Partner as debtor is on file in the office
of the Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those created by or
arising under the Delaware LP Act.
3. To the knowledge of such counsel: EPC Partners II, Inc.
owns 65% of the issued and outstanding membership interests of the General
Partner; Dan Duncan LLC owns 5% of the issued and outstanding membership
interests of the General Partner; and Shell US Gas & Power, an affiliate of
Shell Oil Company, owns 30% of the issued and outstanding membership interests
of the General Partner; such membership interests have been duly authorized and
validly issued in accordance with the limited liability company agreement of the
General Partner; and each of EPC Partners II, Inc. and Dan Duncan LLC owns such
membership interests free and clear of all liens, encumbrances, security
interests, charges or claims (A) in respect of which a financing statement under
the Uniform Commercial Code of the State of Delaware naming Enterprise Products
Company as debtor is on file in the office of the Secretary of State of the
State of Delaware or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LLC Act
and those in favor of Enterprise Products Company's lenders.
4. The General Partner is the sole general partner of the
Operating Partnership with a 1.0101% general partner interest in the Operating
Partnership; such general partner interest has been duly authorized and validly
issued in accordance with the Operating Partnership Agreement; and the General
Partner owns such general partner interest free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which a
financing statement under the Uniform Commercial Code of the
A-1
State of Delaware naming the General Partner as debtor is on file in the office
of the Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those created by or
arising under the Delaware LP Act. The Partnership is the sole limited partner
of the Operating Partnership with a 98.9899% limited partner interest in the
Operating Partnership; such limited partner interest has been duly authorized
and validly issued in accordance with the Operating Partnership Agreement and is
fully paid (to the extent required under the Operating Partnership Agreement)
and non-assessable (except as such non-assessability 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 State of Delaware naming the Partnership as debtor is on
file in the office of the Secretary of State of the State of Delaware or (B)
otherwise known to such counsel, without independent investigation, other than
those created by or arising under the Delaware LP Act.
5. The Partnership Agreement has been duly authorized,
executed and delivered by the General Partner and is a valid and legally binding
agreement of the General Partner, enforceable against the General Partner in
accordance with its terms; the Operating Partnership Agreement has been duly
authorized, executed and delivered by the General Partner and the Partnership
and is a valid and legally binding agreement of the General Partner and the
Partnership in accordance with its terms; provided that, with respect to each
such agreement, the enforceability thereof may be limited by (A) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (B) public policy, applicable law relating
to fiduciary duties and indemnification and an implied covenant of good faith
and fair dealing.
6. As of the date hereof, the issued and outstanding limited
partner interest of the Partnership consists of 131,894,766 Common Units,
10,000,000 Special Units and 32,114,804 Subordinated Units. All outstanding
Common Units, Special Units and Subordinated Units and the limited partner
interests represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement and are fully paid (to the extent
required under the Partnership Agreement) and non-assessable (except as such
non-assessability may be affected by Section 17-607 of the Delaware LP Act and
as described in the Prospectus). Enterprise Products Company beneficially owns
80,308,802 and 32,114,804 Subordinated Units, in each case free and clear of all
liens, encumbrances, security interests, charges or claims (A) in respect of
which a financing statement under the Uniform Commercial Code of the State of
Delaware naming Enterprise Products Company as debtor is on file in the office
of the Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those created by or
arising under the Delaware LP Act and those in favor of Enterprise Products
Company's lenders.
7. The Units and the limited partner interests represented
thereby have been duly authorized by the Partnership Agreement and, when issued
and delivered
A-2
to the Underwriters against payment therefor in accordance with the terms of
this Agreement, will be validly issued, fully paid (to the extent required under
the Partnership Agreement) and non-assessable (except as such non-assessability
may be affected by Section 17-607 of the Delaware LP Act and as described in the
Prospectus).
8. Except as described in the Prospectus and for rights that
have been waived, there are no preemptive rights or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of, any
partnership or membership interests or capital stock in the Enterprise Parties,
in each case pursuant to the organizational documents of such entity. To such
counsel's knowledge, neither the filing of the Registration Statement nor the
offering or sale of the Units as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any Units or other securities
of the Partnership or any of its subsidiaries, other than as provided in the
Prospectus and the Partnership Agreement or as have been waived. 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, the Registration Statement and Prospectus.
9. This Agreement has been duly authorized and validly
executed and delivered by each of the Enterprise Parties.
10. None of the offering, issuance and sale by the Partnership
of the Units, the execution, delivery and performance of this Agreement by the
Enterprise 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 Enterprise Parties, (ii) results or will
result in any violation of the Delaware LP Act, the Delaware LLC Act, the
Delaware General Corporation Law (the "DGCL"), the laws of the State of Texas or
federal law, or (iii) results or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of any of the
Partnership Entities, which conflicts, breaches, violations, defaults or liens,
in the case of clauses (ii) or (iii), would, individually or in the aggregate,
have a material adverse effect on the financial condition, business or results
of operations of the Partnership Entities, taken as a whole or could materially
impair the ability of any of the Enterprise Parties to perform its obligations
under this Agreement.
11. No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any federal,
Delaware or Texas court, governmental agency or body having jurisdiction over
the Partnership Entities or any of their respective properties is required in
connection with the offering, issuance and sale by the Partnership of the Units,
the execution, delivery and performance of this Agreement by the Partnership or
the consummation of the transactions contemplated by this Agreement, except for
such consents required under state securities or "Blue Sky" laws, as to which
such counsel need not express an opinion.
A-3
12. The statements in the Registration Statement under the
caption "Description of Common Units," insofar as they constitute a description
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 and the Special Units conform in all material respects to the
descriptions thereof contained in the Registration Statement.
13. The opinion of Vinson & Elkins L.L.P. that is filed as
Exhibit 5.1 to the Registration Statement is confirmed and the Underwriters may
rely upon such opinion as if it were addressed to them.
14. The Registration Statement was declared effective under
the Act on [March 27,] 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 Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by such Rule.
15. The Registration Statement and the Prospectus (except for
the financial statements and the notes and the schedules thereto and the other
financial and statistical information included in the Registration Statement or
the Prospectus, as to which such counsel need not express any opinion) comply as
to form in all material respects with the requirements of the Act and the rules
and regulations promulgated thereunder.
16. None of the Partnership Entities is (i) an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended, or (ii) a "public utility holding company" or "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Partnership Entities and the independent public accountants of the Partnership
and your representatives, at which the contents of the Registration Statement
and the Prospectus and related matters were discussed, and although such counsel
has not independently verified, is not passing on, and is not assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Registration Statement and the Prospectus (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 and statistical 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 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 and
A-4
statistical 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
Partnership Entities and upon information obtained from public officials, (B)
assume that all documents submitted to them as originals are authentic, that all
copies submitted to them conform to the 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 opinion expressed in paragraph 1 above as to the due qualification or
registration as a foreign limited partnership or limited liability company, as
the case may be, of the General Partner, the Partnership and the Operating
Partnership, state that such opinions are based upon certificates of foreign
qualification or registration provided by the Secretary of State of the States
listed on Annex 1 (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
Partnership Entities may be subject.
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EXHIBIT B
FORM OF OPINION OF RICHARD H. BACHMANN
1. Each of the Partnership Entities (other than the Enterprise
Parties) has been duly formed and is validly existing and in good standing under
the laws of its respective jurisdiction of formation with all necessary
corporate, limited liability company or limited 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 Prospectus.
Each of the Partnership Entities (other than the Enterprise Parties) is duly
registered or qualified as a foreign corporation, foreign limited partnership or
foreign limited liability company for the transaction of business under the laws
of each jurisdiction in which its ownership or lease of property or the conduct
of its businesses requires such qualification, except where the failure to so
qualify would not, individually or in the aggregate, have a Material Adverse
Effect.
2. All of the outstanding shares of capital stock, partnership
interest or membership interest, as the case may be, of each Subsidiary have
been duly and validly authorized and issued, are fully paid and non-assessable,
except that, for each Subsidiary of which the Operating Partnership and/or the
Partnership own 50% or less of the outstanding capital stock, partnership
interest or membership interest, as the case may be, this opinion is limited to
the ownership interest set forth on Schedule 2 of the Underwriting Agreement.
The Operating Partnership and/or the Partnership, as the case may be, owns the
shares of capital stock, partnership interests or membership interests in each
Subsidiary as set forth on Schedule 2 hereto free and clear of any lien, charge,
encumbrance (other than contractual restrictions on transfer), security
interest, restriction upon voting or any other claim of any third party.
3. Except as described in the Prospectus and for rights that
have been waived, there are no preemptive rights or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of, any
partnership or membership interests or capital stock (a) in the Subsidiaries
pursuant to the organizational documents of any such entity or (b) in the
Partnership Entities pursuant to any agreement or other instrument known to such
counsel to which any Partnership Entity is a party or by which any of them may
be bound (other than the organizational documents of such entity). To such
counsel's knowledge, neither the filing of the Registration Statement nor the
offering or sale of the Units as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any Units or other securities
of the Partnership or any of its subsidiaries, other than as provided in the
Prospectus and the Partnership Agreement or as have been waived. To such
counsel's knowledge, except for options granted pursuant to employee benefits
plans, qualified unit option plans or other employee compensations plants, there
are no outstanding options or warrants to purchase any partnership or membership
interests or capital stock in any Partnership Entity. 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, the Registration Statement and Prospectus.
4. None of the offering, issuance and sale by the Partnership
of the Units, the execution, delivery and performance of this Agreement by the
Enterprise Parties, or the consummation of the transactions contemplated hereby
(i) conflicts or will conflict with or
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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
Partnership Entities (other than the Enterprise Parties), (ii) conflicts or will
conflict with or constitutes or will constitute a breach or violation of, or a
default (or an event that, with notice or lapse of time or both, would
constitute such a default) under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to such counsel to which
any of the Partnership Entities is a party or by which any of them or any of
their respective properties may be bound, or (iii) will result, to the knowledge
of such counsel, in any violation of any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency having jurisdiction
over the Partnership Entities or any of their assets or properties, which
conflicts, breaches, violations, defaults or liens, in the case of clauses (ii)
or (iii), would, individually or in the aggregate, have a material adverse
effect on the financial condition, business or results of operations of the
Partnership Entities, taken as a whole or could materially impair the ability of
any of the Enterprise Parties to perform its obligations under this Agreement.
5. To the knowledge of such counsel, (a) there is no legal or
governmental proceeding pending or threatened to which any of the Partnership
Entities is a party or to which any of their respective properties is subject
that is required to be disclosed in the Prospectus and is not so disclosed and
(b) there are no agreements, contracts or other documents to which any of the
Partnership Entities is a party that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
In addition, such counsel shall state that he has participated
in conferences with officers and other representatives of the Partnership
Entities and the independent public accountants of the Partnership and your
representatives, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although such counsel has not
independently verified, is not passing on, and is not assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Registration Statement and the Prospectus (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 and statistical 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 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 and statistical 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 on
certificates of officers and employees of the Partnership Entities and upon
information obtained from public officials,
B-2
(B) assume that all documents submitted to him as originals are authentic, that
all copies submitted to him conform to the originals thereof, and that the
signatures on all documents examined by him are genuine, (C) state that his
opinion is limited to federal laws, the Delaware LP Act, the Delaware LLC Act,
the DGCL and the laws of the State of Texas, (D) state that he expresses no
opinion with respect to any permits to own or operate any real or personal
property, (E) state that he expresses no opinion with respect to the title of
any of the Partnership Entities to any of their respective real or personal
property or with respect to the accuracy or descriptions of real or personal
property and (F) state that he expresses no opinion with respect to state or
local taxes or tax statutes to which any of the limited partners of the
Partnership or any of the Partnership Entities may be subject.
B-3
EXHIBIT C
FORM OF LOCK-UP LETTER AGREEMENT
Lehman Brothers Inc. October 2, 2002
Goldman, Sachs & Co.
UBS Warburg LLC
RBC Dain Rauscher Inc.
Wachovia Securities, Inc.
McDonald Investments Inc.
Raymond James & Associates Inc.
Sanders Morris Harris Inc.
c/o Lehman Brothers Inc.
745 7th Avenue
New York, New York 10019
Dear Sirs:
The undersigned understands that you, as underwriters (the "Underwriters"),
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
with the Enterprise Parties providing for the purchase by you and such other
Underwriters of common units, each representing a limited partner interest (the
"Common Units") in the Partnership, and that the Underwriters propose to reoffer
the Common Units to the public (the "Offering"). Capitalized terms used but not
defined herein have the meanings given to them in the Underwriting Agreement.
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Lehman
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
Common Units (including, without limitation, Common Units purchased pursuant to
the Directed Unit Program and Common Units that may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and Common Units that may be issued upon
exercise of any option or warrant) or securities convertible into or
exchangeable for Common Units owned by the undersigned on the date of execution
of this Lock-up Letter Agreement or on the date of the completion of the
Offering, or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such Common Units (including Directed Units, if any), whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Units or other securities, in cash or otherwise, for a period
of 90 days from the date of the Prospectus.
C-1
In furtherance of the foregoing, the Partnership and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Partnership notifies you that it does not intend
to proceed with the Offering, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
that survive termination) shall terminate or be terminated prior to payment for
and delivery of the Common Units, the undersigned will be released from
[his/her] obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Partnership and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to an
Underwriting Agreement, the terms of which are subject to negotiation between
the Partnership and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this Lock-Up Letter Agreement and that, upon
request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the [heirs and personal representatives] (FOR INDIVIDUALS)
[successors and assigns] (FOR NONNATURAL PERSONS) of the undersigned.
Yours very truly,
C-2
EXHIBIT D
FORM OF LETTER AGREEMENT FOR AFFILIATE PURCHASE
Lehman Brothers Inc.
Goldman, Sachs & Co.
UBS Warburg LLC
RBC Dain Rauscher Inc.
Wachovia Securities, Inc.
McDonald Investments Inc.
Raymond James & Associates Inc.
Sanders Morris Harris Inc.
c/o Lehman Brothers Inc.
745 7th Avenue
New York, New York 10019
October 2, 2002
Dear Sirs:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") among Enterprise Products
GP, LLC, Enterprise Products Partners L.P. (the "Partnership") and Enterprise
Products Operating L.P., relating to an underwritten public offering (the
"Offering") of _______ common units representing limited partner interests (the
"Common Units"), of the Partnership. Capitalized terms used herein have the
meanings given them in the Underwriting Agreement.
Simultaneously with the closing of the public Offering, the
Underwriters agree, severally, to sell to ___________________, and
_______________ agrees to purchase from the Underwriters, at a price of $____
per Unit (which is the purchase price per Common Unit paid by the Underwriters
to the Partnership in the public Offering), ________ Common Units (the
"Affiliate Units").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Lehman
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
Affiliate Units (including, without limitation, Affiliate Units that may be
deemed to be beneficially owned by the undersigned in accordance with the rules
and regulations of the Securities and Exchange Commission and Common Units that
may be issued upon exercise of any option or warrant) or securities convertible
into or exchangeable for Affiliate Units owned by the undersigned on the date of
execution of this letter agreement or on the date of the completion of the
Offering, or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of
D-1
the economic benefits or risks of ownership of such Affiliate Units, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Affiliate Units or other securities, in cash or otherwise, for a
period of 90 days from the date of the Prospectus.
In furtherance of the foregoing, the Partnership and its Transfer Agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this letter agreement.
It is understood that, if the Partnership notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof that survive termination) shall terminate or be terminated prior to
payment for and delivery of the Affiliate Units, the undersigned will be
released from [his/its] obligations under this letter agreement.
The undersigned understands that the Partnership and the Underwriters
will proceed with the Offering in reliance on this letter agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Partnership and the Underwriters.
_______________ represents and warrants that it is purchasing the
Affiliate Units for investment purposes only and has no present intention to
resell the Affiliate Units. The undersigned further represents that [he/it] is
not an "affiliate" (as defined in Conduct Rule 2720 of the NASD Manual) of an
NASD member (as defined in Article 1 of the Bylaws of the NASD) or an
"associated person" (as defined in Article 1 of the Bylaws of the NASD) of an
NASD member.
Yours very truly,
-----------------------
By:
Name:
Title:
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