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Exhibit 1.1
SEMGROUP ENERGY PARTNERS,
L.P.
6,000,000 Common
Units
Representing Limited
Partner Interests
UNDERWRITING
AGREEMENT
New York, New York
February 13,
2008
C ITIGROUP G
LOBAL M ARKETS I NC
.
L EHMAN B
ROTHERS I NC .
As Representatives of the several
Underwriters,
c/o Citigroup Global Markets
Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
SemGroup Energy Partners,
L.P., a Delaware limited partnership (the “
Partnership ”), proposes to issue and sell to the
several underwriters named in Schedule I hereto (the “
Underwriters ”), for whom you (the “
Representatives ”) are acting as representatives,
6,000,000 common units (the “ Firm Units
”), each representing a limited partner interest (the “
Common Units ”) in the Partnership. The Partnership
also proposes to grant to the Underwriters an option to purchase up
to 900,000 additional Common Units to cover over-allotments,
if any (the “ Option Units ;” the Option Units,
together with the Firm Units, being hereinafter called the “
Units ”). Certain terms used herein are defined in
Section 20 hereof.
It is understood and agreed
to by the parties hereto that certain crude oil gathering,
transportation, terminalling and storage assets (collectively,
“ Crude Oil Assets ”) and the operations and
businesses associated with those assets (the “ Crude Oil
Business ”) were contributed to the Partnership in July
2007 in connection with the Partnership’s initial public
offering, as more particularly described in the Disclosure Package
and the Prospectus (as defined herein).
It is further understood and
agreed to by the parties hereto that on January 14, 2008,
SemGroup Energy Partners Operating, L.L.C., a Delaware limited
liability company and wholly-owned subsidiary of the Partnership
(the “ OLLC ”), and SemMaterials, L.P., an
Oklahoma limited partnership (“ SemMaterials ”),
entered into a purchase and sale agreement (the “ Purchase
and Sale Agreement ”) whereby the OLLC will acquire all
of the outstanding membership interests of SemMaterials Energy
Partners, L.L.C., a Delaware limited liability company (the “
Asphalt Sub ”).
It is further understood and
agreed to by the parties hereto that the following transactions
will occur on or before the Closing Date (as defined in
Section 3):
(a) SemMaterials and K.C.
Asphalt, L.L.C., a Colorado limited liability company (“
K.C. Asphalt ”), will contribute substantially all of
the
domestic liquid asphalt
cement terminalling and storage assets of SemMaterials (the “
Acquired Assets ,” and together with the operation of
these assets, the “ Asphalt Business ”) to the
Asphalt Sub pursuant to a Contribution Agreement (the “
Contribution Agreement ”);
(b) the OLLC will purchase
the membership interests of the Asphalt Sub from SemMaterials as
contemplated under the Purchase and Sale Agreement;
(c) SemMaterials and the
Asphalt Sub will enter into the Terminalling and Storage Agreement
(the “ Terminalling Agreement ”);
(d) SemMaterials, K.C.
Asphalt and the Asphalt Sub will enter into the Terminal Access and
Use Agreement (the “ Access and Use Agreement
”);
(e) SemGroup, SemManagement,
L.L.C., a Delaware limited liability company (“
SemManagement ”), SemMaterials, the Partnership,
SemGroup Energy Partners G.P., L.L.C., a Delaware limited liability
company and the general partner of the Partnership (the “
General Partner ”), and the Asphalt Sub will enter
into the Amended and Restated Omnibus Agreement (the “
Amended Omnibus Agreement ”); and
(f) the credit agreement,
dated as of July 20, 2007, by and among the Partnership, as
borrower, certain subsidiaries of the Partnership, as Guarantors,
Wachovia Bank, National Association, as administrative agent, and
the other lenders party thereto (as the same will be supplemented,
amended or restated at or prior to the Closing Date and together
with the agreements, exhibits and attachments contemplated or
included therein, the “ Credit Agreement ”),
will be amended and restated.
The transactions contemplated by the
Purchase and Sale Agreement and in subsections (a)
through (f) above are collectively referred to herein as the
“ Transactions .” The Credit Agreement, the
Purchase and Sale Agreement, the Terminalling Agreement, the
Contribution Agreement, the Access and Use Agreement and the
Amended Omnibus Agreement shall be collectively referred to as the
“ Transaction Documents .” The Partnership, the
General Partner and the OLLC are hereinafter collectively referred
to as the “ Partnership Parties .” The
Partnership, the General Partner, SemGroup Energy Partners
Management, Inc., a Delaware corporation (“ Employee
Sub ”), the OLLC, the Asphalt Sub, SemGroup Energy
Partners, L.L.C., a Delaware limited liability company (“
New SemCrude LLC ”), SemPipe G.P., L.L.C., a Delaware
limited liability company (“ SemPipe GP ”), and
SemPipe, L.P., a Texas limited partnership (“ SemPipe
”), are hereinafter collectively referred to as the “
Partnership Entities .” SemGroup, L.P., an Oklahoma
limited partnership (“ SemGroup ”),
SemManagement, K.C. Asphalt and SemMaterials are hereinafter
collectively referred to as the “ Parent Entities
.” SemMaterials and K.C. Asphalt are hereinafter collectively
referred to as the “ Parent Seller Entities .”
The Partnership Entities and the Parent Entities are collectively
referred to as the “ SemGroup Entities
.”
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This is to confirm the
agreement among the Partnership Parties and the Underwriters
concerning the purchase by the Underwriters of the Units from the
Partnership.
1. Representations and
Warranties . Each of the Partnership Parties, jointly and
severally, represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) Registration . The
Partnership has prepared and filed with the Commission a
registration statement (file number 333-148755) on Form S-1,
including a related preliminary prospectus, for registration under
the Act of the offering and sale of the Units. Such Registration
Statement, including all amendments thereto filed prior to the
Execution Time, has become effective. The Partnership may have
filed one or more amendments thereto, including a related
preliminary prospectus, each of which has previously been furnished
to you. The Partnership will file with the Commission a final
prospectus in accordance with Rule 424(b). As filed, such final
prospectus shall contain all information required by the Act and
the rules thereunder and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary
Prospectus) as the Partnership has advised you, prior to the
Execution Time, will be included or made therein.
(b) No Material
Misstatements or Omissions in Registration Statement or
Prospectus . Each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the requirements of
the Act and the rules and regulations of the Commission thereunder,
and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. On the Effective Date,
the Registration Statement did, and when the Prospectus is first
filed in accordance with Rule 424(b) and on the Closing Date and on
any date on which Option Units are purchased, if such date is not
the Closing Date (a “ settlement date ”), the
Prospectus (and any supplement thereto) will, comply in all
material respects with the applicable requirements of the Act and
the rules and regulations of the Commission thereunder; on the
Effective Date and at the Execution Time, the Registration
Statement did not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading; and on the date of any filing pursuant to Rule
424(b) and on the Closing Date and any settlement date, the
Prospectus (together with any supplement thereto) will not include
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; each of the statements made by the Partnership in the
Registration Statement and in any Preliminary Prospectus provided
to the Underwriters for use in connection with the public offering
of the Units, and to be made in the Prospectus and any further
amendments or supplements to the Registration Statement or
Prospectus within the coverage of Rule 175(b) of the rules and
regulations under the Act, including (but not limited to) any
statements with
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respect to projected results
of operations, estimated accretion, estimated available cash and
future cash distributions of the Partnership, and any statements
made in support thereof or related thereto under the heading
“Cash Distribution Policy” or the anticipated ratio of
taxable income to distributions, was made or will be made with a
reasonable basis and in good faith; provided ,
however , that the Partnership makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement, each Preliminary Prospectus or the
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Partnership
by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement, each
Preliminary Prospectus or the Prospectus (or any supplement
thereto), it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information described as such in Section 7 hereof.
(c) No Material
Misstatements or Omissions in Disclosure Package . (i) The
Disclosure Package and (ii) each electronic road show, when
taken together as a whole with the Disclosure Package, and the
price to the public, the number of Firm Units and the number of
Option Units to be included on the cover page of the Prospectus,
did not, as of the Applicable Time, contain any 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, not misleading. The
preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with
written information furnished to the Partnership by any Underwriter
through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by
or on behalf of any Underwriter consists of the information
described as such in Section 7 hereof.
(d) Eligible Issuer .
(i) At the time of filing the Registration Statement and
(ii) as of the Execution Time (with such date being used as
the determination date for purposes of this clause (ii)), the
Partnership was not and is not an Ineligible Issuer (as defined in
Rule 405), without taking account of any determination by the
Commission pursuant to Rule 405 that it is not necessary that the
Partnership be considered an Ineligible Issuer.
(e) Issuer Free Writing
Prospectuses . Each Issuer Free Writing Prospectus does not
include any information that conflicts with the information
contained in the Registration Statement, the Preliminary Prospectus
or the Prospectus. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to
the Partnership by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that
the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in
Section 7 hereof.
(f) Formation and
Qualification . Each of the SemGroup Entities has been duly
formed or incorporated and is validly existing as a corporation,
limited partnership or limited liability company, as applicable, in
good standing under the laws of its jurisdiction of organization
with full power and authority to enter into and perform
its
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obligations under the
Transaction Documents to which it is a party, to own or lease and
to operate its properties currently owned or leased or to be owned
or leased on the Closing Date and each settlement date and conduct
its business as currently conducted or as to be conducted on the
Closing Date and each settlement date, in each case as described in
the Disclosure Package and the Prospectus. Each of the Partnership
Entities is, or at the Closing Date and each settlement date will
be, duly qualified to do business as a foreign corporation, limited
partnership or limited liability company, as applicable and is in
good standing under the laws of each jurisdiction which requires,
or at the Closing Date and each settlement date will require, such
qualification, except where the failure to be so qualified or
registered would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business
or properties, taken as a whole, whether or not arising from
transactions in the ordinary course of business of the Partnership
Entities (a “ Material Adverse Effect ”), or
subject the limited partners of the Partnership to any material
liability or disability.
(g) Power and Authority to
Act as a General Partner . The General Partner has, and, on the
Closing Date and each settlement date, will have, full power and
authority to act as general partner of the Partnership in all
material respects as described in the Disclosure Package and
Prospectus.
(h) Ownership of the
General Partner . SemGroup Holdings, L.P., a Delaware limited
partnership (“ SemGroup Holdings ”), owns, and
on the Closing Date and each settlement date, will own, all 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 (as the same may be amended or restated at
or prior to the Closing Date, the “ GP LLC Agreement
”), and are fully paid (to the extent required by the GP LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by Sections 18-607 and 18-804 of the Delaware Limited
Liability Company Act (the “ Delaware LLC Act
”)); and SemGroup Holdings owns such membership interests
free and clear of all liens, encumbrances, security interests,
charges or other claims (“ Liens ”) (except
restrictions on transferability and other Liens as described in the
Disclosure Package and the Prospectus).
(i) Ownership of the
General Partner Interest in the Partnership . The General
Partner is, and on the Closing Date and each settlement date, will
be, the sole general partner of the Partnership with a 2.0% general
partner interest in the Partnership; such general partner interest
has been duly authorized and validly issued in accordance with the
agreement of limited partnership of the Partnership (as the same
may be amended or restated at or prior to the Closing Date, the
“ Partnership Agreement ”); and the General
Partner owns, and on the Closing Date and each settlement date,
will own, such general partner interest free and clear of all Liens
(except restrictions on transferability and other Liens as
described in the Disclosure Package and the Prospectus).
(j) Ownership of
Subordinated Units and Incentive Distribution Rights . SemGroup
Holdings owns, and on the Closing Date and each settlement date,
will own
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12,570,504 Subordinated Units
(the “ Subordinated Units ”) and the General
Partner owns, and on the Closing Date and each settlement date,
will own 100% of the incentive distribution rights in the
Partnership (the “ IDRs ”); all of such
Subordinated Units and IDRs and the limited partner interests
represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement, and have been fully paid
(to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by
Sections 17-607 and 17-804 of the Delaware Limited Partnership Act
(the “ Delaware LP Act ”)); and SemGroup
Holdings owns the Subordinated Units and the General Partner owns
the IDRs, in each case free and clear of all Liens (except
restrictions on transferability and other Liens as described in the
Disclosure Package and the Prospectus).
(k) Valid Issuance of the
Units . The Units that may be purchased by the Underwriters
from the Partnership have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Partnership pursuant to this Agreement
against payment of the consideration set forth herein, will be
validly issued and fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in Sections
17-607 and 17-804 of the Delaware LP Act).
(l) Capitalization .
At the Closing Date, after giving effect to the offering of the
Firm Units as contemplated by this Agreement, the issued and
outstanding partnership interests of the Partnership will consist
of 20,375,000 Common Units, 12,570,504 Subordinated Units, 672,357
general partner units representing an aggregate 2% general partner
interest in the Partnership (the “ General Partner
Units ”) and the IDRs.
(m) Ownership of the
OLLC . The Partnership owns, and on the Closing Date and each
settlement date will own, all of the issued and outstanding
membership interests of the OLLC; such membership interests have
been duly authorized and validly issued in accordance with the
limited liability company agreement of the OLLC (as the same may be
amended or restated at or prior to the Closing Date, the “
OLLC LLC Agreement ”) and have been fully paid (to the
extent required by the OLLC LLC Agreement) and nonassessable
(except as such nonassessability may be affected by Sections 18-607
and 18-804 of the Delaware LLC Act); and the Partnership owns such
membership interests free and clear of all Liens (other than those
arising under the Credit Agreement).
(n) Ownership of the
Asphalt Sub . On the Closing Date and each settlement date,
after giving effect to the Transactions, the OLLC will own all of
the issued and outstanding membership interests of the Asphalt Sub;
such membership interests will be duly authorized and validly
issued in accordance with the limited liability company agreement
of the Asphalt Sub (as the same may be amended or restated at or
prior to the Closing Date, the “ Asphalt Sub LLC
Agreement ”) and will be fully paid (to the extent
required by the Asphalt Sub LLC Agreement) and nonassessable
(except as such nonassessability may be affected by Sections 18-607
and 18-804 of the Delaware LLC Act); and the OLLC will own such
membership interests free and clear of all Liens (other than those
arising under the Credit Agreement).
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(o) Ownership of New
SemCrude LLC . The OLLC owns, and on the Closing Date and each
settlement date will own, all of the issued and outstanding
membership interests of New SemCrude LLC; such membership interests
have been duly authorized and validly issued in accordance with the
limited liability company agreement of New SemCrude LLC (as the
same may be amended or restated at or prior to the Closing Date,
the “ New SemCrude LLC Agreement ”) and have
been fully paid (to the extent required by the New SemCrude LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by Sections 18-607 and 18-804 of the Delaware LLC Act);
and the OLLC owns such membership interests free and clear of all
Liens (other than those arising under the Credit
Agreement).
(p) Ownership of SemPipe
GP . New SemCrude LLC owns, and on the Closing Date and
each settlement date will own, all of the issued and outstanding
membership interests of SemPipe GP; such membership interests
have been duly authorized and validly issued in accordance with the
limited liability company agreement of SemPipe GP (as the same
may be amended or restated at or prior to the Closing Date, the
“ SemPipe GP LLC Agreement ”) and have been
fully paid (to the extent required by the SemPipe GP LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by Sections 18-607 and 18-804 of the Delaware LLC Act);
and New SemCrude LLC owns such membership interests free and clear
of all Liens (other than those arising under the Credit
Agreement).
(q) Ownership of the
General Partner Interest in SemPipe . SemPipe GP is, and on the
Closing Date and each settlement date will be, the sole general
partner of SemPipe with a 0.5% general partner interest in SemPipe;
such general partner interest has been duly authorized and validly
issued in accordance with the partnership agreement of SemPipe (as
the same may be amended or restated at or prior to the Closing
Date, the “ SemPipe Partnership Agreement ”);
and SemPipe GP owns such general partner interest free and
clear of all Liens (other than those arising under the Credit
Agreement).
(r) Ownership of the
Limited Partner Interest in SemPipe . New SemCrude LLC owns,
and on the Closing Date and each settlement date will own, a 99.5%
limited partner interest in SemPipe; such limited partner interest
has been duly authorized and validly issued in accordance with the
SemPipe Partnership Agreement and is fully paid (to the extent
required under the SemPipe Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters
described in Sections 3.03, 5.02 and 6.07 of the Texas Revised
Limited Partnership Act (the “ Texas LP Act ”);
and New SemCrude LLC owns such limited partner interest free and
clear of all Liens (other than those arising under the Credit
Agreement).
(s) Ownership of Employee
Sub . The General Partner owns, and on the Closing Date and
each settlement date will own, all of the outstanding shares of
capital stock of Employee Sub; all of such shares have been duly
authorized and validly issued and are fully paid and nonassessable;
and the General Partner owns such shares free and clear of all
Liens (other than those arising under the Credit
Agreement).
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(t) No Other
Subsidiaries . Other than its ownership of its 2.0% general
partner interest in the Partnership, the IDRs and all of the
outstanding shares of capital stock of Employee Sub, the General
Partner will not, on the Closing Date and each settlement date,
own, directly or indirectly, any equity or long-term debt
securities of any corporation, partnership, limited liability
company, joint venture, association or other entity. Other than
(i) the Partnership’s ownership of a 100% membership
interest in the OLLC, (ii) the OLLC’s ownership of a
100% membership interest in New SemCrude LLC, (iii) the
OLLC’s ownership of a 100% membership interest in the Asphalt
Sub, (iv) New SemCrude LLC’s ownership of
SemPipe GP and (v) New SemCrude LLC’s ownership of
a 99.5% limited partner interest, and SemPipe GP’s 0.5%
general partner interest, in SemPipe, none of the Partnership, the
OLLC, New SemCrude LLC, SemPipe GP or SemPipe will, on the
Closing Date and each settlement date, own, directly or indirectly,
any equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association
or other entity.
(u) No Preemptive Rights,
Registration Rights or Options . Except as set forth in the
Disclosure Package and the Prospectus, there are no
(i) preemptive rights or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any
equity securities of the Partnership Entities or
(ii) outstanding options or warrants to purchase any
securities of the Partnership Entities. Except for such rights that
have been waived, 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.
(v) Authority and
Authorization . Each of the Partnership Parties has all
requisite power and authority to execute and deliver this Agreement
and perform its respective obligations hereunder. The Partnership
has all requisite partnership power and authority to issue, sell
and deliver the Units to the Underwriters, in accordance with and
upon the terms and conditions set forth in this Agreement, the
Partnership Agreement, the Registration Statement, the Disclosure
Package and the Prospectus. On the Closing Date and each settlement
date, all corporate, partnership and limited liability company
action, as the case may be, required to be taken by the SemGroup
Entities or any of their respective members, stockholders or
partners for the authorization, issuance, sale and delivery of the
Units, the execution and delivery by the SemGroup Entities of this
Agreement, the Transaction Documents and the Asphalt Sub LLC
Agreement and the consummation of the transactions (including the
Transactions) contemplated by this Agreement and the Transaction
Documents, shall have been validly taken.
(w) Authorization of this
Agreement . This Agreement has been duly authorized, executed
and delivered by each of the Partnership Parties.
(x) Enforceability of
Operative Agreements . At or before the Closing
Date:
(i) 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;
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(ii) the GP LLC Agreement has
been duly authorized, executed and delivered by SemGroup Holdings
and is a valid and legally binding agreement of SemGroup Holdings,
enforceable against SemGroup Holdings in accordance with its
terms;
(iii) the OLLC LLC Agreement
has been duly authorized, executed and delivered by the Partnership
and is a valid and legally binding agreement of the Partnership,
enforceable against the Partnership in accordance with its
terms;
(iv) the New SemCrude LLC
Agreement has been duly authorized, executed and delivered by the
OLLC and is a valid and legally binding agreement of the OLLC,
enforceable against the OLLC in accordance with its
terms;
(v) the SemPipe GP LLC
Agreement has been duly authorized, executed and delivered by New
SemCrude LLC and is a valid and legally binding agreement of New
SemCrude LLC, enforceable against New SemCrude LLC in accordance
with its terms;
(vi) the SemPipe Partnership
Agreement has been duly authorized, executed and delivered by
SemPipe GP and New SemCrude LLC and is a valid and legally
binding agreement of SemPipe GP and New SemCrude LLC,
enforceable against SemPipe GP and New SemCrude LLC in
accordance with its terms;
(vii) the Contribution
Agreement has been duly authorized, executed and delivered by
SemMaterials, K.C. Asphalt and the Asphalt Sub and is a valid and
legally binding agreement of SemMaterials, K.C. Asphalt and the
Asphalt Sub, enforceable against SemMaterials, K.C. Asphalt and the
Asphalt Sub in accordance with its terms;
(viii) the Purchase and Sale
Agreement has been duly authorized, executed and delivered by
SemMaterials and the OLLC and is a valid and legally binding
agreement of SemMaterials and the OLLC, enforceable against
SemMaterials and the OLLC in accordance with its terms;
(ix) the Asphalt Sub LLC
Agreement will have been duly authorized, executed and delivered by
the OLLC and will be a valid and legally binding agreement of the
OLLC, enforceable against the OLLC in accordance with its
terms;
(x) the Credit Agreement will
have been duly authorized, executed and delivered by the
Partnership Entities party thereto and, assuming due authorization,
execution and delivery by the other parties thereto, will be a
valid and legally binding agreement of each of the Partnership
Entities party thereto, enforceable against each of them in
accordance with its terms;
(xi) the Amended Omnibus
Agreement will have been duly authorized, executed and delivered by
each of the SemGroup Entities party thereto and will be a valid and
legally binding agreement of each of the SemGroup Entities party
thereto, enforceable against each of them in accordance with its
terms;
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(xii) the Terminalling
Agreement will have been duly authorized, executed and delivered by
SemMaterials and the Asphalt Sub and will be a valid and legally
binding agreement of SemMaterials and the Asphalt Sub, enforceable
against SemMaterials and the Asphalt Sub in accordance with its
terms; and
(xiii) the Access and Use
Agreement will have been duly authorized, executed and delivered by
the SemGroup Entities party thereto and will be a valid and legally
binding agreement of the SemGroup Entities party thereto,
enforceable against each of them party thereto in accordance with
its terms;
provided , that, with
respect to each agreement described in this Section 1(x), 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);
provided further ; that the indemnity, contribution and
exoneration provisions contained in any of such agreements may be
limited by applicable laws and public policy.
The Partnership Agreement,
the GP LLC Agreement, the OLLC LLC Agreement, the New SemCrude LLC
Agreement, the SemPipe GP LLC Agreement, the SemPipe Partnership
Agreement, the Asphalt Sub LLC Agreement and the Transaction
Documents are herein collectively referred to as the “
Operative Agreements .”
(y) No Conflicts .
None of (i) the offering, issuance or sale by the Partnership
of the Units, (ii) the execution, delivery and performance of
this Agreement and the Operative Agreements by the SemGroup
Entities that are parties hereto or thereto, as the case may be, or
(iii) the consummation of the Transactions and any other
transactions contemplated by this Agreement, (A) conflicts or
will conflict with or constitutes or will constitute a violation of
the bylaws, partnership agreement, limited liability company
agreement, certificate or articles of incorporation, certificate of
limited partnership, certificate of formation or other constituent
document (collectively, the “ Organizational Documents
”) of any of the SemGroup Entities, (B) 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 SemGroup Entities is a
party or by which any of them or any of their respective properties
may be bound, (C) violates or will violate any statute, law or
regulation or any order, judgment, decree or injunction of any
court or governmental agency or body directed to any of the
SemGroup Entities or any of their properties in a proceeding to
which any of them or their property is a party or (D) results
or will result in the creation or imposition of any Lien upon any
property or assets of any of the Partnership Entities (other than
Liens created pursuant to the Credit Agreement), which conflicts,
breaches, violations, defaults or Liens, in the case of clauses
(B), (C) or (D), would, individually or in the aggregate, have
a Material Adverse Effect or materially impair the ability of the
SemGroup Entities to consummate the Transactions or any other
transactions provided for in this Agreement.
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(z) No Consents . No
permit, consent, approval, authorization, order, registration,
filing or qualification of or with any court, governmental agency
or body having jurisdiction over any of the Partnership Entities or
any of their properties or assets is required in connection with
the offering, issuance or sale by the Partnership of the Units, the
execution, delivery and performance of this Agreement by the
Partnership Parties, the execution, delivery and performance by the
Partnership Entities that are parties thereto of their respective
obligations under the Operative Agreements or the consummation of
the Transactions or any other transactions contemplated by this
Agreement except (i) for such permits, consents, approvals and
similar authorizations required under the Act, the Exchange Act and
blue sky laws of any jurisdiction, (ii) for such consents and
approvals that have been, or prior to the Closing Date will be,
obtained, (iii) for such consents and approvals that, if not
obtained, would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, and (iv) as
disclosed in the Disclosure Package and the Prospectus.
(aa) No Defaults .
None of the Partnership Entities is in (i) violation of its
Organizational Documents, (ii) violation of any statute, law,
rule or regulation, or any judgment, order, injunction or decree of
any court, governmental agency or body or arbitrator having
jurisdiction over any of the Partnership Entities or any of their
properties or assets or (iii) breach, default (or an event
which, with notice or lapse of time or both, would constitute such
an event) or violation in the performance of any obligation,
agreement or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument
relating to the Crude Oil Business or the Asphalt Business to which
it is a party or by which it or any of its properties may be bound,
which in the case of either (ii) or (iii) would, if
continued, have a Material Adverse Effect.
(bb) Conformity of Units
to Description . The Units, when issued and delivered in
accordance with the terms of the Partnership Agreement and this
Agreement against payment therefor as provided therein and herein,
will conform in all material respects to the description thereof
contained in the Disclosure Package and the Prospectus.
(cc) No Labor Dispute
. Except as set forth in or contemplated in the Disclosure Package
and the Prospectus, no labor problem or dispute with the SemGroup
Entities’ employees who are engaged in the Crude Oil Business
or in the Asphalt Business exists or is threatened or imminent,
that could have a Material Adverse Effect.
(dd) Sufficiency of the
Transaction Documents . The Transaction Documents will be
legally sufficient to transfer or convey to the Partnership and its
subsidiaries satisfactory title to, or valid rights to use or
manage all properties not already held by it that are, individually
or in the aggregate, required to enable the Partnership and its
subsidiaries to conduct their operations in all material respects
as contemplated by the Disclosure Package and the Prospectus,
subject to the conditions, reservations, encumbrances and
limitations described therein or contained in the
Transaction
11
Documents. The Partnership
and its subsidiaries, upon the consummation of the Transactions,
will succeed in all material respects to the business, assets,
properties, liabilities and operations described in the Transaction
Documents, the Prospectus and the Disclosure Package.
(ee) Financial
Statements . The consolidated historical financial statements
and schedules of the predecessor to the Partnership and its
consolidated subsidiaries included in the Registration Statement,
the Preliminary Prospectus and the Prospectus present fairly the
financial condition, results of operations and cash flows of the
predecessor to the Partnership as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The consolidated historical financial statements and
schedules of the Partnership and its consolidated subsidiaries
included in the Registration Statement, the Preliminary Prospectus
and the Prospectus present fairly the financial condition, results
of operations and cash flows of the Partnership as of the dates and
for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as
otherwise noted therein). The audited balance sheet of the General
Partner as of February 28, 2007 included in the Registration
Statement, the Preliminary Prospectus and the Prospectus presents
fairly the financial condition of General Partner as of the date
indicated, complies as to form with the applicable accounting
requirements of the Act and has been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the period involved (except as otherwise noted
therein). The unaudited balance sheet of the General Partner as of
September 30, 2007 included in the Registration Statement, the
Preliminary Prospectus and the Prospectus presents fairly the
financial condition of General Partner as of the date indicated,
complies as to form with the applicable accounting requirements of
the Act and has been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
period involved (except as otherwise noted therein). The pro forma
financial statements of the Partnership and its consolidated
subsidiaries included in the Registration Statement, the
Preliminary Prospectus and the Prospectus include assumptions that
provide a reasonable basis for presenting the significant effects
directly attributable to the transactions and events described
therein, the related pro forma adjustments give appropriate effect
to those assumptions, and the pro forma adjustments reflect the
proper application of those adjustments to the historical financial
statement amounts in the pro forma financial statements included in
the Registration Statement, the Preliminary Prospectus and the
Prospectus. The pro forma financial statements included in the
Registration Statement, the Preliminary Prospectus and the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the
Act and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements. The
summary historical financial and operating information set forth in
the Registration Statement, the Preliminary Prospectus and the
Prospectus under the caption “Summary—Summary
Historical Financial and Operating Data” and the selected
historical financial and operating information set forth under
the
12
caption “Selected
Historical Financial and Operating Data” in the Registration
Statement, the Preliminary Prospectus and the Prospectus is fairly
presented in all material respects and prepared on a basis
consistent with the audited and unaudited historical financial
statements from which it has been derived, unless expressly noted
otherwise.
(ff) Independent Public
Accountants . PricewaterhouseCoopers LLP, who has certified
certain financial statements of the predecessor to the Partnership
and its consolidated subsidiaries, the Partnership and its
consolidated subsidiaries and the General Partner and delivered
their report with respect to the audited consolidated financial
statements and schedules included in the Disclosure Package and the
Prospectus, is an independent registered public accounting firm
with respect to the Partnership within the meaning of the Act and
the applicable published rules and regulations
thereunder.
(gg) No Adverse Change
. None of the Partnership Entities has sustained, since the date of
the latest audited financial statements included in the Preliminary
Prospectus and the Prospectus, any loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, otherwise than as set forth or
contemplated in the Preliminary Prospectus and the Prospectus; and
since such date, except as described in the Preliminary Prospectus
and the Prospectus, there has not been any change in the
capitalization, increase in long-term debt, or decrease in net
current assets of any of the Partnership Entities or any adverse
change, or development involving a prospective adverse change, in
or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of the Partnership Entities, taken
as a whole, in each case except as could not, in the aggregate,
reasonably be expected to have a Material Adverse
Effect.
(hh) No Legal
Proceedings . Except as described in the Disclosure Package and
the Prospectus, there is (i) no action, suit or proceeding
before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the knowledge of
any of the Partnership Parties, threatened, to which any of the
Partnership Entities is or may be a party or to which the business
or property of any of the Partnership Entities is or may be
subject, (ii) no statute, rule, regulation or order that has
been enacted, adopted or issued by any governmental agency and
(iii) no injunction, restraining order or order of any nature
issued by a federal or state court or foreign court of competent
jurisdiction to which any of the Partnership Entities is or may be
subject, that, in the case of clauses (i), (ii) and
(iii) above, is reasonably expected to (A) individually
or in the aggregate have a Material Adverse Effect,
(B) prevent or result in the suspension of the offering and
issuance of the Units, or (C) draw into question the validity
of this Agreement.
(ii) Title to
Properties . Following consummation of the Transactions and on
the Closing Date and each settlement date, the Partnership Entities
will have good and marketable title to all real property and good
title to all personal property described in the Disclosure Package
or the Prospectus as owned or to be owned by the Partnership
Entities, free and clear of all Liens except (i) as described,
and subject to limitations contained, in the Disclosure Package and
the Prospectus, (ii) that arise under the Credit
13
Agreement or (iii) such
as do not materially interfere with the use of such properties
taken as a whole as they have been used in the past and are
proposed to be used in the future as described in the Disclosure
Package and the Prospectus; provided , that, with respect to
any real property and buildings held under lease by the Partnership
Entities, such real property and buildings are held under valid and
subsisting and enforceable leases with such exceptions as do not
materially interfere with the use of the properties of the
Partnership Entities taken as a whole as they have been used in the
past as described in the Disclosure Package and the Prospectus and
are proposed to be used in the future as described in the
Disclosure Package and the Prospectus.
(jj) Rights-of-Way .
Following consummation of the Transactions and on the Closing Date
and each settlement date, the Partnership Entities will have such
easements or rights-of-way from each person (collectively, “
rights-of-way ”) as are necessary to conduct their
business in the manner described, and subject to the limitations
contained, in the Disclosure Package and the Prospectus, except for
(i) qualifications, reservations and encumbrances that would
not have, individually or in the aggregate, a Material Adverse
Effect and (ii) such rights-of-way that, if not obtained,
would not have, individually or in the aggregate, a Material
Adverse Effect; other than as set forth, and subject to the
limitations contained, in the Disclosure Package and the
Prospectus, the Partnership Entities have, or following
consummation of the Transactions will have, fulfilled and performed
all their material obligations with respect to such rights-of-way
and no event has occurred that 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 would not have a Material Adverse Effect; and,
except as described in the Disclosure Package and the Prospectus,
none of such rights-of-way contains any restriction that is
materially burdensome to the Partnership Entities, taken as a
whole.
(kk) Title Policies .
Except as described in the Disclosure Package and the Prospectus,
at the Closing Date and each settlement date after giving effect to
the Transactions, the Partnership Entities will have owner’s
title policies or lessee’s leasehold title policies issued by
an approved ALTA title insurance company with respect to properties
which contain, in the aggregate, a material amount of the storage
capacity of, other than leasehold title policies for which consent
to transfer the underlying leasehold interest has not been obtained
on the Closing Date or such settlement date, the Acquired Assets in
such amounts and with such exclusions and exceptions as are
commercially reasonable for properties of such type, and in each
case such title policies will be in full force and
effect.
(ll) Transfer Taxes .
There are no transfer taxes or other similar fees or charges under
federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the sale and issuance by the
Partnership of the Units.
(mm) Tax Returns .
Each of the Partnership Entities has filed all foreign, federal,
state and local tax returns that are required to be filed or has
requested extensions thereof, except in any case in which the
failure so to file would not have a Material Adverse
14
Effect and has paid all taxes
required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due
and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as would not have a
Material Adverse Effect.
(nn) Insurance . The
Partnership Entities carry or are entitled to the benefits of,
insurance relating to the Crude Oil Business and, on the Closing
Date and each settlement date, the Partnership Entities will carry
or will be entitled to the benefits of, insurance relating to the
Asphalt Business, in each case with financially sound and reputable
insurers, in such amounts and covering such risks as is
commercially reasonable, and all such insurance is in full force
and effect. The Partnership Parties have no reason to believe that
the Partnership Entities will not be able to (i) renew their
existing insurance coverage relating to the Crude Oil Business and
the Asphalt Business as and when such policies expire or
(ii) obtain comparable coverage relating to the Crude Oil
Business and Asphalt Business from similar institutions as may be
necessary or appropriate to conduct such business as now conducted
and at a cost that would not reasonably be expected to have a
Material Adverse Effect.
(oo) Distribution
Restrictions . No subsidiary of the Partnership is currently
prohibited, directly or indirectly, from paying any distributions
to the Partnership, from making any other distribution on such
subsidiary’s equity interests, from repaying to the
Partnership any loans or advances to such subsidiary from the
Partnership or from transferring any of such subsidiary’s
property or assets to the Partnership or any other subsidiary of
the Partnership, except as described in or contemplated by the
Disclosure Package and the Prospectus or arising under the Credit
Agreement.
(pp) Possession of
Licenses and Permits . Following the consummation of the
Transactions and on the Closing Date and each settlement date, the
Partnership Entities and, with respect to the Asphalt Business, the
Parent Seller Entities, will possess such permits, licenses,
approvals, consents and other authorizations (collectively, “
Governmental Licenses ”) issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the Crude Oil Business and the Asphalt
Business, as applicable, as presently conducted and as proposed to
be conducted following the consummation of the Transactions as
described in the Disclosure Package and the Prospectus, except
where the failure so to possess would not, singly or in the
aggregate, result in a Material Adverse Effect; the Parent Seller
Entities and the Partnership Entities are in compliance with the
terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the
aggregate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, result in a Material
Adverse Effect; and neither the Parent Seller Entities nor the
Partnership Entities have received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
15
(qq) Environmental
Laws . Each of the Partnership Entities and, with respect to
the Asphalt Business, the Parent Seller Entities (i) is in
compliance with applicable federal, state and local laws and
regulations relating to the prevention of pollution or protection
of the environment or imposing liability or standards of conduct
concerning any Hazardous Materials (as defined below) (“
Environmental Laws ”), (ii) has received all
permits required of them under applicable Environmental Laws to
conduct their respective businesses as presently conducted or as
proposed to be conducted in the future as described in the
Disclosure Package and the Prospectus, (iii) is in compliance
with all terms and conditions of any such permits and
(iv) does not have any liability in connection with the
release into the environment of any Hazardous Material, except
where such noncompliance with Environmental Laws, failure to
receive required permits, failure to comply with the terms and
conditions of such permits or liability in connection with such
releases would not, individually or in the aggregate, have a
Material Adverse Effect. The term “ Hazardous Material
” means (A) any “hazardous substance” as
defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, (B) any
“hazardous waste” as defined in the Resource
Conservation and Recovery Act, as amended, (C) any petroleum
or petroleum product, (D) any polychlorinated biphenyl and
(E) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material, waste or substance regulated under or
within the meaning of any applicable Environmental Law. In the
ordinary course of business, the Partnership Entities and, with
respect to the Asphalt Business, the Parent Seller Entities
periodically review the effect of Environmental Laws on their
business, operations and properties, in the course of which they
identify and evaluate costs and liabilities that are reasonably
likely to be incurred pursuant to such Environmental Laws
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such
review, the Partnership Entities and, with respect to the Asphalt
Business, the Parent Seller Entities have reasonably concluded that
such associated costs and liabilities relating to their respective
assets and businesses would not, singly or in the aggregate, have a
Material Adverse Effect.
(rr) Possession of
Intellectual Property . Except for such exceptions that would
not reasonably be expected to result in a Material Adverse Effect,
(i) the Partnership Entities and, with respect to the Asphalt
Business, the Parent Seller Entities own or possess, or can acquire
or use on reasonable terms, and following the consummation of the
Transactions and on the Closing Date and each settlement date, the
Partnership Entities will continue to own or possess, or will be
able to acquire or use on reasonable terms, adequate patents,
patent rights, licenses, inventions, copyrights, know how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual
property necessary to carry on the Crude Oil Business and the
Asphalt Business as presently conducted or as proposed to be
conducted following the consummation of the Transactions as
described in the Disclosure Package and the Prospectus
(collectively, “ Intellectual Property ”), and
(ii) the Partnership Entities and, with respect to the Asphalt
Business, the Parent Seller Entities have not received any notice
and are not otherwise aware of any infringement of or conflict with
asserted rights
16
of others with respect to any
Intellectual Property or of any facts or circumstances that would
render any Intellectual Property invalid or inadequate to protect
the interest of the Parent Seller Entities or the Partnership
Entities.
(ss) Certain Relationships
and Related Transactions . No relationship, direct or indirect,
exists between or among any Partnership Entity, on the one hand,
and the directors, officers, stockholders, affiliates, customers or
suppliers of any Partnership Entity, on the other hand, that is
required to be described in the Preliminary Prospectus or the
Prospectus and is not so described.
(tt) ERISA . On the
Closing Date and each settlement date, each Partnership Entity will
be in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ ERISA ”); no
“reportable event” (as defined in ERISA) has occurred
with respect to any “pension plan” (as defined in
ERISA) for which any Partnership Entity (after giving effect to the
Transactions) would have any liability, excluding any reportable
event for which a waiver could apply; no Partnership Entity (after
giving effect to the Transactions) expects to incur liability under
(i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the “ Code ”). None
of the Partnership Entities maintain a “pension
plan.”
(uu) Description of Legal
Proceedings and Contracts; Filing of Exhibits . There are no
legal or governmental proceedings pending or, to the knowledge of
the Partnership Parties, threatened or contemplated, against any of
the Partnership Entities, or to which any of the SemGroup Entities
is a party, or to which any of their properties or assets is
subject, that are required to be described in the Registration
Statement or the Disclosure Package that 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 Disclosure Package or to be filed
as an exhibit to the Registration Statement that are not described
or filed as required by the Act or the Exchange Act or the rules
and regulations thereunder. The statements included in the
Registration Statement and the Disclosure Package, insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate summaries of such legal
matters, agreements, documents or proceedings.
(vv) Sarbanes-Oxley Act of
2002 . The Partnership is in compliance in all material
respects with all applicable provisions of the Sarbanes-Oxley Act
of 2002, the rules and regulations promulgated in connection
therewith and the rules of the Nasdaq Global Market (the “
Nasdaq ”) that are effective and applicable to the
Partnership.
(ww) Investment
Company . None of the Partnership Entities is nor, after giving
effect to the Transactions and the offering and sale of the Units
and the application of the proceeds thereof as described in the
Disclosure Package and the Prospectus, will any of the Partnership
Entities be an “investment company” or a company
“controlled by” an “investment company,”
each as defined in the Investment Company Act of 1940, as amended
(the “ Investment Company Act ”).
17
(xx) Internal Accounting
Controls . Each Partnership Entity maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Each
Partnership Entity’s internal controls over financial
reporting are effective and none of the Partnership Entities is
aware of any material weakness in their internal control over
financial reporting.
(yy) Disclosure Controls
and Procedures . (i) Each Partnership Entity has
established and maintains disclosure controls and procedures (to
the extent required by and as such term is defined in Rule 13a-15
under the Exchange Act), (ii) such disclosure controls and
procedures are designed to ensure that the information required to
be disclosed by the Partnership in the reports it files or will
file or submit under the Exchange Act, as applicable, is
accumulated and communicated to management of the General Partner,
including their respective principal executive officers and
principal financial officers, as appropriate, to allow timely
decisions regarding required disclosure to be made and
(iii) such disclosure controls and procedures are effective in
all material respects to perform the functions for which they were
established to the extent required by Rule 13a-15 of the Exchange
Act.
(zz) Other Sales; Market
Stabilization . 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. None of the Partnership Entities has taken, directly
or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the
price of any security of the Partnership to facilitate the sale or
resale of the Units.
(aaa) No Loans to
Directors and Officers . The Partnership Entities have not
extended credit in the form of a personal loan made, directly or
indirectly, by any of the Partnership Entities to any director or
executive officer of any of the Partnership Entities or to any
family member or affiliate of any director or executive officer of
any of the Partnership Entities.
(bbb) Foreign Corrupt
Practices Act . No Partnership Entity nor, to the knowledge of
the Partnership Parties, any director, officer, agent, employee or
affiliate of any Partnership Entity is aware of or has taken any
action, directly or indirectly, that would result in a violation by
such Persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (collectively,
the “ FCPA ”), including, without limitation,
making use of the mails or any means or instrumentality
of
18
interstate commerce corruptly
in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is
defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in
contravention of the FCPA, and the Partnership Entities and, to the
knowledge of the Partnership Parties, their affiliates have
conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure,
and which are reasonably expected to continue to ensure, continued
compliance therewith.
(ccc) Money Laundering
Laws . The operations of the Partnership Entities are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental
agency (collectively, the “ Money Laundering Laws
”) and no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving any of the Partnership Entities with respect to the Money
Laundering Laws is pending or, to the best knowledge of the
Partnership Parties, threatened.
(ddd) Office of Foreign
Assets Control . No Partnership Entity nor, to the knowledge of
the Partnership Parties, any director, officer, agent, employee or
affiliate of any Partnership Entity is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“ OFAC ”); and
the Partnership will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(eee) Lending
Relationship . Except as disclosed in the Disclosure Package
and the Prospectus, no SemGroup Entity (i) has any material
lending or other relationship with any bank or lending affiliate of
any of the Underwriters and (ii) intends to use any of the
proceeds from the sale of the Units hereunder to repay any
outstanding debt owed to any affiliate of the
Underwriters.
(fff) Private
Placement . The issuance and sale of 122,449 General
Partner Units to the General Partner is exempt from the
registration requirements of the Act, the rules and regulations and
the securities laws of any state having jurisdiction with respect
thereto, and none of the Partnership Entities has taken or will
take any action that would cause the loss of such
exemption.
(ggg) Statistical Data
. Any statistical and market-related data included in the
Disclosure Package or the Prospectus are based on or derived from
sources that the Partnership believes to be reliable and accurate,
and the Partnership has obtained the written consent to the use of
such data from such sources to the extent required.
19
(hhh) No Distribution of
Other Offering Materials . None of the Partnership Entities has
distributed and, prior to the later to occur of the Closing Date or
any settlement date and completion of the distribution of the
Units, will distribute any offering material in connection with the
offering and sale of the Units other than any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus to
which the Representatives have consented in accordance with this
Agreement, any other materials, if any, permitted by the Act,
including Rule 134.
(iii) Listing on the
Nasdaq . The Units have been approved to be listed on the
Nasdaq.
Any certificate signed by any
officer of any of the Partnership Entities and delivered to the
Representatives or counsel for the Underwriters in connection with
the offering of the Units shall be deemed a representation and
warranty by such entity, as to matters covered thereby, to each
Underwriter.
2. Purchase and Sale
.
(a) Subject to the terms and
conditions and in reliance upon the representations and warranties
herein set forth, the Partnership agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Partnership, at a purchase price of
$22.9141 per unit, the amount of the Firm Units set forth
opposite such Underwriter’s name in Schedule I
hereto.
(b) Subject to the terms and
conditions and in reliance upon the representations and warranties
here
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