Exhibit 1.1.
Underwriting Agreement.
1,600,000 Units
STAR GAS PARTNERS, L.P.
Common Units
UNDERWRITING AGREEMENT
-----------------
September 17, 2002
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
UBS WARBURG LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
As Representatives of the several Underwriters named in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Star Gas Partners, L.P., a Delaware limited partnership (the "Partnership"),
proposes to sell an aggregate of 1,600,000 Common Units representing limited
partner interests in the Partnership (the "Firm Units") to you and the other
underwriters named in Schedule 1 (collectively, the "Underwriters") for whom you
are acting as representatives (the "Representatives"). If you are the only
Underwriters named in Schedule 1, all references herein to the Representatives
shall be deemed to be to you as the Underwriters. The Partnership has also
agreed to grant to the several Underwriters an option (the "Option") to purchase
up to an aggregate of 240,000 additional Common Units (the "Option Units") on
the terms and for the purposes set forth in Section 1(b). The Firm Units and the
Option Units are hereinafter collectively referred to as the "Units."
The initial public offering price per Unit and the purchase price per Unit to be
paid by the several Underwriters shall be agreed upon by the Partnership and the
Representatives, acting on behalf of the several Underwriters, and such
agreement shall be set forth in a separate written instrument substantially in
the form of Exhibit A hereto (the "Price Determination Agreement"). The Price
Determination Agreement may take the form of an exchange of any standard form of
written telecommunication among the Partnership and ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
("▇.▇. ▇▇▇▇▇▇▇") on behalf of the Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto. The offering of the
Units will be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the execution and delivery
of the Price Determination Agreement, this Agreement shall be deemed to
incorporate, and, unless the context otherwise indicates, all references
contained herein to "this Agreement" and to the phrase "herein" shall be deemed
to include, the Price Determination Agreement.
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Star Gas LLC, a Delaware limited liability company (the "General Partner"), is
the sole general partner of the Partnership and Star Gas Propane, L.P., a
Delaware limited partnership (the "Operating Partnership"). Star/Petro, Inc.
("Star/Petro"), Petro Holdings, Inc., Petroleum Heat and Power Co., Inc.
("Petro"), Total Gas & Electric, Inc. ("TG&E"), Total Gas & Electricity (PA),
Inc., TG&E Service Company, Inc., Stellar Propane Service Corp., Ohio Gas &
Appliance Company, ▇▇▇▇▇▇ Oil Co., L.P., and ▇▇▇▇▇▇ Oil Co., Inc., which are
direct and indirect subsidiaries of the Partnership, are referred to herein as
the "Principal Subsidiaries." The Partnership, the Operating Partnership, the
General Partner, the Principal Subsidiaries and their subsidiaries are referred
to herein as the "Star Entities." The Partnership, the Operating Partnership,
Star/Petro and the General Partner (the "Star Parties") hereby confirm their
agreement (this "Agreement") with the several Underwriters as follows:
Section 1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of
the Star Parties herein contained and subject to all the terms and conditions of
this Agreement, the Partnership agrees to issue and sell to each Underwriter,
and each Underwriter, severally and not jointly, agrees to purchase from the
Partnership, at the purchase price per Firm Unit to be agreed upon by ▇.▇.
▇▇▇▇▇▇▇ on behalf of the Representatives and the Partnership in accordance with
Section 1(c) or 1(d) hereof and set forth in the Price Determination Agreement,
the number of Firm Units (subject to such adjustments to eliminate fractional
units as ▇.▇. ▇▇▇▇▇▇▇ on behalf of the Representatives may determine) which
bears the same proportion to the total number of Firm Units to be sold by the
Partnership as the number of Firm Units set forth opposite the name of such
Underwriter in Schedule 1 bears to the total number of Firm Units, plus such
additional number of Firm Units which such Underwriter may become obligated to
purchase pursuant to Section 8 hereof. Schedule 1 may be attached to the Price
Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement, the
Partnership grants the Option to the Underwriters to purchase, severally and not
jointly, up to 240,000 Option Units from the Partnership at the same price per
Option Unit as the Underwriters shall pay for each of the Firm Units. The Option
may be exercised only to cover over-allotments in the sale of the Firm Units by
the Underwriters and may be exercised in whole or in part at any time (but not
more than once) on or before the 30th day after the date of this Agreement (or,
if the Partnership has elected to rely on Rule 430A of the Securities Act of
1933, as amended (the "Act"), on or before the 30th day after the date of the
Price Determination Agreement), upon written or telegraphic notice (the "Option
Units Notice") by ▇.▇. ▇▇▇▇▇▇▇ on behalf of the Representatives to the
Partnership no later than 12:00 noon, New York City time, at least two and no
more than five business days before the date specified for closing in the Option
Units Notice (the "Option Closing Date") setting forth the aggregate number of
Option Units to be purchased and the time and date for such purchase. On the
Option Closing Date, the Partnership will sell to the Underwriters the number of
Option Units set forth in the Option Units Notice, and each Underwriter will
purchase such percentage of the Option Units as is equal to the percentage of
Firm Units that such Underwriter is purchasing, as adjusted by ▇.▇. ▇▇▇▇▇▇▇ on
behalf of the Representatives in such manner as it deems advisable to avoid
fractional units.
(c) The initial public offering price per Firm Unit and the purchase
price per Firm Unit to be paid by the several Underwriters shall be agreed upon
and set forth in the Price Determination Agreement, if the Partnership has
elected to rely on Rule 430A.
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(d) If the Partnership has elected not to rely on Rule 430A, the
initial public offering price per Firm Unit and the purchase price per Firm Unit
to be paid by the several Underwriters shall be agreed upon and set forth in the
Price Determination Agreement, which shall be dated the date hereof, and an
amendment to the Registration Statement containing such per unit price
information shall be filed before the Registration Statement becomes effective.
Section 2. Delivery and Payment.
Delivery of the Firm Units shall be made through the facilities of The
Depository Trust Company, New York, New York ("DTC") for the accounts designated
by ▇.▇. ▇▇▇▇▇▇▇ against payment of the purchase price by wire transfer of
Federal funds or similar same day funds to an account designated in writing by
the Partnership to ▇.▇. ▇▇▇▇▇▇▇ at least one business day prior to the Closing
Date (as hereinafter defined). Such payment shall be made at 10:00 a.m., New
York City time, at the office of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the third business day (or fourth business day, if the Price
Determination Agreement is executed after 4:30 p.m.) after the date on which the
first bona fide offering of the Units to the public is made by the Underwriters
or at such time on such other date, not later than ten business days after such
date, as may be agreed upon by the Partnership and ▇.▇. ▇▇▇▇▇▇▇ on behalf of the
Representatives (such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Units against
payment by the Underwriters (in the manner specified above) will take place at
the offices specified above for the Closing Date at the time and date (which may
be the Closing Date) specified in the Option Units Notice.
The cost of original issue tax stamps, if any, in connection with the issuance
and delivery of the Firm Units and Option Units by the Partnership to the
respective Underwriters shall be borne by the Partnership. The Partnership will
pay and save each Underwriter and any subsequent holder of the Units harmless
from any and all liabilities with respect to or resulting from any failure or
delay in paying federal and state stamp and other transfer taxes, if any, which
may be payable or determined to be payable in connection with the original
issuance or sale to such Underwriter of the Firm Units and Option Units.
Section 3. Representations and Warranties.
Each of the Star Parties, jointly and severally, represents, warrants and
covenants to each Underwriter that:
(a) The Partnership meets the requirements for use of Form S-3, and a
registration statement (Registration No. 333-57994) on Form S-3, including any
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Partnership under the provisions of
the Act, and the rules and regulations (collectively referred to as the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. Such registration statement
(Registration No. 333-57994) on Form S-3 became effective on April 27, 2001 (the
"Effective Date"). Copies of such registration statement and any amendments
thereto have been delivered to the Representatives. The term "Registration
Statement" means the registration statement as amended at the Effective Date,
including all financial statements and exhibits and all documents and
information included or incorporated or deemed
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incorporated therein by reference, as from time to time amended or supplemented
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), Rule 430A and Rule 434 of the Rules and Regulations, or otherwise, and
any other registration statement filed under Rule 462 of the Rules and
Regulations as such registration statement may be amended from time to time.
(b) The term "Prospectus" means the prospectus constituting a part of
the Registration Statement and any amendments or supplements to such prospectus,
including without limitation the prospectus supplement prepared in connection
with the proposed sale of Units contemplated by this Agreement (the "Prospectus
Supplement"), through the date of such Prospectus Supplement; provided, however,
that if any revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Partnership for use in connection with the offering of the
Units that differs from the Prospectus or the Prospectus Supplement (whether or
not such revised prospectus or prospectus supplement is required to be filed by
the Partnership with the Commission pursuant to Rule 424(b) of the Rules and
Regulations), the term "Prospectus" shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act, on or before the date hereof or are so
filed hereafter. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include any such documents filed or to be filed under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the Effective Date
or the date of the Prospectus, as the case may be, and deemed to be incorporated
therein by reference. On the Effective Date, the date the Prospectus was first
filed with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented), including the financial statements included or incorporated by
reference in the Prospectus, did or will comply with all applicable provisions
of the Act, the Exchange Act, the rules and regulations thereunder (the
"Exchange Act Rules and Regulations") and the Rules and Regulations and will
contain all statements required to be stated therein in accordance with the Act,
the Exchange Act, the Exchange Act Rules and Regulations and the Rules and
Regulations. On the Effective Date and when any post-effective amendment to the
Registration Statement becomes effective, no part of the Registration Statement
or any such amendment did or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. At the Effective Date,
the date the Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission and at the Closing Date and, if later, the Option
Closing Date, the Prospectus did not or will not contain any untrue statement of
a material fact or omit 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 addition, each of the statements made in such documents
within the coverage of Rule 175(b) of the Rules and Regulations, including (but
not limited to) any statements with respect to the anticipated ratio of taxable
income to distributions, was made or will be made by the Partnership or the
General Partner, as the case may be, with a reasonable basis and in good faith.
The foregoing representations and warranties in this Section 3(b) do not apply
to any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Partnership
by the Representatives specifically for inclusion in the Registration Statement
or Prospectus or any amendment or supplement thereto.
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The Partnership has not distributed any offering material in connection with the
offering or sale of the Units other than the Registration Statement, the
Prospectus or any other materials, if any, permitted by the Act.
(c) The documents which are incorporated by reference in the Prospectus
or from which information is so incorporated by reference, when they become
effective or were filed with the Commission, as the case may be, complied in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations; and any document so filed and incorporated by reference subsequent
to the Effective Date shall, when filed with the Commission, conform in all
material respects with the requirements of the Act and the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations.
(d) Each of the Partnership and the Operating Partnership has been duly
formed and is validly existing and in good standing as a limited partnership
under the Delaware Revised Uniform Limited Partnership Act (the "Delaware Act"),
with all necessary partnership power and authority to own or lease its
properties and conduct its business, in each case as described in the
Prospectus. Each of the Partnership and the Operating Partnership is duly
qualified or registered as a foreign limited partnership for the transaction of
business under the laws of each jurisdiction in which the character of the
business conducted by it or the location of the properties owned or leased by it
make such qualification or registration necessary (except where the failure to
so qualify or register would not have a material adverse effect on the condition
(financial or other), results of operations or business of the Star Entities,
taken as a whole, or subject the Partnership or the limited partners of the
Partnership to any material liability or disability).
(e) Each Principal Subsidiary has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the jurisdiction of
its incorporation, with all necessary corporate power and authority to own or
lease its properties and conduct its business, in each case as described in the
Prospectus. Each of the Principal Subsidiaries is duly qualified or registered
as a foreign corporation for the transaction of business under the laws of each
jurisdiction in which the character of the business conducted by it or the
location of the properties owned or leased by it makes such qualification or
registration necessary (except where the failure to so qualify or register would
not have a material adverse effect on the condition (financial or other),
results of operations or business of the Star Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability).
(f) All of the outstanding shares of capital stock or other capital
interests of the Principal Subsidiaries (except for TG&E, Total Gas &
Electricity (PA), Inc. and TG&E Service Company, Inc.) have been duly authorized
and validly issued and are fully paid and non-assessable and are owned (directly
or indirectly) by the Partnership free and clear of all liens, encumbrances and
claims except for liens, encumbrances or claims against the Operating
Partnership, a 99.99% limited partner interest of which is owned by the
Partnership and a 0.01% general partner interest of which is owned by the
General Partner, as described in the Registration Statement. Except for the
units or stock of the Principal Subsidiaries, and as disclosed in the
Registration Statement or as set forth on Schedule 3 hereto, the Partnership
does not own, and at the Closing Date will not own, directly or indirectly, any
equity or long-term debt securities of any corporation, firm, partnership, joint
venture, association or other entity. Complete and correct copies of the
certificate of incorporation and by-laws or other equivalent agreements for each
of the Star Parties and the Principal Subsidiaries and all amendments
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thereto have been delivered to the Representatives, and no changes therein will
be made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date.
(g) The Partnership owns all of the shares, $.001 par value per share,
of common stock of TG&E. The Partnership also owns (i) 26,250 shares of Series A
preferred stock of TG&E having a $9.00 per share non-cumulative preferred
dividend and a $100.00 per share liquidation preference and (ii) 38,750 shares
of Series B preferred stock of TG&E having a $1.667 per share non-cumulative
preferred dividend and a $100.00 per share liquidation preference. All such
common and preferred shares have been duly authorized and validly issued and are
fully paid and non-assessable and are owned directly by the Partnership free and
clear of all liens, encumbrances, security interests, charges and claims (other
than the interest created by the pledge by the Partnership to Bank of America of
its TG&E shares as collateral for TG&E's bank credit facilities).
(h) TG&E owns all of the shares of common stock of each of Total Gas &
Electricity (PA), Inc. and TG&E Service Company, Inc. Such shares have been duly
authorized and validly issued and are fully paid and non-assessable and are
owned directly by TG&E free and clear of all liens, encumbrances, security
interests, charges and claims (other the general security interest created by
TG&E's bank credit facilities).
(i) The General Partner has been duly organized and is validly existing
in good standing as a limited liability company under the laws of the State of
Delaware. The General Partner has all necessary power and authority to own or
lease its properties and conduct its business and to act as general partner of
the Partnership and the Operating Partnership, in each case as described in the
Registration Statement, and the General Partner is duly qualified or registered
as a foreign entity for the transaction of business and is in good standing
under the laws of each jurisdiction in which the character of the business
conducted by it or the location of the properties owned or leased by it make
such qualification or registration necessary (except where the failure to so
qualify or register would not have a material adverse effect on the condition
(financial or other), results of operations or business of the General Partner,
or subject the General Partner, the Partnership or the limited partners of the
Partnership to any material liability or disability).
(j) The General Partner is the sole general partner of the Partnership
with a 1.99% general partner interest in the Partnership; such general partner
interest has been duly authorized by the Partnership Agreement, as amended
through the Closing Date, and is validly issued to the General Partner; and the
General Partner owns such general partner interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims (except for such
liens, encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material) other than those created by or
arising under the Delaware Act, the Operating Partnership's bank credit
facilities (the "Bank Credit Facilities") or the First Mortgage Note Agreement
between the General Partner and various institutional investors (the "First
Mortgage Note Agreement").
(k) The Partnership owns its limited partner interest in the Operating
Partnership free and clear of all liens, encumbrances, security interests,
equities, charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material) other than those created by or arising under the Delaware
Act, the Bank Credit Facilities or the First Mortgage Note Agreement.
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(l) The General Partner is the sole general partner of the Operating
Partnership with a 0.01% general partner interest in the Operating Partnership;
such general partner interest has been duly authorized by the Agreement of
Limited Partnership of the Operating Partnership as amended through the Closing
Date (the "Operating Partnership Agreement" and, together with the Partnership
Agreement, the "Partnership Agreements") and has been validly issued to the
General Partner; and the General Partner owns such general partner interest free
and clear of all liens, encumbrances, security interests, equities, charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material) other
than those created by or arising under the Delaware Act, the Bank Credit
Facilities or the First Mortgage Note Agreement.
(m) All of the issued and outstanding member interests of the General
Partner are duly authorized and have been validly issued, and are fully paid and
nonassessable, and ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and Hanseatic Americas Inc.
(the "LLC Owners") own all such outstanding membership interests of the General
Partner free and clear of all liens, encumbrances, security interests, equities,
charges or claims (except for such liens, encumbrances, security interests,
equities, charges or claims as are not, individually or in the aggregate,
material).
(n) At the Closing Date, after giving effect to the issuance of Firm
Units but not any Option Units, the capitalization of the Partnership will
consist of 28,730,446 Common Units, 3,134,196 Senior Subordinated Units, 345,364
Junior Subordinated Units and 325,729 General Partner Units. The outstanding
Common Units and Senior Subordinated Units and the limited partner interests
represented thereby have been, and the Units to be issued and sold by the
Partnership under this Agreement upon such issuance will be, duly authorized,
validly issued, fully paid and nonassessable and will not be subject to any
preemptive or similar right. The description of the Common Units in the
Registration Statement and the Prospectus is, and at the Closing Date will be,
complete and accurate in all respects. Except as set forth in the Prospectus,
the Partnership does not have outstanding, and at the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any Common Units or other partnership interests,
any capital stock or partnership interests of any Subsidiary or any such
warrants, convertible securities or obligations. Except as described in the
Prospectus, there are no preemptive rights or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any limited
partner interests in the Partnership.
(o) The LLC Owners own all outstanding Junior Subordinated Units; all
of such Junior 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 nonassessable (except as such nonassessability may be
affected by Section 17-607 of the Delaware Act); and each of the LLC Owners owns
its Junior Subordinated Units free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material).
(p) The Partnership does not have any subsidiaries (other than the
Operating Partnership or any Principal Subsidiary) which, individually or
considered as a whole, would be deemed to be a significant subsidiary (as
defined in Rule 405 under the Act).
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(q) The Units, when issued and delivered against payment therefor as
provided herein, will conform to the description thereof contained in the
Prospectus. The Partnership has all requisite power and authority to issue, sell
and deliver the Units, in accordance with and upon the terms and conditions set
forth in this Agreement, the Partnership Agreement and the Prospectus. At the
Closing Date and the Option Closing Date, all partnership and limited liability
company action, as the case may be, required to be taken by the Partnership or
the General Partner or any of their partners or members for the authorization,
issuance, sale and delivery of the Units shall have been validly taken.
(r) The financial statements and schedules included or incorporated by
reference in the Registration Statement or the Prospectus present fairly the
consolidated financial condition of the Star Entities as of the respective dates
thereof and the consolidated results of operations and cash flows of the Star
Entities for the respective periods covered thereby, all in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. The pro forma financial statements and other pro forma financial
information included or incorporated by reference in the Registration Statement
or the Prospectus (i) present fairly in all material respects the information
shown therein, (ii) have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and (iii) have
been properly computed on the bases described therein. The assumptions used in
the preparation of the pro forma financial statements and other pro forma
financial information included in the Registration Statement or the Prospectus
are reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein. No other financial
statements or schedules of the Partnership are required by the Act, the Exchange
Act, the Exchange Act Rules and Regulations or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. KPMG LLP (the
"Accountants"), who have reported on such financial statements and schedules,
are independent accountants with respect to each of the Star Entities as
required by the Act and the Rules and Regulations. The statements included in
the Registration Statement with respect to the Accountants pursuant to Rule 509
of Regulation S-K of the Rules and Regulations are true and correct in all
material respects.
(s) Each of the Star Entities 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 authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(t) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date,
except as set forth in or contemplated by the Registration Statement and the
Prospectus, (i) there has not been and will not have been any change in the
capitalization of any of the Star Entities, or in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of any of the Star Entities, arising for any reason whatsoever, (ii) none of the
Star Entities has incurred nor will it incur any material liabilities or
obligations, direct or contingent, except liabilities incurred in the ordinary
course of business and consistent with past practices, nor has it entered into
nor will it enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein and (iii) the Partnership has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of its partnership units.
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(u) None of the Star Entities are, or as of the Closing Date, as a
result of any of the transactions described under "Recent Developments" in the
Prospectus Supplement or as a result of the applications of net proceeds from
this offering as contemplated in the Prospectus Supplement under "Use of
Proceeds," will be, (i) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" thereof, within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (ii) an "investment
company," a company "controlled by" an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
(v) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending, or to the
knowledge of the Star Entities, threatened against or affecting any of the Star
Entities or any of their respective directors or officers in their capacity as
such, before or by any federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding might materially and adversely affect
any of the Star Entities or their business, properties, business prospects,
condition (financial or otherwise) or results of operations. Each of the
investigations to which TG&E has been subject in the States of New York, New
Jersey and Pennsylvania in connection with its practices for soliciting
customers has been satisfactorily resolved and settled.
(w) Each of the Star Entities has, and at the Closing Date will have,
(i) all governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus, (ii) complied in all respects with all laws, regulations and orders
applicable to it or its business, except where the failure to so comply would
not have a material adverse effect on the Star Entities, taken as a whole, and
(iii) performed all its obligations required to be performed by it, and is not,
and at the Closing Date will not be, in default, under any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement, lease, contract or other agreement or instrument (collectively, a
"contract or other agreement") to which it is a party or by which its property
is bound or affected. To the best knowledge of the Star Parties, no other party
under any contract or other agreement to which it is a party is in default in
any material respect thereunder. None of the Star Entities is, nor at the
Closing Date will any of them be, in violation of any provision of its
Partnership Agreement, Operating Agreement or certificate of incorporation or
by-laws, as the case may be.
(x) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Units by the Partnership, in connection with the execution, delivery and
performance of this Agreement and the Price Determination Agreement by the Star
Parties, or in connection with the taking by the Star Parties of any action
contemplated hereby, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Units.
(y) The Star Parties have full power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Star Parties and constitutes a valid and binding agreement of the Star
Parties and is enforceable against the Star Parties in accordance with the terms
hereof; provided that the enforceability hereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium, or similar laws
relating
11
to or affecting creditors' rights generally and by general equitable principals
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). The performance of this Agreement, the consummation of the
transactions contemplated hereby and the application of the net proceeds from
the offering and sale of the Units in the manner set forth in the Prospectus and
the Prospectus Supplement under "Use of Proceeds" will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of any of the Star Entities pursuant to the terms or provisions of, or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, the
Partnership Agreement of the Partnership or certificate of incorporation,
by-laws, operating agreement, partnership agreement or other governing document,
as the case may be, of any of the Star Entities, any contract or other agreement
to which any of the Star Entities is a party or by which any of the Star
Entities or any of their respective properties is bound or affected, or violate
or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of any of the Star Entities.
(z) The Partnership Agreement, as amended as of the Closing Date, is
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, as amended as of the Closing Date, is 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, enforceable
against the General Partner and the Partnership in accordance with its terms;
provided that, with respect to both agreements described in this paragraph (z),
the enforceability thereof may by limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws relating to
or affecting creditors' right generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(aa) Each of the Star Entities has good and marketable title to all
properties and assets described in the Prospectus as owned by it, free and clear
of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material to the business of the Star
Entities. Each of the Star Entities has valid, subsisting and enforceable leases
for the properties described in the Prospectus as leased by it, with such
exceptions as are not material and do not materially interfere with the use made
and proposed to be made of such properties by the Star Entities.
(bb) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which any of the Star Entities is a party have
been duly authorized, executed and delivered by such Star Entity, constitute
valid and binding agreements of such Star Entity and are enforceable against
such Star Entity in accordance with the terms thereof.
(cc) No statement, representation, warranty or covenant made by a Star
Party in this Agreement or made in any certificate or document required by this
Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect.
12
(dd) None of the Star Entities nor the directors, officers or
controlling persons of any such entity have taken, directly or indirectly, any
action intended, or which might reasonably be expected, to cause or result,
under the Act or otherwise, in, or which has constituted, stabilization or
manipulation of the price of any security of the Partnership to facilitate the
sale or resale of the Units.
(ee) Except as disclosed on Schedule 2 hereto, no person or entity has
the right to require the registration under the Act of Common Units or other
securities of any Star Entity by reason of the filing or effectiveness of the
Registration Statement.
(ff) The Units have been approved for listing on the New York Stock
Exchange ("NYSE"), subject only to official notice of issuance.
(gg) The Star Entities are in compliance in all material respects with
all federal, state and local employment and labor laws, including, but not
limited to, laws relating to non-discrimination in hiring, promotion and pay of
employees; no labor dispute with the employees of such entities exists or, to
the knowledge of the Star Parties, is imminent or threatened; and the Star
Parties are not aware of any existing, imminent or threatened labor disturbance
by the employees of any principal suppliers, manufacturers or contractors of the
Star Entities that could result in a material adverse effect on the condition
(financial or otherwise) or on the earnings, business, properties, business
prospects or operations of the Star Entities, taken as a whole.
(hh) The Star Entities own, or are licensed or otherwise have the full
exclusive right to use or will be licensed or otherwise will have full exclusive
right to use, the material 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, services marks and trade names (collectively, "patent and
proprietary rights") presently employed by them or which are necessary in
connection with the conduct of the business now operated by them as set forth in
the Registration Statement and the Prospectus and none of the Star Entities have
received any written notice or otherwise have actual knowledge of any
infringement of or conflict with asserted rights of others or any other claims
with respect to any patent or proprietary rights, or of any basis for rendering
any patent and proprietary rights invalid or inadequate to protect the interest
of such Star Entity.
(ii) None of the Star Entities, nor, to the Star Parties' knowledge,
any employee or agent of such Star Entity has made any payment of funds of the
Star Entity or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus. The
Partnership has complied, and until the completion of the distribution of the
Units will comply, with all of the provisions of (including, without limitation,
filing all forms required by) Section 517.075 of the Florida Securities and
Investor Protection Act and Regulation 3E-900.001 issued thereunder with respect
to the offering and sale of the Units.
(jj) The Star Entities (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or imposing liability
or standards of conduct concerning any Hazardous Material (as hereinafter
defined) ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other
13
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, individually or in the aggregate result in a
material adverse effect on the condition (financial or otherwise) or on the
earnings, business, properties, business prospects or operations of the Star
Entities, taken as a whole. The term "Hazardous Material" means (A) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (B) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended, (C) any
petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any
pollutant or contaminant or hazardous, dangerous, or toxic chemical, material,
waste or substance regulated under or within the meaning of any other
Environmental Law.
(kk) Each of the Star Entities maintains insurance with respect to its
properties and business of the types and in amounts generally deemed adequate
for its business and consistent with insurance coverage maintained by similar
companies and businesses, all of which insurance is in full force and effect.
(ll) Each of the Star Entities has filed all material federal, state
and foreign income and franchise tax returns and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP; and none of the
Star Entities has knowledge of any tax deficiency which has been or might be
asserted or threatened against any such entity. There are no tax returns of any
Star Entity that are currently being audited by state, local or federal taxing
authorities or agencies (and with respect to which any such entity has received
notice), where the findings of such audit, if adversely determined, would result
in a material adverse effect on the condition (financial or otherwise) or on the
earnings, business, properties, business prospects or operations of the Star
Entities, taken as a whole.
(mm) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to by any Star Entity, or with
respect to which any Star Entity could incur any liability under ERISA
(collectively, the "Benefit Plans"), no event has occurred and, to the best
knowledge of any of the Star Entities, there exists no condition or set of
circumstances, in connection with which any such entity could be subject to any
liability under the terms of such Benefit Plan, applicable law (including,
without limitation, ERISA and the Internal Revenue Code of 1986, as amended) or
any applicable agreement that could materially adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Star Entities, taken as a whole.
Section 4. Agreements of the Partnership.
The Partnership agrees with the Underwriters as follows:
(a) The Partnership will not, during such period as the Prospectus is
required by law to be delivered in connection with sales of the Units by an
Underwriter or dealer, file any amendment or supplement to the Registration
Statement or the Prospectus, unless a copy thereof shall first have been
submitted to the Representatives within a reasonable period of time prior to the
filing thereof and the Representatives shall not have objected thereto in good
faith.
14
(b) The Partnership will notify the Representatives promptly, and will
confirm such notice in writing, (1) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (2) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (3) of the happening of
any event during the period mentioned in the second sentence of Section 4(e)
that in the judgment of the Partnership makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in which they are made, not
misleading and (4) of receipt by any of the Star Parties or any representative
or attorney of the Star Parties of any other communication from the Commission
relating to the Partnership, the Registration Statement or the Prospectus. If at
any time the Commission shall issue any order suspending the effectiveness of
the Registration Statement, the Partnership will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible moment. The
Partnership will use its best efforts to comply with the provisions of and make
all requisite filings with the Commission pursuant to Rule 430A and to notify
the Representatives promptly of all such filings.
(c) The Partnership will furnish to the Representatives, without
charge, two signed copies of each of the Registration Statement and of any
post-effective amendments thereto, including financial statements and schedules,
and all exhibits thereto (including any document filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus), and will
furnish to the Representatives, without charge, for transmittal to each of the
other Underwriters, a copy of each of the Registration Statement and any
post-effective amendments thereto, including financial statements and schedules
but without exhibits.
(d) The Partnership will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) The Partnership will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request. The Partnership consents to the
use of the Prospectus or any amendment or supplement thereto by the Underwriters
and by all dealers to whom the Units may be sold, both in connection with the
offering or sale of the Units and for any period of time thereafter during which
the Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of the
Partnership or counsel to the Underwriters should be set forth in the Prospectus
in order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Partnership will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment thereto,
and will deliver to each of the Underwriters, without charge, such number of
copies thereof as the Representatives may reasonably request. The Partnership
shall not file any document under the Exchange Act before the termination of the
offering of the Units by the Underwriters if such document would be deemed to be
incorporated by reference into the Prospectus which is not approved by ▇.▇.
▇▇▇▇▇▇▇ after reasonable notice thereof.
(f) Prior to any public offering of the Units by the Underwriters, the
Partnership will cooperate with the Representatives and counsel to the
Underwriters in connection with the registration or qualification of the Units
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representatives may request; provided, that in no event shall the
Partnership
15
be obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the Effective Date,
the Partnership will furnish to the Representatives copies of such financial
statements and other periodic and special reports as the Partnership may from
time to time distribute generally to the holders of any class of its partnership
interests, and will furnish to the Representatives copies of each annual or
other report it shall be required to file with the Commission.
(h) The Partnership will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Partnership will pay, or
reimburse if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Partnership under this Agreement,
including but not limited to, costs and expenses of or relating to (1) the
preparation, printing and filing of the Registration Statement and exhibits to
it, the Prospectus and any amendment or supplement to the Registration Statement
or the Prospectus, (2) the preparation and delivery of certificates representing
the Units, (3) the word processing, printing and reproduction of this Agreement,
the Agreement Among Underwriters, any Dealer Agreements and any Underwriters'
Questionnaire, (4) furnishing (including costs of shipping, mailing and courier)
such copies of the Registration Statement and the Prospectus, and all amendments
and supplements thereto, as may be requested for use in connection with the
offering and sale of the Units by the Underwriters or by dealers to whom Units
may be sold, (5) the listing of the Units on the NYSE, (6) any filings required
to be made by the Underwriters with the NASD, and the fees, disbursements and
other charges of counsel for the Underwriters in connection therewith, (7) the
registration or qualification of the Units for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
4(f), including the fees, disbursements and other charges of counsel to the
Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (8) counsel to the
Partnership, (9) the transfer agent for the Units and (10) the Accountants.
(j) If this Agreement shall be terminated by the Partnership pursuant
to any of the provisions hereof (otherwise than pursuant to Section 8) or if for
any reason the Partnership shall be unable to perform its obligations hereunder,
the Partnership will reimburse the Underwriters for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
(k) The Partnership will not at any time, directly or indirectly, take
any action intended, or which might reasonably be expected, to cause or result
in, or which will constitute, stabilization of the price of the Units to
facilitate the sale or resale of any of the Units.
16
(l) The Partnership will apply the net proceeds from the offering and
sale of the Units to be sold by the Partnership in the manner set forth in the
Prospectus and the Prospectus Supplement under "Use of Proceeds."
(m) During the period of 90 days commencing at the Closing Date, the
Star Parties will not, without the prior written consent of ▇.▇. ▇▇▇▇▇▇▇,
directly or indirectly, contract to sell, offer to sell, distribute, grant any
option, right or warrant for the sale of, pledge, hypothecate or otherwise
dispose of, or file with the Commission a registration statement under the Act
relating to, any Common Units or securities convertible into, or exerciseable or
exchangeable for, Common Units or any other rights to acquire such Common Units,
or publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing other than to the Underwriters pursuant to this Agreement
and other than pursuant to employee benefit plans as in existence as of the date
hereof, provided, that the Partnership will not grant options to purchase Common
Units pursuant to such employee benefit plans at a price less than the public
offering price.
(n) The Partnership will not, and will cause each of its executive
officers, directors, and beneficial owners of more than 5% of the outstanding
Common Units to enter into agreements with the Representatives in the form set
forth in Exhibit B to the effect that they will not, for a period of 90 days
after the commencement of the public offering of the Units (the "Lock-up
Period"), without the prior written consent of ▇.▇. ▇▇▇▇▇▇▇, directly or
indirectly, offer, pledge, sell, contract to sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of any Common Units or
rights to acquire Common Units or any security convertible into or exercisable
or exchangeable for Common Units (including, without limitation, Common Units
which may be deemed to be beneficially owned in accordance with the rules and
regulations of the Commission, but not including Senior Subordinated Units) or
enter into a transaction which would have the same effect, or enter into any
swap, hedge or other arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of Common Units, or publicly disclose the
intention to make any such offer, sale, pledge or disposition other than, in the
case of the Partnership, the Option Units (other than (i) pursuant to employee
stock option plans as in existence as of the date hereof or in connection with
other employee incentive compensation arrangements consistent with past
practice, or (ii) pursuant to or in connection with an acquisition by the
Partnership provided that any person receiving such Common Units in the
acquisition will also enter into an agreement with the Underwriters in
substantially the same form set forth in Exhibit B, in which such person will
agree not to sell, contract to sell or otherwise dispose of any Common Units or
rights to acquire such units for the remainder of the Lock-up Period).
Section 5. Conditions of the Obligations of the Underwriters.
In addition to the execution and delivery of the Price Determination Agreement,
the obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement and all post-effective
amendments thereto have become effective shall be received by ▇.▇. ▇▇▇▇▇▇▇ not
later than 5:00 p.m., New York City time, on the date of this Agreement or at
such later date and time as shall be consented to in writing by ▇.▇. ▇▇▇▇▇▇▇ and
all filings required by Rule 424 of the Rules and Regulations and Rule 430A
shall have been made.
17
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Units under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to ▇.▇. ▇▇▇▇▇▇▇ and ▇.▇. ▇▇▇▇▇▇▇ did not object thereto in good faith,
and ▇.▇. ▇▇▇▇▇▇▇ shall have received certificates, dated the Closing Date and
the Option Closing Date and signed by the Chief Executive Officer and Chief
Financial Officer of the General Partner (who may, as to proceedings threatened,
rely upon the best of their information and belief), to the effect of clauses
(i), (ii) and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been, and no
development shall have occurred which could reasonably be expected to result in,
a material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Star Entities, taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other than as set
forth in or contemplated by the Registration Statement and the Prospectus and
(ii) none of the Star Entities shall have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statement and the Prospectus, if in the
judgment of ▇.▇. ▇▇▇▇▇▇▇ any such development makes it impracticable or
inadvisable to consummate the sale and delivery of the Units by the Underwriters
at the public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against any of the Star Entities or any of their
respective officers or directors in their capacities as such, before or by any
federal, state or local court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Star Entities taken as
a whole.
(e) Each of the representations and warranties of the Star Parties
contained herein shall be true and correct in all material respects (except for
those representations and warranties which are already qualified by materiality,
in which case such representations and warranties shall be true and correct in
all respects) at the Closing Date and, with respect to the Option Units, at the
Option Closing Date, as if made at the Closing Date and, with respect to the
Option Units, at the Option Closing Date, and all covenants and agreements
herein contained to be performed on the part of the Star Parties and all
conditions herein contained to be fulfilled or complied with by the Star Parties
at or prior to the Closing Date and, with respect to the Option Units, at or
prior to the Option Closing Date, shall have been duly performed, fulfilled or
complied with.
18
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Units, the Option Closing Date,
satisfactory in form and substance to counsel for the Underwriters, from
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel to the Partnership, to the effect set forth in
Exhibit C.
(g) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Units, the Option Closing Date,
from ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel to the Underwriters, with respect to the
Registration Statement, the Prospectus and this Agreement, which opinion shall
be satisfactory in all respects to the Representatives.
(h) On the date of the Prospectus, the Accountants shall have furnished
to the Representatives a letter, dated the date of its delivery, addressed to
the Representatives and in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with respect
to the Partnership as required by the Act and the Rules and Regulations and with
respect to the financial and other statistical and numerical information
contained in the Registration Statement or incorporated by reference therein. At
the Closing Date and, as to the Option Units, the Option Closing Date, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letter from the Accountants, that nothing
has come to their attention during the period from the date of the letter
referred to in the prior sentence to a date (specified in the letter) not more
than five days prior to the Closing Date and the Option Closing Date which would
require any change in their letter dated the date of the Prospectus, if it were
required to be dated and delivered at the Closing Date and the Option Closing
Date.
(i) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(n).
(j) At the Closing Date and, as to the Option Units, the Option Closing
Date, there shall be furnished to the Representatives an accurate certificate,
dated the date of its delivery, signed by each of the Chief Executive Officer
and the Chief Financial Officer of the General Partner, in form and substance
satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus (including any documents
filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus) and (A) as of the date of such
certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein
not untrue or misleading and (B) since the Effective Date, no event
has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect and there has been no
document required to be filed under the Exchange Act and the Exchange
Act Rules and Regulations that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so
filed;
(ii) Each of the representations and warranties of the Star
Parties contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct in
all material respects (except for those representations and warranties
which are
19
already qualified by materiality, in which case such representations
and warranties are true and correct in all respects);
(iii) Each of the covenants required herein to be performed by
the Star Parties on or prior to the delivery of such certificate has
been duly, timely and fully performed and each condition herein
required to be complied with by the Star Parties on or prior to the
date of such certificate has been duly, timely and fully complied
with; and
(iv) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (A) there has not
been, and no development has occurred which could reasonably be
expected to result in, a material adverse change in the general
affairs, business, business prospects, properties, management,
condition (financial or otherwise) or results of operations of the
Star Entities taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and
the Prospectus and (B) none of the Star Entities have sustained any
material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by
insurance, or from any labor dispute or any court, legislative,
administrative, regulatory or other governmental action,
investigation, order or decree, which is not set forth in the
Registration Statement and the Prospectus;
and such other matters as the Representatives may reasonably request.
(k) The Units shall be qualified for sale in such states as the
Representatives may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(l) Prior to the Closing Date and the Option Closing Date, the Firm
Units and the Option Units, respectively shall have been duly authorized for
listing on NYSE upon official notice of issuance.
(m) The Partnership shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus or any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, as
to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Star Parties herein, as to the performance
by the Star Parties of their obligations hereunder, or as to the fulfillment of
the conditions concurrent and precedent to the obligations hereunder of the
Underwriters.
Section 6. Indemnification.
(a) The Star Parties will, jointly and severally, indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, liabilities, expenses and damages
(collectively, "Liabilities") (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in settlement of, any
20
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party
(including any governmental agency or body), or in which any Underwriter or
other indemnified party must appear as a third party witness or otherwise, or
any claim asserted), as and when incurred, to which any Underwriter, or any such
person, may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or in any documents
filed under the Exchange Act and deemed to be incorporated by reference into the
Prospectus, or in any application or other document executed by or on behalf of
any of the Star Entities or based on written information furnished by or on
behalf of the Partnership filed in any jurisdiction in order to qualify the
Units under the securities laws thereof or filed with the Commission, (ii) the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading or
(iii) 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, liability, expense or damage arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Star Parties
shall not be liable under this clause (iii) to the extent it is finally
judicially determined by a court of competent jurisdiction that such loss,
claim, liability, expense or damage resulted primarily and 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); provided that
the Star Parties will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Units in the public
offering to any person by an Underwriter and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Partnership by the Representatives on behalf of any Underwriter expressly
for inclusion in the Registration Statement or the Prospectus. This indemnity
agreement will be in addition to any liability that any of the Star Parties
might otherwise have.
(b) Each Underwriter will indemnify and hold harmless each Star Party,
each person, if any, who controls such Star Party within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, each director of the General
Partner and each officer of the General Partner who signs the Registration
Statement to the same extent as the foregoing indemnity from the Star Parties to
each Underwriter, but only insofar as Liabilities arise out of or are based on
any untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Partnership by the Representatives on behalf of such
Underwriter expressly for use in the Registration Statement or the Prospectus.
This indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting discounts and
commissions received by such Underwriter.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the
21
extent that, such omission results in the forfeiture of substantive rights or
defenses by the indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its commencement,
the indemnifying party will be entitled to participate in and, to the extent
that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel satisfactory to the indemnified party,
and after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel 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 on advice of counsel) 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 on 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 such 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 admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld). No indemnifying party shall,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
6 (whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding and does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any such
indemnified party. Notwithstanding any other provision of this Section 6(c), if
at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be insufficient or unavailable to the Star Parties or the
22
Underwriters, the Star Parties and the Underwriters will contribute to the total
Liabilities (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Star Parties from persons other than the Underwriters, such as
persons who control the Star Parties within the meaning of the Act, officers of
the General Partner who signed the Registration Statement and directors of the
General Partner, who also may be liable for contribution) to which any one or
more of the Star Parties and any one or more of the Underwriters may be subject
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.
The relative benefits received by the Partnership on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Partnership bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the Star Parties, on the one hand, and the Underwriters, on the other,
with respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such 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 Star Parties, or the Representatives
on behalf of 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 6(d) 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
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the Liabilities, or action in
respect thereof, referred to above in this Section 6(d) shall be deemed to
include, for purpose of this Section 6(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 6(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions received by it and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will 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 6(d) are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 6(d), any person who controls a party to this Agreement
within the meaning of the Act will have the same rights to contribution as that
party, and each officer of the General Partner who signed the Registration
Statement will have the same rights to contribution as the Partnership, subject
in each case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim for contribution may be made under this
Section 6(d), will notify any such party or parties from whom contribution may
be sought, but the omission so to notify will not relieve the party or parties
from whom contribution may be sought from any other obligation it or they may
have under this Section 6(d). Except for a settlement entered into pursuant to
the last sentence of Section 6(c) hereof, no party will be liable for
23
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section
6 and the representations and warranties of the Star Parties contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
the Units and payment therefor or (iii) any termination of this Agreement.
(f) Each of the Star Parties hereby irrevocably consents and agrees,
for the benefit of each Underwriter and each person who controls any
Underwriter, that any action, suit or proceeding asserting a claim for
indemnification or contribution under or pursuant to this Section 6 may be
instituted by any Underwriter or any such controlling person in any state or
federal court in the Borough of Manhattan in the City of New York, and the Star
Parties will accept the jurisdiction of such court in such action, and waives,
to the fullest extent permitted by applicable law, any defense based upon lack
of personal jurisdiction or venue.
Section 7. Termination.
The obligations of the Underwriters under this Agreement may be terminated at
any time on or prior to the Closing Date (or, with respect to the Option Units,
on or prior to the Option Closing Date), by notice to the Partnership from the
Representatives, without liability on the part of any Underwriter to any of the
Star Parties, if, prior to delivery and payment for the Units (or the Option
Units, as the case may be), in the sole judgment of the Representatives, (i)
there has been, since the respective dates as of which information is given in
the Registration Statement or the Prospectus, any material adverse change in the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Star Entities, taken as a whole, (ii) trading in
any of the equity securities of the Partnership shall have been suspended by the
Commission, the NASD, an exchange that lists the Units or the NYSE, (iii)
trading in securities generally on the NYSE or the Nasdaq Stock Market shall
have been suspended or limited or minimum or maximum prices shall have been
generally established on such exchange or over the counter market, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by such exchange or
by order of the Commission or the NASD or any court or other governmental
authority, (iv) a general banking moratorium shall have been declared by either
federal or New York State authorities or (v) any material adverse change in the
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred the effect of
any of which is such as to make it, in the sole judgment of the Representatives,
impracticable or inadvisable to market the Units on the terms and in the manner
contemplated by the Prospectus.
Section 8. Substitution of Underwriter.
If any one or more of the Underwriters shall fail or refuse to purchase any of
the Firm Units which it has or they have agreed to purchase hereunder, and the
aggregate number of Firm Units which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Firm Units, the other Underwriters shall be obligated,
severally, to purchase the Firm Units which such defaulting Underwriter or
Underwriters agreed but failed or
24
refused to purchase, in the proportion which the number of Firm Units which they
have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Units which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportion as the Representatives may
specify; provided that in no event shall the maximum number of Firm Units which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of the number of
Firm Units agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Units and the aggregate number of Firm Units which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of Firm Units and
arrangements satisfactory to the Representatives and the Partnership for the
purchase of such Firm Units are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of the
non-defaulting Underwriters and the Partnership for the purchase or sale of any
Units under this Agreement. In any such case either the Representatives or the
Partnership shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken pursuant to this Section 8 shall
not relieve the defaulting Underwriter or Underwriters from liability in respect
of any default of such Underwriter under this Agreement.
Section 9. Information Furnished by the Underwriters.
The statements set forth in the last sentence of the penultimate paragraph on
the cover page of the Prospectus Supplement and the tables and the third and
eleventh through fourteenth paragraphs under the caption "Underwriting" in the
Prospectus Supplement constitute the only information furnished by or on behalf
of the Underwriters relating to them as such information is referred to in
Sections 3(b) and 6 hereof.
Section 10. Miscellaneous
Notice given pursuant to any of the provisions of this Agreement shall be in
writing and, unless otherwise specified, shall be mailed or delivered (a) if to
the Partnership, at the offices of the Partnership, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.O.
Box 120011, Stamford, Connecticut 06912-0011, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, or (b)
if to the Representatives, at the offices of ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance
Department.
Any such notice shall be effective only upon receipt. Any notice under Section 7
or 8 may be made by telex or telephone, but if so made shall be subsequently
confirmed in writing.
This Agreement has been and is made solely for the benefit of the Underwriters
and the Partnership and of the controlling persons, directors and officers
referred to in Section 6, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Units from any of the Underwriters.
All representations, warranties and agreements of the Star Parties contained
herein or in certificates or other instruments delivered pursuant hereto, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any of its controlling persons and
shall survive delivery of and payment for the Units hereunder.
25
Any action required or permitted to be taken by the Representatives under this
Agreement may be taken by them jointly or by ▇.▇. ▇▇▇▇▇▇▇.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
Except as set forth below, no claim may be commenced, prosecuted or continued in
any court other than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication
of such matters, and the Star Parties consent to the jurisdiction of such courts
and personal service with respect thereto. The Star Parties hereby consent to
personal jurisdiction, service and venue in any court in which any claim arising
out of or in any way relating to this Agreement is brought by any third party
against the Underwriters or any indemnified party. Each of the Underwriters and
the Star Parties (on its behalf and, to the extent permitted by applicable law,
on behalf of its stockholders and affiliates) waives all right to trial by jury
in any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Star
Parties agree that a final judgment in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding upon each
of the Star Parties and may be enforced in any other courts in the jurisdiction
of which any of the Star Parties is or may be subject, by suit upon such
judgment.
This Agreement may be signed in two or more counterparts with the same effect as
if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. The Star
Parties and the Underwriters each hereby irrevocably waive any right they may
have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any provision hereof
waived except by an instrument in writing signed by ▇.▇. ▇▇▇▇▇▇▇ and the
Partnership.
[SIGNATURE PAGES TO FOLLOW]
26
Please confirm that the foregoing correctly sets forth the
agreement among the Star Parties and the several
Underwriters.
Very truly yours,
STAR GAS PARTNERS, L.P.
By: STAR GAS LLC, as General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
STAR GAS PROPANE, L.P.
By: STAR GAS LLC, as General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
STAR GAS LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
STAR/PETRO INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
27
Confirmed as of the date first above mentioned:
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
UBS WARBURG LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
Acting on behalf of themselves and as the
Representatives of the other several
Underwriters named in Schedule 1 hereof.
By: ▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director - Investment Banking
28
SCHEDULE 1
Number of Firm
Units to be
Name of Underwriter Purchased
--------------------------------- ---------------
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc......... 640,000
UBS Warburg LLC.................. 640,000
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc............ 320,000
------------
Total.................... 1,600,000
============
SCHEDULE 2
Registration Rights of the General Partner or Its
Affiliates
The Partnership is required
to register for resale under the Act any units proposed to be sold by the
General Partner or its affiliates upon their request if an exemption from the
registration requirements is not otherwise available; and
to register for resale under the Act the common units and senior subordinated
units issued to affiliates of Petro in the Petro transaction (as defined in the
Prospectus) upon their request if an exemption from the registration
requirements is not otherwise available.
The Partnership is obligated to pay all expenses incidental to the above
registrations, excluding underwriting discounts and commissions.
SCHEDULE 3
SECURITY OWNERSHIP OF THE PARTNERSHIP
1. Star Gas Partners owns $22,336,631 of 14.5% Subordinated Notes of
Total Gas & Electric, Inc.
STAR GAS PARTNERS, L.P.
PRICE DETERMINATION AGREEMENT
September 17, 2002
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
UBS WARBURG LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
As Representatives of the several Underwriters
named in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
Reference is made to the Underwriting Agreement, dated September 17, 2002 (the
"Underwriting Agreement"), among Star Gas Partners, L.P., a Delaware limited
partnership (the "Partnership"), Star Gas LLC, a Delaware limited liability
company, Star Gas Propane, L.P., a Delaware limited partnership, and Star/Petro
Inc., a Minnesota corporation (collectively, the "Star Parties"), and the
Underwriters named in Schedule 1 thereto or hereto (the "Underwriters") for whom
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., UBS Warburg LLC and RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. are acting
as representatives (the "Representatives"). If you are the only Underwriters
named in Schedule 1, all references herein to the Representatives shall be
deemed to be to you as the Underwriters. The Underwriting Agreement provides for
the purchase by the Underwriters, subject to the terms and conditions set forth
therein, of an aggregate of 1,600,000 Common Units representing limited partner
interests in the Partnership (the "Firm Units"). The Partnership has also agreed
to grant to the Underwriters an option (the "Option") to purchase up to an
aggregate of 240,000 additional Common Units (the "Option Units") on the terms
and for the purposes set forth in the Underwriting Agreement. The Firm Units and
the Option Units are hereinafter collectively referred to as the "Units." This
Agreement is the Price Determination Agreement referred to in the Underwriting
Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned agrees with
the Representatives as follows:
The public offering price per Unit shall be $17.65.
0-1
The purchase price per Unit to be paid by the several Underwriters shall be
$16.7675, representing an amount equal to the public offering price set forth
above, less $.8825 per Unit. The Star Parties represent and warrant to each of
the Underwriters that the representations and warranties of the Star Parties set
forth in Section 3 of the Underwriting Agreement are accurate, as though
expressly made at and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule 1 is a
complete list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
This Agreement shall be governed by the law of the State of New York without
regard to the conflict of laws principles of such State.
If the foregoing is in accordance with your understanding of the agreement among
the Underwriters and the Star Parties, please sign and return to the Partnership
a counterpart hereof, whereupon this instrument along with all counterparts and
together with the Underwriting Agreement shall be a binding agreement among the
Underwriters and the Star Parties in accordance with its terms and the terms of
the Underwriting Agreement.
[SIGNATURE PAGES TO FOLLOW]
0-2
Very truly yours,
STAR GAS PARTNERS, L.P.
By: STAR GAS LLC, as General Partner
By:
-------------------------------------
Name:
Title:
STAR GAS PROPANE, L.P.
By: STAR GAS LLC, as General Partner
By:
-------------------------------------
Name:
Title:
STAR GAS LLC
By:
-------------------------------------
Name:
Title:
STAR/PETRO INC.
By:
-------------------------------------
Name:
Title:
0-3
Confirmed as of the date first above mentioned:
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
UBS WARBURG LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
Acting on behalf of themselves and as the
Representatives of the other several
Underwriters named in Schedule 1 hereto.
By: ▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By:
-------------------------------------------
Name:
Title:
0-4
September 17, 2002
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
UBS WARBURG LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
As Representatives of the several Underwriters
c/o ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
In consideration of the agreement of the several Underwriters, for
which ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., UBS Warburg LLC and RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. (the
"Representatives") intend to act as Representatives to underwrite a proposed
public offering (the "Offering") of 1,600,000 Common Units (the "Units") of Star
Gas Partners, L.P., a Delaware partnership (the "Partnership"), as contemplated
by Registration Statement No. 333-57994 on Form S-3, which was filed with the
Securities and Exchange Commission, the undersigned hereby agrees that the
undersigned will not, for a period of 90 days after the commencement of the
public offering of such Units, without the prior written consent of ▇.▇. ▇▇▇▇▇▇▇
& Sons, Inc., directly or indirectly offer, pledge, sell, contract to sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
or enter into a transaction which would have the same effect, or enter into any
swap, hedge or other arrangement that transfers, in whole or in part, any of the
economic consequence of ownership of, or publicly disclose the intention to make
any such offer, sale, pledge or disposition, or require any person to file with
the Securities and Exchange Commission a registration statement under the
Securities Act of 1933 to register, any Common Units or securities convertible
into or exercisable or exchangeable for Common Units (which, for the avoidance
of doubt, shall not include Senior Subordinated Units) or warrants or other
rights to acquire Common Units of which the undersigned is now, or may in the
future become, the beneficial owner within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934 (other than pursuant to employee stock option
plans as in existence on the date hereof or in connection with other employee
incentive compensation arrangements consistent with past practice).
Very truly yours,
By:
-------------------------------
Name:
Title:
Form of Opinion of Counsel to the Partnership
1. Each of the Partnership and the Operating Partnership has been duly
formed and is validly existing and in good standing as a limited partnership
under the Delaware Act, with all necessary partnership power and authority to
own or lease its properties and conduct its business, in each case as described
in the Prospectus.
2. Each Principal Subsidiary has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
jurisdiction of its incorporation, with all necessary corporate power and
authority to own or lease its properties and conduct its business, in each case
as described in the Prospectus.
3. The General Partner has been duly organized and is validly existing
and in good standing as a limited liability company under the laws of the State
of Delaware, with all necessary limited liability company power and authority to
own or lease its properties and conduct its business and to act as general
partner of the Partnership and the Operating Partnership, in each case as
described in the Prospectus.
4. (a) Each of the Partnership, the Operating Partnership, the General
Partner and the Principal Subsidiaries is duly qualified or registered as a
foreign limited partnership, foreign limited liability company or foreign
corporation, as the case may be, for the transaction of business under the laws
of the States set forth on Exhibit A to this opinion. (b) To such counsel's
knowledge such jurisdictions are the only jurisdictions in which the character
of the business conducted by it or the location of the properties owned or
leased by it make such qualification or registration necessary (except where the
failure to so qualify or register would not have a material adverse effect on
the condition (financial or other), results of operations or business of the
Star Entities, taken as a whole, or subject the Partnership or the limited
partners of the Partnership to any material liability or disability).
5. The General Partner owns all outstanding General Partner Units,
representing the entire general partner interest in the Partnership. All of such
General Partner Units have been duly authorized and validly issued in accordance
with the Partnership Agreement, and the General Partner owns such General
Partner Units free and clear of all liens, encumbrances, security interests,
charges or claims (i) in respect of which a financing statement under the
Uniform Commercial Code of the State of Delaware naming the General Partner as a
debtor is on file in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware Act,
the Bank Credit Facilities or the First Mortgage Note Agreement.
6. The Partnership is the sole limited partner of the Operating
Partnership with a 99.99% limited partner interest in the Operating Partnership.
Such limited partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement and is fully paid (to the
extent required under the Operating Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the
Delaware Act), and the Partnership owns such limited partner interest free and
clear of all liens,
encumbrances, security interests, equities, charges or claims (i) in respect of
which a financing statement under the Uniform Commercial Code of the State of
Delaware naming the Partnership as a debtor is on file in the office of the
Secretary of State of the State of Delaware or (ii) otherwise known to such
counsel, without independent investigation, other than those created by or
arising under the Delaware Act, the Bank Credit Facilities or the First Mortgage
Note Agreement.
7. All of the outstanding Common Units and Senior Subordinated Units
have been, and the Units to be issued and sold to the Underwriters by the
Partnership pursuant to the Underwriting Agreement, including any Option Units,
and the limited partner interests represented thereby have been, duly authorized
in accordance with the Partnership Agreement and, when issued and delivered to
the Underwriters against payment therefor in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-607 of the Delaware Act). All of
the outstanding Common Units and Senior Subordinated Units are not, and the
Units will not be, subject to any preemptive or similar right, nor any
restriction upon the voting or transfer of such Units under (i) the statutes,
judicial and administrative decisions, and the rules and regulations of the
governmental agencies of the State of Delaware, (ii) the Partnership Agreement,
(iii) any instrument, document, contract or agreement referred to in the
Registration Statement or any instrument, document, contract or agreement filed
as an exhibit to or incorporated by reference in, the Registration Statement or
(iv) any other law or agreement of which such counsel are aware. Except as
described in the Registration Statement or the Prospectus or as set forth on
Exhibit B hereto, to such counsel's knowledge, the Partnership does not have
outstanding, and at the Closing Date will not have outstanding, any options to
purchase, or any rights or warrants calling for the issuance of, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any Common Units or other partnership interests, any capital
stock or partnership interests of any subsidiary or any such warrants,
convertible securities or obligations.
8. 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 the Underwriting Agreement, the Partnership Agreement and the
Prospectus. At the Closing Date, all partnership and limited liability company
action, as the case may be, required to be taken by the Partnership or the
General Partner or any of their partners or members for the authorization,
issuance, sale and delivery of the Units shall have been validly taken.
9. No permit, consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
in connection with the execution, delivery and performance of the Underwriting
Agreement by the Star Parties and the consummation of the transactions
contemplated thereby, including the issuance and delivery of the Units, except
such as have been obtained under the Act and the Rules and Regulations and such
as may be required under state securities or "Blue Sky" laws or by the by-laws
and rules of the NASD in connection with the purchase and distribution by the
Underwriters of the Units.
10. The description of the Common Units contained in the Prospectus is
complete and accurate in all material respects. The form of certificate used to
evidence the Common Units is in due and proper form and complies with all
applicable statutory requirements.
11. The Registration Statement, the Prospectus (including any documents
incorporated, at the time they were filed, by reference into the Prospectus) and
any further amendments and supplements thereto prior to the date hereof, comply
in all material respects as to form with the requirements of the Act, the
Exchange Act, the Exchange Act Rules and Regulations and the Rules and
Regulations (except that such counsel need express no opinion as to financial
statements, schedules and other financial data contained in the Registration
Statement, or the Prospectus, or incorporated by reference therein).
12. To such counsel's knowledge, any instrument, document, lease,
license, contract or other agreement (collectively, "Documents") required to be
described or referred to in the Registration Statement or the Prospectus has
been properly described or referred to therein and any Document required to be
filed as an exhibit to the Registration Statement has been filed as an exhibit
thereto or has been incorporated as an exhibit by reference in the Registration
Statement; and no default exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any Document
filed or required to be filed as an exhibit to the Registration Statement.
13. To such counsel's knowledge, except as described in the
Registration Statement or the Prospectus, no person or entity has the right to
require the registration under the Act of Common Units or other securities of
any Star Entity by reason of the filing or effectiveness of the Registration
Statement.
14. To such counsel's knowledge, none of the Star Entities is in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment or decree, except as may be described in the Prospectus, and except
such as in the aggregate do not now have and will not in the future have a
material adverse effect upon the operations, business or assets of the Star
Entities, taken as a whole.
15. All of the issued and outstanding member interests of the General
Partner are duly authorized and have been validly issued, and are fully paid and
nonassessable, and the LLC Owners own all such outstanding membership interests
free and clear of all liens, encumbrances, security interests, equities, charges
or claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material) (i) in
respect of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming any LLC Owner as a debtor is on file in the office of
the Secretary of State of the State of Delaware or (ii) otherwise known to such
counsel, without independent investigation.
16. As of the Closing Date, after giving effect to the issuance of the
Firm Units but not any Option Units, the capitalization of the Partnership will
consist of 28,730,446 Common Units, 3,134,196 Senior Subordinated Units, 345,364
Junior Subordinated Units and 325,729 General Partner Units.(1)
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(1) The number of Common Units outstanding does not include 60,727 Common Units
registered in the name of Petro, which the Partnership treats as treasury
units and does not include 11 Common Units which are issuable upon the
surrender of Petro securities.
17. The LLC Owners own all outstanding Junior Subordinated Units. All
of such Junior 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 nonassessable (except as such nonassessability may be
affected by Section 17-607 of the Delaware Act), and each of the LLC Owners owns
its Junior Subordinated Units free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material) (i) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware naming any
LLC Owner as a debtor is on file in the office of the Secretary of State of the
State of Delaware or (ii) otherwise known to such counsel, without independent
investigation.
18. The General Partner is the sole general partner of the Operating
Partnership with a 0.01% general partner interest in the Operating Partnership.
Such general partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement, and the General Partner
owns such general partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material) (i) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware naming the
General Partner as a debtor is on file in the office of the Secretary of State
of the State of Delaware or (ii) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Delaware Act, the Bank Credit Facilities or the First Mortgage Note Agreement.
19. The Partnership owns all of the shares, $.001 par value per share,
of common stock of TG&E. The Partnership also owns (i) 26,250 shares of Series A
preferred stock of TG&E having a $9.00 per share non-cumulative preferred
dividend and a $100.00 per share liquidation preference and (ii) 38,750 shares
of Series B preferred stock of TG&E having a $1.667 per share non-cumulative
preferred dividend and a $100.00 per share liquidation preference. All such
common and preferred shares have been duly authorized and validly issued and are
fully paid and non-assessable and are owned directly by the Partnership free and
clear of all liens, encumbrances, security interests, charges and claims (i) in
respect of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming the Partnership as a debtor is on file in the office of
the Secretary of State of the State of Delaware or (ii) otherwise known to such
counsel, without independent investigation, other than the interest created by
the pledge by the Partnership to Bank of America of its TG&E shares as
collateral for TG&E's bank credit facilities.
20. TG&E owns all of the shares of common stock of each of Total Gas &
Electricity (PA), Inc. and TG&E Service Company, Inc. Such shares have been duly
authorized and validly issued and are fully paid and non-assessable and are
owned directly by TG&E free and clear of all liens, encumbrances, security
interests, charges and claims (i) in respect of which a financing statement
under the Uniform Commercial Code of the State of Delaware naming the
Partnership as a debtor is on file in the office of the Secretary of State of
the State of Delaware or (ii) otherwise known to such counsel, without
independent investigation, other than the general security interest created by
TG&E's bank credit facilities.
21. All descriptions in the Prospectus of statutes, regulations or
legal or governmental proceedings are accurate in all material respects and
fairly present the information required to be shown. The statements in the
Registration Statement or the Prospectus under the captions, "Cash Distribution
Policy," "Description of the Common Units," "Description of Partnership
Securities," "Conflicts of Interest," "Federal Income Tax Considerations" and
"Recent Tax Developments," insofar as they constitute descriptions of the
Partnership Agreements or refer to statements of law or legal conclusions, are
accurate and complete in all material respects.
22. Each Star Party has full power and authority to enter into the
Underwriting Agreement. The Underwriting Agreement has been duly authorized,
executed and delivered by each Star Party and is a valid and binding agreement
of each Star Party and, except for the indemnification and contribution
provisions thereof, as to which such counsel need express no opinion, is
enforceable against the Star Parties in accordance with the terms thereof.
23. 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,
enforceable against each of them in accordance with its terms; provided that,
with respect to each of the Partnership Agreements, the enforceability thereof
may by limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws relating to or affecting creditors' rights generally
and by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
24. Neither the issuance and sale by the Partnership of the Units nor
the execution, delivery and performance of the Underwriting Agreement will (i)
violate any of the provisions of the certificate or agreement of limited
partnership, certificate of incorporation or by-laws, certificate of formation
or limited liability company agreement or other governing documents of any of
the Star Entities, (ii) breach or result in a default under (or an event which
with notice or lapse of time or both would constitute such a default), cause the
time for performance of any obligation to be accelerated under or give any party
the right to accelerate the payment of any amount under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Star Entities pursuant to the terms of (x) any indenture, mortgage, deed
of trust, loan agreement, bond, debenture, note agreement, capital lease or
other evidence of indebtedness of which such counsel has knowledge, (y) any
voting trust arrangement or any contract or other agreement to which a Star
Entity is a party that restricts the ability of such Star Entity to issue
securities and of which such counsel has knowledge or (z) any Document filed as
an exhibit to, or incorporated as an exhibit by reference in, the Registration
Statement, (iii) breach or otherwise violate any existing obligation of any of
the Star Entities under any court or administrative order, judgment or decree of
which such counsel has knowledge or (iv) violate applicable provisions of any
statute or regulation in any of the states of the Star Entities' formation, and
any state in which such entities have material operations, or of the United
States.
25. Assuming that the Underwriters do not have notice of any adverse
claim (as defined in Sections 8-102 and 8-105 of the New York Commercial Code)
to the Units, upon delivery to the Underwriters of the Units as contemplated by
this Agreement and payment by the
Underwriters of the purchase price for the Units, the Underwriters (or their
nominee) will be "protected purchasers" as such term is used in Section 8-303 of
the New York Commercial Code. No financing statement under the UCC of the State
of Delaware naming the General Partner, the Partnership or the Operating
Partnership as a debtor is on file in the Office of the Secretary of the State
of Delaware with respect to the Units and such counsel, without independent
investigation, does not otherwise have notice of any adverse claim.
26. Except as described in the Prospectus, to such counsel's knowledge,
each of the Star Entities has (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, (ii) complied in all respects with all laws,
regulations and orders applicable to it or its business, except where the
failure to so comply would not have a material adverse affect on the Star
Entities, taken as a whole, and (iii) performed all its obligations required to
be performed by it, and is not in default, under any indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, bond, indenture, note
agreement, lease, contract or other agreement or instrument (collectively, a
"contract or other agreement") to which it is a party or by which its property
is bound or affected. None of the Star Entities is in violation of any provision
of its certificate or agreement of limited partnership, certificate of
incorporation or by-laws, certificate of formation or limited liability company
agreement, as the case may be.
27. None of the Star Entities are, or as a result of the transactions
described under "Recent Developments" in the Prospectus Supplement will be, (i)
a "holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" thereof, within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (ii) an "investment company," a company "controlled
by" an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.
28. The Units have been approved for listing on the NYSE, subject only
to official notice of issuance.
29. The Registration Statement was declared effective under the Act on
April 27, 2001. Such counsel shall confirm that it has been advised by the
Commission that no order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or threatened or is pending or contemplated by the Commission. 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.
30. To such counsel's knowledge, there are no actions, suits,
proceedings or investigations pending or overtly threatened in writing against
the Star Entities, or any of their respective officers or directors in their
capacities as such, before or by any court, governmental, administrative or
regulatory body, agency, commission or arbitrator which (i) seek to challenge
the legality or enforceability of the Underwriting Agreement, (ii) seek to
challenge the legality or enforceability of any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iii) seek
damages or other remedies with respect to any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iv) except as
set forth in or contemplated by the Registration Statement or the Prospectus,
seek money
damages or seek to impose criminal penalties upon the Star Entities or any of
their respective officers or directors in their capacities as such and of which
such counsel has knowledge or (v) seek to enjoin any of the business activities
of the Star Entities or the transactions described in the Prospectus and of
which such counsel has knowledge.
Such counsel participated in the preparation of the Registration
Statement and the Prospectus and, without assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or in any amendment or supplement thereto
or in any documents incorporated by reference into the Prospectus (except to the
extent specified in the foregoing opinion), nothing has come to such counsel's
attention that causes such counsel to believe that, both as of the Effective
Date and the Closing Date, the Registration Statement or any amendment thereto,
including any documents incorporated by reference into the Registration
Statement, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
or any amendment or supplement thereto, including any documents incorporated by
reference into the Prospectus, at the time such Prospectus was issued, at the
time any such amended or supplemented Prospectus was issued, and at the Closing
Date, contained or contains any untrue statement of a material fact or omitted
or omits 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 (except that such counsel need express no opinion as to financial
statements, schedules and other financial data contained in the Registration
Statement or the Prospectus or incorporated by reference therein).
