EXHIBIT 1.1
Units
STAR GAS PARTNERS, L.P.
Common Units
UNDERWRITING AGREEMENT
----------------------
___________, 1999
PAINEWEBBER INCORPORATED
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇ BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, A DIVISION OF ▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Star Gas Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to sell an aggregate of 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"). The Partnership has also agreed to grant to the several
Underwriters an option (the "Option") to purchase up to an aggregate of
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 PaineWebber Incorporated ("PaineWebber") 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
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herein to "this Agreement" and to the phrase "herein" shall be deemed to
include, the Price Determination Agreement.
On the Closing Date (as hereinafter defined) the Partnership will
acquire Petroleum Heat and Power Co., Inc. ("Petro") as part of a four-part
transaction (the "Transaction"). The four principal parts of the Transaction are
as follows:
(i) Pursuant to the terms of an Agreement and Plan of
Merger (the "Merger Agreement") entered into on October 22, 1998,
that was amended and restated on February 3, 1999 between the
Partnership and ▇▇▇▇▇, ▇▇▇▇▇ will become a wholly-owned, indirect
subsidiary of the Partnership through (1) a merger of one of the
Partnership's wholly-owned Subsidiaries into Petro and (2) an exchange
by affiliates of Petro of their Petro common stock for senior
subordinated units, junior subordinated units and general partner units
of the Partnership.
(ii) The Partnership will offer Common Units and separately,
Petro will offer (the "Notes Offering") Senior Secured Notes (the
"Notes"). The Partnership, along with Petro Holdings, Inc., a Minnesota
corporation and the parent corporation of Petro ("Petro Holdings"),
will guarantee (the "Guarantees") the Notes. The Partnership will use
the proceeds from these offerings to redeem or restructure certain
public and private debt and preferred stock of Petro.
(iii) As a result of the Transaction, Star Gas Corporation, a
Delaware corporation ("Star Gas Corporation") will become a subsidiary
of the Partnership. The Partnership will substitute a new general
partner (the "General Partner"), Star Gas LLC, a Delaware limited
liability company ("Star Gas LLC") for Star Gas Corporation.
(iv) The Partnership will amend its Agreement of Limited
Partnership (the "Partnership Agreement") among the General Partner and
the limited partners of the Partnership, which is in effect prior to
the Transaction. The amendment will, among other things, facilitate the
consummation of the Transaction and increase the Partnership minimum
quarterly distribution from $0.55 to $0.575 per Common Unit per
quarter.
The Partnership confirms as follows its agreements with the
Representatives and the several other Underwriters.
SECTION 1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Partnership 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
PaineWebber 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 PaineWebber 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
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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 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, on or before
the 30th day after the date of the Price Determination Agreement), upon written
or telegraphic notice (the "Option Units Notice") by PaineWebber 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 PaineWebber 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. In the event such price has not
been agreed upon and the Price Determination Agreement has not been executed by
the close of business on the fourteenth business day following the date on which
the Registration Statement (as hereinafter defined) becomes effective, this
Agreement shall terminate forthwith, without liability of any party to any other
party except that Section 6 shall remain in effect.
(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 to the several Underwriters
for their accounts at the office of PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, credit to the account of the Partnership
with the Depository Trust Company, 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 PaineWebber at least one business day prior to the
Closing Date. Such payment shall be made at 10:00 a.m., New York City time, on
the third business day (or fourth business day, if the Price Determination
Agreement is executed after 4:30
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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 PaineWebber 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.
Certificates evidencing the Units shall be in definitive form and shall
be registered in such names and in such denominations as PaineWebber on behalf
of the Representatives shall request at least two business days prior to the
Closing Date or the Option Closing Date, as the case may be, by written notice
to the Partnership. For the purpose of expediting the checking and packaging of
certificates for the Units, the Partnership agrees to make such certificates to
be sold by the Partnership available for inspection at least 24 hours prior to
the Closing Date or the Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm 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.
The Partnership 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. 333-68329) on Form S-3 relating
to the Units, including a preliminary prospectus and such 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 Securities Act
of 1933, as amended (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. The term "preliminary prospectus" as used herein means a preliminary
prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of the Rules
and Regulations included at any time as part of the registration statement.
Copies of such registration statement and amendments and of each related
preliminary prospectus have been delivered to the Representatives. The term
"Registration Statement" means such registration statement as amended at the
time it becomes or became effective (the "Effective Date"), including financial
statements and all exhibits and any information deemed to be included by Rule
430A or Rule 434 of the Rules and Regulations. If the Partnership files a
registration statement to register a portion of the Units and relies on Rule
462(b) of the Rules and Regulations for such registration statement to become
effective upon
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filing with the Commission (the "Rule 462 Registration Statement"), then any
reference to the "Registration Statement" shall be deemed to include the Rule
462 Registration Statement, as amended from time to time. The term "Prospectus"
means the prospectus as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective Date.
Any reference herein to the Registration Statement, any preliminary prospectus
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 Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the Effective Date or the date of such preliminary
prospectus or the Prospectus, as the case may be. Any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
Effective Date, or the date of any preliminary prospectus or the Prospectus, as
the case may be, and deemed to be incorporated therein by reference.
(b) On the Effective Date, the date the Prospectus is 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 if the Partnership shall have filed with the Commission any
amendment or supplement thereto), 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. 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. For all purposes of this Agreement, the amounts of the
selling concession and reallowance set forth in the Prospectus constitute the
only information relating to any Underwriter furnished in writing to the
Partnership by the Representatives specifically for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. The
Partnership has not distributed any offering material in connection with the
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offering or sale of the Units other than the Registration Statement, the
preliminary prospectus, the Prospectus or any other materials, if any, permitted
by the Act.
(c) The documents which are incorporated by reference in the
preliminary prospectus and 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
requirement 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 they
are 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) The Partnership and each of its direct or indirect
subsidiaries listed on Exhibit B hereto (the "Subsidiaries" and together with
the Partnership, the General Partner, Petro and its direct or indirect
subsidiaries, the "Star Entities"), have been duly formed and are validly
existing and in good standing, and after consummation of the Transaction will
continue to be validly existing and in good standing, as a limited partnership
under the Delaware Revised Uniform Limited Partnership Act (the "Delaware Act")
(or, in the case of certain of the Subsidiaries, a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation), with all necessary partnership power and authority to own or
lease the properties it owns or leases or will own or lease at the Closing Date,
assume its liabilities and conduct the business it conducts and will conduct at
the Closing Date, in each case as described in the Prospectus, and are, and at
the Closing Date will be, duly qualified or registered as a foreign limited
partnership (or, in the case of certain of the Subsidiaries, 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 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 to subject the
Partnership or the limited partners of the Partnership to any material liability
or disability).
(e) The only subsidiaries (as defined in the Rules and
Regulations) of the Partnership are the Subsidiaries. All of the outstanding
shares of capital stock or other capital interests of the Subsidiaries have been
duly authorized and validly issued and are fully paid and non-assessable and are
owned by the Partnership free and clear of all liens, encumbrances and claims
except for liens, encumbrances or claims against Star Gas Propane, L.P. (the
"Operating Partnership"), a Delaware limited partnership, a 99.99% limited
partner interest of which will be owned by the Partnership and a 0.01% general
partner interest of which will be owned by the General Partner, as described in
the Registration Statement. Except for the units or stock of the Subsidiaries
and as disclosed in the Registration Statement, the Partnership does not own,
and at the Closing Date will not own, directly or indirectly, any units of units
or any other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or other
entity. Complete and correct copies of the certificate of incorporation and of
the by-laws or, if applicable, partnership agreements of the Partnership and
each of its Subsidiaries and all amendments thereto have been delivered to the
Representatives,
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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.
(f) The Operating Partnership has been duly formed and is
validly existing, and after consummation of the Transaction will continue to be
validly existing, as a limited partnership under the Delaware Act, with all
necessary partnership power and authority to own or lease the properties it will
own or lease at the Closing Date, assume its liabilities and conduct the
business it will conduct at the Closing Date, in each case as described in the
Registration Statement, and is, or at the Closing Date will be, 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 Operating Partnership, the Partnership or the
limited partners of the Partnership to any material liability or disability).
(g) 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).
(h) On the Closing Date, the General Partner will be duly
organized and will continue to be validly existing in good standing as a limited
liability company under the laws of the State of Delaware. The General Partner
will have 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 will be 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).
(i) Petro has been duly organized and is validly existing and
in good standing as a corporation under the laws of the State of Minnesota.
Petro has all necessary power and authority to own or lease its properties and
conduct its business as described in the Registration
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Statement, and Petro 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 Petro, or subject Petro, the Partnership or
the limited partners of the Partnership to any material liability or
disability).
(j) Each of Petro's direct and indirect subsidiaries has been
duly organized and is validly existing and in good standing under the laws of
its jurisdiction of organization. Each of Petro's direct and indirect
subsidiaries has all necessary power and authority to own or lease its
properties and conduct its business as described in the Registration Statement,
and each subsidiary 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 Petro or any of its direct or indirect
subsidiaries, taken as a whole, or subject Petro, its direct and indirect
subsidiaries, the Partnership or the limited partners of the Partnership to any
material liability or disability).
(k) On the Closing Date, the General Partner will be the sole
general partner of the Partnership with a 1.99% general partner interest in the
Partnership; such general partner interest will have been duly authorized by the
Partnership Agreement, as amended through the Closing Date, and will be validly
issued to the General Partner; and the General Partner will own 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").
On the Closing Date, the Partnership will be own 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.
(l) On the Closing Date, the General Partner will be the sole
general partner of the Operating Partnership with a 0.01% general partner
interest in the Operating Partnership; such general partner interest will have
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 will have been validly issued to the General Partner; and the
General Partner will own such general partner interest free and clear of all
liens, encumbrances, security interests,
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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 capital stock of the
General Partner has been duly authorized and was validly issued, and is fully
paid and nonassessable, and Petro owns all such outstanding capital stock 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) On the Closing Date, all of the issued and outstanding
member interests of the General Partner will be duly authorized and will have
been validly issued, and will be fully paid and nonassessable, and ▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and two entities affiliated with ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ will
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).
(o) The outstanding Common Units 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.
(p) 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 Partnership and Petro
as of the respective dates thereof and the consolidated results of operations
and cash flows of the Partnership and Petro 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 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
9
Rules and Regulations or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. KPMG Peat Marwick 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.
(q) 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.
(r) 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 capital units.
(s) None of the Star Entities is, or as of the Closing Date
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.
(t) 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.
10
(u) 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 affect 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
Partnership and each of its Subsidiaries, 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 or
certificate of incorporation or by-laws, as the case may be.
(v) 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
Partnership, in connection with the execution, delivery and performance of the
Merger Agreement by the Partnership (other than the filing of the certificate of
merger with respect thereto filed with the Secretary of State of the State of
Delaware), in connection with the taking by the Partnership of any action
contemplated hereby or in connection with the taking by the Partnership of any
other action contemplated by the Transaction, 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. [other approvals, if
any, to be discussed]
(w) The Partnership has full power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Partnership and constitutes a valid and binding agreement of the
Partnership and is enforceable against the Partnership in accordance with the
terms hereof; provided that the enforceability hereof may by limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or
similar laws relating to or affecting creditors' right 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 under "Use of Proceeds" will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of the
Partnership or any of its Subsidiaries or Petro or any of its subsidiaries
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 or by-laws, as the case may be, of
any of its Subsidiaries or of Petro or any of its subsidiaries, any
11
contract or other agreement to which the Partnership or any of its Subsidiaries
or Petro or any of its subsidiaries is a party or by which the Partnership or
any of its Subsidiaries or Petro or any of its subsidiaries 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
the Partnership or any of its Subsidiaries or Petro or any of its subsidiaries.
(x) The Partnership Agreement has been and, as amended as of
the Closing Date will be, 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 and, as amended as of the Closing Date,
will be 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; provided that, with respect to
both agreements described in this paragraph (u), 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 principals (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(y) The Partnership has full power and authority to enter into
the Merger Agreement. The Merger Agreement has been duly authorized, executed
and delivered by the Partnership and constitutes a valid and binding agreement
of the Partnership and is enforceable against the Partnership in accordance with
the terms thereof; provided that 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 principals (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The performance of the Merger Agreement and
the consummation of the transactions contemplated thereby will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Partnership or any of its Subsidiaries 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 or by-laws, as the case may be, of any of its Subsidiaries, any
contract or other agreement to which the Partnership or any of its Subsidiaries
is a party or by which the Partnership or any of its Subsidiaries or any of its
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 the
Partnership or any of its Subsidiaries.
(z) Petro has full power and authority to enter into the
Merger Agreement. The Merger Agreement has been duly authorized, executed and
delivered by Petro and constitutes a valid and binding agreement of Petro and is
enforceable against Petro in accordance with the terms thereof; provided that
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 principals
(regardless of whether
12
such enforceability is considered in a proceeding in equity or at law). The
performance of the Merger Agreement and the consummation of the transactions
contemplated thereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of Petro or any of its subsidiaries
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 certificate of incorporation or by-
laws of Petro or any of its subsidiaries, any contract or other agreement to
which Petro or any of its subsidiaries is a party or by which Petro or any of
its subsidiaries or any of its 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 Petro or any of its subsidiaries.
(aa) On the Closing Date, the Notes Offering will be
consummated pursuant to the terms of the purchase agreement entered into by
▇▇▇▇▇, ▇▇▇▇▇ Holdings, the Partnership and the initial purchasers parties
thereto.
(bb) 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
Partnership or its Subsidiaries. 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 Partnership
and such Subsidiaries.
(cc) 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 the Partnership or any Subsidiary is a
party have been duly authorized, executed and delivered by the Partnership or
such Subsidiary, constitute valid and binding agreements of the Partnership or
such Subsidiary and are enforceable against the Partnership or such Subsidiary
in accordance with the terms thereof.
(dd) No statement, representation, warranty or covenant made
by the Partnership 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.
(ee) Neither 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.
(ff) Except as disclosed 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.
13
(gg) The Units have been approved for listing on the New York
Stock Exchange ("NYSE"), subject only to official notice of issuance.
(hh) The Star Entities are, and immediately after consummation
of the Transaction will be, 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 Partnership, is imminent or threatened; and the Partnership
is 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 Partnership and its Subsidiaries, taken as a
whole.
(ii) The Star Entities own, or are licensed or otherwise have
the full exclusive right to use, and after consummation of the Transaction will
own, 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, [except as set forth on Schedule 2 hereto,] 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.
(jj) None of the Star Entities, nor, to any Star Entity's
knowledge, any employee or agent of such Star Entity has made, and after
consummation of the Transaction will have 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.
(kk) 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.
(ll) 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 approvals or failure to comply with the terms and
14
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 Partnership and its Subsidiaries, 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.
(mm) 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.
(nn) 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 nor Petro 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 or of Petro 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 Partnership and its Subsidiaries, taken as a
whole.
(oo) 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, either prior to the Effective
Date or thereafter 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
15
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.
(b) The Partnership will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (1) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (2) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (3) 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, (4) 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 (5) of receipt by the Partnership or any representative or attorney of the
Partnership of any other communication from the Commission relating to the
Partnership, the Registration Statement, any preliminary prospectus 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 the Registration Statement and of any
post-effective amendment 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 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) On the Effective Date, and thereafter from time to time,
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
16
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 the
Representatives 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 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 capital units, 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, each preliminary prospectus, 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, the Prospectus and any preliminary 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
17
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 of Common Units to facilitate the sale or resale of any of the Units.
(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 under "Use of Proceeds."
(m) During the period of 120 days commencing at the Closing
Date, the Partnership will not, without the prior written consent of PaineWebber
Incorporated, directly or indirectly, sell, offer to sell, grant any option for
the sale of, or otherwise dispose of, any Common Units or securities convertible
into Common Units, 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
affiliates, and certain executive officers, directors and controlling persons to
enter into agreements with the Representatives in the form set forth in Exhibit
C to the effect that they will not, for a period of 120 days after the
commencement of the public offering of the Units (the "Lock-up Period"), without
the prior written consent of PaineWebber Incorporated, 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 SEC) 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 C, in which
such person will agree not to sell, contract to sell or
18
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 has become
effective shall be received by the Representatives 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 the Representatives and all filings required
by Rule 424 of the Rules and Regulations and Rule 430A shall have been made.
(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 the Representatives and the Representatives did
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer or the Chairman of the Board of Directors of the
General Partner and the 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 Partnership and its Subsidiaries or Petro and
its subsidiaries, in each case 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) neither the Partnership nor any of its Subsidiaries, nor Petro nor any of
its Subsidiaries, 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
the Representatives any such development makes it
19
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 the General Partner, the
Partnership or any of its Subsidiaries or Petro or any of its Subsidiaries 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 Partnership
and its Subsidiaries or Petro and its subsidiaries, as the case may be, in each
case taken as a whole.
(e) Each of the representations and warranties of the
Partnership contained herein shall be true and correct in all material 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 Partnership and all conditions herein contained to
be fulfilled or complied with by the Partnership 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.
(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
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon LLP, counsel to the Partnership, to the
effect set forth in Exhibit D (to the extent such opinions are not covered by
the opinion received pursuant to Section 5(g) hereof).
(g) 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 D
(to the extent such opinions are not covered by the opinion received pursuant to
Section 5(f) hereof).
(h) The Representatives shall have received an opinion, dated
the Closing Date and the Option Closing Date, from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, 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.
(i) 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
20
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.
(j) On or prior to the Closing Date, the Representatives shall
have received the executed agreements referred to in Section 4(n).
(k) 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
Partnership contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct in all
material respects;
(iii) Each of the covenants required herein to be
performed by the Partnership 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 Partnership 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
Partnership and its Subsidiaries or Petro and its subsidiaries, in each
case 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)
neither the Partnership nor any of its Subsidiaries, nor Petro nor any
of its Subsidiaries, has sustained
21
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,
and such other matters as the Representatives may reasonably request.
(l) 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.
(m) Prior to the Closing Date, the Units shall have been duly
authorized for listing on NYSE upon official notice of issuance.
(n) The National Association of Securities Dealers, Inc. shall have
approved the underwriting terms and arrangements and such approval shall not
have been withdrawn or limited.
(o) 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 Partnership herein, as to the performance
by the Partnership of its obligations hereunder, or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Underwriters.
(p) On the Closing Date, the Partnership will acquire Petro in the
Transaction substantially as set forth in the Prospectus and in the
Partnership's Registration Statement on Form S-4 (Registration No. 333-59807),
as amended.
(q) The Merger Agreement shall be in full force and effect, all
conditions thereto shall have been satisfied, and no condition shall have been
waived without the express written consent of the Representatives.
SECTION 6. Indemnification.
(a) The Partnership and its Subsidiaries 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,
22
and any and all amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, 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 any
preliminary prospectus, 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 the Partnership 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
Partnership 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 Partnership 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, any preliminary prospectus or the
Prospectus. This indemnity agreement will be in addition to any liability that
the Partnership might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Partnership, each person, if any, who controls the Partnership 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 Partnership 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, the Preliminary Prospectus 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.
23
(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 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 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. 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
24
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 unavailable from the Partnership or the Underwriters,
the Partnership 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 Partnership from persons other than the Underwriters, such as persons who
control the Partnership 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 the Partnership 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 Partnership, 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 Partnership, 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
25
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(d) hereof, no party will be liable for 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 Partnership 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 therefore or (iii) any termination of this Agreement.
(f) The Partnership 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 Partnership 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
the Partnership, 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, any material adverse change in the Partnership's
business, properties, business prospects, condition (financial or otherwise) or
results of operations, (ii) trading in any of the equity securities of the
Partnership shall have been suspended by the Commission, the NASD, by an
exchange that lists the Units or by the Nasdaq Stock Market, (iii) trading in
securities generally on the New York Stock Exchange 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
26
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 Underwriters.
If any one or more of the Underwriters shall fail or refuse to purchase any
of the Firm Units which it 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 refused to purchase, in the proportions 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
proportions 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 any Representatives 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 from liability in
respect of any default of such Underwriter under this Agreement.
SECTION 9. 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 office of the Partnership, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, or (b) if to the
Representatives, at the offices of PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department,
with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇. Any such notice shall be effective
only upon receipt.
27
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 Partnership 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.
Any action required or permitted to be taken by the Representatives under
this Agreement may be taken by them jointly or by PaineWebber Incorporated.
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.
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 Partnership 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 the Representatives
and the Partnership.
28
Please confirm that the foregoing correctly sets forth the agreement
among the Partnership and the several Underwriters.
Very truly yours,
STAR GAS PARTNERS, L.P.
By: STAR GAS CORPORATION, as General Partner
By: _____________________________________
Name:
Title:
STAR GAS LLC
By: _____________________________________
Name:
Title:
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇ BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, A DIVISION OF ▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
Acting on behalf of themselves and as the
Representatives of the other several
Underwriters named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: ____________________________
Name:
Title:
29
SCHEDULE 1
UNDERWRITERS
Number of
Name of Firm Units
Underwriters to be Purchased
------------ ---------------
PaineWebber Incorporated.............................
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp................................
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a division of
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated......................
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation..........................
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.............................
▇▇▇▇▇▇ Brothers, Inc.................................
Prudential Securities Incorporated...................
---------
Total................................................
=========
1
SCHEDULE 2
TRADEMARK RIGHTS
1
EXHIBIT A
STAR GAS PARTNERS, L.P.
PRICE DETERMINATION AGREEMENT
-----------------------------
_________________, 1999
PAINEWEBBER INCORPORATED
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇ BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, A DIVISION OF ▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Reference is made to the Underwriting Agreement, dated ____________,
1999 (the "Underwriting Agreement"), among Star Gas Partners, L.P., a Delaware
partnership (the "Partnership"), and the Underwriters named in Schedule 1
thereto or hereto (the "Underwriters") for whom PaineWebber Incorporated, CIBC
▇▇▇▇▇▇▇▇▇▇▇ Corp., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇.▇.
▇▇▇▇▇▇▇ & Sons, Inc., ▇▇▇▇▇▇ Brothers Inc. Prudential Securities Incorporated
and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated, are acting
as representatives (the "Representatives"). The Underwriting Agreement provides
for the purchase by the Underwriters, subject to the terms and conditions set
forth therein, of an aggregate of ___________ 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 ___________ 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 $_____.
1
The purchase price per Firm Unit to be paid by the several Underwriters
shall be $_____ representing an amount equal to the public offering price set
forth above, less $___ per Unit.
The Partnership represents and warrants to each of the Underwriters
that the representations and warranties of the Partnership 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 completed 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 Partnership, 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 Partnership in accordance with its
terms and the terms of the Underwriting Agreement.
Very truly yours,
STAR GAS PARTNERS, L.P.
By: STAR GAS CORPORATION, as General Partner
By: ________________________________________
Name:
Title:
2
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇ BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, A DIVISION OF ▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I to the Underwriting Agreement.
By: PAINEWEBBER INCORPORATED
By:____________________________________
Name:
Title:
3
EXHIBIT B
SUBSIDIARIES
------------
1
EXHIBIT C
____________, 1999
PAINEWEBBER INCORPORATED
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇ BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, A DIVISION OF ▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
In consideration of the agreement of the several Underwriters, for which
PaineWebber Incorporated, CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation, ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., ▇▇▇▇▇▇ Brothers Inc.,
Prudential Securities Incorporated and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a division of ▇▇▇▇
▇▇▇▇▇▇▇▇ Incorporated (the "Representatives") intend to act as Representatives
to underwrite a proposed public offering (the "Offering") of Common
Units (the "Common Units") of Star Gas Partners, L.P., a Delaware partnership
(the "Partnership"), as contemplated by a registration statement with respect to
such units filed with the Securities and Exchange Commission on Form S-3
(Registration No. 333-68329), the undersigned hereby agrees that the undersigned
will not, for a period of 120 days after the commencement of the public offering
of such units, without the prior written consent of PaineWebber Incorporated
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 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 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 in the case of
the Partnership the Option Units, (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).
1
Very truly yours,
By: _____________________________
Name:
Print Name: _________________
2
EXHIBIT D
Form of Opinion of
Counsel to the Partnership
--------------------------
