EXHIBIT 1.1
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CORNERSTONE PROPANE PARTNERS, L.P.
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COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
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FORM OF UNDERWRITING AGREEMENT
STANDARD PROVISIONS
, 1998
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From time to time, Cornerstone Propane Partners, L.P., a Delaware limited
partnership (the "Partnership"), may enter into one or more underwriting
agreements that provide for the sale of common units representing limited
partner interests in the Partnership (the "Firm Units") to the several
underwriters named therein (the "Underwriters"). If specified in such
underwriting agreement, the Partnership may also grant to the Underwriters the
right to purchase at their election an additional amount of common units
representing limited partner interests in the Partnership (the "Additional
Units") as provided in Section 2 hereof. The Firm Units and the Additional Units
are hereinafter collectively referred to as the "Units." The common units
representing limited partner interests in the Partnership to be outstanding
after giving effect to such contemplated sales are hereinafter referred to as
the "Common Units." The standard provisions set forth herein may be incorporated
by reference in any such underwriting agreement (an "Underwriting Agreement") as
set forth in Annex I or as may otherwise be agreed with the Underwriters. The
Underwriting Agreement, including the provisions incorporated therein by
reference is herein sometimes referred to as this Agreement. Terms defined in
the Underwriting Agreement are used herein as therein defined.
The Partnership has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including a prospectus,
pursuant to Rule 415 under the Securities Act of 1933, as amended (the
"Securities Act") and relating to the Common Units and has filed with, or
transmitted for filing to, or shall promptly hereafter file with or transmit for
filing to, the Commission a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Common Units pursuant to Rule 424 under the
Securities Act. The term "Registration Statement" means the registration
statement, including the exhibits thereto, as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus" means
a preliminary prospectus supplement specifically relating to the Common Units,
together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment," and "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Partnership with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
Cornerstone Propane GP, Inc., a California corporation, is the general
partner (the "Managing General Partner") of both the Partnership and Cornerstone
Propane, L.P., a Delaware limited partnership (the "Operating Partnership"). SYN
Inc., a Delaware corporation, is the special general partner (the "Special
General Partner") of the Partnership and the Operating Partnership. The
Partnership and the Operating Partnership, and Flame Inc. and Cornerstone Sales
& Service Corporation, Delaware corporations and wholly owned subsidiaries of
the Operating Partnership (the "Corporate Subs"), are collectively referred to
herein as the "Partnership Entities."
1. REPRESENTATIONS AND WARRANTIES. Each of the Partnership, the Operating
Partnership and the Managing General Partner represents and warrants to and
agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and
no proceedings for such purpose are pending before or, to the knowledge of
the Partnership, the Operating Partnership, or the Managing General Partner,
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder, (ii) each
part of the Registration Statement, when such part became effective, did not
contain, and each such part, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein
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not misleading, (iii) the Registration Statement and the Prospectus comply,
and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations of
the Commission thereunder and (iv) the Prospectus does not contain and, as
amended or supplemented, if applicable, 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, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Partnership in
writing by such Underwriter through the Manager expressly for use therein.
(c) None of the Partnership Entities, the Managing General Partner or
the Special General Partner has taken, and none of them will take, directly
or indirectly, any action designed to or that could reasonably be expected
to cause or result in the stabilization or manipulation of the price of the
Common Units, and the Partnership has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Units, will not distribute, any prospectus (as defined
under the Securities Act) in connection with the offering and sale of the
Units other than the Registration Statement, any Preliminary Prospectus, the
Prospectus or other materials, if any, permitted by the Securities Act,
including Rule 134 of the general rules and regulations thereunder.
(d) Each of the Partnership and the Operating Partnership is a limited
partnership duly formed, validly existing and in good standing under the
Delaware Revised Uniform Limited Partnership Act (the "Delaware Act") with
full partnership power and authority to own or lease its properties and to
conduct its business in all material respects as described in the
Registration Statement and the Prospectus, and each of the Partnership and
the Operating Partnership is duly registered or qualified as a foreign
limited partnership to conduct its business and in good standing in each
jurisdiction or place where the nature or location of its properties or the
conduct of its business requires such registration or qualification, except
where the failure so to register or qualify (i) would not have a material
adverse effect on the Partnership Entities taken as a whole, and (ii) would
not subject the limited partners of the Partnership to any material
liability.
(e) The Managing General Partner is a corporation duly organized and
validly existing in good standing under the laws of the State of California,
with full corporate power and authority to own or lease its properties and
to conduct its business and to act as managing general partner of the
Partnership and of the Operating Partnership, in each case in all material
respects as described in the Registration Statement and the Prospectus, and
the Managing General Partner is duly registered or qualified as a foreign
corporation to conduct its business and in good standing in each
jurisdiction or place where the nature or location of its properties or the
conduct of its business requires such registration or qualification, except
where the failure so to register or qualify (i) would not have a material
adverse effect on the Partnership Entities taken as a whole, and (ii) would
not subject the limited partners of the Partnership to any material
liability.
(f) Each subsidiary of the Operating Partnership is a corporation duly
organized and validly existing in good standing under the laws of the state
of its incorporation, with full corporate power and authority to own or
lease its properties and to conduct its business, in each case in all
material respects as described in the Registration Statement and the
Prospectus, and each subsidiary of the Operating Partnership is duly
registered or qualified as a foreign corporation to conduct its business and
in good standing in each jurisdiction or place where the nature or location
of its properties or the conduct of its business requires such registration
or qualification, except where the failure so to register or qualify (i)
would not have a material adverse effect on the Partnership Entities taken
as a whole, and (ii) would not subject the limited partners of the
Partnership to any material liability; all of the issued shares of capital
stock of each subsidiary of the Operating Partnership have been duly and
validly authorized and issued, are fully paid and nonassessable and are
owned directly by the Operating Partnership, free and clear of all liens,
encumbrances, equities or claims.
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(g) The authorized interests in the Partnership outstanding prior to the
issuance of the Units have been duly authorized and are validly issued,
fully paid and non-assessable, except as described in the Prospectus.
(h) The Units have been duly authorized and, when issued and delivered
in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable, except as described in the Prospectus; and,
except as described in the Prospectus, there are no preemptive rights or
other rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any limited partner interests in the Partnership or
the Operating Partnership pursuant to the Partnership Agreement, the
Operating Partnership Agreement or any agreement or other instrument to
which the Partnership or the Operating Partnership is a party or by which
either of them may be bound. Except as described in the Prospectus, there
are no outstanding options or warrants to purchase any Common Units or
Subordinated Units. The Units, when issued and delivered against payment
therefor as provided herein, will conform in all material respects to the
descriptions thereof contained in the Prospectus. The Partnership has all
requisite power and authority to issue, sell and deliver the Units, in
accordance with and upon the terms and conditions set forth in this
Agreement and in the Prospectus. At the Closing Date and the Option Closing
Date, all corporate and partnership action, as the case may be, required to
be taken by any of the Partnership Entities, the Managing General Partner,
the Special General Partner or any of their shareholders or partners for the
authorization, issuance, sale and delivery of the Units contemplated by this
Agreement shall have been validly taken.
(i) This Agreement has been duly authorized, executed and delivered by
each of the Partnership, the Operating Partnership and the Managing General
Partner.
(j) The Partnership Agreement is a valid and legally binding agreement
of the Managing General Partner and the Special General Partner, enforceable
against the Managing General Partner and the Special General Partner in
accordance with its terms.
(k) None of the offering, issuance and sale by the Partnership of the
Units, the execution, delivery and performance of this Agreement nor the
consummation of the transactions contemplated hereby (i) will conflict with
or will constitute a violation of the agreement of limited partnership,
certificate or articles of incorporation or bylaws or other organizational
documents of any of the Partnership Entities, the Managing General Partner
or the Special General Partner, (ii) will conflict with or will constitute a
breach or violation of, or a default (or an event which, with notice or
lapse of time or both, would constitute such an event) under any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which any of the Partnership Entities, the Managing General
Partner, or the Special General Partner is a party or by which any of them
or any of their respective properties may be bound, (iii) violates or will
violate any order, judgment, decree or injunction of any court or
governmental agency or body directed to any of the Partnership Entities, the
Managing General Partner or the Special General Partner or any of their
properties in a proceeding to which any of them or their property is a
party, (iv) violates or will violate any statute, law or regulation
applicable to any of the Partnership Entities, the Managing General Partner
or the Special General Partner or any of their respective properties, or (v)
will result in the creation or imposition of any lien, charge or encumbrance
(except as contemplated by the Note Agreement and the Bank Credit Agreement)
upon any property or assets of any of the Partnership Entities, the Managing
General Partner or the Special General Partner, or in the case of clause
(ii), (iii), (iv) or (v) which conflicts, breaches, violations or defaults
would have a material adverse effect upon the Partnership Entities taken as
a whole.
(l) No permit, consent approval, authorization or order of any court,
governmental agency or body or financial institution is required in
connection with the execution and delivery of, or the consummation of the
transactions contemplated by, this Agreement except (i) for such permits,
consents, approvals and similar authorizations required under the Securities
Act, the Securities
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Exchange Act of 1934, as amended (the "Exchange Act"), and the securities or
"Blue Sky" laws of certain jurisdictions, (ii) for such permits, consents,
approvals and similar authorizations which have been, or on or prior to the
Closing Date will be, obtained, (iii) for such permits, consents, approvals
and similar authorizations which, if not obtained, would not, individually
or in the aggregate, have a material adverse effect upon the Partnership
Entities taken as a whole and (iv) as set forth or contemplated in the
Prospectus.
(m) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have expressed their opinions on the
audited consolidated financial statements of the Partnership and SYN Inc.
included in the Registration Statement and the Prospectus, are independent
public accountants as required by the Securities Act and the rules and
regulations thereunder.
(n) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, who have expressed their opinions on the
audited consolidated financial statements of Empire Energy Corporation and
Synergy Group, Incorporated included in the Registration Statement and the
Prospectus, are independent public accountants as required by the Securities
Act and the rules and regulations thereunder.
(o) PricewaterhouseCoopers LLP, who have expressed their opinion on the
audited consolidated financial statements of CGI Holdings, Inc. included in
the Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the rules and regulations
thereunder.
(p) As of the date for which capitalization information is presented in
the Prospectus, the Partnership had the capitalization set forth in the
Prospectus. The financial statements (including the related notes and
supporting schedules) included in the Registration Statement and the
Prospectus present fairly in all material respects the financial position,
results of operations and cash flows of the entities purported to be shown
thereby on the basis stated therein at the respective dates or for the
respective periods to which they apply and have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved, except to the extent disclosed therein. The
information set forth in the Registration Statement and the Prospectus under
the captions "Selected [Pro Forma] Financial and Operating Data" and
"Selected Historical Financial and Operating Data" is accurately presented
in all material respects and has been prepared on a basis consistent with
the audited and unaudited historical consolidated financial statements
included in the Registration Statement and the Prospectus.
(q) The Units have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
(r) From the date of the most recent financial statements included in
the Prospectus, there has not occurred any material adverse change, or any
development involving a prospective material adverse change (compared with
the immediately preceeding twelve month period), in the condition, financial
or otherwise, or in the earnings, business or operations of the Partnership
Entities taken as a whole from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(s) There are no legal or governmental proceedings pending or threatened
to which any of the Partnership Entities is a party or to which any of the
properties of the Partnership Entities is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that are not
described or filed as required.
(t) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied
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when so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(u) None of the Partnership Entities or the Managing General Partner is
now, or after the sale of the Units to be sold by the Partnership hereunder
and the application of the net proceeds from such sale as described in the
Prospectus under the caption "Use of Proceeds" will be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(v) After sale of the Units to be sold by the Partnership hereunder and
application of the net proceeds from such sale as described in the
Prospectus under the caption "Use of Proceeds," the Operating Partnership
will not be a "gas utility company" and none of the Partnership Entities,
the Managing General Partner or the Special General Partner will be a
"holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or subject to regulation thereunder.
(w) All of the Partnership 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
hazardous or toxic substances or wastes, pollutants or contaminants
("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
conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect upon the Partnership Entities
taken as a whole.
(x) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures
required for clean up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Partnership Entities, taken as a whole.
(y) There are no contracts, agreements or understandings between the
Partnership Entities, the Managing General Partner or the Special General
Partner and any person granting such person the right to require the
Partnership to file a registration statement under the Securities Act with
respect to any securities of the Partnership or to require the Partnership
to include such securities with the Units registered pursuant to the
Registration Statement.
(z) Each of the Partnership Entities maintains insurance against such
losses and risks and in such amounts as is reasonably adequate to protect
the Partnership Entities, the Managing General Partner, the Special General
Partner and their businesses; none of the Partnership Entities (or their
predecessors) has within the last two years been refused any insurance
coverage sought or applied for; and none of the Partnership Entities has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a cost
that would not materially and adversely affect the condition (financial or
otherwise), business or operations of the Partnership Entities taken as a
whole, except as described in or contemplated by the Prospectus.
(aa) Each of the Partnership 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 authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
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(bb) Each of the Partnership Entities, the Managing General Partner and
the Special General Partner has complied with all provisions of Section
517.075, Florida Statutes relating to issuers doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
2. AGREEMENTS TO SELL AND PURCHASE. Upon the execution of the Underwriting
Agreement applicable to any Units and authorization by the Manager of the
release of the Firm Units, the several Underwriters propose to offer the Firm
Units for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
The Partnership may specify in the Underwriting Agreement applicable to any
Units that the Partnership thereby grants to the Underwriters the right (an
"Overallotment Option") to purchase at their election up to the number of
Additional Units set forth in such Underwriting Agreement, on the terms set
forth in the paragraph above, for the sole purpose of covering over-allotments
in the sale of the Firm Units. Any such election to purchase Additional Units
may be exercised by written notice from the Manager to the Partnership, given
within a period specified in the Underwriting Agreement, setting forth the
aggregate number of Additional Units to be purchased and the date on which such
Additional Units are to be delivered, as determined by the Manager but in no
event earlier than the Closing Date or, unless the Manager and the Partnership
otherwise agree in writing, earlier than or later than the respective number of
business days after the date of such notice set forth in such Underwriting
Agreement.
3. TERMS OF PUBLIC OFFERING. The Partnership will be advised, as of the
date of the Underwriting Agreement, by the Manager that the Underwriters propose
to make a public offering of their respective portions of the Units as soon
after the Registration Statement and this Agreement has been entered into as in
the Manager's judgment is advisable. The terms of the public offering of the
Units are set forth in the Prospectus.
4. PAYMENT AND DELIVERY. Payment for the Units shall be made to the
Partnership in Federal or other funds immediately available at the time and
place set forth in the Underwriting Agreement upon delivery to the Manager for
the respective accounts of the several Underwriters of the Units registered in
such names and in such denominations as the Manager shall request in writing not
less than two full business days prior to the date of delivery, with any
transfer taxes payable in connection with the transfer of the Units to the
Underwriters duly paid.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase and pay for the Units on the Closing Date are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the securities of the
Partnership Entities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations of the
Partnership Entities taken as a whole from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement) that, in the Manager's judgment, is
material and adverse and that makes it, in the Manager's judgment,
impracticable to market the Units on the terms and in the manner
contemplated in the Prospectus.
(b) The representations and warranties of the Partnership, the Operating
Partnership and the Managing General Partner contained in this Agreement
shall be true and correct as of the Closing Date and the Partnership, the
Operating Partnership and the Managing General Partner shall have
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complied in all material respects with all of the agreements and satisfied
in all material respects all of the conditions on their part to be performed
or satisfied hereunder on or before the Closing Date.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Managing General Partner, to the effect set forth in clause (b) above.
(d) The Underwriters shall have received on the Closing Date, an opinion
of McCutchen, Doyle, ▇▇▇▇▇ & Enersen LLP ("▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇"), outside
counsel for the Partnership, the Operating Partnership, the Managing General
Partner and the Special General Partner, dated the Closing Date, to the
effect that:
(i) Each of the Partnership and the Operating Partnership has
been duly formed and is validly existing in good standing as a limited
partnership under the Delaware Act with all necessary partnership power
and authority to own or lease its properties, and to conduct its
business, in each case in all material respects as described in the
Prospectus.
(ii) The Units to be issued and sold to the Underwriters by the
Partnership pursuant to this Agreement and the limited partner interests
represented thereby are duly authorized under the Partnership Agreement
and, when issued and delivered against payment therefor as provided in
this Agreement, will be validly issued, fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in the
Prospectus under the caption "The Partnership Agreement--Limited
Liability").
(iii) The Partnership Agreement constitutes a valid and legally
binding agreement of the Managing General Partner and the Special General
Partner, enforceable against the Managing General Partner and the Special
General Partner in accordance with its terms, except as the
enforceability thereof may be limited by (A) bankruptcy, insolvency,
fraudulent transfer, reorganization, receivership, moratorium and similar
laws of general application relating to or affecting creditors' rights
generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (B)
public policy, applicable law relating to fiduciary duties and an implied
covenant of good faith and fair dealing.
(iv) The Operating Partnership Agreement constitutes a valid and
legally binding agreement of the Managing General Partner, the Special
General Partner and the Partnership, enforceable against the Managing
General Partner, the Special General Partner and the Partnership in
accordance with its terms, except as the enforceability thereof may be
limited by (A) bankruptcy, fraudulent transfer, reorganization,
receivership, moratorium and similar laws of general application relating
to or affecting creditors' rights generally and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (B) public policy, applicable law
relating to fiduciary duties and an implied covenant of good faith and
fair dealing.
(v) The opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ that is filed as Exhibit 8.1
to the Registration Statement is confirmed and the Underwriters may rely
upon such opinion as if it were addressed to them.
(vi) The Registration Statement was declared effective under the
Securities Act on October , 199 ; to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or
threatened by the Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in the manner and within the time
period required by such Rule.
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(vii) Upon delivery to the Underwriters of certificates
evidencing the Units issued in the name of the Underwriters and payment
by the Underwriters of the purchase price for the Units, the Underwriters
will acquire the Units free of any adverse claim (as such term is defined
in Section 8-302 of the New York Uniform Commercial Code), assuming that
the Underwriters are acting in good faith and without notice of any
adverse claim.
(viii) The Partnership has all requisite power and authority under
the Delaware Act and the Partnership Agreement to issue, sell and deliver
the Units, in accordance with and upon the
terms and conditions set forth in this Agreement and in the Registration
Statement and Prospectus.
(ix) The Managing General Partner is a corporation duly
organized and validly existing in good standing under the laws of the
State of California, with full corporate power and
authority to own or lease its properties and to conduct its business and
to act as managing general partner of the Partnership and of the
Operating Partnership, in each case in all material respects as described
in the Registration Statement and the Prospectus.
(x) The Special General Partner is a corporation duly organized
and validly existing in good standing under the laws of the State of
Delaware, with full corporate power and authority to own or lease its
properties and to conduct its business and to act as special general
partner of the Partnership and the Operating Partnership, in each case in
all material respects as described in the Registration Statement and the
Prospectus.
(xi) Each Corporate Sub is a corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware, with full corporate power and authority to own or lease its
properties and to conduct its business as contemplated by the
Registration Statement and the Prospectus.
(xii) Each of the Partnership and the Operating Partnership is
duly qualified or registered as a foreign limited partnership for the
transaction of business under the laws of the states listed on Schedule I
to such opinion; and to the knowledge of such counsel, such jurisdictions
are the only jurisdictions in which the character of the business
conducted by the Partnership and the Operating Partnership or the
location of the properties owned or leased by either of them makes such
qualification or registration necessary (except where the failure to so
qualify or so register would not (A) have a material adverse effect on
the Partnership Entities taken as a whole or (B) subject the limited
partners of the Partnership to any material liability).
(xiii) Each of the Managing General Partner and the Special
General Partner is duly qualified or registered as a foreign corporation
for the transaction of business under the laws of the states listed on
Schedule II to such opinion; and to the knowledge of such counsel, such
jurisdictions are the only jurisdictions in which the character of the
business conducted by the Managing General Partner and the Special
General Partner or the location of the properties owned or leased by
either of them makes such qualification or registration necessary (except
where the failure to so qualify or so register would not (A) have a
material adverse effect on the Partnership Entities taken as a whole or
(B) subject the limited partners of the Partnership to any material
liability).
(xiv) Each of the Corporate Subs is duly qualified or registered
as a foreign corporation for the transaction of business under the laws
of the states listed on Schedule III to such opinion; and to the
knowledge of such counsel, such jurisdictions are the only jurisdictions
in which the character of the business conducted by the Corporate Subs or
the location of the properties owned or leased by them makes such
qualification or registration necessary (except where the failure to so
qualify or so register would not (A) have a material adverse effect on
the Partnership
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Entities taken as a whole or (B) subject the limited partners of the
Partnership to any material liability).
(xv) All of the issued and outstanding shares of capital stock of
the Corporate Subs have been duly authorized and validly issued and are
fully paid and nonassessable; and all of such shares are owned of record
by the Operating Partnership free and clear of all liens, encumbrances,
security interests, charges or claims known to such counsel, without
independent investigation, other than those created by or arising under
the Delaware General Corporation Law.
(xvi) This Agreement has been duly authorized, executed and
delivered by each of the Partnership, the Operating Partnership and the
Managing General Partner.
(xvii) The statements (A) in the Prospectus under the captions
"Plan of Distribution", "The Partnership Agreement" and "Description of
Common Units" and (B) in "Item 7-- Management's Discussion and Analysis
of Financial Condition and Results of Operations--The
Partnership--Liquidity and Capital Resources--Financing and Sources of
Liquidity," of the Partnership's most recent annual report on Form 10-K
incorporated by reference in the Prospectus insofar as they constitute
descriptions of the operative agreements or refer to statements of law or
legal conclusions, are accurate and complete in all material respects.
(xviii) After due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which any of the
Partnership Entities is a party or to which any of the properties of any
of the Partnership Entities is subject that are required to be described
in the Registration Statement or the Prospectus and are not so described
or of any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus
or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(xix) To the knowledge of such counsel, other than as described
or contemplated in the Prospectus, there is no litigation, proceeding or
governmental investigation pending or threatened against any of the
Partnership Entities, the Managing General Partner or the Special General
Partner which, if adversely determined, (x) would have a material adverse
effect on the Partnership Entities taken as a whole or (y) would impair
or call into question the validity of this Agreement or the performance
by any of the Partnership Entities or the Managing General Partner of
their obligations under this Agreement.
(xx) None of the Partnership Entities or the Managing General
Partner is now, or after sale of the Units to be sold by the Partnership
hereunder and application of the net proceeds from such sale as described
in the Prospectus under the caption "Use of Proceeds" none of them will
be, an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(xxi) After sale of the Units to be sold by the Partnership
hereunder and application of the net proceeds from such sale as described
in the Prospectus under the caption "Use of Proceeds," the Operating
Partnership will not be a "gas utility company" and none of the
Partnership Entities, the Managing General Partner or the Special General
Partner will be a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or subject to regulation
thereunder.
(xxii) Neither the offering, issuance and sale by the Partnership
of the Units, nor the execution, delivery and performance of this
Agreement by any of the Partnership, the Operating Partnership or the
Managing General Partner, nor the consummation of the transactions
contemplated hereby (A) will constitute a violation of the certificate or
articles of incorporation or bylaws or other organizational documents of
the Partnership Entities, the Managing General
10
Partner or the Special General Partner, (B) will constitute a breach or
violation of, or a default under (or an event which, with notice or lapse
of time or both, would constitute such an event), any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument (other than the Partnership Agreements) known to such counsel
to which any of the Partnership Entities, the Managing General Partner or
the Special General Partner is a party or by which any of them or any of
their respective properties may be bound, (C) will violate any order,
judgment, decree or injunction of any court or governmental agency or
body known to such counsel directed to any of the Partnership Entities,
the Managing General Partner or the Special General Partner, or any of
their properties in a proceeding to which any of the Partnership
Entities, the Managing General Partner or the Special General Partner or
any of their property is a party, (D) violates or will violate any
federal statute, law or regulation applicable to any of the Partnership
Entities, the Managing General Partner or the Special General Partner or
any of their respective properties, or (E) will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of any of the Partnership Entities except as contemplated by the Note
Agreement and the Bank Credit Agreement.
(xxiii) No permit consent, approval, authorization or order of any
federal court, governmental agency or body or any financial institution
is required in connection with the execution and delivery of, or the
consummation of the transactions contemplated by, this Agreement except
(A) as may be required under state securities or "Blue Sky" laws, as to
which such counsel need not express any opinion, and (B) for such
permits, consents, approvals and similar authorizations which have been
obtained.
(xxiv) Except as described in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any limited partner
interests in the Partnership or the Operating Partnership or shares of
capital stock of the Managing General Partner or the Special General
Partner pursuant to the certificate of incorporation or bylaws of the
Managing General Partner or the Special General Partner or, to the
knowledge of such counsel, pursuant to any agreement or instrument to
which any Partnership Entity, the Managing General Partner or the Special
General Partner is a party or by which any of them may be bound. To such
counsel's knowledge, neither the filing of the Registration Statement nor
the offering or sale of the Units as contemplated hereby gives rise to
any rights for or relating to the registration of any Units or other
securities of the Partnership. To such counsel's knowledge, except as
disclosed in the Prospectus, there are no outstanding options or warrants
to purchase any Units or Subordinated Units or other partnership
interests in the Partnership or the Operating Partnership. All corporate
and partnership action required to be taken by the Partnership Entities,
the Managing General Partner, the Special General Partner and their
shareholders or partners for the authorization, issuance, sale and
delivery of the Units has been validly taken.
(xxv) Such counsel (A) is of the opinion that each document, if
any, filed pursuant to the Exchange Act and incorporated by reference in
the Prospectus (except for financial statements and schedules, and other
historical pro forma and projected financial and statistical data
included therein as to which such counsel need not express any belief)
complied when so filed as to form in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (B) is of the opinion that the Registration Statement and
Prospectus (except for financial statements and schedules and other
historical, pro forma and projected financial and statistical data
included therein as to which such counsel need not express any belief)
comply as to form in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder, (C)
has no reason to believe that (except for financial statements and
schedules and other historical, pro forma and projected financial and
11
statistical data as to which such counsel need not express any belief)
each part of the Registration Statement, when such part became effective,
contained, and as of the date such opinion is delivered, contains any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
(e) The Underwriters shall have received on the Closing Date an opinion
of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the Underwriters, dated the Closing
Date, with respect to such matters as the Manager may reasonably request.
(f) The Underwriters shall have received, on the date of the
Underwriting Agreement and the Closing Date, a letter dated the date of the
Underwriting Agreement and the Closing Date, in form and substance
satisfactory to the Underwriters, from each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇ and PricewaterhouseCoopers LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in or
incorporated by reference into the Prospectus; provided that the letters
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date of the Underwriting Agreement.
(g) The Units shall have been approved for listing on the New York Stock
Exchange.
The several obligations of the Underwriters to purchase Additional Units
hereunder are subject to the delivery to the Manager on the Option Closing Date
of such documents as the Manager may reasonably request with respect to the good
standing of the Partnership, the due authorization and issuance of the
Additional Units and other matters related to the issuance of the Additional
Units and the satisfaction of the foregoing conditions to the several
obligations of the Underwriters to purchase and pay for the Firm Units on the
Closing Date, except that all references to the Firm Units and the Closing Date
shall be deemed to refer to the Additional Units and the Option Closing Date,
respectively.
6. COVENANTS OF THE PARTNERSHIP. In further consideration of the agreements
of the Underwriters herein contained, each of the Partnership, the Operating
Partnership and the Managing General Partner covenants with each Underwriter as
follows:
(a) To furnish the Manager, without charge, three signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish the Manager in New York City, without
charge, prior to 10:00 A.M., New York City time, on the business day next
succeeding the date of this Agreement and during the period mentioned in
paragraph 6(c) below, as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments thereto
or to the Registration Statement as the Manager may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to the Manager a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which the Manager reasonably objects, and to file with the Commission within
the applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Units as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses the Manager will
furnish to the Partnership) to which Units may have been sold by the Manager
on behalf of the Underwriters
12
and to any other dealers upon request, either amendments or supplements to
the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus
is delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Units for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Manager shall
reasonably request; PROVIDED, HOWEVER, that neither the Partnership, the
Managing General Partner nor the Special General Partner shall be required
to qualify to do business or to file a general consent to service of process
in any such jurisdictions.
(e) To make generally available to the Partnership's security holders
and to the Manger as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal
quarter after the date of the Underwriting Agreement, which earning
statement shall satisfy the provisions of Section 11(a) of the Securities
Act and the rules and regulations of the Commission thereunder. If such
fiscal quarter is the last fiscal quarter of the Partnership's fiscal year,
such earning statement shall be made available not later than 90 days after
the close of the period covered thereby and in all other cases shall be made
available not later than 45 days after the close of the period covered
thereby.
(f) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Partnership's counsel and the Partnership's accountants in connection with
the registration and delivery of the Units under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove specified,
(ii) all costs and expenses related to the transfer and delivery of the
Units to the Underwriters, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Units
under state securities laws and all expenses in connection with the
qualification of the Units for offer and sale under state securities laws as
provided in Section 6(d) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with
the Blue Sky or Legal Investment memorandum, (iv) all filing fees and
disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Units by the National
Association of Securities Dealers, Inc., (v) all costs and expenses incident
to listing the Units on the New York Stock Exchange, (vi) the cost of
printing certificates representing the Units, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and expenses
of the Partnership relating to investor presentations on any "road show"
undertaken in connection with the marketing of the Offering of the Units,
including, without limitation expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of
the Partnership, travel and lodging expenses of the representatives and
officers of the Partnership and any such consultants, and the cost of any
aircraft chartered in connection with the road show, and (ix) other costs
and expenses incident to the performance of the obligations of the
Partnership hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this Section,
Section 7 entitled "Indemnity and Contribution," and the last paragraph of
Section 9 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Units by them and any advertising expenses
connected with any offers they may make. Notwithstanding anything to the
contrary provided in the foregoing, each of the parties to this Agreement
shall bear its own expenses in connection with road show presentations.
13
(g) The Partnership Entities will use the net proceeds received by them
from the sale of the Units in the manner specified in the Prospectus under
"Use of Proceeds."
7. INDEMNITY AND CONTRIBUTION.
(a) Each of the Partnership, the Operating Partnership and the Managing
General Partner, jointly and severally, agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended
or supplemented if the Partnership shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Partnership in writing by such
Underwriter through the Manager expressly for use therein; PROVIDED,
HOWEVER, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or
liabilities purchased Units, or any person controlling such Underwriter, if
a copy of the Prospectus (as then amended or supplemented if the Partnership
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the
sale of the Units to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Partnership with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Partnership, the Operating Partnership and the Managing
General Partner, their respective directors and officers who sign the
Registration Statement and each person, if any, who controls the Partnership
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Partnership, the Operating Partnership and the Managing General Partner to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Partnership in writing by such Underwriter
through the Manager expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to paragraph (a) or (b) of this Section 7, such person
(the "indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified
14
party in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties and
that all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by the Manager, in the case of
parties indemnified pursuant to paragraph (a) of this Section 7, and by the
Managing General Partner, in the case of parties indemnified pursuant to
paragraph (b) of this Section 7. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 7 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Partnership, the Operating
Partnership and the Managing General Partner on the one hand and the
Underwriters on the other hand from the offering of the Units or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Partnership, the Operating Partnership and the Managing General Partner on
the one hand and of the Underwriters on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Partnership, the Operating Partnership and
the Managing General Partner on the one hand and the Underwriters on the
other hand in connection with the offering of the Units shall be deemed to
be in the same respective proportions as the net proceeds from the offering
of the Units (before deducting expenses) received by the Partnership and the
total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover of the Prospectus, bear
to the aggregate Public Offering Price of the Units. The relative fault of
the Partnership, the Operating Partnership and the Managing General Partner
on the one hand and the Underwriters on the other hand shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Partnership, the
Operating Partnership and the Managing General Partner or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the respective number of Units
they have purchased hereunder, and not joint.
(e) The Partnership, the Operating Partnership and the Managing General
Partner and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this Section 7.
The amount paid or payable by an indemnified Party as a result of the
losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by an
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be
15
required to contribute any amount in excess of the amount by which the total
price at which the Units underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 7 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or
in equity.
(f) The indemnity and contribution provisions contained in this Section
7 and the representations, warranties and other statements of the
Partnership, the Operating Partnership and the Managing General Partner
contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Partnership, the
Operating Partnership and the Managing General Partner, or the respective
officers or directors or any person controlling the Partnership and (iii)
acceptance of and payment for any of the Units.
8. TERMINATION. This Agreement shall be subject to termination by notice
given by the Manager to the Partnership, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date, (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any of
the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the
Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Partnership shall have been suspended on any exchange or in
any over-the-counter market (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis that
in the Manager's judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 8(a)(i) through (iv), such event, singly or
together with any other such event, makes it, in the Manager's judgment,
impracticable to market the Units on the terms and in the manner contemplated in
the Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Units that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of 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 the Units to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Units set forth
opposite their respective names on the Underwriting Agreement bears to the
aggregate number of Firm Units set forth opposite the names of all such
nondefaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Units which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date; provided that in no event
shall the number of Units that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 9 by an amount in excess
of one ninth of such number of Units without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Units and the aggregate number of Firm Units with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Units to be purchased, and arrangements satisfactory to the
Manager and the Partnership for the purchase of such Firm Units are not made
within 48 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Partnership. In
any such case either the Manager 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
16
documents or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Units
and the aggregate number of Additional Units with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Units to be
purchased, the nondefaulting Underwriters shall have the option to (i) terminate
their obligation hereunder to purchase Additional Units or (ii) purchase not
less than the number of Additional Units that such nondefaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Partnership, the Operating
Partnership or the Managing General Partner to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Partnership, the Operating Partnership or the Managing General Partner shall be
unable to perform their obligations under this Agreement, the Partnership, the
Operating Partnership and the Managing General Partner will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. HEADINGS. The heading of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
17
ANNEX I
UNDERWRITING AGREEMENT
------------------------
Cornerstone Propane Partners, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
We (the "Manager") are acting on behalf of the underwriter or underwriters
(including ourselves) named below (such underwriter or underwriters being herein
called the "Underwriters"), and we understand that Cornerstone Propane Partners,
L.P., a Delaware limited partnership (the "Partnership"), proposes to issue and
sell common units representing limited partner interests in the
Partnership (the "Firm Units").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Partnership hereby agrees to sell to the several Underwriters, and
each Underwriter agrees, severally and not jointly, to purchase from the
Partnership the number of Firm Units set forth below opposite their names at a
purchase price of $ per Unit.
NAME NUMBER OF FIRM UNITS
---------------------------------------------------------------------------------- --------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.................................................
-----------
Total.........................................................................
-----------
-----------
The Underwriters will pay for the Firm Units upon delivery thereof at
[office] at a.m. (New York City time) on , , or at such other
time, not later than 5:00 p.m. (New York City time) on , , as
shall be designated by the Manager. The time and date of such payment and
delivery are hereinafter referred to as the "Closing Date."
The Underwriters will pay for any Additional Units upon deliver thereof at
[office] at a.m. (New York City time) on the date specified in the notice
described in Section 2 of this Agreement or at such other time on the same or on
such other date, in any event not later than , , as shall be
designated in writing by the Manager. The time and date of such payment and
delivery are hereinafter referred to as the "Option Closing Date."
The Units shall have the terms set forth in the Prospectus dated
, , and the Prospectus Supplement dated , ,
including the following:
NUMBER OF UNITS:
Number of Firm Units:
Maximum Number of Additional Units:
INITIAL OFFERING PRICE TO PUBLIC:
$ per Unit
PURCHASE PRICE BY UNDERWRITERS:
$ per Unit
1
FORM OF UNITS:
Definitive form, to be made available for checking [and packaging] at least twenty-four
hours prior to the Closing Date at the office of [The Depository Trust Company or its
designated custodian] [the Manager]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Wire transfer of same day funds
[DESCRIBE ANY BLACKOUT PROVISIONS WITH RESPECT TO THE UNITS]
CLOSING DATE:
a.m. (New York City time), , 19
CLOSING LOCATION:
NAMES AND ADDRESSES OF MANAGER:
Designated Manager:
Address for Notices, etc.:
[OTHER TERMS]*
All provisions contained in the document entitled Cornerstone Propane
Partners, L.P. Underwriting Agreement Standard Provisions dated ,
1998, a copy of which is attached hereto, are herein incorporated by reference
in their entirety and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein, except that (i)
if any term defined in such document is otherwise defined herein, the definition
set forth herein shall control, (ii) all references in such document to a type
of security that is not a Common Unit shall not be deemed to be a part of this
Agreement, and (iii) all references in such document to a type of agreement that
has not been entered into in connection with the transactions contemplated
hereby shall not be deemed to be a part of this Agreement.
------------------------
*A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Units should be set forth, or
referenced to an attached or accompanying description, if necessary, to ensure
agreement as to the terms of the Units to be purchased and sold. Such a
description might appropriately be in the form in which such features will be
described in the Prospectus Supplement for the offering.
2
ANNEX II
[SIGNATURE PAGE WHERE
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
OR ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
IS A CO-LEAD MANAGER]
Please confirm your agreement by having an authorized officer sign a copy of
this Agreement in the space set forth below.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED
[Name of Other Lead Managers]
Acting severally on behalf of
themselves
and the several Underwriters named
herein
By: [▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED]
By: __________________________________
Name:
Title:
Accepted:
CORNERSTONE PROPANE PARTNERS, L.P.
By: Cornerstone Propane GP, Inc.,
its Managing General Partner
By: __________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive
Officer
CORNERSTONE PROPANE, L.P.
By: Cornerstone Propane GP, Inc.,
its Managing General Partner:
By __________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive
Officer
3
