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EXHIBIT 1.1
HERITAGE PROPANE PARTNERS, L.P.
2,500,000 Common Units*
Representing Limited Partner Interests
Underwriting Agreement
New York, New York
July 26, 2001
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxxx & Sons, Inc.
Xxxx Xxxxxxxx Incorporated
First Union Securities, Inc.
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Heritage Propane Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 2,500,000 common units representing limited partner interests
in the Partnership ("Common Units") (said units to be issued and sold by the
Partnership being hereinafter called the "Underwritten Securities"). The
Partnership also proposes to grant to the Underwriters an option to purchase up
to 375,000 additional Common Units to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). To the extent there are no
additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Any reference herein to the Registration Statement, a
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 Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary Prospectus or the
Prospectus, as the case may be; and 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
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* Plus an option to purchase from Heritage Propane Partners, L.P.,
up to 375,000 additional common units to cover over-allotments.
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include the filing of any document under the Exchange Act after the Effective
Date of the Registration Statement, or the issue date of any Preliminary
Prospectus or the Prospectus, as the case may be, deemed to be incorporated
therein by reference. Certain terms used herein are defined in Section 17
hereof.
Heritage Holdings, Inc., a Delaware corporation (the "General
Partner"), is the sole general partner of the Partnership and the sole general
partner of Heritage Operating, L.P. (the "Operating Partnership"). U.S. Propane,
L.P., a Delaware limited partnership ("U.S. Propane"), owns 100% of the
outstanding stock of the General Partner. U.S. Propane L.L.C., a Delaware
limited liability company ("U.S. Propane L.L.C."), is the sole general partner
of U.S. Propane. The Partnership, the Operating Partnership and the General
Partner are collectively referred to herein as the "Heritage Parties."
1. Representations and Warranties. Each of the Heritage Parties,
jointly and severally, represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) The Partnership meets the requirements for use of Form S-3 under
the Act and has prepared and filed with the Commission a registration
statement (file number 333-86057) on Form S-3, including a related
preliminary prospectus, for registration under the Act of the offering and
sale of the Securities. The Registration Statement has been declared
effective by the Commission, and no stop order suspending the effectiveness
of such registration statement has been issued by the Commission. The
Partnership may have filed one or more amendments thereto, including a
related preliminary prospectus, each of which has previously been furnished
to you. The Partnership will next file with the Commission a final
prospectus in accordance with Rule 424(b). The Partnership has included in
such registration statement, as amended at the Effective Date, all
information required by the Act and the rules thereunder to be included in
such registration statement and the Prospectus. As filed, such amendment
and form of final prospectus, or such final prospectus, shall contain all
such required information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time, or to
the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in
the latest Preliminary Prospectus) as the Partnership has advised you,
prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing Date
(a "settlement date"), the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules thereunder; on the Effective
Date the Registration Statement did not, and at the Execution Time the
Registration Statement, as supplemented or amended, will not, contain any
untrue statement of a material fact or omit to state
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any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Heritage Parties make no representations or warranties as
to the information contained in or omitted from the Registration Statement
or the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to any Heritage Party by
or on behalf of any Underwriter through the Representatives specifically
for inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(c) The documents which are incorporated by reference in the
Prospectus (or any supplement thereto) or from which information is so
incorporated by reference, when they became effective or were filed with
the Commission as the case may be, complied in all material respects with
the requirements of the Act or the Exchange Act, as applicable, and the
respective rules thereunder; and any documents 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, and the respective rules
thereunder.
(d) Each of the Partnership and the Operating Partnership has been
duly formed and is validly existing as a limited partnership under the
Delaware Revised Uniform Limited Partnership Act (the "Delaware LP Act")
with full partnership power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business, in each case in
all material respects as described in the Prospectus, and is duly qualified
to do business as a foreign limited partnership and is in good standing
under the laws of each jurisdiction which requires such qualification,
except where the failure to so qualify would not (i) have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Partnership and its
subsidiaries, taken as a whole, or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(e) The General Partner has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the State of
Delaware with full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business and to
act as general partner of the Partnership and the Operating Partnership, in
each case in all material respects as described in the Prospectus. The
General Partner is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires
such qualification, except where the failure to so qualify would not (i)
have a material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
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Partnership and its subsidiaries, taken as a whole, or the General Partner,
or (ii) subject the limited partners of the Partnership to any material
liability or disability.
(f) U.S. Propane has been duly formed and is validly existing as a
limited partnership under the Delaware LP Act with full partnership power
and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign limited partnership and is in
good standing under the laws of each jurisdiction which requires such
qualification.
(g) U.S. Propane L.L.C. has been duly formed and is validly existing
in good standing as a limited liability company under the laws of the State
of Delaware with full power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business and to act as
general partner of U.S. Propane as described in the Prospectus. U.S.
Propane L.L.C. is duly qualified to do business as a foreign limited
liability company and is in good standing under the laws of each
jurisdiction which requires such qualification.
(h) Heritage Service Corp. has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the State of
Delaware with full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business, in
each case in all material respects as described in the Prospectus. Heritage
Service Corp. is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify would not (i) have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the
Partnership and its subsidiaries, taken as a whole, or (ii) subject the
limited partners of the Partnership to any material liability or
disability.
(i) M-P Oils, Ltd. has been duly incorporated and is validly existing
in good standing as a corporation under the laws of the Province of
Alberta, Canada with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business, in
each case in all material respects as described in the Prospectus. M-P
Oils, Ltd. is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify would not (i) have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the
Partnership and its subsidiaries, taken as a whole, or (ii) subject the
limited partners of the Partnership to any material liability or
disability.
(j) M-P Energy Partnership has been duly formed and is validly
existing in good standing as a general partnership under the laws of the
Province of Alberta, Canada with full partnership power and authority to
own or lease, as
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the case may be, and to operate its properties and conduct its business, in
each case in all material respects as described in the Prospectus.
(k) Bi-State Propane has been duly formed and is validly existing in
good standing as a general partnership under the laws of the State of
California, with full partnership power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business, in
each case in all material respects as described in the Prospectus.
(l) Heritage Energy Resources, L.L.C. has been duly formed and is
validly existing in good standing as a limited liability company under the
laws of the State of Oklahoma with full power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business, in each case in all material respects as described in the
Prospectus. Heritage Energy Resources, L.L.C. is duly qualified to do
business as a foreign limited liability company and is in good standing
under the laws of each jurisdiction which requires such qualification,
except where the failure to so qualify would not (i) have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Partnership and its
subsidiaries, taken as a whole, or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(m) AGL Propane, L.L.C. has been duly formed and is validly existing
in good standing as a limited liability company under the laws of the State
of Georgia with full power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business, in each case in
all material respects as described in the Prospectus. AGL Propane, L.L.C.
is duly qualified to do business as a foreign limited liability company and
is in good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify would not (i) have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the
Partnership and its subsidiaries, taken as a whole, or (ii) subject the
limited partners of the Partnership to any material liability or
disability.
(n) Peoples Gas Company, L.L.C. has been duly formed and is validly
existing in good standing as a limited liability company under the laws of
the State of Delaware with full power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business, in
each case in all material respects as described in the Prospectus. Peoples
Gas Company, L.L.C. is duly qualified to do business as a foreign limited
liability company and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to
so qualify would not (i) have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results
of operations of the Partnership and its subsidiaries, taken as a whole, or
(ii) subject the limited partners of the Partnership to any material
liability or disability.
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(o) United Cities Propane Gas, L.L.C. has been duly formed and is
validly existing in good standing as a limited liability company under the
laws of the State of Delaware with full power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business, in each case in all material respects as described in the
Prospectus. United Cities Propane Gas, L.L.C. is duly qualified to do
business as a foreign limited liability company and is in good standing
under the laws of each jurisdiction which requires such qualification,
except where the failure to so qualify would not (i) have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Partnership and its
subsidiaries, taken as a whole, or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(p) Retail Propane Company, L.L.C. has been duly formed and is
validly existing in good standing as a limited liability company under the
laws of the State of Delaware with full power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business, in each case in all material respects as described in the
Prospectus. Retail Propane Company, L.L.C. is duly qualified to do business
as a foreign limited liability company and is in good standing under the
laws of each jurisdiction which requires such qualification, except where
the failure to so qualify would not (i) have a material adverse effect on
the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Partnership and its subsidiaries,
taken as a whole, or (ii) subject the limited partners of the Partnership
to any material liability or disability.
(q) Guilford Gas, Inc. has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the State of
North Carolina with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business, in
each case in all material respects as described in the Prospectus. Guilford
Gas, Inc. is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify would not (i) have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the
Partnership and its subsidiaries, taken as a whole, or (ii) subject the
limited partners of the Partnership to any material liability or
disability.
(r) EnergyNorth Propane, Inc. has been duly incorporated and is
validly existing in good standing as a corporation under the laws of the
State of New Hampshire with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business, in each case in all material respects as described in the
Prospectus. Energy North Propane, Inc. is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to
so qualify would not (i) have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results
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of operations of the Partnership and its subsidiaries, taken as a whole, or
(ii) subject the limited partners of the Partnership to any material
liability or disability.
(s) VGS Propane, L.L.C. has been duly formed and is validly existing
in good standing as a limited liability company under the laws of the State
of Vermont with full power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business, in each case in
all material respects as described in the Prospectus. VGS Propane, L.L.C.
is duly qualified to do business as a foreign limited liability company and
is in good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify would not (i) have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the
Partnership and its subsidiaries, taken as a whole, or (ii) subject the
limited partners of the Partnership to any material liability or
disability.
(t) U.S. Propane owns 100% of the outstanding shares of capital
stock of the General Partner; such shares of capital stock have been duly
authorized and validly issued and are fully paid and nonassessable; and
U.S. Propane owns such shares of capital stock free and clear of any
perfected security interest or any other security interests, claims, liens
or encumbrances.
(u) The General Partner is the sole general partner of the
Partnership with a 1% general partner interest in the Partnership; such
general partner interest has been duly authorized and validly issued in
accordance with the Amended and Restated Agreement of Limited Partnership
of the Partnership, as amended to date (as the same may be amended and
restated at the Closing Date, the "Partnership Agreement"); and the General
Partner owns such general partner interest free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
(v) The General Partner owns 4,001,328 Common Units and all of the
Incentive Distribution Rights (as defined in the Partnership Agreement),
other than the 1,000,000 Class C Units owned by certain former stockholders
of the General Partner and the General Partner, owns such Common Units and
Incentive Distribution Rights free and clear of any perfected security
interest or any other security interests, claims, liens or encumbrances.
(w) On the date hereof, the issued and outstanding limited partner
interests of the Partnership consist of 11,655,667 Common Units, 1,382,514
Class B Subordinated Units and the Incentive Distribution Rights (including
1,000,000 Class C Units). The Common Units, Class B Subordinated Units,
Incentive Distribution Rights (including Class C Units) and all other
limited partner interests of the Partnership conform in all material
respects to the description thereof contained in the Prospectus; all
outstanding Common Units, Class B Subordinated Units and Incentive
Distribution Rights (including the Class C Units) and the limited partner
interests represented thereby have been duly
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authorized and validly issued in accordance with the Partnership Agreement,
and are fully paid (to the extent required under the Partnership Agreement)
and nonassessable (except as such nonassessability may be affected by
matters described under the caption "The Partnership Agreement - Limited
Liability" in the prospectus contained in the Partnership's Registration
Statement on Form S-1 (No. 333-4018) filed as Exhibit No. 1 to the
Partnership's Registration Statement on Form 8-A (File No. 1-11727)
incorporated by reference in the Prospectus (the "IPO Prospectus")).
(x) The Securities issued to the Underwriters that may be issued at
the Closing Date and any settlement date and the limited partner interests
represented thereby will be duly authorized in accordance with the
Partnership Agreement and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms hereof, will be
validly issued, fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be
affected by matters described under the caption "The Partnership Agreement
- Limited Liability" in the IPO Prospectus); the Securities are duly
listed, and admitted and authorized for trading, subject to official notice
of issuance, on the New York Stock Exchange; the certificates for the
Securities are in valid and sufficient form; except as described in the
Prospectus or arising under certain agreements providing for the issuance
of Common Units to the General Partner in connection with stock
acquisitions for the benefit of the Partnership ("Stock Issuance
Agreements"), there are no preemptive rights or other rights to purchase or
to subscribe for, nor any restriction upon the voting or transfer of, any
interests in the Partnership or the Operating Partnership; and, except (i)
as set forth in the Prospectus, (ii) for restricted units granted under the
General Partner's restricted unit plan and (iii) for Common Units issuable
under the Stock Issuance Agreements, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for, Common Units, Class B
Subordinated Units or other partnership interests in the Partnership or
Operating Partnership are outstanding.
(y) The Partnership has all requisite power and authority to issue,
sell and deliver the Securities, in accordance with and upon the terms and
conditions set forth in this Agreement, the Partnership Agreement and the
Prospectus. At the Closing Date and any settlement date, all corporate and
partnership action, as the case may be, required to be taken by the
Heritage Parties or any of their stockholders or partners for the
authorization, issuance, sale and delivery of the Securities shall have
been validly taken.
(z) The General Partner is the sole general partner of the Operating
Partnership with a 1.0101% general partner interest in the Operating
Partnership; such general partner interest has been duly authorized and
validly issued in accordance with the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, as amended to date (as
the same may be amended and restated at the Closing Date, the "Operating
Partnership Agreement" and, together
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with the Partnership Agreement, the "Partnership Agreements"); and the
General Partner owns such general partner interest free and clear of any
perfected security interest or any other security interests, claims, liens
or encumbrances.
(aa) The Partnership and U.S. Propane are the sole limited partners of
the Operating Partnership with a 97.9798% limited partner interest and a
1.0101% limited partner interest, respectively, in the Operating
Partnership; such limited partner interests have been duly authorized and
validly issued in accordance with the Operating Partnership Agreement and
are fully paid (to the extent required under the Operating Partnership
Agreement) and nonassessable (except as such nonassessability may be
affected by matters described under the caption "The Partnership Agreement
- Limited Liability" in the IPO Prospectus) and the Partnership and U.S.
Propane own such limited partner interests free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
(bb) All the outstanding shares of capital stock of Heritage Service
Corp. have been duly authorized and validly issued and are fully paid and
nonassessable; and, except as provided in the Security Agreement dated June
25, 1996 among the General Partner, the Operating Partnership and
Wilmington Trust Company (the "Security Agreement), the Operating
Partnership owns all of such shares free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
(cc) All the outstanding shares of capital stock of M-P Oils, Ltd.
have been duly authorized and validly issued and are fully paid and
nonassessable; and, except as provided in the Security Agreement, Heritage
Service Corp. owns all of such shares free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
(dd) M-P Oils, Ltd. owns a general partner interest of 60% in M-P
Energy Partnership; such general partner interest has been duly authorized
and validly issued in accordance with the partnership agreement of M-P
Energy Partnership; and M-P Oils, Ltd. owns such general partner interest
free and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances.
(ee) There is no agreement, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Prospectus under the headings "Tax
Considerations", "Recent Tax Developments" and "Description of Units"
insofar as such statements summarize legal matters, agreements, documents
or proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.
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(ff) This Agreement has been duly authorized, executed and delivered
by each of the Heritage Parties and constitutes a valid and binding
obligation of the Heritage Parties enforceable against each of the Heritage
Parties in accordance with its terms; provided that the enforceability
hereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) and except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws.
(gg) The Partnership Agreement has been duly authorized, executed and
delivered by the General Partner and is a valid and legally binding
agreement of the General Partner, enforceable against the General Partner
in accordance with its terms; the Operating Partnership Agreement has been
duly authorized, executed and delivered by the General Partner and the
Partnership, and is a valid and legally binding agreement of the General
Partner and the Partnership, enforceable against each of them in accordance
with its terms; provided that, with respect to each of the Partnership
Agreements, the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(hh) None of the Heritage Parties or any of their subsidiaries is now,
nor after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Prospectus, will
be, an (i) "investment company" as defined in the Investment Company Act of
1940, as amended, or (ii) a "public utility company" or "holding company"
or subject to regulation as a "subsidiary company" of a "registered holding
company" or an "affiliate" thereof, under the Public Utility Holding
Company Act of 1935, as amended.
(ii) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the Exchange Act or the blue sky
laws of any jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner contemplated herein and
in the Prospectus.
(jj) Neither the offering, issue and sale of the Securities, nor the
execution, delivery and performance of this Agreement by the Heritage
Parties, nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with,
result in a breach, default or violation (and no event has occurred that,
with notice or lapse of time or otherwise, would constitute such an event)
or imposition of any lien, charge or encumbrance upon any property or
assets of the Heritage Parties or any of their subsidiaries pursuant to,
(i) the certificate or agreement of limited partnership, the certificate or
articles of incorporation or bylaws or other organizational
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documents of any of the Heritage Parties or any of their subsidiaries, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which any of the Heritage Parties or any of their
subsidiaries is a party or bound or to which any of their respective
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to any of the Heritage Parties or any of their
subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
any of the Heritage Parties or any of their subsidiaries or any of their
respective properties, which conflicts, breaches, violations or defaults,
in the case of clauses (ii) or (iii), would have a material adverse effect
on the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Heritage Parties, taken as a whole
whether or not arising from transactions in the ordinary course of
business, ("Material Adverse Effect") or could materially impair the
ability of any of the Heritage Parties to perform its obligations under
this Agreement.
(kk) To the knowledge of the Heritage Parties, no third party to any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which any of the Heritage Parties or any of their subsidiaries is a
party or bound or to which their respective properties are subject, is in
breach, default or violation under any such agreement (and no event has
occurred that, with notice or lapse of time or otherwise, would constitute
such an event), which breach, default or violation would have a Material
Adverse Effect.
(ll) No holders of securities of the Partnership have rights to the
registration of such securities under the Registration Statement, except
for any such rights as have been effectively waived with respect to the
offering of the Securities.
(mm) The financial statements and schedules and the related notes
included in the Prospectus and the Registration Statement present fairly in
all material respects the financial condition, results of operations and
cash flows as of the dates and for the periods indicated, comply as to form
in all material respects with the applicable accounting requirements of the
Act and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as otherwise noted therein). The selected financial data set forth
under the caption "Selected Financial Information" in the Partnership's
Annual Report on Form 10-K for the fiscal year ended August 31, 2000 (the
"Form 10-K"), the Prospectus and Registration Statement fairly present, on
the basis stated in the Form 10-K, the Prospectus and the Registration
Statement, the information included therein. The pro forma financial
statements included in the Prospectus and the Registration Statement
include assumptions that provide a reasonable basis for presenting the
effects directly attributable to the transactions and events described
therein, the related pro forma adjustments give appropriate effect to those
assumptions, and the pro
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forma adjustments reflect the proper application of those adjustments to
the historical financial statement amounts in the pro forma financial
statements included in the Prospectus and the Registration Statement. The
pro forma financial statements included in the Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act and the
pro forma adjustments have been properly applied to the historical amounts
in the compilation of those statements.
(nn) Except as disclosed in the Prospectus, subsequent to the date as
of which such information is given in the Prospectus, (i) none of the
Heritage Parties or any of their respective subsidiaries has incurred any
liability or obligation, indirect, direct or contingent, or entered into
any transactions, not in the ordinary course of business, that, singly or
in the aggregate, is material to the Heritage Parties and their
subsidiaries, taken as a whole, (ii) there has not been any material change
in the capitalization, or material increase in the short-term debt or
long-term debt, of the Heritage Parties or any of their respective
subsidiaries and (iii) there has not been any material adverse change, or
any development involving or which may reasonably be expected to involve,
singly or in the aggregate, a prospective material adverse change in the
condition (financial or other), business, prospects, properties, net worth
or results of operations of the Heritage Parties or any of their respective
subsidiaries whether or not arising from transactions in the ordinary
course of business.
(oo) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving any of
the Heritage Parties or any of their subsidiaries or any of their
respective property is pending or, to the knowledge of any of the Heritage
Parties, threatened that (i) could reasonably be expected to have a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii) could
reasonably be expected to have a Material Adverse Effect, except as set
forth in or contemplated in the Prospectus.
(pp) There are no legal or governmental proceedings pending or, to the
knowledge of the Heritage Parties, threatened, against any of the Heritage
Parties or any of their subsidiaries, or to which any of the Heritage
Parties or any of their subsidiaries is a party, or to which any of their
respective properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required.
(qq) The Heritage Parties and their subsidiaries have good and
marketable title to all real property and good title to all personal
property described in the Prospectus as being owned by them, free and clear
of any perfected security interest or any other security interests, claims,
liens or encumbrances except (i) as described in the Prospectus, (ii)
pursuant to the Security Agreement and (iii) such as do not materially
interfere with the use of such properties taken as a whole as described in
the Prospectus, including security
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interests, claims, liens and encumbrances pursuant to mortgage and/or
security agreements given as security for certain non-compete agreements
with the prior owners of certain businesses previously acquired by the
Heritage Parties and their subsidiaries; and all real property and
buildings held under lease by any of the Heritage Parties or any of their
subsidiaries are held under valid and subsisting and enforceable leases
with such exceptions as do not materially interfere with the use of such
properties taken as a whole as described in the Prospectus.
(rr) Neither the Heritage Parties nor any of their subsidiaries is in
violation or default (and no event has occurred that, with notice or lapse
or time or otherwise, would constitute such an event) of (i) any provision
of its certificate or agreement of limited partnership, the certificate or
articles of incorporation or bylaws or other organizational documents, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Heritage Parties or such subsidiary or any of their respective
properties, as applicable, which violation or default would, in the cases
of clauses (ii) and (iii), have a Material Adverse Effect, or could
materially impair the ability of any of the Heritage Parties to perform its
obligations under this Agreement.
(ss) Xxxxxx Xxxxxxxx LLP, who have audited certain financial
statements of the Heritage Parties and their subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectus, are independent public
accountants with respect to the Heritage Parties within the meaning of the
Act and the Exchange Act and the applicable published rules and regulations
thereunder.
(tt) The Heritage Parties maintain insurance covering their
properties, operations, personnel and businesses against such losses and
risks as are reasonably adequate to protect them and their businesses in a
manner consistent with other businesses similarly situated. None of the
Heritage Parties has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will
have to be made in order to continue such insurance, and all such insurance
is outstanding and duly in force on the date hereof and will be outstanding
and duly in force on the Closing Date.
(uu) The Heritage Parties and their subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
foreign, federal, state or local regulatory authorities necessary to
conduct their respective businesses in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus and except for such licenses, certificates, permits and other
authorizations, the failure of which to have obtained would not have,
individually or in the aggregate, a material adverse effect upon the
ability of the Heritage Parties to conduct their businesses as
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currently conducted and as contemplated by the Prospectus to be conducted.
None of the Heritage Parties or any of their subsidiaries have received any
notice of proceedings relating to the revocation or modification of any
such license, certificate, permit or other authorization which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(vv) The Heritage Parties and each of their subsidiaries maintain 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.
(ww) The Heritage Parties have not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Securities.
(xx) The Heritage Parties and their subsidiaries are (i) 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 and are in
compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
and (iii) have not received notice of any actual or potential liability for
the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a Material Adverse Effect, except as set forth in
or contemplated in the Prospectus. Except as set forth in the Prospectus
and except with respect to the Xxxxx Superfund site in New England to which
the Operating Partnership has been named as a de minimis potentially
responsible party, neither the Heritage Parties nor any of its subsidiaries
has been named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
Any certificate signed by any officer of any of the Heritage
Parties and delivered to the Representatives or counsel for the Underwriters in
connection with the
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offering of the Securities shall be deemed a representation and warranty by the
Heritage Parties, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Partnership agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Partnership, at a purchase price of $26.60
per unit, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Partnership hereby
grants an option to the several Underwriters to purchase, severally and not
jointly, up to 375,000 Option Securities at the same purchase price per
unit as the Underwriters shall pay for the Underwritten Securities. Said
option may be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option 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 the Prospectus upon written or telegraphic
notice by the Representatives to the Partnership setting forth the number
of Option Securities as to which the several Underwriters are exercising
the option and the settlement date. The number of Option Securities to be
purchased by each Underwriter shall be the same percentage of the total
number of Option Securities to be purchased by the several Underwriters as
such Underwriter is purchasing of the Underwritten Securities, subject to
such adjustments as you in your absolute discretion shall make to eliminate
any fractional units.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
July 31, 2001, or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the
Partnership or as provided in Section 9 hereof (such date and time of delivery
and payment for the Securities being herein called the "Closing Date"). Delivery
of the Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to or upon the order
of the Partnership by wire transfer payable in same-day funds to an account
specified by the Partnership. Delivery of the Underwritten Securities and the
Option Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Partnership will
deliver the Option Securities
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(at the expense of the Partnership) to the Representatives, at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the Representatives (which
shall be within three Business Days after exercise of said option) for the
respective accounts of the several Underwriters, against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Partnership by wire transfer payable in same-day funds to
an account specified by the Partnership. If settlement for the Option Securities
occurs after the Closing Date, the Partnership will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set
forth in the Prospectus.
5. Agreements. Each of the Partnership and the General Partner
agrees with the several Underwriters that:
(a) The Partnership will use its best efforts to cause any amendment
to the Registration Statement to become effective. Prior to the termination
of the offering of the Securities, the Partnership will not file any
amendment of the Registration Statement or supplement to the Prospectus or
any Rule 462(b) Registration Statement unless the Partnership has furnished
you a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object. Subject to
the foregoing sentence, if filing of the Prospectus is required under Rule
424(b), the Partnership will cause the Prospectus, properly completed, and
any supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely
filing. The Partnership will promptly advise the Representatives (1) when
the Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(2) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (3) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (4) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (5) of
the receipt by the Partnership of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Partnership will use its best efforts to prevent the issuance
of any such stop order or the
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suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Partnership
promptly will (1) notify the Representatives of such event, (2) prepare and
file with the Commission, subject to the second sentence of paragraph (a)
of this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (3) supply any
supplemented Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Partnership will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Partnership and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Partnership will furnish to the Representatives and counsel
for the Underwriters, without charge, a copy of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Representatives may reasonably request. The
Partnership will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Partnership will arrange, if necessary, for the qualification
of the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay any
fee of the National Association of Securities Dealers, Inc. in connection
with its review of the offering; 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 that would subject
it to service of process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction where it is not now
so subject.
(f) The Heritage Parties will not, without the prior written consent
of Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement
or otherwise) by the Heritage Parties or any affiliate of the Heritage
Parties) directly or indirectly, including the filing
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(or participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other Common Units or any
securities convertible into, or exercisable, or exchangeable for, Common
Units; or publicly announce an intention to effect any such transaction,
for a period of 90 days after the date of the Underwriting Agreement,
provided, however, that the Heritage -------- ------- Parties may issue and
sell Common Units (i) to the Underwriters pursuant to this Agreement, (ii)
pursuant to the Amended and Restated Unit Plan dated as of August 10, 2000,
(iii) to the General Partner in connection with any acquisition by the
Heritage Parties of assets or similar prior acquisitions, (iv) in a
transaction not involving a public offering to purchasers who enter into an
agreement with the Underwriters in the form set forth in Exhibit A, (v)
upon the conversion of securities or the exercise of warrants outstanding
at the Execution Time, and (vi) to Xxxx X. Balkoni, members of his family
or trusts associated with such family under an Agreement for Contribution
of Assets in Exchange for Partnership Interests; provided that no more than
17,000 Common Units will be issued pursuant to clause (vi).
(g) The Heritage Parties will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Securities.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Heritage Parties contained
herein as of the Execution Time, the Closing Date and any settlement date
pursuant to Section 3 hereof, to the accuracy of the statements of the Heritage
Parties made in any certificates pursuant to the provisions hereof, to the
performance by the Heritage Parties of their obligations hereunder and to the
following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Partnership shall have requested and caused Xxxxx Xxxxx
L.L.P., counsel for the Partnership, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) Each of the Partnership and the Operating Partnership
has been duly formed and is validly existing as a limited partnership
in good
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standing under the Delaware LP Act, with all necessary partnership
power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the Prospectus.
(ii) Heritage Service Corp. has been duly incorporated and is
validly existing in good standing as a corporation under the laws of
the State of Delaware with all necessary corporate power and authority
to own or lease its properties and conduct its business as described in
the Prospectus.
(iii) The General Partner is the sole general partner of the
Partnership with a 1% general partner interest in the Partnership; such
general partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement; the General Partner owns
4,001,328 Common Units and the Incentive Distribution Rights, other
than the 1,000,000 Class C Units owned by certain former stockholders
of the General Partner; and the General Partner owns such general
partner interest, Common Units and Incentive Distribution Rights (other
than the class C units) free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a
financing statement under the Uniform Commercial Code of the State of
Delaware naming the General Partner as debtor is on file in the office
of the Secretary of State of the State of Delaware or (B) otherwise
known to such counsel, without independent investigation, other than
those created by or arising under the Delaware LP Act.
(iv) All outstanding Common Units issued to the underwriters in
the Partnership's initial public offering (including pursuant to the
underwriters' overallotment option) and the Partnership's public
offering in October 1999, the Class B Subordinated Units and the
Incentive Distribution Rights (including the Class C Units) and the
limited partner interests represented thereby have been duly authorized
and validly issued and are fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described under the caption
"The Partnership Agreement-Limited Liability" in the IPO Prospectus).
(v) The Securities and the limited partner interests
represented thereby have been duly and validly authorized, and, when
issued and delivered to and paid for by the Underwriters pursuant to
this Agreement, will be fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described under the caption
"The Partnership Agreement-Limited Liability" in the IPO Prospectus);
except as described in the Prospectus, there are no preemptive rights
or other rights to purchase or subscribe for, nor any restriction upon
the voting or transfer
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of any interests in the Partnership or Operating Partnership pursuant
to either of the Partnership Agreements.
(vi) The General Partner is the sole general partner of the
Operating Partnership with a 1.0101% general partner interest in the
Operating Partnership; such general partner interest has been duly
authorized and validly issued in accordance with the Operating
Partnership Agreement; and the General Partner owns such general
partner interest free and clear of all liens, encumbrances, security
interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware
naming the General Partner as debtor is on file in the office of the
Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those
created by or arising under the Delaware LP Act.
(vii) The Partnership and U.S. Propane are the sole limited
partners of the Operating Partnership with a 97.9798% limited partner
interest and a 1.0101% limited partner interest, respectively, in the
Operating Partnership; such limited partner interests have been duly
authorized and validly issued in accordance with the Operating
Partnership Agreement and are fully paid (to the extent required under
the Operating Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described under the caption
"The Partnership Agreement-Limited Liability" in the IPO Prospectus);
and the Partnership and U.S. Propane own such limited partner interests
free and clear of all liens, encumbrances, security interests, charges
or claims (A) in respect of which a financing statement under the
Uniform Commercial Code of the State of Delaware naming the Partnership
or U.S. Propane as debtor is on file in the office of the Secretary of
State of the State of Delaware or (B) otherwise known to such counsel,
without independent investigation, other than those created by or
arising under the Delaware LP Act.
(viii) The Operating Partnership owns 100% of the issued and
outstanding capital stock of Heritage Service Corp.; such capital stock
has been duly authorized and validly issued and is fully paid and
nonassessable; and except pursuant to the Security Agreement, the
Operating Partnership owns such capital stock free and clear of all
liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Operating Partnership as
debtor is on file in the office of the Secretary of State of the State
of Delaware or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the
Delaware LP Act.
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(ix) Neither the filing of the Registration Statement nor the
offering, issuance or sale of the Securities as contemplated by this
Agreement gives rise to any rights under the Partnership Agreements,
other than those which have been waived for purposes of the offering of
the Securities, for or relating to the registration of any Securities
or other securities of the Partnership; the Partnership has all
requisite power and authority to offer, issue, sell and deliver the
Securities, in accordance with and upon the terms and conditions set
forth in this Agreement, the Partnership Agreement and the Prospectus;
at the Closing Date and any settlement date, all corporate and
partnership action, as the case may be, required to be taken by the
Heritage Parties or any of their stockholders or partners for the
authorization, issuance, sale and delivery of the Securities shall have
been validly taken.
(x) The Partnership Agreement has been duly authorized,
executed and delivered by the General Partner and is a valid and
legally binding agreement of the General Partner, enforceable against
the General Partner in accordance with its terms; the Operating
Partnership Agreement has been duly authorized, executed and delivered
by the General Partner and the Partnership and is a valid and legally
binding agreement of the General Partner and the Partnership,
enforceable against each of them in accordance with its terms; provided
that, with respect to each Partnership Agreement, the enforceability
thereof may be limited by (A) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws from time to time
in effect affecting creditors' rights and remedies generally and by
general principles of equity (regardless of whether such principles are
considered in a proceeding in equity or at law) and (B) public policy,
applicable law relating to fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing.
(xi) To the knowledge of such counsel, there is no (A) pending
or threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator to which any
of the Heritage Parties is a party or to which any of their
subsidiaries or their respective properties is subject of a character
required to be disclosed in the Registration Statement or Prospectus
which is not adequately disclosed in the Prospectus, and (B) agreement,
contract or other document to which any of the Heritage Parties or any
of their subsidiaries is a party that is 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; and the statements included or incorporated by reference in
the Prospectus under the heading "Description of Units," insofar as
such statements summarize legal matters, agreements, documents or
proceedings discussed therein, are materially accurate and fair
summaries of such legal matters, agreements, documents or proceedings;
the discussion set forth under the captions "Tax Considerations" and
"Recent Tax Developments" included in the
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Prospectus, subject to the qualifications stated therein, constitutes
our opinion as to the material federal United States income tax
consequences for purchasers of the Securities; and the Securities, the
Common Units, the Subordinated Units, the Class B Subordinated Units,
Class C Units and the Incentive Distribution Rights conform in all
material respects to the descriptions thereof contained in the
Prospectus.
(xii) The Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement and the
Prospectus (other than the financial statements and other financial and
related statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the Exchange
Act and the respective rules thereunder.
(xiii) This Agreement has been duly authorized, executed and
delivered by each of the Heritage Parties.
(xiv) None of the Heritage Parties or any of their subsidiaries
is now, nor after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in
the Prospectus will be, a "public utility company" or a "holding
company" or subject to regulation as a "subsidiary company" of a
"registered holding company" or an "affiliate" thereof, under the
Public Utility Holding Company Act of 1935, as amended.
(xv) None of the Heritage Parties are, or after giving effect
to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus will be, an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(xvi) No consent, approval, authorization, filing with or order
of any federal, Delaware or Texas court, governmental agency or body
having jurisdiction over the Heritage Parties is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the state
securities or "Blue Sky" laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in
the manner contemplated in this Agreement and in the Prospectus and
such other approvals (specified in such opinion) as have been obtained.
(xvii) Neither the offering, issue and sale of the Securities nor
the execution, delivery and performance of this Agreement by the
Heritage
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Parties, nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict
with, result in a breach, default or violation (and no event has
occurred that, with notice or lapse of time or otherwise, would
constitute such an event) or imposition of any lien, charge or
encumbrance upon any property or assets of the Heritage Parties or any
of their subsidiaries pursuant to, (i) the certificate or agreement of
limited partnership, the certificate or articles of incorporation or
bylaws or other organizational documents of any of the Heritage
Parties, (ii) any agreement filed or incorporated by reference as an
exhibit to the Registration Statement, or (iii) the Delaware LP Act,
the Delaware General Corporation Law, the laws of the State of Texas or
federal law which in the cases of clauses (ii) and (iii) would
reasonably be expected to have a material adverse effect on the
financial condition, business or results of operations of the
Partnership and its subsidiaries, taken as a whole whether or not
arising from transactions in the ordinary course of business.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Heritage Parties
and the independent public accountants of the Partnership and your
representatives, at which the contents of the Registration Statement and
the Prospectus and related matters were discussed and, although such
counsel has not independently verified, is not passing upon, and is not
assuming responsibility for the accuracy, completeness or fairness of the
statements contained in, the Registration Statement and the Prospectus
(except to the extent specified in the foregoing opinion), no facts have
come to such counsel's attention that lead such counsel to believe that the
Registration Statement or any further amendment thereto made by the
Partnership prior to such Closing Date (other than (i) the financial
statements included or incorporated by reference therein, including the
notes and schedules thereto and the report of independent public
accountants thereon, (ii) the other historical and pro forma financial
information and the statistical and accounting information included or
incorporated by reference therein and (iii) the exhibits thereto, as to
which such counsel need express no opinion), as of its effective date
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any further
amendment or supplement thereto made by the Partnership prior to such
Closing Date (other than (i) the financial statements included or
incorporated by reference therein, including the notes and schedules
thereto and the report of independent public accountants thereon and (ii)
the other historical and pro forma financial information and the
statistical and accounting information included or incorporated by
reference therein, as to which such counsel need express no opinion) as of
its issue date and the Closing Date contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
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In rendering such opinion, such counsel may (i) rely in respect of matters
of fact upon certificates of officers and employees of the General Partner
and upon information obtained from public officials, (ii) assume that all
documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures
on all documents examined by such counsel are genuine, (iii) state that
they express no opinion with respect to state or local taxes or tax
statutes or municipal ordinances to which any of the limited partners of
the Partnership or any of the Heritage Parties may be subject and (iv)
state that their opinion is limited to federal laws, the Delaware LP Act,
the Delaware General Corporation Law and the laws of the State of Texas.
(c) The Partnership shall have requested and caused Doerner,
Saunders, Xxxxxx & Xxxxxxxx, L.L.P., counsel to the Partnership, to have
furnished to the Representatives their opinion, dated the Closing Date and
addressed to the Representatives to the effect that:
(i) The General Partner has been duly incorporated and is
validly existing in good standing as a corporation under the laws of
the State of Delaware, with all necessary corporate power and authority
to own or lease, as the case may be, and to operate its properties,
conduct its business and act as general partner of the Partnership and
the Operating Partnership, in each case in all material respects as
described in the Prospectus.
(ii) Heritage Energy Resources, L.L.C. has been duly formed
and is validly existing as a limited liability company in good standing
under the Oklahoma Limited Liability Company Act, with all necessary
power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the Prospectus.
(iii) Each of Peoples Gas Company, L.L.C., United Cities Propane
Gas, L.L.C. and Retail Propane Company, L.L.C. has been duly formed and
is validly existing as a limited liability company in good standing
under the Delaware Limited Liability Company Act, with all necessary
power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the Prospectus.
(iv) Each of the Partnership and the Operating Partnership is
duly registered or qualified as a foreign limited partnership for the
transaction of business and is in good standing under the laws of the
states set forth on Exhibit A to such opinion; and, to such counsel's
knowledge, such jurisdictions are the only jurisdictions in which the
character of the business conducted by the Partnership or the Operating
Partnership or the nature or location of the properties owned or leased
by it make such registration or qualification necessary (except where
the failure to so
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register or so qualify would not (A) have a material adverse effect on
the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Partnership and its
subsidiaries, taken as a whole, or (B) subject the limited partners of
the Partnership to any material liability or disability).
(v) The General Partner is duly registered or qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of the states set forth on Exhibit A to such
opinion; and to such counsel's knowledge, such jurisdictions are the
only jurisdictions in which the character of the business conducted by
the General Partner or the nature or location of the properties owned
or leased by it make such registration or qualification necessary
(except where the failure to so register or so qualify would not (A)
have a material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Partnership and its subsidiaries, taken as a whole, or the General
Partner, or (B) subject the limited partners of the Partnership to any
material liability or disability).
(vi) Heritage Service Corp. is duly registered or qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of the states set forth on Exhibit A to such
opinion; and to such counsel's knowledge, such jurisdictions are the
only jurisdictions in which the character of the business conducted by
Heritage Service Corp. or the nature or location of the properties
owned or leased by it make such registration or qualification necessary
(except where the failure to so register or so qualify would not (A)
have a material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Partnership and its subsidiaries, taken as a whole, or (B) subject
the limited partners of the Partnership to any material liability or
disability).
(vii) All outstanding Common Units (other than those which were
issued to the underwriters in the Partnership's initial public offering
(including pursuant to the underwriters' overallotment option) and the
Partnership's public offering in October 1999) and the limited partner
interests represented thereby have been duly authorized and validly
issued in accordance with the Partnership Agreement, and are fully paid
(to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by
matters described under the caption "The Partnership Agreement -
Limited Liability" in the IPO Prospectus).
(viii) All of the issued and outstanding shares of capital stock
of the General Partner have been duly authorized and validly issued and
are fully paid and nonassessable; and all such shares are owned by U.S.
Propane free and clear of all liens, encumbrances, security interests,
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charges or claims (A) in respect of which a financing statement under
the Uniform Commercial Code of the State of Delaware naming U.S.
Propane as debtor is on file in the office of the Secretary of State of
the State of Delaware or (B) otherwise known to such counsel, without
independent investigation, other than those created by the Delaware
General Corporation Law.
(ix) To such counsel's knowledge, except as described in the
Prospectus or arising under the Stock Issuance Agreements, 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
any agreement or instrument to which the Partnership or the Operating
Partnership is a party or by which either of them may be bound, other
than the Partnership Agreements. To such counsel's knowledge, except as
described in the Prospectus, neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated by
this Agreement gives rise to any rights (other than those arising under
the Partnership Agreements), other than those which have been waived,
for or relating to the registration of any Units or other securities of
the Partnership. To such counsel's knowledge, except (A) as described
in the Prospectus, (B) for restricted units granted under the
Partnership's restricted unit plan and (C) for Common Units issuable
under the Stock Issuance Agreements, there are no outstanding options
or warrants to purchase any Common Units, Class B Subordinated Units or
Class C Units or other partnership interests in the Partnership or the
Operating Partnership.
(x) The statements in the Form 10-K under the caption
"Business - Government Regulation," insofar as they refer to statements
of law or legal conclusions, are accurate and complete in all material
respects.
(xi) None of the offering, issuance and sale by the Partnership
of the Securities, the execution, delivery and performance by the
Heritage Parties of this Agreement or the consummation of the
transactions contemplated hereby (A) constitutes or 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
bond, debenture, note or any other evidence of indebtedness, indenture
or any other material instrument known to such counsel to which a
Heritage Party or one of its subsidiaries is a party or by which any
one of them may be bound (other than any other agreement filed or
incorporated by reference as an exhibit to the Registration Statement),
(B) violates or will violate any order, judgment, decree or injunction
of any court or governmental agency or body known to such counsel
directed to any of them or any of their properties in a proceeding to
which any of them or their property is a party, or (C) violates or will
violate any Oklahoma statute, law or
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regulation applicable to any of the Heritage Parties or any of their
subsidiaries or any of their respective properties, which in the case
of clauses (A), (B) or (C) would reasonably be expected to have a
material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Partnership and its subsidiaries, taken as a whole whether or not
arising from transactions in the ordinary course of business.
(xii) No permit, consent, approval, authorization, order,
registration, filing or qualification of or with any Oklahoma court,
governmental agency or body having jurisdiction over the Heritage
Parties or any of their respective properties is required for the
offering, issuance and sale by the Partnership of the Securities, the
execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated by this Agreement, except
as may be required under state securities or "Blue Sky" laws, as to
which counsel need not express any opinion.
(xiii) To the knowledge of such counsel, none of the Heritage
Parties is in (A) breach or violation of its partnership agreement,
certificate of limited partnership, articles or certificate of
incorporation or bylaws or other organizational documents or (B)
default (and no event has occurred which, with notice or lapse of time
or both, would constitute such a default) or violation in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which it is a party
or by which it or any of its properties may be bound which breach,
default or violation would, if continued, have a Material Adverse
Effect, or could materially impair the ability of any of the Heritage
Parties to perform their obligations under this Agreement. (xiv) ____
Except as described in the Prospectus, to the knowledge of such
counsel, there is no litigation, proceeding or governmental
investigation pending or threatened against any of the Heritage Parties
or any of their subsidiaries which, if adversely determined to such
Heritage Parties, is reasonably likely to have a Material Adverse
Effect.
(xv) To the knowledge of such counsel, without independent
investigation, each of the Heritage Parties and their subsidiaries has
such permits, consents, licenses, franchises and authorizations
("permits") issued by the appropriate federal, state or local
governmental or regulatory authorities as are necessary to own or lease
its properties and to conduct its business in the manner described in
the Prospectus, subject to such qualifications as may be set forth in
the Prospectus, and except for such permits which, if not obtained
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and, to the knowledge of such
counsel, without independent investigation, none of the
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Heritage Parties or their subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
permits which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected
to have a Material Adverse Effect.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Heritage Parties
and the independent public accountants of the Partnership and your
representatives, at which the contents of the Registration Statement and
the Prospectus and related matters were discussed and, although such
counsel has not independently verified, is not passing upon, and is not
assuming responsibility for the accuracy, completeness or fairness of the
statements contained in, the Registration Statement and the Prospectus
(except to the extent specified in the foregoing opinion), no facts have
come to such counsel's attention that lead such counsel to believe that the
Registration Statement or any further amendment thereto made by the
Partnership prior to such Closing Date (other than (i) the financial
statements included or incorporated by reference therein, including the
notes and schedules thereto and the report of independent public
accountants thereon, (ii) the other historical and pro forma financial
information and the statistical and accounting information included or
incorporated by reference therein and (iii) the exhibits thereto, as to
which such counsel need express no opinion), as of its effective date
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any further
amendment or supplement thereto made by the Partnership prior to such
Closing Date (other than (i) the financial statements included or
incorporated by reference therein, including the notes and schedules
thereto and the report of independent public accountants thereon and (ii)
the other historical and pro forma financial information and the
statistical and accounting information included or incorporated by
reference therein, as to which such counsel need express no opinion) as of
its issue date and the Closing Date contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may (i) rely in respect of matters
of fact upon certificates of officers and employees of the General Partner
and upon information obtained from public officials, (ii) assume that all
documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures
on all documents examined by such counsel are genuine, (iii) state that
they express no opinion with respect to state or local taxes or tax
statutes or municipal ordinances to which any of the limited partners of
the Partnership or any of the Heritage Parties may be subject, (iv) state
that their opinion is limited to federal laws and the laws of the State of
Oklahoma and (v) with respect to the opinions expressed in paragraphs (i),
(iv), (v) and (iv) above as to the due qualification of and registrations
as a foreign limited partnership or foreign corporation, of each of the
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Heritage Parties or their subsidiaries, state that such opinions are based
solely upon certificates of foreign qualification and registration provided
by the Secretaries of State of the States listed on Exhibit A to such
opinion, each of which shall be dated as of a date not more than 14 days
prior to the Closing date and shall be provided to you.
(d) The Representatives shall have received from Xxxxxxx & Xxxxx
L.L.P., counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the
Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Heritage Parties
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(e) The General Partner shall have furnished to the Representatives
a certificate of the General Partner, signed by the Chairman of the Board
or the President and the principal financial or accounting officer of the
General Partner, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Heritage
Parties in this Agreement are true and correct on and as of the Closing
Date with the same effect as if made on the Closing Date and the
Heritage Parties have complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior
to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the General Partner's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus (exclusive of
any supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Partnership and its subsidiaries, taken as a whole
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(f) The Partnership shall have requested and caused Xxxxxx Xxxxxxxx
LLP to have furnished to the Representatives, at the Execution Time and at
the Closing Date, letters, dated respectively as of the Execution Time and
as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent public accountants
within the meaning of
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the Act and the Exchange Act and the respective applicable rules and
regulations adopted by the Commission thereunder and that they have
performed a review of the unaudited interim financial information of the
Partnership for the nine-month period ended May 31, 2001, and as at May 31,
2001 in accordance with Statement on Auditing Standards No. 71, and stating
in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statement and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Partnership and its subsidiaries;
their limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim
financial information for the nine-month period ended May 31, 2001, and
as at May 31, 2001, incorporated by reference in the Registration
Statement and the Prospectus; carrying out certain specified procedures
(but not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors, the Acquisition
Committee, Audit Committee or other governing committee of the
Partnership; and inquiries of certain officials of the Partnership who
have responsibility for financial and accounting matters of the
Partnership as to transactions and events subsequent to August 31,
2000, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects with
applicable accounting requirements of the Act and with the
related rules and regulations adopted by the Commission with
respect to financial statements included or incorporated by
reference in quarterly reports on Form 10-Q under the Exchange
Act; and said unaudited financial statements are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to May 31, 2001,
there were any changes, at a specified date not more than five
days prior to the date of the letter, in the long-term debt of
the Partnership and its subsidiaries or capitalization of the
Partnership
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or decreases in the partners' capital as compared with the
amounts shown on the May 31, 2001, consolidated balance sheet
included or incorporated by reference in the Registration
Statement and the Prospectus, or for the period from June 1, 2001
to such specified date there were any decreases, as compared with
the corresponding period in revenues, income before income taxes,
in total, operating income or income from trading activities,
minority interest or basic and diluted net income per common unit
of the Partnership and its subsidiaries, except in all instances
for changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the
Partnership as to the significance thereof unless said
explanation is not deemed necessary by the Representatives;
(3) the information included or incorporated by
reference in the Registration Statement and Prospectus in
response to Regulation S-K, Item 301 (Selected Financial Data) is
not in conformity with the applicable disclosure requirements of
Regulation S-K; or
(4) If "capsule" information add: the unaudited amounts of
the capsule information, if any, included in the Prospectus under
the heading "Recent Financial Developments" do not agree with the
amounts set forth in the unaudited financial statements for the
same periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus or did not conform with
generally accepted accounting principles;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Partnership and its subsidiaries) set
forth in the Registration Statement and the Prospectus, including the
information set forth under the captions "Selected Financial
Information" in the Prospectus, the information included or
incorporated by reference in Items 1, 2, 6, 7 and 11 of the
Partnership's Annual Report on Form 10-K, incorporated by reference in
the Registration Statement and the Prospectus, and the information
included in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or incorporated by
reference in the Partnership's Quarterly Reports on Form 10-Q,
incorporated by reference in the Registration Statement and the
Prospectus, agrees with the accounting records of the Partnership and
its subsidiaries, excluding any questions of legal interpretation; and
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(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures; inquiries of
certain officials of the Partnership and the acquired companies who
have responsibility for financial and accounting matters; and proving
the arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the pro forma financial statements,
nothing came to their attention which caused them to believe that the
pro forma financial statements do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (f) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Partnership and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
(h) Prior to the Closing Date, the Heritage Parties shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(i) The Securities shall have been listed and admitted and authorized
for trading on the New York Stock Exchange, and satisfactory evidence of
such actions shall have been provided to the Representatives.
(j) At the Execution Time, the General Partner shall have furnished
to the Representatives a letter substantially in the form of Exhibit A
hereto from each executive officer and director of the General Partner and
U.S. Propane addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have
been
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fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Partnership in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters,
at 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Heritage Parties to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Partnership will reimburse the
Underwriters severally through Xxxxxxx Xxxxx Xxxxxx Inc. on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
8. Indemnification and Contribution.
(a) The Heritage Parties agree to, jointly and severally, indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, to which they
or any of them 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, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in
any amendment thereof, or in any Preliminary Prospectus or the Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Heritage Parties
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information
furnished to the Heritage Parties by or on behalf of any Underwriter
through the
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Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Heritage Parties
may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless each Heritage Party, each of the General Partner's
directors, each of the General Partner's officers who signs the
Registration Statement, and each person who controls a Heritage Party
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from each Heritage Party to each
Underwriter, but only with reference to written information relating to
such Underwriter furnished to each Heritage Party by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise
have. The Heritage Parties acknowledge that the statements set forth in the
last paragraph of the cover page regarding delivery of the Securities and,
under the heading "Underwriting" or "Plan of Distribution", (i) the list of
Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances and
(iii) the paragraphs related to stabilization, syndicate covering
transactions and penalty bids in any Preliminary Prospectus and the
Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary
Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the right
to employ separate counsel (including local counsel), and the indemnifying
party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would, based on advice of counsel to the
indemnified party, present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such action
include
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both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded, based on advice from its counsel,
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such
action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Heritage Parties jointly and
severally and the Underwriters severally agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Heritage Parties and one or more
of the Underwriters may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Heritage Parties on the one
hand and by the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to
the offering of the Securities) be responsible for any amount in excess of
the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Heritage
Parties jointly and severally and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Heritage Parties on
the one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Heritage
Parties shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by it, and benefits received
by the Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of
the Prospectus. Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by Heritage Parties on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Heritage Parties and
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the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee
and agent of an Underwriter shall have the same rights to contribution as
such Underwriter, and each person who controls a Heritage Party within the
meaning of either the Act or the Exchange Act, each officer of the General
Partner who shall have signed the Registration Statement and each director
of the General Partner shall have the same rights to contribution as the
General Partner, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Heritage Parties. In the event of a default by any Underwriter as set forth
in this Section 9, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Partnership and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Heritage
Parties prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in the equity securities of the Partnership shall
have been suspended by the Commission or the New York Stock Exchange or trading
in securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by federal or New York
State authorities or (iii) there shall have occurred any outbreak or
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escalation of hostilities, declaration by the United States of a national
emergency or war, or other calamity or crisis the effect of which on financial
markets is such as to make it, in the sole judgment of the Representatives,
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Prospectus (exclusive of any supplement
thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Heritage Parties or their officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Heritage
Parties or any of the officers, directors, employees, agents or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Barney Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Xxxxxx
Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General
Counsel; or, if sent to the Partnership, will be mailed, delivered or telefaxed
to (000) 000-0000 and confirmed to it at (000) 000-0000, attention of the
President.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
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"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus referred
to in paragraph 1(a) above.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities included in the Registration Statement at the
Effective Date.
"Registration Statement" shall mean the registration statement referred
to in paragraph 1(a) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the case
may be.
"Rule 424"and "Rule 462" refer to such rules under the Act.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the offering covered by the registration statement referred to in Section 1(a)
hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Heritage Parties and the several Underwriters.
Very truly yours,
Heritage Propane Partners, L.P.
By: Heritage Holdings, Inc.
its General Partner
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Heritage Operating, L.P.
By: Heritage Holdings, Inc.
its General Partner
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Heritage Holdings, Inc.
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Heritage Parties and the several Underwriters.
Very truly yours,
Heritage Propane Partners, L.P.
By: Heritage Holdings, Inc.
its General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Vice President and
Chief Financial Officer
-------------------------------
Heritage Operating, L.P.
By: Heritage Holdings, Inc.
its General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Vice President and
Chief Financial Officer
-------------------------------
Heritage Holdings, Inc.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------
Title: Vice President and
Chief Financial Officer
-------------------------------
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxxx & Sons, Inc.
Xxxx Xxxxxxxx Incorporated
First Union Securities, Inc.
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------
Title: Director
--------------------------------------
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
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[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
Heritage Propane Partners, L.P.
Public Offering of Common Stock
, 2001
Xxxxxxx Xxxxx Barney Inc.
X.X. Xxxxxxx & Sons, Inc.
Xxxx Xxxxxxxx Incorporated
First Union Securities, Inc.
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Heritage Propane
Partners, L.P., a Delaware limited partnership (the "Partnership"), and each of
you as representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Units (the "Common Units"), of the
Partnership.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Barney Inc., offer, sell, contract to sell, pledge or
otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned), directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
equity interests of the Partnership or any securities convertible into or
exercisable or exchangeable for such equity interests, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of the Underwriting Agreement, other than Common Units disposed of as bona fide
gifts approved by Xxxxxxx Xxxxx Xxxxxx Inc.
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43
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
[SIGNATURE OF OFFICER, DIRECTOR OR
MAJOR STOCKHOLDER]
[NAME AND ADDRESS OF OFFICER, DIRECTOR
OR MAJOR STOCKHOLDER]
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EXHIBIT B
Entity Jurisdiction in which registered or qualified
------ ---------------------------------------------
Partnership Delaware, Oklahoma
Operating Partnership Arizona, Alabama, California, Colorado, Delaware, Florida,
Georgia, Idaho, Kentucky, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Montana, Nevada, New Hampshire, New
Jersey, New Mexico, New York, North Carolina, Oklahoma,
Oregon, Pennsylvania, South Carolina, Tennessee, Texas,
Vermont, Washington
General Partner Arizona, Alabama, California, Colorado, Delaware, Florida,
Georgia, Idaho, Kentucky, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Montana, Nevada, New Hampshire, New
Jersey, New Mexico, New York, North Carolina, Oklahoma,
Oregon, Pennsylvania, South Carolina, Tennessee, Texas,
Vermont, Washington
Heritage Service Corp. Arizona, California, Colorado, Delaware, Florida, Idaho,
Massachusetts, Michigan, Minnesota, Montana, New Mexico,
North Carolina, Oklahoma, Oregon, South Carolina, Texas,
Washington
Guilford Gas, Inc. North Carolina
Energy North Propane, Inc. New Hampshire
VGS Propane, L.L.C. Vermont
AGL Propane, L.L.C. Alabama, Georgia, North Carolina, Tennessee
Peoples Gas Company, L.L.C. Delaware, Florida, Georgia
United Cities Propane Gas, L.L.C. Alabama, Delaware, Illinois, Indiana, Kentucky, North
Carolina, Ohio, Tennessee, Virginia
Retail Propane Company, L.L.C. Delaware, Georgia, Mississippi, North Carolina, South
Carolina, Tennessee
Heritage Energy Resources, L.L.C. Oklahoma
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SCHEDULE I
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
Xxxxxxx Xxxxx Xxxxxx Inc.................... 625,000
X.X. Xxxxxxx & Sons, Inc.................... 625,000
Xxxx Xxxxxxxx Incorporated.................. 625,000
First Union Securities, Inc................. 625,000
-------
Total..................... 2,500,000
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