EXHIBIT 1.1
DRAFT ________, 2002
1,400,000 Common Units
UNDERWRITING AGREEMENT
----------------------
_______, 2002
X.X. Xxxxxxx & Sons, Inc.
[Other Co-Managers]
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, Inergy, L.P., a Delaware limited partnership (the
"Partnership"), Inergy Propane, LLC, a Delaware limited liability company (the
"Operating Company"), New Inergy Propane, LLC, a Delaware limited liability
company ("New Propane"), IPCH Acquisition Corp., a Delaware corporation
("Acquisition Corp."), Inergy Partners, LLC, a Delaware limited liability
company (the "Non-Managing General Partner"), Inergy GP, LLC, a Delaware limited
liability company (the "Managing General Partner") (the Managing General Partner
and the Non-Managing General Partner are sometimes collectively referred to
herein as the "General Partners"), Inergy Holdings, LLC, a Delaware limited
liability company ("Holdings"), Inergy Sales & Service, Inc., a Delaware
corporation ("Service Sub"), L&L Transportation, LLC, a Delaware limited
liability company ("L&L Transportation"), Inergy Transportation, LLC, a Delaware
limited liability company ("Inergy Transportation") and the persons listed on
Schedule I attached hereto (the "Selling Unitholders"), hereby address you as
the "Underwriters" and hereby confirm their agreement with the Underwriters as
set forth below. The Partnership, the Operating Company, Service Sub, L&L
Transportation and Inergy Transportation are referred to as the "Partnership
Group." L&L Transportation and Inergy Transportation are sometimes collectively
referred to herein as the "Operating Subs." The Partnership, the Operating
Company, New Propane, Acquisition Corp., the General Partners, Holdings, Service
Sub and the Operating Subs are referred to as the "Inergy Parties." The Inergy
Parties, Xxxxxx Oil Company of Xxxxxxxx County, Inc., a North Carolina
corporation ("Xxxxxx"), and Rolesville Gas and Oil Company, Inc., a North
Carolina corporation ("Rolesville"), are collectively referred to herein as the
"Inergy Entities."
It is understood and agreed by all parties that the Partnership was formed
to acquire, own and operate the business and assets of subsidiaries of Holdings.
The partnership agreement of the Partnership was adopted by the Managing General
Partner and the Non-Managing General Partner, in its capacity as the Non-
Managing General Partner and as the organizational limited partner of the
Partnership (the "Organizational Limited Partner"), on March 7, 2001 (as the
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same has been and may be amended or restated at or prior to the Closing Date,
the "Partnership Agreement"). The Partnership operates its business through the
Operating Company. The Operating Company operates its business through itself,
the Operating Subs and Service Sub. The Managing General Partner serves as the
managing general partner of the Partnership. The Non-Managing General Partner
serves as the non-managing general partner of the Partnership.
1. Description of Common Units. The Partnership and the Selling
Unitholders propose to issue and sell to the Underwriter an aggregate of
1,400,000 common units (the "Firm Units") representing limited partner interests
in the Partnership (the "Common Units"). The Firm Units consist of 1,054,741
Common Units to be issued and sold by the Partnership, and 345,259 Common Units
to be sold by the Selling Unitholders. Solely for the purpose of covering over-
allotments in the sale of the Firm Units, the Partnership further proposes to
grant to the Underwriters the right to purchase up to an additional 210,000
Common Units (the "Option Units"), as provided in Section 3 of this Agreement.
The Firm Units and the Option Units are herein sometimes referred to as the
"Units" and are more fully described in the Prospectus hereinafter defined.
2. Purchase, Sale and Delivery of Firm Units. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Partnership and the Selling
Unitholders agree, severally and not jointly, to sell to the Underwriters, and
each such Underwriter agrees, severally and not jointly, (a) to purchase from
the Partnership and the Selling Unitholders, at a purchase price of [$33.00] per
unit, the number of Firm Units set forth opposite the name of such Underwriter
in Schedule II hereto and (b) to purchase from the Partnership any additional
number of Option Units which such Underwriter may become obligated to purchase
pursuant to Section 3 hereof.
Delivery of the Firm Units will be in book-entry form through the
facilities of The Depository Trust Company, New York, New York ("DTC").
Delivery of the documents required by Section 7 hereof with respect to the Units
shall be made at or prior to 11:00 a.m. on __________, 2002 at Xxxxxx & Xxxxxx
LLP, 2300 First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000-0000 or at such
other place as may be agreed upon between you and the Partnership (the "Place of
Closing"), or at such other time and date not later than five full business days
thereafter as you and the Partnership may agree, such time and date of payment
and delivery being herein called the "Closing Date."
The Partnership will cause its transfer agent to deposit as original issue
the Firm Units pursuant to the Full Fast Delivery Program of the DTC.
It is understood that an Underwriter, individually, may (but shall not be
obligated to) make payment on behalf of the other Underwriters whose funds shall
not have been received prior to the Closing Date for Units to be purchased by
such Underwriter. Any such payment by an Underwriter shall not relieve the
other Underwriters of any of their obligations hereunder.
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It is understood that the Underwriters propose to offer the Units to the
public upon the terms and conditions set forth in the Registration Statement
hereinafter defined.
3. Purchase, Sale and Delivery of the Option Units. The Partnership
hereby grants an option to the Underwriters to purchase from the Partnership up
to 210,000 Option Units, on the same terms and conditions as the Firm Units;
provided, however, that such option may be exercised only for the purpose of
covering any over-allotments that may be made by them in the sale of the Firm
Units. No Option Units shall be sold or delivered unless the Firm Units
previously have been, or simultaneously are, sold and delivered.
The option is exercisable by you at any time, and from time to time, before
the expiration of 30 days from the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next day thereunder when The
Nasdaq National Market (the "Nasdaq") is open for trading), for the purchase of
all or part of the Option Units covered thereby, by notice given by you to the
Partnership in the manner provided in Section 14 hereof, setting forth the
number of Option Units as to which the Underwriters are exercising the option,
and the date of delivery of said Option Units, which date shall not be more than
five business days after such notice unless otherwise agreed to by the parties.
You may terminate the option at any time, as to any unexercised portion thereof,
by giving written notice to the Partnership to such effect.
You shall make such allocation of the Option Units among the Underwriters
as may be required to eliminate purchases of fractional units.
Delivery of the Option Units will be in book-entry form through the
facilities of DTC. Delivery of the documents required by Section 8 hereof with
respect to the Units shall be made at the Place of Closing at or prior to 11:00
a.m. on the date designated in the notice given by you as provided above, or at
such other time and date as you and the Partnership may agree (which may be the
same as the Closing Date), such time and date of payment and delivery being
herein called the "Option Closing Date." On the Option Closing Date, the
Partnership shall provide the Underwriters such representations, warranties,
agreements, opinions, letters, certificates and covenants with respect to the
Option Units as are required to be delivered on the Closing Date with respect to
the Firm Units.
The Partnership will cause its transfer agent to deposit as original issue
the Option Units pursuant to the Full Fast Delivery Program of the DTC.
4. Representations, Warranties and Agreements of the Inergy Parties. The
Inergy Parties jointly and severally represent and warrant to and agree with
each Underwriter that:
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(a) Definitions. A registration statement (Registration
No.[__________]) on Form S-1 with respect to the Units, including a
preliminary prospectus, and such amendments to such registration statement
as may have been required to the date of this Agreement, has been prepared
by the Partnership pursuant to and in conformity with the requirements of
the Securities Act of 1933, as amended (the "1933 Act"), and the rules and
regulations thereunder (the "1933 Act Rules and Regulations") of the
Securities and Exchange Commission (the "SEC") and has been filed and
declared effective by the SEC under the 1933 Act. Copies of such
registration statement, including any amendments thereto, each related
preliminary prospectus contained therein, and the exhibits, financial
statements and schedules thereto have heretofore been delivered by the
Partnership to you. A final prospectus containing information permitted to
be omitted at the time of effectiveness by Rule 430A of the 1933 Act Rules
and Regulations will be filed promptly by the Partnership with the SEC in
accordance with Rule 424(b) of the 1933 Act Rules and Regulations. The
term "Registration Statement" as used herein means the registration
statement as amended at the time it became effective under the 1933 Act
(the "Effective Date"), including financial statements and all exhibits
and, if applicable, the information deemed to be included by Rule 430A of
the 1933 Act Rules and Regulations. If it is contemplated, at the time
this Agreement is executed, that a post-effective amendment to such
registration statement will be filed and must be declared effective before
the offering of Units may commence, the term "Registration Statement" as
used herein means the registration statement as amended by said post-
effective amendment. If an abbreviated registration statement is prepared
and filed with the SEC in accordance with Rule 462(b) or Rule 462(d) under
the 1933 Act (an "Abbreviated Registration Statement"), the term
"Registration Statement" as used in this Agreement includes the Abbreviated
Registration Statement. The term "Prospectus" as used herein means the
prospectus as first filed with the SEC pursuant to Rule 424(b) of the 1933
Act Rules and Regulations. The term "Preliminary Prospectus" as used
herein shall mean the preliminary prospectus, dated __________, 2002,
relating to the Units as such preliminary prospectus shall have been
amended from time to time prior to the date of the Prospectus. For
purposes of this Agreement, the words "amend," "amendment," "amended,"
"supplement" or "supplemented" with respect to the Registration Statement
or the Prospectus shall mean amendments or supplements to the Registration
Statement or the Prospectus, as the case may be.
(b) No Material Misstatements or Omissions. Neither the SEC nor any
state or other jurisdiction or other regulatory body has issued, and
neither is, to the knowledge of the Inergy Parties, threatening to issue,
any stop order under the 1933 Act or other order suspending the
effectiveness of the Registration Statement (as amended or supplemented) or
preventing or suspending the use of the Preliminary Prospectus or the
Prospectus or suspending the qualification or registration of the Units for
offering or sale in any jurisdiction nor instituted or, to the knowledge of
the Inergy Parties, threatened to institute proceedings for any such
purpose. The Registration Statement, in the form in
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which it became effective and also in such form as it may be when any post-
effective amendment thereto becomes effective, and the Prospectus comply or
will comply, as the case may be, in all material respects with the
requirements of the 1933 Act and the 1933 Act Rules and Regulations.
Neither the Registration Statement nor any amendment thereto, as of the
applicable effective date, contains or will contain, as the case may be,
any untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, not misleading, and neither the Preliminary Prospectus,
the Prospectus nor any supplement thereto contains or will contain, as the
case may be, any untrue statement of a material fact or omits or will 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;
provided, however, that the Partnership makes no representation or warranty
as to information contained in or omitted from the Registration Statement,
the Preliminary Prospectus or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Partnership relating to the Underwriters by or on behalf
of the Underwriters expressly for use in the preparation thereof (as
provided in Section 15 hereof). Each of the statements made by the
Partnership in such documents within the coverage of Rule 175(b) of the
1933 Act Rules and Regulations, including (but not limited to) any
statements with respect to future available cash or future cash
distributions of the Partnership or the anticipated ratio of taxable income
to distributions was made or will be made with a reasonable basis and in
good faith.
(c) Formation and Due Qualification of the Partnership. The
Partnership has been duly formed and is validly existing in good standing
as a limited partnership under the Delaware Revised Uniform Limited
Partnership Act ("Delaware LP Act") with full partnership power and
authority to own or lease its properties to be owned or leased at the
Closing Date and to conduct its business to be conducted at the Closing
Date in all material respects as described in the Registration Statement
and the Prospectus. The Partnership is duly registered or qualified as a
foreign limited partnership for the transaction of business under the laws
of each jurisdiction in which the character of the business conducted by it
or the nature or location of the properties owned or leased by it makes
such registration or qualification necessary, except where the failure so
to register or qualify would not (i) have a material adverse effect on the
business, financial condition or results of operations of the Partnership
Group, taken as a whole ("Material Adverse Effect"), or (ii) subject the
limited partners of the Partnership to any material liability or
disability.
(d) Formation and Due Qualification of Holdings, New Propane, the
Operating Company and the Operating Subs. Each of Holdings, New Propane,
the Operating Company and the Operating Subs has been duly formed and is
validly existing in good standing as a limited liability company under the
Delaware Limited Liability
5
Company Act (the "Delaware LLC Act") with full limited liability company
power and authority to own or lease its properties to be owned or leased at
the Closing Date and to conduct its business to be conducted at the Closing
Date, in each case in all material respects as described in the
Registration Statement and the Prospectus. Each of Holdings, New Propane,
the Operating Company and the Operating Subs is duly registered or
qualified as a foreign limited liability company for the transaction of
business under the laws of each jurisdiction in which the character of the
business conducted by it or the nature or location of the properties owned
or leased by it makes such registration or qualification necessary, except
where the failure so to register or qualify would not (i) have a Material
Adverse Effect or (ii) subject the limited partners of the Partnership to
any material liability or disability.
(e) Formation and Due Qualification of the General Partners. Each of
the General Partners has been duly formed and is validly existing in good
standing as a limited liability company under the Delaware LLC Act with
full limited liability company power and authority to own or lease its
properties to be owned or leased at the Closing Date, to conduct its
business to be conducted at the Closing Date and to act as a general
partner of the Partnership, in each case in all material respects as
described in the Registration Statement and the Prospectus. Each of the
General Partners is duly registered or qualified as a foreign limited
liability company for the transaction of business under the laws of each
jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to
register or qualify would not (i) have a Material Adverse Effect or (ii)
subject the limited partners of the Partnership to any material liability
or disability.
(f) Formation and Due Qualification of Service Sub and Acquisition
Corp. Each of Service Sub and Acquisition Corp. has been duly incorporated
and is validly existing in good standing under the Delaware General
Corporation Law ("DGCL") with full corporate power and authority to own or
lease its properties to be owned or leased at the Closing Date and to
conduct its business to be conducted at the Closing Date, in all material
respects as described in the Registration Statement and the Prospectus.
Each of Service Sub and Acquisition Corp. is duly registered or qualified
as a foreign corporation for the transaction of business under the laws of
each jurisdiction in which the character of the business conducted by it or
the nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to
register or qualify would not (i) have a Material Adverse Effect or (ii)
subject the limited partners of the Partnership to any material liability
or disability.
(g) Ownership of the General Partner Interests in the Partnership.
The Managing General Partner and the Non-Managing General Partner are the
sole general partners of the Partnership. The Non-Managing General Partner
owns a 2% general
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partner interest and the Managing General Partner owns a non-economic,
managing general partner interest; such general partner interests have been
duly authorized and validly issued in accordance with the Partnership
Agreement; and each General Partner owns its general partner interest free
and clear of all liens, encumbrances, security interests, equities, charges
or claims.
(h) Ownership of the Subordinated Units, Common Units and the
Incentive Distribution Rights. (i) New Propane owns 959,954 senior
subordinated units ("Senior Subordinated Units") representing senior
subordinated limited partnership interests in the Partnership and 507,063
junior subordinated units ("Junior Subordinated Units") representing junior
subordinated limited partnership interests in the Partnership (the Junior
Subordinated Units and the Senior Subordinated Units are collectively
referred to herein as the "Subordinated Units"), (ii) the persons and
entities listed on Schedule III collectively own 2,353,413 Senior
Subordinated Units and 65,479 Junior Subordinated Units, (iii) Acquisition
Corp. owns 394,601 Common Units, and (iv) Holdings owns 10,000 Common Units
and all of the incentive distribution rights, as defined in the Partnership
Agreement (the "Incentive Distribution Rights"); and New Propane owns its
Subordinated Units and Holdings owns its Common Units and the Incentive
Distribution Rights free and clear of all liens, encumbrances (except
restrictions on transferability as described in the Prospectus), security
interests, charges or claims.
(i) Valid Issuance of the Common Units. At the Closing Date, there
will be issued to the Underwriters the Firm Units (assuming no purchase by
the Underwriters of Option Units); at the Closing Date or the Option
Closing Date, as the case may be, the Firm Units or the Option Units, as
the case may be, and the limited partner interests represented thereby, and
all outstanding Common Units, Subordinated Units and the Incentive
Distribution Rights of the Partnership, including without limitation the
Firm Units to be sold by the Selling Unitholders hereunder, will be duly
authorized by 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 in the Prospectus
under the caption "The Partnership Agreement--Limited Liability"); and
other than the Subordinated Units and the Incentive Distribution Rights,
the Units and the Common Units sold to the public in connection with the
Partnership's initial public offering will be the only limited partner
interests of the Partnership issued and outstanding at the Closing Date or
the Option Closing Date.
(j) Ownership of the Membership Interests in the Operating Company.
The Partnership owns 100% of the issued and outstanding membership
interests in the Operating Company; such membership interests have been
duly authorized and validly issued in accordance with the limited liability
company agreement of the Operating
7
Company (the "Operating Company LLC Agreement") and are fully paid (to the
extent required under the Operating Company LLC Agreement) and
nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and the Partnership owns its membership
interests free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(k) Ownership of Service Sub. The Operating Company owns 100% of the
issued and outstanding capital stock of Service Sub; such capital stock has
been duly authorized and validly issued and is fully paid and
nonassessable; and the Operating Company owns such capital stock free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(l) Ownership of the Operating Subs. The Operating Company owns 100%
of the issued and outstanding membership interests in each of the Operating
Subs; such membership interests have been duly authorized and validly
issued in accordance with the limited liability company agreements of the
Operating Subs (as the same may be amended or restated at or prior to the
Closing Date, the "Operating Subs LLC Agreements") and are fully paid (to
the extent required under the Operating Subs LLC Agreements) and
nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and the Operating Company owns such
membership interests free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(m) Ownership of New Propane. The Non-Managing General Partner owns a
100% common membership interest in New Propane, Xxxxxx owns 48.4% of the
preferred membership interests in New Propane, and Rolesville owns 51.6% of
the preferred membership interests in New Propane; such membership
interests have been duly authorized and validly issued in accordance with
New Propane's limited liability company agreement (as the same may be
amended or restated at or prior to the Closing Date, the "New Propane LLC
Agreement") and are fully paid (to the extent required under the New
Propane LLC Agreement) and nonassessable (except as such nonassessability
may be affected by Section 18-607 of the Delaware LLC Act); and the Non-
Managing General Partner, Xxxxxx and Rolesville own such membership
interests free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(n) Ownership of the Managing General Partner. Holdings owns 100% of
the issued and outstanding membership interests in the Managing General
Partner; such membership interests have been duly authorized and validly
issued in accordance with the Managing General Partner's limited liability
company agreement (as the same may be amended or restated at or prior to
the Closing Date, the "Managing General Partner LLC Agreement") and are
fully paid (to the extent required under the Managing General Partner LLC
Agreement) and nonassessable (except as such nonassessability may be
affected by Section 18-607 of the Delaware LLC Act); and Holdings owns such
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membership interests free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(o) Ownership of the Non-Managing General Partner. Holdings owns 100%
of the issued and outstanding common membership interests in the Non-
Managing General Partner. Such membership interests have been duly
authorized and validly issued in accordance with the Non-Managing General
Partner's limited liability company agreement (as the same may be amended
or restated at or prior to the Closing Date, the "Non-Managing General
Partner LLC Agreement") and are fully paid (to the extent required under
the Non-Managing General Partner LLC Agreement) and nonassessable (except
as such nonassessability may be affected by Section 18-607 of the Delaware
LLC Act); and Holdings owns its membership interests free and clear of all
liens, encumbrances, security interests, equities, charges or claims.
(p) Ownership of Acquisition Corp. Holdings owns 100% of the issued
and outstanding capital stock of Acquisition Corp.; such capital stock has
been duly authorized and validly issued and is fully paid and
nonassessable; and Holdings owns such capital stock free and clear of all
liens, encumbrances, security interests, equities, charges or claims.
(q) No Other Subsidiaries. Other than the Partnership's ownership of
its membership interest in the Operating Company and the Operating
Company's ownership of its membership interest in the Operating Subs and
its shares of capital stock of Service Sub, neither the Partnership nor the
Operating Company own, and at the Closing Date and the Option Closing Date,
neither will own, directly or indirectly, any equity or long term debt
securities of any corporation, partnership, limited liability company,
joint venture, association or other entity. Other than its ownership of
its partnership interests in the Partnership, the Managing General Partner
does not own, and at the Closing Date and the Option Closing Date will not
own, directly or indirectly, any equity or long-term debt securities of any
corporation, partnership, limited liability company, joint venture,
association or other entity.
(r) No Preemptive Rights, Registration Rights or Options. Except as
described in the Prospectus, there are no preemptive rights or other rights
to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, (i) any limited partner interests of the Partnership, (ii) any
membership interests of the Managing General Partner, the Operating
Company, or the Operating Subs or (iii) any shares of Service Sub, in each
case pursuant to the partnership agreement or limited liability company
agreement of such entity (collectively, the "Organizational Agreements") or
the certificates of incorporation, bylaws and other organizational
documents (together with the Organization Agreements, the "Organizational
Documents") or any other agreement or instrument to which any of such
entities is a party or by which any one of them may be
9
bound. Neither the filing of the Registration Statement nor the offering or
sale of the Units as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any Units or other securities
of the Partnership, other than as have been waived. Except as described in
the Prospectus, there are no outstanding options or warrants to purchase
(A) any Common Units, Senior Subordinated Units, Junior Subordinated Units
or Incentive Distribution Rights or other interests in the Partnership, (B)
any membership interests in the Managing General Partner, the Operating
Company, or the Operating Subs or (C) any shares of Service Sub.
(s) Authority and Authorization. The Partnership has all requisite
power and authority to issue, sell and deliver the Units in accordance with
and upon the terms and conditions set forth in this Agreement, the
Partnership Agreement and the Registration Statement and the Prospectus.
At the Closing Date and the Option Closing Date, all corporate, partnership
and limited liability company action, as the case may be, required to be
taken by the Inergy Entities or any of their stockholders, members or
partners for the authorization, issuance, sale and delivery of the Units
shall have been validly taken.
(t) Enforceability of the Underwriting Agreement. This Agreement has
been duly executed and delivered by each of the Inergy Parties, and
constitutes the valid and legally binding agreement of each of the Inergy
Parties, enforceable against each of the Inergy Parties in accordance with
its terms, provided that the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); provided, further, that
the indemnity and contribution provisions hereunder may be limited by
federal or state securities laws.
(u) Enforceability of Other Agreements. At or before the Closing
Date:
(i) The Partnership Agreement has been duly authorized,
executed and delivered by the General Partners and the Organizational
Limited Partner and is a valid and legally binding agreement of the General
Partners and the Organizational Limited Partner, enforceable against the
General Partners and the Organizational Limited Partner in accordance with
its terms;
(ii) The Operating Company LLC Agreement has been duly
authorized, executed and delivered by the Partnership and is a valid and
legally binding agreement of the Partnership, enforceable against it in
accordance with its terms;
(iii) The New Propane LLC Agreement has been duly authorized,
executed and delivered by the Non-Managing General Partner and will be a
valid and
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binding agreement of the Non-Managing General Partner against it in
accordance with its terms;
(iv) The Managing General Partner LLC Agreement has been duly
authorized, executed and delivered by Holdings and is a valid and legally
binding agreement of Holdings, enforceable against it in accordance with
its terms;
(v) The Non-Managing General Partner LLC Agreement has been duly
authorized, executed and delivered by Holdings and is a valid and legally
binding agreement of Holdings, enforceable against it in accordance with
its terms;
provided that, with respect to each agreement described in this Section
4(u), 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); and provided, further, that the indemnity,
contribution and exoneration provisions contained in any of such agreements
may be limited by applicable laws and public policy.
(v) No Conflicts. None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby (i)
conflicted, conflicts or will conflict with or constituted, constitutes or
will constitute a violation of the Organizational Documents, (ii)
conflicted, conflicts or will conflict with or constituted, constitutes or
will constitute a breach or violation of, or a default (or an event which,
with notice or lapse of time or both, would constitute such a default)
under any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which any of the Inergy Entities is a
party or by which any of them or any of their respective properties may be
bound, (iii) violated, violates or will violate any statute, law or
regulation or any order, judgment, decree or injunction of any court or
governmental agency or body directed to any of the Inergy Entities or any
of their properties in a proceeding to which any of them or their property
is a party or (iv) resulted, results or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of any of the Inergy Entities, which conflicts, breaches, violations or
defaults, in the case of clauses (ii), (iii) or (iv), would, individually
or in the aggregate, have a Material Adverse Effect.
(w) No Consents. No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any court,
governmental agency or body having jurisdiction over the Inergy Parties or
any of their respective properties is required for the offering, issuance
and sale by the Partnership of the Units, the execution, delivery and
performance of this Agreement or the consummation by the Inergy Entities of
the transactions contemplated by this Agreement, except (i) as described in
the
11
Prospectus, (ii) for such consents required under the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act") and state
securities or "Blue Sky" laws, (iii) for such consents which have been, or
prior to the Closing Date will be, obtained, and (iv) for such consents
which, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect.
(x) No Default. None of the Inergy Entities is (i) in violation of
its Organizational Documents, or (ii) in violation of any law, statute,
ordinance, administrative or governmental rule or regulation applicable to
it or of any decree of any court or governmental agency or body having
jurisdiction over it or (iii) in breach, default (or an event 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 in the case of clause (ii) or (iii)
would, if continued, have a Material Adverse Effect or could materially
impair the ability of any of the Inergy Parties to perform their
obligations under this Agreement. To the knowledge of the Inergy Parties,
no third party to any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which any of the Inergy Entities is a
party or by which any of them is bound or to which any of their properties
is subject, is in default under any such agreement, which breach, default
or violation would, if continued, have a Material Adverse Effect.
(y) Conformity of Securities to Descriptions in the Prospectus. The
Units, when issued and delivered against payment therefor as provided
herein will conform in all material respects to the description thereof
contained in the Prospectus.
(z) Independent Public Accountants - Ernst & Young. The accountants,
Ernst & Young LLP, who have certified or shall certify the audited
financial statements included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants with respect to the Partnership and the General Partners as
required by the 1933 Act and the applicable published rules and regulations
thereunder.
(aa) Independent Public Accountants - Xxxxxx Xxxxxxxx LLP. The
accountants, Xxxxxx Xxxxxxxx LLP, who have certified or shall certify the
audited financial statements included in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants with respect to Independent Propane Company as required by the
1933 Act and the applicable published rules and regulations thereunder.
12
(bb) Financial Statements. At March 31, 2002, the Partnership would
have had, on the consolidated pro forma basis indicated in the Prospectus
(and any amendment or supplement thereto), a capitalization as set forth
therein. The historical financial statements (including the related notes
and supporting schedules) included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) present fairly in all
material respects the financial position, results of operations and cash
flows of the entities purported to be shown thereby on the basis stated
therein at the respective dates or for the respective periods to which they
apply and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except to the extent disclosed therein. The summary historical and pro
forma information set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) under the caption
"Summary Pro Forma Financial and Operating Data and the selected historical
information set forth under the caption "Selected Historical Financial and
Operating Data" is accurately presented in all material respects and
prepared on a basis consistent with the audited and unaudited historical
consolidated financial statements and pro forma financial statements, as
applicable, from which it has been derived. The pro forma financial
statements of the Partnership included in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) have been prepared
in all material respects in accordance with the applicable accounting
requirements of Article 11 of Regulation S-X of the Commission; the
assumptions used in the preparation of such pro forma financial statements
are, in the opinion of the management of the Managing General Partner,
reasonable; and the pro forma adjustments reflected in such pro forma
financial statements have been properly applied to the historical amounts
in compilation of such pro forma financial statements.
(cc) No Material Adverse Change. None of the Inergy Parties has
sustained since the date of the latest audited financial statements
included in the Registration Statement and the Prospectus any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, investigation, order or decree, otherwise
than as set forth or contemplated in the Registration Statement and the
Prospectus. Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i)
none of the Inergy Parties 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 Partnership Group, (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 Inergy Parties 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 or affecting
13
the general affairs, business, prospects, properties, management, condition
(financial or other), partners' capital, stockholders' equity, net worth or
results of operations of the Partnership Group.
(dd) Legal Proceedings or Contracts to be Described or Filed. There
are no legal or governmental proceedings pending or, to the knowledge of
the Inergy Parties, threatened, against any of the Inergy Parties, or to
which any of the Inergy Parties 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,
and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required by the Act.
(ee) Title to Properties. The Operating Company, Service Sub and the
Operating Subs will have good and indefeasible title to all real property
and good title to all personal property described in the Prospectus to be
owned by the Operating Company, Service Sub and the Operating Subs, free
and clear of all liens, claims, security interests or other encumbrances
except (i) such as are described in the Registration Statement or
Prospectus or (ii) such as do not materially interfere with the use of such
properties taken as a whole as they have been used in the past and are
proposed to be used in the future as described in the Registration
Statement and the Prospectus. All real property and buildings held under
lease or license by the Operating Company, Service Sub and the Operating
Subs are held by the Operating Company, Service Sub and the Operating Subs
and enforceable leases or licenses with such exceptions as do not
materially interfere with the use of such properties taken as a whole as
they have been used in the past and are proposed to be used in the future
as described in the Registration Statement and the Prospectus.
(ff) Permits. Each of the Operating Company, Service Sub and the
Operating Subs has, and at the Closing Date will have, such permits,
consents, licenses, franchises, certificates and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own
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
Registration Statement and the Prospectus and except for such permits
which, if not obtained, would not, individually or in the aggregate, have a
Material Adverse Effect; each of the Operating Company, Service Sub and the
Operating Subs has fulfilled and performed all its material obligations
with respect to such permits which are due to have been fulfilled and
performed by such date and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any impairment of the rights of the holder of any such permit,
except for such revocations, terminations and impairments that would not,
individually or in the aggregate, have a Material Adverse
14
Effect, subject in each case to such qualification as may be set forth in
the Registration Statement and the Prospectus; and, except as described in
the Registration Statement and the Prospectus, none of such permits
contains any restriction that is materially burdensome to the Partnership
Group taken as a whole.
(gg) Books and Records. The Partnership (i) makes and keeps books,
records and accounts, which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of assets and (ii) maintains
systems of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(hh) Tax Returns. Each of the Inergy Parties has filed (or has
obtained extensions with respect to) all material federal, state and
foreign income and franchise tax returns required to be filed through the
date hereof, which returns are complete and correct in all material
respects, and has timely paid all taxes shown to be due pursuant to such
returns, other than those (i) which are being contested in good faith or
(ii) which, if not paid, would not have a Material Adverse Effect.
(ii) Investment Company/Public Utility Holding Company. None of the
Inergy Parties is now, and after sale of the Units to be sold by the
Partnership hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds," none of
the Inergy Parties will be, (i) an "investment company" or a company
"controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or (ii) a "public utility
company," "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" thereof, under the Public Utility Holding
Company Act of 1935, as amended.
(jj) No Environmental Problems. The Inergy Entities (i) are in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety
and the environment or imposing liability or standards of conduct
concerning any Hazardous Material (as hereinafter defined) ("Environmental
Laws"), (ii) have received all permits required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, except where
such noncompliance with Environmental Laws, failure to receive required
permits, or failure to comply with the terms and conditions of such permits
would not, individually or in the
15
aggregate, have a Material Adverse Effect. The term "Hazardous Material"
means (A) any "hazardous substance" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
(B) any "hazardous waste" as defined in the Resource Conservation and
Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material, waste or substance regulated under
or within the meaning of any other Environmental Law.
(kk) No Labor Dispute. No material labor dispute with the employees
of the Inergy Entities exists or, to the knowledge of the Inergy Parties,
is imminent.
(ll) Insurance. The Inergy Entities 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
Inergy Entities 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.
(mm) Litigation. Except as described in the Prospectus, there is (i)
no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending or,
to the knowledge of the Inergy Parties, threatened, to which any of the
Inergy Entities is or may be a party or to which the business or property
of any of the Inergy Entities is or may be subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental agency or proposed by any governmental agency and (iii) no
injunction, restraining order or order of any nature issued by a federal or
state court or foreign court of competent jurisdiction to which any of the
Inergy Entities is or may be subject, that, in the case of clauses (i),
(ii) and (iii) above, is reasonably likely to (A) individually or in the
aggregate have a Material Adverse Effect, (B) prevent or result in the
suspension of the offering and issuance of the Units, or (C) in any manner
draw into question the validity of this Agreement.
(nn) Private Placement. The sale and issuance of the Subordinated
Units and the Incentive Distribution Rights pursuant to the Partnership
Agreement are exempt from the registration requirements of the Act and the
securities laws of any state having jurisdiction with respect thereto.
(oo) No Distribution of Other Offering Materials. The Inergy Entities
have not distributed and, prior to the later to occur of (i) the Closing
Date and (ii) completion of the distribution of the Units, will not
distribute, any prospectus (as defined under the Act) in connection with
the offering and sale of the Units other than the Registration
16
Statement, the Preliminary Prospectus, the Prospectus or other materials,
if any, permitted by the Act, including Rule 134 of the general rules and
regulations thereunder.
(pp) Listing. The Units have been approved for quotation on the
Nasdaq, subject only to official notice of issuance.
(qq) Price Manipulation. Except as stated in this Agreement and the
Prospectus, the Inergy Entities and the directors, officers or controlling
persons of any such entity have not taken, and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Units to facilitate the sale or resale of the Units.
Any certificate signed by any officer of any Inergy Party and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by such Inergy Party to each Underwriter as to
the matters covered thereby.
5. Representations, Warranties and Agreements of the Selling Unitholders.
Each Selling Unitholder severally represents, warrants and agrees with each
Underwriter solely with respect to itself that:
(a) No Material Misstatements or Omissions. With respect to any
statements or omissions, if any, made in the section entitled "Selling
Unitholders" in the Registration Statement and the Prospectus in reliance
upon and in conformity with written information furnished to the
Partnership by such Selling Unitholder expressly for use therein, (i)
neither the Registration Statement nor any amendment thereto omits or will,
as of the applicable effective date, contains, or will contain, as the case
may be, any untrue statement of a material fact or omits to or will omit
state any material fact required to be stated therein or necessary to make
the statements therein, not misleading, and (ii) neither the Preliminary
Prospectus, the Prospectus nor any supplement thereto contains or will
contain, as the case may be, will contain any untrue statement of a
material fact or omits or will 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.
(b) Formation and Due Qualification of the Selling Unitholder. In the
event that such Selling Unitholder is a corporation, such Selling
Unitholder has been duly incorporated and is validly existing in good
standing as a corporation under the laws of the jurisdiction of its
incorporation; in the event that such Selling Unitholder is a limited
partnership, such Selling Unitholder has been duly formed and is validly
existing in good standing as a limited partnership under the laws of the
jurisdiction of its formation; and, in the event that such Selling
Unitholder is a limited liability company, such Selling Unitholder has been
duly formed and is validly existing under the laws as a limited liability
company of the jurisdiction of its formation.
17
(c) No Consents. No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of any court,
governmental agency or body having jurisdiction over such Selling
Unitholder or any of its respective properties is required for the
offering, issuance and sale by such Selling Unitholder of the Firm Units,
the execution, delivery and performance of this Agreement, the Power of
Attorney (the "Power of Attorney") hereinafter referred to and the Custody
Agreement (the "Custody Agreement") hereinafter referred to, except (i) as
described in the Prospectus, (ii) for such consents required under the 1933
Act, the 1934 Act and "Blue Sky" laws, (iii) for such consents which have
been, or prior to the Closing Date will be, obtained, and (iv) for such
consents which, if not obtained, would not, individually or in the
aggregate, have a Material Adverse Effect.
(d) Authority and Authorization. Such Selling Unitholder has all
requisite power, authority and capacity to issue, sell and deliver the Firm
Units in accordance with and upon the terms and conditions set forth in
this Agreement, and the Registration Statement and the Prospectus. At the
Closing Date all corporate, partnership and limited liability company
action, as the case may be, required to be taken by such Selling Unitholder
for the authorization, issuance, sale and delivery of the Firm Units shall
have been validly taken.
(f) Enforceability of this Agreement. This Agreement, the Power of
Attorney and the Custody Agreement have been duly by such Selling
Unitholder, the transactions contemplated by this Agreement have been duly
authorized by the Selling Unitholder and, when this Agreement is executed
and delivered by an Attorney-in-Fact (as defined herein) on behalf of such
Selling Unitholder, this Agreement will be duly executed and delivered, and
the Power of Attorney and the Custody Agreement constitute, and this
Agreement, when executed by an Attorney-in-Fact consistent with the Power
of Attorney, will constitute, the valid and legally binding agreements of
such Selling Unitholder enforceable against such Selling Unitholder in
accordance with their terms provided that the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
provided, further, that the indemnity and contribution provisions hereunder
may be limited by federal or state securities laws.
(g) No Conflicts. None of the offering, issuance and sale by such
Selling Unitholder of the Firm Units, the execution, delivery and
performance of this Agreement, the Power of Attorney and the Custody
Agreement or the consummation of the transactions contemplated hereby (i)
conflicted, conflicts or will conflict with or constituted, constitutes or
will constitute a violation of the organizational documents of such Selling
Unitholder, if not an individual, (ii) conflicted, conflicts or will
conflict with
18
or constituted, constitutes or will constitute a breach or violation of, or
a default (or an event which, with notice or lapse of time or both, would
constitute such a default) under any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which such
Selling Unitholder is a party or by which any of it or any of its
respective properties may be bound, (iii) violated, violates or will
violate any statute, law or regulation or any order, judgment, decree or
injunction of any court or governmental agency or body directed to such
Selling Unitholder or any of its properties in a proceeding to which it or
its property is a party or (iv) resulted, results or will result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of such Selling Unitholder which conflicts, breaches, violations
or defaults, in the case of clauses (ii), (iii) or (iv), would,
individually or in the aggregate, have a Material Adverse Effect.
(g) Title to Firm Units. The Selling Unitholder has, and immediately
prior to the transfer of the Units to the Underwriter on the Closing Date,
the Selling Unitholder will have, good and valid title to the Firm Units,
free and clear of all liens, encumbrances, equities or claims; and, upon
delivery of the Firm Units and payment therefor, as contemplated in this
Agreement, the Power of Attorney and the Custody Agreement, good and valid
title to the Firm Units, free and clear of all liens, pledges,
encumbrances, equities, or claims, will pass to the several Underwriters.
No person has any right to acquire from such Selling Unitholder any Units
to be sold hereunder and such Selling Unitholder is under no obligation,
whether absolute or contingent, to sell any such Units to any person,
except as contemplated by this Agreement.
(h) No Price Manipulation. Except as stated in this Agreement and the
Prospectus, such Selling Unitholder has not taken, and will not take,
directly or indirectly, any action to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Common Units to facilitate the sale or resale of the Firm Units.
(i) Power of Attorney. Such Selling Unitholder has placed in custody
under the Custody Agreement furnished to such Selling Unitholder and duly
executed and delivered by such Selling Unitholder to ____________, as
custodian (the "Custodian"), for delivery under this Agreement,
certificates in negotiable form representing the Firm Units to be sold by
such Selling Unitholder hereunder. Such Selling Unitholder specifically
agrees that the Firm Units represented by the certificates so held in
custody for such Selling Unitholder are subject to the interest of the
Underwriters, that the arrangements made by such Selling Unitholder for
custody are to that extent irrevocable except as provided in the Custody
Agreement and in the Power of Attorney and that the obligations of such
Selling Unitholder hereunder shall not be terminated by any act of such
Selling Unitholder, by operation of law or the occurrence of any other
event. Such Selling Unitholder has duly and irrevocably executed and
delivered a Power of Attorney appointing ___________ and _____________ as
such Selling Unitholder's Attorneys-in-
19
Fact (the "Attorneys-in-Fact") upon the terms and subject to the conditions
set forth therein to execute and deliver this Agreement and to take certain
other action on behalf of such Selling Unitholder as may be necessary or
desirable in connection with the transactions contemplated by this
Agreement and the Custody Agreement.
6. Additional Covenants. The Inergy Parties covenant and agree with the
Underwriters that:
(a) The Partnership will timely transmit copies of the Prospectus, and
any amendments or supplements thereto, to the SEC for filing pursuant to
Rule 424(b) of the 1933 Act Rules and Regulations.
(b) The Partnership will deliver to the Underwriters, and to counsel
for the Underwriters (i) a signed copy of the Registration Statement as
originally filed, including copies of exhibits thereto, of any amendments
and supplements to the Registration Statement and (ii) a signed copy of
each consent and certificate included in, or filed as an exhibit to, the
Registration Statement as so amended or supplemented; the Partnership will
deliver to the Underwriters as soon as practicable after the date of this
Agreement as many copies of the Prospectus as the Underwriters may
reasonably request for the purposes contemplated by the 1933 Act; if there
is a post-effective amendment to the Registration Statement that is not
effective under the 1933 Act, the Partnership will use its best efforts to
cause the post-effective amendment to the Registration Statement to become
effective as promptly as possible, and it will notify you, promptly after
it shall receive notice thereof, of the time when the post-effective
amendment to the Registration Statement has become effective; the
Partnership will promptly advise the Underwriters of any request of the SEC
for amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information, and of the issuance by the
SEC or any state or other jurisdiction or other regulatory body of any stop
order under the 1933 Act or other order suspending the effectiveness of the
Registration Statement (as amended or supplemented) or preventing or
suspending the use of the Preliminary Prospectus or the Prospectus or
suspending the qualification or registration of the Units for offering or
sale in any jurisdiction, and of the institution or threat of any
proceedings therefor, of which the Partnership shall have received notice
or otherwise have knowledge prior to the completion of the distribution of
the Units; and the Partnership will use its best efforts to prevent the
issuance of any such stop order or other order and, if issued, to secure
the prompt removal thereof.
(c) The Partnership will not file any amendment or supplement to the
Registration Statement, the Prospectus (or any other prospectus relating to
the Units filed pursuant to Rule 424(b) of the 1933 Act Rules and
Regulations that differs from the Prospectus as filed pursuant to such Rule
424(b)), of which the Underwriters shall not previously have been advised
or to which the Underwriters shall have reasonably objected
20
in writing after being so advised unless the Partnership shall have
determined based upon the advice of counsel that such amendment or
supplement is required by law; and the Partnership will promptly notify you
after it shall have received notice thereof of the time when any amendment
to the Registration Statement becomes effective or when any supplement to
the Prospectus has been filed.
(d) During the period when a prospectus relating to any of the Units
is required to be delivered under the 1933 Act by any Underwriter or
dealer, the Partnership will comply, at its own expense, with all
requirements imposed by the 1933 Act and the 1933 Act Rules and
Regulations, so far as necessary to permit the continuance of sales of or
dealing in the Units during such period in accordance with the provisions
hereof and as contemplated by the Prospectus.
(e) If, during the period when a prospectus relating to any of the
Units is required to be delivered under the 1933 Act by any Underwriter or
dealer, (i) any event relating to or affecting the Partnership or of which
the Partnership shall be advised in writing by the Underwriters shall occur
as a result of which, in the opinion of the Partnership or the counsel for
the Underwriters, the Prospectus as then amended or supplemented would
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 or (ii) it shall
be necessary to amend or supplement the Registration Statement or the
Prospectus to comply with the 1933 Act, the 1933 Act Rules and Regulations,
the 1934 Act or the 1934 Act Rules and Regulations, the Partnership will
forthwith at its expense prepare and file with the SEC, and furnish to the
Underwriters a reasonable number of copies of, such amendment or supplement
or other filing that will correct such statement or omission or effect such
compliance.
(f) During the period when a prospectus relating to any of the Units
is required to be delivered under the 1933 Act by the Underwriter or
dealer, the Partnership will furnish such proper information as may be
lawfully required and otherwise cooperate with you in qualifying the Units
for offer and sale under the securities or blue sky laws of such
jurisdictions as the Underwriters may reasonably designate and will file
and make such statements or reports as are or may be reasonably necessary;
provided, however, that the Partnership shall not be required to qualify as
a foreign corporation or to qualify as a dealer in securities or to file a
general consent to service of process under the laws of any jurisdiction.
(g) In accordance with Section 11(a) of the 1933 Act and Rule 158 of
the 1933 Act Rules and Regulations, the Partnership will make generally
available to its security holders, an earning statement (which need not be
audited) in reasonable detail covering the 12-month period beginning not
later than the first day of the month next
21
succeeding the month in which occurred the effective date (within the
meaning of Rule 158) of the Registration Statement as soon as practicable
after the end of such period.
(h) The Partnership will furnish to its security holders annual
reports containing financial statements audited by independent public
accountants and quarterly reports containing financial statements and
financial information which may be unaudited. The Partnership will, for a
period of two years from the Closing Date, furnish or make available to the
Underwriters a copy of each annual report, quarterly report, current report
and all other documents, reports and information furnished by the
Partnership to holders of Units or filed with any securities exchange or
market pursuant to the requirements of such exchange or market or with the
SEC pursuant to the 1933 Act or the 1934 Act. The Partnership will deliver
to the Underwriters similar reports with respect to any significant
subsidiaries, as that term is defined in the 1933 Act Rules and
Regulations, which are not consolidated in the Partnership's financial
statements. Any report, document or other information required to be
furnished under this paragraph (h) shall be furnished as soon as
practicable after such report, document or information becomes publicly
available.
(j) The Partnership, New Propane and the General Partners will not,
during the 90 days after the date of this prospectus, without the prior
written consent of X.X. Xxxxxxx & Sons, Inc., directly or indirectly, offer
for sale, contract to sell, sell, distribute, grant any option, right or
warrant to purchase, pledge, hypothecate or otherwise dispose of any Common
Units, any securities convertible into, or exercisable or exchangeable for,
Common Units (other than the Senior Subordinated Units and the Junior
Subordinated Units) or any other rights to acquire such Common Units, other
than pursuant to employee benefit plans as in existence as of the date of
the Prospectus.
(k) The Partnership will apply the proceeds from the sale of the Units
as set forth in the description under "Use of Proceeds" in the Prospectus.
(l) The Partnership will promptly provide you with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Units under the 1933 Act.
(m) The Partnership will use its best efforts to obtain approval for,
and maintain the quotation of the Units on, the Nasdaq.
(n) The Partnership will cause its directors and officers to furnish
to you, on or prior to the date of this Agreement, a letter or letters, in
form and substance satisfactory to counsel for the Underwriters, pursuant
to which each such person shall agree not to directly or indirectly, offer
for sale, contract to sell, sell, distribute, grant any option, right or
warrant to purchase, pledge, hypothecate or otherwise dispose of any Common
Xxxxx,
00
or any securities convertible into, or exercisable or exchangeable for,
Common Units (other than Senior Subordinated Units and Junior Subordinated
Units) or any other rights to acquire such Common Units, during the 90 days
after the date of the Prospectus, without the prior written consent of X.
X. Xxxxxxx & Sons, Inc.
(o) If the Partnership elects to rely on Rule 462(b) under the 1933
Act, the Partnership shall both file an Abbreviated Registration Statement
with the SEC in compliance with Rule 462(b) and pay the applicable fees in
accordance with Rule 111 of the 1933 Act by the earlier of (i) 10:00 p.m.,
New York time, on the date of this Agreement, and (ii) the time that
confirmations are given or sent, as specified by Rule 462(b)(2).
(p) The Partnership shall timely complete all required filings and
otherwise fully comply in a timely manner with all provisions of the 1934
Act, including the rules and regulations promulgated thereunder, in
connection with the registration of the Units thereunder.
7. Covenants of the Selling Unitholder. Each Selling Unitholder
severally, and not jointly, agrees:
(a) Such Selling Unitholder will furnish to you, on or prior to the
date of this Agreement, a letter or letters, in form and substance
satisfactory to counsel for the Underwriters, pursuant to which each such
Selling Unitholder shall agree not to directly or indirectly, offer for
sale, contract to sell, sell, distribute, grant any option, right or
warrant to purchase, pledge, hypothecate or otherwise dispose of any Common
Units, or any securities convertible into, or exercisable or exchangeable
for, Common Units or any other rights to acquire such Common Units, during
the 90 days after the date of the Prospectus, without the prior written
consent of X.X. Xxxxxxx & Sons, Inc.
(b) That the Firm Units to be sold by such Selling Unitholder
hereunder is subject to the interest of the Underwriter and that the
obligations of such Selling Unitholder hereunder shall not be terminated by
any act of such Selling Unitholder or by operation of law.
(c) To deliver to the Underwriter at the Closing Date a properly
completed and executed United States Treasury Department Form W-9.
(d) To pay the fees and expenses of its counsel and any transfer taxes
payable in connection with its sale of the Firm Units to the Underwriter.
23
(e) To deliver to the Underwriter a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
(f) To deliver to the Attorneys-in-Fact such documentation as the
Attorneys-in-Fact, the Partnership or the Underwriters or their counsel may
reasonably request to effectuate any of the provisions hereof, the Custody
Agreement or the Power of Attorney, all of the foregoing to be in form and
substance reasonably satisfactory to the Attorneys-in-Fact and the
Underwriters.
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase and pay for the Units, as provided herein, shall be
subject to the accuracy, as of the date hereof and as of the Closing Date (and,
if applicable, the Option Closing Date), of the representations and warranties
of the Inergy Parties and the Selling Unitholders contained herein, to the
performance by the Inergy Parties and the Selling Unitholders of their covenants
and obligations hereunder, and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective not later than 5:30 p.m., New York
time, on the date hereof, or, with your consent, at a later date and time,
not later than 1:00 p.m., New York time, on the first business day
following the date hereof, or at such later date and time as may be
approved by the Underwriters; if the Partnership has elected to rely on
Rule 462(b) under the 1933 Act, the Abbreviated Registration Statement
shall have become effective not later than the earlier of (x) 10:00 p.m.
New York time, on the date hereof, or (y) at such later date and time as
may be approved by the Underwriters. All filings required by Rule 424 and
Rule 430A of the 1933 Act Rules and Regulations shall have been made. No
stop order suspending the effectiveness of the Registration Statement,
shall have been issued and no proceeding for that purpose shall have been
initiated or, to the knowledge of the Partnership or any Underwriter,
threatened or contemplated by the SEC, and any request of the SEC for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of the Underwriters.
(b) No Underwriter shall have advised the Partnership on or prior to
the Closing Date (and, if applicable, the Option Closing Date), that the
Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to
the Underwriters, is material, or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
24
(c) On the Closing Date (and, if applicable, the Option Closing
Date), you shall have received the opinion of Xxxxxx & Xxxxxx L.L.P.,
counsel for the Partnership, addressed to you and dated the Closing Date
(and, if applicable, the Option Closing Date), to the effect that:
(i) The Partnership has been duly formed and is validly
existing in good standing as a limited partnership under the Delaware
LP Act with all necessary partnership power and authority to own or
lease its properties and to conduct its business in all material
respects as described in the Registration Statement and the
Prospectus.
(ii) The Operating Company has been duly formed and is validly
existing in good standing as a limited liability company under the
Delaware LLC Act with all necessary limited liability company power
and authority to own or lease its properties and to conduct its
business in all material respects as described in the Registration
Statement and the Prospectus.
(iii) The Managing General Partner has been duly formed and is
validly existing in good standing as a limited liability company under
the Delaware LLC Act with all necessary limited liability company
power and authority to own or lease its properties, to conduct its
business and to act as general partner of the Partnership, in each
case in all material respects as described in the Registration
Statement and the Prospectus.
(iv) The Managing General Partner and the Non-Managing General
Partner are the sole general partners of the Partnership. The Non-
Managing General Partner owns a 2% general partner interest in the
Partnership and the Managing General Partner owns a non-economic,
managing general partner interest in the Partnership; such general
partner interests have been duly authorized and validly issued in
accordance with the Partnership Agreement; and each General Partner
owns its general partner interest free and clear of all liens,
encumbrances, security interests, charges or claims (i) in respect of
which a financing statement under the Uniform Commercial Code of the
State of Delaware naming either of such General Partners as debtors is
on file in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the
Delaware LP Act.
(v) The Sponsor Units, the Incentive Distribution Rights 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
25
such nonassessability may be affected by matters described in the
Prospectus under the caption "The Partnership Agreement--Limited
Liability"); and New Propane owns 959,954 Senior Subordinated Units
and 507,063 Junior Subordinated Units and Holdings owns the Incentive
Distribution Rights and 10,000 Common Units, in each case, free and
clear of all liens, encumbrances (except restrictions on
transferability as described in the Prospectus), security interests,
charges or claims (i) in respect of which a financing statement under
the Uniform Commercial Code of the State of Delaware naming New
Propane or Holdings as debtor is on file in the office of the
Secretary of State of the State of Delaware or (ii) otherwise known to
such counsel, without independent investigation, other than those
created by or arising under the Delaware LP Act.
(vi) The Units to be issued and sold to the Underwriters by the
Partnership pursuant to this Agreement and the limited partner
interests represented thereby, and all outstanding Common Units,
Subordinated Units and the Incentive Distribution Rights of the
Partnership, including without limitation the Firm Units to be sold by
the Selling Unitholders hereunder have been duly authorized by 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 in the
Prospectus under the caption "The Partnership Agreement--Limited
Liability"); and other than the Subordinated Units and the Incentive
Distribution Rights, the Units and the Common Units sold to the public
in connection with the Partnership's initial public offering will be
the only limited partner interests of the Partnership issued and
outstanding at the Closing Date.
(vii) The Partnership owns a 100% membership interest in the
Operating Company; such membership interest has been duly authorized
and validly issued in accordance with the Operating Company LLC
Agreement and is fully paid (to the extent required under the
Operating Company LLC Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the
Prospectus under the caption "The Partnership Agreement--Limited
Liability"); and the Partnership owns its membership interest free and
clear of all liens, encumbrances, security interests, charges or
claims (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming the Partnership as
debtor is on file in the office of the Secretary of State of the State
of Delaware or (ii) otherwise known to such counsel, without
independent investigation, other than those created by or arising
under the Delaware LP Act.
26
(viii) Except as described in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, (i) any limited
partner interests of the Partnership or (ii) any membership interests
of the Managing General Partner or the Operating Company pursuant to
the Partnership Agreement, the Managing General Partner LLC Agreement
or the Operating Company LLC Agreement, respectively, or, to the
knowledge of such counsel after due inquiry, any other agreement or
instrument to which such entities are a party or by which any of them
may be bound. To the knowledge of such counsel, neither the filing of
the Registration Statement nor the offering or sale of the Units as
contemplated by this Agreement gives rise to any rights for or
relating to the registration of any Units or other securities of the
Partnership, other than as have been waived. To such counsel's
knowledge after due inquiry, except as described in the Prospectus,
there are no outstanding options or warrants to purchase (A) any
Common Units, Senior Subordinated Units, Junior Subordinated Units or
Incentive Distribution Rights or other partnership interests in the
Partnership or (B) membership interests of the Managing General
Partner or the Operating Company.
(ix) The Partnership has all requisite power and authority to
issue, sell and deliver the Units in accordance with and upon the
terms and conditions set forth in this Agreement, the Partnership
Agreement and the Registration Statement and the Prospectus in
accordance with and upon the terms and conditions set forth in the
Partnership Agreement.
(x) The Underwriting Agreement has been duly executed and
delivered by the Partnership, the Managing General Partner and the
Operating Company.
(xi) Each of the Partnership Agreement, the Managing General
Partner LLC Agreement and the Operating Company LLC Agreement has been
duly authorized and validly executed and delivered by Holdings, the
Partnership, the Managing General Partner or the Operating Company
party thereto. Each of the Partnership Agreement, the Managing
General Partner LLC Agreement and the Operating Company LLC Agreement
constitutes a valid and legally binding agreement of the parties
thereto, enforceable against such entity in accordance with its
respective terms, subject to (i) applicable 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 (ii) public
policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair
dealing.
27
(xii) None of the offering, issuance and sale by the Partnership
of the Units, the execution, delivery and performance of this
Agreement by the Partnership, the Managing General Partner and the
Operating Company, or the consummation by the Partnership, the
Managing General Partner and the Operating Company of the transactions
contemplated hereby (i) constitutes or will constitute a violation of
the Partnership Agreement, the Managing General Partner LLC Agreement
or the Operating Company LLC Agreement (ii) violates or will violate
the Delaware LP Act, the Delaware LLC Act, the DGCL or federal law or
(iii) results or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Partnership, the Managing General Partner or the Operating Company,
which breaches, violations, defaults or liens, in the case of clauses
(ii) or (iii), would, individually or in the aggregate, have a
material adverse effect on the condition (financial or other),
business or results of operations of the Partnership Group.
(xiii) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any
federal or Delaware court, governmental agency or body having
jurisdiction over the Partnership, the Managing General Partner or the
Operating Company is required for the offering, issuance and sale by
the Partnership of the Units, the execution, delivery and performance
of this Agreement by the Managing General Partner, the Partnership and
the Operating Company that is party thereto or the consummation by the
Partnership, the Managing General Partner and the Operating Company of
the transactions contemplated by this Agreement, except for such
consents required under the 1933 Act, the 1934 Act and state
securities or "Blue Sky" laws, as to which such counsel need not
express any opinion.
(xiv) The statements in the Registration Statement and
Prospectus under the captions "Cash Distribution Policy," "Business--
Government Regulation," "Conflicts of Interest and Fiduciary
Responsibilities," "Description of the Common Units," "Description of
the Subordinated Units," "The Partnership Agreement" and "Investment
in the Inergy, L.P. by Employee Benefit Plans," insofar as they refer
to statements of law or legal conclusions, are accurate and complete
in all material respects, and the Common Units, the Senior
Subordinated Units, the Junior Subordinated Units and the Incentive
Distribution Rights conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus under the captions "Prospectus Summary--The Offering,"
"Cash Distribution Policy," "Description of the Common Units,"
"Description of the Subordinated Units" and "The Partnership
Agreement."
28
(xv) The opinion of Xxxxxx & Xxxxxx L.L.P. that is filed as
Exhibit [___] to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to
them.
(xvi) The Registration Statement was declared effective under
the 1933 Act on ________, 2002; to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or threatened by the Commission; and any required filing of
the Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by such Rule.
(xvii) The Registration Statement and the Prospectus (except for
the financial statements and the notes and the schedules thereto, and
the other financial, statistical and accounting data included in the
Registration Statement or the Prospectus, as to which such counsel
need not express any opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations promulgated thereunder.
(xviii) To the knowledge of such counsel, (i) there are no legal
or governmental proceedings pending or threatened against any of the
Inergy Entities or to which any of the Inergy Entities is a party or
to which any of their respective properties is subject that are
required to be described in the Prospectus but are not so described as
required and (ii) there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required
by the Act.
(xix) None of the Inergy Parties is an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended.
(xx) None of the Partnership, the Managing General Partner or
the Operating Company is a "public utility company" or a "holding
company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
In addition, such counsel shall state that they have participated
in conferences with officers and other representatives of the Inergy
Parties and the independent public accountants of the Partnership and
the Underwriters, 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 on, and is
not assuming any 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), based on the
29
foregoing, no facts have come to such counsel's attention that cause
such counsel to believe that the Registration Statement (other than
(i) the financial statements included therein, including the notes and
schedules thereto and the auditors' reports thereon, and (ii) the
other financial data included therein, as to which such counsel need
express no belief), 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 (other than (i) the
financial statements included therein, including the notes and
schedules thereto and the auditors' reports thereon, and (ii) the
other financial data included therein, as to which such counsel need
express no belief), 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 the light
of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect
of matters of fact upon representations of the Inergy Parties set
forth in this Agreement and upon certificates of officers and
employees of the Inergy Entities and upon information obtained from
public officials, (B) 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 them are genuine, (C) state that their opinion is limited
to federal laws, the Delaware LP Act, the Delaware LLC Act, and the
DGCL, and (D) state that they express no opinion with respect to state
or local taxes or tax statutes to which any of the limited partners of
the Partnership or any of the other Inergy Entities may be subject.
(d) On the Closing Date (and, if applicable, the Option Closing
Date), you shall have received the opinion of Xxxxxxx Xxxxxxxx Xxxxxx LLP,
counsel for the Partnership, addressed to you and dated the Closing Date
(and, if applicable, the Option Closing Date), to the effect that:
(i) The Partnership is duly registered or qualified as a
foreign limited partnership for the transaction of business under the
laws of the jurisdictions set forth on Exhibit A to this Agreement.
(ii) The Operating Company is duly registered or qualified as a
foreign limited liability company for the transaction or business
under the laws of the jurisdictions set forth on Exhibit A to this
Agreement.
(iii) Each of Holdings, New Propane and the Operating Subs has
been duly formed and is validly existing in good standing as a limited
liability company
30
under the Delaware LLC Act with all necessary limited liability
company power and authority to own or lease its properties and to
conduct its business in each case in all material respects as
described in the Registration Statement and the Prospectus. Each of
Holdings, New Propane and the Operating Subs is duly registered or
qualified as a foreign limited liability company for the transaction
of business under the laws of the jurisdictions set forth on Exhibit A
to this Agreement.
(iv) The Managing General Partner is duly registered or
qualified as a foreign limited liability company for the transaction
of business under the laws of the jurisdictions set forth on Exhibit A
to this Agreement.
(v) The Non-Managing General Partner has been duly formed and
is validly existing in good standing as a limited liability company
under the Delaware LLC Act with all necessary limited liability
company power and authority to own or lease its properties and to
conduct its business and to act as a general partner of the
Partnership in all material respects as described in the Registration
Statement and the Prospectus. The Non-Managing General Partner is duly
registered or qualified as a foreign limited liability company for the
transaction of business under the laws of the jurisdictions set forth
on Exhibit A to this Agreement.
(vi) Each of Service Sub and Acquisition Corp. has been duly
incorporated and is validly existing in good standing as a corporation
under the DGCL with all necessary corporate power and authority to own
or lease its properties and to conduct its business in all material
respects as described in the Registration Statement and the
Prospectus. Each of Service Sub and Acquisition Corp. is duly
registered or qualified as a foreign corporation for the transaction
of business under the laws of the jurisdictions set forth on Exhibit A
to this Agreement.
(vii) The Operating Company owns of record 100% of the issued
and outstanding capital stock of Service Sub; such capital stock has
been duly authorized and validly issued and is fully paid and
nonassessable; and the Operating Company owns such capital stock free
and clear of all liens, encumbrances, security interests, charges or
claims (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming the Operating Company
as debtor is on file in the office of the Secretary of State of the
State of Delaware or (ii) otherwise known to such counsel, without
independent investigation, other than those created by or arising
under the DGCL.
31
(viii) The Operating Company owns of record 100% of the issued
and outstanding membership interests in each of the Operating Subs;
such membership interests have been duly authorized and validly issued
in accordance with the Operating Subs LLC Agreements and are fully
paid (to the extent required under the Operating Subs LLC Agreements)
and nonassessable (except as such nonassessability may be affected by
Section 18-607 of the Delaware LLC Act); and the Operating Company
owns such membership interests free and clear of all liens,
encumbrances, security interests, charges or claims (i) in respect of
which a financing statement under the Uniform Commercial Code of the
State of Delaware naming the Operating Company as debtor is on file in
the office of the Secretary of State of the State of Delaware or (ii)
otherwise known to such counsel, without independent investigation,
other than those created by or arising under the Delaware LLC Act.
(ix) The Non-Managing General Partner owns of record 100% of
the issued and outstanding common membership interests in New Propane,
Xxxxxx owns of record 48.4% of the issued and outstanding preferred
membership interests in New Propane, and Rolesville owns of record
51.6% of the issued and outstanding preferred membership interests in
New Propane; such membership interests have been duly authorized and
validly issued in accordance with the New Propane LLC Agreement and
are fully paid (to the extent required under the New Propane LLC
Agreement) and nonassessable (except as such nonassessability may be
affected by Section 18-607 of the Delaware LLC Act); and the Non-
Managing General Partner, Xxxxxx and Rolesville own such membership
interests free and clear of all liens, encumbrances, security
interests, charges or claims (i) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware
naming the Non-Managing General Partner, Xxxxxx or Rolesville as
debtor is on file in the office of the Secretary of State of the State
of Delaware or (ii) otherwise known to such counsel, without
independent investigation, other than those created by or arising
under the Delaware LLC Act.
(x) Holdings owns of record 100% of the issued and
outstanding membership interests of the Managing General Partner. Such
membership interests have been duly authorized and validly issued and
are fully paid (to the extent required under the Holdings LLC
Agreement) and nonassessable (except as such nonassessability may be
affected by Section 18-607 of the Delaware LLC Act); and Holdings owns
such membership interests free and clear of all liens, encumbrances,
security interests, charges or claims (i) in respect of which a
financing statement under the Uniform Commercial Code of the State of
Delaware naming Holdings as debtor is on file in the office of the
Secretary of State of the State of Delaware or (ii) otherwise known to
such counsel, without
32
independent investigation, other than those created by or arising
under the Delaware LLC Act.
(xi) Holdings owns of record 100% of the issued and
outstanding common membership interests in the Non-Managing General
Partner; such membership interests have been duly authorized and
validly issued and are fully paid (to the extent required under the
Holdings LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); and Holdings owns such membership interests free and clear of
all liens, encumbrances, security interests, charges or claims (i) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming Holdings as debtor is on file in
the office of the Secretary of State of the State of Delaware or (ii)
otherwise known to such counsel, without independent investigation,
other than those created by or arising under the Delaware LLC Act.
(xii) Holdings owns of record 100% of the issued and
outstanding capital stock of Acquisition Corp.; such capital stock has
been duly authorized and validly issued and is fully paid and
nonassessable; and Holdings owns such capital stock free and clear of
all liens, encumbrances, security interests, charges or claims (i) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming Holdings as debtor is on file in
the office of the Secretary of State of the State of Delaware or (ii)
otherwise known to such counsel, without independent investigation,
other than those created by or arising under the DGCL.
(xiii) Except as described in the Prospectus and as set forth in
Article VII of the Non-Managing General Partner LLC Agreement, there
are no preemptive rights or other rights to subscribe for or to
purchase, nor any restrictions upon the voting or transfer of (i) any
membership interests of the Non-Managing General Partner, New Propane
or the Operating Subs or (ii) any shares of Service Sub, pursuant to
the Non-Managing General Partner LLC Agreement, the New Propane LLC
Agreement, the Operating Subs LLC Agreement, the Certificate of
Incorporation or Bylaws of the Service Sub, respectively, or, to the
knowledge of such counsel after due inquiry, any other agreement or
instrument to which such entities are a party or by which any of them
may be bound. To the knowledge of such counsel, neither the filing of
the Registration Statement nor the offering or sale of the Units as
contemplated by this Agreement gives rise to any rights for or
relating to the registration of any Units or other securities of the
Partnership, other than as have been waived. To such counsel's
knowledge after due inquiry, except as described in the Prospectus,
there are no outstanding options or warrants to
33
purchase (A) any membership interests of the Non-Managing General
Partner, New Propane or the Operating Subs or (B) any shares of
Service Sub.
(xiv) None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of
this Agreement by the Partnership, the Managing General Partner and
the Operating Company or the consummation by the Partnership, the
Managing General Partner and the Operating Company of the transactions
contemplated hereby (i) constitutes or will constitute a violation of
the Organizational Documents (other than the Partnership Agreement,
the Managing General Partner LLC Agreement or the Operating Company
LLC Agreement) or (ii) constitutes or will constitute a breach or
violation of, or a default (or an event which, with notice or lapse of
time or both, would constitute such a default) under, any agreement,
lease or other instrument known to such counsel (excluding any
Organizational Document) to which any of the Inergy Entities or any of
their properties may be bound, which breaches, violations or defaults,
in the case of clause (ii), would, individually or in the aggregate,
have a Material Adverse Effect.
(xv) None of the execution, delivery and performance of this
Agreement by the Inergy Entities which are parties hereto (other than
the execution, delivery and performance of this Agreement by the
Partnership, the Managing General Partner and the Operating Company),
or the consummation of the transactions contemplated hereby (other
than the consummation by the Partnership, the Managing General Partner
and the Operating Company of the transactions contemplated by this
Agreement (i) constitutes or will constitute a violation of the
Organizational Documents, (ii) constitutes or will constitute a breach
or violation of, or a default (or an event which, with notice or lapse
of time or both, would constitute such a default) under, any
agreement, lease or other instrument known to such counsel (excluding
any Organizational Document) to which any of the Inergy Entities or
any of their properties may be bound, (iii) violates or will violate
the Delaware LP Act, the Delaware LLC Act, the DGCL or federal law or
(iv) results or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of any of the Inergy
Entities, which breaches, violations, defaults or liens, in the cases
of clauses (ii), (iii) or (iv), would, individually or in the
aggregate, have a material adverse effect on the condition (financial
or other), business or results of operations of the Partnership Group
taken as a whole.
(xvi) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any
federal or Delaware court, governmental agency or body having
jurisdiction over any of the Inergy Parties is required for the
offering, issuance and sale by the Partnership of the Units
34
(excluding any consent, required by any federal or Delaware court,
governmental agency or body having jurisdiction over the Partnership,
the Managing General Partner or the Operating Company), the execution,
delivery and performance of this Agreement by the Inergy Entities that
are parties thereto (excluding the execution, delivery and performance
of this Agreement by the Managing General Partner, the Partnership and
the Operating Company) or the consummation by the Inergy Parties of
the transactions contemplated by this Agreement except for such
consents required under the 1933 Act, the 1934 Act and state
securities or "Blue Sky" laws, as to which such counsel need not
express any opinion.
(xvii) The statements in the Registration Statement and the
Prospectus under the captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Description of
Indebtedness," and "Certain Relationships and Related Transactions--
Related Party Transactions," insofar as they constitute descriptions
of agreements or refer to statements of law or general conclusions,
are accurate and complete in all material respects.
(xviii) This Agreement has been duly executed and delivered by
each of Holdings, the Non-Managing General Partner, New Propane,
Service Sub, Acquisition Corp. and the Operating Subs.
(xix) To the knowledge of such counsel after due inquiry, none
of the Inergy Entities is in (i) violation of its Organizational
Documents, or of any law, statute, ordinance, administrative or
governmental rule or regulation applicable to it or of any decree of
any court or governmental agency or body having jurisdiction over it
which violation would reasonably be expected to have a Material
Adverse Effect or (ii) breach, default (or an event 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 Inergy Entities to perform their obligations under this
Agreement.
(xx) To the knowledge of such counsel after due inquiry, each
of the Inergy Entities has such permits, consents, licenses,
franchises, certificates and authorizations of governmental or
regulatory authorities ("permits") as are necessary to own 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
35
Adverse Effect and, to the knowledge of such counsel after due
inquiry, none of the Inergy Entities 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.
(xxi) The persons and entities listed on Schedule II own of
record the Senior Subordinated Units in the Partnership set forth
opposite their respective names.
(xxii) Except as described in the Prospectus, to the knowledge
of such counsel after due inquiry, there is no litigation, proceeding
or governmental investigation pending or threatened against any of the
Inergy Entities or to which any of the Inergy Entities is a party or
to which any of their respective properties is subject, which, if
adversely determined to such Inergy Entities, is reasonably likely to
have a Material Adverse Effect.
In addition, such counsel shall state that they have participated
(to the extent set forth in such opinion) in conferences with officers
and other representatives of the Inergy Parties and the independent
public accountants of the Partnership and the Underwriters, 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 on, and is not assuming any
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), based on
the foregoing, no facts have come to such counsel's attention that
causes such counsel to believe that the Registration Statement (other
than (i) the financial statements included therein, including the
notes and schedules thereto and the auditors' reports thereon, (ii)
the other financial data included therein, (iii) any summaries of the
Partnership Agreement, and (iv) the information contained under "Tax
Considerations" as to which such counsel need express no belief), 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 (other than (i) the financial statements included therein,
including the notes and schedules thereto and the auditors' reports
thereon, (ii) the other financial data included therein, (iii) any
summaries of the Partnership Agreement, and (iv) the information
contained under "Tax Considerations" as to which such counsel need
express no belief), 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 the light
of the circumstances under which they were made, not misleading.
36
In rendering such opinion, such counsel may (A) rely in respect
of matters of fact upon representations of the Inergy Parties officers
and employees of the Inergy Entities (B) 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 them are genuine, (C) state
that their opinion is limited to federal laws, the Delaware LP Act,
the Delaware LLC Act, the DGCL and the laws of the State of Missouri,
excepting therefrom municipal and local ordinances and regulations,
(D) with respect to the opinions expressed in subparagraphs (i)
through (vi) above as to the due qualification or registration as a
foreign limited partnership, corporation or limited liability company,
as the case may be, of Holdings, the Partnership, the General
Partners, the Operating Company, the Operating Subs, New Propane and
Service Sub, state that such opinions are based upon certificates of
foreign qualification or registration provided by the Secretary of
State of the States of the States listed on Exhibit A to such opinion
(each of which shall be dated as of a date not more than fourteen days
prior to the Closing Date and shall be provided to you), (E) state
that they express no opinion with respect to the accuracy or
descriptions of real or personal property, and (F) state that they
express no opinion with respect to state or local taxes or tax
statutes to which any of the limited partners of the Partnership or
any of the other Inergy Entities may be subject.
(e) On the Closing Date, you shall have received the opinion of
[Xxxxxxx Xxxxxxxx Xxxxxx LLP], counsel for the Selling Unitholders
addressed to you and dated the Closing Date, to the effect that:
(i) Each Selling Unitholder that is a corporation has been
duly incorporated and is validly existing in good standing as a corporation
under the laws of the jurisdiction of its incorporation; each Selling
Unitholder that is a limited partnership has been duly formed and is
validly existing in good standing as a limited partnership under the laws
of the jurisdiction of its formation; and each such Selling Unitholder that
is a limited liability company has been duly formed and is validly existing
in good standing as a limited liability company under the laws of the
jurisdiction of its formation.
(ii) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of any court,
governmental agency or body having jurisdiction over such Selling
Unitholder or any of its respective properties is required for the
offering, issuance and sale by such Selling Unitholder of the Firm Units,
the execution, delivery and performance of this Agreement, the Power of
Attorney (the "Power of Attorney") hereinafter referred to and the Custody
Agreement (the "Custody Agreement") hereinafter referred to, except (i) as
described in the Prospectus, (ii) for such consents required under the 1933
Act, the 1934 Act and "Blue Sky" laws, (iii) for such
37
consents which have been, or prior to the Closing Date will be, obtained,
and (iv) for such consents which, if not obtained, would not, individually
or in the aggregate, have a Material Adverse Effect.
(iii) Such Selling Unitholder has all requisite power, authority
and capacity to issue, sell and deliver the Firm Units in accordance with
and upon the terms and conditions set forth in this Agreement, and the
Registration Statement and the Prospectus. At the Closing Date all
corporate, partnership and limited liability company action, as the case
may be, required to be taken by such Selling Unitholder for the
authorization, issuance, sale and delivery of the Firm Units shall have
been validly taken.
(iv) This Agreement, the Power of Attorney and the Custody
Agreement have been duly by such Selling Unitholder, the transactions
contemplated by this Agreement have been duly authorized by the Selling
Unitholder and, when this Agreement is executed and delivered by an
Attorney-in-Fact (as defined herein) on behalf of such Selling Unitholder,
this Agreement will be duly executed and delivered, and the Power of
Attorney and the Custody Agreement constitute, and this Agreement, when
executed by an Attorney-in-Fact consistent with the Power of Attorney, will
constitute, the valid and legally binding agreements of such Selling
Unitholder enforceable against such Selling Unitholder in accordance with
their terms provided that the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); provided, further, that
the indemnity and contribution provisions hereunder may be limited by
federal or state securities laws.
(v) None of the offering, issuance and sale by such Selling
Unitholder of the Firm Units, the execution, delivery and performance of
this Agreement, the Power of Attorney and the Custody Agreement or the
consummation of the transactions contemplated hereby (i) conflicted,
conflicts or will conflict with or constituted, constitutes or will
constitute a violation of the organizational documents of such Selling
Unitholder (if not an individual), (ii) conflicted, conflicts or will
conflict with or constituted, constitutes or will constitute a breach or
violation of, or a default (or an event which, with notice or lapse of time
or both, would constitute such a default) under any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to
which such Selling Unitholder is a party or by which any of it or any of
its respective properties may be bound, (iii) violated, violates or will
violate any statute, law or regulation or any order, judgment, decree or
injunction of any court or governmental agency or body directed to such
Selling Unitholder or any of its properties in a proceeding to which it or
its property is a party or (iv) resulted, results or will result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of such Selling
38
Unitholder which conflicts, breaches, violations or defaults, in the case
of clauses (ii), (iii) or (iv), would, individually or in the aggregate,
have a Material Adverse Effect.
(vi) The Selling Unitholder has, and immediately prior to the
transfer of the Units to the Underwriter on the Closing Date, the Selling
Unitholder will have, good and valid title to the Firm Units, free and
clear of all liens, encumbrances, equities or claims; and, upon delivery of
the Firm Units and payment therefor, as contemplated in this Agreement, the
Power of Attorney and the Custody Agreement, good and valid title to the
Firm Units, free and clear of all liens, pledges, encumbrances, equities,
or claims, will pass to the several Underwriters. No person has any right
to acquire from such Selling Unitholder any Units to be sold hereunder and
such Selling Unitholder is under no obligation, whether absolute or
contingent, to sell any such Units to any person, except as contemplated by
this Agreement.
(vii) Such Selling Unitholder has placed in custody under the
Custody Agreement furnished to such Selling Unitholder and duly executed
and delivered by such Selling Unitholder to ____________, as custodian (the
"Custodian"), for delivery under this Agreement, certificates in negotiable
form representing the Firm Units to be sold by such Selling Unitholder
hereunder. Such Selling Unitholder has duly and irrevocably executed and
delivered a Power of Attorney appointing ___________ and _____________ as
such Selling Unitholder's Attorneys-in-Fact (the "Attorneys-in-Fact") upon
the terms and subject to the conditions set forth therein to execute and
deliver this Agreement and to take certain other action on behalf of such
Selling Unitholder as may be necessary or desirable in connection with the
transactions contemplated by this Agreement and the Custody Agreement.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon representations of the Selling Unitholder(s) set forth
in this Agreement and upon certificates of the Selling Unitholder(s) and
upon information obtained from public officials and (B) assume that the
documents submitted to them as originals thereof, and that the signatures
on all documents examined by such counsel are genuine, and the legal
capacity of natural persons.
(f) You shall have received on the Closing Date (and, if applicable,
the Option Closing Date), from Xxxxx Xxxxx L.L.P., counsel to the
Underwriters, such opinion or opinions, dated the Closing Date (and, if
applicable, the Option Closing Date) with respect to such matters as you
may reasonably require; and the Partnership shall have furnished to such
counsel such documents as they reasonably request for the purposes of
enabling them to review or pass on the matters referred to in this Section
8 and in order to evidence the accuracy, completeness and satisfaction of
the representations, warranties and conditions herein contained.
39
(g) You shall have received at or prior to the Closing Date from Xxxxx
Xxxxx L.L.P. a memorandum or memoranda, in form and substance satisfactory
to you, with respect to the qualification for offering and sale by the
Underwriters of the Units under state securities or Blue Sky laws of such
jurisdictions as the Underwriters may have designated to the Partnership.
(h) On the date of this Agreement and on the Closing Date (and, if
applicable, the Option Closing Date), you shall have received from Ernst &
Young LLP, a letter or letters, dated the date of this Agreement and the
Closing Date (and, if applicable, the Option Closing Date), respectively,
in form and substance satisfactory to you, confirming that they are
independent public accountants with respect to the Partnership and the
General Partners within the meaning of the 1933 Act and 1933 Act Rules and
Regulations, and stating to the effect set forth in Schedule IV hereto.
(i) Except as set forth in the Registration Statement and the
Prospectus, (i) none of the members of the Partnership Group shall have
sustained since the date of the latest audited financial statements
included or in the Registration Statement and in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree; and (ii) subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), none
of the Inergy Entities shall have incurred any liability or obligation,
direct or contingent, or entered into any transactions, and there shall not
have been any change in the capital stock or short-term or long-term debt
of the Partnership Group or any change, or any development involving or
which might reasonably be expected to involve a prospective change in the
condition (financial or other), net worth, business, affairs, management,
prospects, results of operations or cash flow of the Partnership or its
subsidiaries, the effect of which, in any such case described in clause (i)
or (ii), is in your judgment so material or adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Units being delivered on such Closing Date (and, if
applicable, the Option Closing Date) on the terms and in the manner
contemplated in the Prospectus.
(j) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
Nasdaq or the establishing on such exchanges or market by the SEC or by
such exchanges or markets of minimum or maximum prices which are not in
force and effect on the date hereof; (ii) a suspension or material
limitation in trading in the Partnership's securities on the Nasdaq or the
establishing on such market by the SEC or by such market of minimum or
maximum prices which are not in force and effect on the date hereof; (iii)
a general moratorium on commercial banking activities declared by either
federal or any Missouri authorities; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration
40
by the United States of a national emergency or war, which in your judgment
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Units in the manner contemplated in the Prospectus;
or (v) any calamity or crisis, change in national, international or world
affairs, act of God, change in the international or domestic markets, or
change in the existing financial, political or economic conditions in the
United States or elsewhere, the effect of which on the financial markets of
the United States is such as to make it in your judgment impracticable or
inadvisable to proceed with the public offering or the delivery of the
Units in the manner contemplated in the Prospectus.
(k) You shall have received a certificate, dated the Closing Date
(and, if applicable, the Option Closing Date) and signed by (x) the
President and Chief Executive Officer and (y) the Vice President and Chief
Financial Officer of the Managing General Partner, in their capacities as
such, stating that:
(i) the condition set forth in Section 8(a) has been fully
satisfied;
(ii) they have carefully examined the Registration Statement and
the Prospectus as amended or supplemented and nothing has come to
their attention that would lead them to believe that either the
Registration Statement or the Prospectus, or any amendment or
supplement thereto as of their respective effective, issue or filing
dates, contained, and the Prospectus as amended or supplemented and at
such Closing Date, contains any untrue statement of a material fact,
or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(iii) since the Effective Date, there has occurred no event
required to be set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been so set
forth;
(iv) all representations and warranties made herein by the
Inergy Parties are true and correct at such Closing Date, with the
same effect as if made on and as of such Closing Date, and all
agreements herein to be performed or complied with by the Inergy
Parties on or prior to such Closing Date have been duly performed and
complied with by the Inergy Parties;
(v) each of the Inergy Parties has performed all obligations
required to be performed by it pursuant to this Agreement;
(vi) no stop order has been issued;
41
(vii) the Units have been approved for listing on the Nasdaq;
and
(viii) covering such other matters as you may reasonably
request.
(l) You shall have received a certificate from each Selling
Unitholder, dated the Closing Date and signed by, or on behalf of, the
Selling Unitholder, stating that the representations, warranties and
agreements of the Selling Unitholder contained herein are true and correct
as of the Closing Date and that the Selling Unitholder has complied with
all agreements contained herein to be performed by the Selling Unitholder
at or prior to the Closing Date.
(l) The Inergy Parties shall not have failed, refused, or been
unable, at or prior to the Closing Date (and, if applicable, the Option
Closing Date) to have performed any agreement on their part to be performed
or any of the conditions herein contained and required to be performed or
satisfied by them at or prior to such Closing Date.
(m) The Partnership shall have furnished to you at the Closing Date
(and, if applicable, the Option Closing Date) such further information,
opinions, certificates, letters and documents as you may have reasonably
requested.
(n) The Units shall have been approved for trading upon official
notice of issuance on the Nasdaq.
(o) You shall have received duly and validly executed letter
agreements referred to in Section 6(m) hereof.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form
and substance to you and to Xxxxx Xxxxx L.L.P., counsel for the several
Underwriters. The Partnership and the Selling Unitholders will furnish you
with such signed and conformed copies of such opinions, certificates,
letters and documents as you may request.
If any of the conditions specified above in this Section 7 shall not
have been satisfied at or prior to the Closing Date (and, if applicable,
the Option Closing Date) or waived by you in writing, this Agreement may be
terminated by you on notice to the Partnership and the Selling Unitholders.
9. Indemnification and Contribution. (a) The Inergy Parties and the
Selling Unitholders, jointly and severally, will indemnify and hold harmless
each Underwriter from and against any losses, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the 1933 Act, or
otherwise, insofar as such losses, damages or liabilities (or actions or claims
in respect thereof) arise out of or are based upon (i) an untrue statement or
42
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment or supplement thereto or 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 or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus or the Prospectus or in any amendment or supplement
thereto, or arise out of or are based upon any omission or alleged omission to
state therein a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, and will reimburse
the Underwriter for any legal or other expenses incurred by the Underwriter in
connection with investigating, preparing, pursuing or defending against or
appearing as a third party witness in connection with any such loss, damage,
liability or action or claim, including, without limitation, any investigation
or proceeding by any governmental agency or body, commenced or threatened,
including the reasonable fees and expenses of counsel to the indemnified party,
as such expenses are incurred (including such losses, damages, liabilities or
expenses to the extent of the aggregate amount paid in settlement of any such
action or claim, provided that (subject to Section 9(c) hereof) any such
settlement is effected with the written consent of the Partnership); provided,
however, that the Inergy Parties and the Selling Unitholders shall not be liable
in any such case to the extent, but only to the extent, that any such loss,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the Preliminary
Prospectus, the Registration Statement, the Prospectus or any other prospectus
relating to the Units, or any such amendment or supplement, in reliance upon and
in conformity with written information relating to the Underwriters furnished to
the Partnership by you or by any Underwriter through you, expressly for use in
the preparation thereof (as provided in Section 15 hereof).
(b) Each Underwriter will indemnify and hold harmless the Inergy
Parties from and against any losses, damages or liabilities to which the
Inergy Parties and the Selling Unitholders may become subject, under the
1933 Act, the 1934 Act or otherwise, insofar as such losses, damages or
liabilities (or actions or claims in respect thereof) arise out of or are
based upon (i) an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment or
supplement thereto, or arise out of 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, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus or the Prospectus or in any amendment or supplement
thereto, or arise out of or are based upon any omission or alleged omission
to state therein a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Preliminary Prospectus, the Registration Statement, the Prospectus or any
such amendment or supplement, in reliance upon and in conformity with
written information relating to the Underwriters furnished to the
Partnership by you or by any Underwriter through you, expressly for use in
the preparation thereof (as
43
provided in Section 15 hereof), and will reimburse the Inergy Parties and
the Selling Unitholders for any legal or other expenses incurred by the
Inergy Parties and the Selling Unitholders in connection with investigating
or defending any such action or claim as such expenses are incurred
(including such losses, damages, liabilities or expenses to the extent of
the aggregate amount paid in settlement of any such action or claim,
provided that (subject to Section 9(c) hereof) any such settlement is
effected with the written consent of the Underwriters).
(c) Promptly after receipt by an indemnified party under Section 9(a)
or 9(b) hereof of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under Section 9(a) or 9(b) hereof, notify
each such indemnifying party in writing of the commencement thereof, but
the failure so to notify such indemnifying party shall not relieve such
indemnifying party from any liability except to the extent that it has been
prejudiced in any material respect by such failure or from any liability
that it may have to any such indemnified party otherwise than under Section
9(a) or 9(b) hereof. In case any such action shall be brought against any
such indemnified party and it shall notify each indemnifying party of the
commencement thereof, each such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party under Section 9(a) or 9(b) hereof similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of such
indemnified party, be counsel to such indemnifying party), and, after
notice from such indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall
not be liable to such indemnified party under Section 9(a) or 9(b) hereof
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. The
indemnified party shall have the right to employ its own counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of counsel by
such indemnified party at the expense of the indemnifying party has been
authorized by the indemnifying party, (ii) the indemnified party shall have
been advised by such counsel that there may be a conflict of interest
between the indemnifying party and the indemnified party in the conduct of
the defense, or certain aspects of the defense, of such action (in which
case the indemnifying party shall not have the right to direct the defense
of such action with respect to those matters or aspects of the defense on
which a conflict exists or may exist on behalf of the indemnified party) or
(iii) the indemnifying party shall not in fact have employed counsel
reasonably satisfactory to such indemnified party to assume the defense of
such action, in any of which events such fees and expenses to the extent
applicable shall be borne, and shall be paid as incurred, by the
indemnifying party. If at any time such indemnified party shall have
requested such indemnifying party under Section 9(a) or 9(b) hereof to
reimburse such indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any
44
settlement of the nature contemplated by Section 9(a) or 9(b) hereof
effected without its written consent if (i) such settlement is entered into
more than 60 days after receipt by such indemnifying party of such request
for reimbursement, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 45 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No such indemnifying
party shall, without the written consent of such indemnified party, effect
the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or
not such indemnified party is an actual or potential party to such action
or claim) unless such settlement, compromise or judgment (A) includes an
unconditional release of such indemnified party from all liability arising
out of such action or claim and (B) does not include a statement as to or
an admission of fault, culpability or a failure to act, by or on behalf of
any such indemnified party. In no event shall such indemnifying parties be
liable for the fees and expenses of more than one counsel, including any
local counsel, for all such indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to indemnify or hold harmless an indemnified
party under Section 9(a) or 9(b) hereof in respect of any losses, damages
or liabilities (or actions or claims in respect thereof) referred to
therein, then each indemnifying party under Section 9(a) or 9(b) hereof
shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, damages or liabilities (or actions or claims in
respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Inergy Parties, the Selling Unitholders,
and the Underwriter, from the offering of the Units. If, however, the
allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice
required under Section 9(c) hereof and such indemnifying party was
prejudiced in a material respect by such failure, then each such
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault, as applicable, of the
Inergy Parties, the Selling Unitholders, and the Underwriter in connection
with the statements or omissions that resulted in such losses, damages or
liabilities (or actions or claims in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by, as
applicable, the Inergy Parties, the Selling Unitholders and the
Underwriter, shall be deemed to be in the same proportion as the total net
proceeds from such offering (before deducting expenses) received by the
Partnership bear to the total underwriting discounts and commissions
received by the Underwriter. The relative fault, as applicable, of the
Inergy Parties, the Selling Unitholders and the Underwriter, shall be
determined by
45
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Inergy Parties, the
Selling Unitholders, or the Underwriter, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Inergy Parties, the Selling Unitholders and the
Underwriter agree that it would not be just and equitable if contribution
pursuant to this Section 9(d) were determined by pro rata allocation (even
if the Underwriter were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to above in this Section 9(d). The amount paid or
payable by such an indemnified party as a result of the losses, damages or
liabilities (or actions or claims in respect thereof) referred to above in
this Section 9(d) shall be deemed to include any legal or other expenses
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 9(d), the Underwriter shall not be required to contribute any
amount in excess of the amount by which the total price at which the Units
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) The obligations of the Inergy Parties under this Section 9 shall
be in addition to any liability that the Inergy Parties and the Selling
Unitholders may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director, employee, agent or other
representative and to each person, if any, who controls the Underwriter
within the meaning of the 1933 Act; and the obligations of any Underwriters
under this Section 9 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Partnership and
the Managing General Partner who signed the Registration Statement and to
each person, if any, who controls the Inergy Parties or the Selling
Unitholders within the meaning of the 1933 Act.
10. Representations and Agreements to Survive Delivery. The respective
representations, warranties, agreements and statements of the Inergy Parties,
the Selling Unitholders and the Underwriters, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain operative and in full force and effect regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of the
Underwriter or any controlling person of the Underwriter, the Inergy Parties,
the Selling Unitholders or any of its officers, directors or any controlling
persons and shall survive delivery of and payment for the Units hereunder.
46
11. Substitution of Underwriters. (a) If any Underwriter shall default in
its obligation to purchase the Units which it has agreed to purchase hereunder,
you may in your discretion arrange for another party or other parties to
purchase such Units on the terms contained herein. If within thirty-six hours
after such default by any Underwriter, you do not arrange for the purchase of
such Units, then the Partnership shall be entitled to a further period of
thirty-six hours within which to procure another party or parties reasonably
satisfactory to you to purchase such Units on such terms. In the event that,
within the respective prescribed periods, you notify the Partnership that you
have so arranged for the purchase of such Units, or the Partnership notifies you
that it has so arranged for the purchase of such Units, you or the Partnership
shall have the right to postpone the Closing Date for a period of not more than
seven days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Partnership agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any persons substituted under this Section 11 with like effect as if such person
had originally been a party to this Agreement with respect to such Units.
(b) If, after giving effect to any arrangements for the purchase of
the Units of a defaulting Underwriter or Underwriters made by you and the
Partnership as provided in subsection (a) above, the aggregate number of
Units which remains unpurchased does not exceed one-eleventh of the total
Units to be sold on the Closing Date, then the Partnership shall have the
right to require each non-defaulting Underwriter to purchase the Units
which you agreed to purchase hereunder and in addition, to require each
non-defaulting Underwriter to purchase it pro rata share (based on the
number of Units which such Underwriter agreed to purchase hereunder) of the
Units of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Units of a defaulting Underwriter or Underwriters made by you and the
Partnership as provided in subsection (a) above, the number of Units which
remains unpurchased exceeds one-eleventh of the total Units to be sold on
the Closing Date, or if the Partnership shall not exercise the right
described in subsection (b) above to require to purchase Units of the
defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to the Option Closing Date, the obligations of the Underwriters to
purchase and of the Partnership to sell the Option Units) shall thereupon
terminate, without liability on the part of the Partnership except for the
expenses to be borne by the Partnership and the Underwriters as provided in
Section 12 hereof and the indemnity and contribution agreements in Section
8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
47
12. Termination. (a) This Agreement may be terminated by you at any time
at or prior to the Closing Date by notice to the Partnership and the Selling
Unitholders if any condition specified in Section 8 hereof shall not have been
satisfied on or prior to the Closing Date. Any such termination shall be
without liability of any party to any other party except as provided in Sections
9 and 13 hereof.
(b) This Agreement also may be terminated by you, by notice to the
Partnership and the Selling Unitholders, as to any obligation of the
Underwriters to purchase the Option Units, if any condition specified in
Section 7 hereof shall not have been satisfied at or prior to the Option
Closing Date or as provided in Section 10 of this Agreement.
If you terminate this Agreement as provided in Sections 12(a) or
12(b), you shall notify the Partnership and the Selling Unitholders by
telephone or telegram, confirmed by letter.
13. Costs and Expenses. The Partnership will bear and pay the costs and
expenses incident to the registration of the Units and public offering thereof,
including, without limitation, (a) all expenses (including stock transfer taxes)
incurred in connection with the delivery to the Underwriters of the Units, the
filing fees of the SEC, the fees and expenses of the Partnership's counsel and
accountants and the fees and expenses of counsel for the Partnership, (b) the
preparation, printing, filing, delivery and shipping of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto (except as otherwise expressly provided in Section 6(d)
hereof) and the printing, delivery and shipping of this Agreement and other
underwriting documents, including the Agreement Among Underwriters, the Selected
Dealer Agreement, Underwriters' Questionnaires and Powers of Attorney and Blue
Sky Memoranda, and any instruments or documents related to any of the foregoing,
(c) the furnishing of copies of such documents (except as otherwise expressly
provided in Section 6(d) hereof) to the Underwriters, (d) the registration or
qualification of the Units for offering and sale under the securities laws of
the various states and other jurisdictions, including the fees and disbursements
of counsel to the Underwriters relating to such registration or qualification
and in connection with preparing any Blue Sky Memoranda or related analysis, (e)
the filing fees of the NASD (if any) and fees and disbursements of counsel to
the Underwriters relating to any review of the offering by the NASD, (f) all
printing and engraving costs related to preparation of the certificates for the
Units, including transfer agent and registrar fees, (g) all fees and expenses
relating to the authorization of the Units for trading on the Nasdaq (h) all
travel expenses, including air fare and accommodation expenses, of
representatives of the Partnership in connection with the offering of the Units,
and (i) all of the other costs and expenses incident to the performance by the
Partnership of the registration and offering of the Units; provided, that
(except as otherwise provided in this Section 13) the Underwriters will bear and
pay all of its own costs and expenses, including the fees and expenses of the
Underwriters'
48
counsel, the Underwriters' transportation expenses and any advertising costs and
expenses incurred by the Underwriters incident to the public offering of the
Units.
If this Agreement is terminated by you in accordance with the provisions of
Section 12(a) (other than pursuant to Section 11 or 8(i)), the Partnership shall
reimburse the Underwriter for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel to the Underwriters.
14. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, Managing Director,
Corporate Finance, facsimile number (000) 000-0000, with a copy to Xxxx Xxxxx,
Attention: General Counsel, facsimile number (000) 000-0000, or if sent to the
Partnership shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed to the Partnership at Inergy, L.P., 0000 Xxxxxx, Xxxxx
0000, Xxxxxx Xxxx, Xxxxxxxx 00000, facsimile number (000) 000-0000. Notice to
any Underwriter pursuant to Section 9 shall be mailed, delivered, sent by
facsimile transmission, or telegraphed and confirmed to such underwriter's
address as it appears in the Underwriters' Questionnaire furnished in connection
with the offering of the Units or as otherwise furnished to the Partnership.
15. Information Furnished by the Underwriter. The statements set forth in
the table on the cover page of the Prospectus and the statements in the table in
the [first paragraph, the third, eleventh, twelfth, thirteenth, fourteenth,
fifteenth, eighteenth and nineteenth paragraphs and the third sentence of the
seventh paragraph] under the caption "Underwriting" in the Prospectus constitute
the only information furnished by or on behalf of the Underwriters through you
as such information is referred to in Section 4(a)(ii) and Section 9 hereof.
16. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Inergy Parties, the Selling Unitholders and, to the
extent provided in Sections 9 and 10, the officers and directors of the Managing
General Partner and each person who controls the Partnership or any Underwriter
and their respective heirs, executors, administrators, successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, corporation or other entity any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and assigns and said controlling persons
and said officers and directors, and for the benefit of no other person,
corporation or other entity. No purchaser of any of the Units from the
Underwriter shall be construed a successor or assign by reason merely of such
purchase.
49
In all dealings hereunder, you shall act on behalf of each of the several
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of the Underwriters, made or
given by you jointly or by X.X. Xxxxxxx & Sons, Inc. on behalf of you as the
Underwriters, as if the same shall have been made or given in writing by the
Underwriters.
17. Counterparts. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
18. Pronouns. Whenever a pronoun of any gender or number is used herein,
it shall, where appropriate, be deemed to include any other gender and number.
19. Time of Essence. Time shall be of the essence of this Agreement.
20. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri, without giving effect to the
choice of law or conflict of laws principles thereof.
50
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Inergy Parties, and the Selling
Unitholders and the Underwriters.
INERGY HOLDINGS, LLC INERGY, L.P.
By: Inergy GP, LLC (its General Partner)
By:_____________________________
Xxxx X. Xxxxxxx, President
By:________________________________________
Xxxx X. Xxxxxxx
President of Inergy GP, LLC
INERGY PARTNERS, LLC INERGY PROPANE, LLC
By:_____________________________ By:________________________________________
Xxxx X. Xxxxxxx, President Xxxx X. Xxxxxxx, President
INERGY GP, LLC L & L TRANSPORTATION, LLC
By:_____________________________ By:________________________________________
Xxxx X. Xxxxxxx, President Xxxx X. Xxxxxxx, President
NEW INERGY PROPANE, LLC INERGY TRANSPORTATION, LLC
By:_____________________________ By:________________________________________
Xxxx X. Xxxxxxx, President Xxxx X. Xxxxxxx, President
INERGY SALES & SERVICE, INC. ACQUISITION CORP.
By:_____________________________ By:________________________________________
Xxxx X. Xxxxxxx, President Title:_____________________________________
Signature Page to Underwriting Agreement
Selling Unitholders
By:_________________________
[Attorney-in-Fact]
Attorney-in-Fact
By:_________________________
[Attorney-in-Fact]
Attorney-in-Fact
Signature Page to Underwriting Agreement
Accepted in St. Louis,
Missouri as of the date
first above written on
behalf of ourselves and each
of the several Underwriters
named in Schedule II hereto.
X.X. Xxxxxxx & Sons, Inc.
[Other Co-Managers]
By: X.X. Xxxxxxx & Sons, Inc.
By:___________________________
Title:________________________
Signature Page to Underwriting Agreement
SCHEDULE I
Name Number of Units
---- ---------------
XX Xxxxxx Partners (SBIC), LLC 314,671
Xxxxxx Financial, Inc. 12,587
Triad Ventures Limited II, L.P. 12,587
Summit Capital Inc. 4,825
Xxxxxxx Xxxxx 378
Summit Capital Group, LLC 151
Xxxx X. Xxxx, Xx. 60
Total 345,259
=======
Schedule I
SCHEDULE II
Name Number of Units
---- ---------------
X. X. Xxxxxxx & Sons, Inc. _______________
[Other Co-Managers] _______________
Schedule II
SCHEDULE III
Persons and Entities who own Senior Subordinated Units of the Partnership
KCEP Ventures II, LP
Country Partners
Domex, Inc.
Investors 300, Inc.
L&L Leasing, Inc.
Moramerica Capital Corporation
NDSBIC, L.P.
Kansas Venture Capital, Inc.
Midstates Capital, L.P.
Diamond State Ventures, L.P.
Rocky Mountain Mezzanine
Firstar Capital Corporation
Eagle Fund II, L.P.
RNG Investments L.P.
KCEP Ventures III, XX
Xxxxxxx-Xxxxxxxx, LLC
Schedule II
SCHEDULE IV
Pursuant to Section 6(g) of the Underwriting Agreement, Ernst & Young
L.L.P. shall furnish letters to the Underwriter to the effect that:
(i) They are independent certified public accountants with respect
to the General Partners and the Partnership within the meaning of the 1933 Act
and the applicable Rules and Regulations thereunder.
(ii) In their opinion, the financial statements audited by them and
included in the Prospectus or the Registration Statement comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the applicable Rules and Regulations with respect to registration
statements on Form S-1.
(iii) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred to
below, performing the procedures specified by the AICPA for a review of interim
financial information as discussed in SAS No. 71, Interim Financial Information,
on the latest available interim financial statements of the Partnership Group,
inspection of the minute books of the Partnership Group since the date of the
latest audited financial statements included in the Prospectus, inquiries of
officials of the Partnership Group responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to believe that:
(A) any material modifications should be made to the unaudited
statements of consolidated income, statements of consolidated
financial position and statements of consolidated cash flows included
in the Prospectus for them to be in conformity with generally accepted
accounting principles, or the unaudited statements of consolidated
income, statements of consolidated financial position and statements
of consolidated cash flows included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the related published Rules and
Regulations thereunder.
(B) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
Schedule IV
(C) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or any increase in the consolidated long-term debt of
the Partnership Group, or any decreases in consolidated working
capital, net current assets or net assets, or any changes in any other
items specified by the Underwriter, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter.
(D) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (C) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net income or any changes in any other items specified by the
Underwriter, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriter, except in each case for changes,
decreases or increases which the Prospectus discloses have occurred or
may occur or which are described in such letter.
(iv) In addition to the audit referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iii) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Underwriter,
which are derived from the general accounting records of the Partnership Group
for the periods covered by their reports and any interim or other periods since
the latest period covered by their reports, which appear in the Prospectus, or
in Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Underwriter, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Partnership Group and have found them to be in agreement.
Schedule IV
