EXHIBIT 1
Execution Copy
1,900,000 Common Units
Representing Limited Partner Interests
STAR GAS PARTNERS, L.P.
UNDERWRITING AGREEMENT
----------------------
January 24, 2001
X.X. Xxxxxxx & Sons, Inc.
UBS Warburg LLC
CIBC World Markets Corp.
As Representatives of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
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The undersigned, Star Gas Partners, L.P., a Delaware limited partnership
(the "Partnership"), hereby addresses you as the representatives (the
"Representatives") of each of the persons, firms and corporations listed on
Schedule I hereto (collectively, the "Underwriters"). If you are the only
Underwriters named in Schedule I, all references herein to the Representatives
shall be deemed to be to you as the Underwriters. Star Gas LLC, a Delaware
limited liability company (the "General Partner"), is the sole general partner
of the Partnership and Star Gas Propane, L.P., a Delaware limited partnership
(the "Operating Partnership"). Star/Petro, Inc. ("Star/Petro"), Petro Holdings,
Inc., Petroleum Heat and Power Co., Inc. ("Petro"), Total Gas & Electric, Inc.
("TG&E"), Total Gas & Electricity (PA), Inc., TG&E Service Company, Inc. and
Stellar Propane Corp., which are direct and indirect subsidiaries of the
Partnership, are referred to herein as the "Principal Subsidiaries." The
Partnership, the Operating Partnership, the General Partner, the Principal
Subsidiaries and their subsidiaries are referred to herein as the "Star
Entities." The Partnership, the Operating Partnership, Star/Petro and the
General Partner (collectively, the "Star Parties") hereby confirm their
agreement (this "Agreement") with the several Underwriters as follows:
Section 1. Description of Units.
The Partnership proposes to issue and sell to the Underwriters an aggregate
of 1,900,000 Common Units representing limited partner interests in the
Partnership (the "Firm Units"). 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 aggregate of 285,000
additional Common Units (the "Option Units"), as provided in Section 3 of this
Agreement. The Firm Units and the Option Units are sometimes referred to herein
as the "Units" and are more fully described in the Prospectus hereinafter
defined.
Section 2. Purchase, Sale and Delivery of Firm Units.
On the basis of the representations, warranties and agreements contained
herein, but subject to the terms and conditions set forth herein, the
Partnership agrees to sell to the Underwriters, and each Underwriter agrees,
severally and not jointly, (a) to purchase from the Partnership at a purchase
price of $16.5675 per unit, the number of Firm Units set forth opposite the name
of such Underwriter in Schedule I 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 Units to the Underwriters against payment of the purchase
price therefor in immediately available funds by wire transfer shall be made
prior to 1:00 p.m., New York time, on Tuesday, January 30, 2001, in book-entry
form through the facilities of The Depository Trust Company, New York, New York
("DTC"), or at such other time and date as may be agreed upon in writing by the
Partnership and the Underwriters. Delivery of the documents required by Section
6 hereof with respect to the Units shall be made at such time and date at the
offices of Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other location as may be agreed upon in writing
by the Partnership and the
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Underwriters. For purposes of this Agreement, "Closing Date" shall mean the hour
and date of such delivery and payment.
The Partnership will cause its transfer agent to deposit as original issue
the Units pursuant to the Full Fast Delivery Program of 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.
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.
Section 3. Purchase, Sale and Delivery of the Option Units.
The Partnership hereby grants an option to the Underwriters to purchase
from it up to 285,000 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 which 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 on behalf of the several Underwriters by you, as
Representatives, at any time, and from time to time, before the expiration of 30
days from the date of the Prospectus Supplement (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next day thereunder when the New York
Stock Exchange 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 12 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 notice to
the Partnership to such effect.
You shall make such allocation of the Option Units among yourselves as may
be required to eliminate purchases of fractional Units.
Delivery of the Option Units with respect to which the option shall have
been exercised shall be made in book-entry form through the facilities of DTC
(or at such other place as you and the Partnership may mutually agree upon),
against payment by you of the per unit purchase price to the Partnership by wire
transfer of immediately available funds. Such payment and delivery shall be
made at 10:00 am, New York time, on the date designated in the notice given by
you as above provided for (which may be the same as the Closing Date), unless
some other date and time are agreed upon, which date and time of payment and
delivery are 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.
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Section 4. Representations and Warranties.
Each of the Star Parties, jointly and severally, represents, warrants and
covenants to the Underwriters that:
(a) A registration statement (Registration No. 333-94031), including the
related prospectus dated January 12, 2000 (the "Base Prospectus"), relating to
the registration under the Securities Act of 1933, as amended (the "Act"), of
certain of the Partnership's Common Units, including the Units, and certain
other securities to be sold from time to time by the Partnership in accordance
with Rule 415 of the rules and regulations under the Act (the "Rules and
Regulations") has been filed with the Securities and Exchange Commission (the
"Commission") and was declared effective by the Commission on January 12, 2000
(the "Effective Date"). The Partnership meets the requirements for use of
Form S-3 under the Act. Copies of such registration statement, including the
exhibits and schedules and any amendments thereto, and the Base Prospectus have
heretofore been delivered by the Partnership to you. The term "Registration
Statement" means the registration statement as amended at the Effective Date,
including all financial statements and exhibits and all documents incorporated
or deemed incorporated therein by reference, as from time to time amended or
supplemented pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and any other registration statement filed under Rule 462 of
the Rules and Regulations as such registration statement may be amended from
time to time. The term "Prospectus" means the Base Prospectus and any amendments
or supplements to the Base Prospectus, including without limitation the
prospectus supplement prepared in connection with the proposed sale of Units
contemplated by this Agreement (the "Prospectus Supplement"), through the date
of such Prospectus Supplement; provided, however, that if any revised prospectus
or prospectus supplement shall be provided to the Representatives by the
Partnership for use in connection with the offering of the Units that differs
from the Prospectus or the Prospectus Supplement (whether or not such revised
prospectus or prospectus supplement is required to be filed by the Partnership
with the Commission pursuant to Rule 424(b) of the Rules and Regulations), the
term "Prospectus" shall refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first provided to
the Representatives for such use. Any reference herein to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the date hereof or are so
filed hereafter. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include any such documents filed or to be filed under
the Exchange Act after the Effective Date, or the date of the Prospectus, as the
case may be, and deemed to be incorporated therein by reference.
(b) On the Effective Date, the date the Prospectus was first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent to and
including the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented),
including the financial statements included or incorporated by reference in the
Prospectus, did or will comply with all applicable provisions of the Act, the
Exchange Act, the rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and the Rules and
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Regulations and will contain all statements required to be stated therein in
accordance with the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations. On the Effective Date and when any
post-effective amendment to the Registration Statement becomes effective, no
part of the Registration Statement or any such amendment did or will contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the Option Closing Date, the Prospectus did not or will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. In addition, each of the statements
made in such documents within the coverage of Rule 175(b) of the Rules and
Regulations, including (but not limited to) any statements with respect to the
anticipated ratio of taxable income to distributions, was made or will be made
by the Partnership or the General Partner, as the case may be, with a reasonable
basis and in good faith. The foregoing representations and warranties in this
Section 4(b) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to any Underwriter furnished in writing
to the Partnership by the Representatives specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. The
Partnership has not distributed any offering material in connection with the
offering or sale of the Units other than the Registration Statement, the
Prospectus or any other materials, if any, permitted by the Act.
(c) The documents which are incorporated by reference in the Prospectus or
from which information is so incorporated by reference, when they became
effective or were filed with the Commission, as the case may be, complied in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations; and any documents so filed and incorporated by reference subsequent
to the effective date of this Agreement shall, when they are filed with the
Commission, conform in all material respects with the requirements of the Act
and the Exchange Act, as applicable, the Exchange Act Rules and Regulations and
the Rules and Regulations.
(d) Each of the Partnership and the Operating Partnership has been duly
formed and is validly existing in good standing as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act (the "Delaware Act"), with
all necessary partnership power and authority to own or lease its properties and
conduct its business, in each case as described in the Prospectus. Each of the
Partnership and the Operating Partnership is duly qualified or registered as a
foreign limited partnership for the transaction of business under the laws of
each jurisdiction in which the character of the business conducted by it or the
location of the properties owned or leased by it make such qualification or
registration necessary (except where the failure to so qualify or register would
not have a material adverse effect on the condition (financial or other),
results of operations or business of the Star Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability).
(e) Each Principal Subsidiary has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the jurisdiction of
its incorporation, with all necessary corporate power and authority to own or
lease its properties and conduct its business, in each case as described in the
Prospectus. Each of the Principal Subsidiaries is duly qualified
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or registered as a foreign corporation for the transaction of business under the
laws of each jurisdiction in which the character of the business conducted by it
or the location of the properties owned or leased by it makes such qualification
or registration necessary (except where the failure to so qualify or register
would not have a material adverse effect on the condition (financial or other),
results of operations or business of the Star Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability).
(f) The General Partner has been duly organized and is validly existing in
good standing as a limited liability company under the laws of the State of
Delaware. The General Partner has all necessary power and authority to own or
lease its properties and conduct its business and to act as general partner of
the Partnership and the Operating Partnership, in each case as described in the
Prospectus. The General Partner is duly qualified or registered as a foreign
entity for the transaction of business under the laws of each jurisdiction in
which the character of the business conducted by it or the location of the
properties owned or leased by it make such qualification or registration
necessary (except where the failure to so qualify or register would not have a
material adverse effect on the condition (financial or other), results of
operations or business of the Star Entities, taken as a whole, or subject the
Partnership or the limited partners of the Partnership to any material liability
or disability).
(g) All of the outstanding shares of capital stock or other capital
interests of the Principal Subsidiaries (except for TG&E, Total Gas &
Electricity (PA), Inc. and TG&E Service Company, Inc.) have been duly authorized
and validly issued and are fully paid and non-assessable and are owned (directly
or indirectly) by the Partnership free and clear of all liens, encumbrances and
claims except for liens, encumbrances or claims against the Operating
Partnership, a 99.99% limited partner interest of which is owned by the
Partnership and a 0.01% general partner interest of which is owned by the
General Partner, as described in the Registration Statement. Except for (1) the
units or stock of the Principal Subsidiaries (2) as disclosed in the
Registration Statement and (3) subordinated debt of TG&E, the Partnership does
not own, and at the Closing Date will not own, directly or indirectly, any
equity or long-term debt securities of any corporation, firm, partnership, joint
venture, association or other entity. Complete and correct copies of the
certificate of incorporation and by-laws or other equivalent agreements for each
of the Star Parties and the Principal Subsidiaries and all amendments thereto
have been delivered to the Representatives, and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or, if later, the
Option Closing Date.
(h) The Partnership owns 300,000 shares, $1.00 par value per share, of
Common Stock, or 72.73% of the common equity interests, of TG&E. The Partnership
also owns 30,000 shares of Series B preferred stock of TG&E having a $1.67 per
share non-cumulative preferred dividend and a $100.00 per share liquidation
preference. Such shares have been duly authorized and validly issued and are
fully paid and non-assessable and are owned directly by the Partnership free and
clear of all liens, encumbrances, security interests, charges and claims (other
than the interest created by the pledge by the Partnership to Bank of America of
its TG&E shares as collateral for TG&E's bank credit facilities).
(i) TG&E owns all of the shares of Common Stock of each of Total Gas &
Electricity (PA), Inc. and TG&E Service Company, Inc. Such shares have been duly
authorized and validly
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issued and are fully paid and non-assessable and are owned directly by TG&E free
and clear of all liens, encumbrances, security interests, charges and claims
(other than the general security interest created by TG&E bank credit
facilities).
(j) At the Closing Date, after giving effect to the issuance of the Firm
Units but not any Option Units, the capitalization of the Partnership will
consist of 19,439,967 Common Units, 2,674,161 Senior Subordinated Units, 345,364
Junior Subordinated Units and 325,729 General Partner Units (including the 0.01%
General Partner interest in the Operating Partnership). Except as set forth in
the Prospectus, the Partnership does not have outstanding, and at the Closing
Date will not have outstanding, any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell, any Common Units or other
partnership interests, any capital stock or partnership interests of any
subsidiary or any such warrants, convertible securities or obligations. Except
as described in the Prospectus, there are no preemptive rights or other rights
to subscribe for or to purchase, nor any restriction upon the voting or transfer
of, any limited partner interests in the Partnership.
(k) All outstanding Common Units and Senior Subordinated Units and the
limited partner interests represented thereby have been duly authorized and
validly issued in accordance with the Amended and Restated Agreement of Limited
Partnership of the Partnership (as the same may be amended and restated through
the Closing Date, the "Partnership Agreement") and are fully paid (to the extent
required under the Partnership Agreement) and non-assessable (except as such
nonassessability may be affected by Section 17-607 of the Delaware Act).
(l) The Units to be issued and sold to the Underwriters by the Partnership
hereunder, including any Option Units, and the limited partner interests
represented thereby have been duly authorized in accordance with the Partnership
Agreement and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms 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 Section 17-607 of the
Delaware Act).
(m) Xxxx X. Xxxxx, Xxxxxx X. Xxxxx, Hanseatic Americas, Inc. (the "LLC
Owners") own all outstanding Junior Subordinated Units; all of such Junior
Subordinated Units and the limited partner interests represented thereby have
been duly authorized and validly issued in accordance with the Partnership
Agreement and are fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
Section 17-607 of the Delaware Act); and each of the LLC Owners and Hanseatic
Corporation owns its Junior Subordinated Units free and clear of all liens,
encumbrances, security interests, equities, charges or claims (except for such
liens, encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material) other than those created by or
arising under that certain $37.5 million line of credit extended by MM Warbourg
Bank Luxembourg to Hanseatic Americas Inc. dated December 1, 1999.
(n) The General Partner owns all outstanding General Partner Units,
representing the entire general partner interest in the Partnership; all of such
General Partner Units have been duly authorized and validly issued in accordance
with the Partnership Agreement; and the General Partner owns such general
partner interest free and clear of all liens, encumbrances,
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security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material) other than those created by or
arising under the Delaware Act, the Operating Partnership's bank credit
facilities (the "Bank Credit Facilities") or the First Mortgage Note Agreement
between the Operating Partnership and various institutional investors (the
"First Mortgage Note Agreement").
(o) The General Partner is the sole general partner of the Operating
Partnership with a 0.01% general partner interest in the Operating Partnership;
such general partner interest has been duly authorized and validly issued in
accordance with the Amended and Restated Agreement of Limited Partnership of the
Operating Partnership (as the same may be amended and restated through the
Closing Date, the "Operating Partnership Agreement" and, together with the
Partnership Agreement, the "Partnership Agreements"); and the General Partner
owns such general partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material) other than those created by or
arising under the Delaware Act, the Bank Credit Facilities or the First Mortgage
Note Agreement.
(p) The Partnership is the sole limited partner of the Operating
Partnership with a 99.99% limited partner interest in the Operating Partnership;
such limited partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement and is fully paid (to the
extent required under the Operating Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the
Delaware Act); and the Partnership owns such limited partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material) other
than those created by or arising under the Delaware Act, the Bank Credit
Facilities or the First Mortgage Note Agreement.
(q) All of the issued and outstanding member interests of the General
Partner are duly authorized and have been validly issued, and are fully paid and
nonassessable, and the LLC Owners own all such outstanding member interests free
and clear of all liens, encumbrances, security interests, equities, charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material) other
than those created by or arising under that certain $37.5 million line of credit
extended by MM Warbourg Bank Luxembourg to Hanseatic Americas Inc. dated
December 1, 1999.
(r) The Partnership does not have any subsidiaries (other than the
Operating Partnership or any Principal Subsidiary) which, individually or
considered as a whole, would be deemed to be a significant subsidiary (as
defined in Rule 405 under the Act).
(s) The Units, when issued and delivered against payment therefor as
provided herein, will conform to the description thereof contained in the
Prospectus. The Partnership has all requisite power and authority to issue, sell
and deliver the Units, in accordance with and upon the terms and conditions set
forth in this Agreement, the Partnership Agreement and the Prospectus. At the
Closing Date and the Option Closing Date, all partnership and limited liability
company action, as the case may be, required to be taken by the Partnership or
the General Partner or any
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of their partners or members for the authorization, issuance, sale and delivery
of the Units shall have been validly taken.
(t) The financial statements and schedules included or incorporated by
reference in the Registration Statement or the Prospectus present fairly the
consolidated financial condition of the Star Entities as of the respective dates
thereof and the consolidated results of operations and cash flows of the Star
Entities for the respective periods covered thereby, all in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. No other financial statements or schedules of the Partnership are
required by the Act, the Exchange Act, the Exchange Act Rules and Regulations or
the Rules and Regulations to be included or incorporated by reference in the
Registration Statement or the Prospectus. KPMG LLP, who have reported on such
financial statements and schedules, are independent accountants with respect to
each of the Star Entities as required by the Act and the Rules and Regulations.
The statements included in the Registration Statement with respect to KPMG LLP
pursuant to Rule 509 of Regulation S-K of the Rules and Regulations are true and
correct in all material respects.
(u) The Partnership maintains a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(v) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing Date,
except as set forth in or contemplated by the Registration Statement and the
Prospectus, (i) there has not been and will not have been any change in the
capitalization of any of the Star Entities, or in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of any of the Star Entities, arising for any reason whatsoever, (ii) none of the
Star Entities has incurred nor will it incur any material liabilities or
obligations, direct or contingent, except liabilities incurred in the ordinary
course of business and consistent with past practices, nor has it entered into
nor will it enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein and (iii) the Partnership has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of partnership interests.
(w) None of the Star Entities is, or as of the Closing Date or as a result
of the transactions described under "Recent Developments" in the Prospectus
Supplement will be, (i) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" thereof, within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (ii) an "investment
company," a company "controlled by" an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
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(x) Except as set forth in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending, or to the knowledge of the
Star Parties, threatened against or affecting any of the Star Entities or any of
their respective directors or officers in their capacity as such, before or by
any federal or state court, commission, regulatory body, administrative agency
or other governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding might materially and adversely affect any of the Star
Entities or their business, properties, business prospects, condition (financial
or otherwise) or results of operations.
(y) Each of the Star Entities has, and at the Closing Date will have, (i)
all overnmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus, (ii) complied in all respects with all laws, regulations and orders
applicable to it or its business, except where the failure to so comply would
not have a material adverse affect on the Star Entities, taken as a whole, and
(iii) performed all its obligations required to be performed by it, and is not,
and at the Closing Date will not be, in default, under any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement, lease, contract or other agreement or instrument (collectively, a
"contract or other agreement") to which it is a party or by which its property
is bound or affected. To the best knowledge of the Star Parties, no other party
under any contract or other agreement to which it is a party is in default in
any material respect thereunder. None of the Star Entities is, nor at the
Closing Date will any of them be, in violation of any provision of its
certificate or agreement of limited partnership, certificate of incorporation or
by-laws, certificate of formation or limited liability company agreement, as the
case may be.
(z) No permit, consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is required in
connection with the execution, delivery and performance of this Agreement by the
Star Parties and the consummation of the transactions contemplated hereby,
including the issuance and delivery of the Units, except such as have been
obtained under the Act or the Rules and Regulations and such as may be required
under state securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Units.
(aa) Each Star Party has full power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
each Star Party and constitutes a valid and binding agreement of each Star Party
and is enforceable against each Star Party in accordance with the terms hereof;
provided that the enforceability hereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
relating to or affecting creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(bb) The performance by the Star Parties of this Agreement, the
consummation by the Star Parties of the transactions contemplated hereby and the
application of the net proceeds from the offering and sale of the Units in the
manner set forth in the Prospectus and the Prospectus Supplement under "Use of
Proceeds" will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of any of the Star Entities pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute
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a default under (or an event which, with notice or lapse of time or both, would
constitute such a default), or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under, or
give any party the right to accelerate the payment of any amount under, the
certificate or agreement of limited partnership, certificate of incorporation or
by-laws, certificate of formation or limited liability company agreement or
other governing document, as the case may be, of any of the Star Entities, any
contract or other agreement to which any of the Star Entities is a party or by
which any of the Star Entities or any of their respective properties is bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Star Entities.
(cc) The Partnership Agreement has been duly authorized, executed and
delivered by the General Partner and is a valid and legally binding agreement of
the General Partner, enforceable against the General Partner in accordance with
its terms; the Operating Partnership Agreement has been duly authorized,
executed and delivered by the General Partner and the Partnership and is a valid
and legally binding agreement of the General Partner and the Partnership,
enforceable against each of them in accordance with its terms; provided that,
with respect to each of the Partnership Agreements, the enforceability thereof
may by limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws relating to or affecting creditors' right generally
and by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(dd) Each of the Star Entities has good and marketable title to all
properties and assets described in the Prospectus as owned by it, free and clear
of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material to the business of the Star
Entities. Each of the Star Entities has valid, subsisting and enforceable leases
for the properties described in the Prospectus as leased by it, with such
exceptions as are not material and do not materially interfere with the use made
and proposed to be made of such properties by the Star Entities.
(ee) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which a Star Entity is a party have been duly
authorized, executed and delivered by such Star Entity, constitute valid and
binding agreements of such Star Entity and are enforceable against such Star
Entity in accordance with the terms thereof.
(ff) No statement, representation, warranty or covenant made by a Star
Entity in this Agreement or made in any certificate or document required by this
Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect.
(gg) None of the Star Entities nor the directors, officers or controlling
persons of the Star Entities have taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Partnership to facilitate the sale or resale of
the Units.
11
(hh) Except as provided in the Partnership Agreement, no person or entity
has the right to require the registration under the Act of Common Units or other
securities of any Star Entity by reason of the filing or effectiveness of the
Registration Statement.
(ii) The Units have been approved for listing on the New York Stock
Exchange ("NYSE"), subject only to official notice of issuance.
(jj) The Star Entities are in compliance in all material respects with all
federal, state and local employment and labor laws, including, but not limited
to, laws relating to non-discrimination in hiring, promotion and pay of
employees; no labor dispute with the employees of such entity exists or, to the
knowledge of the Star Parties, is imminent or threatened; and the Star Parties
are not aware of any existing, imminent or threatened labor disturbance by the
employees of any principal suppliers, manufacturers or contractors of the Star
Entities that could result in a material adverse effect on the condition
(financial or otherwise) or on the earnings, business, properties, business
prospects or operations of the Star Entities, taken as a whole.
(kk) The Star Entities own, or are licensed or otherwise have the full
exclusive right to use or will be licensed or otherwise will have full exclusive
right to use, the material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, services marks and trade names (collectively, "patent and
proprietary rights") presently employed by them or which are necessary in
connection with the conduct of the business now operated by them as set forth in
the Registration Statement and the Prospectus and none of the Star Entities have
received any written notice or otherwise have actual knowledge of any
infringement of or conflict with asserted rights of others or any other claims
with respect to any patent or proprietary rights, or of any basis for rendering
any patent and proprietary rights invalid or inadequate to protect the interest
of such Star Entity.
(ll) None of the Star Entities, nor, to the knowledge of any Star Party,
any employee or agent of such Star Entity has made any payment of funds of the
Star Entity or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus.
(mm) The Partnership has complied, and until the completion of the
distribution of the Units will comply, with all of the provisions of (including,
without limitation, filing all forms required by) Section 517.075 of the Florida
Securities and Investor Protection Act and Regulation 3E-900.001 issued
thereunder with respect to the offering and sale of the Units.
(nn) The Star Entities (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or imposing liability or
standards of conduct concerning any Hazardous Material (as hereinafter defined)
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, individually or in the aggregate, result in a
12
material adverse effect on the condition (financial or otherwise) or on the
earnings, business, properties, business prospects or operations of the Star
Entities, taken as a whole. The term "Hazardous Material" means (A) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (B) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended, (C) any
petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any
pollutant or contaminant or hazardous, dangerous, or toxic chemical, material,
waste or substance regulated under or within the meaning of any other
Environmental Law.
(oo) Each of the Star Entities maintains insurance with respect to its
properties and business of the types and in amounts generally deemed adequate
for its business and consistent with insurance coverage maintained by similar
companies and businesses, all of which insurance is in full force and effect.
(pp) Each of the Star Entities has filed all material federal, state and
foreign income and franchise tax returns and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP; and none of the
Star Entities has knowledge of any tax deficiency which has been or might be
asserted or threatened against any such entity. There are no tax returns of any
Star Entity that are currently being audited by state, local or federal taxing
authorities or agencies (and with respect to which any such entity has received
notice), where the findings of such audit, if adversely determined, would result
in a material adverse effect on the condition (financial or otherwise) or on the
earnings, business, properties, business prospects or operations of the Star
Entities, taken as a whole.
(qq) With respect to each employee benefit plan, program and arrangement
(including, without limitation, any "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) maintained or contributed to by any Star Entity, or with respect to
which any Star Entity could incur any liability under ERISA (collectively, the
"Benefit Plans"), no event has occurred and, to the best knowledge of any of the
Star Entities, there exists no condition or set of circumstances, in connection
with which any such entity could be subject to any liability under the terms of
such Benefit Plan, applicable law (including, without limitation, ERISA and the
Internal Revenue Code of 1986, as amended) or any applicable agreement that
could materially adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Star
Entities, taken as a whole.
Section 5. Agreements of the Partnership.
The Partnership agrees with the Underwriters as follows:
(a) The Partnership will not, during such period as the Prospectus is
required by law to be delivered in connection with sales of the Units by an
Underwriter or dealer, file any amendment or supplement to the Registration
Statement or the Prospectus, unless a copy thereof shall first have been
submitted to the Representatives within a reasonable period of time prior to the
filing thereof and the Representatives shall not have objected thereto in good
faith.
13
(b) The Partnership will notify the Representatives promptly, and will
confirm such notice in writing, (1) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (2) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (3) of the happening of
any event during the period mentioned in the second sentence of Section 5(e)
that in the judgment of the Partnership makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading and (4) of receipt by the Partnership or any representative or
attorney of the Partnership of any other communication from the Commission
relating to the Partnership, the Registration Statement or the Prospectus. If at
any time the Commission shall issue any order suspending the effectiveness of
the Registration Statement, the Partnership will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible moment.
(c) The Partnership will furnish to the Representatives, without charge,
two signed copies of the Registration Statement and of any post-effective
amendments thereto, including financial statements and schedules, and all
exhibits thereto (including any document filed under the Exchange Act and deemed
to be incorporated by reference into the Prospectus), and will furnish to the
Representatives, without charge, for transmittal to each of the other
Underwriters, a copy of each of the Registration Statement and any post-
effective amendments thereto, including financial statements and schedules but
without exhibits.
(d) The Partnership will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) The Partnership will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request. The Partnership consents to the
use of the Prospectus or any amendment or supplement thereto by the Underwriters
and by all dealers to whom the Units may be sold, both in connection with the
offering or sale of the Units and for any period of time thereafter during which
the Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of the
Partnership or counsel to the Underwriters should be set forth in the Prospectus
in order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Partnership will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment thereto,
and will deliver to each of the Underwriters, without charge, such number of
copies thereof as the Representatives may reasonably request. The Partnership
shall not file any document under the Exchange Act before the termination of the
offering of the Units by the Underwriters if such document would be deemed to be
incorporated by reference into the Prospectus which is not approved by X.X.
Xxxxxxx & Sons, Inc. after reasonable notice thereof.
(f) Prior to any public offering of the Units by the Underwriters, the
Partnership will cooperate with the Representatives and counsel to the
Underwriters in connection with the registration or qualification of the Units
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representatives may request; provided, that in no event shall the
14
Partnership be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the Effective Date, the
Partnership will furnish to the Representatives copies of such financial
statements and other periodic and special reports as the Partnership may from
time to time distribute generally to the holders of any class of Partnership
interests, and will furnish to the Representatives copies of each annual or
other report it shall be required to file with the Commission.
(h) The Partnership will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) The Partnership will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the Common Units to
facilitate the sale or resale of any of the Units.
(j) The Partnership will apply the net proceeds from the offering and sale
of the Units to be sold by the Partnership in the manner set forth in the
Prospectus and the Prospectus Supplement under "Use of Proceeds."
(k) During the period of 90 days after the date of the Prospectus
Supplement 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 or any other rights to acquire such Common Units, other than (i) to
the Underwriters pursuant to this Agreement, (ii) pursuant to employee benefit
plans as in existence as of the date hereof and (iii) in connection with an
acquisition by the Partnership, provided the person receiving such Common Units
or other securities in the acquisition enters into an agreement with the
Underwriters in substantially the form set forth in Exhibit A.
(l) The Partnership will cause each of Xxxxxxx X. Xxxxxx, Xxxx Xxxxxxxxx,
Xxxxx X. Xxxxxxxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxxx X. Xxxxxxx, I. Xxxxxx Xxxxxxx,
Xxxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxx, Xxxx X. Xxxxx,
Xxxxxx Xxxxxxxxx and Xxxxxxx Xxxxxxx to enter into agreements with the
Representatives in the form set forth in Exhibit A to the effect that they will
not, during the Lock-up Period, 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 or any other rights to
acquire such Common Units.
15
Section 6. Conditions of the Obligations of the Underwriters.
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 Star Parties contained herein, to
the performance by the Star Parties 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 1:00 p.m., New York time, on the date
hereof, or at such later date and time as may be approved by the
Representatives; if the Partnership has elected to rely on Rule 462(b) under the
1933 Act, the registration statement filed pursuant to such Rule 462(b) 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 Representatives. All filings required by Rule 424 of the Rules and
Regulations shall have been made. No stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, shall have been issued
and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Star Parties or any Underwriter, threatened or contemplated by
the Commission, and any request of the Commission 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.
(c) Except as set forth in the Registration Statements and the Prospectus,
(i) subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been, and no
development shall have occurred which could reasonably be expected to result in,
a material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Star Entities, taken as a whole, whether or not arising from
transactions in the ordinary course of business, and (ii) none of the Star
Entities shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any loss or
interference with its business or properties from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, 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
the Closing Date (and, if applicable, the Option Closing Date) on the terms and
in the manner contemplated in the Prospectus.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted
16
against any of the Star Entities or any of their respective officers or
directors in their capacities as such, before or by any federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding would materially and adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Star Entities taken as a whole.
(e) Each of the representations and warranties of the Star Parties
contained herein shall be true and correct in all material respects at the
Closing Date and, with respect to the Option Units, at the Option Closing Date,
as if made at the Closing Date and, with respect to the Option Units, at the
Option Closing Date, and all covenants and agreements herein contained to be
performed on the part of the Star Parties and all conditions herein contained to
be fulfilled or complied with by the Star Parties at or prior to the Closing
Date and, with respect to the Option Units, at or prior to the Option Closing
Date, shall have been duly performed, fulfilled or complied with.
(f) The Representatives shall have received an opinion, dated the Closing
Date and, with respect to the Option Units, the Option Closing Date,
satisfactory in form and substance to counsel for the Underwriters, from
Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP, counsel to the Partnership, to the
effect set forth in Exhibit B.
(g) The Representatives shall have received an opinion, dated the Closing
Date and, with respect to the Option Units, the Option Closing Date, from Xxxxx
Xxxxx L.L.P., counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and this Agreement, which opinion shall be
satisfactory in all respects to the Representatives.
(h) On the date of the Prospectus Supplement, the Accountants shall have
furnished to the Representatives a letter, dated the date of its delivery,
addressed to the Representatives and in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with respect
to the Partnership as required by the Act and the Rules and Regulations and with
respect to the financial and other statistical and numerical information
contained in the Registration Statement or incorporated by reference therein. At
the Closing Date and, as to the Option Units, the Option Closing Date, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letter from the Accountants, that nothing
has come to their attention during the period from the date of the letter
referred to in the prior sentence to a date (specified in the letter) not more
than five days prior to the Closing Date and the Option Closing Date which would
require any change in their letter dated the date of the Prospectus, if it were
required to be dated and delivered at the Closing Date and the Option Closing
Date.
(i) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 5(l).
(j) At the Closing Date and, as to the Option Units, the Option Closing
Date, there shall be furnished to the Representatives an accurate certificate,
dated the date of its delivery, signed
17
by each of the Chief Executive Officer and the Chief Financial Officer of the
General Partner, in form and substance satisfactory to the Representatives, to
the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus (including any documents filed
under the Exchange Act and deemed to be incorporated by reference into the
Prospectus) and (A) as of the date of such certificate, such documents are
true and correct in all material respects and do not omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein not untrue or misleading and (B) since the Effective
Date, no event has occurred as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect and there has been no document
required to be filed under the Exchange Act and the Exchange Act Rules and
Regulations that upon such filing would be deemed to be incorporated by
reference into the Prospectus that has not been so filed;
(ii) Each of the representations and warranties of the Partnership
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects;
(iii) Each of the covenants required herein to be performed by the
Partnership on or prior to the delivery of such certificate has been duly,
timely and fully performed and each condition herein required to be
complied with by the Partnership on or prior to the date of such
certificate has been duly, timely and fully complied with; and
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (A) there has not been, and
no development has occurred which could reasonably be expected to result
in, a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or
results of operations of the Star Entities taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration Statement
and the Prospectus and (B) none of the Star Entities has sustained any
material loss or interference with its business or properties from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration
Statement and the Prospectus;
and such other matters as the Representatives may reasonably request.
(k) The Units shall be qualified for sale in such states as the
Representatives may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(l) Prior to the Closing Date, the Units shall have been duly authorized
for listing on NYSE upon official notice of issuance.
18
(m) The Partnership shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus or any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, as
to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Star Parties herein, as to the performance
by the Star Parties of their obligations hereunder, or as to the fulfillment of
the conditions concurrent and precedent to the obligations hereunder of the
Underwriters.
(n) There shall not have occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or The Nasdaq National Market or the
establishing on such exchanges or market by the Commission or by such exchanges
or market 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 New York Stock Exchange or the establishing on
such exchange by the Commission or by such exchange 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 state
authorities; (iv) the outbreak or escalation of hostilities involving the United
States or the declaration 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, 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.
Section 7. Indemnification and Contribution.
(a) The Star Parties will, jointly and severally, indemnify and hold
harmless each Underwriter for and against any losses, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the 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, the Prospectus or any other prospectus relating to the Units, or any
amendment or supplement thereto, or in any blue sky application or other
document executed by the Partnership or based on any information furnished in
writing by the Partnership, filed in any state or other jurisdiction in order to
qualify any or all of the Units under the securities laws thereof (the "Blue Sky
Application"), (ii) 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 (iii) any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to, the
Units or the offering contemplated hereby, and which is included as part of or
referred to in any loss, damage, liability or action or claim arising out of or
based upon matters covered by clause (i) or (ii) above (provided that no Star
Party shall be liable under this clause (iii) to the extent it is finally
judicially determined by a court of competent jurisdiction that such loss,
damage, liability or action or claim resulted primarily and
directly
19
from any such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct) and will
reimburse each Underwriter for any legal or other expenses incurred by such
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 7(c)
hereof) any such settlement is effected with the written consent of the
Partnership); provided, however, that no Star Party shall 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 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 Underwriter furnished to the Partnership by you or
by any Underwriter through you, expressly for use in the preparation thereof (as
provided in Section 13 hereof).
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless each Star Party against any losses, damages or liabilities to which
such Star Party may become subject, under the Act or otherwise, insofar as such
losses, damages or liabilities (or actions or claims in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus or any
other prospectus relating to the Units, or any amendment or supplement thereto,
or any Blue Sky Application, 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, 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 Registration
Statement, the Prospectus or any other prospectus relating to the Units, or any
such amendment or supplement, or any Blue Sky Application, in reliance upon and
in conformity with written information relating to the Underwriter furnished to
the Partnership by you or by any Underwriter through you, expressly for use in
the preparation thereof (as provided in Section 13 hereof), and will reimburse
the Star Parties for any legal or other expenses incurred by them 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 7(c) hereof) any such settlement is effected with the
written consent of the Underwriters).
(c) Promptly after receipt by an indemnified party under Section 7(a) or
7(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 7(a) or 7(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 7(a) or 7(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
20
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party under Section 7(a) or 7(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 7(a) or 7(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 7(a) or 7(b) hereof to reimburse such indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 7(a) or 7(b) hereof
effected without its written consent if (i) such settlement is entered into more
than 45 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 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request 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 7 is unavailable to
or insufficient to indemnify or hold harmless an indemnified party under Section
7(a) or 7(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 7(a) or 7(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
21
received by the Partnership, on the one hand, and the Underwriters, on the other
hand, 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 7(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 Partnership, on the one hand, and the Underwriters, on the
other hand, 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 Partnership, on the one hand, and the
Underwriters, on the other hand, 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 Underwriters. The relative fault, as applicable, of the
Partnership, on the one hand, and the Underwriters, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Partnership, on the one
hand, or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Partnership and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to above in this Section 7(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 7(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 7(d), no Underwriter shall be required to contribute
any amount in excess of the total underwriting discounts and commissions
received by such Underwriter with respect to the Units. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters in this
Section 7(d) to contribute are several in proportion to their respective
underwriting obligations with respect to the Units and not joint.
(e) The obligations of the Star Parties under this Section 7 shall be in
addition to any liability that the Star Parties 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 any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 7 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 who signed the
Registration Statement and to each person, if any, who controls the Partnership
within the meaning of the Act.
(f) The parties to this Agreement hereby acknowledge that they are
ophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including, without limitation, the
provisions of this Section 7, and are fully informed regarding such provisions.
They further acknowledge that the provisions of this
22
Section 7 fairly allocate the risks in light of the ability of the parties to
investigate the Partnership and its business in order to assure that adequate
disclosure is made in the Registration Statement, the Prospectus, and any
supplement or amendment thereof, as required by the Act.
Section 8. Representations and Agreements to Survive Delivery.
The respective representations, warranties, agreements and statements of
the Star Parties 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 any Underwriter or
any controlling person of any Underwriter, a Star Party or any of its officers,
directors or any controlling persons and shall survive delivery of and payment
for the Units hereunder.
Section 9. 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 you or 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 9 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 such Underwriter
agreed to purchase hereunder and, in addition, to require each non-defaulting
Underwriter to purchase its 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
23
to be sold on the Closing Date, or if the Partnership shall not exercise the
right described in subsection (b) above to require the non-defaulting
Underwriters 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 any
non- defaulting Underwriter or the Partnership except for the expenses to be
borne by the Partnership and the Underwriters as provided in Section 11 hereof
and the indemnity and contribution agreements in Section 7 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
Section 10. Effective Date and Termination.
(a) This Agreement shall become effective at such time after the effective
date of the Registration Statement as you in your discretion shall first release
the Units for offering to the public; provided, however, that the provisions of
Section 7 and 11 shall at all times be effective. For the purposes of this
Section 10(a), the Units shall be deemed to have been released to the public
upon release by you of the publication of a newspaper advertisement relating to
the Units or upon release of telegrams, facsimile transmissions or letters
offering the Units for sale to securities dealers, whichever shall first occur.
(b) This Agreement may be terminated by you at any time before it becomes
effective in accordance with Section 10(a) by notice to the Partnership;
provided, however, that the provisions of this Section 10 and of Section 7 and
Section 11 hereof shall at all times be effective. In the event of any
termination of this Agreement pursuant to Section 9 or this Section 10(b)
hereof, the Partnership shall not then be under any liability to any Underwriter
except as provided in Section 7 or Section 11 hereof.
(c) This Agreement may be terminated by you at any time at or prior to the
Closing Date by notice to the Partnership if any condition specified in Section
6 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 7 and 11 hereof. (d) This Agreement also may be terminated
by you, by notice to the Partnership as to any obligation of the Underwriters to
purchase the Option Units, if any condition specified in Section 6 hereof shall
not have been satisfied at or prior to the Option Closing Date or as provided in
Section 9 of this Agreement.
If you terminate this Agreement as provided in Sections 10(b), 10(c) or
10(d), you shall notify the Partnership by telephone or facsimile, confirmed by
letter.
Section 11. Costs and Expenses.
(a) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Partnership will pay, or
reimburse if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Partnership under this Agreement,
including but not limited to costs and expenses of or relating to (1) the
preparation, printing and filing of the Registration Statement and exhibits to
it, the Prospectus and any amendment or supplement to the Registration Statement
or the Prospectus,
24
(2) the preparation and delivery of certificates representing the Units, (3) the
word processing, printing and reproduction of this Agreement, the Agreement
Among Underwriters, any Dealer Agreements and any Underwriters' Questionnaire,
(4) furnishing (including costs of shipping, mailing and courier) such copies of
the Registration Statement and the Prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the offering
and sale of the Units by the Underwriters or by dealers to whom Units may be
sold, (5) the listing of the Units on the NYSE, (6) any filings required to be
made by the Underwriters with the NASD, and the fees, disbursements and other
charges of counsel for the Underwriters in connection therewith, (7) the
registration or qualification of the Units for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
5(f), including the fees, disbursements and other charges of counsel to the
Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (8) counsel to the
Partnership, (9) the transfer agent for the Units and (10) the Accountants.
If this Agreement is terminated by you in accordance with the provisions of
Section 10(c), the Partnership will reimburse the Underwriters for all out-of-
pocket expenses (including the fees, disbursements and other charges of counsel
to the Underwriters) reasonably incurred by them in connection herewith.
Section 12. 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 Xxxx, 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 the office of
the Partnership, 0000 Xxxxxxxx Xxxxxx, X.X. Xxx 000000, Xxxxxxxx, XX 00000-0000,
Attention: Xxxxxxx Xxxxxx, facsimile number (000) 000-0000. Notice to any
Underwriter pursuant to Section 7 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.
Section 13. Information Furnished by Underwriters.
The amounts of the selling concession and reallowance and the paragraphs
related to stabilization, covering transactions and penalty bids under the
caption "Underwriting" in the Prospectus Supplement constitute the only
information relating to any Underwriter furnished in writing to the Partnership
by the Representatives specifically for inclusion in the Registration Statement
or the Prospectus as such information is referred to in Section 4(c) and Section
7 hereof.
Section 14. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Underwriters, the Star Parties and, to the extent provided in Sections 7 and 8,
the officers and directors of the Star Parties and each person who controls the
Star Parties or any Underwriter and their respective
25
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 any Underwriter shall be construed
a successor or assign by reason merely of such purchase.
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
Representatives, as if the same shall have been made or given in writing by the
Underwriters.
Section 15. 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.
Section 16. 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.
Section 17. Time of Essence.
Time shall be of the essence of this Agreement.
Section 18. 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.
26
If this Agreement 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 Star Parties and the
Underwriters.
Very truly yours,
STAR GAS PARTNERS, L.P.
By: STAR GAS LLC, as General Partner
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman and
Chief Executive Officer
STAR GAS PROPANE, L.P.
By: STAR GAS LLC, as General Partner
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman and
Chief Executive Officer
STAR GAS LLC
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman and Chief Executive Officer
STAR/PETRO INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: President
27
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 I hereto.
X.X. XXXXXXX & SONS, INC.
UBS WARBURG LLC
CIBC WORLD MARKETS CORP.
As Representatives of the Several
Underwriters named on Schedule I hereto
By: X.X. XXXXXXX & SONS, INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------
Name: Xxxxxx X. Xxxx
Title: Corporate Vice President
28
SCHEDULE I
UNDERWRITERS
Number of Firm Units
Name of Underwriter to be Purchased
------------------- ---------------
X.X. Xxxxxxx & Sons, Inc. 760,000
UBS Warburg LLC 760,000
CIBC World Markets Corp. 380,000
-------
Total 1,900,000
29
EXHIBIT A
January 24, 2001
X.X. XXXXXXX & SONS, INC.
UBS WARBURG LLC
CIBC WORLD MARKETS CORP.
As Representatives of the
several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Sirs:
In consideration of the agreement of the several Underwriters, for which
X.X. Xxxxxxx & Sons, Inc., UBS Warburg LLC and CIBC World Markets Corp. (the
"Representatives") intend to act as Representatives to underwrite a proposed
public offering (the "Offering") of Common Units (the "Common Units") of Star
Gas Partners, L.P., a Delaware limited partnership (the "Partnership"), as
contemplated by registration statement (Registration No. 333-94031) on Form S-3
which was filed with the Securities and Exchange Commission, the undersigned
hereby agrees that the undersigned will not, for a period of 90 days after the
date of the Prospectus Supplement relating to the Offering, 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 or
any other rights to acquire such Common Units.
Very truly yours,
By:
-----------------------
Name:
Print Name:
---------------
1
EXHIBIT B
OPINION OF XXXXXXXX XXXXX
XXXXXXXX XXXX & BALLON LLP
(a) Each of the Partnership and the Operating Partnership has been duly
formed and is validly existing in good standing as a limited partnership under
the Delaware Act, with all necessary partnership power and authority to own or
lease its properties and conduct its business, in each case as described in the
Prospectus.
(b) Each Principal Subsidiary has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the jurisdiction of
its incorporation, with all necessary corporate power and authority to own or
lease its properties and conduct its business, in each case as described in the
Prospectus.
(c) The General Partner has been duly organized and is validly existing in
good standing as a limited liability company under the laws of the State of
Delaware, with all necessary limited liability company power and authority to
own or lease its properties and conduct its business and to act as general
partner of the Partnership and the Operating Partnership, in each case as
described in the Prospectus.
(d) Each of the Partnership, the Operating Partnership, the General Partner
and the Principal Subsidiaries is duly qualified or registered as a foreign
limited partnership, foreign limited liability company or foreign corporation,
as the case may be, for the transaction of business under the laws of the States
set forth on Exhibit A to this opinion; and to our knowledge such jurisdictions
are the only jurisdictions in which the character of the business conducted by
it or the location of the properties owned or leased by it make such
qualification or registration necessary (except where the failure to so qualify
or register would not have a material adverse effect on the condition (financial
or other), results of operations or business of the Star Entities, taken as a
whole, or subject the Partnership or the limited partners of the Partnership to
any material liability or disability).
(e) All of the outstanding shares of capital stock of Star/Xxxxx, Xxxxx
Holdings, Inc., Petro and Stellar Propane Corp. have been duly authorized and
validly issued and are fully paid and non-assessable and are owned by the
Partnership or the Operating Partnership free and clear of all liens,
encumbrances, security interests, equities, charges or claims (i) in respect of
which a financing statement under the Uniform Commercial Code of the State of
Delaware naming the Partnership or the Operating Partnership as a debtor is on
file in the Office of the Secretary of State of the State of Delaware or (ii)
otherwise known to us, without independent investigation, other than those
against the Operating Partnership.
(f) The Partnership owns 300,000 shares, $1.00 par value per share, of
Common Stock, or 72.73% of the common equity interests, of TG&E. The Partnership
also owns 30,000 shares of Series B preferred stock of TG&E having a $1.67 per
share non-cumulative preferred dividend and a $100.00 per share liquidation
preference. Such shares have been duly authorized and validly issued and are
fully paid and non-assessable and are owned directly by the
2
Partnership free and clear of all liens, encumbrances, security interests,
charges and claims (i) in respect of which a financing statement under the
Uniform Commercial Code of the State of Delaware naming the Partnership as a
debtor is on file in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than the interest created by the pledge by the Partnership
to Bank of America of its TG&E shares as collateral for TG&E's bank credit
facilities.
(g) TG&E owns all of the shares of Common Stock of each of Total Gas &
Electricity (PA), Inc. and TG&E Service Company, Inc. Such shares have been duly
authorized and validly issued and are fully paid and non- assessable and are
owned directly by TG&E free and clear of all liens, encumbrances, security
interests, charges and claims (i) in respect of which a financing statement
under the Uniform Commercial Code of the State of Delaware naming TG&E as a
debtor is on file in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than the general security interest created by TG&E's bank
credit facilities.
(h) As of the Closing Date, after giving effect to the issuance of the Firm
Units but not any Option Units, the capitalization of the Partnership will
consist of 19,492,831 Common Units, 2,674,161 Senior Subordinated Units, 345,364
Junior Subordinated Units and 325,729 General Partner Units (including the 0.01%
General Partner interest in the Operating Partnership). To our knowledge,
except as set forth in the Prospectus, the Partnership does not have
outstanding, and at the Closing Date will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any Common Units or other partnership interests, any capital stock or
partnership interests of any subsidiary or any such warrants, convertible
securities or obligations. To our knowledge, except as described in the
Prospectus, there are no preemptive rights or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any limited
partner interests in the Partnership.
(i) All outstanding Common Units and Senior Subordinated Units and the
limited partner interests represented thereby have been duly authorized and
validly issued in accordance with the Partnership Agreement and are fully paid
(to the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the
Delaware Act).
(j) The Units to be issued and sold to the Underwriters by the Partnership
hereunder, including any Option Units, and the limited partner interests
represented thereby have been duly authorized in accordance with the Partnership
Agreement and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms 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 Section 17-607 of the
Delaware Act).
---------------
(1) The number of common units outstanding does not include ____ common units
registered in the name of Petro, which the Partnership treats as treasury units
and includes _____ common units which are issuable in connection with the Petro
acquisition upon the surrender of Petro securities.
3
(k) The LLC Owners own all outstanding Junior Subordinated Units; all of
such Junior Subordinated Units and the limited partner interests represented
thereby have been duly authorized and validly issued in accordance with the
Partnership Agreement and are fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by Section 17-607 of the Delaware Act); and each of the LLC Owners owns
its Junior Subordinated Units free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material) (i) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware naming any
LLC Owner as a debtor is on file in the office of the Secretary of State of the
State of Delaware or (ii) otherwise known to us, without independent
investigation, other than those created by or arising under that certain $37.5
million line of credit extended by MM Warbourg Bank Luxembourg to Hanseatic
Americas dated December 1, 1999. (
(l) The General Partner owns all outstanding General Partner Units,
representing the entire general partner interest in the Partnership; all of such
General Partner Units have been duly authorized and validly issued in accordance
with the Partnership Agreement; and the General Partner owns such General
Partner Units free and clear of all liens, encumbrances, security interests,
equities, charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material) (i) in respect of which a financing statement under the
Uniform Commercial Code of the State of Delaware naming the General Partner as a
debtor is on file in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to us, without independent investigation, other
than those created by or arising under the Delaware Act, the Bank Credit
Facilities or the First Mortgage Note Agreement.
(m) The General Partner is the sole general partner of the Operating
Partnership with a 0.01% general partner interest in the Operating Partnership;
such general partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement; and the General Partner
owns such general partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material) (i) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware naming the
General Partner as a debtor is on file in the office of the Secretary of State
of the State of Delaware or (ii) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Delaware Act, the Bank Credit Facilities or the First Mortgage Note Agreement.
(n) The Partnership is the sole limited partner of the Operating
Partnership with a 99.99% limited partner interest in the Operating Partnership;
such limited partner interest has been duly authorized and validly issued in
accordance with the Operating Partnership Agreement and is fully paid (to the
extent required under the Operating Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the
Delaware Act); and the Partnership owns such limited partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material) (i) in
respect of which a financing statement under the Uniform Commercial Code of the
State of
4
Delaware naming the Partnership as a debtor is on file in the office of the
Secretary of State of the State of Delaware or (ii) otherwise known to us,
without independent investigation, other than those created by or arising under
the Delaware Act, the Bank Credit Facilities or the First Mortgage Note
Agreement.
(o) All of the issued and outstanding member interests of the General
Partner are duly authorized and have been validly issued, and are fully paid and
nonassessable, and the LLC Owners own all such outstanding membership interests
free and clear of all liens, encumbrances, security interests, equities, charges
or claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material) (i) in
respect of which a financing statement under the Uniform Commercial Code of the
State of Delaware naming any LLC Owner as a debtor is on file in the office of
the Secretary of State of the State of Delaware or (ii) otherwise known to us,
without independent investigation, other than those created by or arising under
that certain $37.5 million line of credit extended by MM Warbourg Bank
Luxembourg to Hanseatic Americas dated December 1, 1999.
(p) The Units, when issued and delivered against payment therefor as
provided herein, will conform to the description thereof contained in the
Prospectus. The form of certificate used to evidence the Common Units is in due
and proper form and complies with all applicable statutory requirements.
(q) The Partnership has all requisite power and authority to issue, sell
and deliver the Units, in accordance with and upon the terms and conditions set
forth in this Agreement, the Partnership Agreement and the Prospectus. At the
Closing Date and the Option Closing Date, all partnership and limited liability
company action, as the case may be, required to be taken by the Partnership or
the General Partner or any of their partners or members for the authorization,
issuance, sale and delivery of the Units shall have been validly taken.
(r) Each Star Party has full power and authority to enter into the
Underwriting Agreement. The Underwriting Agreement has been duly authorized,
executed and delivered by each Star Party.
(s) The Partnership Agreement has been duly authorized, executed and
delivered by the General Partner and is a valid and legally binding agreement of
the General Partner, enforceable against the General Partner in accordance with
its terms; the Operating Partnership Agreement has been duly authorized,
executed and delivered by the General Partner and the Partnership and is a valid
and legally binding agreement of the General Partner and the Partnership,
enforceable against each of them in accordance with its terms; provided that,
with respect to each of the Partnership Agreements, the enforceability thereof
may by limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws relating to or affecting creditors' right generally
and by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(t) Neither the issuance and sale by the Partnership of the Units nor the
execution, delivery and performance of this Agreement will (i) violate any of
the provisions of the certificate or agreement of limited partnership,
certificate of incorporation or by-laws, certificate of formation or limited
liability company agreement or other governing documents of any of the
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Star Gas Entities, (ii) breach or result in a default under (or an event which
with notice or lapse of time or both would constitute such a default), cause the
time for performance of any obligation to be accelerated under or give any party
the right to accelerate the payment of any amount under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Star Gas Entities pursuant to the terms of (x) any indenture, mortgage,
deed of trust, loan agreement, bond, debenture, note agreement, capital lease or
other evidence of indebtedness of which we have knowledge, (y) any voting trust
arrangement or any contract or other agreement to which a Star Gas Entity is a
party that restricts the ability of such Star Gas Entity to issue securities and
of which we have knowledge or (z) any instrument, document, lease, license,
contract or other agreement (collectively, "Documents") filed as an exhibit to,
or incorporated as an exhibit by reference in, the Registration Statement, (iii)
breach or otherwise violate any existing obligation of any of the Star Gas
Entities under any court or administrative order, judgment or decree of which we
have knowledge or (iv) violate applicable provisions of any statute or
regulation in any of the states of the Star Gas Entities' formation, and any
state in which such entities have material operations, or of the United States.
(u) No permit, consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is required in
connection with the execution, delivery and performance of the Agreement by the
Star Parties and the consummation of the transactions contemplated hereby,
including the issuance and delivery of the Units, except such as have been
obtained under the Act and the Rules and Regulations and such as may be required
under state securities or "Blue Sky" laws or by the by-laws and rules of the
NASD in connection with the purchase and distribution by the Underwriters of the
Units.
(v) To our knowledge, any Document required to be described or referred to
in the Registration Statement or the Prospectus has been properly described or
referred to therein and any Document required to be filed as an exhibit to the
Registration Statement has been filed as an exhibit thereto or has been
incorporated as an exhibit by reference in the Registration Statement; and no
default exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any Document filed or required to
be filed as an exhibit to the Registration Statement.
(w) All descriptions in the Prospectus of statutes, regulations or legal or
governmental proceedings are accurate in all material respects and fairly
present the information required to be shown. The statements in the Registration
Statement or the Prospectus under the captions, "Cash Distribution Policy",
"Description of the Common Units," "Description of Partnership Securities,"
"Conflicts of Interest" and "Federal Income Tax Considerations" insofar as they
constitute descriptions of the Partnership Agreements or refer to statements of
law or legal conclusions, are accurate and complete in all material respects.
(x) To our knowledge, except as provided in the Partnership Agreement, no
person or entity has the right to require the registration under the Act of
Common Units or other securities of any Star Entity by reason of the filing or
effectiveness of the Registration Statement.
(y) The Units have been approved for listing on the NYSE, subject only to
official notice of issuance.
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(z) None of the Star Entities is, or as of the Closing Date or as a result
of the transactions described under "Recent Developments" in the Prospectus
Supplement will be, (i) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" thereof, within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (ii) an "investment
company," a company "controlled by" an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
(aa) Except as described in the Prospectus, to our knowledge each of the
Star Entities has (i) all governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, (ii) complied in all respects with all laws,
regulations and orders applicable to it or its business, except where the
failure to so comply would not have a material adverse affect on the Star
Entities, taken as a whole, and (iii) performed all its obligations required to
be performed by it, and is not, and at the Closing Date will not be, in default,
under any contract or other agreement or instrument to which it is a party or by
which its property is bound or affected. To our knowledge, none of the Star
Entities is in violation of any provision of its certificate or agreement of
limited partnership, certificate of incorporation or by-laws, certificate of
formation or limited liability company agreement, as the case may be.
(bb) To our knowledge, none of the Star Gas Entities is in violation of, or
in default with respect to, any law, rule, regulation, order, judgment or
decree, except as may be described in the Prospectus, or such as in the
aggregate do not now have and will not in the future have a material adverse
effect upon the operations, business or assets of the Star Gas Entities, taken
as a whole.
(cc) The Registration Statement, the Prospectus (including any documents
incorporated, at the time they were filed, by reference into the Prospectus) and
any further amendments and supplements thereto prior to the date hereof, comply
in all material respects as to form with the requirements of the Act, the
Exchange Act, the Exchange Act Rules and Regulations and the Rules and
Regulations (except that we express no opinion as to financial statements,
schedules and other financial data contained in the Registration Statement, the
Prospectus or incorporated by reference therein). (dd) Assuming that the
Underwriters do not have notice of any adverse claim (as defined in Sections
8-102 and 8-105 of the New York Uniform Commercial Code) to the Units, upon the
delivery to the Underwriters of certificates evidencing the Units registered in
the name of the Underwriters (or their nominee) and payment by the Underwriters
of the purchase price for the Units, the Underwriters (or such nominee) will be
"protected purchasers" (as such term is used in Section 8-303 of the New York
Uniform Commercial Code).
(ee) The Registration Statement was declared effective under the Act on
January 12, 2000; to our knowledge, no order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or threatened by the Commission; and any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner and within the
time period required by such Rule.
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(ff) To our knowledge, there are no actions, suits, proceedings or
investigations pending or overtly threatened in writing against the Star Gas
Entities, or any of their respective officers or directors in their capacities
as such, before or by any court, governmental agency or arbitrator which (i)
seek to challenge the legality or enforceability of the Agreement, (ii) seek to
challenge the legality or enforceability of any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iii) seek
damages or other remedies with respect to any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iv) except as
set forth in or contemplated by the Registration Statement or the Prospectus,
seek money damages or seek to impose criminal penalties upon the Star Gas
Entities or any of their respective officers or directors in their capacities as
such and of which we have knowledge or (v) seek to enjoin any of the business
activities of the Star Gas Entities or the transactions described in the
Prospectus and of which we have knowledge.
We have participated in the preparation of the Registration Statement
and the Prospectus and, without assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Prospectus or in any amendment or supplement thereto or in any
documents incorporated by reference into the Prospectus (except to the extent
specified in the foregoing opinion), nothing has come to our attention that
causes us to believe that, both as of the Effective Date and the Closing Date,
the Registration Statement or any amendment thereto, including any documents
incorporated by reference into the Registration Statement, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus or any amendment or supplement
thereto, including any documents incorporated by reference into the Prospectus,
at the time such Prospectus was issued, at the time any such amended or
supplemented Prospectus was issued, and at the Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances in which they were made, not misleading (except that we
express no opinion as to financial statements, schedules and other financial
data contained in the Registration Statement, the Prospectus or incorporated by
reference therein).
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