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Exhibit 1.1
EXECUTION COPY
1,200,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
HERITAGE PROPANE PARTNERS, L.P.
UNDERWRITING AGREEMENT
PAINEWEBBER INCORPORATED
X.X. XXXXXXX & SONS, INC.
CIBC WORLD MARKETS CORP.
c/o PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Heritage Propane Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to sell an aggregate of 1,200,000 common units ("Common
Units") representing limited partner interests in the Partnership (the "Firm
Units") to you (the "Underwriters"). The Partnership has also agreed to grant to
the Underwriters an option (the "Option") to purchase up to an additional
180,000 Common Units (the "Option Units") on the terms and for the purposes set
forth in Section 1(b). The Firm Units and the Option Units are hereinafter
referred to as the "Units."
The initial public offering price per Common Unit for the Units and the
purchase price per Common Unit for the Units to be paid by the several
Underwriters shall be agreed upon by the Partnership and the Underwriters, and
such agreement shall be set forth in a separate written instrument substantially
in the form of Exhibit A hereto (the "Price Determination Agreement"). The Price
Determination Agreement may take the form of an exchange of any standard form of
written telecommunication between the Partnership and the Underwriters and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Units will be governed by this Agreement, as supplemented by the
Price Determination Agreement. From and after the date of the execution and
delivery of the Price Determination Agreement, this Agreement shall be deemed to
incorporate, and, unless the context otherwise indicates, all references
contained herein to "this Agreement" and to the phrase "herein" shall be deemed
to include, the Price Determination Agreement.
Heritage Holdings, Inc., a Delaware corporation (the "General
Partner"), is the sole general partner of the Partnership and the sole general
partner of Heritage Operating, L.P. (the "Operating
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Partnership"). The Partnership, the Operating Partnership and the General
Partner are collectively referred to herein as the "Heritage Parties." The
Heritage Parties confirm as follows their agreements with the Underwriters:
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Heritage Parties herein contained and subject to all the terms
and conditions of this Agreement, the Partnership agrees to sell to each
Underwriter named below, and each Underwriter, severally and not jointly, agrees
to purchase from the Partnership, at the purchase price per Common Unit for the
Firm Units to be agreed upon by the Underwriters and the Partnership in
accordance with Section 1(c) hereof and set forth in the Price Determination
Agreement, the number of Firm Units set forth opposite the name of such
Underwriter in Schedule I, plus such additional number of Firm Units which such
Underwriter may become obligated to purchase pursuant to Section 8 hereof.
Schedule I may be attached to the Price Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement,
the Partnership grants the Option to the several Underwriters to purchase,
severally and not jointly, up to 180,000 Option Units from the Partnership at
the same price per Common Unit as the Underwriters shall pay for the Firm Units.
The Option may be exercised only to cover over-allotments in the sale of the
Firm Units by the Underwriters and may be exercised in whole or in part at any
time (but not more than once) on or before the 30th day after the date of this
Agreement upon written or telegraphic notice (the "Option Units Notice") by the
Underwriters to the Partnership no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for
closing in the Option Units Notice (the "Option Closing Date") setting forth the
aggregate number of Option Units to be purchased and the time and date for such
purchase. On the Option Closing Date, the Partnership will issue and sell to the
Underwriters the number of Option Units set forth in the Option Units Notice,
and each Underwriter will purchase such percentage of the Option Units as is
equal to the percentage of Firm Units that such Underwriter is purchasing, as
adjusted by the Underwriters in such manner as they deem advisable to avoid
fractional units.
(c) The initial public offering price per unit for the Firm
Units and the purchase price per unit for the Firm Units to be to be paid by the
several Underwriters shall be agreed upon and set forth in the Price
Determination Agreement which shall be dated the date hereof, and a prospectus
supplement to the prospectus contained in the Registration Statement containing
such per unit price information shall be filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Act").
2. Delivery and Payment. Delivery of the Firm Units shall be made by
causing The Depository Trust Company to credit the Firm Units to the account of
the Partnership, against payment of the purchase price therefor by wire transfer
of Federal Funds or similar same day funds to an account designated in writing
by the Partnership to PaineWebber Incorporated at least one business day prior
to the Closing Date (as hereinafter defined). Such payment shall be made at
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10:00 a.m., New York City time, on the third business day (or fourth business
day, if the Price Determination Agreement is executed after 4:30 p.m., New York
City time) after the date on which the first bona fide offering of the Firm
Units to the public is made by the Underwriters or at such time on such other
date, not later than ten business days after such date, as may be agreed upon by
the Partnership and the Underwriters (such date is hereinafter referred to as
the "Closing Date").
To the extent the Option is exercised, delivery of the Option Units
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Units Notice.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Units and the Option Units by the Partnership
to the respective Underwriters shall be borne by the Partnership. The
Partnership will pay and save the Underwriters and any subsequent holder of the
Units harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying Federal and state stamp and other transfer taxes,
if any, which may be payable or determined to be payable in connection with the
original issuance or sale to the Underwriters of the Firm Units and Option
Units.
3. Representations and Warranties of the Heritage Parties. Each of the
Heritage Parties, jointly and severally, represents, warrants and covenants to
the Underwriters that:
(a) The Partnership meets the requirements for use of Form S-3
and a registration statement (Registration No. 333-86057) on Form S-3 relating
to the Units (and such amendments to such registration statement as may have
been required to the date of this Agreement) has been prepared by the
Partnership under the provisions of the Act and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. Such registration statement has been declared effective by the
Commission. Copies of such registration statement and amendments have been
delivered to the Underwriters. The term "Registration Statement" means the
registration statement as amended at the time it became effective (the
"Effective Date"), including all financial statements and exhibits and any
information deemed to be included by Rule 430A or Rule 434 of the Rules and
Regulations. If the Partnership files a Registration Statement to register a
portion of the Units and relies on Rule 462(b) of the Rules and Regulations for
such registration statement to become effective upon filing with the Commission
(the "Rule 462 Registration Statement"), then any reference to the Registration
Statement shall be deemed to include the Rule 462 Registration Statement as
amended from time to time. The term "Prospectus" means the prospectus
constituting a part of the Registration Statement and any amendments or
supplements to such prospectus, including without limitation the prospectus
supplement filed with the Commission 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, including the Prospectus Supplement, shall
be provided to the Underwriters by the Partnership for use in connection with
the offering of the Units
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that differs from the Prospectus (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
Underwriters 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 Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the Effective Date or the date of the Prospectus, as the
case may be. 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 the filing of any document 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 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 3(b) do not apply
to any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Partnership
by the Underwriters specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. For all purposes of this
Agreement the only information relating to the Underwriters furnished in writing
to the Partnership by the Underwriters specifically for inclusion in the
Registration Statement or the Prospectus is the information set forth in the
first, second, sixth, eighth and tenth paragraphs of the section captioned
"Underwriting" in the Prospectus Supplement. The Partnership has not distributed
any offering material in connection with
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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 LP Act") with full partnership power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Prospectus. Each of the Partnership and the Operating
Partnership is duly registered or qualified as a foreign limited partnership for
the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership and
its subsidiaries, taken as a whole, or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(e) The General Partner has been duly incorporated and is
validly existing in good standing as a corporation under the laws of the State
of Delaware with full corporate power and authority to own or lease its
properties, to conduct its business and to act as general partner of the
Partnership and the Operating Partnership, in each case in all material respects
as described in the Prospectus. The General Partner is duly registered or
qualified as a foreign corporation for the transaction of business under the
laws of each jurisdiction in which the character of the business conducted by it
or the nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to register
or qualify would not (i) have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Partnership and its subsidiaries, taken as a whole, or the
General Partner or (ii) subject the limited partners of the Partnership to any
material liability or disability.
(f) Heritage Service Corp. has been duly incorporated and is
validly existing in good standing as a corporation under the laws of the State
of Delaware with full corporate power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Prospectus. Heritage Service Corp. is duly registered or
qualified as a foreign corporation for the transaction of business under the
laws of each jurisdiction in which the
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character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership and
its subsidiaries, taken as a whole, or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(g) M-P Oils, Ltd. has been duly incorporated and is validly
existing in good standing as a corporation under the laws of the Province of
Alberta, Canada with full corporate power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Prospectus. M-P Oils, Ltd. is duly registered or qualified as a
foreign corporation for the transaction of business under the laws of each
jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to register
or qualify would not (i) have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Partnership and its subsidiaries, taken as a whole, or (ii)
subject the limited partners of the Partnership to any material liability or
disability.
(h) M-P Energy Partnership has been duly formed and is validly
existing in good standing as a general partnership under the laws of the
Province of Alberta, Canada, with full partnership power and authority to own or
lease its properties and to conduct its business, in each case in all material
respects as described in the Prospectus.
(i) Bi-State Propane has been duly formed and is validly
existing in good standing as a general partnership under the laws of the State
of California, with full partnership power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Prospectus.
(j) The General Partner is the sole general partner of the
Partnership with a 1% general partner interest in the Partnership; such general
partner interest has been duly authorized and validly issued in accordance with
the Amended and Restated Agreement of Limited Partnership of the Partnership (as
the same may be amended and restated at the Closing Date, the "Partnership
Agreement"); and the General Partner owns such general partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(k) The General Partner owns 1,116,243 Common Units and
2,777,207 Subordinated Units (as defined in the Partnership Agreement) (such
Common Units and Subordinated Units being hereinafter referred to as the
"Sponsor Units") and all of the Incentive Distribution Rights (as defined in the
Partnership Agreement); all of such Sponsor Units and Incentive Distribution
Rights and the limited partner interests represented thereby have been duly
authorized and validly issued in accordance with the Partnership Agreement, and
are fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters
described under the caption "The Partnership Agreement-Limited Liability" in the
prospectus contained in the Partnership's Registration
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Statement on Form S-1 (No. 333-4018) filed as Exhibit No. 1 to the Partnership's
Registration Statement on Form 8-A (File No. 1-11727) incorporated by reference
in the Prospectus (the "IPO Prospectus")); and the General Partner owns such
Sponsor Units and Incentive Distribution Rights free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(l) All outstanding Common Units (other than those which are
Sponsor 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 matters
described under the caption "The Partnership Agreement-Limited Liability" in the
IPO Prospectus).
(m) The Units issued to the Underwriters, including any Option
Units that may be issued at the Firm Closing Date or the Option Closing Date, as
the case may be, and the limited partner interests represented thereby will be
duly authorized in accordance with the Partnership Agreement and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid (to the extent required
under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described under the caption "The
Partnership Agreement-Limited Liability" in the IPO Prospectus).
(n) The General Partner is the sole general partner of the
Operating Partnership with a 1.0101% general partner interest in the Operating
Partnership; such general partner interest has been duly authorized and validly
issued in accordance with the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership (as the same may be amended and
restated at 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.
(o) The Partnership is the sole limited partner of the
Operating Partnership with a 98.9899% 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 matters
described under the caption "The Partnership Agreement-Limited Liability" in the
IPO Prospectus); and the Partnership owns such limited partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(p) All of the outstanding shares of capital stock of the
General Partner have been duly authorized and validly issued and are fully paid
and nonassessable; and all of such shares are owned by the registered holders
thereof free and clear of all liens, encumbrances, security interests, equities,
charges or claims, except (i) as provided in the Amended and Restated
Stockholders'
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Agreement dated as of June 1, 1997 between the General Partner and the
stockholders named therein (the "Stockholders' Agreement") and (ii) as provided
in the Pledge Agreements dated December 10, 1998 between the General Partner and
certain of the stockholders named therein (the "Pledge Agreements").
(q) All of the outstanding shares of capital stock of Heritage
Service Corp. have been duly authorized and validly issued and are fully paid
and nonassessable; and the Operating Partnership owns all of such shares, free
and clear of all liens, encumbrances, security interests, equities, charges or
claims, except as provided in the Security Agreement dated June 25, 1996 among
the General Partner, the Operating Partnership and Wilmington Trust Company (the
"Security Agreement").
(r) All of the outstanding shares of capital stock of M-P
Oils, Ltd. have been duly authorized and validly issued and are fully paid and
nonassessable; and Heritage Service Corp. owns all of such shares, free and
clear of all liens, encumbrances, security interests, equities, charges or
claims, except as provided in the Security Agreement.
(s) M-P Oils, Ltd. owns a general partner interest of 60% in
M-P Energy Partnership; such general partner interest has been duly authorized
and validly issued in accordance with the partnership agreement of M-P Energy
Partnership; and M-P Oils, Ltd. owns such general partner interest, free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(t) None of the Heritage Parties has any subsidiaries (other
than the Partnership and the Operating Partnership themselves and Heritage
Service Corp., M-P Oils, Ltd. and M-P Energy Partnership) which, individually or
considered as a whole, would be deemed to be a significant subsidiary (as
defined in Rule 405 under the Act).
(u) Except as described in the Prospectus or arising under
certain agreements providing for the issuance of Common Units to the General
Partner in connection with stock acquisitions for the benefit of the Partnership
("Stock Issuance Agreements"), there are no preemptive rights or other rights to
subscribe for or to purchase, nor any restriction upon the voting or transfer
of, any interests in the Partnership or the Operating Partnership pursuant to
either of the Partnership Agreements or any other agreement or instrument to
which the Partnership or the Operating Partnership is a party or by which either
of them may be bound. Neither the filing of the Registration Statement nor the
offering or sale of the Units as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any Units or other securities
of the Partnership, except such rights as have been waived or satisfied. Except
(i) as described in the Prospectus, (ii) for restricted units granted under the
Partnership's restricted unit plan and (iii) for Common Units issuable under the
Stock Issuance Agreements, there are no outstanding options or warrants to
purchase any Common Units or Subordinated Units or other partnership interests
in the Partnership or the Operating Partnership. The Units, when issued and
delivered against payment therefor as provided herein, will conform in all
material respects to the description thereof contained in the
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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 corporate and partnership action,
as the case may be, required to be taken by the Heritage Parties or any of their
stockholders or partners for the authorization, issuance, sale and delivery of
the Units shall have been validly taken.
(v) The execution and delivery of, and the performance by each
of the Heritage Parties of their respective obligations under, this Agreement
have been duly and validly authorized by each of the Heritage Parties, and this
Agreement has been duly executed and delivered by each of the Heritage Parties,
and constitutes the valid and legally binding agreement of each of the Heritage
Parties, enforceable against each of the Heritage Parties in accordance with its
terms; provided that the enforceability hereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws.
(w) The Partnership Agreement has been duly authorized,
executed and delivered by the General Partner and is a valid and legally binding
agreement of the General Partner, enforceable against the General Partner in
accordance with its terms; the Operating Partnership Agreement has been duly
authorized, executed and delivered by the General Partner and the Partnership,
and is a valid and legally binding agreement of the General Partner and the
Partnership, enforceable against each of them in accordance with its terms;
provided that, with respect to each of the Partnership Agreements, the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(x) None of the offering, issuance and sale by the Partnership
of the Units, the execution, delivery and performance of this Agreement by the
Heritage Parties, or the consummation of the transactions contemplated hereby
(i) conflicts or will conflict with or constitutes or will constitute a
violation of the certificate or agreement of limited partnership, the
certificate or articles of incorporation or bylaws or other organizational
documents of any of the Heritage Parties or any of their subsidiaries, (ii)
conflicts or will conflict with or constitutes or will constitute a breach or
violation of, or a default under (or an event which, with notice or lapse of
time or both, would constitute such an event), any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which any of
the Heritage Parties or any of their subsidiaries is a party or by which any of
them or any of their respective properties may be bound, (iii) violates or will
violate any statute, law or regulation or any order, judgment, decree or
injunction of any court or governmental agency or body directed to any of the
Heritage Parties or any of their subsidiaries or any of their properties in a
proceeding to which any of them or their property is a party or (iv) will result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets
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of any of the Heritage Parties or any of their subsidiaries, which conflicts,
breaches, violations or defaults, in the case of clauses (ii), (iii) or (iv),
would have a material adverse effect upon the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Heritage Parties, taken as a whole.
(y) No permit, consent, approval, authorization, order,
registration, filing or qualification of or with any court, governmental agency
or body is required in connection with the execution and delivery of, or the
consummation by the Heritage Parties of the transactions contemplated by, this
Agreement, except as may be required under the Securities Act, the Exchange Act
and state securities or "Blue Sky" laws.
(z) None of the Heritage Parties is in (i) violation of its
partnership agreement, certificate or articles of incorporation or bylaws or
other organizational documents, or of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it or of any
decree of any court or governmental agency or body having jurisdiction over it
or (ii) breach, default (or an event which, with notice or lapse of time or
both, would constitute such a default) or violation in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any agreement, indenture, lease or other
instrument to which it is a party or by which it or any of its properties may be
bound, which breach, default or violation would, if continued, have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Heritage Parties, taken as
a whole, or could materially impair the ability of any of the Heritage Parties
to perform its obligations under this Agreement. To the knowledge of the
Heritage Parties, no third party to any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of the Heritage Parties
is a party or by which any of them is bound or to which any of their properties
are subject, is in default under any such agreement, which breach, default or
violation would, if continued, have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Heritage Parties, taken as a whole.
(aa) The accountants, Xxxxxx Xxxxxxxx LLP, who have certified
or shall certify the audited financial statements included in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), are
independent public accountants with respect to the Heritage Parties as required
by the Act and the Rules and Regulations.
(bb) The financial statements (including the related notes and
supporting schedules) included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) present fairly in all material
respects the financial position, results of operations and cash flows of the
entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, except to the extent disclosed therein. The selected historical
information set forth in the Partnership's Annual Report on Form 10-K for the
fiscal year ended August 31, 1998 under the caption "Selected Historical
Financial and Operating Data" is accurately presented in all material respects
and prepared on a basis consistent with the
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audited and unaudited historical consolidated financial statements from which it
has been derived, except as disclosed therein.
(cc) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i) none
of the Heritage Parties has incurred any liability or obligation, indirect,
direct or contingent, or entered into any transactions, not in the ordinary
course of business, that, singly or in the aggregate, is material to the
Heritage Parties, taken as a whole, (ii) there has not been any material change
in the capitalization, or material increase in the short-term debt or long-term
debt, of the Heritage Parties and (iii) there has not been any material adverse
change, or any development involving or which may reasonably be expected to
involve, singly or in the aggregate, a prospective material adverse change in
the condition (financial or other), business, prospects, properties, net worth
or results of operations of the Heritage Parties, taken as a whole.
(dd) There are no legal or governmental proceedings pending
or, to the knowledge of the Heritage Parties, threatened, against any of the
Heritage Parties or any of their subsidiaries, or to which any of the Heritage
Parties or any of their subsidiaries is a party, or to which any of their
respective properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required, and
there are no agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that are not described
or filed as required by the Act.
(ee) The Heritage Parties and their subsidiaries have good and
marketable title to all real property and good title to all personal property
described in the Prospectus as being owned by them, free and clear of all liens,
claims, security interests or other encumbrances except (i) as described in the
Prospectus, (ii) pursuant to the Security Agreement and (iii) such as do not
materially interfere with the use of such properties taken as a whole as
described in the Prospectus, including liens, claims, security interests and
other encumbrances pursuant to mortgage and/or security agreements given as
security for certain non-compete agreements with the prior owners of certain
businesses previously acquired by the Heritage Parties and their subsidiaries;
and all real property and buildings held under lease by any of the Heritage
Parties or any of their subsidiaries are held under valid and subsisting and
enforceable leases with such exceptions as do not materially interfere with the
use of such properties taken as a whole as described in the Prospectus.
(ff) Each of the Heritage Parties and their subsidiaries has
such permits, consents, licenses, franchises, certificates and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own its
properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the Prospectus
and except for such permits the failure of which to have obtained would not
have, individually or in the aggregate, a material adverse effect upon the
ability of the Heritage Parties considered as a whole to conduct their
businesses in all material respects as currently conducted and as contemplated
by the
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Prospectus to be conducted; each of the Heritage Parties and their subsidiaries
has fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any impairment of
the rights of the holder of any such permit, except for such revocations,
terminations and impairments that would not have a material adverse effect upon
the ability of the Heritage Parties considered as a whole to conduct their
businesses in all material respects as currently conducted and as contemplated
by the Prospectus to be conducted, subject in each case to such qualification as
may be set forth in the Prospectus; and, except as described in the Prospectus,
none of such permits contains any restriction that is materially burdensome to
the Heritage Parties and their subsidiaries considered as a whole.
(gg) None of the Heritage Parties or any of their subsidiaries
is now, and after sale of the Units to be sold by the Partnership hereunder and
application of the net proceeds from such sale as described in the Prospectus
Supplement under the caption "Use of Proceeds," none of the Heritage Parties or
any of their subsidiaries will be, (i) an "investment company" or a company
"controlled by" an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or (ii) a "public utility company," "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate"
thereof, under the Public Utility Holding Company Act of 1935, as amended.
(hh) The Partnership has reviewed its operations and that of
its subsidiaries and is in the process of reviewing the relevant operations of
third parties with which the Partnership or any of its subsidiaries has a
material relationship to evaluate the extent to which the business or operations
of the Partnership or any of its subsidiaries will be affected by the Year 2000
Problem (as hereinafter defined). As a result of such review, the Partnership
has no reason to believe, and does not believe, that the Year 2000 Problem will
have a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Partnership and
its subsidiaries, taken as a whole. The "Year 2000 Problem" as used herein means
any significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
(ii) None of the Heritage Parties has violated any
environmental, safety, health or similar law or regulation applicable to its
business relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), or lacks any permits, licenses or other approvals
required of them under applicable Environmental Laws to own, lease or operate
their properties and conduct their business as described in the Prospectus or is
violating any terms and conditions of any such permit, license or approval,
which in each case would have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Heritage Parties, taken as a whole.
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(jj) The Heritage Parties maintain insurance covering their
properties, operations, personnel and businesses against such losses and risks
as are reasonably adequate to protect them and their businesses in a manner
consistent with other businesses similarly situated. None of the Heritage
Parties has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be made in
order to continue such insurance, and all such insurance is outstanding and duly
in force on the date hereof and will be outstanding and duly in force on the
Closing Date.
(kk) Except as described in the Prospectus, there is (i) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to the knowledge
of the Heritage Parties, threatened, to which any of the Heritage Parties or any
of their respective subsidiaries is or may be a party or to which the business
or property of any of the Heritage Parties or any of their respective
subsidiaries is or may be subject, (ii) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or that has
been proposed by any governmental body and (iii) no injunction, restraining
order or order of any nature issued by a federal or state court or foreign court
of competent jurisdiction to which any of the Heritage Parties or any of their
respective subsidiaries is or may be subject, that, in the case of clauses (i),
(ii) and (iii) above, is reasonably expected to (A) singly or in the aggregate
have a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Heritage
Parties, taken as a whole, (B) prevent or result in the suspension of the
offering and issuance of the Units or (C) in any manner draw into question the
validity of this Agreement.
(ll) The Common Units are listed on the New York Stock
Exchange ("NYSE"), and the Units have been approved for listing on the NYSE
subject only to official notice of issuance.
4. Agreements of the Partnership. Each of the Partnership and the
General Partner 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 Underwriters within a reasonable period of time prior to
the filing thereof and the Underwriters shall not have reasonably objected
thereto in good faith.
(b) During such period as the Prospectus is required by law to
be delivered in connection with the sale of Units by an Underwriter or dealer,
the Partnership will notify the Underwriters promptly, and will confirm such
notice in writing, (i) when any post-effective amendment to the Registration
Statement becomes effective, (ii) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (iii) 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, (iv) of
the happening of any event that in the judgment of the Partnership makes any
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statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading and (v) 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 during such period as the Prospectus
is required by law to be delivered in connection with the sale of Units by an
Underwriter or dealer, 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 Underwriters, without
charge, (i) one signed copy 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 (ii) such
number of conformed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
but without exhibits, as the Underwriters or their counsel may reasonably
request.
(d) The Partnership and the General Partner 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 Underwriters 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 Underwriters 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 PaineWebber Incorporated after reasonable notice thereof, which
approval will not be unreasonably withheld.
(f) Prior to any public offering of the Units by the
Underwriters, the Partnership will cooperate with the Underwriters 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 Underwriters may request; provided, that in no event shall
the Partnership be obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take
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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 two years commencing on the Effective
Date, the Partnership will furnish to the Underwriters 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 Common Units.
(h) The Partnership will make generally available to holders
of its securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement (which need not be audited
but shall be in reasonable detail) for a period of 12 months ended commencing
after the Effective Date, and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Partnership will
pay, or reimburse if paid by the Underwriters, 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 (i) 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, (ii) the preparation and delivery of certificates
representing the Units, (iii) the word processing, printing and reproduction of
this Agreement, the Agreement Among Underwriters, any Dealer Agreements and any
Underwriters' Questionnaire, (iv) 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, (v) the listing of the Units on the NYSE,
(vi) 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, (vii) 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 4(f), including the fees, disbursements and other
charges of counsel to the Underwriters in connection therewith, and the
preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (viii) counsel to the Partnership, (ix) the transfer agent for the
Units and (x) the Partnership's independent public accountants.
(j) If this Agreement shall be terminated by the Partnership
pursuant to any of the provisions hereof (otherwise than pursuant to Section 8)
or if for any reason the Partnership shall be unable to perform its obligations
hereunder, the Partnership will reimburse the Underwriters for all out-of-pocket
expenses (including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
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(k) The Partnership will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
Common Units to facilitate the sale or resale of any of the Units.
(l) The Partnership will apply the net proceeds from the
offering and sale of the Units to be sold by the Partnership in the manner set
forth in the Prospectus and the Prospectus Supplement under "Use of Proceeds."
(m) During the period of 90 days after the commencement of the
public offering of the Units, the Heritage Parties will not, without the prior
written consent of PaineWebber Incorporated, directly or indirectly, sell, offer
to sell, grant any option for the sale of, or otherwise dispose of, any Common
Units, securities convertible into or exercisable or exchangeable for Common
Units or rights to acquire 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, (iii) in connection with, or as payment of any
part of, or to finance the purchase price for, the acquisition by the Heritage
Parties of assets (including by way of purchase of capital stock or other equity
interest, including, without limitation, Common Units issued by the Partnership
to the General Partner in connection with any such acquisition or similar prior
acquisitions) and (iv) issuances of Common Units in a transaction not involving
a public offering to purchasers who enter into an agreement with the
Underwriters in the form set forth in Exhibit C; provided, that the Partnership
will not grant options to purchase Common Units pursuant to such employee
benefit plans at a price less than the public offering price; provided further
that during such 90-day period, the Partnership will not issue more than an
aggregate of 200,000 Common Units pursuant to clauses (iii) and (iv).
(n) The Partnership will cause each of its executive officers
and directors to enter into agreements with the Underwriters in the form set
forth in Exhibit C to the effect that they will not, for a period of 90 days
after the commencement of the public offering of the Units, without the prior
written consent of PaineWebber Incorporated, sell, contract to sell or otherwise
dispose of any Common Units, securities convertible into or exercisable or
exchangeable for Common Units or rights to acquire Common Units (other than
pursuant to employee benefit plans as in existence as of the date hereof).
5. Conditions of the Obligations of the Underwriters. In addition to
the execution and delivery of the Price Determination Agreement, the obligations
of each Underwriter hereunder are subject to the following conditions:
(a) All filings required by Rule 424 of the Rules and
Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for such
purpose shall be pending before or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Units under the securities or Blue Sky laws of any
jurisdiction
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shall be in effect and no proceeding for such purpose shall be pending before or
threatened by the authorities of any such jurisdiction, (iii) any request for
additional information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and (iv) after the date hereof no amendment
or supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Underwriters and the
Underwriters did not reasonably object thereto in good faith, and the
Underwriters shall have received certificates, dated the Closing Date and the
Option Closing Date and signed by the Chairman of the Board of Directors and the
President of the General Partner (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been, and no development shall have occurred which could reasonably be expected
to result in, a material adverse change in the general affairs, business,
prospects, properties, management, condition (financial or otherwise) or results
of operations of the Partnership and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, in each
case other than as set forth in or contemplated by the Registration Statement
and the Prospectus and (ii) neither the Partnership nor any of its subsidiaries
shall have sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or not covered
by insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, which is not set forth in the Registration
Statement and the Prospectus, if in the judgment of the Underwriters any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Units by the Underwriters at the public offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Heritage Parties or any of
their subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any federal, state or local court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding would materially and adversely affect the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Partnership and its subsidiaries taken as a whole.
(e) Each of the representations and warranties of the Heritage
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 Heritage Parties and all conditions herein
contained to be fulfilled or complied with by the Heritage 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.
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(f) The Underwriters 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 Xxxxxxx
& Xxxxx L.L.P., counsel to the Partnership, to the effect that:
(i) Each of the Partnership and the Operating
Partnership has been duly formed and is validly existing in good
standing as a limited partnership under the Delaware LP Act with all
necessary partnership power and authority to own or lease its
properties and conduct its business, in each case in all material
respects as described in the Prospectus.
(ii) Heritage Service Corp. has been duly
incorporated and is validly existing in good standing as a corporation
under the laws of the State of Delaware with all necessary corporate
power and authority to own or lease its properties and conduct its
business, in each case in all material respects as described in the
Prospectus.
(iii) The General Partner is the sole general partner
of the Partnership with a 1% general partner interest in the
Partnership; such general partner interest has been duly authorized and
validly issued in accordance with the Partnership Agreement; the
General Partner owns all of the Sponsor Units and the Incentive
Distribution Rights; all of such Sponsor Units and the Incentive
Distribution Rights, and the limited partner interests represented
thereby, have been duly authorized and validly issued in accordance
with the Partnership Agreement and are fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described under the
caption "The Partnership Agreement-Limited Liability" in the IPO
Prospectus); and the General Partner owns such general partner
interest, Sponsor Units and Incentive Distribution Rights free and
clear of all liens, encumbrances, security interests, charges or claims
(A) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming the General Partner as
debtor is on file in the office of the Secretary of State of the State
of Delaware or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the
Delaware LP Act.
(iv) All outstanding Common Units issued to the
underwriters in the Partnership's initial public offering (including
pursuant to the underwriters' overallotment option) or pursuant to the
Stock Issuance Agreements and the limited partner interests represented
thereby have been duly authorized and validly issued in accordance with
the Partnership Agreement, and are fully paid (to the extent required
under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described under the caption
"The Partnership Agreement-Limited Liability" in the IPO Prospectus).
(v) The 1,200,000 Common Units to be issued and sold
to the Underwriters by the Partnership pursuant to this Agreement and
the limited partner interests
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represented thereby have been duly authorized by the Partnership
Agreement and, when issued and delivered against payment therefor as
provided in this Agreement, will be validly issued, fully paid (to the
extent required by the Partnership Agreement) and nonassessable (except
as such nonassessability may be affected by matters described under the
caption "The Partnership Agreement-Limited Liability" in the IPO
Prospectus).
(vi) The General Partner is the sole general partner
of the Operating Partnership with a 1.0101% general partner interest in
the Operating Partnership; such general partner interest has been duly
authorized and validly issued in accordance with the Operating
Partnership Agreement; and the General Partner owns such general
partner interest free and clear of all liens, encumbrances, security
interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware
naming the General Partner as debtor is on file in the office of the
Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those
created by or arising under the Delaware LP Act.
(vii) The Partnership is the sole limited partner of
the Operating Partnership with a 98.9899% 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 matters described under the caption
"The Partnership Agreement-Limited Liability" in the IPO Prospectus);
and the Partnership owns such limited partner interest free and clear
of all liens, encumbrances, security interests, charges or claims (A)
in respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Partnership as debtor is on
file in the office of the Secretary of State of the State of Delaware
or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the
Security Agreement or the Delaware LP Act.
(viii) The Operating Partnership owns 100% of the
issued and outstanding capital stock of Heritage Service Corp.; such
capital stock has been duly authorized and validly issued and is fully
paid and nonassessable; and the Operating Partnership owns such capital
stock free and clear of all liens, encumbrances, security interests,
charges or claims (A) in respect of which a financing statement under
the Uniform Commercial Code of the State of Delaware naming the
Operating Partnership as debtor is on file in the office of the
Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those
created by or arising under the Security Agreement or the Delaware
General Corporation Law.
(ix) Except as described in the Prospectus, there are
no preemptive rights or other rights to subscribe for or to purchase,
nor any restriction upon the voting or transfer of, any limited partner
interests in the Partnership or the Operating Partnership pursuant to
either of the Partnership Agreements. Neither the filing of the
Registration Statement nor
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the offering or sale of the Units as contemplated by this Agreement
gives rise to any rights under the Partnership Agreements, other than
those which have been waived or satisfied, for or relating to the
registration of any Units or other securities of the Partnership. The
Partnership has all requisite power and authority to issue, sell and
deliver the Units or other partnership interests in the Partnership, in
accordance with and upon the terms and conditions set forth in this
Agreement, the Partnership Agreement and the Prospectus.
(x) This Agreement has been duly authorized, executed
and delivered by each of the Heritage Parties.
(xi) The Partnership Agreement has been duly
authorized, executed and delivered by the General Partner and is a
valid and legally binding agreement of the General Partner, enforceable
against the General Partner in accordance with its terms; the Operating
Partnership Agreement has been duly authorized, executed and delivered
by the General Partner and the Partnership and is a valid and legally
binding agreement of the General Partner and the Partnership,
enforceable against each of them in accordance with its terms; provided
that, with respect to each Partnership Agreement, the enforceability
thereof may be limited by (A) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws from time to time
in effect affecting creditors' rights and remedies generally and by
general principles of equity (regardless of whether such principles are
considered in a proceeding in equity or at law) and (B) public policy,
applicable law relating to fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing.
(xii) None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of
this Agreement by the Heritage Parties, or the consummation of the
transactions contemplated hereby (A) constitutes or will constitute a
violation of the Partnership Agreements, the certificates of limited
partnership of the Partnerships, or the certificate or articles of
incorporation or bylaws or other organizational documents of any of the
Heritage Parties, (B) constitutes or will constitute a breach or
violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such an event), any agreement
filed or incorporated by reference as an exhibit to the Registration
Statement, (C) results or will result in any violation of the Delaware
LP Act, the Delaware General Corporation Law, the laws of the State of
Texas or federal law, or (D) results or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of any of the Heritage Parties, which in the case of clauses
(B), (C) or (D) would reasonably be expected to have a material adverse
effect on the financial condition, business or results of operations of
the Partnership and its subsidiaries, taken as a whole.
(xiii) No permit, consent, approval, authorization,
order, registration, filing or qualification of or with any federal,
Delaware or Texas court, governmental agency or body having
jurisdiction over the Heritage Parties or any of their respective
properties is required for the offering, issuance and sale by the
Partnership of the Units, the execution,
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delivery and performance of this Agreement or the consummation of the
transactions contemplated by this Agreement, except as may be required
under state securities or "Blue Sky" laws, as to which such counsel
need not express any opinion.
(xiv) The statements in the Registration Statement
and Prospectus under the caption "Description of Common Units" insofar
as they constitute descriptions of agreements or refer to statements of
law or legal conclusions, are accurate and complete in all material
respects, and the Units, the Common Units, the Subordinated Units and
the Incentive Distribution Rights conform in all material respects to
the descriptions thereof contained in the Prospectus.
(xv) The opinion of Xxxxxxx & Xxxxx L.L.P. filed as
Exhibit 8.1 to the Registration Statement is confirmed and you may rely
upon such opinion as if it were addressed to you.
(xvi) The Registration Statement was declared
effective under the Act on September 13, 1999; the Prospectus and
Prospectus Supplement were filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations on October 26, 1999; and to our
knowledge no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission.
(xvii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Partnership prior to the date hereof (other than the financial
statements and the notes and the schedules thereto and the other
financial, statistical and accounting data included therein, as to
which such counsel need not express any opinion) comply as to form in
all material respects with the requirements of the Act and the Rules
and Regulations.
(xviii) To the knowledge of such counsel, (A) there
is no legal or governmental proceeding pending or threatened to which
any of the Heritage Parties is a party or to which any of their
respective properties is subject that is required to be disclosed in
the Prospectus and is not so disclosed and (B) there are no agreements,
contracts or other documents to which any of the Heritage Parties is a
party that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described as required.
(xix) None of the Heritage Parties is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Heritage Parties and the independent public accountants of
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the Partnership and your representatives, at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel has not independently verified, is not passing upon,
and is not assuming responsibility for the accuracy, completeness or fairness of
the statements contained in, the Registration Statement and the Prospectus
(except to the extent specified in the foregoing opinion), no facts have come to
such counsel's attention that lead such counsel to believe that the Registration
Statement or any further amendment thereto made by the Partnership prior to such
Closing Date (other than (i) the financial statements included or incorporated
by reference therein, including the notes and schedules thereto and the
auditors' report thereon, (ii) the other historical, pro forma and projected
financial information and the statistical and accounting information included or
incorporated by reference therein and (iii) the exhibits thereto, as to which
such counsel need express no opinion), as of its effective date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus or any further amendment or supplement thereto made by
the Partnership prior to such Closing Date (other than (i) the financial
statements included or incorporated by reference therein, including the notes
and schedules thereto and the auditors' report thereon and (ii) the other
historical, pro forma and projected financial information and the statistical
and accounting information included or incorporated by reference therein, as to
which such counsel need express no opinion) as of its issue date and the Closing
Date contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may (i) rely in
respect of matters of fact upon certificates of officers and employees of the
General Partner and upon information obtained from public officials, (ii) assume
that all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures on
all documents examined by such counsel are genuine, (iii) state that they
express no opinion with respect to state or local taxes or tax statutes to which
any of the limited partners of the Partnership or any of the Heritage Parties
may be subject and (iv) state that their opinion is limited to federal laws, the
Delaware LP Act, the Delaware General Corporation Law and the laws of the States
of New York and Texas.
In rendering such opinion, such counsel shall state that all
references in their opinion to the Underwriting Agreement shall include the
Price Determination Agreement.
(g) The Underwriters 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
Doerner, Saunders, Xxxxxx & Xxxxxxxx, L.L.P., counsel to the Partnership, to the
effect that:
(i) The General Partner has been duly incorporated
and is validly existing in good standing as a corporation under the
laws of the State of Delaware, with all necessary corporate power and
authority to own or lease its properties, conduct its business and act
as
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general partner of the Partnership and the Operating Partnership, in
each case in all material respects as described in the Prospectus.
(ii) Each of the Partnership and the Operating
Partnership is duly registered or qualified as a foreign limited
partnership for the transaction of business and is in good standing
under the laws of the States set forth on Exhibit A to such opinion;
and, to such counsel's knowledge, such jurisdictions are the only
jurisdictions in which the character of the business conducted by the
Partnership or the Operating Partnership or the nature or location of
the properties owned or leased by it make such registration or
qualification necessary (except where the failure to so register or so
qualify would not (A) have a material adverse effect on the condition
(financial or other), business or results of operations of the
Partnership and its subsidiaries, taken as a whole, or (B) subject the
limited partners of the Partnership to any material liability or
disability).
(iii) The General Partner is duly registered or
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of the States set forth on Exhibit A
to such opinion; and to such counsel's knowledge, such jurisdictions
are the only jurisdictions in which the character of the business
conducted by the General Partner or the nature or location of the
properties owned or leased by it make such registration or
qualification necessary (except where the failure to so register or so
qualify would not (A) have a material adverse effect on the condition
(financial or other), business or results of operations of the
Partnership and its subsidiaries, taken as a whole, or the General
Partner or (B) subject the limited partners of the Partnership to any
material liability or disability).
(iv) Heritage Service Corp. is duly registered or
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of the States set forth on Exhibit A
to such opinion; and to such counsel's knowledge, such jurisdictions
are the only jurisdictions in which the character of the business
conducted by Heritage Service Corp. or the nature or location of the
properties owned or leased by it make such registration or
qualification necessary (except where the failure to so register or so
qualify would not (A) have a material adverse effect on the condition
(financial or other), business or results of operations of the
Partnership and its subsidiaries, taken as a whole, or (B) subject the
limited partners of the Partnership to any material liability or
disability).
(v) All outstanding Common Units (other than those
which (A) are Sponsor Units, (B) were issued to the underwriters in the
Partnership's initial public offering (including pursuant to the
underwriters' overallotment option) and (C) were issued pursuant to the
Stock Issuance Agreements) and the limited partner interests
represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement, and are fully paid (to the
extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described
under the caption "The Partnership Agreement-Limited Liability" in the
IPO Prospectus).
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(vi) All of the issued and outstanding shares of
capital stock of the General Partner have been duly authorized and
validly issued and are fully paid and nonassessable; and all such
shares are owned by the registered holders thereof free and clear of
all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial
Code of the states of residence of each of the registered holders of an
aggregate of 75% of the outstanding shares of capital stock of the
General Partner naming such holder as debtor is on file in the office
of the Secretary of State of such states, or (B) otherwise known to
such counsel, without independent investigation, other than those
created by or arising under the Stockholders' Agreement, the Pledge
Agreements or the Delaware General Corporation Law.
(vii) To such counsel's knowledge, except as
described in the Prospectus or arising under the Stock Issuance
Agreements, there are no preemptive rights or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of,
any limited partner interests in the Partnership or the Operating
Partnership pursuant to any agreement or instrument to which the
Partnership or the Operating Partnership is a party or by which either
of them may be bound, other than the Partnership Agreements. To such
counsel's knowledge, except as described in the Prospectus, neither the
filing of the Registration Statement nor the offering or sale of the
Units as contemplated by this Agreement gives rise to any rights (other
than those arising under the Partnership Agreements), other than those
which have been waived or satisfied, for or relating to the
registration of any Units or other securities of the Partnership. To
such counsel's knowledge, except (A) as described in the Prospectus,
(B) for restricted units granted under the Partnership's restricted
unit plan and (C) for Common Units issuable under the Stock Issuance
Agreements, there are no outstanding options or warrants to purchase
any Common Units or Subordinated Units or other partnership interests
in the Partnership or the Operating Partnership.
(viii) The statements in the Partnership's Annual
Report on Form 10-K under the caption "Business - Government
Regulation," insofar as they refer to statements of law or legal
conclusions, are accurate and complete in all material respects.
(ix) None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance by
the Heritage Parties of this Agreement or the consummation of the
transactions contemplated hereby (A) constitutes or will constitute a
breach or violation of, or a default under (or an event which, with
notice or lapse of time or both, would constitute such an event) any
bond, debenture, note or any other evidence of indebtedness, indenture
or any other material instrument known to such counsel to which a
Heritage Party or one of its subsidiaries is a party or by which any
one of them may be bound (other than any other agreement filed or
incorporated by reference as an exhibit to the Registration Statement),
(B) violates or will violate any order, judgment, decree or injunction
of any court or governmental agency or body known to such counsel
directed to any of them or any of their properties in a proceeding to
which any of them or their property is a party,
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or (C) violates or will violate any Oklahoma statute, law or regulation
applicable to any of the Heritage Parties or any of their respective
properties, which in the case of clauses (A), (B) or (C) would
reasonably be expected to have a material adverse effect on the
financial condition, business or results of operations of the
Partnership and its subsidiaries, taken as a whole.
(x) No permit, consent, approval, authorization,
order, registration, filing or qualification of or with any Oklahoma
court, governmental agency or body having jurisdiction over the
Heritage Parties or any of their respective properties is required for
the offering, issuance and sale by the Partnership of the Units, the
execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated by this Agreement, except
as may be required under state securities or "Blue Sky" laws, as to
which counsel need not express any opinion.
(xi) To the knowledge of such counsel, none of the
Heritage Parties is in (A) breach or violation of its partnership
agreement, certificate of limited partnership, articles or certificate
of incorporation or bylaws or other organizational documents or (B)
default (and no event has occurred which, with notice or lapse of time
or both, would constitute such a default) or violation in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which it is a party
or by which it or any of its properties may be bound which breach,
default or violation would, if continued, have a material adverse
effect on the financial condition, business or results of operations of
the Heritage Parties, taken as a whole, or could materially impair the
ability of any of the Heritage Parties to perform their obligations
under this Agreement.
(xii) Except as described in the Prospectus, to the
knowledge of such counsel, there is no litigation, proceeding or
governmental investigation pending or threatened against any of the
Heritage Parties which, if adversely determined to such Heritage
Parties, is reasonably likely to have a material adverse effect on the
financial condition, business, or results of operations of the Heritage
Parties, taken as a whole.
(xiii) To the knowledge of such counsel, without
independent investigation, each of the Heritage Parties has such
permits, consents, licenses, franchises and authorizations ("permits")
issued by the appropriate federal, state or local governmental or
regulatory authorities as are necessary to own or lease its properties
and to conduct its business in the manner described in the Prospectus,
subject to such qualifications as may be set forth in the Prospectus,
and except for such permits which, if not obtained would not reasonably
be expected to have, individually or in the aggregate, a material
adverse effect upon the operations conducted by the Partnership and its
subsidiaries taken as a whole; and, to the knowledge of such counsel,
without independent investigation, none of the Heritage Parties has
received any notice of proceedings relating to the revocation or
modification of any such permits which, individually or in the
aggregate, if the subject of an unfavorable
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decision, ruling or finding, would reasonably be expected to have a
material adverse effect upon the operations conducted by the
Partnership and its subsidiaries, taken as a whole.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Heritage Parties and the independent public accountants of the Partnership and
your representatives, at which the contents of the Registration Statement and
the Prospectus and related matters were discussed and, although such counsel has
not independently verified, is not passing upon, and is not assuming
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Registration Statement and the Prospectus (except to the
extent specified in such counsel's opinion), no facts have come to such
counsel's attention that lead such counsel to believe that the Registration
Statement or any further amendment thereto made by the Partnership prior to each
Closing Date (other than (i) the financial statements included or incorporated
by reference therein, including the notes and schedules thereto and the
auditors' report thereon, (ii) the other historical, pro forma and projected
financial information and the statistical and accounting information included or
incorporated by reference therein and (iii) the exhibits thereto, as to which
such counsel need express no opinion), as of its effective date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus or any further amendment or supplement thereto made by
the Partnership prior to such Closing Date (other than (i) the financial
statements included or incorporated by reference therein, including the notes
and schedules thereto and the auditors' report thereon and (ii) the other
historical, pro forma and projected financial information and the statistical
and accounting information included or incorporated by reference therein, as to
which such counsel need express no opinion) as of its issue date or the Closing
Date contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may (i) rely in
respect of matters of fact upon certificates of officers and employees of the
Heritage Parties and upon information obtained from public officials, (ii)
assume that all documents submitted to them as originals are authentic, that all
copies submitted to them conform to the originals thereof, and that the
signatures on all documents examined by such counsel are genuine, (iii) state
that they express no opinion with respect to state or local taxes or tax
statutes to which any of the limited partners of the Partnership or any of the
Heritage Parties may be subject, (iv) state that their opinion is limited to
federal laws and the laws of the State of Oklahoma and (v) with respect to the
opinions expressed in paragraphs (i), (ii), (iii) and (iv) above as to the due
qualification of and registrations as a foreign limited partnership or foreign
limited corporation, of each of the Heritage Parties or their subsidiaries,
state that such opinions are based solely upon certificates of foreign
qualification and registration provided by the Secretaries of State of the
States listed on Exhibit A to such opinion, each of which shall be dated as of a
date not more than 14 days prior to the Closing Date and shall be provided to
you).
In rendering such opinion, such counsel shall state that all
references in their opinion to the Underwriting Agreement shall include the
Price Determination Agreement.
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(h) The Underwriters shall have received an opinion, dated the
Closing Date and 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
Underwriters.
(i) On the date of the Prospectus, Xxxxxx Xxxxxxxx LLP shall
have furnished to the Underwriters a letter, dated the date of its delivery,
addressed to the Underwriters and in form and substance satisfactory to the
Underwriters, 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, Xxxxxx
Xxxxxxxx LLP shall have furnished to the Underwriters 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 Xxxxxx Xxxxxxxx LLP, 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
Supplement, if it were required to be dated and delivered at the Closing Date
and the Option Closing Date.
(j) On or prior to the Closing Date, the Underwriters shall
have received the executed agreements referred to in Section 4(n).
(k) At the Closing Date and, as to the Option Units, the
Option Closing Date, there shall be furnished to the Underwriters an accurate
certificate, dated the date of its delivery, signed by each of the Chairman of
the Board and the President of the General Partner, in form and substance
satisfactory to the Underwriters, 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 date of the Prospectus Supplement, 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 Heritage Parties contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true and
correct in all material respects.
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(iii) Each of the covenants required herein to be
performed by the Heritage Parties 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 Heritage Parties
on or prior to the date of such certificate has been duly, timely and
fully complied with.
(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, prospects, properties, management, condition
(financial or otherwise) or results of operations of the Partnership
and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and
the Prospectus and (B) neither the Partnership nor any of its
subsidiaries has sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree,
which is not set forth in the Registration Statement and the
Prospectus.
(l) The Units shall be qualified for sale in such states as
the Underwriters may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(m) Prior to the Closing Date, the Units shall have been duly
authorized for listing on NYSE subject to official notice of issuance.
(n) The NASD shall have approved the underwriting terms and
arrangements and such approval shall not have been withdrawn or limited.
(o) The Partnership shall have furnished to the Underwriters
such certificates, in addition to those specifically mentioned herein, as the
Underwriters 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 Heritage Parties herein, as to the
performance by the Heritage Parties of their obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Underwriters.
6. Indemnification.
(a) The Heritage Parties will, jointly and severally,
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the Act or Section 20 of
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the Exchange Act, from and against any and all losses, claims, liabilities,
expenses and damages (collectively, "Liabilities") (including, but not limited
to, any and all investigative, legal and other expenses reasonably incurred in
connection with, and any and all amounts paid in settlement of, any action, suit
or proceeding between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or otherwise, or
any claim asserted), as and when incurred, to which any Underwriter, or any such
person, may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or in any documents
filed under the Exchange Act and deemed to be incorporated by reference into the
Prospectus, or in any application or other document executed by or on behalf of
the Partnership or based on written information furnished by or on behalf of the
Partnership filed in any jurisdiction in order to qualify the Units under the
securities laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in such document a material fact required to be stated
in it or necessary to make the statements in it not misleading or (iii) any act
or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Units or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, liability, expense or damage arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Partnership shall not be
liable under this clause (iii) to the extent it is finally judicially determined
by a court of competent jurisdiction that such loss, claim, liability, expense
or damage resulted primarily and directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct); provided that the Partnership will not be
liable to the extent that such loss, claim, liability, expense or damage (A)
arises from the sale of the Units in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission of a material fact made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to the
Partnership by the Underwriters on behalf of any Underwriter expressly for
inclusion in the Registration Statement or the Prospectus or (B) results solely
from an untrue statement of a material fact contained in, or the omission of a
material fact from, such prospectus, which untrue statement or omission was
completely corrected in the Prospectus (as then amended or supplemented) if the
Partnership shall sustain the burden of proving that the Underwriters sold Units
to the person alleging such loss, claim, liability, expense or damage without
sending or giving, at or prior to the written confirmation of such sale, a copy
of the Prospectus (as then amended or supplemented) if the Partnership had
previously furnished copies thereof to the Underwriters within a reasonable
amount of time prior to such sale or such confirmation, and the Underwriters
failed to deliver the corrected Prospectus, if required by law to have so
delivered it and if delivered would have been a complete defense against the
person asserting such loss, claim, liability, expense or damage. This indemnity
agreement will be in addition to any liability that the Partnership might
otherwise have.
(b) Each Underwriter will indemnify and hold harmless each
Heritage Party, each person, if any, who controls a Heritage Party within the
meaning of Section 15 of the Act or Section
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20 of the Exchange Act, each director of the General Partner and each officer of
the General Partner who signs the Registration Statement to the same extent as
the foregoing indemnity from the Heritage Parties to each Underwriter, but only
insofar as Liabilities arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission of a material fact made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Partnership by the Underwriters on behalf of such
Underwriter expressly for use in the Registration Statement or the Prospectus.
This indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting discounts and
commissions received by such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm (in addition to local counsel) admitted to practice in such
jurisdiction at any one time for all such indemnified party or
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parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 6 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Heritage Parties or the
Underwriters, the Heritage Parties and the Underwriters will contribute to the
total Liabilities (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Heritage Parties from persons other than the
Underwriters, such as persons who control the Heritage Parties within the
meaning of the Act, officers of the General Partner who signed the Registration
Statement and directors of the General Partner, who also may be liable for
contribution) to which the Heritage Parties and any one or more of the
Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Heritage Parties on the one hand
and the Underwriters on the other. The relative benefits received by the
Heritage Parties on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Partnership bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. If, but only
if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Heritage Parties, on the
one hand, and the Underwriters, on the other, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Heritage Parties, or the Underwriters, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Heritage
Parties and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the Liabilities, or action in respect
thereof, referred to above in this Section 6(d) shall be deemed to include, for
purpose of this Section 6(d), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating
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or defending any such action or claim. Notwithstanding the provisions of this
Section 6(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions received by it and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 6(d) are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 6(d), any person who controls a party to this Agreement
within the meaning of the Act will have the same rights to contribution as that
party, and each officer of the General Partner who signed the Registration
Statement will have the same rights to contribution as the Heritage Parties,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 6 and the representations and warranties of the Heritage Parties
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Underwriters,
(ii) acceptance of the Units and payment therefore or (iii) any termination of
this Agreement.
(f) The Heritage Parties hereby irrevocably consent and agree,
for the benefit of each Underwriter and each person who controls any
Underwriter, that any action, suit or proceeding asserting a claim for
indemnification or contribution under or pursuant to this Section 6 may be
instituted by any Underwriter or any such controlling person in any state or
federal court in the Borough of Manhattan in the City of New York, and the
Heritage Parties will accept the jurisdiction of such court in such action, and
waive, to the fullest extent permitted by applicable law, any defense based upon
lack of personal jurisdiction or venue.
7. Termination. The obligations of the Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Units, on or prior to the Option Closing Date), by
notice to the Heritage Parties from the Underwriters, without liability on the
part of any Underwriter to the Partnership, if, prior to delivery and payment
for the Units (or the Option Units, as the case may be), in the sole judgment of
the Underwriters, (i) there has been, since the respective dates as of which
information is given in the Registration Statement or the Prospectus, any
material adverse change in the Partnership's business, properties, prospects,
condition (financial or otherwise) or results of operations, (ii) trading in any
of the equity securities of the Partnership shall have been suspended by the
Commission, the NASD, an exchange that lists the Units or the NYSE, (iii)
trading in securities generally on the NYSE or the Nasdaq Stock Market shall
have been suspended or limited or minimum or maximum prices shall have been
generally established on such exchange or over-the-counter market, or additional
material governmental
32
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restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange or by order of the
Commission or the NASD or any court or other governmental authority, (iv) a
general banking moratorium shall have been declared by either federal or New
York State authorities or (v) any material adverse change in the financial or
securities markets in the United States or in political, financial or economic
conditions in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national emergency or war
or other calamity or crisis shall have occurred the effect of any of which is
such as to make it, in the sole judgment of the Underwriters, impracticable or
inadvisable to market the Units on the terms and in the manner contemplated by
the Prospectus.
8. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Units which it has agreed to
purchase hereunder, and the aggregate number of Firm Units which such defaulting
Underwriter agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Firm Units, the other Underwriters shall be obligated
to purchase the Firm Units which such defaulting Underwriter agreed but failed
or refused to purchase, in the proportion which the number of Firm Units which
each other Underwriter has respectively agreed to purchase pursuant to Section 1
bears to the aggregate number of Firm Units which such non-defaulting
Underwriter has so agreed to purchase, or in such other proportion as the
Underwriters may specify; provided that in no event shall the maximum number of
Firm Units which any Underwriter has become obligated to purchase pursuant to
Section 1 be increased pursuant to this Section 8 by more than one-ninth of the
number of Firm Units agreed to be purchased by such Underwriter without the
prior written consent of such Underwriter. If any Underwriter shall fail or
refuse to purchase any Firm Units and the aggregate number of Firm Units which
such defaulting Underwriter agreed but failed or refused to purchase exceeds
one-tenth of the aggregate number of Firm Units and arrangements satisfactory to
the Underwriters and the Partnership for the purchase of such Firm Units are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of the non-defaulting Underwriters and the Partnership for
the purchase or sale of any Units under this Agreement. In any such case either
the Underwriters or the Partnership shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken pursuant to
this Section 8 shall not relieve the defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
9. Miscellaneous. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Heritage Parties, at the office of Heritage
Propane Partners, L.P., 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000
Attention: President, or (b) if to the Underwriters, at the offices of
PaineWebber Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Finance Department. Any such notice shall be effective only
upon receipt. Any notice under Section 7 or 8 hereof may be made by telex or
telephone, but if so made shall be subsequently confirmed in writing.
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This Agreement has been and is made solely for the benefit of the
Underwriters, the Heritage Parties and of the controlling persons, directors and
officers referred to in Section 6, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Units from the Underwriters.
All representations, warranties and agreements of the Heritage Parties
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriters or any of its controlling
persons and shall survive delivery of and payment for the Units hereunder.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Partnership and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Heritage Parties and the Underwriters.
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Please confirm that the foregoing correctly sets forth the agreement
between the Heritage Parties and the Underwriters.
Very truly yours,
HERITAGE PROPANE PARTNERS, L.P.
By: HERITAGE HOLDINGS, INC.
its General Partner
By: /s/ H. Xxxxxxx Xxxxxxxx
Name: H. Xxxxxxx Xxxxxxxx
Title: President and Chief Financial Officer
HERITAGE OPERATING, L.P.
By: HERITAGE HOLDINGS, INC.,
its General Partner
By: /s/ H. Xxxxxxx Xxxxxxxx
Name: H. Xxxxxxx Xxxxxxxx
Title: President and Chief Financial Officer
HERITAGE HOLDINGS, INC.
By: /s/ H. Xxxxxxx Xxxxxxxx
Name: H. Xxxxxxx Xxxxxxxx
Title: President and Chief Financial Officer
Confirmed and accepted as of
the date first above-mentioned
PAINEWEBBER INCORPORATED
X.X. XXXXXXX & SONS, INC.
CIBC WORLD MARKETS CORP.
By: PAINEWEBBER INCORPORATED
By: /s/ Xxxxx X. XxXxxxxx
Name: Xxxxx X. XxXxxxxx
Title: Managing Director
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SCHEDULE I
UNDERWRITERS
Number of
Name of Firm Units
Underwriters to be Purchased
------------ ----------------
PaineWebber Incorporated 540,000
X.X. Xxxxxxx & Sons, Inc. 360,000
CIBC World Markets Corp. 300,000
----------------
Total............................................ 1,200,000
================
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EXHIBIT A
HERITAGE PROPANE PARTNERS, L.P.
PRICE DETERMINATION AGREEMENT
October __, 1999
PaineWebber Incorporated
X.X. Xxxxxxx & Sons, Inc.
CIBC World Markets Corp.
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated October __, 1999
(the "Underwriting Agreement"), among Heritage Propane Partners, L.P. (the
"Partnership"), Heritage Operating, L.P. and Heritage Holdings, Inc.
(collectively, the "Heritage Parties"), PaineWebber Incorporated, X.X. Xxxxxxx &
Sons, Inc. and CIBC World Markets Corp. (the "Underwriters"). The Underwriting
Agreement provides for the purchase by the Underwriters from the Partnership,
subject to the terms and conditions set forth therein, of an aggregate of
1,200,000 Common Units representing limited partner interests in the Partnership
(the "Firm Units"). This Agreement is the Price Determination Agreement referred
to in the Underwriting Agreement. Capitalized terms used herein but not defined
shall have the meanings assigned to such terms in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree as follows:
The public offering price per Common Unit for the Firm Units shall be
$_________.
The purchase price per Common Unit for the Firm Units to be paid by the
Underwriters shall be $_________ representing an amount equal to the public
offering price set forth above, less $_______ per Common Unit.
The Heritage Parties represent and warrant to the Underwriters that the
representations and warranties of the Heritage Parties set forth in Section 3 of
the Underwriting Agreement are accurate, in all material respects, as though
expressly made at and as of the date hereof.
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THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
If the foregoing is in accordance with your understanding of the
agreement between the Heritage Parties and the Underwriters, please sign and
return to the Partnership a counterpart hereof, whereupon this instrument along
with all counterparts and together with the Underwriting Agreement shall be a
binding agreement between the Heritage Parties and the Underwriters in
accordance with its terms and the terms of the Underwriting Agreement.
Very truly yours,
HERITAGE PROPANE PARTNERS, L.P.
By: HERITAGE HOLDINGS, INC.
its General Partner
By:
------------------------------
Name:
------------------------------
Title:
-----------------------------
HERITAGE OPERATING, L.P.
By:
------------------------------
Name:
------------------------------
Title:
-----------------------------
HERITAGE HOLDINGS, INC.
By:
------------------------------
Name:
------------------------------
Title:
-----------------------------
Confirmed and accepted as of
the date first above-mentioned
PAINEWEBBER INCORPORATED
X.X. XXXXXXX & SONS, INC.
CIBC WORLD MARKETS CORP.
By: PAINEWEBBER INCORPORATED
By:
--------------------------
Name:
-------------------------
Title:
-----------------------
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EXHIBIT B
Entity Jurisdiction in which registered or qualified
------ ---------------------------------------------
Partnership Delaware, Oklahoma
Operating Partnership Arizona, California, Colorado, Delaware,
Florida, Georgia, Idaho, Kentucky, Maryland,
Massachusetts, Michigan, Minnesota,
Mississippi, Montana, New Hampshire, New
Jersey, New Mexico, New York, North
Carolina, Oklahoma, Oregon, Pennsylvania,
South Carolina, Tennessee, Texas, Vermont,
Washington
General Partner Arizona, California, Colorado, Delaware,
Florida, Georgia, Idaho, Kentucky, Maryland,
Massachusetts, Michigan, Minnesota,
Mississippi, Montana, Nevada, New
Hampshire, New Jersey, New Mexico, New
York, North Carolina, Oklahoma, Oregon,
Pennsylvania, South Carolina, Tennessee,
Texas, Vermont, Washington
Heritage Service Corp. Arizona, California, Colorado, Delaware,
Florida, Idaho, Massachusetts, Michigan,
Minnesota, Montana, New Mexico, North
Carolina, Oklahoma, Oregon, South Carolina,
Texas, Washington
40
EXHIBIT C
October __, 1999
PAINEWEBBER INCORPORATED
X.X. XXXXXXX & SONS, INC.
CIBC WORLD MARKETS CORP.
c/o PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In consideration of the agreement of the several Underwriters to
underwrite a proposed public offering (the "Offering") of 1,200,000 Common Units
(the "Common Units") of Heritage Propane Partners, L.P., a Delaware partnership
(the "Partnership"), as contemplated by a registration statement (Registration
No. 333-86057) 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 commencement of the public offering of such units,
without the prior written consent of PaineWebber Incorporated, sell, contract to
sell or otherwise dispose of any Common Units or rights to acquire Common Units,
of which the undersigned is now, or may in the future become, the beneficial
owner within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934
(other than pursuant to employee stock option plans as in existence as of the
date hereof or in connection with other employee incentive compensation
arrangements consistent with past practice).
Very truly yours,
By:
---------------------------
Name:
Print Name:
--------------------
