Exhibit 4.4
EXECUTION COPY
$175,000,000
6.875% Senior Notes due 2013
SUBURBAN PROPANE PARTNERS, L.P.
(a Delaware limited partnership)
and
SUBURBAN ENERGY FINANCE CORP.
(a Delaware corporation)
as Issuers
PURCHASE AGREEMENT
December 18, 2003
December 18, 2003
Wachovia Capital Markets, LLC
Goldman, Sachs & Co.
c/o Wachovia Capital Markets, LLC
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288
Ladies and Gentlemen:
Suburban Propane Partners, L.P., a Delaware limited partnership (the
"Partnership"), and Suburban Energy Finance Corp., a Delaware corporation
("Finance Corp." and together with the Partnership, the "Issuers"), propose,
subject to the terms and conditions stated herein, to issue and sell to the
several purchasers named in Schedule I hereto (the "Initial Purchasers"), for
whom Wachovia Capital Markets, LLC and Goldman, Sachs & Co. are acting as
Representatives (in such capacity, the "Representatives"), $175,000,000
aggregate principal amount of their 6.875% Senior Notes due 2013 (the "Notes").
The Notes will be issued pursuant to an Indenture (the "Indenture"), dated as of
the Closing Date (as defined in Section 2 hereof), among the Issuers and The
Bank of New York, as trustee (the "Trustee").
Concurrently with the offering of the Notes (this "Offering"), the
Partnership is offering 2,600,000 common units representing limited partner
interests ("Common Units") in a public offering. Neither this Offering nor the
concurrent public offering of Common Units is contingent on the completion of
the other. The net proceeds of this Offering, together with the net proceeds
from the concurrent offering of Common Units, will be used to fund the
acquisition (the "Acquisition") of substantially all of the assets and
operations of Agway Energy Products LLC, Agway Energy Services, Inc. and Agway
Energy Services PA, Inc. (collectively, "Agway Energy") and for general
partnership purposes.
The Notes will be offered and sold through the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act and in offshore
transactions in reliance on Regulation S under the Securities Act ("Regulation
S"). The Initial Purchasers have advised the Issuers that they will offer and
sell the Notes purchased by them hereunder in accordance with Section 3 hereof
as soon as the Representatives deem advisable.
In the event the Acquisition does not close on the Closing Date, the
Issuers will enter into an escrow and security agreement, dated as of the
Closing Date (the "Escrow and Security Agreement"), among the Issuers, the
Initial Purchasers and the Trustee, as escrow agent (the "Escrow Agent"),
pursuant to which the Initial Purchasers will deposit the net proceeds of this
Offering into an escrow account (the "Escrow Account") held by the Escrow Agent,
and the Issuers will contribute to the Escrow Account an amount in cash such
that the total escrowed
funds will be sufficient to pay the Special Redemption Price (as defined below).
The Notes are subject to special redemption no later than February 29, 2004, at
a special redemption price equal to 101% of the aggregate principal amount of
the Notes plus accrued interest to, but not including, the redemption date (the
"Special Redemption Price") if the Acquisition is not consummated by February
15, 2004. Alternatively, the Issuers may redeem the Notes, at their option, in
whole but not in part, at any time prior to February 29, 2004, if, in their
judgment, the Acquisition will not be consummated by February 15, 2004, at a
redemption price equal to 101% of the aggregate principal amount of the Notes,
plus accrued interest to, but not including, the redemption date.
This Agreement, the Escrow and Security Agreement, the Registration Rights
Agreement, to be dated the Closing Date, among the Initial Purchasers and the
Issuers (the "Registration Rights Agreement") and the Indenture are hereinafter
collectively referred to as the "Transaction Documents" and the execution and
delivery of the Transaction Documents and the transactions contemplated herein
and therein are hereinafter referred to as the "Transactions."
In connection with the sale of the Notes, the Issuers have prepared a
preliminary offering memorandum, dated December 5, 2003 (the "Preliminary
Memorandum") and a final offering memorandum, dated the date hereof (the "Final
Memorandum" and, with the Preliminary Memorandum, each a "Memorandum"). Each
Memorandum sets forth certain information concerning the Issuers, the Notes, the
Transaction Documents, the Transactions and the Acquisition. Each Issuer hereby
confirms that it has authorized the use of the Preliminary Memorandum and the
Final Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Notes by the Initial Purchasers. As used herein, the
term "Memorandum" shall include, except where specifically noted, in each case
the documents incorporated by reference therein. The terms "supplement,"
"amendment" and "amend" as used herein with respect to a Memorandum shall
include all documents deemed to be incorporated by reference in the Preliminary
Memorandum or Final Memorandum that are filed subsequent to the date of such
Memorandum with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
The Partnership and Suburban Propane, L.P., a Delaware limited partnership
(the "Operating Partnership") are collectively referred to herein as the
"Partnership Entities," and Suburban Sales & Service, Inc., a Delaware
corporation, Suburban Holdings, Inc., a Delaware corporation, Suburban @ Home,
Inc., a Delaware corporation, Suburban Franchising, Inc., a Nevada corporation,
and Gas Connection, Inc., an Oregon corporation, all of which are subsidiaries
of the Operating Partnership, are collectively referred to herein as the
"Subsidiaries."
1. Representations and Warranties of the Issuers. The Issuers jointly and
severally represent and warrant to, and agree with, each of the Initial
Purchasers that:
(a) The Preliminary Memorandum does not contain, and the Final
Memorandum, in the form used by the Initial Purchasers to confirm sales and
on the Closing Date, and any amendment or supplement thereto does not and
will not contain, any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that
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the representations or warranties set forth in this paragraph shall not
apply to statements in or omissions from either Memorandum made in reliance
upon and in conformity with information furnished in writing to the Issuers
by the Representatives expressly for use therein, as specified in Section
11.
(b) The Partnership is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
The documents incorporated by reference in the Final Memorandum, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents 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; and any further documents so filed and incorporated by
reference in the Final Memorandum or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
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.
(c) None of the Issuers, the Operating Partnership or any of the
Subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Final Memorandum
any loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, that,
individually or in the aggregate, would have a material adverse effect on
the business, prospects, operations, financial condition or results of
operations of the Issuers, the Operating Partnership and the Subsidiaries
taken as a whole (a "Material Adverse Effect"), otherwise than as set forth
or contemplated in the Final Memorandum. In addition, since the respective
dates as of which information is given in the Final Memorandum, (i) none of
the Partnership and its subsidiaries have incurred any material liability
or obligation, direct or contingent, or entered into any material
transaction (other than the Acquisition) in each case not in the ordinary
course of business; (ii) the Partnership has not purchased any of its
outstanding capital stock, and, except for regular quarterly distributions
on the common units of the Partnership in amounts per share that are
consistent with past practice, has not declared, paid or otherwise made any
dividend or distributions of any kind on any class of its capital stock;
and (iii) there has not been any change in the partners' capital or
long-term debt (other than borrowings under the Operating Partnership's
existing credit facility) of either of the Issuers or the Operating
Partnership or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, partners' capital or results of operations
of either of the Issuers or the Operating Partnership, otherwise than as
set forth or contemplated in the Final Memorandum.
(d) Each of the Issuers, the Operating Partnership and the
Subsidiaries has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by
it, in each case free and clear of all liens, encumbrances and defects,
except such as are described in the Final Memorandum or such as do not
materially affect the value of
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such property and do not materially interfere with the use made and
proposed to be made of such property by that Issuer, Operating Partnership
or Subsidiary. All real property and buildings held under lease by the
Issuers, the Operating Partnership or the Subsidiaries are held under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed to
be made of such property and buildings by the lessee.
(e) Each of the Partnership Entities is and on the Closing Date will
be a limited partnership duly formed, validly existing and in good standing
under the laws of the State of Delaware, with all necessary partnership
power and authority to own its properties and conduct its business as
described in the Final Memorandum, and has been duly licensed or qualified
to do business and is in good standing as a foreign limited partnership in
all jurisdictions in which it owns or leases properties or conducts any
business so as to require such licensing or qualification, except where the
failure to be so qualified or in good standing would not have a Material
Adverse Effect. Complete and correct copies of the certificates of limited
partnership of the Partnership and the Operating Partnership, and all
amendments thereto, and of the agreements of limited partnership of the
Partnership, as amended and restated (the "Partnership Agreement") and the
Operating Partnership, as amended and restated (the "Operating Partnership
Agreement"), have been delivered to the Initial Purchasers.
(f) Finance Corp. is and on the Closing Date will be a corporation
duly incorporated, validly existing and in good standing under the laws of
the State of Delaware, with all necessary corporate power and authority to
own its properties and conduct its business as described in the Final
Memorandum, and has been duly licensed or qualified to do business and is
in good standing as a foreign corporation in all jurisdictions in which it
owns or leases properties or conducts any business so as to require such
licensing or qualification, except where the failure to be so qualified or
in good standing would not have a Material Adverse Effect. Complete and
correct copies of the certificate of incorporation of Finance Corp., and
all amendments thereto (the "Certificate of Incorporation"), and of the
by-laws of Finance Corp., as amended and restated (the "By-laws"), have
been delivered to the Initial Purchasers.
(g) Suburban Energy Services Group LLC, the general partner of each of
the Partnership Entities (the "General Partner"), has been, and on the
Closing Date will be, duly formed and is validly existing as a limited
liability company in good standing under the laws of the State of Delaware,
with limited liability company power and authority to own its properties
and conduct its business as described in the Final Memorandum, and has been
duly qualified as a foreign limited liability company for the transaction
of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business
so as to require such qualification, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect.
Complete and correct copies of the certificate of formation and the limited
liability company agreement of the General Partner, and all amendments
thereto, have been delivered to the Initial Purchasers.
(h) Each of the Subsidiaries has been, and on the Closing Date will
be, duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own its properties and
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conduct its business as described in the Final Memorandum, and has been
duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect. Complete and correct
copies of the certificate of incorporation and the bylaws of each of the
Subsidiaries have been delivered to the Initial Purchasers.
(i) The Partnership has no direct or indirect subsidiaries (other than
the Operating Partnership and the Subsidiaries) that, taken as a whole,
would be deemed to be a significant subsidiary (as such term is defined in
Section 1-02 of Regulation S-X under the Act).
(j) The General Partner is the sole general partner of the Partnership
with a 0.55% general partner interest in the Partnership; such general
partner interest is duly authorized by the Partnership Agreement and was
validly issued to the General Partner. The General Partner owns such
general partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material to such ownership or as
described in the Final Memorandum).
(k) 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 is duly authorized by the
Operating Partnership Agreement, and was validly issued to the General
Partner. The General Partner owns such general partner interest free and
clear of all liens, encumbrances, security interests, equities, charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as would not, individually or in the aggregate, be
material to such ownership or as described in the Final Memorandum).
(l) The Partnership is the sole limited partner of the Operating
Partnership with a limited partner interest of 98.9899%; such limited
partner interest is duly authorized by the Operating Partnership Agreement,
and was validly issued to the Partnership and is fully paid and
nonassessable (except as nonassessability may be affected by the legal
issues described with respect to holders of the Common Units in the "Risk
Factors" section of the Final Memorandum under the captions "Unitholders
may not have limited liability in some circumstances" and "Unitholders may
have liability to repay distributions"). The Partnership owns such limited
partner interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as would not,
individually or in the aggregate, be material to such ownership or as
described in the Final Memorandum).
(m) All of the outstanding shares of capital stock of Finance Corp.
have been duly authorized and are fully paid and nonassessable. The issued
shares of capital stock of Finance Corp. are owned by the Partnership, free
and clear of all liens, encumbrances, security interests, equities, charges
or other claims. All of the outstanding membership interests of the General
Partner are owned by management and other key employees of the Partnership.
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(n) All of the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and are fully paid and
nonassessable. The issued shares of capital stock of each of the
Subsidiaries are owned by the Operating Partnership, free and clear of all
liens, encumbrances, security interests, equities, charges or other claims.
All of the outstanding membership interests of the General Partner are
owned by management and other key employees of the Partnership.
(o) The Partnership has an authorized capitalization as set forth in
the Final Memorandum, and all of the issued and outstanding Common Units of
the Partnership have been duly and validly authorized and issued, are fully
paid and nonassessable (except as nonasessability may be affected by the
legal issues described with respect to holders of the Common Units in the
"Risk Factors" section of the Final Memorandum under the captions
"Unitholders may not have limited liability in some circumstances" and
"Unitholders may have liability to repay distributions") and conform to the
description of the Common Units contained in the Final Memorandum.
(p) The execution, delivery and performance by each of the Issuers and
the Operating Partnership (with respect to Section 7 hereof) of this
Agreement and the other Transaction Documents, the issuance and sale of the
Notes and the compliance by the Issuers with all of the provisions of the
Notes, the Indenture, the Escrow and Security Agreement, the Registration
Rights Agreement and this Agreement and compliance by the Operating
Partnership with the provisions of Section 7 hereof, and the consummation
of the transactions contemplated hereby and thereby and the consummation of
the Acquisition will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which either of the Issuers, the Operating
Partnership or any of the Subsidiaries is a party or by which either of the
Issuers, the Operating Partnership or any of the Subsidiaries is bound or
to which any of the property or assets of either of the Issuers, the
Operating Partnership or any of the Subsidiaries is subject, (ii) result in
any violation of the provisions of the Partnership Agreement, the Operating
Partnership Agreement, the Certificate of Incorporation or the By-laws or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over either of the Issuers, the
Operating Partnership or any of the Subsidiaries or any of their
properties, except for breaches, violations or defaults (other than those
relating to the Partnership Agreement, the Operating Partnership Agreement
or the Certificate of Incorporation) that would not, individually or in the
aggregate, have a Material Adverse Effect or impair the Partnership's
ability to consummate the transactions herein contemplated. No consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the issue and
sale of the Notes or the consummation by the Issuers of the transactions
contemplated by this Agreement and the Operating Partnership with the
provisions in Section 7 hereof, except such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the offer or sale of
the Notes and by federal and state securities laws with respect to the
obligations of the Issuers under the Registration Rights Agreement.
(q) The financial statements and pro forma financial data, together
with related schedules and notes, included or incorporated by reference in
the Final Memorandum present
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fairly (i) the consolidated financial condition of the Partnership and the
combined financial condition of Agway Energy, in each case as of the
respective dates thereof, and (ii) the consolidated results of operations
and cash flows of the Partnership and the combined results of operations
and cash flows of Agway Energy, in each case for the respective periods
covered thereby; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the entire period involved, except as
otherwise disclosed in the Final Memorandum; and the other financial and
statistical information included or incorporated by reference in the Final
Memorandum are accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Partnership. No
other financial statements or schedules of the Partnership are required by
the Act, the Exchange Act or the rules and regulations of the Commission
under such acts to be included in the Final Memorandum.
(r) Each of the Issuers and the Operating Partnership (with respect to
Section 7 hereof) has all necessary partnership or corporate power (as
applicable) to enter into the Transaction Documents to which it is a party
and to carry out all the terms and provisions hereof and thereof to be
carried out by it.
(s) This Agreement has been duly authorized, executed and delivered by
each of the Issuers and the Operating Partnership and constitutes a valid
and binding agreement of each of the Issuers and the Operating Partnership
and is enforceable against each of the Issuers and the Operating
Partnership in accordance with its terms; provided that such enforceability
may be limited (i) by bankruptcy, insolvency, fraudulent transfer,
moratorium and similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (ii)
as to rights to indemnification or contribution by considerations of public
policy related to federal or state securities laws.
(t) 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 each of 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 such
agreement, 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).
(u) None of the Issuers, the Operating Partnership, the Subsidiaries
or the General Partner is in violation of its certificate of incorporation,
certificate of formation, by-laws, partnership agreement or limited
liability company agreement, or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound, except for such defaults that, individually or in
the aggregate, would not have a Material Adverse Effect.
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(v) The statements set forth in the Final Memorandum under the caption
"Description of Notes," insofar as they purport to constitute a summary of
the terms of the Notes, and under the captions "Description of Certain
Indebtedness," "Certain U.S. Federal Tax Considerations" and "Plan of
Distribution," insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects.
(w) Each of the Issuers, the Operating Partnership and the
Subsidiaries (i) is in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants, or contaminants ("Environmental Laws"), (ii) has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its respective businesses and
(iii) is in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, individually or in the aggregate, have a Material
Adverse Effect.
(x) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean up, closure or properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, individually or in the aggregate, have a Material
Adverse Effect.
(y) Other than as set forth in the Preliminary Memorandum and the
Final Memorandum, there are no legal or governmental proceedings pending to
which the Issuers, the Operating Partnership or any of the Subsidiaries is
a party or of which any property of the Issuers, the Operating Partnership
or any of the Subsidiaries is the subject which, if determined adversely to
the Issuers, the Operating Partnership or any of the Subsidiaries, would,
individually or in the aggregate, have a Material Adverse Effect. To the
knowledge of the Partnership's management, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(z) None of the Issuers or the Operating Partnership is, nor, after
giving effect to the offering and sale of the Notes, will be, (i) an
"investment company," as such term is defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act"), or (ii) subject to
regulation as a "holding company" or a "subsidiary company" of a holding
company or "affiliate" thereof, under the Public Utility Holding Company
Act of 1935, as amended (the "PUHCA").
(aa) Each of the Issuers, the Operating Partnership and the
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 Memorandum, subject to such qualifications as may
be set forth in the Memorandum and except for such permits the failure of
which to have obtained would not have, individually or in the aggregate, a
Material Adverse Effect; each of the Issuers, the Operating Partnership and
each of the Subsidiaries has fulfilled and performed all its material
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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. Except as
described in the Memorandum, none of such permits contains any restriction
that is materially burdensome to the Issuers, the Operating Partnership and
the Subsidiaries considered as a whole.
(bb) None of the Issuers or the Operating Partnership nor any of their
respective affiliates does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes.
(cc) Each of the Issuers and the Operating Partnership maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(dd) The Partnership has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15 under the Exchange
Act), which (i) are designed to ensure that material information relating
to the Partnership, including its consolidated subsidiaries, is made known
to its principal executive officer and its principal financial officer by
others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; (ii)
have been evaluated for effectiveness as of the date of the filing of the
Partnership's most recent annual or quarterly report filed with the
Commission; and (iii) are effective in all material respects to perform the
functions for which they were established.
(ee) Based on the evaluation of its disclosure controls and
procedures, the Partnership is not aware of (i) any significant deficiency
in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the Partnership's ability
to record, process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Partnership's internal control over financial
reporting.
(ff) Since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
control over financial reporting or in other factors that could
significantly affect internal control over financial reporting, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
(gg) For each taxable year of the Partnership, less than 10% of the
gross income of the Partnership has been derived from sources other than
(i) the exploration, development, production, processing, refining,
transportation or marketing of any mineral or natural resource,
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including oil, gas or products thereof, or (ii) other items of qualifying
income within the meaning of Section 7704(d) of the Internal Revenue Code
of 1986, as amended.
(hh) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Partnership and Agway Energy, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(ii) Each of the Indenture, the Escrow and Security Agreement and the
Registration Rights Agreement have been duly authorized by each of the
Issuers and, on the Closing Date, will have been duly executed and
delivered by each of the Issuers, and will constitute the valid and binding
obligations of each of the Issuers, enforceable against each of the Issuers
in accordance with their respective terms, except as may be limited (i) by
bankruptcy, insolvency, fraudulent transfer, moratorium and similar laws
relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (ii) as to rights to
indemnification or contribution by considerations of public policy related
to federal or state securities laws. The Escrow and Security Agreement, the
Indenture and the Registration Rights Agreement will conform to the
description thereof in the Final Memorandum.
(jj) The Indenture conforms to the requirements of the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and to the rules and
regulations of the Commission applicable to an indenture that is qualified
thereunder.
(kk) The Notes have been duly authorized by each of the Issuers and,
on the Closing Date, when executed and authenticated by each of the Issuers
in the manner provided for in the Indenture and delivered to and paid for
by the Initial Purchasers as provided in this Agreement, will constitute
the legal, valid and binding obligations of each of the Issuers,
enforceable against each of the Issuers in accordance with their terms,
except as the enforcement thereof may be limited (i) by bankruptcy,
insolvency, fraudulent transfer, moratorium and similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (ii) as to rights to indemnification or contribution
by considerations of public policy related to federal or state securities
laws, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement; the Exchange Notes (as defined in the
Registration Rights Agreement) have been duly authorized and, when executed
and authenticated in the manner provided for in the Registration Rights
Agreement and the Indenture, will constitute the legal, valid and binding
obligations of the Issuers, enforceable against the Issuers in accordance
with their terms, except as the enforcement thereof may be limited (A) by
bankruptcy, insolvency, fraudulent transfer, 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 (B) as to rights to
indemnification or contribution by considerations of public policy related
to federal or state securities laws, and will be entitled to the benefits
of the Indenture and the Registration Rights Agreement; and the Notes and
the Exchange Notes will conform to the descriptions thereof in the Final
Memorandum.
-10-
(ll) Each of the Issuers is not now nor after giving effect to the
issuance of the Notes and the execution, delivery and performance of the
Transaction Documents and the consummation of the transactions contemplated
thereby or described in the Preliminary Memorandum or the Final Memorandum,
will be (i) insolvent, (ii) left with unreasonably small capital with which
to engage in its anticipated business or (iii) incurring debts or other
obligations beyond its ability to pay such debts or obligations as they
become due.
(mm) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(c) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred, exists or is
reasonably expected to occur with respect to any employee benefit plan (as
defined in Section 3(3) of ERISA) which the Partnership or any of its
subsidiaries maintains, contributes to or has any obligation to contribute
to, or with respect to which the Partnership or any of its subsidiaries has
any liability, direct or indirect, contingent or otherwise (a "Plan"); each
Plan is in compliance in all material respects with applicable law,
including ERISA and the Code; none of the Partnership or any of its
subsidiaries has incurred or expects to incur liability under Title IV of
ERISA with respect to the termination of, or withdrawal from, any Plan; and
each Plan that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or failure to act, which could reasonably be expected to cause
the loss of such qualification.
(nn) No holder of securities of the Issuers or any Subsidiary will be
entitled to have such securities registered under the registration
statements required to be filed by the Issuers pursuant to the Registration
Rights Agreement other than as expressly permitted thereby.
(oo) The Partnership and its Affiliates (as defined in Rule 501(b) of
Regulation D under the Securities Act ("Regulation D")) have not
distributed and, prior to the later of (i) the Closing Date and (ii) the
completion of the distribution of the Notes, will not distribute any
offering material in connection with the offering and sale of the Notes
other than the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto.
(pp) Within the preceding six months, none of the Partnership or any
of its Affiliates has, directly or through any agent, made offers or sales
of any security of the Partnership, or solicited offers to buy or otherwise
negotiated in respect of any securities of the Partnership of the same
class (within the meaning of Rule 144A under the Securities Act) as the
Notes, other than the Notes offered or sold to the Initial Purchasers
hereunder.
(qq) None of the Partnership, any of its Affiliates, nor any person
acting on its or their behalf (other than the Initial Purchasers, as to
which no statement is made), has engaged in any directed selling efforts
with respect to the Notes, and each of them has complied with the offering
restrictions requirement of Regulation S under the Securities Act
("Regulation S"). Terms used in this paragraph have the meanings given to
them by Regulation S.
-11-
(rr) None of the Partnership or any of its Affiliates has taken,
directly or indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to cause or result
in, stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Notes; nor has the
Partnership or any of its Affiliates paid or agreed to pay to any person
any compensation for soliciting another to purchase any securities of the
Partnership (except as contemplated by this Agreement).
(ss) The Notes satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(tt) Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 3 hereof and compliance by the Initial
Purchasers with the procedures set forth in Section 3 hereof, it is not
necessary in connection with the offer, sale and delivery of the Notes to
the Initial Purchasers in the manner contemplated by this Agreement and
disclosed in the Preliminary Memorandum and the Final Memorandum to
register the Notes under the Securities Act or to qualify the Indenture
under the Trust Indenture Act.
(uu) None of the Transactions (including, without limitation, the use
of proceeds from the sale of the Notes) will violate or result in a
violation of Section 7 of the Exchange Act or any regulation promulgated
thereunder, including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System.
(vv) Except as disclosed in the Final Memorandum, to the knowledge of
the Issuers there are no agreements, arrangements or understandings that
will require the payment of any commissions, fees or other remuneration to
any investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement.
Each certificate signed by any officer of the Issuers and delivered to the
Initial Purchasers or their counsel shall be deemed to be a representation and
warranty by the Issuers, to the Initial Purchasers as to the matters covered
thereby.
2. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to issue
and sell $175,000,000 aggregate principal amount of Notes, and each of the
Initial Purchasers, severally and not jointly, agree to purchase from the
Issuers the principal amount of Notes set forth opposite the name of such
Initial Purchaser in Schedule I hereto at a purchase price equal to 97.25% of
the principal amount thereof (the "Purchase Price"). One or more certificates in
definitive form or global form, as instructed by the Representatives for the
Notes that the Initial Purchasers have severally agreed to purchase hereunder,
and in such denomination or denominations and registered in such name or names
as the Representatives request upon notice to the Partnership not later than one
full business day prior to the Closing Date, shall be delivered by or on behalf
of the Issuers to the Representatives for the respective accounts of the Initial
Purchasers, with any transfer taxes payable in connection with the transfer of
the Notes to the Initial Purchasers duly paid, against payment by or on behalf
of the Initial Purchasers of the Purchase Price therefor by wire transfer in
Federal or other funds immediately available to the account of the Issuers
specified by the Partnership to the
-12-
Representatives at least forty-eight hours in house; provided that such account
may be required to be the Escrow Account pursuant to the Escrow and Security
Agreement, if applicable. Such delivery of and payment for the Notes shall be
made at the offices of Latham & Watkins LLP ("Counsel for the Initial
Purchasers"), 885 Third Avenue, Suite 1000, New York, New York 10022, at 10:00
A.M., New York City time, on December 23, 2003, or at such other place, time or
date as the Representatives and the Issuers may agree upon, such time and date
of delivery against payment being herein referred to as the "Closing Date." The
Issuers will make such certificate or certificates for the Notes available for
examination by the Initial Purchasers at the New York City offices of Counsel
for the Initial Purchasers not later than 10:00 A.M., New York City time on the
business day prior to the Closing Date.
3. Offering of the Notes and the Initial Purchasers' Representations and
Warranties. Each of the Initial Purchasers, severally and not jointly, represent
and warrant to and agree with the Issuers that:
(a) It is a qualified institutional buyer as defined in Rule 144A
under the Securities Act (a "QIB").
(b) It will solicit offers for such Notes only from, and will offer
such Notes only to, persons that it reasonably believes to be (1) in the
case of offers inside the United States, QIBs or (2) in the case of offers
outside the United States, to persons other than U.S. persons ("foreign
purchasers"), which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for
foreign beneficial owners (other than an estate or trust)) in reliance upon
Regulation S under the Securities Act that, in each case, in purchasing
such Notes are deemed to have represented and agreed as provided in the
Final Memorandum under the caption "Notice to Investors."
(c) It will not offer or sell the Notes using any form of general
solicitation or general advertising (within the meaning of Regulation D) or
in any manner involving a public offering within the meaning of Section
4(2) under the Securities Act.
(d) With respect to offers and sales outside the United States:
(i) at or prior to the confirmation of any sale of any Notes sold
in reliance on Regulation S, it will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other
remuneration that purchases Notes from it during the distribution
compliance period (as defined in Regulation S) a confirmation or
notice substantially to the following effect:
"The Notes covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons, (i) as part of their
distribution at any time; or (ii) otherwise until 40 days after
the later of the commencement of the offering of the Notes and
December 23, 2003, except in either case in accordance with
Regulation S or
-13-
Rule 144A under the Securities Act. Terms used above have the
meanings given to them by Regulation S."; and
(ii) such Initial Purchaser has offered the Notes and will offer
and sell the Notes (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 of
Regulation S or as otherwise permitted in Section 3(b); accordingly,
such Initial Purchaser has not engaged nor will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to
the Notes, and such Initial Purchasers has complied and will comply
with the offering restrictions requirements of Regulation S.
Terms used in this Section 3(d) have the meanings given to them by
Regulation S.
(e) (A) it has not offered or sold and, prior to the expiry of a
period of six months from the closing of the Offering of the Notes, will
not offer or sell any Notes to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995 (as amended); (B) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the
meaning of Section 21 of the Financial Services and Markets Act 2000 (the
"FMSA")) received by it in connection with the issue or sale of any Notes
in circumstances in which Section 21(1) of the FMSA does not apply to the
Issuers; and (C) it has complied and will comply with all applicable
provisions of the FMSA with respect to anything done by it in relation to
such Notes in, from or otherwise involving the United Kingdom.
4. Covenants of the Issuers. The Issuers covenant and agree with the
Initial Purchasers that:
(a) The Issuers will prepare the Final Memorandum in the form approved
by the Representatives and will not amend or supplement the Final
Memorandum, including by filing documents under the Exchange Act which are
incorporated by reference therein, without first furnishing to the
Representatives a copy of such proposed amendment or supplement or filing
and will not use or file any amendment or supplement to which the
Representatives may object.
(b) The Issuers will furnish to the Initial Purchasers and to Counsel
for the Initial Purchasers prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period referred to in paragraph (c) below, without charge, as many copies
of the Final Memorandum and any amendments and supplements thereto as they
reasonably may request.
(c) At any time prior to the completion of the distribution of the
Notes by the Initial Purchasers, if any event occurs or condition exists as
a result of which the Final Memorandum, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances
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under which they were made, not misleading, or if it should be necessary to
amend or supplement the Final Memorandum to comply with applicable law, the
Issuers will promptly (i) notify the Initial Purchasers of the same; (ii)
subject to the requirements of paragraph (a) of this Section 4, prepare and
provide to the Initial Purchasers an amendment or supplement to the Final
Memorandum so that the statements in the Final Memorandum as so amended or
supplemented will not, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, be misleading or so that the Final
Memorandum, as amended or supplemented, will comply with applicable law;
and (iii) supply any supplemented or amended Final Memorandum to the
Initial Purchasers and Counsel for the Initial Purchasers, without charge,
in such quantities as may be reasonably requested.
(d) To furnish to the holders of the Notes as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, partners' capital and cash flows of the
Partnership and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement), to
make available to its unitholders consolidated summary financial
information of the Partnership and its subsidiaries for such quarter in
reasonable detail; the Issuers shall be deemed to be in compliance with
their obligations pursuant to this Section 4(d) by publicly filing such
information with the Commission via its Electronic Data Gathering and
Retrieval System ("EDGAR");
(e) During a period of two years from the Closing Date, to furnish to
the Initial Purchasers copies of all reports or other communications
(financial or other) furnished to unitholders (which delivery obligations
shall be deemed to be complied with the public filing of such information
with the Commission via EDGAR), and to deliver to you (i) as soon as they
are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on which
any class of securities of the Partnership is listed (which delivery
obligations shall be deemed to be complied with the public filing of such
information with the Commission via EDGAR); and (ii) such additional
information concerning the business and financial condition of the
Partnership as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Partnership and its subsidiaries are consolidated in reports furnished to
its unitholders generally or to the Commission).
(f) To use the net proceeds received by it from the sale of the Units
pursuant to this Agreement in the manner specified in the Final Memorandum
under the caption "Use of Proceeds."
(g) The Issuers will (i) qualify the Notes for sale by the Initial
Purchasers under the laws of such jurisdictions as the Representatives may
designate and (ii) maintain such qualifications for so long as required for
the resale of the Notes by the Initial Purchasers; provided that in
connection therewith the Issuers shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction where they are not presently qualified or where they would
be subject to taxation as a foreign entity. The Issuers will promptly
advise the Initial Purchasers of the receipt by the Issuers of any
notification
-15-
with respect to the suspension of the qualification of the Notes for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(h) During the period of two years from the Closing Date, the Issuers
will not, and will not permit any of their Affiliates to, resell any of the
Notes that have been acquired by any of them, other than pursuant to an
effective registration statement under the Securities Act or in accordance
with Rule 144 under the Securities Act.
(i) Except as contemplated in the Registration Rights Agreement, none
of the Issuers or any of their Affiliates, nor any person acting on its or
their behalf (other than the Initial Purchasers or any of their respective
Affiliates, as to which no statement is made) will, directly or indirectly,
make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of the
Notes under the Securities Act.
(j) None of the Issuers or any of their Affiliates, nor any person
acting on its or their behalf (other than the Initial Purchasers or any of
their respective Affiliates, as to which no statement is made), will sell,
offer for sale, or solicit any offer to buy the Notes by means of any form
of general solicitation or general advertising (within the meaning of
Regulation D) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(k) None of the Issuers or any of their Affiliates, nor any person
acting on its or their behalf (other than the Initial Purchasers or any of
their respective Affiliates, as to which no statement is made), will engage
in any directed selling efforts (within the meaning of Regulation S) with
respect to the Notes, and each of them will comply with the offering
restrictions requirements of Regulation S.
(l) So long as any of the Notes are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, at any time that the
Partnership is not then subject to Section 13 or 15(d) of the Exchange Act,
the Partnership will provide at its expense to each holder of the Notes and
to each prospective purchaser (as designated by such holder) of the Notes,
upon the request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Securities Act.
(m) Until completion of the distribution, neither the Issuers nor any
of their Affiliates will take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably
be expected to cause or result in, stabilization or manipulation of the
price of any security of the Partnership to facilitate the sale or resale
of the Notes.
(n) During the period of three years from the Closing Date, the
Partnership and its subsidiaries will conduct its operations in a manner
that will not subject the Partnership or any subsidiary to registration as
an investment company under the Investment Company Act.
(o) The Issuers will not, directly or indirectly, offer, sell,
contract to sell or otherwise dispose of any debt securities of the Issuers
or warrants to purchase debt securities of the Issuers substantially
similar to the Notes (other than the Notes offered pursuant to this
Agreement) for a
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period of 90 days after the date hereof, without the prior written consent
of each of the Representatives.
5. Expenses. (a) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Issuers will pay
or cause to be paid all expenses incident to the performance of its obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Issuers' counsel and accountants in connection with the issuance and sale of the
Notes and all other fees or expenses in connection with the preparation of each
Memorandum and all amendments and supplements thereto, including all printing
and mailing costs associated therewith, and the delivering of copies thereof to
the Initial Purchasers, in the quantities herein above specified, (ii) the cost
of producing any Blue Sky or legal investment memorandum in connection with the
offer and sale of the Notes under state securities laws, closing documents
(including compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Notes, and all expenses in
connection with the qualification of the Notes for offer and sale under state
securities laws as provided in Section 4(d) hereof, including filing fees and
fees and disbursements of counsel for the Initial Purchasers in connection with
such qualification and in connection with the Blue Sky or legal investment
memorandum, (iii) any fees charged by rating agencies for the rating of the
Notes, (iv) all document production charges in connection with the preparation
of this Agreement and the Notes, (v) the fees and expenses, if any, incurred in
connection with the admission of the Notes for trading in PORTAL or any
appropriate market system, (vi) the costs and charges of the Trustee and any
paying agent, registrar or depositary, (vii) the cost of the preparation,
issuance and delivery of the Notes, (viii) all costs and expenses relating to
investor presentations, including any "road show" presentations undertaken in
connection with the marketing of the offering of the Notes, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel and lodging expenses of the representatives
(including the Initial Purchasers) and officers of the Issuers and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, and (ix) all other costs and expenses incident to the performance of the
obligations of the Issuers hereunder for which provision is not otherwise made
in this Section. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Initial Purchasers will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Notes by them, and any advertising expenses
connected with any offers they may make.
(b) If the sale of the Notes provided for herein is not consummated because
any condition to the obligations of the Initial Purchasers set forth in Section
6 hereof is not satisfied, or because of any failure, refusal or inability on
the part of the Issuers to perform all obligations and satisfy all conditions on
their part to be performed or satisfied hereunder other than (i) termination of
this Agreement pursuant to Section 8 hereof, or (ii) by reason of a default by
any of the Initial Purchasers, the Issuers will reimburse the Initial Purchasers
upon demand for all reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Notes.
-17-
6. Conditions to the Initial Purchaser's Obligations. The obligations of
the several Initial Purchasers hereunder to purchase and pay for the Notes shall
be subject, in their discretion, to the condition that all representations and
warranties and other statements of the Issuers herein are, at and as of the
Closing Date, true and correct, the condition that the Issuers shall have
performed all of their obligations hereunder theretofore to be performed, the
accuracy of the statements by the Issuers' officers made pursuant to the
provisions hereof, and the following additional conditions:
(a) Latham & Watkins LLP, Counsel for the Initial Purchasers, shall
have furnished to the Initial Purchasers their written opinion, dated the
Closing Date, with respect to the matters covered in paragraphs (i), (ii),
(iii), (iv), (v), (viii) (insofar paragraph (viii) relates to the
"Description of Notes"), (ix) and (xiii) of subsection (b) below as well as
such other related matters as the Initial Purchasers may reasonably
require, and such counsel shall have received such papers and information
from the Issuers as they may reasonably request to enable them to pass upon
such matters.
(b) Cahill Gordon & Reindel LLP, counsel for the Issuers, shall have
furnished to you their written opinion, dated the Closing Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that:
(i) Each of the Partnership Entities has been duly formed and is
validly existing as a limited partnership in good standing under the
laws of the State of Delaware. Finance Corp. has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with corporate power and
authority to own its property and to conduct its business as described
in the Final Memorandum, to enter into the Transaction Documents to
which it is a party and to carry out its obligations thereunder.
(ii) The Purchase Agreement has been duly authorized, executed
and delivered by each of the Issuers and the Operating Partnership.
(iii) Each of the Indenture, the Escrow and Security Agreement
and the Registration Rights Agreement has been duly authorized by each
of the Issuers and has been duly executed and delivered by each of the
Issuers, and constitutes the valid and binding obligations of each of
the Issuers, enforceable against each of the Issuers in accordance
with their respective terms, except as may be limited (i) by
bankruptcy, insolvency, fraudulent transfer, moratorium and similar
laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
(ii) as to rights to indemnification or contribution by considerations
of public policy related to federal or state securities laws.
(iv) The Notes have been duly authorized, executed and delivered
by each of the Issuers and, when paid for by the Initial Purchasers as
provided in the Purchase Agreement, will constitute the legal, valid
and binding obligations of each of the Issuers, enforceable against
each of the Issuers in accordance with their terms, except as the
-18-
enforcement thereof may be limited (i) by bankruptcy, insolvency,
fraudulent transfer, moratorium and similar laws relating to or
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (ii) as to rights to
indemnification or contribution by considerations of public policy
related to federal or state securities laws, and will be entitled to
the benefits of the Indenture and the Registration Rights Agreement.
(v) The Exchange Notes have been duly authorized and, when
executed and authenticated in the manner provided for in the
Registration Rights Agreement and the Indenture, will constitute the
legal, valid and binding obligations of the Issuers, enforceable
against the Issuers in accordance with their terms, except as the
enforcement thereof may be limited (i) by bankruptcy, insolvency,
fraudulent transfer, moratorium and similar laws relating to or
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (ii) as to rights to
indemnification or contribution by considerations of public policy
related to federal or state securities laws.
(vi) The issuance and sale of the Notes on the Closing Date by
the Issuers, the compliance by the Issuers with all of the provisions
of this Agreement and the compliance by the Operating Partnership with
the provisions of Section 7 hereof and the consummation of the
transactions herein contemplated do not conflict with or violate any
of the terms or provisions of, or constitute a breach or default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which either of the
Issuers or the Operating Partnership is a party or is bound and that
is material to that Issuer or the Operating Partnership, nor will such
action result in any violation of the provisions of the partnership
agreement of either of the Issuers or the Operating Partnership or any
Delaware partnership or corporation statute or federal statute or any
order, rule or regulation (other than foreign and state securities or
Blue Sky Laws, as to which such counsel expresses no opinion), or any
judgment, writ, injunction, decree, order or ruling of any court or
governmental agency or body having jurisdiction over either of the
Issuers or the Operating Partnership of which such counsel is aware.
(vii) No consent, approval, authorization, order, registration or
qualification of or with any Delaware or federal governmental agency
or body is required for the issuance and sale of the Notes or the
consummation by the Issuers of the Transactions contemplated by this
Agreement and the Operating Partnership with respect to Section 7
hereof, except such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue
Sky laws or such approvals as may be required by the Commission in
relation to any Exchange Registration Statement or Shelf Registration
Statement (as defined in the Registration Rights Agreement) (it being
understood that the opinion may be limited to those consents,
approvals, authorizations, orders, registrations or qualifications
that, in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement).
(viii) The statements set forth in the Final Memorandum under the
caption "Description of Notes," insofar as they purport to constitute
a summary of the terms of
-19-
the Notes, and under the captions "Description of Certain
Indebtedness" and "Plan of Distribution," insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate and complete in all material respects.
(ix) The statements in the Final Memorandum under the caption
"Certain United States Federal Income Tax Considerations," insofar as
such statements constitute a summary of the United States federal tax
laws referred to therein, are accurate and fairly summarize in all
material respects the United States federal tax laws referred to
therein.
(x) Neither of the Issuers nor the Operating Partnership is (i)
an "investment company," as such term is defined in the Investment
Company Act, or (ii) subject to regulation as a "holding company" or a
"subsidiary company" of a holding company or an "affiliate" thereof,
under PUHCA.
(xi) The documents incorporated or deemed to be incorporated by
reference in the Final Memorandum (other than the financial statements
and related schedules therein, as to which such counsel need express
no opinion), when they were filed with the Commission complied as to
form in all material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission promulgated
thereunder.
(xii) The Escrow and Security Agreement creates a valid and
enforceable security interest in favor of the Trustee for the benefit
of the holders of Notes in the Escrow Accounts and the Escrow Property
to secure the repayment of the Notes and other amounts that may be
payable from time to time under the Indenture. The provisions of the
Escrow and Security Agreement are effective to perfect the security
interest of the Trustee in the Grantors' rights, title and interest in
the Escrow Accounts under Article 9 of the New York Uniform Commercial
Code.
(xiii) Assuming, without independent investigation, (a) that the
Notes are sold to the Initial Purchasers, and initially resold by the
Initial Purchasers, in accordance with the terms of, and in the manner
contemplated by, this Agreement and the Final Memorandum, (b) the
accuracy of the representations and warranties of the Issuers set
forth in the Purchase Agreement and in the certificates delivered by
officers of the Issuers pursuant to this Agreement, (c) the accuracy
of the Initial Purchasers' representations and warranties set forth in
this Agreement, (d) the due performance by the Issuers and the Initial
purchasers of their respective covenants and agreements set forth in
this Agreement, (e) the Initial Purchasers' compliance with the
offering and transfer procedures and restrictions described in the
Final Memorandum and (f) the accuracy of the representations and
warranties made in accordance with the Final Memorandum by purchasers
to whom the Initial Purchasers initially resell the Notes, it is not
necessary in connection with the offer, sale and delivery of the Notes
to the Initial Purchasers under the Purchase Agreement or in
connection with the initial resale of such Notes by the Initial
Purchasers in accordance with Section 3 of the Purchase Agreement to
register the Notes under the Securities Act of 1933 or to qualify the
Indenture under the Trust
-20-
Indenture Act of 1939, it being understood that no opinion is
expressed as to any subsequent resale of any Notes.
It being understood that the opinions set forth in clause (iii) above,
insofar as it relates to the Escrow and Security Agreement, and in clause
(xi) above, in its entirety, will be required only to the extent that the
Escrow and Security Agreement is executed and delivered on the Closing Date
pursuant to Section 6(l) hereof.
In addition, such counsel will provide you a letter of negative
assurance, dated as of the Closing Date, in form and substance satisfactory
to you, to the effect that such counsel has participated in conferences
with officers and other representatives of the Issuers, representatives of
the independent public accountants for the Issuers and Agway Energy,
representatives of the Initial Purchasers and representatives of counsel
for the Initial Purchasers, at which conferences the contents of the
Memorandum and related matters were discussed, and, although such counsel
has not independently verified and are not passing upon and assume no
responsibility for the accuracy, completeness or fairness of the statements
contained in the Memorandum (except to the extent specified in subsection
(vii) and (viii) of this Section 6(b)), no facts have come to their
attention that lead them to believe that the Memorandum, on the date
thereof or on the date of such letter, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel express no view with
respect to the financial statements and related notes, the financial
statement schedules and the other financial and accounting data included or
incorporated by reference in the Memorandum).
(c) Janice G. Meola, Vice President, General Counsel and Secretary of
the Partnership, shall have furnished to you her written opinion, dated the
Closing Date, in form and substance satisfactory to the Initial Purchasers,
to the effect that:
(i) Each of the Issuers has an authorized capitalization as set
forth in the Final Memorandum. All of the issued and outstanding
Common Units of the Partnership have been duly and validly authorized
and issued and are fully paid and nonassessable (except as
nonassessability may be affected by the legal issues described with
respect to holders of the Common Units in the "Risk Factors" section
of the Prospectus under the captions "Unitholders may not have limited
liability in some circumstances" and "Unitholders may have liability
to repay distributions").
(ii) There is no legal or governmental proceeding pending or, to
such counsel's knowledge, threatened against either of the Issuers or
the Operating Partnership or any of their respective properties that
is required to be described in the Final Memorandum and that has not
been so described.
(iii) 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
-21-
by each of the General Partner and the Partnership and is a valid and
legally binding agreement of the General Partner and the Partnership,
enforceable against each in accordance with its terms, provided that
the enforceability of each such agreement is subject to the
qualifications that (A) the enforceability of such document may be
limited by bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights
generally, (B) the enforceability of such document may be limited by
public policy, applicable law relating to fiduciary duties and the
judicial imposition of an implied covenant of good faith and fair
dealing, (C) the enforceability of equitable rights and remedies
provided for in such document is subject to equitable defenses and
judicial discretion, and the enforceability of such document may be
limited by general equitable principles (regardless of whether
enforcement is sought in a proceeding at law or in equity) and (D) the
enforceability of the indemnity and contribution provisions of such
document may be limited by federal and state securities laws.
(d) The Initial Purchasers shall have received on each of the date
hereof and the Closing Date a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the Initial
Purchasers and Counsel for the Initial Purchasers, from
PricewaterhouseCoopers LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements,
pro forma financial information and certain financial information contained
in each Memorandum; provided that the letter shall use a "cut-off date"
within three days of the date of such letter. References to the Final
Memorandum in this paragraph (c) with respect to either letter referred to
above shall include any amendment or supplement thereto at the date of such
letter.
(e) (i) Neither of the Issuers nor the Operating Partnership shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Memorandum any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Memorandum, and (ii) since the respective dates as
of which information is given in the Memorandum there shall not have been
any change in the Common Units, partners' capital or long-term debt of
either of the Issuers nor the Operating Partnership or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, partners' capital or results of
operations of either of the Issuers or the Operating Partnership, otherwise
than as set forth or contemplated in the Memorandum, the effect of which,
in any such case described in clause (i) or (ii), is in the judgment of the
Initial Purchasers so material and adverse as to make it impracticable or
inadvisable to proceed with the Offering or the delivery of the Notes being
delivered on the Closing Date on the terms and in the manner contemplated
in the Memorandum;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Partnership's debt securities by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under
-22-
surveillance or review, with possible negative implications, its rating of
any of the Partnership's debt securities (other than as part of a
downgrading or public announcement of surveillance or review, with possible
negative implications, of the industry sector in which the Partnership
conducts business by any such nationally recognized statistical rating
organization);
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange (the "Exchange"), the
NASDAQ National Market or in the over-the-counter market; (ii) a suspension
or material limitation in trading in the Partnership's securities on the
Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal, New York State or North Carolina State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war; or (v) the occurrence of
any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in the judgment of either of the
Representatives makes it impracticable or inadvisable to proceed with the
Offering or the delivery of the Notes being delivered on the Closing Date
on the terms and in the manner contemplated in the Memorandum;
(h) The Initial Purchasers shall have received a certificate, dated
the Closing Date and in form and substance satisfactory to the Initial
Purchasers, of the Chief Executive Officer and the Chief Financial Officer
of the Issuers as to the accuracy of the representations and warranties of
the Issuers in this Agreement at and as of the Closing Date; that the
Issuers have performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Closing Date; and as to the matters set forth in Sections 6(d) and (e).
(i) The Notes shall have been designated for trading on PORTAL.
(j) The Notes shall be eligible for clearance and settlement through
the Depository Trust Company.
(k) The bankruptcy court with jurisdiction over the chapter 11
proceedings of Agway, Inc. shall have entered an order approving the sale
(the "Sale Order") of substantially all of the assets of Agway Energy (as
described and on the terms set forth in the Final Memorandum, the
"Acquisition"); the Operating Partnership shall be a bona fide purchaser of
the assets acquired in the Acquisition entitled to a valid 363(m) sale
under the Bankruptcy Code; and any appeal period applicable to the Sale
Order shall have expired or, with the prior approval of the
Representatives, which shall not be unreasonably withheld, waived by the
Operating Partnership.
(l) Either (A) the Acquisition shall be consummated simultaneously
with the closing of the Offering on the Closing Date or (B) the Initial
Purchasers shall have received copies of the Escrow and Security Agreement,
duly authorized, executed and delivered by each of the Issuers and the
Trustee; the Escrow Account shall have been established by the Trustee, in
its capacity as escrow agent, to the reasonable satisfaction of the Initial
Purchasers; the Issuers shall have irrevocably sent by wire transfer, in
immediately available funds, such amount in currency required to be
deposited by the Issuers in the Escrow Account pursuant to Escrow and
Security
-23-
Agreement; the Issuers shall have granted a valid first priority security
interest in the Escrow Account on behalf of the holders of the notes and
shall have perfected such security interest to the reasonable satisfaction
of the Initial Purchasers; and the other conditions contained in the Escrow
and Security Agreement shall have been satisfied.
(m) The Initial Purchasers shall have received copies of the
Registration Rights Agreement, duly authorized, executed and delivered by
each of the Issuers.
(n) On or before the Closing Date, the Initial Purchasers and Counsel
for the Initial Purchasers shall have received such further certificates,
documents or other information as they may have reasonably requested from
the Issuers.
7. Indemnification and Contribution. (a) Each of the Issuers and the
Operating Partnership, jointly and severally, will indemnify and hold harmless
each Initial Purchaser against any losses, claims, damages or liabilities, joint
or several, to which such Initial Purchaser may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Memorandum, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Initial Purchaser for any legal or other expenses reasonably
incurred by such Initial Purchaser in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
neither of the Issuers nor the Operating Partnership shall be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Memorandum or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Partnership by any Initial Purchaser through the Representatives expressly for
use therein.
(b) Each Initial Purchaser will indemnify and hold harmless each of the
Issuers and the Operating Partnership against any losses, claims, damages or
liabilities to which either of the Issuers or the Operating Partnership may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Memorandum, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Memorandum or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Partnership by such Initial Purchaser through the Representatives expressly for
use therein; and will reimburse each of the Issuers and the Operating
Partnership for any legal or other expenses reasonably incurred by either of
them in connection with investigating or defending any such action or claim as
such expenses are incurred.
-24-
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 7 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Issuers and the Operating Partnership on the one hand and the Initial
Purchasers on the other from the offering of the Units. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Issuers and the Operating Partnership on the one hand and the
Initial Purchasers on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Issues and the Operating Partnership on the
one hand and the Initial Purchasers 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 Issuers and the Operating Partnership bear to the
total underwriting discounts and commissions received by the Initial Purchasers,
in each case as set forth in the table on the cover page of the Final
Memorandum. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by
-25-
the Issuers or the Operating Partnership on the one hand or the Initial
Purchasers on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuers, the Operating Partnership and the Initial Purchasers agree that it
would not be just and equitable if contributions pursuant to this subsection (d)
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Units underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations under this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Issuers and the Operating Partnership under this
Section 7 shall be in addition to any liability which the Issuers or the
Operating Partnership may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Initial Purchaser
within the meaning of the Act; and the obligations of the Initial Purchasers
under this Section 7 shall be in addition to any liability which the respective
Initial Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to the General Partner, to each officer and member of the Board of
Supervisors of the Partnership and to each person, if any, who controls either
of the Issuers or the Operating Partnership within the meaning of the Act.
8. Defaulting Initial Purchasers. If, on the Closing Date, any Initial
Purchaser defaults in the performance of its obligations under this Agreement,
the non-defaulting Initial Purchasers shall be obligated to purchase the Notes
that such defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase on the Closing Date (the "Remaining Notes") in the respective
proportions that the principal amount of the Notes set opposite the name of each
non-defaulting Initial Purchaser in Schedule I hereto bears to the total number
of the Notes set opposite the names of all the non-defaulting Initial Purchasers
in Schedule I hereto; provided, however, that the non-defaulting Initial
Purchasers shall not be obligated to purchase any of the Notes on the Closing
Date if the total amount of Notes which the defaulting Initial Purchaser or
Initial Purchasers agreed but failed to purchase on such date exceeds 10% of the
total amount of Notes to be purchased on the Closing Date, and no non-defaulting
Initial Purchaser shall be obligated to purchase more than 110% of the amount of
Notes that it agreed to purchase on the Closing Date pursuant to this Agreement.
If the foregoing maximums are exceeded, the non-defaulting Initial Purchasers,
or those other purchasers satisfactory to the Initial Purchasers who so agree,
shall have the right, but not the obligation, to purchase, in such proportion as
may be
-26-
agreed upon among them, all the Remaining Notes. If the non-defaulting Initial
Purchasers or other Initial Purchasers satisfactory to the Initial Purchasers do
not elect to purchase the Remaining Notes, this Agreement shall terminate
without liability on the part of any non-defaulting Initial Purchaser or the
Issuers, except that the Partnership will continue to be liable for the payment
of expenses to the extent set forth herein.
Nothing contained in this Agreement shall relieve a defaulting Initial
Purchaser of any liability it may have to the Issuers for damages caused by its
default. If other purchasers are obligated or agree to purchase the Notes of a
defaulting or withdrawing Initial Purchaser, the Issuers or the Representatives
may postpone the Closing Date for up to five full business days in order to
effect any changes in the Transaction Documents or in any other document or
arrangement that, in the opinion of counsel for the Issuers or Counsel for the
Initial Purchasers, may be necessary.
9. Survival. The respective indemnities, agreements, representations,
warranties, covenants and other statements of the Issuers, the Operating
Partnership, their respective officers, and the several Initial Purchasers set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement shall remain in full force and effect, regardless of (i) any
investigation (or any statement as to the results thereof) made by or on behalf
of any Initial Purchaser or any person controlling any Initial Purchaser, or
either of the Issuers, the Operating Partnership, or any officer, member of the
Board of Supervisors or controlling person of either Issuer or the Operating
Partnership referred to in Section 7 hereof and (ii) delivery of and payment for
the Notes. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5, 7, 9 and 15 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
10. Termination. If this Agreement shall be terminated pursuant to Section
8, the Issuers shall not then be under any liability to any of the Initial
Purchasers except as provided in Sections 5 and 7 hereof; but, if for any other
reason, the Notes are not delivered by or on behalf of the Issuers as provided
herein, the Issuers will reimburse the Initial Purchasers through you for all
out-of-pocket expenses reasonably incurred by the Initial Purchasers in making
preparations for the purchase, sale and delivery of the Notes, but the Issuers
shall then be under no further liability to any Initial Purchasers except as
provided in Section 5 and 7 hereof.
11. Information Supplied by Initial Purchasers. The statements set forth in
the last sentence of the second paragraph, the third sentence of the fifth
paragraph and the sixth paragraph under the heading "Plan of Distribution" in
the Preliminary Memorandum and the Final Memorandum, to the extent such
statements relate to the Initial Purchasers, constitute the only information
furnished by the Initial Purchasers to the Issuers for the purposes of Sections
1(a) and 7 hereof.
12. Notices. All communications hereunder shall be in writing and, if sent
to any of the Initial Purchasers, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Wachovia Capital Markets,
LLC, One Wachovia Center, 301 South College Street, Charlotte, North Carolina
28288-0604, Attention: Jay Braden, with a copy to Latham & Watkins LLP, 885
Third Avenue, Suite 1000, New York, New York 10022,
-27-
Attention: Kirk A. Davenport, Esq., and if sent to the Issuers, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Issuers at 240 Route 10 West, Whippany, New Jersey 07981,
Attention: A. Davin D'Ambrosio, with a copy to Cahill Gordon & Reindel LLP, 80
Pine Street, New York, New York 10005, Attention: John Schuster, Esq.
13. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the several Initial Purchasers, the Issuers, the Operating
Partnership and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement, or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the several Initial Purchasers, the
Issuers, the Operating Partnership and their respective successors and legal
representatives, and for the benefit of no other person, except that (i) the
indemnities of the Issuers and the Operating Partnership contained in Section 7
of this Agreement shall also be for the benefit of any person or persons who
control any Initial Purchasers within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Initial Purchasers contained in Section 7 of this Agreement shall also be for
the benefit of the affiliates, supervisors, directors and officers of the
Issuers, the Operating Partnership, and any person or persons who control the
Issuers and the Operating Partnership within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act. No purchaser of Notes from any
Initial Purchaser shall be deemed a successor to such Initial Purchaser because
of such purchase.
14. Time is of the Essence. Time shall be of the essence of this Agreement.
As used herein, the term "business day" shall mean any day when banking
institutions in the City and State of New York are open for business.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. Consent to Jurisdiction and Service of Process. (a) All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, which
jurisdiction is non-exclusive.
(b) Each party agrees that any service of process or other legal summons in
connection with any Proceeding may be served on it by mailing a copy thereof by
registered mail, or a form of mail substantially equivalent thereto, postage
prepaid, addressed to the served party at its address as provided for in Section
12 hereof. Nothing in this Section shall affect the right of the parties to
serve process in any other manner permitted by law.
17. Counterparts. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
18. Confidentiality. The Partnership is authorized, subject to applicable
law, to disclose any and all aspects of this potential transaction that are
necessary to support any U.S.
-28-
federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to those benefits, without the Initial Purchasers imposing any
limitation of any kind.
[The remainder of this page is intentionally left blank.]
-29-
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Issuers, the Operating
Partnership and the Initial Purchasers.
Very truly yours,
SUBURBAN PROPANE PARTNERS, L.P.
By: /s/ Michael J. Dunn, Jr.
----------------------------------------
Name: Michael J. Dunn, Jr.
Title: Senior Vice President--Corporate
Development
SUBURBAN ENERGY FINANCE CORP.
By: /s/ Michael J. Dunn, Jr.
----------------------------------------
Name: Michael J. Dunn, Jr.
Title: President
SUBURBAN PROPANE, L.P.
By: /s/ Michael J. Dunn, Jr.
----------------------------------------
Name: Michael J. Dunn, Jr.
Title: Senior Vice President--Corporate
Development
Accepted as of the date hereof.
WACHOVIA CAPITAL MARKETS, LLC
/s/ Lewis S. Morris III
- ------------------------------------
Name: Lewis S. Morris III
Title: Vice President
/s/ Goldman, Sachs & Co.
- ------------------------------------
(Goldman, Sachs & Co.)
-30-
SCHEDULE I
INITIAL PURCHASERS
Aggregate Principal
Amount of Notes to be
Initial Purchaser Purchased from the Issuers
- ----------------- --------------------------
Wachovia Capital Markets, LLC.................. $ 87,500,000
Goldman, Sachs & Co............................ $ 87,500,000
----------------
Total................................. $ 175,000,000
================
S-1