<PAGE>
AMERIGAS PARTNERS, L.P.
Underwriting Agreement
New York, New York
October 11, 2000
To the Representatives named in Schedule I
hereto of the Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
AmeriGas Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to sell to the several underwriters named in Schedule
II hereto (the "Underwriters"), for whom you (the "Representatives") are acting
as representatives, the number of common units of its limited partner interests
in the Partnership (the "Common Units") set forth in Schedule I hereto (said
Common Units to be issued and sold by the Partnership being hereinafter called
the "Underwritten Securities"). The Partnership also proposes to grant to the
Underwriters an option to purchase up to the number of additional Common Units
set forth in Schedule II hereto to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). To the extent there are no
additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
The Partnership, AmeriGas Propane, L.P., a Delaware limited partnership
(the "Operating Partnership"), and AmeriGas Propane, Inc., a Pennsylvania
corporation and general partner of
<PAGE>
both the Partnership and the Operating Partnership (the "General Partner), are
collectively referred to herein as the "Partnership Entities".
1. Representations and Warranties. The Partnership Entities, jointly and
-- -------------------------------
severally, represent and warrant to, and agree with, each Underwriter as set
forth below in this Section 1.
(a) The Partnership meets the requirements for use of Form S-3 under the Act
and has prepared and filed with the Commission a registration statement
(the file number of which is set forth in Schedule I hereto) on Form S-3,
including a related basic prospectus, for registration under the Act of the
offering and sale of the Securities. The Registration Statement has been
declared effective by the Commission and no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or overtly threatened by
the Commission. The Partnership has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder. As
filed, the Final Prospectus or any such amendment shall contain all Rule
430A Information, together with all other such required information, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Partnership has advised you, prior to
the Execution Time, will be included or made therein. The Registration
Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x). The Partnership may have filed one or more amendments
thereto, including a Preliminary Final Prospectus, each of which has
previously been furnished to you. The Partnership will next file with the
Commission a Final Prospectus relating to the Securities in accordance with
Rules 430A and 424(b).
(b) On the Effective Date, the Registration Statement did, and when the Final
Prospectus is first filed (if required) in accordance with Rule 424(b) and
on the Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a
"settlement date"), the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statement did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and, on the Execution Time, the Preliminary Final
Prospectus did not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date and any settlement date, the Final Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
-------- -------
Partnership Entities make no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Final Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Partnership by or
on behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Final Prospectus (or any
supplement thereto).
2
<PAGE>
(c) Each of the Partnership and the Operating Partnership has been duly formed
and is validly existing as a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Delaware Act") with full partnership
power and authority to own, lease and operate their respective properties
to be owned and operated at the Closing Date and to conduct their
respective businesses to be conducted at the Closing Date in all material
respects as described in the Registration Statement and the Final
Prospectus, and each of the Partnership and the Operating Partnership is,
or at each Closing Date will be, duly registered or qualified to conduct
its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify (i) does not have a material adverse effect on the financial
condition, results of operations, prospects, business or properties,
whether or not arising from transactions in the ordinary course of
business, except as set forth in the Final Prospectus (exclusive of any
supplement thereto) ("Material Adverse Effect") of the Partnership and the
Operating Partnership, taken as a whole, or (ii) would not subject the
limited partners of the Partnership that are common unitholders to any
material liability or disability.
(d) The General Partner is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania, with
full corporate power and authority to own, lease and operate its properties
and to conduct its business and to act as general partner of the
Partnership and of the Operating Partnership, in each case in all material
respects as described in the Registration Statement and the Final
Prospectus, and the General Partner is duly registered or qualified to
conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires
such registration or qualification, except where the failure so to register
or qualify (i) does not have a Material Adverse Effect on the General
Partner or (ii) would not subject the limited partners that are common
unitholders of the Partnership to any material liability or disability.
(e) Neither the General Partner, the Partnership nor the Operating Partnership
has any subsidiaries (other than the Partnership and Operating Partnership
themselves and Petrolane Incorporated, a Pennsylvania corporation
("Petrolane")) which, 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).
(f) None of the Partnership, the Operating Partnership or the General Partner
is in violation of its partnership agreement, certificate or articles of
incorporation or by-laws, or other organizational documents, or of any law,
ordinance, administrative or governmental rule or regulation applicable to
the Partnership, the Operating Partnership or the General Partner or of any
decree of any court or governmental agency or body having jurisdiction over
the Partnership, the Operating Partnership or the General Partner, or in
breach, default or violation in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which the Partnership, the Operating Partnership or the
General Partner is a party or by which any of them or any of their
respective properties may be bound which breach, default or violation
would, if continued, (i) have a Material Adverse Effect on the Partnership
and the Operating Partnership, taken as a whole, or on the General Partner
or (ii) subject the
3
<PAGE>
limited partners of the Partnership that are common unitholders to any
material liability or disability.
(g) None of the offering, issuance and sale of the Securities, the execution,
delivery or performance of this Agreement by the Partnership, the Operating
Partnership or the General Partner nor the consummation by the Partnership,
the Operating Partnership or the General Partner of the transactions
contemplated hereby (A) requires any permit, consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency
or official or conflicts or will conflict with or constitutes or will
constitute a violation of the agreement of limited partnership, certificate
or articles of incorporation or bylaws or other organizational documents of
the Partnership, the Operating Partnership or the General Partner or (B)
conflicts or will conflict with or constitutes or will constitute a breach
or violation of, or a default under, any material agreement, indenture,
lease or other instrument to which the Partnership, the Operating
Partnership or the General Partner is a party or by which any of them or
any of their respective properties may be bound other than as described in
the Final Prospectus and except for agreements, indentures, leases or other
instruments that will be extinguished on the Closing Date, or (C) violates
or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Partnership, the Operating
Partnership or the General Partner or any of their respective properties,
or (D) will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Partnership, the Operating
Partnership or the General Partner pursuant to the terms of any agreement
or instrument to which any of them is a party or by which any of them may
be bound or to which any of the property or assets of any of them is
subject (other than as described in the Final Prospectus) which conflict,
breach, violation or default would, if continued (i) have a Material
Adverse Effect on the Partnership and the Operating Partnership, taken as a
whole, or the General Partner or (ii) subject the limited partners of the
Partnership that are common unitholders to any material liability or
disability, except for permits, consents, approvals and similar
authorizations required under the Act and the securities or blue sky laws
of certain jurisdictions.
(h) The accountants, Arthur Andersen LLP, who have certified the financial
statements included or incorporated by reference in the Preliminary Final
Prospectus (or any amendment or supplement thereto) are independent public
accountants as required by the Act.
(i) Except as disclosed in the Registration Statement and the Final Prospectus
(or any amendment or supplement thereto), subsequent to the respective
dates as of which information is given in the Registration Statement and
the Final Prospectus (or any amendment or supplement thereto), none of the
Partnership, the Operating Partnership or the General Partner has incurred
any liability or obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, that is material to
the Partnership and the Operating Partnership, taken as a whole, or the
General Partner.
(j) The Partnership has not distributed and, prior to the later to occur of (i)
the Closing Date and (ii) completion of the distribution of the Securities,
will not distribute, any prospectus (as defined under the Act) in
connection with the offering and sale of the Securities
4
<PAGE>
other than the Registration Statement, the Basic Prospectus, the
Preliminary Final Prospectus, the Final Prospectus or any amendment or
supplement thereto, or other materials, if any, permitted by the Act,
including Rule 134 of the general rules and regulations promulgated
thereunder.
(k) Each of the Partnership, the Operating Partnership and the General Partner
has filed all material tax returns required to be filed and has timely paid
all taxes shown to be due pursuant to said returns, other than those (i)
which, if not paid, would not have a Material Adverse Effect on the
Partnership and the Operating Partnership, taken as a whole, or the General
Partner or (ii) which are being contested in good faith.
(l) Except as described in the Final Prospectus, none of the Partnership, the
Operating Partnership and the General Partner has sustained since the date
of the latest audited financial statements included in the Final Prospectus
any material loss or interference with its business from fire, explosion,
flood or other calamity, 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 Final Prospectus; and, except as described
in the Final Prospectus since the respective dates as of which information
is given in the Registration Statement and the Final Prospectus, there has
not been any material change in the partners' equity or capital stock
(other than a decrease in partners' capital of the Partnership of $49.844
million from June 30, 2000 to August 31, 2000) or long-term debt of the
Partnership, the Operating Partnership or the General Partner or any
material adverse change in or affecting the financial condition, business,
properties, results of operations or prospects of the Partnership and the
Operating Partnership, taken as a whole, or the General Partner.
(m) At June 30, 2000, the Partnership had and would have had on the adjusted
basis indicated in the Final Prospectus, a duly authorized and outstanding
capitalization as set forth therein; the consolidated historical financial
statements together with the related schedules and notes of the Partnership
and its subsidiaries included or incorporated by reference in the Final
Prospectus and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash flows of
the Partnership as of the dates and the periods indicated, comply as to
form with the applicable requirements as to financial statements of the
Act, the Exchange Act and the rules promulgated under the Act or the
Exchange Act and have been prepared in conformity with generally accepted
accounting principles; the historical information set forth in the Final
Prospectus under the caption "Summary Historical Consolidated Financial
Data" accurately presents, on the bases stated in the Registration
Statement and Final Prospectus, the information included therein.
(n) The General Partner is the sole general partner of the Partnership and the
Operating Partnership with a general partner interest in the Partnership of
1.0% pursuant to the Second Amended and Restated Agreement of Limited
Partnership, dated as of September 30, 2000 (the "Partnership Agreement"),
and a general partner interest in the Operating Partnership of 1.0101%
pursuant to the Amended and Restated Agreement of Limited Partnership of
the Operating Partnership, dated as of April 12, 1995 (as it may be amended
or restated at or prior to the Closing Date, the "Operating Partnership
Agreement" and, together with the Partnership Agreement, the "Partnership
Agreements").
5
<PAGE>
(o) As of the Closing Date, the General Partner and its consolidated
subsidiaries will own limited partner interests in the Partnership
represented by 14,283,932 Common Units and 9,891,072 units representing
subordinated limited partner interests ("Subordinated Units").
(p) As of the Closing Date, the Partnership will be the sole limited partner of
the Operating Partnership, with a limited partner interest of 98.9899%, and
will own such limited partner interest in the Operating Partnership free
and clear of all liens, encumbrances, charges or claims other than those
arising pursuant to the Operating Partnership Agreement.
(q) At the Closing Date, or the settlement date, as the case may be, the
Securities and the limited partner interests represented thereby will be
duly authorized by the Partnership Agreement and, when issued and delivered
against payment therefor as provided herein, will be validly issued, fully
paid (to the extent required under the Partnership Agreement) and non-
assessable (except as such non-assessability may be affected by the
provisions of the Delaware Act with respect to maintenance of limited
liability).
(r) Other than as described in the Basic Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase limited or general
partner interests from the Partnership or the Operating Partnership, nor
any restriction upon the voting or transfer of, any Common Units of the
Partnership or limited partner interests of the Operating Partnership
pursuant to either of the Partnership Agreements or any agreement or other
instrument to which the Partnership or the Operating Partnership is a party
or by which either of them may be bound, except for restrictions on
transfer of the unregistered Common Units issued pursuant to acquisition
agreements.
(s) All of the issued shares of capital stock of the General Partner have been
duly authorized and validly issued and are fully paid and non-assessable;
and all of the issued shares of capital stock of the General Partner are
held directly or indirectly by UGI Corporation, free and clear of all
liens, encumbrances, equities or claims, except as set forth in the Final
Prospectus.
(t) This Agreement has been duly authorized, executed and delivered by the
Partnership, the Operating Partnership and the General Partner.
(u) Each of the Partnership and the Operating Partnership has, or at or before
the Closing Date will have, all necessary consents, approvals,
authorizations, orders, registrations and qualifications of or with any
court or governmental agency or body having jurisdiction over it or any of
its properties or of or with any other person to acquire its properties and
to conduct its business as set forth or contemplated in the Final
Prospectus, except such consents, approvals, authorizations, orders,
registrations or qualifications which, if not obtained, would not (i)
individually or in the aggregate, have a Material Adverse Effect on the
Partnership or the Operating Partnership taken as a whole, or (ii) affect
the limited liability of the limited partners of the Partnership that are
common unitholders.
6
<PAGE>
(v) None of the Partnership, the Operating Partnership or the General Partner
(i) has violated any environmental, safety, health or similar law or
regulation applicable to its business relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), which violation
would have a Material Adverse Effect on the Partnership or the Operating
Partnership, taken as a whole, or the General Partner or (ii) lacks any
permits, licenses or other approvals required of them under applicable
Environmental Laws to own, lease or operate their properties and conduct
their businesses as described in the Final Prospectus or is violating any
terms and conditions of any such permit, license or approval, which would
have a Material Adverse Effect on the Partnership or the Operating
Partnership, taken as a whole, or on the General Partner.
(w) Each of the Partnership, the Operating Partnership and the General Partner
maintains insurance covering their properties, operations, personnel and
businesses. In the General Partner's reasonable judgment, such insurance
insures against such losses and risks as are adequate to protect the
Partnership, the Operating Partnership and the General Partner and their
businesses. Neither the Partnership, the Operating Partnership or the
General Partner has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will
have to be made in order to continue such insurance; all such insurance is
outstanding and duly in force on the date hereof and will be outstanding
and duly in force on the Closing Date.
(x) No action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Partnership, any
of its subsidiaries or the General Partner or its or their property is
pending or, to the knowledge of the Partnership or the General Partner,
threatened that (i) would reasonably be expected to have a Material Adverse
Effect on the Partnership and the Operating Partnership, taken as a whole,
or prevent or result in the suspension of the offering and issuance of the
Securities or (ii) would in any manner question the validity of this
Agreement.
(y) Any certificate signed by any officer of the General Partner on behalf of
the Partnership and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be
deemed a representation and warranty by the Partnership, as to matters
covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in reliance
-- -----------------
upon the representations and warranties herein set forth, the Partnership agrees
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Partnership, at a purchase price of $17.5375 per
unit, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Partnership hereby
grants an option to the several Underwriters to purchase, severally and not
jointly, up to 345,000 Option Securities at the same purchase price per
unit as the Underwriters shall pay for the Underwritten
7
<PAGE>
Securities. Said option may be exercised only to cover over-allotments in
the sale of the Underwritten Securities by the Underwriters. Said option
may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the Final Prospectus upon
written or telegraphic notice by the Representatives to the Partnership
setting forth the number of Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The number
of Option Securities to be purchased by each Underwriter shall be in the
same percentage of the total number of Option Securities to be purchased by
the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional units.
3. Delivery and Payment. Delivery of and payment for the Underwritten
-- ---------------------
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made on the date and at the time specified in
Schedule I hereto or at such time on such later date and time after the
foregoing date as may be determined by agreement between the Representatives and
the Partnership or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Partnership by wire transfer payable in same-day funds to
an account specified by the Partnership. Delivery of the Underwritten
Securities and the Option Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Partnership will deliver the
Option Securities (at the expense of the Partnership) to the Representatives, at
388 Greenwich Street, New York, New York, on the date specified by the
Representatives (which shall be no earlier than three Business Days after
exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Partnership by wire transfer payable in same-day funds to an account specified
by the Partnership. If settlement for the Option Securities occurs after the
Closing Date, the Partnership will deliver to the Representatives on the
settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several Underwriters
-- -------------------------
propose to offer the Securities for sale to the public as set forth in the Final
Prospectus.
5. Agreements. The Partnership agrees with the several Underwriters that:
-- -----------
(a) Prior to the termination of the offering of the Securities, the Partnership
will not file any amendment of the Registration Statement or supplement
(including any Final Prospectus) to the Basic Prospectus or any Rule 462(b)
Registration Statement relating to the Securities unless the Partnership
has furnished you a copy for your review prior to filing and will
8
<PAGE>
not file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Partnership will cause the
Final Prospectus, properly completed, and any supplement thereto to be
filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Partnership
will promptly advise the Representatives (1) when the Final Prospectus, and
any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement relating to the Securities shall have been filed with the
Commission, (2) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been
filed or become effective, (3) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Final Prospectus or
for any additional information, (4) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(5) of the receipt by the Partnership of any notification with respect to
the suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Partnership will use its best efforts to prevent the issuance
of any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is required to
be delivered under the Act, any event occurs as a result of which the Final
Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Partnership promptly
will (1) notify the Representatives of such event, (2) prepare and file
with the Commission, subject to the second sentence of paragraph (a) of
this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (3) supply any
supplemented Final Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Partnership will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Partnership which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(d) The Partnership will furnish to Salomon Smith Barney Inc., on behalf of the
Representatives and counsel for the Underwriters, without charge, one
signed copy of the Registration Statement (including exhibits thereto) and
to each other Underwriter a copy of the Registration Statement (without
exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Final Prospectus and the Final Prospectus and any supplement
thereto as the Representatives may reasonably request. The Partnership
will pay the expenses of printing or other production of all documents
relating to the offering.
9
<PAGE>
(e) The Partnership will arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities and will
pay any required fee of the National Association of the Securities Dealers,
Inc. in connection with any required review of the offering; provided that
in no event shall the Partnership be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(f) The Partnership will not, without the prior written consent of Salomon
Smith Barney Inc., offer, sell, contract to sell, pledge, grant any options
or warrants to purchase Common Units or otherwise dispose of (or enter into
any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the
Partnership or any affiliate of the Partnership or any person in privity
with the Partnership or any affiliate of the Partnership), directly or
indirectly, including through the filing (or participation in the filing)
of a registration statement with the Commission in respect of, or the
establishment of or increase in a put equivalent position in or liquidation
or the decrease in a call equivalent position in, within the meaning of
Section 16 of the Exchange Act, any other Common Units or rights that
represent the right to receive Common Units or any securities that are
senior to or pari passu with Common Units or publicly announce an intention
to effect any such transaction, until the Business Day set forth on
Schedule I hereto, other than (i) in connection with the acquisition of
assets, businesses or the capital stock or other ownership interests of
businesses by the Partnership or the Operating Partnership in exchange for
securities of the Partnership that are substantially similar to the Common
Units, if the recipient(s) of such securities agree(s) not to offer, sell,
contract to sell, or otherwise dispose of such securities or take any of
the other actions restricted by this Section 5(f) during such lock-up
period or (ii) pursuant to employee benefit plans or unit option plans, or
upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement.
(g) The Partnership will not take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause
or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Partnership to facilitate
the sale or resale of the Securities.
6. Conditions to the Obligations of the Underwriters. The obligations of the
-- --------------------------------------------------
Underwriters to purchase the Underwritten Securities and the Option Securities,
as the case may be, shall be subject to the accuracy of the representations and
warranties on the part of the Partnership Entities contained herein as of the
Execution Time, the Closing Date and any settlement date pursuant to Section 3
hereof, to the accuracy of the statements of the Partnership made in any
certificates pursuant to the provisions hereof, to the performance by the
Partnership Entities of their obligations hereunder and to the following
additional conditions:
10
<PAGE>
(a) The Final Prospectus, and any such supplement, will be filed in the manner
and within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Partnership shall have requested and caused Morgan, Lewis & Bockius
LLP, counsel for the Partnership, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the Representatives,
to the effect that:
(i) Each of the Partnership and the Operating Partnership has been duly formed
and is validly existing as a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Delaware Act") with full partnership
power and authority to own or lease, as the case may be, and to operate its
properties and conduct their respective businesses as described in the
Final Prospectus, and is duly registered or qualified to conduct its
business and is in good standing under the laws of each jurisdiction or
place where the nature of its properties or the conduct of its business
requires registration or qualification (except where failure to so qualify
would not have a Material Adverse Effect). Each of the Partnership
Agreements has been duly authorized and validly executed and delivered by
the Partnership, the Operating Partnership and the General Partner, as the
case may be, and constitutes a valid and binding obligation of the
Partnership, the Operating Partnership and the General Partner, as the case
may be, enforceable against such party in accordance with its terms subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws relating to or affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity) and securities laws and public policy underlying such
laws with respect to rights to indemnification and contribution.
(ii) The General Partner is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania, with
full corporate power and authority to own, lease and operate its properties
and to conduct its business and to act as general partner of the
Partnership and Operating Partnership and the General Partner is duly
registered or qualified to conduct its business and is in good standing
under the laws of each jurisdiction or place where the nature of its
properties or the conduct of its business requires registration or
qualification (except where failure to so qualify would not have a Material
Adverse Effect).
(iii) The outstanding Common Units have been duly and validly authorized and
issued and are fully paid and nonassessable; the Securities have been duly and
validly authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and nonassessable;
upon official notice of issuance, the Securities will be duly listed, and
admitted and authorized for trading on the New York Stock Exchange; the
certificates for the Securities are in valid and sufficient form; and the
holders of outstanding Common Units of the
11
<PAGE>
Partnership are not entitled to preemptive or other rights to subscribe for the
Securities other than preemptive rights of the General Partner pursuant to the
Partnership Agreement and, except as set forth in the Final Prospectus, no
options, warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any securities
for, Common Units of or ownership interests in the Partnership are outstanding.
(iv) To the knowledge of such counsel, there is no pending or threatened action,
suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Partnership Entities or its or
their property of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final Prospectus, and
there is no franchise, contract or other document of a character required
to be described in the Registration Statement or Final Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as required;
and the statements included or incorporated by reference in the Final
Prospectus under the heading "Business and Properties - Government
Regulation" insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair summaries
of such legal matters, agreements, documents or proceedings.
(v) The Registration Statement has become effective under the Act; any required
filing of the Basic Prospectus, any Preliminary Final Prospectus and the
Final Prospectus, and any supplements thereto, pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no proceedings
for that purpose have been instituted or threatened and the Registration
Statement and the Final Prospectus (other than the financial statements and
other financial information contained therein, as to which such counsel
need express no opinion) comply as to form in all material respects with
the applicable requirements of the Act and the Exchange Act and the
respective rules thereunder.
(vi) This Agreement has been duly authorized and validly executed and delivered
by the Partnership, the Operating Partnership and the General Partner, as
the case may be.
(vii) The Partnership is not, and after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Final Prospectus will not be, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(viii) Neither the General Partner, the Partnership nor the Operating
Partnership has any subsidiaries (other than the Partnership and Operating
Partnership themselves and Petrolane) which, 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).
12
<PAGE>
(ix) The General Partner is the sole general partner of the Partnership and the
Operating Partnership with a general partner interest in the Partnership of
1.0% and a general partner interest in the Operating Partnership of
1.0101%; such general partner interests are duly authorized by the
Partnership Agreement and the Operating Partnership Agreement,
respectively, are validly issued and are owned by the General Partner free
and clear of all liens, encumbrances, charges or claims of record (A) in
respect of which a financing statement under the Uniform Commercial Code of
the State of Delaware naming the General Partner as debtor is on file in
the office of the Secretary of State of the State of Delaware or (B)
otherwise known to such counsel, without independent investigation, other
than those created by or arising under the Delaware Act.
(x) 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 is validly
issued, fully paid (to the extent required) and non-assessable (except as
such non-assessability may be affected by provisions of the Delaware Act
with respect to maintenance of limited liability); and the Partnership owns
such limited partner interest in the Operating Partnership free and clear
of all liens, encumbrances, charges or claims of record (A) in respect of
which a financing statement under the Uniform Commercial Code of the State
of Delaware naming the Partnership as debtor is on file in the office of
the Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those created
by or arising under the Delaware Act.
(xi) The Securities to be issued and sold to the Underwriters by the Partnership
hereunder and the limited partner interests represented thereby have been
authorized by the General Partner on behalf of the Partnership pursuant to
the Partnership Agreement and, when issued and delivered against payment
therefor as provided in this Agreement, will be validly issued, fully paid
(to the extent required) and nonassessable (except as such non-
assessability may be affected by provisions of the Delaware Act with
respect to maintenance of limited liability).
(xii) The statements incorporated in the Registration Statement and in the
Final Prospectus under the caption "Business and Properties - Government
Regulation" insofar as they constitute descriptions of the Partnership Agreement
or refer to statements of law or legal conclusions, are accurate and complete in
all material respects.
(xiii) Except as described in the Final Prospectus, there are no preemptive
rights or other rights to subscribe for limited partner interests or to
purchase, nor any restriction upon the voting or transfer of, any owners of
Common Units of the Partnership or the Operating Partnership pursuant to either
of the Partnership Agreements.
(xiv) Neither the offer, sale or delivery of the Underwritten Securities, the
execution, delivery or performance of this Agreement by the Partnership or the
13
<PAGE>
Operating Partnership nor any of the transactions contemplated hereby, conflicts
with or will conflict with or constitutes or will constitute a breach of, or a
default under the Partnership Agreements, nor will any such action result in any
violation of the Delaware Act, except for such conflicts, breaches or defaults
which could not (i) reasonably be expected to have a Material Adverse Effect on
the Partnership and the Operating Partnership, taken as a whole, or the General
Partner or (ii) subject the limited partners of the Partnership that are common
unitholders to any material liability or disability.
(xv) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions
contemplated herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and in the Final
Prospectus and such other approvals (specified in such opinion) as have
been obtained.
(xvi) Neither the issue and sale of the Securities, nor the consummation of
any other of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any property or assets of the
Partnership Entities pursuant to (i) the charter or by-laws of the Partnership
Entities, (ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which any of the Partnership Entities is a party or
bound or to which its or their property is subject and which is filed as an
exhibit to the Partnership's Annual Report on Form 10-K for the fiscal year
ended September 30, 1999, or (iii) to the knowledge of such counsel, any
statute, law, rule, regulation, judgment, order or decree applicable to the
Partnership Entities of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Partnership or its subsidiaries or any of its or their properties.
(xvii) Except as provided in the Partnership Agreement, to the knowledge of
such counsel, no holders of securities of the Partnership have rights to the
registration of such securities under the Registration Statement.
(xviii) Neither the Partnership nor the General Partner is a "holding company"
within the meaning of the Section 2(a)(7) of the 1935 Act, and neither the
Operating Partnership, the Partnership, nor the General Partner is subject to
regulation under the 1935 Act.
In addition, such counsel shall state that in the course of the preparation
of the Registration Statement, Basic Prospectus and Final Prospectus, such
counsel has participated in conferences with officers and other representatives
of the Partnership, representatives of the independent accountants of the
Partnership, representatives of the Underwriters, representations of Baker Botts
L.L.P. and representatives of counsel for the Underwriters, at which the
contents of the Registration Statement, Basic Prospectus and Final Prospectus
and related matters were
14
<PAGE>
discussed and, although such counsel does not pass upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of any statement
contained in the Registration Statement, Basic Prospectus or Final Prospectus
and such counsel has made no independent check or verification thereof (except
as set forth in paragraph (xii) above), based in part upon the foregoing, no
facts have come to such counsel's attention that have led such counsel to
believe that the Registration Statement (except as to the financial statements
and notes thereto and other financial and statistical data included therein as
to which such counsel need not express any opinion or belief), as of the date of
effectiveness, contained an untrue statement of material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading or that the Basic Prospectus and
Final Prospectus and the Final Prospectus (except as to the financial statements
and the notes thereto and other financial and statistical data included therein
or excluded therefrom as to which such counsel need not express any opinion or
belief), as of its date or as of the date of such opinion, contained or contains
an untrue statement of material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering such opinion such counsel may rely as to matters of fact, to
the extent such counsel deems reasonable, upon certificates of public officials
and officers of the Company, provided that the extent of such reliance is
specified in such opinion.
(c) You shall have received on the Closing Date, an opinion of Baker Botts
L.L.P., counsel for the Partnership, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, to the effect that
the statements in the Registration Statement and Basic Prospectus under the
caption "Description of Common Units," insofar as they constitute
descriptions of the Partnership Agreement or refer to statements of law or
legal conclusions, are accurate and complete in all material respects.
Such opinion also should state that the opinion of Baker Botts L.L.P. filed
as Exhibit 8.1 to the Registration Statement is confirmed and the
Representatives may rely on such opinion as if it were addressed to such
representatives.
(d) The Representatives shall have received from Vinson & Elkins L.L.P.,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date and addressed to the Representatives, with respect to the issuance and
sale of the Securities, the Registration Statement, the Final Prospectus
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Partnership shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(e) The Partnership shall have furnished to the Representatives a certificate
of the Partnership, signed on behalf of the General Partner by a President
or Vice President thereof dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplements to the Final Prospectus
and this Agreement and that:
15
<PAGE>
(i) (A) the representations and warranties of the Partnership contained in this
Agreement are true and correct on and as of the Closing Date as though made
at and as of the Closing Date; (B) the Partnership has performed all
obligations required to be performed by it pursuant to the terms of this
Agreement at or prior to the Closing Date; (C) the Registration Statement
has become effective and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been initiated or, to the knowledge of the Partnership, threatened by
the Commission, and all requests for additional information on the part of
the Commission have been complied with or otherwise satisfied; (D) the
Common Units have been duly listed, subject to official notice of issuance,
on the New York Stock Exchange; and (E) no event contemplated by subsection
(i) of this Section 6 in respect of the Partnership or the Operating
Partnership shall have occurred; and
(ii) since the date of the most recent financial statements included or
incorporated by reference in the Final Prospectus (exclusive of any
supplement thereto), there has been no Material Adverse Effect on the
Partnership and its subsidiaries, taken as a whole.
(f) The Partnership shall have requested and caused Arthur Andersen LLP to have
furnished to the Representatives, at the Execution Time and at the Closing
Date, letters (which may refer to letters previously delivered to one or
more of the Representatives), dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
rules and regulations adopted by the Commission thereunder and that they
have performed a review of the unaudited interim financial information of
the Partnership for the nine-month period ended June 30, 2000, and as at
June 30, 2000, in accordance with Statement on Auditing Standards No. 71,
and stating in effect, except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements and financial statement
schedules included or incorporated by reference in the Registration
Statement and the Preliminary Final Prospectus and reported on by them
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial statements made
available by the Partnership; their limited review, in accordance with
standards established under Statement on Auditing Standards No. 71, of the
unaudited interim financial information for the nine-month period ended
June 30, 2000, and as at June 30, 2000, carrying out certain specified
procedures (but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter; a
reading of the minutes of the meetings of the Board of Directors of the
General Partner and inquiries of certain officials of the General Partner
who have responsibility for financial and accounting matters of the
Partnership as to transactions and events
16
<PAGE>
subsequent to September 30, 1999, nothing came to their attention which
caused them to believe that:
(A) any unaudited financial statements included or incorporated by reference in
the Registration Statement and the Preliminary Final Prospectus do not
comply as to form in all material respects with applicable accounting
requirements of the Act and with the related rules and regulations adopted
by the Commission with respect to financial statements included or
incorporated by reference in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial statements are not in conformity
with generally accepted accounting principles;
(B) with respect to the period subsequent to June 30, 2000, there were any
changes, at a specified date not more than five days prior to the date of
the letter, in the long-term debt of the Partnership or capital of the
Partnership or decreases in the unitholders' equity of the Partnership as
of June 30, 2000 as compared with the amounts shown on the June 30, 2000
consolidated balance sheet included or incorporated by reference in the
Registration Statement and the Preliminary Final Prospectus, or for the
period from July 1, 2000 to such specified date there were any decreases,
as compared with June 30, 1999, in net revenues or income before income
taxes or in total or per unit amounts of net income of the Partnership,
except in all instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an explanation by the
Partnership as to the significance thereof unless said explanation is not
deemed necessary by the Representatives; or
(C) the information included or incorporated by reference in the Registration
Statement and Preliminary Final Prospectus in response to Regulation S-K,
Item 301 (Selected Financial Data) and Item 302 (Supplementary Financial
Information) is not in conformity with the applicable disclosure
requirements of Regulation S-K.
(iii) they have performed certain other specified procedures as a result of
which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Partnership and
its subsidiaries) set forth in the Registration Statement and the Preliminary
Final Prospectus and in Exhibit 12 to the Registration Statement, including the
information set forth under the captions "Capitalization" and "Summary
Historical Consolidated Financial Data" in the Preliminary Final Prospectus, the
information included or incorporated by reference in Items 1, 2, 6, 7 and 11 of
the Partnership's Annual Report on Form 10-K, incorporated by reference in the
Registration Statement and the Preliminary Final Prospectus, and the information
included in the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated by reference in the
Partnership's Quarterly Reports on Form 10-Q, incorporated by reference in the
17
<PAGE>
Registration Statement and the Preliminary Final Prospectus, agrees with the
accounting records of the Partnership, excluding any questions of legal
interpretation.
References to the Preliminary Final Prospectus in this paragraph (f)
include any supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any material change or decrease
specified in the letter or letters referred to in paragraph (f) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the financial condition, results of operations,
prospects, business or properties of the Partnership and the Operating
Partnership, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto) and except for a
decrease in partners' capital of the Partnership of $49.844 million from
June 30, 2000 to August 31, 2000, the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement thereto).
(h) On or prior to the Closing Date, the Partnership shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(i) Subsequent to the effective date of this Agreement, there shall not have
occurred (i) any change in or affecting the financial condition, business,
properties or results of operations or prospects of the Partnership, the
Operating Partnership or the General Partner not contemplated by the Final
Prospectus, which in your reasonable opinion, as Representatives of the
several Underwriters would materially adversely affect the market for the
Securities, or (ii) any event or development relating to or involving the
Partnership, the Operating Partnership or the General Partner which makes
any statement of material fact made in the Final Prospectus untrue or
which, in the opinion of the Partnership and its counsel or the
Underwriters and their counsel, requires the making of any addition to or
change in the Final Prospectus in order to state a material fact required
by the Act or any other applicable law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Final Prospectus to reflect such event or development
would, in your opinion, as Representatives of the several Underwriters,
materially adversely affect the market for the Securities.
(j) Subsequent to the Execution Time, there shall not have been any decrease in
the rating of any of the Partnership's or Operating Partnership's debt
securities by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
18
<PAGE>
(k) The Securities shall have been listed and admitted and authorized for
trading on the New York Stock Exchange, subject to official notice of
issuance, and satisfactory evidence of such actions shall have been
provided to the Representatives.
(l) On or prior to the Closing Date, the Partnership shall have furnished to
the Representatives a letter substantially in the form of Annex I hereto
from the General Partner, Petrolane and each executive officer of the
General Partner addressed to the Representatives.
All such opinions, certificates, letters and other documents referred to in
this Section 6 will be in compliance with the provisions hereof only if they are
reasonably satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Partnership, the
Operating Partnership or the General Partner and delivered to you, as
Representatives of the Underwriters, or to counsel for the Underwriters, shall
be deemed a representation and warranty by the Partnership, the Operating
Partnership or the General Partner to each Underwriter as to the statements made
therein.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at
the Closing Date by the Representatives. Notice of such cancelation shall be
given to the Partnership in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall be delivered
at the office of Morgan, Lewis & Bockius LLP, counsel for the Partnership, at
101 Park Avenue, New York, New York 10178, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the Securities
-- ----------------------------------------
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied or because of
any refusal, inability or failure on the part of the Partnership Entities to
perform any agreement herein or comply with any provision hereof other than by
reason of a default or termination by any of the Underwriters pursuant to
Sections 9 or 10 hereof, the Partnership Entities will reimburse the
Underwriters severally through Salomon Smith Barney Inc. on 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 Securities.
8. Indemnification and Contribution. (a) The Partnership Entities, jointly and
-- --------------------------------
severally, agree to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
19
<PAGE>
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Partnership Entities will not
-------- -------
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Partnership or the
General Partner by or on behalf of any Underwriter through the Representatives,
specifically for inclusion therein. With respect to any untrue statement or
omission of material fact made in any Preliminary Final Prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased the Securities, to the extent that any such loss,
claim, damage or liability of such Underwriter occurs under the circumstance
where it shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that (w) the Partnership had previously
furnished copies of the Final Prospectus to the Representatives, (x) delivery of
the Final Prospectus was required by the Act to be made to such person, (y) the
untrue statement or omission of a material fact contained in the Preliminary
Final Prospectus was corrected in the Final Prospectus (excluding documents
incorporated by reference) and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Final Prospectus. This indemnity agreement will be in
addition to any liability that the Partnership Entities may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Partnership Entities, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls
the Partnership Entities within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Partnership Entities to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the
Partnership or the General Partner by or on behalf of such Underwriter
through the Representatives specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be
in addition to any liability that any Underwriter may otherwise have. The
Partnership Entities acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities and under
the heading "Underwriting" in (i) the list of Underwriters and their
respective participation in the sale of the Securities, (ii) the sentences
related to concessions and reallowances and (iii) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in any
Preliminary Final Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Final Prospectus or the Final
Prospectus.
20
<PAGE>
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure to so notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraphs (a) or (b) above.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
--------
however, that such counsel shall be satisfactory to the indemnified party.
-------
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) based on the advice of counsel, the use of
counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded (based on the advice of counsel) that there
may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such
action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding. An indemnifying party will not be liable for any settlement of
any action or claim effected without its written consent (which consent
will not be unreasonably withheld).
(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Partnership Entities and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Partnership Entities and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative
benefits received by the Partnership Entities on the one hand and by the
Underwriters on the other from the offering of the Securities; provided,
--------
however, that in no case shall any Underwriter (except as may be provided
-------
21
<PAGE>
in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Partnership Entities
and the Underwriters severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Partnership Entities on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Partnership Entities shall be
deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of
the Final Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Partnership Entities on the one hand
or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Partnership Entities and
the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation that does not take into account the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d),
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee
and agent of an Underwriter shall have the same rights to contribution as
such Underwriter, and each person who controls any of the Partnership
Entities within the meaning of either the Act or the Exchange Act, each
officer of the Partnership Entities who shall have signed the Registration
Statement and each director or officer of the Partnership Entities shall
have the same rights to contribution as the Partnership Entities, subject
in each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to
-- -------------------------
purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
-------- -------
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Partnership Entities. In the event of a default by any
Underwriter as set forth
22
<PAGE>
in this Section 9, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Registration Statement and the Final Prospectus
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Partnership Entities and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
--- -----------
absolute discretion of the Representatives, by notice given to the Partnership
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Partnership's Common Units shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
--- ------------------------------------------
representations, warranties, indemnities and other statements of the Partnership
Entities or its officers and of the Underwriters set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Partnership
Entities or any of the officers, directors, employees, agents or controlling
persons referred to in Section 9 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
--- -------
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to the Salomon Smith Barney Inc. General Counsel (fax no.: (212)
816-7912) and confirmed to the General Counsel, Salomon Smith Barney Inc., at
388 Greenwich Street, New York, New York, 10013, Attention: General Counsel; or,
if sent to any of the Partnership Entities, will be mailed, delivered or
telefaxed to the office of the Partnership at 460 North Gulph Road, King of
Prussia, Pennsylvania, 19406, Attention: Managing Counsel and confirmed to it at
(610) 992-3258, attention of the Legal Department.
13. Successors. This Agreement will inure to the benefit of and be binding
--- ----------
upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
23
<PAGE>
14. Applicable Law. This Agreement will be governed by and construed in
--- --------------
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more counterparts,
--- ------------
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only and
--- --------
shall not affect the construction hereof.
17. Definitions. The terms that follow, when used in this Agreement, shall
--- -----------
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph 1(a)
above contained in the Registration Statement at the Effective Date including
any Final Prospectus and Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus that describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus, together
with the Basic Prospectus.
"Registration Statement" shall mean the registration statement referred to
in paragraph 1(a) above, including exhibits and financial statements, as amended
at the Execution
24
<PAGE>
Time and, in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall also
mean such registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the registration statement referred to in Section 1(a)
hereof.
25
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Partnership Entities and the several Underwriters.
Very truly yours,
AmeriGas Partners, L.P.
By: AmeriGas Propane, Inc.
its General Partner
By: _______________________________________
Name:
Title:
AmeriGas Propane, L.P.
By: AmeriGas Propane, Inc.
its General Partner
By: ______________________________________
Name:
Title:
AmeriGas Propane, Inc.
By: ______________________________________
Name:
Title:
26
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.
Salomon Smith Barney Inc.
By:________________________________
Name:
Title:
For itself and the other several Underwriters, if any, named in Schedule II to
the foregoing Agreement.
27
<PAGE>
SCHEDULE I
Underwriting Agreement dated October 11, 2000
Registration Statement No. 333-45902
Representative(s): Salomon Smith Barney Inc., Banc of America Securities LLC,
Donaldson, Lufkin & Jenrette Securities Corporation and PaineWebber
Incorporated.
Title, Purchase Price and Description of Securities:
Title: Common Units representing Limited Partner Interests
Number of Common Units to be sold by the Partnership: 2,300,000
Price to Public per Unit: $18.4375
Price to Public -- total: $ 42,406,250
Underwriting Discount per Unit: $0.9000
Underwriting Discount -- total: $2,070,000
Proceeds to Partnership per Unit: $17.5375
Proceeds to Partnership -- total: $40,336,250
Other provisions:
Closing Date, Time and Location: October 17, 2000 at 10:00 a.m. at the offices
of Morgan, Lewis & Bockius LLP, 101 Park
Avenue, New York, New York, 10178.
Type of Offering: Non-Delayed
Date referred to in Section 5(f) after which the Partnership may offer or sell
securities issued or guaranteed by the Partnership without the consent of the
Representative(s): The first business day which is at least 90 days after the
date of the Final Prospectus.
Modification of items to be covered by the letter from Arthur Andersen LLP
delivered pursuant to Section 6(h) at the Execution Time:
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF UNDERWRITTEN
SECURITIES TO BE PURCHASED
---------------------------------------------- ---------------------------
<S> <C>
Salomon Smith Barney Inc. 690,000
Banc of America Securities LLC 460,000
Donaldson, Lufkin & Jenrette Securities 460,000
Corporation
PaineWebber Incorporated 690,000
---------------------
Total......................................... 2,300,000
---------
</TABLE>
<PAGE>
ANNEX I
[Letterhead of AmeriGas Propane, Inc., Petrolane Incorporated and executive
officers of AmeriGas Partners, L.P.]
AmeriGas Partners, L.P.
Public Offering of Common Units
October 17, 2000
Salomon Smith Barney Inc.
Banc of America Securities LLC
Donaldson, Lufkin & Jenrette Securities Corporation
PaineWebber Incorporated
As Representatives of the several Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the Underwriting
Agreement (the "Underwriting Agreement") by and among AmeriGas Partners, L.P., a
Delaware limited partnership (the "Partnership"), AmeriGas Propane, L.P., a
Delaware limited partnership (the "Operating Partnership") and AmeriGas Propane,
Inc., a Pennsylvania corporation (the "General Partner") (collectively, the
"Partnership Entities"), and you as the representatives of a group of
Underwriters named therein, relating to the sale of 2,300,000 common units of
limited partner interests in the Partnership (the "Common Units") (said units to
be issued and sold by the Partnership being hereinafter called the "Underwritten
Securities") and the option to purchase up to 345,000 additional Common Units to
cover over-allotments (the "Option Securities"; the Option Securities, together
with the Underwritten Securities, being hereinafter called the "Securities").
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Salomon Smith Barney Inc., offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or
<PAGE>
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder with respect to, any Common Units of
limited partner interests or any securities convertible into or exercisable or
exchangeable for such units, or publicly announce an intention to effect any
such transaction, for a period of 90 days after the date of the Final
Prospectus.
If for any reason the Underwriting Agreement should be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
[Signature of AmeriGas Propane, Inc. and Petrolane
Incorporated and executive officers of AmeriGas
Partners, L.P.]
--------------------------------------------------
II-2
