Exhibit 99.7
SUBSCRIPTION AGENT
AGREEMENT
This Subscription Agent Agreement
(the “Agreement”) is made as of the
day of
,
2006, by and between Star Gas Partners, L.P. (the
“Company”), and LaSalle Bank National Association, as
subscription agent (the “Agent”).
RECITALS
WHEREAS, the Company has caused a prospectus (the
“Prospectus”) included in the Registration Statement on
Form S-3, File No.
,
to be filed with the Securities and Exchange Commission (the
“Commission”) on
,
2006, as amended by the amendment filed with respect thereto
(collectively the “Registration Statement”), which
relates to a proposed distribution by the Company of
non-transferable subscription rights (the “Subscription
Rights”) to purchase the Company’s common units
(“Common Units”), upon the exercise of such
Subscription Rights (the distribution of the Subscription Rights
and the sale of shares of Common Units upon the exercise thereof as
contemplated by the Registration Statement is referred to herein as
the “Rights Offering”);
WHEREAS, the Subscription Rights will be distributed on
or about
,
2006 to holders of record of Common Units (the
“Holders”) as of the close of business on
,
2006 (the “Record Date”) at a rate of one Subscription
Right for each Common Units held on the Record Date;
WHEREAS, each Subscription Right shall evidence the right
of the Holder to purchase .5441 Common Units;
WHEREAS, no more than 17,500,000 Common Units shall be
issued upon the exercise of the Subscription Rights;
WHEREAS, the Company has authorized the issuance of up to
17,500,000 authorized and unissued Common Units (the
“Underlying Units”) to be distributed pursuant to the
Rights Offering;
WHEREAS, Holders will be entitled to subscribe to
purchase at a price per share of $2.00 (the “Subscription
Price”) one Underlying Unit for each Subscription Right held,
which right to subscribe for such Underlying Units is not
transferable; provided, however, that the number of Common Units
which each Holder may purchase based upon the Subscription Rights
distributed to such Holder shall be rounded up to the nearest whole
number; provided, further, that if more than 17,500,000 Common
Units are subscribed for, then the amount each subscription shall
be ratable and equitably reduced so that no more than 17,500,000
Common Units shall be issued upon the exercise of the Subscription
Rights (“Subscription Privilege”); and
WHEREAS, the Company wishes the Agent to perform certain
acts on behalf of the Company, and the Agent is willing to so act,
in connection with the Rights Offering as set forth herein, all
upon the terms and conditions set forth herein.
NOW, THEREFORE,
in consideration of the foregoing
and of the mutual agreements set forth herein, the parties agree as
follows:
ARTICLE 1
APPOINTMENT OF
AGENT
Section 1.1. Appointment
of Agent. The Company hereby appoints the Agent to act as
agent for the Company in accordance with the instructions set forth
in the Agreement, and the Agent hereby accepts such
appointment.
ARTICLE 2
ISSUANCE OF
SECURITIES
Section 2.1. Authorization;
issuance. The Company has
authorized the issuance of the Subscription Rights and, following
the Record Date and the effectiveness of the Registration
Statement, will issue such Subscription Rights to the Holders as
contemplated by the Registration Statement. The Company will notify
the Agent upon the effectiveness of the Registration Statement. As
transfer agent and registrar for the Common Units, the Agent shall
provide such assistance as the Company may require in order to
effect the distribution of the Subscription Rights to Holders,
including assistance in determining the number of Subscription
Rights to be distributed to each such Holder and assistance in
distributing the Subscription Documents (as defined in
Section 5.2 hereof) evidencing the Subscription Rights and all
other ancillary documents and issuance of the Underlying
Units.
Section 2.2. Reservation.
The Company
has authorized the issuance of and will hold in reserve the
Underlying Units, and upon the valid exercise of Subscription
Rights, the Company will issue Underlying Units to validly
exercising Holders as set forth in the Registration
Statement.
ARTICLE 3
SUBSCRIPTION RIGHTS AND
ISSUANCE
OF SUBSCRIPTION
DOCUMENTS
Section 3.1. Subscription
Rights and Issuance of Subscription
Documents. Each set of Subscription Documents shall contain
a certificate evidencing the Holder’s right to subscribe for
Common Units in the form filed with the Registration Statement (the
“Subscription Right”) which shall be non-transferable.
The Agent shall, in its capacity as transfer agent and registrar of
the Company, maintain a register of Subscription Rights and the
Holders thereof. Each Subscription Rights shall, subject to the
provisions thereof, entitle the Holder in whose name it is recorded
to subscribe for prior to 5:00 P.M., New York City time, on
, 2006 or such later time to which the
Rights Offering may be extended (the “Expiration
Date”), at the Subscription Price a number of shares equal to
the Subscription Privilege.
ARTICLE 4
FRACTIONAL SUBSCRIPTION
UNITS
Section 4.1. Fractional
Units. All questions as to the validity and eligibility
of any rounding of fractional Subscription Rights shall be
determined by the Company in its sole discretion, and its
determination shall be final and binding. The Company shall not
issue fractional of Common Units to exercising Holders upon
exercise of Subscription Rights. The number of Common Units which
each Holder may purchase shall be equal to the Subscription
Privilege.
ARTICLE 5
FORM AND EXECUTION OF
SUBSCRIPTION DOCUMENTS
Section 5.1. Subscription
Right. Each Subscription Right shall evidence the
Subscription Privilege of the Holder therein named to purchase
Common Units upon the terms and conditions set forth in the
Subscription Documents.
Section 5.2. Delivery;
Form; Execution. Upon the written advice
of the Company, signed by any of its duly authorized officers, as
to the Record Date, the Agent shall, from a list of the
Company’s stockholders as of the Record Date to be prepared
by the Agent, prepare and record Subscription Rights in the names
of the Holders, setting forth the number of Subscription Rights to
subscribe for the Company’s Common Units calculated on the
basis of one Subscription Right for each Common Unit recorded on
the books in the name of
each such Holder. Each Subscription Right shall
be dated as of the Record Date. Upon the written advice, signed as
aforesaid, as to the effective date of the Registration Statement,
the Agent shall deliver to each registered Holder, along with the
originally issued Subscription Rights, (i) a letter from the
Chief Executive Officer of the Company to all Holders, (ii) a
Prospectus, (iii) Instructions as to Use of the Subscription
Rights, (iv) a return envelope addressed to the Agent, and
(v) such other documents and information as the Company may
provide (collectively the “Subscription Documents”).
The Agent shall also provide copies of the Prospectus and other
documents prepared by the Company to Holders, and other persons,
upon request by a Holder. The Company will provide the Agent with a
sufficient number of Subscription Documents as the Agent may
require. The Subscription Agent shall provide a sufficient number
of Subscription Rights as required to distribute to Holders and to
replace lost, destroyed, mutilated or stolen Subscription Rights.
Delivery shall be by first class mail (without registration or
insurance).
Section 5.3. Foreign
Addresses. Subscription Documents will not be mailed to
Holders having a registered address outside the United States, or
to those Holders having APO of FPO addresses. The Subscription
Rights to which such Subscription Privilege relates will be held by
the Agent for such Holders’ accounts until instructions are
received to exercise the Subscription Rights.
ARTICLE 6
EXERCISE OF SUBSCRIPTION
RIGHTS;
EXERCISE PRICE; EXPIRATION
DATE
Section 6.1. Exercise
of Subscription Rights.
Each Holder may exercise some or
all of the Subscription Privilege evidenced by the Subscription
Right (but not in amounts of less than one Subscription Right or an
integral multiple thereof) by delivering to the Agent, on or prior
to the Expiration Date, properly completed and executed
Subscription Documents evidencing such Subscription Privilege (with
signatures guaranteed, if required by Section 6.9 hereof, by a
financial institution (including commercial banks, savings and loan
associations and brokerage houses) that is a member of a recognized
signature guarantee or medallion program with the meaning of Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended
(each, an Eligible Institution”), together with payment of
the Subscription Price for each Underlying Unit subscribed for
pursuant to the Subscription Privilege. In the case or persons
acquiring Common Units at an aggregate Subscription Price of
$ or
more, an alternative payment method may be arranged with the Agent
and approved by the Company.
(a) The
Subscription Price shall be paid in United States dollars, by
(i) check or draft drawn on a United States bank, or a postal,
telegraphic or express money order payable to the Agent, or
(ii) by wire transfer of same day funds to an account
maintained by Agent for the purpose of accepting subscriptions, in
accordance with wire instructions by the Agent.
(b) Payment
will be deemed to have been received by the Agent only upon:
(i) clearance of any uncertified check; or (ii) receipt
by the Agent of any certified check or bank draft drawn upon a U.S.
bank or of any postal, telegraphic or express money order;
(iii) receipt by the Agent of any funds transferred by wire
transfer; or (iv) receipt of funds by the Agent through an
alternative payment method approved by the Company.
(c) If a
Holder exercises fewer than all of the Subscription Privilege
evidenced by the Holder’s Subscription Right and requests in
writing that the Agent issue a Subscription Right evidencing the
unexercised Subscription Privilege, the Agent shall immediately
issue to such holder a new Subscription Right evidencing the
unexercised Subscription Privilege and deliver it to the eligible
Holder at the address shown on such Subscription Right.
Section 6.2. Depositary
Trust Company. In the case of Holders of Subscription Rights
that are held of record through The Depository Trust Company
(“DTC”), exercises of the Subscription Rights may be
effected by instructing DTC to transfer Subscription Rights from
the DTC account of such Holder to the DTC account of the Agent,
together with payment of the Subscription Price for each Underlying
Unit subscribed for pursuant to the Subscription
Privilege.
Section 6.3. Guaranteed
Delivery Procedures.
If a Holder wishes to exercise
Subscription Rights, but time will not permit such Holder to cause
the Subscription Right evidencing such Subscription Rights to reach
the Agent on or prior to the Expiration Date, such Subscription
Rights may nevertheless be exercised if all of the following
conditions (the “Guaranteed Delivery Procedures”) are
met: (a) such Holder has caused payment in full of the
Subscription Price for each Underlying Unit being subscribed for
pursuant to the Subscription Privilege to be received (in the
manner set forth in Section 6.5 hereof) by the Agent on or
prior to the Expiration Date; (b) the Agent receives, on or
prior to the Expiration Date, a guarantee notice (a “Notice
of Guaranteed Delivery”), substantially in the form provided
with the Subscription Documents, from an Eligible Institution,
stating the name of the exercising Holder, the number of
Subscription Rights represented by the Subscription Right or
Subscription Rights held by such exercising Holder, the number of
Underlying Units being subscribed for pursuant to the Subscription
Privilege, and guaranteeing the delivery to the Agent of the
Subscription Right evidencing such Subscription Privilege at or
prior to 5:00 p.m., New York City time, on the date three
over-the-counter (“OTC”) trading days following the
date of the Notice of Guaranteed Delivery; and (c) the
properly completed Subscription Rights(s) evidencing the
Subscription Privilege being exercised, with any required
signatures guaranteed, are received by the Agent, or such
Subscription Rights are transferred into the DTC account of the
Agent, at or prior to 5:00 p.m., New York City time, on the date
three OTC trading days following the date of the Notice of
Guaranteed Delivery relating thereto; provided, however, that the
Agent shall not honor a Notice of Guaranteed Delivery relating
thereto; provided, however, that the Agent shall not honor a Notice
of Guaranteed Delivery unless a properly completed and executed
Subscription Right is received by the Subscription Agent by the
close of business on the third OTC trading day after the Expiration
Date.
The Notice of Guaranteed Delivery
may be delivered to the Agent in the same manner as Subscription
Rights at the addresses set forth above, or may be transmitted to
the Agent by telegram or facsimile transmission.
Section 6.4. Expiration
of Rights. The Subscription Rights shall expire at 5:00
p.m., New York City time, on the Expiration Date.
Section 6.5. Deemed
Exercises; Subscription Excess.
If an exercising Holder has not
indicated the number of Subscription Rights being exercised, or if
the Subscription Price payment forwarded by such Holder to the
Agent is not sufficient to purchase the number of shares subscribed
for, the Holder will be deemed to have exercised the Subscription
Privilege with respect to the maximum number of whole Subscription
Rights which may be exercised for the Subscription Price delivered
to the Agent, (to the extent that the Subscription Price payment
delivered by such Holder exceeds the Subscription Price multiplied
by the maximum number of whole Subscription Rights which may be
exercised such excess being the “Subscription Excess”).
The Agent, as soon as practicable after the exercise of the
Subscription Rights, shall mail to such Holders the Subscription
Excess, without interest or deduction.
Section 6.6.
Escrow;
Investment of Funds; Bank Account. The
Agent shall:
(a) Maintain a record of the date,
amount of e
