Exhibit 1.1
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LEGACY RESERVES LP
6,000,000 Units
FORM OF UNDERWRITING AGREEMENT
Dated: ________, 2007
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TABLE OF CONTENTS
Page
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SECTION 1. Representations and Warranties .............................. 2
SECTION 2. Sale and Delivery to Underwriters; Closing .................. 14
SECTION 3. Covenants of the Partnership ................................ 16
SECTION 4. Payment of Expenses ......................................... 20
SECTION 5. Conditions of Underwriters' Obligations ..................... 21
SECTION 6. Indemnification ............................................. 24
SECTION 7. Contribution ................................................ 26
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery ............................................ 27
SECTION 9. Termination of Agreement .................................... 27
SECTION 10. Default by One or More of the Underwriters .................. 28
SECTION 11. Notices ..................................................... 29
SECTION 12. Parties ..................................................... 29
SECTION 13. GOVERNING LAW AND TIME ...................................... 29
SECTION 14. Effect of Headings .......................................... 29
SECTION 15. Definitions ................................................. 29
SECTION 16. Permitted Free Writing Prospectuses ......................... 33
SECTION 17. Absence of Fiduciary Relationship ........................... 33
EXHIBITS
Exhibit A - Underwriters
Exhibit B - Initial Securities to be Sold
Exhibit C - Subsidiaries of the Partnership
Exhibit D - List of Directors and Officers
Exhibit E - Form of Lock-Up Agreement
Exhibit F - Form of Opinion of Partnership Counsel
Exhibit G - Price-Related Information
Exhibit H - Issuer General Use Free Writing Prospectuses
Exhibit I - Existing Unitholders
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LEGACY RESERVES LP
6,000,000 Units
UNDERWRITING AGREEMENT
January [___], 2007
Wachovia Capital Markets, LLC
As Representative of the several Underwriters
c/o Wachovia Capital Markets, LLC
0 Xx. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Legacy Reserves LP, a Delaware limited partnership (the "Partnership"),
confirms its agreement with Wachovia Capital Markets, LLC ("Wachovia") and each
of the other Underwriters named in Exhibit A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Wachovia is acting as
representative (in such capacity, the "Representative"), with respect to the
issue and sale by the Partnership of a total of 6,000,000 Units (the "Initial
Securities") representing limited partner interests in the Partnership (the
"Units"), and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of Initial Securities set forth in said
Exhibit A hereto, and with respect to the grant by the Partnership to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 900,000 additional Units to
cover over-allotments, if any. The Initial Securities to be purchased by the
Underwriters and all or any part of the 900,000 Units subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities." Certain terms used in this Agreement are
defined in Section 15 hereof.
Legacy Reserves GP, LLC, a Delaware limited liability company (the "General
Partner"), is the Partnership's sole general partner. Legacy Reserves Operating
GP, LLC, a Delaware limited liability company and a wholly owned subsidiary of
the Partnership ("Operating GP"), is the sole general partner of Legacy Reserves
Operating LP, a Delaware limited partnership (the "Operating Partnership" and,
together with the General Partner, the Partnership and the Operating GP, the
"Legacy Parties" and, together with the direct and indirect subsidiaries of the
Partnership (collectively, the "Subsidiaries") listed on Exhibit C, the
"Partnership Entities").
All or some of the Partnership Entities have entered into, prior to the
date hereof, the following agreements (the "Formation Documents"): the Amended
and Restated Agreement of Limited Partnership governing the Partnership (the
"Partnership Agreement"), (ii) the Amended and Restated Limited Liability
Company Agreement governing the General Partner (the "GP LLC Agreement"), (iii)
the Agreement of Limited Partnership governing the Operating Partnership (the
"Operating Partnership Agreement") and (iv) the Limited Liability Company
Agreement governing the Operating GP (the "Operating GP Agreement").
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The Partnership understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered.
The Partnership and the Underwriters agree that up to 5% of the Initial
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to the Partnership's directors,
officers, friends, business associates and other related persons (the "Reserved
Security Offerees") as part of the distribution of the Securities by the
Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the NASD and all other applicable laws, rules
and regulations. To the extent that any such Reserved Securities are not orally
confirmed for purchase by any such Reserved Security Offeree before 9:00 A.M.
(Eastern Daylight Time) on the first day of trading of the Securities, such
Reserved Securities may, at the sole and absolute discretion of Wachovia, be
offered to the public as part of the public offering contemplated hereby or
offered or sold to any other Reserved Security Offerees.
Promptly after the execution of this Agreement, the Partnership will
prepare and file with the Commission a prospectus in accordance with the
provisions of Rule 430A and Rule 424(b) and the Partnership has previously
advised you of all information (financial and other) that will be set forth
therein. Such prospectus in the form first furnished to the Underwriters for use
in connection with the offering of the Securities is herein called the
"Prospectus." Any Prospectus delivered pursuant to Rule 173(d) shall be
identical to the electronically transmitted copy thereof filed with the
Commission pursuant to Rule 424(b).
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Partnership. The Legacy Parties
jointly and severally represent and warrant to each Underwriter as of the date
hereof, as of the Applicable Time, as of the Closing Date referred to in Section
2(c) hereof, and as of each Option Closing Date (if any) referred to in Section
2(b) hereof, and agrees with each Underwriter, as follows:
(1) Compliance with Registration Requirements. The Securities have
been duly registered under the 1933 Act pursuant to the Registration
Statement. Each of the Initial Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Initial Registration Statement or
any Rule 462(b) Registration Statement has been issued under the 1933 Act
and no proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Partnership, are contemplated by the Commission,
and any request on the part of the Commission for additional information
has been complied with.
At the respective times the Initial Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became or become effective and at the Closing Date (and, if any Option
Securities are purchased, at the applicable Option Closing Date), the
Initial Registration Statement, any Rule 462(b) Registration Statement and
any amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
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Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
the Prospectus nor any amendments or supplements thereto, as of its date,
at the Closing Date (and, if any Option Securities are purchased, at the
applicable Option Closing Date), and at any time when a prospectus is
required by applicable law to be delivered in connection with sales of
Securities, included or will include an untrue statement of a material fact
or omitted or will 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. Each of the statements made by the Partnership
in such documents within the coverage of Rule 175(b) of the Rules and
Regulations, including (but not limited to) any projections, results of
operations or statements with respect to future available cash or future
cash distributions of the Partnership or the anticipated ratio of taxable
income to distributions, was made or will be made with a reasonable basis
and in good faith. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement, the Statutory Prospectus, the Prospectus or any Issuer Free
Writing Prospectus made in reliance upon and in conformity with information
furnished to the Partnership in writing by any Underwriter through Wachovia
expressly for use in the Registration Statement, the Statutory Prospectus,
the Prospectus or such Issuer Free Writing Prospectus, as the case may be.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act in connection
with the offering of the Securities (including, without limitation, the
Prospectus and the Statutory Prospectus), complied when so filed in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and each preliminary prospectus and prospectus (including,
without limitation, the Prospectus and the Statutory Prospectus) and any
amendments or supplements thereto delivered to the Underwriters for use in
connection with the offering of the Securities was identical to the
electronically transmitted copy thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
As of the Applicable Time, neither (a) any Issuer General Use Free
Writing Prospectuses issued at or prior to the Applicable Time, the
Statutory Prospectus as of the Applicable Time and the information included
on Exhibit H hereto, all considered together (collectively, the "General
Disclosure Package"), nor (b) any individual Issuer Limited Use Free
Writing Prospectus, when considered together with the General Disclosure
Package, included or will include any untrue statement of a material fact
or omitted or will omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
The Partnership has made available a "bona fide electronic road show"
(as defined in Rule 433(h)(5)) in compliance with Rule 433(d)(8)(ii) such
that no filing of any "road show" (as defined in Rule 433(h)) is required
in connection with the offering of the Securities.
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Each Issuer Free Writing Prospectus, as of its date and at all
subsequent times through the completion of the public offering and sale of
the Securities, did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in
the Registration Statement or the Statutory Prospectus or the Prospectus
and any preliminary or other prospectus deemed to be a part thereof that
has not been superseded or modified.
At the time of filing the Initial Registration Statement, any 462(b)
Registration Statement and any post-effective amendments thereto and at the
date hereof, the Partnership was not and is not an "ineligible issuer" as
defined in Rule 405, in each case without taking into account any
determination made by the Commission pursuant to clause 2 of the definition
of such term in Rule 405.
(2) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement and the Prospectus are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(3) Reserve Engineer. XxXxxxx Petroleum Consultants Ltd. (the
"Reservoir Engineer"), whose report is included in the Registration
Statement (the "Reserve Report") are the Partnership's independent reserve
engineers. No information has come to the attention of the Partnership or,
to the Partnership's knowledge, to the Reservoir Engineer, that could
reasonably be expected to cause the Reservoir Engineer to withdraw its
Reserve Report.
(4) Information Underlying Reserve Report. The information underlying
the estimates of the Partnership's proved reserves that was supplied to the
Reservoir Engineer for the purposes of preparing the Reserve Report and
estimates of the proved reserves of the Partnership disclosed in the
Registration Statement, General Disclosure Package and the Prospectus,
including, production, costs of operation, and, to the Partnership
Entities' knowledge, future operations and sales of production, was true
and correct in all material respects on the dates such information was
provided, and such information was supplied and was prepared in accordance
with customary industry practices; and the estimates of such reserves and
PV-10 thereof as described in the Registration Statement, General
Disclosure Package and the Prospectus and reflected in the Reserve Report
referenced therein have been prepared in a manner that complies with the
applicable requirements of the 1933 Act Regulations. Other than normal
production of the reserves, product price fluctuations, and fluctuations of
demand for such products, and except as disclosed in the Registration
Statement, General Disclosure Package and the Prospectus, no Legacy Party
is aware of any facts or circumstances that would result in a materially
adverse change in the reserves in the aggregate, or the aggregate present
value of the future net cash flows therefrom as described in the
Registration Statement, General Disclosure Package and the Prospectus and
as reflected in the Reserve Report.
(5) Financial Statements. The financial statements of the Partnership
included in the Registration Statement, the General Disclosure Package and
the Prospectus, together with the related schedules (if any) and notes,
present fairly the financial position
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of the Partnership and its consolidated subsidiaries at the dates indicated
and the results of operations, changes in unitholders' equity and cash
flows of the Partnership and its consolidated subsidiaries for the periods
specified; the financial statements of any other entities or businesses
included in the Registration Statement, the General Disclosure Package or
the Prospectus, together with the related schedules (if any) and notes,
present fairly the financial position of each such entity or business, as
the case may be, and its consolidated subsidiaries (if any) at the dates
indicated and the results of operations, changes in stockholders' (or other
owners') equity and cash flows of such entity or business, as the case may
be, and its consolidated subsidiaries, if any, for the periods specified;
and all such financial statements have been prepared in conformity with
GAAP applied on a consistent basis throughout the periods involved and
comply with all applicable accounting requirements under the 1933 Act and
the 1933 Act Regulations. The supporting schedules, if any, included in the
Registration Statement present fairly, in accordance with GAAP, the
information required to be stated therein. The information (other than the
pro forma information) in the Statutory Prospectus constituting a part of
the General Disclosure Package and in the Prospectus under the captions
"Summary Historical and Pro Forma Consolidated Financial and Operating
Data" and "Selected Historical and Pro Forma Consolidated Financial and
Operating Data" presents fairly the information shown therein and has been
compiled on a basis consistent with that of the audited financial
statements of the Partnership included in the Registration Statement and
the Prospectus. The pro forma financial statements and the related notes
thereto included in the Registration Statement, the General Disclosure
Package and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein; and the pro forma information appearing in the Statutory
Prospectus constituting a part of the General Disclosure Package and in the
Prospectus under the caption "Summary Historical and Pro Forma Consolidated
Financial and Operating Data" presents fairly the information shown therein
and has been compiled on a basis consistent with that of the pro forma
financial statements included in the Registration Statement, the General
Disclosure Package and the Prospectus. All information contained in the
Registration Statement, the General Disclosure Package and the Prospectus
regarding "non-GAAP financial measures" (as defined in Regulation G of the
Commission) comply with Regulation G and Item 10 of Regulation S-K of the
Commission, to the extent applicable. There are no financial statements
(historical or pro forma) that are required to be included in the
Registration Statement, the General Disclosure Package or the Prospectus
that are not included as required.
(6) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement, the General
Disclosure Package and the Prospectus (in each case exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Partnership and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a
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"Material Adverse Effect"), (B) there have been no transactions entered
into by the Partnership or any of its subsidiaries which are material with
respect to the Partnership and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly distributions on the Units
in amounts per Unit that are consistent with past practice, there has been
no dividend or distribution of any kind declared, paid or made by the
Partnership on the Units.
(7) Good Standing of the Partnership Entities. Each Partnership Entity
has been duly organized or formed and is validly existing as a limited
partnership, limited liability company, corporation or other business
entity, in good standing under the laws of the state of its incorporation
or formation and has power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement, the General Disclosure Package and the Prospectus and to enter
into and perform its obligations under this Agreement; and the Partnership
is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect.
(8) Entity Ownership
(a) Moriah Properties, Ltd., DAB Resources, Ltd., Brothers
Production Properties, Ltd., Brothers Production Company, Inc., Brothers
Operating Company, Inc., J&W McGraw Properties, Ltd., MBN Properties LP,
and H2K Holdings, Ltd. own 100% of the issued and outstanding membership
interests in the General Partner; such membership interests have been duly
authorized and validly issued in accordance with the GP LLC Agreement, and
are fully paid and non-assessable (except as such non-assessability may be
limited by Section 18-607 of the Delaware LLC Act); and such persons and
entities own such membership interests free and clear of all Liens.
(b) The General Partner is the sole general partner of the
Partnership with a 0.1% general partner interest in the Partnership; such
general partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement, and is fully paid; and the
General Partner owns such general partner interest free and clear of all
Liens; the General Partner owns no assets, and has no business, other than
with respect to its 0.1% general partner interest in the Partnership.
(c) At the Closing Date, after giving effect to the offering
contemplated hereby (assuming the option to purchase Option Securities is
not exercised), the persons listed on Schedule I (the "Existing
Unitholders") will own [ ] Units, representing collectively a [ ]% limited
partner interest in the Partnership (the "Existing Unitholder Units"). At
the Closing Time, all of the issued and outstanding Existing Unitholder
Units, and the limited partner interests represented thereby, will be duly
authorized and validly issued in accordance with the Partnership Agreement,
and will be fully paid (to the extent required under the Partnership
Agreement) and non-assessable (except as such non-assessability may be
affected by Section 17-607 of the Delaware LP Act).
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(d) The Units to be issued and sold by the Partnership hereunder,
and the limited partner interests represented thereby, will be duly
authorized in accordance with the Partnership Agreement and, when issued
and delivered to the purchaser thereof against payment therefor in
accordance with the terms of this Agreement, 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 Section
17-607 of the Delaware LP Act).
(9) Operating GP Ownership. The Partnership owns 100% of the
membership interests in the Operating GP; such membership interests have
been duly authorized and validly issued in accordance with the Operating GP
Agreement, and are fully paid and non-assessable (except as such
non-assessability may be affected by Section 18-607 of the Delaware LLC
Act); and the Partnership owns such membership interests free and clear of
all Liens, except for the pledge of such membership interests under the
Existing Credit Agreement.
(10) Operating Partnership Ownership. (A) The Operating GP is the sole
general partner of the Operating Partnership with a 0.1% general partner
interest in the Operating Partnership; such general partner interest has
been duly authorized and validly issued in accordance with the Operating
Partnership Agreement, and is fully paid; and the Operating GP owns such
general partner interest free and clear of all Liens, except for the pledge
of such general partner interest under the Existing Credit Agreement; and
(B) the Partnership is the sole limited partner of the Operating
Partnership with a 99.9% limited partner interest in the Operating
Partnership; such limited partner interest has been duly authorized and
validly issued in accordance with the Operating Partnership Agreement and
is fully paid (to the extent required under the Operating Partnership
Agreement) and non-assessable (except as such non-assessability may be
affected by Section 17-607 of the Delaware LP Act and as otherwise
described in the Prospectus); and the Partnership owns such limited partner
interest free and clear of all Liens, except for the pledge of such limited
partner interest under the Existing Credit Agreement.
(11) No Other Subsidiaries. Other than ownership interests in the
Subsidiaries, the Partnership does not own, and at the Closing Date and the
Option Closing Date, will not own, directly or indirectly, an equity or
long-term debt securities of any corporation, partnership, limited
liability company, joint venture, association or other entity. Other than
its ownership interest in the Partnership and its indirect ownership
interests in the Subsidiaries, the General Partner does not own, and at the
Closing Date and the Option Closing Date will not own, directly or
indirectly, any equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association or other
entity.
(12) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Legacy Parties.
(13) Description of Securities. The Units and the Partnership's
Organizational Documents conform in all material respects to all of the
respective statements relating thereto contained in the Registration
Statement, the General Disclosure Package and the
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Prospectus and such statements conform to the rights set forth in the
respective instruments and agreements defining the same.
(14) Absence of Defaults and Conflicts. Neither the Partnership nor
any of its subsidiaries is in violation of its Organizational Documents or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any Partnership Document, except (solely
in the case of Partnership Documents other than Subject Instruments) for
such defaults that would not result in a Material Adverse Effect. The
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated herein and in the Registration Statement,
the General Disclosure Package and the Prospectus (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Legacy Parties with their obligations
under this Agreement do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event under, or result in the creation
or imposition of any Lien upon any property or assets of the Partnership or
any of its subsidiaries pursuant to any Partnership Documents, except
(solely in the case of Partnership Documents other than Subject
Instruments) for such conflicts, breaches, defaults or Liens that would not
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of the Organizational Documents of the
Partnership or any of its subsidiaries or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Partnership or any of its subsidiaries or any of
their respective assets, properties or operations.
(15) Absence of Labor Dispute. No labor dispute with the employees of
any Partnership Entity exists or, to the knowledge of the Partnership, is
threatened or imminent, and the Partnership is not aware of any existing or
imminent labor disturbance by the employees of any of the principal
suppliers, manufacturers, customers or contractors of any Partnership
Entity which, in any such case, may reasonably be expected to result in a
Material Adverse Effect.
(16) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Partnership, threatened, against or affecting any Partnership Entity
which is required to be disclosed in the Registration Statement (other than
as disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Partnership of its obligations under this Agreement; the
aggregate of all pending legal or governmental proceedings to which any
Partnership Entity is a party or of which any of their respective property
or assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
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(17) Accuracy of Descriptions and Exhibits. The information in the
Statutory Prospectus constituting a part of the General Disclosure Package
and in the Prospectus under the captions "Business--Environmental Matters
and Regulation," "Business--Other Regulation of the Oil and Natural Gas
Industry," "Business--Legal Proceedings," "Description of Units," and
"Material Tax Consequences," in each case to the extent that it constitutes
matters of law, summaries of legal matters, summaries of provisions of the
Partnership's Organizational Documents or any other instruments or
agreements, summaries of legal proceedings, or legal conclusions, is
correct in all material respects; all descriptions in the Registration
Statement, the General Disclosure Package and the Prospectus of any
Partnership Documents are accurate in all material respects; and there are
no franchises, contracts, indentures, mortgages, deeds of trust, loan or
credit agreements, bonds, notes, debentures, evidences of indebtedness,
leases or other instruments or agreements required to be described or
referred to in the Registration Statement, the Statutory Prospectus
constituting a part of the General Disclosure Package or the Prospectus or
to be filed as exhibits to the Registration Statement which have not been
so described and filed as required.
(18) Possession of Intellectual Property. The Partnership and its
subsidiaries own or possess or have the right to use on reasonable terms
all patents, patent rights, patent applications, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names, service names and
other intellectual property (collectively, "Intellectual Property")
necessary to carry on their respective businesses as described in the
Prospectus and as proposed to be conducted; and neither the Partnership nor
any of its subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Partnership or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, individually or in the
aggregate, would result in a Material Adverse Effect.
(19) Absence of Further Requirements. (A) No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, (B) no authorization, approval, vote or other consent
of any member, unitholder or creditor of any Partnership Entity, (C) no
waiver or consent under any Subject Instrument, and (D) no authorization,
approval, vote or other consent of any other person or entity, is necessary
or required for the performance by the Partnership of its obligations under
this Agreement, for the offering, issuance, sale or delivery of the
Securities hereunder, or for the consummation of any of the other
transactions contemplated by this Agreement, in each case on the terms
contemplated by the Registration Statement, the General Disclosure Package
and the Prospectus, except such as have been already obtained under the
1933 Act or the 1933 Act Regulations or such as may be required under state
securities laws.
(20) Possession of Licenses and Permits. The Partnership Entities
possess such permits, licenses, approvals, consents and other
authorizations (collectively,
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"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them; the Partnership Entities are in compliance with the terms
and conditions of all such Governmental Licenses, except where the failure
so to comply would not, individually or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and none of the Partnership
Entities has received any notice of proceedings relating to the revocation
or modification of any such Governmental Licenses which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(21) Title to Assets. Each of the Partnership Entities has (A) legal,
valid and defensible title to the interests in Oil and Gas Properties
supporting the estimates of its net proved reserves contained in the
Registration Statement, the General Disclosure Package and the Prospectus,
(B) good and marketable title in fee simple to all real property other than
Oil and Gas Properties covered by clause (A), and (B) good and marketable
title to all personal property owned by them, in each case free and clear
of all Liens except such as are described in the Registration Statement,
the General Disclosure Package and the Prospectus or such as do not
materially affect the value of the property of the Partnership Entities,
taken as a whole, and do not materially interfere with the use made and
proposed to be made of such property by any of the Partnership Entities;
all real property and buildings held under lease by any of the Partnership
Entities are held by them under valid, subsisting and enforceable leases,
with such exceptions as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made
of such property by any of the Partnership Entities. The Working Interests
derived from the Oil and Gas Properties evidence in all material respects
the right of the Partnership Entities to explore, develop and produce
hydrocarbons from such Hydrocarbon Interests, and the acquisition and
procurement of such oil and gas leases, options to lease, drilling rights
and concessions or other property interests was generally consistent with
standard industry practices in the areas in which the Partnership Entities
operate for acquiring or procuring oil and gas leases and interests therein
to explore, develop or produce hydrocarbons.
(22) Investment Company Act. No Partnership Entity is, and upon the
issuance by the Partnership and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as described
in the Prospectus, no Partnership Entity will be, an "investment company"
or an entity "controlled" by an "investment company" as such terms are
defined in the 1940 Act.
(23) Environmental Laws. Except as described in the Registration
Statement, the General Disclosure Package and the Prospectus and except as
would not, individually or in the aggregate, result in a Material Adverse
Effect, (A) no Partnership Entity is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without
10
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Partnership Entities have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against any Partnership Entity and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting any Partnership
Entity relating to Hazardous Materials or any Environmental Laws.
(24) Absence of Registration Rights. Except as disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus,
there are no persons with registration rights or other similar rights to
have any securities (debt or equity) (A) registered pursuant to the
Registration Statement or included in the offering contemplated by this
Agreement or (B) otherwise registered by the Partnership under the 1933
Act. There are no persons with tag-along rights or other similar rights to
have any securities (debt or equity) included in the offering contemplated
by this Agreement or sold in connection with the sale of Securities by the
Partnership pursuant to this Agreement.
(25) Parties to Lock-Up Agreements. Each of the parties listed on
Exhibit D hereto has executed and delivered to the Representative a lock-up
agreement in the form of Exhibit E hereto. Exhibit D hereto contains a
true, complete and correct list of all directors and officers of the Legacy
Parties.
(26) Nasdaq Global Market. The Securities being sold hereunder by the
Partnership have been approved for listing, subject only to official notice
of issuance, on the Nasdaq Global Market.
(27) NASD Matters. All of the information provided to the Underwriters
or to counsel for the Underwriters by the Partnership, its officers and
directors and the holders of any securities (debt or equity) or options to
acquire any securities of the Partnership in connection with letters,
filings or other supplemental information provided to NASD Regulation Inc.
pursuant to NASD Conduct Rule 2710 or 2720 is true, complete and correct.
(28) Tax Returns. The Partnership Entities have filed all foreign,
federal, state and local tax returns that are required to be filed or have
requested extensions thereof, except where the failure so to file would
not, individually or in the aggregate, have a Material Adverse Effect, and
have paid all taxes required to be paid by them and any other assessment,
fine or penalty levied against any of them, to the extent that any of the
11
foregoing is due and payable, except for any such tax, assessment, fine or
penalty that is currently being contested in good faith by appropriate
actions and except for such taxes, assessments, fines or penalties the
nonpayment of which would not, individually or in the aggregate, have a
Material Adverse Effect.
(29) Insurance. The Partnership Entities are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; all policies of insurance and any fidelity or surety bonds
insuring any Partnership Entity or their respective businesses, assets,
employees, officers and directors are in full force and effect; the
Partnership Entities are in compliance with the terms of such policies and
instruments in all material respects; there are no claims by any
Partnership Entity under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; no Partnership Entity has been refused any insurance
coverage sought or applied for; and no Partnership Entity has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect.
(30) Accounting Controls. The Partnership Entities maintain a system
of internal accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's general
or specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus, since the end of the Partnership's
most recent audited fiscal year, there has been (1) no material weakness in
the Partnership's internal control over financial reporting (whether or not
remedied) and (2) no change in the Partnership's internal control over
financial reporting that has materially affected, or is reasonably likely
to materially affect, the Partnership's internal control over financial
reporting.
(31) Compliance with the Xxxxxxxx-Xxxxx Act. There is and has been no
failure on the part of the Partnership or any of the Partnership's
directors or officers, in their capacities as such, to comply with any
provision of the Xxxxxxxx-Xxxxx Act, including Section 402 related to
loans.
(32) Absence of Manipulation. No Partnership Entity has taken nor will
any Partnership Entity take, directly or indirectly, any action designed to
or that would constitute or that might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Securities.
(33) No Right of First Refusal. No Partnership Entity nor any other
person has any preemptive right, right of first refusal or other similar
right to purchase or otherwise
12
acquire any of the Securities to be sold by the Partnership to the
Underwriters pursuant to this Agreement.
(34) Statistical, Demographic or Market-Related Data. Any statistical,
demographic, market-related, customer-related or production-related data
included in the Registration Statement, the General Disclosure Package or
the Prospectus is based on or derived from sources that the Partnership
believes to be reliable and accurate and all such data included in the
Registration Statement, the General Disclosure Package or the Prospectus
accurately reflects the materials upon which it is based or from which it
was derived.
(35) Foreign Corrupt Practices Act. No Partnership Entity nor, to the
knowledge of any Partnership Entity, any director, officer, agent,
employee, affiliate or other person acting on behalf of any Partnership
Entity is aware of or has taken any action, directly or indirectly, that
has resulted or would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the "FCPA"), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any "foreign official"
(as such term is defined in the FCPA) or any foreign political party or
official thereof or any candidate for foreign political office, in
contravention of the FCPA, and the Partnership Entities and, to the
knowledge of the Partnership Entities, their other affiliates have
conducted their businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(36) Money Laundering Laws. The operations of the Partnership Entities
are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, "Money Laundering Laws") and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any
arbitrator involving any Partnership Entity with respect to the Money
Laundering Laws is pending or, to the knowledge of the Partnership
Entities, threatened.
(37) OFAC. No Partnership Entity nor, to the knowledge of any
Partnership Entity, any director, officer, agent, employee, affiliate or
person acting on behalf of any Partnership Entity is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department ("OFAC"); and no Partnership Entity will
directly or indirectly use the proceeds of the offering contemplated by
this Agreement, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
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(38) Lending Relationship. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, no
Partnership Entity has any lending relationship or other commercial banking
relationship with any bank or similar institution affiliated with any of
the Underwriters, and no Partnership Entity intends to use any of the
proceeds from the sale of the Securities to repay any debt owed to any
Underwriter or any affiliate of any Underwriter.
(39) Transfer Taxes. There are no stock or other transfer taxes, stamp
duties, capital duties or other similar duties, taxes or charges payable in
connection with the execution or delivery of this Agreement by the
Partnership Entities or the issuance or sale by the Partnership of the
Securities to the Underwriters hereunder.
(40) No Prohibition on Dividends by Subsidiaries. No subsidiary of the
Partnership is prohibited, directly or indirectly, from paying any
dividends or making any other distributions on such subsidiary's capital
stock, from repaying any debt owed to the Partnership or any of its other
subsidiaries, or from transferring any of its property or assets to the
Partnership or any of its other subsidiaries.
(41) Stop Transfer Instructions. The Partnership has, with respect to
all Units (other than the Securities to be sold pursuant to this Agreement)
and any securities convertible into, or exercisable or exchangeable for,
Units owned or held (of record or beneficially) by any of the persons who
have entered into or are required to enter into an agreement in the form of
Exhibit E hereto, instructed the transfer agent or other registrar to enter
stop transfer instructions and implement stop transfer procedures with
respect to such securities during the Lock-Up Period (as defined below);
and, during the Lock-Up Period, the Partnership will not cause or permit
any waiver, release, modification or amendment of any such stop transfer
instructions or stop transfer procedures without the prior written consent
of Wachovia.
(b) Certificates. Any certificate signed by any officer of the Partnership
Entities or any of its subsidiaries and delivered to the Representative or to
counsel for the Underwriters shall be deemed a representation and warranty by
such Partnership Entity to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Partnership agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter, severally and not jointly, agrees to purchase from the
Partnership, at the price of $______ per share (the "Purchase Price"), that
proportion of the number of Initial Securities set forth in Exhibit B opposite
the name of the Partnership, which the number of Initial Securities set forth in
Exhibit A opposite the name of such Underwriter, plus any additional number of
Initial Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof, bears to the total number of
Initial Securities, subject in each case to such adjustments among the
Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of
14
fractional Securities. The price at which the Securities shall initially be
offered to the public is $_____ per share.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Partnership hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to 900,000 Units at a price per share equal to
the Purchase Price referred to in Section 2(a) above; provided that the price
per share for any Option Securities shall be reduced by an amount per share
equal to any dividends or distributions declared by the Partnership and payable
or paid on the Initial Securities but not payable on such Option Securities. The
option hereby granted will expire at the close of business on the 30th day after
the date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Initial Securities upon notice by the
Representative to the Partnership setting forth the number of Option Securities
as to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (an "Option Closing Date") shall be determined by the
Representative, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, the Partnership will sell to the Underwriters that number of
Option Securities as to which the Underwriters are exercising the Option, and
each of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Exhibit A opposite the name of
such Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject in
each case to such adjustments as the Representative in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxxx
& Xxxxxx L.L.P., 0000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, or at such other
place as shall be agreed upon by the Representative and the Partnership, at 9:00
A.M. (Eastern time) on January [___], 2007 (unless postponed in accordance with
the provisions of Section 10), or such other time not later than ten business
days after such date as shall be agreed upon by the Representative and the
Partnership (such time and date of payment and delivery being herein called
"Closing Date").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Partnership, on each Option Closing Date as specified in the notice from
the Representative to the Partnership.
Payment shall be made to the Partnership by wire transfer of immediately
available funds to a single bank account designated by the Partnership against
delivery to the Representative for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Representative, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial
15
Securities and the Option Securities, if any, which it has agreed to purchase.
Wachovia, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by any Underwriter
whose funds have not been received by the Closing Date or the relevant Option
Closing Date, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representative may request in writing at least one full
business day before the Closing Date or the relevant Option Closing Date, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representative in Houston, Texas not later than noon (Central time) on the
business day prior to the Closing Date or the relevant Option Closing Date, as
the case may be.
SECTION 3. Covenants of the Partnership. The Partnership covenants with
each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Partnership, subject to Section 3(b), will comply with the requirements
of Rule 430A and will notify the Representative immediately, and confirm
the notice in writing, (i) when the Initial Registration Statement, any
Rule 462(b) Registration Statement or any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or any Issuer Free Writing Prospectus or
for additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes, or of any examination pursuant to
Section 8(e) of the 1933 Act concerning the Registration Statement and (v)
if the Partnership becomes the subject of a proceeding under Section 8A of
the 1933 Act in connection with the offering of the Securities. The
Partnership will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) Filing of Amendments. The Partnership will give the Representative
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act or otherwise, or (without
limitation to the provisions of Section 16 of this Agreement), any Issuer
Free Writing Prospectus or any amendment or supplement thereto, and will
furnish the Representative with copies of any such documents within a
reasonable amount of time prior to such
16
proposed filing or use, as the case may be, and will not file or use any
such document to which the Representative or counsel for the Underwriters
shall object.
(c) Delivery of Registration Statements. The Partnership has furnished
or will deliver to the Representative and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith)
and signed copies of all consents and certificates of experts. The copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Partnership has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
and any Issuer Free Writing Prospectuses prepared prior to the date of this
Agreement as such Underwriter reasonably requested, and the Partnership
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Partnership will furnish to each Underwriter, without charge,
such number of copies of the documents constituting the General Disclosure
Package, any Issuer Free Writing Prospectuses prepared on or after the date
of this Agreement and the Prospectus (and any amendments or supplements
thereto) as such Underwriter may reasonably request. The Statutory
Prospectus, each Issuer Free Writing Prospectus and the Prospectus and any
amendments or supplements thereto furnished to the Underwriters is or will
be, as the case may be, identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Partnership will
comply with the 1933 Act, the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities (including, without limitation, pursuant to Rule 172), any event
shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or for the Partnership, to
amend the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus 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 not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Partnership will promptly prepare and file with the Commission, subject
to Section 3(b) hereof, such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or
the Prospectus comply with such requirements, and the Partnership will
furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer Free
Writing Prospectus conflicted, conflicts or would conflict with the
17
information contained in the Registration Statement or included, includes
or would include an untrue statement of a material fact or omitted, omits
or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances, prevailing at that
subsequent time, not misleading, the Partnership will promptly notify
Wachovia and the Partnership will, subject to Section 3(b) hereof, promptly
amend or supplement such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Partnership will use its best
efforts, in cooperation with the Underwriters, to qualify the Securities
for offering and sale under the applicable securities laws of such states
and other jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect for a period of not
less than one year from the date of this Agreement; provided, however, that
the Partnership shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Partnership will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one
year from the date of this Agreement.
(g) Rule 158. The Partnership will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide to the Underwriters the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Partnership will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectus under "Use of Proceeds."
(i) Listing. The Partnership will use its best efforts to effect the
listing of the Securities on the Nasdaq Global Market.
(j) Restriction on Sale of Securities. During the Lock-Up Period, the
Partnership will not, without the prior written consent of Wachovia,
directly or indirectly:
(i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend or otherwise transfer
or dispose of any Units or any securities convertible into or
exercisable or exchangeable for Units,
(ii) file or cause the filing of any registration statement under
the 1933 Act with respect to any Units or any securities convertible
into or exercisable or exchangeable for any Units (other than any Rule
462(b) Registration Statement filed to register Securities to be sold
to the Underwriters pursuant to this Agreement and registration
statements on Form S-8 to register Units or options to
18
purchase Units pursuant to the long-term incentive plan described in
clause (2) of the next paragraph(1), or
(iii) enter into any swap or other agreement, arrangement or
transaction that transfers to another, in whole or in part, directly
or indirectly, any of the economic consequence of ownership of any
Units or any securities convertible into or exercisable or
exchangeable for Units,
whether any transaction described in (i) or (iii) above is to be settled by
delivery of Units, other securities, in cash or otherwise. Moreover, if:
(1) during the last 17 days of the Lock-Up Period the Partnership
issues an earnings release or material news or a material event
relating to the Partnership occurs, or
(2) prior to the expiration of the Lock-Up Period, the Partnership
announces that it will release earnings results during the 16-day
period beginning on the last day of the Lock-Up Period,
the Lock-Up Period shall be extended and the restrictions imposed by this
Section 3(j) shall continue to apply until the expiration of the 18-day
period beginning on the date of issuance of the earnings release or the
occurrence of the material news or material event, as the case may be,
unless Wachovia waives, in writing, such extension.
Notwithstanding the provisions set forth in the immediately preceding
paragraph, the Partnership may, without the prior written consent of
Wachovia:
(1) issue Securities to the Underwriters pursuant to this Agreement,
(2) issue Units, and options to purchase Units, pursuant to the
long-term incentive plan described in the Prospectus under the caption
"Management--Long-Term Incentive Plan," as such plan is in effect on
the date of this Agreement, and
(3) issue Units upon the exercise of options outstanding on the date
of this Agreement or issued after the date of this Agreement under the
long-term incentive plan referred to in clause (2) above, as such
options and plan are in effect on the date of this Agreement.
(k) Reporting Requirements. The Partnership, during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
----------
(1) Discuss
19
(l) Preparation of Prospectus. Immediately following the execution of
this Agreement, the Partnership will, subject to Section 3(b) hereof,
prepare the Prospectus containing the Rule 430A Information and other
selling terms of the Securities, the plan of distribution thereof and such
other information as may be required by the 1933 Act or the 1933 Act
Regulations or as the Representative and the Partnership may deem
appropriate, and will file the Prospectus with the Commission in the manner
and within the time period required by Rule 424(b) (without reliance on
Rule 424(b)(8)). Any Prospectus delivered pursuant to Rule 173(d) shall be
identical to the electronically transmitted copy thereof filed with the
Commission pursuant to Rule 424(b).
SECTION 4. Payment of Expenses.
(a) Expenses. The Partnership will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the word processing, printing and delivery to the Underwriters of
this Agreement, any Agreement among Underwriters and such other documents as may
be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the counsel, accountants and other advisors to the Partnership,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any
supplements thereto, (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, any Permitted Free Writing Prospectus,
the documents constituting the General Disclosure Package and the Prospectus and
any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplements thereto, (viii) the fees and expenses of the Custodian and the
transfer agent and registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the listing of
the Securities on the Nasdaq Global Market, (xi) all costs and expenses of the
Underwriters, including the reasonable fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities and
the establishment and administration of the program for the sale of the Reserved
Securities and (xii) the disbursements of counsel for the Underwriters in
connection with the copying and delivery of closing documents delivered by the
Partnership or the Partnership's accountants or counsel (including any local
counsel).
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
or (v) hereof, the Partnership shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
20
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Legacy Parties contained in this Agreement
or in certificates of any officer of the Partnership or any subsidiary of the
Partnership, to the performance by the Legacy Parties of their respective
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Date (or the applicable Option Closing Date,
as the case may be) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or, to the knowledge of the Partnership,
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. The Prospectus shall have been
filed with the Commission in the manner and within the time period required
by Rule 424(b) (without reliance upon Rule 424(b)(8)), and prior to Closing
Date, the Partnership shall have provided evidence satisfactory to the
Representative of such timely filing.
(b) Opinion of Counsel for Partnership. At Closing Date, the
Representative shall have received the favorable opinion, dated as of
Closing Date, of Xxxxxxx Xxxxx LLP, counsel for the Partnership
("Partnership Counsel"), in form and substance satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters, to the effect set forth in Exhibit F
hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Date, the
Representative shall have received the favorable opinion, dated as of
Closing Date, of Xxxxxx & Xxxxxx L.L.P., counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters, with respect to such matters as the Underwriters may
reasonably require. In giving such opinion such counsel may rely without
investigation, as to all matters governed by the laws of any jurisdictions
other than the law of the State of New York, the federal law of the United
States and the Delaware Revised Uniform Limited Partnership Act, upon the
opinions of counsel satisfactory to the Representative. Such counsel may
also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of the Partnership and its subsidiaries and of public officials.
(d) Officers' Certificate. At Closing Date or the applicable Option
Closing Date, as the case may be, there shall not have been, since the date
hereof or since the respective dates as of which information is given in
the Prospectus or the General Disclosure Package (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Partnership and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, and, at the Closing
Date, the Representative shall have received a certificate of the Chairman,
the President, the Chief Executive Officer or an Executive Vice President
or Senior Vice President of each of the Legacy Parties (or persons holding
21
similar positions, as applicable) and of the Chief Financial Officer or
Chief Accounting Officer of each of the Legacy Parties (or persons holding
similar positions, as applicable), dated as of Closing Date, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties of the Legacy Parties in this Agreement are
true and correct with the same force and effect as though expressly made at
and as of Closing Date, (iii) the Partnership has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Date under or pursuant to this Agreement,
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to their knowledge, are contemplated by the
Commission.
(e) Comfort Letters. At the time of the execution of this Agreement,
the Representative shall have received from each of BDO Xxxxxxx, LLP,
Xxxxxxx Xxxxxx & Co. and the Reserve Engineer a letter, dated the date of
this Agreement and in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letters
for each of the other Underwriters, containing (i) in the case of the
letters of BDO Xxxxxxx, LLP and Xxxxxxx Xxxxxx & Co., statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information of the Partnership contained in the
Registration Statement or the Prospectus and (ii) in the case of the letter
of the Reserve Engineer, containing statements and information ordinarily
included in reserve engineers' "comfort letters" to underwriters with
respect to the Reserve Report and related information contained in the
Registration Statement or the Prospectus.
(f) Bring-down Comfort Letter. At Closing Date, the Representative
shall have received from each of BDO Xxxxxxx, LLP and the Reserve Engineer
a letter, dated as of Closing Date and in form and substance satisfactory
to the Representative, to the effect that they reaffirm the statements made
in the letters furnished pursuant to subsection (e) of this Section, except
that the specified date referred to shall be a date not more than three
business days prior to Closing Date.
(g) Approval of Listing. At Closing Date and each Option Closing Date,
if any, the Securities to be purchased by the Underwriters at such time
shall have been approved for listing on the Nasdaq Global Market, subject
only to official notice of issuance.
(h) Lock-up Agreements. Prior to the date of this Agreement, the
Representative shall have received an agreement substantially in the form
of Exhibit E hereto signed by each of the persons listed on Exhibit D
hereto.
(i) No Objection. Prior to the date of this Agreement, NASD Regulation
Inc. shall have confirmed in writing that it has no objection with respect
to the fairness and reasonableness of the underwriting terms and
arrangements.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities on any Option Closing
Date that is after the Closing
22
Date, the obligations of the several Underwriters to purchase the
applicable Option Securities shall be subject to the conditions specified
in the introductory paragraph of this Section 5 and to the further
condition that, at the applicable Option Closing Date, the Representative
shall have received:
(1) Officers' Certificate. A certificate, dated such Option
Closing Date, to the effect set forth in, and signed by two of the
officers specified in, Section 5(d) hereof, except that the references
in such certificate to the Closing Date shall be changed to refer to
such Option Closing Date.
(2) Opinion of Counsel for Partnership. The favorable opinion of
Partnership Counsel in form and substance satisfactory to counsel for
the Underwriters, dated such Option Closing Date, relating to the
Option Securities to be purchased on such Option Closing Date and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(3) Opinion of Counsel for Underwriters. The favorable opinion of
Xxxxxx & Xxxxxx L.L.P., counsel for the Underwriters, dated such
Option Closing Date, relating to the Option Securities to be purchased
on such Option Closing Date and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
(4) Bring-down Comfort Letters. A letter from each of BDO
Xxxxxxx, LLP, Xxxxxxx Xxxxxx & Co. and the Reserve Engineer in form
and substance satisfactory to the Representative and dated such Option
Closing Date, substantially in the same form and substance as the
letters furnished to the Representative pursuant to Section 5(f)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Option Closing Date.
(k) Additional Documents. At Closing Date and at each Option Closing
Date, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
contained in this Agreement; and all proceedings taken by the Partnership
in connection with the issuance and sale of the Securities as herein
contemplated and in connection with the other transactions contemplated by
this Agreement shall be satisfactory in form and substance to the
Representative and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase
of Option Securities on an Option Closing Date which is after the Closing
Date, the obligations of the several Underwriters to purchase the relevant
Option Securities, may be terminated by the Representative by notice to the
Partnership at any time on or prior to Closing Date or such Option Closing
Date, as the case may be, and such termination shall be without liability
of any party to any other
23
party except as provided in Section 4 hereof and except that Sections 1, 6,
7 and 8 hereof shall survive any such termination and remain in full force
and effect.
SECTION 6. Indemnification.
(a) Indemnification by the Legacy Parties. The Legacy Parties agree,
jointly and severally, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue statement
or alleged untrue statement of a material fact included in any preliminary
prospectus, any Issuer Free Writing Prospectus, the Statutory Prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Partnership; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Wachovia), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above,
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Partnership by
any Underwriter through Wachovia expressly for use in the Registration Statement
(or any amendment thereto), or in any preliminary prospectus, any Issuer Free
Writing Prospectus, the Statutory Prospectus or the Prospectus (or any amendment
or supplement thereto).
(b) Indemnification by the Underwriters. Each Underwriter severally agrees
to indemnify and hold harmless the Partnership, its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Partnership within the meaning
24
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section 6, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), or any preliminary
prospectus, any Issuer Free Writing Prospectus, the Statutory Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Partnership by such
Underwriter through Wachovia expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus, any Issuer Free Writing
Prospectus, the Statutory Prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Counsel to the indemnified parties shall be selected as follows:
counsel to the Underwriters and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall be selected by Wachovia; and, counsel to the Partnership, its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Partnership within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall be selected by the Partnership.
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for the Underwriters and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and the fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for the
Partnership, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Partnership within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, in each
case in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any
25
settlement of the nature contemplated by Section 6(a) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Legacy Parties agree, promptly upon a
request in writing from Wachovia, to indemnify and hold harmless the
Underwriters from and against any and all losses, liabilities, claims, damages
and expenses incurred by any of the Underwriters as a result of the failure of
any Reserved Security Offeree to pay for and accept delivery of Reserved
Securities which such Reserved Security Offeree agreed (orally or in writing) to
purchase.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (a) in such proportion as is
appropriate to reflect the relative benefits received by the Legacy Parties on
the one hand and the Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (b) if the allocation provided by
clause (a) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (a)
above but also the relative fault of the Legacy Parties on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Legacy Parties on the one hand and
the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Partnership and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth on the cover of the Prospectus, bear
to the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Legacy Parties on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by any of the Legacy Parties or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Legacy Parties and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters or the Legacy Parties were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and
26
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Partnership, each officer of the Partnership who signed the
Registration Statement, and each person, if any, who controls the Partnership
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Partnership. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Exhibit A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Legacy Parties or any of their subsidiaries
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Partnership, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this Agreement,
by notice to the Partnership, at any time on or prior to Closing Date (and, if
any Option Securities are to be purchased on an Option Closing Date which occurs
after the Closing Date, the Representative may terminate the obligations of the
several Underwriters to purchase such Option Securities, by notice to the
Partnership, at any time on or prior to such Option Closing Date) (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus or the General
Disclosure Package, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Partnership and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
27
economic conditions, in each case the effect of which is such as to make it, in
the judgment of the Representative, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Partnership has been suspended or materially
limited by the Commission or the Nasdaq Global Market, or if trading generally
on the American Stock Exchange or the NYSE or in the Nasdaq Global Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States or
in Europe, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities or (v) if there shall have occurred, since the time of
execution of this Agreement, any downgrading in the rating of any debt
securities or Partnership by any "nationally recognized statistical rating
organization" (as defined by the Commission for purposes of Rule 436 under the
0000 Xxx) or any public announcement that any such organization has under
surveillance or review its ratings on any such debt securities, (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) or any announcement by
any such organization that the Partnership has been placed on negative outlook.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 hereof shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Date or an Option Closing Date to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representative shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representative shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters; or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Option Closing Date which occurs after the Closing Date, the obligation
of the Underwriters to purchase and of the Partnership to sell the Option
Securities that were to have been purchased and sold on such Option Closing
Date, shall terminate without liability on the part of any non-defaulting
Underwriter.
28
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of an Option Closing Date which is after the
Closing Date, which does not result in a termination of the obligation of the
Underwriters to purchase and the Partnership to sell the relevant Option
Securities, as the case may be, the Representative shall have the right to
postpone the Closing Date or the relevant Option Closing Date, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at Wachovia Capital
Markets, LLC, 0 Xx. Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention of
_________; notices to the Partnership shall be directed to it at _________,
Attention of _________.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Legacy Parties and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Legacy Parties and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Partnership
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 14. Effect of Headings. The Section and Exhibit headings herein are
for convenience only and shall not affect the construction hereof.
SECTION 15. Definitions. As used in this Agreement, the following terms
have the respective meanings set forth below:
"Applicable Time" means _____ (New York time) on _____, 200_ or such other
date or time as agreed by the Partnership and Wachovia.
"Commission" means the Securities and Exchange Commission.
29
"XXXXX" means the Commission's Electronic Data Gathering, Analysis and
Retrieval System.
"Existing Credit Agreement" means the Credit Agreement dated as of March
15, 2006 among the Partnership, BNP Paribas, as agent, and the other parties
thereto, as amended or supplemented, if applicable, including any promissory
notes, pledge agreements, security agreements, mortgages, guarantees and other
instruments or agreements entered into by the Partnership or any of its
subsidiaries in connection therewith or pursuant thereto, in each case as
amended or supplemented if applicable.
"GAAP" means generally accepted accounting principles.
"Hydrocarbon Interests" means all rights, titles, interests and estates now
owned or hereafter acquired in and to oil and gas leases, oil, gas and mineral
leases (including subleases), oil, gas and casinghead gas leases, or other
liquid or gaseous hydrocarbon leases, mineral fee or lease interests, other oil,
gas and mineral leasehold fee or term interests, farm outs, overriding royalty
and royalty interests, net profits interests, net revenue interests, carried
interests, oil payments, production payment interests and similar mineral
interests, including any reserved, reversionary or residual interest of whatever
nature.
"Initial Registration Statement" means the Partnership's registration
statement on Form S-1 (Registration No. 333-138637), as amended (if applicable),
at the time it became effective, including the Rule 430A Information.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433, relating to the Securities (including,
without limitation, any "road show" that is a "written communication" within the
meaning of Rule 433(d)(8)(i) whether or not required to be filed with the
Commission and any issuer free writing prospectus that is exempt from filing
pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms), in each
case in the form furnished to the Underwriters for use in connection with the
offering of the Securities (and not as the form of Issuer Free Writing
Prospectus filed with the Commission pursuant to Rule 433).
"Issuer General Use Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors,
as evidenced by it being listed in Exhibit H hereto.
"Issuer Limited Use Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing Prospectus.
"Lien" means any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
"Lock-Up Period" means the period beginning on and including the date of
this Agreement through and including the date that is the 180th day after the
date of this Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"NYSE" means the New York Stock Exchange.
30
"Oil and Gas Properties" means all of the Partnership's Hydrocarbon
Interests; personal property and/or real property now or hereafter pooled or
unitized with Hydrocarbon Interests; currently existing or future unitization,
pooling agreements and declarations of pooled units and the units created
thereby (including all units created under orders, regulations and rules of any
governmental body having jurisdiction) which may affect all or any portion of
the Hydrocarbon Interests; pipelines, gathering lines, compression facilities,
tanks and processing plants; oil xxxxx, gas xxxxx, water xxxxx, injection xxxxx,
platforms, spars or other offshore facilities, casings, rods, tubing, pumping
units and engines, Christmas trees, derricks, separators, gun barrels, flow
lines, gas systems (for gathering, dehydration, treating and compression), and
water systems (for treating, disposal and injection); interests held in royalty
trusts whether currently existing or hereafter created; hydrocarbons in and
under and which may be produced, saved, processed or attributable to the
Hydrocarbon Interests, the lands covered thereby and all hydrocarbons in
pipelines, gathering lines, tanks and processing plants and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; tenements, hereditaments, appurtenances and personal
property and/or real property in any way appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests, and all rights, titles, interests and
estates described or referred to above, including any and all real property, now
owned or hereafter acquired, used or held for use in connection with the
operating, working or development of any of such Hydrocarbon Interests or
personal property and/or real property and including any and all surface leases,
rights-of-way, easements and servitudes together with all additions,
substitutions, replacements, accessions and attachments to any and all of the
foregoing.
"Organizational Documents" means (a) in the case of a corporation, its
charter and by-laws; (b) in the case of a limited or general partnership, its
partnership certificate, certificate of formation or similar organizational
document and its partnership agreement; (c) in the case of a limited liability
company, its articles of organization, certificate of formation or similar
organizational documents and its operating agreement, limited liability company
agreement, membership agreement or other similar agreement; (d) in the case of a
trust, its certificate of trust, certificate of formation or similar
organizational document and its trust agreement or other similar agreement; and
(e) in the case of any other entity, the organizational and governing documents
of such entity.
"Partnership Documents" means any contracts, indentures, mortgages, deeds
of trust, loan or credit agreements, bonds, notes, debentures, evidences of
indebtedness, leases or other instruments or agreements to which the Partnership
or any of its subsidiaries is a party or by which the Partnership or any of its
subsidiaries is bound or to which any of the property or assets of the
Partnership or any of its subsidiaries is subject.
"preliminary prospectus" means any prospectus used in connection with the
offering of the Securities that was used before the Initial Registration
Statement became effective, or that was used after such effectiveness and prior
to the execution and delivery of this Agreement, or that omitted the Rule 430A
Information or that was captioned "Subject to Completion".
"Registration Statement" means the Initial Registration Statement; provided
that, if a Rule 462(b) Registration Statement is filed with the Commission, then
the term "Registration Statement" shall also include such Rule 462(b)
Registration Statement.
31
"Repayment Event" means any event or condition which gives the holder of
any bond, note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Partnership or any
subsidiary of the Partnership.
"Rule 164," "Rule 172," "Rule 424(b)," "Rule 430A," "Rule 433" and "Rule
462(b)" refer to such rules under the 1933 Act.
"Rule 430A Information" means the information included in the Prospectus
that was omitted from the Initial Registration Statement at the time it became
effective but that is deemed to be a part of the Initial Registration Statement
at the time it became effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" means a registration statement filed
by the Partnership pursuant to Rule 462(b) for the purpose of registering any of
the Securities under the 1933 Act, including the Rule 430A Information.
"Xxxxxxxx-Xxxxx Act" means the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated thereunder or implementing the provisions thereof.
"Statutory Prospectus" as of any time means the prospectus or preliminary
prospectus, as the case may be, relating to the Securities that is included in
the Initial Registration Statement immediately prior to that time in the form
furnished to the Underwriters for use in connection with the offering of the
Securities.
"Subject Instruments" means the Existing Credit Agreement and all other
instruments, agreements and documents filed as exhibits to the Registration
Statement pursuant to Rule 601(b)(10) of Regulation S-K of the Commission;
provided that if any instrument, agreement or other document filed as an exhibit
to the Registration Statement as aforesaid has been redacted or if any portion
thereof has been deleted or is otherwise not included as part of such exhibit
(whether pursuant to a request for confidential treatment or otherwise), the
term "Subject Instruments" shall nonetheless mean such instrument, agreement or
other document, as the case may be, in its entirety, including any portions
thereof which shall have been so redacted, deleted or otherwise not filed.
"1933 Act" means the Securities Act of 1933, as amended.
"1933 Act Regulations" means the rules and regulations of the Commission
under the 1933 Act.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1934 Act Regulations" means the rules and regulations of the Commission
under the 1934 Act.
"1940 Act" means the Investment Company Act of 1940, as amended.
32
"Working Interest" means each Partnership Entity's undivided operating and
expense-bearing interest under a Hydrocarbon Interest.
All references in this Agreement to the Registration Statement, the Initial
Registration Statement, any Rule 462(b) Registration Statement, any preliminary
prospectus, the Statutory Prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to XXXXX; and all references to any Issuer Free
Writing Prospectus that is required to be filed with the Commission pursuant to
Rule 433 shall be deemed to include the copy thereof filed with the Commission
pursuant to XXXXX.
SECTION 16. Permitted Free Writing Prospectuses. Each Legacy Party jointly
and severally represents, warrants and agrees that, unless it obtains the prior
consent of Wachovia, and each Underwriter, severally and not jointly, represents
and agrees that, unless it obtains the prior consent of the Partnership and
Wachovia, it has not made and will not make any offer relating to the Securities
that would constitute an "issuer free writing prospectus," as defined in Rule
433, or that would otherwise constitute a "free writing prospectus," as defined
in Rule 405, required to be filed with the Commission. Any such free writing
prospectus consented to by Wachovia or by the Partnership and Wachovia, as the
case may be, is hereinafter referred to as a "Permitted Free Writing
Prospectus." The Partnership represents and warrants that it has treated and
agrees that it will treat each Permitted Free Writing Prospectus as an "issuer
free writing prospectus," as defined in Rule 433, and has complied and will
comply with the requirements of Rule 433 applicable to any Permitted Free
Writing Prospectus, including timely filing with the Commission where required,
legending and record keeping. For the purposes of clarity, nothing in this
Section 16 shall restrict the Partnership from making any filings required under
the 1934 Act or 1934 Act Regulations.
SECTION 17. Absence of Fiduciary Relationship. Each of the Legacy Parties
acknowledges and agrees that:
(a) Each of the Underwriters is acting solely as an underwriter in
connection with the public offering of the Securities and no fiduciary, advisory
or agency relationship between the Legacy Parties, on the one hand, and any of
the Underwriters, on the other hand, has been or will be created in respect of
any of the transactions contemplated by this Agreement, irrespective of whether
or not any of the Underwriters have advised or is advising the Legacy Parties on
other matters and none of the Underwriters has any obligation to the Legacy
Parties with respect to the transactions contemplated by this Agreement except
the obligations expressly set forth in this Agreement;
(b) the public offering price of the Securities and the price to be paid by
the Underwriters for the Securities set forth in this Agreement were established
by the Partnership following discussions and arms-length negotiations with the
Representative;
(c) it is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;
33
(d) in connection with each transaction contemplated by this Agreement and
the process leading to such transactions, each Underwriter is and has been
acting solely as principal and not as fiduciary, advisor or agent of the Legacy
Parties or any of their affiliates, or any of their respective unitholders (or
other equity holders), creditors or employees or any other party;
(e) none of the Underwriters has provided any legal, accounting, regulatory
or tax advice with respect to the transactions contemplated by this Agreement
and it has consulted its own legal, accounting, regulatory and tax advisors to
the extent it has deemed appropriate;
(f) it is aware that the Underwriters and their respective affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of the Legacy Parties and that none of the Underwriters has any
obligation to disclose such interests and transactions to the Legacy Parties by
virtue of any fiduciary, advisory or agency relationship; and
(g) it waives, to the fullest extent permitted by law, any claims it may
have against any of the Underwriters for breach of fiduciary duty or alleged
breach of fiduciary duty and agrees that none of the Underwriters shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to it in
respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on its behalf or in right of it or the Legacy Parties or any
affiliates, unitholders (or other equity holders), employees or creditors of the
Legacy Parties.
[SIGNATURE PAGE FOLLOWS]
34
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Partnership a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Partnership in accordance with its terms.
Very truly yours,
LEGACY RESERVES GP LLC
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LEGACY RESERVES LP
By: Legacy Reserves GP, LLC
its General Partner
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LEGACY RESERVES OPERATING GP LLC
By: Legacy Reserves LP,
its sole member
By: Legacy Reserves GP, LLC
its General Partner
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
35
LEGACY RESERVES OPERATING LP
By: Legacy Reserves Operating GP LLC,
its general partner
By: Legacy Reserves LP
its sole member
By: Legacy Reserves GP, LLC
its General Partner
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CONFIRMED AND ACCEPTED, as of the
date first above written:
By: WACHOVIA CAPITAL MARKETS, LLC
By
----------------------------------
Authorized Signatory
For itself and as Representative of the Underwriters named in Exhibit A hereto.
36
EXHIBIT A
Number of
Initial
Name of Underwriter Securities
------------------------------------------- ----------
Wachovia Capital Markets, LLC..............
Friedman, Billings, Xxxxxx & Co., Inc......
Xxxxxxx Xxxxx & Associates, Inc............
RBC Capital Markets Corporation............
Xxxxxxxxxxx & Company, Incorporated........
Xxxxxx, Xxxxxxxx & Company, Incorporated...
Total...................................
A-1
EXHIBIT B
Number of
Initial
Securities
to be Sold
----------
Partnership................................
Total......................................
B-1
EXHIBIT C
[TO BE PROVIDED BY PARTNERSHIP COUNSEL. IN THE CASE OF PARTNERSHIPS AND LIMITED
LIABILITY COMPANIES, PLEASE INDICATE THEIR GENERAL PARTNERS AND MANAGING
MEMBERS]
SUBSIDIARIES OF THE PARTNERSHIP
JURISDICTION OF
NAME ORGANIZATION TYPE OF ENTITY
---- --------------- --------------------------------
[Name of Subsidiary] [State] [Corporation/Limited Liability
Company/Limited
Partnership/General Partnership]
MATERIAL SUBSIDIARIES
[Name of Subsidiary] [State] [Corporation/Limited Liability
Company/Limited
Partnership/General Partnership]
C-1
EXHIBIT D
LIST OF DIRECTORS AND OFFICERS
D-1
EXHIBIT E
FORM OF LOCK-UP AGREEMENT
LEGACY RESERVES LP
Public Offering of Units Representing Limited Partner Interests
Dated as of January [___], 2007
Wachovia Capital Markets, LLC
As Representative of the several Underwriters
0 Xx. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
This agreement is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") between Legacy Reserves
LP, a Delaware limited partnership (the "Partnership"), Wachovia Capital
Markets, LLC ("Wachovia"), as representative or one of the representatives of a
group of underwriters (the "Underwriters"), and the other parties thereto (if
any) to be named therein, relating to a proposed underwritten public offering of
Units (the "Units") representing limited partner interests in the Partnership.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, and in light of the benefits that the offering of the
Units will confer upon the undersigned in its capacity as a securityholder
and/or an officer, director or employee of the Partnership or one of its
affiliates, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
Underwriter that, during the period beginning on and including the date of the
Underwriting Agreement through and including the date that is the 180th day
after the date of the Underwriting Agreement (the "Lock-Up Period"), the
undersigned will not, without the prior written consent of Wachovia, directly or
indirectly:
(i) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of any
Units or any securities convertible into or exercisable or exchangeable for
Units, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or
(ii) enter into any swap or other agreement, arrangement or
transaction that transfers to another, in whole or in part, directly or
indirectly, any of the economic
E-1
consequence of ownership of any Units or any securities convertible into or
exercisable or exchangeable for any Units,
whether any transaction described in clause (i) or (ii) above is to be settled
by delivery of Units, other securities, in cash or otherwise. Moreover, if:
(1) during the last 17 days of the Lock-Up Period, the Partnership issues
an earnings release or material news or a material event relating to
the Partnership occurs, or
(2) prior to the expiration of the Lock-Up Period, the Partnership
announces that it will release earnings results during the 16-day
period beginning on the last day of the Lock-Up Period,
the Lock-Up Period shall be extended and the restrictions imposed by this
agreement shall continue to apply until the expiration of the 18-day period
beginning on the date of issuance of the earnings release or the occurrence of
the material news or material event, as the case may be, unless Wachovia waives,
in writing, such extension.
Notwithstanding the provisions set forth in the immediately preceding
paragraph, the undersigned may, without the prior written consent of Wachovia,
transfer any Units or any securities convertible into or exchangeable or
exercisable for Units
(1) if the undersigned is a natural person, as a bona fide gift or
gifts, or by will or intestacy, to any member of the immediate family (as
defined below) of the undersigned or to a trust the beneficiaries of which
are exclusively the undersigned or members of the undersigned's immediate
family or to a charity or educational institution, and
(2) if the undersigned is a partnership or a limited liability
company, to a partner or member, as the case may be, of such partnership or
limited liability company if, in any such case, such transfer is not for
value,
provided, however, that in the case of any transfer described in clause (1) or
(2) above, it shall be a condition to the transfer that (A) the transferee
executes and delivers to Wachovia, acting on behalf of the Underwriters, not
later than one business day prior to such transfer, a written agreement, in
substantially the form of this agreement (it being understood that any
references to "immediate family" in the agreement executed by such transferee
shall expressly refer only to the immediate family of the undersigned and not to
the immediate family of the transferee) and otherwise satisfactory in form and
substance to Wachovia, and (B) if the undersigned is required to file a report
under Section 16(a) of the Securities Exchange Act of 1934, as amended,
reporting a reduction in beneficial ownership of Units or any securities
convertible into or exercisable or exchangeable for Units by the undersigned
during the Lock-Up Period (as the same may be extended as described above), the
undersigned shall include a statement in such report to the effect that such
transfer or distribution is not a transfer for value and, in the case of any
transfer pursuant to clause (1), that such transfer is being made as a gift or
by will or intestacy, as the case may be, and, in the case of any transfer
pursuant to clause (2), that such transfer is being made to the partners or
members, as the case may be, of the applicable partnership or limited liability
company, as the case may be, and is not a transfer for value. For
E-2
purposes of this paragraph, "immediate family" shall mean a spouse, child,
grandchild or other lineal descendant (including by adoption), father, mother,
brother or sister of the undersigned.
The undersigned further agrees that (i) it will not, during the Lock-Up
Period (as the same may be extended as described above), make any demand for or
exercise any right with respect to the registration under the Securities Act of
1933, as amended (the "1933 Act"), of any Units or any securities convertible
into or exercisable or exchangeable for Units, and (ii) the Partnership may,
with respect to any Units or any securities convertible into or exercisable or
exchangeable for Units owned or held (of record or beneficially) by the
undersigned, cause the transfer agent or other registrar to enter stop transfer
instructions and implement stop transfer procedures with respect to such
securities during the Lock-Up Period (as the same may be extended as described
above).
In addition, the undersigned hereby waives any and all notice requirements
and rights with respect to the registration of any securities pursuant to any
agreement, instrument, understanding or otherwise, including any registration
rights agreement or similar agreement, to which the undersigned is a party or
under which the undersigned is entitled to any right or benefit and any
tag-along rights or other similar rights to have any securities (debt or equity)
included in the offering contemplated by the Underwriting Agreement or sold in
connection with the sale of Units pursuant to the Underwriting Agreement,
provided that such waiver shall apply only to the public offering of Units
pursuant to the Underwriting Agreement and each registration statement filed
under the 1933 Act in connection therewith.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this agreement and that this agreement
has been duly authorized (if the undersigned is not a natural person), executed
and delivered by the undersigned and is a valid and binding agreement of the
undersigned. This agreement and all authority herein conferred are irrevocable
and shall survive the death or incapacity of the undersigned (if a natural
person) and shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
If the Underwriting Agreement is not executed by the parties thereto prior
to _________, 2007, this agreement shall automatically terminate and become null
and void.
The undersigned acknowledges and agrees that whether or not any public
offering of Units actually occurs depends on a number of factors, including
market conditions.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
E-3
IN WITNESS WHEREOF, the undersigned has executed and delivered this
agreement as of the date first set forth above.
Yours very truly,
----------------------------------------
Print Name:
E-4
EXHIBIT F
FORM OF OPINION OF PARTNERSHIP COUNSEL
(1) Each of the Legacy Parties has been duly formed or organized, as
applicable, and is validly existing as a limited partnership or limited
liability company, as applicable, in good standing under the laws of the
State of Delaware.
(2) The Legacy Parties have the partnership or limited liability
company power and authority, as applicable, to own, lease and operate their
properties and to conduct their respective businesses as described in the
Registration Statement, the General Disclosure Package and the Prospectus
and to enter into and perform its obligations under the Underwriting
Agreement.
(3) The Legacy Parties are duly qualified as a foreign partnership or
limited liability company, as applicable, to transact business and are in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect.
(4) Moriah Properties, Ltd., DAB Resources, Ltd., Brothers Production
Properties, Ltd., Brothers Production Company, Inc., Brothers Operating
Company, Inc., J&W McGraw Properties, Ltd., MBN Properties LP, and H2K
Holdings, Ltd. own 100% of the issued and outstanding membership interests
in the General Partner; such membership interests have been duly authorized
and validly issued in accordance with the GP LLC Agreement, and are fully
paid and non-assessable (except as such non-assessability may be limited by
Section 18-607 of the Delaware LLC Act); and such persons and entities own
such membership interests free and clear of all Liens.
(5) The General Partner is the sole general partner of the Partnership
with a 0.1% general partner interest in the Partnership; such general
partner interest has been duly authorized and validly issued in accordance
with the Partnership Agreement, and is fully paid; and the General Partner
owns such general partner interest free and clear of all Liens; the General
Partner owns no assets, and has no business, other than with respect to its
0.1% general partner interest in the Partnership.
(6) As of the date hereof, after giving effect to the offering
contemplated by the Underwriting Agreement (assuming the option to purchase
Option Securities is not exercised), the Existing Unitholders will own [ ]
Units, representing collectively a [ ]% limited partner interest in the
Partnership (the "Existing Unitholder Units"). As of the date hereof, all
of the issued and outstanding Existing Unitholder Units, and the limited
partner interests represented thereby, are duly authorized and validly
issued in accordance with the Partnership Agreement, and are fully paid (to
the extent required under the Partnership Agreement) and non-assessable
(except as such non-assessability may be affected by Section 17-607 of the
Delaware LP Act).
F-1
(7) The Units to be issued and sold by the Partnership pursuant to the
Underwriting Agreement, and the limited partner interests represented
thereby, are duly authorized in accordance with the Partnership Agreement
and, when issued and delivered to the purchaser thereof against payment
therefor in accordance with the terms of the Underwriting Agreement, 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 Section 17-607 of the Delaware LP Act).
(8) The Partnership owns 100% of the membership interests in the
Operating GP; such membership interests have been duly authorized and
validly issued in accordance with the Operating GP Agreement, and are fully
paid and non-assessable (except as such non-assessability may be affected
by Section 18-607 of the Delaware LLC Act); and the Partnership owns such
membership interests free and clear of all Liens, except for the pledge of
such membership interests under the Existing Credit Agreement.
(9) (A) The Operating GP is the sole general partner of the Operating
Partnership with a 0.1% general partner interest in the Operating
Partnership; such general partner interest has been duly authorized and
validly issued in accordance with the Operating Partnership Agreement, and
is fully paid; and the Operating GP owns such general partner interest free
and clear of all Liens, except for the pledge of such general partner
interest under the Existing Credit Agreement; and (B) the Partnership is
the sole limited partner of the Operating Partnership with a 99.9% limited
partner interest in the Operating Partnership; such limited partner
interest has been duly authorized and validly issued in accordance with the
Operating Partnership Agreement and is fully paid (to the extent required
under the Operating Partnership Agreement) and non-assessable (except as
such non-assessability may be affected by Section 17-607 of the Delaware LP
Act); and the Partnership owns such limited partner interest free and clear
of all Liens, except for the pledge of such limited partner interest under
the Existing Credit Agreement.
(10) The Underwriting Agreement has been duly authorized, executed and
delivered by each of the Legacy Parties.
(11) The issuance of the Securities to be sold by the Partnership
pursuant to the Underwriting Agreement is not subject to any preemptive
rights, rights of first refusal or other similar rights of any
securityholder of the Partnership or any other person arising under
Organization Documents of any of the Legacy Parties, the Delaware Revised
Uniform Limited Partnership Act or any of the agreements listed on Schedule
1 attached hereto (the "Applicable Agreements") or, to our knowledge,
otherwise.
(12) The Initial Registration Statement and any Rule 462(b)
Registration Statement have been declared effective under the 1933 Act; the
Prospectus has been filed pursuant to Rule 424(b) in the manner and within
the time period required by Rule 424(b) (without reference to Rule
424(b)(8)); any required filing of each Issuer Free Writing Prospectus
pursuant to Rule 433 has been made in the manner and within the time period
required by Rule 433(d); and, to our knowledge, no stop order suspending
the effectiveness of the Initial Registration Statement or any Rule 462(b)
Registration
F-2
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or threatened by the
Commission.
(13) The Initial Registration Statement and any amendments thereto and
any Rule 462(b) Registration Statement, as of their respective effective
dates, and the Prospectus and any amendments or supplements thereto, as of
their respective issue dates (in each case other than the financial
statements and schedules and other financial data included therein or
omitted therefrom, as to which we have not been called upon to express an
opinion), complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(14) The form of certificate used to evidence the Units complies in
all material respects with all applicable requirements of the Delaware
Revised Uniform Limited Partnership Act, with any applicable requirements
of the charter and by-laws of the Partnership and with any applicable
requirements of the Nasdaq Global Market.
(15) To our knowledge, except as otherwise disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus,
there is not pending or threatened any action, suit, proceeding, inquiry or
investigation to which the Partnership or any subsidiary is a party, or to
which the property of the Partnership or any subsidiary is subject, before
or brought by any court or governmental agency or body which might
reasonably be expected to result in a Material Adverse Effect or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in the Underwriting Agreement or the performance by the
Partnership of its obligations thereunder.
(16) The information in the Statutory Prospectus constituting a part
of the General Disclosure Package and the Prospectus under the captions
"Business--Environmental Matters and Regulation," "Business--Other
Regulation of the Oil and Natural Gas Industry," "Business--Legal
Proceedings," "Description of Units," and "Material Tax Consequences," in
each case to the extent that it constitutes matters of law, summaries of
legal matters, summaries of provisions of the Partnership's Organizational
Documents or any other instruments or agreements, summaries of legal
proceedings, or legal conclusions, has been reviewed by us and is correct
in all material respects and our opinion set forth in the Prospectus under
the caption "Material Tax Consequences" is confirmed.
(17) (A) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than under the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations, which have been
obtained, or as may be required under the securities or blue sky laws of
the various states, as to which we have not been called upon to express an
opinion), (B) no authorization, approval, vote or other consent of any
unitholder or creditor of the Partnership, (C) no waiver or consent under
any Subject Instrument, and (D) to our knowledge, no authorization,
approval, vote or other consent of any other person or entity, is necessary
or required in connection with the due authorization,
F-3
execution and delivery of the Underwriting Agreement or for the offering,
issuance, sale or delivery of the Securities.
(18) The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions contemplated therein and
in the Registration Statement, the General Disclosure Package and the
Prospectus (including the issuance and sale of the Securities and the use
of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the
Legacy Parties with their obligations under the Underwriting Agreement do
not and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default or
Repayment Event under, or result in the creation or imposition of any Lien
upon any property or assets of the Partnership or any of its subsidiaries
pursuant to any Applicable Agreement, nor will such action result in any
violation of the provisions of the Organizational Documents of the
Partnership or any of its subsidiaries or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Partnership or any of its subsidiaries or any of
their respective assets, properties or operations.
(19) The Partnership is not and, immediately after giving effect to
the issuance by the Partnership and sale of the Securities and the
application of the net proceeds thereof as described in the Statutory
Prospectus constituting a part of the General Disclosure Package or the
Prospectus, will not be an "investment company", as such term is defined in
the 1940 Act.
Nothing has come to our attention that would lead us to believe that:
(a) the Initial Registration Statement or any amendment thereto, at
the time the Initial Registration Statement or any such amendment became
effective, or any Rule 462(b) Registration Statement, at the time such Rule
462(b) Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or
(b) the General Disclosure Package, as of the Applicable Time,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of circumstances under which they were made, not misleading, or
(c) the Prospectus or any amendment or supplement thereto, as of the
date the Prospectus was issued, as of the date of any such amendment or
supplement was issued or on the date of this letter, included or includes
an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
(except in each case that we make no statement and express no belief with
respect to (i) financial statements and schedules and other financial or
statistical data and (ii) any other financial,
F-4
accounting or oil and gas reserve data included in or omitted from the Initial
Registration Statement, any Rule 462(b) Registration Statement or the Prospectus
or any amendment or supplement thereto).
In the event that such opinion shall define the term "Registration
Statement," "Initial Registration Statement," "Rule 462(b) Registration
Statement," "Statutory Prospectus," "Prospectus" or "Issuer Free Writing
Prospectus" (rather than indicating that such terms, as used in such opinion,
have the respective meanings given thereto in the Underwriting Agreement), such
opinion shall define the terms "Registration Statement", "Initial Registration
Statement" and "Rule 462(b) Registration Statement" to include the Rule 430A
Information, shall define the term "Statutory Prospectus" as the Statutory
Prospectus in the form furnished to the Underwriters for use in connection with
the offering of the Securities, shall define the term "Prospectus" as the
Prospectus in the form furnished to the Underwriters for use in connection with
the offering of the Securities and such opinion shall state that if any
Prospectus is delivered pursuant to Rule 173(d), such Prospectus shall be
identical to the electronically transmitted copy thereof filed with the
Commission pursuant to Rule 424(b), and shall define "Issuer Free Writing
Prospectus" as the Issuer Free Writing Prospectus in the form furnished to the
Underwriters for use in connection with the offering of the Securities (and not
as the form of Issuer Free Writing Prospectus filed with the Commission pursuant
to Rule 433).
In rendering such opinion, Partnership Counsel shall state that such
opinion covers matters arising under the laws of the State of Texas, the
Delaware Revised Limited Partnership Act, the Delaware Limited Liability Company
Act and the federal laws of the United States of America. In rendering such
opinion, Partnership Counsel may rely as to matters involving the laws of any
other state upon the opinion of local counsel satisfactory to the
Representative; provided that such opinion shall be addressed to the
Representative, shall state that Partnership Counsel may rely on such opinion as
if it were addressed to them in rendering their opinion pursuant to the
Underwriting Agreement, shall be dated the same date as the opinion of
Partnership Counsel, shall be delivered to the Representative at the same time
that the opinion of Partnership Counsel is delivered, and shall be satisfactory
in form and substance to counsel for the Underwriters. In rendering such
opinion, Partnership Counsel may rely, as to matters of fact (but not as to
legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Partnership and public officials. Such opinion shall
not state that it is to be governed or qualified by, or that it is otherwise
subject to, any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
F-5
EXHIBIT G
PRICE-RELATED INFORMATION
[INSERT AS APPROPRIATE]
Public offering price: $___________ per share
Underwriting discounts and commissions: $___________ per share
Proceeds, before expenses to the Partnership: $___________ per share
[Last reported sale price on the Nasdaq Global Market]: $___________ per share
on [date]
Shares offered: _____ primary, _____ secondary
Over-allotment option: _____ primary, _____ secondary
[IF THE NUMBER OF SHARES OFFERED OR OTHER INFORMATION HAS CHANGED MATERIALLY
FROM THAT SET FORTH IN THE PRELIMINARY PROSPECTUS, CONSIDER DESCRIBING]
Trade date: __________
Settlement date: __________
[INSERT ANY OTHER APPLICABLE TERMS.]
G-1
EXHIBIT H
ISSUER GENERAL USE FREE WRITING PROSPECTUSES
[List or state "None"]
H-1
EXHIBIT I
EXISTING XXXXXXXXXXX
X-0
