EXHIBIT 1.1
EXECUTION COPY
EV ENERGY PARTNERS, L.P.
3,900,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
September 26, 2006
X.X. XXXXXXX & SONS, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
WACHOVIA CAPITAL MARKETS, LLC
XXXXXXXXXXX & CO. INC.
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, EV Energy Partners, L.P., a Delaware limited partnership
(the "Partnership"), EV Energy GP, L.P., a Delaware limited partnership and
general partner of the Partnership (the "General Partner"), EV Management, LLC,
a Delaware limited liability company and general partner of the General Partner
("GP LLC"), EV Properties, L.P., a Delaware limited partnership (the "Operating
Partnership"), EV Properties GP, LLC, a Delaware limited liability company and
general partner of the Operating Partnership (the "Operating Partnership GP"),
EnerVest Management Partners, Ltd., a Texas limited partnership ("EVMP"), CGAS
Exploration, Inc., an Ohio corporation ("CGAS"), EnerVest Operating, LLC, a
Texas limited liability company ("EVOC"), EnCap Energy Capital Fund V, L.P., a
Texas limited partnership ("EnCap Fund V"), EnCap V-B Acquisitions, L.P., a
Texas limited partnership (together with EnCap Fund V, the "EnCap Entities"),
EVEC Holdings, LLC, a Delaware limited liability company ("EVH"), and CGAS
Holdings, LLC, a Delaware limited liability company ("CGH" and together with
EVMP, EVH and the EnCap Entities, the "Sponsor Entities"), hereby address you as
the "Underwriters" and hereby confirm their agreement with the several
Underwriters named below.
The Partnership, the General Partner, GP LLC, the Operating Partnership
GP, the Operating Partnership, and the Sponsor Entities are collectively
referred to herein as the "EVEP Parties." The Partnership, the General Partner,
GP LLC, the Operating Partnership GP and the Operating Partnership and the other
Subsidiaries (as defined in Section 5(l)) are referred to collectively herein as
the "Partnership Entities."
It is understood and agreed by all that the Partnership was recently
formed by EVMP and the General Partner to acquire, produce and develop oil and
natural gas properties. The Partnership will initially own oil and natural gas
properties and related gathering systems and production assets in Northern
Louisiana (the "Monroe Assets"), primarily in West Virginia (the
"West Virginia Assets") and primarily in Ohio (the "Clinton Assets"). Currently,
the Operating Partnership indirectly owns all of the interests in the Monroe
Assets through its direct and indirect ownership of EnerVest Production
Partners, L.P. ("EVPP") and its indirect ownership of Lower Cargas Operating
Company LLC ("LCOC") and all of the West Virginia Assets through its direct and
indirect ownership of EnerVest WV, LP ("EVWV"); and CGAS owns all of the Clinton
Assets.
Prior to the date hereof, the following transactions occurred:
1. EVOC formed EVPP GP LLC, a Delaware limited liability company ("EVPP
GP").
2. EVOC contributed its general partner interest in EVPP and its
general partner interest in EnerVest-Cargas, Ltd., a Texas limited
partnership ("XX Xxxxxx") to EVPP GP.
3. EVMP formed EVWV GP LLC, a Delaware limited liability company ("EVWV
GP").
4. EVMP contributed its general partner interest in EVWV to EVWV GP.
5. EVMP, certain members of management, and the EnCap Entities formed
EV Investors, L.P. ("EV Investors"), a Delaware limited partnership.
6. EVMP formed Operating Partnership GP.
7. Operating Partnership GP, EVMP, EVOC, the EnCap Entities and EV
Investors formed the Operating Partnership.
8. Operating Partnership GP contributed cash to Operating Partnership
in exchange for a 0.01% general partner interest in Operating
Partnership.
9. EVMP contributed the membership interest in EVWV GP and its limited
partner interest in EVPP (subject to debt of $10.3 million incurred
to purchase the Northern Louisiana properties (the "EVPP Debt")) to
Operating Partnership in exchange for a 7.71% limited partner
interest in Operating Partnership
10. EVOC contributed its 100% member interest in EVPP GP to Operating
Partnership in exchange for a 54.03% limited partner interest in
Operating Partnership.
11. The EnCap Entities contributed an aggregate net $16 million to
Operating Partnership in exchange for an aggregate 33.25% limited
partner interest in Operating Partnership.
12. The Operating Partnership issued a 5.00% Class B limited partner
interest to EV Investors.
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13. The Operating Partnership paid $16 million to Liberty Energy, LLC, a
Massachusetts limited liability company ("LEC") (and successor to
Liberty Energy Corporation), in exchange for LEC's limited
partnership interest in EVWV.
14. The Operating Partnership formed EVCG GP LLC ("EVCG GP"), a Delaware
limited liability company.
15. EVCG GP, as general partner, and CGAS, as limited partner, formed
CGAS Properties, L.P. ("Clinton Properties"), a Delaware limited
partnership.
16. EVMP formed GP LLC.
17. GP LLC, as general partner, and EVMP, as limited partner, formed the
General Partner.
18. The General Partner, as general partner, and EVMP, as limited
partner, formed the Partnership.
The transactions described in clauses (1)-(18) above are referred to
herein collectively as the "Prior Transactions."
It is further understood and agreed to by all parties that, on or prior to
the Closing Date, the following transactions will occur:
1. CGAS has formed CGH and assigned to it the right to receive the
Common Units and Subordinated Units that CGAS is entitled to receive
from the Partnership as described herein.
2. EVMP formed EVH and assigned to it the right to receive the Common
Units and Subordinated Units that EVMP and EVOC are entitled to
receive from the Partnership as described herein.
3. CGAS will contribute the Clinton Assets subject to existing xxxxxx
to Clinton Properties and following such transfer will own a 99.99%
interest as limited partner in Clinton Properties.
4. GP LLC will pay $288.30 to the General Partner to retain its a 0.01%
general partner interest in the General Partner.
5. EVMP will contribute its 100% member interest in the Operating
Partnership GP and a portion (3.44%) of its limited partner interest
in the Operating Partnership to the General Partner in exchange for
a 71.24% limited partner interest in the General Partner.
6. The EnCap Entities will contribute a portion (1.18%) of their
aggregate limited partner interest in the Operating Partnership to
the General Partner in exchange for an aggregate 23.75% limited
partner interest in the General Partner.
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7. EV Investors will contribute $144,150.00 to the General Partner for
a 5.00% limited partnership interest in the General Partner.
8. The General Partner will contribute its 100% member interest in the
Operating Partnership GP, its 4.63% limited partner interests in the
Operating Partnership to the Partnership and $144,150.00 in exchange
for (a) a 2% general partner interest in the Partnership and (b) the
Incentive Distribution Rights (as defined in Section 1.1 of the
Partnership Agreement).
9. EVOC will contribute its 58.30% limited partner interest in the
Operating Partnership to the Partnership in exchange for (a) 138,381
Common Units (as defined in Section 1.1 of the Partnership
Agreement) representing limited partner interests in the Partnership
to be issued to EVH, (b) 810,030 Subordinated Units (as defined in
Section 1.1 of the Partnership Agreement) representing limited
partner interests in the Partnership to be issued to EVH, and (c)
the right to receive $14,519,564.03 from the Offering Proceeds (as
defined below).
10. EVMP will contribute the remainder (4.27%) of its limited partner
interest in the Operating Partnership to the Partnership in exchange
for (a) 25,244 Subordinated Units representing limited partner
interests in the Partnership to be issued to EVH, and (b) the right
to receive $2,072,327.22 from the Offering Proceeds.
11. The EnCap Entities will contribute the remainder (32.07%) of their
limited partner interest in the Operating Partnership to the
Partnership in exchange for (a) 88,120 Common Units representing
limited partner interests in the Partnership, (b) 436,170
Subordinated Units representing limited partner interests in the
Partnership, and (c) the right to receive $8,935,488 from the
Offering Proceeds.
12. EV Investors will contribute its 5.00% limited partner interest in
the Operating Partnership to the Partnership in exchange for 155,000
Subordinated Units representing limited partner interests in the
Partnership.
13. CGAS will transfer its limited partner interest in EVCG to the
Partnership in exchange for (a) 343,255 Common Units representing
limited partner interests in the Partnership to be issued to CGH,
(b) 1,698,800 Subordinated Units representing limited partner
interests in the Partnership to be issued to CGH, and (c) the right
to receive $34,806,771.14 from the Offering Proceeds.
14. The public, through the underwriters, will contribute $72.54 million
in cash, $78.0 million of gross proceeds, net of the Underwriters'
discounts and commissions and a structuring fee (the "Offering
Proceeds"), to the Partnership in exchange for 3.9 million Common
Units representing a 50.3% limited partner interest in the
Partnership (the "Offering").
15. The Partnership will use the Offering Proceeds and the cash
contribution from the General Partner to (i) pay the underwriters'
structuring fee, (ii) pay approximately $2.0 million in offering
expenses (net of the Underwriters' discounts and commissions and
structuring fees) incurred by EVMP on behalf of the
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Partnership, (iii) contribute $10.35 million to the Operating
Partnership, and the Operating Partnership will repay the EVPP Debt
and (iv) distribute to EVMP, EVOC, EV Investors, the EnCap Entities
and CGAS a total of $60.33 million in the amounts to which they are
entitled with respect to each entity's respective contribution to
the Partnership.
16. The Partnership will contribute the limited partner interest in EVCG
to the Operating Partnership as a capital contribution.
17. The Operating Partnership will enter into $150 million revolving
credit facility with XX Xxxxxx Securities Inc., as administrative
agent, and the other lenders named therein (collectively with the
other financing documents entered into in connection therewith, the
"Credit Facility").
18. The agreements of limited partnership and the limited liability
company agreements of the aforementioned entities will be amended
and restated to the extent necessary to reflect the foregoing
transactions and any other transactions contemplated by the
Contribution Documents (as defined below).
19. If the Underwriters exercise their option to purchase any Option
Units within 30 days after the date of this Agreement as provided in
Section 4, the Partnership will use the net proceeds of the sale of
those Option Units to redeem a pro rata portion of the Common Units
issued to EVMP, EVOC, CGAS, and the EnCap Entities.
The transactions described above in clauses (l)-(19) or otherwise provided
for in the Contribution Documents (as defined below) together with the Prior
Transactions, are referred to as the "Transactions." In connection with the
Transactions, the parties to the Transactions have entered or will enter into
various bills of sale, assignments, conveyances, contribution agreements and
related documents (collectively, the "Contribution Documents"). The Omnibus
Agreement to be dated the Closing Date among the Partnership, the General
Partner, the GP LLC, the Operating Partnership and EVMP is referred to herein as
the "Omnibus Agreement." The Investor Rights Agreement to be dated the Closing
Date among EVMP, EVOC, EV Investors, CGAS, the EnCap Entities and EV Management,
L.P. is referred to herein as the "Investor Agreement." The Contribution
Documents, the Credit Facility, the Omnibus Agreement and the Investor Agreement
are referred to herein collectively as the "Transaction Documents."
1. DEFINITIONS. As used in this Agreement:
(i) "Disclosure Package" shall mean the Statutory Prospectus,
any Preliminary Prospectus together with any combination of one or
more of the Permitted Free Writing Prospectuses, if any, and any
other free writing prospectus that the parties hereto shall
hereafter expressly agree in writing to treat as part of the
Disclosure Package.
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(ii) "Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
(iii) "Execution Time" shall mean the date and time (3:10
p.m., Central Daylight Time) that this Agreement is executed and
delivered by the parties hereto.
(iv) "Issuer Free Writing Prospectus" shall mean an issuer
free writing prospectus, as defined in Rule 433.
(v) "Permitted Free Writing Prospectus" shall mean the
documents listed on Schedule III attached hereto, each "road show"
(as defined in Rule 433(h)(4) under the Act), if any, related to the
Offering contemplated hereby that is a "written communication" (as
defined in Rule 405 under the Act) (each such road show, a "Road
Show") and any other "free writing prospectus" (as defined in Rule
405 under the Act) to which the Underwriters and the Partnership
provide their prior consent.
(vi) "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in paragraph 5(a) below and any preliminary
prospectus included in the Registration Statement at the Effective
Date that omits Rule 430A Information.
(vii) "Prospectus" shall mean the prospectus relating to the
Units that is first filed pursuant to Rule 424(b) after the
Execution Time.
(viii) "Registration Statement" shall mean the registration
statement referred to in paragraph 5(a) below, including exhibits
and financial statements and any prospectus supplement relating to
the Units that is filed with the SEC pursuant to Rule 424(b) and
deemed part of such registration statement pursuant to Rule 430A, as
amended at the Execution Time and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes
effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be.
(ix) "Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the registration
statement referred to in Section 5(a) hereof.
(x) "Statutory Prospectus" shall mean the preliminary
prospectus relating to the Units that is included in the
registration statement relating to the Units immediately prior to
the Execution Time, including any document that is incorporated by
reference therein.
2. DESCRIPTION OF COMMON UNITS. The Partnership proposes to issue and sell
to the Underwriters 3,900,000 Common Units (the "Firm Units"). Solely for the
purpose of covering
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over-allotments in the sale of the Firm Units, the Partnership further proposes
to grant to the Underwriters the right to purchase up to an additional 585,000
Common Units (the "Option Units"), as provided in Section 4 of this Agreement.
The Firm Units and the Option Units are herein sometimes referred to as the
"Units" and are more fully described in the Prospectus hereinafter defined.
3. PURCHASE, SALE AND DELIVERY OF THE FIRM UNITS. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Partnership agrees to sell to the
Underwriters, and each such Underwriter agrees, severally and not jointly, (a)
to purchase from the Partnership, at a purchase price of $18.70 per unit, the
number of Firm Units set forth opposite the name of such Underwriter in Schedule
I hereto and (b) to purchase from the Partnership any additional number of
Option Units which such Underwriter may become obligated to purchase pursuant to
Section 4 hereof.
Delivery of the Firm Units will be in book-entry form through the
facilities of The Depository Trust Company, New York, New York ("DTC"). Delivery
of the documents required by Section 7 hereof with respect to the Units shall be
made at or prior to 11:00 a.m. on September 29, 2006 at the offices of Xxxxxx
and Xxxxx, LLP, 0000 XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 or at such other
place as may be agreed upon between X.X. Xxxxxxx & Sons, Inc. and the
Partnership (the "Place of Closing"), or at such other time and date not later
than five full business days thereafter as X.X. Xxxxxxx & Sons, Inc. and the
Partnership may agree, such time and date of payment and delivery being herein
called the "Closing Date."
The Partnership will cause its transfer agent to deposit as original issue
the Firm Units pursuant to the Full Fast Delivery Program of the DTC.
It is understood that an Underwriter, individually, may (but shall not be
obligated to) make payment on behalf of the other Underwriters whose funds shall
not have been received prior to the Closing Date for Units to be purchased by
such Underwriter. Any such payment by an Underwriter shall not relieve the other
Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Units to the
public upon the terms and conditions set forth in the Registration Statement
hereinafter defined.
4. PURCHASE, SALE AND DELIVERY OF THE OPTION UNITS. The Partnership hereby
grants an option to the Underwriters to purchase from the Partnership up to
585,000 Option Units, on the same terms and conditions as the Firm Units;
provided, however, that such option may be exercised only for the purpose of
covering any over-allotments that may be made by the Underwriters in the sale of
the Firm Units. No Option Units shall be sold or delivered unless the Firm Units
previously have been, or simultaneously are, sold and delivered.
The option is exercisable by the Underwriters at any time, and from time
to time, before the expiration of 30 days from the date of the Prospectus (or,
if such 30th day shall be a Saturday or Sunday or a holiday, on the next day
thereunder when the NASDAQ Global Market is open for trading), for the purchase
of all or part of the Option Units covered thereby, by notice given by X.X.
Xxxxxxx & Sons, Inc. to the Partnership in the manner provided in Section 13
hereof,
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setting forth the number of Option Units as to which the Underwriters are
exercising the option, and the date of delivery of said option Units, which date
shall not be more than five business days after such notice unless otherwise
agreed to by the Partnership and X.X. Xxxxxxx & Sons, Inc. The Underwriters may
terminate the option at any time, as to any unexercised portion thereof, by
giving written notice from X.X. Xxxxxxx & Sons, Inc. to the Partnership to such
effect.
The Underwriters shall make such allocation of the Option Units among them
as may be required to eliminate purchases of fractional Units.
Delivery of the Option Units will be in book-entry form through the
facilities of DTC. Delivery of the documents required by Section 7 hereof with
respect to the Units shall be made at the Place of Closing at or prior to 11:00
a.m. on the date designated in the notice given by X.X. Xxxxxxx & Sons, Inc. as
provided above, or at such other time and date as X.X. Xxxxxxx & Sons, Inc. and
the Partnership may agree (which may be the same as the Closing Date), such time
and date of payment and delivery being herein called the "Option Closing Date."
On the Option Closing Date, the Partnership Entities and EVMP shall provide the
Underwriters such representations, warranties, agreements, opinions, letters,
certificates and covenants with respect to the Option Units as are required to
be delivered on the Closing Date with respect to the Firm Units.
The Partnership will cause its transfer agent to deposit as original issue
the Option Units pursuant to the Full Fast Delivery Program of the DTC.
5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE EVEP PARTIES. The
EVEP Parties jointly and severally represent and warrant to and agree with each
Underwriter as set forth below; provided, however that the representations and
warranties of the EnCap Entities shall be several, as to themselves only, and
shall be limited to only Sections 5(a), (f), (h) and (q), each with respect
solely to statements and information specifically concerning and the EnCap
Entities or their ownership of Sponsor Units (as defined in Section 5(f):
(a) Registration; No Material Misstatements or Omissions. The
Registration Statement has heretofore become effective under the Act or,
with respect to any registration statement to be filed to register the
offer and sale of Units pursuant to Rule 462(b) under the Act, will be
filed with the Commission and become effective under the Act no later than
10:00 P.M., New York City time, on the date of determination of the public
offering price for the Units; no stop order of the Commission preventing
or suspending the use of any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus or the effectiveness of the Registration
Statement, has been issued, and no proceedings for such purpose have been
instituted or, to the Partnership's knowledge after due inquiry, are
contemplated by the Commission; the Registration Statement complied when
it became effective, complies as of the date hereof and, as amended or
supplemented, at the time of purchase, each additional time of purchase,
if any, and at all times during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Units,
will comply, in all material respects, with the requirements of the Act;
the Exchange Act Registration Statement on Form 8-A has
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become effective as provided in Section 12 of the Exchange Act; the
Registration Statement did not, as of the Effective Date, 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; each Preliminary Prospectus complied, at the time it was
filed with the Commission, and complies as of the date hereof, in all
material respects with the requirements of the Act; at no time during the
period that begins on the earlier of the date of such Preliminary
Prospectus and the date such Preliminary Prospectus was filed with the
Commission and ends at the time of purchase did or will any Preliminary
Prospectus, as then amended or supplemented, include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, and at no time during such period did or
will any Preliminary Prospectus, as then amended or supplemented, together
with any combination of one or more of the then-issued Permitted Free
Writing Prospectuses, if any, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; the Prospectus will comply, as of its date and
the date it is filed with the Commission, the time of purchase, each
additional time of purchase, if any, and at all times during which a
prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Units, will comply, in all material respects,
with the requirements of the Act (including, without limitation, Section
10(a) of the Act); at no time during the period that begins on the earlier
of the date of such Prospectus and the date the Prospectus is filed with
the Commission and ends at the later of the time of purchase, the latest
additional time of purchase, if any, and the end of the period during
which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Units did or will the
Prospectus, as then amended or supplemented, include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; at no time during the period that begins
on the date of each such Permitted Free Writing Prospectus and ends at the
time of purchase did or will any such Permitted Free Writing Prospectus
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or conflict
with the information contained in the Registration Statement, the
Preliminary Prospectus or the Prospectus; provided, however, that the EVEP
Parties make no representation or warranty in this Section 5(a) with
respect to any statement contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any Permitted Free Writing
Prospectus in reliance upon and in conformity with information concerning
an Underwriter and furnished in writing by or on behalf of such
Underwriter through you to the Partnership expressly for use in the
Registration Statement, such Preliminary Prospectus, the Prospectus or
such Permitted Free Writing Prospectus. If required, all Permitted Free
Writing Prospectuses were preceded by, or accompanied with, a statutory
prospectus meeting the requirements of Section 10(a) of the Act as
required by Rule 164 under the Act.
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(b) Prospectuses Used in Offering. Prior to the execution of this
Agreement, the Partnership has not, directly or indirectly, offered or
sold any Units by means of any "prospectus" (within the meaning of the
Act) or used any "prospectus" (within the meaning of the Act) in
connection with the offer or sale of the Units, in each case other than
the Preliminary Prospectuses and the Permitted Free Writing Prospectuses,
if any; the Partnership has not, directly or indirectly, prepared, used or
referred to any Permitted Free Writing Prospectus except in compliance
with Rules 164 and 433 under the Act; assuming that such Permitted Free
Writing Prospectus is so sent or given after the Registration Statement
was filed with the Commission (and after such Permitted Free Writing
Prospectus was, if required pursuant to Rule 433(d) under the Act, filed
with the Commission), the sending or giving, by any Underwriter, of any
Permitted Free Writing Prospectus will satisfy the provisions of Rule 164
and Rule 433 (without reliance on subsections (b), (c) and (d) of Rule
164); each of the Preliminary Prospectuses is a prospectus that, other
than by reason of Rule 433 under the Act, satisfies the requirements of
Section 10 of the Act, including a price range where required by rule;
neither the Partnership nor the Underwriters are disqualified, by reason
of subsection (f) or (g) of Rule 164 under the Act, from using, in
connection with the offer and sale of the Units, "free writing
prospectuses" (as defined in Rule 405 under the Act) pursuant to Rules 164
and 433 under the Act; the Partnership is not an "ineligible issuer" (as
defined in Rule 405 under the Act) as of the eligibility determination
date for purposes of Rules 164 and 433 under the Act with respect to the
Offering contemplated by the Registration Statement; the parties hereto
agree and understand that the content of any and all "road shows" (as
defined in Rule 433(h) under the Act) related to the Offering is solely
the property of the Partnership; the Partnership has caused there to be
made available at least one version of a "bona fide electronic road show"
(as defined in Rule 433(h)(5) under the Act) in a manner that, pursuant to
Rule 433(d)(8)(ii) under the Act, causes the Partnership not to be
required, pursuant to Rule 433(d) under the Act, to file with the
Commission any road show.
(c) Other Sales. The Partnership has not sold or issued any Units
during the six-month period preceding the date of the Preliminary
Prospectus, other than pursuant to acquisitions, employee benefit plans,
qualified options plans or other employee compensation plans or pursuant
to outstanding options, rights or warrants described in the Disclosure
Package and the Prospectus.
(d) Formation and Due Qualification. Formation and Due
Qualification. Each of the Partnership Entities has been duly formed or
incorporated and is validly existing as a limited partnership or limited
liability company, as the case may be, in good standing under the laws of
its respective jurisdiction of formation or incorporation, and is, or at
the Closing Date will be, duly registered or qualified to do business and
is in good standing as a foreign limited partnership or foreign limited
liability company, as the case may be, in each jurisdiction in which its
ownership or lease of property or the conduct of its businesses requires
such registration or qualification, except where the failure so to
register or qualify would not (i) have a material adverse effect on the
consolidated financial position, partners' or members' equity, results of
operations, business or prospects of the Partnership Entities taken as a
whole (a "Material Adverse Effect") or (ii) subject the limited partners
of the Partnership to any material liability or disability, as
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set forth under its name on Schedule II to this Agreement. Each of the
Partnership Entities has all limited partnership or limited liability
company, as the case may be, power and authority necessary to own or lease
its properties currently owned or leased or to be owned or leased at the
Closing Date, to assume the liabilities assumed or being assumed by it
pursuant to the Transaction Documents and to conduct its business as
currently conducted and as to be conducted at the Closing Date, in each
case in all material respects as described in the Prospectus.
(e) Ownership of the General Partner Interest in the Partnership. At
the Closing Date and the Option Closing Date, after giving effect to the
Transactions, the General Partner will be the sole general partner of the
Partnership with a 2% general partner interest in the Partnership. Such
general partner interest will be duly authorized and validly issued in
accordance with the partnership agreement of the Partnership (as the same
may be amended or restated at or prior to the Closing Date, the
"Partnership Agreement") and will be fully paid (to the extent required
under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-303 and 17-607 of the
Delaware Revised Uniform Limited Partnership Act (the "Delaware LP Act")),
and the General Partner will own such general partner interest free and
clear of all liens, encumbrances (except restrictions on transferability
described in the Prospectus), security interests, equities, charges or
claims.
(f) Ownership of Sponsor Units and the Incentive Distribution
Rights. Assuming no purchase by the Underwriters of any Option Units on
the Closing Date, at the Closing Date, after giving effect to the
Transactions, (i) EVH will own 163,625 Common Units and 810,030
Subordinated Units, (ii) EV Investors will own 155,000 Subordinated Units,
(iii) CGH will own 343,255 Common Units and 1,698,800 Subordinated Units,
(iv) the EnCap Entities will own 88,120 Common Units and 436,170
Subordinated Units (all such Common Units and Subordinated Units being
collectively referred to herein as the "Sponsor Units") as described in
the Prospectus and (v) the General Partner will own all of the incentive
distribution rights in the Partnership (as defined in the Partnership
Agreement, the "Incentive Distribution Rights"); all of such Sponsor Units
and Incentive Distribution Rights 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 nonassessable (except
as such nonassessability may be affected by Sections 17-303 and 17-607 of
the Delaware LP Act and as otherwise described in the Prospectus under the
caption "The Partnership Agreement--Limited Liability," "Risk
Factors--Risks Inherent in an Investment in Us--Your liability may not be
limited if a court finds that unitholder action constitutes control of our
business" and "Risk Factors--Risks Inherent in an Investment in
Us--Unitholders may have liability to repay distributions that were
wrongfully distributed to them"); and at the Closing Date, EVMP, EV
Investors, CGAS and the EnCap Entities will own their respective Sponsor
Units and the General Partner will own the Incentive Distribution Rights
free and clear of all liens, encumbrances (except restrictions on
transferability as described in the Prospectus), security interests,
equities, charges or claims.
11
(g) Valid Issuance of the Units. At the Closing Date or the Option
Closing Date, as the case may be, the Firm Units or the Option Units, as
the case may be, and the limited partner interests represented thereby,
will be duly authorized by the Partnership Agreement and, when issued and
delivered to the Underwriters against payment therefor in accordance with
the terms hereof will be validly issued, fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by Sections 17-303 and 17-607 of the
Delaware LP Act and as otherwise described in the Prospectus under the
caption "The Partnership Agreement--Limited Liability," "Risk
Factors--Risks Inherent in an Investment in Us--Your liability may not be
limited if a court finds that unitholder action constitutes control of our
business" and "Risk Factors--Risks Inherent in an Investment in
Us--Unitholders may have liability to repay distributions that were
wrongfully distributed to them"); and other than the Sponsor Units and the
Incentive Distribution Rights, the Units will be the only limited partner
interests of the Partnership issued and outstanding at the Closing Date or
the Option Closing Date.
(h) Ownership of Partnership Interests in the General Partner. At
the Closing Date and the Option Closing Date, after giving effect to the
Transactions, GP LLC will own 100% of the outstanding general partner
interests in the General Partner and EVMP, Encap Entities and EV Investors
will own 100% of the outstanding limited partner interests in the General
Partner; all of such interests will be duly authorized and validly issued
in accordance with the limited partnership agreement of the General
Partner (as the same may be amended or restated at or prior to the Closing
Date, the "General Partner Partnership Agreement")) and will be fully paid
(to the extent required under the General Partner LP Agreement) and
nonassessable (except as such nonassessability may be affected by Section
17-303 and 17-607 of the Delaware LP Act), and at the Closing Date, GP
LLC, EVMP, the EnCap Entities and EV Investors will own such interests
free and clear of all liens, encumbrances (except as described in the
Prospectus), security interests, equities, charges or claims.
(i) Ownership of Limited Liability Company Interests in the GP LLC.
At the Closing Date and the Option Closing Date, after giving effect to
the Transactions, EVMP will own 100% of the outstanding limited liability
company interests in GP LLC; all of such interests will be duly authorized
and validly issued in accordance with the limited liability company
agreement of the GP LLC (as the same may be amended or restated at or
prior to the Closing Date, the "GP LLC LLC Agreement"). All of such
interests will be duly authorized and validly issued in accordance with
the GP LLC LLC Agreement, fully paid (to the extent required under the GP
LLC LLC Agreement) and nonassessable (except as such nonassessability may
be affected by Section 18-607 of the Delaware Limited Liability Company
Act (the "Delaware LLC Act")), and EVMP will own such interests free and
clear of all liens, encumbrances (except as described in the Prospectus),
security interests, equities, charges or claims.
(j) Ownership of Partnership Interests in the Operating Partnership.
At the Closing Date and the Option Closing Date, after giving effect to
the Transactions, Operating Partnership GP will own 100% of the
outstanding general partner interests in the Operating Partnership and the
Partnership will own 100% of the outstanding limited
12
partner interests in the Operating Partnership; all of such interests will
be duly authorized and validly issued in accordance with the limited
partnership agreement of the Operating Partnership (as the same may be
amended or restated at or prior to the Closing Date, the "Operating
Partnership LP Agreement")) and will be fully paid (to the extent required
under the Operating Partnership LP Agreement) and nonassessable (except as
such nonassessability may be affected by Section 17-303 and 17-607 of the
Delaware LP Act), and Operating Partnership GP and the Partnership will
own such interests free and clear of all liens, encumbrances (except as
described in the Prospectus), security interests, equities, charges or
claims.
(k) Ownership of Limited Liability Company Interests in the
Operating Partnership GP. At the Closing Date and the Option Closing Date,
after giving effect to the Transactions, the Partnership will own 100% of
the outstanding limited liability company interests in Operating
Partnership GP; all of such interests will be duly authorized and validly
issued in accordance with the limited liability company agreement of the
Operating Partnership GP (as the same may be amended or restated at or
prior to the Closing Date, the "Operating Partnership GP LLC Agreement"),
and will be fully paid (to the extent required under the Operating
Partnership GP LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act), and the Partnership will own such interests free and clear of all
liens, encumbrances, security interests, equities, charges or claims.
(l) Ownership of the Subsidiaries. At the Closing Date and the
Option Closing Date, after giving effect to the Transactions, the
Partnership will, directly or indirectly, own 100% of the limited
liability company interests or partnership interests, as the case may be,
in EVPP GP LLC, EVWV GP LLC, EVCG GP LLC, EVPP, EVWV, Clinton Properties,
XX Xxxxxx and LCOC (the "Subsidiaries," together with the Operating
Partnership and the Operating Partnership GP, the "Operating
Subsidiaries") free and clear of all liens, encumbrances, security
interests, equities, charges and other claims, except for liens created
pursuant to the Credit Facility. At the Closing Date and the Option
Closing Date, such limited liability company interests or partnership
interests, as the case may be, will be duly authorized and validly issued
in accordance with the limited liability company or limited partnership
agreements, as the case may be, of the respective Subsidiaries, and will
be fully paid (to the extent required under their respective limited
liability company agreement or limited partnership agreement) and
non-assessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act, in the case of a Delaware limited
liability company, or Section 17-607 of the Delaware LP Act, in the case
of a Delaware limited partnership).
(m) No Other Subsidiaries. Other than ownership interests in the
Operating Subsidiaries, the Partnership 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.
Other than its ownership of its partnership interests in the Partnership,
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.
13
(n) No Preemptive Rights, Registration Rights or Options. Except as
described in the Disclosure Package and the Prospectus, there are no
options, warrants, preemptive rights or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
partnership or limited liability company interests in any Partnership
Entity. Neither the filing of the Registration Statement nor the offering
or sale of the Units as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any Units or other
securities of any of the Partnership Entities.
(o) Authority and Authorization. The Partnership has all requisite
power and authority to issue, sell and deliver (i) the Units, in
accordance with and upon the terms and conditions set forth in this
Agreement, the Partnership Agreement and the Registration Statement, the
Disclosure Package and the Prospectus and (ii) the Sponsor Units and
Incentive Distribution Rights, in accordance with and upon the terms and
conditions set forth in the Partnership Agreement and the Transaction
Documents. At the Closing Date and the Option Closing Date, all corporate,
partnership and limited liability company action, as the case may be,
required to be taken by the Partnership Entities or any of their
stockholders, members or partners for the authorization, issuance, sale
and delivery of the Units, the Sponsor Units and Incentive Distribution
Rights, the execution and delivery of the Operative Agreements (as defined
in Section 4(q)) and the consummation of the transactions (including the
Transactions) contemplated by this Agreement and the Operative Agreements,
shall have been validly taken.
(p) Authorization of Underwriting Agreement. This Agreement has been
duly authorized and validly executed and delivered by each of the EVEP
Parties.
(q) Enforceability of Other Agreements. At or before the Closing
Date:
(i) the Partnership Agreement (in substantially the form
included in the Prospectus) will have been duly authorized, executed
and delivered by the General Partner and the Sponsor Entities and
will be a valid and legally binding agreement of the General Partner
and the Sponsor Entities enforceable against each of them in
accordance with its terms;
(ii) the General Partner Partnership Agreement, GP LLC LLC
Agreement, Operating Partnership LP Agreement, Operating Partnership
GP LLC Agreement and the limited liability company agreement or
limited partnership agreement, as applicable, of each of the
Subsidiaries (together with the Partnership Agreement (as described
above), the "Partnership Entity Operative Agreements") will have
been duly authorized, executed and delivered by the parties thereto
and will be valid and legally binding agreements of the parties
thereto, enforceable against such parties in accordance with their
respective terms; and
(iii) each of the Transaction Documents will have been duly
authorized, executed and delivered by the parties thereto and will
be valid and legally binding agreements of the parties thereto,
enforceable against such parties in accordance with their respective
terms;
14
provided that, with respect to each agreement described in this Section
5(q), the enforceability thereof may be limited by (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (ii) public policy,
applicable law relating to fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing. The Partnership Entity
Operative Agreements and the Transaction Documents are herein collectively
referred to as the "Operative Agreements."
(r) No Conflicts. None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of this
Agreement or the Operative Agreements by the Partnership Entities which
are parties hereto or thereto, or the consummation of the transactions
contemplated hereby and thereby (including the Transactions) (i) conflicts
or will conflict with or constitutes or will constitute a violation of the
partnership agreement, limited liability company agreement, certificate of
formation or conversion, certificate or articles of incorporation, bylaws
or other constituent document of any of the Partnership Entities, (ii)
conflicts or will conflict with or constitutes or will constitute a breach
or violation of, or a default (or an event which, with notice or lapse of
time or both, would constitute such a default) under any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which any of the Partnership Entities is a party or by which
any of them or any of their respective properties may be bound, (iii)
violates or will violate any statute, law or regulation or any order,
judgment, decree or injunction of any court or governmental agency or body
directed to any of the Partnership Entities or any of their properties in
a proceeding to which any of them or their property is a party or (iv)
results or will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of any of the Partnership
Entities (other than liens created under the Credit Facility), which
conflicts, breaches, violations, defaults or liens, in the case of clauses
(ii), (iii) or (iv), would, individually or in the aggregate, have a
Material Adverse Effect or would materially impair the ability of any of
the Partnership Entities to perform their obligations under this Agreement
or the Operative Agreements.
(s) No Consents. No permit, consent, approval, authorization, order,
registration, filing or qualification ("Consent") of or with any court,
governmental agency or body having jurisdiction over any of the
Partnership Entities or any of their respective properties is required in
connection with the offering, issuance and sale by the Partnership of the
Units, the execution, delivery and performance of this Agreement and the
Operative Agreements by the Partnership Entities party hereto and thereto,
or the consummation by the Partnership Entities of the transactions
contemplated hereby and thereby (including the Transactions), except (i)
as described in the Registration Statement, the Prospectus and the
Disclosure Package, (ii) for registration of the Units under the 1933 Act
and Consents required under the Securities Exchange Act of 1934, as
amended (the "1934 Act") and applicable state securities or "Blue Sky"
laws in connection with the purchase and distribution of the Units by the
Underwriters, (iii) for such Consents that have been, or prior to the
Closing Date will be, obtained, and (iv) for such Consents which, if not
obtained, would not, individually or in the aggregate, have a
15
Material Adverse Effect or materially impair the ability of any of the
Partnership Entities to perform their obligations under this Agreement or
the Operative Agreements.
(t) No Default. None of the Partnership Entities is (i) in violation
of its partnership agreement, limited liability company agreement,
certificate of formation or conversion, certificate or articles of
incorporation, bylaws or other constituent document, (ii) in violation of
any law, statute, ordinance, administrative or governmental rule or
regulation applicable to it or of any order, judgment, decree or
injunction of any court or governmental agency or body having jurisdiction
over it or (iii) in breach, default (or an event which, with notice or
lapse of time or both, would constitute such a default) or violation in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which it is a party or
by which it or any of its properties may be bound, which breach, default
or violation in the case of clause (ii) or (iii) would, if continued, have
a Material Adverse Effect or materially impair the ability of any of the
Partnership Entities to perform their obligations under this Agreement or
the Operative Agreements. To the knowledge of the EVEP Parties, no third
party to any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any of the Partnership Entities is a
party or by which any of them is bound or to which any of their properties
is subject, is in breach, default or violation of any such agreement,
which breach, default or violation would, if continued, have a Material
Adverse Effect or materially impair the ability of any of the Partnership
Entities to perform their obligations under this Agreement or the
Operative Agreements.
(u) Conformity of Securities to Descriptions in the Disclosure
Package and the Prospectus. The Units, when issued and delivered in
accordance with the terms of the Partnership Agreement against payment
therefor as provided herein, and the Sponsor Units and the Incentive
Distribution Rights, when issued and delivered in accordance with the
terms of the Partnership Agreement, will conform in all material respects
to the descriptions thereof contained in the Registration Statement, the
Prospectus and the Disclosure Package.
(v) Independent Public Accountants. The accountants, Deloitte &
Touche LLP, who have certified or shall certify the audited financial
statements included in the Registration Statement, the Preliminary
Prospectus and the Prospectus (or any amendment or supplement thereto),
were independent registered public accountants with respect to the
Partnership and the General Partner as required by the 1933 Act and the
1933 Act Rules and Regulations during the periods covered by the financial
statements on which they reported.
(w) Financial Statements. As of June 30, 2006, the Partnership would
have had, on the consolidated pro forma basis indicated in the Prospectus
(and any amendment or supplement thereto), a capitalization as set forth
therein. The historical financial statements (including the related notes
and supporting schedules) included in the Registration Statement, the
Preliminary Prospectus and the Prospectus, together with the related notes
(and any amendment or supplement thereto) comply as to form in all
material respects with the requirements of Regulation S-X under the 1933
Act and
16
present fairly in all material respects the financial position, results of
operations and cash flows of the entities purported to be shown thereby on
the basis stated therein at the respective dates or for the respective
periods to which they apply and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved, except to the extent disclosed therein. Any pro
forma financial statements or other pro forma financial information set
forth in the Registration Statement, the Prospectus and the Disclosure
Package (and any amendment or supplement thereto) is accurately presented
in all material respects and prepared on a basis consistent with the
audited and unaudited historical financial statements and pro forma
financial statements, as applicable, from which it has been derived. The
pro forma financial statements of the Partnership included in the
Registration Statement, the Preliminary Prospectus and the Prospectus (and
any amendment or supplement thereto) have been prepared in all material
respects in accordance with the applicable requirements of Article 11 of
Regulation S-X of the Commission; the assumptions used in the preparation
of such pro forma financial statements are, in the opinion of the
management of the General Partner, reasonable; and the pro forma
adjustments reflected in such pro forma financial statements have been
properly applied to the historical amounts in compilation of such pro
forma financial statements. There are no financial statements (historical
or pro forma) that are required to be included in the Registration
Statement, the Prospectus and the Disclosure Package that are not included
as required.
(x) Independent Petroleum Engineers. Xxxxxx, Xxxxxxxxx & Associates,
Inc. Services, whose report dated December 31, 2005 is referenced in the
Registration Statement, Prospectus and Preliminary Prospectus and who has
delivered the letter referred to in Section 7(h) hereof, was, as of the
date of such report, and is, as of the date hereof, an independent reserve
engineer with respect to the Partnership.
(y) Title to Real Property. Upon consummation of the Transactions on
the Closing Date, the Partnership Entities will have good, valid and
indefeasible title to all of the interests in oil and gas properties
underlying the Partnership Entities estimates of their net proved reserves
contained in the Prospectus and to all other real and personal property
reflected in the Registration Statement, the Prospectus and any Disclosure
Package as assets owned by them, in each case, free and clear of all (i)
liens and security interests or (ii) other claims and other encumbrances
(other than liens or security interests) except, in each case, (1) as
described, and subject to the limitations contained, in the Registration
Statement, the Prospectus and the Disclosure Package or (2) such as do not
materially interfere with the use of such properties taken as a whole as
they have been used in the past and are proposed to be used in the future
as described, and subject to limitations contained, in the Registration
Statement, the Prospectus and the Disclosure Package; provided that, with
respect to any real property and buildings held under lease by any
Partnership Entity, such real property and buildings are held under valid
and subsisting and enforceable leases with such exceptions as do not
materially interfere with the use of the properties of the Partnership
Entities taken as a whole as they have been used in the past as described,
subject to the limitations contained, in the Registration Statement, the
Prospectus and the Disclosure Package and are proposed to be used in the
future as described in contained in the Registration Statement, the
Prospectus and the Disclosure Package; the leases, mineral interests,
operating agreements and other contract rights to
17
which the Partnership Entities are a party give the Partnership Entities
the right, in all material respects, to explore, develop or produce
hydrocarbons as described, and subject to the limitations contained, in
the Registration Statement, the Prospectus and the Disclosure Package. The
care taken by the Partnership Entities in acquiring or otherwise procuring
such leases or mineral interests was generally consistent with standard
industry practices in the areas in which the Partnership Entities operate
for acquiring or procuring leases and interests therein to explore,
develop or produce hydrocarbons.
(z) Information Underlying Reserve Report. The factual information
underlying the estimates of pro forma reserves of the Partnership
Entities, which was supplied by the Partnership Entities to Xxxxxx,
Xxxxxxxxx & Associates, Inc. For purposes of preparing the reserve
reports, the estimates of pro forma net proved reserves and standardized
measure attributable thereto, and the letter (the "Reserve Report Letter")
of Xxxxxx, Xxxxxxxxx & Associates, Inc. included as an annex to the
Prospectus, including, without limitation, production volumes, costs of
operation and development, current prices for production, agreements
relating to current and future operations and sales of production, was
true and correct in all material respects on the dates such estimates were
made and such information was supplied and was prepared in accordance with
customary industry practices; other than normal production of the reserves
and intervening market commodity price fluctuations, the Partnership
Entities are not aware of any facts or circumstances that would result in
a material adverse change in the reserves, or the present value of future
net cash flows therefrom, as described in the Prospectus and as reflected
in the Reserve Report Letter; estimates of such reserves and present
values as described in the Pricing Prospectus and reflected in the Reserve
Report Letter comply in all material respects with the applicable
requirements of Regulation S-X and Industry Guide 2 under the Securities
Act.
(aa) No Material Adverse Change. None of the Partnership Entities
has sustained, since the date of the latest audited financial statements
included in the Registration Statement, the Prospectus and the Disclosure
Package, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, investigation,
order or decree, otherwise than as set forth or contemplated in the
Registration Statement, the Prospectus and the Disclosure Package. Except
as disclosed in the Registration Statement, the Prospectus and the
Disclosure Package (or any amendment or supplement thereto), subsequent to
the respective dates as of which such information is given in the
Registration Statement, the Prospectus and the Disclosure Package (or any
amendment or supplement thereto), (i) none of the Partnership Entities has
incurred any liability or obligation, indirect, direct or contingent, or
entered into any transactions, not in the ordinary course of business,
that, singly or in the aggregate, is material to the Partnership Entities,
(ii) there has not been any material change in the capitalization, or
material increase in the short-term debt or long-term debt, of any
Partnership Entity and (iii) there has not been any material adverse
change, or any development involving or which may reasonably be expected
to involve, singly or in the aggregate, a prospective material adverse
change in or affecting the general affairs, business, prospects,
properties, management, condition (financial or other), partners' equity,
members' equity, net worth or results of operations of the Partnership
Entities.
18
(bb) Legal Proceedings or Contracts to be Described or Filed. There
are no legal or governmental proceedings pending or, to the knowledge of
the EVEP Parties, threatened, against any of the Partnership Entities, or
to which any of the Partnership Entities is a party, or to which any of
their respective properties is subject, that are required to be described
in the Registration Statement, the Prospectus and the Disclosure Package
but are not described as required, and there are no agreements, contracts,
indentures, leases or other instruments that are required to be described
in the the Registration Statement, the Prospectus and the Disclosure
Package or to be filed as exhibits to the Registration Statement that are
not described or filed as required by the 1933 Act or the 1933 Act Rules
and Regulations.
(cc) Certain Relationships and Related Transactions. No
relationship, direct or indirect, exists between or among any Partnership
Entity on the one hand, and the directors, managers, officers, members,
partners, stockholders, customers or suppliers of any Partnership Entity
on the other hand, that is required to be described in the Prospectus and
is not so described. There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business)
or guarantees of indebtedness by any Partnership Entity to or for the
benefit of any of the officers, directors or managers of any Partnership
Entity or their respective family members, except as disclosed in the
Registration Statement, the Prospectus and the Disclosure Package. No
Partnership Entity has, in violation of the Xxxxxxxx-Xxxxx Act of 2002,
directly or indirectly, extended or maintained credit, arranged for the
extension of credit or renewed an extension of credit, in the form of a
personal loan to or for any director, manager or executive officer of any
Partnership Entity.
(dd) Rights-of-Way. Upon consummation of the Transactions on the
Closing Date, each of the Partnership Entities will have such easements,
rights-of-way, permits or licenses (collectively, "rights-of-way") and
consents with respect to the transfer of any of the foregoing, as are
necessary to conduct its business in the manner described, and subject to
the limitations contained, in the Registration Statement, the Prospectus
and the Disclosure Package, except for (i) qualifications, reservations
and encumbrances that would not have a Material Adverse Effect and (ii)
such rights-of-way or consents that, if not obtained, would not have,
individually or in the aggregate, a Material Adverse Effect; other than as
set forth, and subject to the limitations contained, in the Registration
Statement, the Prospectus and the Disclosure Package, each of the
Partnership Entities has, or upon consummation of the Transactions at the
Closing Date will have, fulfilled and performed all of its material
obligations with respect to such rights-of-way or consents and no event
has occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or would result in any impairment of the
rights of the holder of any such rights-of-way or consents, except for
such revocations, terminations and impairments that would not have a
Material Adverse Effect; and, except as described in the Registration
Statement, the Prospectus and the Disclosure Package, none of such
rights-of-way or consents contains any restriction that is materially
burdensome to the business of the Partnership Entities, taken as a whole.
(ee) Sufficiency of Contribution Documents. The Contribution
Documents were or will be legally sufficient to transfer or convey to the
Operating Subsidiaries
19
satisfactory title to, or valid rights to use or manage, all properties
not already held by them that are, individually or in the aggregate,
required to enable the Partnership and the Subsidiaries to conduct their
operations (in all material respects as contemplated by the Prospectus),
subject to the conditions, reservations and limitations contained in the
Contribution Documents and those set forth in the Prospectus. The
Operating Subsidiaries, upon execution and delivery of the Contribution
Documents, succeeded or will succeed in all material respects to the
business, assets, properties, liabilities and operations reflected by the
pro forma financial statements of the Partnership included in the
Prospectus, except as disclosed in the Prospectus and the Contribution
Documents.
(ff) Permits. Each of the Partnership Entities has, or at the
Closing Date will have, such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory authorities
("permits") as are necessary to own its properties and to conduct its
business in the manner described in the Disclosure Package and the
Prospectus, subject to such qualifications as may be set forth in the
Disclosure Package and the Prospectus and except for such permits that, if
not obtained, would not, individually or in the aggregate, have a Material
Adverse Effect; except as set forth in the Registration Statement, the
Prospectus and the Disclosure Package, each of the Partnership Entities
has, or at the Closing Date will have, fulfilled and performed all its
material obligations with respect to such permits which are or will be due
to have been fulfilled and performed by such date and no event has
occurred that would prevent the permits from being renewed or reissued or
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any impairment of the rights of the
holder of any such permit, except for such non-renewals, non-issuances,
revocations, terminations and impairments that would not, individually or
in the aggregate, have a Material Adverse Effect.
(gg) Books and Records. Each Partnership Entity (i) makes and keeps
books, records and accounts, which, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of its assets and (ii)
maintains systems of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of its financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for its assets; (C) access to its assets is permitted only
in accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(hh) Disclosure Controls. The General Partner has established and
maintains disclosure controls and procedures (as such term is defined in
Rule 13a-14 under the 1934 Act), which (i) are designed to ensure that
material information relating to the Partnership, including its
consolidated subsidiaries, is made known to the General Partner's
principal executive officer and its principal financial officer by others
within those entities, and (ii) are effective in all material respects to
perform the functions for which they were established.
20
(ii) Tax Returns. Each of the Partnership Entities has filed (or has
obtained extensions with respect to) all material federal, state, local
and foreign income and franchise tax returns required to be filed through
the date hereof, which returns are complete and correct in all material
respects, and has timely paid all taxes due thereon, other than those (i)
which are being contested in good faith and for which adequate reserves
have been established in accordance with generally accepted accounting
principles or (ii) which, if not paid, would not have a Material Adverse
Effect.
(jj) Investment Company. None of the Partnership Entities is now,
and after sale of the Units to be sold by the Partnership hereunder and
application of the net proceeds from such sale as described in the
Prospectus under the caption "Use of Proceeds" will be an "investment
company" or a company "controlled by" an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(kk) Environmental Compliance. The Partnership Entities (i) are in
compliance with any and all applicable federal, state and local laws and
regulations relating to the protection of human health and safety and the
environment or imposing liability or standards of conduct concerning any
Hazardous Material (as hereinafter defined) ("Environmental Laws"), (ii)
have received all permits required of them under applicable Environmental
Laws to conduct their respective businesses, (iii) are in compliance with
all terms and conditions of any such permit and (iv) do not have any
liability in connection with the release into the environment of any
Hazardous Material, except, in each case, where such noncompliance with
Environmental Laws, failure to receive required permits, failure to comply
with the terms and conditions of such permits or liability would not,
individually or in the aggregate, have a Material Adverse Effect. The term
"Hazardous Material" means (A) any "hazardous substance" as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (B) any "hazardous waste" as defined in the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or petroleum
product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental
Law.
(ll) Xxxxxxxx-Xxxxx Act of 2002. The Partnership is in compliance in
all material respects with all applicable provisions of the Xxxxxxxx-Xxxxx
Act of 2002 and the rules and regulations of the SEC and the NASDAQ Global
Market that pertain thereto that are effective.
(mm) No Labor Dispute. No labor dispute with the employees of the
Partnership Entities exists or, to the knowledge of any of the EVEP
Parties, is imminent or threatened that is reasonably likely to result in
a Material Adverse Effect.
(nn) Insurance. A Partnership Entity, EVMP or EVOC maintains
insurance covering the properties, operations, personnel and businesses of
the Partnership Entities against such losses and risks and in such amounts
as is reasonably adequate for the conduct of their respective businesses
and the value of their respective properties and as
21
is customary for companies engaged in similar businesses in similar
industries. None of the Partnership Entities, EVMP or EVOC has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to
continue such insurance (including after giving effect to the
Transactions), and all such insurance is outstanding and duly in force on
the date hereof and will be outstanding and duly in force on the Closing
Date.
(oo) Litigation. Except as described in the Registration Statement,
the Prospectus and the Disclosure Package, there is (i) no action, suit or
proceeding before or by any court, arbitrator or governmental agency, body
or official, domestic or foreign, now pending or, to the knowledge of the
EVEP Parties, threatened, to which any of the Partnership Entities is or
may be a party or to which the business or property of any of the
Partnership Entities is or may be subject, (ii) no injunction, restraining
order or order of any nature issued by a federal or state court or foreign
court of competent jurisdiction to which any of the Partnership Entities
is or may be subject, that, in the case of clauses (i) and (ii) above, is
reasonably likely to (A) individually or in the aggregate have a Material
Adverse Effect, (B) prevent or result in the suspension of the offer,
issuance or sale of the Units, or (C) in any manner draw into question the
validity of this Agreement.
(pp) No Distribution of Other Offering Materials. None of the
Partnership Entities have distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Units,
will not distribute, any prospectus (as defined under the 0000 Xxx) in
connection with the offering and sale of the Units other than any
Prospectus, any Preliminary Prospectus, or any Permitted Free Writing
Prospectus.
(qq) Listing. The Units have been approved for quotation on the
NASDAQ Global Market, subject only to official notice of issuance.
(rr) Directed Unit Sales. None of the Directed Units (as defined in
Section 6(a)(xvi) below) distributed in connection with the Directed Unit
Program (as defined in Section 6(a)(xvi) below) will be offered or sold
outside of the United States. None of the Partnership Entities has
offered, or caused the Underwriters to offer, Units to any person pursuant
to the Directed Unit Program with the specific intent to unlawfully
influence (i) a customer or supplier of the Partnership Entities to alter
the customer's or supplier's level or type of business with the
Partnership Entities, or (ii) a trade journalist or publication to write
or publish favorable information about the Partnership Entities or their
products or services.
(ss) Brokers. Except as described in the Prospectus, there are no
contracts, agreements or understandings between any Partnership Entity and
any person that would give rise to a valid claim against any Partnership
Entity or any Underwriter for a brokerage commission, finder's fee or
other like payment in connection with this offering of the Units.
(tt) Market Stabilization. None of the Partnership Entities (i) has
taken, and none of such persons shall take, directly or indirectly, any
action designed to cause or
22
result in, or which has constituted or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of the Units
to facilitate the sale or resale of the Units in violation of any law,
rule or regulation or (ii) since the initial filing of the Registration
Statement, except as contemplated by this Agreement, (A) has sold, bid
for, purchased or paid anyone any compensation for soliciting purchases of
the Units or (B) has paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the
Corporation.
(uu) Statistical and Market-Related Data. All statistical or
market-related data included in the Registration Statement, the
Preliminary Prospectuses, and the Disclosure Package, if any, are based on
or derived from sources that the Partnership reasonably believes to be
reliable and accurate, and the Partnership has obtained the written
consent to the use of such data from such sources to the extent required.
(vv) NASD Affiliations. To the Partnership's knowledge, there are no
affiliations or associations between any member of the National
Association of Securities Dealers, Inc. ("NASD") and any of the
Partnership's officers or directors or the Partnership's 5% or greater
securityholders, except as set forth in the Registration Statement, the
Preliminary Prospectuses and the Prospectus.
Any certificate signed by any officer of any Partnership Entity or EVMP
and delivered to the Underwriters or to counsel for the Underwriters pursuant to
this Agreement shall be deemed a representation and warranty by such Partnership
Entity or EVMP to each Underwriter as to the matters covered thereby.
6. ADDITIONAL COVENANTS.
(a) The EVEP Parties (but not including the EnCap Entities) jointly
and severally covenant and agree with the several Underwriters with
respect to the provisions of this Section 6(a), and the EnCap Entities
severally as to themselves only covenant and agree with the several
Underwriters with respect to Section 6(a)(xiii) solely as such section
relates to the EnCap Entities, that:
(i) The Partnership will timely transmit copies of the
Prospectus in a form approved by the Underwriters, and any
amendments or supplements thereto (subject to the provisions of this
Section 5), to the SEC for filing pursuant to Rule 424(b) of the
1933 Act Rules and Regulations or, if applicable, Rule 430A(a)(3) of
the 1933 Act Rules and Regulations.
(ii) The Partnership will deliver to each of the Underwriters,
and to counsel for the Underwriters (i) a signed copy of the
Registration Statement as originally filed, including copies of
exhibits thereto, of any amendments and supplements to the
Registration Statement and (ii) a signed copy of each consent and
certificate included in, or filed as an exhibit to, the Registration
Statement as so amended or supplemented; the Partnership will
deliver to the Underwriters as soon as practicable after the date of
this Agreement as many copies of the Preliminary Prospectus,
Prospectus and any amendment or supplement thereto as
23
the Underwriters may reasonably request for the purposes
contemplated by the 1933 Act; if there is a post-effective amendment
to the Registration Statement that is not effective under the 1933
Act, the Partnership will use its best efforts to cause the
post-effective amendment to the Registration Statement to become
effective as promptly as possible, and it will notify the
Underwriters, promptly after it shall receive notice thereof, of the
time when the post-effective amendment to the Registration Statement
has become effective; the Partnership will promptly advise the
Underwriters of any request of the SEC for amendment of the
Registration Statement or for supplement to the Prospectus or for
any additional information, and of the issuance by the SEC or any
state or other jurisdiction or other regulatory body of any stop
order under the 1933 Act or other order suspending the effectiveness
of the Registration Statement (as amended or supplemented) or
preventing or suspending the use of the Preliminary Prospectus, any
Permitted Free Writing Prospectus or the Prospectus or suspending
the qualification or registration of the Units for offering or sale
in any jurisdiction, and of the institution or threat of any
proceedings therefor, of which the Partnership shall have received
notice or otherwise have knowledge prior to the completion of the
distribution of the Units; and the Partnership will use its best
efforts to prevent the issuance of any such stop order or other
order and, if issued, to secure the prompt removal thereof.
(iii) The Partnership will not file any amendment or
supplement to the Registration Statement, the Prospectus, Permitted
Free Writing Prospectus or any other free writing prospectus (or any
other prospectus relating to the Units filed pursuant to Rule 424(b)
of the 1933 Act Rules and Regulations that differs from the
Prospectus as filed pursuant to such Rule 424(b)), of which the
Underwriters shall not previously have been advised or to which the
Underwriters shall have reasonably objected in writing after being
so advised unless the Partnership shall have determined based upon
the advice of counsel that such amendment or supplement is required
by law; and the Partnership will promptly notify the Underwriters
after it shall have received notice thereof of the time when any
amendment to the Registration Statement, the Prospectus or Permitted
Free Writing Prospectus becomes effective or when any supplement to
the Prospectus has been filed.
(iv) During the period when a prospectus relating to any of
the Units is required to be delivered under the 1933 Act by any
Underwriter or dealer, the Partnership will comply, at its own
expense, with all requirements imposed by the 1933 Act and the 1933
Act Rules and Regulations, so far as necessary to permit the
continuance of sales of or dealing in the Units during such period
in accordance with the provisions hereof and as contemplated by the
Prospectus.
(v) If, during the period when a prospectus relating to any of
the Units is required to be delivered under the 1933 Act by any
Underwriter or dealer, (i) any event relating to or affecting the
Partnership or of which the Partnership shall be advised in writing
by the Underwriters shall occur as a result of which, in the opinion
of the Partnership or the counsel for the Underwriters, the
Prospectus
24
or any Permitted Free Writing Prospectus, as then amended or
supplemented would include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading or (ii) it shall be necessary to
amend or supplement the Registration Statement or the Prospectus to
comply with the 1933 Act, the 1933 Act Rules and Regulations, the
1934 Act or the 1934 Act Rules and Regulations, the Partnership will
forthwith at its expense prepare and file with the SEC, and furnish
to the Underwriters a reasonable number of copies of, such amendment
or supplement or other filing that will correct such statement or
omission or effect such compliance.
(vi) During the period when a prospectus relating to any of
the Units is required to be delivered under the 1933 Act by any
Underwriter or dealer, the Partnership will furnish such proper
information as may be lawfully required and otherwise cooperate with
the Underwriters in qualifying the Units for offer and sale under
the securities or blue sky laws of such jurisdictions as the
Underwriters may reasonably designate and will file and make such
statements or reports as are or may be reasonably necessary;
provided, however, that the Partnership shall not be required to
qualify as a foreign partnership or to qualify as a dealer in
securities or to file a general consent to service of process under
the laws of any jurisdiction.
(vii) In accordance with Section 11(a) of the 1933 Act and
Rule 158 of the 1933 Act Rules and Regulations, the Partnership will
make generally available to its security holders, an earning
statement (which need not be audited) in reasonable detail covering
the 12-month period beginning not later than the first day of the
month next succeeding the month in which occurred the effective date
(within the meaning of Rule 158) of the Registration Statement as
soon as practicable after the end of such period.
(viii) The Partnership will furnish or make available to its
security holders annual reports containing financial statements
audited by independent public accountants and quarterly reports
containing financial statements and financial information which may
be unaudited. The Partnership will, for a period of two years from
the Closing Date, furnish or make available to the Underwriters via
the Commissions' Electronic Data Gathering, Analysis and Retrieval
(XXXXX) system or its website a copy of each annual report,
quarterly report, current report and all other documents, reports
and information furnished by the Partnership to holders of Units
(excluding any periodic income tax reporting) or filed with any
securities exchange or market pursuant to the requirements of such
exchange or market or with the SEC pursuant to the 1933 Act or the
1934 Act. The Partnership will deliver or make available to the
Underwriters similar reports with respect to any significant
subsidiaries, as that term is defined in the 1933 Act Rules and
Regulations, which are not consolidated in the Partnership's
financial statements.
25
(ix) The Partnership and the General Partner will not, during
the 180 days after the date of the Prospectus, without the prior
written consent of X.X. Xxxxxxx & Sons, Inc., which consent will not
be unreasonably withheld, directly or indirectly, (i) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the future
of) any Common Units or securities convertible into or exchangeable
for Common Units (other than Common Units issued (a) pursuant to
employee benefit plans, qualified unit option plans or other
employee compensation plans existing on the date hereof or pursuant
to currently outstanding options, warrants or rights, (b) to
affiliates, (c) in connection with acquisitions of assets accretive
to the common unitholders or businesses in which common units are
issued as consideration, or (d) overallotment option; provided,
however, any such recipient of common units will agree to be bound
by these provisions for the remainder of the 180-day period) or sell
or grant options, rights or warrants with respect to any Common
Units or securities convertible into or exchangeable for Common
Units (other than the grant of options pursuant to option plans
existing or the date hereof) or (ii) enter into any swap or other
derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such
Common Units, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Units or other
securities, in cash or otherwise. Notwithstanding the foregoing or
the provisions of the letters referred to in paragraph (xiii) below,
for the purpose of facilitating research coverage of the Partnership
by the Underwriters and compliance with NASD Rule 2711, if (1)
during the last 17 days of the 180-day restricted 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 180-day restricted period, the Partnership
announces that it will release earnings results during the 16-day
period beginning on the last day of the 180-day period, then the
restrictions imposed by this paragraph (i) and the letters referred
to in paragraph (xiii) below shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material
event.
(x) The Partnership will apply the proceeds from the sale of
the Units as set forth in the description under "Use of Proceeds" in
the Prospectus and will file with the SEC such information on Form
10-K or Form l0-Q as may be required by Rule 463 of the 1933 Act
Rules and Regulations.
(xi) The Partnership will promptly provide the Underwriters
with copies of all correspondence to and from, and all documents
issued to and by, the SEC in connection with the registration of the
Units under the 1933 Act.
(xii) The Partnership will apply for listing of the Units on
the NASDAQ Global Market and will use its best efforts to effect
that listing, subject to notice of issuance, prior to the Closing
Date.
26
(xiii) The EVEP Parties will cause the directors and officers
of the GP LLC, the members and executive officers of EnerVest
Management GP, L.C., a Texas limited liability company, EVMP, EVOC,
CGAS, each of the Sponsor Entities and EV Investors, to furnish to
the Underwriters, on or prior to the date of this Agreement, a
letter or letters, in form and substance satisfactory to counsel for
the Underwriters, pursuant to which each such person shall agree not
to directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any Common Units or
securities convertible into or exchangeable for Common Units or (2)
enter into any swap or other derivatives transaction that transfers
to another, in whole or in part, any of the economic benefits or
risks of ownership of such Common Units, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Units or other securities, in cash or otherwise,
in each case during the 180 days after the date of the Prospectus,
without the prior written consent of X.X. Xxxxxxx & Sons, Inc.
(xiv) The Partnership agrees that, unless it has obtained or
will obtain the prior written consent of X.X. Xxxxxxx & Sons, Inc.,
it has not made and will not make any offer relating to the
Securities that would constitute an Issuer Free Writing Prospectus
or that would otherwise constitute a "free writing prospectus" (as
defined in Rule 405) required to be filed by the Partnership with
the SEC or retained by the Partnership under Rule 433; provided that
the prior written consent of the parties hereto shall be deemed to
have been given in respect of the free writing prospectuses included
in Schedule III hereto and any electronic road show. The Partnership
agrees that (x) it has treated and will treat, as the case may be,
each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus and (y) it has complied and will comply, as the case may
be, with the requirements of Rules 164 and 433 applicable to any
Permitted Free Writing Prospectus, including in respect of timely
filing with the SEC, legending and record keeping.
(xv) If, at any time prior to the filing of the Prospectus
pursuant to Rule 424(b), any event occurs as a result of which the
Disclosure Package would include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which
they were made at such time not misleading, the Partnership will (i)
notify promptly X.X. Xxxxxxx & Sons, Inc. so that any use of the
Disclosure Package may cease until it is amended or supplemented;
(ii) amend or supplement the Disclosure Package to correct such
statement or omission; and (iii) supply any amendment or supplement
to you in such quantities as you may reasonably request.
(xvi) It is understood that up to 195,000 of the Firm Units
(the "Directed Units") will initially be reserved by the
Underwriters for offer and sale to officers, directors, employees
and persons having business relationships with the Partnership
Entities ("Directed Unit Participants") upon the terms and
conditions
27
set forth in the Prospectus (the "Directed Unit Program") and in
accordance with the rules and regulations of the NASD and that any
allocation of such Directed Units among such persons will be made in
accordance with timely directions received by Xxxxxxx Xxxxx &
Associates, Inc. from the Partnership. Under no circumstances will
Xxxxxxx Xxxxx & Associates, Inc. or any Underwriter be liable to any
Partnership Entity or to any Directed Unit Participant for any
action taken or omitted to be taken in good faith in connection with
such Directed Unit Program. To the extent that any Directed Units
are not affirmatively reconfirmed for purchase by any Directed Unit
Participant on or immediately after the date of this Agreement, such
Directed Units may be offered to the public as part of the public
offering contemplated hereby.
(xvii) If the Partnership elects to rely on Rule 462(b) of the
1933 Act Rules and Regulations, the Partnership shall both file an
Abbreviated Registration Statement with the SEC in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111
of the 1933 Act Rules and Regulations by the earlier of (i) 10:00
p.m., New York time, on the date of this Agreement, and (ii) the
time that confirmations are given or sent, as specified by Rule
462(b)(2).
(b) The several Underwriters jointly and severally covenant and
agree with the Partnership that each Underwriter, severally and not
jointly, agrees with the Partnership that, unless it has obtained or will
obtain, as the case may be, the prior written consent of the Partnership,
it has not made and will not make any offer relating to the Securities
that would constitute an Issuer Free Writing Prospectus or that would
otherwise constitute a "free writing prospectus" (as defined in Rule 405)
required to be filed by the Partnership with the SEC or retained by the
Partnership under Rule 433; provided that the prior written consent of the
parties hereto shall be deemed to have been given in respect of the free
writing prospectuses included in Schedule III hereto and any electronic
road show.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the
Underwriters to purchase and pay for the Units, as provided herein, shall be
subject to the accuracy, as of the date hereof and as of the Closing Date (and,
if applicable, the Option Closing Date), of the representations and warranties
of the EVEP Parties contained herein, to the performance by the EVEP Parties of
their covenants and obligations hereunder, and to the following additional
conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective not later than 5:30 p.m., New York
time, on the date hereof, or, with the consent of the Underwriters, at a
later date and time, not later than 1:00 p.m., New York time, on the first
business day following the date hereof, or at such later date and time as
may be approved by the Underwriters; if the Partnership has elected to
rely on Rule 462(b) of the 1933 Act Rules and Regulations, the Abbreviated
Registration Statement shall have become effective not later than the
earlier of (i) 10:00 p.m. New York time, on the date hereof, or (ii) at
such later date and time as may be approved by the Underwriters. All
filings required by Rule 424 and Rule 430A of the 1933 Act Rules and
Regulations shall have been made. No stop order suspending the
effectiveness of the Registration Statement or preventing or suspending
the use of the Prospectus or any
28
Permitted Free Writing Prospectus shall have been issued and no proceeding
for that purpose shall have been initiated or, to the knowledge of the
Partnership or any Underwriter, threatened or contemplated by the SEC, and
any request of the SEC for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Underwriters.
(b) No Underwriter shall have advised the Partnership on or prior to
the Closing Date (and, if applicable, the Option Closing Date), that the
Registration Statement, any Preliminary Prospectus or Prospectus, any
Permitted Free Writing Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of the
Underwriters (upon the advice of counsel) is material, or omits to state a
fact which, in the opinion of the Underwriters (upon the advice of
counsel) is material and is required to be stated therein or is necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing
Date), the Underwriters shall have received the opinion of Xxxxxx and
Xxxxx, LLP, counsel for the Partnership, addressed to them and dated the
Closing Date (and, if applicable, the Option Closing Date), in form and
substance reasonably satisfactory to the Underwriters, to the effect set
forth on Exhibit A hereto.
(d) On the Closing Date, the Underwriters shall have received the
opinion of Vorys, Xxxxx, Xxxxxxx and Xxxxx, LLP, opining as to the laws of
Ohio, Waters, Warner & Xxxxxx, PLLC, opining as to the laws of West
Virginia and C. Xxxxxxx Xxxxx, opining as to the laws of Louisiana,
addressed to the Underwriters and dated the Closing Date (and, if
applicable, the Option Closing Date), in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth on Exhibits X-0,
X-0 and B-3 hereto.
(e) The Underwriters shall have received on the Closing Date (and,
if applicable, the Option Closing Date), from Xxxxxx & Xxxxxx L.L.P.,
counsel to the Underwriters, such opinion or opinions, dated the Closing
Date (and, if applicable, the Option Closing Date) with respect to such
matters as the Underwriters may reasonably require; and the EVEP Parties
shall have furnished to such counsel such documents as they reasonably
request for the purposes of enabling them to review or pass on the matters
referred to in this Section 7 and in order to evidence the accuracy,
completeness and satisfaction of the representations, warranties and
conditions herein contained.
(f) At the time of execution of this Agreement, the Underwriters
shall have received from Deloitte & Touche LLP a letter or letters, in
form and substance reasonably satisfactory to the Underwriters, addressed
to the Underwriters and dated the date hereof and covering the matters
described in Exhibit C hereto including (i) confirming that they are
independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X of the Commission and
(ii) stating, as of
29
the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Registration Statement, the Prospectus, any
Preliminary Prospectus and any Permitted Free Writing Prospectuses, as of
a date not more than five days prior to the date hereof), the conclusions
and findings of such firm with respect to the various financial
information in the Registration Statement, the Prospectus, any Preliminary
Prospectus and any Permitted Free Writing Prospectuses and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(g) With respect to the letter or letters of Deloitte & Touche LLP
referred to in the preceding paragraph and delivered to the Underwriters
concurrently with the execution of this Agreement (the "initial letters"),
the Partnership shall have furnished to the Underwriters a letter (the
"bring-down letter") of such accountants, in form and substance reasonably
satisfactory to the Underwriters, addressed to the Underwriters and dated
the Closing Date (or if applicable, the Option Closing Date) (i)
confirming that they are independent public accountants within the meaning
of the Act and are in compliance with the applicable requirements relating
to the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Registration Statement, the Prospectus, any Preliminary Prospectus and
any Permitted Free Writing Prospectuses, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letters and (iii) confirming in all
material respects the conclusions and findings set forth in the initial
letters.
(h) At the time of execution of this Agreement, the Underwriters
shall have received from Xxxxxx, Xxxxxxxxx & Associates, Inc. a letter, in
form and substance reasonably satisfactory to the Underwriters, addressed
to the Underwriters and dated the date hereof covering the matters
described in Exhibit D.
(i) With respect to the letter of Xxxxxx, Xxxxxxxxx & Associates,
Inc. referred to in the preceding paragraph and delivered to the
Underwriters concurrently with the execution of this Agreement, the
Partnership shall have furnished to the Underwriters a letter of such
reserve engineers, addressed to the Underwriters and dated each of the
Closing Date and the Option Closing Date, if any, confirming in all
material respects covering the matters in the letter referred to in the
preceding paragraph.
(j) Except as set forth in the Registration Statement, the
Prospectus and the Disclosure Package, (i) none of the Partnership
Entities shall have sustained since the date of the latest audited
financial statements included in the Registration Statement and in the
Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order,
investigation or decree; and (ii) subsequent to the respective dates as of
which such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), none of the
Partnership Entities shall have incurred any liability or obligation,
direct or contingent, or entered into any
30
transactions, and there shall not have been any change in the
capitalization or short-term or long-term debt of the Partnership Entities
or any change, or any development involving or which might reasonably be
expected to involve a prospective change in the condition (financial or
other), net worth, partners' or members' equity, business, affairs,
management, prospects, results of operations or cash flow of the
Partnership Entities, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of the Underwriters so material or
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Units being delivered on such
Closing Date (and, if applicable, the Option Closing Date) on the terms
and in the manner contemplated in the Prospectus.
(k) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on
the NASDAQ Global Market, or the establishing on such market by the SEC or
by such market of minimum or maximum prices which are not in force and
effect on the date hereof; (ii) a suspension or material limitation in
trading in the Partnership's securities on the NASDAQ Global Market or the
establishing on such market by the SEC or by such market of minimum or
maximum prices which are not in force and effect on the date hereof, (iii)
a general moratorium on commercial banking activities declared by either
federal or applicable state authorities; (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the
United States of a national emergency or war, which in the judgment of the
Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Units in the manner contemplated in
the Prospectus; or (v) any calamity or crisis, change in national,
international or world affairs, act of God, change in the international or
domestic markets, or change in the existing financial, political or
economic conditions in the United States or elsewhere, the effect of which
on the financial markets of the United States is such as to make it in the
judgment of the Underwriters impracticable or inadvisable to proceed with
the public offering or the delivery of the Units in the manner
contemplated in the Prospectus.
(l) The Underwriters shall have received certificates, dated the
Closing Date (and, if applicable, the Option Closing Date) and signed by
chief executive officer and the chief financial officer, in their
capacities as such, (or persons holding similar positions, as applicable)
of each of the EVEP Parties, stating that:
(i) the conditions set forth in Section 7(a) have been fully
satisfied;
(ii) such EVEP Party has examined the Registration Statement,
the Prospectus, the Disclosure Package and any amendment or
supplement thereto, as well as each electronic roadshow used in
connection with the offering, and (A) nothing has come to such EVEP
Party's attention that would lead it to believe that, as of the
Effective Date, the Registration Statement included any untrue
statement of a material fact or omitted to state material fact
required to be stated therein or necessary to make the statements
therein not misleading, and as of its issue date and as of the
Closing Date (and, if applicable, the Option Closing Date), the
Prospectus, the Disclosure Package and any amendment or supplement
thereto, as well as each electronic roadshow used in connection with
the offering,
31
as of their respective effective, issue or filing dates, included
any untrue statement of a material fact or omitted to state material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (B)
since the Effective Date, there has occurred no event required to be
set forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not been so set forth;
(iii) all representations and warranties made herein by such
EVEP Party are true and correct at such Closing Date, with the same
effect as if made on and as of such Closing Date; and all agreements
herein to be performed or complied with by such EVEP Party on or
prior to such Closing Date have been duly performed and complied
with by such EVEP Party;
(iv) no event contemplated by Section 7(j) has occurred; and
(v) covering such other matters as the Underwriters may
reasonably request.
(m) The EVEP Parties shall not have failed, refused, or been unable,
at or prior to the Closing Date (and, if applicable, the Option Closing
Date) to have performed any agreement on their part to be performed or any
of the conditions herein contained and required to be performed or
satisfied by them at or prior to such Closing Date.
(n) The Partnership shall have furnished to the Underwriters at the
Closing Date (and, if applicable, the Option Closing Date) such further
information, opinions, certificates, letters and documents as the
Underwriters may have reasonably requested.
(o) The NASDAQ Global Market shall have approved the Units for
quotation, subject only to official notice of issuance.
(p) The Underwriters shall have received duly and validly executed
letter agreements referred to in Section 6(a)(xiii) hereof.
(q) The Underwriters shall have received evidence satisfactory to
them that each of the Transactions shall have occurred or will occur as of
the Closing Date, in each case as described in the Prospectus without
modification, change or waiver, except for such modifications, changes or
waivers as have been specifically identified to the Underwriters and
which, in the judgment of the Underwriters, do not make it impracticable
or inadvisable to proceed with the offering and delivery of the Units on
the Closing Date on the terms and in the manner contemplated in the
Prospectus.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Underwriters and to Xxxxxx & Xxxxxx L.L.P., counsel
for the several Underwriters. The Partnership will furnish the Underwriters with
such signed and conformed copies of such opinions, certificates, letters and
documents as they may request.
32
In accordance with the provisions of Section 11, hereof, this Agreement
may be terminated by the Underwriters at any time at or prior to the Closing
Date by notice to the Partnership if any condition specified in Section 7 shall
not have been satisfied on or prior to the Closing Date
8. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the limitation set forth in Section 8(e) below with
respect to the EnCap Entities, the EVEP Parties will indemnify and hold
harmless each of the Underwriters from and against any losses, damages or
liabilities, joint or several, to which the Underwriters may become
subject, under the 1933 Act, or otherwise, insofar as such losses, damages
or liabilities (or actions or claims in respect thereof) arise out of or
are based upon (i) an untrue statement or alleged untrue statement of a
material fact contained in (A) any Preliminary Prospectus, the
Registration Statement, the Prospectus or any amendment or supplement
thereto, (B) any Permitted Free Writing Prospectus used or referred to in
any "free writing prospectus" (as defined in Rule 405) used or referred to
by any Underwriter, or (C) any Blue Sky application or other document
prepared or executed by any of the Partnership Entities (or based upon any
written information furnished by any of the Partnership Entities or (ii)
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, and will
reimburse each of the Underwriters for any legal or other out-of-pocket
expenses incurred by such Underwriter in connection with investigating,
preparing, pursuing or defending against or appearing as a third party
witness in connection with any such loss, damage, liability or action or
claim, including, without limitation, any investigation or proceeding by
any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to the indemnified party, as such
expenses are incurred (including such losses, damages, liabilities or
expenses to the extent of the aggregate amount paid in settlement of any
such action or claim, provided that (subject to Section 8(c) hereof) any
such settlement is effected with the written consent of the General
Partner); provided, however, that the EVEP Parties shall not be liable in
any such case to the extent, but only to the extent, that any such loss,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any
Permitted Free Writing Prospectus or in any such amendment or supplement
thereto or any Blue Sky Application, in reliance upon and in conformity
with written information relating to the Underwriters furnished to the
EVEP Parties by you, expressly for use in the preparation thereof (as
provided in Section 14 hereof).
In connection with the offer and sale of the Directed Units, Subject
to the limitation set forth in Section 8(e) below with respect to the
EnCap Entities, the EVEP Parties, jointly and severally, will indemnify
and hold harmless Xxxxxxx Xxxxx & Associates, Inc. from and against any
losses, damages or liabilities (or actions or claims in respect thereof)
which (i) arise out of or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in any material prepared by
or with the approval of any Partnership Entity for distribution to
Directed Unit Participants in
33
connection with the Directed Unit Program or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) arise out of
or are based upon the failure of any Directed Unit Participant to pay for
and accept delivery of Directed Units that the Directed Unit Participant
agreed to purchase or (iii) are otherwise related to the Directed Unit
Program, other than losses, damages or liabilities (or expenses relating
thereto) finally judicially determined to have resulted directly from the
bad faith or gross negligence or willful misconduct of Xxxxxxx Xxxxx &
Associates, Inc. The EVEP Parties, jointly and severally, will reimburse
each Underwriter for any legal or other expenses incurred by such
Underwriter in connection with investigating, preparing, pursuing or
defending against or appearing as a third party witness in connection with
any such loss, damage, liability or action or claim, including, without
limitation, any investigation or proceeding by any governmental agency or
body, commenced or threatened, including the reasonable fees and expenses
of counsel to the indemnified party, as such expenses are incurred
(including such losses, damages, liabilities or expenses to the extent of
the aggregate amount paid in settlement of any such action or claim,
provided that (subject to Section 8(c) hereof) any such settlement is
effected with the written consent of the Partnership).
(b) Each of the Underwriters, severally and not jointly, will
indemnify and hold harmless the EVEP Parties from and against any losses,
damages or liabilities to which the EVEP Parties may become subject, under
the 1933 Act or otherwise, insofar as such losses, damages or liabilities
(or actions or claims in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus and the Disclosure
Package or in any amendment or supplement thereto or Blue Sky Application,
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in the Registration Statement, the Prospectus and the Disclosure
Package or any such amendment or supplement, in reliance upon and in
conformity with written information relating to the Underwriters furnished
to the Partnership by the Underwriters, expressly for use in the
preparation thereof (as provided in Section 14 hereof), and will reimburse
the EVEP Parties for any legal or other expenses incurred by the EVEP
Parties in connection with investigating or defending any such action or
claim as such expenses are incurred (including such losses, damages,
liabilities or expenses to the extent of the aggregate amount paid in
settlement of any such action or claim, provided that (subject to Section
7(c) hereof) any such settlement is effected with the written consent of
the Underwriters).
(c) Promptly after receipt by an indemnified party under Section
8(a) or 8(b) hereof of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under Section 8(a) or 8(b) hereof, notify
each such indemnifying party in writing of the commencement thereof, but
the failure so to notify such indemnifying party shall not relieve such
indemnifying party from any liability except to the extent that it has
been prejudiced in any material respect by such failure or from any
liability that it may have to any such
34
indemnified party otherwise than under Section 8(a) or 8(b) hereof. In
case any such action shall be brought against any such indemnified party
and it shall notify each indemnifying party of the commencement thereof,
each such indemnifying party shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other indemnifying
party under Section 8(a) or 8(b) hereof similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of such indemnified party, be counsel
to such indemnifying party), and, after notice from such indemnifying
party to such indemnified party of its election so to assume the defense
thereof, such indemnifying party shall not be liable to such indemnified
party under Section 8(a) or 8(b) hereof for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. The indemnified party shall have the
right to employ its own counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party at the
expense of the indemnifying party has been authorized by the indemnifying
party, (ii) the indemnified party shall have been advised by such counsel
that there may be a conflict of interest between the indemnifying party
and the indemnified party in the conduct of the defense, or certain
aspects of the defense, of such action (in which case the indemnifying
party shall not have the right to direct the defense of such action with
respect to those matters or aspects of the defense on which a conflict
exists or may exist on behalf of the indemnified party) or (iii) the
indemnifying party shall not in fact have employed counsel reasonably
satisfactory to such indemnified party to assume the defense of such
action, in any of which events such fees and expenses to the extent
applicable shall be borne, and shall be paid as incurred, by the
indemnifying party. If at any time such indemnified party shall have
requested such indemnifying party under Section 8(a) or 8(b) hereof to
reimburse such indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 8(a) or 8(b) hereof effected without
its written consent if (i) such settlement is entered into more than 60
days after receipt by such indemnifying party of such request for
reimbursement, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 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 for
reimbursement prior to the date of such settlement. No such indemnifying
party shall, without the written consent of such indemnified party, effect
the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or
not such indemnified party is an actual or potential party to such action
or claim) unless such settlement, compromise or judgment (A) includes an
unconditional release of such indemnified party from all liability arising
out of such action or claim and (B) does not include a statement as to or
an admission of fault, culpability or a failure to act, by or on behalf of
any such indemnified party. In no event shall such indemnifying parties be
liable for the fees and expenses of more than one counsel, other than one
local counsel, for all such indemnified parties 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.
35
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to indemnify or hold harmless an
indemnified party under Section 8(a) or 8(b) hereof in respect of any
losses, damages or liabilities (or actions or claims in respect thereof)
referred to therein, then each indemnifying party under Section 8(a) or
8(b) hereof shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, damages or liabilities (or
actions or claims in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the EVEP Parties on the one
hand, and the Underwriters on the other hand, from the offering of the
Units. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 8(c) hereof and such
indemnifying party was prejudiced in a material respect by such failure,
then each such indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault, as
applicable, of the EVEP Parties on the one hand, and the Underwriters, on
the other hand in connection with the statements or omissions that
resulted in such losses, damages or liabilities (or actions or claims in
respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by, as applicable, the EVEP Parties on the
one hand and the Underwriters, on the other hand, shall be deemed to be in
the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the EVEP Parties bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault, as applicable, of the EVEP Parties, on the one hand and
the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the EVEP Parties on the one hand, or
the Underwriters, on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The EVEP Parties and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 8(d) were determined by pro rata allocation or by any other method
of allocation that does not take account of the equitable considerations
referred to above in this Section 8(d). The amount paid or payable by such
an indemnified party as a result of the losses, damages or liabilities (or
actions or claims in respect thereof) referred to above in this Section
8(d) shall be deemed to include any legal or other expenses incurred by
such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 8(d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Units underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the EVEP Parties under this Section 8 shall
be in addition to any liability that the EVEP Parties may otherwise have
and shall extend, upon the same terms and conditions, to each officer,
director, employee, agent or other
36
representative and to each person, if any, who controls any Underwriter
within the meaning of the 1933 Act; and the obligations of each of the
Underwriters under this Section 8 shall be in addition to any liability
that the respective Underwriter may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the
Partnership and General Partner who signed the Registration Statement and
to each person, if any, who controls the EVEP Parties within the meaning
of the 1933 Act. The obligations of each of the EnCap Entities under this
Section 8 shall be limited to the representations and warranties of the
EnCap Entites and the statements and information specifically concerning
the EnCap Entities or their ownership of Sponsor Units.
9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. The respective
representations, warranties, agreements and statements of the EVEP Parties and
the Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain operative and in
full force and effect regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, the EVEP Parties or any of their officers, directors
or any controlling persons and shall survive delivery of and payment for the
Units hereunder.
10. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter shall default in
its obligation to purchase the Units which it has agreed to purchase hereunder,
the non-defaulting Underwriters may in their discretion arrange for themselves
or another party or other parties to purchase such Units on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
non-defaulting Underwriters do not arrange for the purchase of such Units, then
the Partnership shall be entitled to a further period of thirty-six hours within
which to procure another party or parties reasonably satisfactory to the
non-defaulting Underwriters to purchase such Units on such terms. In the event
that, within the respective prescribed periods, the non-defaulting Underwriters
notify the Partnership that they have so arranged for the purchase of such
Units, or the Partnership notifies the non-defaulting Underwriters that it has
so arranged for the purchase of such Units, the non-defaulting Underwriters or
the Partnership shall have the right to postpone the Closing Date for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Partnership agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in the opinion
of the non-defaulting Underwriters may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any persons substituted
under this Section 10 with like effect as if such person had originally been a
party to this Agreement with respect to such Units.
(b) If, after giving effect to any arrangements for the purchase of
the Units of a defaulting Underwriter or Underwriters made as provided in
subsection (a) above or if no such arrangements are made, the aggregate
number of Units which remains unpurchased does not exceed one-eleventh of
the total Units to be sold on the Closing Date, then the Partnership shall
have the right to require each non-defaulting Underwriter to purchase the
Units which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the number of Units which such Underwriter agreed to
purchase hereunder) of the
37
Units of such defaulting Underwriter or Underwriters for which such
arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of
the Units of a defaulting Underwriter or Underwriters made by the
non-defaulting Underwriters and the Partnership as provided in subsection
(a) above, the number of Units which remains unpurchased exceeds
one-eleventh of the total Units to be sold on the Closing Date, or if the
Partnership shall not exercise the right described in subsection (b) above
to require the non-defaulting Underwriters to purchase Units of the
defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to the Option Closing Date, the obligations of the Underwriters to
purchase and of the Partnership to sell the Option Units) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter
or the EVEP Parties except for the expenses to be borne by the Partnership
and the Underwriters as provided in Section 12 hereof and the indemnity
and contribution agreements in Section 8 hereof, but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
11. TERMINATION. (a) This Agreement may be terminated by the Underwriters
at any time at or prior to the Closing Date by notice to the Partnership if any
condition specified in Section 7 hereof shall not have been satisfied on or
prior to the Closing Date. Any such termination shall be without liability of
any party to any other party except as provided in Sections 8 and 12 hereof.
(b) This Agreement also may be terminated by the Underwriters, by
notice to the Partnership, as to any obligation of the Underwriters to
purchase the Option Units, if any condition specified in Section 7 hereof
shall not have been satisfied at or prior to the Option Closing Date or as
provided in Section 10 of this Agreement.
If the Underwriters terminate this Agreement as provided in Sections 11(a)
or 11(b), they shall notify the Partnership by telephone or telegram, confirmed
by letter.
12. COSTS AND EXPENSES. The Partnership will bear and pay the costs and
expenses incident to the registration of the Units and public offering thereof,
including, without limitation, (a) all expenses (including transfer taxes)
incurred in connection with the delivery to the several Underwriters of the
Units, the filing fees of the SEC, the fees and expenses of the Partnership's
counsel and accountants, (b) the preparation, printing, filing, delivery and
shipping of the Registration Statement, each Preliminary Prospectus, the
Prospectus, each Permitted Free Writing Prospectus and any amendments or
supplements thereto (except as otherwise expressly provided in Section 5(d)
hereof) and the printing, delivery and shipping of this Agreement and other
underwriting documents, including the Agreement Among Underwriters, the Selected
Dealer Agreement, Underwriters' Questionnaires and Powers of Attorney and Blue
Sky Memoranda, and any instruments or documents related to any of the foregoing,
(c) the furnishing of copies of such documents (except as otherwise expressly
provided in Section 5(d) hereof) to the Underwriters, (d) the registration or
qualification of the Units for offering and sale under the securities laws of
the various states and other jurisdictions, including the fees and disbursements
of counsel to the Underwriters relating to such registration or qualification
and in connection with preparing any Blue Sky Memoranda or related analysis, (e)
the filing fees of the NASD (if
38
any) and fees and disbursements of counsel to the Underwriters relating to any
review of the offering by the NASD, (f) all printing and engraving costs related
to preparation of the certificates for the Units, including transfer agent and
registrar fees, (g) all fees and expenses relating to the authorization of the
Units for trading on the NASDAQ Global Market; (h) all travel expenses,
including air fare and accommodation expenses, of representatives of the
Partnership in connection with the offering of the Units, and (i) all of the
other costs and expenses incident to the performance by the Partnership of the
registration and offering of the Units; provided, that (except as otherwise
provided in this Section 12) the Underwriters will bear and pay all of their own
costs and expenses, including the fees and expenses of the Underwriters'
counsel, the Underwriters' transportation expenses and any advertising costs and
expenses incurred by the Underwriters incident to the public offering of the
Units.
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 11(a) (other than pursuant to Section 7(h)(i), (iii), (iv)
or (v)), the Partnership shall reimburse the Underwriters for all of their
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel to the Underwriters.
13. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed do X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: T. Xxxxx Xxxxxx, Managing
Director, Corporate Finance, facsimile number (000) 000-0000, with a copy to
Xxxx Xxxxx, Attention: General Counsel, facsimile number (000) 000-0000, or if
sent to the Partnership shall be mailed, delivered, sent by facsimile
transmission, or telegraphed and confirmed to the Partnership at EV Energy
Partners, L.P., 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, facsimile
number (000) 000-0000 and if sent to any other party, shall be given at the
address set forth on the signature page hereof. Notice to any Underwriter
pursuant to Section 8 shall be mailed, delivered, sent by facsimile
transmission, or telegraphed and confirmed to such Underwriter's address as it
appears in the Underwriters' Questionnaire furnished in connection with the
offering of the Units or as otherwise furnished to the Partnership.
14. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in the
third, eleventh, twelfth, thirteenth, fourteenth and fifteenth paragraphs and
the third sentence of the sixth paragraph under the caption "Underwriting" in
the Prospectus constitute the only information furnished by or on behalf of the
Underwriters, as such information is referred to in Section 5(b) and Section 8
hereof
15. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the EVEP Parties, their respective successors and assigns
and the officers, directors, employees, agents, representatives and controlling
persons referred to in Section 8 hereof (to the extent provided in Section 8)
and their respective heirs, executors, administrators, successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, corporation or other entity 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 being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and assigns and said
39
controlling persons and said officers and directors, and for the benefit of no
other person, corporation or other entity. No purchaser of any of the Units from
any Underwriter shall be construed a successor or assign by reason merely of
such purchase.
16. RESEARCH INDEPENDENCE. In addition, the Partnership acknowledges that
the Underwriters' research analysts and research departments are required to be
independent from their respective investment banking divisions and are subject
to certain regulations and internal policies, and that such Underwriters'
research analysts may hold and make statements or investment recommendations
and/or publish research reports with respect to the Partnership and/or the
offering that differ from the views of its investment bankers. The Partnership
hereby waives and releases, to the fullest extent permitted by law, any claims
that the Partnership may have against the Underwriters with respect to any
conflict of interest that may arise from the fact that the views expressed by
their independent research analysts and research departments may be different
from or inconsistent with the views or advice communicated to the Partnership by
such Underwriters' investment banking divisions. The Partnership acknowledges
that each of the Underwriters is a full service securities firm and as such from
time to time, subject to applicable securities laws, may effect transactions for
its own account or the account of its customers and hold long or short positions
in debt or equity securities of the companies which may be the subject of the
transactions contemplated by this Agreement.
17. NO FIDUCIARY DUTY. Notwithstanding any preexisting relationship,
advisory or otherwise, between the parties or any oral representations or
assurances previously or subsequently made by the Underwriters, the Partnership
acknowledges and agrees that: (i) nothing herein shall create a fiduciary or
agency relationship between the Partnership, on the one hand, and the
Underwriters, on the other; (ii) the Underwriters are not acting as advisors,
expert or otherwise, to the Partnership in connection with this offering, the
sale of the Units or any other services the Underwriters may be deemed to be
providing hereunder, including, without limitation, with respect to the public
offering price of the Units; (iii) the relationship between the Partnership, on
the one hand, and the Underwriters, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iv) any duties and obligations
that the Underwriters may have to the Partnership shall be limited to those
duties and obligations specifically stated herein; and (v) notwithstanding
anything in this Agreement to the contrary, the Partnership acknowledges that
the Underwriters' may have financial interest in the success of the offering
that are not limited to the difference between the price to the public and the
purchase price paid to the Partnership by the Underwriters for the Units and the
Underwriters have no obligation to disclose, or account to the Partnership for,
any of such additional financial interests. The Partnership hereby waives and
releases, to the fullest extent permitted by law, any claims that the
Partnership may have against the Underwriters with respect to any breach or
alleged breach of fiduciary duty with respect to the transactions contemplated
by this Agreement.
18. COUNTERPARTS. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
19. PRONOUNS. Whenever a pronoun of any gender or number is used herein,
it shall, where appropriate, be deemed to include any other gender and number.
40
20. TIME OF ESSENCE. Time shall be of the essence of this Agreement.
21. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Missouri, without giving effect to the
choice of law or conflict of laws principles thereof.
41
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the EVEP Parties and the
Underwriters.
EV ENERGY PARTNERS, L.P.
By: EV Energy GP, L.P., its General Partner
By: EV Management, LLC, its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
EV ENERGY GP, L.P.
By: EV Management, LLC, its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
EV MANAGEMENT, LLC
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
EV PROPERTIES GP, LLC
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx
Executive Vice President and
Chief Operating Officer
[Signature Page to Underwriting Agreement]
EV PROPERTIES, L.P.
By: EV Properties GP, LLC, its General Partner
By: EnerVest Management Partners, Ltd.,
a Texas limited partnership,
its sole Member
By: EnerVest Management GP, L.C.,
a Texas limited liability company,
its General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx
Executive Vice President and
Chief Operating Officer
EVEC HOLDINGS, LLC
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx
Executive Vice President and
Chief Operating Officer
ENERVEST MANAGEMENT PARTNERS, LTD.
By: EnerVest Management GP, L.C.,
a Texas limited liability company,
its General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx
Executive Vice President and
Chief Operating Officer
CGAS HOLDINGS, LLC
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx
President and Chief Operating Officer
[Signature Page to Underwriting Agreement]
ENCAP ENERGY CAPITAL FUND V, L.P.
By: EnCap Equity Fund V GP, L.P., a Texas
limited partnership, its General Partner
By: EnCap Investments LP, a Delaware limited
partnership, its General Partner
By: EnCap Investments GP, L.L.C., a Delaware
limited liability company, its General
Partner
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Managing Director
ENCAP V-B ACQUISITIONS, L.P.
By: EnCap V-B Acquisitions GP, LLC, a Delaware
limited liability company, its General
Partner
By: EnCap Energy Capital Fund V-B, L.P. a
Texas limited partnership, its General
Partner
By: EnCap Equity Fund V GP, L.P., a Texas
limited partnership, its General Partner
By: EnCap Investments LP, a Delaware limited
partnership, its General Partner
By: EnCap Investments GP, L.L.C., a Delaware
limited liability company, its General
Partner
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Managing Director
[Signature Page to Underwriting Agreement]
ACCEPTED in St. Louis, Missouri,
as of the date first above written.
X.X. XXXXXXX & SONS, INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
WACHOVIA CAPITAL MARKETS, LLC
XXXXXXXXXXX & CO. INC.
By: X.X. XXXXXXX & SONS, INC.
By:
________________________________
Name:
Title:
[Signature Page to Underwriting Agreement]
SCHEDULE I
ALLOCATION OF UNITS
NAME NUMBER OF UNITS
--------------------------------------------------- ---------------
X.X. Xxxxxxx & Sons, Inc............................ 1,560,000
Xxxxxxx Xxxxx & Associates, Inc..................... 1,365,000
Wachovia Capital Markets, LLC....................... 682,500
Xxxxxxxxxxx & Co. Inc............................... 292,500
---------
Total...................................... 3,900,000
=========
Schedule I
SCHEDULE II
FOREIGN QUALIFICATIONS
ENTITY: FOREIGN QUALIFICATIONS:
----------------------------------- ------------------------
EV Management, LLC Texas
EV Energy GP, L.P. Texas
EV Energy Partners, L.P. Texas
EV Properties GP, LLC None
EV Properties, L.P. None
EVPP GP LLC None
EnerVest Production Partners, L.P. Louisiana
EVWV GP LLC None
EnerVest WV, LP West Virginia and Pennsylvania
EVCG GP LLC Ohio
CGAS Properties, L.P. Ohio
EnerVest-Cargas, Ltd. Louisiana
Lower Cargas Operating Company LLC None
Schedule II
SCHEDULE III
PERMITTED FREE WRITING XXXXXXXXXX
0. Xxxxxxxxxx Xxxx Show on Xxxxxxxxxxx.xxx
Schedule III
EXHIBIT A
OPINION OF XXXXXX AND XXXXX, LLP
1.Formation and Due Qualification. Each of the Partnership Entities has
been duly formed or incorporated and is validly existing as a limited
partnership, limited liability company, as the case may be, in good standing
under the laws of its respective jurisdiction of formation or incorporation, and
is, or at the Closing Date will be, duly registered or qualified to do business
and is in good standing as a foreign limited partnership or foreign limited
liability company, as the case may be, in each jurisdiction, as set forth under
its name on Schedule II of the Agreement, in which its ownership or lease of
property or the conduct of its businesses requires such registration or
qualification, except where the failure so to register or qualify would not (i)
have a material adverse effect on the consolidated financial position, partners'
or members' equity, results of operations, business or prospects of the
Partnership Entities taken as a whole or (ii) subject the limited partners of
the Partnership to any material liability or disability. Each of the Partnership
Entities has all limited partnership or limited liability company, as the case
may be, power and authority necessary to own or lease its properties currently
owned or leased or to be owned or leased at the Closing Date, to assume the
liabilities assumed or being assumed by it pursuant to the Transaction Documents
and to conduct its business as currently conducted and as to be conducted at the
Closing Date, in each case in all material respects as described in the
Prospectus.
2.Ownership of the General Partner Interest in the Partnership. At the
Closing Date and, if applicable, the Option Closing Date, after giving effect to
the Transactions, the General Partner will be the sole general partner of the
Partnership with a 2% general partner interest in the Partnership. Such general
partner interest 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 nonassessable (except as such nonassessability
may be affected by Section 17-303 and 17-607 of the Delaware LP Act, and the
General Partner will own such general partner interest free and clear of all
liens, encumbrances (except restrictions on transferability described in the
Prospectus or the Partnership Agreement), security interests, equities, charges
or claims (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming the General Partner as debtor is
on file as of a recent date in the office of the Secretary of State of the State
of Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LP Act,
contained in the Partnership Agreement or described in the Prospectus.
3.Ownership of Sponsor Units and the Incentive Distribution Rights. All of
the Sponsor Units and Incentive Distribution Rights 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 nonassessable (except as such
nonassessability may be affected by Sections 17-303 and 17-607 of the Delaware
LP Act and as otherwise described in the Prospectus under the caption "The
Partnership Agreement -- Limited Liability," "Risk Factors -- Risks Inherent in
an Investment in Us -- Your liability may not be limited if a court finds that
unitholder action constitutes control of our business" and "Risk Factors --
Risks Inherent in an Investment in Us -- Unitholders may have
Exhibit A - Page 1
liability to repay distributions that were wrongfully distributed to them"). EVH
owns 163,625 Common Units and 810,030 Subordinated Units, EV Investors owns
155,000 Subordinated Units, CGH owns 343,255 Common Units and 1,698,800
Subordinated Units, and the EnCap Entities own an aggregate of 88,120 Common
Units and 436,170 Subordinated Units as described in the Prospectus and the
General Partner owns all of the Incentive Distribution Rights. EVH, EV
Investors, CGH and the EnCap Entities own their respective Sponsor Units and the
General Partner owns the Incentive Distribution Rights free and clear of all
liens, encumbrances (except restrictions on transferability as described in the
Prospectus or contained in the Partnership Agreement), security interests,
equities, charges or claims (i) in respect of which a financing statement under
the Uniform Commercial Code of the State of Delaware naming any of them as
debtor is on file as of a recent date in the office of the Secretary of State of
the State of Delaware or (ii) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Delaware LP Act, contained in the Partnership Agreement or described in the
Prospectus.
4.Valid Issuance of the Units. The Units to be issued and sold to the
Underwriters by the Partnership pursuant to this Agreement and the limited
partner interests represented thereby have been duly authorized by the
Partnership Agreement and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof will be validly issued,
fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Sections
17-303 and 17-607 of the Delaware LP Act and as otherwise described in the
Prospectus under the caption "The Partnership Agreement -- Limited Liability,"
"Risk Factors -- Risks Inherent in an Investment in Us -- Your liability may not
be limited if a court finds that unitholder action constitutes control of our
business" and "Risk Factors -- Risks Inherent in an Investment in Us --
Unitholders may have liability to repay distributions that were wrongfully
distributed to them"); and other than the Sponsor Units and the Incentive
Distribution Rights, the Units will be the only limited partner interests of the
Partnership issued and outstanding at the date of such opinion.
5.Ownership of Partnership Interests in the General Partner. The GP LLC
owns 100% of the outstanding general partner interests in the General Partner
and EVMP, the EnCap Entities and EV Investors own collectively 100% of the
outstanding limited partner interests in the General Partner and all of such
interests have been duly authorized and validly issued in accordance with the
General Partnership Agreement and are fully paid (to the extent required under
the General Partner LP Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-303 and 17-607 of the Delaware LP
Act). GP LLC, EVMP, the EnCap Entities and EV Investors own such interests free
and clear of all liens, encumbrances, security interests, equities, charges or
claims (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming any of them as debtor is on file
as of a recent date in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LP Act,
contained in the General Partnership Agreement or described in the Prospectus.
6.Ownership of Limited Liability Company Interests in the GP LLC. The
outstanding limited liability company interests in GP LLC owned by EVMP comprise
all of the limited liability company interests in GP LLC and all of such
interests have been authorized and
Exhibit A - Page 2
validly issued in accordance with the GP LLC LLC Agreement. Such outstanding
limited liability company interests are fully paid (to the extent required under
the GP LLC LLC Agreement) and nonassessable (except as such nonassessability may
be affected by Section 18-607 of the Delaware LLC Act), and EVMP owns such
interests free and clear of all liens, encumbrances, security interests,
equities, charges or claims (i) in respect of which a financing statement under
the Uniform Commercial Code of the State of Delaware naming any of them as
debtor is on file as of a recent date in the office of the Secretary of State of
the State of Delaware or (ii) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Delaware LLC Act, the GP LLC LLC Agreement or described in the Prospectus.
7.Ownership of Partnership Interests in the Operating Partnership.
Operating Partnership GP owns 100% of the outstanding general partner interests
in the Operating Partnership and the Partnership owns 100% of the outstanding
limited partner interests in the Operating Partnership. All of such interests
have been duly authorized and validly issued in accordance with the Operating
Partnership LP Agreement and have been fully paid (to the extent required under
the Operating Partnership LP Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-303 and 17-607 of the Delaware LP
Act), and Operating Partnership GP and the Partnership will own such interests
free and clear of all liens, encumbrances, security interests, equities, charges
or claims (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming any of them as debtor is on file
as of a recent date in the office of the Secretary of State of the State of
Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LP Act,
contained in the Operating Partnership LP Agreement or securing indebtedness
under the Credit Facility.
8.Ownership of Limited Liability Company Interests in the Operating
Partnership GP. The Partnership owns 100% of the outstanding limited liability
company interests in the Operating Partnership GP and all of such interests have
been authorized and validly issued in accordance with the Operating Partnership
GP LLC Agreement. and are fully paid (to the extent required under the Operating
Partnership GP LLC Agreement) and nonassessable (except as such nonassessability
may be affected by Section 18-607 of the Delaware LLC Act), and the Partnership
owns such interests free and clear of all liens, encumbrances, security
interests, equities, charges or claims (i) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware naming any
of them as debtor is on file as of a recent date in the office of the Secretary
of State of the State of Delaware or (ii) otherwise known to such counsel,
without independent investigation, other than those created by or arising under
the Delaware LLC Act, contained in the Operating Partnership GP LLC Agreement or
securing indebtedness under the Credit Facility.
9.Ownership of the Subsidiaries. The Partnership owns, directly or
indirectly, 100% of the limited liability company interests or partnership
interests, as the case may be, in the Subsidiaries, such interests have been
duly authorized and validly issued in accordance with the limited liability
company or limited partnership agreement, as the case may be, of the respective
Subsidiaries, and are fully paid (to the extent required under their respective
limited liability company agreement or limited partnership agreement) and
non-assessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act, in the case of a
Exhibit A - Page 3
Delaware limited liability company, or Section 17-607 of the Delaware LP Act, in
the case of a Delaware limited partnership), in each case, free and clear of all
liens, encumbrances, security interests, equities, charges and other claims (i)
in respect of which a financing statement under the Uniform Commercial Code of
the State of Delaware naming any of them as debtor is on file as of a recent
date in the office of the Secretary of State of the State of Delaware or (ii)
otherwise known to such counsel, without independent investigation, other than
those created by or arising under the Delaware LP Act or securing indebtedness
under the Credit Facility.
00.Xx Preemptive Rights, Registration Rights or Options. Except as
described in the Registration Statement, the Prospectus and the Disclosure
Package, there are no options, warrants, preemptive rights or other rights to
subscribe for or to purchase, nor any restriction upon the voting or transfer
of, any partnership or limited liability company interests in any Partnership
Entity pursuant to any partnership agreement, limited liability company
agreement, certificate of formation or conversion or other constituent document
of any Partnership Entity or any other agreement or instrument listed as an
exhibit to the Registration Statement. To the knowledge of such counsel, neither
the filing of the Registration Statement nor the offering or sale of the Units
as contemplated by this Agreement gives rise to any rights for or relating to
the registration of any Units or other securities of any Partnership Entity
other than as described in the Prospectus, as provided in the Partnership
Agreement or as have been waived.
11.Authority and Authorization. The Partnership has all requisite
partnership power and authority to issue, sell and deliver (i) the Units, in
accordance with and upon the terms and conditions set forth in this Agreement
and the Partnership Agreement and (ii) the Sponsor Units and Incentive
Distribution Rights, in accordance with and upon the terms and conditions set
forth in the Transaction Documents, the Registration Statement, the Prospectus,
the Disclosure Package and the Partnership Agreement.
12.Due Authorization, Execution and Delivery of Agreement. This Agreement
has been duly authorized, executed and delivered by each of the Partnership, the
General Partner, GP LLC, the Operating Partnership and the Operating Partnership
GP.
13.Enforceability of Other Agreements. Each of the Operative Agreements to
which any of the Partnership Entities is a party has been duly authorized and
validly executed and delivered by each of the Partnership Entities party
thereto. Each of the Operative Agreements governed by Delaware law constitutes a
valid and legally binding agreement of the Partnership Entities party thereto,
enforceable against each of them in accordance with its respective terms,
subject to (i) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors'
rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (ii)
public policy, federal and state securities laws and other applicable laws
relating to fiduciary duties and indemnification and an implied covenant of good
faith and fair dealing.
00.Xx Conflicts. None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of this
Agreement or the Operative Agreements by the Partnership Entities that are
parties hereto or thereto, or the consummation of the transactions contemplated
hereby and thereby (including the Transactions) constitutes a breach or
violation of or a default (or an event which, with notice or lapse of time or
both, would
Exhibit A - Page 4
constitute such a default) under, or results or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of any of the Partnership Entities pursuant to, (i) the partnership
agreement, limited liability company agreement, certificate of formation,
certificate or articles of incorporation, bylaws or other constituent document
of any of the Partnership Entities, (ii) (A) any Transaction Document, (B) any
agreement or other instrument filed as an exhibit to the Registration Statement
or (C) any indenture or loan agreement to which the Partnership is a party or by
which any of their properties may be bound or any other agreement that has been
identified to such counsel as being material to the Partnership, (iii) the
Delaware LP Act, the Delaware LLC Act, the Delaware General Corporation Law (the
"DGCL"), the laws of the State of Texas or federal law or (iv) any order,
judgment, decree or injunction of any court or governmental agency or body known
to such counsel directed to any of the Partnership Entities or any of their
properties in a proceeding to which any of them or their property is a party,
which conflict, breach, violation, default or lien in the case of clauses (ii),
(iii) or (iv), would reasonably be expected to have a Material Adverse Effect or
a material adverse effect on the ability of any of the Partnership Entities to
consummate the transactions (including the Transactions) provided for in this
Agreement or the Operative Agreements; provided, however, that no opinion is
expressed pursuant to this paragraph with respect to federal or state securities
laws and other anti-fraud laws.
15.Consents. No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") under the Delaware LP Act, the
Delaware LLC Act, the DGCL, Texas law or federal law is required in connection
with the offering, issuance and sale by the Partnership of the Units, the
execution, delivery and performance of this Agreement and the Operative
Agreements by the Partnership Entities party hereto and thereto or the
consummation by the Partnership Entities of the transactions contemplated hereby
and thereby (including the Transactions), except (i) for such consents required
under the 1933 Act, the 1934 Act and under state securities or "Blue Sky" laws,
as to which such counsel need not express any opinion, (ii) for such consents
that have been obtained or made, (iii) for such consents that (A) are of a
routine or administrative nature, (B) are not customarily obtained or made prior
to the consummation of transactions such as those contemplated by this Agreement
or the Operative Agreements and (C) are expected in the reasonable judgment of
the General Partner to be obtained or made in the ordinary course of business
subsequent to the consummation of the Transactions (other than those
contemplated by the Credit Facility), (iv) for such consents which, if not
obtained or made, would not, individually or in the aggregate, have a Material
Adverse Effect, (v) as disclosed in the Prospectus and the Disclosure Package or
(vi) approval of the underwriting terms by the NASD.
16.Accuracy of Statements. The statements set forth in the Registration
Statement, the Preliminary Prospectus, the Prospectus and any Permitted Free
Writing Prospectuses under the captions "How We Will Make Cash Distributions,"
"Business -- Regulation," "Business -- Environmental Matters," "Certain
Relationships and Related Party Transactions," "Conflicts of Interest and
Fiduciary Duties," "Description of the Common Units," "The Partnership
Agreement" and "Investment in Us by Employee Benefit Plans," insofar as they
describe any agreement, statute or regulation or refer to statements of law or
legal conclusions, are accurate and complete in all material respects; and the
Common Units, the Subordinated Units and the Incentive Distribution Rights
conform in all material respects to the descriptions thereof contained in the
Registration Statement and Prospectus under the captions "Summary -- The
Exhibit A - Page 5
Offering," "How We Will Make Cash Distributions," "Description of the Common
Units," and "The Partnership Agreement."
00.Xxx Opinion. The opinion of Xxxxxx and Xxxxx, LLP that is filed as
Exhibit 8.1 to the Registration Statement is confirmed, and the Underwriters may
rely upon such opinion as if it were addressed to them.
18.Effectiveness of Registration Statement. The Registration Statement was
declared effective under the 1933 Act on September 25, 2006; to the knowledge of
such counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or threatened by the Commission; and any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner and within the
time period required by such Rule.
19.Compliance as to Form. Except for the financial statements and the
notes and schedules thereto, and the other financial, statistical and accounting
data included in the Registration Statement, as to which such counsel need not
express any opinion, the Registration Statement, on the Effective Date and on
the applicable Closing Date, the Preliminary Prospectus, the Prospectus, when
filed with the SEC pursuant to Rule 424(b) and on the applicable Closing Date
(except for the financial statements and the notes and the schedules thereto,
and the other financial, statistical and accounting data included or
incorporated by reference in the Registration Statement or the Prospectus, as to
which such counsel need not express any opinion) and the Permitted Free Writing
Prospectuses appear on their face to comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Rules and Regulations.
20.Investment Company Act of 1940, as amended. None of the Partnership
Entities is an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
00.Xxxxx Proceedings or Contracts to be Described or Filed. To the
knowledge of such counsel, (i) there are no legal or governmental proceedings
pending or threatened to which any of the Partnership Entities is a party or to
which any of their respective properties is subject that are required to be
described in the Preliminary Prospectus and the Prospectus but are not so
described as required and (ii) there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the Preliminary
Prospectus and the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required by the 1933 Act or the
1933 Act Rules and Regulations.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Partnership Entities,
the independent public accountants of the Partnership, and representatives of
the Underwriters, at which the contents of the Registration Statement, the
Disclosure Package, the Preliminary Prospectus and the Prospectus and related
matters were discussed, and although such counsel has not independently
verified, is not passing on, and is not assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in, the
Registration Statement, the Disclosure Package, the Preliminary Prospectus and
the Prospectus (except to the extent specified in the foregoing
Exhibit A - Page 6
opinion), based on the foregoing, no facts have come to such counsel's attention
that lead such counsel to believe that:
(A).the Registration Statement at the time it 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,
(B).the Prospectus as of its issue date and the Closing Date contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
(C).the Disclosure Package (other than a road show or bona fide electronic
road show as defined in Rule 433 of the Exchange Act), as of the Execution Time,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading,
other than in the case of (A), (B) and (C) above as applicable (i) the
financial statements included therein, including the notes and schedules there
to and the auditors' reports thereon, and (ii) the other financial statistical
data included therein, as to which such counsel need not comment.
In rendering such opinion, such counsel may (i) rely in respect of matters of
fact upon certificates of officers and employees of the Partnership Entities and
upon information obtained from public officials, (ii) assume that all documents
submitted to them as originals are authentic, that all copies submitted to them
conform to the originals thereof, and that the signatures on all documents
examined by them are genuine, (iii) state that their opinion is limited to
federal laws, the Delaware LP Act, the Delaware LLC Act, the DGCL and Texas law,
(iv) state that they express no opinion with respect to the title of any of the
Partnership Entities to any of their respective real or personal property
purported to be transferred by the Contribution Documents nor with respect to
the accuracy or descriptions of real or personal property, and (v) state that
they express no opinion with respect to state or local taxes or tax statutes to
which any of the limited partners of the Partnership or any of the Partnership
Entities may be subject.
Exhibit A - Page 7
EXHIBIT B
[OHIO][WEST VIRGINIA][LOUISIANA] LOCAL COUNSEL OPINION
1.Due Qualification. Each of the [applicable Partnership Entities] has
been duly qualified or registered as a foreign limited partnership or foreign
limited liability company, as the case may be, for the transaction of business
under the laws of the State of [Ohio][West Virginia][Louisiana].
2.Power and Authority. Each of the Partnership Entities has all limited
partnership or limited liability company, as applicable, power and authority
under the laws of the State of [Ohio][West Virginia][Louisiana] necessary to own
or lease its properties and to conduct its business in the State of [Ohio][West
Virginia][Louisiana], in each case in all material respects as described in the
Prospectus.
0.Xxxxxxx Liability. Upon the consummation of the Transactions, as a
result solely of their ownership interests in the Partnership or the
Subsidiaries, as applicable, the Partnership will not be liable under the laws
of the State of [Ohio][West Virginia][Louisiana] for the liabilities of the
Subsidiaries, and the Unitholders will not be liable under the laws of the State
of [Ohio][West Virginia][Louisiana] for the liabilities of the Partnership or
the Subsidiaries, except in each case to the same extent as under the laws of
the State of Delaware.
0.Xx Consents. No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any court,
governmental agency or body of the State of [Ohio][West Virginia][Louisiana]
having jurisdiction over any of the Partnership Entities or any of their
respective properties is required for the issuance and sale of the Units by the
Partnership, the execution, delivery and performance of this Agreement and the
Operative Agreements by the Partnership Entities party hereto and thereto or the
consummation by the Partnership Entities of the transactions contemplated hereby
and thereby (including the Transactions), except (i) for such consents required
under state securities or "Blue Sky" laws in connection with the purchase and
distribution of the Units by the Underwriters, as to which such counsel need not
express any opinion, (ii) for such consents that have been obtained or made,
(iii) for such consents which, if not obtained or made, would not, individually
or in the aggregate, have a material adverse effect upon the operations
conducted or to be conducted as described in the Prospectus in the State of
[Ohio][West Virginia][Louisiana] by the Partnership Entities or (iv) as
disclosed in the Prospectus.
0.Xx Conflicts. None of the offering, issuance and sale by the Partnership
of the Units, the execution, delivery and performance of this Agreement or the
Operative Agreements by the Partnership Entities that are parties hereto or
thereto, or the consummation of the transactions contemplated hereby and thereby
(including the Transactions) (i) violates or will violate any statute of the
State of [Ohio][West Virginia][Louisiana] or any rule, regulation or, to such
counsel's knowledge after due inquiry, any order of any agency of the State of
[Ohio][West Virginia][Louisiana] having jurisdiction over any of the Partnership
Entities or any of their respective properties or (ii) results or will result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Partnership Entities in the State of [Ohio][West
Virginia][Louisiana] (other than liens created pursuant to the Credit Facility),
which
Exhibit B - Page 1
violation or lien would have a material adverse effect on the Unitholders
or the operations conducted or to be conducted as described in the Prospectus
and the Disclosure Package in the State of [Ohio][West Virginia][Louisiana] by
the Partnership Entities.
6.Enforceability of Transaction Documents. Each of the Transaction
Documents (i) governed by [Ohio][West Virginia][Louisiana] law or (ii) relating
to the transfer of property in the State of [Ohio][West Virginia][Louisiana] (if
governed by laws other than [Ohio][West Virginia][Louisiana], to the extent it
is a valid and legally binding agreement under the applicable law as stated
therein and that such law applies thereto), constitutes a valid and legally
binding agreement of the parties thereto under the laws of the State of
[Ohio][West Virginia][Louisiana], enforceable against such parties in accordance
with their respective terms, subject to (i) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (ii) public policy, applicable law relating to fiduciary
duties and indemnification and an implied covenant of good faith and fair
dealing.
7.Sufficiency of Contribution Documents. Each of the Contribution
Documents is in a form legally sufficient as between the parties thereto to
convey to the transferee or successor, as the case may be, thereunder all right,
title and interest of the transferor or predecessor, as the case may be, stated
therein in and to the properties located in the State of [Ohio][West
Virginia][Louisiana] as described in the Contribution Documents, subject to the
conditions, reservations and limitations contained in the Contribution
Documents, except motor vehicles and other property requiring conveyance of
certificated title, as to which the Contribution Documents are legally
sufficient to compel delivery of such certificated title.
8.Form of Deeds and Assignments. Each of the Contribution Documents that
are deeds or real property assignments (including, without limitation, the form
of the exhibits and schedules thereto) is in a form legally sufficient for
recordation in the appropriate public offices of the State of [Ohio][West
Virginia][Louisiana], to the extent such recordation is required to evidence
title to the properties covered thereby in the transferee or successor, as the
case may be, thereunder, and, upon proper recordation of any of such deeds, real
property assignments, as the case may be, in the State of [Ohio][West
Virginia][Louisiana], will constitute notice to all third parties under the
recordation statutes of the State of [Ohio][West Virginia][Louisiana] concerning
record title to the assets transferred thereby; recordation in the office of the
[insert applicable office] for each county in which any Partnership Entity owns
property is the appropriate public office in the State of [Ohio][West
Virginia][Louisiana] for the recordation of deeds and assignments of interests
in real property located in such county.
9.Permits. To such counsel's knowledge after due inquiry, each of the
Partnership Entities has such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory authorities
("permits") of the State of [Ohio][West Virginia][Louisiana] as are necessary to
own its properties and to conduct its business in the manner described in the
Prospectus and the Disclosure Package, subject to such qualifications as may be
set forth in the Prospectus and the Disclosure Package and except for such
permits that, if not obtained, would not, individually or in the aggregate, have
a material adverse effect upon the
Exhibit B - Page 2
operations conducted or to be conducted as described in the Prospectus and the
Disclosure Package in the State of [Ohio][West Virginia][Louisiana] by the
Partnership Entities.
In rendering such opinions, such counsel may (i) rely in respect of
matters of fact upon certificates of officers and employees of the Partnership
Entities and upon information obtained from public officials, (ii) assume that
all documents submitted to such counsel as originals are authentic, and all
copies submitted to such counsel conform to the originals thereof, and that the
signatures on all documents examined by such counsel are genuine, (iii) state
that their opinion is limited to the laws of the State of [Ohio][West
Virginia][Louisiana] and (iv) state that they express no opinion with respect to
state or local taxes or tax statutes to which any of the limited partners of the
Partnership or the Partnership Entities may be subject.
Exhibit B - Page 3
EXHIBIT C
COMFORT LETTER
September __, 2006
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Xxxxx & Associates, Inc.
Wachovia Capital Markets, LLC
Xxxxxxxxxxx & Company, Inc.
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
As Initial Purchasers of 3,900,000 common units of EV Energy Partners, L.P.
Dear Sirs:
We have audited the combined balance sheets of the Combined Predecessor Entities
(the "Company"), as defined in Note 1 to the combined financial statements, as
of December 31, 2005 and 2004, and the combined statements of operations and
comprehensive income, cash flows and changes in owners' equity for each of the
three years in the period ended December 31, 2005. We have audited the balance
sheet of EV Energy Partners, L.P. and the balance sheet of EV Energy GP, L.P.,
each as of May 12, 2006. All of the audited financial statements are included in
Registration Statement No. 333-134139 on Form S-1 filed by EV Energy Partners,
L.P. under the Securities Act of 1933 (the "Act"); our reports with respect
thereto (which report for the Company expresses an unqualified opinion and
includes an explanatory paragraph that indicates that the combined financial
statements have been restated as disclosed in footnote 16 to the combined
financial statements) are also included in that registration statement. This
registration statement, dated September __, 2006, is herein referred to as the
registration statement.
In connection with the registration statement --
1. We are an independent registered public accounting firm with respect to
the Company, EV Energy Partners, L.P. and EV Energy GP, L.P. within the
meaning of the Act and the applicable rules and regulations thereunder
adopted by the Securities and Exchange Commission ("SEC") and the Public
Company Accounting Oversight Board (United States) ("PCAOB").
2. In our opinion, the combined financial statements of the Company, the
balance sheet of EV Energy Partners, L.P. and the balance sheet of EV
Energy GP, L.P. audited by us and included in the registration statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related rules and regulations adopted by
the SEC.
3. We have not audited any financial statements of the Company as of any date
or for any period subsequent to December 31, 2005; although we have
conducted an audit for the year ended December 31, 2005, the purpose (and
therefore the scope) of the audit was to enable us to express our opinion
on the combined financial statements as of December 31, 2005, and for the
year then ended, but not on the financial statements for any interim
period within that year. Therefore, we are unable to and do not express
any opinion on the unaudited condensed combined balance sheet as of
Exhibit C - Page 1
June 30, 2006, and the unaudited condensed combined statements of
operations and comprehensive income, cash flows, and changes in owners'
equity for the six-month periods ended June 30, 2006 and 2005, included in
the registration statement, or on the financial position, results of
operations, or cash flows as of any date or for any period subsequent to
December 31, 2005.
4. For purposes of this letter, the Company management has represented to us
that there is no minutes of any meetings of owners of the Combined
Predecessor Entities. We have carried out other procedures to September
__, 2006, as follows (our work did not extend to the period from
September__, 2006 to September ___, 2006, inclusive):
A. With respect to the six-month periods ended June 30, 2006 and 2005 -
(i) Performed the procedures specified by the PCAOB for a review
of interim financial information as described in SAS No. 100,
Interim Financial Information, on the unaudited condensed
combined balance sheet as of June 30, 2006, and the unaudited
condensed combined statements of operations and comprehensive
income, cash flows, and changes in owners' equity for the
six-month periods ended June 30, 2006 and 2005, included in
the registration statement.
(ii) Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether
the unaudited condensed combined financial statements referred
to in 4A(i) comply as to form in all material respects with
the applicable accounting requirements of the Act and the
related rules and regulations adopted by the SEC.
B. Company officials have advised us that no combined financial
statements as of any date or for any period subsequent to June 30,
2006, are available.
The foregoing procedures do not constitute an audit conducted in accordance with
the standards of the PCAOB. Also, they would not necessarily reveal matters of
significance with respect to the comments in the following paragraph.
Accordingly, we make no representations regarding the sufficiency of the
foregoing procedures for your purposes.
5. Nothing came to our attention as a result of the foregoing procedures,
however, that caused us to believe that --
(i) Any material modifications should be made to the unaudited
condensed combined financial statements described in 4A(i),
included in the registration statement, for them to be in
conformity with accounting principles generally accepted in
the United States of America.
(ii) The unaudited condensed combined financial statements
described in 4a(i) do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related rules and regulations adopted by the SEC.
6. As mentioned in 4B, Company officials have advised us that no combined
financial statements as of any date or for any period subsequent to [June
30, 2006], are available; accordingly, the procedures carried out by us
with respect to changes in financial statement items after [June 30,
2006], have, of necessity, been very limited. We have inquired of certain
officials of the Company who have responsibility for financial and
accounting matters whether (a) at September __, 2006, there was any
increase in long-term debt or any decreases in combined net current assets
or owners' equity of the Company as compared with amounts shown on the
June 30, 2006 unaudited condensed combined
Exhibit C - Page 2
balance sheet included in the registration statement or (b) for the period
from July 1, 2006, to September __, 2006, there were any decreases, as
compared with the corresponding period in the preceding year, in combined
net revenues or net income. On the basis of these inquiries, officials of
the Company have advised us that there was no increase in long-term debt
and complete information is not available as to combined net current
assets or owners' equity as of September __, 2006. Officials of the
Company have also advised us that complete information is not available
for combined net revenues or net income for the period July 1, 2006 to
September __, 2006, as compared to the corresponding period in the prior
year.
Officials of EV Energy Partners, L.P. and EV Energy GP, L.P. have advised
us that no financial statements as of any date or for any period
subsequent to May 12, 2006, are available; accordingly, the procedures
carried out by us with respect to changes in financial statement items
after May 12, 2006, have, of necessity, been limited. We have inquired of
certain officials of EV Energy Partners, L.P. and EV Energy GP, L.P. who
have responsibility for financial and accounting matters whether at
September __, 2006, there was any change in limited partner interests,
increase in long-term debt, or any decreases in consolidated net current
assets or Partners' Capital of EV Energy Partners, L.P. and EV Energy GP,
L.P. as compared to amounts derived from the May 12, 2006 audited balance
sheets for each such entity included in the registration statement. On the
basis of these inquires, nothing came to our attention that caused us to
believe that there was any such change, increase, or decrease, except in
all instances for changes, increases or decreases that the registration
statement discloses have occurred or may occur except that _____________.
7. It should be understood that (1) we make no representations regarding the
Company's determination and presentation of the non-GAAP measures of
financial performance or liquidity, Adjusted EBITDA, (2) the non-GAAP
measures presented may not be comparable to similarly titled measures
reported by other companies, and (3) we make no comment as to whether the
non-GAAP measures comply with the requirements of Item 10 of Regulation
S-K.
8. At your request, we have --
A. Read the unaudited pro forma combined balance sheet as of June 30,
2006, and the unaudited pro forma combined statements of operations
for the year ended December 31, 2005, and the six-month period ended
June 30, 2006, included in the registration statement.
B. Inquired of certain officials of the Company who have responsibility
for financial and accounting matters about --
(i) The basis for their determination of the pro forma
adjustments, and
(ii) Whether the unaudited pro forma condensed combined financial
statements referred to in 8A comply as to form in all material
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X.
C. Proved the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro forma
condensed combined financial statements.
The foregoing procedures are substantially less in scope than an examination,
the objective of which is the expression of an opinion on management's
assumptions, the pro forma adjustments, and the application of those adjustments
to historical financial information. Accordingly, we do not express such an
opinion. The foregoing procedures would not necessarily reveal matters of
significance with respect to
Exhibit C - Page 3
the comments in the following paragraph. Accordingly, we make no representation
about the sufficiency of such procedures for your purposes.
9. Nothing came to our attention as a result of the procedures specified in
paragraph 8, however, that caused us to believe that the unaudited pro
forma condensed combined financial statements referred to in 8A included
in the registration statement do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements.
Had we performed additional procedures or had we made an examination of
the pro forma condensed combined financial statements, other matters might
have come to our attention that would have been reported to you.
10. At your request, for purposes of this letter, we have also read the items
identified by you on the attached copies of pages from the registration
statement, and have performed the following procedures, which were applied
as indicated with respect to the cross reference code explained below:
A Compared amount(s) to or recalculated amount(s) based on the
corresponding amount(s) in the Company's 2003, 2004, or 2005 audited
combined financial statements and footnotes included in the
registration statement and found such amount(s) to be in agreement.
B Compared amount(s) to or recalculated the amount(s) based on the
corresponding amount(s) in the Company's unaudited combined
financial statements and footnotes for the six-month periods ended
June 30, 2005 or June 30, 2006 included in the registration
statement and found such amount(s) to be in agreement.
C Compared to, or derived or recalculated the amount(s) from the
unaudited pro forma condensed combined statements of operations
included in the registration statement, and found such amount(s) to
be in agreement.
D Recalculated the arithmetic accuracy of the amount or percentage.
E Compared or recalculated amount(s) and/or other information to the
corresponding amount(s) in analyses prepared by employees of
EnerVest Management Partners, Ltd. ("EnerVest"), the general
partner, who have responsibility for accounting for the Company. The
analyses prepared by EnerVest employees were agreed to or can be
derived from the accounting records that are subject to the internal
controls of the Company's accounting system.
F Compared amount of capital expenditures of $10.7 million related to
the acquisition of oil and gas interests in the Monroe field in
March 2005 to the corresponding amount in the Company's unaudited
combined financial statements and footnotes for the six-month
periods ended June 30, 2005 or June 30, 2006 and found such amount
to be in agreement and we make no comment regarding the
appropriateness of the amount as a component of the pro forma
financial statements or pro forma footnotes.
G Compared the amount to an analysis prepared by EnerVest employees
and noted that capital expenditures for the year ended December 31,
2003 should be $10,736 (in thousands). The amount in the
registration statement is $10,436 (in thousands).
H Compared the amount to an analysis prepared by EnerVest employees
and noted that the amount spent for the three years ended December
31, 2005 for drilling in the Northern Louisiana properties should be
$262,000. The amount in the registration statement is $300,000.
Exhibit C - Page 4
I Proved the arithmetic accuracy of amounts to be outstanding after
the issuance of the common units to be offered by means of the
registration statement and the proposed use of proceeds therefrom,
as stated under the caption "Use of Proceeds"; however, we make no
comment regarding the reasonableness of "Use of Proceeds" or whether
such use will actually take place.
J Compared and agreed components of the non-GAAP measure of Adjusted
EBITDA to line items in an analysis prepared by the Company. The
amounts contained in such analysis have been prepared using amounts
included in the audited and unaudited financial statements included
within the registration statement or can be derived from the
accounting records that are subject to the internal controls of the
Company's accounting system. Proved arithmetic accuracy of the
non-GAAP measure Adjusted EBITDA. (See Paragraph 7 above.)
11. Our audits of the financial statements for the periods referred to in the
introductory paragraph of this letter comprised audit tests and procedures
deemed necessary for the purpose of expressing an opinion on the financial
statements taken as a whole. For none of the periods referred to therein,
or any other period, did we perform audit tests for the purpose of
expressing an opinion on individual balances of accounts or summaries of
selected transactions such as those enumerated above, and accordingly, we
express no opinion thereon.
12. It should be understood that we make no representations regarding
questions of legal interpretation or regarding the sufficiency for your
purposes of the procedures enumerated in paragraph 10; also, such
procedures would not necessarily reveal any material misstatement of the
amounts or percentages listed above. Further we have addressed ourselves
solely to the foregoing data as set forth in the registration statement
and make no representations regarding the adequacy of disclosure or
regarding whether any material facts have been omitted.
13. This letter is solely for the information of the addressees and to assist
the underwriters in conducting and documenting their investigation of the
affairs of the Company, EV Energy Partners, L.P. and EV Energy GP, L.P. in
connection with the offering of securities covered by the registration
statement, and it is not to be used, circulated, quoted, or otherwise
referred to within or without the underwriting group for any purpose,
including but not limited to the registration, purchase, or sale of
securities, nor is it to be filed with or referred to in whole or in part
in the registration statement or any other document, except that reference
may be made to it in the underwriting agreement or any list of closing
documents pertaining to the offering of securities covered by the
registration statement.
Yours truly,
Exhibit C - Page 5
EXHIBIT D
ENGINEERS' RESERVE REPORT LETTER
[This letter, which is written at the request of EV Energy Partners, L.P.
(the "Company"), is being delivered to the Underwriters pursuant to the terms of
an underwriting agreement between [_______] and the Underwriters relating to the
public offering of 3,900,000 common units representing limited partner interests
of the Partnership (the "Common Units"), which are being offered by the
Partnership pursuant to the prospectus dated [______], 2006 (the "Prospectus").
Our report letter dated [__________] to the Partnership presented our
estimates of Proved Reserves and Future Net Revenues (including discounted
values thereof) attributable to interests of the Partnership as of December 31,
2005 (the "2005 Report"). [In addition, we also delivered previous reports to
the Partnership for the year ended December 31, 2003 and 2004 (the "Previous
Reports").] The 2005 Report and the previous reports are collectively referred
to in this letter as the "Reports".
In connection with the foregoing, we hereby inform you as follows:
1. As of the date of this letter and as of the date of the Reports, we
are and were independent reserve engineers with respect to the
Partnership as provided in the standards pertaining to the
estimating and auditing of oil and gas reserve information
promulgated by the Securities and Exchange Commission (the "SEC").
Neither we, nor to our knowledge, any of our employees, officers or
directors, own interests in the oil and gas properties included in
the Reports. We have not been employed by the Partnership on a
contingent basis.
2. All terms used in this letter, where applicable, conform to the
definitions set forth in Rule 4-10 of Regulation S-X promulgated by
the SEC.
3. The estimates of the Partnership's Proved Reserves, Future Net
Revenues and the discounted values of Future Net Revenues contained
in the Reports, and the computations made in connection therewith,
were, unless otherwise stated, made in accordance with the
provisions of Rule 4-10 of Regulation S-X promulgated by the SEC and
have been prepared in a manner consistent and in compliance with the
standards and definitions pertaining to the estimating and auditing
of oil and gas reserve information promulgated by the SEC.
4. The engineering projections included in the [2005 Report] were based
on the latest available production data, the majority through
[December] 2005. [Although we were not requested to review
subsequent data concerning either the performance of the xxxxx or
field operations, no additional information has been brought to our
attention that would lead us to believe that there would be a
material change in the estimated Proved Reserves or Future Net
Revenues attributable to the Partnership's interests reflected in
the 2005 Report.]
Exhibit D - Page 1
5. You may rely upon our Reports in the same manner as if such report
were addressed to you.
6. We have reviewed the circled reserve information on pages attached
hereto as Appendix A from the Prospectus dated ________, 2006. We
confirm that such circled information labeled "A" in the right
margin has been accurately derived from our Reports. [Our Reports do
not present proved reserve information presented on a barrel or Mcf
equivalent basis. We have, however, confirmed that to the extent
such equivalent unit information is circled in Appendix A, it has
been accurately calculated using proved reserve volumes from our
Reports and applying a 6 to 1 ratio to convert Mcf natural gas
volumes to barrel of oil equivalents or vice versa.] [Discuss with
Xxxxxx] Circled information labeled "B" in the right margin contains
information calculated by the company using information from our
2005 Report aggregated with outside information; we verified these
values with additional information supplied by the Partnership.
Circled information labeled "C" in the right margin is not included
in our Reports and was prepared by the Partnership; we reviewed this
information with the Partnership and the values appear reasonable
based on our review; however, we have not independently verified
this information.
We hereby consent to the references to our firm and the use of the Reports
as set forth in the Prospectus.
This letter is solely for the information of the addressees and to assist
the addressees in documenting their investigations in connection with the
offering of the Common Units covered by the Prospectus.
Exhibit D - Page 2
