Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is entered into March
15, 2006, by and among Legacy Reserves, LP, a Delaware limited partnership (the
"PARTNERSHIP"), Legacy Reserves GP, LLC, a Delaware limited liability company
(the "GP" and, together with the Partnership, the "LEGACY ENTITIES"), and
Friedman, Billings, Xxxxxx & Co., Inc., a Delaware corporation ("FBR"), for the
benefit of the purchasers of the units representing limited partner interests in
the Partnership (the "UNITS"), as participants ("PARTICIPANTS") in the offering
and sale of the Units and the direct and indirect transferees of FBR and each of
the Participants.
WITNESSETH:
WHEREAS, FBR, the Legacy Entities and other parties entered into the
Purchase/Placement Agreement dated March 6, 2006 (the "PLACEMENT AGREEMENT"), in
connection with which the Partnership agreed to sell 5,000,000 newly issued
Units (plus an additional 250,000 Units to cover over allotments and optional
issuances, if any), with FBR acting as initial purchaser of the 144A Units (as
defined) and placement agent with respect to the Private Placement Units (as
defined);
WHEREAS, to induce FBR to enter into the Placement Agreement, the
Partnership has agreed to provide the registration rights provided for in this
Agreement for the holders of Registrable Units (as defined below); and
WHEREAS, the execution of this Agreement is a condition to the closing of
the transactions contemplated by the Placement Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereto, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:
"144A UNITS" is defined in the Placement Agreement.
"ADDITIONAL PAYMENTS" is defined in Section 7(a).
"AFFILIATE" means, as to any specified Person, (i) any Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified Person, (ii) any
executive officer, director, trustee or general partner of the specified Person
and (iii) any legal entity for which the specified Person acts as an executive
officer, director, trustee or general partner. For purposes of this definition,
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), as used with respect to any Person, means the
possession, directly, or indirectly through one or more intermediaries, of the
power to direct or cause the direction of the management and policies of such
Person, whether by contract, through the ownership of voting securities, partner
interests or other equity interests or otherwise.
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"AGREEMENT" is defined in the introductory paragraph.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by applicable law, regulation or executive order to
close.
"CLOSING DATE" is defined in the Placement Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"PARTNERSHIP" is defined in the introductory paragraph.
"CONTROLLING PERSON" is defined in Section 6(a).
"END OF SUSPENSION NOTICE" is defined in Section 5(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission pursuant thereto.
"FBR" is defined in the introductory paragraph.
"FBR MERCHANT BANKING" means Friedman, Billings, Xxxxxx Group, Inc. and any
successor thereto.
"FBR MANDATORY SHELF REGISTRATION STATEMENT" is defined in Section 2(a).
"FORM 10-K" means an annual report required to be filed with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act, as such form may be
amended from time to time, or any similar form, rule or regulation hereafter
adopted by the Commission as a replacement thereto having substantially the same
effect as such form, provided that such form need not include those items
required by Section 404 of the Xxxxxxxx-Xxxxx Act of 2002.
"FORM 10-Q" means a quarterly report required to be filed with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act, as such
form may be amended from time to time, or any similar form, rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such form, provided that such form need not
include those items required by Section 404 of the Xxxxxxxx-Xxxxx Act of 2002.
"GAAP" is defined in Section 3(e).
"GP" is defined in the introductory paragraph.
"HOLDER" means each owner of any Registrable Units from time to time,
including FBR and its Affiliates.
"HOLDERS MANDATORY SHELF REGISTRATION STATEMENT" is defined in Section
2(a).
"INDEMNIFIED PARTY" is defined in Section 6(c).
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"INDEMNIFYING PARTY" is defined in Section 6(c).
"IPO REGISTRATION STATEMENT" is defined in Section 8.
"LEGACY ENTITIES" is defined in the introductory paragraph.
"LIABILITIES" is defined in Section 6(a).
"MANDATORY SHELF REGISTRATION STATEMENT" is defined in Section 2(a).
"NASD" means the National Association of Securities Dealers, Inc.
"NO OBJECTIONS LETTER" is defined in Section 4(t).
"NOTICE AND QUESTIONNAIRE" is defined in Section 2(a)(iii).
"PARTICIPANTS" is defined in the introductory paragraph.
"PERSON" means an individual, limited liability company, partnership,
corporation, trust, unincorporated organization, government or agency or
political subdivision thereof, or any other legal entity.
"PIGGYBACK REGISTRATION STATEMENT" is defined in Section 2(b).
"PLACEMENT AGREEMENT" is defined in the first recital clause.
"PRIOR HOLDER" means an investor party to or other beneficiary of the
Founders Registration Rights Agreement, dated March 6, 2006, among the
Partnership and certain other parties listed therein that has not waived its
rights under such Registration Rights Agreement and holding "Registrable
Securities" (as defined in such Registration Rights Agreement).
"PRIVATE PLACEMENT UNITS" means Units initially sold by the Partnership
directly to "accredited investors" (within the meaning of Rule 501(a)
promulgated under the Securities Act) as Participants, with FBR acting as
placement agent.
"PROSPECTUS" means the prospectus included in any Registration Statement,
including any preliminary prospectus, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
"PURCHASER INDEMNITEE" is defined in Section 6(a).
"REGISTRABLE UNITS" means the 144A Units and the Private Placement Units,
upon original issuance thereof, and at all times subsequent thereto, including
upon the transfer thereof by the original holder or any subsequent holder and
any units or other securities issued in respect of such Registrable Units
because of or in connection with any dividend, distribution, split, purchase in
any rights offering or in connection with any exchange for or replacement of
such Registrable Units or any combination of units, recapitalization, merger or
consolidation, or any
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other equity securities issued pursuant to any other pro rata distribution with
respect to the Units, until, in the case of any such 144A Unit or Private
Placement Unit, the earliest to occur of:
(i) the date on which it has been sold pursuant to a Registration
Statement or sold pursuant to Rule 144;
(ii) the date on which it is saleable, in the opinion of counsel
to the Partnership, without registration under the Securities Act,
pursuant to Rule 144(k);
(iii) the date on which it is saleable, without restriction,
pursuant to an available exemption from registration under the
Securities Act; or
(iv) the date on which it is sold to the Partnership or its
subsidiaries.
"REGISTRATION DEFAULT" is defined in Section 7(a).
"REGISTRATION EXPENSES" means any and all expenses incident to the
performance of or compliance with this Agreement, including: (i) all Commission,
securities exchange, NASD registration, listing, inclusion and filing fees
(including those of FBR, FBR Merchant Banking and Holders associated or
affiliated with FBR), (ii) all fees and expenses incurred in connection with
compliance with international, federal or state securities or blue sky laws
(including any registration, listing and filing fees and reasonable fees and
disbursements of counsel in connection with blue sky qualification of any of the
Registrable Units and the preparation of a blue sky memorandum and compliance
with the rules of the NASD), (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, duplicating, printing, delivering and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements,
certificates and any other documents relating to the performance under and
compliance with this Agreement, (iv) all fees and expenses incurred in
connection with the listing or inclusion of any of the Registrable Units on the
New York Stock Exchange, the American Stock Exchange or The NASDAQ Stock Market
pursuant to Section 4(n), (v) the fees and disbursements of counsel for the
Partnership and of the independent public accountants of the Partnership
(including the expenses of any special audit and "cold comfort" letters required
by or incident to such performance) and the reasonable fees and disbursements of
one counsel, reasonably acceptable to the Partnership, for the Holders, selected
by the Holders holding a majority of the Registrable Units, and (vi) any fees
and disbursements customarily paid by issuers in issues and sales of securities
(including the fees and expenses of any experts retained by the Partnership in
connection with any Registration Statement), provided, however, that
Registration Expenses shall exclude brokers' or underwriters' discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Units by a Holder and the fees and disbursements of any counsel to
the Holders other than as provided for in clause (v).
"REGISTRATION STATEMENT" means any Mandatory Registration Statement or
Piggyback Registration Statement.
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"RULE 144", "RULE 144A", "RULE 158", "RULE 415", "RULE 424", or "RULE 429",
respectively, means such specified rule promulgated by the Commission pursuant
to the Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission thereunder.
"SUSPENSION EVENT" is defined in Section 5(b).
"SUSPENSION NOTICE" is defined in Section 5(b).
"UNDERWRITTEN OFFERING" means a sale of securities of the Partnership to an
underwriter or underwriters for reoffering to the public.
"UNITS" is defined in the introductory paragraph.
2. Registration Rights.
(a) Mandatory Shelf Registration. As set forth in Section 4, the
Partnership will file with the Commission as soon as reasonably practicable, but
not later than May 15, 2006, (A) a shelf registration statement on Form S-1 or
such other form under the Securities Act then available to the Partnership
providing for the resale pursuant to Rule 415 from time to time by the Holders,
other than those Holders for which the resale of such Holder's Registrable Units
is provided for under the FBR Mandatory Shelf Registration Statement (as defined
below), of any and all of such Holders' Registrable Units (including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement, the "HOLDERS MANDATORY SHELF
REGISTRATION STATEMENT"), and (B) a shelf registration statement on Form S-1 or
such other form under the Securities Act then available to the Partnership
providing for the resale pursuant to Rule 415 from time to time by FBR, FBR
Merchant Banking and any Holder that is associated or affiliated with FBR of any
and all of such Holders' Registrable Units (including the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference, if any, in such
registration statement, the "FBR MANDATORY SHELF REGISTRATION STATEMENT"; either
or both the Holders Mandatory Shelf Registration and the FBR Mandatory Shelf
Registration Statement may be referred to herein without distinction as a
"MANDATORY SHELF REGISTRATION STATEMENT"). If the Partnership has an effective
Holders Mandatory Shelf Registration Statement on Form S-1 and becomes eligible
to use Form S-3 or such other short-form registration statement form under the
Securities Act, the Partnership shall promptly give notice of such eligibility
to the Holders covered thereby and may, or at the request of such Holders with a
majority of such Registrable Units shall, promptly convert such Holders
Mandatory Shelf Registration Statement on Form S-1 to a registration statement
on Form S-3 or such other short-form registration statement by means of a
post-effective amendment or otherwise, unless any Holder with Registrable Units
under the initial
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Holders Mandatory Shelf Registration Statement notifies the Partnership within
10 Business Days of receipt of the Partnership notice that such conversion would
interfere with its distribution of Registrable Units already in progress and
provides a reasonable explanation therefor, in which case the Partnership will
delay the conversion of the Holders Mandatory Shelf Registration Statement for a
reasonable time after receipt of the first such notice, not to exceed 30 days in
the aggregate, for all Holders requesting such suspension (unless the
Partnership, at such time as the conversion from Form S-1 to Form S-3 or such
other short-form registration statement may occur, would otherwise be required
to amend the Holders Mandatory Shelf Registration Statement and require that
Holders suspend sales under Section 4(i) or Section 5). If the Partnership has
an effective FBR Mandatory Shelf Registration Statement on Form S-1 under the
Securities Act and becomes eligible to use Form S-3 or such other short-form
registration statement form under the Securities Act, the Partnership shall
promptly give notice of such eligibility to the Holders covered thereby and may
(unless FBR or FBR Merchant Banking reasonably objects unless the Partnership,
at such time as the conversion from Form S-1 to Form S-3 or such other
short-form registration statement may occur, would otherwise be required to
amend the FBR Mandatory Shelf Registration Statement and require that Holders
suspend sales under Section 4(i) or Section 5), or at the request of FBR or FBR
Merchant Banking shall, promptly convert such FBR Mandatory Shelf Registration
Statement on Form S-1 to a Registration Statement on Form S-3 or such other
short-form registration statement by means of a post-effective amendment or
otherwise.
(i) Effectiveness and Scope. The Partnership shall use its
commercially reasonable efforts to cause the Mandatory Registration Statement to
be declared effective by the Commission as soon as practicable following such
filing, and to remain effective until the date on which all Units in respect
thereof cease to be Registrable Units. The Partnership may not include any Units
owned by a Prior Holder in the Holders Mandatory Shelf Registration Statement or
the FBR Mandatory Shelf Registration Statement. Each Mandatory Shelf
Registration Statement shall provide for the resale from time to time, and
pursuant to any method or combination of methods legally available (including an
Underwritten Offering, a direct sale to purchasers, a sale through brokers or
agents, or a sale over the internet) by the Holders of any and all Registrable
Units. The Partnership shall not file any registration statement on behalf of or
for the benefit of any Prior Holder unless it has filed or files concurrently
each Mandatory Shelf Registration Statement, and the Partnership shall not
submit an acceleration request to the Commission requesting effectiveness of any
such Prior Holder registration statement unless it has submitted or concurrently
submits an acceleration request to the Commission requesting effectiveness of
each Mandatory Shelf Registration Statement and reasonably believes based on
communications with the Commission that such request with respect to each
Mandatory Shelf Registration Statement will be granted.
(ii) Underwriting. If any Holder proposes to conduct an Underwritten
Offering under a Mandatory Shelf Registration Statement, such Holder shall
advise the Partnership and all other Holders whose securities are included in
such Mandatory Shelf Registration Statement (if applicable), of the managing
underwriters for such proposed Underwritten Offering (which may include FBR or
an Affiliate thereof); such managing underwriters to be subject to the approval
of the Partnership, not to be unreasonably withheld. In such event, the
Partnership shall enter into an underwriting agreement in customary form with
the managing underwriters, which shall include, among other provisions,
indemnities to the
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effect and to the extent provided in Section 6, and shall take all such other
reasonable actions as are requested by the managing underwriter in order to
expedite or facilitate the registration and disposition of the Registrable Units
included in such Underwritten Offering; provided, however, that the Partnership
shall not be required to cause appropriate officers of the Partnership or its
Affiliates to participate in a "road show" or similar marketing effort being
conducted by such underwriter with respect to such Underwritten Offering more
than once in any six month calendar period or if the Holders do not reasonably
anticipate gross proceeds from such Underwritten Offering of at least $30
million. All Holders proposing to distribute their Registrable Units through
such Underwritten Offering shall enter into an underwriting agreement in
customary form with the managing underwriters selected for such underwriting and
complete and execute any questionnaires, powers of attorney, indemnities,
securities escrow agreements and other documents reasonably required under the
terms of such underwriting, and furnish to the Partnership such information in
writing as the Partnership may reasonably request for inclusion in the
Registration Statement; provided, however, that no Holder shall be required to
make any representations or warranties to or agreements with the Partnership or
the underwriters other than representations, warranties or agreements as are
customary and reasonably requested by the underwriters. Notwithstanding any
other provision of this Agreement, with respect to an Underwritten Offering in
connection with a Mandatory Shelf Registration Statement, if the managing
underwriters determine in good faith that marketing factors require a limitation
on the number of Units to be included in such Underwritten Offering, then the
managing underwriters may exclude Units (including Registrable Units) from the
Underwritten Offering, and any Units included in the Underwritten Offering shall
be allocated first, to each of the Holders requesting inclusion of their
Registrable Units in such Underwritten Offering on a pro rata basis based on the
total number of Registrable Units requested to be included, second to the
Partnership requesting inclusion of primary Units in such Underwritten Offering,
and third, to any Prior Holders requesting inclusion of their Units in such
Underwritten Offering in the manner provided in the Founders Registration Rights
Agreement. In the case of the FBR Mandatory Shelf Registration Statement, such
exclusion shall be negotiated by FBR, FBR Merchant Banking and the underwriters.
(iii) Selling Stockholder Questionnaires. Each Holder agrees, by its
acquisition of Units, that if such Holder wishes to sell Registrable Units
pursuant to a Mandatory Shelf Registration Statement and related Prospectus, it
will do so only in accordance with this Section 2(a)(iii). Each Holder wishing
to sell Registrable Units pursuant to a Mandatory Shelf Registration Statement
and related Prospectus agrees to deliver a written notice, substantially in form
and substance of Annex V to the preliminary offering memorandum, subject to
completion, dated February 13, 2006 (a "NOTICE AND QUESTIONNAIRE"), to the
Partnership. The Partnership shall mail the Notice and Questionnaire to the
Holders no later than the date of initial filing of a Mandatory Shelf
Registration Statement with the Commission. No Holder shall be entitled to be
named as a selling securityholder in a Mandatory Shelf Registration Statement as
of the initial effective date of a Mandatory Shelf Registration Statement, and
no Holder may use the Prospectus forming a part thereof for resales of
Registrable Units at any time, unless such Holder has returned a completed and
signed Notice and Questionnaire to the Partnership by the deadline for response
set forth therein; provided, however, Holders shall have at least 20 days from
the date on which the Notice and Questionnaire is first mailed to such Holders
to return a completed and signed Notice and Questionnaire to the Partnership.
Notwithstanding the foregoing, (x) upon the request of any Holder that did not
return a Notice and Questionnaire on a timely basis or did
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not receive a Notice and Questionnaire because it was a subsequent transferee of
Registrable Units after the Partnership mailed the Notice and Questionnaire, the
Partnership shall distribute a Notice and Questionnaire to such Holders at the
address set forth in the request and (y) upon receipt of a properly completed
Notice and Questionnaire from such Holder, the Partnership shall use its
reasonable best efforts to name such Holder as a selling securityholder in such
Mandatory Shelf Registration Statement by means of a pre-effective amendment, by
means of a post-effective amendment or, if permitted by the Commission, by means
of a Prospectus supplement to the Mandatory Shelf Registration Statement;
provided, however, that the Partnership will have no obligation to add Holders
to a Mandatory Shelf Registration Statement as selling securityholders more
frequently than one time every 30 calendar days.
(b) Piggyback Registration. If, after the date hereof, the Partnership
proposes to file a registration statement under the Securities Act providing for
a public offering of the Partnership's equity securities, other than the Holders
Mandatory Shelf Registration Statement, the FBR Mandatory Shelf Registration
Statement or a registration statement on Form S-8 or Form S-4 or any similar
form hereafter adopted by the Commission as a replacement therefor (including
the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement, the "PIGGYBACK REGISTRATION
STATEMENT"), the Partnership will notify each Holder of the proposed filing if
clause (i) of the following sentence applies, or only those affected Holders if
clause (ii) or (iii) of the following sentence applies. If (i) the Piggyback
Registration Statement relates to an IPO Registration Statement, (ii) a
Mandatory Shelf Registration Statement is not then effective or (iii)
Registrable Units eligible for inclusion in a Mandatory Shelf Registration
Statement when initially declared effective were not included in a Mandatory
Shelf Registration Statement (unless such Units have been or can be added to a
Mandatory Registration Statement at such time), then each Holder in the case of
clause (i), and each such affected Holder in the case of clause (ii) and (iii),
shall be given an opportunity to include in such Piggyback Registration
Statement all or any part of such Holder's Registrable Units. Each such Holder
desiring to include in any such Piggyback Registration Statement all or part of
such Holder's Registrable Units shall, within 10 days after receipt of the
above-described notice by the Partnership, so notify the Partnership in writing,
and in such notice shall inform the Partnership of the number of Registrable
Units such Holder wishes to include in such Piggyback Registration Statement and
provide, as a condition to such inclusion, such information regarding itself,
its Registrable Units and the intended method of disposition of such securities
as is required pursuant to Regulation S-K promulgated under the Securities Act
to effect the registration of the Registrable Units. Any Holder's election to
include any Registrable Units in such Piggyback Registration Statement will not
affect the inclusion of such Registrable Units in a Mandatory Shelf Registration
Statement until such Registrable Units have been sold under the Piggyback
Registration Statement at which time the Partnership may remove such Units from
a Mandatory Shelf Registration Statement.
(i) Right to Terminate Piggyback Registration. The Partnership may
terminate or withdraw any Piggyback Registration Statement, and without any
obligation to any such Holder whether or not any Holder has elected to include
Registrable Units in such registration. The Partnership may suspend the
effectiveness and use of any Piggyback Registration Statement at any time for an
unlimited amount of time whether or not any Holder
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has elected to include Registrable Units in such registration. In the event of
any such termination or withdrawal or unlimited suspension with respect to an
IPO Registration Statement, the following Registration Statement (other than a
Mandatory Shelf Registration Statement) for a public offering of securities by
the Partnership filed under the Securities Act shall, for purposes of this
Agreement, be an IPO Registration Statement.
(ii) Underwriting. The Partnership shall advise the Holders of the
managing underwriters for any Underwritten Offering proposed under the Piggyback
Registration Statement. The right of any such Holder's Registrable Units to be
included in any Piggyback Registration Statement pursuant to this Section 2(b)
shall be conditioned upon such Holder's participation in such Underwritten
Offering and the inclusion of such Holder's Registrable Units in the
Underwritten Offering to the extent provided herein. All Holders proposing to
distribute their Registrable Units through such Underwritten Offering shall
enter into an underwriting agreement in customary form with the managing
underwriters selected for such underwriting and complete and execute any
questionnaires, powers of attorney, indemnities, securities escrow agreements
and other documents reasonably required under the terms of such underwriting,
and furnish to the Partnership such information in writing as the Partnership
may reasonably request for inclusion in the Registration Statement; provided,
however, that no Holder shall be required to make any representations or
warranties to or agreements with the Partnership or the underwriters other than
representations, warranties or agreements as are customary and reasonably
requested by the underwriters. Notwithstanding any other provision of this
Agreement, if the managing underwriters determine in good faith that marketing
factors require a limitation on the number of Units to be included, then the
managing underwriters may exclude Units (including Registrable Units) from the
Piggyback Registration Statement and the Underwritten Offering, and any Units
included in the Piggyback Registration Statement and the Underwritten Offering
shall be allocated, first, to the Partnership, and second, to each Holder and
the Prior Holder(s) requesting inclusion of their Registrable Securities in such
Piggyback Registration Statement on a pro rata basis based on the total number
of such Units requested to be included provided that among the Prior Holders the
allocation shall be made taking into account the provisions of the Founders
Registration Rights Agreement, provided, however, that the number of Registrable
Units to be included in the Piggyback Registration Statement shall not be
reduced unless all other securities of the Partnership held by other holders of
the Partnership's capital stock with registration rights that are inferior (with
respect to such reduction) to the registration rights of the Holders set forth
herein, are first entirely excluded from the underwriting and registration. If
any Holder disapproves of the terms of any Underwritten Offering, such Holder
may elect to withdraw therefrom by written notice to the Partnership and the
underwriter, delivered at least 10 Business Days before the effective date of
the Piggyback Registration Statement. Any Registrable Units excluded or
withdrawn from such Underwritten Offering shall be excluded and withdrawn from
the Piggyback Registration Statement.
(iii) Hold-Back Agreement. By electing to include Registrable Units in
the Piggyback Registration Statement, if any, the Holder shall be deemed to have
agreed not to effect any sale or distribution of securities of the Partnership
of the same or similar class or classes of the securities included in the
Registration Statement or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 under the
Securities Act, during such periods as reasonably requested (but in no event
longer than 30 days before and 75 days following the effective date of the
Piggyback Registration Statement,
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provided the Prior Holders and each of the executive officers and directors of
the Legacy Entities that hold Units or securities convertible into or
exchangeable or exercisable for Units are subject to at least the same
restriction for the entire time period required of the Holders hereunder) by the
representatives of the underwriters, if an Underwritten Offering.
(iv) Mandatory Shelf Registration not Impacted by Piggyback
Registration Statement. The Partnership's obligation to file any Mandatory Shelf
Registration Statement shall not be affected by the filing or effectiveness of
the Piggyback Registration Statement.
(c) Expenses. The Partnership shall pay all Registration Expenses in
connection with the registration of the Registrable Units pursuant to this
Agreement. Each Holder participating in a registration pursuant to this Section
2 shall bear such Holder's proportionate share (based on the total number of
Registrable Units sold in such registration) of all discounts and commissions
payable to underwriters or brokers and all transfer taxes in connection with a
registration of Registrable Units pursuant to this Agreement and any other
expense of the Holders not specifically allocated to the Partnership pursuant to
this Agreement relating to the sale or disposition of such Holder's Registrable
Units pursuant to any Registration Statement.
3. Rule 144 and Rule 144A Reporting; Reports to Holders.
(a) With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Registrable Units
to the public without registration, the Partnership agrees to, so long as any
Holder owns any Registrable Units:
(i) make and keep adequate current public information available, as
those terms are understood and defined in Rule 144(c) at all times after the
effective date of the first registration statement filed by the Partnership
relating to an offering of the Partnership's securities to the general public;
(ii) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required to be filed by the
Partnership under the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements);
(iii) furnish to any Holder promptly upon request a written statement
by the Partnership as to its compliance with the reporting requirements of Rule
144 (at any time after 60 days after the effective date the first registration
statement filed by the Partnership for an offering of its securities to the
general public) and of the Exchange Act, a copy of the most recent annual or
quarterly report of the Partnership, and such other reports and documents of the
Partnership, and take such further actions consistent with this Section 3, as a
Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing a Holder to sell any such Registrable Units without
registration; and
(iv) so long as a Holder owns any Registrable Units constituting 144A
Units, if the Partnership is not required to file reports and other documents
under the Securities Act and the Exchange Act, it will make available other
information as required by, and so long as necessary to permit sales of
Registrable Units pursuant to, Rule 144 or Rule 144A.
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(b) So long as a Holder owns any Units, notwithstanding that the
Partnership may not be required to file interim reports under the Securities
Act, or the Exchange Act or otherwise report on an annual and quarterly basis on
forms provided for such annual and quarterly reporting pursuant to rules and
regulations promulgated by the Commission, the Partnership shall use best
efforts to furnish to the Holders all quarterly and annual financial information
that would be required to be contained in a filing with the Commission on Forms
10-K and 10-Q if the Partnership were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, audit reports
thereon by the certified independent accountants of the Partnership. Such annual
reports shall be furnished by March 31 of the next year and such quarterly
reports shall be furnished within 45 days after the end of such quarter.
Notwithstanding the foregoing, such information shall not be required until
April 15, 2006, with respect to the year ended December 31, 2005 and May 30,
2006, with respect to the quarter ended March 31, 2006.
(c) Until the Units are listed on the New York Stock Exchange or the
American Stock Exchange or approved for quotation on The NASDAQ Stock Market,
within 60 days of the end of each fiscal quarter (or, with respect to the
quarter ending on the Partnership's fiscal year end, 110 days after the end of
such fiscal quarter (115 with respect to the year ended December 31, 2005)), the
Partnership shall hold a quarterly conference call attended by the GP's Chief
Executive Officer and Chief Financial Officer of a type customarily held by
companies subject to the reporting requirements of the Exchange Act for the
Holders to discuss the results of the prior quarter reported pursuant to Section
3(b) and other relevant matters; provided, however, that if the GP's Board of
Directors determines in good faith upon the advice of legal counsel that such a
call would be inadvisable due to the provisions of the Securities Act or
Exchange Act as a result of any proposed financing, acquisition, merger or other
significant transaction involving the Partnership, the Partnership may suspend
or delay such calls so long as and to the extent that it discontinues all
similar calls with investors in or persons or entities that do business with the
Partnership; provided further that the Partnership shall not suspend such calls
for more than 90 days out of any 365-day period.
4. Registration Procedures.
In connection with the obligations of the Partnership with respect to any
registration pursuant to this Agreement, the Partnership shall:
(a) notify FBR, in writing, at least 10 Business Days prior to the initial
filing of a Registration Statement, of its intention to file a Registration
Statement with the Commission and, at least five Business Days prior to filing,
provide a draft of the Registration Statement to FBR; prepare and file with the
Commission, as specified in this Agreement, each Registration Statement, which
Registration Statement at the time it is declared effective shall comply as to
form in all material respects with the requirements of the applicable form and
include all financial statements required by the Commission to be filed
therewith and shall be reasonably acceptable to FBR; notify FBR at least five
Business Days prior to filing of any amendment or supplement to such
Registration Statement and, at least three Business Days prior to filing,
provide a draft of such amendment or supplement to FBR for review and comment;
promptly following receipt from the Commission, provide to FBR copies of any
comments made by the
11
staff of the Commission relating to such Registration Statement and the
Partnership's responses thereto for review and comment; and, in the case of the
Mandatory Shelf Registration Statement, use its commercially reasonable efforts
to cause such Mandatory Shelf Registration Statement to become effective as soon
as practicable after filing and to remain effective as set forth in Section
2(a)(i);
(b) subject to Section 4(i), (i) prepare and file with the Commission such
amendments and post-effective amendments to each such Registration Statement as
may be necessary to keep such Registration Statement effective for the period
described in Section 2(a)(i), (ii) cause each Prospectus contained therein to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 or any similar rule that may be adopted under the
Securities Act, (iii) promptly and in any event within 10 calendar days after
the filing thereof amend or supplement each such Registration Statement to
include the Partnership's quarterly and annual financial information and other
material developments (until the Partnership is eligible to incorporate such
information by reference into the Registration Statement), during which time
sales of the Registrable Securities under the Registration Statement will be
suspended until such amendment or supplement is filed and effective, and (iv)
comply in all material respects with the provisions of the Securities Act with
respect to the disposition of all securities covered by each Registration
Statement during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof;
(c) furnish to each Holder and to each underwriter in any Underwritten
Offering, if any, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and any amendment or supplement thereto and such
other documents as any party may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Units; the Partnership
hereby consents to the use of such Prospectus, including each preliminary
Prospectus, by the Holders, if any, in connection with the offering and sale of
the Registrable Units covered by any such Prospectus;
(d) use its reasonable best efforts to register or qualify, or obtain
exemption from registration or qualification for, all Registrable Units by the
time the applicable Registration Statement is declared effective by the
Commission under all applicable state securities or "blue sky" laws of such
jurisdictions as FBR or any Holder covered by a Registration Statement shall
reasonably request in writing, keep each such registration or qualification or
exemption effective for as long as such Registration Statement is required to be
kept effective pursuant to this Agreement and do any and all other acts and
things that may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable Units
owned by such Holder; provided, however, that the Partnership shall not be
required to (i) qualify generally to do business in any jurisdiction or to
register as a broker or dealer in such jurisdiction where it would not otherwise
be required to qualify but for this Section 4(d), (ii) subject itself to
taxation in any such jurisdiction, or (iii) submit to the general service of
process in any such jurisdiction;
(e) use its reasonable best efforts to cause all Registrable Units covered
by such Registration Statement to be registered and approved by such other
governmental agencies or authorities, if any, as may be necessary to enable the
Holders thereof to consummate the disposition of such Registrable Units;
12
(f) notify FBR and each Holder with Registrable Units covered by a
Registration Statement promptly and, if requested by FBR or any such Holder,
confirm such advice in writing (i) when such Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective, (ii) of the issuance by the Commission or any state securities
authority of any stop order suspending the effectiveness of such Registration
Statement or the initiation of any proceedings for that purpose, (iii) of any
request by the Commission or any other federal, state, or foreign governmental
authority for amendments or supplements to such Registration Statement or
related Prospectus or for additional information, (iv) of the happening of any
event during the period such Registration Statement is effective as a result of
which such Registration Statement or the related Prospectus or any document
incorporated by reference therein contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading (which information shall
be accompanied by an instruction to suspend the use of the Registration
Statement and the Prospectus until the requisite changes have been made) and (v)
at the request of any such Holder, promptly to furnish to such Holder a
reasonable number of copies of a supplement to or an amendment of such
Prospectus prepared in accordance with Section 4(i);
(g) during the period of time referred to in Section 2(a)(i), use its
reasonable best efforts to avoid the issuance of, or if issued, to obtain the
withdrawal of, any order enjoining or suspending the use or effectiveness of a
Registration Statement or suspending the qualification (or exemption from
qualification) of any of the Registrable Units for sale in any jurisdiction, as
promptly as practicable;
(h) upon request, furnish to each requesting Holder with Registrable Units
covered by a Registration Statement, without charge, at least one conformed copy
of such Registration Statement and any post-effective amendment or supplement
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
(i) except as provided in Section 5, upon the occurrence of any event
contemplated by Section 4(f)(iv), use its reasonable best efforts to promptly
prepare a supplement or post-effective amendment to a Registration Statement or
the related Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Units, such Prospectus will not contain any 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, in the light of the
circumstances under which they were made, not misleading, and, upon request,
promptly furnish to each requesting Holder covered by such Registration
Statement a reasonable number of copies of each such supplement or
post-effective amendment;
(j) if requested by the representative of the underwriters, if any, or any
Holders of Registrable Units being sold in connection with such offering, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment such
material information as the representative of the underwriters, if any, or such
Holders indicate relates to them or otherwise reasonably request be included
therein and (ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Partnership has
13
received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(k) in the case of an Underwritten Offering with reasonably anticipated
gross proceeds of at least $15 million, use its reasonable best efforts to
furnish or caused to be furnished to each Holder of Registrable Units covered by
such Registration Statement and the underwriters a signed counterpart, addressed
to each such Holder (to the extent customarily so addressed) and the
underwriters, of: (i) an opinion of counsel for the Partnership, dated the date
of each closing under the underwriting agreement, reasonably satisfactory to the
underwriters; and (ii) a "comfort" letter, dated the effective date of such
Registration Statement and the date of each closing under the underwriting
agreement, signed by the independent public accountants who have certified the
Partnership's financial statements included in such Registration Statement,
covering substantially the same matters with respect to such Registration
Statement (and the Prospectus included therein) and with respect to events
subsequent to the date of such financial statements, as are customarily covered
in accountants' letters delivered to underwriters in underwritten public
offerings of securities, and such other financial matters as the underwriters
may reasonably request and customarily obtained by underwriters in underwritten
offerings, provided that, to be an addressee of the comfort letter, each Holder
may be required to confirm that it is in the category of persons to whom a
comfort letter may be delivered in accordance with applicable accounting
literature;
(l) enter into customary agreements (including in the case of an
Underwritten Offering, an underwriting agreement in customary form) and take all
other action in connection therewith to expedite or facilitate the distribution
of the Registrable Units included in such Registration Statement and, in the
case of an Underwritten Offering, make representations and warranties to the
underwriters in such form and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same to the extent
customary if and when requested;
(m) in the case of an Underwritten Offering with reasonably anticipated
gross proceeds of at least $15 million, use its reasonable best efforts to make
available for inspection by the representatives of the Holders and the
representative of any underwriters participating in any disposition pursuant to
a Registration Statement, and any special counsel or accountants retained by
such Holders or underwriters, all financial and other records, pertinent
corporate documents and properties of the Partnership and cause the respective
officers, directors and employees of the Partnership to supply all information
reasonably requested by any such representatives, the representative of the
underwriters, counsel thereto or accountants in connection with a Registration
Statement; provided, however, that such records, documents or information that
the Partnership determines, in good faith, to be confidential and notifies such
representatives, representative of the underwriters, counsel thereto or
accountants are confidential shall not be disclosed by the representatives,
representative of the underwriters, counsel thereto or accountants unless (i)
the disclosure of such records, documents or information is necessary to avoid
or correct a misstatement or omission in a Registration Statement or Prospectus,
(ii) the release of such records, documents or information is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction, or (iii)
such records, documents or information have been generally made available to the
public;
14
(n) use its commercially reasonable efforts (including curing the listing
or inclusion application for any deficiencies cited by the relevant exchange or
market) to list or include all Registrable Units on the New York Stock Exchange,
the American Stock Exchange or The Nasdaq Stock Market (if the Partnership meets
the listing criteria for any such exchange or market);
(o) prepare and file in a timely manner all documents and reports required
by the Exchange Act and, to the extent the Partnership's obligation to file such
reports pursuant to Section 15(d) of the Exchange Act expires prior to the
expiration of the effectiveness period of the Registration Statement as required
by Section 2(a)(i), the Partnership shall register the Registrable Units under
the Exchange Act and shall maintain such registration through the effectiveness
period required by Section 2(a)(i);
(p) provide a CUSIP number for all Registrable Units not later than the
effective date of the Registration Statement;
(q) (i) otherwise use its reasonable best efforts to comply in all material
respects with all applicable rules and regulations of the Commission, (ii) make
generally available to its stockholders, as soon as reasonably practicable,
earnings statements covering at least 12 months that satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder, and (iii) delay
filing any Registration Statement or Prospectus or amendment or supplement to
such Registration Statement or Prospectus to which any Holder of Registrable
Units covered by any such Registration Statement shall have reasonably objected
on the grounds that such Registration Statement or Prospectus or amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act, such Holder having been furnished with a copy thereof at least
three Business Days before the filing thereof, provided that the Partnership may
file such Registration Statement or Prospectus or amendment or supplement
following such time as the Partnership shall have made a good faith effort to
resolve any such issue with the objecting Holder and shall have advised the
Holder in writing of its reasonable belief that such filing complies in all
material respects with the requirements of the Securities Act;
(r) cause to be maintained a registrar and transfer agent for all
Registrable Units covered by any Registration Statement from and after a date
not later than the effective date of such Registration Statement;
(s) in connection with any sale or transfer of the Registrable Units
(whether or not pursuant to a Registration Statement) that will result in the
securities being delivered no longer constituting Registrable Units, cooperate
with the Holders and the representative of the underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing the
Registrable Units to be sold, which certificates shall not bear any transfer
restrictive legends (other than as required by the Partnership's charter), and
to enable such Registrable Units to be in such denominations and registered in
such names as the representative of the underwriters, if any, or the Holders may
request at least three Business Days prior to any sale of the Registrable Units;
provided, however, that such Holder has provided the Partnership with any
documents that are reasonably requested by the Partnership;
15
(t) if required under the rules of the NASD, in connection with the initial
filing of a Shelf Registration Statement and each amendment thereto with the
Commission pursuant to Section 2(a), prepare and file with the NASD all forms
and information required or requested by the NASD in order to obtain written
confirmation from the NASD that the NASD does not object to the fairness and
reasonableness of the underwriting terms and arrangements (or any deemed
underwriting terms and arrangements) (each such written confirmation, a "NO
OBJECTIONS LETTER") relating to the resale of Registrable Units pursuant to the
Shelf Registration Statement, including, without limitation, information
provided to the NASD through its COBRADesk system, and pay all costs, fees and
expenses incident to the NASD's review of the Shelf Registration Statement and
the related underwriting terms and arrangements, including, without limitation,
all filing fees associated with any filings or submissions to the NASD and the
legal expenses, filing fees and other disbursements of FBR and any other NASD
member that is the holder of, or is affiliated or associated with an owner of,
Registrable Units included in the Shelf Registration Statement (including in
connection with any initial or subsequent member filing); and
(u) upon effectiveness of the first Registration Statement filed under this
Agreement, the Partnership will take such actions and make such filings as are
necessary to effect the registration of the Units under the Exchange Act
simultaneously with or immediately following the effectiveness of the
Registration Statement.
The Partnership may require the Holders to furnish to the Partnership such
information regarding the proposed distribution by such Holder as the
Partnership may from time to time reasonably request in writing or as shall be
required to effect the registration of the Registrable Units, and no Holder
shall be entitled to be named as a selling stockholder in any Registration
Statement and no Holder shall be entitled to use the Prospectus forming a part
thereof if such Holder does not provide such information to the Partnership.
Each Holder further agrees to furnish promptly to the Partnership in writing all
information required from time to time to make the information previously
furnished by such Holder not misleading.
Each Holder agrees that, upon receipt of any notice from the Partnership of
the happening of any event of the kind described in Section 4(f)(ii), 4(f)(iii)
or 4(f)(iv), such Holder will immediately discontinue disposition of Registrable
Units pursuant to a Registration Statement until (i) any such stop order is
vacated or (ii) if an event described in Section 4(f)(iii) or 4(f)(iv) occurs,
such Holder's receipt of the copies of the supplemented or amended Prospectus.
If so directed by the Partnership, such Holder will deliver to the Partnership
(at the reasonable expense of the Partnership) all copies in its possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Units current at the time of receipt of
such notice.
5. Suspension Period.
(a) Subject to the provisions of this Section 5, following the
effectiveness of a Registration Statement (and the filings with any
international, federal or state securities commissions), the Partnership may
direct the Holders, in accordance with Section 5(b), to suspend sales of the
Registrable Units pursuant to a Registration Statement for such times as the
Partnership reasonably may determine is necessary and advisable (but in no
event, (A) in the
16
case of clause (i) below, for more than 60 consecutive days and (B) in the case
of clauses (i), (ii) and (iii) below, for more than an aggregate of 90 days in
any consecutive 12-month period commencing on the Closing Date or more than 60
days in any consecutive 90-day period, except (in the case of clause (B)) as a
result of a review of any post-effective amendment by the Commission prior to
declaring any post-effective amendment to the Registration Statement effective,
provided that the Partnership has used its commercially reasonable efforts to
cause such post-effective amendment to be declared effective), so long as in
each of the following cases (1) the Prior Holders and (2) the Holders under the
FBR Mandatory Registration Statement and the Holders Mandatory Registration
Statement, if applicable, are given a substantially similar notice and are
required to suspend sales for the same period, if any of the following events
shall occur: (i) except with respect to an initial public offering governed by
Section 8, the representative of the underwriters of an Underwritten Offering of
primary units by the Partnership has advised the Partnership that the sale of
Registrable Units pursuant to such Registration Statement would have a material
adverse effect on such Underwritten Offering; (ii) the majority of the members
of the Board of Directors of the GP shall have determined in good faith that (1)
the offer or sale of any Registrable Units would materially impede, delay or
interfere with any proposed financing, offer or sale of securities, acquisition,
merger, tender offer, business combination, corporate reorganization,
consolidation or other significant transaction involving the Partnership, (2)
upon the advice of counsel, the sale of Registrable Units pursuant to such
Registration Statement would require disclosure of non-public material
information not otherwise required to be disclosed under applicable law, or (3)
either (x) the Partnership has a bona fide business purpose for preserving the
confidentiality of such transaction, (y) disclosure would have a material
adverse effect on the Partnership or the Partnership's ability to consummate
such transaction, or (z) the proposed transaction renders the Partnership unable
to comply with Commission requirements, in each case under circumstances that
would make it impractical or inadvisable to cause the Registration Statement (or
such filings) to become effective or to promptly amend or supplement the
Registration Statement on a post-effective basis, as applicable; or (iii) the
majority of the members of the Board of Directors of the Partnership shall have
determined in good faith that it is required by law, rule or regulation or
Commission published release or interpretation to supplement the Registration
Statement or file a post-effective amendment to the Registration Statement in
order to incorporate information into the Registration Statement including for
the purpose of (1) including in the Registration Statement any prospectus
required under Section 10(a)(3) of the Securities Act; (2) reflecting in the
prospectus included in the Registration Statement any facts or events arising
after the effective date of the Registration Statement (or of the most-recent
post-effective amendment) that, individually or in the aggregate, represents a
fundamental change in the information set forth therein; or (3) including in the
prospectus included in the Registration Statement any material information with
respect to the plan of distribution not disclosed in the Registration Statement
or any material change to such information. Upon the occurrence of any such
suspension, the Partnership shall use its reasonable best efforts to cause the
Registration Statement to become effective or to promptly amend or supplement
the Registration Statement on a post-effective basis or to take such action as
is necessary to make resumed use of the Registration Statement compatible with
the Partnership's best interests, as applicable, so as to permit the Holders to
resume sales of the Registrable Units as soon as possible.
(b) In the case of an event that causes the Partnership to suspend the use
of a Registration Statement (a "SUSPENSION EVENT"), the Partnership shall give
written notice (a
17
"SUSPENSION NOTICE") to FBR and the Holders to suspend sales of the Registrable
Units included in such Registration Statement and such notice shall continue
only for so long as the Suspension Event or its effect is continuing. No Holder
shall effect any sales of the Registrable Units pursuant to such Registration
Statement (or such filings) at any time after it has received a Suspension
Notice from the Partnership and prior to receipt of an End of Suspension Notice
(as defined below) with respect to such Registration Statement. If so directed
by the Partnership, each Holder will deliver to the Partnership (at the expense
of the Partnership) all copies other than permanent file copies then in such
Holder's possession of the Prospectus covering the Registrable Units at the time
of receipt of the Suspension Notice. The Holders may recommence effecting sales
of the Registrable Units pursuant to such Registration Statement (or such
filings) following further notice to such effect (an "END OF SUSPENSION NOTICE")
from the Partnership, which End of Suspension Notice shall be given by the
Partnership to the Holders and FBR in the manner described above promptly
following the conclusion of any Suspension Event and its effect.
(c) Notwithstanding any provision herein to the contrary, subject to any
Suspension Events or as contemplated by Section 4(f)(iv), each Registration
Statement shall be maintained effective pursuant to this Agreement until the
Registrable Units are not Registrable Units.
6. Indemnification and Contribution.
(a) The Partnership agrees to indemnify and hold harmless (i) FBR, each
Holder and any underwriter (as determined in the Securities Act) for such Holder
(including, if applicable, FBR), (ii) each Person, if any, who controls (within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) any of the foregoing (a "CONTROLLING PERSON"), and (iii) the respective
officers, directors, partners, members, employees, representatives and agents of
any such Person or any Controlling Person (any Person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "PURCHASER INDEMNITEE") from
and against any and all losses, claims, damages, judgments, actions, reasonable
out-of-pocket expenses, and other liabilities, including, as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or
defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of outside counsel to any Purchaser Indemnitee, joint or
several (the "LIABILITIES"), directly or indirectly related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus (as amended or supplemented if the Partnership shall have furnished
to such Purchaser Indemnitee any amendments or supplements thereto), or any
preliminary Prospectus or any other document which document is used in
connection with the offering of Registrable Units pursuant to this Agreement, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
Prospectus, in light of the circumstances under which they were made), not
misleading, except insofar as such Liabilities arise out of or are based upon
(i) any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with information relating to any
Purchaser Indemnitee furnished to the Partnership or any underwriter in writing
by such Purchaser Indemnitee expressly for use therein, or (ii) any sales by any
Holder after the delivery by the Partnership to such Holder of a Suspension
Notice and before the delivery by the Partnership of an End of Suspension
Notice. The Partnership shall notify the Holders promptly
18
of the institution, threat or assertion of any claim, proceeding (including any
governmental investigation), or litigation which it shall have become aware in
connection with the matters addressed by this Agreement which involves the
Partnership or a Purchaser Indemnitee. The indemnity provided for herein shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Purchaser Indemnitee.
(b) In connection with any Registration Statement in which a Holder is
participating, such Holder agrees, severally and not jointly, to indemnify and
hold harmless FBR, the Partnership, each Person who controls the Partnership or
FBR within the meaning of Section 15 of the Securities Act or Section 20(a) of
the Exchange Act, and the respective officers, directors, partners, members,
representatives, employees and agents of such Person or Controlling Person to
the same extent as the foregoing indemnity from the Partnership to each
Purchaser Indemnitee, but only with reference to (i) untrue statements or
omissions or alleged untrue statements or omissions made in reliance upon and in
strict conformity with information relating to such Holder furnished to the
Partnership in writing by such Holder expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any preliminary
Prospectus and (ii) any sales by any Holder after the delivery by the
Partnership to such Holder of a Suspension Notice and before the delivery by the
Partnership of an End of Suspension Notice. The liability of any Holder pursuant
to clause (i) of the immediately preceding sentence shall in no event exceed the
net proceeds received by such Holder from sales of Registrable Units giving rise
to such obligations. If a Holder elects to include Registrable Units in an
Underwritten Offering, the Holder shall be required to agree to such customary
indemnification provisions as may reasonably be required by the underwriter in
connection with such Underwritten Offering.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to Section 6(a)
or 6(b), such Person (the "INDEMNIFIED PARTY"), shall promptly notify the Person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY"), in writing
(to the extent legally advisable) of the commencement thereof (but the failure
to so notify an Indemnifying Party shall not relieve it from any Liability which
it may have under this Section 6, except to the extent the Indemnifying Party is
materially prejudiced by the failure to give notice), and the Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party and any
others the Indemnifying Party may reasonably designate in such proceeding and
shall assume the defense of such proceeding and pay the fees and expenses
actually incurred by such counsel related to such proceeding. Notwithstanding
the foregoing, in any such proceeding, any Indemnified Party may retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party, unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Party failed within a reasonable time after notice of commencement
of the action to assume the defense and employ counsel reasonably satisfactory
to the Indemnified Party, (iii) the Indemnifying Party and its counsel do not
pursue in a reasonable manner the defense of such action or (iv) the named
parties to any such action (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, or any Affiliate of the
Indemnifying Party, and such Indemnified Party shall have been reasonably
advised by counsel that, either (x) there may be one or more legal defenses
available
19
to it which are different from or additional to those available to the
Indemnifying Party or such Affiliate of the Indemnifying Party or (y) a conflict
may exist between such Indemnified Party and the Indemnifying Party or such
Affiliate of the Indemnifying Party, in which event the Indemnifying Party may
not assume or direct the defense of such action on behalf of such Indemnified
Party, it being understood, however, that the Indemnifying Party shall not, in
connection with any one such action or separate but substantially similar or
related actions arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Indemnified Parties, which firm
shall be designated in writing by those Indemnified Parties who sold a majority
of the Registrable Units sold by all such Indemnified Parties and any such
separate firm for the Partnership, the directors, the officers and such control
Persons of the Partnership as shall be designated in writing by the Partnership.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff, the Indemnifying
Party agrees to indemnify any Indemnified Party from and against any Liability
by reason of such settlement or judgment to the extent provided in this Section
6 without reference to this sentence. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all Liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in Section 6(a) or 6(b) is for any
reason held to be unavailable to an Indemnified Party in respect of any
Liabilities referred to therein (other than by reason of the exceptions provided
therein) or is insufficient to hold harmless a party indemnified thereunder,
then each Indemnifying Party under such sections, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such Liabilities (i) in such proportion as
is appropriate to reflect the relative benefits of the Indemnified Party on the
one hand and the Indemnifying Parties on the other in connection with the
statements or omissions that resulted in such Liabilities, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Indemnifying
Parties and the Indemnified Party, as well as any other relevant equitable
considerations. The relative fault of the Partnership, on the one hand, and any
Purchaser Indemnitees, on the other, 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 Partnership or by such Purchaser Indemnitees and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation
(even if such Indemnified Parties were treated as one entity for such purpose),
or by any other method of allocation that does not take account of the equitable
considerations referred to in Section 6(d). The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to in Section 6(d)
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses
20
actually incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 6, in no event shall a Purchaser Indemnitee be required to contribute
any amount in excess of the amount by which proceeds received by such Purchaser
Indemnitee from sales of Registrable Units exceeds the amount of any damages
that such Purchaser Indemnitee has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. For
purposes of this Section 6, each Person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) FBR or a
Holder shall have the same rights to contribution as FBR or such Holder, as the
case may be, and each Person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) the Partnership, and
each officer, director, partner, member, employee, representative, agent or
manager of the Partnership shall have the same rights to contribution as the
Partnership. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties, notify each party or parties from whom contribution may be sought, but
the omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 6 or otherwise, except to the extent that any party is
materially prejudiced by the failure to give notice. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act), shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section 6
will be in addition to any Liability which any Indemnifying Party may otherwise
have to any Indemnified Party referred to above. Each Purchaser Indemnitee's
obligations to contribute pursuant to this Section 6 are not joint but are
several in the proportion that the number of Units sold by such Purchaser
Indemnitee bears to the number of Units sold by all Purchaser Indemnities.
7. Registration Defaults.
(a) Additional payments ("ADDITIONAL PAYMENTS") with respect to the
Units shall be assessed as follows if any of the following events occur
(each such event in clauses (i) through (iii) below being herein called a
"REGISTRATION DEFAULT"):
(i) either a Mandatory Shelf Registration Statement has not been
(A) filed with the Commission before May 15, 2006 or (B) declared
effective by the Commission within 180 days of the filing thereof
(provided that (x) if a majority of the Independent Directors (as
defined in the Amended and Restated Agreement of Limited Partnership
of the Partnership) determine in good faith that causing the Mandatory
Shelf Registration Statement to comply with the requirements as to
acquired company financial statements included in Section 3-05 and
Article 11 of Regulation S-X under the Securities Act would materially
impede, delay or interfere with a proposed acquisition, then the date
required for effectiveness of the Mandatory Shelf Registration
Statement may be extended for not more than 60 days, and (y) in such
event, the Partnership has given notice of such determination to the
Holders five days after it is made);
21
(ii) the Partnership fails, with respect to a Holder that
supplies a Notice and Questionnaire described in Section 2(a)(iii), to
cause an amendment to the already effective Mandatory Shelf
Registration Statement to be filed or, if permitted by the Commission,
to prepare a Prospectus supplement to such Mandatory Shelf
Registration Statement and distribute such supplement to Holders, in
each case within the time period set forth in Section 2(a)(iii) to
name such Holder as an additional selling securityholder; or
(iii) any Mandatory Shelf Registration Statement is declared
effective by the Commission but (A) a Mandatory Shelf Registration
Statement thereafter ceases to be effective during the period
contemplated by Section 2(a)(i) or (B) as specified in Section 5(a), a
Mandatory Shelf Registration Statement or the Prospectus ceases to be
usable in connection with resales of Registrable Units during the
periods specified herein and the Partnership fails to (1) cure such
Mandatory Shelf Registration Statement within five business days by a
post-effective amendment or a report filed pursuant to the Exchange
Act or (2) if applicable, terminate the suspension period described in
Section 5(a) by the 60th day.
Each of the foregoing will constitute a Registration Default whatever
the reason for any such event and whether it is voluntary or
involuntary or is beyond the Partnership's control or pursuant to
operation of law or as a result of any action or inaction by the
Commission.
(b) Additional Payments shall accrue on the Units from and including
the date on which any such Registration Default occurs to but excluding the
date on which all such Registration Defaults have been cured, at the rate
of $0.085 per Unit ($0.17 with respect to Registration Defaults under
Section 7(a)(i)(A)) per annum (subject to adjustment for splits,
recombinations and similar matters); provided, however, that in no event
shall Additional Payments accrue on any Units for more than one
Registration Default at any one time, and in the case of a Registration
Default the Partnership's obligation to pay Additional Payments extends
only to the affected Registrable Units. Except as described in Section
7(c), other than the obligation to pay Additional Payments, the Partnership
will have no other liabilities for monetary damages with respect to its
registration obligations. With respect to each Holder, the Partnership's
obligations to pay Additional Payments remain in effect only so long as the
securities held by the Holder are Registrable Units.
(c)
(i) Notwithstanding any other provision of this Agreement, if the
Holders Mandatory Registration Statement is not filed within 240 days
of the date hereof, in lieu of the right to receive Additional
Payments, the Holders may appoint a majority of the GP's Board of
Directors (the "BOARD"). The Partnership must provide notice of such
failure to file the Registration Statement within 245 days of the date
hereof to the ten Holders hereunder having the greatest "beneficial
ownership" (as defined under Section 13d-3 and 13d-5 under the
22
Exchange Act) of Registrable Units. Such Holders may serve on a
committee to propose individuals to serve on the Board. The Holders
who elect to serve on such committee shall meet within 255 days of the
date hereof to nominate individuals to serve on the Board. The
committee's vote shall be made based on the number of Units the
applicable members "beneficially own." Committee meetings may be in
person or telephonically.
(ii) If members of such committee beneficially own greater than
50% of the Registrable Units, the members of such committee having
beneficial ownership of greater than 50% of the Registrable Units may
directly appoint the members of the Board. If members of such
committee holding greater than 50% of the Registrable Units cannot
agree on Board members, within 15 days of the date of the nomination
of individuals to serve on the Board, the GP shall deliver proxies to
Holders as of the 240th day after the date hereof who shall vote on
such nominees. Such Holders may act with respect to such matters in
person or by proxy. It shall take the approval of a majority of the
Holders of Registrable Units present in person or by proxy to select
Board members. Holders beneficially owning greater than 50% of the
Registrable Units may also act by written consent. If an insufficient
number of individuals receive the affirmative vote of the majority of
the Registrable Units to constitute a majority of the Board, then no
members shall be elected and Additional Payments shall continue to be
due.
8. Market Stand-off Agreement.
Each Holder hereby agrees that it shall not, to the extent requested by the
Partnership or an underwriter of securities of the Partnership, directly or
indirectly sell, offer to sell (including without limitation any short sale),
grant any option or otherwise transfer or dispose of any Registrable Units or
other Units or any securities convertible into or exchangeable or exercisable
for Units then owned by such Holder (other than to donees or partners of the
Holder who agree to be similarly bound) for 75 days following the effective date
of a registration statement (other than the Mandatory Shelf Registration
Statement) for an initial public offering of securities by the Partnership filed
under the Securities Act (an "IPO REGISTRATION STATEMENT"); provided, however,
that:
(a) the restrictions above shall not apply to Registrable Units sold
pursuant to the IPO Registration Statement;
(b) all Prior Holders, and all executive officers and directors of the
Legacy Entities then holding Units or securities convertible into or
exchangeable or exercisable for Units are subject to the same restrictions for
the entire time period required of the Holders hereunder;
(c) the Holders shall be allowed any concession or proportionate release
allowed to any officer or director that entered into similar agreements (with
such proportion being determined by dividing the number of Units being released
with respect to such officer or director by the total number of Units held by
such officer or director); provided, that nothing in this Section 7(c) shall be
construed as a right to proportionate release for the executive officers
23
and directors of the Legacy Entities upon the expiration of the 75-day period
applicable to all Holders other than the executive officers and directors of the
Legacy Entities.
To enforce the foregoing covenant, the Partnership may place restrictive
legends on the certificates representing the securities subject to this Section
8 and to impose stop transfer instructions with respect to the Registrable Units
and such other securities of each Holder (and the securities of every other
Person subject to the foregoing restriction) until the end of such period.
9. Termination of the Partnership's Obligations.
The Partnership shall have no further obligations pursuant to this
Agreement at such time as no Registrable Units are outstanding after their
original issuance, provided, however, that the Partnership's obligations under
Sections 6 and 11 (and any related definitions) shall remain in full force and
effect following such time.
10. Limitations on Subsequent Registration Rights.
From and after the date of this Agreement, the Partnership shall not,
without the prior written consent of the Holders of a majority of the
Registrable Units of such Holders that are not Affiliates of the Partnership,
enter into any agreement with any holder or prospective holder of any securities
of the Partnership that would allow such holder or prospective holder to include
such securities in a Holders Mandatory Shelf Registration Statement or, except
as provided herein and in the Founders Registration Rights Agreement with
respect to Holders and Prior Holders, the IPO Registration Statement, if any,
filed pursuant to the terms hereof, unless under the terms of such agreement,
such holder or prospective holder may include such securities on such Holders
Mandatory Shelf Registration Statement or such IPO Registration Statement only
to the extent that the inclusion of such securities will not reduce the amount
of Registrable Units of the Holders that is included on the Holders Mandatory
Shelf Registration Statement or such IPO Registration Statement. From and after
the date of this Agreement, the Partnership shall not, without the prior written
consent of FBR or FBR Merchant Banking, enter into any agreement with any holder
or prospective holder or any securities of the Partnership that would allow such
holder or prospective holder to include such securities in the FBR Mandatory
Shelf Registration Statement.
11. Miscellaneous.
(a) Remedies. In the event of a breach by the Partnership of any of its
obligations under this Agreement, each Holder, in addition to being entitled to
exercise all rights provided herein or, in the case of FBR, in the Placement
Agreement, or granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. Subject to Section 7,
the Partnership agrees that monetary damages would not be adequate compensation
for any loss incurred because of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) Amendments and Waivers. This Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be
24
given, without the written consent of the Partnership and Holders beneficially
owning a majority of the Registrable Units; provided, however, that for purposes
of this Agreement, Registrable Units owned, directly or indirectly, by an
Affiliate of the Partnership shall not be deemed to be outstanding.
Notwithstanding the foregoing, a waiver or consent to or departure from the
provisions hereof with respect to a matter that relates exclusively to (i) a
Holders Mandatory Shelf Registration Statement or FBR Mandatory Shelf
Registration Statement may be given only with the consent of a majority of
Registrable Units covered thereby and (ii) the rights of a Holder whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders may be given by such Holder; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(c) Notices. All notices and other communications, provided for or
permitted hereunder shall be made in writing and delivered by facsimile (with
receipt confirmed), overnight courier or registered or certified mail, return
receipt requested, or by telegram, addressed as follows:
(i) if to a Holder, at the most current address given by the transfer
agent and registrar of the Units to the Partnership;
(ii) if to the Partnership, at the offices of the Partnership at 000
X. Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000; Attention: Xxxxxx X. Xxxxxx
(facsimile (000) 000-0000); with a copy (which shall not constitute notice) to
Xxxxxxx Xxxxx LLP, 000 Xxxxxx Xx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention:
Xxxxx Xxxxx (facsimile (000) 000-0000); and
(iii) if to FBR, at the offices of FBR at 0000 00xx Xxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx, Esq. (facsimile (804)
788-8218); with a copy (which shall not constitute notice) to Akin Gump Xxxxxxx
Xxxxx & Xxxx LLP, 0000 Xxxxxxxxx Xx., Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx
Xxxxxx, Esq. and Xxxxx Xxxxxxxx, Esq. (facsimile (000) 000-0000).
(d) Successors and Assigns; Third Party Beneficiaries. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto and shall inure to the benefit of each Holder. The
Partnership agrees that the Holders shall be third party beneficiaries to the
agreements made hereunder by FBR and the Partnership, and each Holder shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights hereunder; provided,
however, that such Holder fulfills all of its obligations hereunder.
(e) No Inconsistent Terms. Each Legacy Entity represents, warrants and
agrees that (i) the rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
any other outstanding securities issued or guaranteed by the Partnership under
any other agreement and (ii) the Partnership has not entered into any agreement
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.
25
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK OR THE SUPREME COURT OF THE STATE OF NEW YORK OR SITTING IN
NEW YORK COUNTY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT
MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(h) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties hereto that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(i) Entire Agreement. This Agreement, together with the Placement
Agreement, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. All of the obligations, agreements,
covenants, representations and warranties under the engagement letter dated
March 6, 2006, between the Partnership and FBR (the "ENGAGEMENT LETTER") shall
survive the execution, delivery and termination and the performance of this
Agreement and the consummation of the transactions contemplated hereby without
any modification thereof; provided, that to the extent there is a conflict
between the provisions of the Engagement Letter and the provisions of this
Agreement, this Agreement shall prevail to that extent.
(j) Registrable Units Held by the Partnership or its Affiliates. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Units is required hereunder,
26
Registrable Units (or securities convertible into Registrable Units) held by the
Partnership or Affiliates of the Partnership shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(k) Survival. This Agreement is intended to survive the consummation of the
transactions contemplated by the Placement Agreement. The indemnification and
contribution obligations under Section 6 shall survive the termination of the
Partnership's obligations under Section 2.
(l) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the provisions of this
Agreement. All references made in this Agreement to "Section" refer to such
Section of this Agreement, unless expressly stated otherwise.
(m) Adjustment for Splits, etc. Wherever in this Agreement there is a
reference to a specific number of equity interests with respect to any
securities, then upon the occurrence of any subdivision, combination, or
dividend of such equity interests, the specific number of equity interests with
respect to any securities so referenced in this Agreement shall automatically be
proportionally adjusted to reflect the effect on the outstanding equity
interests of such class or series of partner interest by such subdivision,
combination, or dividend.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
LEGACY RESERVES LP
By: Legacy Reserves GP, LLC,
its general partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President, Chief Financial Officer
and Secretary
LEGACY RESERVES GP, LLC
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President, Chief Financial Officer
and Secretary
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
(for the benefit of the Holders)
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------------
Title: Senior Managing Director
----------------------------------
Signature Page - Registration Rights Agreement
