ENCORE ENERGY PARTNERS LP 2,400,000 Common Units Representing Limited Partner Interests UNDERWRITING AGREEMENT May 19, 2009
Exhibit 1.1
Execution Copy
2,400,000 Common Units
Representing Limited Partner Interests
Representing Limited Partner Interests
May 19, 2009
May 19, 2009
Barclays Capital Inc.
As Representative of the several Underwriters
named in Schedule A attached hereto
named in Schedule A attached hereto
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Encore Energy Partners LP, a Delaware limited partnership (the “Partnership”),
proposes to issue and sell to the underwriters named in Schedule A annexed hereto (the
“Underwriters”), for whom you are acting as representative (the “Representative”),
an aggregate of 2,400,000 common units (the “Firm Units”) representing limited partner
interests in the Partnership (the “Common Units”). In addition, solely for the purpose of
covering over-allotments, the Partnership proposes to grant to the Underwriters the option to
purchase from the Partnership up to an additional 360,000 Common Units (the “Additional
Units”). The Firm Units and the Additional Units are hereinafter collectively sometimes
referred to as the “Units.” This agreement (the “Agreement”) is to confirm the
agreement among the Partnership, Encore Energy Partners GP LLC, a Delaware limited liability
company (the “General Partner”), and Encore Energy Partners Operating LLC, a Delaware
limited liability company (“OLLC” and, together with the Partnership and the General
Partner, the “Partnership Entities”), on the one hand, and the Underwriters, on the other
hand, concerning the purchase of the Units from the Partnership by the Underwriters (the
“Offering”).
A registration statement on Form S-3 relating to the Units has (i) been prepared by the
Partnership in conformity with the requirements of the Securities Act of 1933, as amended (the
“Securities Act”), and the rules and regulations (the “Rules and Regulations”) of
the Securities and Exchange Commission (the “Commission”) thereunder; (ii) been filed with
the Commission under the Securities Act; and (iii) become effective under the Securities Act.
Copies of such registration statement and any amendments thereto have been delivered by the
Partnership to the Representative. As used in this Agreement:
(i) “Applicable Time” means 9:00 a.m. (New York time) on the date of this Agreement;
(ii) “Base Prospectus” means the Base Prospectus filed as part of the Registration
Statement, in the form in which it has been most recently amended on or prior to the date hereof,
relating to the Units;
(iii) “Effective Date” means the time of the Registration Statement’s effectiveness
for purposes of Section 11 of the Securities Act, as such section applies to the respective
Underwriters;
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(iv) “Issuer Free Writing Prospectus” means each “free writing prospectus” (as defined
in Rule 405 of the Rules and Regulations) prepared by or on behalf of the Partnership or used or
referred to by the Partnership in connection with the offering of the Units;
(v) “Preliminary Prospectus” means any preliminary prospectus relating to the Units,
including the Base Prospectus and any preliminary prospectus supplement thereto, included in the
Registration Statement or filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations;
(vi) “Pricing Disclosure Package” means, as of the Applicable Time, the most recent
Preliminary Prospectus together with (i) each Issuer Free Writing Prospectus filed or used by the
Partnership on or before the Applicable Time and identified on Schedule B-1 hereto, other
than a road show that is an Issuer Free Writing Prospectus but is not required to be filed under
Rule 433 of the Rules and Regulations, and (ii) the information set forth on Schedule B-2
hereto;
(vii) “Prospectus” means the final prospectus relating to the Units, including the
Base Prospectus and the prospectus supplement thereto, as filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations; and
(viii) “Registration Statement” means, collectively, the registration statement on
Form S-3 (File No. 333-153768), as amended as of the Effective Date, including any Preliminary
Prospectus and the Prospectus and all exhibits to such registration statement.
Any reference to the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the
Pricing Disclosure Package or the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Form S-3 under the Securities Act. Any reference to
the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary
Prospectus included in the Registration Statement. Any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the
date of such Preliminary Prospectus or the Prospectus, as the case may be, and incorporated by
reference in such Preliminary Prospectus or the Prospectus, as the case may be. Any reference to
any amendment to the Registration Statement shall be deemed to include any periodic or current
report of the Partnership filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Date that is incorporated by reference in the Registration
Statement. The Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus or suspending the
effectiveness of the Registration Statement, and no proceeding for any such purpose or pursuant to
Section 8A of the Securities Act against the Partnership or relating to the offering of the Units
has been instituted or, to the knowledge of the Partnership Entities, threatened by the Commission.
As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange (the “NYSE”) is open for trading. The terms “herein,” “hereof,” “hereto,”
“hereinafter” and similar terms, as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph, sentence or other subdivision of
this Agreement. The term “or,” as used herein, is not exclusive.
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The “Organizational Documents” shall mean each of the GP Agreement (as defined below),
the Partnership Agreement (as defined below), the OLLC Agreement (as defined below) and the
certificates of limited partnership or formation and other organizational documents of the General
Partner and the Partnership.
The Partnership and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Partnership agrees to issue and sell to
the respective Underwriters and each of the Underwriters, severally and not jointly, agrees to
purchase from the Partnership the number of Firm Units set forth opposite the name of such
Underwriter in Schedule A attached hereto, subject to adjustment in accordance with Section
8 hereof, in each case at a purchase price of $14.91 per Unit. The Partnership is advised by you
that the Underwriters intend (i) to make a public offering of their respective portions of the Firm
Units as soon after the effectiveness of this Agreement as in your judgment is advisable and (ii)
initially to offer the Firm Units upon the terms set forth in the Prospectus. You may from time to
time increase or decrease that public offering price after the initial public offering to the
extent you may determine. The respective purchase obligations of the Underwriters with respect to
the Firm Units shall be rounded among the Underwriters to avoid fractional units, as the
Underwriters may determine.
In addition, the Partnership hereby grants to the several Underwriters the option (the
“Over-Allotment Option”) to purchase, and upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the Partnership, ratably in accordance with
the number of Firm Units to be purchased by each of them, all or a portion of the Additional Units
at the same purchase price per unit to be paid by the Underwriters to the Partnership for the Firm
Units. The Over-Allotment Option may be exercised by the Representative on behalf of the several
Underwriters at any time and from time to time on or before the thirtieth day following the date of
this Agreement, by written notice to the Partnership. Such notice shall set forth the aggregate
number of Additional Units as to which the Over-Allotment Option is being exercised and the date
and time when the Additional Units are to be delivered (any such date and time being herein
referred to as an “additional time of purchase”); provided, however, that no additional
time of purchase shall be earlier than the “time of purchase” (as defined below) nor earlier than
the second business day after the date on which the Over-Allotment Option shall have been exercised
nor later than the tenth business day after the date on which the Over-Allotment Option shall have
been exercised. The number of Additional Units to be sold to each Underwriter shall be the number
which bears the same proportion to the aggregate number of Additional Units being purchased as the
number of Firm Units set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Units (subject, in each case, to such adjustment as the
Representative may determine to eliminate fractional Units), subject to adjustment in accordance
with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Units shall be
made to the Partnership by Federal Funds wire transfer against electronic delivery of the
certificates for the Firm Units in book entry to you through the facilities of The Depository Trust
Company (“DTC”) for the respective accounts of the Underwriters. Such payment and delivery
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shall be made at 10:00 A.M., New York City time, on May 22, 2009 (unless another time shall be
agreed to by you and the Partnership or unless postponed in accordance with the provisions of
Section 8 hereof). The time at which such payment and delivery are to be made is hereinafter
sometimes called the “time of purchase.” Electronic transfer of the Firm Units shall be
made to you at the time of purchase in such names and in such denominations as you shall specify.
Payment of the purchase price for the Additional Units shall be made at the additional time of
purchase in the same manner and at the same office as the payment for the Firm Units. Electronic
transfer of the Additional Units shall be made to you at the additional time of purchase in such
names and in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the
Units shall be made at the offices of Xxxxx Xxxxx L.L.P. at One Shell Plaza, 000 Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000, at 9:00 A.M., Houston, Texas time, on the date of the closing of the purchase
of the Firm Units or the Additional Units, as the case may be.
3. Representations and Warranties of the Partnership Entities. Each of the
Partnership Entities, jointly and severally, represents and warrants to and agrees with each of the
Underwriters that:
(a) Status. The Partnership was not at the earliest time after filing of the
Registration Statement at which the Partnership or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) of the Rules and Regulations) of the Units
an “ineligible issuer” (as defined in Rule 405 of the Rules and Regulations). The
Partnership has been since the time of initial filing of the Registration Statement and
continues to be eligible to use Form S-3 for the offering of the Units.
(b) Conformity to the Securities Act. The Registration Statement conformed and will
conform in all material respects, on the Effective Date and on the date of the time of
purchase or additional time of purchase, if any, and any amendment to the Registration
Statement filed after the date hereof will conform in all material respects, when filed with
the Commission, to the requirements of the Securities Act and the Rules and Regulations.
The most recent Preliminary Prospectus conforms in all material respects on the date hereof,
and the Prospectus and any amendment or supplement thereto will conform in all material
respects, when filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and on the date of the time of purchase or additional time of purchase, if any,
to the requirements of the Securities Act and the Rules and Regulations. The documents
incorporated by reference in the Pricing Disclosure Package or the Prospectus conformed or
will conform in all material respects, when filed with the Commission, to the requirements
of the Exchange Act or the Securities Act, as applicable, and the rules and regulations of
the Commission thereunder.
(c) Misleading Statements — Registration Statement. The Registration Statement did
not, as of the Effective Date, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement in reliance upon
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and in conformity with written information furnished to the Partnership by the
Representative on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 10 hereof.
(d) Misleading Statements — Prospectus. The Prospectus and any amendment or
supplement thereto will not, as of its date and on the date of the time of purchase or
additional time of purchase, if any, contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted from the
Prospectus in reliance upon and in conformity with written information furnished to the
Partnership by the Representative on behalf of any Underwriter specifically for inclusion
therein, which information is specified in Section 10 hereof.
(e) Misleading Statements — Documents Incorporated by Reference. The documents
incorporated by reference into the Registration Statement, the Pricing Disclosure Package
and the Prospectus did not, as of the Effective Date, and any further documents filed and
incorporated by reference therein will not, when filed with the Commission, contain an
untrue statement of a material fact or omit to state a material fact (i) solely in the case
of the Registration Statement, required to be stated therein or (ii) necessary to make the
statements therein (in the case of the documents incorporated by reference into the Pricing
Disclosure Package or the Prospectus, in the light of the circumstances under which they
were made) not misleading.
(f) Misleading Statements — Pricing Disclosure Package. The Pricing Disclosure
Package will not, as of the Applicable Time, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except that the price
of the Units and disclosures directly relating thereto will be included in the Prospectus;
provided that no representation or warranty is made as to information contained in or
omitted from the Pricing Disclosure Package in reliance upon and in conformity with written
information furnished to the Partnership by the Representative on behalf of any Underwriter
specifically for inclusion therein, which information is specified in Section 10 hereof.
(g) Misleading Statements — Free Writing Prospectuses. Each Issuer Free Writing
Prospectus (including, without limitation, any road show that is a free writing prospectus
under Rule 433 of the Rules and Regulations), when considered together with the Pricing
Disclosure Package, as of the Applicable Time, will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading,
except that the price of the Units and disclosures directly relating thereto will be
included in the Prospectus.
(h) Free Writing Prospectuses. Each Issuer Free Writing Prospectus conformed or will
conform in all material respects to the requirements of the Securities Act and the Rules and
Regulations on the date of first use, and the Partnership has
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complied with all filing requirements applicable to such Issuer Free Writing Prospectus
pursuant to the Rules and Regulations. The Partnership has not made any offer relating to
the Units that would constitute an Issuer Free Writing Prospectus without the prior written
consent of the Underwriters. The Partnership has retained in accordance with the Rules and
Regulations all Issuer Free Writing Prospectuses that were not required to be filed pursuant
to the Rules and Regulations.
(i) Formation, Good Standing and Qualification of the Partnership Entities. Each of
the Partnership Entities has been duly formed and is validly existing in good standing as a
limited partnership or limited liability company, as the case may be, under the laws of its
respective jurisdiction of formation, with all partnership or limited liability company
power and authority necessary to own, lease and operate its properties and conduct its
business and, (i) in the case of the General Partner, to act as the general partner of the
Partnership, and (ii) in the case of the General Partner, the Partnership and OLLC, to
execute and deliver this Agreement to consummate the transactions contemplated hereby.
(j) Foreign Qualification and Registration. Each of the Partnership Entities is duly
qualified to do business as a foreign limited liability company or limited partnership, as
the case may be, and is in good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its business requires such qualification, except where
the failure to be so qualified and in good standing would not, individually or in the
aggregate, (i) have a material adverse effect on the business, properties, financial
condition, results of operations or prospects of the Partnership Entities taken as a whole
(a “Material Adverse Effect”); or (ii) subject the limited partners of the
Partnership to any material liability or disability; insofar as the foregoing representation
relates to the qualification of each Partnership Entity, the applicable jurisdictions are
set forth on Schedule B-3 hereto.
(k) Ownership of the General Partner. Encore Partners GP Holdings LLC, a Delaware
limited liability company (“GP Holdings”) owns 100% of the issued and outstanding
membership interests in the General Partner; such membership interests have been duly
authorized and validly issued in accordance with the limited liability company agreement of
the General Partner (the “GP Agreement”), as in effect at the time of purchase, and
GP Holdings owns such membership interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims (collectively, “Liens”).
(l) Ownership of the Partnership.
(i) General Partner Interest. The General Partner is the sole general partner of the
Partnership, with an approximate 1.5% general partner interest in the Partnership (the
“GP Interest”) represented by 504,851 General Partner Units (as defined in the
Partnership Agreement); such general partner interest is the only general partner interest
of the Partnership that is issued and outstanding; and such general partner interest has
been duly authorized and validly issued in accordance with the Second Amended and Restated
Agreement of Limited Partnership of Encore Energy Partners LP, dated as of September 17,
2007, as amended (the “Partnership Agreement”), and is owned by the
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General Partner free and clear of all Liens, other than Liens described in the Pricing
Disclosure Package and Liens created by or arising under the Partnership Agreement or the
Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”).
(ii) Limited Partner Interests. The limited partners of the Partnership hold Common
Units in the Partnership aggregating an approximate 98.5% limited partner interest in the
Partnership (the “LP Interest”), represented by (as of May 15, 2009 and excluding
the Units) (i) 12,153,555 publicly traded Common Units (representing an approximate 36.2%
limited partner interest), (ii) 9,995,801 Common Units (representing an approximate 29.8%
limited partner interest) owned by Encore Partners LP Holdings LLC, a Delaware limited
liability company (“LP Holdings”) and (iii) 10,928,254 Common Units (representing an
approximate 32.5% limited partner interest) owned by Encore Operating, L.P., a Texas limited
partnership (“Encore Operating”); such Common Units are the only limited partner
interests of the Partnership that are issued and outstanding; all of such Common Units have
been duly authorized and validly issued pursuant to the Partnership Agreement, and are fully
paid and nonassessable (except to the extent such nonassessability may be affected by
Sections 17-303, 17-607 and 17-804 of the Delaware LP Act); LP Holdings and Encore Operating
own such limited partner interests free and clear of all Liens, other than Liens described
in the Pricing Disclosure Package and Liens created by or arising under the Partnership
Agreement or the Delaware LP Act.
(m) Ownership of GP Holdings. Encore Acquisition Company, a Delaware corporation
(“EAC”), owns 100% of the issued and outstanding membership interests in GP
Holdings; such membership interests have been duly authorized and validly issued in
accordance with the limited liability agreement of GP Holdings (the “GP Holdings
Agreement”) and are fully paid (to the extent required under the GP Holdings Agreement)
and nonassessable (except as such nonassessability may be affected by matters described in
Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act); and EAC owns such membership
interests free and clear of all Liens, other than Liens described in the Pricing Disclosure
Package and Liens created by or arising under the Delaware LLC Act.
(n) Ownership of LP Holdings. EAC owns 100% of the issued and outstanding membership
interests in LP Holdings; such membership interests have been duly authorized and validly
issued in accordance with the limited liability agreement of LP Holdings (the “LP
Holdings Agreement”) and are fully paid (to the extent required under the LP Holdings
Agreement) and nonassessable (except as such nonassessability may be affected by matters
described in Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act); and EAC owns such
membership interests free and clear of all Liens, other than Liens described in the Pricing
Disclosure Package and Liens created by or arising under the Delaware LLC Act.
(o) Ownership of OLLC. The Partnership owns 100% of the issued and outstanding
membership interests in OLLC; such membership interests have been duly authorized and
validly issued in accordance with the limited liability agreement of OLLC (the “OLLC
Agreement”) and are fully paid (to the extent required under the OLLC
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Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act); and the
Partnership owns such membership interests free and clear of all Liens, other than Liens
under or permitted by the Partnership’s Amended and Restated Credit Agreement dated as of
March 7, 2007, as amended (the “Credit Agreement”) by and among OLLC, the
Partnership, Bank of America, N.A., as administrative agent and L/C Issuer, Banc of America
Securities LLC, as sole lead arranger and sole book manager, and other lenders party
thereto, Liens described in the Pricing Disclosure Package and Liens created by or arising
under the Delaware LLC Act.
(p) Subsidiaries. The Partnership has no direct or indirect subsidiaries (as defined
under the Securities Act) other than the subsidiaries listed in Exhibit 21.1 of the
Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008
(collectively, sometimes referred to herein as the “Subsidiaries”); other than the
Subsidiaries, the Partnership does not own, directly or indirectly, any shares of stock or
any other equity interests or long-term debt securities of any corporation, firm,
partnership, joint venture, association or other entity; complete and correct copies of the
formation and governing documents of each of the Partnership Entities and all amendments
thereto have been delivered to you; and each of the Partnership Entities is in compliance
with the laws, orders, rules, regulations and directives issued or administered by such
jurisdictions, except where the failure to be in compliance would not, individually or in
the aggregate, have a Material Adverse Effect.
(q) Valid Issuance of Units. As of the time of purchase or any additional time of
purchase, the Firm Units and the Additional Units, if any, and the limited partner interests
represented thereby, will be duly authorized in accordance with the Partnership Agreement
and, when issued and delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such nonassessability may be affected by
(i) matters described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus under the captions “Risk Factors—Risks Inherent in an Investment in
Us—Unitholder liability may not be limited if a court finds that unitholder action
constitutes control of our business,” “Risk Factors—Risks Inherent in an Investment in
Us—Unitholders may have liability to repay distributions” and “Our Partnership
Agreement—Limited Liability” and (ii) Sections 17-303, 17-607 and 17-804 of the Delaware LP
Act); and other than the LP Interest and the GP Interest, the Units will be the only partner
interests of the Partnership issued and outstanding as of the time of purchase and any
additional time of purchase, as applicable; the Units, when issued and delivered against
payment therefor as provided herein, will be free of any restriction upon the voting or
transfer thereof pursuant to the Partnership’s formation and governing documents or any
agreement or other instrument to which the Partnership or any of the Partnership Entities or
their affiliates is a party or by which any of them or any of their respective properties
may be bound or affected.
(r) Conformity to Description of Units. The Units, when issued and delivered in
accordance with the terms of the Partnership Agreement and against payment therefor as
provided herein, will conform in all material respects to the description thereof
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contained in the Registration Statement, the Pricing Disclosure Package and the
Prospectus.
(s) Authority and Authorization. The Partnership has all requisite partnership power
and authority to issue, sell and deliver the Units, in accordance with and upon the terms
and conditions set forth in this Agreement and the Partnership Agreement. Each of the
Partnership Entities has all requisite right, power and authority to execute and deliver the
Underwriting Agreement and to perform its respective obligations thereunder. At each time
of purchase, all partnership and limited liability company action, as the case may be,
required to be taken by any of the Partnership Entities or any of their respective
unitholders, members or partners for the authorization, issuance, sale and delivery of the
Units, the execution and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement shall have been validly taken.
(t) Authorization, Execution and Delivery of this Agreement. This Agreement has been
duly authorized, executed and delivered by each of the Partnership Entities.
(u) No Conflicts or Violations; No Default. None of the Partnership Entities is (A) in
violation of its respective Organizational Documents, or (B) in breach of, in default under
or violation of (nor has any event occurred which with notice, lapse of time or both would
result in any breach of, default under or violation of or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or any part of such indebtedness under) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or instrument to which any
of the Partnership Entities is a party or by which any of them or any of their respective
properties may be bound or affected, or (C) in violation of any federal, state, local or
foreign law, regulation or rule, or (D) in violation of any rule or regulation of any
self-regulatory organization or other non-governmental regulatory authority (including,
without limitation, the rules and regulations of the NYSE), or (E) in violation of any
decree, judgment or order applicable to any of the Partnership Entities or any of their
respective properties, which breach, default or violation, in the case of clauses
(B), (C), (D) and (E) above, would, if continued, have,
individually or in the aggregate, a Material Adverse Effect or prevent or materially
interfere with the consummation of the transactions contemplated by this Agreement,
including the Offering, the Registration Statement, the Pricing Disclosure Package and the
Prospectus. The execution, delivery and performance of this Agreement by the Partnership
Entities, the issuance and sale of the Units and the consummation of the transactions
contemplated hereby will not (I) conflict with, result in any breach or violation of or
constitute a default under (nor constitute any event which with notice, lapse of time or
both would result in any breach or violation of or constitute a default under) the
Organizational Documents of any of the Partnership Entities, or any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to any of the
Partnership Entities, except as disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus or (II) conflict with, result in any breach or
violation of or constitute a default under (nor constitute any event which with notice,
lapse of time or both would result in any breach or violation of or constitute a default
under) any indenture, mortgage, deed of
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trust, bank loan or credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which any Partnership Entity is a party
or by which any of them or any of their respective properties may be bound or affected,
except as disclosed in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, and for any such breach, violation or default that would not have a Material
Adverse Effect.
(v) No Consents Regarding the Offering. No approval, authorization, consent or order
of or filing with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any self-regulatory organization
or other non-governmental regulatory authority having jurisdiction over any Partnership
Entity or its property (including, without limitation, the NYSE) (each, a “Consent”)
or any approval of the security holders of the Partnership Entities, is required in
connection with the Offering and the execution, delivery and performance of this Agreement
by the Partnership Entities or the consummation by the Partnership Entities of the
transactions contemplated hereby other than (i) registration of the Units under the
Securities Act, which has been effected (or, with respect to any registration statement to
be filed hereunder pursuant to Rule 462(b) under the Securities Act, will be effected in
accordance herewith), (ii) any necessary qualification under the securities or blue sky laws
of the various jurisdictions in which the Units are being offered by the Underwriters or
under the Conduct Rules of the Financial Industry Regulatory Authority (“FINRA”) and
(iii) such Consents that have been, or prior to the time of purchase will be, obtained, or,
if not obtained would not, individually or in the aggregate, result in a Material Adverse
Effect or prevent or materially interfere with the consummation of the transactions
contemplated by this Agreement.
(w) No Preemptive Rights, Registration Rights, Options or Other Rights. Except as
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
(i) no person has the right, contractual or otherwise, to cause the Partnership to issue or
sell to it the Units or other equity interests of the Partnership, (ii) no person has any
preemptive rights, rights of first refusal or other rights to purchase any Units or other
equity interests in the Partnership, (iii) no person has any resale rights in respect of the
Units that would be required to be disclosed in the Registration Statement and are not so
disclosed and (iv) no person has the right to act as an underwriter or as a financial
advisor to the Partnership in connection with the Offering; except as described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, no person has the
right, contractual or otherwise, to cause the Partnership to register under the Securities
Act any equity interests in the Partnership, or to include any such interests in the
Registration Statement or the Offering contemplated thereby.
(x) Permits. Each of the Partnership Entities has all necessary licenses,
authorizations, consents and approvals (each, a “Permit”) and has or will have made
all necessary filings required under any applicable law, regulation or rule, and has
obtained all necessary Permits from other persons, in order to conduct its business, except
for such Permits that, if not obtained, would not have a Material Adverse Effect; none of
the Partnership Entities is in violation of, or in default under, or has received notice of
any proceedings relating to the revocation or modification of, any such Permit or any
federal,
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state, local or foreign law, regulation or rule or any decree, order or judgment
applicable to any of the Partnership Entities, except where such violation, default,
revocation or modification would not, individually or in the aggregate, have a Material
Adverse Effect.
(y) Descriptions; Exhibits. All legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses, agreements, properties,
leases or documents of a character required to be described in the Registration Statement,
the Pricing Disclosure Package or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required; and the statements
included in the Registration Statement, any Preliminary Prospectus and the Prospectus under
the headings “Description of Common Units,” “Conflicts of Interest and Fiduciary Duties,”
“Our Partnership Agreement,” “Cash Distribution Policy,” “Material Tax Considerations,”
“Material Tax Consequences” and “Underwriting” (and any similar information, if any,
contained in any Issuer Free Writing Prospectus), insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings.
(z) Litigation. Except as described in the Pricing Disclosure Package, there are no
actions, suits, claims, investigations or proceedings pending or, to the knowledge of the
Partnership Entities, threatened or contemplated to which any of the Partnership Entities or
any of their respective directors or officers is or would be a party or of which any of
their respective properties is or would be subject at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission, board, body,
authority or agency, or before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the NYSE), except any
such action, suit, claim, investigation or proceeding which would not result in a judgment,
decree or order having, individually or in the aggregate, a Material Adverse Effect.
(aa) Independent Registered Public Accounting Firms. Ernst & Young LLP, whose reports
on the (A) consolidated balance sheets of the General Partner and the Partnership as of
December 31, 2008 and 2007 and (B) the Partnership’s consolidated statements of operations,
partners’ equity and comprehensive income, and cash flows for each of the three years in the
period ended December 31, 2008 are included in or incorporated by reference in the Pricing
Disclosure Package and the Prospectus, is an independent registered public accounting firm
as required by the Securities Act and by the rules of the Public Company Accounting
Oversight Board (United States) (the “PCAOB”).
(bb) Reserve Engineer. Xxxxxx and Xxxxx, Ltd. (the “Engineer”), whose reserve
evaluations are referenced or appear, as the case may be, in the Pricing Disclosure Package
and the Prospectus, are independent engineers with respect to the Partnership; and the
historical information underlying the estimates of the reserves of the Partnership supplied
by the Partnership to the Engineer for the purposes of preparing the reserve reports of the
Partnership incorporated by reference in the Pricing Disclosure Package and the Prospectus
(the “Reserve Reports”), including, without limitation, production
11
volumes, sales prices for production, contractual pricing provisions under oil or gas
sales or marketing contracts or under hedging arrangements, costs of operations and
development, and working interest and net revenue information relating to the Partnership’s
ownership interests in properties, was true and correct in all material respects on the date
of each such Reserve Report and was prepared in all material respects in accordance with
customary industry practices.
(cc) Financial Statements. The consolidated historical financial statements, together
with the related notes and schedules, of the Partnership and the General Partner included or
incorporated by reference in the Pricing Disclosure Package and the Prospectus present
fairly in all material respects the consolidated financial position of the Partnership and
the General Partner as of the dates and for the periods indicated, comply as to form with
the applicable accounting requirements of the Securities Act and have been prepared in
conformity with generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein). The summary
consolidated financial and operating data set forth under the caption “Summary Consolidated
Financial Data” in the Preliminary Prospectus and the Prospectus (or similar sections or
information in any Issuer Free Writing Prospectus) fairly present in all material respects,
on the basis stated in the Preliminary Prospectus and the Prospectus, the information
included therein.
(dd) No Material Adverse Change. Subsequent to the date as of which information is
given in the Pricing Disclosure Package, there has not been any material adverse change, or
any development involving, individually or in the aggregate, a prospective material adverse
change, in the business, properties, management, financial condition, prospects, net worth
or results of operations of the Partnership Entities taken as a whole, whether or not
arising from transactions in the ordinary course of business.
(ee) Investment Company. None of the Partnership Entities is and at no time during
which a prospectus is required by the Securities Act to be delivered (whether physically or
through compliance with Rule 172 under the Securities Act or any similar rule) in connection
with any sale of Units will any of them be, and, after giving effect to the Offering and
sale of the Units, none of them will be an “investment company” or an entity “controlled” by
an “investment company,” as such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”).
(ff) Title to Properties. Each of the Partnership Entities has good and marketable
title to all real property and good title to all personal property described in the Pricing
Disclosure Package and the Prospectus as being owned by any of them, free and clear of all
Liens except (i) as described in the Pricing Disclosure Package, (ii) pursuant to the Credit
Agreement, (iii) as would not, individually or in the aggregate, have a Material Adverse
Effect, and (iv) as do not materially interfere with the use of such properties, taken as a
whole, as described in the Pricing Disclosure Package and the Prospectus. All of the
property held under lease by any of the Partnership Entities is held under valid and
subsisting and enforceable leases, with such exceptions as would not materially interfere
with the use of such properties, taken as a whole, as described in the Pricing Disclosure
Package and the Prospectus.
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(gg) Rights-of-Way. Each of the Partnership Entities has such consents, easements,
rights-of-way or licenses from any person (“rights-of-way”) as are necessary to
enable it to conduct its business in the manner described in the Pricing Disclosure Package
and the Prospectus, subject to such qualifications as may be set forth in the Pricing
Disclosure Package and the Prospectus and except for such rights-of-way the lack of which
would not have, individually or in the aggregate, a Material Adverse Effect; and, except as
described in the Pricing Disclosure Package or Prospectus, as would not interfere with the
operations of the Partnership Entities as conducted on the date hereof to such a material
extent that the Representatives could reasonably conclude that proceeding with the Offering
would be inadvisable; none of such rights-of-way contains any restriction that is materially
burdensome to the Partnership Entities, taken as a whole.
(hh) Intellectual Property. Each of the Partnership Entities owns, licenses or
possesses adequate rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) necessary for the conduct of
their respective businesses, except where the failure to own, license or have such rights
would not, individually or in the aggregate, have a Material Adverse Effect; and none of the
Partnership Entities has received any notice of conflict with, any such rights of others.
(ii) Labor and Employment. No labor disputes with the employees that are engaged in the
businesses of the Partnership Entities exist or, to the knowledge of the Partnership
Entities, are imminent or threatened that would, individually or in the aggregate, have a
Material Adverse Effect. To the Partnership’s knowledge, there has been no violation of any
federal, state, local or foreign law relating to discrimination in the hiring, promotion or
pay of employees, any applicable wage or hour laws or any provision of the Employee
Retirement Income Security Act of 1974, as amended, or the rules and regulations promulgated
thereunder concerning the employees providing services to any of the Partnership Entities.
(jj) Environmental Compliance. Except as described in the Pricing Disclosure Package
and the Prospectus, each of the Partnership Entities and their subsidiaries (i) are in
compliance with any and all applicable laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”), (ii) have received and are in
compliance with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as they are currently being
conducted and (iii) have not received written notice of any, and to the knowledge of the
Partnership Entities there are no, pending events or circumstances that could reasonably be
expected to form the basis for any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, and (iv) are not subject to any pending or, to the knowledge of
the Partnership Entities, threatened actions, suits, demands, orders or proceedings relating
to any Environmental Laws against the Partnership Entities (collectively,
“Proceedings”), except where such non-compliance with Environmental
13
Laws, failure to receive required permits, licenses or other approvals, actual or
potential liability or Proceedings could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect. Except as set forth in the Pricing
Disclosure Package and the Prospectus, to the knowledge of the Partnership Entities, none of
the Partnership Entities or their subsidiaries is currently named as a “potentially
responsible party” under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (“CERCLA”).
(kk) Tax Returns. All tax returns required to be filed by the Partnership Entities
through the date hereof have been timely filed (or extensions have been timely obtained with
respect to such tax returns), and all taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any interest, additions to tax
or penalties applicable thereto due or claimed to be due from such entities have been timely
paid, other than those (i) that are being contested in good faith and for which adequate
reserves have been provided or (ii) that, if not paid, would not, individually or in the
aggregate, have a Material Adverse Effect.
(ll) Insurance. The Partnership Entities maintain insurance covering their respective
properties, operations, personnel and businesses as each Partnership Entity reasonably deems
adequate; such insurance insures against such losses and risks to an extent that is adequate
in accordance with customary industry practice to protect the Partnership Entities and their
respective businesses; all such insurance is fully in force on the date hereof and will be
fully in force at the time of purchase and any additional time of purchase; none of the
Partnership Entities has reason to believe that it will not be able to renew any such
insurance as and when such insurance expires.
(mm) No Business Interruptions. None of the Partnership Entities has sustained since
the date of the last audited financial statements included in the Pricing Disclosure Package
and the Prospectus any material loss or interference with its respective business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree.
(nn) Internal Controls. Each of the Partnership Entities maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
(oo) Adequacy of Internal Controls. Each of the Partnership Entities has established
and maintains and evaluates “disclosure controls and procedures” (as such term is defined in
Rules 13a-15 and 15d-15 under the Exchange Act) and “internal control over financial
reporting” (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act); such
disclosure controls and procedures are designed to ensure
14
that material information relating to the Partnership Entities is made known to the
General Partner’s principal executive officer and principal financial officer by others
within those entities, and such disclosure controls and procedures are effective to perform
the functions for which they were established; the Partnership Entities’ independent
auditors and the Audit Committee of the Board of Directors of the General Partner have been
advised of: (i) all significant deficiencies, if any, in the design or operation of internal
controls which could adversely affect the Partnership Entities’ ability to record, process,
summarize and report financial data and (ii) all fraud, if any, whether or not material,
that involves management or other employees who have a role in the Partnership Entities’
internal controls; all material weaknesses, if any, in internal controls have been
identified to the Partnership Entities’ independent auditors; since the date of the most
recent evaluation of such disclosure controls and procedures and internal controls, there
have been no significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses; the principal executive officer and
principal financial officer of the General Partner have made all certifications required by
the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”) and any related rules and
regulations promulgated by the Commission, and the statements contained in each such
certification are complete and correct; and the Partnership Entities and the General
Partner’s directors and officers are each in compliance in all material respects with all
applicable effective provisions of the Xxxxxxxx-Xxxxx Act and the rules and regulations of
the Commission and the NYSE promulgated thereunder.
(pp) Related Party Transactions. None of the Partnership Entities has, directly or
indirectly, including through any Subsidiary extended credit, arranged to extend credit, or
renewed any extension of credit, in the form of a personal loan, to or for any director or
executive officer of the General Partner or to or for any family member or affiliate of any
director or executive officer of the General Partner.
(qq) Forward-Looking Statements. Each “forward-looking statement” contained in the
Pricing Disclosure Package and the Prospectus has been made or reaffirmed with a reasonable
basis and in good faith.
(rr) Statistical and Market-Related Data. All statistical or market-related data
included in the Pricing Disclosure Package and the Prospectus are based on or derived from
sources that the Partnership believes to be reliable and accurate in all material respects,
and the Partnership has obtained the written consent to the use of such data from such
sources to the extent required.
(ss) No Prohibition on Distributions. The Partnership is not currently prohibited,
directly or indirectly, from making distributions in respect of its equity securities,
except in each case as described in (A) the Pricing Disclosure Package and the Prospectus
and (B) the Organizational Documents of the Partnership.
(tt) NYSE Listing. The Units have been approved for listing on the NYSE, subject to
official notice of issuance.
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(uu) No Brokers’ Fees. Except pursuant to this Agreement, none of the Partnership
Entities has incurred any liability for any finder’s or broker’s fees or agent’s commissions
in connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement.
(vv) No Stabilizing Transactions. None of the Partnership Entities nor any of their
respective Affiliates (as such term is defined in Rule 405 promulgated under the Securities
Act) has taken, directly or indirectly, any action designed, or which has constituted or
could reasonably be expected to cause or result in the stabilization or manipulation of the
price of any security of the Partnership to facilitate the sale or resale of the Units.
(ww) FINRA Affiliations. To the knowledge of the Partnership Entities, other as
disclosed in the Pricing Disclosure Package, there are no affiliations or associations
between (i) any member of the FINRA and (ii) the Partnership, any of the General Partner’s
officers or directors, any 5% or greater securityholders of the Partnership, or any
beneficial owner of the Partnership’s unregistered equity securities that were acquired at
any time on or after the 180th day immediately preceding the date the Registration Statement
was initially filed with the Commission, except as disclosed in the Pricing Disclosure
Package.
(xx) No Distribution of Other Offering Materials. None of the Partnership Entities has
distributed nor will they distribute, prior to the later to occur of (x) the time of
purchase and additional time of purchase and (y) the completion of the distribution of the
Units, any prospectus (as defined under the Securities Act) in connection with the offering
and sale of the Units other than the Registration Statement, any Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus or other materials, if any, permitted by the
Securities Act, including Rule 134 promulgated thereunder.
(yy) No Foreign Operations. None of the Partnership Entities conducts business
operations outside the United States.
Any certificate signed by any officer of the Partnership Entities or any of the Subsidiaries
and delivered to the Underwriters or counsel for the Underwriters in connection with the Offering
shall be deemed to be a representation and warranty by the Partnership Entity or Subsidiary, as the
case may be, as to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Partnership and the General Partner. The Partnership and
the General Partner hereby agree:
(a) To prepare the Prospectus in a form approved by the Representative (such approval
not to be unreasonably withheld) and to file such Prospectus pursuant to Rule 424(b) of the
Rules and Regulations not later than the Commission’s close of business on the second
business day following the execution and delivery of this Agreement; to make no further
amendment or any supplement to the Registration Statement or the Prospectus prior to the
time of purchase or additional time of purchase, if any, except as provided herein; to
advise the Representative, promptly after it receives notice thereof, of the time
16
when any amendment or supplement to the Registration Statement or the Prospectus has
been filed and to furnish the Representative with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be filed by the
Partnership with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Units; to advise the
Representative, promptly after it receives notice thereof, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of the Prospectus or any
Issuer Free Writing Prospectus, of the suspension of the qualification of the Units for
offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, of any notice from the Commission objecting to the use of the form of the
Registration Statement or any post-effective amendment thereto or of any request by the
Commission for the amending or supplementing of the Registration Statement, the Prospectus
or any Issuer Free Writing Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use of the
Prospectus or any Issuer Free Writing Prospectus or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal.
(b) To furnish promptly to the Representative and to counsel for the Underwriters a
signed copy of the Registration Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all consents and exhibits filed
therewith.
(c) To deliver promptly to the Underwriters such number of the following documents as
the Representative shall reasonably request: (A) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment thereto (in each case
excluding exhibits), (B) the Prospectus and any amended or supplemented Prospectus, (C) each
Issuer Free Writing Prospectus and (D) any document incorporated by reference in the
Registration Statement or the Prospectus; and, if the delivery of the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) of the Rules and Regulations) is required at
any time after the date hereof in connection with the offering or sale of the Units and if
at such time any events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or, if for any other reason it
shall be necessary to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Representative and, upon their request, to
file such document that will correct such statement or omission or effect such compliance
and to prepare and furnish without charge to the Underwriters and to any dealer in
securities as many copies as the Representative may from time to time reasonably request of
such amended or supplemented Prospectus or other documents.
(d) To file promptly with the Commission any amendment or supplement to the
Registration Statement or the Prospectus that may, in the reasonable judgment of the
17
Partnership or the Representative, be required by the Securities Act or requested by
the Commission.
(e) Prior to filing with the Commission any amendment or supplement to the Registration
Statement or the Prospectus, or any document incorporated by reference in the Prospectus or
any amendment to any document incorporated by reference in the Prospectus, to furnish a copy
thereof to the Representative and counsel for the Underwriters and obtain the consent of the
Representative to the filing, which consent shall not be unreasonably withheld and which
shall be provided to the Partnership promptly after having been given notice of the proposed
filing; provided that the foregoing provision shall not apply if such filing is, in the
judgment of counsel to the Partnership, required by law.
(f) Not to make any offer relating to the Units that would constitute an Issuer Free
Writing Prospectus without the prior written consent of the Representative.
(g) To retain in accordance with the Rules and Regulations all Issuer Free Writing
Prospectuses not required to be filed pursuant to the Rules and Regulations; and if at any
time after the date hereof any events shall have occurred as a result of which any Issuer
Free Writing Prospectus, as then amended or supplemented, would conflict with the
information in the Registration Statement, the Pricing Disclosure Package or the Prospectus
or would include an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or, if for any other reason it shall be necessary to
amend or supplement any Issuer Free Writing Prospectus, to notify the Representative and,
upon their request, to file such document and to prepare and furnish without charge to the
Underwriters as many copies as the Representative may from time to time reasonably request
of an amended or supplemented Issuer Free Writing Prospectus that will correct such
conflict, statement or omission or effect such compliance.
(h) As soon as practicable after the Effective Date and in any event not later than 16
months after the date hereof, to make generally available to the Partnership’s security
holders and to deliver to the Underwriters an earnings statement of the Partnership and its
subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations.
(i) Promptly from time to time to take such action as the Representative may reasonably
request to qualify the Units for offering and sale under the securities laws of such
jurisdictions as the Representative may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Units; provided that in connection therewith
the Partnership shall not be required to (i) qualify as a foreign limited partnership in any
jurisdiction in which it would not otherwise be required to so qualify, (ii) file a general
consent to service of process in any such jurisdiction or (iii) subject itself to taxation
in any jurisdiction in which it would not otherwise be subject; and
18
(j) To apply the net proceeds from the sale of the Units in the manner set forth under
the caption “Use of Proceeds” in the Prospectus.
(k) To pay all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statement, the Prospectus, any Preliminary Prospectus, each
Issuer Free Writing Prospectus and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the Underwriters and to dealers (including costs
of mailing and shipment), (ii) the registration, issue, sale and delivery of the Units
including any stock or transfer taxes and stamp or similar duties payable upon the sale,
issuance or delivery of the Units to the Underwriters, (iii) the producing, word processing
and/or printing of this Agreement, any agreement among underwriters, any dealer agreements,
any powers of attorney and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof to the Underwriters
and (except closing documents) to dealers (including costs of mailing and shipment), (iv)
the qualification of the Units for offering and sale under state or foreign laws and the
determination of their eligibility for investment under state or foreign law (including the
reasonably incurred legal fees and filing fees and other disbursements of counsel for the
Underwriters) and the reasonably incurred costs and expenses of printing and furnishing of
copies of any legal investment surveys to the Underwriters and to dealers, (v) any listing
of the Units on any securities exchange or qualification of the Units for quotation on the
NYSE and any registration thereof under the Exchange Act, (vi) any filing for review of the
public offering of the Units by the FINRA, including the reasonably incurred legal fees and
filing fees and other disbursements of counsel to the Underwriters relating to FINRA
matters, (vii) the fees and disbursements of any transfer agent or registrar for the Units,
(viii) the costs and expenses of the Partnership relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale of the Units to
prospective investors and the Underwriters’ sales forces, and (ix) the performance of the
Partnership’s other obligations hereunder; provided, however, that except as otherwise
provided in this Section 4 and in Section 5 hereof, the Underwriters shall bear and pay all
of their own costs and expenses, including the fees and expenses of their counsel, any
transfer taxes payable in connection with the resale of any Units by the Underwriters and
any “tombstone” or other advertising expenses incurred by them in connection with the
announcement of their participation in the Offering.
(l) Beginning on the date hereof and ending on, and including, the date that is 45 days
after the date of this Agreement (the “Lock-Up Period”), without the prior written
consent of the Representative, not to (i) issue, sell, offer to sell, contract or agree to
sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to
dispose of, directly or indirectly, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act and the rules and regulations of the Commission promulgated thereunder, with
respect to, any Common Units or any other securities of the Partnership that are
substantially similar to Common Units, or any securities convertible into or exchangeable or
exercisable for, or any warrants or other rights to purchase, the foregoing, (ii) file or
cause to become effective a registration statement under the Securities Act relating to the
offer and sale of any Common Units or any other securities of the Partnership that are
19
substantially similar to Common Units, or any securities convertible into or
exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing,
(iii) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of Common Units or any other securities
of the Partnership that are substantially similar to Common Units, or any securities
convertible into or exchangeable or exercisable for, or any warrants or other rights to
purchase, the foregoing, whether any such transaction is to be settled by delivery of Common
Units or such other securities, in cash or otherwise or (iv) publicly announce an intention
to effect any transaction specified in clause (i), (ii) or (iii), except, in each case, for
(A) the registration of the offer and sale of the Units as contemplated by this Agreement,
(B) the issuance of employee unit options or phantom units that do not vest or become
exercisable during the Lock-Up Period pursuant to the Encore Energy Partners GP LLC
Long-Term Incentive Plan, (C) issuances of Common Units or other rights to acquire Common
Units in private transactions in connection with future acquisitions by the Partnership,
provided that the persons receiving Common Units or other rights to acquire Common Units
shall have agreed in writing to be bound by the terms of these lock-up provisions during the
Lock-Up Period, and (D) issuances of Common Units in underwritten public transactions in
connection with future acquisitions; provided, however, that if (a) during the period that
begins on the date that is seventeen (17) days before the last day of the Lock-Up Period and
ends on the last day of the Lock-Up Period, the Partnership issues an earnings release or
material news or a material event relating to the Partnership occurs, or (b) prior to the
expiration of the Lock-Up Period, the Partnership announces that it will release earnings
results during the sixteen (16) day period beginning on the last day of the Lock-Up Period,
then the restrictions imposed by this Section 4(n) shall continue to apply until the
expiration of the date that is eighteen (18) days after the date on which the issuance of
the earnings release or the material news or material event occurs unless the
Representative, on behalf of the Underwriters, waives such extension in writing.
(m) The Partnership has obtained, or will use its reasonable best efforts to obtain,
for the benefit of the Underwriters the agreement (a “Lock-Up Agreement”), in the
form set forth as Exhibit A hereto, of each of its directors and “officers” (within
the meaning of Rule 16a-1(f) under the Exchange Act) and each beneficial owner of more than
5% of the Common Units named in Exhibit A-1 hereto.
(n) Prior to the time of purchase, to issue no press release or other communication
directly or indirectly and hold no press conferences with respect to the Partnership or any
Subsidiary, the financial condition, results of operations, business, properties, assets, or
liabilities of the Partnership or any Subsidiary, or the offering of the Units, without your
prior consent.
(o) Not, at any time at or after the execution of this Agreement, to, directly or
indirectly, offer or sell any Units by means of any “prospectus” (within the meaning of the
Securities Act), or use any “prospectus” (within the meaning of the Securities Act) in
connection with the offer or sale of the Units, in each case other than the Prospectus or
any Issuer Free Writing Prospectus.
20
(p) Not to take, directly or indirectly, any action designed, or which has constituted
or might reasonably be expected to cause or result in the stabilization or manipulation of
the price of any security of the Partnership to facilitate the sale or resale of the Units.
(q) To use its reasonable best efforts to cause the Units to be listed on the NYSE and
to maintain such listing on the NYSE.
(r) To maintain a transfer agent and, if necessary under the jurisdiction of formation
of the Partnership, a registrar for the Common Units.
Each Underwriter, severally and not jointly, agrees that it shall not include any “issuer
information” (as defined in Rule 433 of the Rules and Regulations) in any “free writing prospectus”
(as defined in Rule 405 of the Rules and Regulations) used or referred to by such Underwriter
without the prior consent of the Partnership and the Representative (any such issuer information
with respect to the use of which the Partnership and the Representative have given their consent,
“Permitted Issuer Information”); provided that (i) no such consent shall be required with
respect to any such issuer information contained in any document filed by the Partnership with the
Commission prior to the use of such free writing prospectus and (ii) “issuer information,” as used
in this Section 4, shall not be deemed to include information prepared by or on behalf of the
Underwriters on the basis of or derived from issuer information.
5. Reimbursement of Underwriters’ Expenses. If (a) the Partnership shall fail to
tender the Units for delivery to the Underwriters by reason of any failure, refusal or inability on
the part of any of the Partnership Entities to perform any agreement on their part to be performed,
or because any other condition to the Underwriters’ obligations hereunder required to be fulfilled
by any of the Partnership Entities is not fulfilled for any reason or (b) the Underwriters shall
decline to purchase the Units for any reason permitted under this Agreement, the Partnership shall
reimburse the Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Units. If the Units are not delivered by reason of the termination of
this Agreement pursuant to the fifth paragraph of Section 8 hereof or the default of one or more
Underwriters in its or their respective obligations hereunder, the Partnership shall not be
obligated to reimburse the Underwriters on account of those expenses.
6. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the respective representations and warranties
on the part of the Partnership Entities on the date hereof, at the time of purchase and, if
applicable, at the additional time of purchase, the performance by the Partnership of its
obligations hereunder and to the following additional conditions precedent:
(a) The Partnership shall furnish to you at the time of purchase and, if applicable, at
the additional time of purchase, an opinion of Xxxxx Xxxxx L.L.P., counsel for the
Partnership, addressed to the Underwriters, and dated the time of purchase or the additional
time of purchase, as the case may be, with executed copies for each of the other
Underwriters, and in form and substance reasonably satisfactory to the Representative, in
substantially the form set forth in Exhibit B hereto.
21
(b) You shall have received from Ernst & Young LLP letters dated, respectively, the
date of this Agreement, the time of purchase and, if applicable, the additional time of
purchase, and addressed to the Underwriters (with executed copies for each of the
Underwriters) in the forms reasonably satisfactory to the Representative, which letters
shall cover, without limitation, the various financial disclosures contained in the
Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and
the Prospectus.
(c) You shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Xxxxxxx Xxxxx LLP, counsel for the
Underwriters, dated the time of purchase or the additional time of purchase, as the case may
be, in form and substance reasonably satisfactory to the Representative.
(d) You shall have received from the Engineer dated the date of the time of purchase or
additional time of purchase, if any, a letter in form and substance reasonably satisfactory
to you, stating, as of the date hereof and as of the time of purchase or additional time of
purchase, if any (or, with respect to matters involving changes or developments since the
respective dates as of which specified information with respect to the oil and gas reserves
is given or incorporated in the Prospectus as of the date not more than five days prior to
the date of such letter), the conclusions and findings of such firm with respect to the oil
and gas reserves of the Partnership.
(e) No Prospectus or Issuer Free Writing Prospectus or amendment or supplement to the
Registration Statement or the Prospectus shall have been filed to which you shall have
reasonably objected in writing.
(f) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
under the Securities Act at or before 5:30 P.M., New York City time, on the second full
business day after the date of this Agreement (or such earlier time as may be required under
the Securities Act).
(g) Prior to and at the time of purchase, and, if applicable, the additional time of
purchase, (i) no stop order with respect to the effectiveness of the Registration Statement
shall have been issued under the Securities Act or proceedings initiated under Section 8(d)
or 8(e) of the Securities Act; (ii) the Registration Statement and all amendments thereto
shall not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading;
(iii) neither the Preliminary Prospectus nor the Prospectus, nor any amendment or supplement
thereto, shall include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading; (iv) neither the Pricing Disclosure Package nor
any amendment or supplement thereto, shall include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading; and (v) no Issuer Free
Writing Prospectus, if any, shall include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
22
statements therein, in the light of the circumstances under which they are made, not
misleading.
(h) The General Partner will, at the time of purchase and, if applicable, at the
additional time of purchase, deliver to you a certificate of its Chief Executive Officer and
its Chief Financial Officer, dated the time of purchase or the additional time of purchase,
as the case may be, in the form attached as Exhibit C hereto.
(i) You shall have received each of the signed Lock-Up Agreements referred to in
Section 4(n) hereof, and each such Lock-Up Agreement shall be in full force and effect at
the time of purchase and the additional time of purchase, as the case may be.
(j) The Partnership shall have furnished to you such other documents and certificates
as to the accuracy and completeness of any statement in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus as of the time
of purchase and, if applicable, the additional time of purchase, as you may reasonably
request.
(k) The Units shall have been approved for listing on the NYSE, subject only to notice
of issuance at or prior to the time of purchase or the additional time of purchase, as the
case may be.
(l) The FINRA shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions, contemplated
hereby.
7. Effective Date of Agreement; Termination. This Agreement shall become effective
when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to termination in the
absolute discretion of the Representative, if (1) since the Effective Date, there has been any
change or any development involving a prospective change in the business, properties, management,
financial condition or results of operations of the Partnership Entities, taken as a whole, the
effect of which change or development is, in the sole judgment of the Representative, so material
and adverse as to make it impractical or inadvisable to proceed with the public offering or the
delivery of the Units on the terms and in the manner contemplated in the Registration Statement,
any Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectus, or (2) since the
time of execution of this Agreement, there shall have occurred: (A) a suspension or material
limitation in trading in securities generally on the NYSE or the NASDAQ; (B) a suspension or
material limitation in trading in the Partnership’s securities on the NYSE; (C) a general
moratorium on commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities settlement or clearance
services in the United States; (D) an outbreak or escalation of hostilities or acts of terrorism
involving the United States or a declaration by the United States of a national emergency or war;
or (E) any other calamity or crisis or any change in financial, political or economic conditions in
the United States or elsewhere, if the effect of any such event specified in clause (D) or (E), in
the sole judgment of the Representative, makes it impractical or
23
inadvisable to proceed with the public offering or the delivery of the Units on the terms and
in the manner contemplated in the Registration Statement, any Preliminary Prospectus, the
Prospectus and any Issuer Free Writing Prospectus, or (3) since the time of execution of this
Agreement, there shall have occurred any downgrading, or any notice or announcement shall have been
given or made of: (A) any intended or potential downgrading or (B) any watch, review or possible
change that does not indicate an affirmation or improvement in the rating accorded any securities
of or guaranteed by the Partnership or any Subsidiary by any “nationally recognized statistical
rating organization,” as that term is defined in Rule 436(g)(2) under the Securities Act.
If the Representative elect to terminate this Agreement as provided in this Section 7, the
Partnership and each other Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the Units, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement, or if such sale is
not carried out because the Partnership shall be unable to comply with any of the terms of this
Agreement, the Partnership shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 5, 9 and 11 hereof), and the Underwriters shall be under
no obligation or liability to the Partnership under this Agreement (except to the extent provided
in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters’ Commitments. Subject to Sections 6 and 7 hereof, if any
Underwriter shall default in its obligation to take up and pay for the Firm Units to be purchased
by it hereunder (otherwise than for a failure of a condition set forth in Section 6 hereof or a
reason sufficient to justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Units which all Underwriters so defaulting shall have agreed but
failed to take up and pay for does not exceed 10% of the total number of Firm Units, the
non-defaulting Underwriters (including the Underwriters, if any, substituted in the manner set
forth below) shall take up and pay for (in addition to the aggregate number of Firm Units they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Units agreed to be purchased
by all such defaulting Underwriters, as hereinafter provided. Such Units shall be taken up and
paid for by such non-defaulting Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such designation is made, such
Units shall be taken up and paid for by all non-defaulting Underwriters pro rata in proportion to
the aggregate number of Firm Units set forth opposite the names of such non-defaulting Underwriters
in Schedule A.
Without relieving any defaulting Underwriter from its obligations hereunder, the Partnership
agrees with the non-defaulting Underwriters that it will not sell any Firm Units hereunder unless
all of the Firm Units are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Partnership or selected by the Partnership with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or by the Partnership
for a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the
Partnership or you shall have the right to postpone the time of purchase for a
24
period not exceeding five business days in order that any necessary changes in the Pricing
Disclosure Package and the Prospectus and other documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 8 with like effect as if such substituted Underwriter had originally
been named in Schedule A hereto.
If the aggregate number of Firm Units which the defaulting Underwriter or Underwriters agreed
to purchase exceeds 10% of the total number of Firm Units which all Underwriters agreed to purchase
hereunder, and if neither the non-defaulting Underwriters nor the Partnership shall make
arrangements within the five business day period stated above for the purchase of all the Firm
Units which the defaulting Underwriter or Underwriters agreed to purchase hereunder, this Agreement
shall terminate without further act or deed and without any liability on the part of the
Partnership Entities to any Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Partnership Entities. Nothing in this paragraph, and no action taken hereunder,
shall relieve any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) Each of the Partnership Entities, jointly and severally, agrees to indemnify,
defend and hold harmless each Underwriter, its partners, directors and officers, and any
person who controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such Underwriter or any
such person may incur under the Securities Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Partnership) or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in, and in conformity with the
information specified in Section 10 hereof or arises out of or is based upon any omission or
alleged omission to state a material fact in the Registration Statement in connection with
such information, which material fact was not contained in such information and which
material fact was required to be stated in such Registration Statement or was necessary to
make such information not misleading, (ii) any untrue statement or alleged untrue statement
of a material fact included in any Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include the Prospectus, any Preliminary Prospectus and any
amendments or supplements to the foregoing), in any Issuer Free Writing Prospectus, in any
“road show” (as defined in Rule 433) not constituting an Issuer Free Writing Prospectus (a
“Non-Prospectus Road Show”), in any “issuer information” (as defined in Rule 433
under the Securities Act) of the Partnership, which “issuer information” is required to be,
or is, filed with the
25
Commission or in any Prospectus together with any combination of one or more Issuer
Free Writing Prospectuses or Non-Prospectus Road Show, if any, or arises out of or is based
upon any omission or alleged omission to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading, except, with respect to such Prospectus, Issuer Free Writing Prospectus or
Non-Prospectus Roadshow, insofar as any such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in, and in conformity with the information specified in Section 10
hereof or arises out of or is based upon any omission or alleged omission to state a
material fact in such Prospectus, Issuer Free Writing Prospectus or Non-Prospectus Roadshow
in connection with such information, which material fact was not contained in such
information and which material fact was necessary in order to make the statements in such
information, in the light of the circumstances under which they were made, not misleading.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the
Partnership Entities, their directors and officers, and any person who controls any of the
Partnership Entities within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and the successors and assigns of all of the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Partnership Entities or any such person may
incur under the Securities Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in, and in conformity
with the information specified in Section 10 hereof or arises out of or is based upon any
omission or alleged omission to state a material fact in such Registration Statement in
connection with such information, which material fact was not contained in such information
and which material fact was required to be stated in such Registration Statement or was
necessary to make such information not misleading or (ii) any untrue statement or alleged
untrue statement of a material fact contained in, and in conformity with the information
specified in Section 10 hereof or arises out of or is based upon any omission or alleged
omission to state a material fact in such Prospectus, Issuer Free Writing Prospectus or
Non-Prospectus Roadshow in connection with such information, which material fact was not
contained in such information and which material fact was necessary in order to make the
statements in such information, in the light of the circumstances under which they were
made, not misleading.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be sought
against any of the Partnership Entities or an Underwriter (as applicable, the
“indemnifying party”) pursuant to subsection (a) or (b), respectively, of this
Section 9, such indemnified party shall promptly notify such indemnifying party in writing
of the institution of such Proceeding and such indemnifying party shall assume the defense
of such Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that the failure
to so notify such indemnifying party shall not relieve such indemnifying party from any
liability which such indemnifying party may have to any indemnified party or otherwise. The
26
indemnified party or parties shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense of such
Proceeding or the indemnifying party shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses available to it
or them which are different from, additional to or in conflict with those available to such
indemnifying party (in which case such indemnifying party shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by such indemnifying party and paid as
incurred (it being understood, however, that except as provided in the second paragraph of
Section 9(a), such indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). The indemnifying party shall not be liable for any settlement
of any Proceeding effected without its written consent but, if settled with its written
consent, such indemnifying party agrees to indemnify and hold harmless the indemnified party
or parties from and against any loss or liability by reason of such settlement. 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 and does not include an admission of fault or culpability or a failure to act by
or on behalf of such indemnified party.
(d) If the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 9 or insufficient to hold an
indemnified party harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Partnership Entities on the one hand and the Underwriters
on the other hand from the Offering 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
Partnership Entities on the one hand and of the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative benefits
received by the Partnership Entities on the one hand and the Underwriters on the other shall
be deemed to be in the same respective proportions as the total proceeds from the Offering
(net of underwriting discounts and commissions but before deducting expenses) received by
the Partnership Entities, and the total underwriting discounts and commissions received by
the Underwriters, bear to the aggregate public offering price of the Units. The relative
fault of the Partnership Entities on the one hand and of the
27
Underwriters on the other shall be determined by reference to, among other things,
whether the untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Partnership Entities or by the
Underwriters and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or defending
any Proceeding.
(e) The Partnership Entities and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Underwriters 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 subsection (d) above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the total price
at which the Units underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue statement or
omission or alleged omission. 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. The Underwriters’
obligations to contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in this Section 9 and the
covenants, warranties and representations of the Partnership Entities contained in this
Agreement shall remain in full force and effect regardless of any investigation made by or
on behalf of any Underwriter, its partners, directors or officers or any person (including
each partner, officer or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of the Partnership Entities, their directors or officers or any person who controls
the Partnership Entities within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and shall survive any termination of this Agreement or the issuance
and delivery of the Units. The Partnership Entities and each Underwriter agree promptly to
notify each other of the commencement of any Proceeding against it in connection with the
issuance and sale of the Units, or in connection with the Registration Statement, any
Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus or any
Non-Prospectus Roadshow.
10. Information Furnished by the Underwriters. The statements set forth (i) in the
last paragraph on the cover page of the Prospectus and (ii) the statements set forth in the second
paragraph under the subsection entitled “Commissions and Expenses,” the paragraphs under the
subsection entitled “Stabilization, Short Positions and Penalty Bids” contained in the section
under the caption “Underwriting” in any Preliminary Prospectus or the Prospectus, only insofar as
such statements relate to the amount of selling concession and reallowance or to over-allotment and
stabilization activities that may be undertaken by the Underwriters, constitute the
28
only information furnished by or on behalf of the Underwriters, as such information is
referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram or facsimile and, if to the Underwriters, shall
be sufficient in all respects if delivered or sent to (i) Barclays Capital Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Registration (Fax: (000) 000-0000), with a
copy, in the case of any notice pursuant to Section 9(c) hereof, to the Director of Litigation,
Office of the General Counsel, Barclays Capital Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
and, if to the General Partner, shall be sufficient in all respects if delivered or sent to the
General Partner at the offices of the General Partner at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxx,
XX 00000, Attention: Xxx X. Xxxxxxx, President and Chief Executive Officer.
12. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement
(“Claim”), directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the parties
hereto consent to the jurisdiction of such courts and personal service with respect thereto. The
parties hereto hereby consent to personal jurisdiction, service and venue in any court in which any
Claim arising out of or in any way relating to this Agreement is brought by any third party against
any Underwriter or any indemnified party. Each Underwriter and the Partnership Entities (on its
behalf and, to the extent permitted by applicable law, on behalf of its equity holders and
affiliates) each waive all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Partnership Entities agree that a final judgment in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding upon the Partnership
Entities and may be enforced in any other courts to the jurisdiction of which the Partnership
Entities are or may be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is made solely
for the benefit of the Underwriters and the Partnership Entities and to the extent provided in
Section 9 hereof the controlling persons, partners, directors and officers referred to in such
Section, and their respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or corporation (including a
purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. No Fiduciary Relationship. The Partnership Entities hereby acknowledge that the
Underwriters are acting solely as underwriters in connection with the purchase and sale of the
Partnership’s securities. The Partnership Entities further acknowledge that the Underwriters are
acting pursuant to a contractual relationship created solely by this Agreement entered into on an
29
arm’s length basis, and in no event do the parties intend that the Underwriters act or be
responsible as a fiduciary to the Partnership Entities, their management, unitholders or creditors
or any other person in connection with any activity that the Underwriters may undertake or have
undertaken in furtherance of the purchase and sale of the Units, either before or after the date
hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations to the
Partnership Entities, either in connection with the transactions contemplated by this Agreement or
any matters leading up to such transactions, and the Partnership Entities hereby confirm their
understanding and agreement to that effect. The Partnership Entities and the Underwriters agree
that they are each responsible for making their own independent judgments with respect to any such
transactions and that any opinions or views expressed by the Underwriters to the Partnership
Entities regarding such transactions, including, but not limited to, any opinions or views with
respect to the price or market for the Partnership’s securities, do not constitute advice or
recommendations to the Partnership Entities. The Partnership Entities hereby waive and release, to
the fullest extent permitted by law, any claims that the Partnership Entities may have against the
Underwriters with respect to any breach or alleged breach of any fiduciary or similar duty to the
Partnership Entities in connection with the transactions contemplated by this Agreement or any
matters leading up to such transactions.
16. Research Analyst Independence. The Partnership acknowledges that the
Underwriters’ research analysts and research departments are required to be independent from their
respective investment banking divisions and are subject to certain regulations and internal
policies, and that such Underwriters’ research analysts may hold views and make statements or
investment recommendations and/or publish research reports with respect to the Partnership and/or
the offering that differ from the views of their respective investment banking divisions. The
Partnership hereby waives and releases, to the fullest extent permitted by law, any claims that the
Partnership may have against the Underwriters with respect to any conflict of interest that may
arise from the fact that the views expressed by their independent research analysts and research
departments may be different from or inconsistent with the views or advice communicated to the
Partnership by such Underwriters’ investment banking divisions. The Partnership acknowledges that
each of the Underwriters is a full service securities firm and as such from time to time, subject
to applicable securities laws, may effect transactions for its own account or the account of its
customers and hold long or short positions in debt or equity securities of the companies that may
be the subject of the transactions contemplated by this Agreement.
17. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.
18. Successors and Assigns. This Agreement shall be binding upon the Underwriters and
the Partnership Entities and their successors and assigns and any successor or assign of any
substantial portion of any of the Partnership Entities’ and any of the Underwriters’ respective
businesses and/or assets.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
30
If the foregoing correctly sets forth the understanding among the Partnership, the General
Partner, OLLC and the several Underwriters, please so indicate in the space provided below for that
purpose, whereupon this Agreement and your acceptance shall constitute a binding agreement among
the Partnership, the General Partner, OLLC and the Underwriters, severally.
| Very truly yours, ENCORE ENERGY PARTNERS LP |
||||
| By: | Encore Energy Partners GP LLC, as general partner | |||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer, Treasurer and Secretary |
|||
| ENCORE ENERGY PARTNERS GP LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer, Treasurer and Secretary |
|||
| ENCORE ENERGY PARTNERS OPERATING LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer, Treasurer and Secretary |
|||
31
Accepted and agreed to as of the date first above written, on behalf of themselves and as
representatives of the other several Underwriters named in Schedule A.
| BARCLAYS CAPITAL INC. |
||||
| By: | /s/ Xxxxxxxx Xxxx | |||
| Name: | Xxxxxxxx Xxxx | |||
| Title: | Vice President | |||
32
SCHEDULE A
| Number of | ||||
| Underwriter | Firm Units | |||
Barclays Capital Inc. |
600,000 | |||
Xxxxxxx Xxxxx & Associates, Inc. |
600,000 | |||
RBC Capital Markets Corporation |
600,000 | |||
Wachovia Capital Markets, LLC |
600,000 | |||
Total |
2,400,000 | |||
A-1
SCHEDULE B-1
Issuer Free Writing Prospectus
None
B-1-1
SCHEDULE B-2
Information included in Pricing Disclosure Package
Common units offered to the public: 2,400,000, or 2,760,000 if the underwriters’ option to purchase
Additional Units is exercised in full.
Public offering price: $15.60 per Unit
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EXHIBIT B
FORM OF OPINION OF XXXXX XXXXX L.L.P.
1. Each of the Partnership Entities has been duly formed and is validly existing in good
standing as a limited partnership or limited liability company, as applicable, under the laws of
the State of Delaware with all partnership or limited liability company power and authority
necessary to execute and deliver the Underwriting Agreement and to consummate the transactions
contemplated thereby, and to own, lease and operate its properties and to conduct its business as
currently conducted, in each case as described in the Pricing Disclosure Package and the
Prospectus. Each of the Partnership Entities is duly qualified to transact business and is in good
standing as a foreign limited liability company or foreign limited partnership, as applicable, in
each jurisdiction set forth opposite its name on Annex I hereto.
2. The General Partner has full limited liability company power and authority to act as
general partner of the Partnership in all material respects as described in the Pricing Disclosure
Package and Prospectus.
3. EAC owns all of the issued and outstanding membership interests of GP Holdings; such
membership interests have been duly authorized and validly issued in accordance with the GP
Holdings Agreement, and are fully paid (to the extent required under the GP Holdings Agreement) and
nonassessable (except as such nonassessability may be affected by matters described in Sections
18-303, 18-607 and 18-804 of the Delaware Limited Liability Company Act (the “Delaware LLC Act”));
and EAC owns such membership interests free and clear of all Liens (except restrictions on
transferability and other Liens as described in the Pricing Disclosure Package, the Prospectus or
the GP Holdings Agreement and Liens created by or arising under the Delaware LLC Act) (i) in
respect of which a financing statement under the Uniform Commercial Code of the State of Delaware
naming EAC as debtor is on file as of a recent date in the office of the Secretary of State of the
State of Delaware or (ii) otherwise known to such counsel, without independent investigation, other
than those created by or arising under the Delaware LLC Act.
4. EAC owns all of the issued and outstanding membership interests of LP Holdings; such
membership interests have been duly authorized and validly issued in accordance with the LP
Holdings Agreement, and are fully paid (to the extent required under the LP Holdings Agreement) and
nonassessable (except as such nonassessability may be affected by matters described in Sections
18-303, 18-607 and 18-804 of the Delaware LLC Act); and EAC owns such membership interests free and
clear of all Liens (except restrictions on transferability and other Liens as described in the
Pricing Disclosure Package, the Prospectus or the LP Holdings Agreement and Liens created by or
arising under the Delaware LLC Act) (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming EAC as debtor is on file as of a recent date in the
office of the Secretary of State of the State of Delaware or (ii) otherwise known to such counsel,
without independent investigation, other than those created by or arising under the Delaware LLC
Act.
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5. GP Holdings owns all of the issued and outstanding membership interests of the General
Partner; such membership interests have been duly authorized and validly issued in accordance with
the GP Agreement, and are fully paid (to the extent required under the GP Agreement) and
nonassessable (except as such nonassessability may be affected by matters described in Sections
18-303, 18-607 and 18-804 of the Delaware LLC Act); and GP Holdings owns such membership interests
free and clear of all Liens (except restrictions on transferability and other Liens as described in
the Pricing Disclosure Package, the Prospectus or the GP Agreement and Liens created by or arising
under the Delaware LLC Act) (i) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming GP Holdings as debtor is on file as of a recent
date in the office of the Secretary of State of the State of Delaware or (ii) otherwise known to
such counsel, without independent investigation, other than those created by or arising under the
Delaware LLC Act.
6. The General Partner is the sole general partner of the Partnership and owns 504,851 General
Partner Units representing an approximate 1.5% general partner interest in the Partnership; such
general partner units have been duly authorized and validly issued in accordance with the
Partnership Agreement; and the General Partner owns such general partner units free and clear of
all Liens (except restrictions on transferability and other Liens as described in the Pricing
Disclosure Package, the Prospectus or the Partnership Agreement and Liens created by or arising
under the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”)) (i) in respect
of which a financing statement under the Uniform Commercial Code of the State of Delaware naming
the General Partner as debtor is on file as of a recent date in the office of the Secretary of
State of the State of Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LP Act.
7. LP Holdings owns 9,995,801 Common Units (the “LP Holdings Units”); the LP Holdings Units
have been duly authorized and validly issued in accordance with the Partnership Agreement, and are
fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in Sections 17-303, 17-607 and 17-804 of
the Delaware LP Act). LP Holdings owns the LP Holdings Units free and clear of all Liens (except
restrictions on transferability and other Liens as described in the Pricing Disclosure Package, the
Prospectus or the Partnership Agreement and Liens created by or arising under the Delaware LP Act)
(i) in respect of which a financing statement under the Uniform Commercial Code of the State of
Delaware naming LP Holdings as debtor is on file as of a recent date in the office of the Secretary
of State of the State of Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LP Act.
8. Encore Operating owns 10,928,254 Common Units (the “Encore Operating Units”); the Encore
Operating Units have been duly authorized and validly issued in accordance with the Partnership
Agreement, and are fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters described in Sections
17-303, 17-607 and 17-804 of the Delaware LP Act). Encore Operating owns the Encore Operating Units
free and clear of all Liens (except restrictions on
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transferability and other Liens as described in the Pricing Disclosure Package, the Prospectus
or the Partnership Agreement and Liens created by or arising under the Delaware LP Act) (i) in
respect of which a financing statement under the Uniform Commercial Code of the State of Delaware
naming Encore Operating as debtor is on file as of a recent date in the office of the Secretary of
State of the State of Delaware or (ii) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware LP Act.
9. The Partnership owns all of the issued and outstanding membership interests of OLLC; such
membership interests have been duly authorized and validly issued in accordance with the OLLC
Agreement, and are fully paid (to the extent required under the OLLC Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in Sections 18-303, 18-607
and 18-804 of the Delaware LLC Act); and the Partnership owns such membership interests free and
clear of all Liens (except restrictions on transferability and other Liens as described in the
Disclosure Package, the Prospectus or the OLLC Agreement and Liens created by or arising under the
Delaware LLC Act) (i) in respect of which a financing statement under the Uniform Commercial Code
of the State of Delaware naming the Partnership as debtor is on file as of a recent date in the
office of the Secretary of State of the State of Delaware or (ii) otherwise known to such counsel,
without independent investigation, other than those created by or arising under the Delaware LLC
Act or the Credit Agreement.
10. The Firm Units have been duly authorized for issuance and sale to the Underwriters
pursuant to the Underwriting Agreement and, when issued and delivered by the Partnership pursuant
to the Underwriting Agreement against payment of the consideration set forth therein, will be
validly issued and fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by (i) matters described in the
Registration Statement, any Preliminary Prospectus and the Prospectus under the captions “Risk
Factors—Risks Inherent in an Investment in Us—Unitholder liability may not be limited if a court
finds that unitholder action constitutes control of our business,” “Risk Factors—Risks Inherent in
an Investment in Us—Unitholders may have liability to repay distributions” and “Our Partnership
Agreement—Limited Liability” and “Our Partnership Agreement—Limited Liability” (and any similar
information, if any, contained in any Issuer Free Writing Prospectus) and (ii) matters described in
Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).
11. Except as identified in the Pricing Disclosure Package and the Prospectus, there are no
outstanding preemptive rights or other rights to subscribe for or to purchase any equity securities
of the Partnership Entities, in each case pursuant to their respective Organizational Documents or
any other agreement or instrument listed as an exhibit to the Registration Statement, in either
case to which any of the Partnership Entities is a party or by which any of them may be bound. To
such counsel’s knowledge, neither the filing of the Registration Statement nor the offering,
issuance or sale of the Firm Units as contemplated by the Underwriting Agreement gives rise to any
rights for or relating to the registration of any Firm Units or other securities of the Partnership
other than as described in the Pricing Disclosure Package and the Prospectus, as set forth in the
Partnership Agreement or as have been waived.
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12. Each of the Partnership Entities has all requisite limited partnership or limited
liability company power and authority to execute and deliver the Underwriting Agreement and perform
its respective obligations thereunder. The Partnership has all requisite limited partnership power
and authority to issue, sell and deliver the Firm Units, in accordance with and upon the terms and
conditions set forth in the Underwriting Agreement and the Partnership Agreement. All limited
partnership and limited liability company action, as the case may be, required to be taken by any
of the Partnership Entities or any of their respective equityholders, members or partners for the
authorization, issuance, sale and delivery of the Firm Units and the consummation of the
transactions contemplated by the Underwriting Agreement has been validly taken.
13. The Underwriting Agreement has been duly authorized and validly executed and delivered by
each of the Partnership Entities.
14. None of (i) the offering, issuance or sale by the Partnership of the Firm Units, (ii) the
execution, delivery and performance of the Underwriting Agreement by the Partnership Entities, or
(iii) the consummation of any other transactions contemplated by the Underwriting Agreement, (A)
constitutes or will constitute a violation of the Organizational Documents of any of the
Partnership Entities, (B) constitutes or will constitute a breach or violation of, or a default (or
an event that, with notice or lapse of time or both, would constitute such a default) under any
agreement or other instrument filed as an exhibit to the Registration Statement or any other
agreement listed on Annex II hereto, or (C) violates or will violate the Delaware LP Act,
the Delaware LLC Act, the Delaware General Corporation Law (the “DGCL”), the laws of the State of
Texas or federal law, which violations, breaches or defaults, in the case of clauses (B) or (C),
would have a Material Adverse Effect or a material adverse effect on the ability of any of the
Partnership Entities to consummate the transactions contemplated by the Underwriting Agreement;
provided, however, such counsel expresses no opinion pursuant to this paragraph with respect to
federal or state securities laws and other anti-fraud laws.
15. No permit, consent, approval, authorization, order, registration, filing or qualification
under the Delaware LP Act, the Delaware LLC Act, the DGCL, Texas law or federal law is required in
connection with the offering, issuance and sale by the Partnership of the Firm Units, the
execution, delivery and performance of the Underwriting Agreement by the Partnership Entities or
the consummation of the transactions contemplated by the Underwriting Agreement except (i) for such
permits, consents, approvals and similar authorizations required under the Securities Act, the
Exchange Act and state securities or “Blue Sky” laws, as to which such counsel does not express any
opinion, (ii) for such consents which have been obtained or made, (iii) for such consents which, if
not obtained, would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or (iv) as disclosed in the Pricing Disclosure Package and the Prospectus.
16. The Registration Statement has become effective under the Securities Act; any required
filing of the Preliminary Prospectus and the Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to such
counsel’s knowledge, no stop order suspending the
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effectiveness of the Registration Statement or any notice objecting to its use has been issued
and no proceedings for that purpose have been instituted or threatened by the Commission.
17. The Registration Statement, the Preliminary Prospectus and the Prospectus, as amended and
supplemented and any further amendments and supplements thereto made by the Partnership prior to
the time of purchase, appear on their face, appropriately responsive, in all material respects, to
the requirements of the Securities Act, except that in each case such counsel expresses no opinion
with respect to the financial statements and related schedules (including the notes and schedules
thereto and the auditors’ reports thereon), any other financial, statistical or accounting data, or
the estimated oil and natural gas reserve evaluations and related calculations of Xxxxxx and Xxxxx,
Ltd., independent petroleum engineers, contained in or omitted from the Registration Statement or
the Prospectus.
18. The statements made in the Registration Statement and the Pricing Disclosure Package under
the captions “Cash Distribution Policy” “How We Make Cash Distributions,” “Description of the
Common Units,” and “Our Partnership Agreement” insofar as they purport to constitute summaries of
the terms of the Common Units (including the Firm Units), are accurate summaries of the terms of
such Common Units in all material respects.
19. The statements included in the Registration Statement and the Pricing Disclosure Package
under the captions “Our Cash Distribution Policy,” “Conflicts of Interest and Fiduciary Duties,”
“Our Partnership Agreement,” and “Investment in Us by Employee Benefit Plans” insofar as they
purport to constitute summaries of the terms of federal statutes, rules or regulations or the
Delaware LP Act or the Delaware LLC Act, any legal and governmental proceedings or any contracts,
constitute accurate summaries of the terms of such statutes, rules and regulations, legal and
governmental proceedings and contracts in all material respects.
20. The opinion of Xxxxx Xxxxx L.L.P. that is filed as Exhibit 8.1 to the Registration
Statement is confirmed and the Underwriters may rely upon such opinion as if it were addressed to
them.
21. None of the Partnership Entities is, nor after giving effect to the offering and sale of
the Firm Units and the application of the proceeds thereof as described in the Pricing Disclosure
Package and the Prospectus will any of the Partnership Entities be, an “investment company” as
defined in the Investment Company Act.
In addition, such counsel shall state that they have participated in conferences with officers
and other representatives of the Partnership Entities, with representatives of the Partnership’s
independent registered public accounting firm and independent petroleum engineer and with the
Underwriters and representatives of the Underwriters, at which the contents of the Registration
Statement, the Pricing Disclosure Package and the Prospectus and related matters were discussed.
Although such counsel has not independently verified the information in the Registration Statement,
the Pricing Disclosure Package or the Prospectus, and is not passing upon, and does not assume any
responsibility for the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Pricing Disclosure Package or the Prospectus (except to the extent
specified in paragraphs 18 and 19 above), such counsel advises
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the Underwriters that, on the basis of the foregoing (relying to a limited extent with respect
to materiality upon statements by officers and other representatives of the Partnership Entities),
no facts have come to such counsel’s attention that lead such counsel to believe that:
(a) the Registration Statement, at the latest effective date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading,
(b) the Pricing Disclosure Package, as of the Applicable Time, contained any untrue statement
of a material fact or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, or
(c) the Prospectus, as of its date and as of the date hereof, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading,
it being understood that such counsel expresses no statement or belief with respect to (i) the
financial statements and related schedules, including the notes and schedules thereto and the
auditors’ reports thereon, any other financial, statistical or accounting data, the estimated oil
and natural gas reserve evaluations and related calculations of Xxxxxx and Xxxxx, Ltd., independent
petroleum engineers, or the other information of a financial or reserve nature included or
incorporated by reference in the Registration Statement, the Pricing Disclosure Package or the
Prospectus, and (ii) representations and warranties and other statements of fact included in the
exhibits to the Registration Statement.
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