2,500,000 Common Units* FORM OF COMPRESSCO PARTNERS, L.P. UNDERWRITING AGREEMENT
Exhibit 1.1
2,500,000 Common Units*
FORM OF
UNDERWRITING AGREEMENT
[Date]
Xxxxxxx Xxxxx & Associates, Inc.
X.X. Xxxxxx Securities LLC
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
X.X. Xxxxxx Securities LLC
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Compressco Partners, L.P., a Delaware limited partnership (the “Partnership”), proposes,
subject to the terms and conditions stated herein, to issue and sell to the several Underwriters
named in Schedule I hereto (the “Underwriters”), an aggregate of 2,500,000 of the
Partnership’s common units representing limited partner interests (the “Common Units”). The
aggregate of 2,500,000 Common Units to be purchased from the Partnership are called the “Firm
Units.” In addition, the Partnership has agreed to sell to the Underwriters, upon the terms and
conditions stated herein, up to an additional 375,000 Common Units (the “Additional Units”) to
cover over-allotments by the Underwriters, if any. The Firm Units and the Additional Units are
collectively referred to in this Underwriting Agreement (this “Agreement”) as the “Units.” Xxxxxxx
Xxxxx & Associates, Inc. and X.X. Xxxxxx Securities LLC are acting as the representatives of the
several Underwriters and in such capacity are referred to in this Agreement as the
“Representatives.”
It is understood and agreed by all parties hereto that TETRA Technologies, Inc., a Delaware
corporation (the “Parent”), has caused the formation of the Partnership and will convey, or cause
to be conveyed, to the Partnership certain assets of Compressco, Inc., a Delaware corporation
(“Compressco”), and TETRA International Incorporated, a Delaware corporation (“TII”), each a wholly
owned subsidiary of the Parent.
It is further understood and agreed to by all parties that as of the date hereof:
(a) Compressco owns 100% of the equity securities in (1) Compressco
| * | Plus an additional [375,000] units subject to Underwriter’s over-allotment option. |
Canada, Inc., an Alberta corporation (“CP Canada”), and (2) Compressco Field Services, Inc.,
an Oklahoma corporation (“CFSI”).
(b) CFSI owns 100% of the equity securities in (1) Compressco Field Services International,
LLC, a Delaware limited liability company (“CFS International”), (2) Compressco Holdings, LLC, a
Delaware limited liability company (“CP Holdings”), (3) Compressco International, LLC, a Delaware
limited liability company (“CP International”), (4) Compressco Leasing, LLC, a Delaware limited
liability company (“CP Leasing”), (5) Compressco Mexico Investment I, LLC, a Delaware limited
liability company (“Mexico I”), (6) Compressco Mexico Investment II, LLC, a Delaware limited
liability company (“Mexico II”), (7) Compressco Netherlands B.V., a Netherlands private limited
liability company (a Besloten Vennootschap) (“Dutch BV”), (8) Compressco Partners Operating, LLC, a
Delaware limited liability company (“OPCO”), and (9) Compressco Partners GP Inc., a Delaware
corporation (the “General Partner”).
(c) CFS International owns 90% of the equity securities in Compressco de Argentina S.R.L., an
Argentina entity (“CP Argentina”), and CP International owns 10% of the equity securities in CP
Argentina.
(d) CFSI owns 99.0% of the equity securities in Compressco Netherlands Coöperatief U.A., a
Netherlands coöperatief with excluded liability for members (“Dutch Coöp”), and CP Holdings owns
1.0% of the equity securities in Dutch Coöp.
(e) Mexico I owns 51.0% of the partnership interests in Compressco de Mexico, S. de X.X. de
C.V., a Mexico limited liability company of variable capital (sociedad de responsabilidad limitada
de capital variable) (“CP Mexico”), and Mexico II owns 49.0% of the partnership interests in CP
Mexico.
(f) The General Partner is the sole general partner of the Partnership with a 0.1% general
partner interest and CFSI is the sole limited partner of the Partnership with a 99.9% limited
partner interest.
(g) The Partnership owns 100% of the equity securities of Compressco Partners Sub, Inc., a
Delaware corporation (“MLP Sub”).
(h) TII owns (1) 0.002% of the partnership interests (such 0.002%, the “PE Mexico
Interest”) of Production Enhancement Mexico, S. de X.X. de C.V., a Mexico limited liability
company of variable capital (sociedad de responsabilidad limitada de capital variable) (“PE
Mexico”), and Providence owns 99.998% of the partnership interests of PE Mexico, and (2) 100% of
the equity securities of Providence Natural Gas, LLC, an Oklahoma limited liability company
(“Providence”).
OPCO, MLP Sub, CFS International, CP International, CP Leasing, CP Holdings, Dutch Coöp, Dutch
BV, Providence, Mexico I, Mexico II, CP Canada, PE Mexico, CP Mexico and CP Argentina are
collectively referred to herein as the “Operating Subsidiaries.” The Partnership, the General
Partner and the Parent are referred to herein as the “Partnership Parties.” The
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Operating Subsidiaries and the Partnership Parties are collectively referred to herein as the
“Partnership Entities.”
The Partnership Parties, Compressco, CFSI, CP Canada, CP Mexico, OPCO, Dutch BV, Dutch Coöp,
CP Holdings, MLP Sub, TII, and PE Mexico will enter into a contribution agreement (the
“Contribution Agreement” and together with the related bills of sales, conveyances and similar
documents in connection with the Transactions (as defined below), the “Contribution Documents”),
pursuant to which at the Closing Date (as defined in Section 4):
| (1) | The Partnership will (a) redeem (i) the 99.9% initial limited partner interest in the Partnership previously contributed to the General Partner by CFSI pursuant to the Contribution Agreement and (ii) the 0.1% initial general partner interest in the Partnership held by the General Partner and (b) refund and distribute to the General Partner the initial capital contributions made by CFSI and the General Partner to the Partnership, along with any interest or other profit that resulted from the investment or other use of such initial capital contributions. | |
| (2) | The General Partner will contribute to the Partnership (x) all of the equity securities of the Operating Subsidiaries (other than Providence and PE Mexico) previously contributed to the General Partner by CFSI pursuant to the Contribution Agreement and (y) all of the business conducted by Compressco and the Operating Subsidiaries (other than Providence and PE Mexico) previously contributed to the General Partner by CFSI pursuant to the Contribution Agreement, in exchange for (a) a 2.0% general partner interest in the Partnership (the “GP Interest”), (b) the Incentive Distribution Rights (as such term is defined in the Partnership Agreement, the “Incentive Distribution Rights”), (c) [5,805,586] Common Units, (d) [5,521,094] Subordinated Units (as such term is defined in the Partnership Agreement, the “Subordinated Units”); (e) the assumption by the Partnership of an intercompany loan owed to TETRA Financial Services, Inc. in the principal amount of approximately $[28.9] million; and (f) the right to receive any Additional Units not purchased by the Underwriters hereunder and the right to receive the proceeds from the purchase of any Additional Units purchased by the Underwriters hereunder. | |
| (3) | TII will contribute to the Partnership (i) all of the equity securities of Providence and the PE Mexico Interest held by TII and (ii) certain compressor units and other equipment of TII, in exchange for [791,671] Common Units and [752,876] Subordinated Units (the assets contributed in clauses (i) and (ii), the “TII Contribution”). The Common Units and Subordinated Units to be issued to the General Partner and TII on the Closing Date are collectively referred to herein as the “Sponsor Units.” | |
| (4) | The Partnership will contribute (i) to OPCO the TII Contribution (previously contributed to the Partnership by TII pursuant to the Contribution Agreement) and certain assets and liabilities used in the conduct of CFSI’s U.S.-based production enhancement services business (previously contributed to the Partnership by the General Partner pursuant to the Contribution Agreement), and (ii) to CP Canada certain assets and liabilities used in the conduct of CP Canada’s Canadian-based production enhancement equipment rental |
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| business (previously contributed to the Partnership by the General Partner pursuant to the Contribution Agreement). | ||
| (5) | OPCO will contribute (i) to CP Holdings 1.0% of the equity securities of Providence (previously contributed to OPCO by the Partnership pursuant to the Contribution Agreement) and 1.0% of the PE Mexico Interest (previously contributed to OPCO by the Partnership pursuant to the Contribution Agreement), and CP Holdings will contribute to Dutch Coöp such 1.0% of the equity securities of Providence and such 1.0% of the PE Mexico Interest, (ii) to Dutch Coöp 99.0% of the equity securities of Providence (previously contributed to OPCO by the Partnership pursuant to the Contribution Agreement) and 99.0% of the PE Mexico Interest (previously contributed to OPCO by the Partnership pursuant to the Contribution Agreement), and (iii) to CP Leasing certain compressor units and other equipment (previously contributed to OPCO by the Partnership pursuant to the Contribution Agreement). | |
| (6) | Dutch Coöp will contribute to Dutch BV 100.0% of the equity securities of Providence (previously contributed to Dutch Coöp by CP Holdings and OPCO pursuant to the Contribution Agreement) and 100.0% of the PE Mexico Interest (previously contributed to Dutch Coöp by CP Holdings and OPCO pursuant to the Contribution Agreement). | |
| (7) | The Partnership will contribute to MLP Sub all of the assets and liabilities constituting CFSI’s manufacturing business and U.S.-based production enhancement equipment rental business (previously contributed to the Partnership by the General Partner pursuant to the Contribution Agreement) and certain assets and liabilities used in the conduct of CFSI’s U.S.-based production enhancement equipment rental business (previously contributed to the Partnership by the General Partner pursuant to the Contribution Agreement). | |
| (8) | Any Additional Units not purchased by the Underwriters (the “Additional Sponsor Units”) shall be delivered to the General Partner. | |
| (9) | The General Partner will amend and restate its Bylaws (as so amended and restated, the “Bylaws” and, together with the Certificate of Incorporation of the General Partner, the “General Partner Charter Documents”). | |
| (10) | The Partnership will amend and restate its agreement of limited partnership (as so amended and restated, the “Partnership Agreement” and, together with the certificate of limited partnership of the Partnership, the “Partnership Charter Documents”). | |
| (11) | Each of OPCO, CFS International, CP International, CP Leasing, CP Holdings, Mexico I and Mexico II will amend and restate its limited liability company agreement (as so amended and restated, collectively, the “LLC Agreements”). |
The transactions contemplated in subsections (1) through (11) above are referred to
herein as the “Transactions.” The “Organizational Documents” shall mean the LLC Agreements and the
certificates of incorporation or formation, bylaws or limited liability company agreement or other
applicable charter documents of the Operating Subsidiaries, the
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Partnership Charter Documents and the General Partner Charter Documents.
The Partnership Parties wish to confirm as follows their agreement with you and the other
several Underwriters, on whose behalf you are acting, in connection with the purchases of the Units
from the Partnership.
1. Registration Statement and Prospectus. The Partnership has prepared and filed with
the Securities and Exchange Commission (the “Commission”) in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the “Securities Act”), a registration statement on Form S-1 (File No. 333-155260),
including a prospectus subject to completion, relating to the Units. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto, at the time when it
becomes effective and as thereafter amended by any post-effective amendment, is referred to in this
Agreement as the “Registration Statement.” The prospectus in the form included in the Registration
Statement or, if the prospectus included in the Registration Statement omits certain information in
reliance upon Rule 430A under the Securities Act and such information is thereafter included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act or as part of
a post-effective amendment to the Registration Statement after the Registration Statement becomes
effective, the prospectus as so filed, is referred to in this Agreement as the “Prospectus.” If
the Partnership files another registration statement with the Commission to register additional
Common Units pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration
Statement”), then any reference to “Registration Statement” herein shall be deemed to include the
registration statement on Form S-1 (File No. 333-155260) and the Rule 462 Registration Statement,
as each such registration statement may be amended pursuant to the Securities Act. The prospectus
subject to completion in the form included in the Registration Statement at the time of the initial
filing of such Registration Statement with the Commission and each such prospectus as amended from
time to time until the date of the Prospectus is referred to in this Agreement as a “Preliminary
Prospectus.” For purposes of this Agreement, “free writing prospectus” has the meaning ascribed to
it in Rule 405 under the Securities Act, and “Issuer Free Writing Prospectus” shall mean each free
writing prospectus prepared by or on behalf of the Partnership or used or referred to by the
Partnership in connection with the offering of the Units. “Time of Sale Information” shall mean
the most recent Preliminary Prospectus together with each free writing prospectus, if any,
identified in Schedule II(A) hereto and the information set out in Schedule II(B)
hereto. “Effective Date” means each date and time as of which any part of the Registration
Statement was or is declared effective by the Commission. “Time of Sale” means ___:___a.m., Eastern
time, on ___, 2011.
2. Agreements to Sell and Purchase.
2.1 The Partnership hereby agrees to issue and sell the Firm Units to the Underwriters and,
upon the basis of the representations, warranties and agreements of the Partnership Parties herein
contained and subject to all the terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Partnership at a purchase price of $[___] per
Unit (the “purchase price per Unit”), the number of Firm Units set forth opposite the name of such
Underwriter in Schedule I hereto.
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2.2 The Partnership hereby also agrees to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Partnership Parties herein contained and subject
to all the terms and conditions set forth herein, the Underwriters shall have the right for 30 days
from the date of the Prospectus to purchase from the Partnership up to 375,000 Additional Units at
the purchase price per Unit for the Firm Units; provided that the purchase price for each
Additional Unit shall be reduced by an amount per Unit equal to any distributions declared by the
Partnership and payable on the Firm Units but not payable on the Additional Units. The Additional
Units may be purchased solely for the purpose of covering over-allotments, if any, made in
connection with the offering of the Firm Units. If any Additional Units are to be purchased, each
Underwriter, severally and not jointly, agrees to purchase the number of Additional Units (subject
to such adjustments as you may determine to avoid fractional units) that bears the same proportion
to the total number of Additional Units to be purchased by the Underwriters as the number of Units
set forth opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Units. The option to purchase Additional Units may be exercised in whole or in part at
any time or from time to time within 30 days after the date of the Prospectus. Any Additional Units
not purchased by the Underwriters shall be delivered to the General Partner in accordance with the
Contribution Agreement.
2.3 It is further understood that approximately 5% of the Firm Units (the “Directed Units”)
will initially be reserved by the several Underwriters for offer and sale upon the terms and
conditions to be set forth in the most recent Preliminary Prospectus and in accordance with the
rules and regulations of the Financial Industry Regulatory Authority (“FINRA”) to certain
directors, executive officers or employees of the General Partner and certain other persons
associated with the Parent (each such person a “Directed Unit Participant”) who have heretofore
delivered to Xxxxxxx Xxxxx & Associates, Inc. offers to purchase Firm Units in form satisfactory to
Xxxxxxx Xxxxx & Associates, Inc. (such program, the “Directed Unit Program”) and that any
allocation of such Firm Units among such persons will be made in accordance with timely directions
received by Xxxxxxx Xxxxx & Associates, Inc. from the Partnership; provided that under no
circumstances will Xxxxxxx Xxxxx & Associates, Inc. or any Underwriter be liable to the Partnership
or General Partner or to any such person for any action taken or omitted in good faith in
connection with such Directed Unit Program. It is further understood that any Directed Units not
affirmatively reconfirmed for purchase by any participant in the Directed Unit Program by 9:00
A.M., Eastern time, on the first business day following the date hereof or otherwise are not
purchased by such persons will be offered by the Underwriters to the public upon the terms and
conditions set forth in the Prospectus.
2.4 The Partnership agrees to pay all fees and disbursements incurred by the Underwriters in
connection with the Directed Unit Program and any stamp duties or other taxes incurred by the
Underwriters in connection with the Directed Unit Program.
3. Terms of Public Offering. The Partnership Parties have been advised by you that
the Underwriters propose to make a public offering of their respective portions of the Units as
soon after the Registration Statement and this Agreement have become effective as in your judgment
is advisable and initially to offer the Units upon the terms set forth in the Prospectus.
4. Delivery of the Units and Payment Therefor.
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4.1 Delivery to the Underwriters of the Firm Units and payment therefor shall be made at the
offices of Xxxxxx & Xxxxxx L.L.P., First City Tower, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
at 10:00 a.m., Eastern time, on [___], or such other place, time and date not later than 1:30
p.m., Eastern time, on [___] as the Representatives shall designate by notice to the
Partnership (the time and date of such closing are called the “Closing Date”). The place of
closing for the Firm Units and the Closing Date may be varied by agreement between the
Representatives and the Partnership. The Partnership Parties hereby acknowledge that circumstances
under which the Representatives may provide notice to postpone the Closing Date as originally
scheduled include any determination by the Partnership or the Representatives to recirculate to the
public copies of an amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 11 hereof.
4.2 Delivery to the Underwriters of and payment for any Additional Units to be purchased by
the Underwriters shall be made at the offices of Xxxxxx & Xxxxxx L.L.P., First City Tower, 0000
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, at 10:00 a.m., Eastern time, on such date or dates (each
an “Additional Closing Date”) (which may be the same as the Closing Date, but, if it is not the
same as the Closing Date, shall not be earlier than the Closing Date nor earlier than three nor
later than ten business days after the giving of the notice hereinafter referred to) as shall be
specified in a written notice or notices, from the Representatives on behalf of the Underwriters to
the Partnership, of the Underwriters’ determination to purchase a number, specified in such notice
or notices, of Additional Units. Such notice or notices may be given at any time within 30 days
after the date of the Prospectus and must set forth (i) the aggregate number of Additional Units as
to which the Underwriters are exercising the option and (ii) the names and denominations in which
ownership of the Additional Units is to be registered. The place of closing for the Additional
Units and the Additional Closing Date may be varied by agreement between you and the Partnership.
4.3 Delivery of the Firm Units and of any Additional Units to be purchased hereunder shall be
made through the facilities of The Depository Trust Company (“DTC”) against payment of the purchase
price therefor by wire transfer of immediately available funds to an account or accounts specified
in writing, not later than the close of business on the business day immediately preceding the
Closing Date or the Additional Closing Date, as the case may be, by the Partnership. Payment for
the Units sold by the Partnership hereunder shall be delivered by the Representatives to the
Partnership.
4.4 It is understood that the Representatives have been authorized, for their own accounts and
the accounts of the several Underwriters, to accept delivery of and receipt for, and make payment
of the purchase price per Unit for the Firm Units and the Additional Units, if any, that the
Underwriters have agreed to purchase. Xxxxxxx Xxxxx and Associates, Inc. and X.X. Xxxxxx
Securities LLC, each individually and not as Representatives of the Underwriters, may, but shall
not be obligated to, make payment for any Units to be purchased by any Underwriter whose funds
shall not have been received by the Representatives by the Closing Date or the Additional Closing
Date, as the case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
5. Covenants and Agreements of the Partnership Parties.
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5.1 Each of the Partnership Parties covenants and agrees with the several Underwriters as
follows:
(a) Preparation of Prospectus and Registration Statement. Each of the Partnership Parties
will use its best efforts to cause the Registration Statement and any amendments thereto to become
effective, if it has not already become effective, and will advise you promptly and, if requested
by you, will confirm such advice in writing (i) when the Registration Statement has become
effective and the time and date of any filing of any post-effective Registration Statement or any
amendment or supplement to any Preliminary Prospectus or the Prospectus and the time and date that
any post-effective amendment to the Registration Statement becomes effective, (ii) if Rule 430A
under the Securities Act is employed, when the Prospectus has been timely filed pursuant to Rule
424(b) under the Securities Act (which the Partnership agrees to file in a timely manner in
accordance with such rules and regulations under the Securities Act), (iii) of the receipt of any
comments of the Commission, or any request by the Commission for amendments or supplements to the
Registration Statement, any Preliminary Prospectus or the Prospectus or for additional information,
(iv) of the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Units for offering or sale in
any jurisdiction or the initiation of any proceeding for such purposes and (v) within the period of
time referred to in Section 5.1(h) below, of any change in the Partnership’s condition
(financial or other), business, prospects, properties, net worth or results of operations, or of
any event that comes to the attention of the Partnership Parties that makes any statement made in
the Registration Statement or the Prospectus (as then amended or supplemented) untrue in any
material respect or that requires the addition of any material fact thereto or making of changes
therein in order to make the statements therein (in the case of the Time of Sale Information and
the Prospectus, in light of the circumstances under which they were made) not misleading in any
material respect, or of the necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Securities Act or any other applicable law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the Registration Statement,
the Partnership Parties will make every reasonable effort to obtain the withdrawal or lifting of
such order at the earliest possible time.
(b) Copies of Registration Statement. The Partnership will furnish to the Underwriters,
without charge, such number of conformed copies of the Registration Statement as originally filed
with the Commission and of each amendment thereto and corresponding to the version filed in the
Commission’s electronic data gathering, analysis and retrieval system (“XXXXX”) version, including
financial statements and all exhibits to the Registration Statement as the Underwriters or the
Underwriters’ counsel may reasonably request.
(c) Post-Effective Amendments. The Partnership will promptly file with the Commission any
amendment or supplement to the Registration Statement or the Prospectus that may, in the judgment
of the Partnership or the Representatives, be required by the Securities Act or requested by the
Commission.
(d) Filing of Amendment or Supplement. The Partnership will furnish a copy of any amendment
or supplement to the Registration Statement or to the Prospectus or any Issuer
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Free Writing Prospectus to you and counsel for Underwriters and obtain your consent prior to
filing any of those with the Commission.
(e) Issuer Free Writing Prospectus. The Partnership will not make any offer relating to the
Common Units that would constitute an Issuer Free Writing Prospectus without your prior consent.
(f) Amendment or Supplement to Issuer Free Writing Prospectus. The Partnership will retain in
accordance with the Securities Act all Issuer Free Writing Prospectuses not required to be filed
pursuant to the Securities Act; 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 cause the Registration Statement, the Preliminary Prospectus or the Prospectus to 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 case of the Time of Sale Information and the Prospectus, 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 you and,
upon your request, to file such document and to prepare and furnish without charge to each
Underwriter as many copies as they may from time to time reasonably request of an amended or
supplemented Issuer Free Writing Prospectus that will correct such untrue statement or omission or
effect such compliance.
(g) Copies of Preliminary Prospectus to Underwriters. Prior to the execution and delivery of
this Agreement, the Partnership has delivered or will deliver to you, without charge, in such
quantities as you have requested or may hereafter reasonably request, copies of each form of the
Preliminary Prospectus. Consistent with the provisions of Section 5.1(h) hereof, each of
the Partnership Parties consents to the use of each Preliminary Prospectus so furnished by the
Partnership.
(h) Copies of Prospectus to Underwriters. As soon after the execution and delivery of this
Agreement as is practicable and thereafter from time to time for such period as in the reasonable
opinion of counsel for the Underwriters a prospectus is required by the Securities Act to be
delivered (or required to be delivered but for Rule 172 under the Securities Act) in connection
with sales by any Underwriter or a dealer, and for so long a period as you may request for the
distribution of the Units, the Partnership will deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any amendment or supplement thereto) as
they may reasonably request. The Partnership consents to the use of the Prospectus and the Time of
Sale Information (and of any amendment or supplement thereto) both in connection with the offering
and sale of the Units and for such period of time thereafter as the Prospectus is required by the
Securities Act to be delivered (or required to be delivered but for Rule 172 under the Securities
Act) in connection with sales by any Underwriter or dealer. If at any time prior to the later of
(i) the completion of the distribution of the Units pursuant to the offering contemplated by the
Registration Statement or (ii) the expiration of prospectus delivery requirements with respect to
the Units under Section 4(3) of the Securities Act and Rule 174 thereunder, any event shall occur
that in the judgment of the Partnership or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light
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of the circumstances under which they were made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with the Securities Act or any other law, the
Partnership will forthwith prepare and, subject to Section 5.1(a) hereof, file with the
Commission and use its best efforts to cause to become effective as promptly as possible an
appropriate supplement or amendment thereto, and will furnish to each Underwriter who has
previously requested Prospectuses, without charge, a reasonable number of copies thereof.
(i) Blue Sky Laws. The Partnership will cooperate with you and counsel for the Underwriters
in connection with the registration or qualification of the Units for offering and sale by the
several Underwriters and by dealers under the securities or Blue Sky laws of such jurisdictions as
you may reasonably designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration or qualification
for so long as required to complete the distribution of the Units; provided that in no event shall
the Partnership be obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to general service of process in suits, other
than those arising out of the offering or sale of the Units, as contemplated by this Agreement and
the Prospectus, in any jurisdiction where it is not now so subject. In the event that the
qualification of the Units in any jurisdiction is suspended, the Partnership shall so advise you
promptly in writing.
(j) Reports to Unitholders. The Partnership will make generally available to its security
holders a consolidated earnings statement (in form complying with the provisions of Rule 158),
which need not be audited, covering a twelve-month period commencing after the effective date of
the Registration Statement and the Rule 462 Registration Statement, if any, and ending not later
than 15 months thereafter, as soon as practicable after the end of such period, which consolidated
earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.
(k) Copies of Reports. During the period ending three years from the date hereof, the
Partnership will furnish to you and, upon your request, to each of the other Underwriters, (i) as
soon as available, a copy of each report of the Partnership mailed to unitholders or filed with the
Commission or the Nasdaq Global Market (“NASDAQ”) or any national securities exchange and (ii) from
time to time such other information concerning the Partnership as you may reasonably request. For
purposes of this Section 5.1(k), the Partnership shall be deemed to have furnished the
required information if such information has been filed on XXXXX.
(l) Termination Expenses. If this Agreement shall terminate or shall be terminated after
execution pursuant to any provision hereof (except pursuant to Section 11 or clauses (iii)
or (iv) of Section 12 hereof) or if this Agreement shall be terminated by the Underwriters because
of any inability, failure or refusal on the part of the Partnership Parties to comply in all
material respects with any of the terms or provisions hereof or to fulfill in any material respects
any of the conditions of this Agreement, then the Partnership agrees to reimburse you and the other
Underwriters for all out-of-pocket expenses (including travel expenses and reasonable fees and
expenses of counsel for the Underwriters, but excluding wages and salaries paid by you) reasonably
incurred by you in connection herewith.
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(m) Application of Proceeds. The Partnership will apply the net proceeds from the sale of the
Units to be sold by it hereunder in accordance in all material respects with the statements under
the caption “Use of Proceeds” in the Prospectus.
(n) Lock-Up Period. For a period commencing on the date hereof and ending on the 180th day
after the date of the Prospectus (the “Lock-Up Period”), the Partnership will not, directly or
indirectly, (i) offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any Common Units or securities convertible into or
exchangeable for Common Units (other than the Common Units issued pursuant to employee benefit
plans, equity-based compensation plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or rights), or sell or grant options,
awards, rights or warrants with respect to any Common Units or securities convertible into or
exchangeable for Common Units (other than the grant of options pursuant to option plans existing on
the date hereof), (ii) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership of such Common
Units, whether any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Units or other securities, in cash or otherwise, (iii) file or cause to be filed
a registration statement, including any amendments, with respect to the registration of any Common
Units or securities convertible, exercisable or exchangeable into Common Units or any other
securities of the Partnership (other than any registration statement on Form S-8) or (iv) publicly
disclose the intention to do any of the foregoing, in each case without the prior written consent
of the Representatives on behalf of the Underwriters, and the Partnership will procure from each
individual or entity set forth on Schedule III hereto and deliver to the Representatives,
prior to the Initial Delivery Date, a letter or letters substantially in the form of Exhibit
A hereto (the “Lock-Up Agreements”); notwithstanding the foregoing, if (x) during the last 17
days of the Lock-Up Period, the Partnership issues an earnings release or announces material news
or a material event relating to the Partnership occurs or (y) prior to the expiration of the
Lock-Up Period, the Partnership announces that it will release earnings results during the 16-day
period beginning on the last day of the Lock-Up Period, then the restrictions imposed in this
Section 5.1(o) shall continue to apply until the expiration of the 18-day period beginning
on the date of issuance of the earnings release or the announcement of the material news or the
occurrence of the material event, unless the Representatives, on behalf of the Underwriters, waive
such extension in writing.
(o) Interim Financial Statements. Prior to the Closing Date or the Additional Closing Date,
as the case may be, the Partnership will furnish to you, as promptly as possible, copies of any
unaudited interim consolidated financial statements of the Partnership and its subsidiaries for any
period subsequent to the periods covered by the financial statements appearing in the Prospectus.
(p) Undertakings. The Partnership will comply with all provisions of any undertakings
contained in the Registration Statement.
(q) Stabilization. The Partnership Entities will not at any time, directly or indirectly,
take any action designed, or which might reasonably be expected to cause or result in,
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or which will constitute, stabilization or manipulation of the price of the Common Units to
facilitate the sale or resale of any of the Units in violation of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the
“Exchange Act”), the Securities Act or other applicable law.
(r) Exchange Act Reports. The Partnership will file all material required to be filed by it
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act within the
time periods required by the Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under
the Securities Act) is required in connection with the offering of the Units.
(s) Satisfaction of Conditions. The Partnership Entities will comply with all agreements and
satisfy all conditions on their part to be complied with or satisfied pursuant to this Agreement on
or prior to the Closing Date or the Additional Closing Date, as the case may be, and the
Partnership will advise the Underwriters prior to the Closing Date or the Additional Closing Date,
as the case may be, if any statements to be made on behalf of the Partnership in the certificates
contemplated by Section 8 hereof would be inaccurate if made as of the Closing Date or the
Additional Closing Date, as the case may be.
(t) Required Filings. The Partnership will file with the Commission such information on Form
10-Q or Form 10-K as may be required by Rule 463 under the Securities Act.
(u) NASDAQ. The Partnership will timely file with the NASDAQ Stock Market LLC (the “NASDAQ”)
all documents and notices required by the NASDAQ of companies that have or will issue securities
that are traded on the NASDAQ.
(v) Transfer Agent. The Partnership shall engage and maintain, at its expense, a transfer
agent and, if necessary under the jurisdiction of its formation or the rules of any national
securities exchange on which the Common Units will be listed, a registrar (which, if permitted by
applicable laws and rules may be the same entity as the transfer agent) for the Common Units.
6. Representations and Warranties of the Partnership Parties.
6.1 The Partnership Parties hereby, jointly and severally, represent and warrant to each
Underwriter on the date hereof, and shall be deemed to represent and warrant to each Underwriter on
the Closing Date and the Additional Closing Date, as the case may be, that:
(a) Partnership Not an “Ineligible Issuer.” The Partnership was not at the time of initial
filing of the Registration Statement and at the earliest time thereafter that the Partnership or
another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the
Securities Act) of the Units, is not on the date hereof and will not be on the Closing Date and the
Additional Closing Date, as the case may be, an “ineligible issuer” (as defined in Rule 405 of the
Securities Act).
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(b) No Stop Order. No stop order suspending the effectiveness of the Registration Statement,
any post effective amendment thereto or the Rule 462 Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the knowledge of the
Partnership Parties, threatened by the Commission. No order preventing or suspending the use of any
Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued and no proceeding for
that purpose has been initiated or, to the knowledge of the Partnership Parties, threatened by the
Commission.
(c) Form of Documents. The Registration Statement conformed in all material respects on the
Effective Date and will conform in all material respects on each of the Closing Date and the
Additional Closing Date, as the case may be, and any amendment to the Registration Statement filed
after the date hereof will conform in all material respects, when they become effective, to the
applicable requirements of the Securities Act. The most recent Preliminary Prospectus conformed,
in all material respects, and the Prospectus will conform, in all material respects, to the
applicable requirements of the Securities Act when filed with the Commission pursuant to Rule
424(b) under the Securities Act and on the Closing Date and the Additional Closing Date, as the
case may be.
(d) No Material Misstatements or Omissions in 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 necessary in order 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 and in conformity with written information furnished to
the Partnership Parties through the Representatives by or on behalf of any Underwriter specifically
for inclusion therein.
(e) No Material Misstatements or Omissions in Prospectus. The Prospectus will not, as of its
date and on the Closing Date and the Additional Closing Date, as the case may be, 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 Parties through the Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(f) No Material Misstatements or Omissions in Time of Sale Information. The Time of Sale
Information did not, as of the Time of Sale, 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 Time of Sale Information in
reliance upon and in conformity with written information furnished to the Partnership Parties
through the Representatives by or on behalf of any Underwriter specifically for inclusion therein.
(g) No Material Misstatements or Omissions in Issuer Free Writing Prospectus. Each Issuer
Free Writing Prospectus (including, without limitation, any road show
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that is a free writing prospectus under Rule 433 under the Securities Act), when considered
together with the Time of Sale Information at the Time of Sale, did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or 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 Time of Sale Information in reliance upon and in conformity with written
information furnished to the Partnership Parties through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(h) Issuer Free Writing Prospectus Conform to the Requirements of the Securities Act. Each
Issuer Free Writing Prospectus conformed or will conform in all material respects to the
requirements of the Securities Act on the date of first use, and the Partnership has complied with
all prospectus delivery and any filing requirements applicable to such Issuer Free Writing
Prospectus pursuant to the Securities Act. 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 Representatives. The Partnership has retained in accordance with the Securities Act all Issuer
Free Writing Prospectuses that were not required to be filed pursuant to the Securities Act. The
Partnership has taken all actions necessary so that any “road show” (as defined in Rule 433 under
the Securities Act) in connection with the offering of the Units will not be required to be filed
pursuant to the Securities Act.
(i) Ownership of the General Partner. At the Closing Date and the Additional Closing Date, as
the case may be, the only issued equity securities in the General Partner will be common stock (“GP
Stock”). Compressco owns 100% of the GP Stock; such GP Stock is duly authorized and validly issued
in accordance with the General Partner Charter Documents and is fully paid and nonassessable; and
Compressco owns such GP Stock free and clear of all liens, encumbrances, security interests,
charges or claims (“Liens”), except for restrictions on transferability as described in the
Registration Statement, the Time of Sale Information and the Prospectus or otherwise contained in
the General Partner Charter Documents and other than those Liens arising under that certain Credit
Agreement filed as Exhibit 10.6 to the Registration Statement (the “Revolving Credit Agreement”)
and the pledge, security agreements and other ancillary documents thereto.
(j) Power and Authority to Act as the General Partner. The General Partner has all requisite
corporate power and authority to act as the general partner of the Partnership in all material
respects as described in the Registration Statement, the Time of Sale Information and the
Prospectus.
(k) Ownership of the General Partner Interest in the Partnership. As of the date hereof, the
General Partner is, and at the Closing Date and the Additional Closing Date, as the case may be,
after giving effect to the Transactions, will be the sole general partner of the Partnership and
will own the GP Interest; such GP Interest will be duly authorized and validly issued in accordance
with the Partnership Agreement and the General Partner will own such GP Interest free and clear of
all Liens, except for restrictions on transferability as described in the Registration Statement,
the Time of Sale Information and the Prospectus or otherwise contained in the Partnership Agreement
and other than those Liens arising under the Revolving Credit
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Agreement and the pledge, security agreements and other ancillary documents thereto.
(l) Ownership of the Incentive Distribution Rights. At the Closing Date and the Additional
Closing Date, as the case may be, after giving effect to the Transactions, the General Partner will
own all of the Incentive Distribution Rights; such Incentive Distribution Rights and the limited
partner interests represented thereby will have been duly authorized and validly issued in
accordance with the Partnership Agreement and will be fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in the Registration Statement, the Time of Sale Information and the Prospectus
under the caption “The Partnership Agreement — Limited Liability” or by Sections 17-303, 17-607,
and 17-804 of the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”)); and
the General Partner will own such Incentive Distribution Rights free and clear of all Liens, except
for restrictions on transferability as described in the Registration Statement, the Time of Sale
Information and the Prospectus or otherwise contained in the Partnership Agreement and other than
those Liens arising under the Revolving Credit Agreement and the pledge, security agreements and
other ancillary documents thereto.
(m) No Other Subsidiaries of the General Partner. Other than with respect to the other
Partnership Entities, the General Partner does not own, and at the Closing Date and the Additional
Closing Date, as the case may be, after giving effect to the Transactions, will not own, directly
or indirectly, any equity or long-term debt securities of any corporation, partnership, limited
liability company, joint venture, association or other entity.
(n) No Other Subsidiaries of the Partnership. Other than the Partnership’s ownership of 100%
of the equity securities of the MLP Sub, as of the date hereof, neither the Partnership, OPCO nor
the MLP Sub owns directly or indirectly, any equity or long-term debt securities of any
corporation, partnership, limited liability company, joint venture, association or other entity.
Other than (i) the Partnership’s ownership of 100% of the limited liability company interest in
OPCO, (ii) OPCO’s ownership, directly or indirectly, of 100% of each of the Operating Subsidiaries
(other than OPCO and MLP Sub), and (iii) the Partnership’s ownership of 100% of the equity
securities of the MLP Sub, at the Closing Date and the Additional Closing Date, as the case may be,
after giving effect to the Transactions, neither the Partnership, OPCO nor the MLP Sub will own,
directly or indirectly, any equity or long-term debt securities of any corporation, partnership,
limited liability company, joint venture, association or other entity.
(o) Capitalization of the Partnership. At the Closing Date, after giving effect to the
Transactions, the issued and outstanding partnership interests of the Partnership will consist of
[9,097,257]1 Common Units, [6,273,970] Subordinated Units, the GP Interest and the
Incentive Distribution Rights; and, assuming no purchase by the Underwriters of any Additional
Units, other than the Sponsor Units, the Additional Sponsor Units, if any, the Incentive
Distribution Rights and any limited partner interests issued pursuant to the Partnership’s
long-term incentive plan, the Firm Units will be the only limited partner interests in the
Partnership issued and outstanding at the Closing Date or the Additional Closing Date, as the case
may be.
| 1 | Need to update to include common units to be issued under LTIP at closing. |
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(p) Duly Authorized and Validly Issued Units. At the Closing Date or the Additional Closing
Date, as the case may be, the Firm Units or the Additional Units, as the case may be, 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 this Agreement, will be validly issued, fully paid (to the extent required under
the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in the Registration Statement, the Time of Sale Information and the Prospectus
under the caption “The Partnership Agreement — Limited Liability” or by Sections 17-303, 17-607 or
17-804 of the Delaware LP Act).
(q) No Preemptive Rights, Options or Registration Rights. Except as described in the
Registration Statement, the Time of Sale Information and the Prospectus, and except for
restrictions on transferability set forth in the Organizational Documents or the Revolving Credit
Agreement, there are no (i) preemptive rights or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, Common Units or other interests or equity
securities of any Partnership Entity or (ii) outstanding options or warrants to purchase any Common
Units or other interests or equity securities in any Partnership Entity. Neither the filing of the
Registration Statement nor the offering or sale of the Units as contemplated by this Agreement
gives rise to any rights for or relating to the registration of any Common Units or other
securities of any Partnership Entity, except (i) as described in the Registration Statement, Time
of Sale Information, the Prospectus and the Partnership Agreement and (ii) such rights as have been
waived or satisfied.
(r) Conformity of Units to Description in the Most Recent Preliminary Prospectus. The Units,
when issued and delivered in accordance with the terms of the Partnership Agreement and this
Agreement against payment therefor as provided therein and herein, and the Sponsor Units, the
Incentive Distribution Rights and the GP Interest, when issued and delivered in accordance with the
terms of the Partnership Agreement and the Contribution Documents against payment therefor as
provided therein, will conform in all material respects to the description thereof contained in the
Registration Statement, the Time of Sale Information and the Prospectus.
(s) Formation and Qualification of the Partnership Entities. Each of the Partnership Entities
has been duly formed and is validly existing as a corporation, limited partnership, limited
liability company or other entity, as applicable, in good standing (to the extent the equivalent
concept exists) under the laws of its respective jurisdiction of formation, with all corporate,
limited partnership, limited liability company or other entity power and authority, as applicable,
necessary to own, operate or lease its properties and to conduct its business, in each case, in all
material respects, as presently conducted and as described in the Registration Statement, the Time
of Sale Information and the Prospectus (and any amendment or supplement thereto), and is duly
registered or qualified to do business and is in good standing (to the extent the equivalent
concept exists) in each jurisdiction in which its ownership or lease of properties or the conduct
of its business requires such registration or qualification, except where the failure to so
register or qualify would not (i) have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of operations of the Partnership
Entities and their respective subsidiaries, taken as a whole (a “Material Adverse
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Effect”), or (ii) subject the limited partners of the Partnership to any material liability or
disability.
(t) Ownership of the Sponsor Units. At the Closing Date and at any Additional Closing Date,
after giving effect to the Transactions, (i) the General Partner and TII will own the Sponsor Units
free and clear of all Liens, except for restrictions on transferability as described in the
Registration Statement, the Time of Sale Information and the Prospectus or otherwise contained in
the Partnership Agreement and other than those Liens arising under the Revolving Credit Agreement
and the pledge, security agreements and other ancillary documents thereto; (ii) the Sponsor Units
and the limited partner interests represented thereby will be duly authorized and validly issued in
accordance with the Partnership Agreement and will be fully paid (to the extent required under
Partnership Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in the Registration Statement, the Time of Sale Information and the Prospectus
under the caption “The Partnership Agreement — Limited Liability” or by Sections 17-303, 17-607
and 17-804 of the Delaware LP Act).
(u) Ownership of the Operating Subsidiaries. At the Closing Date and the Additional Closing
Date, as the case may be, after giving effect to the Transactions,
(i) the Partnership will be the sole member of OPCO and will own 100% of the limited liability
company interests in OPCO;
(ii) OPCO will be the sole member of each of CFS International, CP International, CP Leasing
and CP Holdings, and will own 100% of the limited liability company interests in each of CFS
International, CP International, CP Leasing and CP Holdings;
(iii) CFS International and CP International will be the owners of CP Argentina, CFS
International will own 90% of the equity securities of CP Argentina and CP International will own
10% of the equity securities of CP Argentina;
(iv) OPCO and CP Holdings will be the owners of Dutch Coöp; OPCO will own 99% of the equity
securities in Dutch Coöp and CP Holdings will own 1% of the equity securities in Dutch Coöp;
(v) Dutch Coöp will be the sole owner of Dutch BV and will own 100% of the equity securities
of Dutch BV;
(vi) Dutch B.V. will be the sole owner of each of Mexico I and Mexico II and will own 100% of
the limited liability company interests of each of Mexico I and Mexico II;
(vii) Dutch BV will be the sole owner of CP Canada and will own 100% of the equity securities
of CP Canada;
(viii) Mexico I and Mexico II will be the owners of CP Mexico and will own 51% of the
partnership interests and 49% of the partnership interests, respectively, of CP Mexico;
(ix) Dutch BV will be the sole member of Providence and will own 100% of the
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limited liability company interests of Providence;
(x) Providence and Dutch BV will be the owners of PE Mexico; Providence will own 99.998% of
the partnership interests of PE Mexico and Dutch BV will own 0.002% of the partnership interests of
PE Mexico; and
(xi) the Partnership will be the sole owner of the MLP Sub and will own 100% of the equity
securities in the MLP Sub.
Such limited liability company interests and equity securities will be duly authorized and validly
issued in accordance with the applicable Organizational Documents and will be fully paid (to the
extent required under such Organizational Documents) 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 each of the Partnership and
OPCO will own such limited liability company interests and equity securities free and clear of all
Liens, except for restrictions on transferability as described in the Registration Statement, the
Time of Sale Information and the Prospectus or otherwise contained in the Partnership Agreement and
other than those Liens arising under the Revolving Credit Agreement and the pledge, security
agreements and other ancillary documents thereto.
(v) Authority. Each of the Partnership Parties has the requisite power and authority to
execute and deliver this Agreement and perform its respective obligations hereunder. The
Partnership has the requisite power and authority to issue, sell and deliver (i) the Units, in
accordance with and upon the terms and conditions set forth in this Agreement and the Partnership
Agreement and (ii) the Sponsor Units and the Incentive Distribution Rights, in accordance with and
upon the terms and conditions set forth in the Partnership Agreement and the Contribution
Documents. At each Closing Date and Additional Closing Date, as the case may be, all corporate,
partnership, limited liability company or other entity action, as the case may be, required to be
taken by the Partnership Parties or any of their respective stockholders, members, partners or
equityholders for the authorization, issuance, sale and delivery of the Units, the Sponsor Units,
the GP Interest and the Incentive Distribution Rights, the execution and delivery of the
Organizational Documents by each of the Partnership Entities party thereto and the consummation of
the transactions (including the Transactions) contemplated by this Agreement shall have been
validly taken.
(w) Authorization, Execution and Delivery of this Agreement. This Agreement has been duly
authorized, executed and delivered by or on behalf of the Partnership Parties.
(x) Authorization, Execution and Enforceability of Certain Agreements. At or before the
Closing Date:
(i) the Partnership Agreement will have been duly authorized, executed and delivered by the
General Partner and will be a valid and legally binding agreement of the General Partner,
enforceable against the General Partner in accordance with its terms;
(ii) the LLC Agreements will have been duly authorized, executed and
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delivered by each of the Partnership Entities party thereto and will be a valid and legally
binding agreement of such Partnership Entity, enforceable against such Partnership Entity in
accordance with their respective terms;
(iii) each of the Contribution Documents will have been duly authorized, executed and
delivered by each of the Partnership Entities party thereto and will be valid and legally binding
agreements of such Partnership Entity, enforceable against such Partnership Entity in accordance
with their respective terms; and
(iv) that certain Omnibus Agreement dated as of the Closing Date the “Omnibus Agreement”) by
and among the Parent, the General Partner and the Partnership will have been duly authorized,
executed and delivered by the parties thereto and will be a valid and legally binding agreement of
such parties, enforceable against such parties in accordance with its terms;
provided, that, with respect to each such agreement described in this Section (x), the
enforceability thereof may be limited by (a) applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights
generally and by general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity), and (b) public policy, applicable law relating to
fiduciary duties and indemnification and an implied covenant of good faith and fair dealing.
(y) Restricted Subsidiary. On or prior to the date of the first contribution of assets
consummated under the Contribution Agreement, the General Partner, the Partnership and the
Operating Subsidiaries will be designated by the Parent as Unrestricted Subsidiaries under that
certain Credit Agreement dated as of June 27, 2006 by and among the Parent and the other parties
thereto (as amended from time to time, the “TETRA Credit Agreement”).
(z) Legal Sufficiency of Contribution Agreement. The Contribution Documents will be legally
sufficient to transfer or convey, directly or indirectly, to the Partnership Entities all
properties, ownership interests, assets and rights not already held by them that are, individually
or in the aggregate, required to enable the Partnership Entities to conduct their operations in all
material respects as described in the Registration Statement, the Time of Sale Information and
Prospectus, subject to the conditions, reservations, encumbrances and limitations contained in the
Contribution Documents and those set forth in the Registration Statement, the Time of Sale
Information and Prospectus. The Partnership Entities, as applicable, upon consummation of the
Transactions pursuant to the Contribution Documents, will succeed in all material respects to the
business, assets, properties, liabilities and operations reflected in the pro forma financial
statements of the Partnership Parties, except as disclosed in the Registration Statement, the Time
of Sale Information and the Prospectus and the Contribution Documents.
(aa) No Legal Proceedings or Contracts to be Described or Filed. Except as described in the
Registration Statement, the Time of Sale Information and Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of the Partnership Parties, threatened
against any of the Partnership Entities or their respective subsidiaries or to which any of the
Partnership Entities or their respective subsidiaries is a party or of which any of their
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properties are subject that are required to be described in the Registration Statement, the
Time of Sale Information or the Prospectus (or any amendment or supplement thereto) that are not
described as required by the Securities Act. Except as described in the Registration Statement,
the Time of Sale Information and Prospectus, there are no agreements, contracts, indentures, leases
or other instruments that are required to be described in the Registration Statement, the Time of
Sale Information or the Prospectus (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement that are not described, filed or incorporated by reference in
the Registration Statement, the Time of Sale Information and the Prospectus as required by the
Securities Act.
(bb) Litigation. Except as described in the Registration Statement, the Time of Sale
Information and Prospectus, there is (i) no action, suit, inquiry, proceeding or investigation by
or before any court or governmental or other regulatory or administrative agency or commission
pending or, to the knowledge of the Partnership Parties, threatened to which any of the Partnership
Entities is or may be a party or to which the business or property of any of the Partnership
Entities is or may be subject, and (ii) no injunction, restraining order or order of any nature
issued by a federal or state court or foreign court of competent jurisdiction to which any of the
Partnership Entities is or may be subject, that, in the cases of clauses (i) and (ii), would
reasonably be expected to, individually or in the aggregate, prevent the transactions contemplated
by this Agreement or result in a Material Adverse Effect.
(cc) No Defaults. None of the Partnership Entities (i) is in violation of its Organizational
Documents, (ii) is in violation of any law, statute, ordinance, administrative or governmental rule
or regulation applicable to it or of any decree of any court or governmental agency or body having
jurisdiction over it, or (iii) is in breach, default (or an event that, with notice or lapse of
time or both, would constitute such a default) or violation in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or other evidence of indebtedness or
in any agreement, indenture, lease or other instrument to which it is a party or by which it or any
of its properties may be bound, which breach, default or violation, in the case of clauses (ii) and
(iii), would, if continued, have a Material Adverse Effect or materially impair the ability of any
of the Partnership Parties to perform their obligations under this Agreement.
(dd) No Consents. No permit, consent, approval, authorization, order, registration or filing
(collectively, “consents”) with or of any court or governmental agency or body having jurisdiction
over any of the Partnership Entities or any of their respective properties is required in
connection with (i) the offering, issuance or sale by the Partnership of the Units, (ii) the
execution, delivery, and performance of this Agreement or the Contribution Documents by the
Partnership Entities party hereto or thereto, or (iii) the consummation of the transactions
(including the Transactions) contemplated by this Agreement or the Contribution Documents, except
(A) such consents required under the Securities Act or the Exchange Act, (B) such consents required
under state securities or “Blue Sky” laws in connection with the purchase and distribution of the
Units by the Underwriters, (C) such consents as have been, or prior to the Closing Date or the
Additional Closing Date, as the case may be, will be, obtained or made, (D) such consents for which
the failure to obtain or make would not have a Material Adverse Effect and (E) as disclosed in the
Time of Sale Information and Prospectus.
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(ee) No Conflicts. None of the (i) offering, issuance or sale of the Units by the Partnership
or the application of the proceeds from the sale of the Units as described under “Use of Proceeds”
in the Registration Statement, the Time of Sale Information and the Prospectus, (ii) execution,
delivery or performance of this Agreement or the Contribution Documents by the Partnership Entities
which are parties thereto, or (iii) consummation by the Partnership Entities of the transactions
(including the Transactions) contemplated by this Agreement or the Contribution Documents (A)
constitutes or will constitute a violation of the Organizational Documents, (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 indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which any of the Partnership Entities is a
party or by which any of them or any of their respective properties may be bound, (C) violates or
will violate any statute, law or regulation or any order, judgment, decree or injunction of any
court or governmental agency or body having jurisdiction over any of the Partnership Entities or
any of their properties in a proceeding to which any of them or their property is a party or (D)
results or will result in the creation or imposition of any Lien upon any property or assets of any
of the Partnership Entities, which breaches, violations, defaults or Liens, in the case of clauses
(B), (C) or (D), would have a Material Adverse Effect or materially impair the ability of any of
the Partnership Entities to consummate the Transactions.
(ff) Private Placement. The sale and issuance of (i) the Sponsor Units to the General Partner
and TII and (ii) the Incentive Distribution Rights and the GP Interest to the General Partner are
exempt from the registration requirements of the Securities Act and securities laws of any state
having jurisdiction with respect thereto, and none of the Partnership Entities has taken or will
take any action that would cause the loss of such exemption. The Partnership has not sold or
issued any securities that would be integrated with the offering of the Units contemplated by this
Agreement pursuant to the Securities Act or the interpretations thereof by the Commission.
(gg) Independent Registered Public Accounting Firm. Ernst & Young LLP, who has certified
certain audited financial statements (including the related notes thereto and supporting schedules)
of the Partnership Parties filed as part of the Registration Statement, the Time of Sale
Information and the Prospectus (or any amendment or supplement thereto), is an independent public
accounting firm with respect to such entities as required by the Securities Act and the Public
Company Accounting Oversight Board.
(hh) Statistical and Market-Related Data. The statistical and market-related data included in
the Registration Statement, the Time of Sale Information and the Prospectus are based on or derived
from sources that the Partnership Parties believe to be reliable and accurate in all material
respects.
(ii) Financial Statements. The historical financial statements, together with related
schedules and notes, included in the Registration Statement, the Time of Sale Information and the
Prospectus (and any amendment or supplement thereto), present fairly in all material respects the
financial condition, results of operations and cash flows of the entities purported to be shown
thereby on the basis stated therein at the respective dates or for the respective periods indicated
and have been prepared in accordance with generally accepted accounting principles in
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the United States consistently applied throughout the periods involved, except as disclosed
therein. The summary historical and pro forma financial data included in the most recent
Preliminary Prospectus under the caption “Summary—Summary Historical and Pro Forma Financial and
Operating Data” in the Registration Statement, the Time of Sale Information and the Prospectus and
the selected historical and pro forma financial data set forth under the caption “Selected
Historical and Pro Forma Financial and Operating Data” included in the Registration Statement, the
Time of Sale Information and the Prospectus (and any amendment or supplement thereto) is fairly
presented in all material respects and prepared on a basis consistent with the audited and
unaudited historical consolidated financial statements and pro forma financial statements, as
applicable, from which they have been derived, except as described therein. The other financial
data set forth in the Registration Statement and Prospectus (and any amendment or supplement
thereto) has been derived from the accounting records of the Partnership and its subsidiaries, and
presents fairly, in all material respects, the information purported to be shown thereby.
(jj) Pro Forma Financial Statements. The pro forma financial statements included in the
Registration Statement, the Time of Sale Information and the Prospectus include assumptions that
provide a reasonable basis for presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma adjustments reflect the proper application of those
adjustments to the historical financial statement amounts in the pro forma financial statements
included in the Time of Sale Information and the Prospectus. The pro forma financial statements
included in the Time of Sale Information and the Prospectus comply as to form in all material
respects with the applicable requirements of Regulation S-X under the Securities Act.
(kk) Xxxxxxxx-Xxxxx Act of 2002. At each Closing Date or Additional Closing Date, as the case
may be, the Partnership will be in compliance in all material respects with all applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002, the rules and regulations promulgated therewith and
the rules of the NASDAQ that are effective and applicable to the Partnership.
(ll) Conduct of Business. Except as disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus (or any amendment or supplement thereto), none of the Partnership
Entities or their respective subsidiaries has (i) incurred any liabilities or obligations,
indirect, direct or contingent, that are material to the Partnership Entities, taken as a whole,
other than liabilities and obligations incurred in the ordinary course of business, (ii) entered
into any transaction that is not in the ordinary course of business that is material to the
Partnership Entities, taken as a whole or (iii) issued or granted any securities or paid or
declared any dividends or other distributions with respect to any class of its securities.
(mm) No Material Adverse Change. (i) None of the Partnership Entities has sustained since the
date of the latest audited financial statements included in the Time of Sale Information and the
Prospectus any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, investigation, order or decree, otherwise than as set forth or contemplated in the
Registration Statement, the Time of Sale Information and the
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Prospectus; and (ii) since, since the respective dates as of which such information is given
in the Registration Statement, the Time of Sale Information and the Prospectus, there has not been
any change in the capitalization or material increase in long-term debt of the Partnership Parties,
or any adverse change in or affecting the condition (financial or other), business, prospects,
properties or results of operations of the Partnership Parties, taken as a whole; in each case
except as set forth or contemplated in the Time of Sale Information and the Prospectus or as would
not have a Material Adverse Effect.
(nn) NASDAQ Listing. The Units have been approved for listing on the NASDAQ, subject to
official notice of issuance.
(oo) Stabilization. The Partnership has not taken, directly or indirectly, any action that
constituted, or any action designed to, or that might reasonably be expected to cause or result in
or constitute under the Exchange Act, stabilization or manipulation of the price of the Common
Units to facilitate the sale or resale of the Units.
(pp) Tax Returns. Each of the Partnership Entities that is required to do so has filed (or
have obtained extensions with respect to) all material tax returns required to be filed through the
date hereof (other than certain state or local tax returns, as to which the failure to file,
individually or in the aggregate, would not have a Material Adverse Effect), which returns are
complete and correct in all material respects, and has timely paid all taxes shown to be due
pursuant to such returns, other than those (i) that are being contested in good faith and for which
adequate reserves have been established in accordance with generally accepted accounting principles
or (ii) which, if not paid, would not have a Material Adverse Effect.
(qq) Affiliate Transactions. Except as set forth in the Registration Statement, the Time of
Sale Information and the Prospectus, there is no relationship, direct or indirect, that exists
between any of the Partnership Entities on the one hand, and the directors, officers, unitholders,
customers or suppliers of any of the Partnership Entities on the other hand that is required by the
Securities Act to be disclosed in the Registration Statement, the Time of Sale Information and the
Prospectus that is not so disclosed.
(rr) Investment Company. The Partnership is not, and after the sale of the Units to be sold
by the Partnership pursuant to this Agreement and the application of the net proceeds therefrom as
described under “Use of Proceeds” in the Prospectus will not be, an “investment company” or a
company “controlled by” an investment company, each within the meaning of the Investment Company
Act of 1940, as amended.
(ss) Title to Properties. As of the Closing Date and the Additional Closing Date, as the case
may be, each of the Partnership Entities has good and indefeasible title to all real property
(exclusive of easements, rights of way and other similar instruments) and good title to all
personal property described in the Time of Sale Information and the Prospectus as being owned by
it, free and clear of all Liens except (i) liens or security interests securing indebtedness
incurred, assumed or agreed to in writing by such Partnership Entity, (ii) liens for real property
taxes, assessments and other governmental charges not delinquencies or that are currently being
contested in good faith by appropriate proceedings, (iii) mechanics’ and materialmen’s liens that
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are filed of record but are being contested in good faith by appropriate proceedings, (iv)
claims and other encumbrances (other than liens or security interests) described, and subject to
the limitations contained, in the Time of Sale Information and the Prospectus or (ii) claims and
other encumbrances (other than liens or security interests) that would not have a Material Adverse
Effect; provided, however, that all real property and buildings held under lease by the Partnership
Entities are held under valid, subsisting and enforceable leases with such exceptions as would not
have a Material Adverse Effect. The Partnership Entities have such easements, rights-of-way and
other similar instruments (collectively, “rights-of-way”) as are necessary to conduct their
business in the manner described, and subject to the limitations contained, in the Registration
Statement, the Time of Sale Information and the Prospectus, except for (i) qualifications,
reservations and encumbrances as may be set forth in the Registration Statement, the Time of Sale
Information and the Prospectus which are not reasonably expected to have a Material Adverse Effect
and (ii) such rights-of-way that, if not obtained, would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; other than as set forth, and subject
to the limitations contained, in the Registration Statement, the Time of Sale Information and the
Prospectus, the Partnership Entities have fulfilled and performed all of their material obligations
with respect to such rights-of-way, and no event has occurred that allows, or after notice or lapse
of time would allow, revocation or termination thereof or would result in any impairment of the
rights of the Partnership Entities with respect to such rights-of-way, except for such revocations,
terminations and impairments that would not have, individually or in the aggregate, a Material
Adverse Effect.
(tt) Permits. As of the Closing Date and Additional Closing Date, as the case may be, the
Partnership Entities has such permits, licenses, franchises, certificates of need and other
approvals or authorizations of governmental or regulatory authorities (“Governmental Permits”) as
are necessary under applicable law to own its properties and conduct its business in the manner
described in the Time of Sale Information and the Prospectus, subject to such qualifications as may
be set forth in the Registration Statement, the Time of Sale Information and the Prospectus except
for any Governmental Permits that, if not obtained, would not, individually or in the aggregate,
have a Material Adverse Effect and except as described in the Time of Sale Information and the
Prospectus; each of the Partnership Entities has fulfilled and performed all of its obligations
with respect to such Governmental Permits which are due to have been fulfilled and performed by
such date, and no event has occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other impairment of the rights of the holder of
any such Governmental Permits, subject to such qualifications as may be set forth in the Time of
Sale Information and the Prospectus, except as described in the Time of Sale Information and the
Prospectus or, for any of the foregoing, that would not have a Material Adverse Effect.
(uu) Disclosure Controls. The Partnership maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15 under the Exchange Act), that (i) are designed to provide
reasonable assurance that information required to be disclosed by the Partnership in reports that
it submits or files under the Exchange Act is accumulated and communicated to the principal
executive officer, the principal financial officer and other appropriate officers of the General
Partner to allow for timely decisions regarding required disclosure and is recorded, processed,
summarized and reported with time records specified in
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the Commission’s rules and forms and (ii) are effective in all material respects to perform
the functions for which they are established to the extent required by 13a-15(e) of the Exchange
Act.
(vv) Books and Records. The Partnership makes and keeps books and records as required by
Section 13(b)(2)(A) of the Exchange Act and maintains systems of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as necessary to
permit preparation of its financial statements in conformity with generally accepted accounting
principles and to maintain accountability for its assets; (C) access to its assets is permitted
only in accordance with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(ww) Foreign Corrupt Practices Act. None of the Partnership Entities, nor, to the knowledge
of the Partnership Parties, any director, officer, employee or agent of the Partnership Entities,
has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds; or (iii) violated
or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”).
(xx) No Changes in Internal Controls. Since the date of the most recent balance sheet of the
Partnership reviewed by Ernst & Young LLP, (i) none of the Partnership Entities has been advised by
Ernst & Young LLP of (A) any significant deficiencies in the design or operation of internal
controls over financial reporting that are reasonably likely to adversely affect the ability of the
Partnership Entities to record, process, summarize and report financial data, or any material
weaknesses in internal controls over financial reporting affecting any of the Partnership Entities,
or (B) any fraud, whether or not material, that involves management or other employees who have a
significant role in the internal controls over financial reporting of the Partnership Entities, and
(ii) there have been no significant changes in the internal controls of any of the Partnership
Entities that materially affected or are reasonably likely to materially affect any internal
controls over financial reporting relating to any of the Partnership Entities.
(yy) Environmental Laws. Except as described in the Time of Sale Information and the
Prospectus, each of Partnership Entities and their respective subsidiaries (i) is, and at all times
prior hereto within the applicable statute of limitations has been, in compliance with all laws,
regulations, ordinances, rules, orders, judgments, decrees, permits or other legal requirements of
any governmental authority, including without limitation any international, national, state,
provincial, regional, or local authority, relating to the protection of the environment, or natural
resources, or imposing remediation liability concerning any Hazardous Materials (as defined below)
(“Environmental Laws”) applicable to such entity, which compliance includes, without limitation,
obtaining, maintaining and complying with all permits and authorizations and approvals required by
Environmental Laws to conduct their respective businesses, (ii) has received all permits required
of them under applicable Environmental Laws to conduct their respective businesses, (iii) is in
material compliance with all terms and conditions of any such permits and (iv) has not received
written notice of any actual or alleged
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violation of Environmental Law and does not, to the knowledge of the Partnership Parties, have
any potential liability in connection with the release into the environment of any Hazardous
Material, except where such noncompliance with Environmental Laws, failure to obtain or maintain
required permits, failure to comply with the terms and conditions of such permits, any notice of
alleged violation or any liability in connection with such releases would not, individually or in
the aggregate, have a Material Adverse Effect. Except as described in the Time of Sale Information
and the Prospectus, (x) there are no proceedings that are pending, or known to be contemplated,
against any of the Partnership Entities under Environmental Laws in which a governmental authority
is also a party, other than such proceedings regarding which it is reasonably believed no monetary
sanctions of $100,000 or more will be imposed and (y) none of the Partnership Entities anticipates
material capital expenditures relating to Environmental Laws other than those incurred in the
ordinary course of business for the purchase of equipment used in compression services or related
activities. The term “Hazardous Material” means (A) any “hazardous substance” as defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, (B) any
“hazardous waste” as defined in the Resource Conservation and Recovery Act, as amended, (C) any
petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under
or within the meaning of any other Environmental Law.
(zz) Money Laundering Laws. The operations of the Partnership Entities are and have been
conducted at all times for the past seven years in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of the United States, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered or
enforced by any United States federal governmental agency (collectively, the “Anti-Money Laundering
Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the any of the Partnership Entities with respect to the
Anti-Money Laundering Laws is pending or, to the knowledge of the Partnership Parties, threatened.
(aaa) OFAC. (i) None of the Partnership Entities or, to the knowledge of the Partnership
Parties, any director or officer of any of the Partnership Entities, is an individual or entity
(“Person”) that is, or is owned or controlled by a Person that is the subject of any sanctions
administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control
(“OFAC”) and (ii) the Partnership Entities will not, directly or indirectly, use the proceeds of
the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person to fund any activities or business of any Person currently
the subject of sanctions administered or enforced by OFAC.
(bbb) Intellectual Property. Each of the Partnership Entities, with respect to the assets to
be owned or leased by such Partnership Entity at the Closing Date, after giving effect to the
Transactions, will be the record holder of or possesses adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses, know-how, software, systems and technology
(including trade secrets and other unpatented and/or unpatentable proprietary or confidential
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information, systems or procedures) necessary for the conduct of its business and has no
reason to believe that the conduct of its business will conflict with, and has not received any
notice of any claim of conflict with, any such rights of others, except for such conflicts that
would not, individually or in the aggregate, have a Material Adverse Effect.
(ccc) FINRA Affiliation. To the knowledge of the Partnership Parties, no officer, director or
nominee for director of the General Partner has a direct or indirect affiliation or association
with any member of the Financial Industry Regulatory Authority (“FINRA”) holders, except as
described in the Registration Statement, the Time of Sale Information and the Prospectus.
(ddd) Insurance. The Partnership Entities maintain or are entitled to the benefits of
insurance covering their properties, operations, personnel and businesses against such losses and
risks as are reasonably adequate to protect them and their businesses. All such insurance is
outstanding and duly in force on the Closing Date and the Additional Closing Date, as the case may
be.
(eee) ERISA. The Partnership Entities and any “employee benefit plan” (as defined under the
Employee Retirement Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ERISA”)) established or maintained by the Partnership,
its subsidiaries and with respect to which any of such other entities that could reasonably be
expected to have any liability are in compliance in form and operation with ERISA and all other
applicable state and federal laws, except for any failure to comply that would not, individually or
in the aggregate, have a Material Adverse Effect. No “reportable event” (as defined in ERISA, but
excluding any event for which the 30-day notice period is waived) has occurred that has not been
timely reported or is reasonably expected to occur with respect to any “employee pension benefit
plan” established or maintained by the Partnership, its subsidiaries or any of their ERISA
Affiliates. No “employee pension benefit plan” that is subject to Title IV of ERISA and that is
established or maintained by the Partnership, its subsidiaries or any of their ERISA Affiliates, if
such “employee pension benefit plan” were terminated, would have any “amount of unfunded benefit
liabilities” (as defined in ERISA), except as would not, individually or in the aggregate, have a
Material Adverse Effect. Neither the Partnership, its subsidiaries nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability that will, individually or in
the aggregate, result in a Material Adverse Effect either: (i) under Title IV of ERISA with respect
to termination of, or withdrawal from, any “employee pension benefit plan” or (ii) under Sections
412, 4971, 4975 or 4980B of the Code. Each “employee pension benefit plan” established or
maintained by the Partnership, its subsidiaries that is intended to be qualified under Section
401(a) of the Code has been determined by the IRS to be so qualified and nothing has occurred,
whether by action or failure to act, that could reasonably be expected to cause the loss of such
qualification. “ERISA Affiliate” means, with respect to the Partnership or any subsidiary thereof,
any member of any group or organization described in Sections 414(b), (c), (m) or (o) of the Code
of which the Partnership or such subsidiary is a member.
(fff) Forward Looking Statements. Each of the statements made by the Partnership in the
Registration Statement, the Time of Sale Information, and the Prospectus (and
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any supplements thereto) within the coverage of Rule 175(b) under the Securities Act,
including (but not limited to) any statements with respect to projected results of operations,
estimated available cash and future cash distributions of the Partnership, and any statements made
in support thereof or related thereto under the heading “Cash Distribution Policy and Restrictions
on Distributions” or the anticipated ratio of taxable income to distributions, was made or will be
made with a reasonable basis and in good faith.
7. Expenses. Whether or not the transactions contemplated hereby are consummated or
this Agreement becomes effective or is terminated, the Partnership agrees to pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Partnership’s counsel and
accountants in connection with the registration of the Units under the Securities Act and all other
expenses in connection with the preparation, printing and filing of the Registration Statement and
the Prospectus and amendments and supplements thereto and the mailing and delivering of copies
thereof and of any Preliminary Prospectus to the Underwriters and dealers; (ii) the printing and
delivery (including postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, the Prospectus, each Preliminary Prospectus, the Time of Sale
Information, any Blue Sky memoranda, the Master Agreement Among Underwriters, this Agreement, the
Selected Dealers Agreement and all amendments or supplements to any of them as may be reasonably
requested for use in connection with the offering and sale of the Units; (iii) consistent with the
provisions of Section 5.1(i), all expenses in connection with the qualification of the
Units for offering and sale under state securities laws or Blue Sky laws, including reasonable
attorneys’ fees and out-of-pocket expenses of the counsel for the Underwriters in connection
therewith; (iv) the filing fees incident to securing any required review by FINRA of the fairness
of the terms of the sale of the Units ; (v) the fees and expenses associated with listing the Units
on the NASDAQ; (vi) the cost of preparing unit certificates; (vii) the costs and charges of any
transfer agent or registrar; (viii) the cost of the tax stamps, if any, in connection with the
issuance and delivery of the Units to the respective Underwriters; (ix) all other fees, costs and
expenses referred to in Item 13 of the Registration Statement; and (x) the transportation, lodging,
graphics and other expenses incidental to the Partnership’s preparation for and participation in
the “road show” for the offering contemplated hereby; provided, however, that the Underwriters will
pay for 50 percent of the costs and expenses of any chartered flight in connection with the road
show. Except as provided in this Section 7 and in Section 8 hereof, the
Underwriters shall pay their own expenses, including the fees and disbursements of their counsel.
In addition, in the event that the proposed offering is terminated for the reasons set forth in
Section 5.1(l) hereof, the Partnership agrees to reimburse the Underwriters as provided in
Section 5.1(l).
8. Indemnification and Contribution.
8.1 Subject to the limitations in this Section 8, the Partnership Parties agree to
indemnify and hold harmless you and each other Underwriter, the directors, officers, employees and
agents of each Underwriter, each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and any “affiliate” (within the
meaning of Rule 405 of the Securities Act) of such Underwriter who has, or who is alleged to have,
participated in the distribution of the Units (such affiliate being referred to herein as
“Participating Affiliates”) from and against any and all losses, claims,
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damages, liabilities and expenses, including reasonable costs of investigation and attorneys’
fees and expenses (collectively, “Damages”) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary Prospectus, in the
Registration Statement, the Time of Sale Information, any Issuer Free Writing Prospectus or the
Prospectus or in any amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to make the statements
therein (except, in the case of the Registration Statement, in light of the circumstances under
which they were made) not misleading, except to the extent that any such Damages arise out of or
are based upon an untrue statement or omission or alleged untrue statement or omission that has
been made therein or omitted therefrom in reliance upon and in conformity with the information
furnished in writing to the Partnership Parties by or on behalf of any Underwriter through you,
expressly for use in connection therewith. This indemnification shall be in addition to any
liability that the Partnership Parties may otherwise have.
8.2 In addition to its other obligations under this Section 8, the Partnership Parties
agree that, as an interim measure during the pendency of any claim, action, investigation, inquiry
or other proceeding arising out of or based upon any statement or omission, or any inaccuracy in
the representations and warranties of the Partnership Parties herein or failure to perform their
obligations hereunder, all as set forth in this Section 8, the party against whom
indemnification is being sought will reimburse each Underwriter on a commercially reasonable
periodic basis for all reasonable legal or other out-of-pocket expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or other proceeding (to
the extent documented by reasonably itemized invoices therefor), notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligation of the Partnership
Parties to reimburse each Underwriter for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent jurisdiction. To the extent that
any such interim reimbursement payment is so held to have been improper, each Underwriter shall
promptly return it to the person(s) from whom it was received.
8.3 If any action or claim shall be brought against any Underwriter or any person controlling
any Underwriter in respect of which indemnity may be sought against the Partnership Parties, such
Underwriter or such controlling person or such Participating Affiliate (an “indemnified party”)
shall promptly notify in writing the party against whom indemnification is being sought (the
“indemnifying party”), but failure to so notify the indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it may have otherwise
than on account of this Section 8, and such indemnifying party shall assume the
defense thereof, including the employment of counsel reasonably acceptable to such indemnified
party and the payment of all reasonable fees of and expenses incurred by such counsel. Such
Underwriter or any such controlling person shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such indemnified party, unless (i) the indemnifying party has agreed in
writing to pay such fees and expenses, (ii) the indemnifying party has failed to assume the defense
and employ counsel reasonably acceptable to the indemnified party or (iii) the named parties to any
such action (including any impleaded parties) include both such indemnified party and the
indemnifying party and one or more legal defenses may be available to the Underwriter
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that may not be available to the Partnership, or that representation of such indemnified party
and any indemnifying party by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has been proposed) due
to actual or potential differing interests between them (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of such indemnified party (but
the Partnership Parties shall not be liable for the fees and expenses of more than one additional
counsel for the Underwriters and such controlling persons (in addition to any local counsel))).
The indemnifying party shall not be liable for any settlement of any such action effected without
its (their several) written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any Underwriter and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment, but in the case of a
judgment only to the extent stated in Sections 8.1 and 8.2.
8.4 Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
Partnership Parties, their respective directors, its officers who sign the Registration Statement
and any person who controls any Partnership Party within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the foregoing several
indemnity from the Partnership Parties to each Underwriter, but only with respect to information
furnished in writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus, the Time of Sale Information, any Issuer Free Writing
Prospectus or any Preliminary Prospectus, or any amendment or supplement thereto. If any action or
claim shall be brought or asserted against the Partnership Parties, any of their respective
directors, any of its officers or any such controlling person based on the Registration Statement,
the Prospectus, the Time of Sale Information or any Preliminary Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any Underwriter
pursuant to this Section 8.4, such Underwriter shall have the rights and duties given to
the Partnership Parties by Section 8.3 (except that if the Partnership Parties shall have
assumed the defense thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees and expenses of such
counsel shall be at such Underwriter’s expense), and the Partnership Parties, their respective
directors, any such officers and any such controlling persons, shall have the rights and duties
given to the Underwriters by Section 8.3.
8.5 In any event, no indemnifying party shall, without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment in any proceeding or threatened claim, action, suit or
proceeding in respect of which the indemnification may be sought hereunder (whether or not the
indemnified parties or any person who controls the indemnified parties is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such claim, action, suit or
proceeding and does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
8.6 If the indemnification provided for in this Section 8 is unavailable or
insufficient
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for any reason whatsoever to an indemnified party in respect of any Damages referred to
herein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result of such Damages (i)
in such proportion as is appropriate to reflect the relative benefits received by the Partnership
Parties on the one hand, and the Underwriters on the other hand, from the offering and sale of the
Units 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 Parties on the one hand, and the
Underwriters on the other hand, in connection with the statements or omissions that resulted in
such Damages as well as any other relevant equitable considerations. The relative benefits
received by the Partnership Parties on the one hand, and the Underwriters on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Partnership Parties bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the table on the cover
page of the Prospectus; provided that, in the event that the Underwriters shall have purchased any
Additional Units hereunder, any determination of the relative benefits received by the Partnership
Parties or the Underwriters from the offering of the Units shall include the net proceeds (before
deducting expenses) received by the Partnership Parties and the underwriting discounts and
commissions received by the Underwriters, from the sale of such Additional Units, in each case
computed on the basis of the respective amounts set forth in the table or in the notes to the table
on the cover page of the Prospectus. The relative fault of the Partnership Parties on the one
hand, and the Underwriters on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Partnership
Parties on the one hand, or by the Underwriters on the other hand and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
8.7 The Partnership Parties and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8 was determined by a 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 into account the equitable considerations referred to in Section 8.6.
The amount paid or payable by an indemnified party as a result of the Damages referred to in
Section 8.6 shall be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount of the underwriting
commissions received by such underwriter in connection with the Units underwritten by it and
distributed to the public. 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 8 are several in proportion to the respective numbers of Firm Units set
forth opposite their names in Schedule I hereto (or such numbers of Firm Units increased as
set forth in Section 9 hereof) and not joint.
8.8 Any Damages for which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the indemnified party
-31-
as Damages are incurred after receipt of reasonably itemized invoices therefor. The
indemnity, contribution and reimbursement agreements contained in this Section 8 and the
representations and warranties of the Partnership Parties set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter, the Partnership Parties, the directors
or officers or any person controlling any Partnership Party, (ii) acceptance of any Units and
payment therefor hereunder and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Partnership Parties, its directors
or officers or any person controlling any Partnership Party, shall be entitled to the benefits of
the indemnity, contribution and reimbursement agreements contained in this Section 8.
8.9 It is agreed that any controversy arising out of the operation of the interim
reimbursement arrangements set forth in Section 8.2, including the amounts of any requested
reimbursement payments and the method of determining such amounts, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of FINRA. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party demanding arbitration
does not make such designation of an arbitration tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do so. Such arbitration would be limited to
the operation of the interim reimbursement provisions contained in Section 8.2 and
Section 8.4, and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses that is created by the provisions of Section 8.2.
8.10 The Partnership Parties shall indemnify and hold harmless Xxxxxxx Xxxxx & Associates,
Inc. (including its directors, officers and employees) and each person, if any, who controls
Xxxxxxx Xxxxx & Associates, Inc. within the meaning of Section 15 of the Securities Act (“Xxxxxxx
Xxxxx Entities”), from and against any loss, claim, damage or liability or any action in respect
thereof to which any of the Xxxxxxx Xxxxx Entities may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action (i) arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact contained in any material
prepared by or with the approval of the Partnership Parties for distribution to Directed Unit
Participants in connection with the Directed Unit Program or arises out of or is based upon any
omission or alleged omission to state therein a material fact necessary in order to make the
statements therein not misleading, in light of the circumstances under which any such statements
were made, except, with respect to such material, insofar as any such loss, claim, damage or
liability or any action arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in, and in conformity with, information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter through you to the Partnership
expressly for use in such material or arises out of or is based upon any omission or alleged
omission to state a material fact in such material relating to 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 not misleading, (ii) arises out of or is based upon the failure
of the Directed Unit Participant to pay for and accept delivery of Directed Units that the Directed
Unit Participant agreed to purchase or (iii) is otherwise related to the Directed Unit Program,
provided that the Partnership Parties shall not be liable under this clause (iii) for any loss,
claim, damage, liability or action that is determined in a
-32-
final judgment by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Xxxxxxx Xxxxx Entities. In the event that it is finally judicially
determined that the Underwriters were not entitled to receive payments for legal and other expenses
pursuant to this Section 8.10, the Underwriters will promptly return all sums that had been
advanced pursuant thereto.
9. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters to purchase the Firm Units to be delivered on the Closing Date, and any Additional
Units to be delivered on an Additional Closing Date, shall be subject hereunder are subject to the
following conditions:
(a) The Registration Statement shall have become effective not later than 11:00 a.m., Eastern
time, on the date hereof, or at such later date and time as shall be consented to in writing by the
Representatives, and all filings required by Rules 424(b), 430A and 462 under the Securities Act
shall have been timely made.
(b) All partnership proceedings and other legal matters incident to the authorization, form
and validity of this Agreement, the Contribution Documents, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the transactions (including
the Transactions) contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Partnership shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to pass upon such
matters.
(c) You shall be satisfied that since the respective dates as of which information is given in
the Registration Statement, the Time of Sale Information and Prospectus, (i) there shall not have
been any change in the capitalization of the Partnership or any material change in the indebtedness
(other than in the ordinary course of business) of the Partnership, (ii) except as set forth or
contemplated by the Registration Statement, the Time of Sale Information and the Prospectus, no
material oral or written agreement or other transaction shall have been entered into by the
Partnership that is not in the ordinary course of business or that could reasonably be expected to
result in a material reduction in the future income of the Partnership, (iii) no loss or damage
(whether or not insured) to the property of the Partnership shall have been sustained that had or
could reasonably be expected to have a Material Adverse Effect, (iv) no legal or governmental
action, suit or proceeding affecting the Partnership or any of its properties that is material to
the Partnership or that affects or could reasonably be expected to affect the transactions
contemplated by this Agreement shall have been instituted or threatened and (v) there shall not
have been any material change in the condition (financial or otherwise), business, management,
results of operations or prospects of the Partnership or its subsidiaries that makes it impractical
or inadvisable in your judgment to proceed with the public offering or purchase of the Units as
contemplated hereby.
(d) You shall have received on the Closing Date (and the Additional Closing Date, if any) an
opinion of Xxxxxx & Xxxxxx L.L.P., counsel to the Partnership, substantially in the form of
Exhibit B hereto.
-33-
(e) You shall have received on the Closing Date (and the Additional Closing Date, if any) an
opinion of Xxxx Xxxxxxx, counsel to the Partnership, substantially in the form of Exhibit C
hereto.
(f) You shall have received on the Closing Date (and the Additional Closing Date, if any) an
opinion of Capín, Calderón, Xxxxxxx x Xxxxxxxxx-Azpe, S.C., Mexico counsel to the Partnership,
substantially in the form of Exhibit D-1 hereto.
(g) You shall have received on the Closing Date (and the Additional Closing Date, if any) an
opinion of Hall, Estill, Oklahoma counsel to the Partnership, substantially in the form of
Exhibit D-2 hereto.
(h) You shall have received on the Closing Date (and the Additional Closing Date, if any) an
opinion of Burstall Winger LLP, Canada counsel to the Partnership, substantially in the form of
Exhibit D-3 hereto.
(i) You shall have received on the Closing Date (and the Additional Closing Date, if any) an
opinion of Houthoff Buruma, the Netherlands counsel to the Partnership, substantially in the form
of Exhibit D-4 hereto.
(j) You shall have received on the Closing Date (and the Additional Closing Date, if any) an
opinion of Brons & Xxxxx Abogados, Argentina counsel to the Partnership, substantially in the form
of Exhibit D-5 hereto.
(k) You shall have received on the Closing Date or Additional Closing Date, as the case may
be, an opinion of Xxxxx Xxxxx L.L.P., as counsel for the Underwriters, dated the Closing Date or
Additional Closing Date, as the case may be, with respect to such matters as you may reasonably
request, and the Partnership and its counsel shall have furnished to your counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such matters.
(l) You shall have received letters addressed to you and dated the date hereof and the Closing
Date or the Additional Closing Date, as the case may be, from (i) the firm of Ernst & Young LLP,
independent certified public accountants and (ii) the Chief Financial Officer of the General
Partner, in its capacity as the general partner of the Partnership, substantially in the forms
heretofore approved by you.
(m) (i) No stop order suspending the effectiveness of the Registration Statement shall have
been issued by the Commission and no proceedings for that purpose shall be pending or, to the
knowledge of the Partnership, shall be threatened or contemplated by the Commission at or prior to
the Closing Date or Additional Closing Date, as the case may be; (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration of the Units under
the securities or Blue Sky laws of any jurisdiction shall be in effect and no proceeding for such
purpose shall be pending or, to the knowledge of the Partnership, threatened or contemplated by the
authorities of any jurisdiction; (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall
-34-
have been complied with to the satisfaction of the staff of the Commission or such
authorities; (iv) after the date hereof, no amendment or supplement to the Registration Statement
or the Prospectus or any Issuer Free Writing Prospectus shall have been filed unless a copy thereof
was first furnished to you and the Partnership obtained your consent prior to filing any of those
with the Commission; and (v) all of the representations and warranties of the Partnership contained
in this Agreement shall be true and correct as of the Closing Date or Additional Closing Date; and
(vi) the Partnership and the General Partner shall have complied with all of the agreements and
satisfied all of the conditions on the part of the Partnership and the General Partner to be
performed or satisfied hereunder on or before such Closing Date or Additional Closing Date; and
(vii) neither the Partnership nor the General Partner shall have failed in any material respect at
or prior to the Closing Date or the Additional Closing Date, as the case may be, to have performed
or complied with any of its agreements herein contained and required to be performed or complied
with by it hereunder at or prior to the Closing Date or Additional Closing Date, as the case may
be, and you shall have received a certificate, dated the Closing Date or the Additional Closing
Date, as the case may be, and signed by the chief executive officer and the chief financial officer
(or such other officers as are acceptable to you) of the General Partner, in its capacity as the
general partner of the Partnership, to the effect set forth in this Section 9(m) and in
Section 9(c) hereof and certifying that they have carefully examined the Registration
Statement, the Time of Sale Information and the Prospectus, as well as each electronic road show
used in connection with the offering of the Units, and, in their opinion (A) (1) the Registration
Statement, as of the Effective Date, (2) the Prospectus, as of its date and on the Closing Date or
Additional Closing Date, as applicable, or (3) the Time of Sale Information, as of the Time of
Sale, did not contain any untrue statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary in order to make the statements therein (except in
the case of the Registration Statement, in the light of the circumstances under which they were
made) not misleading, and (B) since the Effective Date, no event has occurred that should have been
set forth in a supplement or amendment to the Registration Statement, the most recent Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus that has not been so set forth.
If any of the conditions hereinabove provided for in this Section 9 shall not have
been satisfied when and as required by this Agreement, this Agreement may be terminated by you by
notifying the Partnership of such termination in writing at or prior to such Closing Date, but you
shall be entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective upon the later
of (a) the execution and delivery hereof by the parties hereto and (b) release of notification of
the effectiveness of the Registration Statement by the Commission; provided, however, that the
provisions of Sections 6 and 7 shall at all times be effective.
11. Defaulting Underwriters. If any one or more of the Underwriters shall fail or
refuse to purchase Firm Units that it or they have agreed to purchase hereunder, and the aggregate
number of Firm Units that such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of the Firm Units, each
non-defaulting Underwriter shall be obligated, severally, in the proportion in which the number of
Firm Units set forth opposite its name in Schedule I hereto bears to the aggregate
-35-
number of Firm Units set forth opposite the names of all non-defaulting Underwriters or in
such other proportion as you may specify in the Agreement Among Underwriters, to purchase the Firm
Units that such defaulting Underwriter or Underwriters agreed, but failed or refused to purchase.
If any Underwriter or Underwriters shall fail or refuse to purchase Firm Units and the aggregate
number of Firm Units with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Units and arrangements satisfactory to you and the Partnership for the
purchase of such Firm Units are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the Partnership. In
any such case that does not result in termination of this Agreement, either you or the Partnership
shall have the right to postpone the Closing Date, but in no event for longer than seven (7) days,
in order that the required changes, if any, in the Registration Statement and the Prospectus or any
other documents or arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to termination in your
absolute discretion, without liability on the part of any Underwriter to the Partnership Parties by
notice to the Partnership, if prior to the Closing Date or the Additional Closing Date (if
different from the Closing Date and then only as to the Additional Units), as the case may be, in
your sole judgment, (i) trading in the Common Units shall have been suspended by the Commission or
the NASDAQ, (ii) trading in securities generally on the NASDAQ shall have been suspended or
materially limited, or minimum or maximum prices shall have been generally established on such
exchange, (iii) a general moratorium on commercial banking activities shall have been declared by
either federal or New York State authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions the effect of which on the financial markets of the
United States is such as to make it, in your judgment, impracticable or inadvisable to market the
Units or to enforce contracts for the sale of the Units. Notice of such cancellation shall be
promptly given to the Partnership and its counsel by telegraph, telecopy or telephone and shall be
subsequently confirmed by letter.
13. Information Furnished by the Underwriters. The Partnership Parties acknowledge
that (i) the first, second and fourth sentences of the fourth paragraph, (ii) each paragraph under
the sub-captions “Stabilization” and “Discretionary Accounts,” (iii) the first paragraph under the
sub-caption “Electronic Prospectus”, and (iv) the paragraph under the sub-caption “FINRA Rules”, in
each case under the caption “Underwriting” in any Preliminary Prospectus and Prospectus, constitute
the only information furnished by or on behalf of the Underwriters through you or on your behalf as
such information is referred to in Sections 6.1(d), 6.1(e), 6.1(f), 6.1(g), 8.1 and 8.3
hereof.
14. Miscellaneous. Notice given pursuant to any of the provisions of this Agreement
shall be in writing and shall be delivered
-36-
| (i) | to the Partnership | ||
| Xxxxxx X. Xxxxxx Compressco Partners, L.P. 000 Xxxx Xxxxxx, Xxxxx 0000 Xxxxxxxx Xxxx, XX 00000 (000) 000-0000 and Bass X. Xxxxxxx, Xx. TETRA Technologies, Inc. 00000 Xxxxxxxxxx 00 Xxxxx, Xxxxx 000 Xxx Xxxxxxxxx, XX 00000 (000) 000-0000 with a copy to Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxx Xxxxxx & Xxxxxx L.L.P. 0000 Xxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx 00000 (000) 000-0000 (ii) to the Underwriters Xxxxxxx Xxxxx & Associates, Inc. 000 Xxxxxxxx Xxxxxxx Xx. Xxxxxxxxxx, Xxxxxxx 00000 Attention: Xxxxx XxXxxxx and X.X. Xxxxxx Securities LLC 000 Xxxxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Equity Syndicate Desk with a copy to Xxxxx Xxxxx Xxxxx Xxxxx Xxxxx L.L.P. 00 Xxx Xxxxxxx Xxxxxxxxx Xxxxxx, Xxxxx 00000 |
-37-
This Agreement has been and is made solely for the benefit of the several Underwriters, the
Partnership Parties and their respective directors and officers and other controlling persons
referred to in Section 8 hereof, and no other person shall acquire or have any right under
or by virtue of this Agreement. Neither the term “successor” nor the term “successors and assigns”
as used in this Agreement shall include a purchaser from any Underwriter of any of the Units in his
status as such purchaser.
15. No Fiduciary Duty. Notwithstanding any preexisting relationship, advisory or
otherwise, between the parties or any oral representations or assurances previously or subsequently
made by any of the Underwriters, the Partnership Parties acknowledge and agree that (i) nothing
herein shall create a fiduciary or agency relationship between the Partnership Parties, on the one
hand, and the Underwriters, on the other hand; (ii) the Underwriters have been retained solely to
act as underwriters and are not acting as advisors, expert or otherwise, to the Partnership Parties
in connection with this offering, the sale of the Units or any other services the Underwriters may
be deemed to be providing hereunder, including, without limitation, with respect to the public
offering price of the Units; (iii) the relationship between the Partnership Parties, on the one
hand, and the Underwriters, on the other hand, is entirely and solely commercial, and the price of
the Units was established by the Partnership Parties and the Underwriters based on discussions and
arms’ length negotiations and the Partnership Parties understand and accept the terms, risks and
conditions of the transactions contemplated by this Agreement; (iv) any duties and obligations that
the Underwriters may have to the Partnership Parties shall be limited to those duties and
obligations specifically stated herein; and (v) notwithstanding anything in this Agreement to the
contrary, the Partnership Parties acknowledge that the Underwriters may have financial interests in
the success of the this offering that are not limited to the difference between the price to the
public and the purchase price paid to the Partnership by the Underwriters for the Units and that
such interests may differ from the interests of the Partnership Parties. The Partnership Parties
hereby waive and release, to the fullest extent permitted by applicable law, any claims that the
Partnership Parties may have against the Underwriters with respect to any breach or alleged breach
of fiduciary duty and agree that the Underwriters shall have no liability (whether direct or
indirect) to the Partnership Parties in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on behalf of or in right of the Partnership Parties or any of
their respective members, managers, employees or creditors.
16. Successors and Assigns. This Agreement shall be binding upon the Underwriters and
the Partnership Parties and their successors and assigns and any successor or assign of any
substantial portion of the Partnership Parties and any of the Underwriters’ respective businesses
and/or assets. No purchaser of any of the Units from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
17. Applicable Law; Counterparts. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without reference to choice of law principles
thereunder. This Agreement may be signed in various counterparts, which together shall constitute
one and the same instrument. This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto. The Partnership and
the Underwriters each hereby irrevocably waive any right they may
-38-
have to a trial by jury in respect to any claim based upon or arising out of this Agreement or
the transactions contemplated hereby.
18. Patriot Act. In accordance with the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain,
verify and record information that identifies their respective clients, including the Partnership,
which information may include the name and address of their respective clients, as well as other
information that will allow the Underwriters to properly identify their respective clients.
-39-
Please confirm that the foregoing correctly sets forth the agreement among the Partnership and
the several Underwriters.
| Very truly yours, |
||||
Xxxxxx X. Xxxxxx |
||||
President |
||||
| Compressco Partners GP Inc. |
||||
Xxxxxx X. Xxxxxx |
||||
President |
||||
| TETRA Technologies, Inc. |
||||
Xxxxxx X. Xxxxxxxxx |
||||
President and Chief Executive Officer |
||||
| CONFIRMED as of the date first above mentioned, on behalf of the Representatives and the other several Underwriters listed on Schedule I hereto. XXXXXXX XXXXX & ASSOCIATES, INC. |
||||
| By: | ||||
| Authorized Representative | ||||
| X.X. XXXXXX SECURITIES LLC |
||||
| By: | ||||
| Authorized Representative | ||||
SCHEDULE I
| Number | ||||
| Name | Firm Units | |||
Xxxxxxx Xxxxx & Associates, Inc. |
||||
X.X. Xxxxxx Securities LLC |
||||
RBC Capital Markets, LLC |
||||
Total: |
||||
SCHEDULE II(A)
Free Writing Prospectuses
[None.]
SCHEDULE II(B)
Information Included in “Time of Sale Information”
Public offering price:
|
$[____] per Common Unit | |
Number of Firm Units:
|
[____] |
SCHEDULE III
Parties to Lock-Up Agreements
Compressco Partners GP Inc.
TETRA International Incorporated
Xxxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx
Xxxx X. XxXxxxx
Xxxxx X. Book
Xxxxx X. Xxxxxxxx
[Any other purchasers of in excess of 1,000 common units under the directed unit program.]
EXHIBIT A
Form of Lock-Up Letter
_______, 2011
XXXXXXX XXXXX & ASSOCIATES, INC.
X.X. XXXXXX SECURITIES LLC
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
X.X. XXXXXX SECURITIES LLC
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
| Re: | Compressco Partners, L.P. (the “Partnership”) |
Dear Sirs:
This letter is delivered to you pursuant to the Underwriting Agreement (the “Underwriting
Agreement”) to be entered into by the Partnership, as issuer, and Xxxxxxx Xxxxx & Associates, Inc.
and X.X. Xxxxxx Securities LLC, the representatives (the “Representatives”) of certain underwriters
(the “Underwriters”) to be named therein. Upon the terms and subject to the conditions of the
Underwriting Agreement, the Underwriters intend to effect a public offering of Common Units of the
Partnership (the “Units”), as described in and contemplated by the registration statement of the
Partnership on Form S-1, File No. 333-155260 (the “Registration Statement”), as filed with the
Securities and Exchange Commission on [__________] (the “Offering”).
In consideration of the execution of the Underwriting Agreement by the Underwriters, and for
other good and valuable consideration, the undersigned hereby acknowledges and agrees that, without
the prior written consent of the Representatives, the undersigned will not (i) offer, sell,
contract to sell, pledge, grant any option to purchase or otherwise dispose of (collectively, a
“Disposition”) any Units, options, warrants or other securities of the Partnership convertible into
or exchangeable for Units (the “Partnership Securities”), or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or otherwise acquire, any Partnership
Securities held by the undersigned or acquired by the undersigned after the date hereof, or that
may be deemed to be beneficially owned by the undersigned (collectively, the “Lock-Up Units”),
pursuant to the rules and regulations promulgated under the Securities Act of 1933, as amended (the
“Securities Act”), and the Securities Exchange Act of 1934, as amended, for a period commencing on
the date hereof and ending 180 days after the date of the Partnership’s Prospectus first filed
pursuant to Rule 424(b) under the Securities Act, inclusive (the “Lock-Up
Period”), without the prior written consent of the Representatives or (ii) exercise or seek to
exercise or effectuate in any manner any rights of any nature that the undersigned has or may have
hereafter to require the Partnership to register under the Securities Act the undersigned’s sale,
transfer or other disposition of any of the Lock-Up Units or other securities of the Partnership
held by the undersigned, or to otherwise participate as a selling security holder in any manner in
any registration effected by the Partnership under the Securities Act, including under the
Registration Statement, during the Lock-Up Period, notwithstanding the foregoing, if (x) during the
last 17 days of the Lock-Up Period, the partnership issues a release concerning earnings or
material news or a material event relating to the partnership occurs; or (y) prior to the
expiration of the Lock-Up Period, the partnership announces it will release earnings results during
the 16 day period beginning on the last day of the Lock-Up Period; the restrictions imposed in this
letter agreement shall continue to apply until the expiration of the 18 day period beginning on the
issuance of the earnings release or the occurrence of the material news or material event. The
foregoing restrictions are expressly agreed to preclude the undersigned from engaging in any
hedging, collar (whether or not for any consideration) or other transaction that is designed to or
reasonably expected to lead or result in a Disposition of Lock-Up Units during the Lock-Up Period,
even if such Lock-Up Units would be disposed of by someone other than such holder. Such prohibited
hedging or other transactions would include any short sale or any purchase, sale or grant of any
right (including any put or call option or reversal or cancellation thereof) with respect to any
Lock-Up Units or with respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from Lock-Up Units.
Notwithstanding the agreement not to make any Disposition during the Lock-Up Period, you have
agreed that the foregoing restrictions shall not apply to (a) the Units being offered in the
prospectus included in the Registration Statement, (b) any grant or exercise of options pursuant to
the Partnership’s long-term incentive plan; provided that the foregoing restrictions shall apply to
any Units received pursuant to any such grant or exercise of options, and (c) (i) to an affiliate
or (ii) as a bona fide gift (provided that in the case of any such transfer (A) the transferee or
donee shall execute and deliver a lock-up letter agreement substantially in the form of this
lock-up letter agreement and (B) no filing under Section 16(a) of the Securities Exchange Act of
1934, as amended, reporting a reduction in beneficial ownership of Units, shall be required or
voluntarily made during the Lock-Up Period).
It is understood that, if the Underwriting Agreement (other than the provisions thereof that
survive termination) shall terminate or be terminated prior to payment for and delivery of the
Units, you will release the undersigned from the obligations under this letter agreement.
In furtherance of the foregoing, the Partnership and its transfer agent and registrar are
hereby authorized to decline to make any transfer of Lock-Up Units if such transfer would
constitute a violation or breach of this letter. This letter shall be binding on the undersigned
and the respective successors, heirs, personal representatives and assigns of the undersigned.
Capitalized terms used but not defined herein have the respective meanings assigned to such terms
in the Underwriting Agreement.
- A-2 -
| Very truly yours, |
||||
| Signature of Securityholder | ||||
- A-3 -
EXHIBIT B
FORM OF OPINION OF XXXXXX & XXXXXX L.L.P.
EXHIBIT C
FORM OF OPINION OF XXXX XXXXXXX
- C-1 -
EXHIBIT D-1
FORM OF OPINION OF CAPIN, XXXXXXXX, XXXXXXX X XXXXXXXX-XXXX, X.X
- X-0 -
XXXXXXX X-0
FORM OF OPINION OF XXXX XXXXXX
- D-2 -
EXHIBIT D-3
FORM OF OPINION OF BURSTALL WINGER LLP
- D-3 -
EXHIBIT D-4
FORM OF OPINION OF HOUTHOFF BURUMA
- D-4 -
EXHIBIT D-5
FORM OF OPINION OF BRONS & XXXXX ABOGADOS
- D-5 -
