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Exhibit 1.2
DEALER
MANAGER AGREEMENT
Mewbourne Energy
06-07 Drilling Programs
___________, 2006
Mewbourne Securities, Inc.
3901 S. Broadway
Tyler, Texas 75701
Gentlemen:
Mewbourne Development Corporation, a
Delaware corporation ("MD"), is or
proposes to be the sole managing general partner (in such capacity the
"Managing
Partner') of two limited partnerships (the "Partnerships") formed
pursuant to
the Delaware Revised Uniform Limited Partnership Act (the "Delaware
Act"). MD
intends to name the Partnerships as follows: Mewbourne Energy Partners 06-A,
L.P. and Mewbourne Energy Partners 07-A, L.P. Each Partnership will participate
in a program, governed by a Drilling Program Agreement (a "Program
Agreement")
among Mewbourne Oil Company, a Delaware corporation ("MOC"), MD and
the
Partnership, the primary purpose of which will be to drill Developmental Wells
(as such term is defined in the Prospectus referred to below).
On behalf of the Partnerships and
MD, a Registration Statement on Form S-1
(Registration No. 333-_____________) dated _______________, relating to the
offer and sale of the Interests (hereinafter defined) was filed with the
Securities and Exchange Commission (the "Commission") under the
Securities Act
of 1933, as amended (the "Act"). On _______________, MD filed with
the
Commission on behalf of the Partnerships Amendment No. 1 to the Registration
Statement. The Registration Statement was declared effective by the Commission
on _____________. MD, the Partnerships and the Interests are described in the
Prospectus dated _________________ (the "Prospectus") that forms a
part of the
Registration Statement. As used in this Dealer Manager Agreement (this
"Agreement"), the terms "Prospectus" and "Registration
Statement" refer solely
to the Prospectus and Registration Statement, as amended, described above,
except that (i) from and after the date on which any post-effective amendment
to
the Registration Statement is declared effective by the Commission, the term
"Registration Statement" shall refer to the Registration Statement as
amended by
that post-effective amendment, and the term "Prospectus" shall refer
to the
Prospectus then forming a part of the Registration Statement, and (ii) if the
Prospectus filed by MD pursuant to Rule 424(b) or (c) promulgated by the
Commission under the Act differs from the Prospectus on file with the
Commission
at the time the Registration Statement or any post-effective amendment thereto
shall have become effective, the term "Prospectus" shall refer to the
Prospectus
filed pursuant thereto from and after the date on which it was filed. Terms
defined in the Prospectus and not otherwise defined herein will have the
meanings set forth in the Prospectus.
MD desires to raise a minimum of
$5,000,000 and a maximum of $50,000,000 in
capital for each Partnership by the sale of up to an aggregate of $100,000,000
of limited partner interests (the "Limited Partner Interests") and
general
partner interests (the "General Partner Interest") in the
Partnerships (the
Limited Partner Interests and the General Partner Interests are collectively
referred to as the "Interests"). The Interests will be offered in
$1,000
increments, with a minimum purchase of twenty Interests ($20,000).
The following are the terms on which
the Managing Partner, on behalf of the
Partnerships, appoints you exclusive agent ("Dealer Manager") to form
a group of
National Association of Securities Dealers, Inc. member firms to solicit
subscribers for the purchase of Interests:
Section 1. Appointment as Dealer
Manager. On the basis of the
representations, warranties and covenants contained in this Agreement, but
subject to the terms and conditions set forth herein:
(a) The Managing Partner hereby
appoints you during the Offering Period (as
defined below) for both Partnerships as exclusive agent to form and manage a
group of securities brokers or dealers selected by you, each of which shall be
registered under the Securities Exchange Act of 1934 (the "Soliciting
Dealers")
and be a member in
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Mewbourne Energy 06-07 Drilling Program
Dealer Manager Agreement
________________, 2006
Page 2
good standing with the National Association of Securities Dealers, Inc. to
assist you in the distribution and sale of Interests. The "Offering
Period" (as
such term is used in this Agreement) for Interests in Mewbourne Energy Partners
06-A, L.P. will commence on or about the date on which the Registration
Statement is declared effective and will end no later than December 31, 2006
unless the Managing Partner accelerates or delays such termination date. The
Offering Period for Interests in Mewbourne Energy Partners 07-A, L.P. will
commence in 2007 and end no later than December 31, 2007. MD has the right in
its sole and absolute discretion to terminate the offering of Interests and end
an Offering Period at any time.
(b) The Managing Partner hereby gives
you, as Dealer Manager, the right to
solicit subscriptions of the Interests directly only in states where you have
registered as a broker-dealer under such states' blue sky laws. Such
subscriptions shall be evidenced by execution by the prospective investor of a
Subscription Agreement. It is understood that no sale shall be regarded as
effective unless and until accepted by the Managing Partner on behalf of a
Partnership. The Managing Partner reserves the right in its sole discretion to
refuse to sell a Interest to any person at any time for any reason, without
liability to it or to you.
(c) You hereby accept appointment as
a Dealer Manager and agree on the
terms and conditions set forth in this Agreement to use your reasonable efforts
to solicit subscriptions for the Interests during each Offering Period and
until
the earlier of (i) the termination of the last Offering Period or (ii) the last
Closing (as hereinafter defined). Neither your acceptance of that appointment
nor this Agreement shall constitute you and MD or a Partnership as an
association, partnership, unincorporated business or other separate entity.
(d) The price at which the Interests
are to be offered shall be $1,000 per
Interest payable upon the terms set forth in the Prospectus: provided, however,
that the minimum purchase shall be twenty (20) Interests for a subscription
price of $20,000.
(e) If an offering for Interests in
a Partnership is commenced and
subscriptions funds of $5,000,000 or more are not received by the termination
of
the Offering Period with respect to Interests in that Partnership, all
subscription funds received by the termination of the Offering Period with
respect to Interests in that Partnership shall be returned in full to the
subscribers, together with any interest earned thereon, if any (as provided in
the Prospectus), and this Agreement will terminate without obligation on your
part or on the part of MD, except that (a) you will promptly, upon notice,
transmit to MD any funds advanced to you by MD of any sales commissions and due
diligence fees paid pursuant to Section 6(b) hereof and which have not been
reallowed to a Soliciting Dealer, and (b) the indemnification and contribution
provisions of Section 9 hereof shall continue after such termination of this
Agreement.
Section 2. Representations and
Warranties of MD. MD, in its individual
capacity and in its capacity as Managing Partner, hereby represents and
warrants
to you that:
(a) In the name and on behalf of the
Partnerships, MD has prepared and
filed with the Commission the Registration Statement (including the Prospectus)
for the registration of the offering and sale of the Interests under the Act.
The Registration Statement has become and is effective under the Act. Copies of
the Registration Statement and the Prospectus have been or will be delivered to
you.
(b) On the Closing Date (as
hereinafter defined) for the sale of Interests
in a Partnership, that Partnership will be a limited partnership duly formed
and
validly existing under the laws of the State of Delaware and will be duly
qualified or registered as a foreign limited partnership or otherwise qualified
as a limited partnership in each jurisdiction in which the nature of the
activities conducted by it or the nature of the assets owned by it make such
qualification necessary (except where the failure to so qualify or register
would not have a material adverse effect on the Partnership or the rights or
liabilities of its General and Limited Partners). In addition, the Partnerships
shall have full and adequate partnership power and partnership authority to
enter into and perform this Agreement and the related Program Agreements and to
own its properties and to conduct its business as proposed in the Prospectus.
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Mewbourne Energy 06-07 Drilling Program
Dealer Manager Agreement
________________, 2006
Page 3
(c) MD is, and at all times through
the last Closing Date will be, a
corporation, validly existing and in good standing under the laws of the State
of Delaware with full and adequate corporate power and corporate authority to
enter into and perform this Agreement and the Agreements of Partnership and to
own its properties and to conduct its business as presently conducted and as
proposed in the Prospectus to be conducted.
(d) Each subscriber for Limited
Partner Interests will become a Limited
Partner of a Partnership entitled to all the rights of a Limited Partner under
the Agreement of Partnership for that Partnership and the Delaware Act upon (i)
payment of the consideration for those Limited Partner Interests specified in
that subscriber's Subscription Agreement and (ii) acceptance by the Managing
Partner of that subscriber as a Limited Partner. Each subscriber for General
Partnership Interests will become a General Partner of a Partnership entitled
to
all the rights of a General Partner under the Agreement of Partnership for that
Partnership and the Delaware Act upon (i) payment of the consideration for
those
General Partner Interests specified in that subscriber's Subscription Agreement
and (ii) acceptance by the Managing Partner of that subscriber as a General
Partner. The Interests, when sold and paid for as contemplated by the
Prospectus, will represent validly authorized and duly issued Interests and
those Interests will conform in all material respects to the statements
relating
thereto contained in the Prospectus, including the Form of Agreement of
Partnership attached as Exhibit A thereto.
(e) This Agreement has been duly and
validly authorized by MD. MD has duly
executed and delivered this Agreement, which constitutes a valid and binding
agreement of MD enforceable in accordance with its terms (except to the extent
that the enforceability of the indemnification provisions of Section 9 hereof
may be limited under federal securities laws or to the extent the
enforceability
of this Agreement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the right of creditors generally).
(f) The Commission has not issued
any order preventing or suspending the
use of the Prospectus.
(g) From the time the Registration
Statement initially became effective
through the last Closing Date, the Registration Statement and the Prospectus
did
and will comply in all material respects with the provisions of the Act, and
neither the Registration Statement and the Prospectus nor any Sales Literature
(as hereinafter defined) contains or will contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the representations and warranties
contained in this subsection (g) shall not apply to statements in, or omissions
from, the Registration Statement, the Prospectus or the Sales Literature based
upon and in conformity with information furnished to MD or a Partnership by you
in writing specifically for use in the Registration Statement, the Prospectus
or
Sales Literature.
(h) Based upon the opinion of Vinson
& Elkins L.L.P., counsel for MD, and
subject to the assumptions and representations expressed therein, under
existing
federal income tax laws and regulations each Partnership, upon its formation,
will be classified as the partnership for federal income tax purposes. Each
Partnership, at the related Closing, will be classified as the partnership for
federal income tax purposes, and at all times subsequent hereto, MD will use
its
best efforts to maintain the status of each Partnerships as a partnership for
federal income tax purposes.
(i) Except as disclosed in the
Prospectus, there is no litigation or
governmental proceeding pending or, to the best knowledge of MD, threatened
that
involves the offering of the Interests or any of the properties or businesses
of
MD that would, if adversely decided, materially and adversely affect
(financially or otherwise) the operation of the business of a Partnership, MD
or
the offering.
(j) MD is not in violation of the
Agreements of Partnership or in material
default in the performance of any obligation, agreement or condition contained
in any agreement by which a Partnership is bound. The execution and delivery of
this Agreement and the Agreements of Partnership, the fulfillment of the terms
set forth herein and therein and the consummation of the transactions
contemplated herein and therein and in the Prospectus will not conflict with or
constitute a breach of or material default under the Agreements of Partnership
or under the certificate of incorporation or bylaws of MD or under any other
agreement, indenture or instrument by which a
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Mewbourne Energy 06-07 Drilling Program
Dealer Manager Agreement
________________, 2006
Page 4
Partnership or MD is bound or, to the best knowledge of MD, any law, rule,
regulation, order or decree of any court or any governmental body or
administrative agency applicable to MD or a Partnership.
(k) The financial information
(including without limitation the balance
sheets and any accompanying notes and schedules) presented in the Prospectus
concerning MD presents fairly MD's financial position as of the dates thereof
in
accordance with generally accepted accounting principles, and there has been,
and through the last Closing Date shall be, no material adverse change in its
financial condition since the date of that information.
(l) There has been no material
adverse change in the condition, business or
properties of MD, financial or otherwise, from that on the latest dates as of
which such condition, business or properties are set forth in the Prospectus,
except as referred to therein, and such properties and business substantially
conform and shall at the last Closing Date substantially conform to the
descriptions thereof contained in the Prospectus.
(m) MD will timely apply, on behalf
of each Partnership, to the Internal
Revenue Service for a tax shelter registration number and, if such a number is
received, will furnish such number to the General and Limited Partners of such
Partnership within a reasonable time after their admission to a Partnership or
within a reasonable time after the Partnership has received such number,
whichever occurs later.
Section 3. Covenants and
Representations of Dealer Manager. You covenant
with and represent to MD that:
(a) You are, and at all times
through the last Closing Date will be, a
corporation, validly existing and in good standing as a corporation under the
laws of the jurisdiction set forth on the signature page hereof, with full and
adequate corporate power and corporate authority to enter into and perform this
Agreement.
(b) This Agreement has been duly and
validly authorized by you. You have
duly executed and delivered this Agreement, which constitutes a valid and
binding agreement of you enforceable in accordance with its terms (except to
the
extent that the enforceability of the indemnification provisions of Section 9
hereof may be limited under federal securities law or to the extent the
enforceability of this Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally).
(c) You will not offer to sell
Interests to, solicit offers to buy
Interests from, or transmit Subscription Agreements to, any person on behalf of
MD that you have reasonable grounds to believe (based on information obtained
from such person or otherwise known to you) does not meet the age, net worth,
annual income or other standards applicable to that person as set forth in the
Subscription Agreement.
(d) You will deliver a copy of the
Prospectus, containing such legends as
directed by MD, to each subscriber to whom you sell the Interests at or before
the completion of any sale of Interests to such subscriber (which sale shall be
deemed, for the purposes of this Agreement to occur on the date on which that
subscriber delivers subscription funds to the escrow agent), or earlier if
required by the blue sky or securities laws of any state. You have not and will
not give any information or make any representation in connection with the
offer
or sale of Interests other than as contained in the Prospectus, and will not
publish, circulate or otherwise distribute without MD's approval any
solicitation material other than the Prospectus and other sales material
("Sales
Literature") provided to you by MD specifically for distribution to
subscribers
with the Prospectus. Any such Sales Literature, if distributed, must have been
preceded or must be accompanied by the Prospectus. You agree not to discuss any
specific oil and gas prospect or to refer to any such oil and gas prospect in
any analysis or report on the Interests prepared by you or on your behalf.
(e) You will make offers to sell
Interests to, sell to or solicit offers to
subscribe for Interests from persons in only those states or other
jurisdictions
where MD represents to you in writing that such Interests may be offered and
sold and you agree to make reasonable efforts to comply with all applicable
laws, rules and regulations of those states and jurisdictions in which you
offer
or sell Interests.
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Mewbourne Energy 06-07 Drilling Program
Dealer Manager Agreement
________________, 2006
Page 5
(f) You are and on the last Closing
Date will be (i) a securities
broker-dealer registered with the Securities and Exchange Commission and any
jurisdiction where broker-dealer registration is required in order to offer and
sell the Interests and (ii) a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD").
(g) You agree to make reasonable
efforts to sell Interests or cause them to
be sold by the Soliciting Dealers in a manner consistent with all the rules of
the NASD applicable in connection with the offering of Interests including,
without limitation, the following provisions of the NASD Conduct Rules:
2730. SECURITIES
TAKEN IN TRADE
(a) A member engaged in a fixed
price offering, who purchases or
arranges the purchase of securities
taken in trade, shall purchase the
securities at a fair market price at
the time of purchase or shall act as
agent in the sale of such securities
and charge a normal commission
therefor.
(b) When used in this Rule:
(1) the term "taken
in trade" means the purchase by a member as
principal, or as agent for the
account of another, of a security from
a customer pursuant to an
agreement or understanding that the customer
purchase securities from the member
which are part of a fixed price
offering.
(2) the term "fair
market price" means a price not higher than
the price at which the
securities would be purchased from the customer
or from a similarly situated
customer in the ordinary course of
business by a dealer in such
securities in transactions of similar
size and having similar
characteristics but not involving a security
taken in trade.
(3) the term "normal
commission" means an amount of commission
which the member would normally
charge to that customer or a similarly
situated customer in the
ordinary course of business in transactions
of similar size and having
similar characteristics but not involving a
security taken in trade.
(c) For purposes of this Rule a
member shall be:
(1) deemed, with respect
to securities other than common stocks,
to have taken such securities
in trade at a fair market price when the
price paid is not higher than
the highest independent bid for the
securities at the time of
purchase, if such bid quotations for the
securities are readily available.
(2) presumed, with respect
to common stocks, to have taken such
common stocks in trade at a
fair market price when the price paid is
not higher than the highest
independent bid for the securities at the
time of purchase, if such bid
quotations for the securities are
readily available.
(3) presumed to have taken
a security in trade at a price higher
than a fair market price when
the price paid is higher than the lowest
independent offer for the securities at
the time of purchase, if such
offer quotations for the
securities are readily available.
<PAGE>
Mewbourne Energy 06-07 Drilling Program
Dealer Manager Agreement
________________, 2006
Page 6
(d) A member, in connection with every
transaction subject to this
Rule, shall with respect to:
(1) common stocks, which
are traded on a national securities
exchange or for which
quotations are entered in an automated quotation
system, obtain the necessary
bid and offer quotations from the
national securities exchange or
from the automated quotation system;
and
(2) other securities and
common stocks not included in
subparagraph (1) above, obtain directly or
with the assistance of an
independent agent bid and offer
quotations from two or more
independent dealers relating to
the securities to be taken in trade
or, if such quotations are not
readily available, exercise its best
efforts to obtain such
quotations with respect to securities having
similar characteristics and of
similar quality as those to be taken in
trade.
(e) A member who purchases a security
taken in trade shall keep or
cause to be kept adequate records to
demonstrate compliance with this Rule
and shall preserve the records for
at least 24 months after the
transaction. If an independent agent
is used for the purpose of obtaining
quotations, the member must request
the agent to identify the dealers from
whom the quotations were obtained
and the time and date they were obtained
or request the agent to keep and
maintain for at least 24 months a record
containing such information.
2740. SELLING CONCESSIONS,
DISCOUNTS AND OTHER ALLOWANCES
In connection with the sale of
securities which are part of a fixed
price offering:
(a) A member may not grant or
receive selling concessions, discounts,
or other allowances except as
consideration for services rendered in
distribution and may not grant such
concessions, discounts or other
allowances to anyone other than a
broker or dealer actually engaged in the
investment banking or securities
business; provided, however, that nothing
in this Rule shall prevent any
member from (1) selling any such securities
to any person, or account managed by
any person, to whom it has provided or
will provide bona fide research, if
the stated public offering price for
such securities is paid by the
purchaser; or (2) selling any such
securities owned by him to any
person at any net price which may be fixed
by him unless prevented therefrom by
agreement.
(b) The term "bona fide
research," when used in this Rule, means
advice, rendered either directly or
through publications or writings, as to
the value of securities, the
advisability of investing in, purchasing, or
selling securities, and the
availability of securities or purchasers or
sellers of securities, or analyses
and reports concerning issuers,
industries, securities, economic
factors and trends, portfolio strategy,
and performance of accounts;
provided, however, that investment management
or investment discretionary services
are not bona fide research.
(c) A member who grants a
selling concession, discount or other
allowance to another person shall
obtain a written agreement from that
person that he will comply with the
provisions of this Rule, and a member
who grants such selling concession,
discount or other allowance to a
nonmember broker or dealer in a
foreign country shall also obtain from such
broker or dealer a written agreement
to comply, as though such broker or
dealer were a member, with the
provisions of Rules 2730 and 2750 and to
comply with Rule 240 as that Rule
applies to a nonmember broker/dealer in a
foreign country.
(d) A member who receives an
order from any person designating another
broker or dealer to receive credit
for the sale shall, within 30 days after
the end of each calendar quarter,
file reports with the Association
containing the following information
with respect to each fixed price
offering which terminated during
that calendar quarter: the name of the
person making the designation; the
identity of the brokers or dealers
designated; the identity and amount
of securities for which each broker or
dealer was
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Mewbourne Energy 06-07 Drilling Program
Dealer Manager Agreement
________________, 2006
Page 7
designated; the date of the
commencement and termination of the offering
and such other information






