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Exhibit 1.1
SOLICITING
DEALER AGREEMENT
Mewbourne Energy
06-07 Drilling Programs
____________, 2006
Gentlemen:
Mewbourne Development Corporation, a
Delaware corporation ("MD"), is or
proposes to be the sole managing general partner (in such capacity the
"Managing
Partner") in a series 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 (the
"Program
Agreement") among Mewbourne Oil Company, a Delaware corporation
("MOC"), MD and
such 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 Partnership 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 (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 Soliciting Dealer 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 Interests") 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).
Mewbourne Securities, Inc., a Texas
corporation (the "Dealer Manager"), has
entered into a Dealer Manager Agreement with the Managing Partner under which
the Dealer Manager is appointed the exclusive agent of the Managing Partner and
of the Partnerships to form a group of National Association of Securities
Dealers, Inc. member firms who will solicit subscribers for the purchase of
Interests.
The following are the terms on which
the Managing Partner, on behalf of the
Partnership, and the Dealer Manager appoint you and you agree to such
appointment to solicit subscribers for the purchase of Interests:
Section 1. Appointment as Soliciting
Dealer. On the basis of the
representations, warranties and covenants contained in this Agreement, but
subject to the terms and conditions set forth herein, you are hereby appointed
to serve as a soliciting dealer ("Soliciting Dealer") during the
Offering Period
(as defined below) for Interests in both Partnerships for the purpose of
finding
subscribers for the Interests through a public offering, at the price of $1,000
per Interest, with a minimum subscription of twenty Interests ($20,000), as
described in the
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Mewbourne Development 06-07 Drilling Program
Soliciting Dealer Agreement
_____________, 2006
Page 2
Prospectus. 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 will 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 the Offering Period at any time. You hereby
accept
appointment as a Soliciting Dealer 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 Offering Period or (ii) the Closing (as hereinafter defined)
with respect to that Partnership. 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. 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 that Partnership's
Offering Period with respect to Interests in that Partnership, all subscription
funds received by the termination of such 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 as to that Partnership 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 sales commissions and marketing fees received
by
you pursuant to Section 6(b) hereof, and (b) the indemnification and
contribution provisions of Section 9 hereof shall continue after such
termination of this Agreement. In the event that you violate the terms,
conditions, agreements or warranties herein, the Managing Partner or the Dealer
Manager, in their sole and absolute discretion, may terminate this Agreement.
Section 2. Representations and
Warranties of MD and the Dealer Manager. MD,
in its individual capacity and in its capacity as Managing Partner, and the
Dealer Manager, jointly and severally, hereby represent and warrant 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, the related 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 or Limited Partners). In addition, such Partnership
shall have full and adequate partnership power and partnership authority to
enter into and perform this Agreement and the related Program Agreement and to
own its properties and to conduct its business as proposed in the Prospectus.
(c) MD is, and at all times through
the 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 Agreement 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 the Partnership entitled to all the rights of a Limited Partner
under
the Agreement of Partnership for the 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 the Partnership entitled
to all the rights of a General Partner under the Agreement of Partnership for
the 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
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Mewbourne Development 06-07 Drilling Program
Soliciting Dealer Agreement
_____________, 2006
Page 3
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 and the
Dealer Manager. MD and the Dealer Manager have duly executed and delivered this
Agreement, which constitutes a valid and binding agreement of MD and the Dealer
Manager 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 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 the Partnership, upon its formation,
will be classified as a partnership for federal income tax purposes. A
Partnership, at the related Closing, will be classified as a partnership for
federal income tax purposes, and at all times subsequent hereto, MD will use
its
best efforts to maintain the status of the Partnership 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 the 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 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 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
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Mewbourne Development 06-07 Drilling Program
Soliciting Dealer Agreement
_____________, 2006
Page 4
Closing Date with respect to the related Partnership substantially conform to
the descriptions thereof contained in the Prospectus.
(m) MD will timely apply, on behalf
of the 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 the Partnership
or
within a reasonable time after the Partnership has received such number,
whichever occurs later.
Section 3. Covenants and
Representations of Soliciting Dealer. 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.
(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 comply with all rules of the
NASD applicable to you in connection with the offering of Interests including,
without limitation, the following provisions:
<PAGE>
Mewbourne Development 06-07 Drilling Program
Soliciting Dealer Agreement
_____________, 2006
Page 5
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.
(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.
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Mewbourne Development 06-07 Drilling Program
Soliciting Dealer Agreement
_____________, 2006
Page 6
(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 2420 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 designated; the date of
the commencement and termination of the
offering and such other information
as the Association shall deem
pertinent.
(e) A member who is designated
by its customer for the sale of
securities shall keep, and maintain
for a period of 24 months, records in
such form and manner to show the
followi






