Exhibit 1.1
6,000,000 Common
Units
BREITBURN ENERGY PARTNERS
L.P.
Representing Limited Partner
Interests
UNDERWRITING
AGREEMENT
October 3, 2006
RBC Capital Markets Corporation
Citigroup Global Markets Inc.
As Representatives of the several
Underwriters
c/o RBC Capital Markets Corporation
One Liberty Plaza, 165 Broadway
New York, New York 10006
Ladies and Gentlemen:
BreitBurn Energy Partners L.P., a
Delaware limited partnership (the “ Partnership
”), proposes to sell 6,000,000 common units (the “
Firm Units ”), representing limited partner interests
in the Partnership (the “ Common Units ”).
In addition, the Partnership proposes to grant to the underwriters
named in Schedule I hereto (the “ Underwriters
”) an option to purchase up to 900,000 additional Common
Units on the terms and for the purposes set forth in Section 2 (the
“ Option Units ”). The Firm Units and any
Option Units purchased are hereinafter collectively called the
“ Units .” This is to confirm the
agreement among the Partnership, BreitBurn GP LLC, a Delaware
limited liability company and the general partner of the
Partnership (the “ General Partner ”), BreitBurn
Energy Company L.P., a Delaware limited partnership (“
BreitBurn Energy ”), and the Underwriters concerning
the purchase of the Units from the Partnership by the
Underwriters.
The Partnership, the General
Partner, BreitBurn Operating L.P., a Delaware limited partnership
(the “ Operating LP ”), BreitBurn Operating GP
LLC, a Delaware limited liability company and the general partner
of the Operating LP (the “ OLP GP ”), and the
BreitBurn Subsidiaries (as defined below) are hereinafter referred
to collectively as the “ BreitBurn MLP Parties
.” BreitBurn Energy, BreitBurn Management Company LLC,
a Delaware limited liability company (“ BMC ”),
BreitBurn Energy Corporation, a California corporation (“
BEC ”), Pro GP Corp., a Delaware corporation (“
Pro GP ”), Pro LP Corp., a Delaware corporation
(“ Pro LP ”), and the BreitBurn MLP Parties are
hereinafter referred to collectively as the “ BreitBurn
Parties .” Phoenix Production Company, a Wyoming
corporation (“ Phoenix ”), Preventive
Maintenance Service LLC, a Colorado limited liability company
(“ Preventive Maintenance Services ”), Alamitos
Company LLC, a Delaware limited liability company (“
Alamitos LLC ”), and Alamitos Company, a California
corporation (“ Alamitos Company ”), are each
referred to as a “ BreitBurn Subsidiary ” and
collectively, as the “ BreitBurn Subsidiaries ”
as described in more detail on Schedule II
hereto.
On or prior to the Initial Delivery
Date (as hereinafter defined), the Partnership and the other
parties thereto will enter into a Contribution, Conveyance and
Assumption Agreement (the “ Contribution Agreement
”). The transactions contemplated by the Contribution
Agreement, including without limitation the public offering of the
Firm Units contemplated hereby (the “ Offering
”), are referred to as the “ Transactions
.” In connection with the Transactions, the parties to
the Transactions entered or will enter into various bills of sale,
assignments, conveyances, contribution agreements and related
documents (collectively with the Contribution Agreement, the
“ Contribution Documents ”).
The following additional
transactions will occur substantially contemporaneously with the
Initial Delivery Date:
1.
The Partnership, the Operating LP, the General Partner and BMC will
enter into an Administrative Services Agreement (the “
Administrative Services Agreement ”) pursuant to which
BMC will operate the Partnership’s assets and perform other
administrative services for the Partnership;
2.
The Partnership, the General Partner, BreitBurn Energy, Pro GP and
Provident Energy Trust, an open-ended unincorporated investment
trust created under the laws of Alberta, Canada (“
Provident ”), will enter into an Omnibus Agreement
(the “ Omnibus Agreement ”), which will set
forth certain agreements with respect to conflicts of interest;
and
3.
The Operating LP will enter into a $400 million credit facility
with a $90 million initial borrowing base (the “ Credit
Facility ”) with Wells Fargo Bank, National Association,
and a syndicate of financial institutions.
The “ Transaction
Documents ” shall mean the Contribution Documents, the
Administrative Services Agreement, the Omnibus Agreement and the
Credit Facility. The “ Organizational Documents
” shall mean the partnership agreement of the partnership
(the “ Partnership Agreement ”), the limited
liability company agreement of the General Partner (the “
GP LLC Agreement”) , the limited liability company
agreement of BMC (the “ BMC LLC Agreement ”),
the limited liability company agreement of the OLP GP (the “
OLP GP Agreement ”), the partnership agreement of the
Operating LP (the “ OLP Agreement ”), the
limited liability company agreements of Preventive Maintenance
Service and Alamitos LLC (collectively, the “ Subsidiary
LLC Agreements ”), and the corporate charters of Alamitos
Company and Phoenix (collectively, the “ Subsidiary
Charters ”). The “ Operative
Agreements ” shall mean the Transaction Documents and the
Organizational Documents collectively, other than the Subsidiary
Charters.
The Partnership, the General Partner
and BreitBurn Energy wish to confirm as follows their agreement
with you in connection with the purchase of the Units from the
Partnership by the Underwriters.
1.
Representations, Warranties and Agreements of the Partnership
and the General Partner. The Partnership and the General
Partner, jointly and severally represent, warrant and agree
that:
2
(a)
Registration; Definitions; No Stop Order . A
registration statement (Registration No. 333-134049) on Form S-1
relating to the Units has (i) been prepared by the Partnership in
conformity with the requirements of the Securities Act of 1933, as
amended (the “ Securities Act ”), and the rules and
regulations (the “ Rules and Regulations ”) of the Securities
and Exchange Commission (the “ Commission ”) thereunder; (ii)
been filed with the Commission under the Securities Act; and (iii)
become effective under the Securities Act. Copies of such
registration statement and any amendment thereto have been
delivered by the Partnership to you as the representatives of the
Underwriters (the “ Representatives ”). As used in
this Agreement:
(i)
“ Applicable
Time ” means 6:00 p.m. (New
York City time) on the date of this Agreement;
(ii)
“ Effective Date
” means
each date and time as of which such registration statement, any
post-effective amendment or amendments thereto and any registration
statement or amendments thereto filed pursuant to Rule 462(b)
relating to the offering of the Units was or is declared effective
by the Commission;
(iii)
“ Issuer Free Writing
Prospectus ” means each
“free writing prospectus” (as defined in Rule 405 of
the Rules and Regulations) prepared by or on behalf of the
Partnership or used or referred to by the Partnership in connection
with the offering of the Units;
(iv)
“ Preliminary
Prospectus ” means any preliminary
prospectus relating to the Units included in such registration
statement or filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations;
(v)
“ Pricing Disclosure
Package ” means, as of the
Applicable Time, the most recent Preliminary Prospectus, together
with each Issuer Free Writing Prospectus filed with the Commission
by the Partnership on or before the Applicable Time and the
information set forth on Schedule IV hereto, and
“ most recent
Preliminary Prospectus ” shall be deemed to
refer to the latest Preliminary Prospectus included in the
Registration Statement or filed pursuant to Rule 424(b) on or prior
to the date hereof.
(vi)
“ Prospectus
” means the
final prospectus relating to the Units, as filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations;
and
(vii)
“ Registration
Statement ” means such
registration statement, as amended as of the Effective Date,
including any Preliminary Prospectus or the Prospectus and all
exhibits to such registration statement.
The Commission has not issued any
order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the effectiveness of the
Registration Statement, and no proceeding or examination for such
purpose has been
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instituted or, to the knowledge of
the BreitBurn MLP Parties, threatened by the Commission.
(b)
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 Rules and Regulations)
of the Units, is not on the date hereof and will not be on the
applicable Delivery Date, an “ineligible issuer” (as
defined in Rule 405).
(c)
Registration Statement and Prospectus Conform to the
Requirements of the Securities Act . The Registration
Statement conformed when filed and will conform in all material
respects on the Effective Date and on the applicable Delivery Date,
and any amendment to the Registration Statement filed after the
date hereof will conform in all material respects when filed, to
the requirements of the Securities Act and the Rules and
Regulations. The Preliminary Prospectus conformed when filed,
and the Prospectus will conform, in all material respects when
filed with the Commission pursuant to Rule 424(b) and on the
applicable Delivery Date, to the requirements of the Securities Act
and the Rules and Regulations.
(d)
No Material Misstatements or Omissions in Registration
Statement . The Registration Statement did not, as of the
Effective Date or at the Applicable Time, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement in reliance upon and in conformity with
written information furnished to the Partnership through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein, which information is specified in Section
8(e).
(e)
No Material Misstatements or Omissions in Prospectus .
The Prospectus will not, as of its date and on the applicable
Delivery Date, contain an untrue statement of a material fact or
omit to state a material fact necessary 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 through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein, which information is specified in Section
8(e).
(f)
No Material Misstatements or Omissions in Pricing Disclosure
Package . The Pricing Disclosure Package and each bona
fide electronic road show, as that term is defined in Rule
433(h)(5) under the Securities Act, taken together with the Pricing
Disclosure Package, did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Each of the statements made by the Partnership in the most recent
Preliminary Prospectus, and to be made in the Prospectus and any
further amendments or supplements to the Registration
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Statement or
Prospectus within the coverage of Rule 175(b) of the rules and
regulations under the Securities Act, including any projections of
results of operations or statements with respect to future
available cash or future cash distributions of the Partnership or
the anticipated ratio of taxable income to distributions, was made
or will be made with a reasonable basis and in good faith.
Notwithstanding the foregoing, no representation or warranty is
made as to information contained in or omitted from the Pricing
Disclosure Package in reliance upon and in conformity with written
information furnished to the Partnership through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein, which information is specified in Section
8(e).
(g)
No Material Misstatements or Omissions in Issuer Free Writing
Prospectuses . Each Issuer Free Writing Prospectus
(including, without limitation, any road show that is a free
writing prospectus under Rule 433), when considered together with
the Pricing Disclosure Package as of the Applicable Time, did not
contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(h)
Issuer Free Writing Prospectuses Conform to the Requirements of
the Securities Act . Each Issuer Free Writing Prospectus,
if any, conformed or will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations on
the date of first use, and the Partnership has complied with all
prospectus delivery requirements, any filing requirements and any
record keeping requirements applicable to such Issuer Free Writing
Prospectus pursuant to the Rules and Regulations. The
Partnership has not made any offer relating to the Units that would
constitute an Issuer Free Writing Prospectus without the prior
written consent of the Representatives. The Partnership has
retained in accordance with the Rules and Regulations all Issuer
Free Writing Prospectuses that were not required to be filed
pursuant to the Rules and Regulations. The Partnership has
taken all actions necessary so that any “road show” (as
defined in Rule 433 of the Rules and Regulations) in connection
with the offering of the Units will not be required to be filed
pursuant to the Rules and Regulations.
(i)
Formation and Qualification . Each of the BreitBurn
Parties has been duly formed and is validly existing and is in good
standing as a limited partnership, limited liability company or
corporation, as applicable, under the laws of its jurisdiction of
organization with full power and authority necessary to enter into
the Transaction Documents to which it is a party. Each of the
BreitBurn MLP Parties has full power and authority necessary to own
or lease its properties to be owned or leased at the Initial
Delivery Date, to assume the liabilities assumed by it pursuant to
the Contribution Documents and to conduct its business to be
conducted at the Initial Delivery Date, in each case in all
material respects as described in the most recent Preliminary
Prospectus. Each of the BreitBurn MLP Parties and BMC is duly
qualified to do business and in good standing as a foreign limited
partnership, foreign limited liability company or foreign
corporation, as applicable, in each jurisdiction in which its
ownership or lease of property or the conduct of its business
requires such qualification, except as would not (i) in the
aggregate, reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), results of operations,
properties, business or prospects of the
5
BrietBurn MLP
Parties taken as a whole (a “ Material Adverse Effect ”), or (ii) subject the
limited partners of the Partnership to any material
liability.
(j)
Power and Authority to Act as a General Partner . Each
of the General Partner and the OLP GP has, and as of each Delivery
Date will have, full limited liability company power and authority
to act as general partner of the Partnership and the Operating LP,
respectively, in all material respects as described in the
Registration Statement and Prospectus.
(k)
Ownership of BMC . At the Initial Delivery Date, BEC
will own 4.45% of the issued and outstanding membership interests
in BMC; Pro LP will own 95.15% of the issued and outstanding
membership interests in BMC; and Pro GP will own .4% of the issued
and outstanding membership interests in BMC. Such membership
interests will have been duly authorized and validly issued in
accordance with the BMC LLC Agreement and will be fully paid (to
the extent required by the BMC LLC Agreement) and nonassessable
(except as such nonassessability may be affected by matters
described in Section 18-607 of the Delaware Limited Liability
Company Act (the “ Delaware LLC Act ”); and BEC, Pro LP
and Pro GP will own such membership interests free and clear of all
liens, encumbrances, security interests, charges or claims, other
than those created by or arising under the Delaware LLC
Act.
(l)
Ownership of the General Partner . At the Initial
Delivery Date, BMC will own 100% of the issued and outstanding
membership interests in the General Partner. Such membership
interests will have been duly authorized and validly issued in
accordance with the GP LLC Agreement and will be fully paid (to the
extent required by the GP LLC Agreement) and nonassessable (except
as such nonassessability may be affected by matters described in
Section 18-607 of the Delaware LLC Act); and BMC will own such
membership interests free and clear of all liens, encumbrances,
security interests, charges or claims, other than those created by
or arising under the Delaware LLC Act.
(m)
Ownership of the General Partner Interest in the Partnership
. At each Delivery Date, the General Partner will be the sole
general partner of the Partnership and will have a 2% interest in
the Partnership; such general partner interest will be duly
authorized and validly issued in accordance with the Partnership
Agreement, and the General Partner will own such general partner
interest free and clear of all liens, encumbrances, security
interests, charges or claims, other than those created by or
arising under the Delaware LLC Act.
(n)
Ownership of the Sponsor Units . At the Initial
Delivery Date, after giving effect to the Transactions, Pro GP will
own 63,903 Common Units, Pro LP will own 15,201,013 Common Units,
and BEC will own 710,842 Common Units (collectively, the
“ Sponsor Units
”).
Such limited partner interests will be 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 Section 17-607 of the Delaware LP
Act). Pro GP, Pro LP and BEC will own their respective
Sponsor Units free and clear
6
of all liens,
encumbrances, security interests, charges or claims, other than
those created by or arising under the Delaware LP Act or any credit
facilities to which Pro GP, Pro LP or BEC is a party.
(o)
Ownership of the OLP GP by the Partnership . At each
Delivery Date, after giving effect to the Transactions, the
Partnership will be the sole member of the OLP GP and will own 100%
of the issued and outstanding membership interests in the OLP GP;
such membership interests will be duly authorized and validly
issued in accordance with the OLP GP Agreement and will be fully
paid (to the extent required under the OLP GP Agreement) and
nonassessable (except as such nonassessability may be affected by
matters described in Section 18-607 of the Delaware LLC Act); and
the Partnership will own such membership interests free and clear
of all liens, encumbrances, security interests, charges or claims,
other than those created by or arising under the Delaware LLC Act
or the Credit Facility.
(p)
Ownership of the General Partner Interests in the Operating
LP . At each Delivery Date, the OLP GP will be the
general partner of the Operating LP and will own a 0.001% general
partner interest; such general partner interest will be duly
authorized and validly issued in accordance with the OLP Agreement;
and the OLP GP will own such general partner interest free and
clear of all liens, encumbrances, security interests, charges or
claims, other than those created by or arising under the Delaware
LP Act, the OLP Agreement or the Credit Facility.
(q)
Ownership of the Limited Partner Interests in the Operating
LP . At each Delivery Date, after giving effect to the
Transactions, the Partnership will own a 99.999% limited partner
interest in the Operating LP; such interest will be duly authorized
and validly issued in accordance with the OLP Agreement and will be
fully paid (to the extent required under the OLP Agreement) and
nonassessable (except as such nonassessability may be affected by
matters described in Section 17-607 of the Delaware LP Act); and
the Partnership will own such interest free and clear of all liens,
encumbrances, security interests, charges or claims, other than
those created by or arising under the Delaware LP Act or the Credit
Facility.
(r)
Ownership of the BreitBurn Subsidiaries . At each
Delivery Date, after giving effect to the Transactions, the
Operating LP will own 100% of the outstanding capital stock or
membership interests, as the case may be, in each of the BreitBurn
Subsidiaries; such stock or membership interests will be duly
authorized and validly issued in accordance with the applicable
Subsidiary LLC Agreement or Subsidiary Charter and will be fully
paid (with respect to Preventative Maintenance Service LLC and
Alamitos Company LLC, to the extent required under the applicable
Subsidiary LLC Agreement) and nonassessable (with respect to
Preventative Maintenance Service LLC and Alamitos Company LLC,
except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act); and the Operating LP will own such stock
or membership interests free and clear of all liens, encumbrances,
security interests, charges or claims other than those created by
or arising under the Delaware LLC Act or the Credit
Facility.
7
(s)
No Other Subsidiaries . Except as disclosed above and
other than its ownership of its general partner interest in the
Partnership, the General Partner does not own, and at each Delivery
Date 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. After giving
effect to the Transactions, other than its ownership of 100% of the
OLP GP and 99.999% of the Operating LP, the Partnership does not
directly own, and at each Delivery Date will not directly own, any
equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association
or other entity.
(t)
Capitalization . At the Initial Delivery Date, after
giving effect to the Transactions, the issued and outstanding
Common Units of the Partnership will consist of 21,975,758 Common
Units (including 15,975,758 Sponsor Units). Other than the
Sponsor Units, the Units will be the only limited partner interests
of the Partnership issued or outstanding at each Delivery
Date.
(u)
Valid Issuance of the Units . At the Initial Delivery
Date, there will be issued and sold to the Underwriters the Firm
Units (assuming no purchase by the Underwriters of Option Units on
the Initial Delivery Date); at the Initial Delivery Date or the
Option Unit Delivery Date (as defined in Section 2 hereof), as the
case may be, the Firm Units or the Option Units, as the case may
be, and the limited partners interests represented thereby, will be
duly and validly 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
duly and 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 Section
17-607 of the Delaware Revised Uniform Limited Partnership Act (the
“ Delaware LP
Act ”)).
(v)
No Preemptive Rights, Registration Rights or Options .
Except as identified in the most recent Preliminary Prospectus,
there are no (i) preemptive rights or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of,
any equity securities of the BreitBurn MLP Parties or (ii)
outstanding options or warrants to purchase any securities of the
BreitBurn MLP Parties. Except for such rights that have been
waived or as described in the most recent Preliminary Prospectus,
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 Units or
other securities of the BreitBurn MLP Parties.
(w)
Authority and Authorization . The Partnership has all
requisite partnership 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, in accordance with and upon
the terms and conditions set forth in the Partnership Agreement and
the Contribution Agreement. At each Delivery Date, all
corporate, partnership and limited liability company action, as the
case may be, required to be taken by any of the BreitBurn Parties
or any of their respective unitholders, stockholders, members or
partners for the authorization, issuance, sale and delivery of the
Units and the Sponsor Units, the execution and delivery of the
Operative Agreements and
8
the consummation
of the transactions (including the Transactions) contemplated by
this Agreement and the Operative Agreements shall have been validly
taken.
(x)
Authorization, Execution and Delivery of this Agreement
. This Agreement has been duly authorized and validly
executed and delivered by each of the Partnership, the General
Partner and BreitBurn Energy.
(y)
Authorization, Execution, Delivery and Enforceability of Certain
Agreements . At or before the Initial Delivery
Date:
(i)
The Transaction Documents will have been duly authorized, executed
and delivered by each of the BreitBurn Parties that are parties
thereto and each will be a valid and legally binding agreement of
such parties thereto, enforceable against such parties in
accordance with its terms;
(ii)
the Partnership Agreement will have been duly authorized, executed
and delivered by the General Partner as the general partner and by
Pro GP, Pro LP and BEC as limited partners, and will be a valid and
legally binding agreement of each of the General Partner, Pro GP,
Pro LP and BEC, enforceable against each of the General Partner,
Pro GP, Pro LP and BEC in accordance with its terms;
(iii)
the BMC LLC Agreement will have been duly authorized, executed and
delivered by Pro GP, Pro LP and BEC and will be a valid and legally
binding agreement of each of Pro GP, Pro LP and BEC, enforceable
against each of Pro GP, Pro LP and BEC in accordance with its
terms;
(iv)
the GP LLC Agreement will have been duly authorized, executed and
delivered by BMC and will be a valid and legally binding agreement
of BMC, enforceable against BMC in accordance with its
terms;
(v)
the OLP GP Agreement will have been duly authorized, executed and
delivered by the Partnership and will be a valid and legally
binding agreement of the Partnership, enforceable against the
Partnership in accordance with its terms;
(vi)
the OLP Agreement will have been duly authorized, executed and
delivered by the OLP GP as the general partner and by the
Partnership as the limited partner, and will be a valid and legally
binding agreement of the OLP GP and the Partnership, enforceable
against each of the OLP GP and the Partnership in accordance with
its terms; and
(vii)
each of the Subsidiary LLC Agreements will be a valid and legally
binding agreement of the Operating LP, enforceable against the
Operating LP in accordance with their respective terms.
provided that
, with respect to each agreement
described in this Section 1(y), the enforceability thereof may be
limited by (i) bankruptcy, insolvency, fraudulent transfer,
reorganization,
9
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 in equity or at law) and (ii) public
policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair
dealing.
(z)
Sufficiency of the Contribution Documents . The
Contribution Documents will be legally sufficient to transfer or
convey to the Operating LP all properties not already held by it
that are, individually or in the aggregate, required to enable the
Operating LP to conduct its operations in all material respects as
contemplated by the most recent Preliminary Prospectus and the
Prospectus, subject to the conditions, reservations, encumbrances
and limitations contained in the Contribution Documents and those
set forth in most recent Preliminary Prospectus and the
Prospectus. The Operating LP, upon execution and delivery of
the Contribution Documents, will succeed in all material respects
to the business, assets, properties, liabilities and operations
reflected by the pro forma financial statements of the
Partnership.
(aa)
No Conflicts . None of (i) the offering, issuance or
sale by the Partnership of the Units, (ii) the execution, delivery
and performance of this Agreement and the Operative Agreements by
the BreitBurn Parties that are parties thereto or (iii) the
consummation of any other transactions contemplated by this
Agreement or the Operative Agreements (including the Transactions)
or the fulfillment of the terms hereof or thereof, conflict with or
will conflict with, result in 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, or imposition of any lien,
charge or encumbrance upon any property or assets of any of the
BreitBurn MLP Parties or BreitBurn Energy pursuant to (x) the
Organizational Documents, (y) the terms of any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or
instrument to which any of the BreitBurn MLP Parties or BreitBurn
Energy is a party or by which any of them or any of their
respective properties may be bound or (z) any statute, law, rule or
regulation, or any judgment, order, injunction or decree of any
court, governmental agency or body or arbitrator having
jurisdiction over any of the BreitBurn MLP Parties or BreitBurn
Energy or any of their properties or assets, except, in the case of
clauses (y) and (z), for such conflicts, breaches, violations,
defaults, liens, charges or encumbrances as would not, individually
or in the aggregate, have a Material Adverse Effect or materially
impair the ability of any of the BreitBurn Parties to perform their
obligations under this Agreement or the Operative Agreements to
which they are parties.
(bb)
No Consents . No permit, consent, approval,
authorization, order, registration, filing or qualification of or
with any court, governmental agency or body having jurisdiction
over any of the BreitBurn Parties or any of their properties or
assets is required in connection with the offering, issuance or
sale by the Partnership of the Units, the execution, delivery and
performance of this Agreement and the Operative Agreements by the
BreitBurn Parties that are parties thereto or the consummation of
any other transactions contemplated by this Agreement or the
Operative Agreements (including the Transactions) except (i) for
such permits, consents, approvals and similar authorizations
required under the Securities Act, the Exchange Act and state
securities or “Blue Sky” laws, (ii) for such consents
that have been, or prior to the Delivery Date will
10
be, obtained,
(iii) for such consents that, if not obtained, would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect and (iv) as disclosed in the most recent
Preliminary Prospectus.
(cc)
No Defaults . None of the BreitBurn MLP Parties is in
(i) violation of its Organizational Documents, or of any statute,
law, rule or regulation, or any judgment, order, injunction or
decree of any court, governmental agency or body or arbitrator
having jurisdiction over any of the BreitBurn MLP Parties or any of
their properties or assets or (ii) breach, default (or an event
which, with notice or lapse of time or both, would constitute such
an event) or violation in the performance of any obligation,
agreement or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be
bound, which breach, default or violation would, if continued, have
a Material Adverse Effect or could materially impair the ability of
any of the BreitBurn MLP Parties to perform their obligations under
this Agreement. To the knowledge of the BreitBurn MLP Parties, no
third party to an agreement or instrument to which any of the
BreitBurn MLP Parties is a party or by which any of them is bound
or to which any of their properties is subject, is in default under
such agreement, which breach, default or violation would, if
continued, have a Material Adverse Effect.
(dd)
Conformity of Units to Description in the Most Recent
Preliminary Prospectus and 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, when issued
and delivered in accordance with the terms of the Partnership
Agreement and the Contribution Agreement, will conform in all
material respects to the description thereof contained in the most
recent Preliminary Prospectus and Prospectus.
(ee)
No Integration . 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, the Rules and Regulations or the interpretations thereof by
the Commission.
(ff)
No Material Adverse Change . None of the BreitBurn MLP
Parties or BreitBurn Energy has sustained, since the date of the
latest audited financial statements included in the most recent
Preliminary Prospectus, any 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, order or decree, and since such date, there
has not been any change in the capitalization or long-term debt of
any of the BreitBurn MLP Parties or BreitBurn Energy or any
material adverse change, or any development involving a prospective
adverse change, in or affecting the condition (financial or
otherwise), results of operations, unitholders’ equity,
properties, management, business or prospects of any of the
BreitBurn MLP Parties taken as a whole, in each case except as
would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. Since the date of the latest audited
financial statements included in the Prospectus, none of the
BreitBurn MLP Parties or BreitBurn Energy has incurred any
liability or obligation, direct, indirect or contingent, or entered
into any
11
transactions, not
in the ordinary course of business, that, individually or in the
aggregate, is material to the BreitBurn MLP Parties, taken as a
whole, otherwise than as set forth or contemplated in the
Prospectus.
(gg)
Conduct of Business . Since the date as of which
information is given in the most recent Preliminary Prospectus,
none of the BreitBurn MLP Parties or BreitBurn Energy has (i)
incurred any liability or obligation, direct or contingent, other
than liabilities and obligations that were incurred in the ordinary
course of business, (ii) entered into any material transaction not
in the ordinary course of business or (iii) declared, paid or made
any dividend or distribution on any class of security other than
monthly distributions of BreitBurn Energy to its partners in the
regular course of business consistent with past
practice.
(hh)
Financial Statements . The historical financial
statements (including the related notes and supporting schedules)
included in the most recent Preliminary Prospectus (or any
amendment or supplement thereto) comply as to form in all material
respects with the requirements of Regulation S-X under the
Securities Act and present fairly in all material respects the
financial condition, results of operations and cash flows of the
entities purported to be shown thereby at the dates and for the
periods indicated and have been prepared in conformity with
accounting principles generally accepted in the United States
applied on a consistent basis throughout the periods
involved. The summary historical and pro forma financial and
operating data included in the most recent Preliminary Prospectus
(and any amendment or supplement thereto) under the caption
“Summary—Summary Historical and Pro Forma Consolidated
Financial and Operating Data” and the selected historical and
pro forma financial and operating data set forth under the caption
“Selected Historical and Pro Forma Consolidated Financial
Data” is accurately presented in all material respects and
prepared on a basis consistent with the audited and unaudited
historical financial statements and pro forma financial statements,
as applicable, from which it has been derived.
(ii)
Pro Forma Financial Statements . The pro forma
financial statements included in the most recent Preliminary
Prospectus (and any amendment or supplement thereto) comply as to
form in all material respects with the applicable requirements of
Regulation S-X. The assumptions used in the preparation of
such pro forma financial statements are, in the opinion of
management of BreitBurn Energy, reasonable and the adjustments used
therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(jj)
Statistical and Market-Related Data . The statistical
and market-related data included under the captions
“BreitBurn Energy Partners L.P.,”
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and
“Business” in the most recent Preliminary Prospectus
are based on or derived from sources that the BreitBurn MLP Parties
and BreitBurn Energy believe to be reliable and accurate in all
material respects.
(kk)
Independent Public Accountants . Pricewaterhouse
Coopers LLP, who has certified certain consolidated financial
statements of BreitBurn Energy, the General
12
Partner and the
Partnership included in the most recent Preliminary Prospectus and
the Prospectus, is an independent registered public accounting firm
with respect to such entities as required by the Securities Act and
the Rules and Regulations.
(ll)
Independent Public Accountants . Hein & Associates
LLP, who has certified certain consolidated financial statements of
BreitBurn Energy included in the most recent Preliminary Prospectus
and the Prospectus, is an independent registered public accounting
firm with respect to BreitBurn Energy as required by the Securities
Act and the Rules and Regulations.
(mm)
Reserve Engineers . Netherland, Sewell and Associates,
Inc. (the “ Reserve
Engineers ”), whose reserve
evaluations are referenced or appear, as the case may be, in the
Prospectus were, as of December 31, 2005, and are, as of the date
hereof, independent engineers with respect to the BreitBurn
Parties; and the historical information underlying the estimates of
the reserves of BreitBurn MLP Parties supplied to the Reserve
Engineers for purposes of preparing the reserve reports referenced
in the Prospectus (the “ Reserve Reports ”), including, without
limitation, production volumes, sale prices for production,
contractual pricing provisions under oil or gas sales or marketing
contracts or under hedging arrangements, costs of operations and
development and working interest and net revenue information
relating to ownership interests in properties, was true and correct
in all material respects in accordance with customary industry
practice on the date that each such Reserve Report was
prepared.
(nn)
Title to Properties . At each Delivery Date, each of
BreitBurn MLP Parties will have (1) good and defensible title to
all of the oil and gas properties described in the most recent
Preliminary Prospectus and the Prospectus, (2) good and marketable
title to all other property owned by the BreitBurn MLP Parties and
(3) good title to all personal property owned by the BreitBurn MLP
Parties, in each case, free and clear of all liens, encumbrances
and defects, except (i) as described in most recent Preliminary
Prospectus and the Prospectus, (ii) liens securing taxes and other
governmental charges, or claims of materialmen, mechanics and
similar persons, not yet due and payable, (iii) liens and
encumbrances under oil and gas leases, options to lease, operating
agreements, utilization and pooling agreements, participation and
drilling concessions agreements and gas sales contracts, securing
payment of amounts not yet due and payable and of a scope and
nature customary in the oil and gas industry, (iv) liens arising
under or permitted by the Credit Facility or (v) liens,
encumbrances and defects that do not, individually or in the
aggregate, materially affect the value of such properties, taken as
a whole, or materially interfere with the use made or proposed to
be made of such properties, taken as a whole, by the BreitBurn MLP
Parties; and any real property and buildings held under lease by
the BreitBurn MLP Parties are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and
do not interfere with the use made or proposed to be made of such
real property and buildings by the BreitBurn MLP
Parties.
(oo)
Insurance . The BreitBurn Parties maintain insurance
covering their properties, operations, personnel and businesses
against such losses and risks as are reasonably adequate to protect
them and their businesses in a manner consistent with other
businesses similarly situated. None of the BreitBurn Parties
has received notice
13
from any insurer
or agent of such insurer that material capital improvements or
other material expenditures will have to be made in order to
continue such insurance, and all such insurance is outstanding and
duly in force on the date hereof and will be outstanding and duly
in force on each Delivery Date.
(pp)
Investment Company . None of the BreitBurn MLP Parties
is, and as of the applicable Delivery Date and, after giving effect
to the offer and sale of the Units and the application of the
proceeds therefrom as described under “Use of Proceeds”
in the most recent Preliminary Prospectus and the Prospectus, none
of them will be, an “investment company” or a company
“controlled by” an “investment company”
within the meaning of such term under the Investment Company Act of
1940, as amended (the “ Investment Company Act ”), and the rules and
regulations of the Commission thereunder.
(qq)
Litigation . Except as described in the most recent
Preliminary Prospectus, there is (i) no action, suit or proceeding
before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the knowledge of
the BreitBurn Parties, threatened, to which any of the BreitBurn
Parties is or may be a party or to which the business or property
of any of the BreitBurn Parties is or may be subject, (ii) no
statute, rule, regulation or order that has been enacted, adopted
or issued by any governmental agency and (iii) 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 BreitBurn Parties is or may be subject, that, in the case of
clauses (i), (ii) and (iii) above, is reasonably expected to (A)
singly or in the aggregate have a Material Adverse Effect, (B)
prevent or result in the suspension of the offering and issuance of
the Units, or (C) in any manner draw into question the validity of
this Agreement.
(rr)
Legal Proceedings or Contracts to be Described or Filed
. Statements made in the most recent Preliminary Prospectus
under the captions “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”
and “Business” insofar as they purport to constitute
summaries of the terms of statutes, rules or regulations, legal or
governmental proceedings or contracts and other documents,
constitute accurate summaries of the terms of such statutes, rules
and regulations, legal and governmental proceedings and contracts
and other documents in all material respects. Each contract,
document or other agreement described in the Registration Statement
or the most recent Preliminary Prospectus is in full force and
effect and is valid and enforceable by and against the BreitBurn
MLP Parties, as the case may be, in accordance with its terms
except as the enforceability thereof may be limited by (i)
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 in equity or at law) and (ii) public policy,
applicable law relating to fiduciary duties and indemnification and
an implied covenant of good faith and fair dealing.
(ss)
Certain Relationships and Related Transactions .
Except as described in the most recent Preliminary Prospectus, no
relationship, direct or indirect, exists between or among any of
the BreitBurn MLP Parties, on the one hand, and the directors,
officers, shareholders, partners, members, customers or suppliers
of any of the BreitBurn MLP
14
Parties, on the
other hand, that is required to be described in the most recent
Preliminary Prospectus or the Prospectus which is not so
described.
(tt)
No Labor Dispute . No labor disturbance by the
employees of any of the BreitBurn Parties exists or, to the
knowledge of the BreitBurn MLP Parties, is imminent that could
reasonably be expected to have a Material Adverse
Effect.
(uu)
ERISA . (i) Each “employee benefit plan”
(within the meaning of Section 3(3) of the Employee Retirement
Security Act of 1974, as amended (“ERISA”)) for which
any of the BreitBurn MLP Parties would have any liability (each a
“Plan”) has been maintained in material compliance with
its terms and with the material requirements of all applicable
statutes, rules and regulations including ERISA and the Internal
Revenue Code of 1986, as amended (the “ Code ”); (ii) no Plan is
subject to Title IV of ERISA, Section 302 of ERISA or Section 412
of the Code; (iii) none of the BreitBurn MLP Parties or any member
of the Controlled Group of any of the BreitBurn MLP Parties has
incurred, or reasonably expects to incur, any liability under Title
IV of ERISA (other than contributions to the Plan or premiums to
the PBGC in the ordinary course and without default) in respect of
a Plan (including a “multiemployer plan,” within the
meaning of Section 4001(a)(3) of ERISA); and (iv) each Plan that is
intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue
Service that it is so qualified in form and nothing has occurred,
whether by action or by failure to act, which could reasonably be
expected to cause the loss of such qualification.
(vv)
Tax Returns . Each of the BreitBurn Parties has filed
all material federal, state, local and foreign income and franchise
tax returns required to be filed through the date hereof, subject
to permitted extensions, and have paid all taxes due thereon, and
no tax deficiency has been determined adversely to any of the
BreitBurn Parties, nor do any of the BreitBurn MLP Parties have any
knowledge of any tax deficiencies that could, in the aggregate,
reasonably be expected to have a Material Adverse
Effect.
(ww)
Books and Records; Accounting Controls . Each of the
BreitBurn MLP Parties (i) makes and keeps books, records and
accounts, which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of assets and (ii)
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 financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (C) access to 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.
(xx)
Sarbanes-Oxley Act of 2002 . Except as described in
the most recent Preliminary Prospectus, there is and has been no
failure on the part of any of the BreitBurn MLP Parties or any of
their respective directors or officers, in their
capacities
15
as such, to
comply with the applicable provisions of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated in connection
therewith.
(yy)
Permits . Each of the BreitBurn MLP Parties and
BreitBurn Energy has such permits, consents, licenses, franchises,
certificates and authorizations of governmental or regulatory
authorities (“Permits”) as are necessary to own its
properties and to conduct its business in the manner described in
the most recent Preliminary Prospectus, subject to such
qualifications as may be set forth in the most recent Preliminary
Prospectus and except for such permits which, if not obtained,
would not have, individually or in the aggregate, a Material
Adverse Effect; each of the BreitBurn MLP Parties and BreitBurn
Energy has fulfilled and performed all its material obligations
with respect to such permits which are due to have been fulfilled
and performed by such date and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or
termination thereof or results in any impairment of the rights of
the holder of any such permit, except for such revocations,
terminations and impairments that would not have a Material Adverse
Effect; and, except as described in the most recent Preliminary
Prospectus, none of such permits contains any restriction that is
materially burdensome to the BreitBurn MLP Parties considered as a
whole.
(zz)
Environmental Compliance . Each of the BreitBurn MLP
Parties and BreitBurn Energy (i) is in compliance with any and all
applicable federal, state and local laws and regulations relating
to the prevention of pollution or protection of the environment or
imposing liability or standards of conduct concerning any Hazardous
Materials (as defined below) (“Environmental Laws”),
(ii) has received all permits required of them under applicable
Environmental Laws to conduct their respective businesses as
presently conducted, (iii) is in compliance with all terms and
conditions of any such permits and (iv) does not have any liability
in connection with the release into the environment of any
Hazardous Material, except where such noncompliance with
Environmental Laws, failure to receive required permits, failure to
comply with the terms and conditions of such permits or liability
in connection with such releases would not, individually or in the
aggregate, have a Material Adverse Effect. 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 applicable Environmental Law. In the ordinary course
of business, the BreitBurn MLP Parties and BreitBurn Energy
periodically review the effect of Environmental Laws on their
business, operations and properties, in the course of which the
BreitBurn MLP Parties and BreitBurn Energy identify and evaluate
costs and liabilities that are reasonably likely to be incurred
pursuant to such Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties).
On the basis of such review, the BreitBurn MLP Parties and
BreitBurn Energy have reasonably
16
concluded that
such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect.
(aaa)
Directed Units Sales . None of the Directed Units
distributed in connection with the Directed Unit Program (each as
defined in Section 4) will be offered or sold outside of the United
States. The Partnership has not offered, or caused the
Representatives to offer, Units to any person pursuant to the
Directed Unit Program with the specific intent to unlawfully
influence (i) a customer or supplier of any of the BreitBurn
Parties or the BreitBurn Subsidiaries to alter the customer’s
or supplier’s level or type of business with any such entity
or (ii) a trade journalist or publication to write or publish
favorable information about any of the BreitBurn Parties or the
BreitBurn Subsidiaries, or their respective businesses or
products.
(bbb)
No Distribution of Other Offering Materials . None of
the BreitBurn Parties has distributed and, prior to the later to
occur of any Delivery Date and completion of the distribution of
the Units, will distribute any offering material in connection with
the offering and sale of the Units other than any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus to
which the Representatives have consented in accordance with Section
1(h) or 4(a)(v) and, in connection with the Directed Unit Program
described in Section 4, the enrollment materials prepared by the
Representatives.
(ccc)
Market Stabilization . The Partnership has not taken
and will not take, directly or indirectly, any action designed to
or that has constituted or that could reasonably be expected to
cause or result in the stabilization or manipulation of the price
of any security of the Partnership or to facilitate the sale or
resale of the Units.
(ddd)
Listing on the NASDAQ Global Select Market . The Units
have been approved to be listed on the NASDAQ Global Select Market,
subject to official notice of issuance.
Any certificate signed by any
officer of the BreitBurn Parties and delivered to the
Representatives or counsel for the Underwriters in connection with
the offering of the Units shall be deemed a representation and
warranty by such entity, as to matters covered thereby, to each
Underwriter.
2.
Representations, Warranties and Agreements of BreitBurn Energy
with respect to Provident. BreitBurn Energy represents,
warrants and agrees with respect to Provident as
follows:
(a)
at or before the Initial Delivery Date, the Omnibus Agreement will
have been duly authorized, executed and delivered by Provident and
will be a valid and legally binding agreement of Provident,
enforceable against Provident in accordance with its terms,
provided that , the enforceability thereof may be limited by
(i) 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 in equity or at law) and
17
(ii) public
policy, applicable law relating to fiduciary duties and an implied
covenant of good faith and fair dealing; and
(b)
none of the execution, delivery and performance of the Omnibus
Agreement by Provident or the consummation of any of the
transactions contemplated by the Omnibus Agreement or the
fulfillment of the terms thereof conflict with or will conflict
with, result in 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, or imposition of any lien, charge or encumbrance
upon any property or assets of Provident pursuant to (x) any
organizational documents of Provident, (y) the terms of any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which Provident is a party or by it or
any of its properties may be bound or (z) any statute, law, rule or
regulation of the Province of Alberta or any federal Canadian law
or any judgment, order, injunction or decree of any provincial
court in the Providence of Alberta or Canadian federal court,
governmental agency or body or arbitrator having jurisdiction over
Provident or any of its properties or assets, except, in the case
of clauses (y) and (z), for such conflicts, breaches, violations,
defaults, liens, charges or encumbrances as would not, individually
or in the aggregate, have a Material Adverse Effect or materially
impair the ability of Provident to perform its obligations under
this Agreement or the Omnibus Agreements.
3.
Purchase of the Units by the Underwriters .
(a)
On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth,
the Partnership agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a
price of $17.205 per unit, the number of Firm Units set forth
opposite the name of each Underwriter in Schedule I hereof,
subject to adjustments in accordance with Section 9 hereof.
The respective purchase obligations of the Underwriters with
respect to the Firm Units shall be rounded among the Underwriters
to avoid fractional units, as the Representatives may
determine.
(b)
Payment for the Firm Units to be sold hereunder is to be made in
New York Clearing House funds by Federal (same day) against
delivery of certificates therefor to the Representatives for the
several accounts of the Underwriters. Such payment and
delivery are to be made through the facilities of The Depository
Trust Company, New York, New York at 10:00 a.m., New York time, on
October 10, 2006 or at such other time and date not later than five
business days thereafter as the Representatives and the Partnership
shall agree upon, such time and date being herein referred to as
the “ Initial Delivery
Date .” As used
herein, “ business
day ” means a day on which
the New York Stock Exchange is open for trading and on which banks
in New York are open for business and are not permitted by law or
executive order to be closed.
(c)
In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set
forth, the Partnership hereby grants an option to the Underwriters
to purchase the Option Units at the price per unit as set forth in
the first paragraph of this Section. The option granted
hereby may be
18
exercised in
whole or in part by giving written notice (i) at any time before
the Initial Delivery Date or (ii) only once thereafter within 30
days after the date of this Agreement, by the Representatives of
the several Underwriters, to the Partnership setting forth the
number of Option Units as to which the several Underwriters are
exercising the option, the names and denominations in which the
Option Units are to be registered and the time and date at which
such certificates are to be delivered. The time and date at
which certificates for Option Units are to be delivered shall be
determined by the Representatives but shall not be earlier than
three nor later than 10 full business days after the exercise of
such option, nor in any event prior to the Initial Delivery Date
(each date and time the Option Units are delivered is sometimes
referred to as an “ Option Unit Delivery Date ,” and the Initial
Delivery Date and any Option Delivery Date are sometimes each
referred to as a “ Delivery Date ”). If the date
of exercise of the option is three or more days before the Initial
Delivery Date, the notice of exercise shall set the Initial
Delivery Date as the Option Unit Delivery Date. The number of
Option Units to be purchased by each Underwriter shall be in the
same proportion to the total number of Option Units being purchased
as the number of Firm Units being purchased by such Underwriter
bears to the total number of Firm Units, adjusted by the
Representatives in such manner as to avoid fractional Units.
The option with respect to the Option Units granted hereunder may
be exercised only to cover over-allotments in the sale of the Firm
Units by the Underwriters. The Representatives of the several
Underwriters may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the
Partnership. To the extent, if any, that the option is
exercised, payment for the Option Units shall be made on the Option
Unit Delivery Date in Federal (same day) funds through the
facilities of The Depository Trust Company in New York, New York,
drawn to the order of the Partnership.
4.
Offering of Units by the Underwriters .
(a)
Upon authorization by the Representatives of the release of the
Firm Units, the several Underwriters propose to offer the Firm
Units for sale upon the terms and conditions to be set forth in the
Prospectus.
(b)
It is understood that 160,200 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
National Association of Securities Dealers, Inc. (the
“ NASD
”) to
certain officers, directors and employees of the General Partner
and its affiliates and persons associated with the Partnership who
have heretofore delivered to the Representatives offers to purchase
Firm Units in form satisfactory to the Representatives (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 the Representatives
from the Partnership; provided that under no circumstances
will the Representatives or any Underwriter be liable to the
Partnership 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 12:00 p.m., Pacific Time, on the first business day
following the date hereof or otherwise are not
19
purchased by such
persons will be offered by the Underwriters to the public upon the
terms and conditions set forth in the most recent Preliminary
Prospectus.
(c)
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.
5.
Further Agreements of the Partnership and the General
Partner .
(a)
Each of the Partnership and the General Partner, jointly and
severally, covenants and agrees to cause the
Partnership:
(i)
Preparation of Prospectus and Registration Statement .
To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act within the time period prescribed by the rule; to
make no further amendment or any supplement to the Registration
Statement or the Prospectus prior to the last Delivery Date except
as provided herein; to advise the Representatives, promptly after
it receives notice thereof, of the time when any amendment or
supplement to the Registration Statement or the Prospectus has been
filed and to furnish the Representatives with copies thereof; to
advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of the Prospectus or any
Issuer Free Writing Prospectus, of the suspension of the
qualification of the Units for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding or
examination for any such purpose or of any request by the
Commission for the amending or supplementing of the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus or
for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of
the Prospectus or any Issuer Free Writing Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(ii)
Signed Copies of Registration Statement . To furnish
promptly to the Representatives and to counsel for the Underwriters
a signed copy of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith;
(iii)
Copies of Documents to Underwriters . To deliver
promptly to the Representatives such number of the following
documents as the Representatives shall reasonably request: (A)
conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto, (B) each
Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus and (C) each Issuer Free Writing
Prospectus; and, if the delivery of a prospectus is required at any
time after the date hereof in connection with the offering or sale
of the Units or any other securities relating thereto and if at
such time any events shall have occurred as a result of which the
Prospectus as then
20
amended or
supplemented would include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to file
such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an
amended or supplemented Prospectus that will correct such statement
or omission or effect such compliance;
(iv)
Filing of Amendment or Supplement . To file promptly
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; prior to filing with the
Commission any amendment or supplement to the Registration
Statement or to the Prospectus, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the
consent of the Representatives to the filing;
(v)
Issuer Free Writing Prospectus . Not to make any offer
relating to the Units that would constitute an Issuer Free Writing
Prospectus without the prior written consent of the
Representatives; to retain in accordance with the Rules and
Regulations all Issuer Free Writing Prospectuses not required to be
filed pursuant to the Rules and Regulations; and if at any time
after the date hereof any events shall have occurred as a result of
which any Issuer Free Writing Prospectus, as then amended or
supplemented, would conflict with the information in the
Registration Statement, the most recent Preliminary Prospectus or
the Prospectus or would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, or, if for any other reason
it shall be necessary to amend or supplement any Issuer Free
Writing Prospectus, to notify the Representatives and, upon their
request, to file such document and to prepare and furnish without
charge to each Underwriter as many copies as the Representatives
may from time to time reasonably request of an amended or
supplemented Issuer Free Writing Prospectus that will correct such
conflict, statement or omission or effect such
compliance;
(vi)
Reports to Security Holders . As soon as practicable
after the Effective Date (it being understood that the Partnership
shall have until at least 410 or, if the fourth quarter following
the fiscal quarter that includes the Effective Date is the last
fiscal quarter of the Partnership’s fiscal year, 455 days
after the end of the Partnership’s current fiscal quarter),
to make generally available to the Partnership’s security
holders and to deliver to the Representatives an earnings statement
of the Partnership and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Partnership, Rule
158);
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(vii)
Qualifications . Promptly from time to time to take
such action as the Representatives may reasonably request to
qualify the Units for offering and sale under the securities laws
of such jurisdictions as the Representatives may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Units; provided that
in connection therewith the Partnership shall not be required to
(i) qualify as a foreign limited partnership in any jurisdiction in
which it would not otherwise be required to so qualify, (ii) file a
general consent to service of process in any such jurisdiction or
(iii) subject itself to taxation in any jurisdiction in which it
would not otherwise be subject;
(viii)
Lock-Up Period; Lock-Up Letters . For a period
commencing on the date hereof and ending on the 180th day after the
date of the Prospectus (the “ Lock-Up Period ”), not to, directly or
indirectly, (1) offer for sale, sell or otherwise dispose of any
other Common Units or securities convertible into or exchangeable
for Common Units (other than the Units and Common Units issued
pursuant to employee benefit plans, option plans or other employee
compensation plans), or sell or grant options, 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), (2) 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 (1)
or (2) above is to be settled by delivery of Common Units or other
securities, in cash or otherwise, (3) 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 (4) 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 to cause the executive officers and
directors of the General Partner to furnish 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, the Partnership may issue Common
Units or any securities convertible or exchangeable into Common
Units, including without limitation to Provident and its
affiliates, as payment of any part of the purcha
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