Eagle Rock Energy
Partners, L.P.
12,500,000 Common Units
Representing Limited Partner Interests
UBS Securities
LLC
Lehman Brothers Inc.
Goldman, Sachs & Co.
as Managing Underwriters
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171-0026
c/o Lehman
Brothers Inc.
745 Seventh Avenue
New York, New York 10019
c/o Goldman,
Sachs & Co.
85 Broad Street
New York, New York 10004-2456
Eagle Rock Energy
Partners, L.P., a Delaware limited partnership (the “
Partnership ”), proposes to issue and sell to the
underwriters named in Schedule A annexed hereto (the
“ Underwriters ”), for whom UBS Securities LLC
(“ UBS ”), Lehman Brothers Inc. (“
Lehman ”) and Goldman, Sachs & Co. (“
Goldman ”) are acting as representatives (the “
Representatives ”), an aggregate of 12,500,000 common
units (the “ Firm Units ”). The units
representing limited partner interests in the Partnership,
including, without limitation, any common units or subordinated
units, together with any units representing general partner
interests in the Partnership, are collectively referred to herein
as the “ Partnership Units ”. In addition,
solely for the purpose of covering over-allotments, the Partnership
proposes to grant to the Underwriters the option to purchase from
the Partnership up to an additional 1,875,000 common units (the
“ Additional Units ”). The Firm Units and the
Additional Units are hereinafter collectively sometimes referred to
as the “ Units .” The Units are described in the
Prospectus which is referred to below. This agreement (the “
Agreement ”) is to confirm the agreement among the
Partnership, Eagle Rock Energy GP, L.P., a Delaware limited
partnership (the “ General Partner ”), Eagle
Rock Energy G&P, LLC, a Delaware limited liability company
(“ G&P ”), and Eagle Rock Holdings, L.P., a
Texas limited partnership (“ Holdings ”, and
together with the Partnership, the General Partner and G&P, the
“ Eagle Rock Parties ”) on the one hand, and the
Underwriters, on the other hand, concerning the purchase of the
Units from the Partnership by the Underwriters. The Eagle Rock
Parties, other than Holdings, and the subsidiaries listed on
Schedule B hereto (the “ Subsidiaries
”) are hereinafter collectively sometimes referred to as the
“ Eagle Rock Entities ”.
The Partnership
hereby acknowledges that, in connection with the proposed offering
(the “ Offering ”) of the Units, it has
requested Lehman Brothers Inc. (the “ DUP Manager
”) to administer a directed unit program (the “
Directed Unit Program ”) under which up to
625,000
Firm Units (the
“ Reserved Units ”) shall be reserved for sale
by the DUP Manager at the initial public offering price to
G&P’s officers, directors and employees and its sole
member and other persons having a relationship with the Partnership
as designated by the Partnership (the “ Directed Unit
Participants ”) as part of the distribution of Units by
the Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the “ NASD
”) and all other applicable laws, rules and regulations. The
number of Units available for sale to the general public will be
reduced to the extent that that Directed Unit Participants purchase
Reserved Units. The Underwriters may offer any Reserved Units not
purchased by Directed Unit Participants to the general public on
the same basis as the other Units being issued and sold hereunder.
The Partnership has supplied the DUP Manager with the names,
addresses and telephone numbers of the individuals or other
entities which the Partnership has designated to be participants in
the Directed Unit Program. It is understood that any number of
those so designated to participate in the Directed Unit Program may
decline to do so.
The Partnership
has prepared and filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the “ Act ”), with the
Securities and Exchange Commission (the “ Commission
”) a registration statement on Form S-1 (File
No. 333-134750) under the Act, including a prospectus,
relating to the Units. Amendments to such registration statement
have been similarly prepared and filed with the Commission in
accordance with the Act. Such registration statement, as so
amended, has become effective under the Act.
Except where the
context otherwise requires, “ Registration Statement
,” as used herein, means the registration statement, as
amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Act, as such
section applies to the respective Underwriters (the “
Effective Time ”), including (i) all documents
filed as a part thereof, (ii) any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule
424(b) under the Act and deemed, pursuant to Rule 430A or
Rule 430C under the Act, to be part of the registration
statement at the Effective Time, and (iii) any registration
statement filed to register the offer and sale of Units pursuant to
Rule 462(b) under the Act.
The Partnership
has furnished to you, for use by the Underwriters and by dealers in
connection with the Offering, copies of one or more preliminary
prospectuses relating to the Units. Except where the context
otherwise requires, “ Preliminary Prospectus ,”
as used herein, means each such preliminary prospectus, in the form
so furnished.
Except where the
context otherwise requires, “ Prospectus ,” as
used herein, means the prospectus filed by the Partnership with the
Commission pursuant to Rule 424(b) under the Act on or before the
second business day after the date hereof (or such earlier time as
may be required under the Act), or, if no such filing is required,
the final prospectus included in the Registration Statement at the
time it became effective under the Act, in each case in the form
furnished by the Partnership to you for use by the Underwriters and
by dealers in connection with the Offering.
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“
Permitted Free Writing Prospectuses ,” as used herein,
means the documents listed on Schedule D attached
hereto, each “road show” (as defined in
Rule 433(h)(4) under the Act), if any, related to the Offering
contemplated hereby that is a “written communication”
(as defined in Rule 405 under the Act) (each such road show, a
“ Road Show ”) and any other “free writing
prospectus” (as defined in Rule 405 under the Act) to
which the Representatives provide their prior consent.
“
Disclosure Package ,” as used herein, means any
Preliminary Prospectus together with any combination of one or more
of the Permitted Free Writing Prospectuses, if any.
As used in this
Agreement, “ business day ” shall mean a day on
which the NASDAQ Global Market (“ NASDAQ ”) is
open for trading. The terms “herein,”
“hereof,” “hereto,”
“hereinafter” and similar terms, as used in this
Agreement, shall in each case refer to this Agreement as a whole
and not to any particular section, paragraph, sentence or other
subdivision of this Agreement. The term “or,” as used
herein, is not exclusive.
The Partnership
has prepared and filed, in accordance with Section 12 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the “ Exchange Act ”), a
registration statement (as amended, the “ Exchange Act
Registration Statement ”) on Form 8-A (File
No. 001-33016) under the Exchange Act to register, under
Section 12(b) of the Exchange Act, the class of securities
consisting of the Partnership Units.
A. It is
understood and agreed to by all parties that the Partnership
directly or indirectly owns, or will own, as of the time of
purchase (as defined in Section 2 ) a 100% ownership
interest in Eagle Rock Pipeline.
B. It is
further understood and agreed to by all parties that, prior to
giving effect to the Offering, on the date hereof, the Partnership
is owned, in simplified terms, by (i) the General Partner,
which holds a 2.0% general partner interest and (ii) Holdings,
which holds a 98% limited partner interest.
C. The
Partnership entered into an amended and restated $500 million
credit and guaranty agreement by and among the Partnership, certain
of the Subsidiaries, Goldman Sachs Credit Partners L.P., Wachovia
Bank, National Association, HSH Nordbank AG, New York Branch, BNP
Paribas, Wells Fargo Bank, National Association, and various other
lenders as listed in therein (the “ Amended and Restated
Credit Agreement ”).
D. The
following additional transactions will occur substantially
contemporaneously with the initial time of purchase:
1. The Partnership
shall have amended and restated its agreement of limited
partnership (as so amended and restated, the “ Partnership
Agreement ”) to conform to the description thereof set
forth in the Prospectus under the caption “The Partnership
Agreement.”
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2. The Partnership
shall have entered into a Contribution, Conveyance and Assumption
Agreement with the Partnership, G&P, the General Partner, Eagle
Rock Pipeline GP and Pipeline (the “ Contribution
Agreement ”).
3. The Partnership
shall have entered into an Agreement and Plan of Merger with
Holdings, Heathrow Energy, LLC and Pipeline (the “ Merger
Agreement ”).
4. The
Partnership, G&P, Holdings and the General Partner shall have
entered into an Omnibus Agreement (the “ Omnibus
Agreement ”).
5. The Partnership
shall have entered into a registration rights agreement with
Holdings (the “ Registration Rights Agreement
”).
6. The Partnership
shall have paid $6.0 million to Natural Gas Partners as
consideration for the termination of an advisory services,
reimbursement and indemnification agreement between Natural Gas
Partners and Holdings.
The transactions
described above in clauses C and D, together with the issuance and
sale of the Units pursuant to this Agreement, are referred to
herein as the “ Transactions .”
The “
Transaction Documents ” shall mean the Partnership
Agreement, the Contribution Agreement, the Merger Agreement, the
Omnibus Agreement, the Amended and Restated Credit Agreement and
the Registration Rights Agreement. The “ Organizational
Documents ” shall mean each of the Partnership Agreement,
the General Partner Partnership Agreement, the Eagle Rock G&P
LLC Agreement, the Eagle Rock Holdings Partnership Agreement, and
the Eagle Rock Pipeline Partnership Agreement (each as defined
below) and the certificates of limited partnership or formation and
other organizational documents of the Eagle Rock Entities. The
“ Operative Documents ” shall mean the
Transaction Documents and the Organizational Documents,
collectively.
The Eagle Rock
Parties and the Underwriters agree as follows:
1. Sale
and Purchase . Upon the basis of the representations and
warranties and subject to the terms and conditions herein set
forth, the Partnership agrees to issue and sell to the respective
Underwriters, each of the General Partner and G&P agree to
cause the Partnership to issue and sell to the respective
Underwriters, and each of the Underwriters, severally and not
jointly, agrees to purchase from the Partnership, the number of
Firm Units set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in
accordance with Section 9 hereof, in each case at a
purchase price of $17.765 per Unit. The Partnership is advised by
you that the Underwriters intend (i) to make a public offering
of their respective portions of the Firm Units as soon after the
effective date of the Registration Statement as in your judgment is
advisable and (ii) initially to offer the Firm Units upon the
terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial
public offering to such extent as you may determine.
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In addition, the
Partnership hereby grants to the several Underwriters the option
(the “ Purchase Option ”) to purchase, and upon
the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the
Partnership, ratably in accordance with the number of Firm Units to
be purchased by each of them, all or a portion of the Additional
Units in the event the Underwriters sell more than the number of
Firm Units, at the same purchase price per Unit to be paid by the
Underwriters to the Partnership for the Firm Units. The Purchase
Option may be exercised by the Representatives on behalf of the
several Underwriters at any time and from time to time on or before
the thirtieth day following the date of the Prospectus, by written
notice to the Partnership. Such notice shall set forth the
aggregate number of Additional Units as to which the Purchase
Option is being exercised and the date and time when the Additional
Units are to be delivered (any such date and time being herein
referred to as an “ additional time of purchase
”); provided , however , that no additional
time of purchase shall be earlier than the “time of
purchase” (as defined below) nor earlier than the second
business day after the date on which the Purchase Option shall have
been exercised nor later than the tenth business day after the date
on which the Purchase Option shall have been exercised. The number
of Additional Units to be sold to each Underwriter shall be the
number which bears the same proportion to the aggregate number of
Additional Units being purchased as the number of Firm Units set
forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm
Units (subject, in each case, to such adjustment as the
Representatives may determine to eliminate fractional Units),
subject to adjustment in accordance with Section 9
hereof.
2.
Payment and Delivery . Payment of the purchase price for the
Firm Units shall be made to the Partnership by Federal Funds wire
transfer against electronic delivery of the certificates for the
Firm Units to you through the facilities of The Depository Trust
Company (“ DTC ”) for the respective accounts of
the Underwriters. Such payment and delivery shall be made at
10:00 A.M., New York City time, on October 27, 2006
(unless another time shall be agreed to by you and the Partnership
or unless postponed in accordance with the provisions of Section
9 hereof). The time at which such payment and delivery are to
be made is hereinafter sometimes called the “ time of
purchase .” Electronic transfer of the Firm Units shall
be made to you at the time of purchase in such names and in such
denominations as you shall specify.
Payment of the
purchase price for the Additional Units shall be made at the
additional time of purchase in the same manner and at the same
office as the payment for the Firm Units. Electronic transfer of
the Additional Units shall be made to you at the additional time of
purchase in such names and in such denominations as you shall
specify.
Deliveries of the
documents described in Section 7 hereof with respect to
the purchase of the Units shall be made at the offices of Vinson
& Elkins L.L.P., at 9:00 A.M., Houston, Texas time, on the date
of the closing of the purchase of the Firm Units or the Additional
Units, as the case may be.
3.
Representations and Warranties of the Partnership . Each of
the Eagle Rock Entities and Holdings, jointly and severally,
represents and warrants to and agrees with each of the Underwriters
that:
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(a) Registration; No Material Misstatements or
Omissions . The Registration Statement has heretofore become
effective under the Act or, with respect to any registration
statement to be filed to register the offer and sale of Units
pursuant to Rule 462(b) under the Act, will be filed with the
Commission and become effective under the Act no later than 10:00
P.M., New York City time, on the date of determination of the
public offering price for the Units; no stop order of the
Commission preventing or suspending the use of any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus
or the effectiveness of the Registration Statement, has been
issued, and no proceedings for such purpose have been instituted
or, to the Partnership’s knowledge after due inquiry, are
contemplated by the Commission; the Registration Statement complied
when it became effective, complies as of the date hereof and, as
amended or supplemented, at the time of purchase, each additional
time of purchase, if any, and at all times during which a
prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Units, will
comply, in all material respects, with the requirements of the Act;
the Exchange Act Registration Statement has become effective as
provided in Section 12 of the Exchange Act; the Registration
Statement did not, as of the Effective 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; each Preliminary Prospectus complied, at
the time it was filed with the Commission, and complies as of the
date hereof, in all material respects with the requirements of the
Act; at no time during the period that begins on the earlier of the
date of such Preliminary Prospectus and the date such Preliminary
Prospectus was filed with the Commission and ends at the time of
purchase did or will any Preliminary Prospectus, as then amended or
supplemented, include an 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, and at no time during such period did or
will any Preliminary Prospectus, as then amended or supplemented,
together with any combination of one or more of the then-issued
Permitted Free Writing Prospectuses, if any, include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; the
Prospectus will comply, as of its date and the date it is filed
with the Commission, the time of purchase, each additional time of
purchase, if any, and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Units, will comply, in all material
respects, with the requirements of the Act (including, without
limitation, Section 10(a) of the Act); at no time during the period
that begins on the earlier of the date of such Prospectus and the
date the Prospectus is filed with the Commission and ends at the
later of the time of purchase, the latest additional time of
purchase, if any, and the end of the period during which a
prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Units did or
will the Prospectus, as then amended or supplemented, include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; at no time during the period that begins on
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the date of
such Permitted Free Writing Prospectus and ends at the time of
purchase did or will any Permitted Free Writing Prospectus include
an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, or conflict with the information contained in the
Registration Statement, the Preliminary Prospectus or the
Prospectus; provided , however , that the Eagle Rock
Parties make no representation or warranty in this
Section 3(a) with respect to any statement contained in
the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Permitted Free Writing Prospectus in reliance
upon and in conformity with the information specified in
Section 11 hereof furnished in writing by or on behalf
of such Underwriter through you to the Partnership expressly for
use in the Registration Statement, such Preliminary Prospectus, the
Prospectus or such Permitted Free Writing Prospectus. All Permitted
Free Writing Prospectuses were preceded by, or accompanied with, a
statutory prospectus meeting the requirements of Section 10(a) of
the Act as required by Rule 164 under the Act.
(b) Prospectuses Used in Offering . Prior to the
execution of this Agreement, the Partnership has not, directly or
indirectly, offered or sold any Units by means of any
“prospectus” (within the meaning of the Act) or used
any “prospectus” (within the meaning of the Act) in
connection with the offer or sale of the Units, in each case other
than the Preliminary Prospectuses and the Permitted Free Writing
Prospectuses, if any; the Partnership has not, directly or
indirectly, prepared, used or referred to any Permitted Free
Writing Prospectus except in compliance with Rules 164 and 433
under the Act; assuming that such Permitted Free Writing Prospectus
is so sent or given after the Registration Statement was filed with
the Commission (and after such Permitted Free Writing Prospectus
was, if required pursuant to Rule 433(d) under the Act, filed with
the Commission), the sending or giving, by any Underwriter, of any
Permitted Free Writing Prospectus will satisfy the provisions of
Rule 164 and Rule 433 (without reliance on subsections
(b), (c) and (d) of Rule 164); each of the
Preliminary Prospectuses is a prospectus that, other than by reason
of Rule 433 or Rule 431 under the Act, satisfies the
requirements of Section 10 of the Act, including a price range
where required by rule; neither the Partnership nor the
Underwriters are disqualified, by reason of subsection (f) or
(g) of Rule 164 under the Act, from using, in connection
with the offer and sale of the Units, “free writing
prospectuses” (as defined in Rule 405 under the Act)
pursuant to Rules 164 and 433 under the Act; the Partnership
is not an “ineligible issuer” (as defined in
Rule 405 under the Act) as of the eligibility determination
date for purposes of Rules 164 and 433 under the Act with
respect to the Offering contemplated by the Registration Statement;
the parties hereto agree and understand that the content of any and
all “road shows” (as defined in Rule 433(h) under the
Act) related to the Offering is solely the property of the
Partnership; the Partnership has caused there to be made available
at least one version of a “ bona fide electronic road
show” (as defined in Rule 433(h)(5) under the Act) in a
manner that, pursuant to Rule 433(d)(8)(ii) under the Act, causes
the Partnership not to be required, pursuant to Rule 433(d) under
the Act, to file with the Commission any Road Show.
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(c) Formation and Qualification of Eagle Rock Entities
. Each of the Eagle Rock Entities has been duly formed and is
validly existing in good standing as a limited partnership or
limited liability company, as the case may be, under the laws of
its respective jurisdiction of formation, with all partnership or
limited liability company power and authority necessary to own,
lease and operate its properties and conduct its business and
(i) in the case of G&P, to act as the general partner of
the General Partner, (ii) in the case of the General Partner,
to act as the general partner of the Partnership, (iii) in the
case of each party to an Operative Document that is an Eagle Rock
Entity, to execute and deliver the Operative Documents to which
such Eagle Rock Entity is a party and to consummate the
transactions contemplated thereby, and (iv) in the case of
Holdings, G&P, the General Partner and the Partnership, to
execute and deliver this Agreement to consummate the transactions
contemplated hereby.
(d) Foreign Qualification and Registration . Each of
the Eagle Rock Entities is duly qualified to do business as a
foreign limited liability company or limited partnership, as the
case may be, and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to
be so qualified and in good standing would not, individually or in
the aggregate, (i) have a material adverse effect on the
business, properties, financial condition, results of operations or
prospects of the Eagle Rock Entities taken as a whole (a “
Material Adverse Effect ”); or (ii) subject the
limited partners of the Partnership to any material liability or
disability; insofar as the foregoing representation relates to the
registration or qualification of each Eagle Rock Entity, the
applicable jurisdictions are set forth on Schedule C
hereto.
(e) Ownership of the General Partner Interest in
Holdings . Eagle Rock GP, L.L.C., a Texas limited liability
company (“ Eagle Rock GP ”) owns, and at the
time of purchase will be the sole general partner of Holdings, with
a 1% general partner interest in Holdings; such general partner
interest has been duly authorized and validly issued in accordance
with the limited partnership agreement of Holdings, as in effect at
the time of purchase (the “ Eagle Rock Holdings
Partnership Agreement ”) and Eagle Rock GP owns such
ownership interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims (collectively,
“ Liens ”).
(f) Ownership of the General Partner .
(i) Holdings owns, and at the time of purchase, will own,
99.999% of the issued and outstanding limited partner interests in
the General Partner; and (ii) G&P owns, and at the time of
purchase, will own, 0.001% of the issued and outstanding general
partner interests in the General Partner; such ownership interests
have been duly authorized and validly issued in accordance with the
limited partnership agreement of the General Partner, as in effect
at the time of purchase (the “ !General Partner
Partnership Agreement ”), and each of Holdings and
G&P owns such ownership interests free and clear of all
Liens.
(g) Ownership of the General Partner Interest in the
Partnership . At the time of purchase, after giving effect to
the Transactions, the General Partner will be the sole general
partner of the Partnership with a 2% general partner interest in
the Partnership
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(the “
GP Interest ”); such GP Interest will be duly
authorized and validly issued in accordance with the Partnership
Agreement of the Partnership, as in effect at the time of purchase,
and the General Partner will own such general partner interest free
and clear of all Liens.
(h) Ownership of G&P . At the time of purchase,
after giving effect to the Transactions, Holdings will own all of
the issued and outstanding membership interests in G&P; such
membership interests will be duly authorized and validly issued in
accordance with the limited liability company agreement of G&P,
as in effect at the time of purchase (“ Eagle Rock G&P
LLC Agreement ”), and Holdings will own such membership
interests free and clear of all Liens.
(i) Ownership of the Sponsor Units . Immediately prior
to the purchase by the Underwriters of any Units pursuant to this
Agreement, after giving effect to the Transactions, there will be
8,191,495 common units and 20,691,495 subordinated units
outstanding, of which Holdings will own 3,459,236 common units and
20,691,495 subordinated units (such common units and subordinated
units being collectively referred to herein as the “
Sponsor Units ”) and the General Partner will own all
of the Incentive Distribution Rights (as defined in the Partnership
Agreement). All of the Sponsor Units and the limited partner
interests represented thereby and the Incentive Distribution Rights
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 Sections 17-303
and 17-607 of the Delaware Revised Uniform Limited Partnership Act
(the “ Delaware LP Act ”) and as otherwise
described in the Prospectus under the caption “The
Partnership Agreement—Limited Liability”). All of the
Sponsor Units owned by Holdings and the Incentive Distribution
Rights will be owned free and clear of all Liens (except with
respect to the restrictions on transferability contained in
Section 4.7 and 4.8 of the Partnership Agreement and as
otherwise described in the Prospectus).
(j) Ownership of Pipeline. At the time of purchase,
after giving effect to the Transactions, (i) the Partnership
will own 99% of the issued and outstanding limited partner
interests in Eagle Rock Pipeline, L.P., a Delaware limited
partnership (“ Pipeline ”) and (ii) Eagle
Rock Pipeline GP, LLC, a Delaware limited liability company
(“ Eagle Rock Pipeline GP ”) will own 1% of the
issued and outstanding general partner interests in Pipeline; such
ownership interests will be duly authorized and validly issued in
accordance with the partnership agreement of Pipeline, as in effect
at the time of purchase (“ Eagle Rock Pipeline Partnership
Agreement ”), and each of the Partnership and Eagle Rock
Pipeline GP will own such ownership interests free and clear of all
Liens.
(k) Subsidiaries . The Partnership has no other direct
or indirect subsidiaries (as defined under the Act) other than the
Subsidiaries. Other than the Subsidiaries, the Partnership does not
own, directly or indirectly, any shares of stock or any other
equity interests or long-term debt securities of any corporation,
firm, partnership, joint venture, association or other entity;
complete and correct copies of the formation and governing
documents of each of the Eagle Rock Entities and all amendments
thereto have been
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delivered to
you, and, except as set forth in the exhibits to the Registration
Statement, no changes thereto will be made on or after the date
hereof, through and including the time of purchase, or, if later,
any additional time of purchase; and each of the Eagle Rock
Entities is in compliance with the laws, orders, rules, regulations
and directives issued or administered by such jurisdictions, except
where the failure to be in compliance would not, individually or in
the aggregate, have a Material Adverse Effect.
(l) Valid
Issuance of Units . As of the time of purchase or any
additional time of purchase, the Firm Units and the Additional
Units, if any, and the limited partner interests represented
thereby, will be duly authorized in accordance with the Partnership
Agreement and, when issued, and delivered to the Underwriters
against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by (i) matters described in
the Registration Statement, the Preliminary Prospectus and the
Prospectus under the caption “Risk Factors—Risks
Inherent in an Investment in Us—Your liability may not be
limited if a court finds that unitholder action constitutes control
of our business” and “—Risks Inherent in an
Investment in Us—Unitholders may have liability to repay
distributions that were wrongfully distributed to them” (and
any similar information, if any, contained in any Permitted Free
Writing Prospectus) and (ii) Sections 17-303 and 17-607 of the
Delaware LP Act); and other than the Sponsor Units, the Units will
be the only limited partner interests of the Partnership issued and
outstanding as of the time of purchase and any additional time of
purchase, as applicable; the Units, when issued and delivered
against payment therefor as provided herein, will be free of any
restriction upon the voting or transfer thereof pursuant to the
Partnership’s formation and governing documents or any
agreement or other instrument to which the Partnership or any of
the Eagle Rock Entities or their affiliates is a party or by which
any of them or any of their respective properties may be bound or
affected.
(m) Conformity to Description of Partnership Units .
The Units, when issued and delivered in accordance with the terms
of the Partnership Agreement and against payment therefore as
provided herein, and the Sponsor Units, the General Partner
Interest and the Incentive Distribution Rights, when issued and
delivered in accordance with the terms of the Partnership
Agreement, will conform in all material respects to the description
thereof contained in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any.
(n) Authorization, Execution and Delivery of this
Agreement . This Agreement has been duly authorized, executed
and delivered by each of the Eagle Rock Parties.
(o) Authorization, Execution, Delivery and Enforceability
of Certain Agreements . At or before the time of
purchase:
(i) the
Partnership Agreement will be duly authorized and executed and
validly delivered by the General Partner and will be a valid and
legally
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binding
agreement of the General Partner, enforceable against the General
Partner in accordance with its terms;
(ii) the General
Partner Partnership Agreement will be duly authorized and executed
and validly delivered by G&P and Holdings and will be a valid
and legally binding agreement of G&P and Holdings, enforceable
against each of them in accordance with its terms;
(iii) the Eagle
Rock G&P LLC Agreement will be duly authorized and executed and
validly delivered by Holdings and will be a valid and legally
binding agreement of Holdings, enforceable against Holdings in
accordance with its terms;
(iv) the Eagle
Rock Holdings Partnership Agreement will be duly authorized and
executed and validly delivered by Eagle Rock GP and will be a valid
and legally binding agreement of Eagle Rock GP, enforceable against
Eagle Rock GP in accordance with its terms;
(v) the Eagle Rock
Pipeline Partnership Agreement will be duly authorized and executed
and validly delivered by the Partnership and Eagle Rock Pipeline GP
and will be a valid and legally binding agreement of each of them
and enforceable against each of them in accordance with its
terms;
(vi) the
Contribution Agreement will be duly authorized and executed and
validly delivered by the Partnership and each of the Eagle Rock
Entities party thereto and will be a valid and legally binding
agreement of each of them, enforceable against each of them in
accordance with its terms;
(vii) the Merger
Agreement will be duly authorized and executed and validly
delivered by Holdings and each of the Eagle Rock Entities party
thereto and will be a valid and legally binding agreement of each
of them, enforceable against each of them in accordance with its
terms;
(viii) the Omnibus
Agreement will be duly authorized and executed and validly
delivered by Holdings and each of the Eagle Rock Entities party
thereto and will be a valid and legally binding agreement of each
of them, enforceable against each of them in accordance with its
terms;
(ix) the Amended
and Restated Credit Agreement will be duly authorized and executed
and validly delivered by each of the Eagle Rock Entities party
thereto and will be a valid and legally binding agreement of each
of them, enforceable against each of them in accordance with its
terms;
(x) the
Registration Rights Agreement will be duly authorized and executed
and validly delivered by each of the Partnership and Holdings and
will
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be a valid and
legally binding agreement of each of them, enforceable against each
of them in accordance with its terms;
except; with
respect to each agreement described in this
Section 3(o) , as the enforceability thereof may be
limited (A) by (bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other 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 (B) with
respect to the indemnity, contribution and exoneration provisions
therein, by public policy and applicable laws relating to fiduciary
duties and indemnification.
(p) No
Conflicts or Violations; No Default . None of the Eagle Rock
Entities is (A) in violation of its respective formation,
governing or any other organizational documents, or (B) in
breach of, in default under or violation of (nor has any event
occurred which with notice, lapse of time or both would result in
any breach of, default under or violation of or give the holder of
any indebtedness (or a person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all
or a part of such indebtedness under) any indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound or affected, or (C) in violation of
any federal, state, local or foreign law, regulation or rule, or
(D) in violation of any rule or regulation of any
self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the rules and regulations
of the NASDAQ), or (E) in violation of any decree, judgment or
order applicable to any of the Eagle Rock Entities or any of their
properties, which breach, default or violation in the case of
Clauses (B) , (C) , (D) and (E) above,
would, if continued, have, individually or in the aggregate, a
Material Adverse Effect, affect the validity of the Units or
prevent or materially interfere with consummation of the
transactions contemplated by this Agreement, including the
Offering, the other transactions contemplated by the Registration
Statement, the Preliminary Prospectus, the Prospectus and the
Permitted Free Writing Prospectus, if any, the Transactions, the
Transaction Documents and the Operative Documents; and none of
(i) the execution, delivery and performance of this Agreement,
the Transaction Documents and the Operative Documents by the
parties thereto, (ii) the offering, issuance and sale of the
Units or (iii) the consummation of the transactions
contemplated hereby and thereby (including, without limitation, the
Transactions) will conflict with, result in any breach or violation
of or constitute a default under, or constitute any event which,
with notice, lapse of time or both, would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the
right to require the repurchase, redemption or repayment of all or
a part of such indebtedness under, or result in the creation or
imposition of a Lien, charge or encumbrance on any property or
assets of the Eagle Rock Entities pursuant to (I) any
formation, governing or any other organizational document of any of
the Eagle Rock Entities, or (II) any indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which any of the Eagle Rock Entities is a party or by
which any of them or any of their
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respective
properties may be bound or affected, or (III) any federal,
state, local or foreign law, regulation or rule, or (IV) any
rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority (including, without
limitation, the rules and regulations of the NASDAQ), or
(V) any decree, judgment or order applicable to any of the
Eagle Rock Entities or any of their respective properties, which
conflicts, breaches, violation or defaults, in the case of
clauses (II) , (III) , (IV) or (V)
above, would, individually or in the aggregate, have a Material
Adverse Effect, affect the validity of the Units or prevent or
materially interfere with consummation of the transactions
contemplated by this Agreement, including the Offering, the other
transactions contemplated by the Registration Statement, the
Preliminary Prospectus, the Prospectus and the Permitted Free
Writing Prospectus, if any, the Transactions, the Transaction
Documents and the Operative Documents.
(q) No
Consents Regarding the Offering . No approval, authorization,
consent or order of or filing with any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency, or of or with any self-regulatory organization
or other non-governmental regulatory authority (including, without
limitation, the NASDAQ) (each, a “ Consent ”) or
any approval of the security holders of the Eagle Rock Entities, is
required in connection with the Offering and the execution,
delivery and performance of the Operative Documents by the Eagle
Rock Parties, or the consummation by the Partnership of the
transactions contemplated hereby or thereby (including, without
limitation, the Transactions) other than (i) registration of
the Units under the Act, which has been effected (or, with respect
to any registration statement to be filed hereunder pursuant to
Rule 462(b) under the Act, will be effected in accordance
herewith), (ii) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which
the Units are being offered by the Underwriters, (iii) under
the Conduct Rules of the NASD and (iv) such Consents that have
been, or prior to the Closing Date will be, obtained, or, if not
obtained, would not, individually or in the aggregate, result in a
Material Adverse Effect, affect the validity of the Units or
prevent or materially interfere with consummation of the
transactions contemplated by this Agreement, including the
Offering, the other transactions contemplated by the Registration
Statement, the Preliminary Prospectus, the Prospectus and the
Permitted Free Writing Prospectus, if any, the Transactions, the
Transaction Documents and the Operative Documents.
(r) No
Preemptive Rights, Registration Rights, Options or Other Rights
. Except as described in the Registration Statement (excluding the
exhibits thereto), each Preliminary Prospectus and the Prospectus,
(i) no person has the right, contractual or otherwise, to
cause the Partnership to issue or sell to it Partnership Units or
other equity interests of the Partnership, (ii) no person has
any preemptive rights, resale rights, rights of first refusal or
other rights to purchase any Partnership Units or other equity
interests in the Partnership, (iii) no person has any resale
rights in respect of the Partnership Units that would be required
to be disclosed in the Registration Statement and are not so
disclosed and (iv) no person has the right to act as an
underwriter or as a financial advisor to the Partnership in
connection with the Offering; no person has the right, contractual
or otherwise, to cause the Partnership to register under the Act
any Partnership Units or
- 13 -
other equity
interests in the Partnership, or to include any such Partnership
Units or other interests in the Registration Statement or the
Offering contemplated thereby.
(s) Permits . Each of the Eagle Rock Entities has all
necessary licenses, authorizations, consents and approvals (each, a
“ Permit ”) and has made all necessary filings
required under any applicable law, regulation or rule, and has
obtained all necessary licenses, authorizations, consents and
approvals from other persons, in order to conduct their respective
businesses except for such Permits that, if not obtained, would not
have a Material Adverse Effect; none of the Eagle Rock Entities is
in violation of, or in default under, or has received notice of any
proceedings relating to the revocation or modification of, any such
Permit or any federal, state, local or foreign law, regulation or
rule or any decree, order or judgment applicable to any of the
Eagle Rock Entities, except where such violation, default,
revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect.
(t) Descriptions; Exhibits . All legal or governmental
proceedings, affiliate transactions, off-balance sheet
transactions, contracts, licenses, agreements, properties, leases
or documents of a character required to be described in the
Registration Statement, each Preliminary Prospectus or the
Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed as required; and the
statements included in the Registration Statement, the Preliminary
Prospectuses and the Prospectus under the headings “Our Cash
Distribution Policy and Restrictions on Distributions,”
“Provisions of our Partnership Agreement Relating to Cash
Distributions,” “Management’s Discussion and
Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources” and
“—Capital Requirements,”
“Management,” “Certain Relationships and Related
Party Transactions,” “Conflicts of Interest and
Fiduciary Duties,” “Description of the Common
Units,” “The Partnership Agreement,”
“Material Tax Consequences” and
“Underwriting” (and any similar information, if any,
contained in any Permitted Free Writing Prospectus) insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or
proceedings.
(u) Litigation . Except as described in the
Registration Statement, the Preliminary Prospectus, the Prospectus
and the Permitted Free Writing Prospectuses, if any, there are no
actions, suits, claims, investigations or proceedings pending or,
to the knowledge of the Eagle Rock Entities, threatened or
contemplated to which any of the Eagle Rock Entities or any of
their respective directors or officers is or would be a party or of
which any of their respective properties is or would be subject at
law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency, or before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without
limitation, the NASDAQ), except any such action, suit, claim,
investigation or proceeding that would not result in a judgment,
decree or order having, individually or in the aggregate, a
Material Adverse Effect.
- 14 -
(v) Independent Registered Public Accounting Firms .
Deloitte & Touche LLP, whose report on the financial statements
of the Partnership, Pipeline and ONEOK Texas Field Services, L.P.
(“ ONEOK ”) are included in the Registration
Statement, the Preliminary Prospectuses and the Prospectus or any
Permitted Free Writing Prospectuses containing an audit report, are
independent registered public accountants as required by the Act
and by the rules of the Public Partnership Accounting Oversight
Board.
(w) Financial Statements . The financial statements
included in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, together with the related notes and
schedules, present fairly in all material respects the consolidated
financial position of the Partnership, Pipeline and ONEOK as of the
dates indicated and the consolidated statements of operations, cash
flows and changes in partners’ equity of the Partnership,
Pipeline and ONEOK for the periods specified and have been prepared
in compliance with the requirements of the Act and Exchange Act and
in conformity with U.S. generally accepted accounting principles
applied on a consistent basis during the periods involved; all pro
forma financial statements or data included in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, (excluding the pro
forma information set forth under the caption “Our Cash
Distribution Policy and Restrictions on
Distributions—Unaudited Pro Forma Available Cash” and
the related notes) comply with the requirements of the Act
(including, without limitation, Regulation S-X under the Act)
(including, without limitation, Regulation G under the Act and the
Exchange Act), Item 10 under Regulation S-K and Financial
Interpretation No. 46, and the assumptions used in the
preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate
to give effect to the transactions or circumstances described
therein and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements and
data; and the other financial and statistical data contained set
forth in the Registration Statement, the Preliminary Prospectuses,
the Prospectus and any Permitted Free Writing Prospectuses are
accurately and fairly presented and prepared on a basis consistent
with the financial statements and books and records of the Eagle
Rock Entities. The assumptions and forecasts underlying the pro
forma information set forth under the caption “Our Cash
Distribution Policy and Restrictions on
Distributions—Unaudited Pro Forma Available Cash” and
the related notes in the Registration Statement, the Preliminary
Prospectuses and the Prospectus (and any similar information, if
any, contained in any Permitted Free Writing Prospectus) are, in
the informed judgment of management of the Eagle Rock Entities,
reasonable. There are no financial statements (historical or pro
forma) that are required to be included in the Registration
Statement, any Preliminary Prospectus or the Prospectus that are
not included as required. The Eagle Rock Entities do not have any
material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not described in the
Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and the Prospectus.
(x) No
Material Adverse Change . Subsequent to the respective dates as
of which information is given in the Registration Statement, the
Preliminary Prospectuses,
- 15 -
the Prospectus
and the Permitted Free Writing Prospectuses, if any, in each case
excluding any amendments or supplements to the foregoing made after
the execution of this Agreement, there has not been (i) any
material adverse change, or any development involving, individually
or in the aggregate, a prospective material adverse change, in the
business, properties, management, financial condition, prospects,
net worth or results of operations of the Eagle Rock Entities
(individually or in the aggregate), (ii) any transaction which
is material to the Eagle Rock Entities (individually or in the
aggregate), (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred
by any of the Eagle Rock Entities, which is material to the Eagle
Rock Entities (individually or in the aggregate), (iv) any
material change in the capitalization, ownership or outstanding
indebtedness of any of the Eagle Rock Entities or (v) any
dividend or distribution of any kind declared, paid or made on the
security interests of any of the Eagle Rock Entities, in each case
whether or not arising from transactions in the ordinary course of
business.
(y) Lock-Up Agreement . The Eagle Rock Entities have
obtained for the benefit of the Underwriters the agreement (a
“ Lock-Up Agreement ”), in the form set forth as
Exhibit A hereto, of each of the directors and
“officers” of G&P (within the meaning of
Rule 16a-1(f) under the Exchange Act), the Private Investors,
as such term is defined in the Prospectus under the caption
“Summary—Formation Transactions and Partnership
Structure—General”, each Directed Unit Participant who
purchases Reserved Units, each holder of Sponsor Units and each
holder of Partnership Units named in Exhibit A-1
hereto.
(z) Investment Company . None of the Eagle Rock
Entities is and at no time during which a prospectus is required by
the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection
with any sale of Units will any of them be, and, after giving
effect to the Offering and sale of the Units, none of them will be,
an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “ Investment Company Act
”).
(aa) Title to Properties . Each of the Eagle Rock
Entities has good and marketable title to all real property and
good title to all personal property described in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, as being owned by any
of them, free and clear of all Liens except Liens, individually or
in the aggregate, that would not have a Material Adverse Effect,
Liens that would not materially interfere with the use of any such
property for the conduct of its businesses and Liens described in
the Registration Statement, the Preliminary Prospectus and the
Prospectus under the caption “Management’s Discussion
and Analysis of Financial Condition and Results of
Operations—Capital Requirements.” All of the property
described in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, as being held under lease by any of the Eagle
Rock Entities is held thereby under valid, subsisting and
enforceable leases.
- 16 -
(bb) Rights-of-Way . Each of the Eagle Rock Entities
has such consents, easements, rights-of-way or licenses from any
person (“ rights-of-way ”) as are necessary to
enable it to conduct its business in the manner described in the
Registration Statement, any Preliminary Prospectus, the Prospectus
or any Permitted Free Writing Prospectus, subject to such
qualifications as may be set forth in the Registration Statement,
any Preliminary Prospectus, the Prospectus or any Permitted Free
Writing Prospectus; and, except as described in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus or as would not interfere with
the operations of the Eagle Rock Entities as conducted on the date
hereof to such a material extent that the Representatives could
reasonably conclude that proceeding with the Offering would be
inadvisable, none of such rights-of-way contains any restriction
that is materially burdensome to the Eagle Rock Entities, taken as
a whole.
(cc) Intellectual Property . Each of the Eagle Rock
Entities owns or possesses all inventions, patent applications,
patents, trademarks (both registered and unregistered), tradenames,
service names, copyrights, trade secrets and other proprietary
information described in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, as being owned or licensed by it or
which is necessary for the conduct of, or material to, its
respective businesses, except where the failure to own, license or
have such rights would not, individually or in the aggregate, have
a Material Adverse Effect (collectively, the “
Intellectual Property ”), and the Eagle Rock Entities
are unaware of any claim to the contrary or any challenge by any
other person to the rights of any of the Eagle Rock Entities with
respect to the Intellectual Property. None of the Eagle Rock
Entities has infringed or is infringing the intellectual property
of a third party, and none of the Eagle Rock Entities has received
notice of a claim by a third party to the contrary.
(dd) Labor and Employment . None of the Eagle Rock
Entities is engaged in any unfair labor practice; no labor disputes
with the employees that are engaged in the businesses of the Eagle
Rock Entities exist or, to the knowledge of the Eagle Rock Parties
after due inquiry, are imminent or threatened that would,
individually or in the aggregate, have a Material Adverse Effect.
To the knowledge of the Eagle Rock Parties: (i) there is
(A) no unfair labor practice complaint pending or threatened
against any of the Eagle Rock Entities before the National Labor
Relations Board, and no grievance or arbitration proceeding arising
out of or under collective bargaining agreements is pending or
threatened, (B) no strike, labor dispute, slowdown or stoppage
pending or threatened against any of the Eagle Rock Entities and
(C) no union representation dispute currently existing
concerning the employees of any of the Eagle Rock Entities,
(ii) no union organizing activities are currently taking place
concerning the employees of any of the Eagle Rock Entities and
(iii) there has been no violation of any federal, state, local or
foreign law relating to discrimination in the hiring, promotion or
pay of employees, any applicable wage or hour laws or any provision
of the Employee Retirement Income Security Act of 1974, as amended
(“ ERISA ”), or the rules and regulations
promulgated thereunder concerning the employees of the Eagle Rock
Entities.
- 17 -
(ee) Environmental Compliance . Except as described in
the Registration Statement, any Preliminary Prospectus, the
Prospectus and any Permitted Free Writing Prospectus, each of the
Eagle Rock Entities and their subsidiaries (i) is in
compliance with any and all applicable federal, state, local or
foreign laws, statutes, ordinances, rules, regulations, orders,
decrees, judgments, injunctions, permits, licenses, authorizations
or other binding requirements, or common laws, relating to
health,
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