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EXHIBIT 1.1
EXECUTION COPY
EV ENERGY PARTNERS, L.P.
3,900,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
September 26, 2006
A.G. EDWARDS & SONS, INC.
RAYMOND JAMES & ASSOCIATES, INC.
WACHOVIA CAPITAL MARKETS, LLC
OPPENHEIMER & CO. INC.
c/o A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63103
The
undersigned, EV Energy Partners, L.P., a Delaware limited
partnership
(the "Partnership"), EV Energy GP, L.P., a Delaware limited
partnership and
general partner of the Partnership (the "General Partner"), EV
Management, LLC,
a Delaware limited liability company and general partner of the
General Partner
("GP LLC"), EV Properties, L.P., a Delaware limited partnership
(the "Operating
Partnership"), EV Properties GP, LLC, a Delaware limited liability
company and
general partner of the Operating Partnership (the "Operating
Partnership GP"),
EnerVest Management Partners, Ltd., a Texas limited partnership
("EVMP"), CGAS
Exploration, Inc., an Ohio corporation ("CGAS"), EnerVest
Operating, LLC, a
Texas limited liability company ("EVOC"), EnCap Energy Capital Fund
V, L.P., a
Texas limited partnership ("EnCap Fund V"), EnCap V-B Acquisitions,
L.P., a
Texas limited partnership (together with EnCap Fund V, the "EnCap
Entities"),
EVEC Holdings, LLC, a Delaware limited liability company ("EVH"),
and CGAS
Holdings, LLC, a Delaware limited liability company ("CGH" and
together with
EVMP, EVH and the EnCap Entities, the "Sponsor Entities"), hereby
address you as
the "Underwriters" and hereby confirm their agreement with the
several
Underwriters named below.
The
Partnership, the General Partner, GP LLC, the Operating
Partnership
GP, the Operating Partnership, and the Sponsor Entities are
collectively
referred to herein as the "EVEP Parties." The Partnership, the
General Partner,
GP LLC, the Operating Partnership GP and the Operating Partnership
and the other
Subsidiaries (as defined in Section 5(l)) are referred to
collectively herein as
the "Partnership Entities."
It is
understood and agreed by all that the Partnership was recently
formed by EVMP and the General Partner to acquire, produce and
develop oil and
natural gas properties. The Partnership will initially own oil and
natural gas
properties and related gathering systems and production assets in
Northern
Louisiana (the "Monroe Assets"), primarily in West Virginia
(the
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"West Virginia Assets") and primarily in Ohio (the "Clinton
Assets"). Currently,
the Operating Partnership indirectly owns all of the interests in
the Monroe
Assets through its direct and indirect ownership of EnerVest
Production
Partners, L.P. ("EVPP") and its indirect ownership of Lower Cargas
Operating
Company LLC ("LCOC") and all of the West Virginia Assets through
its direct and
indirect ownership of EnerVest WV, LP ("EVWV"); and CGAS owns all
of the Clinton
Assets.
Prior to
the date hereof, the following transactions occurred:
1.
EVOC
formed EVPP GP LLC, a Delaware limited liability company ("EVPP
GP").
2.
EVOC
contributed its general partner interest in EVPP and its
general partner interest in EnerVest-Cargas, Ltd., a Texas
limited
partnership ("EV Cargas") to EVPP GP.
3.
EVMP
formed EVWV GP LLC, a Delaware limited liability company ("EVWV
GP").
4.
EVMP
contributed its general partner interest in EVWV to EVWV GP.
5.
EVMP,
certain members of management, and the EnCap Entities formed
EV Investors, L.P. ("EV Investors"), a Delaware limited
partnership.
6.
EVMP
formed Operating Partnership GP.
7.
Operating
Partnership GP, EVMP, EVOC, the EnCap Entities and EV
Investors formed the Operating Partnership.
8.
Operating
Partnership GP contributed cash to Operating Partnership
in exchange for a 0.01% general partner interest in Operating
Partnership.
9.
EVMP
contributed the membership interest in EVWV GP and its limited
partner interest in EVPP (subject to debt of $10.3 million
incurred
to purchase the Northern Louisiana properties (the "EVPP Debt"))
to
Operating Partnership in exchange for a 7.71% limited partner
interest in Operating Partnership
10.
EVOC contributed
its 100% member interest in EVPP GP to Operating
Partnership in exchange for a 54.03% limited partner interest
in
Operating Partnership.
11.
The EnCap
Entities contributed an aggregate net $16 million to
Operating Partnership in exchange for an aggregate 33.25%
limited
partner interest in Operating Partnership.
12.
The Operating
Partnership issued a 5.00% Class B limited partner
interest to EV Investors.
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13.
The Operating
Partnership paid $16 million to Liberty Energy, LLC, a
Massachusetts limited liability company ("LEC") (and successor
to
Liberty Energy Corporation), in exchange for LEC's limited
partnership interest in EVWV.
14.
The Operating
Partnership formed EVCG GP LLC ("EVCG GP"), a Delaware
limited liability company.
15.
EVCG GP, as
general partner, and CGAS, as limited partner, formed
CGAS Properties, L.P. ("Clinton Properties"), a Delaware
limited
partnership.
16.
EVMP formed GP
LLC.
17.
GP LLC, as
general partner, and EVMP, as limited partner, formed the
General Partner.
18.
The General
Partner, as general partner, and EVMP, as limited
partner, formed the Partnership.
The
transactions described in clauses (1)-(18) above are referred
to
herein collectively as the "Prior Transactions."
It is
further understood and agreed to by all parties that, on or prior
to
the Closing Date, the following transactions will occur:
1.
CGAS has
formed CGH and assigned to it the right to receive the
Common Units and Subordinated Units that CGAS is entitled to
receive
from the Partnership as described herein.
2.
EVMP
formed EVH and assigned to it the right to receive the Common
Units and Subordinated Units that EVMP and EVOC are entitled to
receive from the Partnership as described herein.
3.
CGAS will
contribute the Clinton Assets subject to existing hedges
to Clinton Properties and following such transfer will own a
99.99%
interest as limited partner in Clinton Properties.
4.
GP LLC
will pay $288.30 to the General Partner to retain its a 0.01%
general partner interest in the General Partner.
5.
EVMP will
contribute its 100% member interest in the Operating
Partnership GP and a portion (3.44%) of its limited partner
interest
in the Operating Partnership to the General Partner in exchange
for
a 71.24% limited partner interest in the General Partner.
6.
The EnCap
Entities will contribute a portion (1.18%) of their
aggregate limited partner interest in the Operating Partnership
to
the General Partner in exchange for an aggregate 23.75% limited
partner interest in the General Partner.
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7.
EV
Investors will contribute $144,150.00 to the General Partner
for
a 5.00% limited partnership interest in the General Partner.
8.
The
General Partner will contribute its 100% member interest in the
Operating Partnership GP, its 4.63% limited partner interests in
the
Operating Partnership to the Partnership and $144,150.00 in
exchange
for (a) a 2% general partner interest in the Partnership and (b)
the
Incentive Distribution Rights (as defined in Section 1.1 of the
Partnership Agreement).
9.
EVOC will
contribute its 58.30% limited partner interest in the
Operating Partnership to the Partnership in exchange for (a)
138,381
Common Units (as defined in Section 1.1 of the Partnership
Agreement) representing limited partner interests in the
Partnership
to be issued to EVH, (b) 810,030 Subordinated Units (as defined
in
Section 1.1 of the Partnership Agreement) representing limited
partner interests in the Partnership to be issued to EVH, and
(c)
the right to receive $14,519,564.03 from the Offering Proceeds
(as
defined below).
10.
EVMP will
contribute the remainder (4.27%) of its limited partner
interest in the Operating Partnership to the Partnership in
exchange
for (a) 25,244 Subordinated Units representing limited partner
interests in the Partnership to be issued to EVH, and (b) the
right
to receive $2,072,327.22 from the Offering Proceeds.
11.
The EnCap
Entities will contribute the remainder (32.07%) of their
limited partner interest in the Operating Partnership to the
Partnership in exchange for (a) 88,120 Common Units
representing
limited partner interests in the Partnership, (b) 436,170
Subordinated Units representing limited partner interests in
the
Partnership, and (c) the right to receive $8,935,488 from the
Offering Proceeds.
12.
EV Investors
will contribute its 5.00% limited partner interest in
the Operating Partnership to the Partnership in exchange for
155,000
Subordinated Units representing limited partner interests in
the
Partnership.
13.
CGAS will
transfer its limited partner interest in EVCG to the
Partnership in exchange for (a) 343,255 Common Units
representing
limited partner interests in the Partnership to be issued to
CGH,
(b) 1,698,800 Subordinated Units representing limited partner
interests in the Partnership to be issued to CGH, and (c) the
right
to receive $34,806,771.14 from the Offering Proceeds.
14.
The public,
through the underwriters, will contribute $72.54 million
in cash, $78.0 million of gross proceeds, net of the
Underwriters'
discounts and commissions and a structuring fee (the "Offering
Proceeds"), to the Partnership in exchange for 3.9 million
Common
Units representing a 50.3% limited partner interest in the
Partnership (the "Offering").
15.
The Partnership
will use the Offering Proceeds and the cash
contribution from the General Partner to (i) pay the
underwriters'
structuring fee, (ii) pay approximately $2.0 million in
offering
expenses (net of the Underwriters' discounts and commissions
and
structuring fees) incurred by EVMP on behalf of the
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Partnership, (iii) contribute $10.35 million to the Operating
Partnership, and the Operating Partnership will repay the EVPP
Debt
and (iv) distribute to EVMP, EVOC, EV Investors, the EnCap
Entities
and CGAS a total of $60.33 million in the amounts to which they
are
entitled with respect to each entity's respective contribution
to
the Partnership.
16.
The Partnership
will contribute the limited partner interest in EVCG
to the Operating Partnership as a capital contribution.
17.
The Operating
Partnership will enter into $150 million revolving
credit facility with JP Morgan Securities Inc., as
administrative
agent, and the other lenders named therein (collectively with
the
other financing documents entered into in connection therewith,
the
"Credit Facility").
18.
The agreements
of limited partnership and the limited liability
company agreements of the aforementioned entities will be
amended
and restated to the extent necessary to reflect the foregoing
transactions and any other transactions contemplated by the
Contribution Documents (as defined below).
19.
If the
Underwriters exercise their option to purchase any Option
Units within 30 days after the date of this Agreement as provided
in
Section 4, the Partnership will use the net proceeds of the sale
of
those Option Units to redeem a pro rata portion of the Common
Units
issued to EVMP, EVOC, CGAS, and the EnCap Entities.
The
transactions described above in clauses (l)-(19) or otherwise
provided
for in the Contribution Documents (as defined below) together with
the Prior
Transactions, are referred to as the "Transactions." In connection
with the
Transactions, the parties to the Transactions have entered or will
enter into
various bills of sale, assignments, conveyances, contribution
agreements and
related documents (collectively, the "Contribution Documents"). The
Omnibus
Agreement to be dated the Closing Date among the Partnership, the
General
Partner, the GP LLC, the Operating Partnership and EVMP is referred
to herein as
the "Omnibus Agreement." The Investor Rights Agreement to be dated
the Closing
Date among EVMP, EVOC, EV Investors, CGAS, the EnCap Entities and
EV Management,
L.P. is referred to herein as the "Investor Agreement." The
Contribution
Documents, the Credit Facility, the Omnibus Agreement and the
Investor Agreement
are referred to herein collectively as the "Transaction
Documents."
1.
DEFINITIONS. As used in this Agreement:
(i) "Disclosure Package" shall mean the Statutory Prospectus,
any Preliminary Prospectus together with any combination of one
or
more of the Permitted Free Writing Prospectuses, if any, and
any
other free writing prospectus that the parties hereto shall
hereafter expressly agree in writing to treat as part of the
Disclosure Package.
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(ii) "Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or
amendments
thereto and any Rule 462(b) Registration Statement became or
become
effective.
(iii) "Execution Time" shall mean the date and time (3:10
p.m., Central Daylight Time) that this Agreement is executed
and
delivered by the parties hereto.
(iv) "Issuer Free Writing Prospectus" shall mean an issuer
free writing prospectus, as defined in Rule 433.
(v) "Permitted Free Writing Prospectus" shall mean the
documents listed on Schedule III 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 Underwriters and the
Partnership
provide their prior consent.
(vi) "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in paragraph 5(a) below and any
preliminary
prospectus included in the Registration Statement at the
Effective
Date that omits Rule 430A Information.
(vii) "Prospectus" shall mean the prospectus relating to the
Units that is first filed pursuant to Rule 424(b) after the
Execution Time.
(viii) "Registration Statement" shall mean the registration
statement referred to in paragraph 5(a) below, including
exhibits
and financial statements and any prospectus supplement relating
to
the Units that is filed with the SEC pursuant to Rule 424(b)
and
deemed part of such registration statement pursuant to Rule 430A,
as
amended at the Execution Time and, in the event any
post-effective
amendment thereto or any Rule 462(b) Registration Statement
becomes
effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be.
(ix) "Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant
to
Rule 462(b) relating to the offering covered by the
registration
statement referred to in Section 5(a) hereof.
(x) "Statutory Prospectus" shall mean the preliminary
prospectus relating to the Units that is included in the
registration statement relating to the Units immediately prior
to
the Execution Time, including any document that is incorporated
by
reference therein.
2.
DESCRIPTION OF COMMON UNITS. The Partnership proposes to issue and
sell
to the Underwriters 3,900,000 Common Units (the "Firm Units").
Solely for the
purpose of covering
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over-allotments in the sale of the Firm Units, the Partnership
further proposes
to grant to the Underwriters the right to purchase up to an
additional 585,000
Common Units (the "Option Units"), as provided in Section 4 of this
Agreement.
The Firm Units and the Option Units are herein sometimes referred
to as the
"Units" and are more fully described in the Prospectus hereinafter
defined.
3.
PURCHASE, SALE AND DELIVERY OF THE FIRM UNITS. On the basis of
the
representations, warranties and agreements herein contained, but
subject to the
terms and conditions herein set forth, the Partnership agrees to
sell to the
Underwriters, and each such Underwriter agrees, severally and not
jointly, (a)
to purchase from the Partnership, at a purchase price of $18.70 per
unit, the
number of Firm Units set forth opposite the name of such
Underwriter in Schedule
I hereto and (b) to purchase from the Partnership any additional
number of
Option Units which such Underwriter may become obligated to
purchase pursuant to
Section 4 hereof.
Delivery
of the Firm Units will be in book-entry form through the
facilities of The Depository Trust Company, New York, New York
("DTC"). Delivery
of the documents required by Section 7 hereof with respect to the
Units shall be
made at or prior to 11:00 a.m. on September 29, 2006 at the offices
of Haynes
and Boone, LLP, 1221 McKinney, Suite 2100, Houston, Texas 77010 or
at such other
place as may be agreed upon between A.G. Edwards & Sons, Inc.
and the
Partnership (the "Place of Closing"), or at such other time and
date not later
than five full business days thereafter as A.G. Edwards & Sons,
Inc. and the
Partnership may agree, such time and date of payment and delivery
being herein
called the "Closing Date."
The
Partnership will cause its transfer agent to deposit as original
issue
the Firm Units pursuant to the Full Fast Delivery Program of the
DTC.
It is
understood that an Underwriter, individually, may (but shall not
be
obligated to) make payment on behalf of the other Underwriters
whose funds shall
not have been received prior to the Closing Date for Units to be
purchased by
such Underwriter. Any such payment by an Underwriter shall not
relieve the other
Underwriters of any of their obligations hereunder.
It is
understood that the Underwriters propose to offer the Units to
the
public upon the terms and conditions set forth in the Registration
Statement
hereinafter defined.
4.
PURCHASE, SALE AND DELIVERY OF THE OPTION UNITS. The Partnership
hereby
grants an option to the Underwriters to purchase from the
Partnership up to
585,000 Option Units, on the same terms and conditions as the Firm
Units;
provided, however, that such option may be exercised only for the
purpose of
covering any over-allotments that may be made by the Underwriters
in the sale of
the Firm Units. No Option Units shall be sold or delivered unless
the Firm Units
previously have been, or simultaneously are, sold and
delivered.
The option
is exercisable by the Underwriters at any time, and from time
to time, before the expiration of 30 days from the date of the
Prospectus (or,
if such 30th day shall be a Saturday or Sunday or a holiday, on the
next day
thereunder when the NASDAQ Global Market is open for trading), for
the purchase
of all or part of the Option Units covered thereby, by notice given
by A.G.
Edwards & Sons, Inc. to the Partnership in the manner provided
in Section 13
hereof,
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setting forth the number of Option Units as to which the
Underwriters are
exercising the option, and the date of delivery of said option
Units, which date
shall not be more than five business days after such notice unless
otherwise
agreed to by the Partnership and A.G. Edwards & Sons, Inc. The
Underwriters may
terminate the option at any time, as to any unexercised portion
thereof, by
giving written notice from A.G. Edwards & Sons, Inc. to the
Partnership to such
effect.
The
Underwriters shall make such allocation of the Option Units among
them
as may be required to eliminate purchases of fractional Units.
Delivery
of the Option Units will be in book-entry form through the
facilities of DTC. Delivery of the documents required by Section 7
hereof with
respect to the Units shall be made at the Place of Closing at or
prior to 11:00
a.m. on the date designated in the notice given by A.G. Edwards
& Sons, Inc. as
provided above, or at such other time and date as A.G. Edwards
& Sons, Inc. and
the Partnership may agree (which may be the same as the Closing
Date), such time
and date of payment and delivery being herein called the "Option
Closing Date."
On the Option Closing Date, the Partnership Entities and EVMP shall
provide the
Underwriters such representations, warranties, agreements,
opinions, letters,
certificates and covenants with respect to the Option Units as are
required to
be delivered on the Closing Date with respect to the Firm
Units.
The
Partnership will cause its transfer agent to deposit as original
issue
the Option Units pursuant to the Full Fast Delivery Program of the
DTC.
5.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE EVEP PARTIES.
The
EVEP Parties jointly and severally represent and warrant to and
agree with each
Underwriter as set forth below; provided, however that the
representations and
warranties of the EnCap Entities shall be several, as to themselves
only, and
shall be limited to only Sections 5(a), (f), (h) and (q), each with
respect
solely to statements and information specifically concerning and
the EnCap
Entities or their ownership of Sponsor Units (as defined in Section
5(f):
(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 on Form 8-A has
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become
effective as provided in Section 12 of the Exchange Act; the
Registration Statement did not, as of the Effective Date, contain
an
untrue
statement of a material fact or omit to state a material fact
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 the 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 the
date of each such Permitted Free Writing Prospectus and ends at
the
time of
purchase did or will any such 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 EVEP
Parties
make no representation or warranty in this Section 5(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 information concerning
an
Underwriter and 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. If required, 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.
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(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 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.
(c) Other Sales. The Partnership has not sold or issued any
Units
during the
six-month period preceding the date of the Preliminary
Prospectus, other than pursuant to acquisitions, employee benefit
plans,
qualified
options plans or other employee compensation plans or pursuant
to
outstanding options, rights or warrants described in the
Disclosure
Package
and the Prospectus.
(d) Formation and Due Qualification. Formation and Due
Qualification. Each of the Partnership Entities has been duly
formed or
incorporated and is validly existing as a limited partnership or
limited
liability
company, as the case may be, in good standing under the laws of
its
respective jurisdiction of formation or incorporation, and is, or
at
the
Closing Date will be, duly registered or qualified to do business
and
is in good
standing as a foreign limited partnership or foreign limited
liability
company, as the case may be, in each jurisdiction in which its
ownership
or lease of property or the conduct of its businesses requires
such
registration or qualification, except where the failure so to
register
or qualify would not (i) have a material adverse effect on the
consolidated financial position, partners' or members' equity,
results of
operations, business or prospects of the Partnership Entities taken
as a
whole (a
"Material Adverse Effect") or (ii) subject the limited partners
of the
Partnership to any material liability or disability, as
10
<PAGE>
set forth
under its name on Schedule II to this Agreement. Each of the
Partnership Entities has all limited partnership or limited
liability
company,
as the case may be, power and authority necessary to own or
lease
its
properties currently owned or leased or to be owned or leased at
the
Closing
Date, to assume the liabilities assumed or being assumed by it
pursuant
to the Transaction Documents and to conduct its business as
currently
conducted and as to be conducted at the Closing Date, in each
case in
all material respects as described in the Prospectus.
(e) Ownership of the General Partner Interest in the Partnership.
At
the
Closing Date and the Option Closing Date, 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.
Such
general
partner interest will be duly authorized and validly issued in
accordance
with the partnership agreement of the Partnership (as the same
may be
amended or restated at or prior to the Closing Date, 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 Section 17-303 and 17-607 of
the
Delaware
Revised Uniform Limited Partnership Act (the "Delaware LP
Act")),
and the
General Partner will own such general partner interest free and
clear of
all liens, encumbrances (except restrictions on transferability
described
in the Prospectus), security interests, equities, charges or
claims.
(f) Ownership of Sponsor Units and the Incentive Distribution
Rights.
Assuming no purchase by the Underwriters of any Option Units on
the
Closing Date, at the Closing Date, after giving effect to the
Transactions, (i) EVH will own 163,625 Common Units and 810,030
Subordinated Units, (ii) EV Investors will own 155,000 Subordinated
Units,
(iii) CGH
will own 343,255 Common Units and 1,698,800 Subordinated Units,
(iv) the
EnCap Entities will own 88,120 Common Units and 436,170
Subordinated Units (all such Common Units and Subordinated Units
being
collectively referred to herein as the "Sponsor Units") as
described in
the
Prospectus and (v) the General Partner will own all of the
incentive
distribution rights in the Partnership (as defined in the
Partnership
Agreement,
the "Incentive Distribution Rights"); all of such Sponsor Units
and
Incentive Distribution Rights and the limited partner interests
represented thereby will be duly authorized and validly issued
in
accordance
with the Partnership Agreement, and will be fully paid (to the
extent
required under the Partnership Agreement) and nonassessable
(except
as such
nonassessability may be affected by Sections 17-303 and 17-607
of
the
Delaware LP Act and as otherwise described in the Prospectus under
the
caption
"The Partnership Agreement--Limited Liability," "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 "Risk Factors--Risks Inherent in an Investment in
Us--Unitholders may have liability to repay distributions that
were
wrongfully
distributed to them"); and at the Closing Date, EVMP, EV
Investors,
CGAS and the EnCap Entities will own their respective Sponsor
Units and
the General Partner will own the Incentive Distribution Rights
free and
clear of all liens, encumbrances (except restrictions on
transferability as described in the Prospectus), security
interests,
equities,
charges or claims.
11
<PAGE>
(g) Valid Issuance of the Units. At the Closing Date or the
Option
Closing
Date, as the case may be, the Firm Units or the Option Units,
as
the case
may be, and the limited partner interests represented thereby,
will be
duly authorized by 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 Sections 17-303 and 17-607 of
the
Delaware
LP Act and as otherwise described in the Prospectus under the
caption
"The Partnership Agreement--Limited Liability," "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 "Risk Factors--Risks Inherent in an Investment in
Us--Unitholders may have liability to repay distributions that
were
wrongfully
distributed to them"); and other than the Sponsor Units and the
Incentive
Distribution Rights, the Units will be the only limited partner
interests
of the Partnership issued and outstanding at the Closing Date
or
the Option
Closing Date.
(h) Ownership of Partnership Interests in the General Partner.
At
the
Closing Date and the Option Closing Date, after giving effect to
the
Transactions, GP LLC will own 100% of the outstanding general
partner
interests
in the General Partner and EVMP, Encap Entities and EV
Investors
will own
100% of the outstanding limited partner interests in the
General
Partner;
all of such interests will be duly authorized and validly
issued
in
accordance with the limited partnership agreement of the
General
Partner
(as the same may be amended or restated at or prior to the
Closing
Date, the
"General Partner Partnership Agreement")) and will be fully
paid
(to the
extent required under the General Partner LP Agreement) and
nonassessable (except as such nonassessability may be affected by
Section
17-303 and
17-607 of the Delaware LP Act), and at the Closing Date, GP
LLC, EVMP,
the EnCap Entities and EV Investors will own such interests
free and
clear of all liens, encumbrances (except as described in the
Prospectus), security interests, equities, charges or claims.
(i) Ownership of Limited Liability Company Interests in the GP
LLC.
At the
Closing Date and the Option Closing Date, after giving effect
to
the
Transactions, EVMP will own 100% of the outstanding limited
liability
company
interests in GP LLC; all of such interests will be duly
authorized
and
validly issued in accordance with the limited liability company
agreement
of the GP LLC (as the same may be amended or restated at or
prior to
the Closing Date, the "GP LLC LLC Agreement"). All of such
interests
will be duly authorized and validly issued in accordance with
the GP LLC
LLC Agreement, fully paid (to the extent required under the GP
LLC LLC
Agreement) and nonassessable (except as such nonassessability
may
be
affected by Section 18-607 of the Delaware Limited Liability
Company
Act (the
"Delaware LLC Act")), and EVMP will own such interests free and
clear of all liens,
encumbrances (except as described in the Prospectus),
security
interests, equities, charges or claims.
(j) Ownership of Partnership Interests in the Operating
Partnership.
At the
Closing Date and the Option Closing Date, after giving effect
to
the
Transactions, Operating Partnership GP will own 100% of the
outstanding general partner interests in the Operating Partnership
and the
Partnership will own 100% of the outstanding limited
12
<PAGE>
partner
interests in the Operating Partnership; all of such interests
will
be duly
authorized and validly issued in accordance with the limited
partnership agreement of the Operating Partnership (as the same may
be
amended or
restated at or prior to the Closing Date, the "Operating
Partnership LP Agreement")) and will be fully paid (to the extent
required
under the
Operating Partnership LP Agreement) and nonassessable (except
as
such
nonassessability may be affected by Section 17-303 and 17-607 of
the
Delaware
LP Act), and Operating Partnership GP and the Partnership will
own such
interests free and clear of all liens, encumbrances (except as
described
in the Prospectus), security interests, equities, charges or
claims.
(k) Ownership of Limited Liability Company Interests in the
Operating
Partnership GP. At the Closing Date and the Option Closing
Date,
after
giving effect to the Transactions, the Partnership will own 100%
of
the
outstanding limited liability company interests in Operating
Partnership GP; all of such interests will be duly authorized and
validly
issued in
accordance with the limited liability company agreement of the
Operating
Partnership GP (as the same may be amended or restated at or
prior to
the Closing Date, the "Operating Partnership GP LLC
Agreement"),
and will
be fully paid (to the extent required under the Operating
Partnership GP
LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware
LLC
Act), and
the Partnership will own such interests free and clear of all
liens,
encumbrances, security interests, equities, charges or claims.
(l) Ownership of the Subsidiaries. At the Closing Date and the
Option
Closing Date, after giving effect to the Transactions, the
Partnership will, directly or indirectly, own 100% of the
limited
liability
company interests or partnership interests, as the case may be,
in EVPP GP
LLC, EVWV GP LLC, EVCG GP LLC, EVPP, EVWV, Clinton Properties,
EV Cargas
and LCOC (the "Subsidiaries," together with the Operating
Partnership and the Operating Partnership GP, the "Operating
Subsidiaries") free and clear of all liens, encumbrances,
security
interests,
equities, charges and other claims, except for liens created
pursuant
to the Credit Facility. At the Closing Date and the Option
Closing
Date, such limited liability company interests or partnership
interests,
as the case may be, will be duly authorized and validly issued
in
accordance with the limited liability company or limited
partnership
agreements, as the
case may be, of the respective Subsidiaries, and will
be fully
paid (to the extent required under their respective limited
liability
company agreement or limited partnership agreement) and
non-assessable (except as such nonassessability may be affected by
Section
18-607 of
the Delaware LLC Act, in the case of a Delaware limited
liability
company, or Section 17-607 of the Delaware LP Act, in the case
of a
Delaware limited partnership).
(m) No Other Subsidiaries. Other than ownership interests in
the
Operating
Subsidiaries, the Partnership does not own, and at the Closing
Date and
the Option Closing 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.
Other than
its ownership of its partnership interests in the Partnership,
the
General Partner does not own, and at the Closing Date and the
Option
Closing
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.
13
<PAGE>
(n) No Preemptive Rights, Registration Rights or Options. Except
as
described
in the Disclosure Package and the Prospectus, there are no
options,
warrants, preemptive rights or other rights to subscribe for or
to
purchase, nor any restriction upon the voting or transfer of,
any
partnership or limited liability company interests in any
Partnership
Entity.
Neither the filing of the Registration Statement nor the
offering
or sale of
the Units as contemplated by this Agreement gives rise to any
rights for
or relating to the registration of any Units or other
securities
of any of the Partnership Entities.
(o) Authority and Authorization. The Partnership has all
requisite
power and
authority to issue, sell and deliver (i) the Units, in
accordance
with and upon the terms and conditions set forth in this
Agreement,
the Partnership Agreement and the Registration Statement, the
Disclosure
Package and the Prospectus and (ii) the Sponsor Units and
Incentive
Distribution Rights, in accordance with and upon the terms and
conditions
set forth in the Partnership Agreement and the Transaction
Documents.
At the Closing Date and the Option Closing Date, all corporate,
partnership and limited liability company action, as the case may
be,
required
to be taken by the Partnership Entities or any of their
stockholders, members or partners for the authorization, issuance,
sale
and
delivery of the Units, the Sponsor Units and Incentive
Distribution
Rights,
the execution and delivery of the Operative Agreements (as
defined
in Section
4(q)) and the consummation of the transactions (including the
Transactions) contemplated by this Agreement and the Operative
Agreements,
shall have
been validly taken.
(p) Authorization of Underwriting Agreement. This Agreement has
been
duly
authorized and validly executed and delivered by each of the
EVEP
Parties.
(q) Enforceability of Other Agreements. At or before the
Closing
Date:
(i) the Partnership Agreement (in substantially the form
included in the Prospectus) will have been duly authorized,
executed
and delivered by the General Partner and the Sponsor Entities
and
will be a valid and legally binding agreement of the General
Partner
and the Sponsor Entities enforceable against each of them in
accordance with its terms;
(ii) the General Partner Partnership Agreement, GP LLC LLC
Agreement, Operating Partnership LP Agreement, Operating
Partnership
GP LLC Agreement and the limited liability company agreement or
limited partnership agreement, as applicable, of each of the
Subsidiaries (together with the Partnership Agreement (as
described
above), the "Partnership Entity Operative Agreements") will
have
been duly authorized, executed and delivered by the parties
thereto
and will be valid and legally binding agreements of the parties
thereto, enforceable against such parties in accordance with
their
respective terms; and
(iii) each of the Transaction Documents will have been duly
authorized, executed and delivered by the parties thereto and
will
be valid and legally binding agreements of the parties thereto,
enforceable against such parties in accordance with their
respective
terms;
14
<PAGE>
provided
that, with respect to each agreement described in this Section
5(q), 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. The Partnership Entity
Operative
Agreements and the Transaction Documents are herein
collectively
referred
to as the "Operative Agreements."
(r) No Conflicts. None of the offering, issuance and sale by
the
Partnership of the Units, the execution, delivery and performance
of this
Agreement
or the Operative Agreements by the Partnership Entities which
are
parties hereto or thereto, or the consummation of the
transactions
contemplated hereby and thereby (including the Transactions) (i)
conflicts
or will
conflict with or constitutes or will constitute a violation of
the
partnership agreement, limited liability company agreement,
certificate of
formation
or conversion, certificate or articles of incorporation, bylaws
or other
constituent document of any of the Partnership Entities, (ii)
conflicts
or will conflict with or constitutes or will constitute a
breach
or
violation of, or a default (or an event which, with notice or lapse
of
time or
both, would constitute such a default) under any indenture,
mortgage,
deed of trust, loan agreement, lease or other agreement or
instrument
to which any of the Partnership Entities is a party or by which
any of
them or any of their respective properties may be bound, (iii)
violates or will
violate any statute, law or regulation or any order,
judgment,
decree or injunction of any court or governmental agency or
body
directed
to any of the Partnership Entities or any of their properties
in
a
proceeding to which any of them or their property is a party or
(iv)
results or
will result in the creation or imposition of any lien, charge
or
encumbrance upon any property or assets of any of the
Partnership
Entities
(other than liens created under the Credit Facility), which
conflicts,
breaches, violations, defaults or liens, in the case of clauses
(ii),
(iii) or (iv), would, individually or in the aggregate, have a
Material
Adverse Effect or would materially impair the ability of any of
the
Partnership Entities to perform their obligations under this
Agreement
or the
Operative Agreements.
(s) No Consents. No permit, consent, approval, authorization,
order,
registration, filing or qualification ("Consent") of or with any
court,
governmental agency or body having jurisdiction over any of the
Partnership Entities or any of their respective properties is
required in
connection
with the offering, issuance and sale by the Partnership of the
Units, the
execution, delivery and performance of this Agreement and the
Operative
Agreements by the Partnership Entities party hereto and
thereto,
or the
consummation by the Partnership Entities of the transactions
contemplated hereby and thereby (including the Transactions),
except (i)
as
described in the Registration Statement, the Prospectus and the
Disclosure
Package, (ii) for registration of the Units under the 1933 Act
and
Consents required under the Securities Exchange Act of 1934, as
amended
(the "1934 Act") and applicable state securities or "Blue Sky"
laws in
connection with the purchase and distribution of the Units by
the
Underwriters, (iii) for such Consents that have been, or prior to
the
Closing
Date will be, obtained, and (iv) for such Consents which, if
not
obtained,
would not, individually or in the aggregate, have a
15
<PAGE>
Material
Adverse Effect or materially impair the ability of any of the
Partnership Entities to perform their obligations under this
Agreement or
the
Operative Agreements.
(t) No Default. None of the Partnership Entities is (i) in
violation
of its
partnership agreement, limited liability company agreement,
certificate of formation or conversion, certificate or articles
of
incorporation, bylaws or other constituent document, (ii) in
violation of
any law,
statute, ordinance, administrative or governmental rule or
regulation
applicable to it or of any order, judgment, decree or
injunction
of any court or governmental agency or body having jurisdiction
over it or
(iii) in breach, default (or an event which, with notice or
lapse of
time or both, would constitute such a default) or violation in
the
performance of any obligation, agreement or condition contained in
any
bond,
debenture, note or any other evidence of indebtedness or in any
agreement,
indenture, lease or other instrument to which it is a party or
by which
it or any of its properties may be bound, which breach, default
or
violation in the case of clause (ii) or (iii) would, if continued,
have
a Material
Adverse Effect or materially impair the ability of any of the
Partnership Entities to perform their obligations under this
Agreement or
the
Operative Agreements. To the knowledge of the EVEP Parties, no
third
party to
any indenture, mortgage, deed of trust, loan agreement or other
agreement
or instrument to which any of the Partnership Entities is a
party or
by which any of them is bound or to which any of their
properties
is
subject, is in breach, default or violation of any such
agreement,
which
breach, default or violation would, if continued, have a
Material
Adverse
Effect or materially impair the ability of any of the
Partnership
Entities
to perform their obligations under this Agreement or the
Operative
Agreements.
(u) Conformity of Securities to Descriptions in the Disclosure
Package
and the Prospectus. The Units, when issued and delivered in
accordance
with the terms of the Partnership Agreement against payment
therefor
as provided herein, and the Sponsor Units 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
descriptions thereof contained in the Registration Statement,
the
Prospectus
and the Disclosure Package.
(v) Independent Public Accountants. The accountants, Deloitte
&
Touche
LLP, who have certified or shall certify the audited financial
statements
included in the Registration Statement, the Preliminary
Prospectus
and the Prospectus (or any amendment or supplement thereto),
were
independent registered public accountants with respect to the
Partnership and the General Partner as required by the 1933 Act and
the
1933 Act Rules
and Regulations during the periods covered by the financial
statements
on which they reported.
(w) Financial Statements. As of June 30, 2006, the Partnership
would
have had,
on the consolidated pro forma basis indicated in the Prospectus
(and any
amendment or supplement thereto), a capitalization as set forth
therein.
The historical financial statements (including the related
notes
and
supporting schedules) included in the Registration Statement,
the
Preliminary Prospectus and the Prospectus, together with the
related notes
(and any
amendment or supplement thereto) comply as to form in all
material
respects with the requirements of Regulation S-X under the 1933
Act
and
16
<PAGE>
present
fairly in all material respects the financial position, results
of
operations
and cash flows of the entities purported to be shown thereby on
the basis
stated therein at the respective dates or for the respective
periods to
which they apply and have been prepared in accordance with
generally
accepted accounting principles consistently applied throughout
the
periods involved, except to the extent disclosed therein. Any
pro
forma
financial statements or other pro forma financial information
set
forth in
the Registration Statement, the Prospectus and the Disclosure
Package
(and any amendment or supplement thereto) 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. The
pro forma
financial statements of the Partnership included in the
Registration Statement, the Preliminary Prospectus and the
Prospectus (and
any
amendment or supplement thereto) have been prepared in all
material
respects
in accordance with the applicable requirements of Article 11 of
Regulation
S-X of the Commission; the assumptions used in the preparation
of such
pro forma financial statements are, in the opinion of the
management
of the General Partner, reasonable; and the pro forma
adjustments reflected in such pro forma financial statements have
been
properly
applied to the historical amounts in compilation of such pro
forma
financial statements. There are no financial statements
(historical
or pro
forma) that are required to be included in the Registration
Statement,
the Prospectus and the Disclosure Package that are not included
as
required.
(x) Independent Petroleum Engineers. Cawley, Gillespie &
Associates,
Inc.
Services, whose report dated December 31, 2005 is referenced in
the
Registration Statement, Prospectus and Preliminary Prospectus and
who has
delivered
the letter referred to in Section 7(h) hereof, was, as of the
date of
such report, and is, as of the date hereof, an independent
reserve
engineer
with respect to the Partnership.
(y) Title to Real Property. Upon consummation of the Transactions
on
the
Closing Date, the Partnership Entities will have good, valid
and
indefeasible title to all of the interests in oil and gas
properties
underlying
the Partnership Entities estimates of their net proved reserves
contained
in the Prospectus and to all other real and personal property
reflected
in the Registration Statement, the Prospectus and any
Disclosure
Package as
assets owned by them, in each case, free and clear of all (i)
liens and
security interests or (ii) other claims and other encumbrances
(other
than liens or security interests) except, in each case, (1) as
described,
and subject to the limitations contained, in the Registration
Statement,
the Prospectus and the Disclosure Package or (2) such as do not
materially
interfere with the use of such properties taken as a whole as
they have
been used in the past and are proposed to be used in the future
as
described, and subject to limitations contained, in the
Registration
Statement,
the Prospectus and the Disclosure Package; provided that, with
respect to
any real property and buildings held under lease by any
Partnership Entity, such real property and buildings are held under
valid
and
subsisting and enforceable leases with such exceptions as do
not
materially
interfere with the use of the properties of the Partnership
Entities
taken as a whole as they have been used in the past as
described,
subject to
the limitations contained, in the Registration Statement, the
Prospectus
and the Disclosure Package and are proposed to be used in the
future as
described in contained in the Registration Statement, the
Prospectus
and the Disclosure Package; the leases, mineral interests,
operating
agreements and other contract rights to
17
<PAGE>
which the
Partnership Entities are a party give the Partnership Entities
the right,
in all material respects, to explore, develop or produce
hydrocarbons as described, and subject to the limitations
contained, in
the
Registration Statement, the Prospectus and the Disclosure Package.
The
care taken
by the Partnership Entities in acquiring or otherwise procuring
such
leases or mineral interests was generally consistent with
standard
industry
practices in the areas in which the Partnership Entities
operate
for
acquiring or procuring leases and interests therein to explore,
develop or
produce hydrocarbons.
(z) Information Underlying Reserve Report. The factual
information
underlying
the estimates of pro forma reserves of the Partnership
Entities,
which was supplied by the Partnership Entities to Cawley,
Gillespie
& Associates, Inc. For purposes of preparing the reserve
reports,
the estimates of pro forma net proved reserves and standardized
measure
attributable thereto, and the letter (the "Reserve Report
Letter")
of Cawley,
Gillespie & Associates, Inc. included as an annex to the
Prospectus, including, without limitation, production volumes,
costs of
operation and
development, current prices for production, agreements
relating
to current and future operations and sales of production, was
true and
correct in all material respects on the dates such estimates
were
made and
such information was supplied and was prepared in accordance
with
customary
industry practices; other than normal production of the
reserves
and
intervening market commodity price fluctuations, the
Partnership
Entities
are not aware of any facts or circumstances that would result
in
a material
adverse change in the reserves, or the present value of future
net cash
flows therefrom, as described in the Prospectus and as
reflected
in the
Reserve Report Letter; estimates of such reserves and present
values as
described in the Pricing Prospectus and reflected in the
Reserve
Report
Letter comply in all material respects with the applicable
requirements of Regulation S-X and Industry Guide 2 under the
Securities
Act.
(aa) No Material Adverse Change. None of the Partnership
Entities
has
sustained, since the date of the latest audited financial
statements
included
in the Registration Statement, the Prospectus and the
Disclosure
Package,
any material loss or interference with its business from fire,
explosion,
flood or other calamity, whether or not covered by insurance,
or from
any labor dispute or court or governmental action,
investigation,
order or
decree, otherwise than as set forth or contemplated in the
Registration Statement, the Prospectus and the Disclosure Package.
Except
as
disclosed in the Registration Statement, the Prospectus and the
Disclosure
Package (or any amendment or supplement thereto), subsequent to
the
respective dates as of which such information is given in the
Registration Statement, the Prospectus and the Disclosure Package
(or any
amendment
or supplement thereto), (i) none of the Partnership Entities
has
incurred
any liability or obligation, indirect, direct or contingent, or
entered
into any transactions, not in the ordinary course of business,
that,
singly or in the aggregate, is material to the Partnership
Entities,
(ii) there
has not been any material change in the capitalization, or
material
increase in the short-term debt or long-term debt, of any
Partnership Entity and (iii) there has not been any material
adverse
change, or
any development involving or which may reasonably be expected
to
involve, singly or in the aggregate, a prospective material
adverse
change in
or affecting the general affairs, business, prospects,
properties, management, condition (financial or other), partners'
equity,
members'
equity, net worth or results of operations of the Partnership
Entities.
18
<PAGE>
(bb) Legal Proceedings or Contracts to be Described or Filed.
There
are no
legal or governmental proceedings pending or, to the knowledge
of
the EVEP
Parties, threatened, against any of the Partnership Entities,
or
to which
any of the Partnership Entities is a party, or to which any of
their
respective properties is subject, that are required to be
described
in the
Registration Statement, the Prospectus and the Disclosure
Package
but are
not described as required, and there are no agreements,
contracts,
indentures, leases or other instruments that are required to be
described
in the the
Registration Statement, the Prospectus and the Disclosure
Package or
to be filed as exhibits to the Registration Statement that are
not
described or filed as required by the 1933 Act or the 1933 Act
Rules
and
Regulations.
(cc) Certain Relationships and Related Transactions. No
relationship, direct or indirect, exists between or among any
Partnership
Entity on
the one hand, and the directors, managers, officers, members,
partners,
stockholders, customers or suppliers of any Partnership Entity
on the
other hand, that is required to be described in the Prospectus
and
is not so
described. There are no outstanding loans, advances (except
normal
advances for business expenses in the ordinary course of
business)
or
guarantees of indebtedness by any Partnership Entity to or for
the
benefit of
any of the officers, directors or managers of any Partnership
Entity or
their respective family members, except as disclosed in the
Registration Statement, the Prospectus and the Disclosure Package.
No
Partnership Entity has, in violation of the Sarbanes-Oxley Act of
2002,
directly
or indirectly, extended or maintained credit, arranged for the
extension
of credit or renewed an extension of credit, in the form of a
personal
loan to or for any director, manager or executive officer of
any
Partnership Entity.
(dd) Rights-of-Way. Upon consummation of the Transactions on
the
Closing
Date, each of the Partnership Entities will have such
easements,
rights-of-way, permits or licenses (collectively, "rights-of-way")
and
consents
with respect to the transfer of any of the foregoing, as are
necessary
to conduct its business in the manner described, and subject to
the
limitations contained, in the Registration Statement, the
Prospectus
and the
Disclosure Package, except for (i) qualifications, reservations
and
encumbrances that would not have a Material Adverse Effect and
(ii)
such
rights-of-way or consents that, if not obtained, would not
have,
individually or in the aggregate, a Material Adverse Effect; other
than as
set forth,
and subject to the limitations contained, in the Registration
Statement,
the Prospectus and the Disclosure Package, each of the
Partnership Entities has, or upon consummation of the Transactions
at the
Closing
Date will have, fulfilled and performed all of its material
obligations with respect to such rights-of-way or consents and no
event
has
occurred that allows, or after notice or lapse of time would
allow,
revocation
or termination thereof or would result in any impairment of the
rights of
the holder of any such rights-of-way or consents, except for
such
revocations, terminations and impairments that would not have a
Material
Adverse Effect; and, except as described in the Registration
Statement,
the Prospectus and the Disclosure Package, none of such
rights-of-way or consents contains any restriction that is
materially
burdensome
to the business of the Partnership Entities, taken as a whole.
(ee) Sufficiency of Contribution Documents. The Contribution
Documents
were or will be legally sufficient to transfer or convey to the
Operating
Subsidiaries
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<PAGE>
satisfactory title to, or valid rights to use or manage, all
properties
not
already held by them that are, individually or in the
aggregate,
required
to enable the Partnership and the Subsidiaries to conduct their
operations
(in all material respects as contemplated by the Prospectus),
subject to
the conditions, reservations and limitations contained in the
Contribution Documents and those set forth in the Prospectus.
The
Operating
Subsidiaries, upon execution and delivery of the Contribution
Documents,
succeeded or will succeed in all material respects to the
business,
assets, properties, liabilities and operations reflected by the
pro forma
financial statements of the Partnership included in the
Prospectus, except as disclosed in the Prospectus and the
Contribution
Documents.
(ff) Permits. Each of the Partnership Entities has, or at the
Closing
Date will have, 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 Disclosure Package and the
Prospectus, subject to such qualifications as may be set forth in
the
Disclosure
Package and the Prospectus and except for such permits that, if
not
obtained, would not, individually or in the aggregate, have a
Material
Adverse
Effect; except as set forth in the Registration Statement, the
Prospectus
and the Disclosure Package, each of the Partnership Entities
has, or at
the Closing Date will have, fulfilled and performed all its
material
obligations with respect to such permits which are or will be
due
to have
been fulfilled and performed by such date and no event has
occurred
that would prevent the permits from being renewed or reissued
or
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 non-renewals, non-issuances,
revocations, terminations and impairments that would not,
individually or
in the
aggregate, have a Material Adverse Effect.
(gg) Books and Records. Each Partnership Entity (i) makes and
keeps
books,
records and accounts, which, in reasonable detail, accurately
and
fairly
reflect the transactions and dispositions of its 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 its financial statements
in
conformity
with generally accepted accounting principles and to maintain
accountability for its assets; (C) access to its assets is
permitted only
in
accordance with management's general or specific authorization; and
(D)
the
recorded accountability for assets is compared with existing assets
at
reasonable
intervals and appropriate action is taken with respect to any
differences.
(hh) Disclosure Controls. The General Partner has established
and
maintains
disclosure controls and procedures (as such term is defined in
Rule
13a-14 under the 1934 Act), which (i) are designed to ensure
that
material
information relating to the Partnership, including its
consolidated subsidiaries, is made known to the General
Partner's
principal
executive officer and its principal financial officer by others
within
those entities, and (ii) are effective in all material respects
to
perform
the functions for which they were established.
20
<PAGE>
(ii) Tax Returns. Each of the Partnership Entities has filed (or
has
obtained
extensions with respect to) all material federal, state, local
and
foreign income and franchise tax returns required to be filed
through
the date
hereof, which returns are complete and correct in all material
respects,
and has timely paid all taxes due thereon, other than those (i)
which are
being contested in good faith and for which adequate reserves
have been
established in accordance with generally accepted accounting
principles
or (ii) which, if not paid, would not have a Material Adverse
Effect.
(jj) Investment Company. None of the Partnership Entities is
now,
and after
sale of the Units to be sold by the Partnership hereunder and
application of the net proceeds from such sale as described in
the
Prospectus
under the caption "Use of Proceeds" will be an "investment
company"
or a company "controlled by" an "investment company" within the
meaning of
the Investment Company Act of 1940, as amended (the "Investment
Company
Act").
(kk) Environmental Compliance. The Partnership Entities (i) are
in
compliance
with any and all applicable federal, state and local laws and
regulations relating to the protection of human health and safety
and the
environment or imposing liability or standards of conduct
concerning any
Hazardous
Material (as hereinafter defined) ("Environmental Laws"), (ii)
have
received all permits required of them under applicable
Environmental
Laws to
conduct their respective businesses, (iii) are in compliance
with
all terms
and conditions of any such permit and (iv) do not have any
liability
in connection with the release into the environment of any
Hazardous
Material, except, in each case, where such noncompliance with
Environmental Laws, failure to receive required permits, failure to
comply
with the
terms and conditions of such permits or liability 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 other
Environmental
Law.
(ll) Sarbanes-Oxley Act of 2002. The Partnership is in compliance
in
all
material respects with all applicable provisions of the
Sarbanes-Oxley
Act of
2002 and the rules and regulations of the SEC and the NASDAQ
Global
Market
that pertain thereto that are effective.
(mm) No Labor Dispute. No labor dispute with the employees of
the
Partnership Entities exists or, to the knowledge of any of the
EVEP
Parties,
is imminent or threatened that is reasonably likely to result
in
a Material
Adverse Effect.
(nn) Insurance. A Partnership Entity, EVMP or EVOC maintains
insurance
covering the properties, operations, personnel and businesses
of
the
Partnership Entities against such losses and risks and in such
amounts
as is
reasonably adequate for the conduct of their respective
businesses
and the
value of their respective properties and as
21
<PAGE>
is
customary for companies engaged in similar businesses in
similar
industries. None of the Partnership Entities, EVMP or EVOC has
received
notice from any
insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order
to
continue
such insurance (including after giving effect to the
Transactions), and all such insurance is outstanding and duly in
force on
the date
hereof and will be outstanding and duly in force on the Closing
Date.
(oo) Litigation. Except as described in the Registration
Statement,
the
Prospectus and the Disclosure Package, 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
EVEP
Parties, threatened, to which any of the Partnership Entities is
or
may be a
party or to which the business or property of any of the
Partnership Entities is or may be subject, (ii) no injunction,
restraining
order or
order of any nature issued by a federal or state court or
foreign
court of
competent jurisdiction to which any of the Partnership Entities
is or may
be subject, that, in the case of clauses (i) and (ii) above, is
reasonably
likely to (A) individually or in the aggregate have a Material
Adverse
Effect, (B) prevent or result in the suspension of the offer,
issuance
or sale of the Units, or (C) in any manner draw into question
the
validity
of this Agreement.
(pp) No Distribution of Other Offering Materials. None of the
Partnership Entities have distributed and, prior to the later to
occur of
(i) the
Closing Date and (ii) completion of the distribution of the
Units,
will not
distribute, any prospectus (as defined under the 1933 Act) in
connection
with the offering and sale of the Units other than any
Prospectus, any Preliminary Prospectus, or any Permitted Free
Writing
Prospectus.
(qq) Listing. The Units have been approved for quotation on the
NASDAQ
Global Market, subject only to official notice of issuance.
(rr) Directed Unit Sales. None of the Directed Units (as defined
in
Section
6(a)(xvi) below) distributed in connection with the Directed
Unit
Program
(as defined in Section 6(a)(xvi) below) will be offered or sold
outside of
the United States. None of the Partnership Entities has
offered,
or caused the Underwriters 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 the Partnership Entities to alter
the
customer's or supplier's level or type of business with the
Partnership Entities, or (ii) a trade journalist or publication to
write
or publish
favorable information about the Partnership Entities or their
products
or services.
(ss) Brokers. Except as described in the Prospectus, there are
no
contracts,
agreements or understandings between any Partnership Entity and
any person
that would give rise to a valid claim against any Partnership
Entity or
any Underwriter for a brokerage commission, finder's fee or
other like
payment in connection with this offering of the Units.
(tt) Market Stabilization. None of the Partnership Entities (i)
has
taken, and
none of such persons shall take, directly or indirectly, any
action
designed to cause or
22
<PAGE>
result in,
or which has constituted or which might reasonably be expected
to
constitute, the stabilization or manipulation of the price of the
Units
to
facilitate the sale or resale of the Units in violation of any
law,
rule or
regulation or (ii) since the initial filing of the Registration
Statement, except as
contemplated by this Agreement, (A) has sold, bid
for,
purchased or paid anyone any compensation for soliciting purchases
of
the Units
or (B) has paid or agreed to pay to any person any compensation
for
soliciting another to purchase any other securities of the
Corporation.
(uu) Statistical and Market-Related Data. All statistical or
market-related data included in the Registration Statement, the
Preliminary Prospectuses, and the Disclosure Package, if any, are
based on
or derived
from sources that the Partnership reasonably believes to be
reliable
and accurate, and the Partnership has obtained the written
consent to
the use of such data from such sources to the extent required.
(vv) NASD Affiliations. To the Partnership's knowledge, there are
no
affiliations or associations between any member of the National
Association of Securities Dealers, Inc. ("NASD") and any of the
Partnership's officers or directors or the Partnership's 5% or
greater
securityholders, except as set forth in the Registration Statement,
the
Preliminary Prospectuses and the Prospectus.
Any
certificate signed by any officer of any Partnership Entity or
EVMP
and delivered to the Underwriters or to counsel for the
Underwriters pursuant to
this Agreement shall be deemed a representation and warranty by
such Partnership
Entity or EVMP to each Underwriter as to the matters covered
thereby.
6.
ADDITIONAL
COVENANTS.
(a) The EVEP Parties (but not including the EnCap Entities)
jointly
and
severally covenant and agree with the several Underwriters with
respect to
the provisions of this Section 6(a), and the EnCap Entities
severally
as to themselves only covenant and agree with the several
Underwriters with respect to Section 6(a)(xiii) solely as such
section
relates to
the EnCap Entities, that:
(i) The Partnership will timely transmit copies of the
Prospectus in a form approved by the Underwriters, and any
amendments or supplements thereto (subject to the provisions of
this
Section 5), to the SEC for filing pursuant to Rule 424(b) of
the
1933 Act Rules and Regulations or, if applicable, Rule 430A(a)(3)
of
the 1933 Act Rules and Regulations.
(ii) The Partnership will deliver to each of the Underwriters,
and to counsel for the Underwriters (i) a signed copy of the
Registration Statement as originally filed, including copies of
exhibits thereto, of any amendments and supplements to the
Registration Statement and (ii) a signed copy of each consent
and
certificate included in, or filed as an exhibit to, the
Registration
Statement as so amended or supplemented; the Partnership will
deliver to the Underwriters as soon as practicable after the date
of
this Agreement as many copies of the Preliminary Prospectus,
Prospectus and any amendment or supplement thereto as
23
<PAGE>
the Underwriters may reasonably request for the purposes
contemplated by the 1933 Act; if there is a post-effective
amendment
to the Registration Statement that is not effective under the
1933
Act, the Partnership will use its best efforts to cause the
post-effective amendment to the Registration Statement to
become
effective as promptly as possible, and it will notify the
Underwriters, promptly after it shall receive notice thereof, of
the
time when the post-effective amendment to the Registration
Statement
has become effective; the Partnership will promptly advise the
Underwriters of any request of the SEC for amendment of the
Registration Statement or for supplement to the Prospectus or
for
any additional information, and of the issuance by the SEC or
any
state or other jurisdiction or other regulatory body of any
stop
order under the 1933 Act or other order suspending the
effectiveness
of the Registration Statement (as amended or supplemented) or
preventing or suspending the use of the Preliminary Prospectus,
any
Permitted Free Writing Prospectus or the Prospectus or
suspending
the qualification or registration of the Units for offering or
sale
in any
jurisdiction, and of the institution or threat of any
proceedings therefor, of which the Partnership shall have
received
notice or otherwise have knowledge prior to the completion of
the
distribution of the Units; and the Partnership will use its
best
efforts to prevent the issuance of any such stop order or other
order and, if issued, to secure the prompt removal thereof.
(iii) The Partnership will not file any amendment or
supplement to the Registration Statement, the Prospectus,
Permitted
Free Writing Prospectus or any other free writing prospectus (or
any
other prospectus relating to the Units filed pursuant to Rule
424(b)
of
the 1933 Act Rules and Regulations that differs from the
Prospectus as filed pursuant to such Rule 424(b)), of which the
Underwriters shall not previously have been advised or to which
the
Underwriters shall have reasonably objected in writing after
being
so advised unless the Partnership shall have determined based
upon
the advice of counsel that such amendment or supplement is
required
by law; and the Partnership will promptly notify the
Underwriters
after it shall have received notice thereof of the time when
