ENCORE ENERGY PARTNERS
LP
2,400,000 Common Units
Representing Limited Partner Interests
As
Representative of the several Underwriters
named in Schedule A attached hereto
745 Seventh
Avenue
New York, New York 10019
Encore Energy
Partners LP, a Delaware limited partnership (the “
Partnership ”), proposes to issue and sell to the
underwriters named in Schedule A annexed hereto (the
“ Underwriters ”), for whom you are acting as
representative (the “ Representative ”), an
aggregate of 2,400,000 common units (the “ Firm Units
”) representing limited partner interests in the Partnership
(the “ Common 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 360,000 Common Units (the “
Additional Units ”). The Firm Units and the Additional
Units are hereinafter collectively sometimes referred to as the
“ Units .” This agreement (the “
Agreement ”) is to confirm the agreement among the
Partnership, Encore Energy Partners GP LLC, a Delaware limited
liability company (the “ General Partner ”), and
Encore Energy Partners Operating LLC, a Delaware limited liability
company (“ OLLC ” and, together with the
Partnership and the General Partner, the “ Partnership
Entities ”), on the one hand, and the Underwriters, on
the other hand, concerning the purchase of the Units from the
Partnership by the Underwriters (the “ Offering
”).
A registration
statement on Form S-3 relating to the Units has (i) been
prepared by the Partnership in conformity with the requirements of
the Securities Act of 1933, as amended (the “ Securities
Act ”), and the rules and regulations (the “
Rules and Regulations ”) of the Securities and
Exchange Commission (the “ Commission ”)
thereunder; (ii) been filed with the Commission under the
Securities Act; and (iii) become effective under the
Securities Act. Copies of such registration statement and any
amendments thereto have been delivered by the Partnership to the
Representative. As used in this Agreement:
(i) “
Applicable Time ” means 9:00 a.m. (New York time) on
the date of this Agreement;
(ii) “
Base Prospectus ” means the Base Prospectus filed as
part of the Registration Statement, in the form in which it has
been most recently amended on or prior to the date hereof, relating
to the Units;
(iii) “
Effective Date ” means the time of the Registration
Statement’s effectiveness for purposes of Section 11 of
the Securities Act, as such section applies to the respective
Underwriters;
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(iv) “
Issuer Free Writing Prospectus ” means each
“free writing prospectus” (as defined in Rule 405
of the Rules and Regulations) prepared by or on behalf of the
Partnership or used or referred to by the Partnership in connection
with the offering of the Units;
(v) “
Preliminary Prospectus ” means any preliminary
prospectus relating to the Units, including the Base Prospectus and
any preliminary prospectus supplement thereto, included in the
Registration Statement or filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations;
(vi) “
Pricing Disclosure Package ” means, as of the
Applicable Time, the most recent Preliminary Prospectus together
with (i) each Issuer Free Writing Prospectus filed or used by
the Partnership on or before the Applicable Time and identified on
Schedule B-1 hereto, other than a road show that is an
Issuer Free Writing Prospectus but is not required to be filed
under Rule 433 of the Rules and Regulations, and (ii) the
information set forth on Schedule B-2
hereto;
(vii) “
Prospectus ” means the final prospectus relating to
the Units, including the Base Prospectus and the prospectus
supplement thereto, as filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations; and
(viii) “
Registration Statement ” means, collectively, the
registration statement on Form S-3 (File No. 333-153768), as
amended as of the Effective Date, including any Preliminary
Prospectus and the Prospectus and all exhibits to such registration
statement.
Any reference
to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus, the Pricing Disclosure Package or the Prospectus shall
be deemed to refer to and include any documents incorporated by
reference therein pursuant to Form S-3 under the Securities Act.
Any reference to the “ most recent Preliminary
Prospectus ” shall be deemed to refer to the latest
Preliminary Prospectus included in the Registration Statement. Any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include any document filed under the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), after
the date of such Preliminary Prospectus or the Prospectus, as the
case may be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be. Any reference to
any amendment to the Registration Statement shall be deemed to
include any periodic or current report of the Partnership filed
with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Date that is incorporated by
reference in the Registration Statement. The Commission has not
issued any order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus or suspending the effectiveness of the Registration
Statement, and no proceeding for any such purpose or pursuant to
Section 8A of the Securities Act against the Partnership or
relating to the offering of the Units has been instituted or, to
the knowledge of the Partnership Entities, threatened by the
Commission.
As used in this
Agreement, “ business day ” shall mean a day on
which the New York Stock Exchange (the “ NYSE ”)
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.
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The “
Organizational Documents ” shall mean each of the GP
Agreement (as defined below), the Partnership Agreement (as defined
below), the OLLC Agreement (as defined below) and the certificates
of limited partnership or formation and other organizational
documents of the General Partner and the Partnership.
The Partnership
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 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 8 hereof, in each case at a purchase price
of $14.91 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
effectiveness of this Agreement 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
that public offering price after the initial public offering to the
extent you may determine. The respective purchase obligations of
the Underwriters with respect to the Firm Units shall be rounded
among the Underwriters to avoid fractional units, as the
Underwriters may determine.
In addition, the
Partnership hereby grants to the several Underwriters the option
(the “ Over-Allotment 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 at the same purchase price per unit to be paid by the
Underwriters to the Partnership for the Firm Units. The
Over-Allotment Option may be exercised by the Representative on
behalf of the several Underwriters at any time and from time to
time on or before the thirtieth day following the date of this
Agreement, by written notice to the Partnership. Such notice shall
set forth the aggregate number of Additional Units as to which the
Over-Allotment 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 Over-Allotment Option
shall have been exercised nor later than the tenth business day
after the date on which the Over-Allotment 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 Representative may determine to eliminate fractional Units),
subject to adjustment in accordance with Section 8
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 in book entry to you through the facilities of The
Depository Trust Company (“ DTC ”) for the
respective accounts of the Underwriters. Such payment and
delivery
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shall be made
at 10:00 A.M., New York City time, on May 22, 2009
(unless another time shall be agreed to by you and the Partnership
or unless postponed in accordance with the provisions of
Section 8 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 6 hereof with respect to the
purchase of the Units shall be made at the offices of Baker Botts
L.L.P. at One Shell Plaza, 910 Louisiana Street, Houston, Texas
77002, 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 Entities .
Each of the Partnership Entities, jointly and severally, represents
and warrants to and agrees with each of the Underwriters
that:
(a) Status
. The Partnership was not at the earliest time after filing of the
Registration Statement at which the Partnership or another offering
participant made a bona fide offer (within the meaning of
Rule 164(h)(2) of the Rules and Regulations) of the Units an
“ineligible issuer” (as defined in Rule 405 of the
Rules and Regulations). The Partnership has been since the time of
initial filing of the Registration Statement and continues to be
eligible to use Form S-3 for the offering of the Units.
(b) Conformity
to the Securities Act . The Registration Statement conformed
and will conform in all material respects, on the Effective Date
and on the date of the time of purchase or additional time of
purchase, if any, and any amendment to the Registration Statement
filed after the date hereof will conform in all material respects,
when filed with the Commission, to the requirements of the
Securities Act and the Rules and Regulations. The most recent
Preliminary Prospectus conforms in all material respects on the
date hereof, and the Prospectus and any amendment or supplement
thereto will conform in all material respects, when filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations and
on the date of the time of purchase or additional time of purchase,
if any, to the requirements of the Securities Act and the Rules and
Regulations. The documents incorporated by reference in the Pricing
Disclosure Package or the Prospectus conformed or will conform in
all material respects, when filed with the Commission, to the
requirements of the Exchange Act or the Securities Act, as
applicable, and the rules and regulations of the Commission
thereunder.
(c) Misleading
Statements — Registration Statement . 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; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement in reliance upon
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and in
conformity with written information furnished to the Partnership by
the Representative on behalf of any Underwriter specifically for
inclusion therein, which information is specified in
Section 10 hereof.
(d) Misleading
Statements — Prospectus . The Prospectus and any
amendment or supplement thereto will not, as of its date and on the
date of the time of purchase or additional time of purchase, if
any, contain 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; provided that no representation or
warranty is made as to information contained in or omitted from the
Prospectus in reliance upon and in conformity with written
information furnished to the Partnership by the Representative on
behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 10 hereof.
(e) Misleading
Statements — Documents Incorporated by Reference . The
documents incorporated by reference into the Registration
Statement, the Pricing Disclosure Package and the Prospectus did
not, as of the Effective Date, and any further documents filed and
incorporated by reference therein will not, when filed with the
Commission, contain an untrue statement of a material fact or omit
to state a material fact (i) solely in the case of the
Registration Statement, required to be stated therein or
(ii) necessary to make the statements therein (in the case of
the documents incorporated by reference into the Pricing Disclosure
Package or the Prospectus, in the light of the circumstances under
which they were made) not misleading.
(f) Misleading
Statements — Pricing Disclosure Package . The Pricing
Disclosure Package will not, as of the Applicable Time, contain 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, except that the price of the Units and disclosures
directly relating thereto will be included in the Prospectus;
provided that no representation or warranty is made as to
information contained in or omitted from the Pricing Disclosure
Package in reliance upon and in conformity with written information
furnished to the Partnership by the Representative on behalf of any
Underwriter specifically for inclusion therein, which information
is specified in Section 10 hereof.
(g) Misleading
Statements — Free Writing Prospectuses . Each Issuer Free
Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433 of the Rules
and Regulations), when considered together with the Pricing
Disclosure Package, as of the Applicable Time, will not contain 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, except that the price of the Units and disclosures
directly relating thereto will be included in the
Prospectus.
(h) Free
Writing Prospectuses . Each Issuer Free Writing Prospectus
conformed or will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations on
the date of first use, and the Partnership has
5
complied with
all filing requirements applicable to such Issuer Free Writing
Prospectus pursuant to the Rules and Regulations. The Partnership
has not made any offer relating to the Units that would constitute
an Issuer Free Writing Prospectus without the prior written consent
of the Underwriters. The Partnership has retained in accordance
with the Rules and Regulations all Issuer Free Writing Prospectuses
that were not required to be filed pursuant to the Rules and
Regulations.
(i) Formation,
Good Standing and Qualification of the Partnership Entities .
Each of the Partnership 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 the General Partner, to act as the general
partner of the Partnership, and (ii) in the case of the
General Partner, the Partnership and OLLC, to execute and deliver
this Agreement to consummate the transactions contemplated
hereby.
(j) Foreign
Qualification and Registration . Each of the Partnership
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 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; insofar as the foregoing representation relates to the
qualification of each Partnership Entity, the applicable
jurisdictions are set forth on Schedule B-3
hereto.
(k) Ownership
of the General Partner . Encore Partners GP Holdings LLC, a
Delaware limited liability company (“ GP Holdings
”) owns 100% of the issued and outstanding membership
interests in the General Partner; such membership interests have
been duly authorized and validly issued in accordance with the
limited liability company agreement of the General Partner (the
“ GP Agreement ”), as in effect at the time of
purchase, and GP Holdings owns such membership interests free and
clear of all liens, encumbrances, security interests, equities,
charges or claims (collectively, “ Liens
”).
(l) Ownership
of the Partnership .
(i)
General Partner Interest . The General Partner is the sole
general partner of the Partnership, with an approximate 1.5%
general partner interest in the Partnership (the “ GP
Interest ”) represented by 504,851 General Partner Units
(as defined in the Partnership Agreement); such general partner
interest is the only general partner interest of the Partnership
that is issued and outstanding; and such general partner interest
has been duly authorized and validly issued in accordance with the
Second Amended and Restated Agreement of Limited Partnership of
Encore Energy Partners LP, dated as of September 17, 2007, as
amended (the “ Partnership Agreement ”), and is
owned by the
6
General Partner
free and clear of all Liens, other than Liens described in the
Pricing Disclosure Package and Liens created by or arising under
the Partnership Agreement or the Delaware Revised Uniform Limited
Partnership Act (the “Delaware LP Act”).
(ii)
Limited Partner Interests . The limited partners of the
Partnership hold Common Units in the Partnership aggregating an
approximate 98.5% limited partner interest in the Partnership (the
“ LP Interest ”), represented by (as of
May 15, 2009 and excluding the Units) (i) 12,153,555
publicly traded Common Units (representing an approximate 36.2%
limited partner interest), (ii) 9,995,801 Common Units
(representing an approximate 29.8% limited partner interest) owned
by Encore Partners LP Holdings LLC, a Delaware limited liability
company (“ LP Holdings ”) and
(iii) 10,928,254 Common Units (representing an approximate
32.5% limited partner interest) owned by Encore Operating, L.P., a
Texas limited partnership (“ Encore Operating
”); such Common Units are the only limited partner interests
of the Partnership that are issued and outstanding; all of such
Common Units have been duly authorized and validly issued pursuant
to the Partnership Agreement, and are fully paid and nonassessable
(except to the extent such nonassessability may be affected by
Sections 17-303, 17-607 and 17-804 of the Delaware LP Act); LP
Holdings and Encore Operating own such limited partner interests
free and clear of all Liens, other than Liens described in the
Pricing Disclosure Package and Liens created by or arising under
the Partnership Agreement or the Delaware LP Act.
(m) Ownership
of GP Holdings . Encore Acquisition Company, a Delaware
corporation (“ EAC ”), owns 100% of the issued
and outstanding membership interests in GP Holdings; such
membership interests have been duly authorized and validly issued
in accordance with the limited liability agreement of GP Holdings
(the “ GP Holdings Agreement ”) and are fully
paid (to the extent required under the GP Holdings Agreement) and
nonassessable (except as such nonassessability may be affected by
matters described in Sections 18-303, 18-607 and 18-804 of the
Delaware LLC Act); and EAC owns such membership interests free and
clear of all Liens, other than Liens described in the Pricing
Disclosure Package and Liens created by or arising under the
Delaware LLC Act.
(n) Ownership
of LP Holdings . EAC owns 100% of the issued and outstanding
membership interests in LP Holdings; such membership interests have
been duly authorized and validly issued in accordance with the
limited liability agreement of LP Holdings (the “ LP
Holdings Agreement ”) and are fully paid (to the extent
required under the LP Holdings Agreement) and nonassessable (except
as such nonassessability may be affected by matters described in
Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act);
and EAC owns such membership interests free and clear of all Liens,
other than Liens described in the Pricing Disclosure Package and
Liens created by or arising under the Delaware LLC Act.
(o) Ownership
of OLLC . The Partnership owns 100% of the issued and
outstanding membership interests in OLLC; such membership interests
have been duly authorized and validly issued in accordance with the
limited liability agreement of OLLC (the “ OLLC
Agreement ”) and are fully paid (to the extent required
under the OLLC
7
Agreement) and
nonassessable (except as such nonassessability may be affected by
matters described in Sections 18-303, 18-607 and 18-804 of the
Delaware LLC Act); and the Partnership owns such membership
interests free and clear of all Liens, other than Liens under or
permitted by the Partnership’s Amended and Restated Credit
Agreement dated as of March 7, 2007, as amended (the “
Credit Agreement ”) by and among OLLC, the
Partnership, Bank of America, N.A., as administrative agent and L/C
Issuer, Banc of America Securities LLC, as sole lead arranger and
sole book manager, and other lenders party thereto, Liens described
in the Pricing Disclosure Package and Liens created by or arising
under the Delaware LLC Act.
(p)
Subsidiaries . The Partnership has no direct or indirect
subsidiaries (as defined under the Securities Act) other than the
subsidiaries listed in Exhibit 21.1 of the Partnership’s
Annual Report on Form 10-K for the fiscal year ended
December 31, 2008 (collectively, sometimes referred to herein
as 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 Partnership
Entities and all amendments thereto have been delivered to you; and
each of the Partnership 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.
(q) 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 Pricing Disclosure Package and the
Prospectus under the captions “Risk Factors—Risks
Inherent in an Investment in Us—Unitholder liability may not
be limited if a court finds that unitholder action constitutes
control of our business,” “Risk Factors—Risks
Inherent in an Investment in Us—Unitholders may have
liability to repay distributions” and “Our Partnership
Agreement—Limited Liability” and
(ii) Sections 17-303, 17-607 and 17-804 of the Delaware
LP Act); and other than the LP Interest and the GP Interest, the
Units will be the only 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 Partnership Entities or their affiliates is a party or by which
any of them or any of their respective properties may be bound or
affected.
(r) Conformity
to Description of Units . The Units, when issued and delivered
in accordance with the terms of the Partnership Agreement and
against payment therefor as provided herein, will conform in all
material respects to the description thereof
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contained in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus.
(s) Authority
and Authorization . The Partnership has all requisite
partnership power and authority to issue, sell and deliver the
Units, in accordance with and upon the terms and conditions set
forth in this Agreement and the Partnership Agreement. Each of the
Partnership Entities has all requisite right, power and authority
to execute and deliver the Underwriting Agreement and to perform
its respective obligations thereunder. At each time of purchase,
all partnership and limited liability company action, as the case
may be, required to be taken by any of the Partnership Entities or
any of their respective unitholders, members or partners for the
authorization, issuance, sale and delivery of the Units, the
execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement shall have been
validly taken.
(t)
Authorization, Execution and Delivery of this Agreement .
This Agreement has been duly authorized, executed and delivered by
each of the Partnership Entities.
(u) No
Conflicts or Violations; No Default . None of the Partnership
Entities is (A) in violation of its respective 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 any 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 any of the
Partnership Entities is a party or by which any of them or any of
their respective 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 NYSE), or (E) in
violation of any decree, judgment or order applicable to any of the
Partnership Entities or any of their respective 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
or prevent or materially interfere with the consummation of the
transactions contemplated by this Agreement, including the
Offering, the Registration Statement, the Pricing Disclosure
Package and the Prospectus. The execution, delivery and performance
of this Agreement by the Partnership Entities, the issuance and
sale of the Units and the consummation of the transactions
contemplated hereby will not (I) conflict with, result in any
breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would
result in any breach or violation of or constitute a default under)
the Organizational Documents of any of the Partnership Entities, or
any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to any of the Partnership
Entities, except as disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or (II) conflict
with, result in any breach or violation of or constitute a default
under (nor constitute any event which with notice, lapse of time or
both would result in any breach or violation of or constitute a
default under) any indenture, mortgage, deed of
9
trust, bank
loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which
any Partnership Entity is a party or by which any of them or any of
their respective properties may be bound or affected, except as
disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, and for any such breach, violation or
default that would not have a Material Adverse Effect.
(v) 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 having jurisdiction over any
Partnership Entity or its property (including, without limitation,
the NYSE) (each, a “ Consent ”) or any approval
of the security holders of the Partnership Entities, is required in
connection with the Offering and the execution, delivery and
performance of this Agreement by the Partnership Entities or the
consummation by the Partnership Entities of the transactions
contemplated hereby other than (i) registration of the Units
under the Securities Act, which has been effected (or, with respect
to any registration statement to be filed hereunder pursuant to
Rule 462(b) under the Securities 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 or under the
Conduct Rules of the Financial Industry Regulatory Authority
(“ FINRA ”) and (iii) such Consents that
have been, or prior to the time of purchase will be, obtained, or,
if not obtained would not, individually or in the aggregate, result
in a Material Adverse Effect or prevent or materially interfere
with the consummation of the transactions contemplated by this
Agreement.
(w) No
Preemptive Rights, Registration Rights, Options or Other Rights
. Except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, (i) no person has the
right, contractual or otherwise, to cause the Partnership to issue
or sell to it the Units or other equity interests of the
Partnership, (ii) no person has any preemptive rights, rights
of first refusal or other rights to purchase any Units or other
equity interests in the Partnership, (iii) no person has any
resale rights in respect of the 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; except as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, no person has the
right, contractual or otherwise, to cause the Partnership to
register under the Securities Act any equity interests in the
Partnership, or to include any such interests in the Registration
Statement or the Offering contemplated thereby.
(x) Permits
. Each of the Partnership Entities has all necessary licenses,
authorizations, consents and approvals (each, a “
Permit ”) and has or will have made all necessary
filings required under any applicable law, regulation or rule, and
has obtained all necessary Permits from other persons, in order to
conduct its business, except for such Permits that, if not
obtained, would not have a Material Adverse Effect; none of the
Partnership 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,
10
state, local or
foreign law, regulation or rule or any decree, order or judgment
applicable to any of the Partnership Entities, except where such
violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse
Effect.
(y)
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, the Pricing Disclosure Package 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, any Preliminary
Prospectus and the Prospectus under the headings “Description
of Common Units,” “Conflicts of Interest and Fiduciary
Duties,” “Our Partnership Agreement,” “Cash
Distribution Policy,” “Material Tax
Considerations,” “Material Tax Consequences” and
“Underwriting” (and any similar information, if any,
contained in any Issuer 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.
(z)
Litigation . Except as described in the Pricing Disclosure
Package, there are no actions, suits, claims, investigations or
proceedings pending or, to the knowledge of the Partnership
Entities, threatened or contemplated to which any of the
Partnership 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 NYSE), except any
such action, suit, claim, investigation or proceeding which would
not result in a judgment, decree or order having, individually or
in the aggregate, a Material Adverse Effect.
(aa)
Independent Registered Public Accounting Firms . Ernst &
Young LLP, whose reports on the (A) consolidated balance
sheets of the General Partner and the Partnership as of
December 31, 2008 and 2007 and (B) the
Partnership’s consolidated statements of operations,
partners’ equity and comprehensive income, and cash flows for
each of the three years in the period ended December 31, 2008
are included in or incorporated by reference in the Pricing
Disclosure Package and the Prospectus, is an independent registered
public accounting firm as required by the Securities Act and by the
rules of the Public Company Accounting Oversight Board (United
States) (the “ PCAOB ”).
(bb) Reserve
Engineer . Miller and Lents, Ltd. (the “ Engineer
”), whose reserve evaluations are referenced or appear, as
the case may be, in the Pricing Disclosure Package and the
Prospectus, are independent engineers with respect to the
Partnership; and the historical information underlying the
estimates of the reserves of the Partnership supplied by the
Partnership to the Engineer for the purposes of preparing the
reserve reports of the Partnership incorporated by reference in the
Pricing Disclosure Package and the Prospectus (the “
Reserve Reports ”), including, without limitation,
production
11
volumes, sales
prices for production, contractual pricing provisions under oil or
gas sales or marketing contracts or under hedging arrangements,
costs of operations and development, and working interest and net
revenue information relating to the Partnership’s ownership
interests in properties, was true and correct in all material
respects on the date of each such Reserve Report and was prepared
in all material respects in accordance with customary industry
practices.
(cc) Financial
Statements . The consolidated historical financial statements,
together with the related notes and schedules, of the Partnership
and the General Partner included or incorporated by reference in
the Pricing Disclosure Package and the Prospectus present fairly in
all material respects the consolidated financial position of the
Partnership and the General Partner as of the dates and for the
periods indicated, comply as to form with the applicable accounting
requirements of the Securities Act and have been prepared in
conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as
otherwise noted therein). The summary consolidated financial and
operating data set forth under the caption “Summary
Consolidated Financial Data” in the Preliminary Prospectus
and the Prospectus (or similar sections or information in any
Issuer Free Writing Prospectus) fairly present in all material
respects, on the basis stated in the Preliminary Prospectus and the
Prospectus, the information included therein.
(dd) No
Material Adverse Change . Subsequent to the date as of which
information is given in the Pricing Disclosure Package, there has
not been 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
Partnership Entities taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(ee) Investment
Company . None of the Partnership Entities is and at no time
during which a prospectus is required by the Securities Act to be
delivered (whether physically or through compliance with
Rule 172 under the Securities 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
”).
(ff) Title to
Properties . Each of the Partnership Entities has good and
marketable title to all real property and good title to all
personal property described in the Pricing Disclosure Package and
the Prospectus as being owned by any of them, free and clear of all
Liens except (i) as described in the Pricing Disclosure
Package, (ii) pursuant to the Credit Agreement, (iii) as
would not, individually or in the aggregate, have a Material
Adverse Effect, and (iv) as do not materially interfere with
the use of such properties, taken as a whole, as described in the
Pricing Disclosure Package and the Prospectus. All of the property
held under lease by any of the Partnership Entities is held under
valid and subsisting and enforceable leases, with such exceptions
as would not materially interfere with the use of such properties,
taken as a whole, as described in the Pricing Disclosure Package
and the Prospectus.
12
(gg)
Rights-of-Way . Each of the Partnership 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 Pricing
Disclosure Package and the Prospectus, subject to such
qualifications as may be set forth in the Pricing Disclosure
Package and the Prospectus and except for such rights-of-way the
lack of which would not have, individually or in the aggregate, a
Material Adverse Effect; and, except as described in the Pricing
Disclosure Package or Prospectus, as would not interfere with the
operations of the Partnership 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 Partnership Entities, taken as
a whole.
(hh)
Intellectual Property . Each of the Partnership Entities
owns, licenses or possesses adequate rights to use all material
patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations,
copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of
their 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; and none of the
Partnership Entities has received any notice of conflict with, any
such rights of others.
(ii) Labor and
Employment . No labor disputes with the employees that are
engaged in the businesses of the Partnership Entities exist or, to
the knowledge of the Partnership Entities, are imminent or
threatened that would, individually or in the aggregate, have a
Material Adverse Effect. To the Partnership’s knowledge,
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, or the
rules and regulations promulgated thereunder concerning the
employees providing services to any of the Partnership
Entities.
(jj)
Environmental Compliance . Except as described in the
Pricing Disclosure Package and the Prospectus, each of the
Partnership Entities and their subsidiaries (i) are in
compliance with any and all applicable laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“ Environmental Laws ”),
(ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as they
are currently being conducted and (iii) have not received
written notice of any, and to the knowledge of the Partnership
Entities there are no, pending events or circumstances that could
reasonably be expected to form the basis for any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, and (iv) are not subject to any
pending or, to the knowledge of the Partnership Entities,
threatened actions, suits, demands, orders or proceedings relating
to any Environmental Laws against the Partnership Entities
(collectively, “ Proceedings ”), except where
such non-compliance with Environmental
13
Laws, failure
to receive required permits, licenses or other approvals, actual or
potential liability or Proceedings could not, individually or in
the aggregate, be reasonably expected to have a Material Adverse
Effect. Except as set forth in the Pricing Disclosure Package and
the Prospectus, to the knowledge of the Partnership Entities, none
of the Partnership Entities or their subsidiaries is currently
named as a “potentially responsible party” under the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended (“ CERCLA ”).
(kk) Tax
Returns . All tax returns required to be filed by the
Partnership Entities through the date hereof have been timely filed
(or extensions have been timely obtained with respect to such tax
returns), and all taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any
interest, additions to tax or penalties applicable thereto due or
claimed to be due from such entities have been timely paid, other
than those (i) that are being contested in good faith and for
which adequate reserves have been provided or (ii) that, if
not paid, would not, individually or in the aggregate, have a
Material Adverse Effect.
(ll)
Insurance . The Partnership Entities maintain insurance
covering their respective properties, operations, personnel and
businesses as each Partnership Entity reasonably deems adequate;
such insurance insures against such losses and risks to an extent
that is adequate in accordance with customary industry practice to
protect the Partnership Entities and their respective businesses;
all such insurance is fully in force on the date hereof and will be
fully in force at the time of purchase and any additional time of
purchase; none of the Partnership Entities has reason to believe
that it will not be able to renew any such insurance as and when
such insurance expires.
(mm) No
Business Interruptions . None of the Partnership Entities has
sustained since the date of the last audited financial statements
included in the Pricing Disclosure Package and the Prospectus any
material loss or interference with its respective business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree.
(nn) Internal
Controls . Each of the Partnership Entities maintains a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(oo) Adequacy
of Internal Controls . Each of the Partnership Entities has
established and maintains and evaluates “disclosure controls
and procedures” (as such term is defined in Rules 13a-15
and 15d-15 under the Exchange Act) and “internal control over
financial reporting” (as such term is defined in
Rules 13a-15 and 15d-15 under the Exchange Act); such
disclosure controls and procedures are designed to
ensure
14
that material
information relating to the Partnership Entities is made known to
the General Partner’s principal executive officer and
principal financial officer by others within those entities, and
such disclosure controls and procedures are effective to perform
the functions for which they were established; the Partnership
Entities’ independent auditors and the Audit Committee of the
Board of Directors of the General Partner have been advised of:
(i) all significant deficiencies, if any, in the design or
operation of internal controls which could adversely affect the
Partnership Entities’ ability to record, process, summarize
and report financial data and (ii) all fraud, if any, whether
or not material, that involves management or other employees who
have a role in the Partnership Entities’ internal controls;
all material weaknesses, if any, in internal controls have been
identified to the Partnership Entities’ independent auditors;
since the date of the most recent evaluation of such disclosure
controls and procedures and internal controls, there have been no
significant changes in internal controls or in other factors that
could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and
material weaknesses; the principal executive officer and principal
financial officer of the General Partner have made all
certifications required by the Sarbanes-Oxley Act of 2002 (the
“ Sarbanes-Oxley Act ”) and any related rules
and regulations promulgated by the Commission, and the statements
contained in each such certification are complete and correct; and
the Partn
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