Attached files
Exhibit
1.1
Execution
Version
QUICKSILVER
GAS SERVICES LP
4,000,000
Common Units
Representing
Limited Partner Interests
Underwriting
Agreement
December
11, 2009
Wells
Fargo Securities, LLC
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
Citigroup
Global Markets Inc.
UBS
Securities LLC
Barclays
Capital Inc.
as
Representatives of the Underwriters
named in
Schedule A attached hereto
c/o Wells
Fargo Securities, LLC
375 Park
Avenue, 4th Floor
New York,
NY 10152
Ladies
and Gentlemen:
Quicksilver
Gas Services LP, a Delaware limited partnership (the “Partnership”), proposes to issue
and sell (the “Offering”) to the
underwriters named in Schedule A attached
hereto (the “Underwriters”), for whom Wells
Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Citigroup Global Markets Inc., UBS Securities LLC and Barclays Capital Inc. are
acting as representatives (the “Representatives”), an aggregate of 4,000,000
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 600,000 Common Units (the “Additional
Units”). The Firm Units and the Additional Units are
hereinafter collectively sometimes referred to as the “Units.” This agreement (this “Agreement”) is to confirm the agreement among the
Partnership and Quicksilver Gas Services GP LLC, a Delaware limited liability
company (the “General Partner” and together
with the Partnership, the “Quicksilver
Parties”), on the one hand, and the Underwriters, on the other hand,
concerning the purchase of the Units from the Partnership by the
Underwriters. The Quicksilver Parties and the subsidiaries listed on
Schedule B attached hereto (the “Subsidiaries”) are hereinafter collectively
sometimes referred to as the “Partnership
Entities.” Quicksilver Gas Services Holdings LLC, a Delaware limited
liability company, is referred to herein as “Holdings,” and Quicksilver Resources Inc., a
Delaware corporation, is referred to herein as “Quicksilver.”
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As used
in this Agreement:
(i) “Applicable Time”
means 8:10 a.m. (New York City time) on the date of this Agreement;
(ii) “Base Prospectus”
means the base prospectus included in the Registration Statement at the
Applicable Time;
(iii) “Disclosure Package”
means, as of the Applicable Time, the most recent Preliminary Prospectus,
together with (A) each Issuer Free Writing Prospectus identified on Schedule D attached
hereto and (B) the number of Units and the pricing information set forth on
Schedule E
attached hereto;
(iv) “Effective Date” means
any date as of which any part of such registration statement relating to the
Units became, or is deemed to have become, effective under the Securities Act in
accordance with the Rules and Regulations;
(v) “Issuer Free Writing
Prospectus” means each “free writing prospectus” (as defined in Rule 405
of the Rules and Regulations) or “issuer free writing prospectus” (as defined in
Rule 433 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;
(vi) “Preliminary
Prospectus” means any preliminary prospectus relating to the Units
included in such registration statement or filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations, including the Base Prospectus and any
preliminary prospectus supplement thereto relating to the Units;
(vii) “Prospectus” means the
final prospectus supplement relating to the Units, including the Base
Prospectus, as filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations; and
(viii) “Quicksilver Entities”
means Quicksilver and its direct and indirect subsidiaries, other than the
Partnership Entities.
(ix) “Registration
Statement” means, collectively, the various parts of such registration
statement, each as amended as of the Effective Date for such part, including the
Prospectus, and all exhibits to such registration statement.
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.
Any
reference to any Preliminary Prospectus or to the Prospectus shall be deemed to
refer to and include any information incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be. Any reference to
the “most recent Preliminary Prospectus” shall be deemed to refer
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to the
latest Preliminary Prospectus included in the Registration Statement or filed
pursuant to Rule 424(b) of the Rules and Regulations prior to the date
hereof. 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 the Preliminary Prospectus or the Prospectus, as
the case may be, and incorporated by reference in the 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 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
Quicksilver Parties and the Underwriters agree as follows:
1. Sale and Purchase.
Upon the basis of the representations and warranties and subject to the terms
and conditions herein set forth, the Partnership agrees to issue and sell to the
respective Underwriters, and each of the Underwriters, severally and not
jointly, agrees to purchase from the Partnership, the number of Firm Units set
forth opposite the name of such Underwriter in Schedule A attached
hereto, subject to adjustment in accordance with Section 9 hereof, in each
case at a purchase price of $20.19 per Unit.
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 in the event
the Underwriters sell more than the number of Firm Units, at the same purchase
price per Unit to be paid by the Underwriters to the Partnership for the Firm
Units. The Over-Allotment Option may be exercised by the
Representatives on behalf of the several Underwriters at any time and from time
to time on or before the thirtieth day following the date of the Prospectus, by
written notice to the Partnership. Such notice shall set forth the
aggregate number of Additional Units as to which the 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 (i) if such additional time of purchase is
concurrent with the initial time of purchase, first business day after the date
on which the Over-Allotment Option shall have been exercised and (ii) if such
additional time of purchase is after the initial time of purchase, 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
attached hereto bears to the total number of Firm Units (subject, in each case,
to such adjustment as the Representatives may determine to eliminate fractional
Units), subject to adjustment in accordance with Section 9
hereof.
2. Payment and Delivery.
Payment of the purchase price for the Firm Units shall be made to
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the
Partnership by Federal Funds wire transfer against electronic delivery of the
certificates for the Firm Units to you through the facilities of The Depository
Trust Company (“DTC”) for the
respective accounts of the Underwriters. Such payment and delivery
shall be made at 10:00 A.M., New York City time, on December 16, 2009 (unless
another time shall be agreed to by you and the Partnership or unless postponed
in accordance with the provisions of Section 9 hereof). The
time at which such payment and delivery are to be made is hereinafter sometimes
called the “time of
purchase.” Electronic transfer of the Firm Units shall be made
to you at the time of purchase in such names and in such denominations as you
shall specify.
Payment
of the purchase price for the Additional Units shall be made at the additional
time of purchase in the same manner and at the same office as the payment for
the Firm Units. Electronic transfer of the Additional Units shall be
made to you at the additional time of purchase in such names and in such
denominations as you shall specify.
Deliveries
of the documents described in Section 7 hereof with
respect to the purchase of the Units shall be made at the offices of Davis Polk
& Wardwell LLP, at 10:00 A.M., New York City time, on the date of the
closing of the purchase of the Firm Units or the Additional Units, as the case
may be.
3. Representations and
Warranties of the Partnership. Each of the Quicksilver Parties, jointly
and severally, represents and warrants to and agrees with each of the
Underwriters that:
(a) Registration. A
registration statement on Form S-3 (File No. 333-161680) with respect to the
Common Units being sold by the Partnership 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. The Partnership
meets the requirements for use of Form S-3 under the Securities
Act. The initial Effective Date of the Registration Statement was not
earlier than three years before the date of this Agreement. Copies of
such registration statement and each of the amendments thereto, if any, have
been delivered by the Partnership to you.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending the effectiveness of the
Registration Statement, and no proceeding or examination for such purpose has
been instituted or to the knowledge of the Partnership, threatened by the
Commission.
(b) Partnership Not an Ineligible
Issuer. At (i) the time of initial filing of the Registration Statement
and (ii) the earliest time after the initial filing of the Registration
Statement that the Partnership or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the
Units, the Partnership was not an “ineligible issuer,” as defined in Rule 405
under the Securities Act.
(c) Form of
Documents. The Registration Statement conformed and will
conform in all material respects on each Effective Date and each time of
purchase, and any amendment to the Registration Statement filed after the date
hereof will conform in all material respects when
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filed, to
the requirements of the Securities Act and the Rules and
Regulations. The most recent Preliminary Prospectus conformed, and
the Prospectus will conform, in all material respects when filed with the
Commission pursuant to Rule 424(b) and at each time of purchase to the
requirements of the Securities Act and the Rules and Regulations. The
documents incorporated by reference in any Preliminary Prospectus or the
Prospectus conformed, and any further documents so incorporated will conform,
when filed with the Commission, in all material respects to the requirements of
the Exchange Act or the Securities Act, as applicable, and the rules and
regulations of the Commission thereunder.
(d) No Material Misstatements or
Omissions in the Registration Statement. The Registration Statement did
not, as of each 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 and in conformity with written information furnished
to the Partnership through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, which information is specified
in Section 11.
(e) No Material Misstatements or
Omissions in the Prospectus. The Prospectus will not, as of its date and
at each time of purchase, 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 through the Representatives by
or on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 11.
(f) No Material Misstatements or
Omissions in Documents Incorporated by Reference. The
documents incorporated by reference in any Preliminary Prospectus or the
Prospectus did not, 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 necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(g) No Material Misstatements or
Omissions in the Disclosure Package. The Disclosure Package
did not, as of the Applicable Time, contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided that no representation or warranty is made as to information contained
in or omitted from the Disclosure Package in reliance upon and in conformity
with written information furnished to the Partnership through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein, which information is specified in Section 11.
(h) No Material Misstatements or
Omissions in Issuer Free Writing Prospectuses. Each Issuer
Free Writing Prospectus (including, without limitation, any road show that is a
free writing prospectus under Rule 433), when considered together with the
Disclosure Package as of the Applicable Time, did not contain an untrue
statement of a material fact or omit to state a
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material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Each Issuer
Free Writing Prospectus, as of its date, did not conflict with the information
contained in the most recent Preliminary Prospectus or the
Prospectus.
(i) Conformity of Issuer Free Writing
Prospectuses to the Requirements of the Securities Act. 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 complied with any 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 Representatives. The Partnership has retained
in accordance with the Rules and Regulations all Issuer Free Writing
Prospectuses that were not required to be filed pursuant to the Rules and
Regulations.
(j) Formation and Qualification of
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 as described in the Disclosure Package and
the Prospectus 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 Quicksilver Parties, to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
(k) Foreign Qualification and
Registration. Each of the Partnership Entities is duly qualified to do
business as a foreign limited partnership or limited liability company, 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 registration or qualification of each Partnership Entity, the
applicable jurisdictions are set forth on Schedule C
hereto.
(l) Ownership of the General Partner.
Holdings owns all 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 “General Partner LLC
Agreement”); and Holdings owns such membership interests free and clear
of all liens, encumbrances (except restrictions on transferability as described
in the Prospectus), security interests, charges or claims (“Liens”) except as
would not be a Material Adverse Effect or under that certain that certain Credit
Agreement dated as of August 10, 2007 by and among the Partnership, Bank of
America, N.A., and the lenders party thereto, as amended, (the “Credit
Agreement”).
(m) Ownership of the General Partner
Interest in the Partnership. The General Partner is the sole general
partner of the Partnership and at the time of purchase, immediately
after
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the
issuance of the Firm Units, will have a 1.7% general partner interest in the
Partnership (the “GP
Interest”) represented by 469,944 General Partner Units; the GP Interest
has been duly authorized and validly issued in accordance with the partnership
agreement of the Partnership (the “Partnership
Agreement”); and the General Partner owns such GP Interest free and clear
of all Liens.
(n) Partnership Interests Outstanding.
As of the date hereof and immediately prior to the time of purchase, the
issued and outstanding limited partner interests of the Partnership consist of
12,313,451 Common Units, 11,513,625 Subordinated Units (as defined in the
Partnership Agreement) and the Incentive Distribution Rights (as defined in the
Partnership Agreement); the General Partner owns all the Incentive Distribution
Rights; all of the outstanding Common Units, Subordinated Units and Incentive
Distribution Rights and the limited partner interests represented thereby have
been duly authorized and validly issued in accordance with the Partnership
Agreement, and are fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
Sections 17-303 and 17-607 of the Delaware Revised Uniform Limited Partnership
Act (the “Delaware
LP Act”)
and otherwise by matters described in the Prospectus under the caption "The
Partnership Agreement—Limited Liability" incorporated by reference from the
Company’s registration statement on Form 8-A filed on March 17, 2009). The
General Partner owns all of the Incentive Distribution Rights free and clear of
all Liens.
(o) Ownership of Quicksilver Operating
LLC. The Partnership owns all of the issued and outstanding
membership interests in Quicksilver Gas Services Operating LLC, a Delaware
limited liability company (“Quicksilver Operating
LLC”); such membership interests have been duly authorized and validly
issued in accordance with the limited liability company agreement of Quicksilver
Operating LLC (the “Quicksilver Operating LLC
Agreement”), and are fully paid (to the extent required under the
Quicksilver Operating LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 18-303 and 18-607 of the Delaware
LLC Act); and the Partnership owns such membership interests free and clear of
all Liens except as would not be a Material Adverse Effect or under the Credit
Agreement.
(p) Ownership of Quicksilver
OPGP. Quicksilver Operating LLC owns all of the issued and
outstanding membership interests in Quicksilver Gas Services Operating GP LLC, a
Delaware limited liability company (“Quicksilver OPGP”);
such membership interests have been duly authorized and validly issued in
accordance with the Quicksilver OPGP limited liability company agreement (the
“Quicksilver OPGP LLC
Agreement”), and are fully paid (to the extent required under the
Quicksilver OPGP LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 18-303 and 18-607 of the Delaware
LLC Act); and Quicksilver Operating LLC owns such membership interests free and
clear of all Liens except as would not be a Material Adverse Effect or under the
Credit Agreement.
(q) Ownership of Processing
Partners. Quicksilver OPGP is the sole general partner of Cowtown Gas
Processing Partners L.P., a Texas limited partnership (“Processing
Partners”), with a 1.0% general partner interest in Processing Partners;
such general partner interest has been duly authorized and validly issued in
accordance with the partnership agreement of Processing Partners (“the “Processing Partners LP
Agreement”); and Quicksilver OPGP owns such general partner interest free
and clear of all Liens except as would not be a Material Adverse Effect
or
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under the
Credit Agreement. Quicksilver Operating is the sole limited partner
of Processing Partners with a 99.0% limited partner interest in Processing
Partners; such limited partner interest has been duly authorized and validly
issued in accordance with the Processing Partners LP Agreement and is fully paid
(to the extent required under the Processing Partners LP Agreement) and is
nonassessable (except as such nonassessability may be affected by Section 6.07
of the Texas Revised Limited Partnership Act (the “Texas Act”)); and.
Quicksilver Operating owns such limited partner interest free and clear of all
Liens except as would not be a Material Adverse Effect or under the Credit
Agreement.
(r) Ownership of Pipeline
Partners. Quicksilver OPGP is the sole general partner of Cowtown
Pipeline Partners L.P., a Texas limited partnership (“Pipeline Partners”),
with a 1.0% general partner interest in Pipeline Partners; such general partner
interest has been duly authorized and validly issued in accordance with the
partnership agreement of Pipeline Partners (the “Pipeline Partners LP
Agreement”); and Quicksilver OPGP owns such general partner interest free
and clear of all Liens except as would not be a Material Adverse Effect or under
the Credit Agreement. Quicksilver Operating is the sole limited
partner of Pipeline Partners with a 99.0% limited partner interest in Pipeline
Partners; such limited partner interest has been duly authorized and validly
issued in accordance with the Pipeline Partners LP Agreement and is fully paid
(to the extent required under the Pipeline Partners LP Agreement) and is
nonassessable (except as such nonassessability may be affected by Section 6.07
of the Texas Act); and Quicksilver Operating owns such limited partner interest
free and clear of all Liens except as would not be a Material Adverse Effect or
under the Credit Agreement.
(s) No Other Subsidiaries. Other
than a direct or indirect ownership in the Partnership or the Subsidiaries,
neither the Partnership nor the General Partner owns, directly or indirectly,
any shares of stock or any other equity interests or long-term debt securities
of any corporation, firm, partnership, limited liability company, joint venture,
association or other entity.
(t) Valid Issuance of Units. The
Units and the limited partner interests represented thereby have been duly
authorized in accordance with the Partnership Agreement and, when issued and
delivered to the Underwriters against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid (to the extent required under
the Partnership Agreement) and nonassessable (except as such nonassessability
may be affected by (i) matters described in the Registration Statement, the
Preliminary Prospectus and the Prospectus under the caption “Risk Factors – Risks
Inherent in an Investment in Us – Your liability may not be limited if a court
finds that unitholder action constitutes control of our business” and
“Risk Factors - Risks
Inherent in an Investment in US Unitholders may have liability to repay
distributions that were wrongfully distributed to them” (and any similar
information, if any, contained in any Permitted Free Writing Prospectus) and
(ii) Sections 17-303 and 17-607 of the Delaware LP Act) and free of any
restriction upon the voting or transfer thereof pursuant to the Partnership
Agreement or other agreement or 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 except as
disclosed in the Disclosure Package and Prospectus.
(u) Conformity to Description of Common
Units. The Units, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will conform in all
material respects to the description thereof contained or incorporated by
reference
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in the
Disclosure Package and the Prospectus.
(v) Authorization, Execution and
Delivery of this Agreement. This Agreement has been duly authorized,
executed and delivered by each of the Quicksilver Parties.
(w) Authorization, Execution, Delivery
and Enforceability of Certain Agreements.
(i) The
Partnership Agreement has been duly authorized and executed and validly
delivered by the General Partner and is a valid and legally binding agreement of
the General Partner, enforceable against the General Partner in accordance with
its terms;
(ii) the
General Partner LLC Agreement has been duly authorized and executed and validly
delivered by Holdings and is a valid and legally binding agreement of Holdings,
enforceable against Holdings in accordance with its terms;
(iii) the
Quicksilver Operating LLC Agreement has been duly authorized and executed and
validly delivered by the Partnership and is a valid and legally binding
agreement of the Partnership, enforceable against the Partnership in accordance
with its terms;
(iv) the
Quicksilver OPGP LLC Agreement has been duly authorized and executed and validly
delivered by Quicksilver Operating LLC and is a valid and legally binding
agreement of Quicksilver Operating LLC, enforceable against Quicksilver
Operating LLC in accordance with its terms;
(v) the
Processing Partners LP Agreement and the Pipeline Partners LP Agreements have
been duly authorized and executed and validly delivered by Quicksilver OPGP and
Quicksilver Operating LLC and are the valid and legally binding agreements of
Quicksilver OPGP and Quicksilver Operating LLC, enforceable against Quicksilver
OPGP and Quicksilver Operating LLC in accordance with their terms;
(vi) the
Purchase and Sale Agreement among Cowtown Pipeline L.P., the Partnership and
Pipeline Partners (the “Alliance Agreement”)
has been duly authorized and executed and validly delivered by Cowtown Pipeline
L.P., the Partnership and Pipeline Partners and is a valid and legally binding
agreement of Cowtown Pipeline L.P., the Partnership and Pipeline Partners,
enforceable against Cowtown Pipeline L.P., the Partnership and Pipeline Partners
in accordance with its terms;
provided
that, with respect to each agreement described in this Section 3(w), the
enforceability thereof may be limited (A) by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (B) with respect to the indemnity, contribution and
exoneration provisions therein, by public policy and applicable laws relating to
fiduciary duties and indemnification.
(x) No Conflicts. None
of (i) the execution, delivery and performance of this Agreement by the parties
hereto, (ii) the offering, issuance and sale of the Units, (iii) the execution
and delivery by the parties thereto of the Alliance Agreement and the
consummation
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of the
transactions contemplated thereby or (iv) the consummation of the transactions
contemplated hereby will conflict with, result in any breach or violation of or
constitute a default under, or constitute any event which, with notice, lapse of
time or both, would result in any breach or violation of, constitute a default
under or give the holder of any indebtedness (or a person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a part of such indebtedness under, or result in the creation or
imposition of a Lien on any property or assets of the Partnership Entities
pursuant to (I) any certificate or articles of incorporation, bylaws,
certificates of formation or limited partnership, limited partnership agreement,
limited liability agreement or other organizational documents (the “Organizational
Documents”) of the Partnership Entities, (II) any indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence of indebtedness,
or any license, lease, contract or other agreement or instrument to which any of
the Partnership Entities is a party or by which any of them or any of their
respective properties may be bound or affected, (III) any federal, state, local
or foreign law, regulation or rule, (IV) any rule or regulation of any
self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the NYSE), or (V)
any decree, judgment or order applicable to any of the Partnership Entities or
any of their respective properties, which conflicts, breaches, violation or
defaults, in the case of clauses (II), (III), (IV) or (V) above, would,
individually or in the aggregate, have a Material Adverse Effect, affect the
validity of the Units or prevent or materially interfere with consummation of
the transactions contemplated by this Agreement or the Alliance
Agreement.
(y) No Consents. No approval,
authorization, consent or order of or filing with any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or agency,
or of or with any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the NYSE ) (each, a “Consent”) or any
approval of the security holders of the Partnership Entities, is required in
connection with the Offering or the consummation by the Partnership of the
transactions contemplated hereby or by the Alliance Agreement, 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,
(iii) under the Conduct Rules of the Financial Industry Regulatory Authority
(“FINRA”), (iv)
such Consents that have been, or prior to the applicable time of purchase will
be, obtained, (v) a supplemental listing application for the Units to be filed
with the New York Stock Exchange, and (vi) such Consents that, if not obtained,
would not, individually or in the aggregate, result in a Material Adverse
Effect, affect the validity of the Units or prevent or materially interfere with
consummation of the transactions contemplated by this Agreement or the Alliance
Agreement.
(z) No Defaults. None
of the Partnership Entities is (A) in violation of its respective Organizational
Documents, (B) in breach of, in default under or violation of (nor has any event
occurred which with notice, lapse of time or both would result in any breach of,
default under or violation of or give the holder of any indebtedness (or a
person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which it is a party
10
or by
which it or any of its properties may be bound or affected, (C) in violation of
any federal, state, local or foreign law, regulation or rule, (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 properties,
which breach, default or violation in the case of Clauses (B), (C), (D) and (E) above, would, if
continued, have, individually or in the aggregate, a Material Adverse Effect,
affect the validity of the Units or prevent or materially interfere with
consummation of the transactions contemplated by this Agreement or the Alliance
Agreement.
(aa) No Preemptive Rights, Registration
Rights, Options or Other Rights. Except as described in the Disclosure
Package and the Prospectus, (i) no person has the right, contractual or
otherwise, to cause the Partnership to issue or sell to it equity interests of
the Partnership, (ii) no person has any preemptive rights, resale rights, rights
of first refusal or other rights to purchase any equity interests in the
Partnership, (iii) no person has any resale rights in respect of equity
interests in the Partnership that would be required to be disclosed in the
Registration Statement and are not so disclosed, (iv) no person has the right to
act as an underwriter or as a financial advisor to the Partnership in connection
with the Offering and (v) 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 equity interests in the Registration
Statement or the Offering.
(bb) Permits. Each of the
Partnership Entities has all necessary licenses, authorizations, consents and
approvals (each, a “Permit”) and has made
all necessary filings required under any applicable law, regulation or rule, and
has obtained all necessary licenses, authorizations, consents and approvals from
other persons, in order to conduct their respective businesses except for such
Permits that, if not obtained, would not, individually or in the aggregate, 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,
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.
(cc) Descriptions; Exhibits. All
legal or governmental proceedings, affiliate transactions, off-balance sheet
transactions, contracts, licenses, agreements, properties, leases or documents
of a character required to be described in the Registration Statement, each
Preliminary Prospectus or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required; and the
statements included in the Registration Statement, the Preliminary Prospectuses
and the Prospectus 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.
(dd) Litigation. Except as
described in the Disclosure Package and the Prospectus, 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
11
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 that would not result in a
judgment, decree or order having, individually or in the aggregate, a Material
Adverse Effect.
(ee) Independent Registered Public
Accounting Firms. Deloitte & Touche LLP, whose report on the
financial statements of the Partnership and the General Partner are included in
the Registration Statement, the Preliminary Prospectuses and the Prospectus or
any Issuer Free Writing Prospectuses containing an audit report, are independent
registered public accountants as required by the Securities Act and by the rules
of the Public Company Accounting Oversight Board.
(ff) Financial Statements. At
September 30, 2009, the Partnership would have had, on an as adjusted pro forma
basis as indicated in the Disclosure Package and the Prospectus, a
capitalization as set forth in the Disclosure Package and the
Prospectus. The historical financial statements included in the
Disclosure Package and the Prospectus, together with the related notes and
schedules, present fairly in all material respects the consolidated financial
position of the Partnership and the General Partner as of the dates indicated
and the consolidated statements of operations, cash flows and changes in
partners’ equity of the Partnership and the General Partner for the periods
specified and have been prepared in compliance with the requirements of the
Securities Act and Exchange Act and in conformity with U.S. generally accepted
accounting principles applied on a consistent basis during the periods
involved. The pro forma financial statements incorporated by
reference in the Disclosure Package and the Prospectus have been prepared in all
material respects in accordance with the applicable accounting requirements of
Article 11 of Regulation S-X of the Commission; the assumptions used in the
preparation of such pro forma financial statements are reasonable; the pro forma
adjustments used therein are appropriate to give effect to the transactions or
circumstances described therein; and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of such pro forma
financial statements. The summary and selected historical financial
data set forth in the Disclosure Package and the Prospectus are accurately and
fairly presented and prepared on a basis consistent with the financial
statements and books and records of the Partnership Entities. There
are no financial statements (historical or pro forma) that are required to be
included in the Disclosure Package or the Prospectus that are not included as
required. The Partnership Entities do not have any material
liabilities or obligations, direct or contingent (including any off-balance
sheet obligations), not described in the Disclosure Package and the
Prospectus.
(gg) No Material Adverse Change.
Subsequent to the respective dates as of which information is given in
the Disclosure Package and the Prospectus, in each case excluding any amendments
or supplements to the foregoing made after the execution of this Agreement,
there has not been (i) any material adverse change, or any development
involving, individually or in the aggregate, a material adverse change, in the
business, properties, management, financial condition, prospects or results of
operations of the Partnership Entities (considered as a single enterprise), (ii)
any transaction which is material to the Partnership Entities (considered as a
single enterprise), (iii) any obligation or liability, direct or contingent
(including any off-balance sheet obligations), incurred by any of the
Partnership Entities, which is material to the Partnership Entities (considered
as a single enterprise), (iv) any material change in the
capitalization,
12
ownership
or outstanding indebtedness of any of the Partnership Entities or (v) any
dividend or distribution of any kind declared, paid or made on the security
interests of any of the Partnership Entities, in each case whether or not
arising from transactions in the ordinary course of business.
(hh) Lock-Up Agreement. The
Partnership Entities have obtained for the benefit of the Underwriters the
agreement (a “Lock-Up
Agreement”), in substantially the form set forth as Exhibit A attached
hereto, of each person listed on Exhibit A-1 hereto, including Holdings and each
executive officer and director of the General Partner.
(ii) 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 and the application of the proceeds thereof, 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”).
(jj) 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 Disclosure Package and the
Prospectus as being owned by any of them, free and clear of all Liens except
Liens, individually or in the aggregate, that would not have a Material Adverse
Effect, Liens that would not materially interfere with the use of any such
property for the conduct of its businesses and/or Liens described in the
Disclosure Package and the Prospectus. All of the property described
in the Disclosure Package and the Prospectus, if any, as being held under lease
by any of the Partnership Entities is held thereby under valid, subsisting and
enforceable leases.
(kk) 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 Disclosure
Package and the Prospectus, subject to such qualifications as may be set forth
in the Disclosure Package and the Prospectus, except for (i) qualifications,
reservations and encumbrances that would not have, individually or in the
aggregate, a Material Adverse Effect and (ii) such rights-of-way that, if not
obtained, would not have, individually or in the aggregate, a Material Adverse
Effect; and, except as described in the Disclosure Package or the Prospectus or
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.
(ll) Intellectual Property. Each
of the Partnership Entities owns or possesses all inventions, patent
applications, patents, trademarks (both registered and unregistered),
tradenames, service names, copyrights, trade secrets and other proprietary
information described in the Disclosure Package and the Prospectus as being
owned or licensed by it or which is necessary for the conduct of, or material
to, its respective businesses, except where the failure to own, license or have
such rights would not, individually or in the aggregate, have a Material Adverse
Effect (collectively, the “Intellectual
Property”), and the Partnership Entities are unaware of any claim to the
contrary or any challenge by any other person to the rights of any of
13
the
Partnership Entities with respect to the Intellectual Property. None
of the Partnership Entities has infringed or is infringing the intellectual
property of a third party, and none of the Partnership Entities has received
notice of a claim by a third party to the contrary.
(mm) Labor and Employment. None of
the Partnership Entities is engaged in any unfair labor practice; no labor
disputes with the employees that are engaged in the businesses of the
Partnership Entities exist or, to the knowledge of the Quicksilver Parties after
due inquiry, are imminent or threatened that would, individually or in the
aggregate, have a Material Adverse Effect. To the knowledge of the
Quicksilver Parties: (i) there is (A) no unfair labor practice complaint pending
or threatened against any of the Partnership Entities before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements is pending or threatened, (B) no strike,
labor dispute, slowdown or stoppage pending or threatened against any of the
Partnership Entities and (C) no union representation dispute currently existing
concerning the employees of any of the Partnership Entities, (ii) no union
organizing activities are currently taking place concerning the employees of any
of the Partnership Entities and (iii) there has been no violation of any
federal, state, local or foreign law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws or any provision
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the rules
and regulations promulgated thereunder concerning the employees of the
Partnership Entities.
(nn) Environmental
Compliance. Except as described in the Disclosure Package and
the Prospectus, each of the Partnership Entities (i) is in compliance with any
and all applicable federal, state, local or foreign laws, statutes, ordinances,
rules, regulations, orders, decrees, judgments, injunctions, permits, licenses,
authorizations or other binding requirements, or common laws, relating to
health, safety or the protection, cleanup or restoration of the environment or
natural resources, including those relating to the distribution, processing,
generation, treatment, storage, disposal, transportation, other handling or
release or threatened release of Hazardous Materials (as defined below) (“Environmental Laws”),
(ii) has received and are in compliance with all permits, licenses, or other
approvals required of it under applicable Environmental Laws to conduct its
respective businesses as they are currently being conducted, (iii) has not
received written notice of any, and to the knowledge of the Quicksilver Parties
after due inquiry 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) is not subject
to any pending or, to the knowledge of the Quicksilver Parties after due
inquiry, threatened actions, suits, demands, orders or proceedings relating to
any Environmental Laws against the Partnership Entities, except in the cases of
clauses (i) through (iv) where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, actual or
potential liability or such actions, suits, demands, orders or proceedings could
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. Except as described in the Disclosure Package and the
Prospectus, none of the Partnership Entities has entered into any agreement
relating to any alleged violation of any Environmental Law or any actual or
alleged release or threatened release or cleanup at any location of any
Hazardous Materials (as defined below). Except as set forth in the
Disclosure Package or the Prospectus, none of the Partnership Entities is
currently named as a “potentially responsible party” under the Comprehensive
Environmental Response, Compensation, and
14
Liability
Act of 1980, as amended (“CERCLA”). As
used herein, “Hazardous Materials”
means any material (including, without limitation, pollutants, contaminants,
hazardous or toxic substances or wastes) that is regulated by or may give rise
to liability under any Environmental Law.
(oo) Environmental Compliance Review.
In the ordinary course of their respective businesses, the Partnership
Entities (i) monitor changes in Environmental Laws applicable to their
respective businesses, operations and properties, and take actions as necessary
to obtain and maintain compliance with any new or amended Environmental Laws;
(ii) retain environmental consultants to apply for and obtain certain permits,
licenses and approvals required for their operations under Environmental Laws,
and to advise the Partnership Entities as to measures that may be required to
obtain and maintain compliance with Environmental Laws; and (iii) consult with
appropriate operations personnel to ensure that adequate capital and operating
budgets are established to provide funding for expenditures required to conduct
their operations in compliance with Environmental Laws.
(pp) Tax Returns. All tax returns
required to be filed by the Partnership Entities have been timely filed, 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.
(qq) Insurance. Quicksilver
maintains insurance covering the Partnership Entities’ properties, operations,
personnel and businesses as the Quicksilver Parties reasonably deem adequate;
such insurance insures against such losses and risks to an extent which 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 each additional time of purchase, if any; and the Quicksilver
Parties do not have reason to believe that it will not be able to renew any such
insurance as and when such insurance expires.
(rr) No Business Interruptions.
None of the Partnership Entities has sustained since the date of the last
audited financial statements included in the 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.
(ss) Non-Renewal of Agreements; No Third
Party Defaults. Except as described in the Disclosure Package and the
Prospectus, none of the Partnership Entities has sent or received any
communication regarding termination of, or intent not to renew, any of the
contracts or agreements referred to or described in the Disclosure Package and
the Prospectus, or referred to or described in, or filed as an exhibit to, the
Registration Statement, and no such termination or non-renewal has been
threatened by any of the Partnership Entities or, to the knowledge of the
Quicksilver Parties, any other party to any such contract or
agreement. To the knowledge of the Quicksilver Parties after due
inquiry, no third party to any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant
15
or
instrument to which any of the Partnership Entities or any of their subsidiaries
is a party or bound or to which their respective properties are subject, is in
breach, default or violation under any such agreement (and no event has occurred
that, with notice or lapse of time or both, would constitute such an event),
which breach, default or violation would have a Material Adverse
Effect.
(tt) Internal
Controls. The Partnership Entities maintain 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.
(uu) Disclosure Controls. The
Partnership has established and will maintain and evaluate “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act) and “internal control over
financial
reporting” (as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act); such disclosure controls and procedures are designed to ensure
that material information relating to the Partnership, including its
consolidated subsidiaries, is made known to General Partner’s Chief Executive
Officer and Chief Financial Officer, and such disclosure controls and procedures
are effective to perform the functions for which they were established; the
Partnership’s independent auditors and the Audit Committee of the Board of
Directors of the General Partner have been advised of: (i) all known significant
deficiencies, if any, in the design or operation of internal control over
financial reporting which could adversely affect the Partnership’s ability to
record, process, summarize and report financial data; and (ii) any known fraud,
if any, whether or not material, that involves management or other employees who
have a significant role in the Partnership’s internal control over financial
reporting; all material weaknesses, if any, in internal control over financial
reporting have been identified to the Partnership’s 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; and the principal executive officers (or
their equivalents) and principal financial officers (or their equivalents) 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; the
Partnership Entities and the General Partner’s directors and officers are each
in compliance in all material respects with all applicable effective provisions
of the Sarbanes-Oxley Act and the rules and regulations of the Commission and
the NYSE promulgated thereunder.
(vv) Related Party Transactions.
None of the Partnership Entities has, directly or indirectly, including
through any Subsidiary: (A) extended credit, arranged to extend credit, or
renewed any extension of credit, in the form of a personal loan, to or for any
director or executive officer of the General Partner or its affiliates, or to or
for any family member or affiliate of any director or executive officer of the
General Partner or its affiliates; or (B) made any material
16
modification,
including any renewal thereof, to the term of any personal loan to any director
or executive officer of the General Partner or its affiliates, or any family
member or affiliate of any director or executive officer of the General Partner
or its affiliates.
(ww) Forward-Looking Statements.
Each “forward-looking
statement” (within the meaning of Section 27A of the Securities Act or
Section 21E of the Exchange Act) contained or incorporated by reference in the
Disclosure Package and the Prospectus, if any, has been made or reaffirmed with
a reasonable basis and in good faith.
(xx) Statistical and Market-Related Data.
All statistical or market-related data included in the Disclosure Package
and the Prospectus 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.
(yy) No Prohibition on Distributions.
None of the Partnership Entities is currently prohibited, directly or
indirectly, from making distributions with respect of its equity securities or
from repaying to the Partnership any loans or advances or from transferring any
property or assets to the Partnership or any other Subsidiary, except as
described in (i) the Disclosure Package and the Prospectus or (ii) the
Organizational Documents of the Partnership and the General
Partner.
(zz) Foreign Corrupt Practices Act.
None of the Partnership Entities nor, to the knowledge of the Quicksilver
Parties, any employee or agent of the Partnership Entities has made any payment
of funds of the Partnership Entities or received or retained any funds in
violation of any law, rule or regulation (including, without limitation, the
Foreign Corrupt Practices Act of 1977), which payment, receipt or retention of
funds is of a character required to be disclosed in the Disclosure Package and
the Prospectus;
(aaa) Money Laundering Laws. The
operations of the Partnership Entities are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money Laundering
Laws”); and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator or non-governmental
authority involving the Partnership Entities with respect to the Money
Laundering Laws is pending or, to the knowledge of the Quicksilver Parties,
threatened.
(bbb) OFAC. None of the
Partnership Entities nor, to the knowledge of the Quicksilver Parties, any
director, officer, agent, employee, affiliate or person acting on behalf of any
Partnership Entity or any Quicksilver Entity is currently subject to any U.S.
sanctions administered by OFAC; and the Partnership will not directly or
indirectly use the proceeds of the Offering, or lend, contribute or otherwise
make available such proceeds to any entity for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by
OFAC.
(ccc) NYSE Listing. The Units have
been approved for listing on the NYSE, subject only to official notice of
issuance.
17
(ddd) No Brokers’ Fees. Except
pursuant to this Agreement, none of the Partnership Entities has incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(eee) No Stabilizing Transactions.
None of the Partnership Entities nor any of their Affiliates (as such
term is defined in Rule 405 of the Rules and Regulations) has taken, directly or
indirectly, any action designed, or which has constituted or might reasonably be
expected to cause or result in the stabilization or manipulation of the price of
any security of the Partnership to facilitate the sale or resale of the
Units.
(fff) FINRA Affiliations. To the
knowledge of the Quicksilver Parties, there are no affiliations or associations
between (i) any member of FINRA and (ii) the Partnership, the General Partner,
any of the General Partner’s officers and directors, or any beneficial owner of
the Partnership’s unregistered equity securities that were acquired at any time
on or after the 180th day immediately preceding the date the Registration
Statement was initially filed with the Commission, except as disclosed in the
Disclosure Package and the Prospectus.
(ggg) No Distribution of Other Offering
Materials. None of the Partnership Entities nor any of their Affiliates
(as such term is defined in Rule 405 of the Rules and Regulations) has
distributed nor will they distribute, prior to the later to occur of (i) the
time of purchase and additional time of purchase and (ii) the completion of the
distribution of the Units, any prospectus (as defined under the Securities Act)
in connection with the offering and sale of the Units other than the
Registration Statement, any Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectuses or other materials, if any, permitted by the
Securities Act, including Rule 134 promulgated thereunder.
In
addition, any certificate signed by any officer of the Partnership Entities and
delivered to the Underwriters or counsel for the Underwriters in connection with
the Offering shall be deemed to be a representation and warranty by the
Partnership Entity, as the case may be, as to matters covered thereby to each
Underwriter.
4. Certain Covenants of the
Partnership. The Quicksilver Parties, jointly and severally, hereby
agree:
(a) Blue Sky Qualification. To
furnish such information as may be required and otherwise to cooperate in
qualifying the Units for offering and sale under the securities or blue sky laws
of such states or other jurisdictions as you may designate and to maintain such
qualifications in effect so long as you may request for the distribution of the
Units; provided, however, that the Partnership shall not be required to qualify
as a foreign limited partnership or to consent to the service of process under
the laws of any such jurisdiction (except service of process with respect to the
Offering); and to promptly advise you of the receipt by the Partnership of any
notification with respect to the suspension of the qualification of the Units
for offer or sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(b) Copies of Prospectus. To make
available to the Underwriters in New York City, as
18
soon as
practicable after this Agreement becomes effective, and thereafter from time to
time to furnish to the Underwriters, as many copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Partnership shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes contemplated by the
Securities Act; in case any Underwriter is required to deliver (whether
physically or through compliance with Rule 172 under the Securities Act or any
similar rule) a prospectus after the nine-month period referred to in Section
10(a)(3) of the Securities Act in connection with the sale of the Units, the
Partnership will prepare, at its expense, promptly upon request such amendment
or amendments to the Registration Statement and the Prospectus as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of the
Securities Act.
(c) Effectiveness of Registration
Statement. If, at the time this Agreement is executed and delivered, it
is necessary or appropriate for a post-effective amendment to the Registration
Statement, or a Registration Statement under Rule 462(b) under the Securities
Act, to be filed with the Commission and become effective before the Units may
be sold, to use its best efforts to cause such post-effective amendment or such
Registration Statement to be filed and become effective, and will pay any
applicable fees in accordance with the Securities Act, as soon as possible; and
the Partnership will advise you promptly and, if requested by you, will confirm
such advice in writing, (i) when such post-effective amendment or such
Registration Statement has become effective, and (ii) if Rule 430A or Rule 430B
under the Securities Act is used, when the Prospectus is filed with the
Commission pursuant to Rule 424(b) under the Securities Act (which the
Partnership agrees to file in a timely manner in accordance with such
Rules).
(d) Delivery of Prospectus. If,
at any time during the period when 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, the Registration Statement shall cease to comply with the requirements of
the Securities Act with respect to eligibility for the use of the form on which
the Registration Statement was filed with the Commission, to (i) promptly notify
the Underwriters, (ii) promptly file with the Commission a new registration
statement under the Securities Act relating to the Units or a post-effective
amendment to the Registration Statement, which new registration statement or
post-effective amendment shall comply with the requirements of the Securities
Act and shall be in a form satisfactory to the Underwriters, (iii) use its best
efforts to cause such new registration statement or post-effective amendment to
become effective under the Securities Act as soon as practicable, (iv) promptly
notify the Underwriters of such effectiveness and (v) take all other action
necessary or appropriate to permit the Offering to continue as contemplated in
the Disclosure Package and the Prospectus; all references herein to the
Registration Statement shall be deemed to include each such new registration
statement or post-effective amendment, if any.
(e) Filing of Amendments or Supplements.
To advise the Underwriters promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer
Free Writing Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for, or the entry of a stop order,
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the lifting or removal
19
of such
order as soon as possible; to advise the Underwriters promptly of any proposal
to amend or supplement (other than, after the termination of the Offering, by
means of filing any document that is incorporated by reference therein) the
Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer
Free Writing Prospectus, and to provide the Underwriters and Underwriters’
counsel copies of any such documents for review and comment a reasonable amount
of time prior to any proposed filing and to file no such amendment or supplement
to which the Underwriters shall object in writing.
(f) Exchange Act Reports. Subject
to Section 4(e) hereof, to
file promptly all reports and documents and any preliminary or definitive proxy
or information statement required to be filed by the Partnership with the
Commission in order to comply with the Exchange Act for so long as 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.
(g) Rule 462(b) Registration Statement.
If necessary or appropriate, to file a registration statement pursuant
to, and in accordance with, Rule 462(b) under the Securities Act and pay the
applicable fees in accordance with the Securities Act.
(h) Misstatements and Omissions.
To advise the Underwriters promptly of the happening of any event within
the period 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, which
event could require the making of any change in the Prospectus then being used
so that the Prospectus would not 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 are made, not
misleading, and to advise the Underwriters promptly if, during such period, it
shall become necessary to amend or supplement the Prospectus to cause the
Prospectus to comply with the requirements of the Securities Act, and, in each
case, during such time, subject to Section 4(e) hereof, to
prepare and furnish, at the Partnership’s expense, to the Underwriters promptly
such amendments or supplements to such Prospectus as may be necessary to reflect
any such change or to effect such compliance.
(i) Earnings Information. To make
generally available to its security holders, and to deliver to the Underwriters,
an earnings statement of the Partnership (which will satisfy the provisions of
Section 11(a) of the Securities Act) covering a period of twelve months
beginning after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act) as soon as is reasonably practicable after
the termination of such twelve-month period but in any case not later than 18
months after the effective date of this Registration Statement.
(j) Annual Report. Unless
otherwise available through the electronic data gathering, analysis and
retrieval system (“EDGAR”), to furnish
to the Partnership’s security holders as soon as practicable after the end of
each fiscal year a 10-K (including a consolidated balance sheet of the General
Partner, as required, and the consolidated balance sheet and statements of
income, partners’ equity and cash flow of the Partnership and the Subsidiaries
for such fiscal year, accompanied by a copy of the certificate of report thereon
of nationally recognized independent
20
registered
public
accountants duly registered with the PCAOB).
(k) Copies of the Registration
Statement. To furnish or make available via EDGAR to the Underwriters as
many copies of the Registration Statement as may be reasonably requested, as
such Registration Statement was initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient copies of the
foregoing (other than exhibits) for distribution of a copy to each of the other
Underwriters and counsel.
(l) Copies of Other Documents. To
furnish or make available via EDGAR to each of the Underwriters for a period of
five years from the date of this Agreement (i) copies of any reports, proxy
statements, or other communications which the Partnership shall send to its
security holders (excluding any periodic income tax reporting materials) or
shall from time to time publish or publicly disseminate, (ii) copies of all
annual, quarterly, transition and current reports filed with the Commission on
Forms 10-K, 10-Q or 8-K, or such other similar forms as may be designated by the
Commission, (iii) copies of publicly available documents or reports filed with
any national securities exchange on which any class of securities of the
Partnership is listed and (iv) such other information as you may reasonably
request regarding the Partnership Entities, in each case to the extent that such
materials are not publicly available.
(m) Application of Proceeds. To
apply the net proceeds from the sale of the Units in the manner set forth under
the caption “Use of
Proceeds” in the Prospectus.
(n) Compliance with Rules 433(d) and
(g). To comply with Rule 433(d) under the Securities Act (without
reliance on Rule 164(b) under the Securities Act) and Rule 433(g) under the
Securities Act.
(o) Partnership Lock-Up.
Beginning on the date hereof and ending on, and including, the date that
is 60 days after the date hereof (the “Lock-Up Period”),
without the prior written consent of Wells Fargo Securities, LLC, not to (i)
issue, sell, offer to sell, contract or agree to sell, hypothecate, pledge,
grant any option to purchase or otherwise dispose of or agree to dispose of,
directly or indirectly, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, with respect to any Common Units or securities
convertible into or exchangeable or exercisable for Common Units or warrants or
other rights to purchase Common Units or any other securities of the Partnership
that are substantially similar to Common Units, (ii) file or cause to become
effective a registration statement under the Securities Act relating to the
offer and sale of any Common Units or securities convertible into or
exchangeable or exercisable for Common Units or warrants or other rights to
purchase Common Units or any other securities of the Partnership that are
substantially similar to Common Units, (iii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Units or any securities convertible into or
exchangeable or exercisable for Common Units or warrants or other rights to
purchase Common Units or any such securities, whether any such transaction is to
be settled by delivery of Common Units or such other securities, in cash or
otherwise or (iv) publicly announce an intention to effect any transaction
specified in clause
(i), (ii) or (iii), except, in
each case, for (A) the sale of the Units as contemplated by this Agreement, (B)
issuances of Common Units upon the exercise or vesting of securities convertible
into or exchangeable or exercisable for Common Units pursuant
21
to the
Partnership’s 2007 equity plan, and (C) the issuance of securities convertible
into or exchangeable or exercisable for Common Units not exercisable during the
Lock-Up Period pursuant to the Partnership’s 2007 equity plan; provided, however, that if (a)
during the period that begins on the date that is seventeen (17) days before the
last day of the Lock-Up Period and ends on the last day of the Lock-Up Period,
the Partnership issues an earnings release or material news or a material event
relating to the Partnership occurs; or (b) prior to the expiration of the
Lock-Up Period, the Partnership announces that it will release earnings results
during the sixteen (16) day period beginning on the last day of the Lock-Up
Period, then the restrictions imposed by this Section 4(o) shall
continue to apply until the expiration of the date that is eighteen (18) days
after the date on which the issuance of the earnings release or the material
news or material event occurs.
(p) Distribution of Prospectuses.
Not, at any time at or after the execution of this Agreement, to,
directly or indirectly, offer or sell any Units by means of any “prospectus” (within
the meaning of the Securities Act), or use any “prospectus” (within
the meaning of the Securities Act) in connection with the offer or sale of the
Units, in each case other than the Prospectus and any Issuer Free Writing
Prospectus identified on Schedule D attached
hereto.
(q) No Stabilization. Not to
take, directly or indirectly, any action designed, or which has constituted or
might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Units.
(r) NYSE Listing. To use its best
efforts to cause the Units to be approved for trading on NYSE.
(s) Transfer Agent. To maintain a
transfer agent and, if necessary under the jurisdiction of formation of the
Partnership, a registrar for the Partnership Units.
5. Covenant to Pay
Costs. The Quicksilver Parties jointly and severally agree to pay all
costs, expenses, fees and taxes in connection with (i) the preparation and
filing of the Registration Statement, each Preliminary Prospectus, the
Prospectus, each Issuer Free Writing Prospectus and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof
to the Underwriters, counsel and to dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the Units
including any stock or transfer taxes and stamp or similar duties payable upon
the sale, issuance or delivery of the Units to the Underwriters, (iii) the
producing, word processing and/or printing of this Agreement, any agreement
among underwriters, any dealer agreements, any powers of attorney and custody
agreements and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters and counsel and (except closing documents) to dealers (including
costs of mailing and shipment), (iv) the qualification of the Units for offering
and sale under state or foreign laws and the determination of their eligibility
for investment under state or foreign law (including the reasonably incurred
legal fees and filing fees and other disbursements of counsel for the
Underwriters) and the reasonably incurred costs and expenses of printing and
furnishing of copies of any Canadian wrapper, blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing of the
Units on any securities exchange, (vi) any filing for review of the public
offering of the Units by
22
FINRA,
including any reasonably incurred legal fees and filing fees and other
disbursements of counsel to the Underwriters relating to FINRA matters in an
amount not to exceed $5,000, (vii) the fees and disbursements of any transfer
agent or registrar for the Units, (viii) the costs and expenses of the
Partnership Entities relating to presentations or meetings undertaken in
connection with the marketing of the offering and sale of the Units to
prospective investors and the Underwriters’ sales forces, including, without
limitation, expenses associated with the production of road show slides and
graphics, lodging and other expenses incurred by the officers of any of the
Partnership Entities, (ix) the costs and expenses of qualifying the Units for
inclusion in the book-entry settlement system of the DTC, and (x) the
performance of the obligations of the Partnership Entities hereunder; provided, however, that (i)
except as otherwise provided in this Section 5 and in Section 6 hereof, the
Underwriters shall bear and pay all of their own costs and expenses, including
the fees and expenses of their counsel, any transfer taxes payable on the
issuance of any Units and any advertising expenses incurred by them in
connection with any offers they make.
6. Reimbursement of
Underwriters’ Expenses. If the Units are not delivered for any reason
other than the termination of this Agreement pursuant to the fifth paragraph of
Section 9 hereof or the
default by one or more of the Underwriters in its or their respective
obligations hereunder, the Partnership shall, in addition to paying the amounts
described in Section
5 hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of their counsel.
7. Conditions of Underwriters’
Obligations. The several obligations of the Underwriters hereunder are
subject to the accuracy of the representations and warranties on the part of the
Quicksilver Parties on the date of this Agreement, at the Applicable Time, at
the time of purchase and, if applicable, at the additional time of purchase, the
performance by the Quicksilver Parties of their obligations hereunder and to the
following additional conditions precedent:
(a) The
Partnership shall furnish to you at the time of purchase and, if applicable, at
the additional time of purchase, an opinion of Davis Polk & Wardwell LLP,
counsel for the Partnership, addressed to the Underwriters, and dated the time
of purchase or the additional time of purchase, as the case may be, with
executed copies for each of the other Underwriters, and in the form approved by
the Representatives, substantially to the effect set forth in Exhibit B attached
hereto.
(b) The
Partnership shall furnish to you at the time of purchase and, if applicable, at
the additional time of purchase, an opinion of Fulbright & Jaworski L.L.P.,
counsel for the Partnership, addressed to the Underwriters, and dated the time
of purchase or the additional time of purchase, as the case may be, with
executed copies for each of the other Underwriters, and in the form approved by
the Representatives, substantially to the effect set forth in Exhibit C attached
hereto.
(c) The
Partnership shall furnish to you at the time of purchase and, if applicable, at
the additional time of purchase, an opinion of John C. Cirone, General Counsel
for the Partnership, addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case may be, with executed
copies for each of the other Underwriters, and in the form approved by the
Representatives, substantially to the effect set forth in Exhibit D
23
attached
hereto.
(d) You
shall have received from Deloitte & Touche LLP customary comfort letters
dated, respectively, the date of this Agreement, the date of the Prospectus, the
time of purchase and, if applicable, the additional time of purchase, and
addressed to the Underwriters (with executed copies for each of the
Underwriters) in the forms approved by the Representatives, which letters shall
cover, without limitation, the various financial disclosures contained in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the
Issuer Free Writing Prospectuses, if any.
(e) You
shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the opinion of Baker Botts L.L.P., counsel for the
Underwriters, dated the time of purchase or the additional time of purchase, as
the case may be, in form and substance reasonably satisfactory to the
Representatives.
(f) No
Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you shall have objected.
(g) The
Registration Statement and any registration statement required to be filed,
prior to the sale of the Units, under the Securities Act pursuant to Rule 462(b)
shall have been filed and shall have become effective under the Securities
Act. The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Securities Act at or before 5:30 P.M., New
York City time, on the second full business day after the date of this Agreement
(or such earlier time as may be required under the Securities Act).
(h) Prior
to and at the time of purchase, and, if applicable, the additional time of
purchase, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Securities Act or
proceedings initiated under Section 8(d) or 8(e) of the Securities Act; (ii) the
Registration Statement and all amendments thereto shall not 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; (iii)
none of the Preliminary Prospectuses or the Prospectus, and no amendment or
supplement thereto, shall 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 are made, not misleading; (iv)
no Disclosure Package, and no amendment or supplement thereto, shall 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 are made, not misleading; and (v) none of the Issuer Free Writing
Prospectuses, if any, shall 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 are made, not
misleading.
(i) Between
the time of execution of this Agreement and the time of purchase or the
additional time of purchase, as the case may be, (i) no material adverse change
or any development involving a prospective material adverse change in the
business, properties, management, financial condition, or results of operations
or prospects of the Partnership Entities, taken as a whole, shall occur or
become known and (ii) no transaction which is material and adverse to the
Partnership Entities, taken as a whole, shall have been entered into by any of
the
24
Partnership
Entities or become probable, the effect of which is, in the judgment of the
Representatives, so material or adverse as to make it impracticable or
inadvisable to proceed with the Offering or the delivery of the Units as
contemplated by the Prospectus.
(j) The
Partnership will, at the time of purchase and, if applicable, at the additional
time of purchase, deliver to you a certificate of the President and Chief
Executive Officer and the Senior Vice President - Chief Financial Officer of the
General Partner, dated the time of purchase or the additional time of purchase,
as the case may be, in the form attached as Exhibit E
hereto.
(k) The
Partnership shall have furnished to you such other documents and certificates as
to the accuracy and completeness of any statement in the Registration Statement,
any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus
as of the time of purchase and, if applicable, the additional time of purchase,
as you may reasonably request.
(l) The
Units shall have been approved for listing on NYSE, subject only to notice of
issuance at or prior to the time of purchase or the additional time of purchase,
as the case may be.
(m) FINRA
shall not have raised any objection (that has not been resolved) with respect to
the fairness or reasonableness of the underwriting, or other arrangements of the
transactions, contemplated hereby.
8. Effective Date of Agreement;
Termination. This Agreement shall become effective when the parties
hereto have executed and delivered this Agreement.
The
obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representatives, if (1) since the
time of execution of this Agreement or the earlier respective dates as of which
information is given in the Registration Statement, the Disclosure Package and
the Prospectus there has been any change or any development involving a
prospective change in the business, properties, management, financial condition
or results of operations of or prospects of the Partnership Entities, taken as a
whole, the effect of which change or development is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the Offering on the terms and in the manner
contemplated in the Registration Statement, the Preliminary Prospectuses, the
Prospectus and the Issuer Free Writing Prospectuses, if any, or (2) since the
time of execution of this Agreement, there shall have occurred: (A) a suspension
or material limitation in trading in securities generally on the NYSE; (B) a
suspension or material limitation in trading in the Partnership’s securities on
the NYSE; (C) a general moratorium on commercial banking activities declared by
either federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States; (D) an outbreak or escalation of hostilities or acts of terrorism
involving the United States or a declaration by the United States of a national
emergency or war; or (E) any other calamity or crisis or any change in
financial, political or economic conditions in the United States or elsewhere,
if the effect of any such event specified in clause (D) or (E), in the judgment
of the Representatives, makes it impractical or inadvisable to proceed with the
public offering or the delivery of the Units on the terms and in the manner
contemplated in the Registration Statement, the Preliminary Prospectuses, the
Prospectus and the Issuer Free Writing Prospectuses, if any, or (3) since the
time of execution of this Agreement, there shall have occurred any downgrading,
or any notice
25
or
announcement shall have been given or made of: (A) any intended or potential
downgrading or (B) any watch, review or possible change that does not indicate
an affirmation or improvement in the rating accorded any securities of or
guaranteed by any Partnership Entity by any “nationally recognized statistical
rating organization,” as that term is defined in Rule 436(g)(2) under the
Securities Act.
If the
Representatives elect to terminate this Agreement as provided in this Section 8, the
Partnership and each other Underwriter shall be notified promptly in
writing.
If the
sale to the Underwriters of the Units, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement,
or if such sale is not carried out because the Quicksilver Parties shall be
unable to comply with any of the terms of this Agreement, the Quicksilver
Parties shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 5, 6 and 10 hereof), and
the Underwriters shall be under no obligation or liability to the Partnership
Entities under this Agreement (except to the extent provided in Section 10 hereof) or to
one another hereunder.
9. Increase in Underwriters’
Commitments. Subject to Sections 7 and 8 hereof, if any
Underwriter shall default in its obligation to take up and pay for the Firm
Units to be purchased by it hereunder (otherwise than for a failure of a
condition set forth in Section 7 hereof or a
reason sufficient to justify the termination of this Agreement under the
provisions of Section
8 hereof) and if
the number of Firm Units which all Underwriters so defaulting shall have agreed
but failed to take up and pay for does not exceed 10% of the total number of
Firm Units, the non-defaulting Underwriters (including the Underwriters, if any,
substituted in the manner set forth below) shall take up and pay for (in
addition to the aggregate number of Firm Units they are obligated to purchase
pursuant to Section
1 hereof) the number of Firm Units agreed to be purchased by all such
defaulting Underwriters, as hereinafter provided. Such Units shall be
taken up and paid for by such non-defaulting Underwriters in such amount or
amounts as you may designate with the consent of each Underwriter so designated
or, in the event no such designation is made, such Units shall be taken up and
paid for by all non-defaulting Underwriters pro rata in proportion to the
aggregate number of Firm Units set forth opposite the names of such
non-defaulting Underwriters in Schedule
A.
Without
relieving any defaulting Underwriter from its obligations hereunder, the
Partnership agrees with the non-defaulting Underwriters that it will not sell
any Firm Units hereunder unless all of the Firm Units are purchased by the
Underwriters (or by substituted Underwriters selected by you with the approval
of the Partnership or selected by the Partnership with your
approval).
If a new
Underwriter or Underwriters are substituted by the Underwriters or by the
Partnership for a defaulting Underwriter or Underwriters in accordance with the
foregoing provision, the Partnership or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order that any
necessary changes in the Registration Statement and the Prospectus and other
documents may be effected.
The term
“Underwriter”
as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 9 with like
effect as if such substituted Underwriter
26
had
originally been named in Schedule A
hereto.
If the
aggregate number of Firm Units which the defaulting Underwriter or Underwriters
agreed to purchase exceeds 10% of the total number of Firm Units which all
Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Partnership shall make arrangements within the five
business day period stated above for the purchase of all the Firm Units which
the defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall terminate without further act or deed and without any liability
on the part of the Quicksilver Parties to any Underwriter and without any
liability on the part of any non-defaulting Underwriter to the Quicksilver
Parties. Nothing in this paragraph, and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Indemnity and
Contribution.
(a) Each
of the Quicksilver Parties, jointly and severally, agrees to indemnify, defend
and hold harmless each Underwriter, the partners, directors, officers, employees
and agents of any Underwriter, affiliates of any Underwriter who have
participated in the distribution of the Units as underwriters, and any person
who controls any Underwriter or any such affiliate within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, and the successors
and assigns of all of the foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or any such person may incur
under the Securities Act, the Exchange Act, the common law or otherwise, insofar
as such loss, damage, expense, liability or claim arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in, or any omission or alleged omission to state a material fact
required to be stated in, the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Partnership)
or arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in, and in conformity with
the information specified in Section 11 hereof
furnished in writing by or on behalf of such Underwriter through you to the
Partnership expressly for use in, the Registration Statement or arises out of or
is based upon any omission or alleged omission to state a material fact in the
Registration Statement in connection with such information, which material fact
was not contained in such information and which material fact was required to be
stated in such Registration Statement or was necessary to make such information
not misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact included in any Prospectus (the term Prospectus for the purpose of
this Section 10 being deemed
to include any Preliminary Prospectus, the Prospectus and any amendments or
supplements to the foregoing), in any Issuer Free Writing Prospectus, in any
“issuer information” (as defined in Rule 433 under the Securities Act) of the
Partnership or in any Prospectus together with any combination of one or more of
the Issuer Free Writing Prospectuses, if any, or arises out of or is based upon
any omission or alleged omission 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, with respect to such Prospectus or Issuer
Free Writing Prospectus, insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue
27
statement
or alleged untrue statement of a material fact contained in, and in conformity
with the information specified in Section 11 hereof
furnished in writing by or on behalf of such Underwriter through you to the
Partnership expressly for use in, such Prospectus or Issuer Free Writing
Prospectus or arises out of or is based upon any omission or alleged omission to
state a material fact in such Prospectus or Issuer Free Writing Prospectus in
connection with such information, which material fact was not contained in such
information and which material fact was necessary in order to make the
statements in such information, in the light of the circumstances under which
they were made, not misleading.
(b) Each
Underwriter severally agrees to indemnify, defend and hold harmless the
Quicksilver Parties, their directors and officers, and any person who controls
the Partnership within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Quicksilver Parties or any such person may incur under the
Securities Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in,
and in conformity with the information specified in Section 11 hereof
furnished in writing by or on behalf of such Underwriter through you to the
Partnership expressly for use in, the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Partnership), or arises out of or is based upon any omission or alleged omission
to state a material fact in such Registration Statement in connection with such
information, which material fact was not contained in such information and which
material fact was required to be stated in such Registration Statement or was
necessary to make such information not misleading or (ii) any untrue statement
or alleged untrue statement of a material fact contained in, and in conformity
with the information specified in Section 11 hereof
furnished in writing by or on behalf of such Underwriter through you to the
Partnership expressly for use in, a Prospectus or a Issuer Free Writing
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in such Prospectus or Issuer Free Writing Prospectus in
connection with such information, which material fact was not contained in such
information and which material fact was necessary in order to make the
statements in such information, in the light of the circumstances under which
they were made, not misleading.
(c) If
any action, suit or proceeding (each, a “Proceeding”) is
brought against a person (an “indemnified party”)
in respect of which indemnity may be sought against the Quicksilver Parties or
an Underwriter (as applicable, the “indemnifying party”)
pursuant to subsection
(a) or (b), respectively, of this Section 10, such
indemnified party shall promptly notify such indemnifying party in writing of
the institution of such Proceeding and such indemnifying party shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided,
however, that the failure to so notify such indemnifying party shall not
relieve such indemnifying party from any liability which such indemnifying party
may have to any indemnified party or otherwise. The indemnified party
or parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have
been authorized in writing by the indemnifying party in connection with the
defense of such Proceeding or the indemnifying party shall not have, within a
reasonable period of time in light of the
28
circumstances,
employed counsel to defend such Proceeding or such indemnified party or parties
shall have reasonably concluded that there may be defenses available to it or
them which are different from, additional to or in conflict with those available
to such indemnifying party (in which case such indemnifying party shall not have
the right to direct the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by such indemnifying party and paid as incurred (it being understood, however,
that, except as provided in the second paragraph of Section 10(a), such
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The
indemnifying party shall not be liable for any settlement of any Proceeding
effected without its written consent, but, if settled with its written consent,
such indemnifying party agrees to indemnify and hold harmless the indemnified
party or parties from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this Section 10(c), then the indemnifying party agrees that it shall
be liable for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have fully reimbursed the indemnified party in
accordance with such request prior to the date of such settlement unless such
failure to reimburse the indemnified party is based on a dispute with a good
faith basis as to either the obligation of the indemnifying party arising under
this Section 10 to indemnify the indemnified party or the amount of such
obligation and the indemnifying party shall have notified the indemnified party
of such good faith dispute prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days’
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault or culpability or
a failure to act by or on behalf of such indemnified party.
(d) If
the indemnification provided for in this Section 10 is unavailable
to an indemnified party under subsections (a) and (b) of this Section 10 or
insufficient to hold an indemnified party harmless in respect of any losses,
damages, expenses, liabilities or claims referred to therein, then each
applicable indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Quicksilver Parties on the one hand and the
Underwriters on the other hand from the Offering or (ii) if the allocation
provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Quicksilver Parties on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative benefits
received by the Quicksilver Parties on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total
proceeds from the Offering
29
(net of
underwriting discounts and commissions but before deducting expenses) received
by the Partnership, and the total underwriting discounts and commissions
received by the Underwriters, bear to the aggregate public offering price of the
Units. The relative fault of the Quicksilver Parties on the one hand
and of the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by
the Quicksilver Parties or by the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(e) The
Quicksilver Parties and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 10 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in subsection (d)
above. Notwithstanding the provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Units underwritten by such Underwriter and
distributed to the public were offered to the public exceeds the amount of any
damage which such Underwriter has otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations to contribute
pursuant to this Section 10 are several in
proportion to their respective underwriting commitments and not
joint.
(f) The
indemnity and contribution agreements contained in this Section 10 and the
covenants, warranties and representations of the Quicksilver Parties contained
in this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, its partners, directors
or officers or any person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Quicksilver Parties, their directors or officers or any person who controls the
Quicksilver Parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and shall survive any termination of this
Agreement or the issuance and delivery of the Units. The Quicksilver
Parties and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Quicksilver
Parties, against any of the General Partner’s officers or directors in
connection with the issuance and sale of the Units, or in connection with the
Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer
Free Writing Prospectus.
11. Information Furnished by the
Underwriters. The concession figure appearing under the caption
“Underwriting—Underwriting Discounts and Expenses,” the legal name of each
Underwriter appearing in the table under the caption “Underwriting,” and the
disclosure appearing under the caption “Underwriting—Price Stabilization, Short
Positions and Penalty Bids” in the Disclosure Package and the Prospectus
constitute the only information furnished by or on behalf of the Underwriters,
as such information is referred to in Sections 3 and 10
hereof.
30
12. Notices. Except as
otherwise herein provided, all statements, requests, notices and agreements
shall be in writing or by telegram or facsimile and, if to the Underwriters,
shall be sufficient in all respects if delivered or sent to Wells Fargo
Securities, LLC, 375 Park Avenue, 4th Floor, New York, NY 10152; to Merrill
Lynch, Pierce, Fenner & Smith Incorporated, One Bryant Park, New York, NY
10036, Facsimile: (646) 855 3073, Attention: Syndicate
Department; to Citigroup Global Markets Inc., 388 Greenwich Street, New York,
New York 10013, Attention: General Counsel; to UBS Securities LLC, 299 Park
Avenue, New York, NY 10171-0026, Attention: Syndicate Department; and to
Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019,
Attention: Syndicate Registration (Fax: 646-834-8133); and, if to the
Quicksilver Parties, shall be sufficient in all respects if delivered or sent to
the Quicksilver Parties at the offices of the Partnership at 777 West Rosedale
Street, Fort Worth, Texas 76104, Attention: John C. Cirone, General
Counsel.
13. Governing Law;
Construction. This Agreement and any claim, counterclaim or dispute of
any kind or nature whatsoever arising out of or in any way relating to this
Agreement (“Claim”), directly or
indirectly, shall be governed by, and construed in accordance with, the laws of
the State of New York. The section headings in this Agreement have
been inserted as a matter of convenience of reference and are not a part of this
Agreement.
14. Submission to
Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New
York located in the City and County of New York or in the United States District
Court for the Southern District of New York, which courts shall have
jurisdiction over the adjudication of such matters, and the parties hereto
consent to the jurisdiction of such courts and personal service with respect
thereto. The parties hereto hereby consent to personal jurisdiction,
service and venue in any court in which any Claim arising out of or in any way
relating to this Agreement is brought by any third party against any Underwriter
or any indemnified party. Each Underwriter and the Quicksilver
Parties (on each of its behalf and, to the extent permitted by applicable law,
on behalf of each of its equity holders and affiliates waive all right to trial
by jury in any action, proceeding or counterclaim (whether based upon contract,
tort or otherwise) in any way arising out of or relating to this
Agreement. The Quicksilver Parties agree that a final judgment in any
such action, proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Quicksilver Parties and may be enforced in any
other courts to the jurisdiction of which the Quicksilver Parties are or may be
subject, by suit upon such judgment.
15. Parties at Interest.
The Agreement herein set forth has been and is made solely for the benefit of
the Underwriters and the Quicksilver Parties and to the extent provided in Section 10 hereof the
controlling persons, partners, directors and officers referred to in such
Section, and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
16. No Fiduciary
Relationship. The Quicksilver Parties hereby acknowledge that the
Underwriters are acting solely as underwriters in connection with the purchase
and sale of the Partnership’s securities. The Quicksilver Parties
further acknowledge that the Underwriters are acting pursuant to a contractual
relationship created solely by this Agreement entered into on an
31
arm’s
length basis, and in no event do the parties intend that the Underwriters act or
be responsible as a fiduciary to the Quicksilver Parties, their management,
security holders or creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance
of the purchase and sale of the Units, either before or after the date
hereof. The Underwriters hereby expressly disclaim any fiduciary or
similar obligations to the Quicksilver Parties, either in connection with the
transactions contemplated by this Agreement or any matters leading up to such
transactions, and the Quicksilver Parties hereby confirm their understanding and
agreement to that effect. The Quicksilver Parties and the
Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions and that any
opinions or views expressed by the Underwriters to the Quicksilver Parties
regarding such transactions, including, but not limited to, any opinions or
views with respect to the price or market for the Partnership’s securities, do
not constitute advice or recommendations to the Quicksilver
Parties. The Quicksilver Parties hereby waive and release, to the
fullest extent permitted by law, any claims that the Quicksilver Parties may
have against the Underwriters with respect to any breach or alleged breach of
any fiduciary or similar duty to the Quicksilver Parties in connection with the
transactions contemplated by this Agreement or any matters leading up to such
transactions.
17. Counterparts. This
Agreement may be signed by the parties in one or more counterparts which
together shall constitute one and the same agreement among the
parties.
18. Successors and
Assigns. This Agreement shall be binding upon the Underwriters and the
Quicksilver Parties and their successors and assigns and any successor or assign
of any substantial portion of any of the Quicksilver Parties and any of the
Underwriters’ respective businesses and/or assets.
[The
Remainder of This Page Intentionally Left Blank; Signature Page
Follows]
32
If the
foregoing correctly sets forth the understanding between the Quicksilver Parties
and the several Underwriters, please so indicate in the space provided below for
that purpose, whereupon this Agreement and your acceptance shall constitute a
binding agreement between the Quicksilver Parties and the Underwriters,
severally.
| Very truly yours, |
| QUICKSILVER GAS SERVICES LP | |||
|
|
By:
|
Quicksilver Gas Services GP LLC, its general partner | |
|
|
By:
|
/s/ Philip Cook | |
| Name: Philip Cook | |||
| Title: Senior Vice President — | |||
| Chief Financial Officer |
| QUICKSILVER GAS SERVICES GP LLC | |||
|
|
By:
|
/s/ Philip Cook | |
| Name: Philip Cook | |||
| Title: Senior Vice President — | |||
| Chief Financial Officer | |||
Signature
Page to Underwriting Agreement
Accepted
and agreed to as of the date first above written, on behalf of themselves and
the other several Underwriters named in Schedule
A
| WELLS FARGO SECURITIES, LLC | |||
|
|
By:
|
/s/ David Herman | |
| Name: | David Herman | ||
| Title: | Director | ||
| MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED | |||
|
|
By:
|
/s/ Scott Archer | |
| Name: | Scott Archer | ||
| Title: | Director | ||
| CITIGROUP GLOBAL MARKETS INC. | |||
|
|
By:
|
/s/ Michael J. Casey, Jr. | |
| Name: | Michael J. Casey, Jr. | ||
| Title: | Director | ||
| UBS SECURITIES LLC | |||
|
|
By:
|
/s/ Sam Pitts | |
| Name: | Sam Pitts | ||
| Title: | Managing Director | ||
|
|
By:
|
/s/ Matthew Hartman | |
| Name: | Matthew Hartman | ||
| Title: | Associate Director | ||
| BARCLAYS CAPITAL INC. | |||
|
|
By:
|
/s/ Victoria Hale | |
| Name: | Victoria Hale | ||
| Title: | Vice President | ||
For
themselves and as Representatives of the other Underwriters.
Signature
Page to Underwriting Agreement
SCHEDULE
A
|
Underwriter
|
Number
of Firm Units
to
be Purchased
|
|
|
Wells
Fargo Securities, LLC
|
760,000
|
|
|
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
|
760,000
|
|
|
Citigroup
Global Markets Inc.
|
760,000
|
|
|
UBS
Securities LLC
|
760,000
|
|
|
Barclays
Capital Inc.
|
400,000
|
|
|
Goldman,
Sachs & Co.
|
200,000
|
|
|
Capital
One Southcoast, Inc.
|
90,000
|
|
|
Comerica
Securities, Inc.
|
90,000
|
|
|
BBVA
Securities Inc.
|
90,000
|
|
|
Ladenburg
Thalmann & Co. Inc.
|
90,000
|
|
|
Total
|
4,000,000
|
SCHEDULE
B
Subsidiaries
|
STATE/JURISDICTION
OF
|
||||
|
INCORPORATION/
|
NAME
UNDER WHICH
|
|||
|
NAME
OF SUBSIDIARY
|
ORGANIZATION
|
BUSINESS
IS CONDUCTED
|
||
|
Quicksilver
Gas Services Operating LLC
|
Delaware
|
Quicksilver
Gas Services Operating LLC
|
||
|
Quicksilver
Gas Services Operating GP LLC
|
Delaware
|
Quicksilver
Gas Services Operating GP LLC
|
||
|
Cowtown
Gas Processing Partners L.P.
|
Texas
|
Cowtown
Gas Processing Partners L.P.
|
||
|
Cowtown
Pipeline Partners L.P.
|
Texas
|
Cowtown
Pipeline Partners L.P.
|
SCHEDULE
C
Jurisdictions
of Foreign Qualification or Registration
|
Entities
|
Foreign
Jurisdictions
|
|||
|
Quicksilver
Gas Services LP
|
TX
|
|||
|
Quicksilver
Gas Services GP LLC
|
TX
|
|||
|
Quicksilver
Gas Services Operating LLC
|
TX
|
|||
|
Quicksilver
Gas Services Operating GP LLC
|
TX
|
|||
|
Cowtown
Pipeline Partners L.P.
|
None
|
|||
|
Cowtown
Gas Processing Partners L.P.
|
None
|
|||
SCHEDULE
D
Issuer
Free Writing Prospectuses
None.
SCHEDULE
E
Pricing
Information
| Number of Units: | 4,000,000 Firm Units and 600,000 Additional Units | |
| Price to Public: | $21.10 | |
| Time of Purchase: | December 16, 2009 |
EXHIBIT
A
Form
of Lock-Up Agreement
December 10, 2009
Wells
Fargo Securities, LLC
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
Citigroup
Global Markets Inc.
UBS
Securities LLC
Barclays
Capital Inc.
Together
with the other Underwriters
named in
Schedule A to the Underwriting Agreement referred to herein
c/o Wells
Fargo Securities, LLC
345 Park
Avenue, 4th Floor
New York,
NY 10152
Ladies
and Gentlemen:
This
Lock-Up Agreement is being delivered to you in connection with the proposed
Underwriting Agreement (the “Underwriting
Agreement”) to be entered into by Quicksilver Gas Services LP, a Delaware
limited partnership (the “Partnership”), and
Quicksilver Gas Services GP LLC, a Delaware limited liability company, on the
one hand, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Citigroup Global Markets Inc., UBS Securities LLC and
Barclays Capital Inc. (collectively, the “Representatives”) and
the other underwriters named in Schedule A to the Underwriting Agreement, on the
other hand, with respect to the public offering (the “Offering”) of
4,000,000 common units of the Partnership representing limited partner interests
in the Partnership (the “Firm Units”).
Capitalized terms used but not defined herein have the meanings given to them in
the Underwriting Agreement.
In order
to induce you to enter into the Underwriting Agreement, the undersigned agrees
that, for a period (the “Lock-Up Period”)
beginning on the date hereof and ending on, and including, the date that is 60
days after the date of the final prospectus relating to the Offering, the
undersigned will not, without the prior written consent of Wells Fargo
Securities, LLC, (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the “Commission”) in
respect of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission promulgated thereunder (the “Exchange Act”) with
respect to any Common Units or any other securities of the Partnership that are
substantially similar to Common Units, or any securities convertible into or
exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, whether currently held or later acquired, (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Common Units or any other securities
of the Partnership that are substantially similar to Common Units, or any
securities convertible into or exchangeable or exercisable for, or any warrants
or
other
rights to purchase, the foregoing, whether any such transaction is to be settled
by delivery of Common Units or such other securities, in cash or otherwise or
(iii) publicly announce an intention to effect any transaction specified in
clause (i) or (ii). The foregoing sentence shall not apply to (a) the sale of
the Units as contemplated by the Underwriting Agreement and the sale of the
Units to the Underwriters (as defined in the Underwriting Agreement) in the
Offering, (b) bona fide gifts, provided the recipient thereof agrees in writing
with the Underwriters to be bound by the terms of this Lock-Up Agreement, (c)
dispositions to any trust for the direct or indirect benefit of the undersigned
and/or the immediate family of the undersigned, provided that such trust agrees
in writing with the Underwriters to be bound by the terms of this Lock-Up
Agreement, (d) the exercise or vesting of securities issued pursuant to the
Partnership’s 2007 equity plan that are convertible into or exchangeable or
exercisable for the Common Units, provided, that in the case of any transfer or
distribution pursuant to (b), (c) or (d) above, no filing by any party under the
Exchange Act or other public announcement shall be required or shall be made
voluntarily in connection with such transfer or distribution (other than a
filing on a Form 5 made after the expiration of the 60-day period referred to
above), or (e) the disposition to the Partnership of Common Units or securities
issued pursuant to the Partnership’s 2007 equity plan that are convertible into
or exchangeable or exercisable for the Common Units in order to satisfy any tax
withholding. For purposes of this paragraph, “immediate family” shall mean the
undersigned and the spouse, any lineal descendent, father, mother, brother or
sister of the undersigned.
In
addition, the undersigned hereby waives any rights the undersigned may have to
require registration of Common Units in connection with the filing of a
registration statement relating to the Offering. The undersigned further agrees
that, for the Lock-Up Period, the undersigned will not, without the prior
written consent of Wells Fargo Securities, LLC, make any demand for, or exercise
any right with respect to, the registration of Common Units or any securities
convertible into or exercisable or exchangeable for Common Units, or warrants or
other rights to purchase Common Units or any such securities.
Notwithstanding
the above, if (a) during the period that begins on the date that is seventeen
(17) days before the last day of the Lock-Up Period and ends on the last day of
the Lock-Up Period, the Partnership issues an earnings release or material news
or a material event relating to the Partnership occurs; or (b) prior to the
expiration of the Lock-Up Period, the Partnership announces that it will release
earnings results during the sixteen (16) day period beginning on the last day of
the Lock-Up Period, then the restrictions imposed by this Lock-Up Agreement
shall continue to apply until the expiration of the date that is eighteen (18)
days after the date on which the issuance of the earnings release or the
material news or material event occurs.
In
addition, the undersigned hereby waives any and all preemptive rights,
participation rights, resale rights, rights of first refusal and similar rights
that the undersigned may have in connection with the Offering or with any
issuance or sale by the Partnership of any equity or other securities before the
Offering, except for any such rights as have been heretofore duly
exercised.
The
undersigned hereby confirms that the undersigned has not, directly or
indirectly, taken, and hereby covenants that the undersigned will not, directly
or indirectly, take, any action
designed,
or which has constituted or will constitute or might reasonably be expected to
cause or result in the stabilization or manipulation of the price of any
security of the Partnership to facilitate the sale or resale of Common
Units.
If (i)
the Partnership notifies you in writing that it does not intend to proceed with
the Offering, (ii) the registration statement filed with the Commission with
respect to the Offering is withdrawn or (iii) for any reason the Underwriting
Agreement shall be terminated prior to the “time of purchase” (as defined in the
Underwriting Agreement), this Lock-Up Agreement shall be terminated and the
undersigned shall be released from its obligations hereunder.
| Yours very truly, | |
|
|
By:
|
||
| Name: | |||
| Title: | |||
Signature Page to Lock-Up
Agreement
EXHIBIT
A-1
List
of Parties to Execute Lock-Up Agreements
|
Name
|
Position
with General Partner
|
|
|
Quicksilver
Gas Services Holdings LLC
|
||
|
Quicksilver
Gas Services GP LLC
|
||
|
Glenn
Darden
|
Chairman
of the Board and Director
|
|
|
Thomas
F. Darden
|
President,
Chief Executive Officer and Director
|
|
|
Jeff
Cook
|
Executive
Vice President - Chief Operating Officer and Director
|
|
|
Philip
W. Cook
|
Senior
Vice President - Chief Financial Officer and Director
|
|
|
John
C. Cirone
|
Senior
Vice President - General Counsel and Secretary
|
|
|
John
C. Regan
|
Vice
President - Chief Accounting Officer
|
|
|
Alvin
Bledsoe
|
Director
|
|
|
Philip
D. Gettig
|
Director
|
|
|
John
W. Somerhalder II
|
Director
|
EXHIBIT
B
Form
of Opinion of Davis Polk & Wardwell LLP
December
16, 2009
Exhibit B-1
December
16, 2009
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
Citigroup
Global Markets Inc.
UBS
Securities LLC
Barclays
Capital Inc.
as
Representatives of the several Underwriters named in
Schedule
A to the Underwriting Agreement referred to below
c/o
Wells Fargo Securities, LLC
375
Park Avenue, 4th Floor
New
York, NY 10152
Ladies
and Gentlemen:
We
have acted as special counsel for Quicksilver Gas Services LP, a Delaware
limited partnership (the “Company”), in connection with the Underwriting
Agreement dated December 11, 2009 (the “Underwriting Agreement”) with you and
the other several Underwriters named in Schedule A thereto under which you and
such other Underwriters have severally agreed to purchase from the Company an
aggregate of 4,000,000 common units (the “Common Units”) representing its
limited partnership interests (the “Limited Partner Interests”).
We
have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable for the
purpose of rendering this opinion.
We
have also participated in the preparation of the Company’s registration
statement on Form S-3 (File No. 333-161680) and Amendment No. 1 thereto (other
than the documents incorporated by reference therein (the “Incorporated
Documents”)) filed with the Securities and Exchange Commission (the
“Commission”) pursuant to the provisions of the Securities Act of 1933, as
amended (the “Act”), relating to the registration of securities (the “Shelf
Securities”) to be issued from time to time by the Company, the preliminary
prospectus supplement dated December 10, 2009 relating to the Common Units and
the prospectus supplement dated December 11, 2009 relating to the Common Units
(the “Prospectus Supplement”), and have reviewed the Incorporated
Documents. In addition, we have examined evidence that the
registration statement as so amended was declared effective under the Act on
December 3, 2009. The registration statement as amended at the date
of the Underwriting Agreement, including the Incorporated Documents and the
information deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430B under the Act, is hereinafter referred to as
the “Registration Statement,” and the related prospectus (including the
Incorporated Documents) dated December 3, 2009 relating to the Shelf Securities
is hereinafter referred to as the “Basic Prospectus.” The Basic
Prospectus, as supplemented by the Preliminary Prospectus Supplement, together
with the information set forth in Schedule E to the Underwriting Agreement for
the Common Units are hereinafter called the “Disclosure Package.” The
Basic Prospectus, as supplemented by the Prospectus Supplement, in the form
first used to confirm sales of the Common Units (or in the form first made
available by the Company to the Underwriters to meet requests of purchasers of
the Common Units under Rule 173 under the Act), is hereinafter referred to as
the “Prospectus.”
We
have assumed the conformity of the documents filed with the Commission via the
Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”), except for
required EDGAR formatting changes, to physical copies of the documents submitted
for our examination.
Based
upon the foregoing, we are of the opinion that:
|
|
1.
|
The
Company is validly existing as a limited partnership in good standing
under the laws of the State of Delaware, and the Company has the limited
partnership power and authority to (i) issue the Common Units, (ii) enter
into the Underwriting Agreement and to perform its obligations thereunder
and (iii) own, lease and operate its properties and conduct its business
as described in the Disclosure Package and the
Prospectus.
|
|
|
2.
|
Quicksilver
Gas Services GP LLC (the “General Partner”) is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, and the General Partner has the limited liability company power
and authority to (i) enter into the Underwriting Agreement and to perform
its obligations thereunder, (ii) own, lease and operate its properties and
conduct its business as described in the Disclosure Package and the
Prospectus and (iii) act as the general partner of the
Company.
|
|
|
3.
|
Each
of Quicksilver Gas Services Operating GP LLC (“Quicksilver Operating GP”)
and Quicksilver Gas Services Operating LLC (“Quicksilver Operating”) is
validly existing as a limited liability company in good standing under the
laws of the State of Delaware.
|
|
|
4.
|
The
Underwriting Agreement has been duly authorized, executed and delivered by
each of the Company and the General
Partner.
|
|
|
5.
|
The
Purchase and Sale Agreement among Cowtown Pipeline L.P., the Company and
Cowtown Pipeline Partners L.P. (the “Alliance Agreement”) has been duly
authorized, executed and delivered by the
Company.
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6.
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The
General Partner is the sole general partner of record of the Company with
a 1.7% general partner percentage interest in the Company and such general
partner percentage interest has been duly authorized and validly issued in
accordance with the Second Amended and Restated Limited Partnership
Agreement of the Company dated February 19, 2008 (the “Company LP
Agreement”) or, for issuances to the General Partner prior to February 19,
2008, in accordance with the terms of such agreement prior to its
amendment on such date; and such general partner percentage interest is
free and clear of all liens, encumbrances, security interests, charges or
claims (“Liens”) in respect of which a financing statement naming the
General Partner as a debtor is on file in the office of the Secretary of
State of the State of Delaware as of December 15,
2009.
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7.
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The
Company is the owner of record of all of the issued and outstanding
membership interests in Quicksilver Operating and such membership
interests have been duly authorized and validly issued in accordance with
the Limited Liability Company Agreement of Quicksilver Operating dated
January 31, 2007 (the “Quicksilver Operating LLC Agreement”), and are
fully paid (to the extent required under the Quicksilver Operating LLC
Agreement) and nonassessable (except as such nonassessability may be
affected by Sections 18-303 and 18-607 of the Delaware Limited Liability
Company Act); and such membership interests are free and clear of all
Liens in respect of which a financing statement naming the Company as a
debtor is on file in the office of the Secretary of State of the State of
Delaware as of December 15, 2009,
except for liens granted pursuant to that certain Credit Agreement dated
as of August 10, 2007 by and among the Company, Bank of America, N.A., and
the lenders party thereto, as amended, (the “Credit
Agreement”)..
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8.
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Quicksilver
Operating is the owner of record of all of the issued and outstanding
membership interests in Quicksilver Operating GP and such membership
interests have been duly authorized and validly issued in accordance with
the Limited Liability Company Agreement of Quicksilver Operating GP dated
January 31, 2007 (as amended and restated, the “Quicksilver Operating GP
LLC Agreement”) and are fully paid (to the extent required under the
Quicksilver Operating GP LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 18-303 and 18-607 of the
Delaware Limited Liability Company Act); and such membership interests are
free and clear of all Liens in respect of which a financing statement
naming Quicksilver Operating as a debtor is on file in the office of the
Secretary of State of the State of Delaware as of December 15,
2009,
except for liens granted pursuant to the Credit
Agreement..
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9.
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The
Company LP Agreement is a valid and binding agreement of the Company, the
General Partner and each partner duly admitted as a partner thereof,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights
generally, concepts of reasonableness and equitable principles of general
applicability.
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10.
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The
First Amended and Restated Limited Liability Company Agreement of the
General Partner dated July 24, 2007 (the “General Partner LLC Agreement”)
is a valid and binding agreement of Quicksilver Gas Services Holdings LLC,
as the sole member, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally, concepts of reasonableness and equitable principles of
general applicability.
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11.
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The
Common Units and the Limited Partner Interests represented thereby have
been duly authorized and, when issued and delivered to and paid for by the
Underwriters pursuant to the Underwriting Agreement, will be validly
issued, fully paid (to the extent required under the Company LP Agreement)
and non-assessable, except as such non-assessability may be affected by
Section 17-303 and 17-607 of the Delaware Revised Uniform Limited
Partnership Act and otherwise by matters described in the Prospectus under
the captions "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 under the caption "The
Partnership Agreement—Limited Liability" incorporated by reference from
the Company’s registration statement on Form 8-A filed on March 17, 2009,
and the issuance of such Common Units is not subject to any statutory
preemptive rights or similar rights arising under the Company LP
Agreement, the Certificate of Limited Partnership of the Company dated
January 31, 2007 (the “Company Certificate”), the Delaware Revised Uniform
Limited Partnership Act or any agreement that is specified in Annex A
hereto.
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12.
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The
Company is not, and after giving effect to the offering and sale of the
Common Units and the application of the proceeds thereof as described in
the Prospectus will not be, required to register as an “investment
company” as such term is defined in the Investment Company Act of 1940, as
amended.
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13.
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The
execution and delivery by the Company and the General Partner of, and the
performance by the Company and the General Partner of their respective
obligations under, the Underwriting Agreement will not contravene (i) any
provision of the laws of the State of New York or any federal law of the
United States of America that in our experience is normally applicable to
general limited partnerships and limited liability companies in relation
to transactions of the type contemplated by the Underwriting Agreement,
the Delaware Revised Uniform Limited Partnership Act or the Delaware
Limited Liability Company Act provided that we express no opinion as to
federal or state securities laws, (ii) the Company LP Agreement, the
Company Certificate, the General Partner LLC Agreement and the Certificate
of Formation of the General Partner dated January 31, 2007, the
Quicksilver Operating LLC Agreement, the certificate of formation of
Quicksilver Operating dated January 31, 2007, the Quicksilver Operating GP
LLC Agreement and certificate of formation of Quicksilver Operating GP
dated January 31, 2007 or (iii) any agreement that is specified in Annex A
hereto.
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14.
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No
consent, approval, authorization, or order of, or qualification with, any
governmental body or agency under the laws of the State of New York or any
federal law of the United States of America that in our experience is
normally applicable to general limited partnerships and limited liability
companies in relation to transactions of the type contemplated by the
Underwriting Agreement, or the Delaware Revised Uniform Limited
Partnership Act or the Delaware Limited Liability Company Act is required
for the execution, delivery and performance by the Company or the General
Partner of their obligations under the Underwriting Agreement, except such
as may be required under federal or state securities or Blue Sky laws as
to which we express no opinion.
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We
have considered the statements included in the Prospectus under the caption
“Description of the Common Units” insofar as they summarize provisions of the
Company LP Agreement and the Company Certificate. In our opinion,
such statements fairly summarize these provisions in all material
respects.
In
rendering the opinion expressed in opinion (9) above, we express no opinion with
respect to (i) any provision of a document reviewed by us to the extent that
such provision purports to bind a person or entity that is not a party to such
document, (ii) transfer restrictions in a document reviewed by us to the extent
that a transfer occurs by operation of law, (iii) any provision of the Company
LP Agreement pursuant to which the parties thereto agree to agree in the future
on any matter, (iv) any provision of the Company LP Agreement to the effect that
the failure to exercise or delay in exercising rights or remedies will not
impair or operate as a waiver of such rights or remedies, or (v) any provision
of the Company LP Agreement to the extent it purports to obligate a party to
cause other persons or entities to act in a certain way insofar as such
provision relates to the actions of such other persons or entities.
In
rendering the opinion expressed in opinion (10) above, we express no opinion
with respect to (i) any provision of a document reviewed by us to the extent
that such provision purports to bind a person or entity that is not a party to
such document, (ii) Section 8 of the General Partner LLC Agreement with respect
to the rights of any judgment creditor of a Member under Section 18-703 of the
Delaware Limited Liability Company Act, or with respect to Sections 18-607 or
18-804 of the Delaware Limited Liability Company Act, or (iii) the second
sentence of Section 12 of the General Partner LLC Agreement. In rendering the
opinion expressed in opinion (6) above, we note that (i) with respect to the
second sentence of Section 3 of the General Partner LLC Agreement, the existence
of the General Partner will continue until its certificate of formation is
cancelled in accordance with the Delaware Limited Liability Company Act, and
(ii) with respect to Section 11 of the General Partner LLC Agreement, a Member
or a Director or officer of the General Partner may be liable for its tortious
or wrongful conduct and for its obligations as set forth in the General Partner
LLC Agreement.
In
rendering the opinions in paragraphs (4), (5), (9) and (10) above, we have
assumed that each party to the Underwriting Agreement, the Alliance Agreement,
the Company LP Agreement and the General Partner LLC Agreement (the “Documents”)
(other than as expressly covered above in respect of the Company and the General
Partner) has been duly incorporated and is validly existing and in good standing
under the laws of the jurisdiction of its organization. In addition, we have
assumed that (i) the execution, delivery and performance by each party thereto
(other than as expressly covered above in respect of the Company and the General
Partner) of each Document to which it is a party, (a) are within its corporate
powers, (b) do not contravene, or constitute a default under, the certificate of
incorporation or bylaws or other constitutive documents of such party, (c)
require no action by or in respect of, or filing with, any governmental body,
agency or official and (d) do not contravene, or constitute a default under, any
provision of applicable law or regulation or any judgment, injunction, order or
decree or any agreement or other instrument binding upon such party, provided
that we make no such assumption to the extent that we have specifically opined
as to such matters with respect to the Company and the General Partner, and (ii)
each Document (other than the Underwriting Agreement) is a valid, binding and
enforceable agreement of each party thereto (other than as expressly covered
above in respect of the Company and the General Partner).
We
are members of the Bar of the State of New York, and the foregoing opinion is
limited to the laws of the State of New York, the federal laws of the United
States of America, the Delaware Revised Uniform Limited Partnership Act and the
Delaware Limited Liability Company Act, except that we express no opinion as to
any law, rule or regulation that is applicable to the Company, the General
Partner, the Documents, the Common Units or such transactions solely because
such law, rule or regulation is part of a regulatory regime applicable to any
party to any of the Documents or any of its affiliates due to the specific
assets or business of such party or such affiliate.
This
opinion is rendered solely to you and the other several Underwriters in
connection with the Underwriting Agreement. This opinion may not be
relied upon by you for any other purpose or relied upon by any other person
(including any person acquiring Common Units from the several Underwriters) or
furnished to any other person without our prior written consent.
Annex
A
1. Indenture
dated as of August 28, 2009 between the Company and The Bank of New York Mellon
Trust Company
2. Quicksilver
Gas Services LP First Amended and Restated 2007 Equity Plan
EXHIBIT
C
Form
of Opinion of Fulbright & Jaworski L.L.P
December
16, 2009
Exhibit C-1
Fulbright
& Jaworski L.L.P.
A
Registered Limited Liability Partnership
Fulbright
Tower
1301
McKinney, Suite 5100
Houston,
Texas 77010-3095
www.fulbright.com
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telephone: (713)
651-5151
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facsimile: (713)
651-5246
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December
16, 2009
Wells
Fargo Securities, LLC
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
Citigroup
Global Markets Inc.
UBS
Securities LLC
Barclays
Capital Inc.
As
Representatives of the several Underwriters (defined below)
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c/o
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Wells
Fargo Securities, LLC
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375
Park Avenue, 4th
Floor
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New
York, New York 10152
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Ladies
and Gentlemen:
We
have acted as special counsel to Quicksilver Gas Services LP, a Delaware limited
partnership (the “Partnership”),
and Quicksilver Gas Services GP LLC, a Delaware limited liability company (the
“General
Partner”), in connection with the offer and sale to the Underwriters by
the Partnership, of up to 4,887,500 common units representing limited
partnership interests in the Partnership (including an over-allotment option of
up to an aggregate of 637,500 common units) (the “Units”)
pursuant to an Underwriting Agreement, dated December 11, 2009 (the “Underwriting
Agreement”), among the Partnership, the General Partner and the several
Underwriters named in Schedule I hereto (collectively, the “Underwriters”). Capitalized
terms used but not defined herein have the same meanings herein as such terms
have in the Underwriting Agreement. The opinions expressed herein are
being furnished to you at the request of the Partnership and the General Partner
pursuant to Section 7(b) of the Underwriting Agreement.
We
have examined (the “Covered
Documents”) (i) the Underwriting Agreement, (ii) the Registration
Statement on Form S-3 (Registration No. 333-161680), filed by the Partnership
under the Securities Act, which became effective on December 3, 2009 (the “Registration
Statement”) and the base prospectus contained therein, (iii) the
prospectus supplement filed with the Commission on December 11, 2009, relating
to the offering of the Units, (iv) that certain Purchase and Sale Agreement
dated as of December 10, 2009, by and among Cowtown Pipeline L.P., a Texas
limited partnership (“Cowtown
Pipeline”), as seller, and the Partnership and Cowtown Pipeline Partners
L.P., a Texas limited partnership (“Cowtown
Partners”), as purchasers (the “Alliance
Agreement”). The Partnership, the General Partner, Cowtown
Pipeline and Cowtown Partners are collectively referred to herein as the “Quicksilver
Entities” and (v) that certain Credit Agreement dated August 10, 2007,
among Quicksilver Gas Services LP, as borrower and the lenders, Bank of America
(Administrative Agent), BNP Paribas (Syndication Agent) and JPMorgan Chase Bank,
the Royal Bank of Scotland and Fortis Capital Corp. (Co-Documentation Agents)
(the “Original Credit
Agreement”), as amended by the First Amendment to Credit Agreement, dated
as of October 10, 2008, among Quicksilver Gas Services LP, Bank of America
(Administrative Agent), and the lenders party thereto (the Original Credit
Agreement as so amended, the “Credit
Agreement”).
Our
engagement in connection with rendering the opinions expressed herein has been
limited in scope to our review of, and counsel with the Quicksilver Entities
(defined below) regarding our review of, the Covered Documents (defined below)
for the limited purposes of rendering the opinions expressed
herein. We have not participated as counsel to any Quicksilver Entity
in regard to the formation of the unit-issuing entity or any other Quicksilver
Entity or the offering, issuance and sale of the Units, including the
development and preparation of the Registration Statement, the Preliminary
Prospectus, the Prospectus or any related agreements or disclosure documents, or
the consummation of the transactions contemplated by each of the foregoing, or
the internal governance considerations related to any of the foregoing, and in
regard to legal matters related thereto, we understand that you will be relying
upon the statements and opinions of other counsel.
We
also have examined originals or copies of such corporate or partnership records
of the Quicksilver Entities, certificates and other communications of public
officials, certificates of officers of the Quicksilver Entities and such other
documents as we have deemed necessary for the purpose of rendering the opinions
expressed herein. As to questions of fact material to those opinions,
we have, to the extent we deemed appropriate, relied on certificates of officers
of the Quicksilver Entities, certificates and other communications of public
officials, and on the factual representations of the Quicksilver Entities
contained in the Underwriting Agreement and the Alliance Agreement and the
certificates and other documents delivered on the date of the closing of the
purchase of the Units pursuant thereto.
In
making such examination and in so relying, we have assumed the authenticity and
completeness of all records, certificates, instruments, agreements and other
documents submitted to us as originals and the conformity to authentic original
records, certificates, instruments, agreements and other documents of all copies
submitted to us as copies. In addition, we have assumed the legal
capacity of each natural person identified in, or indicated as having executed,
any of those records, certificates, instruments, agreements and other documents
and the genuineness of all signatures on such records, certificates,
instruments, agreements and other documents.
In
rendering the opinions expressed herein, we also have assumed the
following:
(i) each
of the documents we examined has been duly authorized, executed (if applicable)
and delivered by each of the parties thereto and constitutes the legal, valid
and binding obligation of each such party thereto, enforceable in accordance
with its terms; and
(ii) no
order, consent, approval, license, authorization, waiver or validation of, or
filing, recording or registration with, or notice to, or exemption by, any
court, governmental body or authority, or any subdivision thereof, is required
to authorize or is required in connection with, the execution and delivery by
any person, corporation, partnership or other entity identified in any Covered
Document as a party thereto, or in connection with the performance of its
obligations thereunder or the consummation of the transactions contemplated
thereby, other than those that have been obtained or made and are in full force
and effect and except to the extent expressly set forth in the paragraph
numbered 1 with respect to the Quicksilver Entities.
Based
upon the foregoing and in the reliance thereon, and subject to and qualified by
the assumptions, qualifications, limitations and exceptions set forth herein,
and having due regard for such legal considerations as we deem relevant, we are
of the opinion that:
None
of (i) the execution, delivery and performance of the
Underwriting Agreement by each of the General Partner and the
Partnership, nor the performance of their respective obligations thereunder,
(ii) the offer, issuance or sale of the Units pursuant to the Underwriting
Agreement, or (iii) the execution and delivery by Cowtown Pipeline, Cowtown
Partners and the Partnership of the Alliance Agreement, nor the performance of
their respective obligations thereunder will (a) result in any breach of, or
constitute a default under, or constitute any event which, with notice or lapse
of time, or both, would result in any breach of, or constitute a default under,
any existing obligation of a Quicksilver Entity, pursuant to the express
provisions of the Credit Agreement, or (b) result in a violation of (1) the
certificate of limited partnership or agreement of limited partnership of each
of Cowtown Pipeline and Cowtown Partners or (2) any statutory law, regulation or
rule (assuming compliance with, and without regard to, all applicable state and
federal securities and blue sky laws, as to which we express no opinion) of the
State of Texas which are applicable to any Quicksilver Entity.
The
foregoing opinions expressed herein are further subject to, and qualified by,
the following assumptions, exceptions, qualifications and
limitations:
A. The
opinions expressed herein are limited exclusively to the internal substantive
laws of the State of Texas. In respect to such laws, in addition to
other limitations set forth herein, such reference is limited to laws that are
normally applicable to the transactions provided for in the Covered Documents
and, in any event and without limitation, does not include statutes, laws, rules
or regulations relating to (i) the operation of any asset or property,
(ii) utility regulation or regulation of matters pertaining to the
acquisition, exploration, production, storage, transmission, transportation and
use of oil, gas or other energy sources used in connection therewith or
generated thereby, (iii) antitrust or (iv) taxation, or the
construction or interpretations of any of the foregoing, or authorizations,
permits, consents and the like with respect thereto. Reference herein
to the “internal substantive laws” of the State of Texas is to the laws of
Texas, other than (x) Texas’ choice-of-law statutes and rules, (y) the
statutes and ordinances, the administrative decisions, and the rules and
regulations of counties, towns, municipalities and political subdivisions
(whether created or enabled through legislative action at the federal, state,
regional or local level) and (z) judicial decisions to the extent they deal
with any of the foregoing.
B. We
have not reviewed, and express no opinion herein as to, any annex, exhibit,
schedule, agreement or other document referred to or incorporated by reference
into the Covered Documents.
C. The
opinion set forth in the paragraph numbered 1 with respect to the certificate of
limited partnership and agreement of limited partnership of each of Cowtown
Pipeline and Cowtown Partners is based solely on copies of such documents
provided and certified by such entity.
The
opinion of Fulbright & Jaworski L.L.P that is filed as Exhibit 8.1 on Form
8-K (filed with the Commission on December 16, 2009) is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to
them.
The
opinions expressed herein are furnished to you for your sole benefit in
connection with the transactions contemplated by the Underwriting
Agreement. The opinions expressed herein may not be relied upon by
you for any other purpose and may not be furnished to, or relied upon for any
purpose by, any other person without our prior written consent. The
opinions expressed herein are as of, and are based on, facts and circumstances
referred to herein which are known to us to exist and law in effect on the date
hereof (and not as of any other date), and we make no undertaking to amend or
supplement such opinion as facts and circumstances or changes in the law occur
that could effect such opinions.
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Very
truly yours,
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Fulbright &
Jaworski L.L.P.
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Schedule
I
To
Opinion of Fulbright & Jaworski L.L.P.
Dated
December [__], 2009
List
of Underwriters
Wells
Fargo Securities, LLC
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
Citigroup
Global Markets Inc.
UBS
Securities LLC
Barclays
Capital Inc.
Goldman,
Sachs & Co.
Capital
One Southcoast, Inc.
Comerica
Securities, Inc.
Compass
Bank
Ladenburg
Thalmann & Co. Inc.
EXHIBIT
D
Form
of Opinion of John C. Cirone
December
16, 2009
Exhibit D-1
[Logo]
December 16,
2009
Wells
Fargo Securities, LLC
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
Citigroup
Global Markets Inc.
UBS
Securities LLC
Barclays
Capital Inc.
as
Representatives of the several Underwriters named in
Schedule
A to the Underwriting Agreement referred to below
c/o Wells
Fargo Securities, LLC
375 Park
Avenue, 4th Floor
New York,
NY 10152
Re: 4,000,000 Common Units of
Quicksilver Gas Services LP
Ladies
and Gentlemen:
As
general counsel for Quicksilver Gas Services LP, a Delaware limited partnership
(the “Company”), I have acted as counsel to the Company in connection with the
Underwriting Agreement dated December 11, 2009 (the “Underwriting Agreement”)
with you and the other several Underwriters named in Schedule A thereto under
which you and such other Underwriters have severally agreed to purchase from the
Company an aggregate of 4,000,000 common units (the “Common Units”) representing
its limited partnership interests.
This
letter is furnished to the Underwriters pursuant to Section 7(c) of the
Underwriting Agreement. Except as otherwise defined herein, terms used in this
letter but not otherwise defined herein are used as defined in the Underwriting
Agreement.
In
rendering the opinions expressed herein, I have examined such documents, records
and matters of law as I have deemed necessary for purposes of such opinions.
Based on the foregoing, and subject to the assumptions, qualifications and
limitations set forth herein, I am of the opinion that:
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1.
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Cowtown
Pipeline Management, Inc. is validly existing as a corporation and in good
standing under the laws of the State of Texas, and each of Cowtown
Pipeline Partners L.P. and Cowtown Gas Processing Partners L.P. (i) is
validly existing as a limited partnership, (ii) is in good standing under
the laws of the State of Texas and (iii) has the limited partnership power
and authority to own, lease and operate its properties and conduct its
business as described in the Disclosure Package and the
Prospectus.
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2.
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The
Company is qualified to do business and is in good standing, or the
applicable equivalent thereof, as a limited partnership in each
jurisdiction listed on Exhibit A attached
hereto.
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3.
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Each
of Quicksilver Gas Services GP LLC, Quicksilver Gas Services Operating GP
LLC and Quicksilver Gas Services Operating LLC is qualified to do business
and is in good standing, or the applicable equivalent thereof, as a
limited liability company in each jurisdiction listed on Exhibit A
attached hereto.
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4.
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Quicksilver
OPGP is the sole general partner of Processing Partners with a 1.0%
general partner interest in Processing Partners, and such general partner
interest has been duly authorized and validly issued in accordance with
the Processing Partners LP Agreement; and Quicksilver OPGP owns such
general partner interest free and clear of all liens, encumbrances,
security interests, charges or claims (“Liens”) in respect of which a
financing statement naming Quicksilver OPGP as a debtor is on file in the
office of the Secretary of State of the States of Delaware or
Texas.
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5.
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Quicksilver
Operating is the sole limited partner of Processing Partners with a 99.0%
limited partner interest in Processing Partners; such limited partner
interest has been duly authorized and validly issued in accordance with
the Processing Partners LP Agreement and is fully paid (to the extent
required by the Processing Partners LP Agreement) and is nonassessable
(except as such nonassessability may be affected by Section 6.07 of the
Texas Act). Quicksilver Operating owns such limited partner interest free
and clear of all Liens in respect of which a financing statement naming
Quicksilver Operating as a debtor is on file in the office of the
Secretary of State of the States of Delaware or
Texas.
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6.
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Quicksilver
OPGP is the sole general partner of Pipeline Partners with a 1.0% general
partner interest in Pipeline Partners; such general partner interest has
been duly authorized and validly issued in accordance with the Pipeline
Partners LP Agreement; and Quicksilver OPGP owns such general partner
interest free and clear of all Liens in respect of which a financing
statement naming Quicksilver OPGP as a debtor is on file in the office of
the Secretary of State of the States of Delaware or
Texas.
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7.
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Quicksilver
Operating is the sole limited partner of Pipeline Partners with a 99.0%
limited partner interest in Pipeline Partners; such limited partner
interest has been duly authorized and validly issued in accordance with
the Pipeline Partners LP Agreement and is fully paid (to the extent
required by the Pipeline Partners LP Agreement) and is nonassessable
(except as such nonassessability may be affected by Section 6.07 of the
Texas Act); and Quicksilver Operating owns such limited partner interest
free and clear of all Liens in respect of which a financing statement
naming Quicksilver Operating as a debtor is on file in the office of the
Secretary of State of the States of Delaware or
Texas.
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8.
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The
Company has an authorized capitalization as set forth in the Preliminary
Prospectus and the Prospectus under the heading "Capitalization," such
capitalization being as of the respective dates of the Preliminary
Prospectus and the Prospectus. As of the date of the Underwriting
Agreement and immediately prior to the time of purchase, the issued and
outstanding limited partner interests of the Company consist of 12,313,451
Common Units, 11,513,625 Subordinated Units and the Incentive Distribution
Rights. All of the outstanding Common Units, Subordinated Units and
Incentive Distribution Rights and the limited partner interests
represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement and are fully paid (to the
extent required under the Partnership Agreement) and nonassessable, except
as such non-assessability may be affected by Section 17-303 and 17-607 of
the Delaware Revised Uniform Limited Partnership Act and otherwise by
matters described in the Prospectus under the captions "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 under the caption "The Partnership Agreement—Limited Liability"
incorporated by reference from the Company’s registration statement on
Form 8-A filed on March 17, 2009.
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9.
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The
execution and delivery by the Company and the General Partner of, and the
performance by the Company and the General Partner of their respective
obligations under, the Underwriting Agreement will not violate any order
or decree of any court, arbitrator or governmental agency known to me to
be binding upon any of the Partnership Entities or their properties, will
not violate or result in a default under any of the express terms and
provisions of a material agreement to which any of the Partnership
Entities is a party and, to my knowledge, will not result in the creation
or imposition of any lien, charge, claim or encumbrance upon the property
or assets of any of the Partnership Entities (this opinion being limited
(A) to those material agreements filed as exhibits to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2008, other
than those agreements listed on Exhibit B hereto, and (B) in that I
express no opinion with respect to any violation or default not readily
ascertainable from the face of any such document, order, decree or
agreement).
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10.
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To
my knowledge, except as disclosed in the Preliminary Prospectus and the
Prospectus, there are no legal, governmental or regulatory proceedings
pending to which the Company or any of its subsidiaries is a party or to
which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect; and, to my knowledge, no such proceedings
are contemplated by governmental or regulatory authorities or threatened
by others.
|
|
11.
|
To
my knowledge, 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 equity interests in the
Registration Statement.
|
|
12.
|
The
statements contained in the Prospectus that are incorporated by reference
from Item 3 of Part I of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2008, as amended, insofar as such
statements purport to summarize legal matters referred to therein, present
fair summaries thereof as of the respective dates thereof and, in the case
of the Prospectus as of the date
hereof.
|
|
13.
|
To
my knowledge, (i) there are no current or pending legal, governmental or
regulatory actions, suits or proceedings that are required to be described
in the Registration Statement that are not described as so required and
(ii) there are no documents that are required to be filed as exhibits to
the Registration Statement that are not so
filed.
|
|
14.
|
To
my knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
are pending or threatened by the Securities and Exchange
Commission.
|
In
connection with this opinion letter, I have assumed the genuineness of all
signatures, other than those of the Company, the legal capacity of natural
persons, the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as certified
or photostatic copies and the authenticity of the originals to such
copies.
As to any
facts material to the opinions expressed herein that I did not independently
establish or verify, I have relied upon and assume the accuracy of
representations and warranties of all parties contained in the Underwriting
Agreement and certificates and oral and written statements and other information
of or from representatives of the Company. Each reference in this opinion to "my
knowledge" means my conscious awareness of facts. All assumptions and statements
of reliance herein have been made without any independent investigation or
verification on my part except to the extent, if any, otherwise expressly
stated, and I express no opinion with respect to the subject matter or accuracy
of the assumptions or items upon which I have relied.
In
rendering the opinion in paragraph 1 above, I have relied solely upon
certificates of public officials as to the factual matters and legal conclusions
set forth therein. I have not examined any public records in any county or state
except as specified above with respect to my opinion in paragraph
1.
The
opinions set forth above are subject to the following qualifications and
limitations:
(A) With
respect to the opinions in paragraph 5 above, I express no opinion with respect
to any violation, breach or default (i) arising under or based upon any
cross-default provision insofar as it relates to a default under any agreement
not filed as an exhibit to the Company’s Annual Report on Form l0-K for the
fiscal year ended December 31, 2008, as amended, or listed on Exhibit B hereto
or (ii) arising under or based upon any provision of any covenant of a financial
or numerical nature requiring computation.
(B) The
opinions expressed herein are limited solely to (i) the laws of the State of
Texas (exclusive of conflict of law statutes, rules and principles of the State
of Texas), which is a state in which I am licensed to practice, and (ii) the
federal securities laws of the United States of America, in each case as
currently in effect. I assume no responsibility as to the applicability or
effect of the laws of any other jurisdiction.
(C) My
opinions are limited to those expressly set forth herein, and I express no
opinions by implication
(D) All of
the opinions expressed herein are rendered as of the date hereof. I assume no
obligation to update such opinions to reflect any facts or circumstances which
may hereafter come to my attention or any changes in the law which may hereafter
occur.
I am
furnishing this opinion to you solely for the benefit of the Underwriters with
respect to the purchase of the Common Units from the Company by the
Underwriters, upon the understanding that I am not hereby assuming any
professional responsibility to any other person whomsoever, and that this
opinion is not to be used, circulated, quoted or otherwise referred to for any
other purpose without my express written consent.
| John C. Cirone,
General
Counsel
|
EXHIBIT
A
Jurisdictions of Foreign
Qualification
|
Quicksilver
Gas Services GP LLC
|
Delaware
|
Texas
|
|
Quicksilver
Gas Services LP
|
Delaware
|
Texas
|
|
Quicksilver
Gas Services Operating GP LLC
|
Delaware
|
Texas
|
|
Quicksilver
Gas Services Operating LLC
|
Delaware
|
Texas
|
EXHIBIT
B
Agreements
1. Indenture
dated as of August 28, 2009 between the Company and The Bank of New York Mello
Trust Company
2. Quicksilver
Gas Services LP First Amended and Restated 2007 Equity Plan
3. Credit
Agreement dated August 10, 2007, as amended, among Quicksilver Gas Services LP,
as borrower and the lenders, Bank of America (Administrative Agent), BNP Paribas
(Syndication Agent) and JPMorgan Chase Bank, the Royal Bank of Scotland and
Fortis Capital Corp. (Co-Documentation Agents)
EXHIBIT
E
Form
of Officers’ Certificate
December
16, 2009
Exhibit E-1
QUICKSILVER
GAS SERVICES GP LLC
Officers’
Certificate
December
16, 2009
Pursuant
to Section 7(j) of the Underwriting Agreement dated December 11, 2009 (the
“Underwriting
Agreement”), by and among Quicksilver Gas Services LP (the “Partnership”), and Quicksilver
Gas Services GP LLC (the “General Partner”), on the one
hand, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Citigroup Global Markets Inc., UBS Securities LLC and Barclays
Capital Inc., as representatives of the several underwriters named in Schedule A
to the Underwriting Agreement (the “Underwriters”), on the other
hand, relating to the issuance and sale by the Partnership to the Underwriters
of 4,000,000 common units representing limited partner interests in the
Partnership, the undersigned duly elected and acting President and Chief
Executive Officer of the General Partner and the Senior Vice President - Chief
Financial Officer of the General Partner, each acting on behalf of the
Partnership, hereby certify as follows (terms used but not defined herein have
the meanings assigned to them in the Underwriting Agreement):
1. The
representations, warranties and agreements of the Quicksilver Parties in Section
3 of the Underwriting Agreement are true and correct on and as of such time of
purchase; and that each of the Quicksilver Parties has complied with all of its
respective agreements contained therein and satisfied all of the respective
conditions on its part to be performed or satisfied thereunder at or prior to
the date hereof;
2. The
Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus
has been filed with the Commission within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act; no stop
order suspending the effectiveness of the Registration Statement has been
issued; and no proceedings or examination for that purpose have been instituted
or, to the knowledge of such officers, threatened; and the Commission has not
notified the Partnership of any objection to the use of the form of the
Registration Statement or any post-effective amendment thereto;
3. Since
the date of the most recent financial statements included or incorporated by
reference in the Registration Statement, the Disclosure Package and the
Prospectus, there has been no Material Adverse Effect, except as set forth in or
contemplated by the Disclosure Package and the Prospectus.
4. The
undersigned have carefully examined the Registration Statement, the Prospectus
and the Disclosure Package, and nothing has come to their attention that would
lead them to believe that, (A) (i) the Registration Statement, as of the
Effective Date, (ii) the Prospectus, as of its date and on the applicable time
of purchase, or (iii) the Disclosure Package, as of the Applicable Time, did or
do contain any untrue statement of a material fact and did or do omit to state a
material fact required to be stated therein or necessary to make the statements
therein (except in the case of the Registration Statement, in the light of the
circumstances under which they were made) not misleading or (B) since the
Effective Date, an event has occurred that should have been set forth in a
supplement or amendment to the Registration Statement, the Prospectus, any
Preliminary Prospectus or any Issuer Free Writing Prospectus that has not been
so set forth; and
5. Each
of Davis Polk & Wardwell LLP, Fulbright & Jaworski L.L.P. and Baker
Botts L.L.P. is entitled to rely on this certificate in connection with the
opinion that such firm is rendering pursuant to Section 7 of the Underwriting
Agreement.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned have executed this Certificate as of the date
first written above.
| Thomas F. Darden | ||
| President and Chief Executive Officer | ||
| Philip Cook | ||
| Senior Vice President - Chief Financial Officer |
Officer's
Certificate
Signature
Page