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Registration No. 333- -01
Registration No. 333- -02
Registration No. 333- -03
SECURITIES AND EXCHANGE COMMISSION
THE SECURITIES ACT OF 1933
Delaware (State or other jurisdiction of incorporation or organization) | 1311 (Primary Standard Industrial Classification Code Number) | 16–1751069 (I.R.S. Employer Identification Number) |
Midland, Texas 79701
(432) 689–5200
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
President and Chief Financial Officer
Legacy Reserves GP, LLC
303 W. Wall Street, Suite 1400
Midland, Texas 79701
(432) 689–5200
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas 77002
(713) 220-4200
Large accelerated filero | Accelerated filero | Non-accelerated filer þ (Do not check if a smaller reporting company) | Smaller Reporting Companyo |
Proposed | ||||||||||||||||
Maximum | ||||||||||||||||
Amount | Offering | Proposed Maximum | Amount of | |||||||||||||
Title of Each Class of | to be | Price per unit | Aggregate | Registration | ||||||||||||
Securities to be Registered | Registered | (1) | Offering Price (2) | Fee | ||||||||||||
Units representing limited partner interests (3) | ||||||||||||||||
Senior debt securities (3) | ||||||||||||||||
Subordinated debt securities (3) | ||||||||||||||||
Guarantees of debt securities (4) | ||||||||||||||||
Total | $500,000,000(1)(2) | $19,650 | ||||||||||||||
(1) | We have estimated the proposed maximum aggregate offering price solely to calculate the registration fee under 457(o). In no event will the aggregate initial offering price of all securities offered from time to time pursuant to the primary offering prospectus included as part of this Registration Statement exceed $500,000,000. | |
(2) | The proposed maximum offering price per unit will be determined from time to time by the registrant in connection with, and at the time of, the issuance by the registrant of the units. | |
(3) | An unspecified amount of units and an unspecified principal amount debt securities as may be sold from time to time by Legacy Reserves LP is being registered hereunder. | |
(4) | If a series of debt securities is guaranteed, such series will be guaranteed by all subsidiaries other than “minor” subsidiaries as such term is interpreted in securities regulations governing financial reporting for guarantors. Pursuant to Rule 457(n), no separate fee is payable with respect to the guarantees of the debt securities being registered. | |
�� | ||
(*) | Each of the following is a co-registrant that may issue some or all of the guarantees of the debt securities: |
Delaware (State or other jurisdiction of incorporation or organization) | 20-4307259 (I.R.S. Employer Identification Number) |
Delaware (State or other jurisdiction of incorporation or organization) | 20-4307209 (I.R.S. Employer Identification Number) |
Texas (State or other jurisdiction of incorporation or organization) | 20-4442710 (I.R.S. Employer Identification Number) |
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The information in this prospectus is not complete and may be changed. This prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.
Units Representing Limited Partner Interests
Debt Securities
Fully and Unconditionally Guaranteed by
Legacy Reserves Operating LP, Legacy Reserves Operating GP LLC and Legacy Reserves Services, Inc.
• | units representing limited partnership interests in Legacy Reserves LP; and | ||
• | debt securities, which may be secured or unsecured senior debt securities or secured or unsecured subordinated debt securities. |
• | will have a maximum aggregate offering price of $500,000,000; | ||
• | will be offered in amounts, at prices and on terms to be set forth in one or more accompanying prospectus supplements; and | ||
• | may be offered separately or together, or in separate series. |
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• | our business strategy; | ||
• | the amount of oil and natural gas we produce; | ||
• | the price at which we are able to sell our oil and natural gas production; | ||
• | our ability to acquire additional oil and natural gas properties at economically attractive prices; | ||
• | our drilling locations and our ability to continue our development activities at economically attractive prices; | ||
• | the level or our lease operating expenses, general and administrative costs and finding and development costs, including payments to our general partner; | ||
• | the level of capital expenditures; | ||
• | our future operating results; and | ||
• | our plans, objectives, expectations and intentions. |
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• | the amount of oil and natural gas we produce; | ||
• | the price at which we are able to sell our oil and natural gas production; | ||
• | whether we are able to acquire additional oil and natural gas properties at economically attractive prices; | ||
• | whether we are able to continue our development activities at economically attractive costs; | ||
• | the level of our operating costs, including payments to our general partner; | ||
• | the level of our interest expense, which depends on the amount of our indebtedness and the interest payable thereon; and | ||
• | the level of our capital expenditures. |
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limited.
• | the domestic and foreign supply of and demand for oil and natural gas; | ||
• | the price and quantity of imports of crude oil and natural gas; | ||
• | overall domestic and global economic conditions; | ||
• | political and economic conditions in other oil and natural gas producing countries, including embargoes and continued hostilities in the Middle East and other sustained military campaigns, and acts of terrorism or sabotage; | ||
• | the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls; | ||
• | the level of consumer product demand; | ||
• | weather conditions; | ||
• | the impact of the U.S. dollar exchange rates on oil and natural gas prices; and | ||
• | the price and availability of alternative fuels. |
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• | our proved reserves; | ||
• | the level of oil and natural gas we are able to produce from existing wells; | ||
• | the prices at which our oil and natural gas are sold; and | ||
• | our ability to acquire, locate and produce new reserves. |
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• | the high cost, shortages or delivery delays of equipment and services; | ||
• | unexpected operational events; | ||
• | adverse weather conditions; | ||
• | facility or equipment malfunctions; | ||
• | title disputes; | ||
• | pipeline ruptures or spills; | ||
• | collapses of wellbore, casing or other tubulars; | ||
• | unusual or unexpected geological formations; | ||
• | loss of drilling fluid circulation; | ||
• | formations with abnormal pressures; | ||
• | fires; | ||
• | blowouts, craterings and explosions; and | ||
• | uncontrollable flows of oil, natural gas or well fluids. |
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• | All of our units issued in our private equity offerings are “restricted securities” within the meaning of Rule 144 under the Securities Act. As more of our units become eligible for sale under Rule 144, the volume of sales of our units may increase, which could reduce the market price of our units. | ||
• | The Founding Investors and their affiliates, including members of our management, own approximately 43% of our outstanding units. We granted the Founding Investors certain registration rights to have their units registered under the Securities Act. Upon registration, these units became eligible for sale into the market. Because of the substantial size of the Founding Investors’ holdings, the sale of a significant portion of these units, or a perception in the market that such a sale is likely, could have a significant impact on the market price of our units. | ||
• | We granted purchasers in our private equity offerings certain registration rights to have the resale of their units registered under the Securities Act. If purchasers in our private equity offerings were to resell a substantial portion of their units, it could reduce the market price of our outstanding units. |
• | neither our partnership agreement nor any other agreement requires our Founding Investors or their affiliates, other than our executive officers, to pursue a business strategy that favors us; | ||
• | our general partner is allowed to take into account the interests of parties other than us, such as our Founding Investors, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders; | ||
• | our Founding Investors and their affiliates (other than our executive officers and their affiliates) may engage in competition with us; | ||
• | our general partner has limited its liability and reduced its fiduciary duties under our partnership agreement and has also restricted the remedies available to our unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty. As a result of purchasing units, unitholders consent to some |
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actions and conflicts of interest that might otherwise constitute a breach of fiduciary or other duties under applicable state law; | |||
• | our general partner determines the amount and timing of asset purchases and sales, capital expenditures, borrowings, issuance of additional partnership securities, and reserves, each of which can affect the amount of cash that is distributed to our unitholders; | ||
• | our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is a maintenance capital expenditure, which reduces operating surplus, or a growth capital expenditure, which does not. Such determination can affect the amount of cash that is distributed to our unitholders; | ||
• | our general partner determines which costs incurred by it and its affiliates are reimbursable by us; | ||
• | our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf; | ||
• | our general partner intends to limit its liability regarding our contractual and other obligations; | ||
• | our general partner controls the enforcement of obligations owed to us by it and its affiliates; and | ||
• | our general partner decides whether to retain separate counsel, accountants, or others to perform services for us. |
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• | permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. This entitles our general partner to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or any unitholder; | ||
• | provides that our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as it acted in good faith, meaning it believed the decision was in the best interests of our partnership; | ||
• | provides that our general partner is entitled to make other decisions in “good faith” if it believes that the decision is in our best interest; | ||
• | provides generally that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of our general partner and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us, as determined by our general partner in good faith, and that, in determining whether a transaction or resolution is “fair and reasonable,” our general partner may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and | ||
• | provides that our general partner and its officers and directors will not be liable for monetary damages to us, our unitholders or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that the general partner or those other persons acted in bad faith or engaged in fraud or willful misconduct. |
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• | our unitholders’ proportionate ownership interests in us will decrease; | ||
• | the amount of cash available for distribution on each unit may decrease; | ||
• | the risk that a shortfall in the payment of our current quarterly distribution will increase; | ||
• | the relative voting strength of each previously outstanding unit may be diminished; and | ||
• | the market price of the units may decline. |
• | a court or government agency determined that we were conducting business in a state but had not complied with that particular state’s partnership statute; or | ||
• | our unitholders’ right to act with other unitholders to take other actions under our partnership agreement that constitute “control” of our business. |
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Years Ended December 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
Ratio of earnings to fixed charges | 34.35x | 38.82x | 4.94x | 1.70x | (1 | ) |
(1) | Earnings were insufficient to cover fixed charges, and fixed charges exceeded earnings by approximately $55.402 million. |
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• | surety bond premiums to replace lost or stolen certificates, taxes and other governmental charges; | ||
• | special charges or services requested by a holder of a unit; and | ||
• | other similar fees or charges. |
• | becomes the record holder of the units; | ||
• | represents that the transferee has the capacity, power and authority to enter into our partnership agreement; | ||
• | automatically agrees to be bound by the terms and conditions of, and is deemed to have executed, our partnership agreement; and | ||
• | gives the consents, approvals and waivers contained in our partnership agreement, such as the approval of all transactions and agreements that we are entering into in connection with our formation. |
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• | Our general partner has broad discretion to establish reserves for the prudent conduct of our business. The establishment of those reserves could result in a reduction in the amount of cash available to pay distributions. | ||
• | Our ability to make distributions of available cash will depend primarily on our cash flow from operations. Although our partnership agreement provides for quarterly distributions of available cash, we may be unable to make distributions to our unitholders. | ||
• | If we fail to make acquisitions on economically attractive terms, we will not be able to replace our declining oil and natural gas reserves at a level that allows us to maintain our current quarterly distribution. | ||
• | We will be prohibited from borrowing under our revolving credit facility to make distributions to unitholders if the amount of borrowing outstanding under our revolving credit facility reaches or exceeds 90% of our borrowing base. Further, we may enter into future debt arrangements that could subject our ability to pay distributions to compliance with certain tests or ratios or otherwise restrict our ability to pay distributions. | ||
• | Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, we may not make a distribution to you if the distribution could cause our liabilities to exceed the fair value of our assets. | ||
• | Although our partnership agreement requires us to distribute our available cash, our partnership agreement, including the provisions requiring us to make cash distributions contained therein, may be amended. Our partnership agreement can be amended with the approval of a majority of the outstanding units. Our Founding Investors, including members of our management, own an aggregate of 43% of the outstanding units, and acting jointly have the ability to amend our partnership agreement. |
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• | less the amount of cash reserves established by our general partner, in its sole discretion, to: |
— | provide for the proper conduct of our business (including reserves for future capital expenditures, future debt service requirements, and for our anticipated credit needs); | ||
— | comply with applicable law, any of our debt instruments or other agreements; or | ||
— | provide funds for distribution to our unitholders for any one or more of the next four quarters; |
• | plus all cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter for which the determination is being made. Working capital borrowings are generally borrowings that will be made under our revolving credit facility and in all cases are used solely for working capital purposes or to pay distributions to unitholders. |
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• | with regard to distributions of available cash, please read “Cash Distribution Policy”; | ||
• | with regard to the fiduciary duties of our general partner, please read “Conflicts of Interest and Fiduciary Duties”; | ||
• | with regard to the transfer of units, please read “Description of Our Units — Transfer of Units”; and | ||
• | with regard to allocations of taxable income and taxable loss, please read “Material Tax Considerations.” |
Issuance of additional units | No approval right. | |
Amendment of the partnership agreement | Certain amendments may be made by our general partner without the approval of our unitholders. Other amendments generally require the approval of a unit majority. Please read “— Amendment of the Partnership Agreement.” |
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Merger of our partnership or the sale of all or substantially all of our assets | Unit majority in certain circumstances. Please read “— Merger, Sale or Other Disposition of Assets.” | |
Amendment of the limited partnership agreement of our operating partnership and other action taken by us as the sole member of its general partner | Unit majority if such amendment or other action would adversely affect our limited partners in any material respect. Please read “— Amendment of the Partnership Agreement — Action Relating to the Operating Partnership and its General Partner.” | |
Dissolution of our partnership | Unit majority. Please read “— Termination and Dissolution.” | |
Continuation of our partnership upon dissolution | Unit majority. Please read “— Termination and Dissolution.” | |
Withdrawal of our general partner | Under most circumstances, the approval of a unit majority, excluding units held by our general partner and its affiliates, is required for the withdrawal of our general partner prior to March 31, 2016 in a manner that would cause a dissolution of our partnership. Please read “— Withdrawal or Removal of the General Partner.” | |
Removal of the general partner | Not less than 662/3% of our outstanding units, including units held by our general partner and its affiliates. Please read “— Withdrawal or Removal of the General Partner.” | |
Transfer of the general partner interest | Our general partner may transfer all, but not less than all, of its general partner interest in us without a vote of our unitholders to an affiliate or another person in connection with its merger or consolidation with or into, or sale of all or substantially all of its assets, to such person. The approval of a majority of the units, excluding units held by the general partner and its affiliates, is required in other circumstances for a transfer of the general partner interest to a third party prior to March 31, 2016. Please read “— Transfer of General Partner Interest.” | |
Transfer of ownership interests in our general partner | No approval required at any time. Please read “— Transfer of Ownership Interests in the General Partner. |
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• | to remove or replace the general partner; | ||
• | to approve some amendments to the partnership agreement; or | ||
• | to take other action under the partnership agreement; |
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• | enlarge the obligations of any limited partner without its consent, unless approved by at least a majority of the type or class of limited partner interests so affected; or | ||
• | enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable by us to our general partner or any of its affiliates without the consent of our general partner, which consent may be given or withheld at its option. |
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• | change in our name, the location of our principal place of business, our registered agent or our registered office; | ||
• | the admission, substitution, withdrawal or removal of partners in accordance with our partnership agreement; | ||
• | a change that our general partner determines to be necessary or appropriate to qualify or continue our qualification as a limited partnership or a partnership in which the limited partners have limited liability under the laws of any state or to ensure that neither we nor the operating partnership nor any of its subsidiaries will be treated as an association taxable as a corporation or otherwise taxed as an entity for federal income tax purposes; | ||
• | an amendment that is necessary, in the opinion of our counsel, to prevent us or our general partner or its directors, officers, agents or trustees from in any manner being subjected to the provisions of the Investment Company Act of 1940, the Investment Advisors Act of 1940, or “plan asset” regulations adopted under the Employee Retirement Income Security Act of 1974, or ERISA, whether or not substantially similar to plan asset regulations currently applied or proposed; | ||
• | an amendment that our general partner determines to be necessary or appropriate for the authorization of additional partnership securities or rights to acquire partnership securities; | ||
• | any amendment expressly permitted in our partnership agreement to be made by our general partner acting alone; | ||
• | an amendment effected, necessitated or contemplated by a merger agreement that has been approved under the terms of our partnership agreement; | ||
• | any amendment that our general partner determines to be necessary or appropriate for the formation by us of, or our investment in, any corporation, partnership or other entity, as otherwise permitted by our partnership agreement; | ||
• | a change in our fiscal year or taxable year and related changes; | ||
• | certain mergers or conveyances as set forth in our partnership agreement; or | ||
• | any other amendments substantially similar to any of the matters described in the clauses above. |
• | do not adversely affect the limited partners (or any particular class of limited partners) in any material respect; | ||
• | are necessary or appropriate to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute; | ||
• | are necessary or appropriate to facilitate the trading of limited partner interests or to comply with any rule, regulation, guideline or requirement of any securities exchange on which the limited partner interests are or will be listed for trading; | ||
• | are necessary or appropriate for any action taken by our general partner relating to splits or combinations of units under the provisions of our partnership agreement; or |
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• | are required to effect the intent expressed in this prospectus or the intent of the provisions of our partnership agreement or are otherwise contemplated by our partnership agreement. |
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We will continue as a limited partnership until terminated under our partnership agreement. We will dissolve upon: | |||
• | the election of our general partner to dissolve us, if approved by the holders of units representing a unit majority; | ||
• | there being no limited partners, unless we are continued without dissolution in accordance with applicable Delaware law; | ||
• | the entry of a decree of judicial dissolution of our partnership; or | ||
• | the withdrawal or removal of our general partner or any other event that results in its ceasing to be our general partner other than by reason of a transfer of its general partner interest in accordance with our partnership agreement or withdrawal or removal following approval and admission of a successor. |
• | the action would not result in the loss of limited liability of any limited partner; and | ||
• | none of us, our operating partnership or any of our other subsidiaries, would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of that right to continue. |
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• | an affiliate of our general partner (other than an individual); or | ||
• | another entity as part of the merger or consolidation of our general partner with or into another entity or the transfer by our general partner of all or substantially all of its assets to another entity, |
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• | the highest cash price paid by either of our general partner or any of its affiliates for any partnership securities of the class purchased within the 90 days preceding the date on which our general partner first mails notice of its election to purchase those limited partner interests; and | ||
• | the current market price as of the date three days before the date the notice is mailed. |
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• | our general partner; | ||
• | any departing general partner; | ||
• | any person who is or was an affiliate of a general partner or any departing general partner; | ||
• | any person who is or was a director, officer, member, partner, fiduciary or trustee of any entity set forth in the preceding three bullet points; | ||
• | any person who is or was serving as director, officer, member, partner, fiduciary or trustee of another person at the request of our general partner or any departing general partner; and | ||
• | any person designated by our general partner. |
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• | a current list of the name and last known address of each partner; | ||
• | a copy of our tax returns; | ||
• | information as to the amount of cash, and a description and statement of the agreed value of any other property or services, contributed or to be contributed by each partner and the date on which each partner became a partner; | ||
• | copies of our partnership agreement, our certificate of limited partnership, related amendments and powers of attorney under which they have been executed; | ||
• | information regarding the status of our business and financial condition; and | ||
• | any other information regarding our affairs as is just and reasonable. |
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• | the title and type of the debt securities; | ||
• | the total principal amount of the debt securities; | ||
• | the percentage of the principal amount at which the debt securities will be issued and any payments due if the maturity of the debt securities is accelerated; | ||
• | the dates on which the principal of the debt securities will be payable; | ||
• | the interest rate which the debt securities will bear and the interest payment dates for the debt securities; | ||
• | any conversion or exchange features; | ||
• | any optional redemption periods; |
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• | any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem some or all of the debt securities; | ||
• | any provisions granting special rights to holders when a specified event occurs; | ||
• | any changes to or additional events of default or covenants; | ||
• | any special tax implications of the debt securities, including provisions for original issue discount securities, if offered; and | ||
• | any other terms of the debt securities. |
• | will pay the principal of, interest and any premium on, the debt securities when due; | ||
• | will maintain a place of payment; | ||
• | will deliver a certificate to the trustee at the end of each fiscal year reviewing our obligations under the indentures; | ||
• | will preserve our existence; and |
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• | will deposit sufficient funds with any paying agent on or before the due date for any principal, interest or premium. |
• | either: (a) Legacy is the surviving Person; or (b) the Person formed by or surviving any such consolidation, amalgamation or merger or resulting from such conversion (if other than Legacy) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation, limited liability company or limited partnership organized or existing under the laws of the United States, any state of the United States or the District of Columbia; | ||
• | the Person formed by or surviving any such conversion, consolidation, amalgamation or merger (if other than Legacy) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all of the obligations of Legacy under such indenture and the debt securities governed thereby pursuant to agreements reasonably satisfactory to the trustee; | ||
• | we or the successor will not immediately be in default under such indenture; and | ||
• | we deliver an officer’s certificate and opinion of counsel to the trustee stating that such consolidation or merger complies with such indenture and that all conditions precedent set forth in such indenture have been complied with. |
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• | a default in the payment of all or any portion of the obligations on any senior debt (“payment default”) occurs, or | ||
• | any other default occurs and is continuing with respect to designated senior debt pursuant to which the maturity thereof may be accelerated (“non-payment default”) and, solely with respect to this clause, the trustee for the subordinated debt securities receives a notice of the default (a “Payment Blockage Notice”) from the trustee or other representative for the holders of such designated senior debt. |
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• | by the applicable depositary to a nominee of the depositary; | ||
• | by any nominee to the depositary itself or another nominee; or | ||
• | by the depositary or any nominee to a successor depositary or any nominee of the successor. |
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• | will not be entitled to have any of the underlying debt securities registered in their names; | ||
• | will not receive or be entitled to receive physical delivery of any of the underlying debt securities in definitive form; and | ||
• | will not be considered the owners or holders under the indenture relating to those debt securities. |
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• | the series of debt securities to which the guarantees apply; | ||
• | whether the guarantees are secured or unsecured; | ||
• | that the guarantees are unconditional; | ||
• | whether the guarantees are senior or subordinate to other guarantees or debt; | ||
• | the terms under which the guarantees may be amended, modified, waived, released or otherwise terminated, if different from the provisions applicable to the guaranteed debt securities; and | ||
• | any additional terms of the guarantees. |
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• | approved by the conflicts committee, although our general partner is not obligated to seek such approval; | ||
• | approved by the vote of a majority of the outstanding units, excluding any units owned by our general partner or any of its affiliates; | ||
• | on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or | ||
• | fair and reasonable to us, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to us. |
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• | provides that the general partner shall not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as it acted in good faith, meaning it believed that the decision was in the best interests of our partnership; | ||
• | generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of our general partner and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us, as determined by the board of directors of our general partner in good faith, and that, in determining whether a transaction or resolution is “fair and reasonable,” our general partner may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and | ||
• | provides that our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or those other persons acted in bad faith or engaged in fraud or willful misconduct. |
• | the amount and timing of asset purchases and sales; | ||
• | cash expenditures; | ||
• | borrowings; | ||
• | the issuance of additional units; and | ||
• | the creation, reduction or increase of reserves in any quarter. |
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• | the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible into securities of the partnership, and the incurring of any other obligations; | ||
• | the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over our business or assets; | ||
• | the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of our assets or the merger or other combination of us with or into another person; | ||
• | the negotiation, execution and performance of any contracts, conveyances or other instruments; | ||
• | the distribution of partnership cash; | ||
• | the selection and dismissal of employees and agents, outside attorneys, accountants, consultants and contractors and the determination of their compensation and other terms of employment or hiring; | ||
• | the maintenance of insurance for our benefit and the benefit of our partners; | ||
• | the formation of, or acquisition of an interest in, and the contribution of property and the making of loans to, any further limited or general partnerships, joint ventures, corporations, limited liability companies or other relationships; | ||
• | the control of any matters affecting our rights and obligations, including the bringing and defending of actions at law or in equity and otherwise engaging in the conduct of litigation, arbitration or mediation and the incurring of legal expense and the settlement of claims and litigation; | ||
• | the indemnification of any person against liabilities and contingencies to the extent permitted by law; | ||
• | the purchase, sale or other acquisition or disposition of our securities, or the issuance of additional options, rights, warrants and appreciation rights relating to our securities; and | ||
• | the entering into of agreements with any of its affiliates to render services to us or to itself in the discharge of its duties as our general partner. |
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State law fiduciary duty standards | Fiduciary duties are generally considered to include an obligation to act in good faith and with due care and loyalty. The duty of care, in the absence of a provision in a partnership agreement providing otherwise, would generally require a general partner to act for the partnership in the same manner as a prudent person would act on his own behalf. The duty of loyalty, in the absence of a provision in a partnership agreement providing otherwise, would generally prohibit a general partner of a Delaware limited partnership from taking any action or engaging in any transaction where a conflict of interest is present. | |
Partnership agreement modified standards | Our partnership agreement contains provisions pursuant to which limited partners waive or consent to conduct by our general partner and its affiliates that might otherwise raise issues about compliance with fiduciary duties or applicable law. For example, our partnership agreement provides that when our general partner is acting in its capacity as our general partner, as opposed to in its individual capacity, it must act in “good faith” and will not be subject to any other standard under applicable law. In addition, when our general partner is acting in its individual capacity, as opposed to its capacity as our general partner, it may act without any fiduciary obligation to us or the unitholders whatsoever. These standards reduce the obligations to which our general partner would otherwise be held. | |
Our partnership agreement generally provides that affiliated transactions and resolutions of conflicts of interest not involving a vote of unitholders and that are not approved by the conflicts committee of the board of directors of our general partner must be: | ||
• on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or |
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• “fair and reasonable” to us, which may take into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous, or unfavorable or disadvantageous, to us). |
If our general partner does not seek approval from the conflicts committee and its board of directors determines that the resolution or course of action taken with respect to the conflict of interest satisfies either of the standards set forth in the bullet points above, then it will be presumed that, in making its decision, the board of directors, which may include board members affected by the conflict of interest, acted in good faith and in any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. These standards reduce the obligations to which our general partner would otherwise be held. | ||
In addition to the other more specific provisions limiting the obligations of our general partner, our partnership agreement further provides that our general partner, its affiliates and their officers and directors will not be liable for monetary damages to us, our limited partners or assignees for errors of judgment or for any acts or omissions unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining that our general partner or its officers and directors acted in bad faith or engaged in fraud or willful misconduct. | ||
Rights and remedies of unitholders | The Delaware Act generally provides that a limited partner may institute legal action on behalf of the partnership to recover damages from a third party where a general partner has refused to institute the action or where an effort to cause a general partner to do so is not likely to succeed. These actions include actions against a general partner for breach of its fiduciary duties or of the partnership agreement. In addition, the statutory or case law of some jurisdictions may permit a limited partner to institute legal action on behalf of himself and all other similarly situated limited partners to recover damages from a general partner for violations of its fiduciary duties to the limited partners. |
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(1) | the treatment of a unitholder whose units are loaned to a short seller to cover a short sale of units (please read “— Tax Consequences of Unit Ownership — Treatment of Short Sales”); | ||
(2) | whether our monthly convention for allocating taxable income and losses is permitted by existing Treasury regulations (please read “— Disposition of Units — Allocations Between Transferors and Transferees”); and | ||
(3) | whether our method for depreciating Section 743 adjustments is sustainable in certain cases (please read “— Tax Consequences of Unit Ownership — Section 754 Election” and “— Uniformity of Units”). |
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(a) | Neither we, nor any of our partnership or limited liability company subsidiaries, have elected nor will we elect to be treated as a corporation; and | ||
(b) | For each taxable year, more than 90% of our gross income has been and will be income that Andrews Kurth LLP has opined or will opine is “qualifying income” within the meaning of Section 7704(d) of the Internal Revenue Code. |
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• | interest on indebtedness properly allocable to property held for investment; | ||
• | our interest expense attributable to portfolio income; and | ||
• | the portion of interest expense incurred to purchase or carry an interest in a passive activity to the extent attributable to portfolio income. |
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• | his relative contributions to us; | ||
• | the interests of all the unitholders in profits and losses; | ||
• | the interest of all the unitholders in cash flow; and | ||
• | the rights of all the unitholders to distributions of capital upon liquidation. |
• | none of our income, gain, loss or deduction with respect to those units would be reportable by the unitholder; | ||
• | any cash distributions received by the unitholder with respect to those units would be fully taxable; and | ||
• | all of these distributions would appear to be ordinary income. |
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• | a short sale; | ||
• | an offsetting notional principal contract; or | ||
• | a futures or forward contract with respect to the partnership interest or substantially identical property. |
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(a) | the name, address and taxpayer identification number of the beneficial owner and the nominee; | ||
(b) | a statement regarding whether the beneficial owner is: |
(1) | a person that is not a United States person, | ||
(2) | a foreign government, an international organization or any wholly owned agency or instrumentality of either of the foregoing, or | ||
(3) | a tax-exempt entity; |
(c) | the amount and description of units held, acquired or transferred for the beneficial owner; and | ||
(d) | specific information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisition cost for purchases, as well as the amount of net proceeds from sales. |
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(1) | for which there is, or was, “substantial authority,” or | ||
(2) | as to which there is a reasonable basis and the relevant facts of that position are disclosed on the return. |
• | accuracy-related penalties with a broader scope, significantly narrower exceptions, and potentially greater amounts than described above at “— Accuracy-related Penalties,” | ||
• | for those persons otherwise entitled to deduct interest on federal tax deficiencies, nondeductibility of interest on any resulting tax liability, and | ||
• | in the case of a listed transaction, an extended statute of limitations. |
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• | through one or more broker-dealers; | ||
• | through underwriters; or | ||
• | directly to investors. |
• | market prices prevailing at the time of any sale under this registration statement; | ||
• | prices related to market prices; or | ||
• | negotiated prices. |
• | in or through one or more transactions (which may involve crosses and block transactions) or distributions; | ||
• | on The Nasdaq Global Select Market; | ||
• | in the over-the-counter market; or | ||
• | in private transactions. |
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• | Annual Report on Form 10-K for the year ended December 31, 2007, filed on March 14, 2008; | ||
• | Current Reports on Form 8-K or 8-K/A filed on June 29, 2007, October 18, 2007, January 2, 2008, January 25, 2008, February 4, 2008, February 14, 2008, March 13, 2008, March 14, 2008, March 18, 2008 and April 4, 2008; |
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• | The description of our units contained in our registration statement on Form 8-A (File No. 001-33249), filed on January 10, 2007; and | ||
• | The financial statements of Brothers Group, Selected Interests of Paul T. Horne and the Selected Properties of Charities Support Foundation included in our prospectus filed on January 12, 2007 pursuant to Rule 424(b) (File No. 333-138637) under the Securities Act. |
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SEC Registration Fee | $ | 19,650 | ||
FINRA Filing Fee | 50,500 | |||
Legal Fees and Expenses | 75,000 | * | ||
Accountants’ Fees and Expenses | 75,000 | * | ||
Trustees’ Fees and Expenses | 20,000 | * | ||
Printing Expenses | 50,000 | * | ||
Listing Fees | ** | |||
Miscellaneous | 9,850 | |||
TOTAL | $ | 300,000 | ** | |
* | Because an indeterminate amount of securities is covered by this registration statement, the expenses in connection with the issuance and distribution of the securities are therefore not currently determinable. The amounts shown are estimates of expenses for the amount of securities which the registrants are currently authorized to issue, but do not limit the amount of securities that may be offered. | |
** | The listing fee is based upon the principal amount of securities listed, if any, and is therefore not currently determinable. |
(a) | See the Exhibit Index on the page immediately preceding the exhibits for a list of exhibits filed as part of this registration statement on Form S-3, which Exhibit Index is incorporated herein by reference. | |
(b) | Financial Statement Schedules | |
Not Applicable. |
(a) | The undersigned registrants hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; | ||
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total |
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dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and | |||
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
(2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | ||
(4) | That, for the purpose of determining liability under the Securities Act to any purchaser: |
(i) | Each prospectus filed by the registrants pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and | ||
(ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.Provided,however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
(5) | That, for the purpose of determining liability of the registrants under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrants undertake that in a primary offering of securities of the undersigned registrants pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, each of the undersigned registrants will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrants relating to the offering required to be filed pursuant to Rule 424; |
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(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrants or used or referred to by such undersigned registrants; | ||
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrants or their securities provided by or on behalf of the undersigned registrants; and | ||
(iv) | Any other communication that is an offer in the offering made by the undersigned registrants to the purchaser. |
(b) | The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | |
(c) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. | |
(d) | The undersigned registrants hereby undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act. |
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LEGACY RESERVES LP | ||||
By: | LEGACY RESERVES GP, LLC, | |||
its general partner | ||||
By: | /s/ Steven H. Pruett | |||
Name: | Steven H. Pruett | |||
Title: | President, Chief Financial Officer and Secretary | |||
Signature | Title | Date | ||
/s/ Cary D. Brown | Chief Executive Officer and Director (Principal Executive Officer) | April 4, 2008 | ||
/s/ Steven H. Pruett | President, Chief Financial Officer and Secretary (Principal Financial Officer) | April 4, 2008 | ||
/s/ William M. Morris | Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) | April 4, 2008 | ||
/s/ Kyle A. McGraw | Director | April 4, 2008 | ||
/s/ Dale A. Brown | Director | April 4, 2008 |
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Signature | Title | Date | ||
/s/ William R. Granberry | Director | April 4, 2008 | ||
/s/ G. Larry Lawrence | Director | April 4, 2008 | ||
/s/ William D. Sullivan | Director | April 4, 2008 | ||
/s/ Kyle D. Vann | Director | April 4, 2008 |
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LEGACY RESERVES OPERATING LP | ||||
By: | LEGACY RESERVES OPERATING GP LLC, | |||
its general partner | ||||
By: | LEGACY RESERVES LP, | |||
its sole member | ||||
By: | LEGACY RESERVES GP, LLC, | |||
its general partner | ||||
By: | /s/ Steven H. Pruett | |||
Name: | Steven H. Pruett | |||
Title: | President, Chief Financial Officer and Secretary | |||
Signature | Title | Date | ||
/s/ Cary D. Brown | Chief Executive Officer and Director (Principal Executive Officer) | April 4, 2008 | ||
/s/ Steven H. Pruett | President, Chief Financial Officer and Secretary (Principal Financial Officer) | April 4, 2008 | ||
/s/ William M. Morris | Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) | April 4, 2008 | ||
/s/ Kyle A. McGraw | Director | April 4, 2008 |
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Signature | Title | Date | ||
/s/ Dale A. Brown | Director | April 4, 2008 | ||
/s/ William R. Granberry | Director | April 4, 2008 | ||
/s/ G. Larry Lawrence | Director | April 4, 2008 | ||
/s/ William D. Sullivan | Director | April 4, 2008 | ||
/s/ Kyle D. Vann | Director | April 4, 2008 |
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LEGACY RESERVES OPERATING GP LLC | ||||
By: | LEGACY RESERVES LP, | |||
its sole member | ||||
By: | LEGACY RESERVES GP, LLC, | |||
its general partner | ||||
By: | /s/ Steven H. Pruett | |||
Name: | Steven H. Pruett | |||
Title: | President, Chief Financial Officer and Secretary | |||
Signature | Title | Date | ||
/s/ Cary D. Brown | Chief Executive Officer and Director (Principal Executive Officer) | April 4, 2008 | ||
/s/ Steven H. Pruett | President, Chief Financial Officer and Secretary (Principal Financial Officer) | April 4, 2008 | ||
/s/ William M. Morris | Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) | April 4, 2008 | ||
/s/ Kyle A. McGraw | Director | April 4, 2008 |
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Signature | Title | Date | ||
/s/ Dale A. Brown | Director | April 4, 2008 | ||
/s/ William R. Granberry | Director | April 4, 2008 | ||
/s/ G. Larry Lawrence | Director | April 4, 2008 | ||
/s/ William D. Sullivan | Director | April 4, 2008 | ||
/s/ Kyle D. Vann | Director | April 4, 2008 |
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LEGACY SERVICES, INC. | ||||
By: | /s/ Steven H. Pruett | |||
Name: | Steven H. Pruett | |||
Title: | President, Chief Financial Officer and Secretary | |||
Signature | Title | Date | ||
/s/ Cary D. Brown | Chief Executive Officer and Director (Principal Executive Officer) | April 4, 2008 | ||
/s/ Steven H. Pruett | President, Chief Financial Officer and Secretary and Director (Principal Financial Officer) | April 4, 2008 | ||
/s/ William M. Morris | Controller (Principal Accounting Officer) | April 4, 2008 | ||
/s/ Kyle A. McGraw | Director | April 4, 2008 |
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Previously Filed | ||||||||
With File Number | ||||||||
Exhibit | (Form) (Period | |||||||
Number | Ending or Date) | As Exhibit | Exhibit | |||||
1.1** | Form of Underwriting Agreement. | |||||||
4.1 | 333-134056 (S-1) (5/12/06) | Appendix A | Amended and Restated Limited Partnership Agreement of Legacy Reserves LP effective as of March 15, 2006. | |||||
4.2 | 001-33249 (8-K) (1/2/09) | 3.1 | Amendment No. 1, dated December 27, 2007, to the Amended and Restated Agreement of Limited Partnership of Legacy Reserves LP. | |||||
4.3* | Form of Senior Indenture. | |||||||
4.4* | Form of Subordinated Indenture. | |||||||
4.5 | 333-134056 (S-1) (5/12/06) | 4.1 | Registration Rights Agreement dated as of March 15, 2006 by and among Legacy Reserves LP, Legacy Reserves GP, LLC and Friedman, Billings, Ramsey & Co. | |||||
4.6 | 333-134056 (S-1) (9/5/06) | 4.2 | Registration Rights Agreement dated June 29, 2006 between Henry Holdings LP, Legacy Reserves LP and Legacy Reserves GP, LLC. | |||||
4.7 | 333-134056 (S-1) (9/5/06) | 4.3 | Founders Registration Rights Agreement dated March 15, 2006 by and among Legacy Reserves LP, Legacy Reserves GP, LLC and other parties thereto. | |||||
4.8 | 001-33249 (10-Q) (5/14/07) | 4.4 | Registration Rights Agreement dated April 16, 2007 by and among Nielson & Associates, Inc., Legacy Reserves GP, LLC and Legacy Reserves LP. | |||||
4.9 | 001-33249 (8-K) (11/9/07) | 4.1 | Registration Rights Agreement dated November 8, 2007 by and among Legacy Reserves LP and the Purchasers named therein. | |||||
5.1* | Opinion of Andrews Kurth LLP regarding the legality of the securities being registered. | |||||||
8.1* | Opinion of Andrews Kurth LLP regarding tax matters. | |||||||
12.1* | Ratio of Earnings to Fixed Charges. | |||||||
23.1* | Consent of BDO Seidman, LLP. | |||||||
23.2* | Consent of Johnson Miller & Co., CPA’s PC. | |||||||
23.3* | Consent of LaRoche Petroleum Consultants, Ltd. | |||||||
23.4* | Consent of Andrews Kurth LLP (contained in Exhibit 5.1). | |||||||
23.5* | Consent of Andrews Kurth LLP (contained in Exhibit 8.1). | |||||||
24.1* | Powers of Attorney (set forth on the signature page contained in Part II of this Registration Statement). | |||||||
25.1** | Form T-1 Statement of Eligibility and Qualification representing the Senior Indenture. | |||||||
25.1** | Form T-1 Statement of Eligibility and Qualification representing the Subordinated Indenture. |
* | Filed herewith. | |
** | To be filed in accordance with the requirements of Section 305(b)(2) of the Trust Indenture Act and Rule 5b-3 thereunder. |