AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
XXXXXX XXXXXX ENERGY PARTNERS, L.P.
This Amendment No. 2 to the Second Amended and Restated Agreement of Limited
Partnership of Xxxxxx Xxxxxx Energy Partners, L.P. (this "Amendment") is made as
of the 21st day of December, 2000, by Kinder Xxxxxx X.X., Inc., a Delaware
corporation (the "General Partner"), in its individual capacity and as
attorney-in-fact for the Limited Partners of Xxxxxx Xxxxxx Energy Partners,
L.P., in accordance with Article XV of the Partnership Agreement (as such
capitalized terms are defined below).
RECITALS
A. The General Partner is the sole general partner of Xxxxxx Xxxxxx
Energy Partners, L.P., a Delaware limited partnership (the "Partnership")
organized under a Second Amended and Restated Agreement of Limited Partnership
effective as of February 14, 1997 (the "Partnership Agreement").
B. The General Partner and the Partnership entered into a Contribution
Agreement dated October 19, 2000 (the "Contribution Agreement") among Xxxxxx
Xxxxxx, Inc., a Kansas corporation ("KMI"), MidCon Gas Services Corp., a
Delaware corporation ("MGSC"), KN Gas Gathering, Inc., a Colorado corporation
("KN Gas"), the General Partner and the Partnership.
C. The Contribution Agreement contemplates, among other things, the
contribution of (i) all of KN Gas' interests in Coyote Gas Treating Limited
Liability Company, a Colorado limited liability company, Thunder Creek Gas
Services, L.L.C., a Wyoming limited liability company, and the Xxxxxxx Natural
Gas Gathering and Processing System and the Casper Natural Gas Gathering and
Processing System, (ii) all of MGSC's equity interest in Xxxxxx Xxxxxx Texas
Pipeline, Inc., a Delaware corporation to be converted into a single-member
Delaware limited liability company prior to the contribution, and (iii) all of
MGSC's equity interest in MidCon NGL Corp., a Delaware corporation to be
converted into a single-member Delaware limited liability company prior to the
contribution, in exchange for the issuance by the Partnership to KN Gas and MGSC
of an aggregate of 640,000 common units representing limited partnership units
of the Partnership and 2,656,700 class B units representing limited partnership
units of the Partnership.
D. Pursuant to the Contribution Agreement, the Partnership has agreed
to incur debt in such amount and on such terms as may be acceptable to the
Partnership (the "KMEP Debt") sufficient in amount to allow the Partnership to
use the proceeds of the KMEP Debt to fund a distribution to MGSC in the amount
of $150,000,000 plus $42,676,903 attributable to a working capital adjustment
for a total of $192,676,903 (the "Special Distribution") which shall be declared
and paid to MGSC upon its contribution pursuant to the Contribution Agreement.
E. To effect the Special Distribution and the creation of the class
of units to be designated "Class B Units" as contemplated by the Contribution
Agreement, it is necessary to amend the Partnership Agreement as provided
herein.
F. Section 15.1(d) of the Partnership Agreement provides that the
General Partner may amend the Partnership Agreement without the consent of any
limited partner of the Partnership to reflect a change that, in the sole
discretion of the General Partner, does not adversely affect such limited
partners in any material respect. In addition, Section 15.1(f) of the
Partnership Agreement provides that the General Partner may amend the
Partnership Agreement without the consent of any limited partner of the
Partnership to reflect, subject to the terms of Section 4.4 of the Partnership
Agreement, an amendment that the General Partner determines in its sole
discretion to be necessary or appropriate in connection with the authorization
for issuance of any class or series of partnership securities pursuant to
Section 4.4 of the Partnership Agreement.
G. The General Partner is authorized to execute and deliver this
Amendment on behalf of the limited partners pursuant to Sections 15.1 and 1.4 of
the Partnership Agreement.
AGREEMENT
NOW, THEREFORE, the Partnership Agreement is hereby amended as follows:
1. Article II. The following definitions shall be added in Article II
of the Partnership Agreement:
"Class B Unit" means a Unit representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees and having the
rights and obligations specified with respect to Class B Units in this
Agreement.
"Mandatory Redemption Notice" has the meaning assigned to such term in
Section 4.12(b).
"Notice of Intent to Convert" has the meaning assigned to such term in
Section 4.12(b).
2. Article II. The following definition in Article II of the Partner-
ship Agreement shall be deleted in its entirety and replaced with the following:
"Unit" means a Partnership Interest of a Limited Partner or Assignee in
the Partnership representing a fractional part of the Partnership Interests of
all Limited Partners and Assignees and shall include, without limitation, Common
Units and Class B Units (but shall exclude APIs); provided that each Unit at any
time Outstanding shall represent the same fractional part of the Partnership
Interests of all Limited Partners and Assignees holding Units as each other
Unit.
3. Article II. The following sentence shall be added to the end of
the definition of "Record Holder" in Article II of the Partnership Agreement:
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Solely for purposes of the distribution of Available Cash pursuant to
Section 5.4 of this Agreement for the calendar quarter ended December
31, 2000, the holders of Common Units and Class B Units issued pursuant
to the Contribution Agreement (as defined herein) shall not be treated
as Record Holders and shall not be entitled to participate in such
distribution.
4. Article II. The reference to "Common Units" in the definition of
"Outstanding," "Partnership Interest," and "Percentage Interest" in Article II
of the Partnership Agreement shall be eliminated and replaced with "Units."
5. Section 4.6(e). A new Section 4.6(e) is hereby added to the Part-
nership Agreement, to follow Section 4.6(d) and to read in full as follows:
(e) Upon the conversion of a Class B Unit into one Common Unit, the
difference (whether positive or negative) between the Per Unit Capital Amount of
such Class B Unit and the Per Unit Capital Amount of the then Outstanding Common
Units shall be allocated proportionately among all Class B Units Outstanding
immediately after such conversion. After giving effect to such reallocation, (i)
the Per Unit Capital Amount of the Common Unit issued upon such conversion shall
equal the Per Unit Capital Amount of each Common Unit then Outstanding, and (ii)
such conversion shall not increase or decrease the aggregate Per Unit Capital
Amounts attributable to all Outstanding Common Units.
6. Section 4.12. A new Section 4.12 is hereby added to the Partner-
ship Agreement, to follow Section 4.11 and to read in full as follows:
4.12 Class B Units. (a) Pursuant to Section 4.4, the General Partner
hereby designates and creates a special class of Units designated "Class B
Units" and fixes the designations, preferences and relative, participating,
optional or other special rights, powers and duties of the holders of the Class
B Units as follows:
(b) Each Class B Unit shall be convertible from time to time, in whole
or in part, into one Common Unit from and after such date as the Partnership has
been advised by the New York Stock Exchange that the Common Units issuable upon
any such conversion are eligible for listing on the New York Stock Exchange. The
General Partner will promptly notify the holders of Class B Units upon receipt
of such advice. Upon written notice to the General Partner from the holders of
at least a majority of the Outstanding Class B Units (a "Notice of Intent to
Convert") given not earlier than one year after the issuance of the Class B
Units, the General Partner will use its reasonable best efforts to cause the
Partnership to meet any unfulfilled requirements of the New York Stock Exchange
for such listing, including obtaining such approval of the holders of Common
Units as may be required by the New York Stock Exchange for the issuance of
additional Common Units to be listed thereon. If, 120 days after the date of the
Notice of Intent to Convert, the Common Units issuable upon such conversion have
not been approved for listing on the New York Stock Exchange, then the
Partnership shall give written notice thereof to the holders of the Outstanding
Class B Units, whereupon each holder of
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Outstanding Class B Units may, at such holder's election at any time thereafter,
notify the General Partner in writing (a "Mandatory Redemption Notice") of such
holder's election to cause the Partnership to redeem such holder's Outstanding
Class B Units for cash. All such Outstanding Class B Units shall be redeemed as
of the 60th day following the date of such Mandatory Redemption Notice unless,
prior to such 60th day, the General Partner gives written notice to the holders
of all Outstanding Class B Units that it has been advised by the New York Stock
Exchange that the Common Units issuable upon a conversion of Class B Units have
been approved for listing on the New York Stock Exchange, in which case the
Mandatory Redemption Notice shall be deemed to have been withdrawn.
(c) Before any holder of Class B Units shall be entitled to receive any
redemption payment or to convert such holder's Class B Units into Common Units,
as the case may be, it shall surrender the Class B Unit Certificates therefor,
duly endorsed, at the office of the General Partner or of any transfer agent for
the Class B Units. In the case of any such conversion, the Partnership shall, as
soon as practicable thereafter, issue and deliver at such office to such holder
of Class B Units one or more Certificates, registered in the name of such
holder, for the number of Common Units to which he shall be entitled as
aforesaid. Such conversion shall be deemed to have been made as of the date of
such surrender of the Class B Units to be converted, and the person entitled to
receive the Common Units issuable upon such conversion shall be treated for all
purposes as the record holder of such Common Units on said date.
(d) Upon the request of KMI or any of its Affiliates to register all or
any part of the Class B Units pursuant to Section 6.13, the Class B Units for
which registration is so requested may be redeemed by the Partnership at its
election. The Partnership shall exercise its option under this Section 4.12(d)
by mailing written notice thereof to the holders of Class B Units for which
registration is so requested. Such notice shall be given not later than 15 days
after the receipt by the General Partner of such registration request and shall
fix a date for redemption of such Class B Units not less than 30 nor more than
60 days after the date of such notice.
(e) Any redemption under Section 4.12(b) or Section 4.12(d) shall be
for a cash redemption price equal to the Current Market Price per Common Unit as
of the date fixed for redemption multiplied by 0.955.
(f) From and after a redemption date (unless default shall be made by
the Partnership in providing money for the payment of the redemption price), the
Class B Units redeemed shall no longer be deemed to be Outstanding, and all
rights of the holders thereof as Partners in the Partnership (except the right
to receive from the Partnership the redemption price) shall cease. Class B Units
redeemed pursuant to Section 4.12(b) or Section 4.12(d) shall be restored to the
status of authorized but unissued Units, without designation as to class.
(g) Except as otherwise provided in this Agreement, each Class B Unit
shall be identical to a Common Unit, and the holder of a Class B Unit shall have
the rights of a holder of a Common Unit with respect to, without limitation,
Partnership distributions, voting and allocations of income, gain, loss or
deductions; but the Certificates evidencing Class B Units shall be separately
identified and shall not bear the same CUSIP number as the Certificates
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evidencing Common Units. Except as otherwise provided herein, all Units shall
vote or consent together as a single class on all matters submitted for a vote
or consent of the Outstanding Units. Class B Units shall be represented by
Certificates in such form as the General Partner may approve.
7. Article IV. The reference to "Common Units" in Section 5.1(c),
Section 5.1(d)(iii) and Section 5.4 of the Partnership Agreement shall be
eliminated and replaced with "Units."
8. Section 5.10. A new Section 5.10 is hereby added to the Partnership
Agreement, to follow Section 5.9 and to read in full as follows:
5.10 Special Distribution. Notwithstanding anything to the
contrary set forth in this Agreement, following the contribution by
MidCon Gas Services Corp., a Delaware corporation ("MGSC"), of (i) all
of its equity interest in Xxxxxx Xxxxxx Texas Pipeline, Inc., a
Delaware corporation to be converted into a single-member Delaware
limited liability company prior to the contribution, and (ii) all of
its equity interest in MidCon NGL Corp., a Delaware corporation to be
converted into a single-member Delaware limited liability company prior
to the contribution, as contemplated by the Contribution Agreement
dated October 19, 2000 (the "Contribution Agreement"), among Xxxxxx
Xxxxxx, Inc., a Kansas corporation, MGSC, KN Gas Gathering, Inc., a
Colorado corporation, the General Partner and the Partnership, the
Partnership shall distribute $150,000,000 plus $42,676,903 attributable
to a working capital adjustment for a total of $192,676,903 in cash to
MGSC, without a corresponding distribution to the General Partner or
the Limited Partners, as provided for in the Contribution Agreement.
Notwithstanding anything to the contrary set forth in this Agreement,
MGSC shall not receive an allocation of income (including gross income)
or gain as a result of the distribution provided for in the preceding
sentence.
9. Section 15.2. The fifth sentence in Section 15.2 of the Partnership
Agreement shall be deleted in its entirety and replaced with the following:
A proposed amendment shall be effective upon its approval by at least
two-thirds of the Outstanding Units unless a greater or different percentage is
required under this Agreement; provided that if the effect of any amendment
shall be to affect materially and adversely any holders of Units of a particular
class in relation to any other class of Units, the affirmative vote of the
holders of at least a majority in interest of the Outstanding Units of the class
so affected shall be required to adopt such amendment.
10. Article II. The following sentence shall be added to the end of
Section 17.1(a) of the Partnership Agreement:
Notwithstanding anything herein to the contrary, the Current Market
Price of each Class B Unit shall be deemed to be the same as the Current Market
Price of one Common Unit.
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11. Ratification. Except as expressly amended hereby, the Partnership
Agreement is hereby ratified and confirmed, and shall continue in full force and
effect.
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IN WITNESS WHEREOF, the General Partner has executed and delivered this
Amendment, in its individual capacity and as attorney-in-fact for the limited
partners of the Partnership, in accordance with Section 15.1 of the Partnership
Agreement, as of the date first above written.
KINDER XXXXXX X.X., INC.,
as General Partner
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Vice President
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KINDER XXXXXX X.X., INC.,
as Attorney-in-Fact for the limited partners
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Vice President
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[Amendment No. 2]
