EXHIBIT 2
Execution Copy
AMENDMENT NO. 1
TO
PURCHASE AGREEMENT,
DATED AS OF APRIL 18, 2003,
BY AND AMONG
XXXXXXXX ENERGY SERVICES, LLC,
XXXXXXXX NATURAL GAS LIQUIDS, INC. AND
XXXXXXXX XX LLC
COLLECTIVELY, AS SELLING PARTIES,
AND
WEG ACQUISITIONS, L.P.
A DELAWARE LIMITED PARTNERSHIP,
AS BUYER,
FOR THE PURCHASE AND SALE OF
(i) ALL THE MEMBERSHIP INTERESTS OF
WEG GP LLC
A DELAWARE LIMITED LIABILITY COMPANY,
(ii) ALL OF THE COMMON UNITS AND SUBORDINATED UNITS OF
XXXXXXXX ENERGY PARTNERS L.P.
A DELAWARE LIMITED PARTNERSHIP
OWNED BY XXXXXXXX ENERGY SERVICES, LLC AND XXXXXXXX NATURAL GAS LIQUIDS, INC.
AND
(iii) ALL THE CLASS B COMMON UNITS OF
XXXXXXXX ENERGY PARTNERS L.P.
A DELAWARE LIMITED PARTNERSHIP
DATED AS OF MAY 5, 2003
AMENDMENT NO. 1
TO
PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO PURCHASE AGREEMENT (this "AMENDMENT NO. 1") is
made and entered into as of this 5th day of May 2003, by and among XXXXXXXX
ENERGY SERVICES, LLC, a Delaware limited liability company ("XXX"), XXXXXXXX
NATURAL GAS LIQUIDS, INC., a Delaware corporation ("WNGL"), and XXXXXXXX XX LLC,
a Delaware limited liability company (the "OLD COMPANY," and collectively with
XXX and WNGL, the "SELLING PARTIES"), and WEG ACQUISITIONS, L.P., a Delaware
limited partnership ("BUYER").
WITNESSETH:
WHEREAS, the Selling Parties and Buyer have entered into the Purchase
Agreement, dated as of April 18, 2003 (the "PURCHASE AGREEMENT"), pursuant to
which, on the terms and subject to the conditions set forth therein, the Selling
Parties have agreed to sell, and Buyer has agreed to purchase, at the Closing
the Securities (as such terms are defined in the Purchase Agreement); and
WHEREAS, in accordance with Section 9.8 of the Purchase Agreement, the
Selling Parties and Buyer have agreed to enter into this Amendment No. 1 to
amend the Purchase Agreement to the extent, and only to the extent, specified
below;
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein and in the Purchase Agreement, the parties
hereto agree as follows:
ARTICLE I
AMENDMENTS
Section 1.1 Capitalized terms used herein but not defined shall have
the meanings assigned to such terms in the Purchase Agreement.
Section 1.2 The Purchase Agreement is hereby amended by adding the
following provisions to Article IV of the Purchase Agreement, as new Sections
4.22, 4.23, 4.24 and 4.25 of the Purchase Agreement:
"SECTION 4.22. COMMITMENT REGARDING INDEMNIFICATION PROVISIONS.
(a) The Selling Parties covenant and agree that prior to Closing the
Selling Parties (i) shall not propose to vote, or vote, the Securities in favor
of, or cause New Company to propose or to adopt, an amendment, modification,
waiver or termination of Section 7.7 or Section 7.8 of the Partnership
Agreement, and (ii) shall not amend, modify, waive or terminate Section 9.01 or
Section 9.02 of the New LLC Agreement, to the extent that such amendment,
modification, waiver or termination under clauses (i) and (ii) above would
affect adversely the
rights thereunder of any person serving as a member of the Board of Directors of
New Company existing as of the date of this Agreement; provided, however, that
the foregoing covenants and agreements shall not apply to any such amendment,
modification, waiver or termination to the extent required to cause such
provisions (or any portion thereof) to comply with applicable law.
(b) Buyer covenants and agrees that, during the period that commences
on the Closing Date and ends at 12:01 a.m. New York time on the sixth (6th)
anniversary of the Closing Date (the "STIPULATED PERIOD"), Buyer (i) shall not
propose to vote, or vote, the Securities (or any of the Securities that Buyer
then owns) in favor of, or cause New Company to propose or adopt, any amendment,
modification, waiver or termination of Section 7.7 or Section 7.8 of the
Partnership Agreement and (ii) shall not amend, modify, waive or terminate
Section 9.01 or Section 9.02 of the New LLC Agreement, to the extent that such
amendment, modification, waiver or termination under clauses (i) and (ii) above
would affect adversely the rights thereunder of any person serving as a member
of the Board of Directors of New Company existing as of the date of this
Agreement; provided, however, that the foregoing covenants and agreements shall
not apply to any such amendment, modification, waiver or termination to the
extent required to cause such provisions (or any portion thereof) to comply with
applicable law.
SECTION 4.23. WEG INSURANCE CONTINUATION.
(a) The Selling Parties covenant and agree that during the Stipulated
Period, with respect to any person serving as a member of the Board of Directors
of New Company as of the date of this Agreement and who resigns effective at or
before the Closing, the Selling Parties shall make the payments contemplated to
be made by the Selling Parties referred to in clause (b) below on the terms and
conditions specified in this Section 4.23.
(b) Buyer covenants and agrees that, during the Stipulated Period, with
respect to any person serving as a member of the Board of Directors of New
Company as of the date of this Agreement and who resigns effective at or before
the Closing, Buyer shall use its commercially reasonable efforts to cause the
New Company: (i) to continue in effect the current director and officer
liability insurance policy or policies that New Company has as of the date of
this Agreement, as reflected on Schedule 2.20(a)(ii) hereto, or (ii) upon the
termination or cancellation of any such policy or policies, (A) to provide
director and officer liability insurance in substitution for, or in replacement
of, such cancelled or terminated policy or policies or (B) to provide a "tail"
or "run-off" policy, in each case, so that any person serving as a member of the
Board of Directors of New Company as of the date of this Agreement and who
resigns effective at or before the Closing has coverage thereunder for acts,
events, occurrences or omissions occurring or arising at or prior to the Closing
to the same extent (including, without limitation, policy limits, exclusions and
scope) as such person has coverage for such acts, events, occurrences or
omissions under the director and officer liability insurance policy maintained
by New Company as of the date of this Agreement, as reflected on Schedule
2.20(a)(ii) hereto; provided, however, that in no event shall Buyer or any of
the Partnership Entities be required to spend in excess of 200% of the annual
premium paid as of the date of this Agreement by or on behalf of the Partnership
Entities for such coverage (which amount as of the date of this Agreement is
$2,055,160.46) (the "CURRENT PREMIUM"). Without limiting the immediately
preceding proviso, if the premium required to obtain the amount of coverage
contemplated by clauses (i) or (ii) above would at any time exceed 200% of the
Current Premium Buyer or the
Partnership Entities shall make a written request to the Selling Parties to pay
the amount of such premium in excess of 200% of the Current Premium, up to 300%
of the Current Premium, and the Selling Parties will make payment to such
requesting party of such amount promptly, and in any event within thirty (30)
calendar days of the date of such request, in immediately available funds to an
account previously designated in writing by the requesting party; provided,
however, that the Selling Parties shall not have any obligation to make any
payments with respect to any amounts of such premium other than the amount
between 200% of the Current Premium and 300% of the Current Premium.
SECTION 4.24. THIRD-PARTY BENEFICIARY RIGHTS.
The parties agree that any person serving as a member of the Board of
Directors of New Company as of the date of this Agreement and who resigns
effective at or before the Closing is an intended third-party beneficiary of the
provisions of Section 4.22 and Section 4.23. In the event that the Selling
Parties do not make the payment to the requesting party in the amount that is in
excess of 200% of the Current Premium and up to 300% of the Current Premium, as
provided in Section 4.23(b), within the time period specified in Section
4.23(b), each person serving as a member of the Board of Directors of New
Company as of the date of this Agreement and who resigns effective at or before
the Closing shall have the right, as a third-party beneficiary of Section 4.22
and Section 4.23, to pursue all remedies available to it under this Agreement or
otherwise at law or in equity against any party to this Agreement in order to
enforce its third-party beneficiary rights under this Section 4.24. If a person
serving as a member of the Board of Directors of New Company as of the date of
this Agreement and who resigns effective at or before the Closing enforces its
third-party beneficiary rights under this Section 4.24 against any party to this
Agreement and prevails in a litigation or otherwise in such enforcement of such
third-party rights, the losing party shall reimburse such person in full for all
of such person's costs and expenses (including reasonable attorney's fees)
resulting from, arising out of or related to the enforcement of such third-party
beneficiary rights.
SECTION 4.25 MODIFICATION OF OMNIBUS AGREEMENT. The Selling Parties and
Buyer agree that the New Omnibus Agreement to be entered into at the Closing
shall provide that no provision of the New Omnibus Agreement with respect to
which any entity comprising the Partnership Entities or the Partnership Group,
as applicable, is a third-party beneficiary can be amended, modified, waived or
terminated without the express prior written approval of the Partnership and if
New Company, in its capacity as the general partner of the Partnership,
determines in its reasonable discretion that such an amendment, modification,
waiver or termination is reasonably likely to adversely affect the holders of
Common Units, such amendment, modification, waiver or termination must also be
approved by Special Approval of the Conflicts Committee (as such terms are
defined in the Partnership Agreement).
Section 1.3 The second sentence of Section 9.2 of the Purchase
Agreement is hereby amended and restated in its entirety as follows:
"Except as contemplated by Section 4.24 and Article VIII, nothing in
this Agreement shall confer upon any Person not a party to this Agreement, or
the legal representatives of such Person, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement."
Section 1.4 Section 9.7 of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
"Section 9.7 Entire Agreement.
This Agreement, together with the Disclosure Schedules and the Exhibits
hereto, the Confidentiality Agreement, the Transaction Documents and the
Amendment No. 1 to the Purchase Agreement, dated May 5, 2003, represent the
entire agreement and understanding of the parties with reference to the
transactions set forth herein and therein and no representations or warranties
have been made in connection herewith and therewith other than those expressly
set forth herein or therein. This Agreement, together with the Disclosure
Schedules and the Exhibits hereto, the Confidentiality Agreement, the
Transaction Documents and the Amendment No. 1 to the Purchase Agreement, dated
May 5, 2003, supersede all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating to
the subject matter hereof or thereof and all prior drafts of such documents, all
of which are merged into such documents. No prior drafts of such documents and
no words or phrases from any such prior drafts shall be admissible into evidence
in any action or suit involving such documents."
Section 1.5. Section 9.8 of the Purchase Agreement is hereby amended by
inserting the following provision immediately after the final sentence of such
section:
"Notwithstanding anything to the contrary in this Agreement, Section
4.22 (Commitment Regarding Indemnification Provisions), Section 4.23 (WEG
Insurance Continuation) and Section 4.24 (Third-Party Beneficiary Rights) shall
not be amended, modified, waived or terminated by the parties hereto without the
prior written consent of all persons who are third-party beneficiaries under
Section 4.24 if such amendment, modification, waiver or termination would
adversely affect such third-party beneficiaries' rights under such provisions."
ARTICLE II
MISCELLANEOUS
SECTION 2.1. SIGNATURES AND COUNTERPARTS. Facsimile transmissions of
any signed original document and/or retransmission of any signed facsimile
transmission shall be the same as delivery of an original. At the request of
Buyer or the Selling Parties, the parties will confirm facsimile transmission by
signing a duplicate original document. This Amendment No. 1 may be executed in
two or more counterparts, each of which shall be deemed an original and all of
which together shall be considered one and the same document.
SECTION 2.2. GOVERNING LAW. This Amendment No. 1 shall be governed by
and construed in accordance with the internal and substantive laws of New York
and without regard to any conflicts of laws concepts that would apply the
substantive law of some other jurisdiction.
SECTION 2.3. CONTINUATION OF PURCHASE AGREEMENT. To the extent not
amended hereby, the Purchase Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
1 as of the date first above written.
SELLING PARTIES: XXXXXXXX ENERGY SERVICES, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXXXX NATURAL GAS LIQUIDS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXXXX XX LLC
By: XXXXXXXX ENERGY SERVICES, LLC and
XXXXXXXX NATURAL GAS LIQUIDS, INC.,
Its Members
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
BUYER: WEG ACQUISITIONS, L.P.
By: WEG Acquisition Management, LLC
Its General Partner
By: /s/ Xxxxxx X. XxXxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. XxXxxxx, Xx.
Title: Authorized Signatory
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
