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EXHIBIT 2
RECAPITALIZATION AGREEMENT
THIS RECAPITALIZATION AGREEMENT (this "Agreement") is being entered
into as of this 6th day of September, 2001 by and among EOTT Energy Partners,
L.P., a Delaware limited partnership ("EOTT"), EOTT Energy Corp., a Delaware
corporation and general partner of EOTT (the "General Partner"), Enron Corp., an
Oregon corporation ("Enron"), and Xxxx Petroleum Group, L.P., a Delaware limited
partnership ("Xxxx"). Any capitalized term used in this Agreement and not
defined will have the meaning assigned to it in the Amended and Restated
Agreement of Limited Partnership of EOTT (as amended to date, the "Partnership
Agreement").
WHEREAS, Xxxx is the owner of 2,000,000 Subordinated Units (the "Xxxx
Interest"), the General Partner is the owner of 7,000,000 Subordinated Units
(the "EOTT Energy Corp. Interest"), and Enron is the owner of $9,318,213 of APIs
(the "Enron Interest"), and each of them desires that its interest be converted
into other securities issued by EOTT;
WHEREAS, the parties hereto intend that the securities to be issued in
exchange for the Xxxx Interest, the EOTT Energy Corp. Interest and the Enron
Interest will be exempt pursuant to Section 3(a)(9) under the Securities Act;
and
WHEREAS, Enron desires to grant to EOTT an option to purchase 1,100,000
Common Units;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
CONVERSION OF UNITS AND APIs AND ISSUANCE OF BACKUP OPTION
1.1 Conversion of Units and APIs. The General Partner hereby consents
to, and agrees to propose to the holders of Outstanding Units, an amendment to
the Partnership Agreement in the form attached as Exhibit A to this Agreement
(the "Amendment") that, upon receipt of Unitholder Approval (as defined herein)
and satisfaction or waiver of the conditions set forth in Article III, will
result in the conversion of:
(a) the Xxxx Interest into 900,000 Common Units and an option (the
"Option") to purchase 1,100,000 Common Units, at an exercise price of $21.10 per
Common Unit, which Option shall be evidenced by, and the terms and conditions of
which shall be governed by, an Option Agreement (the "Option Agreement") in the
form attached as Annex I to Exhibit A to this Agreement;
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(b) the EOTT Energy Corp. Interest into 3,150,000 Common Units; and
(c) the Enron Interest into 219,815 Common Units.
Upon satisfaction or waiver of the conditions set forth in Article III, the
parties will conduct a closing (the "Closing"). At the Closing, which the
parties agree will occur promptly upon satisfaction of the conditions set forth
in Section 3.1, (i) the General Partner will execute the Amendment, (ii) EOTT
will issue in the name of each of Xxxx, the General Partner and Enron (or such
designees as any of them may designate as permitted by this Agreement)
certificates representing the number of Common Units to which each of them is
entitled on conversion of their interests and will execute and deliver to Xxxx
the Option Agreement to evidence the Option and (iii) Enron will execute and
deliver to EOTT the Backup Option (as defined below). The date on which the
Closing occurs is referred to herein as the "Closing Date."
1.2 Backup Option. Enron agrees that, on the Closing Date, Enron will
grant to EOTT an option (the "Backup Option") to purchase 1,100,000 Common
Units, at an exercise price of $21.10 per Common Unit, which Option shall be
evidenced by, and the terms and conditions of which shall be governed by, an
Option Agreement in the form attached as Exhibit B to this Agreement.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Representations, Warranties and Covenants of EOTT and the General
Partner. EOTT and the General Partner hereby represent and warrant to and
covenant with the other parties to this Agreement that:
(a) each of them is duly organized, validly existing and in
good standing under the laws of the State of Delaware with partnership or
corporate power and authority to enter into this Agreement, to perform its
respective obligations hereunder and to conduct its business as conducted and
proposed to be conducted; each of EOTT Energy Finance Corp., EOTT Energy General
Partner, L.L.C., EOTT Energy Operating Limited Partnership, EOTT Energy Pipeline
Limited Partnership, EOTT Energy Canada Limited Partnership and EOTT Energy
Liquids, L.P. (collectively, the "Subsidiaries") is duly organized, validly
existing and in good standing under the laws of the State of Delaware with
partnership, corporate or limited liability company power and authority to
conduct its business as conducted and proposed to be conducted; the Subsidiaries
are the only subsidiaries of EOTT;
(b) the execution and delivery of this Agreement by each of
EOTT and the General Partner and the performance by each of them of the
transactions contemplated hereby have been duly and validly approved and
authorized by all necessary partnership or corporate action on the part of EOTT
and the General Partner, and this Agreement is the legal, valid and binding
obligation of each of EOTT and the General Partner, enforceable against each of
them in accordance with its terms, subject,
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as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general application affecting creditor's rights generally;
(c) provided that Unitholder Approval is obtained, neither the
execution or the delivery of this Agreement by EOTT or the General Partner nor
the consummation of the transactions contemplated hereby will (i) conflict with
or result in a breach, default or violation of the partnership agreement or the
organizational documents of EOTT, of the General Partner or of any Subsidiary,
(ii) conflict with or result in a breach, default or violation of any legal
requirement, including the requirements of the New York Stock Exchange (the
"NYSE"), or any agreement, document, instrument, judgment, decree, order,
governmental permit, certificate or license to which EOTT, the General Partner
or any Subsidiary is a party or to which any of them is subject, (iii) except
for filings required by the Commission, require EOTT, the General Partner or any
Subsidiary to obtain or make any waiver, consent, action, approval, clearance or
authorization of, or registration, declaration or filing with, any governmental
entity, or (iv) require EOTT, the General Partner or any Subsidiary to obtain
the consent of or give notice to any private nongovernmental third party not
already obtained or given, except for notices that may be required following
receipt of Unitholder Approval;
(d) EOTT has received a fairness opinion meeting the
requirements of Section 5.10 of the First Supplemental Indenture, dated as of
October 1, 1999, among EOTT, EOTT Energy Finance Corp., EOTT Energy Operating
Limited Partnership, EOTT Energy Pipeline Limited Partnership, EOTT Energy
Canada Limited Partnership and The Bank of New York;
(e) the vote of holders of Common Units or Subordinated Units
required to approve the Amendment is the affirmative vote of the holders of at
least two-thirds of the Outstanding Common Units and the holders of at least
two-thirds of the Outstanding Subordinated Units, voting as separate classes
("Unitholder Approval"); except for actions specified by this Agreement, no
other action on the part of the General Partner, EOTT or any of the Subsidiaries
is necessary to authorize and effect the transactions contemplated by this
Agreement;
(f) neither EOTT nor any of its Affiliates has knowingly
withheld material factual information from, or knowingly provided materially
false or misleading factual information to, the other parties hereto regarding
the transactions contemplated by this Agreement or the future plans of EOTT;
(g) the 900,000 Common Units to be issued to Xxxx, the
3,150,000 Common Units to be issued to the General Partner and the 219,815
Common Units to be issued to Enron pursuant to the Amendment will be, upon
effectiveness of the Amendment, validly issued, fully paid (except as provided
in Section 17-607 of the Delaware Revised Uniform Limited Partnership Act) and
non-assessable Common Units; the Option will, upon effectiveness of the
Amendment, be a validly issued and binding obligation of EOTT; and all Common
Units to be issued to Xxxx upon exercise of the Option will be, upon exercise
thereof and payment of the consideration provided for
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therein, validly issued, fully paid (except as provided in Section 17-607 of the
Delaware Revised Uniform Limited Partnership Act) and non-assessable Common
Units;
(h) EOTT will, as soon as practicable following the execution
of this Agreement, prepare and file with the Commission a proxy statement and
other proxy material (collectively, with any amendments thereto and any
documents incorporated by reference therein, the "Proxy Statement"), in
compliance in all material respects with the requirements of the Commission
under the Securities Exchange Act of 1934 (the "Exchange Act"), relating to a
special meeting of Limited Partners (the "Special Meeting," which term shall
include any adjournments thereof) to be held pursuant to Section 15.4 of the
Partnership Agreement for the purpose of voting on the Amendment, and such
matter shall be the only matter that the Limited Partners will be requested to
vote upon at the Special Meeting, other than procedural matters; upon
satisfaction of applicable Commission requirements, EOTT will mail to Record
Holders a Notice of Special Meeting and will hold the Special Meeting as soon as
practicable thereafter to vote upon the Amendment; the Proxy Statement will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; the consolidated financial statements of EOTT to be incorporated by
reference into the Proxy Statement, including any amendments thereto, will
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto;
(i) when the Special Meeting is first convened, the General
Partner will vote all Units held by it in favor of the Amendment; upon obtaining
Unitholder Approval and satisfaction or waiver of the other conditions to
Closing, the Amendment will be duly authorized and effective as an amendment to
the Partnership Agreement, effective on and as of the date Unitholder Approval
is obtained; the General Partner will recommend that Unitholders vote in favor
of the Amendment and will not change such recommendation unless in its good
faith judgment it is required by its fiduciary duty to do so; and the General
Partner will take no action to postpone or adjourn, or that would have the
effect of postponing or adjourning, the Special Meeting, except for the purpose
of soliciting additional proxies in order to obtain Unitholder Approval with
respect to the Common Units held by holders other than Enron;
(j) EOTT has filed with the Commission and the NYSE all
periodic reports and all material schedules, forms, statements and other
documents required by the Exchange Act or the rules of the NYSE to be filed by
EOTT since March 25, 1994 (collectively, and in each case including all exhibits
and schedules thereto and documents incorporated by reference therein, the
"Public Documents"); as of their respective dates, except to the extent revised
or superseded by a subsequent filing with the Commission or the NYSE, the Public
Documents complied in all material respects with the requirements of the
Securities Act, the Exchange Act or the rules and regulations of the NYSE, as
the case may be, and none of the Public Documents (including any and all
financial statements included therein) as of such dates contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were
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made, not misleading; the consolidated financial statements of EOTT included in
all Public Documents, including any amendments thereto, comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto;
(k) EOTT has furnished to Xxxx and Enron a true, correct and
complete copy of the certificate of limited partnership of EOTT and the
Partnership Agreement, together with all amendments thereto (collectively, the
"EOTT Organizational Documents"), and the EOTT Organizational Documents are in
full force and effect as of the date hereof and constitute all of the
organizational and governing documents for EOTT; there are no proceedings or
actions pending or contemplated to dissolve EOTT;
(l) as of date hereof, the total number of issued and
outstanding equity interests of EOTT consist of a 1.98% general partner interest
and limited partner interests consisting of 18,476,011 Common Units, 9,000,000
Subordinated Units and $9,318,213 of APIs; except as contemplated by the
Partnership Agreement, EOTT's other organizational documents and this Agreement,
and except for options granted under EOTT's 1994 Unit Option Plan, there are no
outstanding rights, subscriptions, calls, options, warrants, preemptive rights,
conversion rights or agreements granted or issued by or binding upon EOTT for
the purchase or acquisition (contingent or otherwise) from EOTT of any Units (as
defined in the Partnership Agreement) or any other equity securities (other than
APIs), and except as contemplated by this Agreement EOTT is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any Units or any security convertible into or exchangeable for any Units
or other interests in EOTT (other than the obligation to redeem APIs); to the
knowledge of EOTT and except as set forth in this Agreement, there is no voting
trust, agreement or arrangement among any of the beneficial holders of Units
affecting the exercise of the voting rights of such Units or that in any way
affects any Limited Partner's ability or right to freely alienate or vote such
Units;
(m) except as disclosed in the Public Documents or as
contemplated by this Agreement, since June 30, 2001, (i) neither EOTT nor any
Subsidiary has entered into any material transaction that was not entered into
in the ordinary course of its business, (ii) there has been no material adverse
change in the financial condition or performance of EOTT and the Subsidiaries
taken as a whole, (iii) there has been no damage to, destruction of or loss of
any of the properties or assets of EOTT or any Subsidiary (whether or not
covered by insurance) materially adversely affecting the financial condition or
performance of EOTT and the Subsidiaries taken as a whole, (iv) neither EOTT nor
any Subsidiary has declared or paid any distributions other than in accordance
with its organizational documents, (v) there has been no labor dispute that has
had a material adverse effect on the ability of EOTT and the Subsidiaries to
conduct their businesses, (vi) there has been no change in the contingent
obligations of EOTT or any Subsidiary by way of guaranty, endorsement,
indemnity, warranty or otherwise that has had a material adverse effect on the
financial condition of EOTT and the Subsidiaries taken as a whole and (vii) no
event has occurred that might reasonably be expected to have a material adverse
effect on the financial condition or performance of EOTT and the
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Subsidiaries taken as a whole or the ability of EOTT and the Subsidiaries to
conduct their businesses as they are currently being conducted;
(n) there are no civil, criminal, administrative, arbitration
or other proceedings or governmental investigations pending or, to the knowledge
of the General Partner, threatened, against EOTT or any of its Affiliates that
seek to restrain or enjoin the transactions contemplated by this Agreement;
(o) prior to the receipt of Unitholder Approval, EOTT will
cause the Common Units to be issued pursuant to this Agreement, including the
Common Units to be issued on exercise of the Option, to be listed for trading on
the NYSE, subject to official notice of issuance; and
(p) no Person other than other parties to this Agreement has
solicited the General Partner to accept the exchange of the EOTT Energy Corp.
Interest for other securities of EOTT as provided in this Agreement, and no
remuneration has been or will be paid or given directly or indirectly for
soliciting the exchange contemplated by this Agreement.
2.2 Representations, Warranties and Covenants of Enron. Enron hereby
represents and warrants to and covenants with the other parties to this
Agreement that:
(a) it is duly organized, valid existing and in good standing
as a corporation under the state laws of the State of Oregon with corporate
power and authority to enter into this Agreement and to perform its obligations
hereunder;
(b) the execution and delivery of this Agreement and the
performance by it of the transactions contemplated hereby have been duly and
validly approved and authorized by all necessary corporate action on the part of
Enron, and this Agreement constitutes the legal, valid and binding obligation of
Enron, enforceable against it in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
application affecting creditor's rights generally;
(c) the execution and delivery of the Backup Option and the
performance by it of the transactions contemplated thereby have been duly and
validly authorized by all necessary corporate action on the part of Enron, and,
when executed by Enron, the Backup Option will constitute the legal, valid and
binding obligation of Enron, enforceable against Enron in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general application affecting creditor's rights generally; the
Common Units to be delivered by Enron upon exercise of the Backup Option (and
payment of the exercise price thereof) are validly issued, fully paid (except as
provided in Section 17-607 of the Delaware Revised Uniform Limited Partnership
Act) and non-assessable Common Units and will be delivered free and clear of any
liens, claims or encumbrances;
(d) neither the execution or the delivery of this Agreement or
the Backup Option by Enron nor the consummation of the transactions contemplated
hereby or thereby will (i) conflict with or result in a breach, default or
violation of the
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organizational documents of Enron, (ii) conflict with or result in a breach,
default or violation of any legal requirement or any agreement, document,
instrument, judgment, decree, order, governmental permit, certificate or license
to which Enron is a party or to which it is subject, (iii) except for filings
required by the Commission, require Enron to obtain or make any waiver, consent,
action, approval, clearance or authorization of, or registration, declaration or
filing with, any governmental entity, or (iv) require Enron to obtain the
consent of or give notice to any private nongovernmental third party not already
obtained or given, except for notices that may be required following receipt of
Unitholder Approval;
(e) it has received and carefully reviewed the provisions of
the Partnership Agreement and the Public Documents and has had adequate
opportunity to ask questions of and receive answers from the officers and
directors of the General Partner concerning the business, financial condition,
properties, operations and prospects of EOTT, and all such questions have been
answered to its full satisfaction; it is acquiring the Common Units for its own
account and not with a present view to or in connection with the distribution
thereof in violation of the Securities Act; it understands that the Common Units
to be issued to it will, upon issuance thereof by EOTT, be subject to the terms,
conditions and restrictions of the Partnership Agreement and may not be sold or
transferred in violation of applicable federal or state securities laws;
(f) when the Special Meeting is first convened, it will vote
all Units held by it in favor of the Amendment; and it will take no action to
postpone or adjourn the Special Meeting, except for the purpose of permitting
the General Partner to solicit additional proxies in order to obtain Unitholder
Approval with respect to the Common Units held by holders other than Enron;
(g) Enron hereby gives its prior written consent to the
Amendment, as required by Section 11.11 of the Amended and Restated Credit
Agreement, dated as of December 1, 1998, between EOTT Energy Operating Limited
Partnership, as borrower, and Enron, as lender; and
(h) no Person other than other parties to this Agreement has
solicited Enron to accept the exchange of the Enron Interest for other
securities of EOTT as provided in this Agreement.
2.3 Representations, Warranties and Covenants of Xxxx. Xxxx hereby
represents and warrants to and covenants with the other parties to this
Agreement that:
(a) it is duly organized, validly existing and in good
standing as a limited partnership under the State of Delaware, with partnership
power and authority to enter into this Agreement and to perform its obligations
hereunder;
(b) the execution and delivery of this Agreement and the
performance by it of the transactions contemplated hereby have been duly and
validly approved and authorized by all necessary partnership action on the part
of Xxxx, and this Agreement is the legal, valid and binding agreement of Xxxx,
enforceable against it in accordance with
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its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general application affecting creditor's rights generally;
(c) neither the execution or the delivery of this Agreement by
Xxxx nor the consummation of the transactions contemplated hereby will (i)
conflict with or result in a breach, default or violation of the partnership
agreement of Xxxx, (ii) conflict with or result in a breach, default or
violation of any legal requirement or any agreement, document, instrument,
judgment, decree, order, governmental permit, certificate or license to which
Xxxx is a party or to which it is subject, (iii) except for filings required by
the Commission, require Xxxx to obtain or make any waiver, consent, action,
approval, clearance or authorization of, or registration, declaration or filing
with, any governmental entity, or (iv) require Xxxx to obtain the consent of or
give notice to any private nongovernmental third party not already obtained or
given;
(d) at the Special Meeting it will vote all Units held by it
in favor of the Amendment;
(e) it has carefully reviewed the provisions of the
Partnership Agreement and the Public Documents and has had adequate opportunity
to ask questions of and receive answers from the officers and directors of the
General Partner concerning the business, financial condition, properties,
operations and prospects of EOTT, and all such questions have been answered to
its full satisfaction; it is acquiring the Common Units and the Option for its
own account; it understands that the 900,000 Common Units to be issued to it
upon receipt of Unitholder Approval and upon exercise of the Option will, upon
issuance thereof by EOTT, be subject to the terms, conditions and restrictions
of the Partnership Agreement and may not be sold or transferred in violation of
applicable federal or state securities laws; and
(f) no Person other than other parties to this Agreement has
solicited Xxxx to accept the exchange of the Xxxx Interest for other securities
of EOTT as provided in this Agreement.
ARTICLE III.
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE PARTIES TO CLOSE
3.1 Conditions to Obligations of Each Party. The obligations of each of
EOTT, the General Partner, Enron and Xxxx to consummate the transactions
contemplated by this Agreement to be consummated on the Closing Date are subject
to the satisfaction of the following conditions:
(a) Unitholder Approval shall have been obtained;
(b) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of any of
the transactions contemplated hereby;
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(c) the representations and warranties of each other party to
this Agreement contained in this Agreement made at the time of the execution of
this Agreement shall not, as of the Closing Date, be untrue or incorrect in any
material respect (provided that the issuance by EOTT of additional indebtedness
to refinance existing indebtedness or the sale of Common Units in compliance
with Section 4.1 shall not be deemed to be such a breach);
(d) on or prior to the Closing Date, each other party to this
Agreement shall have performed in all material respects the covenants and
agreements of each such other party required to be performed on or prior to the
Closing Date; and
(e) each party shall have received from each other party a
certificate, dated the Closing Date and validly executed on behalf of such other
party, to the effect that the conditions in paragraphs (c) and (d) with respect
to such other party have been satisfied.
Any party may waive the failure of EOTT, the General Partner and/or Enron to
satisfy the conditions in paragraphs (c), (d) or (e) above as such paragraphs
apply to EOTT, the General Partner and/or Enron; provided, however, that such
conditions shall be deemed satisfied with respect to EOTT, the General Partner
and/or Enron if Xxxx waives such failure. Any party other than Xxxx may waive
the failure of Xxxx to satisfy the conditions in paragraphs (c), (d) or (e)
above as such paragraphs apply to Xxxx (provided that neither Enron, EOTT or the
General Partner will waive any such failure without the written consent of the
other), and a waiver by any of such parties shall be deemed a satisfaction of
such conditions.
ARTICLE IV.
REGISTRATION RIGHTS
4.1 Purchase of Common Units Issued on Conversion of Xxxx Interest in
the Event of a Sale by EOTT Prior to the Unitholder Vote or Effectiveness of
Resale Registration Statement. EOTT agrees that, if it proposes to sell Common
Units for cash prior to the date of the Special Meeting or prior to the date the
registration statement referred to in Section 4.2 is effective, it will notify
Xxxx of its proposed sale at least three business days, but not more than 10
days, prior to the date of the proposed sale. If Xxxx desires to sell to EOTT
all or a portion of the Common Units to be issued to Xxxx on conversion of the
Xxxx Interest pursuant to the Amendment other than Common Units issuable upon
exercise of the Option (the "Amendment Common Units") with a portion of the
proceeds from such sale, then Xxxx shall make a written request to EOTT, within
two business days after receipt of EOTT's notice, specifying the number of
Amendment Common Units it desires to sell to EOTT and the minimum price per
Amendment Common Unit for which it would be willing to sell such Amendment
Common Units (the "Minimum Price"). In the event that the sale price per Common
Unit (after deducting underwriting discounts and commissions per Common Unit) is
equal to or greater than the Minimum Price, EOTT will purchase the Amendment
Common Units specified in
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Xxxx'x notice for cash in immediately available funds at a purchase price per
Common Unit equal to the sale price per Common Unit, less underwriting discounts
and commissions per Common Unit, received by EOTT with respect to its sale of
Common Units. Such purchase by EOTT from Xxxx will occur on the later of the
date of closing of the sale of Common Units by EOTT and the Closing Date.
Nothing herein shall require EOTT to proceed with its sale of Common Units if it
determines that it is in its best interest not to do so.
4.2 Registration Statement Relating to the Xxxx Interest. EOTT agrees
to prepare and file with the Commission (as promptly as practical following the
execution of this Agreement), and use reasonable efforts to cause to become
effective prior to the date of the Special Meeting, a shelf registration
statement under the Securities Act registering the offering and sale of the Xxxx
Interest (including any securities into which the Xxxx Interest may be converted
upon receipt of Unitholder Approval and Common Units issuable upon exercise of
the Option) by Xxxx or any Affiliate of Xxxx (a "Holder"). The plan of
distribution in such registration statement shall cover offerings and sales (a)
in one or more transactions on the NYSE, (b) in underwritten public offerings,
(c) in block trades (which may involve crosses) in which the broker or dealer
will attempt to sell the common units as agent but may position and resell a
portion of the block as principal to facilitate the transaction, (d) in
purchases by a broker or dealer as principal and resale by such broker or dealer
for its own account pursuant to the prospectus, (e) in other secondary
distributions in accordance with the rules of the New York Stock Exchange, (f)
in ordinary brokerage transactions and transactions in which the broker solicits
purchasers, (g) in privately negotiated transactions and (h) in any combination
of the foregoing, and such transactions may take place at prevailing market
prices, at negotiated prices or at fixed prices. In connection with any
registration pursuant to this Section 4.2, EOTT shall promptly prepare and file
such documents as may be necessary to register or qualify the securities subject
to such registration under the securities laws of such states as the Holder
shall reasonably request and shall do any and all other acts and things that may
reasonably be necessary or advisable to enable the Holder to consummate a public
sale of such Common Units in such states in accordance with the plan of
distribution in such registration statement; provided, however, that no such
qualification shall be required in any jurisdiction where, as a result thereof,
EOTT would be required to register as a broker or dealer or would become subject
to general service of process or to taxation or qualification to do business as
a foreign corporation or partnership doing business in such jurisdiction.
Following the effectiveness of such registration statement, EOTT shall use
reasonable efforts to cause such registration statement to remain effective and
to file such amendments and supplements to such registration statement and any
prospectus included therein as may be necessary to permit such sales from time
to time; provided that EOTT's obligations under this Section 4.2 shall cease on
the second anniversary of the Closing Date.
4.3 Piggy Back Rights.
(a) If EOTT shall propose to effect an underwritten public
offering of Common Units for cash pursuant to an underwriting agreement that
will be executed and delivered on or following the effective date of the
registration statement referred to in
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Section 4.2 and on or after the date of the Special Meeting, EOTT shall deliver
written notice (the "EOTT Notice") of such fact to the Holder at least ten (10)
days prior to the date it desires to enter into an underwriting agreement in
respect of such offering, specifying the number of Common Units that EOTT
reasonably expects to offer and sell in such offering. Upon receipt of the EOTT
Notice, the Holder shall have a period of five (5) days thereafter to notify
EOTT that it desires to include in such offering the Amendment Common Units or
Common Units acquired upon exercise of the Option (the "Option Common Units"),
or both, or such portion thereof as shall be specified in the Holder's notice
(the "Holder's Notice"). Upon receipt of any such request from the Holder, EOTT
shall include such Common Units in its offering; provided, however, that EOTT
shall not be obligated to include that portion of the Common Units held by the
Holder in such offering if and to the extent that the managing underwriters of
such offering advise EOTT and the Holder in writing that in its good faith
opinion the inclusion of that portion of the Holder's Common Units would
adversely and materially affect the success of the offering.
(b) Notwithstanding the last sentence of subsection (a) above,
if EOTT proposes to effect an underwritten public offering of Common Units that
would be completed on or prior to the Xxxx Lock-up Expiration Date as to which
one or more Holders has notified EOTT that it desires to include Common Units in
the manner specified above and the managing underwriters of such offering advise
EOTT and the Holder (or Holders) in writing that, in their good faith opinion
the inclusion of all or some of the Common Units of the Holder (or Holders)
requested to be included in such offering pursuant to the Holder's Notices would
adversely and materially affect the success of the offering, then the number of
Common Units to be offered by EOTT, and the Holder or Holders in the aggregate
shall be reduced to a number that, based on the good faith opinion of the
managing underwriters of such offering given to EOTT and the Holder (or Holders)
in writing, would not adversely and materially affect the success of the
offering (the "Initial Offering Maximum Number of Units"), and the Initial
Offering Maximum Number of Common Units shall be allocated among EOTT and the
Holder (or Holders) in the following order of priority: (i) first, EOTT shall be
entitled to sell up to 2,650,000 Common Units to the extent such quantity of
Common Units does not exceed the Initial Offering Maximum Number of Units, (ii)
second, the Holder (along with any other Holders) shall collectively be entitled
to sell up to 350,000 Common Units to the extent such quantity, when added to
the quantity of Common Units to be sold pursuant to the allocation specified in
clause (i) above, does not exceed the Initial Offering Maximum Number of Units
and (iii) third, EOTT, on one hand, and the Holder or Holders, on the other
hand, shall be entitled to sell Common Units up to the difference between the
Initial Offering Maximum Number of Units and the number of Common Units to be
sold pursuant to the allocations specified in clauses (i) and (ii) above pro
rata based upon, with respect to EOTT, on one hand, the total number of Common
Units it initially proposed that it offer and sell in such offering as specified
in the EOTT Notice less the total number of Common Units to be sold pursuant to
the allocation in clause (i) above and, with respect to the Holder or Holders,
on the other hand, the total number of Common Units it or they initially
proposed to offer and sell in such offering as specified in their Holders'
Notices less the number of Common Units to be sold by it or them pursuant to the
allocation in clause (ii) above.
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(c) Notwithstanding the last sentence of subsection (a) above,
in the event that (i) EOTT shall propose to effect an underwritten public
offering of Common Units for cash pursuant to an underwriting agreement that
will be executed and delivered after the completion of the first public offering
subject to this Section 4.3 but on or prior to the Xxxx Lock-up Expiration Date
(the "Subsequent Offering"), (ii) the Holder or Holders who proposed to sell
Common Units in such first offering (the "Initial Offering") did not sell all of
the Common Units it or they proposed to sell in the Initial Offering as
specified in their Holders' Notices relating to the Initial Offering, (iii) such
Holder or Holders shall specify in their Holders' Notice with respect to the
Subsequent Offering that it or they desire to include Common Units in such
Subsequent Offering and (iv) the managing underwriters of the Subsequent
Offering provide written advice to EOTT and the Holder (or Holders) that have
given a Holder's Notice with respect to the Subsequent Offering in writing that,
in the good faith opinion of the managing underwriters the inclusion of all or
some of the Common Units of such Holder (or Holders) would adversely and
materially affect the success of the offering, then the number of Common Units
to be offered by EOTT and the Holder (or Holders) shall be reduced to a number
that, based on the good faith opinion of the managing underwriters of such
offering given to EOTT and such Holder (or Holders) in writing, would not
adversely and materially affect the success of the offering (the "Subsequent
Offering Maximum Number of Units"), and the Subsequent Offering Maximum Number
of Units shall be allocated among EOTT and the Holder (or Holders) in the
following order of priority: (i) first, EOTT shall be entitled to sell up to
2,650,000 Common Units less the number of Common Units it sold pursuant to
clause (i) of subsection (b) above, (ii) second, the Holder or Holders shall
collectively be entitled to sell up to 350,000 Common Units less the number of
Common Units it or they sold pursuant to clause (ii) of subsection (b) above and
(iii) third, the number of Common Units equal to the difference between the
Subsequent Offering Maximum Number of Units and the number of Common Units to be
sold pursuant to clauses (i) and (ii) of this sentence shall be allocated on a
pro rata basis based upon, with respect to EOTT, on the one hand, the total
number of Common Units it initially proposed to sell in the Subsequent Offering
as specified in the EOTT Notice relating to such offering less the total number
of Common Units to be sold by it pursuant to the allocation specified in clause
(i) of this sentence and, with respect to the Holder or Holders, on the other
hand, the total number of Common Units it or they initially proposed to sell in
the Subsequent Offering as specified in their Holders' Notices relating to such
offering less the total number of Common Units to be sold by it or them pursuant
to the allocation specified in clause (ii) of this sentence.
(d) In connection with any offering and sale subject to this
Section 4.3 that occurs on or prior to the Xxxx Lock-up Expiration Date, in the
event less than all of the Common Units that the Holder desires to be included
in such offering are not included as a result of the advice of the managing
underwriter as provided in the preceding sentence, there may be no Common Units
sold by other holders of Common Units in such offering. If any Common Units that
the Holder desires to be included in any offering are excluded, the Holder shall
be entitled to have the excluded shares subject to the Underwriters'
over-allotment option, subject to the customary limits on the size of the
over-allotment option, with such shares to have the first priority with respect
to purchase by the underwriters. In connection with any offering subject to this
Section 4.3
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that occurs after the Xxxx Lock-up Expiration Date, any reduction in Common
Units sold by selling holders of Common Units shall be pro rata based on the
number of Common Units that each desired to be included in the offering.
(e) All of the costs and expenses incurred by EOTT in
connection with any such offering (other than the underwriting discounts and
commissions applicable to the Holder's Common Units sold) shall be paid by EOTT,
without reimbursement by the Holder. Nothing herein shall require EOTT to
proceed with such offering if it determines that it is in its best interest not
to do so. Each Holder who, at the time of the pricing of an offering, elects to
sell Common Units in such offering pursuant to this Section 4.3 shall enter into
an underwriting agreement with the managing underwriters for such offering, in
usual and customary form reasonably acceptable to the Holders, provided that (i)
the Holders' aggregate indemnification and contribution liability thereunder
shall not exceed their net proceeds therefrom and (ii) any lock-up agreement
pursuant to such underwriting agreement shall be subject to the time limitations
set forth in Section 4.4. EOTT's obligations under this Section 4.3 shall cease
on the second anniversary of the Closing Date.
4.4 Lockup Agreement. Xxxx agrees that it will not, and that any Holder
owning all or any portion of the Subordinated Units now owned by Xxxx, the
Amendment Common Units or any Option Common Units will not, sell or otherwise
transfer or dispose of (other than to donees or Affiliates who agree to be
similarly bound) any such Units held by it until the earlier of (a) 120 days
following the Closing Date and (b) 90 days (or such earlier date as may be
allowed by the managing underwriter or underwriters of such offering) following
the execution and delivery of an underwriting agreement for the first
underwritten public offering of Common Units by EOTT following the date of this
Agreement (the earlier date provided for in clauses (a) and (b) is referred to
herein as the "Xxxx Lock-up Expiration Date") provided that such restriction
shall not apply to (i) Common Units being sold to EOTT pursuant to Section 4.1
or being sold in an offering made pursuant to Section 4.3 or (ii) Common Units
purchased by a Holder in any such offering or on the open market after
completion of such offering. With respect to any underwritten public offering
made pursuant to Section 4.1 or Section 4.3, each Holder will enter into a
lock-up agreement with the underwriters in customary form as specified by the
managing underwriter or underwriters of such offering; provided, however, that
(i) with respect to any public offering for which the underwriting agreement is
executed and delivered on or before January 31, 2002, the lock-up period will
not extend beyond the Xxxx Lock-up Expiration Date and (ii) such obligation
shall not apply to any such offering for which an underwriting agreement is
entered into after January 31, 2002 unless a Holder sells Common Units in such
offering, in which case all Holders shall enter into a lockup agreement as
specified above not to exceed the shorter of (x) the lock-up period to which
EOTT will be obligated under such underwriting agreement and (y) 90 days from
the date of the execution and delivery of the underwriting agreement relating
thereto. Enron and the General Partner agree that neither of them nor any of
their Affiliates will sell or otherwise transfer or dispose of (other than to
donees or Affiliates who agree to be similarly bound) any Units held by any of
them until the earlier of (X) 180 days following the Closing Date and (Y) the
date on which the Option has been fully exercised and neither Xxxx nor any
Holder own any
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Amendment Common Units or Option Common Units. In addition, Enron and the
General Partner agree to enter into, and to cause any such Affiliate owning
Common Units to enter into, a lockup agreement with the underwriters in
customary form as specified by the managing underwriter or underwriters of any
offering of Common Units following the date of this Agreement covering a period
not in excess of the shortest of (i) the lock-up period to which EOTT will be
obligated under the underwriting agreement relating to such offering, (ii) 90
days, and (iii) the shortest lock-up period specified with respect to any Holder
participating in such offering.
4.5 Costs and Expenses of Registration and Offerings. Except as
otherwise provided herein, all of the costs and expenses incurred by EOTT in
connection with any registration statement and any offering pursuant to such
registration statement shall be paid by EOTT, without reimbursement by the
Holder. In connection with any underwritten public offering pursuant to the
registration statement referred to in Section 4.2, EOTT agrees to enter into an
underwriting agreement containing customary terms and conditions, but only if
the managing underwriters in such offering are satisfactory to EOTT.
Notwithstanding the foregoing, EOTT shall not be required to bear the costs and
expenses of more than two underwritten public offerings (exclusive of offerings
referred to in Section 4.3) on behalf of Persons holding registration rights
pursuant to this Agreement. In the event a Holder requests that EOTT enter into
any underwriting agreement for any additional underwritten public offering, the
Holder shall bear the costs and expenses of, and shall reimburse EOTT for its
out of pocket costs and expenses in connection with the plan of distribution,
including the negotiation and execution of the underwriting agreement for any
such offering, the furnishing of opinions of counsel and accountants' comfort
letters, the costs of preparation, printing, distribution and filing of any
preliminary prospectus supplement or prospectus supplement that may be required
to be filed with the Commission and other expenses in connection with the
underwriting of such offering.
4.6 Indemnification. In connection with any underwritten offering
referred to in this Article IV, EOTT shall provide indemnification,
representations, covenants, opinions and other assurances to the underwriters in
form and substance reasonably satisfactory to such underwriters and customary
for underwritten public offerings. Further, in addition EOTT shall, to the
fullest extent permitted by law, indemnify and hold harmless the Holder, its
officers, directors and each Person or entity who controls the Holder (within
the meaning of the Securities Act) and any agent thereof (collectively,
"Indemnified Persons") against any losses, claims, demands, actions, causes of
action, assessments, damages, liabilities (joint or several), costs and expenses
(including, without limitation, interest, penalties and reasonable attorneys'
fees and disbursements), imposed upon or incurred by the Indemnified Persons,
directly or indirectly, under the Securities Act or otherwise (hereinafter
referred to in this Section 4.6 as a "claim" and in the plural as "claims"),
based upon, arising out of, or resulting from any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which any Common Units were registered under the Securities Act or any
state securities or Blue Sky laws, in any preliminary prospectus (if used prior
to the effective date of such registration statement), or in any summary or
final prospectus or in any amendment or supplement thereto (if used during the
period EOTT is required to keep the registration
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statement current), or arising out of, based upon or resulting from the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements made therein not misleading;
provided, however, that EOTT shall not be liable to any Indemnified Person to
the extent that any such claim arises out of, is based upon or results from an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, such preliminary, summary or final
prospectus or such amendment or supplement, in reliance upon and in conformity
with written information furnished to EOTT by or on behalf of such Indemnified
Person specifically for use therein.
4.7 Information. Any request to include a Holder's Common Units in any
underwritten offering pursuant to Section 4.3 shall (i) specify the Common Units
intended to be offered and sold by the Holder in such offering, (ii) contain the
undertaking of such Holder to provide all such information and materials and
take all action as may be required in order to permit EOTT to comply with all
applicable requirements in connection with the offering of such Common Units and
(iii) contain an agreement by the Holder to reimburse EOTT for its out of pocket
costs and expenses in connection with the plan of distribution if required by
this Article IV. In connection with any registered public offering of Common
Units held by the Holder contemplated by this Article IV, EOTT agrees to furnish
the Holder with as many copies of the applicable prospectus as the Holder may
reasonably request (provided the Holder reimburses EOTT for the cost thereof if
required by this Article IV).
ARTICLE V.
MISCELLANEOUS
5.1 Further Assurances. From time to time after the date hereof, and
without any further consideration, each of the parties to this Agreement shall
execute, acknowledge and deliver all such additional instruments, notices and
other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate to more fully and
effectively carry out the purposes and intent of this Agreement.
5.2 Headings; References; Interpretation. All Article and Section
headings in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any of the provisions hereof.
The words "hereof," "herein" and "hereunder" and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole, including
without limitation, all Exhibits attached hereto, and not to any particular
provision of this Agreement. All references herein to Articles, Sections, and
Exhibits shall, unless the context requires a different construction, be deemed
to be references to the Articles, Sections and Exhibits of this Agreement,
respectively, and all such Exhibits attached hereto are hereby incorporated
herein and made a part hereof for all purposes. All personal pronouns used in
this Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders, and the singular shall include the plural and vice
versa. The use herein of the word
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"including" following any general statement, term or matter shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not non-limiting language (such as "without limitation,"
"but not limited to," or words of similar import) is used with reference
thereto.
5.3 Successors and Assigns. The Agreement shall be binding upon and
inure to the benefit of the parties signatory hereto and their respective
successors and assigns.
5.4 No Third Party Rights. The provisions of this Agreement are
intended to bind the parties signatory hereto as to each other and are not
intended to and do not create rights in any other Person or confer upon any
other Person any benefits, rights or remedies (other than the rights conferred
upon Holders in Article IV) and no Person is or is intended to be a third party
beneficiary of any of the provisions of this Agreement (other than Holders with
respect to Article IV).
5.5 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
5.6 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware applicable to contracts
made and to be performed wholly within such state.
5.7 Severability. If any of the provisions of this Agreement are held
by any court of competent jurisdiction to contravene, or to be invalid under,
the laws of any political body having jurisdiction over the subject matter
hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid, and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Agreement at the time of
execution of this Agreement.
5.8 Amendment, Modification or Waiver. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto. Except as provided in Section 3.1, no waiver of any provision of this
Agreement shall be effective unless signed in writing by all parties to this
Agreement, provided that Xxxx may, at any time prior to Unitholder Approval,
waive its right to receive the Option by giving written notice to the other
parties hereto, in which case Enron shall have no obligation to grant the Backup
Option to EOTT.
5.9 Integration. This Agreement supersedes all previous understandings
or agreements among the parties, whether oral or written, with respect to its
subject matter. This document is an integrated agreement that contains the
entire understanding of the parties. No understanding, representation, promise
or agreement, whether oral or written, is intended to be or shall be included in
or form part of this Agreement unless it is
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contained in a written amendment hereto executed by the parties hereto after the
date of this Agreement.
5.10 Termination. This Agreement may be terminated at the option of any
party (in which case it will be of no further force and effect) if the Closing
has not occurred prior to December 31, 2001 through no fault of the terminating
party. Enron shall have the right to elect to terminate this Agreement, which
right may be exercised at any time prior to the receipt of Unitholder Approval
by notifying the other parties hereto. Enron represents that it has no present
intention of exercising such right.
5.11 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which they are entitled at law or in equity.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
ENRON CORP.
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
------------------------------------------
Title: Managing Director,
-----------------------------------------
Corporate Development
-----------------------------------------
EOTT ENERGY CORP.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Chairman and CEO
-----------------------------------------
EOTT ENERGY PARTNERS, L.P.
By: EOTT Energy Corp., as general partner
By: /s/ Xxxx X. Xxxxx
-----------------------------------------------
Name: Xxxx X. Xxxxx
------------------------------------------
Title: President and COO
-----------------------------------------
XXXX PETROLEUM GROUP, L.P.
By: KPG/GP, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------
Title: Vice President & Chief Financial Officer
-----------------------------------------
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EXHIBIT A
AMENDMENT NO. 8 TO
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
EOTT ENERGY PARTNERS, L.P.
THIS AMENDMENT NO. 8 TO AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF EOTT ENERGY PARTNERS, L.P. (this "Amendment"), dated as of
_______________, 2001, is entered into by EOTT Energy Corp., a Delaware
corporation, as the General Partner, pursuant to authority granted to it in
Section 15.1(d) of the Amended and Restated Agreement of Limited Partnership of
EOTT Energy Partners, L.P., dated as of March 25, 1994 (as amended, the
"Partnership Agreement").
WHEREAS, the General Partner has proposed this Amendment, and the
holders of at least two-thirds of the Outstanding Common Units and the holders
of at least two-thirds of the Outstanding Subordinated Units have approved this
Amendment by a vote at a special meeting of holders of Units held on the date
hereof;
NOW, THEREFORE, the Partnership Agreement is hereby amended as follows:
1. AMENDMENT RELATING TO CONVERSION OF SUBORDINATED UNITS. Section
5.7(c) of the Partnership Agreement is hereby amended to read as follows:
"(c) At the end of the Subordination Period, the Outstanding
Subordinated Units shall be converted as follows:
(i) the 2,000,000 Subordinated Units held by Xxxx Petroleum
Group, L.P. (or its successors and assigns) shall be converted into
900,000 Common Units and an option (the "Option") to purchase 1,100,000
Common Units, such Option to be evidenced by, and having terms and
conditions of exercise as shall be set forth in, an Option Agreement in
the form of Annex I to this Amendment, which Option Agreement shall be
executed by the General Partner on behalf of the Partnership
immediately upon execution of this Amendment; and
(ii) the 7,000,000 Subordinated Units held by the General
Partner (or its successors and assigns) shall be converted into
3,150,000 Common Units.
In connection with such conversion, the General Partner shall take whatever
reasonable steps are required to provide economic uniformity to the Common
Units, including the application of Sections 4.4(c) and 5.1(d)(x); provided,
however, that no such steps may be taken that would have a material adverse
effect on the Limited Partners holding Common Units or the Record Holders of
any class of Units."
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2. AMENDMENT RELATING TO CONVERSION OF APIS. Section 5.8 of the
Partnership Agreement is hereby amended by adding the following at the end
thereof: "At the end of the Subordination Period, the $9,318,213 APIs
outstanding as of September 1, 2001 shall be converted into 219,815 Common
Units. In connection with such conversion, the General Partner shall take
whatever reasonable steps are required to provide economic uniformity to the
Common Units, including the application of Sections 4.4(c) and 5.1(d)(x);
provided, however, that no such steps may be taken that would have a material
adverse effect on the Limited Partners holding Common Units or the Record
Holders of any class of Units."
3. AMENDMENT RELATING TO SUBORDINATION PERIOD DEFINITION. The
definition of Subordination Period in Article II of the Partnership Agreement is
hereby amended to read as follows:
"SUBORDINATION PERIOD" means the period commencing on the Closing Date
and ending on __________, 2001, the date of execution of Amendment No.
8 to this Agreement.
4. MISCELLANEOUS. Capitalized terms used but not defined herein are
used as defined in the Partnership Agreement. This Amendment will be governed by
and construed in accordance with the laws of the State of Delaware.
[signature page follows]
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IN WITNESS WHEREOF, this Amendment has been executed as of the date
first written above.
GENERAL PARTNER:
EOTT ENERGY CORP.
By:
-------------------------------------
Xxxx X. Xxxxx
President and Chief Operating Officer
LIMITED PARTNERS:
All Limited Partners now and hereafter admitted as
limited partners of the Partnership, pursuant to
Powers of Attorney now and hereafter executed in
favor of, and granted and delivered to, the General
Partner.
By: EOTT Energy Corp.,
General Partner, as attorney-in-fact for all
Limited Partners pursuant to the Powers of
Attorney granted pursuant to Section 1.4.
By:
-----------------------------------------
Xxxx X. Xxxxx
President and Chief Operating Officer
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ANNEX I
OPTION AGREEMENT
This Option Agreement (this "Agreement") is made and entered into as of
__________, 2001 (the Effective Date"), by and between EOTT Energy Partners,
L.P., a Delaware limited partnership ("EOTT") and Xxxx Petroleum Group, L.P., a
Delaware limited partnership ("Xxxx"). Any capitalized term used in this
Agreement and not defined will have the meaning assigned to it in the Amended
and Restated Agreement of Limited Partnership (as amended to date, the
"Partnership Agreement") of EOTT.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which EOTT acknowledges and confesses:
1. The Option. This instrument evidences an option (the "Option")
granted to Xxxx to purchase 1,100,000 Common Units (the "Option Common Units")
from EOTT. The Option is issued pursuant to Amendment No. 8 to the Amended and
Restated Agreement of Limited Partnership of EOTT Energy Partners, L.P.
2. Option Exercise Price. The Option shall be exercisable, in whole or
in part in increments of 100,000 shares, at any time and from time to time
during the Option Term (as defined herein) by means of payment by Xxxx or its
successor holder of the Option (the "Option Holder") of $21.10 in cash for each
Common Unit issued upon exercise of the Option (the "Exercise Price"), payable
to an account designated by EOTT by wire transfer in immediately available
funds; provided that the failure or refusal of EOTT to designate an account
shall not preclude Xxxx from exercising the Option, in whole or in part.
3. Option Term. The right to exercise the Option shall commence on the
date hereof, and such right to exercise shall continue until 11:59 p.m. on the
first anniversary of the date hereof. The period during which the Option is
exercisable is referred to herein as the "Option Term."
4. Option Exercise. The Option may be exercised, in whole or in part in
increments of 100,000 shares, at any time by giving written notice to EOTT
during the Option Term, which notice shall:
(a) specify that the Option Holder has exercised the Option;
(b) specify the number of Common Units with respect to which the Option
has been exercised (the "Option Shares");
(c) set forth the binding agreement of the Option Holder to pay, on the
third business day following the date of the notice (the "Option Closing Date"),
the Exercise Price with respect to each Common Unit for which the Option has
been exercised; and
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(d) at the closing of a purchase and sale pursuant to the Option to be
held on the Option Closing Date (an "Option Closing"), EOTT shall deliver to
Xxxx a certificate or certificates representing the Option Shares to be
purchased at the Option Closing, which Option Shares shall be free and clear of
all liens, claims, charges and encumbrances of any kind whatsoever.
5. Adjustments.
(a) In the event EOTT (i) pays a dividend to holders of Common Units in
Common Units or makes a distribution to holders of Common Units in Common Units;
(ii) subdivides its outstanding Common Units into a larger number of Common
Units; (iii) combines its outstanding Common Units into a smaller number of
Common Units; or (iv) issues by reclassification of its Common Units other
securities of EOTT, the number and class of securities purchasable upon exercise
of the Option immediately prior thereto shall be adjusted so that the Option
Holder shall be entitled to receive the number and class of securities of EOTT
which it would have owned or have been entitled to receive after the happening
of any of the events described above, had such Option been exercised immediately
prior to the happening of such event or any record date with respect thereto
(whichever is earlier) regardless of whether such Option is exercisable at the
time of the happening of such event, at the time of any record date with respect
thereto or at some subsequent time.
(b) In the event that EOTT enters into an agreement (i) to consolidate
with or merge into any corporation, partnership, limited liability company or
other business entity (each, a "Person"), and EOTT shall not be the continuing
or surviving corporation in such consolidation or merger, (ii) to permit any
Person to merge into or consolidate with EOTT and EOTT shall be the continuing
or surviving entity, but in connection with such merger or consolidation, the
Common Units outstanding immediately prior to the consummation of such merger or
consolidation shall be changed into or exchanged for stock or other securities
of EOTT or any other Person or cash or any other property, or the Common Units
outstanding immediately prior to the consummation of such merger or
consolidation shall, after such merger or consolidation, represent less than 50%
of the outstanding voting securities of the merged or consolidated entity, or
(iii) to sell or otherwise transfer all or substantially all of its assets to
any Person, then, and in each such case, the agreement governing such
transaction shall make proper provision so that the Option shall, upon
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option with identical terms
appropriately adjusted to acquire the number and class of shares or other
securities, cash or property that Xxxx would have received in respect of Common
Units if the Option had been exercised immediately prior to such consolidation,
merger, sale or transfer, or the record date therefore, as applicable,
regardless of whether the Option is exercisable at the time of the happening of
such event, or at the time of the record date thereof or at some subsequent
time.
(c) Whenever the number of Common Units purchasable upon the exercise
of the Option is adjusted, as provided in Sections 5(a) or 5(b) above, the
Exercise Price
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payable shall be adjusted by multiplying such Exercise Price immediately prior
to the adjustment by a fraction, of which the numerator shall be the number of
Common Units purchasable upon the exercise of the Option immediately prior to
adjustment, and of which the denominator shall be the number of Common Units
purchasable immediately after the adjustment.
6. Notice of Adjustment. When the number or class of securities
purchasable upon the exercise of the Option or the Exercise Price is adjusted,
as herein provided, EOTT shall promptly mail by first class, postage prepaid, to
the Option Holder notice of such adjustment or adjustments setting forth the
number or class of securities purchasable upon the exercise of the Option and
the Exercise Price of such Option after such adjustment and setting forth a
brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.
7. Privilege of Common Unit Ownership. The Option Holder shall not have
any of the rights of a Common Unit holder, including, without limitation, the
right to vote or to receive dividends or to consent or to receive notice as a
Common Unit holder in respect of any meeting of the Common Unit holders on any
matter until it shall have exercised the Option for such Option Common Units and
paid the Exercise Price. The Option Holder's right to vote the Option Common
Units received upon exercise of the Option shall be subject to such limitations,
if any, as may be imposed by Delaware law and the Partnership Agreement.
8. Covenants of EOTT. EOTT covenants (a) to maintain, free from
preemptive rights, sufficient authorized but unissued Common Units so that the
Option may be fully exercised without additional authorization of Common Units
after giving effect to all other options, warrants, convertible securities and
other rights of third parties to purchase Common Units; (b) not to seek to avoid
the observance or performance of any of the covenants, agreements or conditions
to be observed or performed hereunder by EOTT and not to take any action which
would cause any of its representations or warranties not to be true; and (c) not
to engage in any action or omit to take any action which would have the effect
of preventing or disabling EOTT from delivering the Option Shares to Xxxx upon
exercise of the Option or otherwise performing its obligations under this
Agreement.
9. Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of the successors and assigns of Xxxx and shall be binding upon
the successors and assigns of EOTT.
10. Notices. Any notice, request, instruction, correspondence or other
document to be given hereunder (herein collectively called "Notice") shall be in
writing and delivered personally and mailed, postage prepaid, or by telegram or
telecopier
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If to EOTT:
EOTT Energy Corp.
0000 Xxxx Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Vice President and General Counsel
Telecopier No.: 713/402-2806
If to the Option Holder:
Xxxx Petroleum Group, L.P.
0000 Xxxx 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
Attention: President
With a courtesy copy to the same address, Attn: Legal Department
Telecopier No.: 316/828-6097
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. EOTT or the Option Holder may
change the address to which Notice is to be given to it by giving Notice as
provided above of such change of address.
11. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware without regard
to principles of conflicts of law.
12. Captions. The captions of the sections and subsections of this
Agreement have been inserted for convenience and shall have no substantive
effect.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned has executed this Option Agreement
as of the Effective Date.
EOTT ENERGY PARTNERS, L.P.
By: EOTT Energy Corp., as general partner
By:
---------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
XXXX PETROLEUM GROUP, L.P.
By: , its general partner
------------------------
By:
---------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
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EXHIBIT B
OPTION AGREEMENT
This Option Agreement (this "Agreement") is made and entered into as of
__________, 2001 (the Effective Date"), by and between Enron Corp., an Oregon
corporation ("Enron") and EOTT Energy Partners, L.P., a Delaware limited
partnership ("EOTT"). Any capitalized term used in this Agreement and not
defined will have the meaning assigned to it in the Amended and Restated
Agreement of Limited Partnership (as amended to date, the "Partnership
Agreement") of EOTT.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which Enron acknowledges and confesses:
1. The Option. This instrument evidences an option (the "Option")
granted to EOTT to purchase 1,100,000 Common Units (the "Option Common Units").
The Option is issued pursuant to the Recapitalization Agreement dated September
6, 2001 among Enron, EOTT, EOTT Energy Corp. and Xxxx Petroleum Group, L.P.
2. Option Exercise Price. The Option shall be exercisable, in whole or
in part in increments of 100,000 shares, at any time and from time to time
during the Option Term (as defined herein) by means of payment by EOTT or its
successor holder of the Option (the "Option Holder") of $21.10 in cash for each
Common Unit issued upon exercise of the Option (the "Exercise Price"), payable
to an account designated by Enron by wire transfer in immediately available
funds; provided that the failure or refusal of Enron to designate an account
shall not preclude EOTT from exercising the Option, in whole or in part.
3. Option Term. The right to exercise the Option shall commence on the
date hereof, and such right to exercise shall continue until 11:59 p.m. on the
first anniversary of the date hereof. The period during which the Option is
exercisable is referred to herein as the "Option Term."
4. Option Exercise. The Option may be exercised, in whole or in part in
increments of 100,000 shares, at any time by giving written notice to Enron
during the Option Term, which notice shall:
(a) specify that the Option Holder has exercised the Option;
(b) specify the number of Common Units with respect to which the Option
has been exercised (the "Option Shares");
(c) set forth the binding agreement of the Option Holder to pay, on the
third business day following the date of the notice (the "Option Closing Date"),
the Exercise Price with respect to each Common Unit for which the Option has
been exercised; and
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(d) at the closing of a purchase and sale pursuant to the Option to be
held on the Option Closing Date (an "Option Closing"), Enron shall deliver to
EOTT a certificate or certificates representing the Option Shares to be
purchased at the Option Closing, which Option Shares shall be free and clear of
all liens, claims, charges and encumbrances of any kind whatsoever.
5. Adjustments.
(a) In the event EOTT (i) pays a dividend to holders of Common Units in
Common Units or makes a distribution to holders of Common Units in Common Units;
(ii) subdivides its outstanding Common Units into a larger number of Common
Units; (iii) combines its outstanding Common Units into a smaller number of
Common Units; or (iv) issues by reclassification of its Common Units other
securities of EOTT, the number and class of securities purchasable upon exercise
of the Option immediately prior thereto shall be adjusted so that the Option
Holder shall be entitled to receive the number and class of securities of EOTT
which it would have owned or have been entitled to receive after the happening
of any of the events described above, had such Option been exercised immediately
prior to the happening of such event or any record date with respect thereto
(whichever is earlier) regardless of whether such Option is exercisable at the
time of the happening of such event, at the time of any record date with respect
thereto or at some subsequent time.
(b) In the event that EOTT enters into an agreement (i) to consolidate
with or merge into any corporation, partnership, limited liability company or
other business entity (each a "Person"), and EOTT shall not be the continuing or
surviving corporation in such consolidation or merger, (ii) to permit any Person
to merge into or consolidate with EOTT and EOTT shall be the continuing or
surviving entity, but in connection with such merger or consolidation, the
Common Units outstanding immediately prior to the consummation of such merger or
consolidation shall be changed into or exchanged for stock or other securities
of EOTT or any other Person or cash or any other property, or the Common Units
outstanding immediately prior to the consummation of such merger or
consolidation shall, after such merger or consolidation, represent less than 50%
of the outstanding voting securities of the merged or consolidated entity, or
(iii) to sell or otherwise transfer all or substantially all of its assets to
any Person, then, and in each such case, the agreement governing such
transaction shall make proper provision so that the Option shall, upon
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option with identical terms
appropriately adjusted to acquire the number and class of shares or other
securities, cash or property that EOTT would have received in respect of Common
Units if the Option had been exercised immediately prior to such consolidation,
merger, sale or transfer, or the record date therefore, as applicable,
regardless of whether the Option is exercisable at the time of the happening of
such event, or at the time of the record date thereof or at some subsequent
time.
(c) Whenever the number of Common Units purchasable upon the exercise
of the Option is adjusted, as provided in Sections 5(a) or 5(b) above, the
Exercise Price payable shall be adjusted by multiplying such Exercise Price
immediately prior to the
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adjustment by a fraction, of which the numerator shall be the number of Common
Units purchasable upon the exercise of the Option immediately prior to
adjustment, and of which the denominator shall be the number of Common Units
purchasable immediately after the adjustment.
6. Notice of Adjustment. When the number or class of securities
purchasable upon the exercise of the Option or the Exercise Price is adjusted,
as herein provided, EOTT shall promptly mail by first class, postage prepaid, to
Enron and to the Option Holder (if other than EOTT) notice of such adjustment or
adjustments setting forth the number or class of securities purchasable upon the
exercise of the Option and the Exercise Price of such Option after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
7. Privilege of Common Unit Ownership. The Option Holder shall not have
any of the rights of a Common Unit holder, including, without limitation, the
right to vote or to receive dividends or to consent or to receive notice as a
Common Unit holder in respect of any meeting of the Common Unit holders on any
matter until it shall have exercised the Option for such Option Common Units and
paid the Exercise Price. The Option Holder's right to vote the Option Common
Units received upon exercise of the Option shall be subject to such limitations,
if any, as may be imposed by Delaware law and the Partnership Agreement.
8. Covenants of Enron. Enron covenants (a) not to seek to avoid the
observance or performance of any of the covenants, agreements or conditions to
be observed or performed hereunder by Enron and not to take any action which
would cause any of its representations or warranties not to be true; and (b) not
to engage in any action or omit to take any action which would have the effect
of preventing or disabling Enron from delivering the Option Shares to EOTT upon
exercise of the Option or otherwise performing its obligations under this
Agreement.
9. Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of the successors and assigns of EOTT and shall be binding upon
the successors and assigns of Enron.
10. Notices. Any notice, request, instruction, correspondence or other
document to be given hereunder (herein collectively called "Notice") shall be in
writing and delivered personally and mailed, postage prepaid, or by telegram or
telecopier
If to the Option Holder:
EOTT Energy Corp.
0000 Xxxx Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Vice President and General Counsel
Telecopier No.: 713/402-2806
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If to Enron:
Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
With a copy to: Executive Vice President, Corporate Development
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. Enron or the Option Holder may
change the address to which Notice is to be given to it by giving Notice as
provided above of such change of address.
11. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware without regard
to principles of conflicts of law.
12. Captions. The captions of the sections and subsections of this
Agreement have been inserted for convenience and shall have no substantive
effect.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned has executed this Option Agreement
as of the Effective Date.
ENRON CORP.
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EOTT ENERGY PARTNERS, L.P.
By: EOTT Energy Corp., as general partner
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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