EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
May 18, 2001, is by and between Xxxxxx Xxxxxx Energy Partners, L.P., a
Delaware limited partnership (the "Issuer"), and Xxxxxx Xxxxxx, Inc., a Kansas
corporation (the "Holder").
WITNESSETH:
WHEREAS, Kinder Xxxxxx X.X., Inc., a Delaware corporation (the "General
Partner"), has formed Xxxxxx Xxxxxx Management, LLC, a Delaware limited
liability company ("Management"), as its wholly owned subsidiary, to be a
limited partner in and, pursuant to a Delegation of Control Agreement of even
date herewith, to manage and control the business and affairs of the Issuer; and
WHEREAS, Management proposes to issue and sell in an underwritten
public offering (the "Offering") pursuant to a registration statement on Form
S-1 (Registration No. 333-55868) filed with the Securities and Exchange
Commission (the "Commission") on February 20, 2001 (the "Management Registration
Statement"), a number of its shares representing limited liability company
interests identified in its Limited Liability Company Agreement as Listed Shares
(the "Listed Shares"); and
WHEREAS, the Exchange Provisions (the "Exchange Provisions") attached
as Annex A to and made a part of Management's Amended and Restated Limited
Liability Company Agreement (including the Exchange Provisions, the "LLC
Agreement"), to be dated as of the date of the closing of the Offering (the
"Closing"), provide that after the 45th day following the Closing the holders of
the Listed Shares may exchange the Listed Shares with the Holder for common
units of the Issuer (the "Common Units"), subject to the right of the Holder to
settle the exchange in cash rather than in Common Units (such provisions of the
LLC Agreement being collectively referred to as the "Exchange Feature"); and
WHEREAS, the parties believe it appropriate for the exchange of the
Common Units owned by the Holder (directly or indirectly through subsidiaries)
for Listed Shares to be registered under the Securities Act of 1933, as amended
(the "Securities Act"), and the Issuer is agreeable to preparing, filing and
maintaining the effectiveness of such a registration statement or registration
statements therefor as provided herein.
NOW THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
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Section 1
Definitions
1.1 Specific Definitions. The following terms shall have the meanings
set forth below:
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by or is under common
control with, the Person in question. As used herein, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agreement" has the meaning set forth in the preamble of this
Agreement.
"Closing" has the meaning set forth in the recitals of this
Agreement.
"Commission" has the meaning set forth in the recitals of this
Agreement.
"Common Units" has the meaning set forth in the recitals of
this Agreement.
"Confidential Information" means information that the Issuer
determines, in good faith, is confidential, other than information which (i) is
or becomes generally available to the public other than as a result of a
disclosure by the Holder or an Inspector to which it was provided, (ii) was
within the possession of the Holder or an Inspector prior to its being furnished
to the Holder or an Inspector by or on behalf of the Issuer pursuant hereto,
provided that the source of such information was not known by the Holder or such
Inspector to be bound by a confidentiality agreement with or other contractual,
legal or fiduciary obligation of confidentiality to the Issuer or any other
party with respect to such information or (iii) becomes available to the Holder
or an Inspector on a non-confidential basis from a source other than the Issuer,
provided that such source is not bound by a confidentiality agreement with or
other contractual, legal or fiduciary obligation of confidentiality to the
Issuer or any other party with respect to such information.
"Entity" means a corporation, limited liability company,
venture, partnership, trust, unincorporated organization, association or other
entity.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Feature" has the meaning set forth in the recitals
of this Agreement.
"Exchange Provisions" has the meaning set forth in the
recitals of this Agreement.
"Exchange Securities" means the Common Units owned by Holder
(directly or indirectly through subsidiaries) or such other securities of the
Issuer (including securities which may be deemed to be distributed by Rule 140
under the Securities Act) as Holder may be
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required, or have the election, to deliver or cause to be delivered in
satisfaction of its obligations under the Exchange Feature.
"General Partner" has the meaning as set forth in recitals of
this Agreement.
"Holder" has the meaning set forth in the preamble of this
Agreement.
"Initial Issuer Registration Statement" has the meaning set
forth in Section 2.1.
"Inspectors" has the meaning set forth in Section 2.3(j).
"Issuer" has the meaning set forth in the preamble of this
Agreement.
"Issuer Registration Statement" has the meaning set forth in
Section 2.3.
"Listed Shares" has the meaning set forth in the recitals of
this Agreement.
"LLC Agreement" has the meaning set forth in the recitals of
this Agreement.
"Management" has the meaning set forth in the recitals of this
Agreement.
"Management Registration Statement" has the meaning set forth
in the recitals of this Agreement.
"Offering" has the meaning set forth in the recitals of this
Agreement.
"Partnership Agreement" means the Third Amended and Restated
Agreement of Limited Partnership of the Issuer, dated as of _________, 2001.
"Person" means a natural person or an Entity.
"Records" has the meaning set forth in Section 2.3(j).
"Section" means a section of this Agreement.
"Securities Act" has the meaning set forth in the recitals of
this Agreement.
"Subsequent Issuer Registration Statement" has the meaning set
forth in Section 2.2.
1.2 Rules of Construction. Unless the context otherwise clearly
requires:
(a) the terms defined in Section 1.1 have the meanings
assigned to them in that Section;
(b) terms defined include the plural as well as the singular
and vice versa;
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(c) references to any document, agreement, instrument or
provision thereof mean such document, agreement, instrument or provision thereof
as the same may be duly amended, supplemented or restated from time to time;
(d) "including" means including without limitation;
(e) "or" is not exclusive; and
(f) the words "herein," "hereof," "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision.
Section 2
Registration Rights
2.1 Initial Issuer Registration Statement. The Issuer has filed with
the Commission a Registration Statement on Form S-3 (Registration No. 333-55866)
(the "Initial Issuer Registration Statement") as a joint registration statement
with the Management Registration Statement covering the resale of Exchange
Securities owned by Holder (directly or indirectly through subsidiaries)
pursuant to the Exchange Feature. The Initial Issuer Registration Statement was
declared effective on May 14, 2001. The Issuer agrees to prepare and file
with the Commission such amendments and supplements to the Initial Issuer
Registration Statement and any prospectus used in connection therewith as may be
necessary to keep such Initial Issuer Registration Statement effective until
Holder has no further obligation to deliver Exchange Securities (or cash in lieu
thereof) pursuant to the Exchange Feature, and to comply with the provisions of
the Securities Act with respect to the disposition of such securities pursuant
to the Exchange Feature. The agreements of the Issuer with respect to the
Initial Issuer Registration Statement under this Section 2.1 shall terminate at
such time as there has been filed and declared effective by the Commission a
Subsequent Issuer Registration Statement pursuant to Section 2.2.
2.2 Subsequent Issuer Registration Statement. In lieu of maintaining
the continued effectiveness of the Initial Issuer Registration Statement, the
Issuer may prepare and file with the Commission a registration statement on any
form for which the Issuer then qualifies and which counsel for the Issuer shall
deem appropriate for the disposition of the Exchange Securities owned by Holder
(directly or indirectly through subsidiaries) pursuant to the Exchange Feature
(the "Subsequent Issuer Registration Statement"), and use its reasonable efforts
to cause the Subsequent Issuer Registration Statement to become effective. After
the Subsequent Issuer Registration Statement has been declared effective by the
Commission, the Issuer agrees to prepare and file with the Commission such
amendments and supplements to the Subsequent Issuer Registration Statement and
any prospectus used in connection therewith as may be necessary to keep the
Subsequent Issuer Registration Statement effective until Holder has no further
obligation to deliver Exchange Securities (or cash in lieu thereof) pursuant to
the Exchange Feature, and to comply with the provisions of the Securities Act
with respect to the disposition of such securities pursuant to the Exchange
Feature.
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2.3 Provisions Relating to All Issuer Registration Statements. The
Issuer agrees, in connection with both the Initial Issuer Registration Statement
and the Subsequent Issuer Registration Statement (each an "Issuer Registration
Statement"), that it will:
(a) Prepare and file with the Commission such amendments and
supplements to any Issuer Registration Statement and any prospectus used in
connection therewith as may be necessary to keep such Issuer Registration
Statement effective as provided in Sections 2.1 and 2.2, and to comply with the
provisions of the Securities Act with respect to the disposition of such
securities pursuant to the Exchange Feature;
(b) furnish to the Holder, (i) at least two business days
prior to filing with the Commission, any Subsequent Issuer Registration
Statement, any amendment or supplement to any Issuer Registration Statement, any
prospectus used in connection therewith and any amendment or supplement to any
such prospectus, which documents will be subject to the reasonable review of the
Holder, and Issuer shall not file any such documents with the Commission to
which the Holder shall reasonably object; and (ii) a copy of any and all
transmittal letters or other correspondence with the Commission or any other
governmental agency or self-regulatory body or other body having jurisdiction
(including any domestic or foreign securities exchange) relating to the offering
of Exchange Securities pursuant to the Exchange Feature;
(c) furnish to the Holder such number of copies as the Holder
may reasonably request of each Issuer Registration Statement, each amendment and
supplement thereto (in each case including all exhibits thereto and documents
incorporated by reference therein) and the prospectus included in or used in
connection with each Issuer Registration Statement (including each preliminary
prospectus, final prospectus and prospectus supplement);
(d) promptly notify the Holder of any stop order issued or, to
the knowledge of the Issuer, threatened to be issued by the Commission with
respect to any Issuer Registration Statement and promptly take all reasonable
actions to prevent the entry of such stop order or to obtain its withdrawal if
entered;
(e) use its reasonable efforts to qualify the Exchange
Securities for offer and sale under the securities, "blue sky" or similar laws
of such jurisdictions (including any foreign country or any political
subdivision thereof) as the Holder shall reasonably request and use its
reasonable efforts to obtain all appropriate registrations, permits and consents
required in connection therewith, except that the Issuer shall not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified, or subject itself to
taxation or file a general consent to service of process in any such
jurisdiction;
(f) furnish upon exchange of the Listed Shares pursuant to the
Exchange Feature unlegended certificates representing ownership of the Exchange
Securities at a time and in a manner that would permit compliance by the Holder
with the terms of the Exchange Feature relating to the delivery of such
certificates to the Persons electing to exchange Listed Shares;
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(g) promptly inform the Holder (i) of the date on which any
Issuer Registration Statement or any post-effective amendment thereto becomes
effective and, if applicable, of the date of filing a Rule 430A prospectus (and,
in the case of any offering abroad of Exchange Securities, of the date when any
required filing under the securities and other laws of such foreign
jurisdictions shall have been made and when the offering may be commenced in
accordance with such laws) and (ii) of any request by the Commission, any
securities exchange, government agency, self-regulatory body or other body
having jurisdiction for any amendment of or supplement to any Issuer
Registration Statement or preliminary prospectus or prospectus included therein
or used in connection therewith or any other offering document relating to such
offering;
(h) until the Holder has no further obligations to deliver
Exchange Securities (or cash in lieu thereof) pursuant to the Exchange Feature,
keep effective and maintain any registration, qualification or approval obtained
in connection with the offering of the Exchange Securities by the Holder
pursuant to the Exchange Feature, and amend or supplement any Issuer
Registration Statement or prospectus or other offering document used in
connection therewith to the extent necessary in order to comply with applicable
securities laws;
(i) as promptly as practicable notify the Holder of the
occurrence of an event requiring the preparation of a supplement or amendment to
the prospectus related to any Issuer Registration Statement so that, as
thereafter delivered to the recipients of the Exchange Securities pursuant to
the Exchange Feature, such prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and as promptly as practicable make
available to the Holder any such supplement or amendment; and
(j) with reasonable promptness make available for inspection
by the Holder, and any attorney, accountant or other agent retained by the
Holder (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Issuer (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Issuer's or the General Partner's or
Management's officers and employees to supply all information reasonably
requested for such purpose by any such Inspector in connection with any Issuer
Registration Statement; provided, however, that the selection of any Inspector
other than an officer or employee of, or attorney or accountant for, the Holder
shall be subject to the consent of the Issuer, which shall not be unreasonably
withheld. Each Inspector that actually reviews Records supplied by the Issuer
that include Confidential Information shall be required, prior to any such
review, to execute an agreement with the Issuer in customary form reasonably
satisfactory to the Issuer providing that such Inspector shall not publicly
disclose any Confidential Information unless such disclosure is required by
applicable law or legal process. The Holder agrees that Confidential Information
obtained by it as a result of such inspections shall not be used by it as the
basis for any transactions in securities of the Issuer unless and until such
information is made generally available to the public. The Holder further agrees
that it will, upon learning that disclosure of Confidential Information supplied
to the Holder or an Inspector is sought in a court of competent jurisdiction
from the Holder or an Inspector, give notice to the Issuer and allow the Issuer,
at its
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expense, to undertake appropriate action to prevent disclosure of the
Confidential Information. The Holder also agrees that the due diligence
investigation made by the Inspectors shall be conducted in a manner that shall
not unreasonably disrupt the operations of the Issuer or the work performed by
the Issuer's or the General Partner's or Management's officers and employees.
2.4 Certain Notices by Issuer. (a) Upon notice to the Holder, the
Issuer may require the Holder to suspend the use of the prospectus or any
prospectus supplement related to an Issuer Registration Statement for a
reasonable period of time, not to exceed 90 consecutive days or 120 days in any
12-month period, if the Issuer would be required to disclose information
regarding the Issuer it was not otherwise then required by law to disclose
publicly where such disclosure would reasonably be expected to adversely affect
any material business transaction or negotiation in which the Issuer is then
engaged. Any periods under this Section 2.4 shall be aggregated with periods
under Section 2.4(b) in determining whether the periods of 90 consecutive days
or 120 days in any 12-month period have been exceeded.
(b) The Holder agrees that, upon receipt of any notice from
the Issuer of the happening of any event of the kind described in Section
2.3(i), the Holder will forthwith discontinue disposition of Exchange Securities
pursuant to the Exchange Feature pursuant to any Issuer Registration Statement
until the Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 2.3(i), and, if so directed by the Issuer,
the Holder will deliver to the Issuer (at the Issuer's expense) all copies,
other than permanent file copies, then in the Holder's possession, of the
prospectus covering such Exchange Securities current at the time of receipt of
such notice. The Holder also agrees to notify the Issuer if any event relating
to the Holder occurs that would require the preparation of a supplement or
amendment to the prospectus so that such prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Section 3
Expenses
3.1 Registration Expenses. The Issuer agrees to bear and to pay or
cause to be paid promptly upon request being made therefor all expenses incident
to the Issuer's performance of or compliance with this Agreement, including (a)
all Commission and any NASD registration and filing fees and expenses; (b) all
fees and expenses in connection with the qualification of the Exchange
Securities for offering and sale under the state or foreign securities and blue
sky laws referred to in Section 2.3(e), including reasonable fees and
disbursements of counsel, in connection with such qualifications; (c) all
expenses relating to the preparation, printing, distribution and reproduction of
any Issuer Registration Statement required to be filed hereunder, each
prospectus included therein or prepared for distribution pursuant hereto, each
amendment or supplement to the foregoing, the certificates representing the
Exchange Securities and all other documents relating hereto; (d) fees and
expenses of any paying agent, and of the registrar and transfer agent for the
Exchange Securities to be issued upon exchange of the Listed Shares, as well as
the reasonable fees and expenses of counsel therefor; (e) internal expenses
(including all salaries and expenses of the Issuer's or General Partner's or
Management's officers and
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employees performing legal or accounting duties); (f) fees, disbursements and
expenses of counsel and independent certified public accountants of the Issuer
(including the expenses of any opinions or "cold comfort" letters required by or
incident to such performance and compliance); (g) fees and expenses of listing
the Exchange Securities on all exchanges where Exchange Securities of the type
then required to be delivered by the Holder pursuant to the Exchange Feature are
listed; and (h) reasonable fees, disbursements and expenses of counsel for the
Holder retained in connection with any Issuer Registration Statement and fees,
expenses and disbursements of any other Persons, including special experts,
retained by the Issuer in connection with such registration (collectively, the
"Registration Expenses"). To the extent that any Registration Expenses are
incurred, assumed or paid by the Holder, the Issuer shall reimburse the Holder
for the full amount of the Registration Expenses so incurred, assumed or paid
promptly after receipt of a documented request therefor. Notwithstanding the
foregoing, the Holder shall pay all the fees and disbursements of any counsel or
other advisors or experts retained by the Holder, other than the counsel and
experts specifically referred to above.
Section 4
Representations and Warranties
4.1 Representations and Warranties. The Issuer represents and warrants
to, and agrees with, the Holder that:
(a) Each Issuer Registration Statement and any further
amendment or supplement to any Issuer Registration Statement, when it becomes
effective or is filed with the Commission, as the case may be, will conform in
all material respects to the applicable requirements of the Securities Act and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and at all times at and subsequent to the time when such
Issuer Registration Statement has been declared effective under the Securities
Act, other than from (i) such time as a notice has been given to the Holder
pursuant to Section 2.3(i) until (ii) such time as the Issuer furnishes an
amended or supplemented prospectus pursuant to Section 2.3(i) or such time as
the Issuer provides notice that offers and sales pursuant to such Issuer
Registration Statement may continue, each prospectus (including any preliminary
or summary prospectus) contained in or prepared in connection with any Issuer
Registration Statement, and each prospectus (including any summary prospectus)
furnished pursuant to Section 2.3(c), as then amended or supplemented, will
conform in all material respects to the applicable requirements of the
Securities Act and will not contain an 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 the light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Issuer by or on behalf of the Holder expressly for use therein in any such
Issuer Registration Statement or prospectus.
(b) Any documents incorporated by reference in any prospectus
referred to in this Agreement, when they become or became effective or are or
were filed with the Commission, as the case may be, will conform or conformed in
all material respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and none of such
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documents will contain or contained an untrue statement of a material fact or
will omit or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Issuer by the Holder expressly for use therein.
(c) The compliance by the Issuer with all of the provisions of
this Agreement and the consummation of the transactions herein contemplated will
not contravene any provision of applicable law or the Partnership Agreement, or
any material indenture or instrument relating to indebtedness for money borrowed
or agreement to which the Issuer or any of its subsidiaries is a party or any
order, rule, regulation or decree of any court or governmental agency or
authority located in the United States having jurisdiction over the Issuer or
any of its subsidiaries or any property of the Issuer or any of its
subsidiaries; and no consent, authorization or order of, or filing or
registration with, any court or governmental agency or authority is required for
the consummation by the Issuer of the transactions contemplated by this
Agreement, except the registration under the Securities Act contemplated hereby,
and such consents, approvals, authorizations, registrations or qualifications as
may be required under state or foreign securities or blue sky laws.
(d) This Agreement has been duly authorized, executed and
delivered by the Issuer.
Section 5
Indemnification and Contributions
5.1 (a) The Issuer will indemnify and hold harmless the Holder against
any losses, claims, damages or liabilities, joint or several, to which the
Holder may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, any Issuer
Registration Statement or any prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Holder for any
legal or other expenses reasonably incurred by the Holder in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Issuer shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus, any Issuer Registration
Statement or any prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Issuer by the Holder
expressly for use therein.
(b) The Holder will indemnify and hold harmless the Issuer
against any losses, claims, damages or liabilities to which the Issuer may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in
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respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, any
Issuer Registration Statement or any prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any preliminary prospectus, any Issuer
Registration Statement or any prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Issuer
by the Holder expressly for use therein; and will reimburse the Issuer for any
legal or other expenses reasonably incurred by the Issuer in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by a party indemnified under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party otherwise than under such subsection and shall not relieve
the indemnifying party from any liability that it may have to any indemnified
party under this Agreement unless such failure to give notice actually
prejudices the indemnifying party's ability to defend the claim. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish, to
assume the defense thereof, with counsel satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 5 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Issuer and the Holder from the transactions
contemplated by this Agreement. If, however, the allocation
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provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above and such failure actually prejudiced the indemnifying
party's ability to defend the claim, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Issuer and the Holder in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Issuer and the
Holder from the transactions contemplated by this Agreement shall be deemed to
be in the same proportion as the total net proceeds (before deducting expenses)
from the purchase of its I-Units by Management with the proceeds of the Offering
received by the Issuer bear to the difference between the market value of the
Listed Shares received by the Holder pursuant to the Exchange Feature and the
market value of the Exchange Securities surrendered by or on behalf of the
Holder in exchange for the Listed Shares received by the Holder pursuant to the
Exchange Feature. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer or the Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Issuer and the Holder agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of the Issuer under this Section 5 shall
be in addition to any liability that the Issuer may otherwise have and shall
extend, upon the same terms and conditions, to each Person, if any, who controls
the Holder or whom the Holder controls within the meaning of the Securities Act;
and the obligations of the Holder under this Section 5 shall be in addition to
any liability that the Holder may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Issuer (including any
Person who, with his or her consent, is named in any Issuer Registration
Statement as about to become a director of the Issuer) and to each Person, if
any, who controls the Issuer within the meaning of the Act.
Section 6
Benefits of Agreement
6.1 Benefits of Agreement. Pursuant to the Exchange Provisions, the
Holder's obligations to deliver Exchange Securities may be performed by
subsidiaries of the Holder. To the extent that such obligations are performed by
subsidiaries of the Holder, the provisions of this Agreement shall also be
binding on, for the benefit of and enforceable by such subsidiaries.
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Section 7
Miscellaneous
7.1 Provision of Information. The Holder shall, and shall cause its
directors, officers, employees and agents to complete and execute all such
questionnaires and other documents as the Issuer shall reasonably request in
connection with any registration of Exchange Securities pursuant to this
Agreement.
7.2 Injunctions. Irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specified terms or were otherwise breached. Therefore, the parties hereto shall
be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms of provisions
hereof in any court having jurisdiction, such remedy being in addition to any
other remedy to which they may be entitled at law or in equity.
7.3 Severability. If any term or provision of this Agreement is held by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms and provisions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term or provision.
7.4 Further Assurances. Subject to the specific terms of this
Agreement, the Holder and the Issuer shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions as
may be reasonably required in order to effectuate the purposes of this Agreement
and to consummate the transactions contemplated hereby.
7.5 Entire Agreement; Modification. This Agreement and the other
related agreements entered into at or prior to the Closing contain the entire
understanding of the parties with respect to the transactions contemplated
hereby and supersede all agreements and understandings entered into with respect
thereto prior to the execution hereof.
7.6 Amendment. (a) This Agreement may be amended by an agreement in
writing signed by the Issuer and the Holder without the vote, approval or
consent or the holders of any of the Listed Shares, unless such amendment would
have a material adverse effect on the rights or preferences of the Listed
Shares, as determined in the sole discretion of the Board of Directors of the
Holder, in which case such amendment must be approved by such vote or consent of
the holders of Listed Shares, if any, as may be required by the LLC Agreement.
(b) Notwithstanding the foregoing provisions with respect to
amendments, the Board of Directors of the Issuer has reserved the right to make,
with the written consent of the Holder, and may make, with the written consent
of the Holder, changes in this Agreement to meet the requirements of applicable
securities and other laws and regulations and stock exchange rules and to effect
the intent of the LLC Agreement, and also may make other changes which the Board
of Directors of the Issuer determines in its sole discretion will not have a
material adverse effect on the rights and privileges of the Listed Shares, in
each case without the vote, consent or
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approval of the holders of any Listed Shares. In addition, notwithstanding the
foregoing provisions with respect to amendments, (a) in the case of (i) any
merger of the Issuer, whether or not the Issuer is the survivor, that is the
subject of a unitholder vote and does not constitute a Mandatory Purchase Event
(as defined in the Exchange Provisions), and (ii) any recapitalization,
reorganization or similar transaction of the Issuer, in each case that is the
subject of a unitholder vote and does not constitute a Mandatory Purchase Event,
or (b) if any Person becomes a Controlling Entity (as defined in the Exchange
Provisions) in a transaction complying with the requirements of clauses (b)(i)
through (b)(iv) of the definition of "Mandatory Purchase Event" in the Exchange
Provisions, such amendments as the Board of Directors of the Issuer deems
appropriate in its good faith discretion and are agreed to by the Issuer may be
made in this Agreement to accommodate, in the case of clause (a), such merger,
recapitalization, reorganization, or similar transaction, or, in the case of
clause (b), the assumption by such Person of the obligations of the Issuer under
this Agreement, and any such amendment shall be deemed not to have such a
material adverse effect, and therefore may be made without the vote, consent or
approval of the holders of any of the Listed Shares.
7.7 Counterparts. For the convenience of the parties hereto, any number
of counterparts of this Agreement may be executed by the parties hereto, but all
such counterparts shall be deemed one and the same instrument.
7.8 Notices. All notices, consents, requests, demands and other
communications hereunder shall be in writing and shall be given by hand or by
mail (return receipt requested) or sent by overnight delivery service, cable,
telegram or facsimile transmission to the parties at the following addresses or
at such other address as shall be specified by the parties by like notice.
(a) if to the Issuer, to:
Xxxxxx Xxxxxx Energy Partners, L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
(b) if to the Holder, to:
Xxxxxx Xxxxxx, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Notice so given shall, in the case of notice so given by mail, be deemed to be
given and received on the third business day after posting, in the case of
notice so given by overnight delivery service, on the day after notice is
deposited with such service, and in the case of notice so given by cable,
telegram, facsimile transmission or, as the case may be, personal delivery, on
the date of actual delivery.
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7.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
ANY CHOICE OF LAW PRINCIPLES WHICH MIGHT REQUIRE OR PERMIT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.
7.10 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by and against the successors
and assigns of the parties hereto. Except with the consent of the other party or
as otherwise provided herein, the parties may not assign their rights under this
Agreement and the Issuer may not delegate its obligations under this Agreement.
Any attempted assignment or delegation prohibited hereby shall be void.
7.11 Parties in Interest. Except as otherwise specifically provided
herein, nothing in this Agreement expressed or implied is in tended or shall be
construed to confer any right or benefit upon any Person, firm or corporation
other than the Holder and the Issuer and their respective successors and
permitted assigns.
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IN WITNESS WHEREOF, each of the Holder and the Issuer have caused this
Agreement to be duly executed as of the date first above written.
Xxxxxx Xxxxxx Energy Partners, L.P.
By: Xxxxxx Xxxxxx, G.P., Inc.,
as General Partner
By: /s/ C. Park Shaper
----------------------------------
Name: C. Park Shaper
Title: Vice President, Treasurer
and Chief Financial Officer
Xxxxxx Xxxxxx, Inc.
By: /s/ Xxxxxx Xxxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President and
General Counsel
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