REGISTRATION RIGHTS AGREEMENT by and between EAGLE ROCK ENERGY PARTNERS, L.P. and MONTIERRA MINERALS & PRODUCTION, L.P.
Exhibit D
by and between
EAGLE ROCK ENERGY PARTNERS, L.P.
and
MONTIERRA MINERALS & PRODUCTION, L.P.
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is
made and entered into as of April 30,
2007, by and between EAGLE ROCK ENERGY PARTNERS, L.P., a Delaware limited partnership (the
“Company”), and MONTIERRA MINERALS & PRODUCTION, L.P., a Texas limited partnership (“Montierra”).
RECITALS:
WHEREAS, the Company, Montierra and the other parties thereto have entered into a Partnership
Interest Contribution Agreement, dated as of March 31, 2007 (the “Contribution Agreement”);
WHEREAS, pursuant to the Contribution Agreement, the Company has agreed to provide the
registration and other rights set forth in this Agreement for the benefit of Montierra;
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by
each party hereto, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.1 Definitions. The terms set forth below are used herein as so defined:
“Affiliate” means, with respect to a specified Person, any other Person, directly or
indirectly controlling, controlled by or under direct or indirect common control with such
specified Person. For purposes of this definition, “control” (including, with correlative
meanings, “controlling,” “controlled by” and “under common control with”) means the power to direct
or cause the direction of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.
“Affiliate Transfer” means any transfer of Registrable Securities (and/or the rights granted
to Montierra by the Company under this Agreement) from Montierra to an Affiliate of Montierra and
any successive Affiliate Transfers.
“Business Day” means any day other than a Saturday, Sunday, or a legal holiday for commercial
banks in New York, New York.
“Commission” means the United States Securities and Exchange Commission.
“Common Units” shall have the meaning set forth in the Partnership Agreement.
“Company” has the meaning specified therefor in the introductory paragraph of this Agreement.
“Contribution Agreement” has the meaning specified in the recitals to this Agreement.
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“Effectiveness Period” has the meaning specified in Section 2.1(a).
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
“Included Registrable Securities” has the meaning specified in Section 2.2(a).
“Indemnified Persons” has the meaning specified in Section 2.6(a).
“Losses” has the meaning specified in Section 2.6(a).
“Managing Underwriter” means, with respect to any Underwritten Offering, the book running lead
manager or managers of such Underwritten Offering.
“March Investors” means those investors who hold registration rights pursuant to that certain
Registration Rights Agreement dated March 27, 2006 among the Company and those investors named
therein.
“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership
of the Company, as amended and/or restated from time to time.
“Person” means any individual, corporation, company, voluntary association, partnership, joint
venture, trust, limited liability company, unincorporated organization, government or any agency,
instrumentality or political subdivision thereof, or any other form of entity.
“Piggyback Registration” has the meaning specified in Section 2.2(a).
“PIPE Investors” means those investors who hold registration rights pursuant to that certain
Registration Rights Agreement dated May ___, 2007 among Eagle Rock Pipeline, L.P. and those
investors named therein.
“Registrable Securities” means (i) the Common Units issued to Montierra pursuant to the
Contribution Agreement and (ii) any common units or other equity securities issued in exchange for
the Common Units described in clause (i) in connection with any merger, consolidation or other
business combination involving the Company until such time as such securities cease to be
Registrable Securities pursuant to Section 1.2.
“Registration Expenses” has the meaning specified in Section 2.5(a).
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder.
“Selling Expenses” has the meaning specified in Section 2.5(a).
“Shelf Registration” has the meaning specified in Section 2.1(a).
“Shelf Registration Statement” has the meaning specified in Section 2.1(a).
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“Underwritten Offering” means an offering (including an offering pursuant to a Shelf
Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis
for reoffering to the public or an offering that is a “bought deal” with one or more investment
banks.
Section 1.2 Registrable Securities. Any Registrable Security will cease to be a
Registrable Security when (a) a registration statement covering such Registrable Security has been
declared effective by the Commission and such Registrable Security has been sold or disposed of
pursuant to such effective registration statement; (b) such Registrable Security has been disposed
of pursuant to any section of Rule 144 (or any similar provision then in force under the Securities
Act); (c) such Registrable Security is held by the Company or one of its subsidiaries or (d) such
Registrable Security has been sold in a private transaction in which the transferor’s rights under
this Agreement are not assigned to the transferee of such securities.
ARTICLE II
REGISTRATION RIGHTS
REGISTRATION RIGHTS
Section 2.1 Shelf Registration.
(a) Shelf Registration. At the request of Montierra, the Company shall use its
commercially reasonable efforts to prepare and file with the Commission, within 90 days following
the receipt of such request, a registration statement under the Securities Act to permit the public
resale by Montierra of the Registrable Securities from time to time as permitted by Rule 415 of the
Securities Act (the “Shelf Registration Statement”), and the Company shall use its commercially
reasonable efforts to cause the Shelf Registration Statement to become effective as soon as
practicable thereafter (the “Shelf Registration”). A Shelf Registration Statement filed pursuant
to this Section 2.1(a) shall be on such appropriate registration form of the Commission as
shall be selected by the Company; provided, however, that if a prospectus
supplement will be used in connection with the marketing of an Underwritten Offering from the Shelf
Registration Statement and the Managing Underwriter at any time shall notify the Company in writing
that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be
used in such prospectus supplement is of material importance to the success of the Underwritten
Offering of such Registrable Securities, the Company shall use its commercially reasonable efforts
to include such information in the prospectus. The Company shall cause the Shelf Registration
Statement filed pursuant to this Section 2.1(a) to be continuously effective, supplemented
and amended to the extent necessary to ensure that it is available for resale of all Registrable
Securities by Montierra and that it conforms in all material respects with the requirements of the
Securities Act during the entire period beginning on the date the Shelf Registration Statement
first is declared effective under the Securities Act and ending on the earlier to occur of (i) the
date all Registrable Securities covered by the Shelf Registration Statement have been distributed
in the manner set forth and as contemplated in the Shelf Registration Statement and (ii) the date
on which all Registrable Securities have ceased to be Registrable Securities hereunder in
accordance with Section 1.2 (the “Effectiveness Period”). The Shelf Registration Statement
when declared effective will comply as to form in all material respects with all 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.
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(b) Delay Rights Notwithstanding anything to the contrary contained herein, the
Company may, upon written notice to Montierra, suspend Montierra’s use of any prospectus which is a
part of the Shelf Registration Statement (in which event Montierra shall discontinue sales of the
Registrable Securities pursuant to the Shelf Registration Statement), for a period not to exceed
(X) an aggregate of 90 days in any 365-day period, if (i) the Company is pursuing a material
acquisition, merger, reorganization, disposition or other similar transaction and the Company
determines in good faith that the Company’s ability to pursue or consummate such a transaction
would be materially adversely affected by any required disclosure of such transaction in the Shelf
Registration Statement, (ii) the Company has experienced some other material non-public event the
disclosure of which at such time, in the good faith judgment of the Company, would materially
adversely affect the Company or (iii) at any time prior to the time when the Company is eligible to
utilize Form S-3 for the Shelf Registration Statement, the Company has prepared and filed with the
Commission a post-effective amendment for the purpose of updating financial information or other
information therein and such post-effective amendment has not been declared effective by the
Commission, or (Y) a period specified by means of a written amendment signed by the Company and
Montierra of a majority of the then outstanding Registrable Securities. Upon disclosure of such
information or the termination of the condition or expiration of the period described above, as
applicable, the Company shall provide prompt notice to Montierra whose Registrable Securities are
included in the Shelf Registration Statement, and shall promptly terminate any suspension of sales
it has put into effect and shall take such other actions to permit registered sales of Registrable
Securities as contemplated in this Agreement.
(c) Inapplicability of Rule 415. If the Commission deems the registration of any
Registrable Securities to be a primary offering by the Company or Montierra, and the Commission
prohibits the use of Rule 415 under the Securities Act (or any similar provision then in force) to
sell Registrable Securities on a delayed or continuous basis, then the parties agree that the
Company’s failure to get the Registration Statement effective shall not be a breach of any this
Agreement. Additionally, Montierra agrees to negotiate in good faith with the Company for an
acceptable number of Registrable Securities to be included in a primary offering to allow the
Registration Statement to be eligible for Rule 415. In the event that Registrable Securities are
excluded from the Registration Statement for purposes of eligibility under Rule 415, the Company
aggress that it shall use commercially reasonable efforts to file a Registration Statement under
Section 2.1 for the remaining shares as soon as reasonably practicable.
Section 2.2 Piggyback Registration.
(a) Underwritten Offering Participation. If at any time after the closing of the
Contribution Agreement, the Company proposes to file a registration statement, for the sale of
Common Units in an Underwritten Offering for its own account and/or another Person (a “Piggyback
Registration”), then as soon as practicable but not less than ten (10) Business Days prior to the
filing of (x) any preliminary prospectus supplement relating to such Underwritten Offering pursuant
to Rule 424(b), (y) the prospectus supplement relating to such Underwritten Offering pursuant to
Rule 424(b) (if no preliminary prospectus supplement is used) or (z) such registration statement as
the case may be, the Company shall give notice of such proposed Underwritten Offering to Montierra
and such notice shall offer Montierra the opportunity to include in such Underwritten Offering such
number of Registrable Securities as Montierra may
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request in writing. Subject to Section 2.2(b), the Company shall include in such
Underwritten Offering all such Registrable Securities with respect to which the Company has
received a request within five (5) Business Days after the Company’s notice has been delivered in
accordance with Section 3.1 (the “Included Registrable Securities”). If no request for
inclusion is received within the specified time, Montierra shall have no further right to
participate in such Underwritten Offering. If, at any time after giving written notice of its
intention to undertake an Underwritten Offering and prior to the closing of such Underwritten
Offering, the Company shall determine for any reason not to undertake or to delay such Underwritten
Offering, the Company may, at its election, give written notice of such determination to Montierra
and, (i) in the case of a determination not to undertake such Underwritten Offering, shall be
relieved of its obligation to sell any Included Registrable Securities in connection with such
terminated Underwritten Offering, and (ii) in the case of a determination to delay such
Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for
the same period as the delay in the Underwritten Offering. Montierra shall have the right to
withdraw its request for inclusion of Registrable Securities in such offering by giving written
notice to the Company of such withdrawal up to and including the time of pricing of such offering.
(b) Priority of Registration. If the Managing Underwriter or Underwriters of any
proposed Underwritten Offering of Common Units advises the Company in writing that the total amount
of Common Units which Montierra and any other Persons intend to include in such offering exceeds
the number which can be sold in such offering without being likely to have an adverse effect in any
material respect on the price, timing or distribution of the Common Units offered or the market for
the Common Units, then the Common Units to be included in such Underwritten Offering shall include
the number of Registrable Securities that such Managing Underwriter or underwriters advises the
Company can be sold without having such adverse effect, with such number to be first, allocated to
the Company and the Person demanding such Underwritten Offering; if there remains availability for
additional Common Units to be included in such Piggyback Registration, second, pro rata between the
March Investors and the PIPE Investors, and, third, pro rata among all others, including Montierra.
Section 2.3 Underwritten Offering.
(a) Underwritten Offering. In the event that Montierra elects dispose of Registrable
Securities under the Shelf Registration Statement pursuant to an Underwritten Offering or
separately pursuant to an Underwritten Offering after 180 days from the Closing of the Contribution
Agreement and the Company reasonably anticipate gross proceeds from such Underwritten Offering of
at least $15.0 million, the Company shall take all such other reasonable actions as are requested
by the Managing Underwriter in order to expedite or facilitate the registration and disposition of
such Registered Securities in an Underwritten Offering; provided, however, that the Company shall
not be required to cause officers of the Company or its Affiliates to participate in a “road show”
or similar marketing effort being conducted by such Managing Underwriter with respect to such
Underwritten Offering.
(b) General Procedures. In connection with an Underwritten Offering, Montierra and
the Company shall be obligated to enter into an underwriting agreement which contains such
representations, covenants, indemnities and other rights and obligations as are customary in
underwriting agreements for firm commitment offerings of securities. Montierra may not
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participate in such Underwritten Offering unless it agrees to sell its Registrable Securities
on the basis provided in such underwriting agreement and completes and executes all questionnaires,
powers of attorney, indemnities and other documents reasonably required under the terms of such
underwriting agreement. Montierra may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters also be made to and for Montierra’s benefit and that any or all of
the conditions precedent to the obligations of such underwriters under such underwriting agreement
also be conditions precedent to its obligations. Montierra shall not be required to make any
representations or warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding Montierra and its ownership of the securities
being registered on its behalf and its intended method of distribution and any other representation
required by law. If Montierra disapproves of the terms of an underwriting, it may elect to
withdraw therefrom by notice to the Company and the Managing Underwriter; provided, however, that
such withdrawal may be made up to and including the time of pricing of the Underwritten Offering.
No such withdrawal or abandonment shall affect the Company’s obligation to pay Registration
Expenses.
(c) Appointment of Underwriters. In connection with an Underwritten Offering, the
Company shall have the sole right to appoint the Managing Underwriters.
Section 2.4 Registration Procedures. In connection with its obligations contained in
Sections 2.1, 2.2 and 2.3 hereof, the Company will, as expeditiously as possible:
(a) subject to Section 2.1(b), prepare and file with the Commission such
amendments and supplements to the Shelf Registration Statement and the prospectus used in
connection therewith or reports filed with the Commission pursuant to Section 13(a), 13(c),
14 of 15(d) of the Exchange Act as may be necessary to keep the Shelf Registration Statement
effective for the Effectiveness Period and as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all Registrable Securities covered
by the Shelf Registration Statement;
(b) furnish to Montierra (i) as far in advance as reasonably practicable before filing
the Shelf Registration Statement or any other registration statement contemplated by this
Agreement or any supplement or amendment thereto (excluding documents filed pursuant to the
Exchange Act that are incorporated by reference into the Shelf Registration Statement, any
other registration statement contemplated by this Agreement or any supplement on amendment
thereto), upon request, copies of reasonably complete drafts of all such documents proposed
to be filed, and provide Montierra the opportunity to object to any information pertaining
to Montierra and its plan of distribution that is contained therein and make the corrections
reasonably requested by Montierra with respect to such information prior to filing the Shelf
Registration Statement or such other registration statement and the prospectus included
therein or any supplement or amendment thereto, and (ii) such number of copies of the Shelf
Registration Statement or such other registration statement and the prospectus included
therein and any supplements and amendments thereto as Montierra may reasonably request in
order to facilitate the public sale or other disposition of the Registrable Securities
covered by such Shelf Registration Statement or other registration statement;
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(c) if applicable, use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by the Shelf Registration Statement or any other registration
statement contemplated by this Agreement under the securities or blue sky laws of such
jurisdictions as Montierra or, in the case of an Underwritten Offering, the Managing
Underwriter, shall reasonably request, provided that the Company will not be required to
qualify generally to transact business in any jurisdiction where it is not then required to
so qualify or to take any action which would subject it to general service of process in any
such jurisdiction where it is not then so subject;
(d) promptly notify Montierra and each underwriter of (i) the filing of the Shelf
Registration Statement or any other registration statement contemplated by this Agreement or
any prospectus or prospectus supplement to be used in connection therewith, or any amendment
or supplement thereto, and, with respect to such Shelf Registration Statement or any other
registration statement or any post-effective amendment thereto, when the same has become
effective; and (ii) any written comments from the Commission with respect to any filing
referred to in clause (i) and any written request by the Commission for amendments or
supplements to the Shelf Registration Statement or any other registration statement or any
prospectus or prospectus supplement thereto;
(e) immediately notify Montierra and each underwriter, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of (i) the happening
of any event as a result of which the prospectus or prospectus supplement contained in the
Shelf Registration Statement or any other registration statement contemplated by this
Agreement, as then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, provided, however,
that the Company shall not be required to specify in the written notice to Montierra the
nature of such event; (ii) the issuance or threat of issuance by the Commission of any stop
order suspending the effectiveness of the Shelf Registration Statement or any other
registration statement contemplated by this Agreement, or the initiation of any proceedings
for that purpose; or (iii) the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale under the
applicable securities or blue sky laws of any jurisdiction; following the provision of such
notice, the Company agrees to as promptly as practicable amend or supplement the prospectus
or prospectus supplement or take other appropriate action so that the prospectus or
prospectus supplement does not include 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 in the light of the circumstances then existing and to take such
other action as is necessary to remove such stop order, suspension, threat thereof or
proceedings related thereto;
(f) furnish to Montierra copies 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 such offering of Registrable Securities;
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(g) in the case of an Underwritten Offering, furnish upon request, (i) an opinion of
counsel for the Company, dated the effective date of the applicable registration statement
or the date of any amendment or supplement thereto, and an opinion in customary form dated
the date of the closing of the Underwritten Offering, and (ii) a “cold comfort” letter or
letters, dated the date of execution of the underwriting agreement and a letter or letters
of like kind dated the date of the closing of the Underwritten Offering, in each case,
signed by the independent public accountants who have certified the financial statements
included or incorporated by reference into the applicable registration statement, and each
of the opinion and the “cold comfort” letter or letters shall be in customary form and
covering substantially the same matters with respect to such registration statement (and the
prospectus and any prospectus supplement included therein) and as are customarily covered in
opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in
Underwritten Offerings of securities, such other matters as such underwriters may reasonably
request;
(h) otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its security
holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities Act in
accordance with Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) or otherwise;
(i) make available to the appropriate representatives of the Managing Underwriter and
Montierra access to such information and personnel as is reasonable and customary to enable
such parties to establish a due diligence defense under the Securities Act; provided that
the Company need not disclose any information to any such representative unless and until
such representative has entered into a confidentiality agreement with the Company;
(j) cause all such Registrable Securities registered pursuant to this Agreement to be
listed on each securities exchange or nationally recognized quotation system on which
similar securities issued by the Company are then listed;
(k) use its commercially reasonable efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable Montierra to
consummate the disposition of such Registrable Securities;
(l) provide a transfer agent and registrar for all Registrable Securities covered by
such registration statement not later than the effective date of such registration
statement; and
(m) enter into customary agreements and take such other actions as are reasonably
requested by Montierra or the underwriters, if any, in order to expedite or facilitate the
disposition of such Registrable Securities.
Montierra, upon receipt of notice from the Company of the happening of any event of the kind
described in subsection (e) of this Section 2.4, shall forthwith discontinue disposition of
the
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Registrable Securities until Montierra’s receipt of the copies of the supplemented or amended
prospectus contemplated by subsection (e) of this Section 2.4 or until it is advised in
writing by the Company that the use of the prospectus may be resumed, and has received copies of
any additional or supplemental filings incorporated by reference in the prospectus, and, if so
directed by the Company, Montierra will, or will request the Managing Underwriter or underwriters,
if any, to deliver to the Company (at the Company’s expense) all copies in their possession or
control, other than permanent file copies then in Montierra’s possession, of the prospectus and any
prospectus supplement covering such Registrable Securities current at the time of receipt of such
notice.
Section 2.5 Cooperation by Montierra. The Company shall have no obligation to include
in the Shelf Registration Statement Common Units of Montierra or in any Piggyback Registration
Common Units of Montierra who has failed to timely furnish such information which, in the opinion
of counsel to the Company, is reasonably required in order for the registration statement or
prospectus supplement, as applicable, to comply with the Securities Act.
Section 2.6 Restrictions on Public Sale by Montierra.
(a) Montierra agrees not to effect any sale, distribution or other disposition to an
unaffiliated third party of the Registrable Securities during the 180 calendar-day period following
the date hereof. Montierra agrees to execute a lock-up letter to reflect the foregoing in a form
reasonably acceptable to each of Montierra and the Company.
(b) As long as Montierra, along with its Affiliates, holds at least $5.0 million of
Registrable Securities (determined by multiplying the number of Registrable Securities offered by
the average of the closing price for Common Units for the ten trading days preceding the date of
such notice), it shall not to effect any public sale or distribution of the Registrable Securities
during the 90 calendar-day period beginning on the date of a prospectus or prospectus supplement
filed with the Commission with respect to the pricing of an Underwritten Offering, provided that
the duration of the foregoing restrictions shall be no longer than the duration of the shortest
restriction generally imposed by the underwriters on the Company or the officers, directors or any
other unitholder of the Company on whom a restriction is imposed.
Section 2.7 Expenses.
(a) Certain Definitions. “Registration Expenses” means all expenses incident to the
Company’s performance under or compliance with this Agreement to effect the registration of
Registrable Securities in a Shelf Registration pursuant to Section 2.1, or a Piggyback
Registration pursuant to Section 2.2, and the disposition of such securities, including,
without limitation, all registration, filing, securities exchange listing and quotation system
fees, all registration, filing, qualification and other fees and expenses of complying with
securities or blue sky laws, fees of the National Association of Securities Dealers, Inc., transfer
taxes and fees of transfer agents and registrars, all word processing, duplicating and printing
expenses, the fees and disbursements of counsel and independent public accountants for the Company,
including the expenses of any special audits or “cold comfort” letters required by or incident to
such performance and compliance. Except as otherwise provided in Section 2.6 hereof, the
Company shall not be responsible for legal fees or other costs incurred by Holders in connection
with the exercise of Montierra’s rights hereunder. In addition, the Company shall not be
responsible for
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any “Selling Expenses,” which means all underwriting fees, discounts and selling commissions
allocable to the sale of the Registrable Securities.
(b) Expenses. The Company will pay all Registration Expenses in connection with the
Shelf Registration Statement filed pursuant to Section 2.1(a) of this Agreement, or a
Piggyback Registration pursuant to Section 2.2, whether or not the applicable registration
statement becomes effective or any sale is made pursuant to the Shelf Registration Statement, a
Piggyback Registration or an Underwritten Offering. Montierra shall pay all Selling Expenses in
connection with any sale of its Registrable Securities hereunder.
Section 2.8 Indemnification.
(a) By the Company. In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless
Montierra thereunder, its Affiliates and their respective directors and officers, and each
underwriter, pursuant to the applicable underwriting agreement with such underwriter, of
Registrable Securities thereunder and each Person, if any, who controls Montierra or underwriter
within the meaning of the Securities Act and the Exchange Act (collectively, the “Indemnified
Persons”), against any losses, claims, damages, expenses or liabilities (including reasonable
attorneys’ fees and expenses) (collectively, “Losses”), joint or several, to which such Indemnified
Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such
Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any material fact
contained in the Shelf Registration Statement or any other registration statement contemplated by
this Agreement, any preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, 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
(in the case of a prospectus, in the light of the circumstances under which they were made) not
misleading, and will reimburse each such Indemnified Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any such Loss or actions
or proceedings within a reasonable time after such expenses are incurred and the Indemnified Person
notifies the Company of such expenses; provided, however, that the Company will not
be liable in any such case if and to the extent that any such Loss arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by such Indemnified Person in writing specifically for use in
the Shelf Registration Statement or such other registration statement, or prospectus supplement, as
applicable. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Person, and shall survive the transfer of such securities
by Montierra.
(b) By Montierra. Montierra agrees to indemnify and hold harmless the Company, its
Affiliates and their respective directors and officers, and each Person, if any, who controls the
Company within the meaning of the Securities Act or of the Exchange Act to the same extent as the
foregoing indemnity from the Company to Montierra, but only with respect to information regarding
Montierra furnished in writing by or on behalf of Montierra expressly for inclusion in the Shelf
Registration Statement or prospectus supplement relating to the Registrable Securities, or any
amendment or supplement thereto; provided, however, that the liability of Montierra
shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses)
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received by Montierra from the sale of the Registrable Securities giving rise to such
indemnification.
(c) Notice. Promptly after receipt by an indemnified party hereunder 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 hereunder, notify the indemnifying party in writing thereof;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have under this Section 2.6 except to the extent
that it has been materially prejudiced by such failure and, provided, further, that
the failure to notify the indemnifying party shall not relieve it from any liability which it may
have to any indemnified party other than under this Section 2.6. The indemnifying party
shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to assume and undertake
the defense thereof, the indemnifying party shall not be liable to such indemnified party under
this Section 2.6 for any legal expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation and of liaison
with counsel so selected; provided, however, that, (i) if the indemnifying party
has failed to assume the defense and employ counsel or (ii) if the defendants in any such action
include both the indemnified party and the indemnifying party and counsel to the indemnified party
shall have concluded that there may be reasonable defenses available to the indemnified party that
are different from or additional to those available to the indemnifying party, or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, then the indemnified party shall have the right to select a separate counsel
and to assume such legal defense and otherwise to participate in the defense of such action, with
the reasonable expenses and fees of such separate counsel and other reasonable expenses related to
such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any
other provision of this Agreement, no indemnified party shall settle any action brought against it
with respect to which it is entitled to indemnification hereunder without the consent of the
indemnifying party, unless the settlement thereof imposes no liability or obligation on, and
includes a complete and unconditional release from all liability of, the indemnifying party and
does not contain any admission of wrongdoing or illegal activity by the indemnified party.
(d) Contribution. If the indemnification provided for in this Section 2.6 is
held by a court or government agency of competent jurisdiction to be unavailable to the Company or
Montierra or is insufficient to hold them harmless in respect of any Losses, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of Montierra on the
other in connection with the statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations; provided, however, that in no event shall Montierra be
required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of
Selling Expenses) received by Montierra from the sale of Registrable Securities giving rise to such
indemnification. The relative fault of the Company on the one hand and Montierra on the other
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 has been
made by, or relates to, information supplied by such party, and the
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parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation
or by any other method of allocation which does not take account of the equitable considerations
referred to above. The amount paid by an indemnified party as a result of the Losses referred to
in the first sentence of this paragraph shall be deemed to include any legal and other expenses
reasonably incurred by such indemnified party in connection with investigating or defending any
Loss which is the subject of this paragraph. 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 is not guilty of such fraudulent misrepresentation.
(e) Other Indemnification. The provisions of this Section 2.6 shall be in
addition to any other rights to indemnification or contribution which an indemnified party may have
pursuant to law, equity, contract or otherwise.
Section 2.9 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the Registrable
Securities to the public without registration, the Company agrees to use its commercially
reasonable efforts to:
(a) Make and keep public information regarding the Company available, as those terms
are understood and defined in Rule 144 of the Securities Act;
(b) File with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(c) So long as Montierra owns any Registrable Securities, furnish to Montierra
forthwith upon request a copy of the most recent annual or quarterly report of the Company,
and such other reports and documents so filed as Montierra may reasonably request in
availing itself of any rule or regulation of the Commission allowing Montierra to sell any
such securities without registration.
ARTICLE III
MISCELLANEOUS
MISCELLANEOUS
Section 3.1 Communications. All notices and other communications provided for or
permitted hereunder shall be made in writing by facsimile, courier service or personal delivery:
(a) if to Montierra, at the most current address given by Montierra to the Company in
accordance with the provisions of this Section 3.1, which address initially is the
address set forth in the Contribution Agreement,
(b) if to a permitted transferee of Montierra, to such transferee at the address
furnished by such permitted transferee, and
(c) if to the Company, at 00000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000, notice of which is given in accordance with the provisions of this Section
3.1.
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All such notices and communications shall be deemed to have been received at the time
delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or
sent via Internet electronic mail; and when actually received, if sent by any other means.
Section 3.2 Successor and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties, including subsequent holders of
Registrable Securities to the extent permitted herein.
Section 3.3 Transfer or Assignment of Registration Rights. The rights granted to
Montierra by the Company under this Agreement may be transferred or assigned by Montierra to one or
more transferee(s) or assignee(s) of such Registrable Securities, provided that (x) the Company is
given written notice prior to any said transfer or assignment, stating the name and address of each
such transferee and identifying the securities with respect to which such registration rights are
being transferred or assigned, and (y) each such transferee assumes in writing responsibility for
its portion of the obligations of Montierra under this Agreement (unless it is already a party to
this Agreement); and provided further, that the requirements in this Section 3.3 shall not
apply to an Affiliate Transfer.
Section 3.4 Recapitalization, Exchanges, etc. Affecting the Common Units. The
provisions of this Agreement shall apply to the full extent set forth herein with respect to any
and all Common Units or other partnership interests of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for or in substitution of, the Registrable Securities, including any common
units or other equity securities that may be issued in exchange for Registrable Securities in
connection with any merger, consolidation or other business combination involving the Company, and
shall be appropriately adjusted for combinations, recapitalizations and the like occurring after
the date of this Agreement. The Company shall not merge, consolidate or combine with any other
Person unless the agreement providing for such merger, consolidation or combination expressly
provides for the continuation of the registration rights specified in this Agreement with respect
to the Common Units or other equity securities issued pursuant to such merger, consolidation or
combination.
Section 3.5 Specific Performance. Damages in the event of breach of this Agreement by
a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that
each such Person, in addition to and without limiting any other remedy or right it may have, will
have the right to an injunction or other equitable relief, including specific performance, in any
court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms
and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may
have on the ground of lack of jurisdiction or competence of the court to grant such an injunction
or other equitable relief. The existence of this right will not preclude any such Person from
pursuing any other rights and remedies at law or in equity which such Person may have.
Section 3.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
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Section 3.7 Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
Section 3.8 Governing Law. The laws of the State of New York shall govern this
Agreement without regard to principles of conflict of laws.
Section 3.9 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting or impairing the validity or enforceability of such provision in any other
jurisdiction.
Section 3.10 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the rights granted by the Company set forth herein.
This Agreement supersedes all prior agreements and understandings between the parties with respect
to such subject matter.
Section 3.11 Amendment. This Agreement may be amended only by means of a written
amendment signed by the Company and Montierra.
Section 3.12 No Presumption. In the event any claim is made by a party relating to
any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or
persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular party or its counsel.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
| EAGLE ROCK ENERGY PARTNERS, L.P. | ||||||
| By: | Eagle Rock Energy GP, L.P., | |||||
| its general partner | ||||||
| By: | Eagle Rock Energy G&P, LLC, | |||||
| its general partner | ||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Name: | Xxxx X. Xxxxxx | |||||
| Title: | President and Chief Executive Officer | |||||
| MONTIERRA MINERALS & PRODUCTION, L.P. | ||||||
| By: | Montierra Management LLC, | |||||
| its general partner | ||||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Name: | Xxxxxx X. Xxxxx | |||||
| Title: | Chief Executive Officer | |||||
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