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EXHIBIT 4.6
DRAFT
APRIL 2, 2001
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
__________, 2001, is by and between Kinder Morgan Energy Partners, L.P., a
Delaware limited partnership (the "Issuer"), and Kinder Morgan, Inc., a Kansas
corporation (the "Holder").
WITNESSETH:
WHEREAS, Kinder Morgan G.P., Inc., a Delaware corporation (the "General
Partner"), has formed Kinder Morgan 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 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 147
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
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.
"Subsidiary," when used in connection with the Issuer, means
any Affiliate of the Issuer which the Issuer controls, and of which the Issuer
owns, directly or indirectly, a majority of the aggregate shares, partnership
interests or other equity interests.
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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;
(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 from time to time;
(d) "or" is not exclusive; and
(e) 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 _____________, 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. On or prior to
____________, 200[1], the Issuer will 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 on or prior to __________,
200[1]. 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
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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.
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) As provided in Sections 2.1 and 2.2, 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 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;
(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;
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(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;
(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
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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 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
which 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 which 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
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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
officers and 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.
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(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 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 any 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, to the best knowledge of the Issuer, 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
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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 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 which it may have to
any indemnified party otherwise than under such subsection and shall not relieve
the indemnifying party from any liability which 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.
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(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 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 which
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 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 which 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 which 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 which 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.
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Section 6
Assignment of Rights
6.1 Assignment of Rights. Subject to Section 6.2, the rights of the
Holder under this Agreement with respect to any Exchange Securities may be
assigned in whole or in part to any one or more Affiliates of the Holder that
hold Exchange Securities. Any assignment of registration rights pursuant to this
Section 6.1 shall be effective upon receipt by the Company of written notice
from the Holder stating (i) the name and address of any assignee, (ii) the
nature of such assignee's relationship to the Holder and (iii) identifying the
Exchange Securities with respect to which the rights under this Agreement are
being assigned.
6.2 Scope of Assignment. The rights of an assignee under Section 6.1
shall be the same rights granted to the Holder under this Agreement, except that
in no event shall the Issuer's obligations hereunder be increased due to any
such assignment, other than increases due only to the addition of the assignee
and having multiple Holders. In connection with any such assignment, the term
"the Holder" as used herein shall, where appropriate to assign the rights and
obligations of the Holder hereunder to such assignee, be deemed to refer to the
assignee or the Holder and the assignee both, as appropriate. After any such
assignment, the Holder shall retain its rights under this Agreement with respect
to all other Exchange Securities owned by the Holder.
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
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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
materially adversely affect the powers, preferences or rights of Management or
such holders of Listed Shares or reduces the time for any notice to which the
holders of the Listed Shares may be entitled, in which case such amendment
shall, pursuant to the LLC Agreement require the affirmative vote or consent of
the holders of at least a majority of the Listed Shares then outstanding. For
this purpose, as provided in the definition of "Outstanding" in the LLC
Agreement, Listed Shares held by the Issuer or any of its Subsidiaries will not
have voting rights and, in determining if the holders of a majority of the
Listed Shares outstanding have approved or consented to such amendment, Listed
Shares held by the Issuer or any of its Subsidiaries will be treated as if they
were not outstanding. In addition, as provided in the definition of
"Outstanding" in the LLC Agreement, a Person or group owning a number of Listed
Shares and Common Units aggregating 20% or more of the aggregate number of
issued and outstanding Listed Shares plus the aggregate number of issued and
outstanding Common Units cannot vote such Listed Shares. The limitation in the
foregoing sentence, however, shall not apply to Kinder Morgan, Inc., Kinder
Morgan G.P., Inc. and their respective Affiliates. Additionally, in certain
limited instances specified in section __ of the LLC Agreement, Listed Shares
owned by Kinder Morgan, Inc. and its Affiliates are treated as not outstanding.
(b) Notwithstanding the foregoing provisions with respect to
amendments, the Holder and the Issuer have reserved the right to make, and may
make, changes in the Listed Shares and this Agreement to meet the requirements
of applicable securities and other laws and regulations, stock exchange rules
and other changes which the Holder or the Issuer determines in its sole
discretion will not have a material adverse effect on the rights and privileges
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.
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(a) if to the Issuer, to:
Kinder Morgan Energy Partners, L.P.
500 Dallas Street, Suite 1000
Houston, Texas 77002
Attention: General Counsel
(b) if to the Holder, to:
Kinder Morgan, Inc.
500 Dallas Street, Suite 1000
Houston, Texas 77002
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.
7.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK 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 as 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.
Kinder Morgan Energy Partners, L.P.
By: Kinder Morgan, G.P., Inc.,
as General Partner
By:
---------------------------------
Authorized Officer
Kinder Morgan, Inc.
By:
--------------------------------------
Authorized Officer
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