REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated as of September 17, 1999
(this "Agreement"), is made and entered into by and among Tejas Energy,
LLC, a Delaware limited liability company ("Tejas") and Enterprise Products
Partners L.P., a Delaware limited partnership ("Enterprise Partners").
W I T N E S S E T H:
WHEREAS, Tejas has received certain units of a special class of partnership
interests (the "Special Units") issued by Enterprise Partners pursuant to that
certain Contribution Agreement dated as of September 17, 1999 (the "Contribution
Agreement") between Tejas, Tejas Midstream Enterprises, LLC ("Tejas Midstream"),
Enterprise Partners, Enterprise Products Operating L.P. ("Enterprise
Operating"), Enterprise Products GP, LLC ("Enterprise GP"), Enterprise Products
Company ("EPC"), and EPC Partners II, Inc. ("EPC Partners II");
WHEREAS, the Special Units will be automatically convertible, on a
one-for-one basis into Common Units (the "Tejas Common Units") of Enterprise
Partners, effective as of the dates specified in the Contribution Agreement (the
"Conversion Date");
WHEREAS, in order to improve the transferability of the Tejas Common Units,
Enterprise Partners is willing to provide certain registration rights with
respect thereto; and
WHEREAS, Enterprise Partners and Tejas deem it to be in their respective
best interests to enter into this Agreement to set forth certain rights of Tejas
in connection with public offerings and sales of the Tejas Common Units and are
entering into this Agreement as a condition to and in connection with the
Contribution Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
obligations hereinafter set forth, the parties hereto hereby agree as follows:
Section Definitions. As used in this Agreement, the following terms have
the following meanings:
"Affiliate" means, with respect to any Person, (i) a director or executive
officer of such Person, and (ii) any other Person that, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with such Person. The term "control" means the possession,
directly or indirectly, of the power to direct the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Best Efforts" as used herein means reasonable best efforts in accordance
with reasonable commercial practice.
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"Business Day" means a day that is not a Saturday, Sunday or other day on
which banks in Houston, Texas and New York, New York are authorized or obligated
to close.
"Commission" means the Securities and Exchange Commission or any other
governmental body or agency succeeding to the functions thereof.
"Common Units" means the common units representing limited partnership
interests in Enterprise Partners.
"Contribution Agreement" means the Contribution Agreement dated September
17, 1999, by and among Tejas, Tejas Midstream, Enterprise Partners, Enterprise
Operating, Enterprise GP, EPC, and EPC Partners II, as the same may be amended,
supplemented, modified or restated.
"Equity Equivalents" means securities which are convertible, exchangeable
or exercisable for or into Common Units.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
"Executive Committee" means the Executive Committee or other governing body
of Enterprise Partners.
"Person" shall be construed broadly and shall include an individual, a
partnership, a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a governmental entity or any department, agency or political subdivision
thereof.
"Public Offering" means a public offering of Common Units or Equity
Equivalents pursuant to a registration statement declared effective under the
Securities Act, except that a Public Offering shall not include an offering made
in connection with a business acquisition or otherwise on Form S-4 under the
Securities Act (or any successor form) or an employee benefit plan or otherwise
on Form S-8 under the Securities Act (or any successor form).
"Registrable Securities" shall mean (i) Tejas Common Units; (ii) any Common
Units or other securities issued as a dividend or other distribution with
respect to or in exchange for or in replacement of the Tejas Common Units; (iii)
any Common Units issued to Tejas under Section 4.1(a) of the Unitholder
Agreement; and (iv) any then outstanding securities into which the Tejas Common
Units shall have been changed by any reclassification or recapitalization of the
Tejas Common Units or otherwise, in each case to the extent and only to the
extent such securities are held by Unitholders; provided, however, that as to
any particular securities that would otherwise be Registrable Securities, such
securities shall not be Registrable Securities until the Conversion Date with
respect to such securities has occurred and provided further, that as to any
particular Registrable
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Securities, once issued, such securities shall cease to be Registrable
Securities if (A) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of by the holder in accordance with such
registration statement, (B) such securities shall have been sold pursuant to
Rule 144, (C) as to the provisions of Section 3 hereof only, at any time the
Registrable Securities owned by a Unitholder (together with all Registrable
Securities owned by its Affiliates) represent less than 200,000 Common Units
(adjusted to reflect splits, reclassifications and similar events) and the
holder of such securities may sell such securities pursuant to paragraph (k) of
Rule 144 and without any limitation as to timing, volume or manner of sale, or
(D) such securities shall have ceased to be outstanding.
"Requesting Unitholder" means, with respect to any request for
registration hereunder, the Unitholders that have requested such registration
under Section 2 or Section 3 hereof, as the case may be.
"Required Unitholders" means, as of the date of any determination thereof,
Unitholders which then hold Registrable Securities representing at least a
majority (by number of units) of the Registrable Securities, on a fully diluted
basis, then held by all Unitholders.
"Rule 144" means Rule 144 promulgated under the Securities Act or any
successor rule thereto or any complementary rule thereto (such as Rule 144A).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"Tejas Common Units" has the meaning specified in the preamble to this
Agreement.
"Unitholder Agreement" means the Unitholder Rights Agreement dated
September 17, 1999 among Tejas, Tejas Midstream, Enterprise Partners, Enterprise
GP, EPC, and EPC Partners II.
"Unitholders" means, collectively, (i) Tejas and (ii) any Persons which, in
the future, may become parties to this Agreement pursuant to Section 13(e).
"Unitholders' Counsel" means one counsel chosen by the Requesting
Unitholders.
Section Required Registration.
Subject to Section 2(b) below, if, at any time following the Conversion
Date with respect to any Registrable Securities, Enterprise Partners shall be
requested by the Required Unitholders to effect the registration under the
Securities Act of Registrable Securities, then Enterprise Partners shall within
15 days of receipt thereof give written notice of such request to all other
holders of Registrable Securities and, thereafter, Enterprise Partners shall use
its Best Efforts to effect the registration under the Securities Act of the
Registrable Securities which Enterprise
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Partners has been requested to register by the Required Unitholders making the
request and the other Requesting Unitholders to the extent notice of such
request is received by Enterprise Partners within 20 days of their receipt of
Enterprise Partners' notice. Any request for a registration under this Section 2
shall specify the number of Registrable Securities proposed to be sold by the
Requesting Unitholders and the intended method of disposition thereof.
Anything contained in Section 2(a) notwithstanding, Enterprise Partners
shall not be obligated to effect any registration of Registrable Securities
under the Securities Act pursuant to Section 2(a) except in accordance with the
following provisions:
Enterprise Partners shall not be obligated to use its Best Efforts to file
and cause to become effective, within the meaning of clause (iii) below, more
than three registration statements in the aggregate pursuant to Section 2(a)
hereof;
Enterprise Partners may, upon written notice to the Requesting Unitholders,
delay the filing or effectiveness of any registration statement (A) during any
period during which Enterprise Partners is in the process of negotiating or
preparing, and ending on a date 90 days following the effective date of any
registration statement pertaining to a Public Offering of Common Units or Equity
Equivalents (other than on Form S-4 or Form S-8 or a comparable form), provided
that Enterprise Partners is throughout that period actively employing in good
faith its Best Efforts to cause such registration statement to become effective,
(B) until a period of at least 90 days shall have elapsed from the effective
date of any previously effected registration pursuant to Section 2, (C) during
any period during which Enterprise Partners is engaged in any material
acquisition or disposition transaction which could be significantly disrupted by
such registration, qualification and/or compliance, or (D) during any period
during which Enterprise Partners is in possession of material information
concerning it or its business and affairs, the public disclosure of which could
have a material adverse effect on Enterprise Partners as reasonably determined
by the Executive Committee; provided, however, that Enterprise Partners may not
effect more than two periods of delay under clauses (A), (C) or (D) above within
any 12-month period, and any such two delay periods shall in the aggregate not
exceed 120 days within any 12-month period;
At any time before the registration statement covering Registrable
Securities becomes effective, the Requesting Unitholders which requested such
registration may request Enterprise Partners to withdraw or not to file the
registration statement. In that event, if such request of withdrawal shall not
have been caused by, or made in response to, a material adverse change in the
business, properties, condition, financial or otherwise, or operations of
Enterprise Partners occurring on or after the date of such request, one demand
registration right shall be deemed to have been effected, as provided in
clause (i) above, unless the Requesting Unitholders shall pay to Enterprise
Partners the expenses incurred by Enterprise Partners in connection with such
registration statement through the date of such request, which payment shall be
pro rata to the number of Registrable Securities originally requested
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to be included in such registration, in which case no such demand registration
right shall be deemed to have been effected; and
Subject to clause (iii) above, no registration shall be deemed to have been
requested or effected for any purposes under this Section 2: (A) unless a
registration statement with respect thereto has become effective; (B) if, after
it has become effective, any stop order, injunction or other order or
requirement of the Commission or any other governmental agency or court, for any
reason, affecting any of the Registrable Securities covered by such registration
statement, is issued by the Commission or other governmental agency or court and
not withdrawn within 10 Business Days; (C) if the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied by reason of a failure by or
inability of Enterprise Partners to satisfy any of such conditions, or the
occurrence of an event outside the reasonable control of the relevant Requesting
Unitholders; or (D) if the request for withdrawal made by the Requesting
Unitholders pursuant to clause (iii) above shall have been caused by, or made in
response to, the material adverse change in the business properties, condition,
financial or otherwise, or operations of Enterprise Partners. (c) If a
registration effected pursuant to this Section 2 is for an underwritten Public
Offering, Enterprise Partners may include in such registration the number of
securities (for its own account or the account of any securityholder) which in
the opinion of such underwriters can be sold without adversely affecting the
proposed offering or the offering price, provided the number of Registrable
Securities requested by the Requesting Unitholders to be included in such
registration shall not be reduced.
Section Piggyback Registration.
If at any time after the Conversion Date with respect to any Registrable
Securities, Enterprise Partners proposes for any reason to register any Common
Units or Equity Equivalents (other than in connection with a business
acquisition or otherwise on Form S-4 under the Securities Act (or any successor
form) or an employee benefit plan or otherwise on Form S-8 under the Securities
Act (or any successor form)) then it shall promptly give written notice at least
15 Business Days before the anticipated filing date to each of the holders of
Registrable Securities of its intention to so register such Common Units or
Equity Equivalents and, upon the written request, delivered to Enterprise
Partners within 10 Business Days after receipt of any such notice by Enterprise
Partners, of the Unitholders to include in such registration Registrable
Securities (which request shall specify the number of Registrable Securities
proposed to be included in such registration), Enterprise Partners shall use its
Best Efforts to cause all such Registrable Securities to be included in such
registration on the same terms and conditions as the Common Units or Equity
Equivalents otherwise being sold in such registration, subject to the
limitations set forth herein.
If a registration referred to in paragraph 3(a) relates to an underwritten
Public Offering on behalf of Enterprise Partners, and the managing underwriters
advise Enterprise Partners
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in writing that the inclusion of all Registrable Securities requested to be
included in such registration would materially and adversely affect the proposed
offering or the offering price, Enterprise Partners will include in such
registration: (i) first, all securities Enterprise Partners proposes to sell,
(ii) second, all Registrable Securities which the Requesting Unitholders ask to
be included and (iii) third, such other securities (provided such securities are
of the same class as the securities being sold by Enterprise Partners) as are
requested to be included in such registration equal to the balance, if any,
allocated pro rata among the holders of such securities on the basis of the
dollar amount or number of securities requested to be included therein by each
such holder. If a registration referred to in paragraph 3(a) relates to an
underwritten secondary registration on behalf of holders of Enterprise Partners'
securities (other than holders of Registrable Securities in their capacity as
such), and the managing underwriters advise Enterprise Partners in writing that
in their opinion the securities requested to be included in such registration
exceeds the securities which can be sold in such offering without adversely
affecting the offering or the offering price, Enterprise Partners will include
in such registration, (i) first, the securities which in the opinion of such
underwriters can be sold without adversely affecting the offering or the
offering price of the securities intended to be included therein on behalf of
the other holders of Enterprise Partners' securities, allocated among the
holders of such securities in such proportions as Enterprise Partners and such
holders may agree, and (ii) to the extent of the balance, if any, the
Registrable Securities requested to be included in such registration, allocated
pro rata among the holders of such Registrable Securities on the basis of the
securities requested to be included therein by each such holder.
If the registration referred to in paragraph 3(a) involves an underwritten
offering, the right of any Unitholder to include any Registrable Securities in
such registration pursuant to this Section 3 shall be conditioned upon such
Unitholders' participation in such underwriting. The Unitholders proposing to
include their Registrable Securities pursuant to this Section 3 shall enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by Enterprise Partners.
(d) Notwithstanding anything to the contrary in this Section 3, if a
registration referred to in paragraph 3(a) relates to an underwritten offering
of a class of securities of Enterprise Partners different from the Registrable
Securities proposed to be included in such offering and the managing
underwriters advise that in their opinion Registrable Securities of a different
class cannot be included in such offering without adversely affecting the
offering or the offering price, then the holders of the Registrable Securities
shall not be entitled to include Registrable Securities in such registration.
(e) Enterprise Partners shall have the right to terminate any proposed
registration under this Section 3 at any time without any obligation to the
Requesting Holders requesting inclusion in such registration under this Section
3.
Section Holdback Agreement.
If Enterprise Partners at any time shall register Common Units or Equity
Equivalents under the Securities Act (including any registration pursuant to
Section 3) for sale in an
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underwritten Public Offering, then to the extent requested by the underwriters
for such offering, the Unitholders shall not sell, make any short sale of, grant
any option for the purchase of, or otherwise dispose of, directly or indirectly,
any Registrable Securities (other than those Registrable Securities included in
such registration) without the prior written consent of Enterprise Partners, for
a period designated by the managing underwriter in writing to the Unitholders,
which period shall begin not more than seven days prior to the effectiveness of
the registration statement pursuant to which such Public Offering shall be made
(or within seven days prior to the execution of the applicable underwriting
agreement in the case of an offering pursuant to Rule 415) and shall not last
more than 90 days after the closing of such Public Offering or such shorter
holdback period to which Enterprise Partners or other unitholders of Enterprise
Partners holding at least 10% of the Common Units of Enterprise Partners (on a
fully diluted basis) are subject. The Requesting Unitholders will enter into
agreements with the underwriters to the foregoing effect.
If, at any time, Enterprise Partners is requested by the Requesting
Unitholders to register Registrable Securities pursuant to Section 2(a) hereof
under the Securities Act for sale in an underwritten Public Offering, then to
the extent requested by the underwriters for such offering Enterprise Partners
shall not sell, make any short sale of, grant any option (other than under
compensatory option or benefit plans of Enterprise Partners or its Affiliates)
for the purchase of, or otherwise dispose of, directly or indirectly, any
securities similar to those being registered or any Equity Equivalents, without
the prior written consent of the managing underwriter, for a period designated
by the managing underwriter in writing to Enterprise Partners, which period
shall begin not more than seven days prior to the effectiveness of the
registration statement pursuant to which such public offering shall be made (or
within seven days prior to the execution of the applicable underwriting
agreement in the case of an offering pursuant to Rule 415) and shall not last
more than 90 days after the closing of the sale of units pursuant to such
registration statement or such shorter holdback period to which the Unitholders
are then subject. Enterprise Partners shall use its Best Efforts to cause each
holder of at least 10% (on a fully diluted basis) of Common Units other than
Unitholders to agree not to sell publicly, make any short sale of, grant any
option for the purchase of, or otherwise dispose publicly of, any Common Units
or Equity Equivalents (except as part of the underwritten offering pursuant to
such registration statement), without the prior written consent of the managing
underwriter, for a period designated by the managing underwriter in writing to
such holders, which period shall begin not more than seven days prior to the
effectiveness of the registration statement pursuant to which such public
offering shall be made (or within seven days prior to the execution of the
applicable underwriting agreement in the case of an offering pursuant to
Rule 415) and shall not last more than 90 days after the closing of the sale of
units pursuant to such registration statement or such shorter holdback period to
which the Unitholders are then subject.
Section Preparation and Filing.
If and whenever Enterprise Partners is under an obligation pursuant to the
provisions of this Agreement to use its Best Efforts to effect the registration
of any Registrable Securities, Enterprise Partners shall, as expeditiously as
practicable:
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use its Best Efforts to cause a registration statement that registers such
Registrable Securities to be filed within 45 days following the request
delivered pursuant to Section 2 and to become and remain effective for a period
(the "Registration Period") of 180 days (or such extended period pursuant to
clause (viii) below) or until all of such Registrable Securities have been
disposed of (if earlier);
furnish, at least five Business Days before filing a registration statement
that registers such Registrable Securities, a prospectus relating thereto or any
amendments or supplements relating to such a registration statement or
prospectus, to Unitholders' Counsel, copies of all such documents proposed to be
filed (it being understood that such five-Business-Day period need not apply to
successive drafts of the same document proposed to be filed so long as such
successive drafts are supplied to Unitholders' Counsel in advance of the
proposed filing by a period of time that is customary and reasonable under the
circumstances);
prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective at all times
during the Registration Period and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of such Registrable
Securities;
notify in writing Unitholders' Counsel promptly of (A) the receipt by
Enterprise Partners of any notification with respect to any comments by the
Commission with respect to such registration statement or prospectus or any
amendment or supplement thereto or any request by the Commission for the
amending or supplementing thereof or for additional information with respect
thereto, (B) the receipt by Enterprise Partners of any notification with respect
to any stop order issued or threatened to be issued by the Commission suspending
the effectiveness of such registration statement or prospectus or any amendment
or supplement thereto or the initiation or threatening of any proceeding for
that purpose and (C) the receipt by Enterprise Partners of any notification with
respect to the suspension of the qualification of such Registrable Securities
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purposes;
use its Best Efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdictions as
Unitholders reasonably request and to keep such registration and qualification
in effect for so long as such registration statement remains in effect and to do
any and all other acts and things which may be reasonably necessary or advisable
to enable Unitholders to consummate the disposition in such jurisdictions of the
Registrable Securities owned by Unitholders; provided, however, that Enterprise
Partners will not be required to qualify generally to do business or consent to
general service of process or taxation in any jurisdiction where it would not
otherwise be required to do so but for this clause (v);
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furnish, without charge, to the holders of such Registrable Securities such
number of copies of such registration statement, prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents (including exhibits thereto and documents
incorporated by reference therein) as such holders may reasonably request in
order to facilitate the public sale or other disposition of such Registrable
Securities;
use its Best Efforts to cause such Registrable Securities to be registered
with or approved by such other governmental agencies or authorities or
self-regulatory organizations as may be necessary by virtue of the business and
operations of Enterprise Partners to enable the Unitholders holding such
Registrable Securities to consummate the disposition of such Registrable
Securities;
notify in writing holders of Registrable Securities on a timely basis at
any time when a prospectus relating to such Registrable Securities is required
to be delivered under the Securities Act during the Registration Period of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing and, at the request of the holders of Registrable
Securities, prepare and furnish to such holders a reasonable number of copies of
a supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the offerees and purchasers of such units, such
prospectus shall 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 light of the circumstances then existing;
provided, however, that the Registration Period shall be deemed to be extended
by the number of days constituting the period commencing on and including the
date of the giving of such notice to such seller and ending on and including the
date when Enterprise Partners made available to such seller an amended or
supplemented prospectus;
in the case of an underwritten offering, use its Best Efforts to obtain
from its independent certified public accountants "comfort" letters in customary
form and at customary times and covering matters of the type customarily covered
by comfort letters;
in the case of an underwritten offering, (A) use its Best Efforts to obtain
from its counsel an opinion or opinions in customary form to the underwriters
and the holders of Registrable Securities and (B) to enter into a customary
underwriting agreement and make representations and warranties to the
underwriters, in form, substance and scope as are customarily made by issuers to
underwriters in comparable underwritten offerings;
provide a transfer agent and registrar (which may be the same entity and
which may be Enterprise Partners) for such Registrable Securities;
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if required, issue to any underwriter to which the holders of Registrable
Securities may sell units in such offering certificates evidencing such
Registrable Securities;
use its Best Efforts to list such Registrable Securities on the New York
Stock Exchange or such other securities exchange on which the Common Units are
traded;
use all reasonable efforts to obtain the lifting at the earliest possible
time of any stop order suspending the effectiveness of such registration
statement or of any order preventing or suspending the use of any preliminary
prospectus included therein; and
use its Best Efforts to take all other steps necessary to effect the
registration of such Registrable Securities contemplated hereby.
Each holder of the Registrable Securities, upon receipt of any notice from
Enterprise Partners of any event of the kind described in Section 5(a)(viii)
hereof, shall forthwith discontinue disposition of the Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5(a)(viii) hereof, and, if so directed by
Enterprise Partners, such holder shall deliver to Enterprise Partners all
copies, other than permanent file copies then in such holder's possession, of
the prospectus covering such Registrable Securities at the time of receipt of
such notice.
In the case of an underwritten offering pursuant to Section 2 hereof, the
Requesting Unitholders shall choose the managing underwriter, provided that the
managing underwriter is reasonably acceptable to Enterprise Partners. In the
case of an underwritten offering pursuant to Section 3 hereof, Enterprise
Partners shall choose the managing underwriter. In either case, the form of
underwriting agreement shall be reasonably acceptable to Enterprise Partners.
Enterprise Partners may require each seller of Registrable Securities as to
which any registration is being effected hereunder to furnish to Enterprise
Partners such information and complete such questionnaires regarding the seller
and the distribution of such securities as Enterprise Partners may from time to
time reasonably request.
Section Expenses. All expenses (other than as provided in the last sentence
of this Section 6) incident to the registration of Registrable Securities
pursuant to Section 2 and 3 hereof, including, without limitation, the fees and
expenses of the underwriters, all salaries and expenses of Enterprise Partners'
officers and employees performing legal or accounting duties, the expense of any
annual audit or quarterly review, the expense of any liability insurance, all
registration and filing fees, the expense and fees for listing securities on one
or more securities exchanges, the fees and expenses of complying with securities
and blue sky laws, printing expenses, messenger and delivery expenses, fees and
expenses of Enterprise Partners' counsel and accountants, and the reasonable
fees and expenses of one counsel to the Unitholders not to exceed $25,000 for
any registration (all such expenses being herein called "Registration
Expenses"), shall be borne by Enterprise Partners;
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provided, however, that with respect to any request for registration begun
pursuant to Section 2 that is subsequently withdrawn by the Requesting
Unitholders, other than if such withdrawal is caused by, or made in response to,
a material adverse change in the business, properties, condition, financial or
otherwise, or operations of Enterprise Partners occurring on or after the date
of such request, then Enterprise Partners shall not be required to pay the
Registration Expenses of such registration and the Registration Expenses shall
be paid by the withdrawing Unitholders pro rata based on the number of
Registrable Securities to be included therein. All underwriting discounts and
selling commissions applicable to the Registrable Securities and the fees and
expenses of any counsel to the Unitholders not provided for in the above
definition of Registration Expenses shall be borne by the holders selling such
securities, in proportion to the number of securities sold by each such holder.
Section Indemnification.
In connection with any registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, Enterprise Partners shall indemnify
and hold harmless, to the fullest extent permitted by law, the holders of
Registrable Securities, each other Person, if any, who controls any such holder
of Registrable Securities within the meaning of the Securities Act or the
Exchange Act, and each of their respective directors, partners, officers and
agents, against any and all losses, claims, damages or liabilities, joint or
several (or actions or threatened actions in respect thereof), to which any of
the foregoing Persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or threatened
actions in respect thereof) arise out of or are based upon (i) an untrue
statement or allegedly untrue statement of a material fact contained in the
registration statement under which such Registrable Securities were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein or otherwise filed with the Commission, any amendment or
supplement thereto or any document incident to registration or qualification of
any Registrable Securities or (ii) 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 or, with respect to any prospectus, necessary
to make the statements therein in light of the circumstances under which they
were made not misleading. Enterprise Partners shall reimburse each holder of
Registrable Securities and each such controlling Person for any expenses
(including reasonable attorneys' fees, disbursements and expenses as incurred)
reasonably incurred by any of them in connection with investigating or defending
against any such loss, claim, damage, liability, action or threatened action.
Notwithstanding the foregoing provisions of this Section 7, Enterprise Partners
shall not be liable to any such indemnified Person in any such case to the
extent that any such loss, claim, damage, liability, action or threatened action
(including any reasonable legal or other fees, disbursements and expenses
incurred) arises out of or is based upon an untrue statement or allegedly untrue
statement or omission or alleged omission made in said registration statement,
preliminary prospectus, final prospectus, amendment, supplement or document
incident to registration or qualification of any Registrable Securities in
reliance upon and in conformity with written information furnished to Enterprise
Partners by or on behalf of a holder of Registrable Securities specifically for
use in the preparation thereof. The foregoing indemnity agreement is subject to
the condition that, insofar as it relates to any untrue statement, allegedly
untrue statement, omission or alleged omission made in any preliminary
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prospectus but eliminated or remedied in the final prospectus (filed pursuant to
Rule 424 of the Securities Act), such indemnity agreement shall not inure to the
benefit of any underwriter who participates in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter (within the meaning of the Securities Act or the Exchange Act) from
whom a Person asserting any loss, claim, damage, liability or expense purchased
the Registrable Securities which are the subject thereof, if a copy of such
final prospectus had been made available to such underwriter and such
controlling Person and such final prospectus was not delivered to such Person
asserting any loss, claim, damage, liability or expense with or prior to the
written confirmation of the sale of such Registrable Securities to such Person.
In connection with any registration of Registrable Securities under the
Securities Act pursuant to this Agreement, each holder of Registrable Securities
shall severally and not jointly indemnify and hold harmless, in the same manner
and to the same extent as set forth in the preceding paragraph (a) of this
Section 7, Enterprise Partners, each director of Enterprise Partners, each
officer of Enterprise Partners who shall sign such registration statement and
each Person who controls any of the foregoing Persons (within the meaning of the
Securities Act), against any losses, claims, damages or liabilities, joint or
several (or actions or threatened actions in respect thereof), to which any of
the foregoing Persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or threatened
actions in respect thereof) arise out of or are based upon any statement or
omission from such registration statement, any preliminary prospectus or final
prospectus contained therein or otherwise filed with the Commission, any
amendment or supplement thereto or any document incident to registration or
qualification of any Registrable Securities, if such statement or omission was
made in reliance upon and in conformity with written information furnished to
Enterprise Partners by such holder with respect to such holder specifically for
use in connection with the preparation of such registration statement,
preliminary prospectus, final prospectus, amendment, supplement or document;
provided, however, that the maximum amount of liability in respect of such
indemnification shall be limited, in the case of each seller of Registrable
Securities, to an amount equal to the net proceeds actually received by such
seller from the sale of Registrable Securities effected pursuant to such
registration.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 7, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, 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
the defense thereof, (i) the indemnified party shall reasonably cooperate with
the indemnifying party and its counsel in the defense of such claim, and
(ii) the indemnifying party shall not be responsible for any legal or other
fees, disbursements and expenses subsequently incurred by the indemnified party
in connection with the defense thereof; provided, however, that if any
indemnified party shall have reasonably concluded that there may be one or more
legal or equitable defenses available to such indemnified
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party which are additional to or conflict with those available to the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party and such
indemnifying party shall reimburse such indemnified party and any Person
controlling such indemnified party for that portion of the fees, disbursements
and expenses of not more than one counsel retained by the indemnified party in
connection with the matters covered by the indemnity agreement provided in this
Section 7 provided that no indemnifying party shall, in connection with any such
suit, be liable under this subsection for the fees and expenses of more than one
separate firm for all indemnified parties. No indemnifying party shall be liable
for any compromise or settlement of any such action effected without its
consent, such consent not to be unreasonably withheld. No indemnifying party, in
the defense of any such claim or suit, shall, except with the consent of each
indemnified party which shall not be unreasonably withheld, consent to any
compromise or settlement which does not include as an unconditional term thereof
the giving by the claimant to such indemnified party of a release from all
liability in respect of such claim or suit.
If the indemnification provided for in this Section 7 is unavailable to an
indemnified party hereunder with respect to any loss, claim, damage, liability,
action or threatened action referred to herein, then the indemnifying party, in
lieu of indemnifying such indemnified party hereunder, shall contribute to the
amounts paid or payable by such indemnified party as a result of such loss,
claim, damage, liability, action or threatened action in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions which resulted in such loss, claim, damage, liability, action or
threatened action as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether any statement or
omission, including any 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 indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that the maximum amount
of liability in respect of such contribution shall be limited, in the case of
each seller of Registrable Securities, to an amount equal to the net proceeds
actually received by such seller from the sale of Registrable Securities
effected pursuant to such registration. The amount paid or payable by a party
under this Section 7(d) as a result of the loss, claim, damage, liability,
action or threatened action referred to above shall be deemed to include any
legal or other fees, disbursements and expenses reasonably incurred by such
party in connection with any investigation or proceeding. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
Section 7(d) were to be determined by pro rata allocation or by any method of
allocation which does not take account of the equitable considerations referred
to in the first and second sentences of this Section 7(d). 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.
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The provisions of this Section 7 shall be in addition to any other
liability which any indemnifying party may have to any indemnified party and
shall survive the termination of this Agreement.
Section Underwriting Agreement. To the extent that the holders of
Registrable Securities participating in any underwritten registration shall
enter into an underwriting or similar agreement that contains provisions which
conflict with any provision of Section 7 hereof, as between Enterprise Partners
and such holders of Registrable Securities, the provisions contained in
Section 7 hereof shall control.
Section Information by Holder. The Unitholders shall furnish to Enterprise
Partners such written information regarding the Unitholders and the distribution
proposed by the Unitholders as Enterprise Partners may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
Section Exchange Act Compliance. Enterprise Partners agrees to and shall
comply with all of the reporting requirements of the Exchange Act applicable to
it. Upon the request of any holder of Registrable Securities, Enterprise
Partners shall deliver to such holder a written statement as to whether it has
complied with such requirements. Enterprise Partners shall cooperate with the
Unitholders in supplying such information as may be necessary for the
Unitholders to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of
Rule 144.
Section No Conflict of Rights. Enterprise Partners shall not, after the
date hereof, grant any registration rights which conflict with or impair the
registration rights granted hereby.
Section Termination. Except as provided in Section 7(e) hereof, this
Agreement shall terminate and be of no further force or effect when there shall
no longer be any Registrable Securities outstanding.
Section Miscellaneous.
Notices. All notices, requests and other communications hereunder must be
in writing and will be deemed to have been duly given only if delivered
personally at by facsimile transmission or mailed (prepaid first class certified
mail, return receipt requested) to the parties at the following addresses or
facsimile numbers: If to Enterprise Partners, to:
Enterprise Products Company
P.O. Box 4324 (77210-4324)
2727 North Loop West, Suite 700
Houston, Texas 77008
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Attention: Chief Financial Officer
Phone: (713) 880-6500
Fax No. (713) 880-6570
With a copy to:
Enterprise Products Company
P.O. Box 4324 (77210-4324)
2727 North Loop West, Suite 700
Houston, Texas 77008
Attention: Chief Legal Officer
Phone: (713) 880-6500
Fax No. (713) 880-6570
If to Tejas or its Affiliates, to:
Tejas Energy, LLC
1301 McKinney Street, Suite 700
Houston, Texas 77010
Attention: Chief Operating Officer
Phone: (713) 230-3000
Fax No. (713) 230-2900
With a copy to:
Tejas Energy, LLC
1301 McKinney Street, Suite 700
Houston, Texas 77010
Attention: General Counsel
Phone: (713) 230-3000
Fax No. (713) 230-1800
All such notices, requests and other communications will (i) if delivered
personally against written receipt to the address as provided in this Section,
be deemed given upon delivery, (ii) if delivered by facsimile transmission to
the facsimile number as provided in this Section, be deemed given upon receipt
or upon the next Business Day if received after normal business hours or a day
which is not a Business Day, and (iii) if delivered by mail in the manner
described above to the address as provided in this Section, be deemed given upon
receipt (in each case regardless of whether such notice is received by any other
person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
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Specific Performance. The parties hereto agree that in the event any
provision of this Agreement was not performed in accordance with the terms
hereof, irreparable damage would occur, and that the parties shall therefore be
entitled to specific performance of the terms hereof, in addition to any remedy
that may be available to any of them at law or equity and, to the extent
permitted by applicable law, each party waives any objection to the imposition
of such relief.
Entire Agreement. This Agreement, together with the Contribution Agreement
and the Unitholder Agreement, supersedes all prior discussions and agreements
between the parties with respect to the subject matter hereof and thereof, and
contains the sole and entire agreement between the parties hereto with respect
to the subject matter hereof and thereof.
Successors and Assigns. This Agreement shall bind and inure to the benefit
of Enterprise Partners and the Unitholders and, subject to Section 13(e) below,
the respective successors and assigns of Enterprise Partners and Unitholders.
Assignment. Subject to the terms set forth in the Unitholder Agreement,
each Unitholder may assign its rights hereunder to any purchaser or transferee
of Registrable Securities; provided, however, that (i) such transfer is
otherwise effected in accordance with applicable securities laws, (ii) such
purchaser or transferee shall, as a condition to the effectiveness of such
assignment, be required to execute a counterpart to this Agreement agreeing to
be treated as a Unitholder, whereupon such purchaser or transferee shall have
the benefits of and shall be subject to the restrictions contained in this
Agreement as if such purchaser or transferee was originally included in the
definition of a Unitholder and had originally been a party hereto and
(iii) Enterprise Partners is given written notice of such transfer after such
transfer, setting forth the name and address of such assignee and identifying
the Registrable Securities with respect to which such registration rights have
been assigned. Schedule I hereto shall, from time to time, be amended to include
the name, address and numbers of Registrable Securities of each such Unitholder.
Waiver. Any term or condition of this Agreement may be waived at any time
by the party that is entitled to the benefit thereof, but no such waiver shall
be effective unless set forth in a written instrument duly executed by or on
behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
Amendment. This Agreement may be amended, supplemented or modified only by
a written instrument duly executed by or on behalf of each party hereto.
No Third Party Beneficiary. The terms and provisions of this Agreement are
intended solely for the benefit of each party hereto and their respective
successors or permitted assigns, and it is not the intention of the parties to
confer third-party beneficiary rights upon any other Person except to the extent
such Person is expressly given rights herein.
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Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas applicable to a contract executed
and performed in such State without giving effect to the conflicts of laws
principles thereof.
Counterparts. This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed as of the date first written above.
TEJAS ENERGY, LLC
By: /s/ Curtis R. Frasier
Curtis R. Frasier
Executive Vice President and
Chief Operating Officer
ENTERPRISE PRODUCTS PARTNERS L.P.
By: Enterprise Products GP, LLC, its General Partner
By: /s/ O.S. Andras
O. S. Andras
President and Chief Executive Officer
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Schedule I
Unitholders Number of Registrable Securities Held
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