Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated as of January 3, 2001 (this
"Agreement"), is by and between Kaneb Pipe Line Partners, L.P., a Delaware
limited partnership (the "Partnership"), and the persons and entity identified
as "Unitholders" on the signature pages hereto (individually, a "Unitholder" and
collectively the "Unitholders");
RECITALS
WHEREAS, the Partnership and the Unitholders are parties to a
Securities Purchase Agreement dated as of September 22, 2000 (the "Purchase
Agreement") pursuant to which the Partnership will acquire from the Unitholders
membership interests in Shore Terminals, LLC in exchange for cash and Units of
Limited Partnership Interests of the Partnership ("Units");
WHEREAS, in order to improve the transferability of the Units to be
received by the Unitholders pursuant to the Purchase Agreement, the Partnership,
as a condition to the consummation of the transactions contemplated therein, has
agreed to provide to the Unitholders certain registration rights with respect to
the Units.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for other good and valuable consideration, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1
REGISTRATION RIGHTS
The Partnership and the Unitholders covenant and agree as follows:
ARTICLE 1.1 Definitions. For purposes of this Agreement:
(a) The terms "register," "registered" and "registration" refer to a
registration of securities effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act (as defined
below), and the declaration or ordering of effectiveness of such registration
statement or document.
(1) The term "Registrable Securities" means any Units received by
the Unitholders pursuant to the Purchase Agreement, or as a
dividend or other distribution with respect to, or in exchange
for or in replacement of, such Units.
(b) The term "Restricted Securities" means the Registrable Securities
subject to the provisions of Section hereof.
(c) The term "Person" means an individual, partnership, corporation,
limited liability company, trust, unincorporated organization, or other legal
entity or government or agency or political subdivision thereof.
(d) The term "Commission" means the Securities and Exchange Commission.
(e) The term "Securities Act" means the Securities Act of 1933, as
amended, and the term "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(f) Securities Subject to this Agreement. The securities entitled to
the benefits of this Agreement are the Registrable Securities, but with respect
to any particular Registrable Security, only so long as such security continues
to be a Restricted Security. A Registrable Security ceases to be a Restricted
Security when it has been effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering it, it is
sold pursuant to Rule 144 or Rule 145 (or any similar provision then in force)
under the Securities Act, it may be otherwise transferred without restriction
under Rule 144 (or any similar or successor rule or provision then in force) in
compliance with the provisions thereof, as long as the volume restrictions
thereunder would permit the Unitholder to transfer all Registrable Securities
then held by the Unitholder in one transaction and the Partnership shall have
delivered a new certificate or other evidence of ownership containing no legend
restricting transfer other than one requiring any transfer to be in compliance
with the provisions of such rule (other than any volume restrictions thereof) or
it has otherwise been transferred by the Unitholder to a Person other than an
affiliate of the Unitholder without the consent of the Partnership.
ARTICLE 1.2 Required Registration.
(a) The Partnership shall, as promptly as practicable after the date
hereof, in accordance with and subject to the provisions of this Agreement,
prepare and file with the Commission a registration statement on Form S_3 (or if
S_3 or a successor form is not then available to the Partnership, on such form
of registration statement as is then available to effect a registration of the
Registrable Securities) (the "Registration Statement") to register all of the
Registrable Securities held by the Unitholders for resale by the Unitholders in
non-underwritten, market transactions, and shall use commercially reasonable
efforts to cause the Registration Statement to become effective under the
Securities Act within 90 days of the date of this Agreement. The Partnership
agrees to use commercially reasonable efforts to keep the Registration Statement
continuously effective from the date on which the Registration Statement is
declared effective through the date that is two (2) years after the date of this
Agreement.
(1) The Partnership is obligated to effect only one registration
pursuant to this Section A registration shall not be deemed to
have been effected unless it has become effective or if, after
it has become effective, such registration is terminated by a
stop order, injunction or other order of the Commission or
other governmental agency or court (unless all of the
Registrable Securities have been sold prior to the issuance of
such stop order, injunction or other order).
(b) The Partnership may delay for a maximum of 90 days the filing of
the Registration Statement pursuant to this Section when, in its good faith
judgment, the Partnership reasonably believes that the filing thereof, or the
offering of securities pursuant thereto, would materially and adversely affect a
pending or proposed public offering of securities of the Partnership, an
acquisition, merger, recapitalization, consolidation, reorganization or similar
transaction relating to the Partnership or negotiations, discussions or pending
proposals with respect thereto or require premature disclosure of information
not otherwise required to be disclosed to the potential detriment of the
Partnership.
ARTICLE 1.3 Additional Obligations of the Partnership. If and whenever the
Partnership is required by the provisions of this Agreement to use commercially
reasonable efforts to effect the registration of any Registrable Securities, the
Partnership shall as expeditiously as reasonably practicable:
(a) prepare and file with the Commission such amendments and
post_effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period (provided
that the Partnership may delay for a maximum of 90 days the filing of any such
amendment when, in its good faith judgment the Partnership reasonably believes
that the filing thereof, or the offering of securities pursuant thereto, would
materially and adversely affect a pending or proposed public offering of
securities of the Partnership, an acquisition, merger, recapitalization,
consolidation, reorganization or similar transaction relating to the Partnership
or negotiations, discussions or pending proposals with respect thereto or
require premature disclosure of information not otherwise required to be
disclosed to the potential detriment of the Partnership); cause the related
prospectus to be filed pursuant to Rule 424(b) under the Securities Act; cause
such prospectus to be supplemented by any required prospectus supplement and, as
so supplemented, to be filed pursuant to Rule 424(b) under the Securities Act;
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition set
forth in the Registration Statement or supplement to such prospectus;
(1) notify the Unitholders promptly, when a prospectus or any
prospectus supplement or post_effective amendment has been
filed, and, with respect to the Registration Statement or any
post_effective amendment, when the same has become effective,
of any request by the Commission for amendments or supplements
to the Registration Statement or related prospectus or for
additional information, of the issuance by the Commission of
any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings
for that purpose, of the receipt by the Partnership of any
notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such
purpose, of the happening of any event which requires the
making of any changes in the Registration Statement or related
prospectus so that such documents will not contain any 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 not misleading, and of the Partnership's
reasonable determination that a post_effective amendment to
the Registration Statement would be appropriate or that there
exists circumstances not yet disclosed to the public which
make further sales under the Registration Statement
inadvisable pending such disclosures and post_effective
amendment;
(b) use commercially reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement, or the lifting
of any suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction;
(c) furnish to the Unitholders, without charge, at least one signed
copy of the Registration Statement and any post_effective amendment thereto;
(d) deliver without charge to the Unitholders as many copies of the
prospectus or prospectuses (including each preliminary prospectus) and any
amendment or supplement thereto as each Unitholder may reasonably request; and
(e) prior to any public offering of Registrable Securities, register or
qualify or cooperate with the Unitholders and their counsel in connection with
the registration or qualification of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such states as the Unitholders
reasonably request in writing, provided that in qualifying under such securities
or Blue Sky laws the Partnership shall not be required to qualify to do business
or submit to the jurisdiction of any state or other jurisdiction.
In connection with the registration of Registrable Securities, the
Partnership may require the Unitholders to furnish to the Partnership such
information regarding the Unitholders and the distribution of such securities as
the Partnership may from time to time reasonably request in writing.
Each Unitholder agrees by acquisition of Registrable Securities that,
upon receipt of any notice from the Partnership of the happening of any event of
the kind described in Section (b)(ii)-(vi) hereof, the Unitholder will forthwith
discontinue disposition of securities covered by the Registration Statement or
prospectus until the Unitholder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section (b)(i) hereof, or until the
Unitholder is advised in writing by the Partnership that the use of the
applicable prospectus may be resumed, and has received copies of any additional
or supplemental filings which are incorporated by reference in such prospectus,
and, if so directed by the Partnership, the Unitholders will deliver to the
Partnership (at the Partnership's expense) all copies, other than permanent file
copies then in the Unitholders' possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
ARTICLE 1.4 Expenses of Registration. All expenses incurred in connection with
the registration pursuant to Section (including, but not limited to,
registration, filing and qualification fees, printers' and accounting fees, and
the fees and disbursements of counsel for the Partnership) shall be borne by the
Partnership, with the exception of fees and disbursements of the Unitholders'
counsel, which shall be borne by the Unitholders. In addition, the Unitholders
shall bear and pay all underwriting discounts and selling commissions
attributable to sales of Registrable Securities.
ARTICLE 1.5 Indemnification and Contribution. In the event any Registrable
Securities are included in the Registration Statement under this Agreement:
(a) The Partnership will indemnify and hold harmless the Unitholders,
the officers and directors of the Unitholders and each other Person, if any, who
controls the Unitholders within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages, liabilities or expenses, joint or several,
to which any such Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement under which such Registrable Securities were registered under the
Securities Act pursuant hereto or any prospectus contained therein, or any
post-effective amendment thereof or supplement thereto, including all documents
incorporated by reference therein, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Unitholders and each
such Person for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or expense; provided, however, that the indemnity agreement contained
in this Section (a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or expense if such settlement is effected without
the consent of the Partnership (which consent shall not be unreasonably
withheld); and provided further that the Partnership shall not be liable to any
such Person in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon any such untrue statement or
omission or alleged untrue statement or omission which has been made in said
registration statement or omitted therefrom in reliance upon and in conformity
with information furnished in writing to the Partnership by such Person
specifically for use in the preparation thereof.
(b) Each Unitholder, severally and not jointly, will indemnify and hold
harmless the Partnership, each of its directors, each of its officers who has
signed the Registration Statement, and each Person, if any, who controls the
Partnership within the meaning of Section 15 of the Securities Act, against any
losses, claims, damages, liabilities or expenses, joint or several, to which the
Partnership or any such Person, may become subject under the Securities Act or
otherwise, but only insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission of a
material fact referred to in Section (a) hereof, in each case to the extent (and
only to the extent) that such untrue statement or omission or alleged untrue
statement or omission was made in reliance upon and in conformity with
information furnished in writing by or on behalf of such Unitholder specifically
for use in connection with such registration; provided, however, that the
indemnity agreement contained in this Section (b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or expense if such
settlement is effected without the consent of the Unitholders, which consent
shall not be unreasonably withheld. The foregoing indemnification shall be
limited in amount as to each Unitholder to the proceeds received by such
Unitholder upon the sale of such Unitholder's Registrable Securities.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section , notify the indemnifying party in
writing of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
to assume the defense thereof with counsel mutually satisfactory to the parties,
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to so notify an indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the indemnified party under
this Section , except to the extent the indemnifying party is actually
prejudiced thereby, but the omission so to notify the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section .
(d) If the indemnification provided for in this Section from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section (c) hereof, any legal or other fees or 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
contribution pursuant to this Section (d) were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the preceding paragraph. Notwithstanding
the provisions of this Section (d), no Unitholder shall be required to
contribute any amount in excess of the dollar amount of the proceeds received by
such Unitholder upon the sale of such Unitholder's Registrable Securities. 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.
ARTICLE 1.6 No Assignment of Rights. No Unitholder shall assign any rights or
benefits under this Agreement without the prior written consent of the
Partnership.
(1) Reports under the Exchange Act. For the shorter of so long as the
Partnership is required under the Exchange Act to file periodic public reports
with the Commission, and a period of three (3) years after the date of this
Agreement, the Partnership shall use commercially reasonable efforts to:
(b) file with the Commission in a timely manner all reports and other
documents required of the Partnership under the Securities Act and the Exchange
Act; and
(1) furnish to a Unitholder owning any Registrable Securities or
its agent upon reasonable request a written statement by the
Partnership that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange
Act, a copy of the most recent annual or quarterly report of
the Partnership and such other reports and documents so filed
by the Partnership, and such other information as may be
reasonably required by any Unitholder to avail itself of the
benefits of Rule 144 promulgated under the Securities Act.
ARTICLE 2 MISCELLANEOUS
ARTICLE 2.1 Successors and Assigns; No Third Party Benefit. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
permitted successors and assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto and their
respective permitted successors and assigns any rights or remedies under or by
reason of this Agreement, except as expressly provided in this Agreement.
ARTICLE 2.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to any
choice or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
ARTICLE 2.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(1) Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice,
request, demand, claim, or other communication hereunder shall
be sent by personal delivery (including courier service),
telecopier during normal business hours to the number
indicated (followed promptly by mail), or registered or
certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below (any
communication shall be deemed given upon receipt):
If to Unitholders:
c/o Lancewood, Inc.
300 Delaware Avenue
9th Floor
Wilmington, Delaware 19801
Attention: Francis Jacobs
Telecopier No. (302) 552-3128
with a copy to:
Warren W. Garden, Esq.
5531 Greenbrier Drive
Dallas, Texas 75209
Telecopier No. (214) 352-3282
If to the Partnership:
Kaneb Pipe Line Partners, L.P.
2435 N. Central Expressway, Suite 700
Richardson, TX 75080
Attention: Edward D. Doherty, II
Telecopier No. (972) 699-4025
Each of the Partnership and Lancewood, Inc. may change its telecopier
number or its address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other notice in the
manner herein set forth.
ARTICLE 2.4 Amendments and Waivers. No amendments of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
party hereto. No waiver by any party of any default, misrepresentation, or
breach hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach hereunder or affect in
any way any rights arising by virtue of any prior or subsequent such occurrence.
ARTICLE 2.5 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
ARTICLE 2.6 Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the parties with respect to
the subject matter hereof, and supersedes any prior understandings, agreements,
or representations between the parties, written or oral, to the extent they
related in any way to the subject matter hereof.
IN WITNESS WHEREOF, the Partnership and the Unitholder have executed
this Agreement as of the date first above written.
PARTNERSHIP:
KANEB PIPE LINE PARTNERS, L.P.
By: Kaneb Pipe Line Company, its general partner
By:
Name: E.D. Doherty
Title: Chairman of the Board
UNITHOLDERS:
LANCEWOOD, INC.
By: Francis Jacobs, President
David L. Widener
Peter J. Jacullo, III
Richard Shore, Jr.
Michael J. Burgett
