Exhibit 10.1
BOARDWALK PIPELINE PARTNERS,
LP
CONTRIBUTION, CONVEYANCE AND
ASSUMPTION AGREEMENT
CONTRIBUTION, CONVEYANCE AND
ASSUMPTION AGREEMENT
This Contribution, Conveyance and
Assumption Agreement, dated as of November 15, 2005, is
entered into by and among BOARDWALK PIPELINES HOLDING CORP., a
Delaware limited liability company (“ BPHC ”),
BOARDWALK GP, LLC, a Delaware limited liability company (“
BGL ”), BOARDWALK PIPELINE PARTNERS, LP, a Delaware
limited partnership (the “ Partnership ”),
BOARDWALK OPERATING GP, LLC, a Delaware limited liability company
(“ Operating GP ”), BOARDWALK GP, LP, a Delaware
limited liability partnership (the “ GP LP ”),
and BOARDWALK PIPELINES, LLC, a Delaware limited liability company
(“ Boardwalk ”). The above-named entities are
sometimes referred to in this Agreement each as a “
Party ” and collectively as the “ Parties
.” Capitalized terms used herein shall have the meanings
assigned to such terms in Section 1.1.
RECITALS
:
WHEREAS , BPHC and GP LP have formed the Partnership
pursuant to the Delaware Revised Uniform Limited Partnership Act
(the “ Delaware LP Act ”) for the purpose of
engaging in any business activity that is approved by and that
lawfully may be conducted by a limited partnership organized
pursuant to the Delaware LP Act;
WHEREAS, in order to accomplish the objectives and
purposes in the preceding recital, each of the following actions
have been taken prior to the date hereof:
1. BPHC formed BGL under the terms
of the Delaware Limited Liability Company Act (the “
Delaware LLC Act ”) and contributed $1,000 to BGL in
exchange for all of the member interests in BGL.
2. BGL and BPHC formed GP LP under
the terms of the Delaware LP Act and BGL contributed $.10 to GP LP
in exchange for a .01% general partner interest and BPHC
contributed $999.90 to GP LP in exchange for a 99.99% limited
partner interest.
3. BGL and BPHC entered into a
reorganization agreement pursuant to which 90% of BGL’s .01%
general partner interest in GP LP was recharacterized as a .009%
limited partner interest and BGL conveyed such limited partner
interest to BPHC, resulting in BPHC owning a 99.999% limited
partner interest in GP LP and BGL owning a .001% general partner
interest in GP LP
4. GP LP and BPHC formed the
Partnership under the terms of the Delaware LP Act and GP LP
contributed $20 to the Partnership in exchange for a 2% general
partner interest in the Partnership and BPHC contributed $980 to
the Partnership in exchange for a 98% limited partner interest in
the Partnership.
5. BPHC formed Operating GP under
the terms of the Delaware LLC Act and contributed $1,000 to
Operating GP in exchange for all of the member interests in
Operating GP.
WHEREAS, concurrently with the consummation of the
transactions contemplated hereby, each of the following shall
occur:
1. All direct and indirect
subsidiaries of Boardwalk will distribute all of their cash
accounts receivable having a value of $115.0 million (the “
Working Capital Assets ”) to Boardwalk (through any
intermediate entities) and Boardwalk, in turn, will distribute the
Working Capital Assets and those assets to BPHC.
2. BPHC will convey a .001% interest
in Boardwalk to Operating GP as a capital contribution.
3. Boardwalk will file articles of
conversion and convert to a limited partnership, Boardwalk
Pipelines, LP (“ OLP ”), designating Operating
GP as the general partner and BPHC as the limited partner of
OLP.
4. BPHC will convey part of its
limited partner interest in OLP to GP LP (the “
Interest ”) with a value equal to 2% of the equity
value of the Partnership at the end of closing (.001% on behalf of
BGL in order for BGL to maintain its .001% interest in GP
LP).
5. GP LP will convey the Interest to
the Partnership in exchange for (a) a continuation of its 2%
general partner interest in the Partnership and (b) the
issuance of the incentive distribution rights (“ IDRs
”).
6. BPHC will convey its interest in
Operating GP and the rest of its limited partner interest in the
OLP (together, the “ BPHC Interest ”) to the
Partnership in exchange for:
(a) 33,093,878 Subordinated Units
representing a 32.0% interest in the Partnership;
(b) 53,256,122 Common Units
representing a 51.5% interest in the Partnership;
(c) the right to receive $42.1
million to reimburse it for certain capital expenditures related to
the acquisition of Gulf South; and
(d) the assumption by the
Partnership of $250 million in debt owed by BPHC to Loews
Corporation relating to the acquisition of Gulf South (the “
Debt ”)
7. In connection with the
Partnership’s initial public offering (the “
Offering ”), the public, through the Underwriters,
will contribute $292,500,000 in cash to the Partnership, less the
Underwriters’ discounts and commissions of $17,550,000 and a
structuring fee of $1,200,000, in exchange for 15,000,000 Common
Units representing a 14.5% limited partner interest in the
Partnership.
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8. The Partnership will borrow $42.1
million on its revolver and distribute the proceeds to BPHC to
reimburse it for certain capital expenditures related the
acquisition of Gulf South and will use the proceeds from the
Offering to:
(a) pay transaction expenses,
estimated at $2.4 million;
(b) retire the Debt; and
(c) contribute the balance to OLP
which, in turn, contributes those funds to its subsidiaries as
additional working capital.
9. The organizational documents of
the Parties will be amended and restated as necessary to reflect
the applicable matters set forth above and as contained in this
Agreement.
NOW, THEREFORE,
in consideration of their mutual
undertakings and agreements hereunder, the Parties undertake and
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Terms . The
following defined terms shall have the meanings given
below:
“ Agreement ”
means this Contribution, Conveyance and Assumption
Agreement.
“ Assets ” means
the Interest and the BPHC Interest
“ BGL ” has the
meaning as set forth in the opening paragraph of this
Agreement.
“ Boardwalk ” has
the meaning as set forth in the opening paragraph of this
Agreement.
“ BPHC ” has the
meaning as set forth in the opening paragraph of this
Agreement.
“ BPHC Interest ”
has the meaning as set forth in the Recitals of this
Agreement.
“ BPHC Interest
Liabilities ” means all liabilities arising out of or
related to the ownership of the BPHC Interest to the extent arising
or accruing on and after the Effective Time, whether known or
unknown, accrued or contingent, and whether or not reflected on the
books and records of OLP, Operating GP or their
affiliates.
“ Code ” means
Internal Revenue Code of 1986, as amended.
“ Common Units ”
has the meaning as set forth in the Partnership
Agreement.
“ Delaware LLC Act
” has the meaning as set forth in the Recitals of this
Agreement.
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“ Delaware LP Act
” has the meaning as set forth in the Recitals of this
Agreement.
“ Effective Time
” means 8:00 a.m. prevailing Eastern Time on
November 15, 2005.
“ General Partner Units
” has the meaning as set forth in the Partnership
Agreement.
“ GP LP ” has the
meaning as set forth in the opening paragraph of this
Agreement.
“ IDR ” has the
same meaning as “Incentive Distribution Right” as set
forth Recitals of this Agreement.
“ Interest ” has
the meaning as set forth in the Recitals of this
Agreement.
“ Interest Liabilities
” means all liabilities arising out of or related to the
ownership of the Interest to the extent arising or accruing on and
after the Effective Time, whether known or unknown, accrued or
contingent, and whether or not reflected on the books and records
of OLP or its affiliates.
“ MLP Agreement ”
means the First Amended and Restated Agreement of Limited
Partnership of the Partnership, as it may be amended, supplemented
or restated from time to time.
“ New Credit Facility
” means that Credit Agreement dated as of November 15,
2005, with OLP, as borrower, the Partnership as initial guarantor,
each lender from time to time party thereto and Citibank, N.A., as
administrative agent.
“ Offering ” has
the meaning as set forth in the Recitals of this
Agreement.
“ OLP ” has the
meaning as set forth in the Recitals of this Agreement.
“ Operating GP ”
has the meaning as set forth in the opening paragraph of this
Agreement.
“ Partnership ”
has the meaning as set forth in the opening paragraph of this
Agreement.
“ Party ” or
“ Parties ” has the meaning as set forth in the
opening paragraph of this Agreement.
“ Subordinated Units
” has the meaning as set forth in the Partnership
Agreement.
“ Underwriters ”
means those the underwriting syndicate as referenced in the
Underwriting Agreement.
“ Working Capital
Assets ” has the meaning as set forth in the Recitals of
this Agreement.
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