Exhibit 10.2
EXECUTION COPY
CONTRIBUTION
AGREEMENT
By and Among,
PENN VIRGINIA RESOURCE LP
CORP.,
PENN VIRGINIA RESOURCE GP,
LLC,
KANAWHA RAIL
CORP.,
PENN VIRGINIA RESOURCE GP
CORP.,
and
PENN VIRGINIA GP HOLDINGS,
L.P.
Dated as of December 8,
2006
TABLE OF CONTENTS
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ARTICLE I
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DEFINITIONS
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ARTICLE II
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CONTRIBUTION AND DISTRIBUTION
TRANSACTIONS
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Section 2.1
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Distribution of
the LTIP Units
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3
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Section 2.2
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Contribution of
Interest in PVR GP LLC by PVR GP Corp.
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3
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Section 2.3
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Contribution of
Interests in the MLP by PVR LP Corp and Kanawha
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4
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Section 2.4
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Public Cash
Contribution
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4
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Section 2.5
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Payment of
Transaction Expenses by PVG
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4
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Section 2.6
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Issuance of New
Certificates
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4
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Section 2.7
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Certificate
Legend
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4
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ARTICLE III
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ADDITIONAL TRANSACTIONS
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Section 3.1
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Over-Allotment
Option
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5
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Section 3.2
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Purchase of
Additional Interests in the MLP by PVG
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5
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ARTICLE IV
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REPRESENTATIONS AND
WARRANTIES
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Section 4.1
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Representations
and Warranties of PVR GP Corp, PVR LP Corp and Kanawha
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5
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ARTICLE V
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FURTHER ASSURANCES
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ARTICLE VI
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EFFECTIVE TIME
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ARTICLE VII
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INDEMNIFICATION
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Section 7.1
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Indemnification
by the Penn Virginia Parties
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7
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Section 7.2
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Indemnification
by PVG
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8
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Section 7.3
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Indemnification
Procedure
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8
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ARTICLE VIII
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MISCELLANEOUS
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Section 8.1
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Order of
Completion of Transactions
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9
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Section 8.2
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Costs
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9
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Section 8.3
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Headings;
References; Interpretation
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9
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Section 8.4
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Successors and
Assigns
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10
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Section 8.5
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No Third Party
Rights
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10
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Section 8.6
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Counterparts
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10
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Section 8.7
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Governing
Law
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10
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Section 8.8
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Severability
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10
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Section 8.9
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Amendment or
Modification
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10
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Section 8.10
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Integration
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10
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Section 8.11
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Deed; Bill of
Sale; Assignment
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11
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CONTRIBUTION AND CONVEYANCE
AGREEMENT
This Contribution and Conveyance
Agreement, dated as of December 8, 2006 (this “
Contribution Agreement ”), is by and among PENN
VIRGINIA RESOURCE LP CORP., a Delaware corporation (“ PVR
LP Corp ”), PENN VIRGINIA RESOURCE GP, LLC, a Delaware
limited liability company (“ PVR GP LLC ”),
KANAWHA RAIL CORP., a Virginia corporation (“ Kanawha
”), PENN VIRGINIA GP HOLDINGS, L.P., a Delaware limited
partnership (“ PVG ”), and PENN VIRGINIA
RESOURCE GP CORP., a Delaware corporation (“ PVR GP
Corp ”). The above-named entities are sometimes referred
to in this Contribution 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.
W I T N E S S E T
H:
WHEREAS , PVR GP Corp owns a 100% interest in PVR GP
LLC, the general partner of Penn Virginia Resource Partners, L.P.
(the “ MLP ”);
WHEREAS , the PVR GP LLC owns 306,327 common units
representing limited partner interests in the MLP (the “
LTIP Units ”) and the 2.0% general partner interest in
the MLP and the incentive distribution rights in the
MLP;
WHEREAS , PVR LP Corp owns 14,074,682 common units
representing limited partner interests in the MLP;
WHEREAS , Kanawha owns 1,050,612 common units
representing limited partner interests in the MLP;
WHEREAS , PVR GP Corp and PVR LP Corp have formed PVG
pursuant to the terms of the Delaware Revised Uniform Limited
Partnership Act (the “ Delaware LP Act ”) for
the purpose of facilitating the Offering;
WHEREAS, PVR GP Corp., PVR LP Corp and Kanawha desire to
transfer the economic benefits of their existing ownership
interests in the MLP GP and the MLP to PVG in order to promote the
long-term growth opportunities of the Parties;
WHEREAS , in order to accomplish the objectives and
purposes in the preceding recital, each of the following actions
has been taken prior to the date hereof:
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1.
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PVR GP Corp has
formed PVG GP, LLC ( “ PVG GP ”) pursuant to the
terms of the Delaware LLC Act and contributed $1,000 to PVG GP in
exchange for all of the member interests in PVG GP.
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2.
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PVR GP Corp and
PVR LP Corp have formed PVG pursuant to the terms of the Delaware
LP Act and PVR GP Corp contributed $100 to PVG in exchange for a
noneconomic general partner interest in PVG and PVR LP Corp
contributed $900 to PVG in exchange for a 100% limited partner
interest in PVG.
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3.
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PVR GP Corp has
conveyed its noneconomic general partner interest in PVG to PVG
GP.
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WHEREAS , concurrently with the consummation of the
transactions contemplated hereby, each of the following shall
occur:
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4.
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PVR GP LLC will
distribute (a) the LTIP Units and (b) all of the net
intercompany receivables as of the date hereof to PVR GP
Corp.
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5.
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PVR GP Corp
will contribute 100% of the interests in PVR GP LLC to PVG in
exchange for 11,317,501 PVG Common Units, representing a 29.5%
limited partner interest in PVG.
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6.
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PVR LP Corp
will contribute its 14,074,682 common units representing the
limited partner interest in the MLP to PVG in exchange for
19,362,198 PVG Common Units, representing a 50.4% limited partner
interest in PVG.
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7.
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Kanawha will
contribute its 1,050,612 common units representing the limited
partner interest in the MLP to PVG in exchange for 1,445,301 PVG
Common Units, representing a 3.8% limited partner interest in
PVG.
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8.
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In connection
with the Offering, the public, through the Underwriters, will
contribute $116,550,000 in cash less the Underwriters’
discounts and commissions of $6,993,000 (the “ Spread
”) and a structuring fee of $582,750 to PVG in exchange for
6,300,000 PVG Common Units, representing a 16.4% limited partner
interest in PVG.
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9.
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PVG will
(a) pay transaction expenses of approximately $9.5 million
(exclusive of the Spread), (b) retain $2.5 million for general
partnership purposes and (c) use the balance of the proceeds
of the Offering to purchase from the MLP, pursuant to the Units
Purchase Agreement, common units and Class B units representing
limited partner interests in the MLP.
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NOW , THEREFORE , in consideration of the
mutual covenants, representations, warranties and agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The terms set forth below in this
Article I shall have the meanings ascribed to them below or in the
part of this Contribution Agreement referred to below:
“ Business Day ”
means any day other than a Saturday, a Sunday or any other day when
banks are not open for business generally in the State of
Delaware.
“ Commission ”
means the U.S. Securities and Exchange Commission.
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“ Closing ” means
the closing of the transactions contemplated pursuant to this
Contribution Agreement.
“ Delaware LLC Act
” means the Limited Liability Company Act of the State of
Delaware, as amended and any successor to such act.
“ Delaware LP Act
” means the Delaware Revised Uniform Limited Partnership Act,
as amended and any successor to such act.
“ Effective Time
” means immediately prior to the closing of the Offering
pursuant to the Underwriting Agreement.
“ Offering ”
means the initial public offering of the PVG Common Units
contemplated by the Registration Statement.
“ Person ” means
an individual, corporation, partnership (limited or general),
limited liability company, trust, joint stock company, Governmental
Authority, unincorporated association or other legal
entity.
“ PVG Common Units
” means the common units representing limited partner
interests in PVG.
“ Registration
Statement” means the Registration Statement on Form S-1
filed with the Commission (Registration
No. 333-135686).
“ Securities Act
” means the Securities Act of 1933, as amended.
“ Underwriters ”
means those underwriters listed in the Underwriting Agreement
between Lehman Brothers Inc. and UBS Securities LLC, as
representatives of the Underwriters, PVG GP and PVG dated as of
December 4, 2006.
“ Units Purchase
Agreement ” means the Units Purchase Agreement, dated
December 4, 2006, between PVG and the MLP.
ARTICLE II
CONTRIBUTION AND DISTRIBUTION
TRANSACTIONS
Section 2.1 Distribution of
the LTIP Units . PVR
GP LLC hereby distributes, grants, contributes, bargains, assigns,
transfers, sets over and delivers to PVR GP Corp, its successors
and assigns, for its and their own use forever, (a) the LTIP
Units and (b) all of the net intercompany receivables as of
the date hereof, and PVR GP Corp accepts such LTIP units and
intercompany receivables.
Section 2.2 Contribution of
Interest in PVR GP LLC by PVR GP Corp . PVR GP Corp hereby grants, contributes,
bargains, assigns, transfers, sets over and delivers to PVG, its
successors and assigns, for its and their own use forever, a 100%
membership interest in the PVR GP LLC (the “Transferred MLP
GP Interest”, and together with the limited partner interests
in the MLP described in Section 2.3 below, the “Transferred
Assets”) in exchange for 11,317,501 PVG Common Units,
representing a 29.5% limited partner interest in PVG.
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Section 2.3 Contribution of
Interests in the MLP by PVR LP Corp and Kanawha
. (a) PVR LP Corp hereby
distributes, grants, contributes, bargains, assigns, transfers,
sets over and delivers to PVG, its successors and assigns, for its
and their own use forever, 14,074,682 common units representing a
30.2% limited partner interest in the MLP to PVG in exchange for
19,362,198 PVG Common Units, representing a 50.4% limited partner
interest in PVG; and (b) Kanawha hereby distributes, grants,
contributes, bargains, assigns, transfers, sets over and delivers
to PVG, its successor and assigns, for its and their own use
forever, 1,050,612 common units of the MLP representing a 2.3%
limited partner interest in the MLP to PVG in exchange for
1,445,301 PVG Common Units, representing a 3.8% limited partner
interest in PVG.
Section 2.4 Public Cash
Contribution . The
Parties acknowledge a capital contribution by the public, through
the Underwriters, to PVG of $116,550,000 in cash, ($109,557,000
after the Underwriters’ Spread of $6,993,000 and $108,974,250
after the payment of the structuring fee of $582,750) in exchange
for 6,300,000 PVG Common Units representing a 16.4% limited partner
interest in PVG.
Section 2.5 Payment of
Transaction Expenses by PVG . The Parties acknowledge (a) the payment
by PVG, in connection with the transactions contemplated hereby, of
estimated transaction expenses in the amount of approximately $1.9
million (exclusive of the Spread and the structuring fee),
(b) the retention by PVG of $2.5 million of the net proceeds
of the Offering for general partnership purposes and (c) the
use by PVG of the balance of the net proceeds of the Offering to
purchase from the MLP 416,444 common units and 3,610,383 Class B
units representing limited partner interests in the MLP pursuant to
the Units Purchase Agreement.
Section 2.6 Issuance of New
Certificates . At the
Closing, PVG shall issue to each of PVR GP Corp, PVR LP Corp and
Kanawha a certificate or certificates, which may be held in book
entry form, representing the respective number of PVG Common Units
to be issued to each of PVR GP Corp, PVR LP Corp and Kanawha
pursuant to Section 2.2 and Section 2.3. Each such certificate
shall be registered in the name of the Person or Persons specified
by the recipient thereof to PVG in writing at least two Business
Days prior to the Closing.
Section 2.7 Certificate
Legend . The
certificates evidencing the PVG Common Units delivered pursuant to
Section 2.2 and Section 2.3 shall bear a legend substantially in
the form set forth below and containing such other information as
PVG may deem necessary or appropriate:
THE HOLDER OF THIS SECURITY
ACKNOWLEDGES FOR THE BENEFIT OF THE PARTNERSHIP THAT THIS SECURITY
MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
IF SUCH TRANSFER WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL
OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF THE SECURITIES
AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY
OTHER GOVERNMENTAL AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER,
(B) TERMINATE THE EXISTENCE OR QUALIFICATION OF
THE
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PARTNERSHIP UNDER THE LAWS OF THE
STATE OF DELAWARE, OR (C) CAUSE THE PARTNERSHIP TO BE TREATED
AS AN ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED
AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT
ALREADY SO TREATED OR TAXED). PVG GP, LLC, THE GENERAL PARTNER OF
THE PARTNERSHIP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER
OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH
RESTRICTIONS ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF THE
PARTNERSHIP BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING
TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES. THE
RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF
ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO THROUGH THE
FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS
SECURITY IS LISTED OR ADMITTED TO TRADING.
ARTICLE III
ADDITIONAL
TRANSACTIONS
Section 3.1 Over-Allotment
Option . The
Parties