Exhibit 10.4
CONTRIBUTION AND CONVEYANCE AGREEMENT
BY AND AMONG
CHENIERE ENERGY PARTNERS,
L.P.
CHENIERE LNG HOLDINGS,
LLC
CHENIERE ENERGY PARTNERS GP,
LLC
CHENIERE ENERGY INVESTMENTS,
LLC
SABINE PASS LNG-GP,
INC.
AND
SABINE PASS LNG-LP,
LLC
EFFECTIVE AS OF
March 26, 2007
CONTRIBUTION AND CONVEYANCE AGREEMENT
This CONTRIBUTION AND CONVEYANCE
AGREEMENT, dated as of March 26, 2007, is entered into by and
among CHENIERE ENERGY PARTNERS, L.P., a Delaware limited
partnership (“MLP”), CHENIERE LNG HOLDINGS, LLC, a
Delaware limited liability company (“Cheniere
Holdings”), CHENIERE ENERGY PARTNERS GP, LLC, a Delaware
limited liability company (“MLP GP”), CHENIERE ENERGY
INVESTMENTS, LLC, a Delaware limited liability company
(“Subsidiary LLC”), SABINE PASS LNG-GP, INC., a
Delaware corporation (“LNG-GP”), and SABINE PASS
LNG-LP, LLC, a Delaware limited liability company
(“LNG-LP”). The parties to this agreement are
collectively referred to herein as the “Parties.”
Capitalized terms used herein shall have the meanings assigned to
such terms in Section 1.1.
RECITALS
WHEREAS, MLP GP and Cheniere
Holdings have formed the MLP, 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 MLP GP 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, the following
actions have been taken prior to the date hereof:
1. Cheniere Holdings formed MLP GP,
to which Cheniere Holdings contributed $1,000 in exchange for all
of the member interests in MLP GP.
2. MLP GP and Cheniere Holdings
formed the MLP; to which MLP GP contributed $20.00 in exchange for
a 2% general partner interest in the MLP and Cheniere Holdings
contributed $980.00 in exchange for a 98% limited partner interest
(the “Holdings Initial LP Interest”).
3. The MLP formed Subsidiary LLC, to
which it contributed $1,000 in cash in exchange for 100% of the
member interests in Subsidiary LLC.
WHEREAS, concurrently with the
consummation of the transactions contemplated hereby (the
“Closing”), each of the following matters shall
occur:
1. Cheniere Holdings will convey to
Subsidiary LLC, as a capital contribution, 100% of the outstanding
common stock of LNG-GP and 100% of the member interests in LNG-LP
(the “Contributed Equity”) in return for 10,000 units
in Subsidiary LLC (the “Holdings
Interests”).
2. Cheniere Holdings will contribute
as a capital contribution to MLP GP a portion of the Holdings
Interests having a value equal to 2% of the equity value of the MLP
immediately after the Closing (the “GP
Interest”).
3. The MLP will enter into the
Services Agreement with Cheniere Terminals.
4. O&M Services will assign the
O&M Agreement to MLP GP, with the consent of Sabine Pass LNG,
pursuant to the Assignment and Assumption Agreement.
5. O&M Services and MLP GP will
enter into the Services and Secondment Agreement.
6. MLP GP will convey to the MLP, as
a capital contribution, the GP Interest in exchange for (a) a
continuation of its 2% general partner interest in the MLP and
(b) the issuance to MLP GP of the IDRs of the MLP.
7. Cheniere Holdings will convey, as
a capital contribution, the remainder of the Holdings Interests to
the MLP in exchange for (a) 135,383,831 Subordinated Units in
the MLP (representing an 82% interest), (b) 21,362,193 Common
Units in the MLP (representing a 16% interest), (c) the right
to receive distributions, if any, from the Distribution Reserve
Account as determined pursuant to Section 5.11 of the
Partnership Agreement and (d) to the extent that the Net
Funding Amount is not sufficient to purchase Treasury Securities
maturing as to principal and interest at such times and in such
amounts as MLP GP has determined will be sufficient to pay the
Initial Quarterly Distribution on the Initial Common Units and the
General Partner Units, the obligation to make an additional capital
contribution to the MLP of cash in an amount needed to purchase the
necessary Distribution Treasury Securities.
8. The public, through the
Underwriters, will (i) contribute $106,137,444 in cash, less
the Underwriters’ discount of $7,164,277 and the structuring
fee of $530,687, in exchange for 5,054,164 Common Units in the MLP
and (ii) purchase 8,445,836 Common Units (plus an additional
2,025,000 Common Units if the Underwriters exercise in full their
option to purchase additional Common Units from Cheniere Holdings)
for $177,362,556, less the Underwriters discount of $11,971,973 and
the structuring fee of $886,812 ($42,525,000, $2,870,438 and
$212,625, respectively, if the Underwriters exercise in full their
option to purchase additional Common Units).
9. Cheniere Holdings will pay
transaction expenses associated with the transactions contemplated
by this Agreement in the amount of approximately $3,800,000
(exclusive of the Underwriters’ discount and the structuring
fee).
10. The MLP will deposit $98,442,481
(the “Net Funding Amount”) in the Distribution Reserve
Account.
11. The MLP will use the Net Funding
Amount, plus any amounts contributed by Cheniere Holdings, pursuant
to Section 2.7, to purchase Treasury Securities.
12. The MLP will redeem from
Cheniere Holdings and retire the Holdings Initial LP Interest in
exchange for a payment in cash to Cheniere Holdings of
$980.00.
13. The Partnership Agreement and
the Amended and Restated Limited Liability Company Agreement of
MLP GP, which as amended and restated reflect the applicable
matters set forth above and as contained in this Agreement, will be
executed.
NOW, THEREFORE, in consideration of
their mutual undertakings and agreements hereunder, the Parties
undertake and agree as follows:
2
ARTICLE
1
DEFINITIONS
Section 1.1 The following
capitalized terms shall have the meanings given below.
(a) “Agreement” means
this Contribution and Conveyance Agreement.
(b) “Assets” has the
meaning assigned to such term in Section 3.1 of this
Agreement.
(c) “Assignment and Assumption
Agreement” means that certain Assignment and Assumption
Agreement dated as of the Closing Date among O&M Services, MLP
GP and Sabine Pass LNG.
(d) “Cheniere Terminals”
means Cheniere LNG Terminals, Inc., a Delaware
corporation.
(e) “Closing Date” means
March 26, 2007.
(f) “Common Unit” has
the meaning assigned to such term in the Partnership
Agreement.
(g) “Distribution Reserve
Account” has the meaning assigned to such term in the
Partnership Agreement.
(h) “Distribution Reserve
Amount” has the meaning assigned to such term in the
Partnership Agreement.
(i) “Effective Date”
shall mean the date on which the Registration Statement is declared
effective by the Securities and Exchange Commission.
(j) “Effective Time”
shall mean 10:30 a.m. New York, New York time on the Closing
Date.
(k) “General Partner
Units” has the meaning assigned to such term in the
Partnership Agreement.
(l) “IDRs” means
“Incentive Distribution Rights” as such term is defined
in the Partnership Agreement.
(m) “Initial Common
Unit” has the meaning assigned to such term in the
Partnership Agreement.
(n) “Initial Quarterly
Distribution” has the meaning assigned to such term in the
Partnership Agreement.
(o) “O&M Agreement”
has the meaning assigned to such term in the Partnership
Agreement.
(p) “O&M Services”
has the meaning assigned to such term in the Partnership
Agreement.
3
(q) “Offering” means the
initial public offering by the MLP and Cheniere Holdings of Common
Units.
(r) “Partnership
Agreement” means that certain First Amended and Restated
Agreement of Limited Partnership of Cheniere Energy Partners, L.P.
dated as of the Closing Date.
(s) “Partnership Group”
means the MLP, MLP GP and Subsidiary LLC.
(t) “Registration
Statement” means the registration statements on Form S-1
(Registration Nos. 333-139572 and 333-141456) filed by the MLP
relating to the Offering.
(u) “Sabine Pass LNG”
has the meaning assigned to such term in the Partnership
Agreement.
(v) “Services Agreement”
means that certain Services Agreement dated as of the Closing Date
between the MLP and Cheniere Terminals.
(w) “Services and Secondment
Agreement” means that certain Services and Secondment
Agreement dated as of the Closing Date between O&M Services and
MLP GP.
(x) “Subordinated Unit”
has the meaning assigned to such term in the Partnership
Agreement.
(y) “Underwriters” has
the meaning assigned to such term in the Underwriting
Agreement.
(z) “Underwriting
Agreement” has the meaning assigned to such term in the
Partnership Agreement.
ARTICLE 2
CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS
Section 2.1 Contribution by
Cheniere Holdings to Subsidiary LLC . Cheniere Holdings hereby
grants, contributes, bargains, conveys, assigns, transfers, sets
over and delivers to Subsidiary LLC, its successors and assigns,
for its and their own use forever, all right, title and interest in
and to the Contributed Equity, as a capital contribution, in
exchange for (a) 10,000 units in Subsidiary LLC and
(b) other good and valuable consideration, the sufficiency of
which is hereby acknowledged, and Subsidiary LLC hereby accepts the
Contributed Equity as a contribution to the capital of Subsidiary
LLC and agrees as the sole member of LNG-LP to be bound by the
terms of the Limited Liability Company Agreement of
LNG-LP.
Section 2.2 Contribution by
Cheniere Holdings of the GP Interest to MLP GP . Cheniere
Holdings hereby grants, contributes, bargains, conveys, assigns,
transfers, sets over and delivers to MLP GP, its successors and
assigns, for its and their own use forever, all right, title and
interest in and to the GP Interest, as a capital contribution, for
good and valuable consideration, the sufficiency of which is hereby
acknowledged, and MLP GP hereby accepts the GP Interest as a
contribution to the capital of MLP GP.
4
Section 2.3 Contribution by MLP
GP of the GP Interest to the MLP . MLP GP hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and
delivers to the MLP, its successors and assigns, for its and their
own use forever, all right, title and interest in and to the GP
Interest, as a capital contribution, in exchange for (a) a
continuation of its 2% general partner interest in the MLP,
(b) the issuance by the MLP to MLP GP of the IDRs, and
(c) other good and valuable consideration, the sufficiency of
which is hereby acknowledged, and the MLP hereby accepts the GP
Interest as a contribution to the capital of the MLP.
Section 2.4 Contribution by
Cheniere Holdings of Holding Interests to the MLP . Cheniere
Holdings hereby grants, contributes, bargains, conveys, assigns,
transfers, sets over and delivers to the MLP, its successors and
assigns, for its and their own use forever, all right,
