Exhibit 10.36
CONTRIBUTION, ASSUMPTION AND
CONVEYANCE AGREEMENT
THIS CONTRIBUTION, ASSUMPTION AND
CONVEYANCE AGREEMENT ,
dated as of November 1, 2006, is entered into by and between
ENERGY TRANSFER EQUITY, L.P., a Delaware limited partnership
(“ ETE ”) and ENERGY TRANSFER
INVESTMENTS, L.P., a Delaware limited partnership (“
ETI ”). 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 , ETI owns a 50% Class B limited partner
interest (the “ IDR Interest ”) in Energy
Transfer Partners GP, L.P. (“ ETP GP
”);
WHEREAS , ETI is a party that certain Credit and
Guaranty Agreement, dated as of April 24, 2006, as amended by
that certain Amendment Number 1 to Credit and Guaranty Agreement,
dated as of July 21, 2006, naming ETI, UBS AG, Stamford
Branch, as Administrative Agent and Collateral Agent, UBS
Securities LLC as Arranger and the lenders from time to time party
thereto (the “Lenders”) (the “ Loan
Agreement ”);
WHEREAS , ETI proposes to assign and transfer all of its
rights and obligations under the Loan Agreement to ETE;
WHEREAS , ETI desires to assign all of its rights and
obligations under the Loan Agreement and ETE desires to accept such
assignment and assume such obligations;
WHEREAS , ETI desires to contribute the IDR Interest to
ETE in exchange for 83,148,900 Class C common units in ETE (the
“ Class C Units ”), the assumption of the
Loan Agreement by ETE, and ETE desires to issue the Class C
units and accept the assignment of, and assume the obligations of
ETI, the Loan Agreement in exchange for the IDR Interest;
and
WHEREAS , the Class C Units will have the
characteristics set forth in Amendment No. 1 to the Third
Amended and Restated Agreement of Limited Partnership of ETE, a
copy of which is attached hereto as Exhibit A
(“ Amendment No. 1 ”).
NOW, THEREFORE
, in consideration of the premises,
warranties, covenants and agreements contained herein, the parties
agree as follows:
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) “ Common
Unit ” has the meaning assigned to such term in the
ETE Partnership Agreement.
(c) “ Closing
” has the meaning specified in Section 3.1.
(d) “ Closing
Date ” has the meaning specified in
Section 3.1.
(e) “ ETE Partnership
Agreement ” means the Third Amended and Restated
Agreement of Limited Partnership of ETE dated as of
February 8, 2006, as amended by Amendment No. 1, dated as
of the Closing Date.
(f) “ ETP
” means Energy Transfer Partners, L.P., a Delaware limited
partnership.
(g) “ ETP GP Partnership
Agreement ” means the Amended and Restated Agreement
of Limited Partnership of ETP GP, dated as of February 8,
2006.
(h) “ ETP GP LLC
Agreement ” means the Amended and Restated Limited
Liability Company Agreement Energy Transfer Partners, L.L.C., dated
as of February 8, 2006.
(i) “ Property
” means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or
intangible.
(j) “ Material Adverse
Effect ” means, with respect to any party, any event
or condition that has had or could reasonably be expected to
(i) have a material adverse effect on the financial condition,
results of operations or business of such party, (ii) result
in a breach or violation of any representation, warranty, covenant
or condition contained in this Agreement as a result of which a
party has, or with notice, the lapse of time or both, is likely to
have, the right to terminate this Agreement or (ii) impair or
affect adversely such party’s ability to perform its
obligations under this Agreement or impair or delay completion of
the transactions contemplated hereby.
(k) “ CCE Purchase
Agreement ” means the Purchase and Sale Agreement,
dated as of September 14, 2006, among ETP and the Class B
Members of CCE Holdings, LLC.
ARTICLE 2
CONTRIBUTIONS, ACKNOWLEDGMENTS
AND DISTRIBUTIONS
Section 2.1 Contribution
of IDR Interest to ETE . Subject to the terms and
conditions hereof, ETI hereby agrees to contribute, grant, bargain,
convey, assign, transfer, set over and deliver to ETE, its
successors and assigns, for their use forever, all right, title and
interest in and to the IDR Interest owned by ETI as a contribution
to the capital of ETE and ETE hereby agrees to accept such IDR
Interest as a contribution to the capital of ETE.
Section 2.2 Issuance of
Class C Units and Assumption of Loan Agreement and ETP Promissory
Note . Subject to the terms and conditions hereof, ETE
hereby agrees to issue, grant, bargain, convey, assign, transfer,
set over and deliver to ETI the Class C Units and to accept and
assume the Loan Agreement and all of the rights and obligations of
ETI arising out of or related to the Loan Agreement in exchange for
the contribution of the IDR Interest by ETI
and ETI hereby agrees to accept the Class C
Units in exchange for its capital contribution of the IDR Interest
to ETE.
Section 2.3 Certificate
Legends . The certificates evidencing the Class C Units
delivered pursuant to Section 2.2 shall bear a legend
substantially in the form set forth below and containing such other
information as ETE may deem necessary or appropriate:
THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IT MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE PARTNERSHIP THAT SUCH REGISTRATION IS NOT REQUIRED.
ARTICLE 3
CLOSING
Section 3.1 Time and
Place . Subject to the terms and conditions hereof, the
closing of the transactions contemplated hereby (the “
Closing ”) shall be held at the offices of
Vinson & Elkins L.L.P., 2500 First City Tower, 1001
Fannin, Houston, Texas 77002 at 3:00 p.m., Houston time,
immediately following the satisfaction or waiver of the conditions
contained in Article 7 or at such other place or time as the
parties hereto may mutually agree. The date of the Closing is
referred to herein as the “ Closing Date
.”
Section 3.2 Deliveries at
the Closing . At the Closing, the following shall
occur:
(a) ETI shall execute and deliver to
ETE duly executed unit certificates or unit certificates endorsed
in blank whereby the IDR Interest is transferred to ETE;
(b) ETE shall execute and deliver
Amendment No. 1 and shall deliver to ETI the Class C
Units;
(c) ETI shall deliver to ETE an
officer’s certificate, dated the Closing Date, and executed
by ETI, reasonably satisfactory in form and substance to ETE, as to
the matters set forth in Sections 7.1(a) and (b);
(d) ETE shall deliver to ETI an
officer’s certificate, dated the Closing Date, and executed
by ETE, reasonably satisfactory in form and substance to ETI, as to
the matters set forth in Sections 7.2(a) and (b);
(e) ETI and ETE shall execute and
deliver to the other counterparts of the form of registration
rights agreement attached as Exhibit B ;
(f) ETI shall deliver an executed
consent of the lenders under the Loan Agreement, approving,
ratifying and consenting to the assignment and assumption set forth
in Section 2.2;
(g) ETI shall deliver to ETE
Investor Representation Letters, duly executed by each of
ETI’s limited and general partners, in the form attached
hereto as Exhibit C ; and
(h) Each Party shall execute such
additional documents as the other Party shall reasonably request to
effectuate the transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF ETI
ETI hereby represents and warrants
to ETE that the statements contained in this Article 4 are
correct and complete as of the date hereof.
Section 4.1
Existence . ETI (i) is a limited partnership
duly organized, legally existing and in good standing under the
laws of the State of Delaware and (ii) has all requisite power
and authority, and has all governmental licenses, authorizations,
consents and approvals necessary, to own, lease, use and operate
its Properties and carry on its business as its business is now
being conducted, except where the failure to obtain such licenses,
authorizations, consents and approvals would not be reasonably
likely to have a Material Adverse Effect.
Section 4.2
Authority . ETI has all necessary power and authority
to execute, deliver and perform its obligations under this
Agreement; and the execution, delivery and performance by ETI of
this Agreement has been duly authorized by all necessary action on
its part; and this Agreement constitutes the legal, valid and
binding obligations of ETI, enforceable in accordance with its
terms.
Section 4.3
Approvals . Other than consents that have been
obtained, ETI is not required to obtain any authorization, consent,
approval, waiver, license, qualification or written exemption from,
nor make any filing, declaration, qualification or registration
with, any court or governmental agency or body or any stock
exchange authority or self regulatory organization (each, a “
Governmental Authority ”) or any other Person
to consummate the contribution and delivery of the IDR Interest
being contributed by ETI to ETE or in connection with the
execution, delivery or performance by ETI of this
Agreement.
Section 4.4 No Breach
. The execution and delivery of this Agreement, the compliance by
ETI with all the provisions of, and the performance by ETI of its
obligations under, this Agreement, and the consummation of the
transactions contemplated in this Agreement will not conflict with
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (i) the
constitutive documents of ETI, (ii) any instrument, contract
or other agreement to which ETI is a party or by which ETI is bound
or to which any of its Properties or assets may be bound or
subject, in each case, the breach or violation of which or default
under which would be reasonably expected to have a Material Adverse
Effect on the ability of ETI to comply with its obligations
hereunder, or (iii) any law or statute or any order, rule or
regulation of any Governmental Authority, in each case having
jurisdiction over ETI or any of its properties.
Section 4.5 Financial
Statements . ETI’s unaudited financial statements and
any notes thereto or schedules included therein (a) were
prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods
involved (except
as may be indicated in the notes thereto), and
(b) fairly present (subject to normal, recurring and year-end
audit adjustments) in all material respects the consolidated
financial position and status of the business of ETI as of the
dates thereof and the consolidated results of its operations and
cash flows for the periods then ended.
Section 4.6 No Material
Adverse Changes . Since the date of ETI’s most recent
balance sheet information, ETI has conducted its business in the
ordinary course, consistent with past practice, and there has been
no change, event, occurrence, fact, circumstance or condition that
has had or would be reasonably likely to have a Material Adverse
Effect on the assets, liabilities, financial condition, business,
operations or affairs of ETI.
Section 4.7 Good
Title . ETI is the record and beneficial owner of, and has
good and marketable title to, the IDR Interest, free and clear of
all pledges, liens, claims, encumbrances, options, voting trusts or
agreements, proxies or other claims or charges or adverse interests
of any nature whatsoever (other than resulting from this Agreement,
the ETP GP Partnership Agreement, the ETP GP LLC Agreement or the
Loan Agreement).
Section 4.8 Nature of the
Investor . ETI (a) is an “accredited
investor” as defined in Rule 501(a) of Regulation D
promulgated under the Act, (b) is able to bear the economic
risk of losing its entire investment in the Class C Units, and
(c) has knowledge and experience in financial and business
matters such that it is capable of evaluating the risks and merits
of this investment.
Section 4.9
Investment . ETI is acquiring the Class C Units for
its own account, and not with a view to any distribution, resale,
subdivision, or fractionalization thereof in violation of the
Securities Act or any other applicable domestic securities law, and
ETI has no present plans to enter into any contract, undertaking,
agreement or arrangement for any such distribution, resale,
subdivision, or fractionalization of the Class C Units in violation
of the Securities Act or any other applicable domestic securities
law. ETI acknowledges and agrees that, based in part upon its
representations contained herein and in reliance upon applicable
exemptions, the purchase and sale of the Class C Units has not been
registered under the Act or the securities laws of any other
domestic or foreign jurisdiction and that accordingly, the Class C
Units may not be offered for sale, sold, or otherwise transferred
in whole or in part, except in accordance with the terms of the
Partnership Agreement and in compliance with all applicable laws,
including securities laws, except that the Class C Units may be
pledged in a bona fide transaction.
Section 4.10 Receipt of
Information . ETI has carefully reviewed the documents
filed by ETE with the Securities and Exchange Commission (the
“ Commission ”) under the Securities
Exchange Act of 1934, as amended (the “ Exchange
Act ” ) within the 18 months prior to the date of
this Agreement, including ETE’s Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, current reports on Form 8-K and
other filings (the “ Partnership Information
”) and acknowledges that ETE has provided to ETI
or
