CONTRIBUTION, CONVEYANCE
AND
ASSUMPTION AGREEMENT
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ARTICLE I
DEFINITIONS; RECORDATION
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4
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Definitions
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4
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ARTICLE II THE
OFFERING AND RELATED TRANSACTIONS
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7
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Contribution of
Gas Purchase Contract by WNGL to Holdings
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7
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Contribution of
Gas Purchase Contract by Holdings to MCFS
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7
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Contribution by
WES to GP LLC of an Interest in CTP
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7
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Contribution by
GP LLC to the MLP of the CTP Interest
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8
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Contribution by
WES to the MLP of its Remaining Interest in CTP
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8
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Contribution by
WE to the MLP of an Interest in Discovery
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8
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Contribution by
Williams Pipeline to the MLP of an Interest in Discovery
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8
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Contribution by
Holdings to the MLP of All of Its Interests in MCFS
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9
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Public Cash
Contribution
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9
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MLP Receipt of
Cash Contribution
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9
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MLP Cash
Distribution to Holdings and Williams Pipeline
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9
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Conveyance and
Contribution by the MLP to the OLLC of its Interests in MCFS, CTP
and Discovery
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9
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ARTICLE III
ASSUMPTION OF CERTAIN LIABILITIES
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10
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Assumption of
Gas Purchase Contract Liabilities by Holdings
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10
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Assumption of
Gas Purchase Contract Liabilities by MCFS
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10
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Assumption of
CTP Liabilities by GP LLC
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10
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Assumption of
CTP Liabilities by the MLP
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11
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Assumption of
CTP Remaining Liabilities by the MLP
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11
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Assumption of
WE Discovery Liabilities by the MLP
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11
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Assumption of
Williams Pipeline Discovery Liabilities by the MLP
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11
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Assumption of
MCFS Liabilities by the MLP
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12
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Assumption of
MLP Aggregate Liabilities by the OLLC
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12
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General
Provisions Relating to Assumption of Liabilities
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12
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ARTICLE IV
FURTHER ASSURANCES
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12
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Further
Assurances
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12
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Other
Assurances
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12
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ARTICLE V
MISCELLANEOUS
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13
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Order of
Completion of Transactions
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13
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Costs
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13
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Headings;
References; Interpretation
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13
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Successors and
Assigns
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14
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No Third Party
Rights
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14
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Counterparts
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14
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Governing
Law
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14
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Severability
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14
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Amendment or
Modification
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14
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Integration
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14
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CONTRIBUTION, CONVEYANCE AND
ASSUMPTION AGREEMENT
THIS CONTRIBUTION,
CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of August 23,
2005, is entered into by and among Williams Energy Services, LLC, a
Delaware limited liability company (“ WES
”); Williams Partners GP LLC, a Delaware limited liability
company (“ GP LLC ”); Williams Partners
L.P., a Delaware limited partnership (the “ MLP
”); Williams Partners Operating LLC, a Delaware limited
liability company (the “ OLLC ”);
Williams Energy, L.L.C., a Delaware limited liability company
(“ WE ”); Williams Discovery Pipeline
LLC, a Delaware limited liability company (“ Williams
Pipeline ”); Williams Partners Holdings LLC, a
Delaware limited liability company (“ Holdings
”); and Williams Natural Gas Liquids, Inc. (“
WNGL ”). The foregoing shall be referred to
individually as a “ Party ” and
collectively as the “ Parties. ” Certain
capitalized terms used are defined in Article I
hereof.
WHEREAS, WES and
GP LLC have formed the MLP pursuant to the Delaware Revised Uniform
Limited Partnership Act (the “ Delaware Limited
Partnership Act ”), for the purpose of, among other
things, owning, operating and acquiring certain assets of certain
subsidiaries of The Williams Companies, Inc., a Delaware
corporation (“ TWC ”), used in the
business of gathering, transporting and processing natural gas and
fractionating and storing natural gas liquids.
WHEREAS, in order
to accomplish the objectives and purposes in the preceding recital,
the following actions have been taken prior to the date
hereof:
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1.
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Williams Midstream Natural Gas
Liquids, Inc. (“ WMNGL ”) contributed the
Conway Storage East, Conway West and Mitchell storage assets,
certain Conway real estate, several easements and a letter of
credit for storage abandonment to Mid-Continent Fractionation and
Storage, LLC (“ MCFS ”) in exchange for a
membership interest in MCFS.
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2.
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WNGL contributed a 50% undivided
interest in the Conway fractionator, all applicable contracts or
agreements relating to the contributed assets (including but not
limited to the Conway fractionator operating agreement) and certain
Conway real estate to MCFS in exchange for a membership interest in
MCFS.
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3.
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ESPAGAS USA Inc. (“
Espagas ”) conveyed certain Conway real estate
to MCFS in exchange for a membership interest in MCFS.
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4.
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MAPCO Inc. (“
MAPCO ”) conveyed certain Conway real estate to
MCFS in exchange for a membership interest in MCFS.
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5.
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WES
formed GP LLC under the terms of the Delaware Limited Liability
Company Act (the “ Delaware LLC Act ”)
and contributed $1,000 in exchange for all of the membership
interests in GP LLC.
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6.
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GP
LLC and WES formed the MLP, to which GP LLC contributed $20 and WES
contributed $980 in exchange for a 2% general partner interest and
98% limited partner interest, respectively.
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7.
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WES
acquired 100% of the membership interests in ENI British Borneo
Pipeline LLC (“ ENIBBP ”). Upon
acquisition, the legal name of ENIBBP was changed to Williams
Discovery Pipeline LLC.
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8.
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The
MLP formed the OLLC pursuant to the Delaware LLC Act and
contributed $1,000 in exchange for all of the membership interests
in the OLLC.
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9.
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WNGL formed Holdings pursuant to the
Delaware LLC Act and contributed $1,000 in exchange for all of the
membership interests in Holdings.
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10.
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WMNGL, WNGL, Espagas and MAPCO
contributed all of the outstanding membership interests in MCFS to
Holdings in exchange for membership interests in
Holdings.
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11.
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Williams Mobile Bay Producer
Services, L.L.C. (“ WMBPS ”) formed
Carbonate Trend Pipeline LLC (“ CTP ”)
pursuant to the Delaware LLC Act and contributed the Carbonate
Trend Pipeline to CTP in exchange for all of the membership
interests in CTP.
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12.
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WMBPS distributed all of the
membership interests in CTP to Arctic Fox Assets, L.L.C. (“
AFA ”).
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13.
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AFA
distributed all of the membership interests in CTP to TWC, which in
turn, contributed those membership interests to WES.
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14.
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The
MLP, TWC and certain other TWC subsidiaries entered into the
Amended and Restated Credit Agreement, to, among other things,
allow the MLP to borrow up to $75 million under the Amended and
Restated Credit Agreement for general partnership purposes,
including acquisitions.
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WHEREAS, on the
date of this Agreement, the MLP will enter into a working capital
loan agreement with TWC providing for a $20 million revolving
credit facility.
WHEREAS,
concurrently with the consummation of the transactions contemplated
hereby, each of the following shall occur:
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1.
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WNGL will contribute the Gas
Purchase Contract to Holdings which, in turn, will contribute the
Gas Purchase Contract to MCFS.
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2.
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WES
will contribute membership interests in CTP with an aggregate value
equal to 2% of the equity value of the MLP at closing
($6.14 million) to GP LLC as a capital
contribution.
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3.
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GP
LLC will contribute its membership interest in CTP to the MLP in
exchange for (a) a continuation of GP LLC’s 2% general
partner interest in the Partnership and (b) the Incentive
Distribution Rights.
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4.
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WES
will contribute its remaining membership interest in CTP to the MLP
in exchange for (a) 253,557 Common Units representing a 1.77%
limited partner interest in the MLP and (b) 887,450
Subordinated Units representing a 6.21% limited partner interest in
the MLP.
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5.
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WE
will contribute a 23.33% membership interest (the “ WE
Discovery Interest ”) in Discovery Producer Services
LLC (“ Discovery ”) to the MLP in
exchange for (y) 715,693 Common Units representing a 5.01%
limited partner interest in the MLP and (z) 2,504,925
Subordinated Units representing a 17.53% limited partner interest
in the MLP.
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6.
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Williams Pipeline will contribute
its 16.67% membership interest (the “ Williams Pipeline
Discovery Interest ”) in Discovery to the MLP, in
exchange for (y) 345,567 Common Units representing a 2.42%
limited partner interest in the MLP and (z) 1,209,486
Subordinated Units representing a 8.47% limited partner interest in
the MLP.
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7.
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Holdings will contribute all of the
membership interests in MCFS to the MLP in exchange for
(a) 685,183 Common Units representing a 4.80% limited partner
interest in the MLP and (b) 2,398,139 Subordinated Units
representing a 16.79% limited partner interest in the
MLP.
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8.
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The
public, through the underwriters of the Offering, will contribute
$107.5 million, $100.2 million net of the underwriters’
discounts and commissions and structuring fees (the “
Offering Proceeds ”), to the MLP in exchange
for 5,000,000 Common Units representing a 35.00% limited partner
interest in the MLP.
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9.
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The
MLP will use the Offering Proceeds to (a) pay the underwriting
discounts and commissions and structuring fees (which may be
withheld by the underwriters from the Offering Proceeds as payment
thereof), (b) pay transaction costs estimated to be
$4.3 million (excluding the underwriters’ discounts and
commissions and structuring fees and net of a reimbursement for
certain expenses received from the underwriters), (c) provide
$12.8 million of additional working capital,
(d) distribute $35.0 million to Williams Pipeline to
reimburse for certain capital expenditures incurred prior to
formation, (e) distribute $18.6 million to Holdings to
reimburse for certain capital expenditures incurred prior to
formation and for the Gas Purchase Contract, (f) distribute
$3.8 million to WE to reimburse for certain capital
expenditures incurred prior to formation, (g) distribute
$1.3 million to WES to reimburse for certain capital
expenditures incurred prior to formation and (h) provide
$24.4 million to make a capital contribution to Discovery to
fund an escrow account in connection with the Tahiti pipeline
lateral expansion.
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10.
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The
MLP will convey its interests in MCFS, CTP and Discovery to the
OLLC as a capital contribution.
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11.
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The
agreements of limited partnership and the limited liability company
agreements of the aforementioned entities will be amended and
restated to the extent necessary to reflect the applicable matters
set forth above and in Article II and Article III of this
Agreement.
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NOW, THEREFORE, in
consideration of their mutual undertakings and agreements
hereunder, the Parties undertake and agree as follows:
DEFINITIONS; RECORDATION
1.1
Definitions . The following capitalized terms have the
meanings given below.
“
Acts ” shall mean collectively the Delaware
Limited Partnership Act and the Delaware LLC Act.
“
Agreement ” means this Contribution, Conveyance
and Assumption Agreement.
“
Amended and Restated Credit Agreement ” means
the Amended and Restated Credit Agreement, dated as of May 20,
2005, by and among TWC, the MLP, Northwest Pipeline Corporation and
Transcontinental Gas Pipe Line Corporation, as the borrowers, the
lenders named therein, Citicorp USA, Inc., as administrative agent
and collateral agent, Citibank, N.A. and Bank of America, N.A., as
the issuing banks, Bank of America, N.A., as syndication agent,
JPMorgan Chase Bank, N.A., the Bank of Nova Scotia and The Royal
Bank of Scotland PLC, as co-documentation agents, and Citigroup
Global Markets Inc. and Banc of America Securities LLC, as joint
lead arrangers and co-book runners.
“
Common Units ” has the meaning assigned to such
term in the Partnership Agreement.
“
CTP ” has the meaning assigned to such term in
Item 11 of the second Recital of this Agreement.
“ CTP
Aggregate Liabilities ” shall mean, collectively, the
CTP Liabilities and the CTP Remaining Liabilities.
“ CTP
Full Interest ” shall mean, collectively, the CTP
Interest and the CTP Remaining Interest.
“ CTP
Interest ” has the meaning assigned to such term in
Section 2.3.
“ CTP
Liabilities ” shall mean all liabilities and
obligations relating to the CTP Interest.
“ CTP
Remaining Interest ” has the meaning assigned to such
term in Section 2.5.
“ CTP
Remaining Liabilities ” shall mean all liabilities
and obligations relating to the CTP Remaining Interest.
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“
Delaware LLC Act ” has the meaning assigned to
such term in Item 5 of the second Recital of this
Agreement.
“
Delaware Limited Partnership Act ” has the
meaning assigned to such term in the initial Recital of this
Agreement.
“
Discovery ” has the meaning assigned to such
term in Item 5 of the third Recital of this
Agreement.
“
Discovery Aggregate Liabilities ” shall mean,
collectively, the WE Discovery Liabilities and the Williams
Pipeline Discovery Liabilities.
“
Discovery Interest ” has the meaning assigned
to such term in Section 2.12.
“
Effective Date ” means August 23,
2005.
“
Effective Time ” means the time when the
transactions contemplated by Article II hereof have been
consummated.
“
Espagas ” has the meaning assigned to such term
in Item 3 of the second Recital of this Agreement.
“ Gas
Purchase Contract ” shall mean that Base Contract for
Sale and Purchase of Natural Gas, dated August 15, 2005,
between WNGL and Williams Power Company, Inc.
“ Gas
Purchase Contract Liabilities ” shall mean all
liabilities and obligations relating to the Gas Purchase
Contract.
“ GP
LLC ” has the meaning assigned to such term in the
first paragraph of this Agreement.
“
Holdings ” has the meaning assigned to such
term in the first paragraph of this Agreement.
“
Incentive Distribution Rights ” has the meaning
assigned to such term in the Partnership Agreement.
“
Laws ” means any and all laws, statutes,
ordinances, rules or regulations promulgated by a governmental
authority, orders of a governmental authority, judicial decisions,
decisions of arbitrators or determinations of any governmental
authority or court.
“
MAPCO ” has the meaning assigned to such term
in Item 4 of the second Recital of this Agreement.
“
MCFS ” has the meaning assigned to such term in
Item 1 of the second Recital of this Agreement.
“ MCFS
Interest ” has the meaning assigned to such term in
Section 2.8.
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“ MCFS
Liabilities ” shall mean all liabilities and
obligations relating to the MCFS Interest.
“
MLP ” has the meaning assigned to such term in
the first paragraph of this Agreement.
“ MLP
Aggregate Interests ” has the meaning assigned to
such term in Section 2.12.
“ MLP
Aggregate Liabilities ” shall mean, collectively, the
MCFS Liabilities, the CTP Aggregate Liabilities and the Discovery
Aggregate Liabilities.
“
Offering ” means the initial public offering
and transfer of title of 5,000,000 Common Units by the MLP to the
public.
“
Offering Proceeds ” has the meaning assigned to
such term in Item 8 of the third Recital of this
Agreement.
“
OLLC ” has the meaning assigned to such term in
the first paragraph of this Agreement.
“
Omnibus Agreement ” means the Omnibus Agreement
dated of even date herewith, among WES, WE, Williams Pipeline,
Holdings, GP LLC, the MLP, the OLLC, and, for purposes of Articles
V and VI thereof only, TWC.
“
Partnership Agreement ” means the Agreement of
Limited Partnership of the MLP, as it may be amended and restated
from time to time.
“
Partnership Group ” has the meaning assigned to
such term in the Omnibus Agreement.
“
Party and Parties ” have the meanings assigned
to such terms in the first paragraph of this Agreement.
“
Registration Statement ” means the registration
statements on Form S-1 (File Nos. 333-124517 and 333-127655) filed
by the MLP relating to the Offering.
“
Subordinated Units ” has the meaning assigned
to such term in the Partnership Agreement.
“
TWC ” has the meaning assigned to such term in
the initial Recital of this Agreement.
“
WE ” has the meaning assigned to such term in
the first paragraph of this Agreement.
“ WE
Discovery Interest ” has the meaning assigned to such
term in Item 5 of the third Recital of this
Agreement.
“ WE
Discovery Liabilities ” shall mean all liabilities
and obligations relating to the WE Discovery Interest.
“
WES ” has the meaning assigned to such term in
the first paragraph of this Agreement.
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“
Williams Pipeline ” has the meaning assigned to
such term in the first paragraph of this Agreement.
“
Williams Pipeline Discovery Interest ” has the
meaning assigned to such term in Item 6 of the third Recital
of this Agreement.
“
Williams Pipeline Discovery Liabilities ” shall
mean all liabilities and obligations relating to the Williams
Pipeline Discovery Interest.
“
WMBPS ” has the meaning assigned to such term
in Item 11 of the second Recital of this Agreement.
“
WMNGL ” has the meaning assigned to such term
in Item 1 of the second Recital of this Agreement.
“
WNGL ” has the meaning assigned to such term in
the first paragraph of this Agreement.
THE OFFERING AND RELATED
TRANSACTIONS
2.1
Contribution of Gas Purchase Contract by WNGL to Holdings
. WNGL hereby grants, contributes, transfers, assigns and
conveys to Holdings, its successor and assigns, for its and their
own use forever, all of its right, title and interest in and to the
Gas Purchase Contract, and Holdings hereby accepts the Gas Purchase
Contract, subject to all matters to be contained in the instruments
of conveyance covering the Gas Purchase Contract to evidence such
contribution and co
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