FORM OF
CONTRIBUTION, CONVEYANCE
AND ASSUMPTION AGREEMENT
REGENCY ENERGY PARTNERS LP ,
REGENCY ACQUISITION, L.P.
CONTRIBUTION, CONVEYANCE
AND ASSUMPTION AGREEMENT
This CONTRIBUTION,
CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of ___, 2006, is
entered into by and among REGENCY ENERGY PARTNERS LP , a
Delaware limited partnership (“ MLP ”),
REGENCY GAS SERVICES LP , a Delaware limited partnership
(“ OLP ”), REGENCY GP LLC , a
Delaware limited liability company (“ GP LLC
”), REGENCY GP LP , a Delaware limited partnership
(the “ General Partner ”), and REGENCY
ACQUISITION, L.P. , a Delaware limited partnership (“
Acquisition ”). 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.
WHEREAS,
Acquisition and the General Partner have formed 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 the General Partner
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
Closing:
1.
Regency Acquisition LLC, a Delaware limited liability company and
the predecessor to Acquisition (“ Acquisition
LLC ”) 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 member interests in GP LLC.
2.
GP LLC and Acquisition LLC formed the General Partner, under the
terms of the Delaware LP Act, to which GP LLC contributed $0.01 and
Acquisition LLC contributed $999.99 in exchange for a 0.001%
general partner interest and 99.999% limited partner interest,
respectively.
3.
The General Partner and Acquisition LLC formed MLP, under the terms
of the Delaware LP Act, to which the General Partner contributed
$20 and Acquisition LLC contributed $980 in exchange for a 2%
general partner interest and a 98% limited partner interest,
respectively.
4.
Acquisition LLC formed Regency OLP GP LLC, a Delaware limited
liability company (“ OLP GP ”), under the
terms of the Delaware LLC Act, and contributed $1,000 in exchange
for all of the member interests in OLP GP.
5.
HMTF Regency, L.P., a Delaware limited partnership (“
HMTF ”), formed Regency Holdings, LLC, a
Delaware limited liability company (“ Holdings
”), under the terms of the Delaware LLC Act, to which HMTF
contributed $1,000 in exchange for all of the member interest in
Holdings.
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6.
HMTF conveyed a 0.001% member interest in Acquisition LLC to
Holdings as a capital contribution, following which HMTF owned a
99.999% member interest and Holdings owned a 0.001% member interest
in Acquisition LLC.
7.
Acquisition LLC filed a certificate of conversion under the
Delaware LLC Act to convert into Acquisition, which is a Delaware
limited partnership, designating Holdings as the general partner
with a 0.001% general partner interest and HMTF as the limited
partner with a 99.999% limited partner interest.
8.
Acquisition conveyed a 0.001% member interest in Regency Gas
Services LLC, a Delaware limited liability company and the
predecessor to the OLP (“ Regency Gas LLC
”), to OLP GP as a capital contribution, following which
Acquisition owned a 99.999% member interest and OLP GP owned a
0.001% member interest in Regency Gas LLC.
9.
Regency Gas LLC filed a certificate of conversion under the
Delaware LLC Act to convert into OLP, which is a Delaware limited
partnership, designating OLP GP as the general partner with a
0.001% general partner interest and Acquisition as the limited
partner with a 99.999% limited partner interest.
10.
All direct and indirect subsidiaries of OLP distributed their
working capital assets consisting of cash and accounts receivable
(the “ Working Capital ”), estimated to
be approximately $[ ] million, to OLP (through any intermediate
entities) and OLP, in turn, distributed the Working Capital to
Acquisition (0.001% on behalf of OLP GP).
11.
Acquisition conveyed to the General Partner a limited partner
interest (the “ Interest ”) in OLP with a
value equal to 2% of the equity of MLP immediately after the
Closing (as defined below) as a capital contribution (of which
0.001% of such conveyance was made to the General Partner on behalf
of GP LLC).
WHEREAS,
concurrently with the consummation of the transactions contemplated
hereby (the “ Closing ”), each of the
following matters will occur:
1.
The General Partner will convey the Interest to MLP in exchange for
(a) a continuation of its 2% general partner interest and
(b) the issuance to the General Partner of the IDRs of the
MLP.
2.
Acquisition will convey all of its member interest in OLP GP and
its remaining limited partner interest in OLP to MLP in exchange
for (a) [14.1] million Sub Units in MLP (representing a [49.0]%
interest), (b) [2.1] million Common Units in MLP (representing a
[7.1]% interest) and (c) the right to receive $[163.5] million to
reimburse Acquisition for certain capital expenditures.
3.
The public, through the Underwriters, will contribute approximately
$[240.0] million in cash, less the Underwriters’ spread of
$[15.9] million, in exchange for 12,000,000 Common Units in MLP
(representing a [41.9]% interest).
4.
MLP will (a) pay transaction expenses associated with the
transactions contemplated by this Agreement (including $[9] million
in fees to terminate a financial advisory
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and monitoring
and oversight agreement with an affiliate of HMTF) in the amount of
approximately $[13] million (exclusive of the Underwriters’
discount), (b) distribute $[163.5] million to Acquisition to
reimburse Acquisition for certain capital expenditures, and (c)
contribute $[ ] million to OLP which, in turn, contributes $[ ]
million to its subsidiaries to replenish working
capital.
5.
OLP will distribute a 0.001% interest in Regency Waha LP, LLC, a
Delaware limited liability company (“ Waha
”), to OLP GP (99.999% on behalf of MLP).
6.
Waha will file a certificate of conversion under the Delaware LLC
Act to convert into Regency Waha, L.P., a Delaware limited
partnership (“ Waha LP ”), following
which OLP GP will own a 0.001% general partner interest and OLP
will own a 99.999% limited partners interest.
7.
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 as contained in this
Agreement.
NOW, THEREFORE, in
consideration of their mutual undertakings and agreements
hereunder, the Parties undertake and agree as follows:
Section 1.1
The following capitalized terms shall have the meanings given
below.
(a)
“ Agreement ” means this Contribution,
Conveyance and Assumption Agreement.
(b)
“ Assets ” has the meaning assigned to
such term in Section 4.1 of this Agreement.
(c)
“ Common Unit ” has the meaning assigned
to such term in the Partnership Agreement.
(d)
“ Effective Time ” shall mean 8:00 a.m.
New York, New York time on ___, 2006.
(e)
“ IDRs ” means “Incentive
Distribution Rights” as such term is defined in the
Partnership Agreement.
(f)
“ MLP ” has the meaning assigned to such
term in the opening paragraph of this Agreement.
(g)
“ Offering ” means the initial public
offering by MLP of Common Units.
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(h)
“ Omnibus Agreement ” means that certain
Omnibus Agreement of even date herewith, among Acquisition, GP LLC,
General Partner, MLP and OLP.
(i)
“ Option ” means the option to purchase
additional Common Units granted to the Underwriters in connection
with the Offering.
(j)
“ Partnership Agreement ” means the First
Amended and Restated Agreement of Limited Partnership of Regency
Energy Partners LP dated as of ___, 2006.
(k)
“ Partnership Group ” has the meaning
assigned to such term in the Omnibus Agreement.
(l)
“ Registration Statement ” means the
registration statement on Form S-1 (Registration
No. 333-128332) filed by MLP relating to the
Offering.
(m)
“ Sub Unit ” means “Subordinated
Unit” as such term is defined in the Partnership
Agreement.
(n)
“ Underwriters ” means UBS Securities
LLC, Lehman Brothers Inc., Citigroup Global Markets Inc., Wachovia
Capital Markets, LLC, A.G. Edwards & Sons, Inc. and KeyBanc
Capital Markets, a division of McDonald Investments,
Inc.
ARTICLE 2
CONTRIBUTIONS, ACKNOWLEDGMENTS AND
DISTRIBUTIONS
Section 2.1
Contribution of the Interest by the General Partner to
MLP . The General Partner hereby grants, contributes,
bargains, conveys, assigns, transfers, sets over and delivers to
MLP, its successors and assigns, for its and their own use forever,
all right, title and interest in and to the Interest, as a capital
contribution, in exchange for (a) a continuation of its 2%
general partner interest in MLP, (b) the issuance to the
General Partner of the IDRs, and (c) other good and valuable
consideration, the sufficiency of which is hereby acknowledged, and
MLP hereby accepts the Interest as a contribution to the capital of
MLP.
Section 2.2
Contribution of Member Interest in OLP GP and Limited Partner
Interest in OLP to MLP . Acquisition hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and
delivers to MLP, its successors and assigns, for its and their own
use forever, all right, title and interest in and to its member
interest in OLP GP and its limited partner interest in OLP in
exchange for (a) [14.1] million Sub Units in MLP, representing
[49.0]% interest in MLP, (b) [2.1] million Common Units in MLP,
representing a [7.1]% interest in MLP, (c) the right to
receive $[163.5] million to reimburse Acquisition for certain
capital contribution agreement, and (d) other good and
valuable consideration, the sufficiency of which is hereby
acknowledged, and MLP hereby accepts such member interest and
limited partner interest as a contribution to the capital of
MLP.
Section 2.3
Public Cash Contribution . The Parties acknowledge a
capital contribution by the public through the Underwriters to MLP
of approximately $[240.0] million in
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cash ($[224.1]
million net to MLP after the underwriting discount of $[15.9]
million) in exchange for 12,000,000 Common Units, representing a
[41.9]% interest in MLP.
Section 2.4
Payment of Transaction Costs . The Parties
acknowledge (a) the payment by MLP, in connection with the
Closing, of transaction expenses (including $[9] million in fees to
terminate a financial advisory and monitoring and oversight
agreement with an affiliate of HMTF) in the amount of approximately
$[13] million (exclus
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