CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT
Exhibit 10.3
CONTRIBUTION, CONVEYANCE
AND ASSUMPTION AGREEMENT
AND ASSUMPTION AGREEMENT
THIS CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of December ___, 2005,
is entered into by and among DCP MIDSTREAM PARTNERS, LP, a Delaware limited partnership
(“MLP”), DCP MIDSTREAM OPERATING, LP, a Delaware limited partnership (“OLP”), DCP
MIDSTREAM GP, LLC, a Delaware limited liability company (“DCP GP LLC”), DCP MIDSTREAM GP,
LP, a Delaware limited partnership (“DCP GP LP”), DUKE ENERGY FIELD SERVICES, LLC, a
Delaware limited liability company (“DEFS”), DEFS HOLDINGS 1, LLC (formerly named DEFS
Holding 1 LLC), a Delaware limited liability company (“DEFS Holdings 1”), DEFS HOLDINGS 2,
LLC (formerly named DEFS Holding, LLC), a Delaware limited liability company (“DEFS Holdings
2”), DCP ASSETS HOLDINGS, LP (formerly named DEFS Assets Holding, LP), a Delaware limited
partnership (“DCP Assets Holdings”), DCP ASSETS HOLDINGS GP, LLC, a Delaware limited
liability company (“DCP Assets Holdings GP”), DUKE ENERGY NGL SERVICES, LP, a Delaware
limited partnership (“DENGL”), DCP BLACK LAKE HOLDINGS, LLC, a Delaware limited liability
company (“Black Lake Holdings”), DCP LP HOLDINGS, LP, a Delaware limited partnership
(“DCP LP Holdings”), and DUKE ENERGY XXXXXXXXX PIPELINE HOLDINGS, INC., a Delaware
corporation (“Xxxxxxxxx Holdings”). 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, DEFS and DCP GP LP have formed MLP, pursuant to the Delaware Revised Uniform Limited
Partnership Act (the “Delaware Act”), for the purpose of engaging in any business activity
that is approved by DCP GP LP and that lawfully may be conducted by a limited partnership organized
pursuant to the Delaware 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. DEFS formed DCP 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
DCP GP LLC.
2. DCP GP LLC and DEFS formed DCP GP LP, under the terms of the Delaware Act, to which DCP GP
LLC contributed $0.01 and DEFS contributed $999.99 in exchange for a 0.001% general partner
interest and 99.999% limited partner interest, respectively.
3. DCP GP LP and DEFS formed MLP, under the terms of the Delaware Act, to which DCP GP LP
contributed $40 and DEFS contributed $1,960 in exchange for a 2% general partner interest and 98%
limited partner interest, respectively.
4. MLP formed DCP Midstream Operating, 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. OLP GP and MLP formed OLP, under the terms of the Delaware Act, to which OLP GP contributed
$0.01 and MLP contributed $999.99 in exchange for a 0.001% general partner interest and 99.999%
limited partner interest, respectively.
6. DEFS Holdings 2 formed DCP Assets Holdings GP under the terms of the Delaware LLC Act, and
contributed $1,000 in exchange for all of the member interests in DCP Assets GP Holdings.
7. DEFS formed Xxxxxxxxx Holdings, under the terms of the Delaware General Corporation Law
(the “Delaware Law”), and contributed $1,000 in exchange for all of the stock in Xxxxxxxxx
Holdings.
8. DEFS and Xxxxxxxxx Holdings formed DCP LP Holdings, under the terms of the Delaware Act, to
which DEFS contributed $500 and Xxxxxxxxx Holdings contributed $500 in exchange for a 50% general
partner interest and 50% limited partner interest, respectively.
9. DENGL formed Black Lake Holding, under the terms of the Delaware LLC Act, and contributed
$1,000 in exchange for all of the member interests in Black Lake Holding.
WHEREAS, concurrently with the consummation of the transactions contemplated hereby, each of
the following matters shall occur:
1. DCP Assets Holdings will distribute all of its stock in Duke Energy Xxxxxxxxx Pipeline,
Inc., a Delaware corporation (“DEGP”), and its member interests in (a) Discovery Producer
Services, LLC, a Delaware limited liability company (“Discovery”), (b) PanEnergy Dauphin
Island LLC, a Delaware limited liability company (“PanEnergy”), (c) Gulf Coast NGL
Pipeline, LLC, a Delaware limited liability company (“Gulf Coast”), (d) Centana Gathering
LLC, a Delaware limited liability company (“Centana”), (e) DEFS Industrial Gas Co. LLC, a
Delaware limited liability company (“DIGC”), and (f) Centana Intrastate Pipeline LLC, a
Delaware limited liability company (“CIP”), to DEFS (of which 0.5% of each of these
distributions will be made to DEFS on behalf of DEFS Holdings 2).
2. DEFS will convey all of its stock in DEGP to Xxxxxxxxx Holdings as a capital contribution.
3. DEGP will file a certificate of conversion under Delaware Law to convert into a Delaware
limited liability company named Duke Energy Xxxxxxxxx Pipeline, LLC (“DEGP LLC”).
4. Gas Supply Resources Inc., a Texas corporation (“Resources”), and GSRI
Transportation Inc., a Texas corporation (“Transportation”), each will file articles of
conversion under the Texas Business Corporation Act (“TBCA”) to convert into Texas limited
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liability companies, named Gas Supply Resources LLC (“Resources LLC”), and GSRI
Transportation LLC (“Transportation LLC”), respectively.
5. DCP Assets Holdings and all of its subsidiaries will distribute approximately $[39.3]
million of its working capital assets, consisting of cash and accounts receivable to DEFS [flows
through intermediaries].
6. DEFS Holdings 2 will convey its 0.5% general partner interest in DCP Assets Holdings to DCP
Assets Holdings GP as a capital contribution.
7. DENGL will contribute a 45% partnership interest in Black Lake Pipe Line Company, a Texas
general partnership (“Black Lake”), to Black Lake Holdings as a capital contribution.
8. DENGL will distribute its member interest in Black Lake Holdings to DEFS Holdings 1 and
DEFS Holdings 2, on a pro rata basis based on their respective ownership interests in DENGL (99.5%
and 0.5% for DEFS Holdings 1 and DEFS Holdings 2, respectively), and DEFS Holdings 1 will
distribute its member interest in Black Lake Holdings to DEFS; in turn, DEFS and DEFS Holdings 2
will convey their member interests in Black Lake Holdings to DCP Assets Holdings as a capital
contribution.
9. DEFS will convey a limited partner interest in DCP Assets Holdings with a value equal to 2%
of the equity of MLP plus the amount of any cash distributed to DCP GP LP by MLP (the
“Interest”) to DCP GP LP as a capital contribution (of which 0.001% of such conveyance will
be made to DEFS on behalf of DCP GP LLC).
10. DEFS will convey its remaining limited partner interest in DCP Assets Holdings to DCP LP
Holdings as a capital contribution.
11. DEFS Holdings 2 will convey its member interests in DCP Assets Holdings GP to DCP LP
Holdings in exchange for a limited partner interest in DCP LP Holdings.
12. Xxxxxxxxx Holdings will convey its member interest in DEGP LLC to DCP LP Holdings as a
capital contribution.
13. DCP GP LP will contribute the Interest to MLP in exchange for (a) a continuation of its 2%
general partner interest in MLP, (b) the issuance of the IDRs of the MLP, (c) the right to receive
$4.0 million to reimburse DCP GP LP for certain capital expenditures and (d) the right to receive
$171.0 million sourced to new indebtedness recourse to DCP GP LP (the “Initial Recourse
Debt”).
14. DCP
LP Holdings will contribute its partner interests in DCP Assets
Holdings, its member interest in DCP Assets Holdings GP and its
member interests in DEGP LLC to MLP in exchange for (a) 1,357,143 Common Units in MLP (representing
a 7.6% interest), (b) 7,142,857 Sub Units in MLP (representing a 40% interest) and (c) the right to
receive $4.0 million to reimburse DCP LP Holdings for certain capital expenditures.
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15. The public, through the Underwriters, will contribute approximately $[180.0] million in
cash, less the Underwriters’ spread of $[11.7] million in exchange for 9,000,000 Common Units in
MLP (representing a 50.4% interest).
16. MLP will (a) pay transaction expenses associated with the transactions contemplated by
this Agreement in the amount of approximately $[4.3] million (exclusive of the Underwriter’s spread
but including debt placement costs), (b) distribute $4.0 million to DCP GP LP to reimburse DCP GP
LP for certain capital expenditures, (c) distribute $4.0 million to DCP LP Holdings to reimburse
DCP LP Holdings for certain capital expenditures, (d) contribute $[62.5] million in the aggregate
to DCP LP Holdings to replenish working capital (of which 0.001% of such contribution will be made
to DCP LP Holdings on behalf of DCP Assets Holdings GP); and (f) contribute $61.0 million in cash,
its member interest in DCP Assets Holdings GP and its limited partner interest in DCP Assets
Holdings to OLP as a capital contribution (of which 0.001% of such contribution will be made to OLP
on behalf of OLP GP).
17. OLP will buy U.S. Treasury securities or other qualifying securities permitted to be
pledged as collateral pursuant to the terms of the Term Loan Facility (the “Securities”)
for $61.0 million in cash and will incur the Initial Recourse Debt by borrowing $171.0 million from
lenders, of which $61.0 million will be borrowed pursuant to the Term Loan Facility and the
remainder will be borrowed pursuant to the Revolving Credit Facility, using the Securities as
collateral security for $61.0 million of borrowings under the Term Loan Facility with MLP
guaranteeing the Initial Recourse Debt.
18. OLP will distribute the borrowed funds of $171.0 million to MLP (of which 0.001% of such
distribution will be made to MLP on behalf of OLP GP) and MLP, in turn, will distribute the funds
to DCP GP LP.
19. DCP GP LP will loan the funds distributed to it pursuant to the preceding paragraph 18 and
will distribute other cash received to DEFS (of which 0.001% of such distribution will be made to
DEFS on behalf of DCP GP LLC), and DEFS will use the proceeds to retire its indebtedness.
20. If the Underwriters exercise their option to purchase up to an additional 1,350,000 Common
Units (the “Option”), the proceeds of that exercise, net of the applicable Underwriter’s
spread, shall be contributed by MLP to OLP and then the OLP will buy additional Securities, which
will be used as collateral for borrowings by OLP of up to $[25.2] million pursuant to the Term Loan
Facility guaranteed by MLP (the “Subsequent Recourse Debt”); the funds borrowed by OLP will
then be distributed to MLP which will use them to redeem from DCP LP Holdings a number of Common
Units sold by MLP pursuant to the exercise of the Shoe.
21. DCP LP Holdings will loan the funds received from the sale of the Common Units pursuant to
the preceding paragraph 20 to DEFS.
22. DCP Assets Holdings will distribute a 0.001% member interest in Black Lake Holdings to OLP
and DCP Assets Holdings GP on a pro rata basis in accordance with their percentage ownership
interests in DCP Assets Holdings.
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23. OLP will convey its interest in Black Lake Holdings to DCP Assets Holdings GP.
24. Black Lake Holdings will file a certificate of conversion under Delaware Law to convert
into a Delaware limited partnership named DCP Black Lake Holdings, LP and to designate DCP Assets
Holdings GP as the general partner thereof and DCP Assets Holdings as the sole limited partner
thereto.
25. 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.
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NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the
Parties undertake and agree as follows:
ARTICLE 1
DEFINITIONS
DEFINITIONS
Section 1.1 The following capitalized terms shall have the meanings given below.
(a) “Acquisition” means consummation of the transactions contemplated by the terms of
this Agreement.
(b) “Agreement” means this Contribution, Conveyance and Assumption Agreement.
(c) “Common Unit” has the meaning assigned to such term in the Partnership Agreement.
(d) “Credit Agreement” means the Credit Agreement, dated as of December ___, 2005,
among the OLP, the MLP, the subsidiaries of the MLP, Wachovia Bank, National Association, as
administrative agent for the lenders named therein.
(e) “Effective Time” shall mean 8:00 a.m. New York, New York time on , 2005.
(f) “IDRs” means “Incentive Distribution Rights” as such term is defined in the
Partnership Agreement.
(g) “MLP” has the meaning assigned to such term in the opening paragraph of this
Agreement.
(h) “Offering” means the initial public offering by MLP of Common Units.
(i) “Omnibus Agreement” means that certain Omnibus Agreement of even date herewith,
among DEFS, DCP GP LLC, DCP GP LP, MLP and OLP.
(j) “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of DCP Midstream Partners, LP dated as of December ___, 2005.
(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. 333-128378) filed by MLP relating to the Offering.
(m) “Revolving Credit Facility” means the [$250.0] million revolving credit facility
under the Credit Agreement.
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(n) “Sub Unit” means “Subordinated Unit” as such term is defined in the Partnership
Agreement.
(o) “Term Loan Facility” means the $[150.0] million term loan facility under the
Credit Agreement.
(p) “Underwriters” means Xxxxxx Brothers Inc., Citigroup Global Markets Inc., UBS
Securities LLC, Wachovia Capital Markets, LLC, X.X. Xxxxxxx & Sons, Inc. and KeyBanc Capital
Markets, a division of McDonald Investments, Inc.
ARTICLE 2
CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS
CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS
Section 2.1 Distribution of DEGP by DCP Assets Holdings. DCP Assets Holdings hereby
distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers to DEFS, its
successors and assigns, for its use forever, all right, title and interest in and to all of its
shares of DEGP common stock (of which 0.5% of such distribution is being made on behalf of DEFS
Holdings 2). DEFS hereby accepts such shares of common stock in DEGP as a distribution.
Section 2.2 Distribution of Discovery by DCP Assets Holdings. DCP Assets Holdings
hereby distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers to DEFS,
its successors and assigns, for its use forever, all right, title and interest in and to all of its
member interests in Discovery (of which 0.5% of such distribution is being made on behalf of DEFS
Holdings 2). DEFS hereby accepts such member interests in Discovery as a distribution.
Section 2.3 Distribution of PanEnergy by DCP Assets Holdings. DCP Assets Holdings
hereby distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers to DEFS,
its successors and assigns, for its use forever, all right, title and interest in and to all of its
member interests in PanEnergy (of which 0.5% of such distribution is being made on behalf of DEFS
Holdings 2). DEFS hereby accepts such member interests in PanEnergy as a distribution.
Section 2.4 Distribution of Gulf Coast by DCP Assets Holdings. DCP Assets Holdings
hereby distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers to DEFS,
its successors and assigns, for its use forever, all right, title and interest in and to all of its
member interests in Gulf Coast (of which 0.5% of such distribution is being made on behalf of DEFS
Holdings 2). DEFS hereby accepts such member interests in Gulf Coast as a distribution.
Section 2.5 Distribution of Centana by DCP Assets Holdings. DCP Assets Holdings
hereby distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers to DEFS,
its successors and assigns, for its use forever, all right, title and interest in and to all of its
member interests in Centana (of which 0.5% of such distribution is being made on behalf of DEFS
Holdings 2). DEFS hereby accepts such member interests in Centana as a distribution.
Section 2.6 Distribution of DIGC by DCP Assets Holdings. DCP Assets Holdings hereby
distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers
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to DEFS, its successors and assigns, for its use forever, all right, title and interest in and
to all of its member interests in DIGC (of which 0.5% of such distribution is being made on behalf
of DEFS Holdings 2). DEFS hereby accepts such member interests in DIGC as a distribution.
Section 2.7 Distribution of CIP by DCP Assets Holdings. DCP Assets Holdings hereby
distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers to DEFS, its
successors and assigns, for its use forever, all right, title and interest in and to all of its
member interests in CIP (of which 0.5% of such distribution is being made on behalf of DEFS
Holdings 2). DEFS hereby accepts such member interests in CIP as a distribution.
Section 2.8 Contribution of DEGP Common Stock to Xxxxxxxxx Holdings. DEFS hereby
grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Xxxxxxxxx
Holdings, its successors and assigns, for its and their own use forever, all right, title and
interest in and to all of its shares of DEGP common stock, as a capital contribution, and Xxxxxxxxx
Holdings hereby accepts such DEGP shares as a contribution to the capital of Xxxxxxxxx Holdings.
Section 2.9 Conversion of DEGP to DEGP LLC. The Parties acknowledge that DEGP has
adopted articles of conversion in the form attached hereto as Exhibit A and pursuant
thereto has converted to DEGP LLC, a Delaware limited liability company, having Xxxxxxxxx Holdings
as a sole member.
Section 2.10 Conversion of Resources to Resources LLC. The Parties acknowledge that
Resources has adopted articles of conversion in the form attached hereto as Exhibit B and
pursuant thereto has converted to Resources LLC, a Texas limited liability company, having DEGP LLC
as a sole member.
Section 2.11 Conversion of Transportation to Transportation LLC. The Parties
acknowledge that Transportation has adopted articles of conversion in the form attached hereto as
Exhibit C and pursuant thereto has converted to Transportation LLC, a Texas limited
liability company, having DEGP LLC as a sole member.
Section 2.12 Distribution of Working Capital Assets by DCP Assets Holdings and its
Subsidiaries. DCP Assets Holdings and its subsidiaries hereby distribute, grant, bargain,
convey, assign, transfer, set over and deliver to DEFS, its successors and assigns, for its use
forever, [$39.3] million of working capital assets, consisting of (a) $___in cash and (b) $___
in accounts receivable. DEFS hereby accepts such working capital assets as a distribution.
Section 2.13 Contribution of General Partner Interest in DCP Assets Holdings to DCP Assets
Holdings GP. DEFS Holdings 2 hereby grants, contributes, bargains, conveys, assigns,
transfers, sets over and delivers to DCP Assets Holdings GP, its successors and assigns, for its
and their own use forever, all right, title and interest in and to its 0.5% general partner
interest in DCP Assets Holdings, as a capital contribution, and DCP Assets Holdings GP hereby
accepts such general partner interest as a contribution to the capital of DCP Assets Holdings GP.
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Section 2.14 Contribution of Black Lake Interest to Black Lake Holding. DENGL hereby
grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to Black Lake
Holding, its successors and assigns, for its and their use forever, all right, title and interest
in and to a 45% partner interest in Black Lake (the “Black Lake Interest”), as a capital
contribution, and Black Lake Holding hereby accepts the Black Lake Interest as a contribution to
the capital of Black Lake Holding.
Section 2.15 Conveyance of Member Interest Black Lake Holdings to DEFS Holdings 1 and DEFS
Holdings 2. DENGL hereby distributes, grants, bargains, conveys, assigns, transfers, sets over
and delivers to DEFS Holdings 1 and DEFS Holdings 2, their successors and assigns, for their own
use forever, all right, title and interest in and to Black Lake Holdings, on a pro rata basis based
on their respective 99.5% and 0.5% ownership interests in DENGL, and DEFS Holdings 1 and DEFS
Holdings 2 hereby accept such member interests in Black Lake Holdings.
Section 2.16 Distribution of Member Interests in Black Lake Holdings by DEFS Holdings
1. DEFS Holdings 1 hereby distributes, grants, bargains, conveys, assigns, transfers, sets
over and delivers to DEFS, its successors and assigns, for its use forever, all right, title and
interest in and to all of its 99.5% member interest in Black Lake Holdings, and DEFS hereby accepts
such interest in Black Lake as a distribution.
Section 2.17 Contribution of Black Lake Holdings to DCP Assets Holdings. DEFS Holding
2 hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to DCP
Assets Holdings, its successors and assigns, for its and their own use forever, all right, title
and interest in and to its 0.5% interest in Black Lake Holdings, as a capital contribution, and DCP
Assets Holdings hereby accepts such interest as a contribution to the capital of DCP Assets
Holdings.
Section 2.18 Contribution of Black Lake Holdings to DCP Assets Holdings. DEFS hereby
grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to DCP Assets
Holdings, its successors and assigns, for its and their own use forever, all right, title and
interest in and to its 99.5% interest in Black Lake Holdings, as a capital contribution, and DCP
Assets Holdings hereby accepts such interest as a contribution to the capital of DCP Assets
Holdings.
Section 2.19 Contribution of the Interest to DCP GP LP. DEFS hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and delivers to DCP GP LP, its
successors and assigns, for its and their own use forever, all right, title and interest in and to
the Interest (of which 0.001% of such contribution is being made on behalf of DCP GP LLC), as a
capital contribution, and DCP GP LP hereby accepts the Interest as a contribution to the capital of
DCP GP LP.
Section 2.20 Contribution of Remaining Interest in DCP Assets Holdings to DCP LP
Holdings. DEFS hereby grants, contributes, bargains, conveys, assigns, transfers, sets over
and delivers to DCP LP Holdings, its successors and assigns, for its and their own use forever, all
right, title and interest in and to its remaining interest in DCP Assets Holdings after
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the contribution of the Interest to DCP GP LP, as a capital contribution, and DCP LP Holdings
hereby accepts such member interest as a contribution to the capital of DCP LP Holdings.
Section 2.21 Contribution of Member Interest in DCP Assets Holdings to DCP LP
Holdings. DEFS Holdings 2 hereby grants, contributes, bargains, conveys, assigns, transfers,
sets over and delivers to DCP LP Holdings, its successors and assigns, for its and their own use
forever, all right, title and interest in and to its membership interest in DCP Assets Holdings GP
in exchange for a ___% limited partner interest in DCP LP Holdings, and DCP LP Holdings hereby
accepts such member interest as a contribution to the capital of DCP LP Holdings.
Section 2.22 Contribution of DEGP LLC Member Interest to DCP LP Holdings. Xxxxxxxxx
Holdings hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers
to DCP LP Holdings, its successors and assigns, for its and their own use forever, all right, title
and interest in and to its member interest in DEGP LLC, as a capital contribution, and DCP LP
Holdings hereby accepts such member interest as a contribution to the capital of DCP LP Holdings.
Section 2.23 Contribution of the Interest by DCP GP LP to MLP. DCP GP LP 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 of the IDRs,
(c) the right to receive $4.0 million to
reimburse DCP GP LP for certain capital expenditures, (d) the right to receive the Initial Recourse
Debt and (e) 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 2.24 Contribution of Interests in DCP Assets Holdings and DEGP LLC to MLP.
DCP LP Holdings 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 partner interests in DCP Assets Holdings,
its member interests in DCP Assets Holdings GP and member interests in DEGP
LLC in exchange for (a) 1,357,143 Common Units, representing a 7.6% interest in MLP, (b) 7,142,857
Sub Units, representing a 40% interest in MLP, (c) the right to
receive $4.0 million to reimburse DCP LP Holdings for certain capital expenditures and (d) other good and valuable consideration, the
sufficiency of which is hereby acknowledged, and MLP hereby accepts such membership interests in
DCP Assets Holdings and DEGP LLC as a contribution to the capital of MLP.
Section 2.25 Public Cash Contribution. The Parties acknowledge a capital contribution
by the public through the Underwriters to MLP of approximately $[180.0] million in cash ($[168.3]
million net to MLP after the underwriters’ spread of $[11.7] million) in exchange for 9,000,000
Common Units, representing a 50.4% interest in MLP.
Section 2.26 Payment of Transaction Costs. The Parties acknowledge (a) the payment by
MLP, in connection with the Acquisition, of transaction expenses in the amount of approximately
$4.3 million (exclusive of the Underwriter’s spread but including debt placement costs), (b) the
distribution by MLP of approximately $4.0 million to DCP GP LP to
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reimburse it for certain capital expenditures, (c) the distribution by MLP of approximately
$4.0 million to DCP LP Holdings to reimburse it for certain capital expenditures and (d) the
contribution by MLP of approximately $[62.5] million to DCP Assets Holdings (of which 0.001% is
being contributed on behalf of DCP Assets Holdings GP) to replenish working capital.
Section 2.27 Contribution of Member Interest in DCP Assets Holdings, Limited Partner
Interest in DCP Assets Holdings and Cash to OLP. MLP hereby grants, contributes, bargains,
conveys, assigns, transfers, sets over and delivers to OLP, its successors and assigns, for its and
their own use forever, all right, title and interest in and to its member interest in DCP Assets
Holdings GP, its limited partner interest in DCP Assets Holdings and $61.0 million in cash (of
which 0.001% is being contributed on behalf of OLP GP), as a capital contribution, and DCP LP
Holdings hereby accepts such membership interest, limited partner interest and cash as a
contribution to the capital of DCP LP Holdings.
Section 2.28 Purchase of Securities by OLP and Incurrence of Initial Recourse Debt by
OLP. The Parties acknowledge (i) the purchase by OLP of $61.0 million in principal amount of
Securities, (ii) the incurrence of the Initial Recourse Debt by OLP, (iii) the pledge of the
Securities referred to in clause (i) of this Section 2.28 as collateral for the borrowings under
the Term Loan Facility and (iv) the guarantee of the Initial Recourse Debt by MLP.
Section 2.29 Distribution of Proceeds from Initial Recourse Debt by OLP to MLP. OLP
hereby distributes, grants, bargains, conveys, assigns, transfers, sets over and delivers to MLP,
its successors and assigns, for its use forever, all right, title and interest in and to cash in an
amount equal to the principal amount of the Initial Recourse Debt (of which 0.001% of such
distribution is being made on behalf of OLP GP).
Section 2.30 Distribution of Cash by MLP to DCP GP LP. MLP hereby distributes, grants,
bargains, conveys, assigns, transfers, sets over and delivers to DCP GP LP, its successors and
assigns, for its use forever, all right, title and interest in and to cash in an amount equal to
amount received by MLP pursuant to Section 2.29.
Section 2.31 Loan of Cash by DCP GP LP to DEFS. DCP GP LP hereby loans to DEFS cash
in an amount equal to amount received by DCP GP LP pursuant to Section 2.30 and, in connection
therewith, DEFS agrees to execute a promissory note in the form attached hereto as Exhibit
D as completed to reflect the principal amount of the loan from DCP GP LP to DEFS.
Section 2.32 Distribution of Member Interest in Black Holdings by DCP Assets Holdings to
OLP and DCP Assets Holdings GP. DCP Assets Holdings hereby distributes, grants, bargains,
conveys, assigns, transfers, sets over and delivers to OLP and DCP Assets Holdings GP, their
successors and assigns, for their use forever, all right, title and interest in and to a 0.001%
member interest in Black Lake Holdings, on a pro rata basis in accordance with their respective
ownership interests in DCP Assets Holdings, and each of OLP and DCP Assets Holdings GP hereby
accept such distribution.
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Section 2.33 Conveyance of Member Interest in Black Lake Holdings by OLP to DCP Assets
Holdings GP. OLP hereby grants, bargains, conveys, assigns, transfers, sets over and delivers
to DCP Assets Holdings GP, its successors and assigns, for its and their own use forever, all
right, title and interest in and to its member interest in Black Lake Holdings, as a capital
contribution, and DCP Assets Holdings GP hereby accepts such member interest as a contribution to
the capital of DCP Assets Holdings GP.
Section 2.34 Conversion of Black Lake Holdings to a Limited Partnership. The Parties
acknowledge that Black Lake Holdings has adopted articles of conversion in the form attached hereto
as Exhibit E and pursuant thereto (i) has converted to Black Lake Holdings, LP, a Delaware limited
partnership, and (ii) has designated DCP Assets Holdings GP as the general partner thereof and DCP
Assets Holdings as the sole limited partner thereof.
ARTICLE 3
ADDITIONAL TRANSACTIONS
ADDITIONAL TRANSACTIONS
Section 3.1 Purchase of Additional Common Units. If the Option is exercised in whole
or in part, the public, through the Underwriters, will contribute additional cash to MLP in
exchange for up to an additional 1,350,000 Common Units.
Section 3.2 Purchase of Securities by OLP and Incurrence of Recourse Debt by OLP. The
Parties acknowledge, in the event that the Option is exercised in whole or in part, (i) the
contribution by MLP to OLP an amount of cash equal to the net proceeds received by MLP pursuant to
Section 3.1, (ii) the purchase of OLP of up to $[25.2] million in principal amount of Securities
utilizing the cash received by OLP from MLP pursuant to clause (i) of this Section 3.2, (iii) the
incurrence of the Subsequent Recourse Debt by OLP, (iv) the pledge of the Securities referred to in
clause (ii) of this Section 3.2 as collateral for the borrowings under the Term Loan Facility and
(v) the guarantee of the Subsequent Recourse Debt, if any, by MLP.
Section 3.3 Distribution of Proceeds from Additional Borrowings by OLP to MLP. In the
event the Option is exercised in whole or in part, OLP hereby agrees to distribute, grant, bargain,
convey, assign, transfer, set over and deliver to MLP, its successors and assigns, for its use
forever, all right, title and interest in and to cash in an amount equal to the principal amount of
the Subsequent Recourse Debt (of which 0.001% of such distribution is being made on behalf of OLP
GP).
Section 3.4 Redemption of Common Units. MLP hereby agrees to redeem a number of Common
Units held by DCP LP Holdings equal to the number of Common Units issued to the public, through the
underwriters, upon exercise of the Option, if any, at a redemption price per Common Unit equal to
the initial public offering price per Common Unit, net of underwriting discounts.
Section 3.5 Loan of Cash by DCP GP LP to DEFS. DCP LP Holdings hereby agrees to loan
to DEFS cash in an amount equal to amount received by DCP LP Holdings pursuant to Section 3.4, if
any, and, in connection therewith, DEFS agrees to execute a promissory note in the form attached
hereto as Exhibit D as completed to reflect the principal amount of the loan from DCP LP
Holdings to DEFS.
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ARTICLE 4
TITLE MATTERS
TITLE MATTERS
Section 4.1 Encumbrances.
(a) Except to the extent provided in any other document executed in connection with this
Agreement or the Offering, the contribution and conveyance (by operation of law or otherwise) of
the various physical assets owned as reflected in this Agreement (collectively, the “Assets”) are
made expressly subject to all recorded and unrecorded liens (other than consensual liens),
encumbrances, agreements, defects, restrictions, adverse claims and all laws, rules, regulations,
ordinances, judgments and orders of governmental authorities or tribunals having or asserting
jurisdictions over the Assets and operations conducted thereon or in connection therewith, in each
case to the extent the same are valid and enforceable and affect the Assets, including all matters
that a current survey or visual inspection of the Assets would reflect.
(b) To the extent that certain jurisdictions in which the Assets are located may require that
documents be recorded in order to evidence the transfers of title reflected in this Agreement, then
the provisions set forth in Section 4.1(a) immediately above shall also be applicable to the
conveyances under such documents.
Section 4.2 Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws.
(a) EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION
WITH THIS AGREEMENT OR THE OFFERING INCLUDING, WITHOUT LIMITATION THE OMNIBUS AGREEMENT, THE
PARTIES ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY
SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR
STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE, NATURE, QUALITY OR CONDITION
OF THE ASSETS INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF
THE ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS ON
THE ASSETS, (B) THE INCOME TO BE DERIVED FROM THE ASSETS, (C) THE SUITABILITY OF THE ASSETS FOR ANY
AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (D) THE COMPLIANCE OF OR BY THE ASSETS
OR THEIR OPERATION WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL
PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (E) THE
HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF
THE ASSETS. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION WITH THIS AGREEMENT OR THE OFFERING INCLUDING, WITHOUT LIMITATION, THE OMNIBUS
AGREEMENT, THE PARTIES ACKNOWLEDGE AND
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AGREE THAT EACH HAS HAD THE OPPORTUNITY TO INSPECT THE RESPECTIVE ASSETS, AND EACH IS RELYING
SOLELY ON ITS OWN INVESTIGATION OF THE RESPECTIVE ASSETS AND NOT ON ANY INFORMATION PROVIDED OR TO
BE PROVIDED BY ANY OF THE PARTIES. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR
DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING INCLUDING, WITHOUT LIMITATION, THE
OMNIBUS AGREEMENT, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE ASSETS FURNISHED BY ANY AGENT,
EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR
DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING INCLUDING, WITHOUT LIMITATION, THE
OMNIBUS AGREEMENT, EACH OF THE PARTIES ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW,
THE CONTRIBUTION OF THE ASSETS AS PROVIDED FOR HEREIN IS MADE IN AN “AS IS”, “WHERE IS” CONDITION
WITH ALL FAULTS, AND THE ASSETS ARE CONTRIBUTED AND CONVEYED SUBJECT TO ALL OF THE MATTERS
CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE SUCH CONTRIBUTION AND CONVEYANCE OR THE
TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES
AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE ASSETS
THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN
THIS AGREEMENT OR ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE
OFFERING, INCLUDING, WITHOUT LIMITATION, THE OMNIBUS AGREEMENT.
(b) The contributions of the Assets made under this Agreement are made with full rights of
substitution and subrogation of the respective parties receiving such contributions, and all
persons claiming by, through and under such parties, to the extent assignable, in and to all
covenants and warranties by the predecessors-in-title of the parties contributing the Assets, and
with full subrogation of all rights accruing under applicable statutes of limitation and all rights
of action of warranty against all former owners of the Assets.
(c) Each of the Parties agrees that the disclaimers contained in this Section 4.2 are
“conspicuous” disclaimers. Any covenants implied by statute or law by the use of the words
“grant,” “convey,” “bargain,” “sell,” “assign,” “transfer,” “deliver,” or “set over” or any of them
or any other words used in this Agreement or any exhibits hereto are hereby expressly disclaimed,
waived or negated.
(d) Each of the Parties hereby waives compliance with any applicable bulk sales law or any
similar law in any applicable jurisdiction in respect of the transactions contemplated by this
Agreement.
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ARTICLE 5
FURTHER ASSURANCES
FURTHER ASSURANCES
Section 5.1 Further Assurances. From time to time after the Effective Time, and
without any further consideration, the Parties agree to execute, acknowledge and deliver all such
additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases,
acquittances and other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate (a) more fully to assure that the
applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers
and privileges granted by this Agreement, or which are intended to be so granted, or (b) more fully
and effectively to vest in the applicable Parties and their respective successors and assigns
beneficial and record title to the interests contributed and assigned by this Agreement or intended
so to be and to more fully and effectively carry out the purposes and intent of this Agreement.
Section 5.2 Other Assurances. From time to time after the Effective Time, and without
any further consideration, each of the Parties shall execute, acknowledge and deliver all such
additional instruments, notices and other documents, and will do all such other acts and things,
all in accordance with applicable law, as may be necessary or appropriate to more fully and
effectively carry out the purposes and intent of this Agreement. Without limiting the generality
of the foregoing, the Parties acknowledge that the parties have used their good faith efforts to
attempt to identify all of the assets being contributed to the MLP or its subsidiaries as required
in connection with the Offering. However, due to the age of some of those assets and the
difficulties in locating appropriate data with respect to some of the assets it is possible that
assets intended to be contributed to the MLP or its subsidiaries were not identified and therefore
are not included in the assets contributed to the MLP or its subsidiaries. It is the express
intent of the Parties that the MLP or its subsidiaries own all assets necessary to operate the
assets that are identified in this Agreement and in the Registration Statement. To the extent any
assets were not identified but are necessary to the operation of assets that were identified, then
the intent of the Parties is that all such unidentified assets are intended to be conveyed to the
appropriate members of the Partnership Group. To the extent such assets are identified at a later
date, the Parties shall take the appropriate actions required in order to convey all such assets to
the appropriate members of the Partnership Group. Likewise, to the extent that assets are
identified at a later date that were not intended by the parties to be conveyed as reflected in the
Registration Statement, the Parties shall take the appropriate actions required in order to convey
all such assets to the appropriate party.
ARTICLE 6
EFFECTIVE TIME
EFFECTIVE TIME
Notwithstanding anything contained in this Agreement to the contrary, none of the provisions
of Article 2 or Article 3 of this Agreement shall be operative or have any effect until the
Effective Time, at which time all the provisions of Article 2 and Article 3 of this Agreement shall
be effective and operative in accordance with Article 7, without further action by any party
hereto.
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ARTICLE 7
MISCELLANEOUS
MISCELLANEOUS
Section 7.1 Order of Completion of Transactions. The transactions provided for in
Article 2 and Article 3 of this Agreement shall be completed immediately following the Effective
Time in the following order: first, the transactions provided for in Article 2 shall be completed
in the order set forth therein; and second, following the completion of the transactions as
provided in Article 2, the transactions, if they occur, provided for in Article 3 shall be
completed.
Section 7.2 Costs. Except for the transaction costs set forth in Section 2.26, the
OLP shall pay all expenses, fees and costs, including but not limited to, all sales, use and
similar taxes arising out of the contributions, conveyances and deliveries to be made hereunder and
shall pay all documentary, filing, recording, transfer, deed, and conveyance taxes and fees
required in connection therewith. In addition, the OLP shall be responsible for all costs,
liabilities and expenses (including court costs and reasonable attorneys’ fees) incurred in
connection with the implementation of any conveyance or delivery pursuant to Section 5.1 or Section
5.2.
Section 7.3 Headings; References; Interpretation. All Article and Section headings in
this Agreement are for convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and
words of similar import, when used in this Agreement, shall refer to this Agreement as a whole,
including, without limitation, all Schedules and Exhibits attached hereto, and not to any
particular provision of this Agreement. All references herein to Articles, Sections, Schedules and
Exhibits shall, unless the context requires a different construction, be deemed to be references to
the Articles and Sections of this Agreement and the Schedules and Exhibits attached hereto, and all
such Schedules and Exhibits attached hereto are hereby incorporated herein and made a part hereof
for all purposes. All personal pronouns used in this Agreement, whether used in the masculine,
feminine or neuter gender, shall include all other genders, and the singular shall include the
plural and vice versa. The use herein of the word “including” following any general statement,
term or matter shall not be construed to limit such statement, term or matter to the specific items
or matters set forth immediately following such word or to similar items or matters, whether or not
non-limiting language (such as “without limitation”, “but not limited to”, or words of similar
import) is used with reference thereto, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadest possible scope of such general statement,
term or matter.
Section 7.4 Successors and Assigns. The Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns.
Section 7.5 No Third Party Rights. The provisions of this Agreement are intended to
bind the Parties as to each other and are not intended to and do not create rights in any other
person or confer upon any other person any benefits, rights or remedies and no person is or is
intended to be a third party beneficiary of any of the provisions of this Agreement.
16
Section 7.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on the parties hereto.
Section 7.7 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Colorado applicable to contracts made and to be performed
wholly within such state without giving effect to conflict of law principles thereof.
Section 7.8 Severability. If any of the provisions of this Agreement are held by any
court of competent jurisdiction to contravene, or to be invalid under, the laws of any political
body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not
invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not
contain the particular provision or provisions held to be invalid and an equitable adjustment shall
be made and necessary provision added so as to give effect to the intention of the Parties as
expressed in this Agreement at the time of execution of this Agreement.
Section 7.9 Amendment or Modification. This Agreement may be amended or modified from
time to time only by the written agreement of all the Parties. Each such instrument shall be
reduced to writing and shall be designated on its face as an Amendment to this Agreement.
Section 7.10 Integration. This Agreement and the instruments referenced herein
supersede all previous understandings or agreements among the Parties, whether oral or written,
with respect to their subject matter. This document and such instruments contain the entire
understanding of the Parties with respect to the subject matter hereof and thereof. No
understanding, representation, promise or agreement, whether oral or written, is intended to be or
shall be included in or form part of this Agreement unless it is contained in a written amendment
hereto executed by the parties hereto after the date of this Agreement.
Section 7.11 Deed; Xxxx of Sale; Assignment. To the extent required and permitted by
applicable law, this Agreement shall also constitute a “deed,” “xxxx of sale” or “assignment” of
the assets and interests referenced herein.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date
first above written.
| DCP MIDSTREAM PARTNERS, LP | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DCP MIDSTREAM OPERATING, LP | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DCP MIDSTREAM GP, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DCP MIDSTREAM GP, LP | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DUKE ENERGY FIELD SERVICES, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to the Contribution Agreement]
| DEFS HOLDINGS 1, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DEFS HOLDINGS 2, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DCP ASSETS HOLDINGS, LP | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DUKE ENERGY XXXXXXXXX PIPELINE HOLDINGS, INC. | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DCP ASSETS HOLDINGS GP, LLC | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to the Contribution Agreement]
| DUKE ENERGY NGL SERVICES, LP | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DCP LP HOLDINGS, LP | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| DCP BLACK LAKE HOLDINGS, LP | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to the Contribution Agreement]
