September 14, 2006
September
14, 2006
Energy
Transfer Partners, L.P.
0000
Xxxxx Xxxx Xxxxxx
Tulsa,
Oklahoma 74137
Ladies
and Gentlemen:
Reference
is hereby made to (i) that certain Purchase and Sale Agreement (the “CCE Acquisition
Agreement”),
dated
as of September 14, 2006, by and among Energy Transfer Partners, L.P., a
Delaware limited partnership (“ETP”),
EFS-PA, LLC, a Delaware limited liability company (“EFS-PA”),
CDPQ
Investments (U.S.) Inc., a Delaware corporation, Lake Bluff Inc., a Delaware
corporation, Xxxxxxx Xxxxx Ventures, L.P. 2001, a Delaware limited partnership,
and Kings Road Holdings I LLC, a Delaware limited liability company, and (ii)
that certain Redemption Agreement (the “Redemption
Agreement”),
dated
as of September 14, 2006, by and between CCE Holdings, LLC, a Delaware limited
liability company (“CCE
Holdings”),
and
ETP. Capitalized terms used herein but not defined herein shall have the
meanings set forth in the Redemption Agreement.
Upon
the
closing of the transactions contemplated by the CCE Acquisition Agreement,
CCE
Acquisition LLC, a Delaware limited liability company (“CCE
Acquisition”),
and
CCEA Corp., a Delaware corporation (“CCEA”),
which
are wholly owned subsidiaries of Southern Union Company (“Southern
Union”),
and
ETP will own all of the membership interests in CCE Holdings. This letter is
to
set forth the understanding between Southern Union and ETP as to certain matters
pertaining to the ownership and operation of CCE Holdings.
1.
Waiver
of Right of First Refusal.
Promptly
following the execution and delivery of this letter agreement, Southern Union
will cause CCE Acquisition and CCEA to execute and deliver to ETP a waiver
of
their rights under Section 8.4 of the Amended and Restated Limited Liability
Company Agreement, dated as of November 5, 2004, as amended, of CCE Holdings,
related to the transfer of Class B Membership Interests pursuant to the CCE
Acquisition Agreement.
2.
Actions
Upon Closing of CCE Acquisition Agreement.
Upon the
closing of the transactions contemplated by the CCE Acquisition
Agreement:
(a)
Southern Union will cause CCE Acquisition and CCEA to enter into, and ETP will
enter into, that certain Second Amended and Restated Limited Liability Company
Agreement of CCE Holdings in the form attached hereto as Exhibit
A.
(b)
The
parties hereto will cause CCE Holdings, and Southern Union will cause its
indirect, wholly owned subsidiary, SU Pipeline Management LP, to enter into
that
certain
190107_4
Energy
Transfer Partners, L.P.
September
14, 2006
Page
2
Amended
and Restated Administrative Services Agreement in the form attached hereto
as
Exhibit
B;
and
(c)
The
Transfer Restriction Agreement dated as of November 4, 2004 given by Southern
Union in favor of EFS-PA automatically shall terminate.
3.
Actions
Upon Termination of Redemption Agreement.
If the
transactions contemplated by the CCE Acquisition Agreement have been consummated
but the transactions contemplated by the Redemption Agreement have not been
consummated and the Redemption Agreement has been terminated, (i) Southern
Union
will cause CCE Acquisition and CCEA to, and ETP shall, enter into that certain
Third Amended and Restated Limited Liability Company Agreement of CCE Holdings
in substantially the form attached hereto an Exhibit
C,
with
such changes thereto as mutually agreed by the parties hereto as a result of
negotiations in good faith with respect to any such changes, it being understood
that the intent of the Third Amended and Restated Limited Liability Company
Agreement of CCE Holdings is to provide ETP with the risks and rewards
(including the profits and losses and cash flow) of Transwestern Pipeline
Company, LLC, a Delaware limited liability company (“Transwestern”), and to
provide Southern Union with the risks and rewards (including the profits and
losses and cash flow) of CrossCountry Citrus, LLC, a Delaware limited liability
company (“CC Citrus”), and its subsidiaries; (ii) the parties hereto will
negotiate in good faith to enter into arrangements mutually satisfactory to
such
parties that are similar to those contained in the term sheet for a Transition
Services Agreement set forth on Exhibit
B
to the
Redemption Agreement and/or the Amended and Restated Administrative Services
Agreement attached hereto as Exhibit
B
and that
will enable ETP to exercise effective management and control over the business
and affairs of Transwestern in conjunction with services provided by CCE
Holdings and its affiliates and that will enable Southern Union to exercise
effective management and control over the business and affairs of CC Citrus,
(iii) Southern Union will take all necessary action to cause Transwestern
Holding Company, LLC, a Delaware limited liability company (“TW Holdings”), to
repay all of its outstanding indebtedness within 60 days following the
termination of the Redemption Agreement (without transferring or encumbering
its
equity interests in, or assets of, Transwestern and without the use of any
borrowings, financial support or guaranties from Transwestern), (iv) the parties
hereto will cooperate to facilitate the refinancing by TPC of the Existing
TPC
Debt to the extent such debt would become due and payable as a result of the
transactions contemplated by the CCE Acquisition Agreement or the Redemption
Agreement, after taking into account any consents or waivers previously obtained
by TPC, and in connection therewith, ETP will use its commercially reasonable
best efforts to make available a bridge loan or other replacement financing
to
the extent necessary for TPC to avoid an acceleration of the payment of such
debt, with all costs of such refinancing (including legal fees) to be borne
by
TPC, (v) Southern Union will cause CCE Holdings to pay to ETP an amount equal
to
the Cash Redemption Amount (as such term is defined in the Redemption Agreement)
determined on the basis that the “Closing Date” for
Energy
Transfer Partners, L.P.
September
14, 2006
Page
3
purposes
of the determination of the Cash Redemption Amount is the date of the
termination of the Redemption Agreement, and (vi) the parties hereto will follow
the procedures specified in Section 2.4 of the Redemption Agreement to determine
the Post-Closing Adjustment Amount, substituting Southern Union for CCE
Holdings, and if the Post-Closing Adjustment Amount is positive, then ETP will
pay to Southern Union the Post-Closing Adjustment Amount or, if the Post-Closing
Adjustment Amount is negative, then Southern Union will pay to ETP the absolute
value of the Post-Closing Adjustment, in each case in accordance with the
procedures specified in Section 2.4(c) of the Redemption Agreement, substituting
Southern Union for CCE Holdings.
4.
Confidential
Project Information.
Upon the
closing of the transactions contemplated by the Redemption Agreement and for
a
period of three and one-half years thereafter, Southern Union shall, and shall
cause its Affiliates to: (i) maintain the confidentiality of any proprietary
business information of TPC relating to the economic terms and conditions of
the
TPC Expansion Projects (the “Project
Information”);
provided, however, that such confidentiality obligation shall not apply in
the
event such Project Information is or becomes generally available to the public,
and (ii) not use such Project Information in a manner intended to be detrimental
to TPC’s pursuit of the TPC Expansion Projects or otherwise take any action to
oppose or challenge the TPC Expansion Projects.
5.
Termination
of Confidentiality Agreement.
Upon the
closing of the transaction contemplated by the Redemption Agreement, the
Confidentiality Agreement, dated July 25, 2006, between ETP and Southern Union,
shall terminate.
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REMAINDER OF THIS PAGE INTENTIONALLY IS LEFT BLANK.]
Energy
Transfer Partners, L.P.
September
14, 2006
Page
4
Please
signify your acceptance of and agreement with the foregoing by executing one
copy of this letter where indicated below.
Sincerely
yours,
SOUTHERN
UNION COMPANY
By:
/s/ XXXXXX X. XXXX
Name:
Xxxxxx X. Xxxx
Title:
Senior Vice President, Pipeline Operations
Accepted
and agreed to as of September 14, 2006.
ENERGY
TRANSFER PARTNERS, L.P.
By: Energy
Transfer Partners GP, L.P., its general partner
By: Energy
Transfer Partners, L.L.C., its general partner
By:
/s/ XXXXX XXXXXX
Name:
Xxxxx Xxxxxx
Title:
Co- Chief Executive Officer
