EXHIBIT 10.1




 








 









WILLIAMS PIPE LINE COMPANY, LLC




 




Up

to $540,000,000




 




Floating

Rate Series A Senior Secured Notes due October 7, 2007


Fixed Rate Series B Senior Secured Notes due October 7, 2007




 






















 




AMENDMENT NO. 1


dated as of May 30, 2003


to Note Purchase Agreement


dated October 1, 2002




 






















 








 


































 




AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT




 




This Amendment No. 1 to Note Purchase Agreement (this “Amendment”)

is entered into as of May 30, 2003 by and among each of the Holders (as defined

below) party hereto, Williams Pipe Line Company, LLC, a Delaware limited

liability company (the “Company”), Williams Energy Partners L.P., a

Delaware limited partnership (the “Guarantor”), and WEG GP LLC, a

Delaware limited liability company (“WEG GP”).




 




WHEREAS, the Company, the Guarantor and Williams GP LLC, a Delaware

limited liability company (“Williams GP”), entered into that certain

Note Purchase Agreement dated as of October 1, 2002 (the “Note Purchase

Agreement”) among such parties and the several Purchasers listed in the Schedule

A-1 and Schedule A-2 thereto for the sale and purchase of Company’s Floating

Rate Series A Senior Secured Notes due October 7, 2007 and the Company’s Fixed

Rate Series B Senior Secured Notes due October 7, 2007 (collectively, the “Notes”);

and




 




WHEREAS, pursuant to the Assignment, Assumption and Amendment dated as

of November 15, 2002 (the “Assignment and Assumption Agreement”) by and

among Williams GP, WEG GP, the Guarantor, Williams Energy Services LLC, a

Delaware limited liability Company (“WES”), and Williams Natural Gas

Liquids Inc., a Delaware corporation (“WNGL”), Williams GP assigned to

WEG GP, and WEG GP assumed, all obligations and rights of Williams GP in its

capacity as general partner of the Guarantor, and WEG GP became a general

partner of the Guarantor; and




 




WHEREAS, WES, WNGL and Williams GP (collectively, the “Selling

Parties”) are negotiating a proposed transaction (the “Proposed

Transaction”) providing for the sale of all of the Selling Parties’

interests in the Guarantor and WEG GP to WEG Acquisitions, L.P., a Delaware

limited partnership (the “Buyer”), substantially as described in the

Press Release attached as Exhibit A; and




 




WHEREAS, the Proposed Transaction would constitute a “Change of

Control” for purposes of the Note Purchase Agreement; and




 




WHEREAS, the registered holders of the Notes (the “Holders”)

have been asked to waive the “Fundamental Change Put” under the Note Purchase

Agreement, in order to insure that the Notes remain outstanding and need not be

repurchased as a result of the consummation of the Proposed Transaction; and




 




WHEREAS, the Holders have been asked to amend certain provisions of the

Note Purchase Agreement in the manner provided in Section 1 in furtherance of

the Proposed Transaction;




 




NOW THEREFORE,

in consideration of the premises, the parties hereto hereby agree as follows:




 




Section 1.                                WAIVER

OF FUNDAMENTAL CHANGE PUT.




 




(a)          Effectiveness.  Effective as of consummation of the Proposed

Transaction, the provisions of the Note Purchase Agreement referenced in

Section 1(b) shall be waived as provided in this Section 1, and  such waiver shall then and at all times

thereafter be deemed effective.




 




(b)         Waiver.  The following are waived: (i) the rights of

the Holders under, and compliance with, Section 8.10(f) and Section 11 of the

Note Purchase Agreement to the extent




 




1





























 




(but only to

the extent) that the Fundamental Change Put (as defined in the Note Purchase

Agreement) would be triggered by the consummation of the Proposed Transaction

and (ii) compliance with the provisions of the Note Purchase Agreement

(including, without limitation, Section 18.1 thereof) to the extent (but only

to the extent) that such provisions would require that the waivers set forth

herein be made with and only with the written consent of the Guarantor, the

Company and any of their respective Subsidiaries.




 




Section

2.                                AMENDMENTS.




 




(a)          Effectiveness.   Effective as of consummation of the

Proposed Transaction, the Note Purchase Agreement shall be amended as provided

in this Section 2, and the amendments effected by this Section 2 shall then and

at all times thereafter be deemed effective, provided that the foregoing

is subject to the satisfaction of each of the following conditions: (A) WEG GP,

the Company, and the Guarantor shall have executed and delivered this

Amendment; and (B) the Company shall have delivered to each of the Holders and

Simpson, Thacher & Bartlett, an opinion of counsel in customary form as to

the due authorization, execution, delivery of this Amendment by the Company,

the Guarantor and WEG GP and the enforceability of this Amendment in accordance

with its terms against the Company, the Guarantor and WEG GP.




 




(b)         General Partner

References.  All references to the

“General Partner” in the Note Purchase Agreement shall be deemed to be

references to WEG GP, in its capacity as general partner of the Guarantor, and

to its successors and assigns in such capacity, and all such references shall

be deemed to not refer to Williams GP, in its capacity as general partner of

the Guarantor or otherwise.




 




(c)          Definition of

“Commonly Controlled Entity.”  The

definition of the term “Commonly Controlled Entity” set forth in Schedule B

(Defined Terms) to the Note Purchase Agreement shall be amended and restated in

its entirety to read as follows:




 




“Commonly

Controlled Entity” means an entity, whether or not incorporated, that is under

common control with the Company or the Guarantor within the meaning of Section

4001 of ERISA or is part of a group that includes the Company or the Guarantor

and that together with the Company or the Guarantor is treated as a single

employer under Section 414 of the Code.




 




(d)         Definition of

“Consolidated EBITDA.”  The

definition of the term “Consolidated EBITDA” set forth in Schedule B (Defined

Terms) to the Note Purchase Agreement shall be amended and restated in its

entirety to read as follows:




 




“Consolidated EBITDA” means for any period,

Consolidated Net Income for such period plus, without duplication and to the

extent reflected as a charge in the statement of such Consolidated Net Income

for such period, the sum of (a) income tax expense, (b) interest expense,

amortization or writeoff of debt discount and debt issuance costs and

commissions, discounts and other fees and charges associated with Indebtedness

(including the Notes), (c) depreciation and amortization expense, (d)

amortization of intangibles and organization costs, (e) any extraordinary

non-cash expenses or losses and (f) any extraordinary, unusual or non-recurring

cash income or gains to the extent not included in Consolidated Net Income, and

minus, (a) to the extent included in the statement of such Consolidated Net

Income for such period, any extraordinary, unusual or non-recurring non-cash

income or gains (including, whether or not otherwise includable as a separate

item in the statement of such Consolidated Net Income for such period, gains on

the sales of assets outside of the ordinary course of




 




2





























 




business) and

(b) any cash payments made during such period in respect of items described in

clause (e) above subsequent to the fiscal quarter in which the relevant

non-cash expenses or losses were reflected as a charge in the statement of

Consolidated Net Income, all as determined on a consolidated basis.  For purposes of calculating Consolidated

EBITDA for the third and fourth quarters of 2002 and the first quarter of 2003,

adjustments shall be made to income and expenses that resulted from the

acquisition of the Company by the Guarantor in the second quarter of 2002, as

set forth on Schedule D.  For purposes

of calculating Consolidated EBITDA for any period encompassing the quarter in

which the Proposed Transaction (as defined in Amendment No. 1 to the Note Purchase

Agreement, dated as of May 30, 2003) occurs and thereafter, adjustments shall

be made to income and expenses as set forth on Schedule A to such Amendment No.

1.  For the purposes of calculating

Consolidated EBITDA for any period of four (4) consecutive fiscal quarters

(each, a “Reference Period”) pursuant to any determination of compliance with

Section 9.1(a), (i) if at any time during such Reference Period the Guarantor

or the Company or any of their respective Subsidiaries shall have made any Disposition

other than in the ordinary course, the Consolidated EBITDA of the Guarantor or

Company, as applicable, for such Reference Period shall be reduced by an amount

equal to the Consolidated EBITDA (if positive) attributable to the property

that is the subject of such Disposition for such Reference Period or increased

by an amount equal to the Consolidated EBITDA (if negative) attributable

thereto for such Reference Period and (ii) if during such Reference Period the

Guarantor or the Company or any of their respective Subsidiaries shall have

made an asset acquisition other than in the ordinary course, Consolidated

EBITDA of the Guarantor or the Company, as applicable, for such Reference

Period shall be calculated after giving pro forma effect thereto as if such

asset acquisition occurred on the first day of such Reference Period.




 




(e)          Definition of “ERISA

Affiliate.”  The definition of the

term “ERISA Affiliate” set forth in Schedule B 

(Defined Terms) to the Note Purchase Agreement is hereby amended and restated

in its entirety to read as follows:




 




“ERISA Affiliate” means any trade or business

(whether or not incorporated) that is treated as a single employer together

with the Company or the Guarantor under Section 414 of the Code.




 




(f)            Definition of

“Omnibus Agreement”  The definition

of the term “Omnibus Agreement” set forth in Schedule B  (Defined Terms) to the Note Purchase

Agreement is hereby amended and restated in its entirety to read as follows:




 




“Omnibus Agreement” means the New Omnibus

Agreement, dated as of the date of the Proposed Transaction (as defined in

Amendment No. 1 to the Note Purchase Agreement, dated as of May 30, 2003),

among WEG Acquisitions, L.P.,  Williams

Energy Services, LLC, Williams Natural Gas Liquids, Inc., and The Williams Companies.




 




(g)         Definition of “Plan.”  The definition of the term “Plan” set forth

in Schedule B  (Defined Terms) to the

Note Purchase Agreement is hereby amended and restated in its entirety to read

as follows:




 




“Plan” means an “employee benefit plan” (as

defined in Section 3(3) of ERISA) that is or, within the preceding five years,

has been established or maintained, or to which contributions are or, within

the preceding five years, have been made or required to be made, by the

Company, the Guarantor, any ERISA Affiliate, or any Commonly




 




3





























 




Controlled

Entity or with respect to which the Company, the Guarantor, any ERISA Affiliate

or any Commonly Controlled Entity may have any liability.




 




Section

3.                                MISCELLANEOUS.




 




(a)                                  Confidentiality.  The information contained herein and in the

materials accompanying this Amendment is strictly confidential and shall

constitute “Confidential Information” as defined in the Note Purchase

Agreement.  Accordingly, the Holders

agree not to disclose any such information in any manner, except as permitted

by the Note Purchase Agreement.




 




(b)                                 Ratification.  Except as expressly provided herein, the

Note Purchase Agreement remains in full force and effect, and is hereby

ratified and confirmed by the parties hereto.




 




(c)                                  Successors

and Assigns.  All covenants and

other agreements contained in this Amendment by or on behalf of any of the

parties hereto bind and inure to the benefit of their respective successors and

assigns (including, without limitation, any subsequent holder of a Note)

whether so expressed or not.




 




(d)                                 Severability.  Any provision of this Amendment that is

prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,

be ineffective to the extent of such prohibition or unenforceability without

invalidating the remaining provisions hereof, and any such prohibition or

unenforceability in any jurisdiction shall (to the full extent permitted by

law) not invalidate or render unenforceable such provision in any other

jurisdiction.




 




(e)                                  Construction.  Schedule A attached hereto is deemed to be a

part of this Amendment.  In addition,

each covenant contained herein shall be construed (absent express provision to

the contrary) as being independent of each other covenant contained herein, so

that compliance with any one covenant shall not (absent such an express

contrary provision) be deemed to excuse compliance with any other

covenant.  Where any provision herein

refers to action to be taken by any person, or which such person is prohibited

from taking, such provision shall be applicable whether such action is taken

directly or indirectly by such person.




 




(f)                                    Counterparts.  This Amendment may be executed in any number

of counterparts, each of which shall be an original but all of which together

shall constitute one instrument.  Each

counterpart may consist of a number of copies hereof, each signed by less than

all, but together signed by all, of the parties hereto.




 




(g)                                 Governing

Law.  This Amendment shall be

construed and enforced in accordance with, and the rights of the parties shall

be governed by, the law of the State of New York excluding choice-of-law

principles of the law of such State that would require the application of the

laws of a jurisdiction other than such State.




 




(h)                                 Termination.  This Amendment shall be effective as of the

date of the Proposed Transaction, provided that if the Proposed Transaction has

not occurred on or before September 30, 2003, this Amendment shall not become

effective.




 




*  *  *  *  *




 




4





























 




IN WITNESS

WHEREOF, the undersigned have executed this Amendment as of the date first

written above.




 




	

   


  	

  WEG GP LLC


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Don R.

  Wellendorf


  	

   


  
	

   


  	

  Name:


  	

    Don R. Wellendorf


  	

   


  
	

   


  	

  Title:


  	

    Authorized Signatory


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  WILLIAMS

  ENERGY PARTNERS L.P.


  
	

   


  	

   


  	

   


  
	

   


  	

  By: WEG GP

  LLC, its General Partner


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Don R.

  Wellendorf


  	

   


  
	

   


  	

  Name:


  	

    Don R. Wellendorf


  	

   


  
	

   


  	

  Title:


  	

    Authorized Signatory


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  WILLIAMS

  PIPE LINE COMPANY, LLC


  
	

   


  	

   


  	

   


  
	

   


  	

  By: WILLIAMS

  ENERGY PARTNERS L.P., its


  Sole Member


  
	

   


  	

   


  
	

   


  	

  By: WEG GP

  LLC, its General Partner


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Don R.

  Wellendorf


  	

   


  
	

   


  	

  Name:


  	

    Don R. Wellendorf


  	

   


  
	

   


  	

  Title:


  	

    Authorized Signatory


  	

   


  
													





 




5





























 




 




	

  GENERAL

  ELECTRIC CAPITAL CORPORATION


  	

  METROPOLITAN

  LIFE INSURANCE COMPANY


  
	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Kevin P.

  Walsh


  	

   


  	

  By:


  	

   


  	

  /s/ Stuart

  L. Ashton


  	

   


  
	

  Name:


  	

  Kevin P.

  Walsh


  	

   


  	

  Name:


  	

  Stuart L.

  Ashton


  	

   


  
	

  Title:


  	

  Manager -

  Operations


  	

   


  	

  Title:


  	

  Director


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  NEW ENGLAND

  LIFE INSURANCE COMPANY


  	

  TEXAS LIFE

  INSURANCE COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  Metropolitan

  Life Insurance Company, as Investment Advisor


  	

   


  	

  By:


  	

   


  	

  Metropolitan

  Life Insurance Company, as Investment Advisor


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Stuart

  L. Ashton


  	

   


  	

  By:


  	

   


  	

  /s/ Stuart

  L. Ashton


  	

   


  
	

  Name:


  	

  Stuart L.

  Ashton


  	

   


  	

  Name:


  	

  Stuart L.

  Ashton


  	

   


  
	

  Title:


  	

  Director


  	

   


  	

  Title:


  	

  Director


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  METROPOLITAN

  INSURANCE AND ANNUITY COMPANY


  	

  ING LIFE

  INSURANCE AND ANNUITY COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Gerald

  P. Marcus


  	

   


  	

  By:


  	

   


  	

  ING

  Investment Management LLC, as Agent


  
	

  Name:


  	

  Gerald P.

  Marcus


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

  Vice

  President


  	

   


  	

  By:


  	

   


  	

  /s/

  Christopher P. Lyons


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

  Name:


  	

  Christopher

  P. Lyons


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

  Title:


  	

  Vice

  President


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  THE

  PRUDENTIAL INSURANCE COMPANY OF AMERICA


  	

  PRUCO LIFE

  INSURANCE COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Jay D.

  Squiers


  	

   


  	

  By:


  	

   


  	

  /s/ Jay D.

  Squiers


  	

   


  
	

  Name:


  	

  Jay D.

  Squiers


  	

   


  	

  Name:


  	

  Jay D.

  Squiers


  	

   


  
	

  Title:


  	

  Vice

  President


  	

   


  	

  Title:


  	

  Vice

  President


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  ING LIFE

  INSURANCE AND ANNUITY COMPANY


  	

  NEW YORK

  LIFE INSURANCE COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  Prudential

  Private Placement Investors, L.P. (as


  	

  By:


  	

   


  	

  /s/ Lisa A.

  Scuderi


  	

   


  
	

   


  	

   


  	

  Investment

  Advisor)


  	

   


  	

  Name:


  	

  Lisa A.

  Scuderi


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

  Title:


  	

  Investment

  Vice President


  	

   


  
	

   


  	

   


  	

  By:


  	

  Prudential

  Private Placement Investors,


  Inc. (as its General Partner)


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Jay D.

  Squiers


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Name:


  	

  Jay D.

  Squiers


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

  Vice

  President


  	

   


  	

   


  	

   


  	

   


  	

   


  





 




6





























 




	

  NEW YORK

  LIFE INSURANCE AND ANNUITY CORPORATION


  	

  SUNAMERICA

  LIFE INSURANCE COMPANY


  FIRST SUNAMERICA LIFE INSURANCE COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  New York

  Life Investment Management LLC,


  its Investment Manager


  	

  By:


  	

   


  	

  AIG Global

  Investment Corp., investment advisor


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Lisa A.

  Scuderi


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Name:


  	

  Lisa A.

  Scuderi


  	

   


  	

  By:


  	

   


  	

  /s/ Victoria

  Y. Chin


  	

   


  
	

  Title


  	

  Investment

  Vice President


  	

   


  	

  Name:


  	

  Victoria Y.

  Chin


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

  Title:


  	

  Vice

  President


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  THE GUARDIAN

  LIFE INSURANCE COMPANY OF 


  AMERICA


  	

  FORT

  DEARBORN LIFE INSURANCE COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Brian

  Keating


  	

   


  	

  By:


  	

   


  	

  Guardian

  Investor Services LLC


  	

   


  
	

  Name:


  	

  Brian

  Keating


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

  Director -

  Fixed Income


  	

   


  	

  By:


  	

   


  	

  /s/ Brian

  Keating


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

  Name:


  	

  Brian

  Keating


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

  Title:


  	

  Director -

  Fixed Income


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  THE GUARDIAN

  INSURANCE & ANNUITY


  COMPANY, INC.


  	

  TEACHERS

  INSURANCE AND ANNUITY ASSOCIATION OF AMERICA


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Brian

  Keating


  	

   


  	

  By:


  	

   


  	

  /s/ Marietta

  Moshiashvili


  	

   


  
	

  Name:


  	

  Brian

  Keating


  	

   


  	

  Name:


  	

  Marietta

  Moshiashvili


  	

   


  
	

  Title:


  	

  Director -

  Fixed Income


  	

   


  	

  Title:


  	

  Associate

  Director


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  TIAA-CREF

  LIFE INSURANCE COMPANY


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  TEACHERS

  INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, as Investment Manager


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Marietta

  Moshiashvili


  	

   


  	

   


  	

   


  	

   


  
	

  Name:


  	

  Marietta

  Moshiashvili


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

  Associate

  Director


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
											





 




7





























 




SCHEDULE A


TO AMENDMENT NO. 1




 




Certain Adjustments to Consolidated EBITDA




 




Consolidated EBITDA in any

period shall be increased by each of the following:




 




(a)                                  the

amount of the general and administrative expenses of the Company or the

Guarantor for such period paid by WEG Acquisitions, L.P. during or with respect

to such period  in accordance with the terms

of the New Omnibus Agreement (as defined below) that, in accordance with the

terms of the New Omnibus Agreement, is not required to be reimbursed to WEG

Acquisitions, L.P. by the Company or the Guarantor, provided that such increase

in Consolidated EBITDA shall not exceed the amount by which Consolidated Net

Income of the Company or the Guarantor was reduced for such period as a result

of the inclusion of such amount of general and administrative expenses on the

income statement of the Company or the Guarantor for such period;




 




(b)                                 the

amount of payments made by any of The Williams Companies, Inc,. Williams Energy

Services, LLC, or WEG Acquisitions, L.P. during or with respect to such

period  in accordance with Article IV of

the New Omnibus Agreement or Section 8.2 of the Purchase Agreement (as defined

below) as indemnification for Covered Environmental Losses (as defined in the

New Omnibus Agreement) or environmental remediation obligations, provided that

such increase in Consolidated EBITDA shall not exceed the amount by which

Consolidated Net Income of the Company or the Guarantor was reduced for such

period as a result of the GAAP treatment of such payments as capital

contributions rather than income;




 




(c)                                  the

sum of (i) the amount of Implementation Costs (as defined in the Purchase

Agreement and, when added to all Implementation Costs previously incurred, not

exceeding $5,000,000 in the aggregate) that are incurred during such period and

that, in accordance with the terms of the Purchase Agreement, are required to

be borne by WEG Acquisitions, L.P., the Company or the Guarantor, and (ii) the

amount of such Implementation Costs in excess of such $5,000,000 aggregate

amount that are incurred during such period and that, in accordance with the

terms of the Purchase Agreement, either (x) are not required to be borne by WEG

Acquisitions, L.P., the Company or the Guarantor or (y) are reimbursed to WEG

Acquisitions, L.P., the Company or the Guarantor, provided that in the case of

this clause (ii) such increase in Consolidated EBITDA shall not exceed the

amount by which Consolidated Net Income of the Company or the Guarantor was

reduced for such period as a result of the inclusion of the Implementation

Costs referred to in this clause (ii) on the income statement of the Company or

the Guarantor for such period;.




 




(d)                                 with

respect to any period encompassing the period in which the Proposed Transaction

(as defined in Amendment No. 1 to the Note Purchase Agreement, dated as of May

30, 2003) occurs, the amount (if any) by which Consolidated Net Income of the

Company or the Guarantor was reduced for such period as a result of the GAAP

treatment of certain retiree healthcare (FAS 106), pension (FAS 87), and

accrued paid-time off costs related to the employment by WEG Acquisitions, L.P.

and its affiliates of former employees of The Williams Company, Inc. that were

formerly involved, and that will continue to be involved, in providing services

to the Guarantor, the General Partner, and the Company; and




 




(e)                                  with

respect to any period encompassing the period in which the Proposed Transaction

occurs, the amount of expenses that are deemed to be incurred by the Company or

the Guarantor during or with respect to such period as a result of the

accelerated vesting of certain Phantom Units (as defined in the Purchase

Agreement) as a result of the consummation of the Proposed Transaction or

events related to the consummation of the Proposed Transaction.




 




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For purposes

of this Schedule, (i) the term “Purchase Agreement” means the Purchase

Agreement, dated as of April 18, 2003, by and among Williams Energy Services,

LLC, Williams Natural Gas Liquids, Inc., Williams GP LLC, and WEG Acquisitions,

L.P., and (ii) the term “New Omnibus Agreement” means the New Omnibus

Agreement to be entered into in connection with the Proposed Transaction, by

and among WEG Acquisitions, L.P., The Williams Companies, Inc., Williams

Natural Gas Liquids, Inc., and Williams Energy Services, LLC, as each such

agreement referred to clause (i) and (ii) may be amended, supplemented or

otherwise modified after the date hereof, but without giving effect to any such

amendment, supplement or other modification thereto not otherwise consented to

by the Required Lenders that would, as a result of the application of the

adjustments to such amendments, supplements or other modifications provided for

in this Schedule A, result in an increase in Consolidated EBITDA in excess of

the increases therein provided for in this Schedule A.




 




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EXHIBIT

A




TO AMENDMENT NO. 1




 








	

  Press

  Release


  	

   


  	

  Source:

  Williams Energy Partners L.P.


  










 




Williams

Energy Partners Announces Buyer of General Partner Interest




 




Monday April 21, 8:03 am ET




 




TULSA, Okla., April 21

/PRNewswire-FirstCall/ — Williams Energy Partners L.P. (NYSE: WEG - News)

announced today that Williams (NYSE: WMB - News) has agreed to sell its 54.6

percent interest in WEG to a new entity formed jointly by private equity firms

Madison Dearborn Partners, LLC and Carlyle/Riverstone Global Energy and Power

Fund II, L.P. The transaction is expected to close in May 2003. The acquisition

includes 100 percent of the ownership interest of the general partner of WEG,

1.1 million common units, 5.7 million subordinated units and 7.8 million Class

B common units representing limited partner interests in WEG.




 




“The financial strength and

breadth of the commercial relationships of Madison Dearborn and

Carlyle/Riverstone will further enhance WEG’s ability to make accretive

acquisitions,” said Don Wellendorf, WEG’s chief executive officer. “Our

operations, focus on safety and commitment to customer service will not be

impacted by the transaction.”




 




Madison Dearborn Partners,

headquartered in Chicago, is one of the most experienced and largest private

equity investment firms in the country with approximately $8 billion of assets

under management. Madison Dearborn focuses on investments in several specific

industries including natural resources, communications, consumer, health care

and financial services.




 




Carlyle/Riverstone is a joint

venture between The Carlyle Group and Riverstone Holdings. Riverstone Holdings

is a New York-based energy and power-focused private equity firm with more than

$750 million currently under management. The Carlyle Group is a global private

equity firm with more than $15.8 billion under management. Carlyle invests in

buyouts, venture, real estate, high yield and turnarounds in North America,

Europe and Asia.




 




The change in control of the

general partner interest also will result in the following:




 




•                  Under current agreements between

Williams and WEG, Williams bears responsibility for WEG’s general and

administrative costs over a specified cap, which escalates annually. As a

result of the transaction, the agreements with Williams will terminate. The new

owners of the general partner will continue to provide G&A services at

costs equivalent to the cap during 2003. Beginning in 2004, the cap will

escalate at 7 percent annually, which is a higher escalation rate than previous

years. The increase in the escalation is expected to increase WEG’s cash

G&A cost in 2004 by approximately $1.5 million;




 




•                  Accounting rules applicable to the

organizational structure of the new entity will require the total general and

administrative costs of WEG, including costs above the cap amount that will be

reimbursed by the general partner, to be recorded as a WEG expense. Under the

previous structure, only the G&A costs under the cap, which reflected WEG’s

actual cash cost, were required to be recorded as a WEG expense. Actual cash

G&A costs incurred by WEG will continue to be limited to the G&A cap

amount and the amount of the reimbursement for costs above the cap will be

recorded as a capital contribution by the general partner. The additional WEG

expense of approximately $7 million in 2003 and $10 million in 2004 resulting

from this accounting treatment will not impact distributable cash generated per

unit or earnings per unit for the limited partners;




 




•                  Accounting rules applicable to the

new entity also require that a liability for paid-time-off benefits, previously




 




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recorded on the books of

Williams, be recorded on the books of WEG. As a result, WEG will record a

one-time expense of approximately $5 million in the second quarter to establish

this liability. This non-cash expense will not impact distributable cash

generated per unit;




 




•                  WEG will incur one-time cash

transition costs of approximately $5 million associated with its separation

from Williams. These costs will be funded out of WEG’s current cash balance;




 




•                  Because the transaction involves a

change in ownership of more than 50 percent of the partnership in one year,

federal tax laws will require a modification to WEG’s 2003 taxable income. For

2003, WEG estimates the amount of taxable income will be approximately 75

percent of the cash distributed. WEG estimates the taxable income for the

three-year period of 2004-2006 will average less than 20 percent of cash

distributions;




 




•                  After the closing of the transaction,

the new owners of the Class B common units plan to request a unitholder vote to

allow the Class B units to convert to common units, as is provided in WEG’s

partnership agreement. The Class B common units were issued to Williams as

partial payment for the purchase of the Williams Pipe Line system in 2002.

These units are equivalent to common units but do not currently have voting

rights. Conversion of the Class B common units will not affect WEG’s earnings

per unit, cash generation or distributions. Unitholders will receive additional

information about this vote in the near future; and




 




•                  As a result of the change of control

that will occur at closing, approximately 174,000 units issued under the 2001

and 2002 equity-based incentive compensation plans will vest, resulting in a

net increase in expense of approximately $1 million for the year. The net

increase results from an expense of approximately $2 million in the second

quarter offset by a reduction in expenses in the second half of the year of

approximately $1 million. Vesting of the units will not impact distributable

cash generated per unit.




 




WEG plans to release its

first-quarter 2003 earnings on Monday, April 28. Management has indicated it

remains comfortable with the earnings guidance previously provided for 2003

even after the effect of the items described above.




 




WEG will continue to be

operated by its current management team and its headquarters will remain in

Tulsa, Okla.




 




“Riverstone principals have a

long history with master limited partnerships, and we look forward to assisting

WEG in identifying and financing accretive acquisition opportunities through

our extensive energy industry relationships,” said Pierre Lapeyre, Jr., managing

director of Carlyle/Riverstone. “We believe that WEG’s management team and

asset base are extremely well-positioned to take advantage of the continued

midstream asset rationalization and restructuring that is taking place in the

energy sector. We expect organic growth and accretive acquisition opportunities

will enable WEG to continue its excellent track record of distribution growth.”




 




“Madison Dearborn Partners is

delighted to be acquiring a substantial interest in an industry leader with an

outstanding management group,” said Justin S. Huscher, managing director of

Madison Dearborn. “We are committed to assisting WEG pursue its acquisition

strategy with the goal of growing cash distributions.”




 




Partnership management will

host a conference call with analysts at 10:30 a.m. Eastern. To participate in

the conference call, dial (800) 289-0518 and provide code 778493. International

callers should dial (913) 981-5532 and provide the same code. A webcast also

will be available at www.williamsenergypartners.com/calendar.jsp.




 




Audio replays of the conference

call will be available from 3 p.m. Eastern on April 21 through midnight on

April 25. To access the replay, dial (888) 203-1112. International callers

should dial (719) 457-0820. The access replay code is 778493. The webcast also

will be available for replay at www.williamsenergypartners.com.




 




About Williams

Energy Partners L.P.




 




Williams Energy Partners L.P.

is a publicly traded partnership formed to own, operate and acquire a

diversified portfolio of energy assets. The partnership primarily transports,

stores and distributes refined petroleum products and ammonia.




 




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Portions of this document may

constitute “forward-looking statements” as defined by federal law. Such

statements are subject to certain risks, uncertainties and assumptions. Should

one or more of these risks or uncertainties materialize, or should underlying

assumptions prove incorrect, actual results may vary materially from those

anticipated, estimated or projected. Examples of such uncertainties and risk

factors include, but are not limited to, changes in the price for crude oil,

changes in demand for refined petroleum products, adverse developments

affecting our ammonia pipeline customers, changes in federal government

policies affecting farm subsidies, changes to cost estimates relating to

specific acquisitions, changes in economic and industry conditions and changes

in regulatory requirements (including changes in environmental requirements). These

and other factors are set forth in the Partnership’s filings with the

Securities and Exchange Commission.




 




 




Source: Williams Energy

Partners L.P.




 




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