Exhibit
10.34
AMENDMENT NO. 1 TO AMENDED AND
RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
NORTHERN BORDER PARTNERS,
L.P.
This Amendment No. 1 to Amended
and Restated Agreement of Limited Partnership of Northern Border
Partners, L.P. (this “Amendment”), dated as of February
[ ], 2006, is entered into and effectuated
by Northern Plains Natural Gas Company, LLC, a Delaware limited
liability company (“Northern Plains”), Northwest Border
Pipeline Company, a Delaware corporation (“Northwest
Border”), and Pan Border Gas Company, LLC, a Delaware limited
liability company (“Pan Border” and, together with
Northern Plains and Northwest Border, the “General
Partners”), as the General Partners, pursuant to authority
granted in Section 4.2 and Section 15.1 of the Amended
and Restated Agreement of Limited Partnership of Northern Border
Partners, L.P., dated as of October 1, 1993 (the
“Partnership Agreement”). Capitalized terms used but
not defined herein are used as defined in the Partnership
Agreement.
RECITALS:
WHEREAS, Section 4.2(a) of the
Partnership Agreement provides that the Partnership Policy
Committee, without the approval of any Limited Partners, may issue
additional Partnership Securities, or classes or series thereof,
for any Partnership purpose, at any time or from time to time, and
may issue such Partnership Securities for such consideration and on
such terms and conditions as shall be established by the
Partnership Policy Committee in its sole discretion;
WHEREAS, Section 4.2(b) of the
Partnership Agreement provides that the Partnership Securities
authorized to be issued by the Partnership pursuant to
Section 4.2(a) may be issued in one more classes, or one or
more series of any such classes, with such designations,
preferences and relative, participating, optional or other special
rights, powers and duties (which may be senior to existing classes
and series of Partnership Securities (except as provided in
Section 4.2(c)) as shall be fixed by the Partnership Policy
Committee;
WHEREAS, Section 15.1(f) of the
Partnership Agreement provides that the Partnership Policy
Committee, without the approval of any Limited Partner or Assignee
(subject to the terms of Section 4.2 of the Partnership
Agreement), may amend any provision of the Partnership Agreement
necessary or appropriate in connection with the authorization for
issuance of any class or series of Partnership Securities pursuant
to Section 4.2 of the Partnership Agreement;
WHEREAS, the Partnership has entered
into a definitive agreement, dated as of February 14, 2006,
between the Partnership and ONEOK, Inc., an Oklahoma corporation
(“ONEOK”) (the “Contribution
Agreement”);
WHEREAS, as part consideration for
the contribution of the Shares to the Partnership, the Contribution
Agreement obligates the Partnership to issue limited partner
interests to be designated as Class B Units having the terms set
forth in this Agreement;
WHEREAS, the Partnership Policy
Committee, in consultation with the Audit Committee, has determined
that the issuance of the Class B Units provided for in this
Amendment is permitted by Section 4.2 of the Partnership
Agreement; and
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WHEREAS, Section 15.1(d)(i) of
the Partnership Agreement provides that the Partnership Policy
Committee, without the approval of any Limited Partner or Assignee,
may amend any provision of the Partnership Agreement to reflect a
change that the Partnership Policy Committee determines, in its
sole discretion, does not adversely affect the Limited Partners in
any material respect;
NOW, THEREFORE, it is hereby agreed
as follows:
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A.
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Amendment. The Partnership Agreement is hereby amended as
follows:
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1)
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Section 1.1 is hereby amended to add the
following definitions:
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“ Class B Subordination
Period ” means the period commencing upon issuance of the
Class B Units and ending on the earlier of (a) the Conversion
Approval Date or (b) the Conversion Approval Termination
Date.
“ Class B Unit ”
means a Unit representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees and having the
rights and obligations specified with respect to Class B Units in
this Agreement. Except as otherwise provided in this Agreement, the
term “ Class B Unit ” does not refer to a Common
Unit prior to the conversion of the Class B Unit into a Common Unit
pursuant to the terms hereof.
“ Class B Unit
Arrearage ” means, with respect to any Class B Unit, and
as to any calendar quarter within the Class B Subordination Period,
the excess, if any, of (a) the Minimum Quarterly Distribution
with respect to such Class B Unit (including any applicable
increased amounts distributable with respect to the Minimum
Quarterly Distribution following the Class B Distribution Increase
Date, the Section 4.11(b) Distribution Increase Date or the GP
Removal Date) over (b) the sum of all Available Cash
distributed with respect to such Class B Unit in respect of such
quarter pursuant to Section 4.10(b)(ii)(A) (and
Section 4.10(b)(ii)(A)(1) following the Class B Distribution
Increase Date and/or GP Removal Date, as applicable).
“ Cumulative Class B Unit
Arrearage ” means, with respect to any Class B Unit, and
as of the end of any calendar quarter (or on the expiration of the
Class B Subordination Period), the excess, if any, of (a) the
sum resulting from adding together the Class B Unit Arrearage as to
such Class B Unit for each of the quarters within the Class B
Subordination Period over (b) the sum resulting from adding
together (i) any distributions theretofore made pursuant to
Section 4.10(b)(ii)(B) (and Section 4.10(b)(ii)(A)(2)
following the Class B Distribution Increase Date and/or
GP
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Removal Date, as applicable) with
respect to such Class B Unit (including any distributions to be
made in respect of the last of such quarters) and (ii) any
Cumulative Common Unit Arrearage then existing upon conversion of a
Class B Unit into a Common Unit pursuant to the terms hereof or the
occurrence of a Termination Capital Transaction.
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2)
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Section 1.1 is hereby amended
to:
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a)
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add the
following sentence to the end of the definition of “Common
Unit”:
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“Except as otherwise provided
in this Agreement, the term “Common Unit” does not
refer to a Class B Unit prior to the conversion of the Class B Unit
into a Common Unit pursuant to the terms hereof.”
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b)
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add the phrase
“or within the Class B Subordination Period” after the
phrase “and as to any calendar quarter within the
Subordination Period” in the definition of “ Common
Unit Arrearage. ”
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c)
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add the phrase
“or within the Class B Subordination Period” after the
phrase “for each of the quarters within the Subordination
Period ending on or before the last day of such quarter” in
clause (a) of the definition of “ Cumulative Common
Unit Arrearage. ”
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d)
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add the
following proviso to the end of the definition of
“Outstanding”:
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“; provided, further, that,
except as provided in Sections 4.11(a), 4.11(b), 4.12(a) and
4.12(b), none of the Class B Units shall be deemed to be
Outstanding for purposes of determining if any Class B Units are
entitled to distributions of Available Cash unless such Class B
Units shall have been reflected on the Partnership’s books
and records as outstanding during such calendar quarter and on the
Record Date for the determination of any distribution of Available
Cash;”
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e)
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add the phrase
“or if not offered to the public, the price per Unit at which
such class or series of Unit was initially issued, in each
case” after the phrase “for sale by the Underwriters in
respect of such offering,” in the definition of “
Unrecovered Initial Unit Price .”
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3)
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Article IV is
hereby amended to add new Sections 4.10 – 4.13 creating a new
class of Units as follows:
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Section 4.10 Establishment
of Class B Units.
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a)
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General. The Partnership Policy Committee hereby
designates and creates a class of Units to be designed as
“Class B Units” and consisting of a total of 36,494,126
Class B Units, and fixes the designations, preferences and
relative, participating, optional or other special rights, power
and duties of holders of the Class B Units as set forth in this
Section 4.10.
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b)
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Rights
Associated with Class B Units. During the period commencing upon issuance of
the Class B Units and ending upon the conversion of the Class B
Units as set forth in Section 4.10(f) hereof, unless amended
pursuant to Section 4.11 or Section 4.12
hereof:
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i)
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subject to the
provisions of Section 5.1(d)(iii)(A), and unless clauses (ii),
(iii), or (iv) below require a different allocation pursuant
to Section 5.1(c)(i) or otherwise, all items of Partnership
income, gain, loss, deduction and credit shall be allocated to the
Class B Units to the same extent as such items would be so
allocated if such Class B Units were Common Units that were then
Outstanding;
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ii)
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Notwithstanding
anything to the contrary in Section 5.4, with respect to
distributions made in accordance with Section 5.4 for calendar
quarters ending on or prior to the expiration of the Class B
Subordination Period, the Class B Units shall be deemed Units, but
not Common Units, for such purposes and, in addition, the holders
of Class B Units shall have the right to share in Partnership
quarterly cash distributions in accordance with Section 5.4
hereof (such distribution to be prorated for the quarter in which
the Class B Units are issued), provided that following any
distribution pursuant to Section 5.4(c) and prior to any
distribution pursuant to Section 5.4(d), Available Cash shall
be distributed as follows:
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(A)
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99% to the
holders of Class B Units and 1% to the General Partners, in
accordance with their relative General Partner Percentage
Interests, until there has been distributed in respect of each
Class B Unit Outstanding as of the last day of such quarter an
amount equal to the Minimum Quarterly Distribution; and
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(B)
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then, 99% to the holders of Class
B Units and 1% to the General Partners, in accordance with their
relative General Partner Percentage Interests, until there has been
distributed in respect of each Class B
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Unit Outstanding as of the last
day of such quarter an amount equal to the Cumulative Class B Unit
Arrearage, if any, existing with respect to such
quarter.
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iii)
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The holders of
Class B Units shall have the right to share in Partnership
quarterly cash distributions for quarters ending after the
expiration of the Class B Subordination Period in accordance with
Section 5.4 hereof as if such holders of Class B Units held
Common Units and, in addition, notwithstanding anything to the
contrary set forth in Section 5.4, if a Cumulative Class B
Unit Arrearage exists on the date of the expiration of the Class B
Subordination Period, prior to any distribution pursuant to
Section 5.4(d), irrespective of whether any such Class B Units
are then Outstanding, Available Cash shall be distributed in
accordance with Section 4.10(b)(ii)(B) hereof to each holder
of record of the applicable Class B Units as of the expiration of
the Class B Subordination Period. This distribution shall not be
deemed a distribution on a Common Unit, but the satisfaction of
prior entitlements of the holders of Class B Units as of the
expiration of the Class B Subordination Period. For the taxable
year in which such distribution is made, if not previously
allocated, each Person receiving such cash distribution shall be
allocated items of gross income in an amount equal to such
distribution as provided in Section 5.1(d)(iii)(A).
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iv)
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Notwithstanding
anything to the contrary in Section 5.1(c)(i), during the
Class B Subordination Period the Class B Units shall be treated as
Common Units then Outstanding for purposes of
Section 5.1(c)(i), and, in addition, following any allocation
made pursuant to Section 5.1(c)(i)(B) and before an allocation
is made pursuant to Section 5.1(c)(i)(C), any remaining Net
Termination Gain shall be allocated 99% to the holders of the Class
B Units and 1% to the General Partners, in accordance with their
relative General Partner Percentage Interests, until each such
holder of a Class B Unit has been allocated Net Termination Gain
equal to any then existing Cumulative Class B Unit Arrearage with
respect to such Class B Unit.
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c)
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Voting Rights.
Unless amended pursuant to
Section 4.11 or Section 4.12 hereof, (i) during the
Class B Subordination Period, the Class B Units are non-voting (and
solely for all purposes of calculating votes and determining the
presence of a quorum under this Agreement, none of the Class B
Units shall be deemed Outstanding), except that the Class B Units
shall be entitled to vote
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as a separate class on any matter
that adversely affects the rights or preferences of the Class B
Units in relation to other classes of Partnership Interests or as
required by law. The approval of a majority of the Class B Units
shall be required to approve any matter for which the holders of
the Class B Units are entitled to vote as a separate class, and
(ii) upon expiration of the Class B Subordination Period, the
Class B Units will have such voting rights pursuant to the
Partnership Agreement as such Class B Units would have if they were
Common Units that were then Outstanding except that, with respect
to the Conversion Approval or Amendment Approval, none of the Class
B Units shall be deemed Outstanding as of the record date for such
vote or be entitled to vote. Each Class B Unit will be entitled to
the number of votes equal to the number of Common Units into which
a Class B Unit is convertible at the time of the record date for
the vote or written consent on the matter.
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d)
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Certificates. The Class B Units will be evidenced by
certificates in such form as the Partnership Policy Committee may
approve and, subject to the satisfaction of any applicable legal
and regulatory requirements, may be assigned or transferred in a
manner identical to the assignment and transfer of other Units. The
Certificates will include the restrictive legend set forth in
Section 2.17 of the Contribution Agreement.
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e)
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Registrar
and Transfer Agent. Northern Plains will act as registrar and
transfer agent of the Class B Units.
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f)
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Conversion. Except as provided in this Section 4.10(f),
the Class B Units are not convertible into Common Units.
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i)
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Optional Conversion
. The Partnership shall, as promptly
as practicable following the issuance of any Class B Units, take
such actions as may be necessary or appropriate to submit to a vote
or consent of its securityholders the approval of a change in the
terms of the Class B Units to provide that each Class B Unit shall
be convertible from time to time, at the option of the holders
thereof, into one Common Unit (subject to appropriate adjustment in
the event of any split-up, combination or similar event affecting
the Common Units that occurs prior to the conversion of the Class B
Units), effective upon approval of the issuance of additional
Common Units in accordance with the following sentence (the
“Conversion Approval”). The vote or consent required
for such approval will be the requisite vote required under the
rules or staff interpretations of the National Securities Exchange
on which the Common Units are listed or admitted for trading for
the listing or addition to
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trading of the Common Units that
would be issued upon such conversion, excluding those Units held by
ONEOK and its affiliates. Upon receipt of the required vote or
consent (the date of such approval, the “Conversion Approval
Date”), the terms of the Class B Units will be changed,
automatically and without further action, so that each Class B Unit
may be converted, at the option of the holder thereof, into one
Common Unit (subject to appropriate adjustment in the event of any
split-up, combination or similar event affecting the Common Units
that occurs prior to the conversion of the Class B
Units).
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ii)
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Automatic
Conversion . The
Partnership shall, as promptly as practicable following the
issuance of any Class B Units, take such actions as may be
necessary or appropriate to submit to a vote or consent of holders
of at least 66 2 / 3
% of the Outstanding
Units (excluding those Units held by ONEOK and its Affiliates) and
otherwise as required by Section 15.2 of the Partnership
Agreement, the amendments to the Partnership Agreement described on
Annex A (the approval of such amendment, the “Amendment
Approval,” and the date of obtaining the Amendment Approval,
the “Amendment Approval Date”). Subject to
Section 4.12, each Class B Unit shall automatically convert
into one Common Unit (subject to appropriate adjustment in the
event of any split-up, combination or similar event affecting the
Common Units that occurs prior to the conversion of the Class B
Units) upon receipt of:
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(A)
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Conversion
Approval as set forth above in paragraph (i); and
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(B)
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Amendment
Approval as set forth above in this paragraph (ii);
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and immediately thereafter, none of
the Class B Units shall be outstanding.
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iii)
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Quarterly Cash
Distributions . Each
Common Unit into which a Class B Unit has been converted as
provided in this Section 4.10(f) shall have the right to share
in any Partnership quarterly cash distributions made in respect of
a Common Unit in accordance with Section 5.4 hereof
(including, without limitation and not withstanding anything to the
contrary contained in the Partnership Agreement, the right to any
distributions of amounts in
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respect of Cumulative Common Unit
Arrearages in respect of a Common Unit).
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Section 4.11 Amendment of
Terms of Class B Units if SecurityHolder Approval is Not
Obtained.
a) If:
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i)
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the Conversion
Approval has not been obtained by the date that is 12 months
following the Closing (as defined under the Contribution
Agreement); and
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ii)
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the Amendment
Approval has not been obtained by the date that is 12 months
following the Closing;
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then, unless the provisions of
Section 4.12 shall already be in effect, effective as of the
next succeeding day (the “Class B Distribution Increase
Date”) until amended by the provisions of Section 4.12,
Sections 4.10(b) and 4.10(c) hereof will be deemed to be amended in
their entirety, automatically and without further action, as
follows:
“b) Rights Associated with
Class B Units. Prior to the conversion of all of the
Class B Units pursuant to Section 4.10(f)
above:
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i)
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subject to the
provisions of Section 5.1(d)(iii)(A) and paragraphs
(ii) and (iii) below, all items of Partnership income,
gain, loss, deduction and credit shall be allocated to the Class B
Units to the same extent such items would be allocated if such
Class B Units were Common Units then Outstanding, and the
allocations to Class B Units shall have the same order of priority
relative to allocations on the Common Units;
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ii)
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(A)
notwithstanding anything to the contrary in Section 5.4, the
Class B Units shall be deemed Units, but not Common Units, for
purposes of Section 5.4 and the Class B Units shall have the
right to share in Partnership quarterly cash distributions in
accordance with Section 5.4 hereof based on 115% of the amount
of any Partnership distribution that would be made to each Common
Unit so that the amount of any Partnership distribution to each
Class B Unit will equal 115% of the amount of such distribution to
each Common Unit (such additional 15% pro rated for the quarter in
which the Class B Distribution Increase Date o
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