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EXHIBIT 3.2
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
April 6, 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:
A.
Amendment.
The Partnership Agreement is hereby amended as follows:
1) Section
1.1 is hereby amended to add the following
definitions:
"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.
2) Section
1.1 is hereby amended to:
a) add the
following sentence to the end of the definition
of "Common Unit":
"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."
b) 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."
c) 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."
d) add the
following proviso to the end of the definition
of
"Outstanding":
"; 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;"
e)
[Intentionally Omitted]
3) Article
IV is hereby amended to add new Sections 4.10 - 4.13
creating a new class of Units as follows:
SECTION 4.10 ESTABLISHMENT OF CLASS B UNITS.
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a)
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.
b) 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:
i) 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;
ii)
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:
(A) 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
(B) 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.
iii) 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).
iv)
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.
c) 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.
d)
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.
e)
Registrar and Transfer Agent. Northern Plains will act
as registrar and transfer agent of the Class B Units.
f)
Conversion. Except as provided in this Section 4.10(f),
the Class B Units are not convertible into Common Units.
i)
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).
ii) 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:
(A) Conversion
Approval as set forth above in
paragraph (i); and
(B) Amendment
Approval as set forth above in
this paragraph (ii);
and
immediately thereafter, none of the Class B Units
shall be outstanding.
iii) 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).
SECTION 4.11 AMENDMENT OF TERMS OF CLASS B UNITS IF
SECURITYHOLDER APPROVAL IS NOT OBTAINED.
a) If:
i) the
Conversion Approval has not been
obtained by the date that is 12 months
following the Closing (as defined under the
Contribution Agreement); and
ii) the
Amendment Approval has not been obtained
by the date that is 12 months following the
Closing;
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:
i) 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;
ii)(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
occurs), provided, however, 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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(1) 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 Outstandi
