AMENDMENT NO. 3 TO THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF COPANO ENERGY, L.L.C.
Exhibit 3.2
AMENDMENT NO. 3 TO THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
COPANO ENERGY, L.L.C.
LIMITED LIABILITY COMPANY AGREEMENT OF
COPANO ENERGY, L.L.C.
THIS AMENDMENT NO. 3 TO THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF COPANO
ENERGY, L.L.C. (this “Amendment”), dated as of October 19, 2007, is entered into and
effectuated by the Board of Directors (the “Board”) of Copano Energy, L.L.C. (the
“Company”) pursuant to authority granted to it in Sections 5.6 and 11.1 of the Third
Amended and Restated Limited Liability Company Agreement of Copano Energy, L.L.C., dated as of
April 30, 2007, as amended (the “Limited Liability Company Agreement”). Capitalized terms
used but not defined herein are used as defined in the Limited Liability Company Agreement.
WHEREAS, Section 5.6(a) of the Limited Liability Company Agreement provides that the Company may
issue additional Company Securities for any Company purpose at any time and from time to time for
such consideration and on such terms and conditions as the Board shall determine, all without the
approval of any Members;
WHEREAS, Section 5.6(b) of the Limited Liability Company Agreement provides that the Company
Securities authorized to be issued by the Company pursuant to Section 5.6(a) may be issued in one
or more classes, or one or more series of any such classes, with such designations, preferences,
rights, powers and duties (which may be senior to existing classes and series of Company
Securities) as shall be fixed by the Board;
WHEREAS, Section 11.1(c)(vii) of the Limited Liability Company Agreement provides that the Board,
without the approval of any Member, may amend any provision of the Limited Liability Company
Agreement that the Board determines to be necessary or appropriate in connection with the
authorization of issuance of any class or series of Company Securities pursuant to Section 5.6 of
the Limited Liability Company Agreement;
WHEREAS, the Board has determined that the issuance of the Class E Units provided for in this
Amendment are permitted by Section 5.6 of the Limited Liability Company Agreement;
WHEREAS, Section 11.1(c)(iv) of the Limited Liability Company Agreement provides that the Board,
without the approval of any Member, may amend any provision of the Limited Liability Company
Agreement to reflect a change that the Board determines does not adversely affect the Members
(including any particular class of Interests as compared to other classes of Interests) in any
material respect; and
WHEREAS, the Board deems it in the best interest of the Company to effect this Amendment to provide
for (i) the creation of a new class of Units to be designated as Class E Units and to fix the
preferences and the relative participating, optional and other special rights, powers and duties
pertaining to the Class E Units, including without limitation the conversion of the Class E Units
into Common Units in accordance with the terms described herein, and (ii) such other matters as are
provided herein.
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 1
Limited Liability Company Agreement, Page 1
NOW, THEREFORE, it is hereby agreed as follows:
A. Amendment. The Limited Liability Company Agreement is hereby amended as follows:
1. Section 1.1 is hereby amended to add the following definitions:
”Class E Units” means a Company Security representing a
fractional part of the Interests of all Members, and having the
rights and obligations specified with respect to the Class E Units
in this Agreement. The term “Class E Unit” does not refer to a
converted Class E Unit after its conversion into a Common Unit
pursuant to the terms hereof.
”Private Placement Value” means with respect to the Class E
Units and the Privately Placed Common Units, [INSERT CURRENT FAIR
MARKET VALUE OF A COMMON UNIT] per Unit.
”Privately Placed Common Units” means the Common Units issued
pursuant to the Unit Purchase Agreement.
”Unit Purchase Agreement” means the Class E Unit and Common
Unit Purchase Agreement dated as of August 31, 2007 between the
Company and the purchasers named therein.
2. Section 1.1 is hereby amended by amending and restating the following definitions:
”Adjusted Capital Account” means the Capital Account maintained
for each Member as of the end of each fiscal year of the Company,
(a) increased by any amounts that such Member is obligated to
restore under the standards set by Treasury Regulation Section
1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under
Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as of
the end of such fiscal year, are reasonably expected to be allocated
to such Member in subsequent years under Sections 704(e)(2) and
706(d) of the Code and Treasury Regulation Section
1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as
of the end of such fiscal year, are reasonably expected to be made
to such Member in subsequent years in accordance with the terms of
this Agreement or otherwise to the extent they exceed offsetting
increases to such Member’s Capital Account that are reasonably
expected to occur during (or prior to) the year in which such
distributions are reasonably expected to be made (other than
increases as a result of a minimum gain chargeback pursuant to
Section 6.1(d)(i) or Section 6.1(d)(ii)). The foregoing definition
of Adjusted Capital Account is intended to comply with the
provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith. The “Adjusted Capital
Account” of a Member in respect of a Common Unit, Class C Unit,
Class D Unit, Class E Unit or any other Interest shall be the amount
that such Adjusted Capital Account would be if such Common Unit,
Class C Unit, Class D Unit, Class E Unit or other Interest were the
only interest in the Company held by such Member from and after the
date on which such Common Unit,
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 2
Limited Liability Company Agreement, Page 2
Class C Unit, Class D Unit, Class E Unit or other Interest was
first issued.
”Capital Account” means the capital account maintained for a
Member pursuant to Section 5.5. The “Capital Account” of a Member
in respect of a Common Unit, Class C Unit, Class D Unit, Class E
Unit or any other Interest shall be the amount that such Capital
Account would be if such Common Unit, Class C Unit, Class D Unit,
Class E Unit or other Interest were the only interest in the Company
held by such Member from and after the date on which such Common
Unit, Class C Unit, Class D Unit, Class E Unit or other Interest was
first issued.
”Common Unit” means a Company Security representing a
fractional part of the Interests of all Members, and having the
rights and obligations specified with respect to Common Units in
this Agreement. The term “Common Unit” does not refer to a Class C
Unit, a Class D Unit or a Class E Unit prior to its conversion into
a Common Unit pursuant to the terms hereof.
”Company Security” means any class or series of equity interest
in the Company (but excluding any options, rights, warrants and
appreciation rights relating to an equity interest in the Company),
including without limitation, Common Units, Class C Units, Class D
Units and Class E Units, which are separate classes of Interests.
”Interest” means the ownership interest of a Member in the
Company, which may be evidenced by Common Units, Class C Units,
Class D Units, Class E Units or other Company Securities or a
combination thereof or interest therein, and includes any and all
benefits to which such Member is entitled as provided in this
Agreement, together with all obligations of such Member to comply
with the terms and provisions of this Agreement.
”Issue Price” means the price at which a Unit is purchased from
the Company, after taking into account any sales commission or
underwriting discount charged to the Company and after taking into
account any other form of discount with respect to the price at
which a Unit is purchased from the Company. In the case of the
Class E Units, the Issue Price shall be deemed to be $31.77 per
unit; and in the case of the Privately Placed Common Units, the
Issue Price shall be deemed to be $34.66 per unit.
”Per Unit Capital Amount” means, as of any date of
determination, the Capital Account, stated on a per Unit basis, as
the case may be, underlying any Common Unit (other than a Privately
Placed Common Unit), Class C Unit, Class D Unit, Class E Unit or
Privately Placed Common Unit, as the case may be, held by a Person.
”Outstanding” means, with respect to Company Securities, all
Company Securities that are issued by the Company and reflected as
outstanding on the Company’s books and records as of the date of
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 3
Limited Liability Company Agreement, Page 3
determination; provided, however, that no
Company Securities held by the Company (other than Company
Securities representing Interests held by the Company on behalf of
Non-Citizen Assignees) or any other Group Member shall be considered
Outstanding; provided, further, that for purposes of
the foregoing, the Class C Units, Class D Units and Class E Units
shall be deemed to be of the same class of Company Securities as the
Common Units.
”Remaining Net Positive Adjustments” means as of the end of any
taxable period, with respect to the Unitholders holding Common
Units, Class C Units, Class D Units or Class E Units, the excess of
(i) the Net Positive Adjustments of the Unitholders holding Common
Units, Class C Units, Class D Units or Class E Units as of the end
of such period over (ii) the sum of those Members’ Share of
Additional Book Basis Derivative Items for each prior taxable
period.
”Share of Additional Book Basis Derivative Items” means in
connection with any allocation of Additional Book Basis Derivative
Items for any taxable period, with respect to the Unitholders
holding Common Units, Class C Units, Class D Units or Class E Units,
the amount that bears the same ratio to such Additional Book Basis
Derivative Items as the Unitholders’ Remaining Net Positive
Adjustments as of the end of such period bears to the Aggregate
Remaining Net Positive Adjustments as of that time.
”Unit” means a Company Security that is designated as a “Unit”
and shall include Common Units, Class C Units, Class D Units and
Class E Units.
3. Section 4.1 is hereby amended and restated as follows:
Section 4.1 Certificates. Upon the Company’s issuance of Common
Units, Class C Units, Class D Units or Class E Units to any Person,
the Company shall issue one or more Certificates in the name of such
Person evidencing the number of such Units being so issued. In
addition, upon the request of any Person owning any other Company
Securities other than Common Units, Class C Units, Class D Units or
Class E Units, the Company shall issue to such Person one or more
certificates evidencing such other Company Securities. Certificates
shall be executed on behalf of the Company by the Chairman of the
Board, President or any Vice President and the Secretary or any
Assistant Secretary. No Common Unit Certificate shall be valid for
any purpose until it has been countersigned by the Transfer Agent;
provided, however, that if the Board of Directors
elects to issue Common Units in global form, the Common Unit
Certificates shall be valid upon receipt of a certificate from the
Transfer Agent certifying that the Common Units have been duly
registered in accordance with the directions of the Company. Any or
all of the signatures required on the Certificate may be by
facsimile. If any Officer or Transfer Agent who shall have signed
or whose facsimile signature shall have been placed upon any such
Certificate shall have ceased to be such Officer or Transfer Agent
before
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 4
Limited Liability Company Agreement, Page 4
such Certificate is issued by the Company, such Certificate may
nevertheless be issued by the Company with the same effect as if
such Person were such Officer or Transfer Agent at the date of
issue. Certificates shall be consecutively numbered and shall be
entered on the books and records of the Company as they are issued
and shall exhibit the holder’s name and number of Units.
4. Section 4.6 of the Limited Liability Company Agreement is hereby amended to add a new
Section 4.6(c) as follows:
(c) The transfer of (1) a Class E Unit that has been converted
into a Common Unit pursuant to Section 5.14 or (2) a Privately
Placed Common Unit shall be subject to the restrictions imposed by
Section 6.9.
5. Section 5.5(a) of the Limited Liability Company Agreement is hereby amended to add the
following at the end of such section:
The initial Capital Account balance in respect of each Class E
Unit shall be the Private Placement Value for such Class E Unit, and
the initial Capital Account balance of each holder of Class E Units
in respect of all Class E Units held by such holder shall be the
product of such initial balance for a Class E Unit multiplied by the
number of Class E Units held by such holder. The initial Capital
Account balance in respect of each Privately Placed Common Unit
shall be the Private Placement Value for such Privately Placed
Common Unit, and the initial Capital Account balance of each holder
of Privately Placed Common Units in respect of all Privately Placed
Common Units held by such holder shall be the product of such
initial balance for a Privately Placed Common Unit multiplied by the
number of Privately Placed Common Units held by such holder.
Immediately following the creation of a Capital Account balance in
respect of each Class E Unit, each holder acquiring a Class E Unit
at original issuance shall be deemed to have received a cash
distribution in respect of such Class E Units in an amount equal to
the product of (x) the total number of Class E Units so acquired by
such holder multiplied by (y) the difference between the Private
Placement Value and the Issue Price of a Class E Unit. Immediately
following the creation of a Capital Account balance in respect of
each Privately Placed Common Unit, each Unitholder acquiring a
Privately Placed Common Unit at original issuance shall be deemed to
have received a cash distribution in respect of such Privately
Placed Common Units in an amount equal to the product of (x) the
total number of Privately Placed Common Units so acquired by such
Unitholder multiplied by (y) the difference between the Private
Placement Value and the Issue Price of a Privately Placed Common
Unit. The purpose of the four preceding sentences is to provide the
initial purchasers of Class E Units and Privately Placed Common
Units with a net Capital Account in the Class E Units and Privately
Placed Common Units on the date of purchase equal to the Issue Price
paid by those purchasers for the Class E Units and Privately Placed
Common Units.
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 5
Limited Liability Company Agreement, Page 5
6. Section 5.5(d) of the Limited Liability Company Agreement is amended and restated in its
entirety to read as follows:
(i) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Interests for
cash or Contributed Property, the Capital Account of all Members and
the Carrying Value of each Company property immediately prior to
such issuance shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Company
property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property immediately prior
to such issuance and had been allocated to the Members at such time
pursuant to Section 6.1 in the same manner as any item of gain or
loss actually recognized during such period would have been
allocated. In determining such Unrealized Gain or Unrealized Loss,
the aggregate cash amount and fair market value of all Company
assets (including, without limitation, cash or cash equivalents)
immediately prior to the issuance of additional Interests shall be
determined by the Board of Directors using such method of valuation
as it may adopt; provided, however, that the Board
of Directors, in arriving at such valuation, must take fully into
account the fair market value of the Interests of all Members at
such time. The Board of Directors shall allocate such aggregate
value among the assets of the Company (in such manner as it
determines) to arrive at a fair market value for individual
properties. Any adjustments that are made under this paragraph in
connection with the issuance of the Class E Units or the Privately
Placed Common Units shall be based on the Private Placement Value of
the Class E Units and Privately Placed Common Units.
(ii) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
distribution to a Member of any Company property (other than a
distribution of cash that is not in redemption or retirement of an
Interest), the Capital Accounts of all Members and the Carrying
Value of all Company property shall be adjusted upward or downward
to reflect any Unrealized Gain or Unrealized Loss attributable to
such Company property, as if such Unrealized Gain or Unrealized Loss
had been recognized in a sale of such property immediately prior to
such distribution for an amount equal to its fair market value, and
had been allocated to the Members, at such time, pursuant to Section
6.1 in the same manner as any item of gain or loss actually
recognized during such period would have been allocated. In
determining such Unrealized Gain or Unrealized Loss the aggregate
cash amount and fair market value of all Company assets (including,
without limitation, cash or cash equivalents) immediately prior to a
distribution shall (A) in the case of an actual distribution that is
not made pursuant to Section 10.3 or in the case of a deemed
distribution, be determined and allocated in the same manner as that
provided in Section 5.5(d)(i) or (B) in the case of a liquidating
distribution pursuant to Section 10.3, be determined and allocated
by the Liquidator using such method of valuation as it may adopt.
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 6
Limited Liability Company Agreement, Page 6
7. Section 5.10(a) is hereby amended and restated in its entirety to read as
follows:
“Subject to Section 5.10(d), Section 6.6 and Section 6.7
(dealing with adjustments of distribution levels), the Company may
make a Pro Rata distribution of Company Securities to all Record
Holders of Company Securities or may effect a subdivision or
combination of Company Securities so long as, after any such event,
each Member shall have the same Percentage Interest in the Company
as before such event, and any amounts calculated on a per Unit basis
or stated as a number of Units (including the number of Common Units
into which Class C Units, Class D Units and Class E Units may
convert and the number of Class C Units issued on the Contribution
Amendment Closing Date and the number of Class D Units and Class E
Units issued on the Purchase Agreement Closing Date are
proportionately adjusted retroactive to the date of formation of the
Company.”
8. Article V is hereby amended to add a new Section 5.14, creating a new series of Units as
follows:
Section 5.14 Establishment of Class E Units.
(a) General. The Board hereby designates and creates a series
of Units to be designated as “Class E Units” and consisting of a
total of 5,598,836 Class E Units, and fixes the designations,
preferences and relative, participating, optional or other special
rights, powers and duties of holders of the Class E Units as set
forth in this Section 5.14.
(b) Allocations. Subject to the provisions of Section
6.1(d)(iii), all allocations of items of Company income, gain, loss,
deduction and credit under Section 6.1 (a) and Section 6.1(b) shall
be allocated to the Class E Units on a basis that is pro rata with
the Common Units (other than Privately Placed Common Units), so that
the amount thereof allocated to each Common Unit (other than
Privately Placed Common Units) will equal the amount thereof
allocated to each Class E Unit.
(c) Distributions.
(i) Not withstanding anything to the contrary in Section 6.4
and Section 6.5, no Class E Unit shall have the right to share in
any distributions made to Unitholders pursuant to Section 6.4 or
Section 6.5 prior to and including Company distributions announced
during the fourth quarter of 2008 for distributions attributable to
the third quarter ending September 30, 2008.
(ii) Beginning with Company distributions paid during the
first quarter of 2009 for distributions attributable to the fourth
quarter ending December 31, 2008, each Class E Unit shall have the
right to share in distributions pursuant to Section 6.4 and Section
6.5 on a pro rata basis with the Common Units, with the amount of
any distributions
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 7
Limited Liability Company Agreement, Page 7
on each Class E Unit equaling 110% of the quarterly cash
distribution amount payable on each Common Unit.
(d) Conversion of Class E Units to Common Units Pursuant to a
Vote of Common Unitholders. Except as provided in this Section
5.14, the Class E Units are not convertible into Common Units. The
Board shall, as promptly as practicable following the issuance of
the Class E Units, but in any event not later than 180 days from the
issuance of the Class E Units, take such actions as may be necessary
or appropriate to submit to a vote or consent of the holders of the
Outstanding Common Units, the Outstanding Class C Units and the
Outstanding Class D Units the approval of a change in the terms of
the Class E Units to provide that each Class E Unit will convert
into one Common Unit on the date on which the Company pays
distributions attributable to the third quarter ending September 30,
2008, such change in terms effective upon such approval by the
Unitholders of the issuance of additional Common Units upon such
conversion. The vote or consent required for such approval will be
the requisite vote required under the Limited Liability Company
Agreement and 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 admission to trading of the
Common Units that would be issued upon any such conversion. Upon
receipt of such approval and compliance with Section 5.14(f), the
terms of the Class E Units will be changed, automatically and
without further action, so that each Class E Unit is automatically
converted into one Common Unit on the date on which the Company pays
distributions attributable to the third quarter ending September 30,
2008 and immediately after the conversion of each Class E Unit into
one Common Unit on such date, none of the Class E Units shall be
Outstanding.
(e) Change in Rules of National Securities Exchange. If at any
time (i) the rules of the National Securities Exchange on which the
Common Units are listed or admitted to trading or the staff
interpretations of such rules are changed or (ii) facts or
circumstances arise so that no vote or consent of Unitholders is
required as a condition to the listing or admission to trading of
the Common Units that would be issued upon any conversion of any
Class E Units into Common Units as provided in Section 5.14(d), the
terms of such Class E Units will be changed so that each Class E
Unit is automatically converted (without further action or any vote
of any Unitholders other than compliance with Section 5.14(f)) into
one Common Unit on the date on which the Company pays distributions
attributable to the third quarter ending September 30, 2008 and
immediately after the conversion of each Class E Unit into one
Common Unit, none of the Class E Units shall be Outstanding.
(f) Surrender of Certificates. Upon receipt of the approval of
the holders of the Outstanding Common Units, the Outstanding Class C
Units and the Outstanding Class D Units to convert the Class E Units
into Common Units in accordance with Section 5.14(d), a change
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 8
Limited Liability Company Agreement, Page 8
in rules of the National Securities Exchange or a change in facts and
circumstances as described in Section 5.14(e), the Board shall give
the holders of the Class E Units prompt notice of such approval or
change and additional notice of the conversion of the Class E Units
into Common Units 10 days prior to the date on which the Company
paid distributions attributable to the third quarter ending
September 30, 2008. Upon the conversion of the Class E Units into
Common Units in accordance with Section 5.14(d) each holder of Class
E Units shall promptly surrender the Class E Unit Certificates
therefor, duly endorsed, at the office of the Company or of any
transfer agent for the Class E Units. In the case of any such
conversion, the Company shall, as soon as practicable thereafter,
issue and deliver at such office to such holder of Class E Units one
or more Common Unit Certificates, registered in the name of such
holder, for the number of Common Units to which he shall be entitled
as aforesaid. Such conversion shall be deemed to have been made as
of the date of the event specified in Section 5.14(d) or Section
5.14(e), as the case may be, and the Person entitled to receive the
Common Units issuable upon such conversion shall be treated for all
purposes as the record holder of such Common Units on said date.
(g) Voting Rights. The Class E Units are non-voting, except that
the Class E Units shall be entitled to vote as a separate class on
any matter that adversely affects the rights or preferences of the
Class E Units in relation to other classes of Interests or as
required by Law. The approval of a majority of the Class E Units
shall be required to approve any matter for which the holders of the
Class E Units are entitled to vote.
9. Section 6.1(c)(i) is hereby amended to add new Sections 6.1(c)(i)(C) and amend former
Section 6.1(c)(i)(C) and redesignate that section as Section 6.1(c)(i)(D) as follows:
(C) Third, if such Net Termination Gain is recognized prior to
the conversion of the Class E Units pursuant to Section 5.14(d),
100% to all Unitholders holding Class E Units, Pro Rata, until the
Capital Account in respect of each Class E Unit then Outstanding
equals the sum of (1) the Unrecovered Capital with respect to a
Common Unit at the time plus (2) if such Net Termination Gain is
recognized (i) prior to or on the date on which the Company pays
distributions to the Common Units attributable to the third quarter
ending September 30, 2008, an amount equal to 100% of the Unpaid MQD
or (ii) after the date on which the Company pays distributions to
the Common Units attributable to the third quarter ending September
30, 2008, an amount equal to 110% of the Unpaid MQD; and
(D) Fourth, 100% to all Unitholders in accordance with their
respective Percentage Interests.
10. Section 6.1(c)(ii) is hereby amended and restated in its entirety to read as follows:
(A) First, if such Net Termination Loss is recognized (or is
deemed to be recognized) prior to the conversion of the Class E
Units pursuant to Section 5.14(d), 100% to all
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 9
Limited Liability Company Agreement, Page 9
Unitholders holding Class E Units, Pro Rata, until the Capital
Account in respect of each Class E Unit then Outstanding has been
reduced to zero;
(B) Second, to the Unitholders holding Common Units, Class C
Units, or Class D Units, Pro Rata, until the Capital Account in
respect of each Common Unit, Class C Unit, and Class D Unit then
Outstanding has been reduced to zero; and
(C) Third, the balance, if any, 100% to all Unitholders in
accordance with their respective Percentage Interests.
11. Section 6.1(d)(iii) of the Limited Liability Company Agreement is hereby amended and
restated in its entirety to read as follows:
(iii) If the amount of cash or the Net Agreed Value of any
property distributed (except cash or property distributed or deemed
distributed pursuant to Section 5.5(a) of this Agreement, with
respect to Class E Units or Privately Placed Common Units, or
Section 10.3 of this Agreement) to any Unitholder with respect to
its Units for a taxable year is greater (on a per Unit basis) than
the amount of cash or the Net Agreed Value of property distributed
to the other Unitholders with respect to their Units (on a per Unit
basis), then each Unitholder receiving such greater cash or property
distribution shall be allocated gross income in an amount equal to
the product of (a) the amount by which the distribution (on a per
Unit basis) to such Unitholder exceeds the distribution (on a per
Unit basis) to the Unitholders receiving the smallest distribution
and (b) the number of Units owned by the Unitholder receiving the
greater distribution.
12. Section 6.1(d)(xiii) of the Limited Liability Company Agreement is hereby amended to add
new Section 6.1(d)(xiii)(C) as follows:
(C) Class E Units and Privately Placed Common Units.
(1) With respect to any taxable period of the Company ending
upon, or after, a Book-Up Event, a Book-Down Event or a sale of all
or substantially all of the assets of the Company occurring after
the date of issuance of the Class E Units or the Privately Placed
Common Units, Company items of income or gain for such taxable
period shall be allocated 100% (1) to the Members holding Class E
Units or converted Class E Units that are Outstanding as of the time
of such event in proportion to the number of Class E Units or
converted Class E Units held by such Members, until each such Member
has been allocated the amount that increases the Per Unit Capital
Amount of each such Class E Unit or converted Class E Unit to the
Per Unit Capital Amount for a then Outstanding Initial Common Unit,
and (2) to the Members holding Privately Placed Common Units that
are Outstanding as of the time of such event in proportion to the
number of Privately Placed Common Units held by such Members, until
each such Member has been allocated the amount that increases the
Per Unit Capital Amount of each
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 10
Limited Liability Company Agreement, Page 10
such Privately Placed Common Unit to the Per Unit Capital
Amount for a then Outstanding Initial Common Unit.
(2) With respect to any taxable period of the Company ending
upon, or after, the transfer of a converted Class E Unit, or
Privately Placed Common Unit to a Person that is not an Affiliate of
the holder, Company items of income or gain for such taxable period
shall be allocated 100% (1) to the Members transferring such
converted Class E Units in proportion to the number of converted
Class E Units transferred by such Members, until each such Member
has been allocated the amount that increases the Per Unit Capital
Amount of each such converted Class E Unit to the Per Unit Capital
Amount for a then Outstanding Initial Common Unit, and (2) to the
Members transferring such Privately Placed Common Units in
proportion to the number of Privately Placed Common Units
transferred by such Members, until each such Member has been
allocated the amount that increases the Per Unit Capital Amount of
each such Privately Placed Common Unit to the Per Unit Capital
Amount for a then Outstanding Initial Common Unit.
(3) With respect to the first taxable period of the Company
ending upon, or after, the date of issuance of the Class E Units or
Privately Placed Common Units, at the election of a Member holding
Class E Units or Privately Placed Common Units (the “Capital
Account True-Up Election”), items of income or gain for such
taxable period shall be allocated 100% to the Members making such
Capital Account True-Up Election with respect to Class E Units or
Privately Placed Common Units held by such Members, until each such
Member has been allocated the amount that increases the Per Unit
Capital Amount of each such Class E Unit or Privately Placed Common
Unit to the Per Unit Capital Amount for a then Outstanding Initial
Common Unit.
13. Article VI is hereby amended to add a new Section 6.9 as follows:
Section 6.9 Special Provisions Relating to Holders of Converted
Class E Units and Privately Placed Common Units. A holder of (1) a
Privately Placed Common Unit or (2) a Class E Unit that has
converted into a Common Unit pursuant to Section 5.14, shall be
required to provide notice to the Board of the number of converted
Class E Units or Privately Placed Common Units transferred by such
holder no later than the last Business Day of the calendar year
during which such transfer occurred, unless (x) the transfer is to
an Affiliate of the holder or (y) by virtue of the application of
Section 6.1(d)(xiii)(C)(2) to a prior transfer of the Common Unit or
the application of Section 6.1(d)(xiii)(C)(1) or Section
6.1(d)(xiii)(C)(3), the Board has previously determined, based on
advice of counsel, that the Privately Placed Common Unit or
converted Class E Unit should have, as a substantive matter, like
intrinsic economic and federal income tax characteristics of an
Initial Common Unit. In connection with the condition imposed by
this Section 6.9, the Board shall take whatever steps are required
to provide economic uniformity to the Privately Placed Common Units
or converted Class E Units in preparation for a transfer
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 11
Limited Liability Company Agreement, Page 11
thereof,
including the application of Section 6.1(d)(xiii)(C)(2) and Section
6.2(c)(ii).
B. Agreement in Effect. Except as hereby amended, the Limited Liability Company Agreement
shall remain in full force and effect.
C. Applicable Law. This Amendment shall be construed in accordance with and governed by
the laws of the State of Delaware, without regard to principles of conflicts of laws.
D. Invalidity of Provisions. If any provisions of this Amendment are or become invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
[Remainder of page intentionally left blank]
Amendment No. 3 to Third Amended and Restated
Limited Liability Company Agreement, Page 12
Limited Liability Company Agreement, Page 12
IN WITNESS WHEREFORE, this Amendment has been executed as of the date first written above.
| COPANO ENERGY, L.L.C. |
||||
| By: | /s/ Xxxx X. Xxxxx, Xx. | |||
| Xxxx X. Xxxxx, Xx. | ||||
| Chairman of the Board and Chief Executive Officer | ||||
Signature Page to Amendment No. 3 to Third Amended
and Restated Limited Liability Company Agreement
and Restated Limited Liability Company Agreement
