EXHIBIT 3.8
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
INTEGRATED PROPANE PARTNERS, LLC
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the
"Agreement") is entered into as of September 30, 1998, between ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇"), Integrated Energy Holdings, LLC, a Delaware
limited liability company ("IEH") and each of the individuals set forth on
Exhibit A attached hereto and incorporated herein by reference (such individuals
are hereinafter collectively referred to as the "Employee Investor Group").
RECITALS
▇. ▇▇▇▇▇▇▇ and IEH caused Mid-Atlantic Energy, LLC ("Mid-Atlantic") to be
formed as a limited liability company under the Delaware Limited Liability
Company Act on November 8, 1996.
▇. ▇▇▇▇▇▇▇ and IEH are parties to the Limited Liability Company Agreement
of Mid-Atlantic, dated November 22, 1996 (the "Initial LLC Agreement").
▇. ▇▇▇▇▇▇▇ and IEH desire to amend and restate in its entirety the Initial
LLC Agreement to, among other things, provide for common and preferred limited
liability company interests, change the name of the limited liability company to
Integrated Propane Partners, LLC (the "Company") and admit certain new Members
to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties hereto agree to amend and restate the Initial LLC
Agreement in its entirety as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions Generally. Unless defined specifically herein, terms
relating to a limited liability company shall have the meanings given to them in
the Delaware Limited Liability Company Act.
1.2 Terms Defined Herein. As used herein, the following terms shall have
the following meanings, unless the context otherwise specifies:
"ACT" means the Delaware Limited Liability Company Act, as amended from
time to time.
"ADDITIONAL CAPITAL CALL" has the meaning set forth in Section 3.2 hereof.
"ADDITIONAL DISTRIBUTIONS" has the meaning set forth in Section 4.3 hereof.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to each Member, the
deficit balance, if any, in such Member's Common Capital Account and/or
Preferred Capital Account as of the end of the relevant fiscal year, after
giving effect to the following adjustments:
(i) increased for any amounts such Member is unconditionally obligated to
restore and the amount of such Member's share of Company Minimum Gain and Member
Minimum Gain after taking into account any changes during such year; and (ii)
reduced by the items described in Treasury Regulations (S) 1.704-
1(b)(2)(ii)(d)(4), (5) and (6).
"AFFILIATE" means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such Person. For
the purposes of this definition, "control," when used with respect to any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AGREEMENT" means this Amended and Restated Limited Liability Company
Agreement of Integrated Propane Partners, LLC, as amended from time to time.
"BANKRUPTCY", with respect to any Person, means the entry of an order for
relief against such Person under the Federal Bankruptcy Code or the insolvency
of such Person under any state insolvency act.
"BUSINESS DAY" shall mean any day other than a Saturday or Sunday or a day
on which banking institutions in Kansas City, Missouri are authorized or
obligated to close.
"CERTIFICATE" means the Certificate of Formation of the Company filed with
the Secretary of State of Delaware, as amended from time to time.
"CLASS A PREFERRED INTEREST" means any Interest designated as such on
Schedule A attached hereto.
"CLASS A PREFERRED MEMBER" means any Member to the extent that such Member
holds a Class A Preferred Interest. All Class A Preferred Members shall be Non-
Voting Members to the extent of their Class A Preferred Interest.
"COMMON CAPITAL ACCOUNT" means the separate account established and
maintained by the Company for each Common Member pursuant to Section 3.5 hereof.
"COMMON INTEREST" means any Interest designated as such on Schedule A
attached hereto.
"COMMON MEMBER" means any Member to the extent that such Member holds a
Common Interest. All Common Members, other than members of the Employee
Investor Group, shall be Voting Members to the extent of their Common Interest.
"COMMON PERCENTAGE INTEREST" means a Common Member's percentage of the
Common Interests in the Company including such Common Member's percentage of the
net income, gain, loss, deductions and credits of the Company allocated to such
Common Members. The Common Percentage Interest of each Common Member, prior to
any adjustments thereto required by the provisions of this Agreement, shall be
as set forth on Schedule A attached hereto.
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"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or the corresponding provisions of future laws.
"COMPANY" means Integrated Propane Partners, LLC, a Delaware limited
liability company.
"COMPANY MINIMUM GAIN" shall have the same meaning as the term "partnership
minimum gain" set forth in Treasury Regulation (S) 1.704-2(d)(1). Company
Minimum Gain shall be determined, first, by computing for each Nonrecourse Debt
any gain that the Company would realize if the Company disposed of the property
subject to that liability for no consideration other than full satisfaction of
such liability and, then, aggregating the separately computed gains. For
purposes of computing gain, the Company shall use the basis of such property
that is used for purposes of determining the amount of the Common Capital
Accounts and the Preferred Capital Accounts under Section 3.5 hereof. In any
taxable year in which a Revaluation occurs, the net increase or decrease in
Company Minimum Gain for such taxable year shall be determined by: (1)
calculating the net decrease or increase in Company Minimum Gain using the
current year's book value and the prior year's amount of Company Minimum Gain,
and (2) adding back any decrease in Company Minimum Gain arising solely from the
Revaluation.
"CONTRIBUTING MEMBER" has the meaning set forth in Section 3.3 hereof.
"CREDITS" means all tax credits allowed by the Code with respect to
activities of the Company or the Property.
"DISTRIBUTIONS" means any distributions by the Company to the Common
Members or Class A Preferred Members of Liquidation Proceeds, Tax Distributions,
Preferred Distributions or Additional Distributions.
"EBITDA" means the net income of the Operating Company before provision for
income taxes determined in accordance with GAAP plus the amount included in such
net income for interest, depreciation and amortization of intangible items.
"EMPLOYEE INVESTOR GROUP" means the individuals collectively set forth on
Exhibit A hereto, and their successors and permitted assigns.
"EXEMPT TRANSFER" has the meaning set forth in Section 7.3 hereof.
"FAIR VALUE" of an asset means its fair market value.
"GAAP" means generally accepted accounting principles.
"IEH" means Integrated Energy Holdings, LLC, a Delaware limited liability
company.
"ILLIQUID ASSETS" has the meaning set forth in Section 3.4 hereof.
"INCOME" and "LOSS" mean, respectively, for each fiscal year or other
period, an amount equal to the Company's taxable income or loss for such year or
period, determined in accordance with Code Section 703(a), except that for this
purpose (i) all items of income, gain, deduction or
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loss required to be separately stated by Code Section 703(a)(1) shall be
included in taxable income or loss; (ii) tax exempt income shall be added to
taxable income or loss; (iii) any expenditures described in Code Section
705(a)(2)(B) (or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Treasury Regulation (S) 1.704-1(b)(2)(iv)(i)) and not otherwise taken into
account in computing taxable income or loss shall be subtracted; and (iv)
taxable income or loss shall be adjusted to reflect any item of income or loss
specially allocated in Article IV hereof and the Company's taxable income shall
be reduced or its loss increased by the amount of Operating Income allocated
pursuant to Section 4.6(a)(ii)(A) hereof.
"INITIAL CONTRIBUTIONS" means either the initial or the restated value of
the capital contributed by the Members for their Interests.
"INITIAL LLC AGREEMENT" means the Limited Liability Company Agreement of
Mid-Atlantic, dated November 22, 1996.
"INTEREST" means either a Class A Preferred Interest or a Common Interest.
The type of Interest held by each Member shall be as set forth on Schedule A
attached hereto.
"LIQUIDATION PROCEEDS" means all Property at the time of liquidation of the
Company and all proceeds thereof.
"▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇▇ Oil & Propane Company, LLC, a Delaware limited
liability company.
"MEMBER" means each Person executing this Agreement, including a Substitute
Member, if any.
"MEMBER MINIMUM GAIN" shall have the same meaning as the term "partner
nonrecourse debt minimum gain" as set forth in Treasury Regulation (S) 1.704-
2(i)(3). With respect to each Member Nonrecourse Debt, Member Minimum Gain
shall be determined by computing for each Member Nonrecourse Debt any gain that
the Company would realize if the Company disposed of the property subject to
that liability for no consideration other than full satisfaction of such
liability. For purposes of computing gain, the Company shall use the basis of
such property that is used for purposes of determining the amount of the Common
Capital Accounts and the Preferred Capital Accounts under Section 3.5 hereof.
In any taxable year in which a Revaluation occurs, the net increase or decrease
in Member Minimum Gain for such taxable year shall be determined by: (1)
calculating the net decrease or increase in Member Minimum Gain using the
current year's book value and the prior year's amount of Member Minimum Gain,
and (2) adding back any decrease in Member Minimum Gain arising solely from the
Revaluation.
"MEMBER NONRECOURSE DEBT" shall have the same meaning as the term "partner
nonrecourse debt" set forth in Treasury Regulation (S) 1.704-2(b)(4).
"MEMBER NONRECOURSE DEDUCTIONS" shall have the same meaning as the term
"partner nonrecourse deductions" set forth in Treasury Regulation (S) 1.704-
2(i)(2). Generally, the amount of Member Nonrecourse Deductions with respect to
a Member Nonrecourse Debt for a fiscal year equals the net increase during the
year in the amount of the Member Minimum Gain
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(determined in accordance with Treasury Regulation (S) 1.704-2(i)) reduced (but
not below zero) by the aggregate distributions made during the year of proceeds
of Member Nonrecourse Debt and allocable to the increase in Member Minimum Gain
determined according to the provisions of Treasury Regulation (S) 1.704-2(i).
"NON-CONTRIBUTING MEMBER" has the meaning set forth in Section 3.3 hereof.
"NON-EXEMPT TRANSFER" means any Transfer that is not an exempt transfer
under Section 7.3 hereof.
"NONRECOURSE DEBT" means a Company liability with respect to which no
Member bears the economic risk of loss as determined under Treasury Regulations
(S)(S) 1.752-1(a)(2) and 1.752-2.
"NONRECOURSE DEDUCTIONS" shall have the same meaning as the term
"nonrecourse deductions" set forth in Treasury Regulation (S) 1.704-2(c).
Generally, the amount of Nonrecourse Deductions for a fiscal year equals the net
increase in the amount of Company Minimum Gain (determined in accordance with
Treasury Regulation (S) 1.704-2(d)) during such year reduced (but not below
zero) by the aggregate distributions made during the year of proceeds of a
Nonrecourse Debt that are allocable to the increase in Company Minimum Gain,
determined according to the provisions of Treasury Regulation (S) 1.704-2(c) and
(h).
"NON-VOTING MEMBER" is a Member who is not entitled to vote in any matter
requiring a vote under the terms of this Agreement.
"OPERATING COMPANIES" means ▇▇▇▇▇▇▇▇▇ Oil & Propane Company, LLC, a
Delaware limited liability company, and such other entities as the Company may
from time to time acquire and own a majority interest in.
"OPERATING INCOME" means the gross receipts of the Operating Companies
minus the cost of goods sold of the Operating Companies.
"PERSON" means any individual, partnership, limited liability company,
corporation, association, cooperative, estate, trust, custodian, nominee or any
other individual or entity in its own or any representative capacity.
"PREFERRED CAPITAL ACCOUNT" means the separate account established and
maintained by the Company for each Class A Preferred Member pursuant to Section
3.5 hereof.
"PREFERRED DISTRIBUTION" has the meaning set forth in Section 4.2 hereof.
"PREFERRED PERCENTAGE INTEREST" means a Class A Preferred Member's
percentage of the Class A Preferred Interests in the Company including such
Class A Preferred Member's percentage of the net income, gain, loss, deductions
and credits of the Company allocated to such Class A Preferred Members. The
Preferred Percentage Interest and the initial Preferred Capital Account balance
of each Class A Preferred Member, prior to any adjustments thereto required by
the provisions of this Agreement, shall be as set forth on Schedule A attached
hereto.
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"PROPERTY" means all properties and assets, including intellectual
property, contract rights and other intangible assets, that the Company may own
or otherwise have an interest in from time to time.
"REPRESENTATIVE" has the meaning set forth in Section 5.1 hereof.
"RESERVES" means amounts set aside from time to time by the Members
pursuant to Section 4.10 hereof.
"REVALUATION" shall mean the occurrence of any event described in clause
(x), (y) or (z) of Section 3.5(b) hereof in which the book basis of Property is
adjusted to its Fair Value.
"SUBSTITUTE MEMBER" has the meaning set forth in Section 7.7 hereof.
"TAX DISTRIBUTION" has the meaning set forth in Section 4.1 hereof.
"TAX MATTERS PARTNER" means the Member designated pursuant to Section 6.4
hereof to represent the Company in matters before the Internal Revenue Service.
"TRANSFER" means (i) when used as a verb, to give, sell, exchange, assign,
transfer, lease, pledge, hypothecate, bequeath, devise or otherwise dispose of
or encumber, and (ii) when used as a noun, the nouns corresponding to such
verbs, in either case voluntarily or involuntarily, by operation of law or
otherwise.
"TRANSFEREE" has the meaning set forth in Section 7.1 hereof.
"TRANSFEROR" has the meaning set forth in Section 7.2 hereof.
"TREASURY REGULATIONS" means the regulations promulgated by the Treasury
Department with respect to the Code, as such regulations are amended from time
to time, or the corresponding provisions of future regulations.
"VOTING MEMBER" is a Member who is entitled to vote in all matters
requiring a vote under the terms of this Agreement.
"VOTING MEMBER MAJORITY" means those Voting Members holding a majority of
the Common Percentage Interests held by all Voting Members.
1.3 Other Definitional Provisions.
(a) As used in this Agreement, accounting terms not defined in this
Agreement, and accounting terms partly defined to the extent not defined,
shall have the respective meanings given to them under GAAP.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
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(c) Words of the masculine gender shall be deemed to include the
feminine or neuter genders, and vice versa, where applicable. Words of the
singular number shall be deemed to include the plural number, and vice
versa, where applicable.
ARTICLE II
BUSINESS PURPOSES AND OFFICES
2.1 Name; Business Purpose.
(a) The name of the Company shall be as stated in the Certificate.
The name of the Company may be changed from time to time by the Voting
Member Majority.
(b) The purpose of the Company is to invest in the Operating
Companies, to do any and all things necessary or incidental thereto, and to
engage in such other business as the Voting Member Majority deems in the
best interests of the Company.
2.2 Powers. The Company may carry on any lawful business, purpose or
activity permitted by the Act and shall possess and may exercise all the powers
granted by the Act, any other law, or this Agreement, together with any powers
incidental thereto, as far as such powers and privileges are necessary or
convenient to the conduct, promotion or attainment of the business, purposes or
activities of the Company.
2.3 Principal Office. The principal office of the Company shall be
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other
place(s) as the Voting Member Majority may determine from time to time.
2.4 Registered Office and Registered Agent. The location of the
registered office and the name of the registered agent of the Company in the
State of Delaware shall be as stated in the Certificate. The registered office
and registered agent of the Company in the State of Delaware may be changed,
from time to time, by the Voting Member Majority.
2.5 Amendment of the Certificate. The Company shall amend the Certificate
at such time or times and in such manner as may be approved by the Voting Member
Majority or as required by the Act or this Agreement.
2.6 Liability of Members. No Member, Representative or officer, solely by
reason of being a Member, Representative or officer, shall be liable, under a
judgment, decree or order of a court, or in any other manner, for any debt,
obligation or liability of the Company, whether arising in contract, tort or
otherwise, or for the acts or omissions of the other Members or any other
Representative or officer of the Company. The failure of the Company to observe
any formalities or requirements relating to the exercise of its powers or
management of its business or affairs under this Agreement or the Act shall not
be grounds for imposing liability on the Members, Representatives or officers
for liabilities of the Company.
2.7 Authority; Investment Intent; Restriction Against Transfer. Each
Member warrants to the Company and to the other Members that: (a) the Member is
duly organized, validly existing and in good standing under the laws of its
state of organization, if applicable, and that the Member has the requisite
power and authority to execute this Agreement and to perform its obligations
hereunder; (b) the Member is acquiring an Interest for such Member's own
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account as an investment and without any intent to distribute such Interest or
any portion thereof or interest therein; and (c) the Member acknowledges that
the Interests have not been registered under the Securities Act of 1933 or any
state securities laws, and such Member's Interest may not be resold or
transferred except as provided in Article VII hereof and except pursuant to a
registration statement under or an exemption from the registration provisions of
the federal and applicable state securities laws.
ARTICLE III
CAPITAL CONTRIBUTIONS AND LOANS
3.l Initial Capital Accounts and Percentage Interests. The initial or
restated Common Capital Account, the initial Preferred Capital Account, the
initial or restated Common Percentage Interest and/or the initial Preferred
Percentage Interest, as the case may be, of each Member shall be as set forth
opposite such Member's name on either Exhibit A or Schedule A attached hereto.
3.2 Additional Capital Calls. The Common Members recognize that the
Company may require from time to time, in addition to the Initial Contributions,
capital in order to accomplish the purpose and business of the Company.
Accordingly, additional cash capital contributions ("Additional Capital Calls")
may be called for from time to time by the Voting Member Majority. Within ten
Business Days after the date such Additional Capital Call is declared by the
Voting Member Majority, each Common Member shall be entitled to contribute, in
cash, to the capital of the Company an amount (the "Additional Contribution")
equal to such Common Member's Common Percentage Interest at the time of the
Additional Capital Call multiplied by the aggregate additional capital
contributions. No Common Member shall be obligated to make any Additional
Contributions to the Company and, accordingly, no Common Member shall be liable
for damage to the Company or any other Common Member as a result of the failure
of such Common Member to make any such Additional Contributions. The remedies
set forth in Section 3.3 below shall be the sole remedies for any such failure.
3.3 Percentage Interest Adjustments.
(a) If the Common Capital Accounts of the Common Members are adjusted
pursuant to Section 3.5(b), then, after such adjustments are made, the
Common Percentage Interests of the Common Members will be correspondingly
adjusted as follows:
(i) Effective as of ten Business Days after the last date a
capital contribution under Section 3.2 above may be made, the Common
Percentage Interests of the Common Members shall be automatically
adjusted to take account of such failure of such Common Member to make
such capital contribution. The Common Percentage Interest of each
Common Member shall be the respective percentage obtained by dividing
the total balance in such Common Member's Common Capital Account as of
such date by the total balance in all Common Members' Common Capital
Accounts as of such date. Any payment by a
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Contributing Member of all or a portion of a Non-Contributing Member's
contribution pursuant to Section 3.3(a)(ii) below shall result in a
comparable adjustment in the Common Percentage Interests of the Common
Members. The sum of the Common Percentage Interests of the Common
Members, as adjusted in accordance with this Section 3.3(a)(i), shall
equal 100%. Any increase in the Common Percentage Interest of a Common
Member pursuant to this Section 3.3(a)(i) shall have the same
designation as a Common Interest as the Common Percentage Interest
held by such Common Member prior to any such increase.
(ii) If any Common Member fails for any reason to make in a
timely manner any part or all of an Additional Contribution called for
under Section 3.2 (the "Unpaid Additional Contribution"), such Common
Member shall be deemed a "Non-Contributing Member" and the Company
shall promptly give written notice of the failure to contribute to all
Common Members. Each of the Common Members contributing their pro-
rata share of an Additional Contribution (the "Contributing Members")
shall have the right, but not the obligation, for a period of 10 days
after notice of such failure to contribute by a Non-Contributing
Member is given, to contribute to the Company an amount equal to (A)
the amount of each Non-Contributing Member's Unpaid Additional
Contribution multiplied by a fraction the numerator of which is the
Contributing Member's Common Percentage Interest at the time of the
Additional Capital Call and the denominator of which is the sum of the
Common Percentage Interests of all Contributing Members who desire to
contribute to the Company such Contributing Members' pro-rata share of
the Non-Contributing Member's Unpaid Additional Contribution or (B)
such greater amount of the Non-Contributing Member's Unpaid Additional
Contribution as shall be agreed upon by all of such Contributing
Members. Upon the payment by the Contributing Members of all or a
portion of the Non-Contributing Member's Unpaid Additional
Contribution, the Common Percentage Interests of the Common Members
shall be adjusted as provided in Section 3.3(a)(i) above. Any
increase in the Common Percentage Interest of a Common Member pursuant
to this Section 3.3(a)(ii) shall have the same designation as a Common
Interest as the Common Percentage Interest held by such Common Member
prior to any such increase.
(b) The Company shall not dissolve as a result of any failure by a
Common Member to make a capital contribution under Section 3.2 above,
unless the Voting Member Majority following such a failure elects to
dissolve the Company.
3.4 Capital Account Adjustments and Revaluation. If a Common Member fails
for any reason to make a capital contribution under Section 3.2 above within ten
Business Days after the last date such capital contribution may be made (the
"Default Date"), then the Common Capital Accounts of the Common Members will be
adjusted pursuant to Section 3.5(b) hereof. For purposes of adjustments made
pursuant to this Section 3.4, the Fair Value of the Company's assets shall be
determined as follows:
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(i) Cash, deposit accounts, United States securities with a
maturity of 90 days or less or other cash equivalents shall be valued
at the principal or par amounts with accrued interest thereon, if any,
through the Default Date.
(ii) All securities and commodities which are traded on a
generally recognized exchange shall be valued at the closing price, or
if applicable the average of the bid and ask price, on the Default
Date.
(iii) All assets of the Company which are not described in
subparagraphs (i) or (ii) above and which would be current assets of
the Company under the accrual method of accounting shall be valued in
an amount equal to their book value determined in accordance with
generally accepted accounting principles consistently applied as if
the Company applied the accrual method of accounting.
(iv) Except as to the value of the Company's interests in the
Operating Companies, all assets not described in the preceding
subparagraphs (i) through (iii) (the "Illiquid Assets") shall be
valued in an amount equal to the Fair Value of such Illiquid Assets as
determined by a Voting Member Majority.
(v) The Company's interests in the Operating Companies shall be
valued using the methods described in (i) through (iv) above for the
valuation of assets held by the Operating Companies (based on the
entire equity interests of the Operating Companies) multiplied by the
Company's percentage interests in the equity of the Operating
Companies at the time of such valuation.
3.5 Capital Accounts.
(a) A separate Common Capital Account shall be maintained for each
Common Member. Each Common Member's Common Capital Account shall be (i)
increased by (a) the amount of money contributed by such Common Member, (b)
the Fair Value of property contributed by such Common Member (net of
liabilities secured by such contributed property that the Company is
considered to assume or take subject to under Code Section 752), (c)
allocations to such Common Member, pursuant to Article IV hereof, of
Company income and gain (or items thereof), and (d) to the extent not
already netted out under clause (ii)(b) below, the amount of any Company
liabilities assumed by the Common Member or which are secured by any
property distributed to such Common Member; and (ii) decreased by (a) the
amount of money distributed to such Common Member, (b) the Fair Value of
property distributed to such Common Member (net of liabilities secured by
such distributed property that such Common Member is considered to assume
or take subject to under Code Section 752), (c) allocations to such Common
Member, pursuant to Article IV hereof, of Company loss and deductions (or
items thereof), and (d) to the extent not already netted out under clause
(i)(b) above, the amount of any liabilities of the Common Member assumed by
the Company or which are secured by any property contributed by such Common
Member to the Company.
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A separate Preferred Capital Account shall be maintained for each
Class A Preferred Member. Each Class A Preferred Member's Preferred
Capital Account shall be (i) increased by (a) the amount of money
contributed by such Class A Preferred Member, (b) the Fair Value of
property contributed by such Class A Preferred Member (net of liabilities
secured by such contributed property that the Company is considered to
assume or take subject to under Code Section 752), (c) allocations to such
Class A Preferred Member, pursuant to Article IV hereof, of Company income
and gain (or items thereof), and (d) to the extent not already netted out
under clause (ii)(b) below, the amount of any Company liabilities assumed
by the Class A Preferred Member or which are secured by any property
distributed to such Class A Preferred Member; and (ii) decreased by (a) the
amount of money distributed to such Class A Preferred Member, (b) the Fair
Value of property distributed to such Class A Preferred Member (net of
liabilities secured by such distributed property that such Class A
Preferred Member is considered to assume or take subject to under Code
Section 752), (c) allocations to such Class A Preferred Member, pursuant to
Article IV hereof, of Company loss and deductions (or items thereof), and
(d) to the extent not already netted out under clause (i)(b) above, the
amount of any liabilities of the Class A Preferred Member assumed by the
Company or which are secured by any property contributed by such Class A
Preferred Member to the Company.
In the event any Interest is transferred in accordance with the terms
of this Agreement, the Transferee shall succeed to the Common Capital
Account and/or the Preferred Capital Account of the Transferor to the
extent it relates to the transferred interest, and the Common Capital
Account and/or the Preferred Capital Account of each Transferee shall be
increased and decreased in the manner set forth above.
(b) In the event of (x) an additional capital contribution by a Common
Member that results in a shift in Common Percentage Interests, (y) the
distribution by the Company to a Common Member of more than a de minimis
amount of property (other than cash) or a distribution of property as
consideration for a Common Interest or (z) the liquidation of the Company
within the meaning of Treasury Regulation (S) 1.704-1(b)(2)(ii)(g), the
book basis of the Property shall be adjusted to Fair Value and the Common
Capital Accounts of the Common Members shall be adjusted simultaneously to
reflect the aggregate net adjustment to book basis as if the Company
recognized gain or loss equal to the amount of such aggregate net
adjustment.
(c) In the event that Property is subject to Code Section 704(c) or is
revalued on the books of the Company in accordance with paragraph (b) above
pursuant to Treasury Regulation (S) 1.704-1(b)(2)(iv)(f), the Members'
Common Capital Accounts and/or Preferred Capital Accounts shall be adjusted
in accordance with Treasury Regulation (S) 1.704-1(b)(2)(iv)(g) for
allocations to the Members of depreciation, amortization and gain or loss,
as computed for book purposes (and not tax purposes) with respect to such
Property.
(d) The foregoing provisions of this Section 3.5 and the other
provisions of this Agreement relating to the maintenance of the Common
Capital Accounts and/or the Preferred Capital Accounts are intended to
comply with Treasury Regulations (S)(S) 1.704-1(b) and 1.704-2, and shall
be interpreted and applied in a manner consistent with
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such Treasury Regulations. In the event the Members determine that it is
prudent or advisable to modify the manner in which the Common Capital
Accounts and/or the Preferred Capital Accounts, or any increases or
decreases therein, are computed in order to comply with such Treasury
Regulations, the Members may cause such modification to be made, provided
such modification is not likely to have a material effect on the amounts
distributable to any Member upon the dissolution of the Company.
3.6 Capital Withdrawal Rights, Interest and Priority. Except as expressly
provided in this Agreement, no Member shall be entitled to withdraw or reduce
such Member's Common Capital Account or Preferred Capital Account or to receive
any Distributions. No Member shall be entitled to demand or receive any
Distributions in any form other than in cash. No Member shall be entitled to
receive or be credited with any interest on the balance in such Member's Common
Capital Account or Preferred Capital Account at any time. Except as may be
otherwise expressly provided herein, no Member shall have any priority over any
other Member as to the return of the balance in such Member's Common Capital
Account or Preferred Capital Account.
3.7 Loans. Any Member may advance funds as a loan to the Company in such
amounts, at such times and on such terms and conditions as may be approved by
the Voting Member Majority. Loans by a Member to the Company shall not be
considered as contributions to the capital of the Company.
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
4.1 Distributions to Pay Taxes. With respect to any tax year in which the
Company shall report taxable income, the Company shall distribute to the Common
Members, based upon their respective Common Percentage Interests at the time of
such distribution, an aggregate amount equal to the Company's taxable income,
plus or minus other items of income, gain, loss or deduction passing through to
the Common Members, times the sum of the effective applicable Federal income tax
rate and the higher of North Carolina or Missouri state income tax rates and
assuming that each Common Member is an individual paying Federal and state
income tax at the highest marginal income tax rates with respect to the
applicable type of income (a "Tax Distribution"). All Tax Distributions shall
be made at a time sufficient to enable the Common Members to pay any required
estimated tax payments.
4.2 Preferred Distributions. On or before the last Business Day of each
month immediately following the end of each calendar quarter (a "Due Date"),
commencing with the calendar quarter ending December 31, 1998, the Company shall
distribute cash to each Class A Preferred Member in an amount equal to the
initial balance in such Class A Preferred Member's Preferred Capital Account
multiplied by 2.25% (a "Preferred Distribution"); provided, however, no such
Preferred Distribution shall be required if such distribution would, as
reasonably determined by a Voting Member Majority, cause a default under any
agreement or covenant between a bank or other lending institution and any one of
the Company or the Operating Companies (any such limitation that precludes
payment of a Preferred Distribution being referred to as the "Limitation"). In
the event any Preferred Distribution, or portion thereof, is not made with
respect to a calendar quarter, such Preferred Distribution, or portion thereof
(the "Accrued Preferred Distribution"), shall accumulate and be payable at such
time as the Limitation no longer prevents payment. In addition, with respect to
any such Accrued Preferred Distribution
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there shall be payable an amount equal to (A) times (B) times (C), where (A)
equals such Accrued Preferred Distribution, (B) equals a percentage equal to the
higher of the Company's cost of funds or the cost of funds of any of the
Operating Companies, and (C) equals a fraction, the numerator of which is the
number of days since the Due Date of such Accrued Preferred Distribution or the
most recent anniversary thereof, and the denominator of which is 365 (such
additional amount and any unpaid portion thereof is hereinafter referred to as
the "Arrearage"). If any Arrearage is not paid by an anniversary of the Due Date
of the related Accrued Preferred Distribution, then such Arrearage shall be
added to and become a part of the Accrued Preferred Distribution as of such
anniversary date and shall no longer be an "Arrearage" hereunder. All payments
made pursuant to this Section 4.2 shall be applied first to any Arrearage and
then to the Accrued Preferred Distribution.
4.3 Additional Cash Distributions. The Company shall make, from time to
time, such distributions as shall be determined by the Voting Member Majority
(an "Additional Distribution"); provided, however, no such Additional
Distributions shall be made if there are accrued but unpaid Preferred
Distributions under Section 4.2 hereof. Such Additional Distributions shall be
distributed to the Common Members in accordance with their respective Common
Percentage Interests, as adjusted.
4.4 Liquidation Distributions. Liquidation Proceeds shall be distributed
in the following order of priority:
(a) First, to the payment of any Accrued Preferred Distributions and
Arrearages under Section 4.2 hereof.
(b) Next, to the payment of debts and liabilities of the Company
(including to Members to the extent otherwise permitted by law) and the
expenses of liquidation.
(c) Next, to the setting up of such reserves as the Person required or
authorized by law to wind up the Company's affairs may reasonably deem
necessary or appropriate for any disputed, contingent or unforeseen
liabilities or obligations of the Company, provided that any such reserves
shall be paid over by such Person to an independent escrow agent, to be
held by such agent or its successor for such period as such Person shall
deem advisable for the purpose of applying such reserves to the payment of
such liabilities or obligations and, at the expiration of such period, the
balance of such reserves, if any, shall be distributed as hereinafter
provided.
(d) Next, to the Class A Preferred Members in proportion to and to the
extent of their respective positive Preferred Capital Account balances.
(e) Next, to the Common Members in proportion to and to the extent of
their respective positive Common Capital Account balances after taking into
account the allocation of all Operating Income, Income or Loss pursuant to
this Agreement for the fiscal year(s) in which the Company is liquidated.
(f) Next, to the Common Members in accordance with their respective
Common Percentage Interests, as adjusted.
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4.5 Profits, Losses and Distributive Shares of Tax Items. The Company's
net income or net loss, as the case may be, for each fiscal year of the Company
or part thereof, as determined in accordance with such method of accounting as
may be adopted for the Company pursuant to Article VI hereof, shall be allocated
to the Members for both financial accounting and income tax purposes as set
forth in this Article IV, except as otherwise provided for herein or unless
decided otherwise by the Voting Member Majority.
4.6 Allocation of Operating Income, Income, Loss and Credits.
(a) Operating Income, Income or Loss and Credits shall be allocated
among the Members as follows:
(i) Loss shall be allocated among the Members in the following
order of priority:
(A) First to the Common Members in proportion to and to the
extent of their respective positive Common Capital Account
balances; then
(B) To the Class A Preferred Members in proportion to and to
the extent of their respective positive Preferred Capital Account
balances; then
(C) To the Common Members in accordance with their
respective Common Percentage Interests, as adjusted.
(ii) Operating Income, Income and Credits shall be allocated
among the Members in the following order of priority:
(A) First, Operating Income shall be allocated to the Class
A Preferred Members in accordance with their respective Preferred
Percentage Interests until the cumulative amount of Operating
Income allocated pursuant to this subparagraph (A) equals the
cumulative amount of cash actually distributed to the Class A
Preferred Members pursuant to Section 3.2 hereof; then
(B) Income shall be allocated to the Common Members, on a
pro rata basis in accordance with the amounts previously
allocated to such Common Members under Section 4.6(a)(i)(C)
hereof, until the cumulative amount of Income allocated pursuant
to this subparagraph (B) equals the cumulative amount of Losses
allocated to the Common Members pursuant to Section 4.6(a)(i)(C)
hereof; then
(C) Income shall be allocated to the Class A Preferred
Members, on a pro rata basis in accordance with the amounts
previously allocated to such Class A Preferred Members under
Section 4.6(a)(i)(B) hereof, until the cumulative amount of
Income allocated pursuant to this
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subparagraph (C) equals the cumulative amount of Losses allocated
to the Class A Preferred Members pursuant to Section 4.6(a)(i)(B)
hereof; then
(D) Income shall be allocated to the Common Members, on a
pro rata basis in accordance with the amounts previously
allocated to such Common Members under Section 4.6(a)(i)(A)
hereof, until the cumulative amount of Income allocated pursuant
to this subparagraph (D) equals the cumulative amount of Losses
allocated to the Common Members pursuant to Section 4.6(a)(i)(A)
hereof; then
(E) Income and Credits shall be allocated to the Common
Members in accordance with their respective Common Percentage
Interests, as adjusted.
To the extent there is any adjustment in the respective Common
Percentage Interests of the Common Members or the respective Preferred
Percentage Interests of the Class A Preferred Members, as the case may be,
Operating Income, Income, Loss and Credits shall be allocated among the
pre-adjustment and post-adjustment periods as provided in Section 4.7(k)
below.
4.7 Special Rules Regarding Allocations. Notwithstanding the foregoing
provisions of this Article IV, the following special rules shall apply in
allocating the net income or net loss of the Company:
(a) Section 704(c) and Revaluation Allocations. In accordance with
Code Section 704(c) and the Treasury Regulations thereunder, income, gain,
loss and deduction with respect to any property contributed to the capital
of the Company shall, solely for tax purposes, be allocated between the
Members so as to take account of any variation between the adjusted basis
of such property to the Company for federal income tax purposes and its
Fair Value at the time of contribution. In the event of a Revaluation,
subsequent allocations of income, gain, loss and deduction with respect to
such property shall take account of any variation between the adjusted
basis of such property to the Company for federal income tax purposes and
its Fair Value immediately after the adjustment in the same manner as under
Code Section 704(c) and the Treasury Regulations thereunder. Any elections
or other decisions relating to such allocations shall be made by the
Members in a manner that reasonably reflects the purpose and intention of
this Agreement. Allocations pursuant to this Section 4.7(a) are solely for
income tax purposes and shall not affect, or in any way be taken into
account in computing, for book purposes, each Member's Common Capital
Account, Preferred Capital Account or share of income or loss, pursuant to
any provision of this Agreement.
(b) Minimum Gain Chargeback. Notwithstanding any other provision of
this Article IV, if there is a net decrease in Company Minimum Gain during
a Company taxable year, each Member shall be allocated items of income and
gain for such year (and, if necessary, for subsequent years) in an amount
equal to that Member's share of the net decrease in Company Minimum Gain
during such year (hereinafter referred to as the "Minimum Gain Chargeback
Requirement"). A Member's share of the net decrease in
15
Company Minimum Gain is the amount of the total decrease multiplied by the
Member's percentage share of the Company Minimum Gain at the end of the
immediately preceding taxable year. A Member is not subject to the Minimum
Gain Chargeback Requirement to the extent: (1) the Member's share of the
net decrease in Company Minimum Gain is caused by a guarantee, refinancing
or other change in the debt instrument causing it to become partially or
wholly recourse debt or a Member Nonrecourse Debt, and the Member bears the
economic risk of loss for the newly guaranteed, refinanced or otherwise
changed liability; (2) the Member contributes capital to the Company that
is used to repay the Nonrecourse Debt and the Member's share of the net
decrease in Company Minimum Gain results from the repayment; or (3) the
Minimum Gain Chargeback Requirement would cause a distortion and the
Commissioner of the Internal Revenue Service waives such requirement.
A Member's share of Company Minimum Gain shall be computed in
accordance with Treasury Regulation (S) 1.704-2(g) and as of the end of any
Company taxable year shall equal: (1) the sum of the Nonrecourse
Deductions allocated to that Member up to that time and the distributions
made to that Member up to that time of proceeds of a Nonrecourse Debt
allocable to an increase of Company Minimum Gain, minus (2) the sum of that
Member's aggregate share of net decrease in Company Minimum Gain plus that
Member's aggregate share of decreases resulting from revaluations of
Property subject to Nonrecourse Debts. In addition, a Member's share of
Company Minimum Gain shall be adjusted for the conversion of recourse and
Member Nonrecourse Debts into Nonrecourse Debts in accordance with Treasury
Regulation (S) 1.704-2(g)(3). In computing the above, amounts allocated or
distributed to the Member's predecessor in interest shall be taken into
account.
(c) Member Minimum Gain Chargeback. Notwithstanding any other
provision of this Article IV other than Section 4.7(b) above, if there is a
net decrease in Member Minimum Gain during a Company taxable year, each
Member who has a share of the Member Minimum Gain (determined under
Treasury Regulation (S) 1.704-2(i)(5) as of the beginning of the year)
shall be allocated items of income and gain for such year (and, if
necessary, for subsequent years) equal to that Member's share of the net
decrease in Member Minimum Gain. In accordance with Treasury Regulation
(S) 1.704-2(i)(4), a Member is not subject to this Member Minimum Gain
Chargeback requirement to the extent the net decrease in Member Minimum
Gain arises because the liability ceases to be Member Nonrecourse Debt due
to a conversion, refinancing or other change in the debt instrument that
causes it to be partially or wholly a Nonrecourse Debt. The amount that
would otherwise be subject to the Member Minimum Gain Chargeback
requirement is added to the Member's share of Company Minimum Gain.
(d) Qualified Income Offset. In the event a Member unexpectedly
receives an adjustment, allocation or distribution described in Treasury
Regulation (S)1.704.1(b)(2)(ii)(d)(4), (5) or (6), that causes or increases
such Member's Adjusted Capital Account Deficit, items of Company income and
gain shall be specially allocated to such Member in an amount and manner
sufficient to eliminate such Adjusted Capital Account Deficit as quickly as
possible, provided that an allocation under this Section
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4.7(d) shall be made if and only to the extent such Member would have an
Adjusted Capital Account Deficit after all other allocations under this
Article IV have been made.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal
year or other period shall be allocated to the Common Members in proportion
to their Common Percentage Interests, as adjusted.
(f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions
shall be allocated to the Member that bears the risk of loss with respect
to the loan to which such Member Nonrecourse Deductions are attributable in
accordance with Treasury Regulation (S) 1.704-2(i).
(g) Curative Allocations. Any special allocations of items of income,
gain, deduction or loss pursuant to Sections 4.7(b), (c), (d), (e) and (f)
hereof shall be taken into account in computing subsequent allocations of
income and gain pursuant to this Article IV, so that the net amount of any
items so allocated and all other items allocated to each Member pursuant to
this Article IV shall, to the extent possible, be equal to the net amount
that would have been allocated to each such Member pursuant to the
provisions of this Article IV if such adjustments, allocations or
distributions had not occurred. In addition, allocations pursuant to this
Section 4.7(g) with respect to Nonrecourse Deductions in Section 4.7(e)
above and Member Nonrecourse Deductions in Section 4.7(f) above shall be
deferred to the extent the Members reasonably determine that such
allocations are likely to be offset by subsequent allocations of Company
Minimum Gain or Member Minimum Gain, respectively.
(h) Loss Allocation Limitation. Notwithstanding the other provisions
of this Article IV, unless otherwise agreed to by the Voting Member
Majority, no Member shall be allocated Loss in any taxable year that would
cause or increase an Adjusted Capital Account Deficit as of the end of such
taxable year.
(i) Share of Nonrecourse Liabilities. Solely for purposes of
determining a Common Member's proportionate share of the "excess
nonrecourse liabilities" of the Company within the meaning of Treasury
Regulation (S) 1.752-3(a)(3), each Common Member's interest in Company
profits is equal to such Common Member's respective Common Percentage
Interest, as adjusted.
(j) Compliance with Treasury Regulations. The foregoing provisions of
this Section 4.7 are intended to comply with Treasury Regulation (S)(S)
1.704-1(b), 1.704-2 and 1.752-1 through 1.752-5, and shall be interpreted
and applied in a manner consistent with such Treasury Regulations. In the
event it is determined by the Voting Member Majority that it is prudent or
advisable to amend this Agreement in order to comply with such Treasury
Regulations, the Voting Member Majority is empowered to so amend or modify
this Agreement, notwithstanding any other provision of this Agreement.
(k) General Allocation Provisions. For purposes of determining the
Operating Income, Income, Loss or any other items for any period, Operating
Income, Income, Loss
17
or any such other items shall be determined on a daily basis, using any
permissible method under Code Section 706 and the Treasury Regulations
thereunder.
4.8 Withholding of Distributions. Notwithstanding any other provision of
this Agreement, a Voting Member Majority (or any Person required or authorized
by law to wind up the Company's affairs) may suspend, reduce or otherwise
restrict Distributions of Liquidation Proceeds or Additional Distributions for
such time as a Voting Member Majority deems appropriate.
4.9 No Priority. Except as may be otherwise expressly provided herein, no
Member shall have priority over the other Members as to Company income, gain,
loss, credits and deductions or distributions.
4.10 Tax Withholding. Notwithstanding any other provision of this
Agreement, the Voting Member Majority is authorized to take any action that they
determine to be necessary or appropriate to cause the Company to comply with any
withholding requirements established under any federal, state or local tax law,
including, without limitation, withholding on any Distribution to any Member.
For the purposes of this Article IV, any amount withheld on any Distribution and
paid over to the appropriate governmental body shall be treated as if such
amount had in fact been distributed to the Member.
4.11 Reserves. The Voting Member Majority shall have the right to
establish, maintain and expend Reserves to provide for working capital, for
future maintenance, repair or replacement of the Property, for debt service, for
future investments and for such other purposes as the Voting Member Majority may
deem necessary or advisable.
4.12 Right to Publicly Traded Common Units. In the event the Company
issues to the public or causes a related entity to issue to the public equity
interests in the Company or such related entity and there results a public
market for such equity interests (such publicly traded equity interests are
hereinafter referred to as "Common Units"), the Company hereby agrees to use its
best efforts to permit the Class A Preferred Members to exchange their Class A
Preferred Interests for such Common Units, either at the time of the public
offering of such Common Units or subsequently, subject to the execution by the
Class A Preferred Members of such agreements and undertakings as may be
necessary to effectuate such public offering. If there are insufficient Common
Units available for all Class A Preferred Members, such Common Units will be
allocated among the Class A Preferred Members in accordance with their
respective Preferred Percentage Interests or as otherwise determined by a Voting
Member Majority.
ARTICLE V
MANAGEMENT
5.1 Management. The business and affairs of the Company shall be managed
by the Voting Member Majority. A Voting Member shall act through one or more
persons (a "Representative") as it shall designate by notice to the other Voting
Members.
5.2 Voting. All Class A Preferred Members shall be Non-Voting Members to
the extent of their Class A Preferred Interests. All Common Members, other than
members of the Employee Investor Group, shall be Voting Members to the extent of
their Common Interests.
18
All members of the Employee Investor Group shall be Non-Voting Members to the
extent of both their Class A Preferred Interests and their Common Interests. The
Voting Members shall be entitled to vote on all matters requiring a vote under
the terms of this Agreement. Each Voting Member shall vote according to their
respective Common Percentage Interests in the Company. Upon the Transfer of an
Interest pursuant to the terms of this Agreement, each Interest shall retain any
and all voting rights associated therewith.
5.3 Officers. The Voting Members may delegate their powers and authority
under this Agreement in whole or in part to one or more officers of the Company
as the Voting Member Majority deems appropriate, which officer shall have such
power and authority as the Voting Member Majority deems appropriate.
5.4 Meetings of the Voting Members. Meetings of the Voting Members shall
not be required to be held at any regular frequency, but, instead, shall be held
upon the call of any Voting Member holding more than 20% in Common Percentage
Interest, acting through one or more of its Representatives. All meetings of
the Voting Members shall be held at the principal office of the Company or at
such other place, either within or without the State of Delaware, as shall be
designated by the person calling the meeting and stated in the notice of the
meeting or in a duly executed waiver of notice thereof. Representatives may
participate in a meeting of the Voting Members by means of conference telephone
or video equipment or similar communications equipment whereby all
Representatives participating in the meeting can hear each other, and
participation in a meeting in this manner shall constitute presence in person at
the meeting.
5.5 Notice of Meeting. Notice of each meeting of the Voting Members,
stating the place, day and hour of the meeting, shall be given by the Voting
Member calling the meeting to the other Voting Members at least three Business
Days before the day on which the meeting is to be held. "Notice" and "call" with
respect to such meetings shall be deemed to be synonymous.
5.6 Waiver of Notice. Whenever any notice is required to be given to any
Voting Member under the provisions of this Agreement, a waiver thereof in
writing signed by such Member, acting through one or more of its
Representatives, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice. Attendance of a Representative
at any meeting of the Voting Members shall constitute a waiver of notice of such
meeting by the Voting Member he/she represents except where a Representative
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
5.7 Action Without a Meeting. Any action that is required to or may be
taken at a meeting of the Voting Members may be taken without a meeting if
consents in writing, setting forth the action so taken, are signed by one or
more of the Representatives of the Voting Member Majority. Such consents shall
have the same force and effect as a unanimous vote at a meeting duly held.
5.8 Non-Voting Members. Non-Voting Members shall have no right to notice
of or to attend any meeting of the Voting Members.
19
5.9 Definitions. For purposes of Sections 5.9 through 5.17 hereof,
inclusive, references to:
(a) The "Company" shall include, in addition to the resulting or
surviving limited liability company, any constituent limited liability
company (including any constituent of a constituent) absorbed in a
consolidation or merger so that any Person who is or was a manager or
officer of such constituent limited liability company, or is or was serving
at the request of such constituent limited liability company as a director,
officer or in any other comparable position of any Other Enterprise shall
stand in the same position under the provisions of this Article V with
respect to the resulting or surviving limited liability company as such
Person would if such Person had served the resulting or surviving limited
liability company in the same capacity;
(b) "Other Enterprises" or "Other Enterprise" shall include, without
limitation, any other limited liability company, corporation, partnership,
joint venture, trust or employee benefit plan, in which a Person is serving
at the request of the Company;
(c) "fines" shall include any excise taxes assessed against a person
with respect to an employee benefit plan;
(d) "defense" shall include investigations of any threatened, pending
or completed action, suit or proceeding as well as appeals thereof and
shall also include any defensive assertion of a cross-claim or
counterclaim;
(e) "serving at the request of the Company" shall include any service
as a director, officer, Representative or in any other comparable position
that imposes duties on, or involves services by, a Person with respect to
any Other Enterprise; and a Person who acted in good faith and in a manner
such Person reasonably believed to be in or not opposed to the interest of
any Other Enterprise shall be deemed to have acted "in the best interest of
the Company" as referred to in this Article V; and "Officer" shall include
any "Authorized Person" who is authorized to act on behalf of the Company
pursuant to the terms hereof, whether or not such person has been
designated an officer of the Company; and
(f) "officer" shall include an "authorized person" who is authorized
to act on behalf of the Company pursuant to the terms hereof, whether or
not such person has been designated an officer of the Company.
5.10 Limitation of Liability. No Person shall be liable to the Company or
its Members for any loss, damage, liability or expense suffered by the Company
or its Members on account of any action taken or omitted to be taken by such
Person as an officer of the Company or as a Representative or by such Person
while serving at the request of the Company as a director, officer or in any
other comparable position of any Other Enterprise, if such Person discharges
such Person's duties in good faith, and in a manner such Person reasonably
believes to be in or not opposed to the best interests of the Company. The
liability of an officer or Representative hereunder shall be limited only for
those actions taken or omitted to be taken by such Person in the discharge of
such Person's obligations in connection with the management of the business
20
and affairs of the Company or any Other Enterprise. The foregoing limitation of
liability shall apply to all officers and to all Persons who serve as a
Representative at any time.
5.11 Right to Indemnification. The Company shall indemnify each Person
who has been or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or appellate (regardless of whether such
action, suit or proceeding is by or in the right of the Company or by third
parties) by reason of the fact that such Person is or was a Voting Member of the
Company, an officer of the Company, a Representative or is or was serving at the
request of the Company as a director, officer or in any other comparable
position of any Other Enterprise, against all liabilities and expenses,
including, without limitation, judgments, amounts paid in settlement, attorneys'
fees, ERISA excise taxes or penalties, fines and other expenses, actually and
reasonably incurred by such Person in connection with such action, suit or
proceeding (including, without limitation, the investigation, defense,
settlement or appeal of such action, suit or proceeding); provided, however,
that the Company shall not be required to indemnify or advance expenses to any
Person on account of such Person's conduct that was finally adjudged to have
been knowingly fraudulent, deliberately dishonest or willful misconduct;
provided, further, that the Company shall not be required to indemnify or
advance expenses to any Person in connection with an action, suit or proceeding
initiated by such Person unless the initiation of such action, suit or
proceeding was authorized in advance by the Voting Members; provided, however,
that an officer or Representative shall be indemnified hereunder only for those
actions taken or omitted to be taken by such Person in the discharge of such
Person's obligations in connection with the management of the business and
affairs of the Company or any Other Enterprise. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction or under a plea of
nolo contendere or its equivalent shall not, of itself, create a presumption
that such Person's conduct was finally adjudged to have been knowingly
fraudulent, deliberately dishonest or willful misconduct. The foregoing right
to indemnification shall apply to all Persons serving as officers and to all
Persons who serve as a Representative at any time or who serve at any time at
the request of the Company as a director, officer or in any other comparable
position of any Other Enterprise. Nothing herein prevents any Member from
indemnifying its representatives or officers under such Member's organizational
documents or other agreements. If any Person is entitled to indemnification
both from the Company and from a Member, then indemnification would come first
from the Company and thereafter from the Member.
5.12 Enforcement of Indemnification. In the event the Company refuses to
indemnify any Person who may be entitled to be indemnified or to have expenses
advanced under this Article V, such Person shall have the right to maintain an
action in any court of competent jurisdiction against the Company to determine
whether or not such Person is entitled to such indemnification or advancement of
expenses hereunder. If such court action is successful and the Person is
determined to be entitled to such indemnification or advancement of expenses,
such Person shall be reimbursed by the Company for all fees and expenses
(including attorneys' fees) actually and reasonably incurred in connection with
any such action (including, without limitation, the investigation, defense,
settlement or appeal of such action).
5.13 Advancement of Expenses. Expenses (including attorneys' fees)
reasonably incurred in defending an action, suit or proceeding, whether civil,
criminal, administrative,
21
investigative or appellate, shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the Person subject thereto to repay such amount if it shall
ultimately be determined that such Person is not entitled to indemnification by
the Company. In no event shall any advance be made in instances where the Voting
Members or legal counsel for the Company reasonably determines that such Person
would not be entitled to indemnification hereunder.
5.14 Non-Exclusivity. The indemnification and advancement of expenses
provided by this Article V shall not be exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any statute, or any agreement, vote of Voting Members, policy of insurance or
otherwise, both as to action in their official capacity and as to action in
another capacity while holding their respective offices, and shall not limit in
any way any right that the Company may have to make additional indemnifications
with respect to the same or different Persons or classes of Persons. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article V shall continue as to a Person who has ceased to be an officer of
the Company, a Representative or a Person eligible for designation as a
Representative and as to a Person who has ceased serving at the request of the
Company as a director, officer or in any other comparable position of any Other
Enterprise and shall inure to the benefit of the heirs, executors and
administrators of such Person.
5.15 Insurance. The Voting Member Majority may cause the Company to
purchase and maintain insurance on behalf of any Person who is or was an
officer, agent or employee of the Company or a Representative or is or was
serving at the request of the Company as a director, officer or in any other
comparable position of any Other Enterprise, against any liability asserted
against such Person and incurred by such Person in any such capacity, or arising
out of such Person's status as such, whether or not the Company would have the
power, or the obligation, to indemnify such Person against such liability under
the provisions of this Article V.
5.16 Amendment and Vesting of Rights. The rights granted or created
hereby shall be vested in each Person entitled to indemnification hereunder as a
bargained-for, contractual condition of such Person's serving or having served
as an officer of the Company or a Representative or serving at the request of
the Company as a director, officer or in any other comparable position of any
Other Enterprise and, while this Article V may be amended or repealed, no such
amendment or repeal shall release, terminate or adversely affect the rights of
such Person under this Article V with respect to any (a) act taken or the
failure to take any act by such Person prior to such amendment or repeal, or (b)
any action, suit or proceeding concerning such act or failure to act filed after
such amendment or repeal.
5.17 Severability. If any provision of this Article V or the application
of any such provision to any Person or circumstance is held invalid, illegal or
unenforceable for any reason whatsoever, the remaining provisions of this
Article V and the application of such provision to other Persons or
circumstances shall not be affected thereby and, to the fullest extent possible,
the court finding such provision invalid, illegal or unenforceable shall modify
and construe the provision so as to render it valid and enforceable as against
all Persons and to give the maximum possible protection to Persons subject to
indemnification hereby within the bounds of validity, legality and
enforceability. Without limiting the generality of the foregoing, if any
officer of the Company, any Representative or any Person who is or was serving
at the request of the
22
Company as a director, officer or in any other comparable position of any Other
Enterprise is entitled under any provision of this Article V to indemnification
by the Company for some or a portion of the judgments, amounts paid in
settlement, attorneys' fees, ERISA excise taxes or penalties, fines or other
expenses actually and reasonably incurred by any such Person in connection with
any threatened, pending or completed action, suit or proceeding (including,
without limitation, the investigation, defense, settlement or appeal of such
action, suit or proceeding), whether civil, criminal, administrative,
investigative or appellate, but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify such Person for the portion
thereof to which such Person is entitled.
5.18 Contracts with Members or their Affiliates. All contracts or
transactions between the Company and one of its Members or officers or between
the Company and another limited liability company, corporation, partnership,
association or other organization in which a Member has a financial interest or
with which such Member is affiliated are permissible if such contract or
transaction, and such Member's or officer's interest therein, are fully
disclosed to the Voting Members and approved by the Voting Member Majority.
5.19 Other Business Ventures. Any Member may engage in, or possess an
interest in, other business ventures of every nature and description,
independently or with others, whether or not similar or identical to the
business of the Company, and neither the Company nor any other Member shall have
any right by virtue of this Agreement in or to such other business ventures or
to the income or profits derived therefrom. The Members and Representatives
shall not be required to devote all of their time or business efforts to the
affairs of the Company, but shall devote so much of their time and attention to
the Company as is reasonably necessary and advisable to manage the affairs of
the Company to the best advantage of the Company. The foregoing shall not
supersede any employment, confidentiality, noncompete or other specific
agreement that may exist between the Company (or an Affiliate of the Company)
and any Member (or an Affiliate of any Member).
ARTICLE VI
ACCOUNTING AND BANK ACCOUNTS
6.1 Fiscal Year. The fiscal year and taxable year of the Company shall
end on September 30 of each year, unless a different year is required by the
Code, or is adopted by the Voting Member Majority.
6.2 Books and Records. At all times during the existence of the Company,
the Company shall cause to be maintained full and accurate books of account,
which shall reflect all Company transactions and be appropriate and adequate for
the Company's business. The books and records of the Company shall be
maintained at the principal office of the Company. Each Member or its
representatives shall have the right during ordinary business hours and upon
reasonable notice to inspect and copy (at such Member's own expense) all books
and records of the Company. The Voting Member Majority may cause the Company to
retain a firm of certified public accountants of recognized standing to audit
the financial statements of the Company.
23
6.3 Tax Information. As soon as practicable after the end of each fiscal
year, there shall be prepared and delivered to each Member all information with
respect to the Company necessary for the preparation of the Members' federal and
state income tax returns.
6.4 Tax Returns and Elections; Tax Matters Partner. The Company shall
cause to be prepared and timely filed all federal, state and local income tax
returns and other returns or statements required of the Company by applicable
law. The Company shall claim all deductions and make such elections for federal
or state income tax purposes that the Members reasonably believe will produce
the most favorable tax results for the Members. IEH is hereby designated as the
Company's "Tax Matters Partner," as defined in the Code, and in such capacity is
hereby authorized and empowered to act for and represent the Company and each of
the Members before the Internal Revenue Service in any audit or examination of
any Company tax return and before any court selected by the Members for judicial
review of any adjustment assessed by the Internal Revenue Service. IEH does
hereby accept such designation. IEH shall provide the other Members with written
notice of any federal income tax audit and shall keep the other Members informed
of all material developments involved in such proceedings. The Members
specifically acknowledge, without limiting the general applicability of this
Section 6.4, that IEH shall not be liable, responsible or accountable in damages
or otherwise to the Company or any Member with respect to any action taken by it
in its capacity as the Tax Matters Partner, provided that IEH acted in a manner
it believed to be in the best interests of the Company and its Members. All
reasonable out-of-pocket expenses incurred by IEH in its capacity as the Tax
Matters Partner shall be considered expenses of the Company for which IEH shall
be entitled to full reimbursement. Nothing in this Section 6.4 shall limit the
ability of the Members to take any action in their individual capacity relating
to tax audit matters that is left to the determination of an individual partner
under Code Section 6222 through Code Section 6232.
6.5 Section 754 Election. In the event a distribution of Company assets
occurs that satisfies the provisions of Section 734 of the Code, upon the
determination of the Voting Member Majority, the Company shall elect, pursuant
to Section 754 of the Code, to adjust the basis of the Property to the extent
allowed by Section 734 and shall cause such adjustments to be made and
maintained. Any additional accounting expenses incurred by the Company in
connection with making or maintaining any such basis adjustment shall be
reimbursed to the Company from time to time by the distributee who benefits from
the making and maintenance of such basis adjustment.
6.6 Bank Accounts. All funds of the Company shall be deposited in a
separate bank, money market or similar account(s) approved by the Voting Member
Majority and in the Company's name. Withdrawals therefrom shall be made only by
such persons as are authorized by the Voting Member Majority.
ARTICLE VII
TRANSFERS OF INTERESTS
7.1 General Transfer Restrictions. No Member may Transfer all or any part
of such Member's Interest, except (i) pursuant to the provisions of Section 7.2,
(ii) pursuant to an Exempt Transfer or (iii) with the written consent of all the
Voting Members; provided, however, that, notwithstanding, the described clauses
(i), (ii) and (iii) above, no Transfer shall be permitted if it would result in
the "termination" of the Company pursuant to (S) 708 of the Code. Any purported
24
Transfer of an Interest in violation of the terms of this Agreement shall be
null and void and of no effect. Any permitted Transfer shall be effected by a
written instrument and shall be effective as of the date specified in such
instrument. Any person receiving an Interest from a Member in a permitted
Transfer shall not become a Substitute Member except in accordance with Section
7.7. Any assignee of an Interest as allowed by this Section 7.1 who does not
become a Substitute Member as provided in Section 7.7 (a "Transferee") shall not
be a Member and shall not have any right to vote as a Member or to participate
in the management of the business and affairs of the Company, such right to vote
such Interest and to participate in the management of the business and affairs
of the Company continuing with the Transferor. The Transferee shall, however,
be entitled to distributions and allocations of the Company, as provided in
Article IV of this Agreement, attributable to the Interest that is the subject
of the Transfer to such Transferee. Any Transferee desiring to make a further
Transfer shall become subject to all of the provisions of this Article VII to
the same extent and in the same manner as any Member desiring to make any
Transfer.
7.2 First Offer Right.
(a) If any Member (the "Transferor") wishes to make a Non-Exempt
Transfer of Interests, then, at least 25 Business Days before making any
such Non-Exempt Transfer (the "First Offer Election Period"), the
Transferor will deliver a written notice (the "First Offer Notice") to the
Company and to all Voting Members (the "Offerees").
(b) The First Offer Notice will specify the proposed percentage and
type of Interests to be the subject of such Transfer (the "Offered
Interests") and disclose in reasonable detail the proposed terms and
conditions of the Transfer. The purchase price for any such Transfer shall
be payable at the closing of the transaction in cash or, at the option of
the Offerees, with a promissory note payable in regular installments over a
period of no more than five years bearing interest at a rate equal to the
Company's cost of funds.
(c) The Offerees may, in the aggregate, give notice to elect to
purchase all (but not less than all) of the Offered Interests, at the price
and on the terms specified in the First Offer Notice by delivering written
notice of such election (the "First Offer Election Notice") to the
Transferor within 15 Business Days after delivery of the First Offer
Notice. If more than one Offeree (other than the Company) gives notice of
election to purchase the Offered Interests, they shall be entitled to
purchase such Offered Interests in proportion to their existing Common
Percentage Interests, as adjusted, of the Company, unless they agree
otherwise. If the Offerees (other than the Company) do not elect to
purchase all of the Offered Interests, the Company may give notice to elect
to purchase all (but not less than all) of the Offered Interests by
delivering written notice to the Transferor within 7 Business Days after
the expiration of the period referred to in the first sentence of this
clause (c).
(d) If any Offerees have elected to purchase any Offered Interests,
the transfer of such shares will be consummated as soon as practical (but
in any event within 10 Business Days) after the expiration of the First
Offer Election Period. If the Offerees have not elected to purchase all of
the Offered Interests, the Transferor may, within 90
25
days after the expiration of the First Offer Election Period, transfer all
(but not less than all) of such Offered Interests to one or more Third
Parties at a price and on terms no more favorable to the Third Parties than
offered to the Offerees in the First Offer Notice; provided, however, that
prior to such Transfer, such Third Parties shall have agreed in writing to
be bound by the provisions of this Agreement and shall have delivered to
the Company an executed counterpart of this Agreement. Any Offered
Interests not transferred within such 90-day period will be subject to the
provisions of this Section 7.2 upon any subsequent transfer.
(e) Notwithstanding the foregoing, unless the Transferor shall have
consented to the purchase of less than all of the Offered Interests, no
Offeree may purchase any Offered Interests unless all of the Offered
Interests are to be purchased by the Offerees.
(f) The designation of the Offered Interests as Class A Preferred
Interests or Common Interests will continue and any and all rights
associated therewith shall be retained by each Offered Interest sold or
otherwise transferred pursuant to this Section 7.2.
7.3 Exempt Transfers. The restrictions contained in this Article VII will
not apply with respect to:
(i) any Transfer to the spouse of a Member;
(ii) any Transfer to a lineal descendant, natural or adopted, of a
Member or to the spouse of any such lineal descendant;
(iii) any Transfer to the trustee of a trust for the substantial
benefit of a Member and/or one or more persons described in (i) or (ii)
above;
(iv) any Transfer to ▇▇▇▇ ▇▇▇▇▇▇▇ or any entity of which the vote is
controlled by ▇▇▇▇ ▇▇▇▇▇▇▇; or
(v) any Transfer to the Company;
provided, however, that the restrictions contained in this Article VII and, in
the case of an Interest held at any time by an Employee Member, Sections 7.10
through 7.14 hereof will continue to be applicable to the Interests after any
such Transfer, other than a Transfer to the Company (but with the buy-back
provisions of Section 7.13 being based upon the employment status of the
original Employee Member), and before any such Transfer is effected the
transferees of such Interests, other than the Company, shall agree in writing to
be bound by all the provisions of this Agreement and shall execute and deliver
to the Company a counterpart of this Agreement.
7.4 Third Party Offer to Purchase. If a third party (a "Proposed
Purchaser") makes an offer (the "Third Party Offer") to purchase the Common
Interest of a Member or Members, and such purchase would enable the Proposed
Purchaser to acquire one or more Members' Interests, which Members' Interests
include in the aggregate more than 50% in Common Percentage Interest, then
within ten Business Days after the issuance of the Third Party Offer to a Member
26
or Members, the Proposed Purchaser shall issue to the other Members an offer
(the "Tag-Along Offer") whereby such Members, individually, may elect, within 30
days after receipt of the Tag-Along Offer, one of the following alternatives:
(a) If a Common Member, to sell any or all of its Common Interest to
the Proposed Purchaser under the same terms and conditions as the Third
Party Offer; or
(b) If a Class A Preferred Member, to sell any or all of its Class A
Preferred Interest to the Proposed Purchaser for a purchase price equal to
the balance in such Class A Preferred Member's Preferred Capital Account
plus all Accrued Preferred Distributions and Arrearages under Section 4.2
hereof; or
(c) To take no action and continue to hold its Interest in the
Company.
7.5 Third Party Offer to Acquire the Entire Company. If a third party
makes an offer (the "Purchase Offer") to purchase all of the Common Interests in
the Company for an identical price per Common Percentage Interest, and the
holders of more than 50% in Common Percentage Interest desire to accept the
Purchase Offer, then the other Members hereby agree to participate in such sale
(i) if a Common Member, on the same terms and conditions as the Purchase Offer
and (ii) if a Class A Preferred Member, at a purchase price equal to the balance
in such Class A Preferred Member's Preferred Capital Account plus all Accrued
Preferred Distributions and Arrearages under Section 4.2 hereof.
7.6 Designation of Interests. The designation of an Interest as a Class A
Preferred Interest or a Common Interest will continue and any and all rights
associated therewith shall be retained by each Interest sold or otherwise
Transferred pursuant to the terms of this Agreement.
7.7 Substitute Members. No assignee of all or part of a Member's Interest
shall become a Member in place of the Member assigning the Interest (a
"Substitute Member") unless and until:
(a) The transferring Member has stated such intention in the
instrument of assignment;
(b) The Transferee has executed an instrument accepting and adopting
the terms and provisions of this Agreement;
(c) The Transferee delivers an opinion of Counsel acceptable to the
Company that the Transfer will not result in a termination of the Company
pursuant to Section 708 of the Code and such Transfer is exempt from
registration under all applicable securities laws;
(d) The transferring Member or Transferee has paid all reasonable
expenses of the Company in connection with the admission of the Transferee
as a Substitute Member; and
(e) All non-transferring Voting Members in their sole and absolute
discretion have consented in writing to such Transferee becoming a
Substitute Member.
27
Upon satisfaction of all of the foregoing conditions with respect to a
particular Transferee, the Voting Members shall cause this Agreement to be duly
amended to reflect the admission of the Transferee as a Substitute Member.
7.8 Effect of Admission as a Substitute Member. Unless and until admitted
as a Substitute Member pursuant to Section 7.7 hereof, a Transferee shall not be
entitled to exercise any rights of a Member in the Company, including the right
to vote, grant approvals or give consents with respect to such Interest, the
right to require any information or accounting with respect to the Company's
business or the right to inspect the Company's books and records, but such
Transferee shall only be entitled to receive, to the extent of the Interest
transferred to it, the Distributions to which the transferring Member would be
entitled. A Transferee that has become a Substitute Member has, to the extent
of the Interest transferred to it, all the rights and powers of the Person for
whom it is substituted and is subject to the restrictions and liabilities of a
Member under this Agreement and the Act. Upon admission of a Transferee as a
Substitute Member, the transferring Member shall cease to be a Member of the
Company to the extent of such Interest. A Person shall not cease to be a Member
upon assignment of all of such Member's Interest unless and until the Transferee
becomes a Substitute Member.
7.9 Additional Members. Additional Members (whether Voting Members or
Non-Voting Members) may be admitted to the Company and additional Interests may
be issued only by the consent of a Voting Member Majority, and the Common
Percentage Interests and the Preferred Percentage Interests shall be adjusted as
approved by such Voting Member Majority.
7.10 Applicability. The provisions of Sections 7.10, 7.11, 7.12, 7.13 and
7.14 hereof shall apply only to the Interests held by Members included in the
Employee Investor Group (herein referred to individually as an "Employee Member"
and collectively as the "Employee Members").
7.11 Termination of Employment. Upon the termination of an Employee
Member's employment with ▇▇▇▇▇▇▇▇▇, for any reason or no reason, the Employee
Member shall sell and the Company shall buy such Employee Member's Interest or
Interests in the Company, at a purchase price determined by a predetermined
valuation formula, as set forth in Section 7.12 below, and subject to the terms
and conditions set forth in Sections 7.13 and 7.14 below.
7.12 Valuation of Interests.
(a) Class A Preferred Interests. The value of the Class A Preferred
Interests shall be equal to the balance in an Employee Member's Preferred
Capital Account on a specific date plus all Accrued Preferred Distributions
and Arrearages under Section 4.2 hereof.
(b) Common Interests. The Common Interests held by the Employee
Members shall be valued by the Company as of September 30th of each year
using the valuation formula set forth in Schedule B attached hereto. The
valuation determined each year by the valuation formula set forth in
Schedule B is hereinafter referred to as the "EBITDA Valuation." The
EBITDA Valuation determined as of September 30th of each year shall be used
for the ensuing twelve-month period to determine the price at which an
28
Employee Member's Common Interest is repurchased by the Company pursuant to
Section 7.11 hereof.
7.13 Buy-Back Provisions. Upon the termination of an Employee Member's
employment with ▇▇▇▇▇▇▇▇▇, for any reason or no reason, the Employee Member
shall sell and the Company shall buy such Employee Member's Interest in the
Company subject to the following terms and conditions:
(a) Class A Preferred Interests. If an Employee Member leaves the
employment of ▇▇▇▇▇▇▇▇▇ by reason of resigning, being terminated with or
without cause or due to such Employee Member's normal retirement, death or
disability at any time, then the Employee Member shall sell and the Company
shall buy such Employee Member's Class A Preferred Interest in the Company
at a purchase price equal to the balance in such Employee Member's
Preferred Capital Account on the date such Employee Member's employment
with ▇▇▇▇▇▇▇▇▇ terminates multiplied by the Preferred Vesting Percentage
(as defined below) plus all Accrued Preferred Distributions and Arrearages
under Section 4.2 hereof. The "Preferred Vesting Percentage" shall be
equal to:
(i) 50%, if such Employee Member's employment with ▇▇▇▇▇▇▇▇▇
terminates on or before the expiration of one year from the date on
which such Employee Member acquires his or her Interest in the Company
pursuant to the Amended and Restated ▇▇▇▇▇▇▇▇▇ Oil & Propane Company,
LLC Equity Purchase Plan (such date is hereinafter referred to as the
"Acquisition Date");
(ii) 60%, if such Employee Member's employment with ▇▇▇▇▇▇▇▇▇
terminates after the expiration of one year from the Acquisition Date
but on or before the expiration of two years from the Acquisition
Date;
(iii) 70%, if such Employee Member's employment with ▇▇▇▇▇▇▇▇▇
terminates after the expiration of two years from the Acquisition Date
but on or before the expiration of three years from the Acquisition
Date;
(iv) 80%, if such Employee Member's employment with ▇▇▇▇▇▇▇▇▇
terminates after the expiration of three years from the Acquisition
Date but on or before the expiration of four years from the
Acquisition Date;
(v) 90%, if such Employee Member's employment with ▇▇▇▇▇▇▇▇▇
terminates after the expiration of four years from the Acquisition
Date but on or before the expiration of five years from the
Acquisition Date; or
(vi) 100%, if such Employee Member's employment with ▇▇▇▇▇▇▇▇▇
terminates at any time after the expiration of five years from the
Acquisition Date:
provided, however, in the event an Employee Member leaves the employment of
▇▇▇▇▇▇▇▇▇ due to such Employee Member's normal retirement, death or
disability on or at any time before the expiration of three years from the
Acquisition Date, then the "Preferred Vesting Percentage" shall be equal to
70%.
29
(b) Common Interests. If an Employee Member leaves the employment of
▇▇▇▇▇▇▇▇▇ by reason of resigning, being terminated with or without cause or
due to such Employee Member's normal retirement, death or disability at any
time, then the Employee Member shall sell and the Company shall buy such
Employee Member's Common Interest in the Company at a purchase price equal
to the EBITDA Valuation on the date such Employee Member's employment with
▇▇▇▇▇▇▇▇▇ terminates multiplied by the Common Vesting Percentage. The
"Common Vesting Percentage" shall be equal to:
(i) 0%, if such Employee Member's employment with ▇▇▇▇▇▇▇▇▇
terminates on or before the expiration of five years from the
Acquisition Date; or
(ii) 100%, if such Employee Member's employment with ▇▇▇▇▇▇▇▇▇
terminates at any time after the expiration of five years from the
Acquisition Date.
7.14 Payment upon Buy-Back. Upon the termination of an Employee Member's
employment with ▇▇▇▇▇▇▇▇▇ such that the Company will buy such Employee Member's
Common Interest and Class A Preferred Interest pursuant to the buy-back
provisions set forth in Section 7.13 above, the Company shall pay the purchase
price for the Common Interest and Class A Preferred Interest, as determined
pursuant to Section 7.13 above, in cash, or at the Company's option, pay all or
any part of the purchase price in equal quarterly installment payments over a
period of 5 years, bearing interest at the applicable federal rate under Section
1274 of the Internal Revenue Code of 1986, as amended.
7.15 Resignation. No Member may resign or withdraw from the Company.
Except as provided in Section 8.1(c) of this Agreement, upon the occurrence of
any event that terminates the continued membership of a Member in the Company,
the Company shall not be dissolved.
7.16 Miscellaneous Provisions Regarding Article VII.
(a) Without limiting any of the foregoing, the Members shall not, and
shall cause each of their respective affiliates not to, (i) take any action
the effect of which would prevent or frustrate the carrying out of the
procedures contemplated by this Article VII or (ii) at any time (whether
before or after any termination of this Agreement) make any assertion,
claim or defense that this Article VII or any of the provisions hereof
violate or are inconsistent with the terms of this Agreement or any laws or
public policies.
(b) At the closing of any purchase and sale of a Common Interest or a
Class A Preferred Interest under this Article VII, the purchaser and the
selling Member shall deliver such certificates and such assignment
documents in customary form as may be reasonably requested in order to
consummate the transaction, and, unless otherwise specified herein, the
purchaser shall deliver the purchase price in immediately available funds
to such bank account as shall have been specified by the selling Member at
least three Business Days prior to the closing (or, if no such notice has
been given, by delivery of a certified or bank check). At such closing,
the selling Member shall sell and transfer its Common Interest and/or its
Class A Preferred Interest to the purchaser free and clear of Liens other
than Liens arising out of Company financing and shall so warrant to the
purchaser. The selling Member shall also represent and warrant to the
purchaser that the
30
selling Member has good and marketable title to the Common Interest or
Class A Preferred Interest being sold and transferred. In addition, each of
the selling Member and the purchaser shall make customary representations
and warranties to the other including representations and warranties with
respect to organization, valid existence, authorization, and non-
contravention. With respect to obligations arising out of Company
financing, the purchaser shall, in addition to paying the purchase price,
either (i) satisfy or otherwise obtain release from all liability on the
part of the selling Member and its Affiliates with respect to all
obligations of the Company, including debt and lease obligations, which
such selling Member and/or its Affiliates shall have guaranteed, or (ii)
indemnify and hold harmless the selling Member and its Affiliates against
such liability and secure such indemnification with a letter of credit or
payment bond reasonably satisfactory to such selling Member. As used
herein, "Lien" shall mean, as to any Interest, liens, encumbrances,
security interests and other rights, interest or claims of others therein
(including, without limitation, warrants, options, rights of first refusal,
rights of first offer, co-sale and similar rights).
(c) If, with respect to any purchase and sale of a Common Interest or
a Class A Preferred Interest under this Article VII, the selling Member is
not present at the time and place designated for a closing, or, if present,
fails to produce the certificates or assignment documents reasonably
requested to consummate the transaction or fails to satisfy any other
obligation to be satisfied at the closing, as aforesaid, for any reason
whatsoever or no reason, then the purchase price and any other document or
instrument required by the Company at the closing ("Closing Documentation")
shall be deposited with the President of the Company. The foregoing shall
constitute valid payment even though the selling Member shall voluntarily
encumber and dispose of said Interests contrary to the provisions hereof
and irrespective of the fact that any pledgee, transferee or other person
may thereby have acquired said Interests or the fact that certificates or
assignment documents for any of said Interests may have been delivered to
any pledgee, transferee or other person.
If the Closing Documentation is deposited with the President of the
Company as provided herein, then from and after the date of such deposit
and even if the certificates evidencing said Interests or the assignment
documents have not been delivered to the Company, the purchase of said
Interests shall be deemed to have been fully effected and all title and
interest in and to the Interests so purchased shall be deemed to have been
vested in the Company, and all rights of the selling Member or of any
transferee, assignee or any other person having an interest therein, as a
Member of the Company or otherwise, shall terminate except for the right to
receive the Closing Documentation, but without interest; and the President
of the Company, as attorney-in-fact for and in the name of the selling
Member, shall cause the Interests so purchased to be transferred on the
books and records of the Company to the Company, and shall issue a new
certificate or certificates therefor to the purchaser(s) thereof. The
selling Member does hereby irrevocably appoint and designate the President
of the Company and his successors in office as his attorney-in-fact, for
and on his behalf, to receive, receipt for, hold and collect the said
Closing Documentation, to effect the transfer of said Interests on the
books and records of the Company, and to issue said certificate or
certificates in the manner above provided. The selling Member shall be
entitled to receive the Closing Documentation upon delivery
31
to the Company of the certificates evidencing the Interests so purchased,
and assignment documents duly indorsed for transfer, as aforesaid, together
with any document or instrument required of such Member.
ARTICLE VIII
DISSOLUTION AND TERMINATION
8.1 Events Causing Dissolution. The Company shall be dissolved only upon
the first to occur of the following events:
(a) December 31, 2026.
(b) The election to dissolve being made by a Voting Member Majority.
(c) At any time there are no Members, provided that the Company shall
not be dissolved if within 90 days after the occurrence of the event that
terminated the continued membership of the last remaining Member, the
personal representative of the last remaining Member agrees in writing to
continue the Company and to the admission of the personal representative of
such Member or its nominee or designee to the Company as a Member,
effective as of the occurrence of the event that terminated the continued
membership of the last remaining Member.
(d) Upon the entry of a decree of dissolution with respect to the
Company under Section 18-802 of the Act.
(e) When the Company is not the surviving entity in a merger or
consolidation under the Act.
8.2 Effect of Dissolution. Except with respect to an event referred to in
Section 8.1(e) of this Agreement, and except as otherwise provided in this
Agreement, upon the dissolution of the Company, the Voting Members or surviving
Voting Member, as the case may be, shall take such actions as may be required
pursuant to the Act and shall proceed to wind up, liquidate and terminate the
business and affairs of the Company. In connection with such winding up, the
Voting Members or surviving Voting Member shall have the authority to liquidate
and reduce to cash (to the extent necessary or appropriate) the assets of the
Company as promptly as is consistent with obtaining Fair Value therefor, to
apply and distribute the proceeds of such liquidation and any remaining assets
in accordance with the provisions of Section 8.3 hereof, and to do any and all
acts and things authorized by, and in accordance with, the Act and other
applicable laws for the purpose of winding up and liquidation.
8.3 Application of Proceeds. Upon dissolution and liquidation of the
Company, the assets of the Company shall be applied and distributed in the order
of priority set forth in Section 4.4 hereof.
8.4 Continuing Obligations. In the event any Member is required to assume
or pay any debt, expense, obligation or liability of the Company following
dissolution or termination, first, the Common Members shall pay and indemnify
such Member for their respective Common Percentage Interest of such debt,
expense, obligation or liability required to be paid by such Member to the
extent of assets distributed to such Common Members, then, the Class A
32
Preferred Members shall pay and indemnify such Member for their respective
Preferred Percentage Interest of such debt, expense, obligation or liability
required to be paid by such Member to the extent of assets distributed to such
Class A Preferred Members.
ARTICLE IX
MISCELLANEOUS
9.1 Title to Assets. Title to the Property and all other assets acquired
by the Company shall be held in the name of the Company. No Member shall
individually have any ownership interest or rights in the Property or any other
assets of the Company, except indirectly by virtue of such Member's ownership of
an Interest. No Member shall have any right to seek or obtain a partition of
the Property or other assets of the Company, nor shall a Member have the right
to any specific assets of the Company upon the liquidation of or any
distribution from the Company.
9.2 Nature of Interest in the Company. An Interest shall be personal
property for all purposes.
9.3 Notices. Any notice, demand, request or other communication required
or permitted to be given pursuant to this Agreement or the Act to the Company, a
Member, or any other Person (a "Notice") shall be sufficient if in writing and
if hand-delivered, mailed or sent by commercial overnight delivery service, to
the Company at its principal office or to a Member at the address of the Member
as it appears on the records of the Company or if sent by facsimile transmission
to the telephone number, if any, of the recipient's facsimile machine as such
telephone number appears on the records of the Company. All Notices that are
mailed shall be deemed to be given when deposited in the United States mail,
postage prepaid. All Notices that are hand-delivered shall be deemed to be
given upon delivery. All notices that are given by commercial overnight
delivery shall be deemed to be given upon delivery by the delivery service. All
Notices that are given by facsimile transmission shall be deemed to be given
upon receipt.
9.4 Waiver of Default. No consent or waiver, express or implied, by the
Company or a Member with respect to any breach or default by the other Members
hereunder shall be deemed or construed to be a consent or waiver with respect to
any other breach or default by such Member of the same provision or any other
provision of this Agreement. Failure on the part of the Company or a Member to
complain of any act or failure to act of the other Members or to declare such
other Member in default shall not be deemed to constitute a waiver by the
Company or the Members of any rights hereunder.
9.5 No Third Party Rights. None of the provisions contained in this
Agreement shall be for the benefit of or enforceable by any third parties,
including, but not limited to, creditors of the Company; provided, however, the
Company may enforce any right granted to the Company under the Act, the
Certificate or this Agreement.
9.6 Entire Agreement. This Agreement, together with the Certificate,
constitutes the entire agreement between the Members, in such capacity, relative
to the formation, operation and continuation of the Company.
33
9.7 Amendments to this Agreement.
(a) Except as otherwise provided herein, this Agreement shall not be
modified or amended in any manner other than by the written agreement of
the Voting Member Majority at the time of such modification or amendment;
provided, however, any amendment affecting the allocation of Income and
Loss to a Member shall be approved by that Member.
(b) This Agreement may be amended by the Voting Member Majority,
without any execution of such amendment by all Members, in order to reflect
the occurrence of any of the following events provided that all of the
conditions, if any, contained in the relevant sections of this Agreement
with respect to such event have been satisfied:
(i) an adjustment of the Common Percentage Interests of the
Common Members and the Preferred Percentage Interests of the Class A
Preferred Members, as the case may be, upon a Common Member's or a
Class A Preferred Member's failure to make a capital contribution as
required hereunder; and
(ii) the modification of this Agreement to comply with the
relevant tax laws pursuant to Sections 3.6 or 4.7(j) hereof.
9.8 Severability. In the event any provision of this Agreement is held to
be illegal, invalid or unenforceable to any extent, the legality, validity and
enforceability of the remainder of this Agreement shall not be affected thereby
and shall remain in full force and effect and shall be enforced to the greatest
extent permitted by law.
9.9 Binding Agreement. Subject to the restrictions on the disposition of
Interests herein contained, the provisions of this Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
heirs, personal representatives, successors and permitted assigns.
9.10 Headings. The headings of Sections of this Agreement are for
convenience of reference only and shall not be considered in construing or
interpreting any of the terms or provisions hereof.
9.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one agreement.
9.12 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
9.13 Remedies. In the event of a default by a Member in the performance
of any obligation undertaken in this Agreement, in addition to any other remedy
available to the non-defaulting Members, the defaulting Member shall pay to the
non-defaulting Members all costs, damages, and expenses, including reasonable
attorneys' fees, incurred by the non-defaulting Member as a result of such
default. In the event that any dispute arises with respect to the enforcement,
interpretation, or application of this Agreement and court proceedings are
instituted
34
to resolve such dispute, the prevailing party in such court proceedings shall be
entitled to recover from the non-prevailing party all costs and expenses,
including, but not limited to, reasonable attorneys' fees, incurred by the
prevailing party in such court proceedings.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
INTEGRATED ENERGY HOLDINGS, LLC
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: ___________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Member
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
MEMBERS OF THE EMPLOYEE INVESTOR GROUP:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
________________________________________
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
35
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ H. ▇▇▇▇ ▇▇▇▇
_______________________
H. ▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ BUDDY ▇▇▇▇▇▇ STREET
________________________
Buddy ▇▇▇▇▇▇ Street
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
________________________
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
36
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP,
INITIAL OR RESTATED CAPITAL ACCOUNTS AND PERCENTAGE INTERESTS
Initial or Common Preferred
Restated Common Initial Preferred Percentage Percentage
Name Capital Account Capital Account Interest Interest
---- --------------- ----------------- ---------- ----------
1. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 609 $ 7,408 0.0228% 0.3155%
2. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 609 $ 7,408 0.0228% 0.3155%
3. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1577%
4. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1577%
5. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 366 $ 4,443 0.0137% 0.1892%
6. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,216 $ 14,813 0.0455% 0.6308%
7. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1577%
8. H. ▇▇▇▇ ▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1577%
9. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1577%
10. Buddy ▇▇▇▇▇▇ Street $ 3,046 $ 37,025 0.1140% 1.5767%
11. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 1,216 $ 14,813 0.0455% 0.6308%
12. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $30,455 $679,200 1.14% 28.9250%
37
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS
AND PERCENTAGE INTERESTS
Initial or Common Preferred
Restated Common Initial Preferred Percentage Percentage
Capital Account Capital Account Interest Interest
--------------- ----------------- ---------- ----------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ -0- $1,564,520 0% 66.6280%
Integrated Energy $2,632,493 $ -0- 98.5386% 0%
Holdings, LLC
38
SCHEDULE B
INTEGRATED PROPANE PARTNERS, LLC
VALUATION FORMULA
The following formula sets forth the method that will be used to value the
Company at September 30th of each year. The value determined by the valuation
formula set forth below will then be used as a basis for determining the price
at which an Employee Member's Common Interest in the Company will be repurchased
by the Company upon the termination of such an Employee Member's employment with
▇▇▇▇▇▇▇▇▇. The following formula will be determined from the consolidated
financial statements of the Company.
EBITDA for the fiscal year ended September 30th
PLUS OR MINUS
the Weather Adjustment Factor
EQUALS
Adjusted EBITDA
MULTIPLY BY
the Valuation Multiple
EQUALS
the value of the Company before adjustments
PLUS
Fixed Asset Purchases after April 1
PLUS OR MINUS
Net Working Capital
MINUS
Long-Term Debt
EQUALS
the EBITDA Valuation
39
The EBITDA Valuation determined pursuant to the valuation formula set forth
above will be calculated with reference to the following assumptions and
definitions:
1. "EBITDA" means earnings before interest, taxes, depreciation and
amortization.
2. The "Weather Adjustment Factor" will be determined pursuant to the
following formula:
Actual Degree Days for period from April through March
Less: Normal Degree Days of 3,750
Equals: Degree Day deviation from normal
Times: Actual propane and distillate gallons per Degree Day for
period from October through March
Equals: Estimated impact on gallons sold
Times: 90% of actual propane and distillate unit gross profit for
period from October through March
Equals: Weather Adjustment Factor
"Degree Days" represent the difference between sixty-five degrees
Fahrenheit and the mean temperature on a given day, provided that the mean
temperature on such day is less than sixty-five degrees Fahrenheit.
3. The "Valuation Multiple" will be equal to 6; provided, however, the Company
and each Employee Members shall have the option of engaging, at their own
expense, a third party mutually agreeable to the Company and such Employee
Member to determine the Valuation Multiple to be used to determine the
EBITDA Valuation for any year. Such third party shall determine the
Valuation Multiple by valuing the Company as a going concern facing a
change of control transaction. No minority discount shall be applied by
such third party in determining the Valuation Multiple.
4. The EBITDA in a given year will receive minimal benefit for Fixed Assets
acquired after the middle of the year. Therefore, only the amount of Fixed
Assets purchased after April 1 of a given year will be added into the
valuation formula.
5. The current portion of long-term debt is included in Long-Term Debt rather
than Net Working Capital.
40
AMENDMENT NO. 1 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INTEGRATED PROPANE PARTNERS, LLC
THIS AMENDMENT NO. 1 (the "Amendment") to the Limited Liability
Company Agreement of Integrated Propane Partners, LLC referred to below is made
and entered into as of December 10, 1998, between Integrated Energy Holdings,
LLC, a Delaware limited liability company ("IEH") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an
individual ("▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the members of the Employee Investor
Group and IEH, the members of Integrated Propane Partners, LLC (the "Company"),
entered into that certain Amended and Restated Limited Liability Company
Agreement of Integrated Propane Partners, LLC, dated September 30, 1998 (the
"LLC Agreement"), pursuant to which the business plan of the Company was
formulated and defined;
WHEREAS, IEH, as the Voting Member Majority, desires to amend certain
provisions of the LLC Agreement on and subject to the terms hereof;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, IEH and ▇▇▇▇▇▇ do hereby promise and agree as follows (all
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the LLC Agreement):
1. Pursuant to Section 7.9 of the LLC Agreement, ▇▇▇▇▇▇ is hereby
admitted as a Class A Preferred Member of the Company, with all of the rights
and obligations assigned to a Class A Preferred Member pursuant to, and subject
to all provisions and limitations set forth in, the LLC Agreement; provided,
however, ▇▇▇▇▇▇ shall not be considered a member of the Employee Investor Group.
▇▇▇▇▇▇ is hereby issued a Class A Preferred Interest in the Company, with a
Preferred Percentage Interest assigned thereto. ▇▇▇▇▇▇ hereby confirms and
agrees to comply with, and be bound by, all of the terms and conditions of the
LLC Agreement. Concurrently herewith, the Preferred Percentage Interests of
such Class A Preferred Members shall be realigned as follows:
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 0.2558%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.2558%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 0.1278%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.1278%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 0.1534%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.5115%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.1278%
H. ▇▇▇▇ ▇▇▇▇ 0.1278%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 0.1278%
Buddy ▇▇▇▇▇▇ Street 1.2785%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.5115%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 23.4519%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 54.0209%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 18.9217%
Integrated Energy Holdings, LLC 0%
Furthermore, Exhibit A and Schedule A to the LLC Agreement are hereby amended by
deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of such Preferred Percentage Interests.
3. The parties hereto hereby acknowledge that ▇▇▇▇▇▇ has contributed
412 shares of Common Stock, $10.00 par value per share, of ▇▇▇▇▇▇ Oil Company of
▇▇▇▇▇▇▇▇ County, Inc., which has a dollar value of approximately $548,000.00, to
the Company in exchange for his Class A Preferred Interest in the Company.
4. Section 4.2 of the LLC Agreement is hereby amended by deleting
said Section 4.2 in its entirety and by substituting the following new Section
4.2 in lieu thereof:
4.2 Preferred Distributions. On or before the last Business Day of
each month immediately following the end of each calendar quarter (a "Due
Date"), commencing with the calendar quarter ending December 31, 1998, the
Company shall distribute cash to each Class A Preferred Member in an amount
equal to the initial balance in such Class A Preferred Member's Preferred
Capital Account multiplied by 2.25%; provided, however, the Company shall
distribute cash to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in an amount equal to the initial
balance in ▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ Preferred Capital Account multiplied by 2.0%
on each Due Date, commencing with the April 30, 1999 Due Date (each such
distribution is hereinafter referred to as a "Preferred Distribution").
Notwithstanding the immediately preceding sentence, no Preferred
Distribution shall be required if such distribution would, as reasonably
determined by a Voting Member Majority, cause a default under any agreement
or covenant between a bank or other lending institution and any one of the
Company or the Operating Companies (any such limitation that precludes
payment of a Preferred Distribution being referred to as the "Limitation").
In the event any Preferred Distribution, or portion thereof, is not made
with respect to a calendar quarter, such Preferred Distribution, or portion
thereof (the "Accrued Preferred Distribution"), shall accumulate and be
payable at such time as the Limitation no longer prevents payment. In
addition, with respect to any such Accrued Preferred Distribution there
shall be payable an amount equal to (A) times (B) times (C), where (A)
equals such Accrued Preferred Distribution, (B) equals a percentage equal
to the higher of the Company's cost of funds or the cost of funds of any of
the Operating Companies, and (C) equals a fraction, the numerator of which
is the number of days since the Due Date of such Accrued Preferred
Distribution or the most recent anniversary thereof, and the denominator of
which is 365 (such additional amount and any unpaid portion thereof is
hereinafter referred to as the "Arrearage"). If any Arrearage is not paid
by an anniversary of the Due Date of the related Accrued
2
Preferred Distribution, then such Arrearage shall be added to and become a
part of the Accrued Preferred Distribution as of such anniversary date and
shall no longer be an "Arrearage" hereunder. All payments made pursuant to
this Section 4.2 shall be applied first to any Arrearage and then to the
Accrued Preferred Distribution.
5. Section 4.4(a) of the LLC Agreement is hereby amended by deleting
said Section 4.4(a) in its entirety and by substituting the following new
Section 4.4(a) in lieu thereof:
(a) First, to the payment of any Accrued Preferred Distributions and
Arrearages under Section 4.2 hereof. In the event the Liquidation Proceeds
are not sufficient to pay all Accrued Preferred Distributions and
Arrearages, then the Liquidation Proceeds shall be distributed to the Class
A Preferred Members in proportion to their respective Accrued Preferred
Distribution and Arrearage under Section 4.2 hereof.
6. Section 4.6(a)(ii)(A) of the LLC Agreement is hereby amended by
deleting said Section 4.6(a)(ii)(A) in its entirety and by substituting the
following new Section 4.6(a)(ii)(A) in lieu thereof:
(A) First, Operating Income shall be allocated to the Class A
Preferred Members in accordance with their respective Preferred Percentage
Interests until the cumulative amount of Operating Income allocated
pursuant to this subparagraph (A) equals the cumulative amount of cash
actually distributed to the Class A Preferred Members pursuant to Section
4.2 hereof; then
7. Except as expressly amended hereby, all of the terms, conditions
and provisions of the LLC Agreement shall remain unamended and in full force and
effect in accordance with its terms, and the LLC Agreement, as amended hereby,
is hereby ratified and confirmed. The amendments provided herein shall be
limited precisely as drafted and shall not constitute an amendment of any other
term, condition or provision of the LLC Agreement.
8. References in the LLC Agreement to "Agreement", "hereof", "herein"
and words of similar impact shall be deemed to be a reference to the LLC
Agreement as amended by this Amendment.
9. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment and affixed their signatures hereto as of the date first above
written.
INTEGRATED ENERGY HOLDINGS, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Voting Member
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
3
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP,
INITIAL OR RESTATED CAPITAL ACCOUNTS AND PERCENTAGE INTERESTS
Initial or Common Preferred
Restated Common Initial Preferred Percentage Percentage
Name Capital Account Capital Account Interest Interest
---- --------------- ----------------- ---------- ----------
1. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 609 $ 7,408 0.0228% 0.2558%
2. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 609 $ 7,408 0.0228% 0.2558%
3. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1278%
4. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1278%
5. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 366 $ 4,443 0.0137% 0.1534%
6. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,216 $ 14,813 0.0455% 0.5115%
7. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1278%
8. H. ▇▇▇▇ ▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1278%
9. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1278%
10. Buddy ▇▇▇▇▇▇ Street $ 3,046 $ 37,025 0.1140% 1.2785%
11. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 1,216 $ 14,813 0.0455% 0.5115%
12. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $30,455 $679,200 1.14% 23.4519%
5
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS
AND PERCENTAGE INTERESTS
Initial or Common Preferred
Restated Common Initial Preferred Percentage Percentage
Capital Account Capital Account Interest Interest
------------------ ------------------- ----------------- --------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ -0- $1,564,520 0% 54.0209%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ -0- $ 548,000 0% 18.9217%
Integrated Energy
Holdings, LLC $2,632,493 $ -0- 98.5386% 0%
6
AMENDMENT NO. 2 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 2 (the "Amendment") to the Limited Liability
Company Agreement of Inergy Partners, LLC referred to below is made and entered
into as of August 4, 1999, between Inergy Holdings, LLC, a Delaware limited
liability company (f/k/a Integrated Energy Holdings, LLC) ("Holdings"), ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇., an individual, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual, and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇., an individual.
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the members of the Employee Investor
Group and Holdings, the members of Inergy Partners, LLC (f/k/a Integrated
Propane Partners, LLC) (the "Company"), entered into that certain Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
September 30, 1998, as amended by Amendment No. 1 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated December 10,
1998 (the "LLC Agreement"), pursuant to which the business plan of the Company
was formulated and defined;
WHEREAS, Holdings, as the Voting Member Majority, desires to amend
certain provisions of the LLC Agreement on and subject to the terms hereof;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, Holdings, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇. do hereby promise and agree as follows (all capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the LLC Agreement):
1. Pursuant to Section 7.9 of the LLC Agreement, each of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. is hereby admitted as a
Class A Preferred Member of the Company, with all of the rights and obligations
assigned to a Class A Preferred Member pursuant to, and subject to all
provisions and limitations set forth in, the LLC Agreement; provided, however,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. shall not be
considered members of the Employee Investor Group. Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. is hereby issued a Class A
Preferred Interest in the Company, with a Preferred Percentage Interest assigned
thereto. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. hereby
confirm and agree to comply with, and be bound by, all of the terms and
conditions of the LLC Agreement. Concurrently herewith, the Preferred
Percentage Interests of such Class A Preferred Members shall be realigned as
follows:
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 0.2247%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.2247%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 0.1123%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.1123%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 0.1348%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.4494%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.1123%
H. ▇▇▇▇ ▇▇▇▇ 0.1123%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 0.1123%
Buddy ▇▇▇▇▇▇ Street 1.1233%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.4494%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 20.6059%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 47.4653%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 16.6255%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. 6.1891%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2.9125%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. 3.0339%
Inergy Holdings, LLC 0%
Furthermore, Exhibit A and Schedule A to the LLC Agreement are hereby amended by
deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of such Preferred Percentage Interests.
3. The parties hereto hereby acknowledge that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
has contributed 7.2857 shares of Common Stock, $10.00 par value per share, of
Rolesville Oil Company, which has a dollar value of approximately $204,000.00,
to the Company in exchange for his Class A Preferred Interest in the Company.
The parties hereto hereby acknowledge that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has contributed
3.4286 shares of Common Stock, $10.00 par value per share, of Rolesville Oil
Company, which has a dollar value of approximately $96,000.00, to the Company in
exchange for her Class A Preferred Interest in the Company. The parties hereto
hereby acknowledge that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. has contributed 3.5714 shares of
Common Stock, $10.00 par value per share, of Rolesville Oil Company, which has a
dollar value of approximately $100,000.00, to the Company in exchange for his
Class A Preferred Interest in the Company.
4. Section 4.2 of the LLC Agreement is hereby amended by deleting
said Section 4.2 in its entirety and by substituting the following new Section
4.2 in lieu thereof:
4.2 Preferred Distributions. On or before the last Business Day of
each month immediately following the end of each calendar quarter (a "Due
Date"), commencing with the calendar quarter ending December 31, 1998, the
Company shall distribute cash to each Class A Preferred Member in an amount
equal to the initial balance in such Class A Preferred Member's Preferred
Capital Account multiplied by 2.25%; provided, however, the Company shall
distribute cash to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in an amount equal to the initial
balance in ▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ Preferred Capital Account multiplied by 2.0%
on each Due Date, commencing with the April 30, 1999 Due Date; provided,
further, the Company shall distribute cash to each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. in an amount equal to the initial
balance in each of their respective Preferred Capital Accounts multiplied
by 2.0% on each Due Date,
2
commencing with the October 29, 1999 Due Date (each such distribution
is hereinafter referred to as a "Preferred Distribution"). However, the
Preferred Distribution made to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. on the October 29, 1999 Due Date only shall be equal
to the Preferred Distribution multiplied by 57 and then divided by 92.
Notwithstanding the immediately preceding sentences, no Preferred
Distribution shall be required if such distribution would, as reasonably
determined by a Voting Member Majority, cause a default under any agreement
or covenant between a bank or other lending institution and any one of the
Company or the Operating Companies (any such limitation that precludes
payment of a Preferred Distribution being referred to as the "Limitation").
In the event any Preferred Distribution, or portion thereof, is not made
with respect to a calendar quarter, such Preferred Distribution, or portion
thereof (the "Accrued Preferred Distribution"), shall accumulate and be
payable at such time as the Limitation no longer prevents payment. In
addition, with respect to any such Accrued Preferred Distribution there
shall be payable an amount equal to (A) times (B) times (C), where (A)
equals such Accrued Preferred Distribution, (B) equals a percentage equal
to the higher of the Company's cost of funds or the cost of funds of any of
the Operating Companies, and (C) equals a fraction, the numerator of which
is the number of days since the Due Date of such Accrued Preferred
Distribution or the most recent anniversary thereof, and the denominator of
which is 365 (such additional amount and any unpaid portion thereof is
hereinafter referred to as the "Arrearage"). If any Arrearage is not paid
by an anniversary of the Due Date of the related Accrued Preferred
Distribution, then such Arrearage shall be added to and become a part of
the Accrued Preferred Distribution as of such anniversary date and shall no
longer be an "Arrearage" hereunder. All payments made pursuant to this
Section 4.2 shall be applied first to any Arrearage and then to the Accrued
Preferred Distribution.
5. Except as expressly amended hereby, all of the terms, conditions
and provisions of the LLC Agreement shall remain unamended and in full force and
effect in accordance with its terms, and the LLC Agreement, as amended hereby,
is hereby ratified and confirmed. The amendments provided herein shall be
limited precisely as drafted and shall not constitute an amendment of any other
term, condition or provision of the LLC Agreement.
6. References in the LLC Agreement to "Agreement", "hereof", "herein"
and words of similar impact shall be deemed to be a reference to the LLC
Agreement as amended by this Amendment.
3
7. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment and affixed their signatures hereto as of the date first above
written.
INERGY HOLDINGS, LLC
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Voting Member
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
4
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP,
INITIAL OR RESTATED CAPITAL ACCOUNTS AND PERCENTAGE INTERESTS
Initial or Common Preferred
Restated Common Initial Preferred Percentage Percentage
Name Capital Account Capital Account Interest Interest
------ ------------------ ------------------ ------------ ------------
1. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 609 $ 7,408 0.0228% 0.2247%
2. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 609 $ 7,408 0.0228% 0.2247%
3. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1123%
4. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1123%
5. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 366 $ 4,443 0.0137% 0.1348%
6. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,216 $ 14,813 0.0455% 0.4494%
7. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1123%
8. H. ▇▇▇▇ ▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1123%
9. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $ 305 $ 3,702 0.0114% 0.1123%
10. Buddy ▇▇▇▇▇▇ Street $ 3,046 $ 37,025 0.1140% 1.1233%
11. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 1,216 $ 14,813 0.0455% 0.4494%
12. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $30,455 $679,200 1.14% 20.6059%
5
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS
AND PERCENTAGE INTERESTS
Initial or Common Preferred
Restated Common Initial Preferred Percentage Percentage
Capital Account Capital Account Interest Interest
------------------ ------------------- --------------- ----------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ -0- $1,564,520 0% 47.4653%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ -0- $ 548,000 0% 16.6255%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 204,000 0% 6.1891%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ -0- $ 96,000 0% 2.9125%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 100,000 0% 3.0339%
Inergy Holdings, LLC $2,632,493 $ -0- 98.5386% 0%
6
AMENDMENT NO. 3 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 3 (the "Amendment") to the Limited Liability
Company Agreement of Inergy Partners, LLC referred to below is made and entered
into as of September 28, 1999, between Inergy Holdings, LLC, a Delaware limited
liability company (f/k/a Integrated Energy Holdings, LLC) ("Holdings"), and
▇▇▇▇▇▇▇ Propane, Inc., a Tennessee corporation ("▇▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the members of the Employee Investor
Group and Holdings, the members of Inergy Partners, LLC (f/k/a Integrated
Propane Partners, LLC) (the "Company"), entered into that certain Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
September 30, 1998, as amended by Amendment No. 1 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated December 10,
1998 and Amendment No. 2 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated August 4, 1999 (the "LLC Agreement"),
pursuant to which the business plan of the Company was formulated and defined;
WHEREAS, Holdings, as the Voting Member Majority, desires to amend
certain provisions of the LLC Agreement on and subject to the terms hereof;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, Holdings and ▇▇▇▇▇▇▇ do hereby promise and agree as follows
(all capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the LLC Agreement):
1. Pursuant to Section 7.9 of the LLC Agreement, ▇▇▇▇▇▇▇ is hereby
admitted as both a Common Member and a Class A Preferred Member of the Company,
with all of the rights and obligations assigned to a Common Member and a Class A
Preferred Member pursuant to, and subject to all provisions and limitations set
forth in, the LLC Agreement; provided, however, ▇▇▇▇▇▇▇ shall not be considered
a member of the Employee Investor Group. ▇▇▇▇▇▇▇ is hereby issued both a Common
Interest and a Class A Preferred Interest in the Company, each with a Common
Percentage Interest and a Preferred Percentage Interest, respectively, assigned
thereto. ▇▇▇▇▇▇▇ hereby confirms and agrees to comply with, and be bound by,
all of the terms and conditions of the LLC Agreement. Concurrently herewith,
the Common Percentage Interests of such Common Members shall be realigned as
follows:
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 0.0223%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.0223%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 0.0111%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.0111%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 0.0134%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.0444%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.0111%
H. ▇▇▇▇ ▇▇▇▇ 0.0111%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 0.0111%
Buddy ▇▇▇▇▇▇ Street 0.1112%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.0444%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 1.1115%
▇▇▇▇▇▇▇ Propane, Inc. 2.5000%
Inergy Holdings, LLC 96.0750%
Concurrently herewith, the Preferred Percentage Interests of such Class A
Preferred Members shall also be realigned as follows:
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 0.1513%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.1513%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 0.0756%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.0756%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 0.0908%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0.3025%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.0756%
H. ▇▇▇▇ ▇▇▇▇ 0.0756%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 0.0756%
Buddy ▇▇▇▇▇▇ Street 0.7562%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0.3025%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 13.8722%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 31.9542%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 11.1925%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. 4.1666%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1.9607%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. 2.0424%
▇▇▇▇▇▇▇ Propane, Inc. 32.6788%
Inergy Holdings, LLC 0%
Furthermore, Exhibit A and Schedule A to the LLC Agreement are hereby amended by
deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of such Common and Preferred Percentage Interests.
3. The parties hereto hereby acknowledge that ▇▇▇▇▇▇▇ has contributed
to the Company, assets with a value approximately equal to $400,000 in exchange
for its Common Interest in the Company and assets with a value approximately
equal to $1,600,000 in exchange for its Class A Preferred Interest in the
Company.
4. Section 4.2 of the LLC Agreement is hereby amended by deleting
said Section 4.2 in its entirety and by substituting the following new Section
4.2 in lieu thereof:
2
4.2 Preferred Distributions. On or before the last Business Day of
each month immediately following the end of each calendar quarter (a "Due
Date"), commencing with the calendar quarter ending December 31, 1998, the
Company shall distribute cash to each Class A Preferred Member in an amount
equal to the initial balance in such Class A Preferred Member's Preferred
Capital Account multiplied by 2.25%; provided, however, the Company shall
distribute cash to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in an amount equal to the initial
balance in ▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ Preferred Capital Account multiplied by 2.0%
on each Due Date, commencing with the April 30, 1999 Due Date; provided,
further, the Company shall distribute cash to each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. in an amount equal to the initial
balance in each of their respective Preferred Capital Accounts multiplied
by 2.0% on each Due Date, commencing with the October 29, 1999 Due Date;
and provided, further, the Company shall distribute cash to ▇▇▇▇▇▇▇
Propane, Inc. in an amount equal to the initial balance in the Preferred
Capital Account of ▇▇▇▇▇▇▇ Propane, Inc. multiplied by 2.0% on each Due
Date, commencing with the January 31, 2000 Due Date (each such distribution
is hereinafter referred to as a "Preferred Distribution"). However, the
Preferred Distribution made to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. on the October 29, 1999 Due Date only shall be equal
to the Preferred Distribution multiplied by 57 and then divided by 92.
Notwithstanding the immediately preceding sentences, no Preferred
Distribution shall be required if such distribution would, as reasonably
determined by a Voting Member Majority, cause a default under any agreement
or covenant between a bank or other lending institution and any one of the
Company or the Operating Companies (any such limitation that precludes
payment of a Preferred Distribution being referred to as the "Limitation").
In the event any Preferred Distribution, or portion thereof, is not made
with respect to a calendar quarter, such Preferred Distribution, or portion
thereof (the "Accrued Preferred Distribution"), shall accumulate and be
payable at such time as the Limitation no longer prevents payment. In
addition, with respect to any such Accrued Preferred Distribution there
shall be payable an amount equal to (A) times (B) times (C), where (A)
equals such Accrued Preferred Distribution, (B) equals a percentage equal
to the higher of the Company's cost of funds or the cost of funds of any of
the Operating Companies, and (C) equals a fraction, the numerator of which
is the number of days since the Due Date of such Accrued Preferred
Distribution or the most recent anniversary thereof, and the denominator of
which is 365 (such additional amount and any unpaid portion thereof is
hereinafter referred to as the "Arrearage"). If any Arrearage is not paid
by an anniversary of the Due Date of the related Accrued Preferred
Distribution, then such Arrearage shall be added to and become a part of
the Accrued Preferred Distribution as of such anniversary date and shall no
longer be an "Arrearage" hereunder. All payments made pursuant to this
Section 4.2 shall be applied first to any Arrearage and then to the Accrued
Preferred Distribution.
5. Pursuant to Section 7.1 of the LLC Agreement, Holdings hereby
consents in advance to (i) the Transfer of 10% of ▇▇▇▇▇▇▇'▇ Common Interest and
10% of ▇▇▇▇▇▇▇'▇ Class A Preferred Interest to ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and (ii) the
Transfer of 90% of ▇▇▇▇▇▇▇'▇ Common
3
Interest and 90% of ▇▇▇▇▇▇▇'▇ Class A Preferred Interest to Zero Butane Gas,
Inc. Upon the satisfaction of Section 7.7(a) through Section 7.7(d) of the LLC
Agreement, and pursuant to Section 7.7(e) of the LLC Agreement, Holdings hereby
consents in advance to the Transferees of such Interests becoming Substitute
Members of the Company. Such Substitute Members shall be obligated to provide
Capital Contributions under Section 3.2 of the LLC Agreement in accordance with
such Common Percentage Interest, or portion thereof assigned to the transferred
Common Interests.
6. Except as expressly amended hereby, all of the terms, conditions
and provisions of the LLC Agreement shall remain unamended and in full force and
effect in accordance with its terms, and the LLC Agreement, as amended hereby,
is hereby ratified and confirmed. The amendments provided herein shall be
limited precisely as drafted and shall not constitute an amendment of any other
term, condition or provision of the LLC Agreement.
7. References in the LLC Agreement to "Agreement", "hereof", "herein"
and words of similar impact shall be deemed to be a reference to the LLC
Agreement as amended by this Amendment.
8. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
4
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment and affixed their signatures hereto as of the date first above
written.
INERGY HOLDINGS, LLC
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: ________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Voting Member
▇▇▇▇▇▇▇ PROPANE, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
By: ________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
5
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP,
INITIAL OR RESTATED CAPITAL ACCOUNTS AND PERCENTAGE INTERESTS
Initial or Common Preferred
Restated Common Initial Preferred Percentage Percentage
Name Capital Account Capital Account Interest Interest
------------------------------ --------------- ----------------- -------------- --------------
1. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 3,568 $ 7,408 0.0223% 0.1513%
2. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 3,568 $ 7,408 0.0223% 0.1513%
3. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0756%
4. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0756%
5. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 2,144 $ 4,443 0.0134% 0.0908%
6. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 7,104 $ 14,813 0.0444% 0.3025%
7. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0756%
8. H. ▇▇▇▇ ▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0756%
9. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0756%
10. Buddy ▇▇▇▇▇▇ Street $ 17,792 $ 37,025 0.1112% 0.7562%
11. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 7,104 $ 14,813 0.0444% 0.3025%
12. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $177,840 $679,200 1.1115% 13.8722%
6
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS
AND PERCENTAGE INTERESTS
Initial or Common Preferred
Restated Common Initial Preferred Percentage Percentage
Capital Account Capital Account Interest Interest
------------------ ------------------- --------------- ----------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ -0- $1,564,520 0% 31.9542%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ -0- $ 548,000 0% 11.1925%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 204,000 0% 4.1666%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ -0- $ 96,000 0% 1.9607%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 100,000 0% 2.0424%
▇▇▇▇▇▇▇ Propane, Inc. $ 400,000 $1,600,000 2.5000% 32.6788%
Inergy Holdings, LLC $15,372,000 $ -0- 96.0750% 0%
7
AMENDMENT NO. 4 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 4 (the "Amendment") to the Limited Liability
Company Agreement of Inergy Partners, LLC referred to below is made and entered
into as of December 31, 1999, between Inergy Holdings, LLC, a Delaware limited
liability company (f/k/a Integrated Energy Holdings, LLC) ("Holdings"), and KCEP
Ventures II, L.P., a Missouri limited partnership ("KCEP").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the members of the Employee Investor
Group and Holdings, the members of Inergy Partners, LLC (f/k/a Integrated
Propane Partners, LLC) (the "Company"), entered into that certain Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
September 30, 1998, as amended by Amendment No. 1 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated December 10,
1998, Amendment No. 2 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated August 4, 1999, and Amendment No. 3 to
Amended and Restated Limited Liability Company Agreement of Inergy Partners,
LLC, dated September 28, 1999 (the "LLC Agreement");
WHEREAS, Holdings, as the Voting Member Majority, desires to amend
certain provisions of the LLC Agreement on and subject to the terms hereof, to
reflect the issuance of a Class A Preferred Interest in the Company to KCEP,
pursuant to a Securities Purchase Agreement between the Company and KCEP dated
as of December 31, 1999 (the "KCEP Agreement").
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, Holdings and KCEP do hereby promise and agree as follows (all
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the LLC Agreement):
1. KCEP is hereby issued a Class A Preferred Interest in the Company
as provided in the KCEP Agreement and KCEP is admitted as a Class A Preferred
Member of the Company, with all of the rights and obligations assigned to a
Class A Preferred Member pursuant to, and subject to all provisions and
limitations set forth in, the LLC Agreement. KCEP hereby confirms and agrees to
comply with, and be bound by, all of the terms and conditions of the LLC
Agreement.
Exhibit A and Schedule A to the LLC Agreement are hereby amended by
deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of Preferred Percentage Interests resulting from the
admission of KCEP as a Class A Preferred Member and to reflect the deemed
initial balance in the Preferred Capital Account of KCEP.
2. Section 4.2 of the LLC Agreement is hereby amended by deleting said
Section 4.2 in its entirety and by substituting the following new Section 4.2 in
lieu thereof:
4.2 Preferred Distributions. On or before the last Business Day of each
month immediately following the end of each calendar quarter (a "Due
Date"), commencing with the calendar quarter ending December 31, 1998, the
Company shall distribute cash to each Class A Preferred Member in an amount
equal to the initial balance in such Class A Preferred Member's Preferred
Capital Account multiplied by such Class A Preferred Member's preferred
distribution percentage (each such distribution is hereinafter referred to
as a "Preferred Distribution"), and commencing as of such Class A Preferred
Member's initial Due Date, as reflected on Exhibit A and Schedule A
attached hereto. Notwithstanding the immediately preceding sentence, no
Preferred Distribution shall be required if such distribution would, as
reasonably determined by a Voting Member Majority, cause a default under
any agreement or covenant between a bank or other lending institution and
any one of the Company or the Operating Companies (any such limitation that
precludes payment of a Preferred Distribution being referred to as the
"Limitation"). In the event any Preferred Distribution, or portion
thereof, is not made with respect to a calendar quarter, such Preferred
Distribution, or portion thereof (the "Accrued Preferred Distribution"),
shall accumulate and be payable at such time as the Limitation no longer
prevents payment. In addition, with respect to any such Accrued Preferred
Distribution there shall be payable an amount equal to (A) times (B) times
(C), where (A) equals such Accrued Preferred Distribution, (B) equals a
percentage equal to the higher of the Company's cost of funds or the cost
of funds of any of the Operating Companies, and (C) equals a fraction, the
numerator of which is the number of days since the Due Date of such Accrued
Preferred Distribution or the most recent anniversary thereof, and the
denominator of which is 365 (such additional amount and any unpaid portion
thereof is hereinafter referred to as the "Arrearage"). If any Arrearage
is not paid by an anniversary of the Due Date of the related Accrued
Preferred Distribution, then such Arrearage shall be added to and become a
part of the Accrued Preferred Distribution as of such anniversary date and
shall no longer be an "Arrearage" hereunder. All payments made pursuant to
this Section 4.2 shall be applied first to any Arrearage and then to the
Accrued Preferred Distribution.
3. A public offering by the Company or its affiliates through a master
limited partnership structure (an "MLP Offering") is contemplated by the Company
and KCEP under the KCEP Agreement. KCEP's Class A Preferred Interest will be
convertible into, or exchanged for, Senior Subordinated Units (the "Senior
Units") of a master limited partnership ("MLP") that is the subject of an MLP
Offering, which conversion or exchange (the "Conversion") shall occur upon
closing of such MLP Offering. The Conversion shall be effected by adding the
following new section 4.7(l) to the LLC Agreement:
4.7(l) Deemed Gain Allocation. Notwithstanding any other provision herein
to the contrary, in the event of an adjustment to the Common Capital
Accounts of the Company at the time of a public offering by the Company or
its affiliates through a master limited partnership structure at a time
during which KCEP Ventures II, L.P. or its permitted assignee ("KCEP") owns
a Class A Preferred Interest in the Company, the Class A Preferred Capital
Account of
2
KCEP at such time shall be allocated an amount of deemed gain referred to
in Section 3.5(b) which would make its Preferred Capital Account equal to
the Put Price (for all of such Class A Preferred Interest) referred to in
Section 9.5 of the Securities Purchase Agreement between the Company and
KCEP dated as of December 30, 1999, and such amount shall reduce the amount
of such deemed gain which would otherwise be allocated to Common Capital
Accounts under Section 3.5(b) at such time.
KCEP's Preferred Capital Account, as adjusted, would then be exchanged in the
MLP Offering for Senior Units of the MLP (priced to yield the same amount as the
publicly traded Common Units included in the MLP Offering). The Company and
KCEP contemplate that the Senior Units will be junior in payment terms to any
publicly traded units included in the MLP Offering. In the event that the
initial yield (which would be the minimum annual distribution divided by the
initial offering price in the MLP Offering) on the publicly traded Common Units
included in the MLP Offering is less than 10.75%, then KCEP's Preferred Capital
Account shall be increased based upon the formula set forth in Appendix A
attached hereto.
4. Notwithstanding any provision of the LLC Agreement to the
contrary, the Company may, at its election, retain all or a portion of any
Distributions that are payable by the Company to KCEP at any time prior to the
earlier of (a) an MLP offering, or (b) the end of the eighteen (18) month period
commencing on the date of this Amendment; provided, however, that KCEP's
Preferred Capital Account shall be increased in an amount equal to the amount of
any such retained Distributions, which increase in KCEP's Preferred Capital
Account shall constitute full satisfaction of any obligations of the Company to
KCEP in regard to such retained Distributions.
5. Except as expressly amended hereby, all of the terms, conditions
and provisions of the LLC Agreement shall remain unamended and in full force and
effect in accordance with its terms, and the LLC Agreement, as amended hereby,
is hereby ratified and confirmed. The amendments provided herein shall be
limited precisely as drafted and shall not constitute an amendment of any other
term, condition or provision of the LLC Agreement.
6. References in the LLC Agreement to "Agreement", "hereof", "herein"
and words of similar impact shall be deemed to be a reference to the LLC
Agreement as amended by this Amendment.
7. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
3
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment and affixed their signatures hereto as of the date first above
written.
INERGY HOLDINGS, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Voting Member
KCEP VENTURES II, L.P.
By: KCEP II, L.C., its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Managing Director of KCEP II, L.C.
4
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP,
INITIAL OR RESTATED CAPITAL ACCOUNTS, PERCENTAGE INTERESTS,
AND PREFERRED DISTRIBUTIONS
Initial or
Restated Initial Initial
Common Preferred Common Preferred Preferred Due Date
Capital Capital Percentage Percentage Distribution for Preferred
Name Account Account Interest Interest Percentage Distributions
---- --------- --------- --------- ---------- ------------ -------------
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ $ 3,568 $ 7,408 0.0223% 0.1075% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ $ 3,568 $ 7,408 0.0223% 0.1075% 2.25% 1-29-99
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0537% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0537% 2.25% 1-29-99
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 2,144 $ 4,443 0.0134% 0.0645% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 7,104 $ 14,813 0.0444% 0.2149% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0537% 2.25% 1-29-99
H. ▇▇▇▇ ▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0537% 2.25% ▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ $ 17,792 $ 37,025 0.1112% 0.5372% 2.25% 1-29-99
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 7,104 $ 14,813 0.0444% 0.2149% 2.25% ▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ $177,840 $679,200 1.1116% 9.8543% 2.25% 1-29-99
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS,
PERCENTAGE INTERESTS AND PREFERRED DISTRIBUTIONS
Initial or Initial
Restated Common Initial Common Preferred Preferred Due Date
Capital Preferred Percentage Percentage Distribution for Preferred
Name Account Capital Account Interest Interest Percentage Distributions
---- --------------- --------------- ---------- ---------- ------------ -------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ -0- $1,564,520 0% 22.6991% 2.25% 01-29-99
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ -0- $ 548,000 0% 7.9507% 2.00% ▇▇-▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 204,000 0% 2.9597% 2.00% 10-29-99(1)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ -0- $ 96,000 0% 1.3928% 2.00% 10-29-99(1)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 100,000 0% 1.4509% 2.00% 10-29-99(1)
▇▇▇▇▇▇▇ Propane,
Inc. $ 400,064 $1,600,000 2.50023% 23.2139% 2.00% 01-31-00
KCEP Ventures II,
L.P. $ -0- $2,000,000 0% 29.0173% 2.50% 04-28-00
Inergy Holdings, LLC $15,374,794 $ -0- 96.08577% 0%
(1) Preferred distribution prorated for initial quarter.
APPENDIX A
CONVERSION PREMIUM
The conversion premium will be $8,000 per basis point of reduced yield from
10.74% to 10.26%, and $12,000 for each basis point of reduced yield below
10.26%. The following table illustrates the conversion premium.
Public Premium per Conversion Conversion
Yield Basis Point Premium Value
------ ----------- ---------- ----------
10.75 $ 0 $ 0 $4,000,000
10.74 8,000 8,000 4,008,000
10.26 8,000 392,000 4,392,000
10.25 12,000 404,000 4,404,000
10.00 12,000 704,000 4,704,000
AMENDMENT NO. 5 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 5 (the "Amendment") to the Limited Liability
Company Agreement of Inergy Partners, LLC referred to below is made and entered
into as of January 1, 2000, between Inergy Holdings, LLC, a Delaware limited
liability company (f/k/a Integrated Energy Holdings, LLC) ("Holdings"), Zero
Butane Gas, Inc., a Tennessee corporation ("Zero"), ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, an
individual ("▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇▇"), and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇▇▇") (Zero, ▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ are
sometimes collectively referred to herein as the "Transferees").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the members of the Employee Investor
Group and Holdings, the members of Inergy Partners, LLC (f/k/a Integrated
Propane Partners, LLC) (the "Company"), entered into that certain Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
September 30, 1998, as amended by Amendment No. 1 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated December 10,
1998, Amendment No. 2 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated August 4, 1999, Amendment No. 3 to
Amended and Restated Limited Liability Company Agreement of Inergy Partners,
LLC, dated September 28, 1999, and Amendment No. 4 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated December 31,
1999 (the "LLC Agreement"); and
WHEREAS, Holdings, as the Voting Member Majority, desires to amend
certain provisions of the LLC Agreement on and subject to the terms hereof, to
reflect the transfer by ▇▇▇▇▇▇▇ Propane, Inc., a Tennessee corporation
("▇▇▇▇▇▇▇"), of its Common Interest and Class A Preferred Interest in the
Company to Zero on December 31, 1999, and the subsequent transfer by Zero of a
portion of such Common Interest and Class A Preferred Interest to Kerr,
Thompson, and ▇▇▇▇▇▇▇▇▇, on January 1, 2000.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, Holdings and the Transferees do hereby promise and agree as
follows (all capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the LLC Agreement):
1. Pursuant to Section 7.7 of the LLC Agreement, Zero is hereby,
effective as of December 31, 1999, admitted as a Substitute Member in place of
▇▇▇▇▇▇▇, as a Common Member with respect to all of ▇▇▇▇▇▇▇'▇ Common Interest in
the Company and as a Class A Preferred Member with respect to all of ▇▇▇▇▇▇▇'▇
Class A Preferred Interest in the Company, with all of the rights and
obligations assigned to a Common Member and a Class A Preferred Member pursuant
to, and subject to all provisions and limitations set forth in, the LLC
Agreement, except that Zero shall be a Non-Voting Member with respect to its
Common Interest. Pursuant to Section 7.7 of the LLC Agreement, ▇▇▇▇ is hereby,
effective as of January 1, 2000, admitted as a Substitute Member of the Company
in place of Zero to the extent of the Common Interest and Class A Preferred
Interest transferred by Zero to ▇▇▇▇ on January 1, 2000 as
reflected on Schedule A attached hereto, and ▇▇▇▇ is hereby admitted as both a
Common Member and a Class A Preferred Member of the Company, with all of the
rights and obligations assigned to a Common Member and a Class A Preferred
Member pursuant to, and subject to all provisions and limitations set forth in,
the LLC Agreement, except that ▇▇▇▇ shall be a Non-Voting Member with respect to
his Common Interest. Pursuant to Section 7.7 of the LLC Agreement, ▇▇▇▇▇▇▇▇ is
hereby, effective as of January 1, 2000, admitted as a Substitute Member of the
Company in place of Zero to the extent of the Common Interest transferred by
Zero to ▇▇▇▇▇▇▇▇ on January 1, 2000 as reflected on Schedule A attached hereto,
and ▇▇▇▇▇▇▇▇ is hereby admitted as a Common Member of the Company, with all of
the rights and obligations assigned to a Common Member pursuant to, and subject
to all provisions and limitations set forth in, the LLC Agreement, except that
▇▇▇▇▇▇▇▇ shall be a Non-Voting Member with respect to his Common Interest.
Pursuant to Section 7.7 of the LLC Agreement, ▇▇▇▇▇▇▇▇▇ is hereby, effective as
of January 1, 2000, admitted as a Substitute Member of the Company in place of
Zero to the extent of the Common Interest transferred by Zero to ▇▇▇▇▇▇▇▇▇ on
January 1, 2000 as reflected on Schedule A attached hereto, and ▇▇▇▇▇▇▇▇▇ is
hereby admitted as a Common Member of the Company, with all of the rights and
obligations assigned to a Common Member pursuant to, and subject to all
provisions and limitations set forth in, the LLC Agreement, except that
▇▇▇▇▇▇▇▇▇ shall be a Non-Voting Member with respect to her Common Interest.
Zero, ▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ each hereby confirms and agrees to comply
with, and be bound by, all of the terms and conditions of the LLC Agreement.
Exhibit A and Schedule A to the LLC Agreement are hereby amended by
deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of Common Percentage Interests, Preferred Percentage
Interests, and Preferred Distribution Percentages, resulting from the transfer
by ▇▇▇▇▇▇▇ of its Common Interest and Class A Preferred Interest to Zero and the
subsequent transfers by Zero of portions thereof to ▇▇▇▇, ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇, and to reflect the deemed initial balances in the respective Capital
Accounts of the Transferees.
2. Except as expressly amended hereby, all of the terms, conditions
and provisions of the LLC Agreement shall remain unamended and in full force and
effect in accordance with its terms, and the LLC Agreement, as amended hereby,
is hereby ratified and confirmed. The amendments provided herein shall be
limited precisely as drafted and shall not constitute an amendment of any other
term, condition or provision of the LLC Agreement.
3. References in the LLC Agreement to "Agreement", "hereof", "herein"
and words of similar impact shall be deemed to be a reference to the LLC
Agreement as amended by this Amendment.
4. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
2
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment and affixed their signatures hereto as of the date first above
written.
INERGY HOLDINGS, LLC
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: ______________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Voting Member
ZERO BUTANE GAS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
By: ______________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President
/s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
__________________________________________________
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
__________________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
3
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP,
INITIAL OR RESTATED CAPITAL ACCOUNTS, PERCENTAGE INTERESTS,
AND PREFERRED DISTRIBUTIONS
Initial or
Restated Initial Initial
Common Preferred Common Preferred Preferred Due Date
Capital Capital Percentage Percentage Distribution for Preferred
Name Account Account Interest Interest Percentage Distributions
------------------ ------- --------- ---------- ---------- ------------- -------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 3,568 $ 7,408 0.0223% 0.1075% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 3,568 $ 7,408 0.0223% 0.1075% 2.25% 1-29-99
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0537% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0537% 2.25% 1-29-99
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 2,144 $ 4,443 0.0134% 0.0645% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 7,104 $ 14,813 0.0444% 0.2149% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0537% 2.25% 1-29-99
H. ▇▇▇▇ ▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0537% 2.25% ▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 17,793 $ 37,025 0.1112% 0.5372% 2.25% 1-29-99
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 7,104 $ 14,813 0.0444% 0.2149% 2.25% ▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $177,868 $679,200 1.1116% 9.8543% 2.25% 1-29-99
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS,
PERCENTAGE INTERESTS AND PREFERRED DISTRIBUTIONS
Initial or Initial Initial
Restated Preferred Common Preferred Preferred Due Date
Common Capital Capital Percentage Percentage Distribution for Preferred
Name Account Account Interest Interest Percentage Distributions
------------------ --------------- --------- ----------- ----------- ------------ ----------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ -0- $1,564,520 0% 22.6991% 2.25% 01-29-99
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ -0- $ 548,000 0% 7.9507% 2.00% ▇▇-▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 204,000 0% 2.9597% 2.00% 10-29-99(1)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ -0- $ 96,000 0% 1.3928% 2.00% 10-29-99(1)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 100,000 0% 1.4509% 2.00% 10-29-99(1)
Zero Butane Gas, Inc. $ 347,658 $1,490,377 2.17268% 21.6234% 2.00% 04-28-00
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ $ 27,406 $ 109,623 .1713% 1.5905% 2.00% ▇▇-▇▇-▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 20,000 $ -0- .1250% 0% 0%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $ 5,000 $ -0- .03125% 0% 0%
KCEP Ventures II, L.P. $ -0- $2,000,000 0% 29.0173% 2.50% 04-28-00
Inergy Holdings, LLC $15,374,794 $ -0- 96.08577% 0% 0%
(1) Preferred distribution prorated for initial quarter.
AMENDMENT NO. 6 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 6 (the "Amendment") to the Limited Liability
Company Agreement of Inergy Partners, LLC referred to below is made and entered
into as of May __, 2000, between Inergy Holdings, LLC, a Delaware limited
liability company (f/k/a Integrated Energy Holdings, LLC) ("Holdings"), and
Country Gas Co., an Illinois corporation ("Country Gas").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the members of the Employee Investor
Group and Holdings, the members of Inergy Partners, LLC (f/k/a Integrated
Propane Partners, LLC) (the "Company"), entered into that certain Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
September 30, 1998, as amended by Amendment No. 1 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated December 10,
1998, Amendment No. 2 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated August 4, 1999, Amendment No. 3 to
Amended and Restated Limited Liability Company Agreement of Inergy Partners,
LLC, dated September 28, 1999, Amendment No. 4 to Amended and Restated Limited
Liability Company Agreement of Inergy Partners, LLC, dated December 31, 1999,
and Amendment No. 5 to Amended and Restated Limited Liability Company Agreement
of Inergy Partners, LLC, dated January 1, 2000 (the "LLC Agreement"); and
WHEREAS, Holdings, as the Voting Member Majority, desires to amend
certain provisions of the LLC Agreement on and subject to the terms hereof, to
reflect the issuance of a Class A Preferred Interest in the Company to Country
Gas, pursuant to that certain Asset Purchase Agreement, dated May 20, 2000 among
the Company, Country Gas, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Revocable Trust u/t/d September 9, 1999, the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Revocable Trust u/t/d September 9, 1999, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the
"Asset Purchase Agreement").
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, Holdings and Country Gas do hereby promise and agree as
follows (all capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the LLC Agreement):
1. Country Gas is hereby issued a Class A Preferred Interest in the
Company as provided in the Asset Purchase Agreement and Country Gas is admitted
as a Class A Preferred Member of the Company, with all of the rights and
obligations assigned to a Class A Preferred Member pursuant to, and subject to
all provisions and limitations set forth in, the LLC
Agreement. Country Gas hereby confirms and agrees to comply with, and be bound
by, all of the terms and conditions of the LLC Agreement.
Exhibit A and Schedule A to the LLC Agreement are hereby amended by
deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of Preferred Percentage Interests, and Preferred
Distribution Percentages, resulting from the admission of Country Gas as a Class
A Preferred Member and to reflect the deemed initial balance in the Preferred
Capital Account of Country Gas.
2. It is the Company's intention to arrange for the organization of a
master limited partnership (the "MLP") that will be the successor to the
Company's business and assets and thereafter effect a public offering of units
of the MLP (the "IPO") in a manner similar to public offerings made by publicly
traded master limited partnerships that are engaged in the distribution and sale
of propane. Notwithstanding anything contained in Section 4.12 of the LLC
Agreement to the contrary, in the event the Company effects the IPO, Country Gas
hereby agrees to immediately exchange its Class A Preferred Interest in the
Company for subordinated units in the MLP, pursuant to which all rights and
privileges of the Class A Preferred Interest in the Company held by Country Gas
shall be exchanged for all rights and privileges of the subordinated units of
the MLP. The subordinated units are expected to have the rights and privileges
of the Senior Subordinated Units described on Exhibit B attached hereto and made
a part hereof.
3. Except as expressly amended hereby, all of the terms, conditions
and provisions of the LLC Agreement shall remain unamended and in full force and
effect in accordance with its terms, and the LLC Agreement, as amended hereby,
is hereby ratified and confirmed. The amendments provided herein shall be
limited precisely as drafted and shall not constitute an amendment of any other
term, condition or provision of the LLC Agreement.
4. References in the LLC Agreement to "Agreement", "hereof", "herein"
and words of similar impact shall be deemed to be a reference to the LLC
Agreement as amended by this Amendment.
5. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
2
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment and affixed their signatures hereto as of the date first above
written.
INERGY HOLDINGS, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Voting Member
COUNTRY GAS CO.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
______________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
3
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP,
INITIAL OR RESTATED CAPITAL ACCOUNTS, PERCENTAGE INTERESTS,
AND PREFERRED DISTRIBUTIONS
Initial or
Restated Initial Initial
Common Preferred Common Preferred Preferred Due Date
Capital Capital Percentage Percentage Distribution for Preferred
Name Account Account Interest Interest Percentage Distributions
-------------------------- ---------- --------- ---------- ---------- ------------ -------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 3,568 $ 7,408 0.0223% 0.0466% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 3,568 $ 7,408 0.0223% 0.0466% 2.25% 1-29-99
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0233% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0233% 2.25% 1-29-99
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 2,144 $ 4,443 0.0134% 0.0280% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 7,104 $ 14,813 0.0444% 0.0932% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0233% 2.25% 1-29-99
H. ▇▇▇▇ ▇▇▇▇ $ 1,776 $ 3,702 0.0111% 0.0233% 2.25% ▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 17,793 $ 37,025 0.1112% 0.2330% 2.25% 1-29-99
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 7,104 $ 14,813 0.0444% 0.0932% 2.25% ▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $177,868 $679,200 1.1116% 4.2737% 2.25% 1-29-99
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS,
PERCENTAGE INTERESTS AND PREFERRED DISTRIBUTIONS
Initial or
Restated Initial Initial
Common Preferred Common Preferred Preferred Due Date
Capital Capital Percentage Percentage Distribution for Preferred
Name Account Account Interest Interest Percentage Distributions
------------------------ ------------- --------- ---------- ---------- ------------ -------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ -0- $1,564,520 0% 9.8444% 2.25% 01-29-99
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ -0- $ 548,000 0% 3.4482% 2.00% ▇▇-▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 204,000 0% 1.2836% 2.00% 10-29-99(1)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ -0- $ 96,000 0% 0.6041% 2.00% 10-29-99(1)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 100,000 0% 0.6292% 2.00% 10-29-99(1)
Zero Butane Gas, Inc. $ 347,658 $1,490,377 2.17268% 9.3779% 2.00% 04-28-00
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ $ 27,406 $ 109,623 .1713% 0.6898% 2.00% ▇▇-▇▇-▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 20,000 $ -0- .1250% 0% 0%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $ 5,000 $ -0- .03125% 0% 0%
KCEP Ventures II, L.P. $ -0- $2,000,000 0% 12.5846% 2.50% 04-28-00
Country Gas Co. $ -0- $9,000,000 0% 56.6307% 2.25% 07-30-00(1)
Inergy Holdings, LLC $15,374,794 $ -0- 96.08577% 0% 0%
(1) Preferred distribution prorated for initial quarter.
EXHIBIT B
SUMMARY OF CERTAIN TERMS
OF INITIAL PUBLIC OFFERING
Subject to negotiations with underwriters, an initial public offering
will have the features described herein. The Senior Subordinated Units issued
to Country Gas Co. ("Country Gas") and to each of the other holders of Preferred
Interests in Inergy Partners, LLC (the "LLC"), will have a yield equal to (but
subordinated to) the yield on the publicly-traded common units, an indicated
value equal to the initial offering price of the common units and the following
additional components:
1. Generally, the partnership will be required to distribute all
"Available Cash" quarterly;
2. Available cash will be distributed based on the following
priorities:
a. First, to the Common Units (issued to the public) and General
Partner (2%), pro rata, until each has received its minimum quarterly
distribution (MQD) per quarter, plus arrearages (the MQD will be a
fixed amount per unit which will be a basis for the pricing of the
sale of units to the public);
b. Second, to the Senior Subordinated Units and General Partner
(2%), pro rata, until each has received the MQD amount referred to
above;
c. Third, to the Junior Subordinated Units and General Partner
(2%), pro rata, until each has received the MQD amount referred to
above; and
d. Finally, after each unit has received the MQD, available cash
will be distributed proportionately to all units except that the
General Partner will receive incentive distributions after
distributions exceed certain target levels.
3. At the expiration of the subordination period, the subordinated
units will convert to common units on a one-for-one basis and will receive
distributions pro rata with all other common units. The subordination
period is expected to terminate as follows:
a. As to 25% of the subordinated units at the end of three years
so long as certain earnings and distribution levels are met;
b. As to 25% of the subordinated units at the end of four years
so long as earnings and distribution levels are met; and
c. As to the balance of the subordinated units at the end of
five years so long as earnings and distribution levels are met.
4. Distributions from Capital Surplus, defined generally as any
distributions other than from operating samples, will be distributed as
follows:
a. First to all units (including the General Partner) until each
unit has received an amount equal to the initial price to the public;
b. Next, to the holders of common units in the amount of any
arrearages; and
c. Thereafter, all distributions will be treated as if from
operating surplus but with the General Partner receiving the highest
level of incentive distributions.
It is not anticipated that there will be distributions from operating
surplus.
5. Distributions and allocations upon liquidation will be made so as
to, after payments to creditors, return first to the common unitholders
their unrecovered capital plus arrearages, then to return to the senior
subordinated unitholders their unrecovered capital, then to return to the
junior subordinated unitholders their unrecovered capital, then to the
unitholders and the general partners based upon the incentive distribution
proportions, applied on a cumulative basis. Special allocations of gains
or losses for tax purposes may occur upon liquidating events.
6. Generally, the master limited partnership in existence after the
IPO will be governed by the General Partner who has broad powers over the
partnership. The limited partners will generally have no voting rights.
In certain cases, the General Partner may be removed by a vote of the
limited partners.
7. The partnership will be allowed to issue additional common units
in certain non-diluted events. All units will generally be protected in
certain dilutive transactions such as splits, etc.
8. To the extent possible, the transactions involved in issuing the
units shall be designed to avoid income taxes to Country Gas.
9. The holders of common units in the LLC will also receive Senior
Subordinated Units in the master limited partnership. These units will be
subject to the same restrictions on public trading as the units received by
Country Gas.
Other provisions will apply to these units. These provisions may
change to meet the requirements of underwriters, however, these summary terms
are expected to be incorporated into the master limited partnership agreement at
the time of a public offering. The tax consequences of the acquisition,
ownership and disposition of the units are not described in this Exhibit.
AMENDMENT NO. 7 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 7 (the "Amendment") to the Limited Liability
Company Agreement of Inergy Partners, LLC referred to below is made and entered
into as of the 12th day of January, 2001, between Inergy Holdings, LLC, a
Delaware limited liability company (f/k/a Integrated Energy Holdings, LLC)
("Holdings"), Domex, Inc., an Indiana corporation ("Domex"), Investors 300,
Inc., an Indiana corporation ("Investors") and L&L Leasing, Inc., an Indiana
corporation ("L&L Leasing").
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the members of the Employee Investor
Group and Holdings, the members of Inergy Partners, LLC (f/k/a Integrated
Propane Partners, LLC) (the "Company"), entered into that certain Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
September 30, 1998, as amended by Amendment No. 1 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated December 10,
1998, Amendment No. 2 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated August 4, 1999, Amendment No. 3 to
Amended and Restated Limited Liability Company Agreement of Inergy Partners,
LLC, dated September 28, 1999, Amendment No. 4 to Amended and Restated Limited
Liability Company Agreement of Inergy Partners, LLC, dated December 31, 1999,
Amendment No. 5 to Amended and Restated Limited Liability Company Agreement of
Inergy Partners, LLC, dated January 1, 2000, and Amendment No. 6 to Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated May
31, 2000 (the "LLC Agreement"); and
WHEREAS, Holdings, as the Voting Member Majority, desires to amend
certain provisions of the LLC Agreement on and subject to the terms hereof, to
reflect the issuance of a Class A Preferred Interest in the Company to each of
Domex, Investors 300 and L&L Leasing pursuant to that certain Asset Purchase
Agreement, dated September 8, 2000 among the Company, Domex, Investors, L&L
Leasing, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as amended
(the "Asset Purchase Agreement").
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, Holdings, Domex, Investors and L&L Leasing do hereby promise
and agree as follows (all capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the LLC Agreement):
1. Domex, Investors and L&L Leasing are each hereby issued a Class A
Preferred Interest in the Company as provided in the Asset Purchase Agreement
and Domex, Investors and L&L leasing are each admitted as Class A Preferred
Members of the Company, with all of the rights and obligations assigned to a
Class A Preferred Member pursuant to, and subject to all provisions and
limitations set forth in, the LLC Agreement. Domex, Investors and L&L Leasing
hereby confirm and agree to comply with, and be bound by, all of the terms and
conditions of the LLC Agreement.
Exhibit A and Schedule A to the LLC Agreement are hereby amended by
deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of Preferred Percentage Interests, and Preferred
Distribution Percentages, resulting from the admission of Domex, Investors and
L&L Leasing as Class A Preferred Members and to reflect the deemed initial
balance in the Preferred Capital Account of each of Domex, Investors and L&L
Leasing.
2. It is the Company's intention to arrange for the organization of a
master limited partnership (the "MLP") that will be the successor to the
Company's business and assets and thereafter effect a public offering of units
of the MLP (the "IPO") in a manner similar to public offerings made by publicly
traded master limited partnerships that are engaged in the distribution and sale
of propane. Notwithstanding anything contained in Section 4.12 of the LLC
Agreement to the contrary, in the event the Company effects the IPO, Domex,
Investors and L&L Leasing hereby agree to immediately exchange their Class A
Preferred Interests in the Company for subordinated units in the MLP, pursuant
to which all rights and privileges of the Class A Preferred Interest in the
Company held by Domex, Investors or L&L Leasing shall be exchanged for all
rights and privileges of the subordinated units of the MLP. The subordinated
units are expected to have the rights and privileges of the Senior Subordinated
Units described on Exhibit B attached hereto and made a part hereof.
3. Except as expressly amended hereby, all of the terms, conditions
and provisions of the LLC Agreement shall remain unamended and in full force and
effect in accordance with its terms, and the LLC Agreement, as amended hereby,
is hereby ratified and confirmed. The amendments provided herein shall be
limited precisely as drafted and shall not constitute an amendment of any other
term, condition or provision of the LLC Agreement.
4. References in the LLC Agreement to "Agreement", "hereof", "herein"
and words of similar impact shall be deemed to be a reference to the LLC
Agreement as amended by this Amendment.
5. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
[End of Page]
2
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment and affixed their signatures hereto as of the date first above
written.
INERGY HOLDINGS, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Voting Member
DOMEX, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
INVESTORS 300, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
L&L LEASING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
3
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP,
INITIAL OR RESTATED CAPITAL ACCOUNTS, PERCENTAGE INTERESTS,
AND PREFERRED DISTRIBUTIONS
Initial or
Restated Initial Initial
Common Preferred Common Preferred Preferred Due Date
Capital Capital Percentage Percentage Distribution for Preferred
Name Account Account Interest Interest Percentage Distribution
---- ------- --------- --------- -------- ---------- -------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 3,569 $ 7,408 0.0223% 0.0319% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 3,569 $ 7,408 0.0223% 0.0319% 2.25% 1-29-99
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 1,777 $ 3,702 0.0111% 0.0159% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 1,777 $ 3,702 0.0111% 0.0159% 2.25% 1-29-99
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ 2,145 $ 4,443 0.0134% 0.0191% 2.25% 1-29-99
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 7,122 $ 14,813 0.0445% 0.0637% 2.25% 1-29-99
H. ▇▇▇▇ ▇▇▇▇ $ 1,777 $ 3,702 0.0111% 0.0159% 2.25% 1-29-99
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 7,122 $ 14,813 0.0445% 0.0637% 2.25% ▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $178,141 $679,200 1.1130% 2.9208% 2.25% 1-29-99
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS,
PERCENTAGE INTERESTS AND PREFERRED DISTRIBUTIONS
Initial or
Restated Initial Initial
Common Preferred Common Preferred Preferred Due Date
Capital Capital Percentage Percentage Distribution for Preferred
Name Account Account Interest Interest Percentage Distribution
---- ------- --------- --------- -------- ---------- -------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $ -0- $1,564,520 0% 6.7280% 2.25% 01-29-99
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ -0- $ 548,000 0% 2.3566% 2.00% ▇▇-▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 204,000 0% 0.8773% 2.00% 10-29-99(1)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ -0- $ 96,000 0% 0.4128% 2.00% 10-29-99(1)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. $ -0- $ 100,000 0% 0.4300% 2.00% 10-29-99(1)
Zero Butane Gas, Inc. $ 348,167 $1,490,377 2.1753% 6.4092% 2.00% 04-28-00
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ $ 27,449 $ 109,623 .1715% 0.4714% 2.00% ▇▇-▇▇-▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $ 20,039 $ -0- .1252% 0% 0%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $ 5,006 $ -0- .0313% 0% 0%
KCEP Ventures II, L.P. $ -0- $2,000,000 0% 8.6008% 2.50% 04-28-00
Country Gas Company, $ -0- $9,000,000 0% 38.7034% 2.25% 07-30-00(1)
Inc.
Domex, Inc. $ -0- $ 962,264 0% 4.1381% 2.25% 04-30-01(1)
Investors 300, Inc. $ -0- $4,367,199 0% 18.7806% 2.25% 04-30-01(1)
L&L Leasing, Inc. $ -0- $2,072,569 0% 8.9128% 2.25% 04-30-01(1)
Inergy Holdings, LLC $15,397,750 $ -0- 96.2034% 0% 0%
(1) Preferred distribution prorated for initial quarter.
EXHIBIT B
SUBORDINATED UNITS
Subject to negotiations with underwriters, an initial public offering
will have the features described herein. The Subordinated Units issued to
Domex, Inc., Investors 300, Inc. and L&L Leasing, Inc. and to each of the other
holders of Preferred Interests in Inergy Partners, LLC (the "LLC"), will have a
yield equal to (but subordinated to) the yield on the publicly-traded common
units, an indicated value equal to the initial offering price of the common
units and the following additional components:
1. Generally, the partnership will be required to distribute all "Available
Cash" quarterly;
2. Available cash will be distributed based on the following priorities:
a. First, to the Common Units (issued to the public) and General Partner
(2%), pro rata, until each has received its minimum quarterly distribution (MQD)
per quarter, plus arrearages (the MQD will be a fixed amount per unit which will
be a basis for the pricing of the sale of units to the public);
b. Second, to the Subordinated Units and General Partner (2%), pro rata,
until each has received the MQD amount referred to above; and
c. Finally, after each unit has received the MQD, available cash will be
distributed proportionately to all units except that the General Partner will
receive incentive distributions after distributions exceed certain target
levels.
3. At the expiration of the subordination period, the subordinated units will
convert to common units on a one-for-one basis and will receive distributions
pro rata with all other common units. The subordination period is expected to
terminate as follows:
a. As to 25% of the subordinated units at the end of three years so long as
certain earnings and distribution levels are met;
b. As to 25% of the subordinated units at the end of four years so long as
earnings and distribution levels are met; and
c. As to the balance of the subordinated units at the end of five years so
long as earnings and distribution levels are met.
4. Distributions from Capital Surplus, defined generally as any distributions
other than from operating surplus, will be distributed as follows:
a. First to all units (including the General Partner) until each unit has
received an amount equal to the initial price to the public;
b. Next, to the holders of common units in the amount of any arrearages; and
c. Thereafter, all distributions will be treated as if from operating surplus
but with the General Partner receiving the highest level of incentive
distributions.
It is not anticipated that there will be distributions from operating surplus.
5. Distributions and allocations upon liquidation will be made so as to, after
payments to creditors, return first to the common unitholders their unrecovered
capital plus arrearages, then to return to the senior subordinated unitholders
their unrecovered capital, then to return to the junior subordinated unitholders
their unrecovered capital, then to the unitholders and the general partners
based upon the incentive distribution proportions, applied on a cumulative
basis. Special allocations of gains or losses for tax purposes may occur upon
liquidating events.
6. Generally, the master limited partnership in existence after the IPO will
be governed by the General Partner who has broad powers over the partnership.
The limited partners will generally have no voting rights. In certain cases, the
General Partner may be removed by a vote of the limited partners.
7. The partnership will be allowed to issue additional common units in certain
non-dilutive events. All units will generally be protected in certain dilutive
transactions such as splits, etc.
8. To the extent possible, the transactions involved in issuing the units
shall be designed to avoid income taxes to Domex, Inc., Investors 300, Inc. and
L&L Leasing, Inc.
9. The holders of common units in the LLC will also receive Subordinated Units
in the master limited partnership. These units will be subject to the same
restrictions on public trading as the units received by Domex, Inc., Investors
300, Inc. and L&L Leasing, Inc.
Other provisions will apply to these units. These provisions may change to meet
the requirements of underwriters, however, these summary terms are expected to
be incorporated into the master limited partnership agreement at the time of a
public offering. The tax consequences of the acquisition, ownership and
disposition of the units are not described in this Exhibit.
AMENDMENT NO. 8 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 8 (the "AMENDMENT") to the Limited Liability Company
Agreement of Inergy Partners, LLC referred to below is made and entered into as
of January 12, 2001, by and among Inergy Holdings, LLC, a Delaware limited
liability company (f/k/a Integrated Energy Holdings, LLC) ("HOLDINGS"), and each
of the Investors which are listed on the signature page hereof.
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the members of the Employee Investor Group and
Holdings, which are all of the members of Inergy Partners, LLC (f/k/a Integrated
Propane Partners, LLC) (the "COMPANY"), entered into that certain Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
September 30, 1998, as amended by Amendment No. 1 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated December 10,
1998, Amendment No. 2 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated August 4, 1999, Amendment No. 3 to
Amended and Restated Limited Liability Company Agreement of Inergy Partners,
LLC, dated September 28, 1999, Amendment No. 4 to Amended and Restated Limited
Liability Company Agreement of Inergy Partners, LLC, dated December 31, 1999, as
amended as of even date herewith, Amendment No. 5 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated January 1,
2000, Amendment No. 6 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated May 31, 2000, and Amendment No. 7 to
Amended and Restated Limited Liability Company Agreement of Inergy Partners,
LLC, dated January 12, 2001 (collectively, the "COMPANY'S LLC AGREEMENT");
WHEREAS, Holdings, as the Voting Member Majority (as defined in the
Company's LLC Agreement), desires to amend certain provisions of the Company's
LLC Agreement on and subject to the terms hereof, to reflect the issuance of the
Class A Preferred Interests in the Company to the Investors pursuant to a
Securities Purchase Agreement dated as of January 12, 2001, among the Company
and the Investors and Warrant Investors that are signatories thereto (the
"SECURITIES PURCHASE AGREEMENT").
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, Holdings and the Investors do hereby promise and agree as
follows (all capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Company's LLC Agreement and the
Securities Purchase Agreement):
1. Each Investor is hereby issued a Class A Preferred Interest in the
Company as provided in the Securities Purchase Agreement and each Investor is
admitted as a Class A Preferred Member of the Company, with all of the rights
and obligations assigned to a Class A Preferred Member pursuant to, and subject
to all provisions and limitations set forth in, the Company's LLC Agreement.
Each Investor hereby confirms and agrees to comply with, and be bound by, all of
the terms and conditions of the Company's LLC Agreement.
Exhibit A and Schedule A to the Company's LLC Agreement are hereby amended
by deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of Preferred Percentage Interests resulting from the
admission of each Investor as a Class A Preferred Member and to reflect the
deemed initial balance in the Preferred Capital Account of each Investor.
2. The following definitions are hereby added to Section 1.2 of the
Company's LLC Agreement:
"BOARD OF DIRECTORS" has the meaning set forth in Section 5.1
hereof.
"CASH EVENT" means any transaction or series of related
transactions whereby all or substantially all of the assets of the
Company and its Subsidiaries, taken together, are sold or otherwise
disposed of (other than a sale contemporaneously with and in
contemplation of a Qualified MLP Offering) wherein not less than 85%
of the aggregate proceeds actually received by the Company and its
Subsidiaries at the closing(s) constitutes cash.
"CASH EVENT MULTIPLIER" means a variable number to be multiplied
by the then relevant amount, depending upon when the Cash Event
occurs. For purposes hereof,
THEN THE CASH
IF THE CASH BUT NO LATER EVENT MULTIPLIER
EVENT OCCURS THAN WILL BE
--------------- ------------- -----------------
From Closing Date August 31, 2001 1.6
From September 1, 2001 June 30, 2002 1.7
From July 1, 2002 December 31, 2002 1.8
After January 1, 2003 2.0
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"CONVERSION EVENT" means a Cash Event or an Equity Event, as the
case may be.
"DEEMED GAIN" shall have the meaning set forth in Section 4.7(l).
"DEFAULT" means an event or condition that with the passage of
time or giving of notice, or both, would become (i) an Event of
Default as defined in the Loan Agreement (as defined in the Securities
Purchase Agreement) or (ii) any material breach or material default
under the Securities Purchase Agreement or any of the Related
Agreements (as defined therein).
"DIRECTOR" and "DIRECTORS" have the meanings set forth in Section
5.1.
"EQUITY EVENT" means (1) a Qualified MLP Offering or (2) any
transaction or series of related transactions (including a merger,
consolidation or "stock-for-stock" sale) wherein all or substantially
all of the assets of the Company or not less than 90% of the Common
Percentage Interests held by all Voting Members of the Company are
sold or otherwise disposed of in exchange for voting Equity Securities
representing the common or residual interest in the purchaser thereof
or an Affiliate of such purchaser.
"EQUITY EVENT MULTIPLIER" means a variable number to be
multiplied by the then relevant amount, depending upon when the Equity
Event occurs. For purposes hereof,
THEN THE EQUITY
IF THE EQUITY BUT NO LATER EVENT MULTIPLIER
EVENT OCCURS THAN WILL BE
------------- ---------------- ----------------
From Closing Date August 31, 2001 1.4
From September 1, 2001 December 31, 2001 1.5
From January 1, 2002 June 30, 2002 1.6
From July 1, 2002 December 31, 2002 1.7
From January 1, 2003 December 31, 2004 1.8
At any time from and 2.0
after January 1, 2005
"EVENT OF DEFAULT" means (i) an Event of Default as defined in
the Loan Agreement (as defined in the Securities Purchase Agreement)
or (ii) any material breach or material default under the Securities
Purchase Agreement or any of the
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Related Agreements (as defined therein) (after giving effect to any
provisions herein or therein expressly regarding the giving of notice,
passage of time or both).
"INDEPENDENT DIRECTOR" has the meaning set forth in Section 5.1.
"INVESTOR" means each of the Investors that are signatory to the
Securities Purchase Agreement or any Substitute Member with respect to
any Investor.
"INVESTOR DIRECTOR" has the meaning set forth in Section 5.1.
"JOINDER AGREEMENT" shall have the meaning set forth in the
Securities Purchase Agreement.
"KCEP" means KCEP Ventures II, L.P., a Missouri limited
partnership.
"KCEP 1999 INTERESTS" mean the Class A Preferred Interests as
purchased by KCEP on December 31, 1999 as reflected on Amendment No. 4
to the Company's LLC Agreement dated December 31, 1999, as amended as
of even date herewith.
"KCEP DIRECTOR" has the meaning set forth in Section 5.1.
"KCEP MULTIPLIER" means, at any time at which a Conversion Event
occurs, the number 2.25.
"LIQUIDITY EVENT" means any transaction or series of transactions
resulting in (i) the sale or lease all or substantially all of the
assets and properties of the Company or its Subsidiaries, (ii) the
sale more than 50% of the Equity Securities (calculated based on the
total of the Common Capital Accounts, adjusted pursuant to Section
3.5(b) hereof, and the Preferred Capital Accounts as of the date of
such transaction or series of transactions) or voting membership
interests of the Company or its Subsidiaries (other than pursuant to a
Qualified MLP Offering), (iii) a merger or consolidation of the
Company or its Subsidiaries with another Person or Persons (whether or
not the Company is the surviving or resulting entity thereof), (iv) a
liquidation, dissolution or termination of the Company, or (v) a
Qualified MLP Offering.
"MAJORITY INVESTORS" shall have the meaning set forth in the
Securities Purchase Agreement.
"QUALIFIED MLP OFFERING" shall have the meaning set forth in the
Securities Purchase Agreement.
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"REPRESENTATIVE" shall be one or more Persons, designated by
written notice from the Voting Member Majority to the other Voting
Members, through which the Voting Member Majority may act.
"SECURITIES PURCHASE AGREEMENT" means that certain Securities
Purchase Agreement dated as of January 12, 2001, by and among the
Company and the Investors and Warrant Investors that are signatories
thereto.
"SUBSIDIARIES" shall have the meaning set forth in the Securities
Purchase Agreement.
"WARRANT" shall have the meaning set forth in the Securities
Purchase Agreement.
"WARRANT INVESTOR" means each of the Warrant Investors that are
signatory to the Securities Purchase Agreement.
"WARRANT INVESTOR AMENDMENT TO LLC AGREEMENT" shall have the
meaning set forth in the Securities Purchase Agreement.
3. Section 4.2 of the Company's LLC Agreement is hereby amended by
deleting said Section 4.2 in its entirety and by substituting the following new
Section 4.2 in lieu thereof:
4.2 Preferred Distributions. On or before the last Business Day of
each month immediately following the end of each calendar quarter (a
"Due Date"), commencing with the calendar quarter ending December 31,
1998, the Company shall distribute cash to each Class A Preferred
Member in an amount equal to the initial balance in such Class A
Preferred Member's Preferred Capital Account multiplied by such Class
A Preferred Member's preferred distribution percentage (each such
distribution is hereinafter referred to as a "Preferred
Distribution"), and commencing as of such Class A Preferred Member's
initial Due Date, as reflected on Exhibit A and Schedule A attached
hereto, provided, that at all times during which a Default has
occurred and remains in effect and has not been waived in writing by
the Majority Investors, then the preferred distribution percentage
for the Class A Preferred Interests held by the Investors shall
automatically be adjusted to equal 3.25%; and provided, further, that
at all times during which an Event of Default has occurred and remains
in effect and has not been waived in writing by the Majority
Investors, then the preferred distribution percentage for the Class A
Preferred Interests held by the Investors shall automatically be
adjusted to equal 3.75%. Notwithstanding the immediately preceding
sentence, no Preferred Distribution shall be required if such
distribution would, as reasonably determined by the Board of
Directors, cause a default under any agreement or covenant between a
bank or other lending institution and any one of the Company or the
Operating Companies (any such limitation that precludes payment of a
Preferred Distribution being referred to as the "Limitation"). In the
event any Preferred Distribution, or portion thereof, is not made with
respect to a
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calendar quarter, such Preferred Distribution, or portion thereof,
(the "Accrued Preferred Distribution"), shall accumulate and be
payable at such time as the Limitation no longer prevents payment. In
addition, with respect to any such Accrued Preferred Distribution
there shall be payable an amount equal to (A) times (B) times (C),
where (A) equals such Accrued Preferred Distribution, (B) equals a
percentage equal to the higher of the Company's cost of funds or the
cost of funds of any of the Operating Companies, and (C) equals a
fraction, the numerator of which is the number of days since the Due
Date of such Accrued Preferred Distribution or the most recent
anniversary thereof, and the denominator of which is 365 (such
additional amount and any unpaid portion thereof is hereinafter
referred to as the "Arrearage"). If any Arrearage is not paid by an
anniversary Due Date of the related Accrued Preferred Distribution,
then such Arrearage shall be added to and become a part of the Accrued
Preferred Distribution as of such anniversary date and shall no longer
be an "Arrearage" hereunder. All payments made pursuant to this
Section 4.2 shall be applied first to any Arrearage and then to the
Accrued Preferred Distribution. Each Preferred Distribution is
intended to be and shall be treated as a distribution to the Member in
its capacity as a Member, and not as a guaranteed payment under
section 707(c) of the Code. Accordingly, notwithstanding any other
provision herein to the contrary, (i) the Preferred Distributions
shall be applied to reduce each Class A Preferred Members' positive
Preferred Capital Account, which shall result in a net reduction
(taking into account the income allocation under Section 4.6(a)(ii)
hereof) of such Preferred Capital Account equal to the amount of the
excess distribution; and (ii) a Member shall not receive payment of
any part of any Preferred Distribution to the extent that such
Preferred Distribution would cause such Member to have an Adjusted
Capital Account Deficit.
4. A Qualified MLP Offering by the Company or its affiliates through a
master limited partnership structure is contemplated by the Company and the
Investors under the Securities Purchase Agreement. Each Investor's Class A
Preferred Interest will be convertible into, or exchanged for, Senior
Subordinated Units (the "Senior Units") of a master limited partnership ("MLP")
that is the subject of a Qualified MLP Offering, which conversion or exchange
(the "Conversion") shall occur upon the closing of such Qualified MLP Offering.
To provide for certain deemed gain allocations upon the Conversion or the
occurrence of a Cash Event or Equity Event prior to the Qualified MLP Offering,
Section 4.7(l) of the Company's LLC Agreement is hereby amended by deleting such
section in its entirety and by substituting the following new Section 4.7(l) in
lieu thereof, and new Sections 4.7(m) and 4.7(n) are hereby added to the
Company's LLC Agreement:
4.7(l) Deemed Gain Allocation for KCEP 1999 Interests.
Notwithstanding any other provision herein to the contrary, in the
event of a Conversion Event and to the extent that the revaluation of
the Property under Section 3.5(b) hereof will produce a positive
aggregate net adjustment to the book basis of the Property as if the
Company recognized gain equal to such aggregate net adjustment (the
"Deemed Gain"), then (i) the Preferred Capital Account of
6
KCEP or its permitted transferee with respect to the KCEP 1999
Interests at the time of the Closing of such Conversion Event shall be
allocated an amount of Deemed Gain that would increase the Preferred
Capital Account with respect to the KCEP 1999 Interests to an amount
equal to (A) the product of the amount referred to in Section
9.5(a)(i) of that certain Securities Purchase Agreement dated December
31, 1999 (as amended as of January 12, 2001 by the Securities Purchase
Agreement, as defined herein), between the Company and KCEP, times (B)
the KCEP 1999 Multiplier; and (ii) such amount shall reduce the amount
of Deemed Gain that would otherwise be allocated to the Common Capital
Accounts under Section 3.5(b) at such time. If the Conversion Event is
a Qualified MLP Offering, the Preferred Capital Account with respect
to the KCEP 1999 Interests, as adjusted, would then be exchanged in
the Qualified MLP Offering for Senior Units of the MLP (priced to
yield the same amount as the publicly traded Common Units included in
the Qualified MLP Offering). The Company and KCEP contemplate that the
Senior Units will be junior in payment terms to any publicly traded
units included in the Qualified MLP Offering. The provisions of this
Section 4.7(l) are intended to comply with Treasury Regulation (S)
1.704-1(b)(2)(iv)(f), and, together with the provisions of Section
4.7(a) hereof, shall be limited, interpreted, and applied in a manner
consistent with such Regulation.
4.7(m) Deemed Gain Allocation for Interests, Other than the KCEP
1999 Interests, Held by the Investors. Notwithstanding any other
provision herein to the contrary, in the event of a Conversion Event
at a time during which an Investor or its permitted assignee owns a
Class A Preferred Interest in the Company other than the KCEP 1999
Interests, and to the extent that the revaluation of the Property
under Section 3.5(b) hereof will produce Deemed Gain, the Preferred
Capital Account of each such Investor or permitted transferee at such
time shall be adjusted, in lieu of any other allocation of gain under
this Agreement, as follows:
(a) if the Conversion Event is a Cash Event, then (i) at the
time of the Closing of such Cash Event the Preferred Capital Account
of each Investor (or permitted transferee) shall be allocated an
amount of Deemed Gain that would increase such Investor's (or
transferee's) Preferred Capital Account to an amount equal to the
product of the amount referred to in Section 9.5(a)(i) of the
Securities Purchase Agreement times the Cash Event Multiplier, and
(ii) such amount shall reduce the amount of Deemed Gain that would
otherwise be allocated to the Common Capital Accounts under Section
3.5(b) at such time; provided, that for purposes of this Section
4.7(m) no such adjustment shall be made to the KCEP 1999 Interests and
instead such adjustments to such interests shall be governed by
Section 4.7(l) hereof.
(b) if the Conversion Event is an Equity Event, then (i) at
the time of the Closing of such Equity Event the Preferred Capital
Account of each Investor (or permitted transferee) shall be allocated
an amount of Deemed Gain
7
that would increase such Investor's (or transferee's) Preferred
Capital Account to an amount equal to the product of the amount
referred to in Section 9.5(a)(i) of the Securities Purchase Agreement
times the Equity Event Multiplier, and (ii) such amount shall reduce
the amount of Deemed Gain that would otherwise be allocated to Common
Capital Accounts under Section 3.5(b) at such time; provided, that for
purposes of this Section 4.7(m) no such adjustment shall be made to
the KCEP 1999 Interests and instead such adjustments to such interests
shall be governed by Section 4.7(l) hereof.
If the Conversion Event is a Qualified MLP Offering, each Investor's
Preferred Capital Account, as adjusted (except for the KCEP 1999
Interests, which shall be adjusted pursuant to Section 4.7(l)), would
then be exchanged in the Qualified MLP Offering for Senior Units of
the MLP (priced to yield the same amount as the publicly traded Common
Units included in the Qualified MLP Offering). The Company and the
Investors contemplate that the Senior Units will be junior in payment
terms to any publicly traded units included in the Qualified MLP
Offering. The provisions of this Section 4.7(m) are intended to
comply with Treasury Regulation (S) 1.704-1(b)(2)(iv)(f), and,
together with the provisions of Section 4.7(a) hereof, shall be
limited, interpreted, and applied in a manner consistent with such
Regulation.
4.7(n) Allocation of Insufficient Deemed Gain. To the extent
that the amount of Deemed Gain is not sufficient to fully adjust all
Investors' Preferred Capital Accounts as described in Section 4.7(l)
and 4.7(m), the available Deemed Gain shall be allocated on a pro rata
basis among the Investors' Preferred Capital Accounts, with each
Investor's pro rata portion determined by the percentage that such
Investor's Preferred Capital Account represents as compared with the
total of all Investor's Preferred Capital Accounts, in each case
adjusted pursuant to Sections 4.7(l) and 4.7(m) as though the amount
of Deemed Gain is sufficient to fully adjust all of the Investor's
Preferred Capital Accounts.
5. Notwithstanding any provision of the Company's LLC Agreement to the
contrary, the Company may, at its election, retain all or a portion of any
regularly scheduled quarterly Distributions that are payable by the Company to
the Investors pursuant to Section 4.2 of this Agreement for one (1), but not
more than one (1), of the calendar quarters ending on September 30, 2001,
December 31, 2002, March 31, 2002 or June 30, 2002; provided, that the payment
of regularly scheduled quarterly distributions on the KCEP 1999 Interests shall
be governed by Section 4 of Amendment No. 4 to the Company's LLC Agreement dated
December 31, 1999; and provided further, that each Investor's Preferred Capital
Account shall be increased in an amount equal to the amount of any such retained
Distributions, which increase in each Investor's Preferred Capital Account shall
constitute full satisfaction of any obligations of the Company to each Investor
in regard to such retained Distributions.
6. Sections 5.1, 5.2, 5.3, 5.9(a), 5.10, 5.11, 5.14, 5.15, 5.16, 5.17, and
5.18 of the Company's LLC Agreement are amended by deleting such sections in
their entirety and by
8
substituting the following new sections in lieu thereof, to be effective
immediately following the Closing, as defined in the Securities Purchase
Agreement, without any further action on the part of the parties hereto or the
Company:
5.1 Management and Board of Directors. Except as otherwise expressly
set forth herein, the business and affairs of the Company shall be
managed by a board of directors (the "Board of Directors") to the
fullest extent allowed under the laws of the State of Delaware,
subject to the following terms and conditions:
(a) Number; Qualifications; Designation.
(i) Initially, the Board of Directors shall consist of five
members. Directors need not be Members. At each annual meeting of
the members of the Company, or at each special meeting of the members
of the Company involving the election of directors of the Company, and
at any other time at which members of the Company will have the right
to or will vote for or render consent in writing regarding the
election of directors of the Company, before and after a Qualified MLP
Offering, then and in each event, the Voting Majority Member and the
Investors hereby covenant and agree to vote all voting membership
interests of the Company presently owned or hereafter acquired by them
(whether owned of record or over which any person exercises voting
control) in favor of the following actions:
(A) to fix and maintain the number of directors
(individually a "Director" and collectively, "Directors") including
any increase in the size of the Board of Directors instituted by the
Voting Member Majority and including such number of Directors
consisting of representatives who are not Affiliates of or employed by
the Investors, the Company or the Voting Member Majority (individually
an "Independent Director" and collectively, "Independent Directors")
as may be required by applicable law or applicable rules of a stock
exchange or national market quotation system following the Qualified
MLP Offering; and
(B) initially to fix the Board of Directors at five (5)
Directors, and to cause and maintain the election to the Board of
Directors of the Company of (a) one (1) Director designated by the
Majority Investors, who shall initially be ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (the
"Investor Director"), (b) one (1) Director designated by KCEP, who
shall initially be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "KCEP Director"), (c) one
Independent Director, who shall initially be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and
(d) two remaining Directors designated by the Voting Member Majority,
who shall initially be ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(ii) None of the parties entitled to designate Directors
hereunder shall vote to remove either the entire Board of Directors,
the
9
Independent Directors or any other Director designated by any other
party or group of Members pursuant hereto, without the express prior
written consent of the party entitled to so designate such Director.
Upon prior written notice to the Board of Directors, a party entitled
to designate a Director may also remove such Director at any time with
or without cause and designate a replacement Director. Each of the
parties hereto shall vote or cause to be voted all shares owned by it
or over which it has voting control (i) to remove from the Board of
Directors any Director designated by any party pursuant hereto at the
request of such party, and (ii) to fill any vacancy in the membership
of the Board of Directors with a designee of the party whose
designee's resignation or removal from the Board of Directors caused
such vacancy.
(iii) Upon the completion of a Qualified MLP Offering, (i)
the Majority Investors shall have the right to designate one Director
to the board of directors or other governing body which governs the
business and affairs of the master limited partnership and the
operating limited partnership to be formed pursuant to such Qualified
MLP Offering until such time as 25% or more of the senior subordinated
limited partnership units of the master limited partnership held by
the Investors after the Qualified MLP Offering are no longer subject
to any subordination period under the Qualified MLP Offering and (ii)
KCEP shall have the right to designate one Director to the board of
directors or other governing body which governs the business and
affairs of the master limited partnership and the operating limited
partnership to be formed pursuant to such Qualified MLP Offering until
such time as 50% or more of the senior subordinated limited
partnership units of the master limited partnership held by KCEP after
the Qualified MLP Offering are no longer subject to any subordination
period under the Qualified MLP Offering, at the later of which time
the provisions of this Section shall terminate and be of no further
force or effect.
(iv) The Company shall provide to each party entitled to
designate Directors hereunder prior written notice of any intended
mailing of notice to members for a meeting at which Directors are to
be elected, and any party entitled to designate Directors pursuant
hereto shall notify the Company in writing, prior to such meeting, of
the person(s) designated by it or them as its or their nominee(s) for
election as Director(s).
(v) If any party entitled to designate Directors hereunder
fails to give notice to the Company as provided above, it shall be
deemed that the designee of such party then serving as Director shall
be its designee for reelection.
(vi) The Investor Director shall be designated by the
Majority Investors and the KCEP Director shall be designated by KCEP.
Any Independent Director shall be designated by the Voting Member
Majority with the approval of Majority Investors, which approval shall
not be unreasonably
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withheld. The Voting Member Majority shall have the exclusive right to
increase the size of the Board of Directors beyond its initial five
members, and to designate all Directors other than the KCEP Director
and the Investor Director and, subject to the provisions hereof, to
designate the Independent Director.
(vii) Until a Qualified MLP Offering, as long as any
Investor owns not less than one percent (1%) of the Class A Preferred
Interests it is purchasing under the Securities Purchase Agreement,
the Company shall invite a representative of each such Investor to
attend all meetings of its Board of Directors in a nonvoting-observer
capacity and, in this respect, shall give such representative copies
of all notices, minutes, consents and other materials it provides to
its directors; provided, however, that such representative shall agree
to hold in confidence and trust all information so provided. The
Company shall reimburse such representatives for all reasonable out-
of-pocket travel and other expenses actually incurred to attend
meetings of the Company's Board of Directors; provided, that for Board
of Directors meeting held in the Kansas City, Missouri, metropolitan
area, the Company shall be required to reimburse such expenses only
for the representative of each Investor that, together with all of
such Investor's Affiliates, holds Class A Preferred Interests having a
Preferred Capital Account equal to or greater than $2,000,000.
(b) Election; Resignation; Vacancies. The Board of Directors shall
be elected at each annual meeting of Voting Members and each director
shall hold office for a term of one (1) year or until his or her
successor is elected and qualified. Any director may resign at any
time upon written notice to the Company. Any newly created
directorship or any vacancy occurring in the Board of Directors for
any cause shall only be filled by the person or persons entitled
hereunder to designate a Director to such vacancy, and each director
so elected shall hold office until the expiration of the term of
office of the director whom he or she has replaced or until his or her
successor is elected and qualified.
(c) Regular Meetings. Board meetings shall be held not less
frequently than quarterly. Regular quarterly meetings of the Board of
Directors may be held at such places within or without the State of
Delaware and at such times as the Board of Directors may from time to
time determine, and if so determined, notices thereof need not be
given.
(d) Special Meetings. Special meetings of the Board of Directors
may be held at any time or place within or without the State of
Delaware whenever called by the Voting Member Majority or by any two
members of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given to each director in person, by
telephone, or in writing by the person or persons calling the meeting
at least twenty-four (24) hours (in the case of notice in person or by
telephone or facsimile) or forty-eight (48) hours (in
11
the case of notice by telegram) or three (3) days (in the case of
notice by mail) before the time at which the meeting is to be held.
(e) Telephonic Meetings Permitted. Members of the Board of
Directors may participate in a meeting thereof by means of conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section 5.1 shall
constitute presence in person at such meeting.
(f) Quorum; Vote Required for Action. At all meetings of
the Board of Directors a majority of the whole Board of Directors
shall constitute a quorum for the transaction of business; provided
that ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or his wife or personal representative shall also
be present at such meeting. Except in cases in which applicable law
or this Agreement otherwise provide, the vote of a majority of the
directors present at a meeting at which a quorum is present shall be
the act of the Board of Directors; provided that ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or
his wife or personal representative shall also be present at such
meeting.
(g) Organization. Meetings of the Board of Directors shall
be presided over by the Chairman of the Board, if any, or in his or
her absence by the Vice Chairman of the Board, if any, or in his or
her absence by the Chief Executive Officer, or in their absence by a
chairman chosen at the meeting. The Secretary shall act as secretary
of the meeting, but in his or her absence the chairman of the meeting
may appoint any person to act as secretary of the meeting. The
initial Chairman of the Board shall be ▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
(h) Action by Written Consent of Directors. Unless otherwise
restricted by applicable law or this Agreement, any action required or
permitted to be taken at any meeting of the Board of Directors, or of
any committee thereof, may be taken without a meeting if all members
of the Board of Directors or such committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board of Directors or such
committee.
(i) Committees. The Company shall not have any executive or
similar committee of the Board of Directors unless the designees of
the Voting Member Majority, the KCEP Director and the Investor
Director consent in writing to the formation of such committee. The
Board of Directors may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or
disqualification of a member of the committee, the member or members
thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in
place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in
12
the resolution of the Board of Directors, shall have and may exercise
all the powers and authority of the Board of Directors in the
management of the business and affairs of the Company and may
authorize the seal of the Company to be affixed to all pages that may
require it.
(j) Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may
make, alter, and repeal rules for the conduct of its business. In the
absence of such rules each committee shall conduct its business in the
same manner as the Board of Directors conducts its business pursuant
to this Section 5.1.
(k) Board Compensation. The Company may compensate members
of the Board of Directors for their service on the Board of Directors,
and may reimburse members of the Board of Directors for their
reasonable travel and other expenses incurred in connection with such
service, pursuant to policies that may be established by the Board of
Directors from time to time.
(l) Voting Member Majority. Except as set forth in the
following sentence, the terms "Voting Member Majority," "Voting
Members" and "Voting Member" shall be deemed to be deleted everywhere
they appear in this Agreement including, without limitation, in the
following Sections of this Agreement, and inserted in lieu thereof
shall be the term "Board of Directors": 2.1(a) and (b), 2.3, 2.4, 2.5,
3.3(b), 3.4(iv), 3.7, 4.3, 4.5, 4.7(h) and (j), 4.8, 4.10, 4.11, 6.1,
6.2, 6.5 and 6.6 and Articles VII, VIII and IX. The terms "Voting
Member Majority," "Voting Members" and "Voting Member" as they appear
in Sections 3.2 and Article V of this Agreement shall continue in full
force and effect. It is expressly understood and agreed that prior
written approval of any Liquidity Event shall be required by both the
Board of Directors and the Voting Member Majority; provided that, if a
Default or Event of Default has occurred and remains in effect and has
not been waived in writing by the Majority Investors, a Liquidity
Event as described in subparts (i)-(iv) of the definition thereof
shall not require the approval of the Voting Member Majority or any
other Voting Members.
5.2 Voting. Except for the right granted to KCEP and the Investors
to designate Directors under Section 5.1, all Class A Preferred
Members shall be Non-Voting Members to the extent of their Class A
Preferred Interests. All Common Members, other than members of the
Employee Investor Group and other than Common Members that agree that
they shall be Non-Voting Members, shall be Voting Members to the
extent of their Common Interests. All members of the Employee Investor
Group shall be Non-Voting Members to the extent of both their Class A
Preferred Interests and their Common Interests. The Voting Members
shall be entitled to vote, in person or by proxy, on all matters
requiring a vote of the Voting Members under the express terms of this
Agreement. Each Voting Member shall vote according to their respective
Common Percentage
13
Interests in the Company. Upon the Transfer of an Interest pursuant to
the terms of this Agreement, each Interest shall retain any and all
voting rights associated therewith.
5.3 Officers. With the written consent of the designees of the
Voting Member Majority, the KCEP Director and the Investor Director,
the Board of Directors may delegate its powers and authority under
this Agreement in whole or in part (i) to one or more officers of the
Company as the Board of Directors deems appropriate, which officers
shall have such power and authority as the Board of Directors deems
appropriate; or (ii) to one or more Members of the Company as the
Board of Directors deems appropriate, which Members shall have such
power and authority as the Board of Directors deems appropriate.
5.9 (a) The "Company" shall include, in addition to the resulting or
surviving limited liability company, any constituent limited liability
company (including any constituent of a constituent) absorbed in a
consolidation or merger so that any Person who is or was a manager,
director, or officer of such constituent limited liability company, or
is or was serving at the request of such constituent limited liability
company as a director, officer or in any other comparable position of
any Other Enterprise shall stand in the same position under the
provisions of this Article V with respect to the resulting or
surviving limited liability company as such Person would if such
Person had served the resulting or surviving limited liability company
in the same capacity;
5.10 Limitation of Liability. No Person shall be liable to the
Company or its Members for any loss, damage, liability or expense
suffered by the Company or its Members on account of any action taken
or omitted to be taken by such Person as a director or an officer of
the Company or as a Representative or by such Person while serving at
the request of the Company as a director, officer or in any other
comparable position of any Other Enterprise, if such Person discharges
such Person's duties in good faith, and in a manner such Person
reasonably believes to be in or not opposed to the best interests of
the Company. The liability of a director or an officer or
Representative hereunder shall be limited only for those actions taken
or omitted to be taken by such Person in the discharge of such
Person's obligations in connection with the management of the business
and affairs of the Company or any Other Enterprise. The foregoing
limitation of liability shall apply to all directors, officers and to
all Persons who serve as a Representative at any time.
5.11 Right to Indemnification. The Company shall indemnify each
Person who has been or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, investigative or appellate
(regardless of whether such action, suit or proceeding is by or in the
right of the Company or by third parties) by reason of the fact that
such Person is or was a Voting Member of the
14
Company, a director or an officer of the Company, a Representative or
is or was serving at the request of the Company as a director, officer
or in any other comparable position of any Other Enterprise, against
all liabilities and expenses, including, without limitation,
judgments, amounts paid in settlement, attorneys' fees, ERISA excise
taxes or penalties, fines and other expenses, actually and reasonably
incurred by such Person in connection with such action, suit or
proceeding (including, without limitation, the investigation, defense,
settlement or appeal of such action, suit or proceeding); provided,
however, that the Company shall not be required to indemnify or
advance expenses to any Person on account of such Person's conduct
that was finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct; provided, further, that
the Company shall not be required to indemnify or advance expenses to
any Person in connection with an action, suit or proceeding initiated
by such Person unless the initiation of such action, suit or
proceeding was authorized in advance by the Board of Directors;
provided, however, that a director or an officer or Representative
shall be indemnified hereunder only for those actions taken or omitted
to be taken by such Person in the discharge of such Person's
obligations in connection with the management of the business and
affairs of the Company or any Other Enterprise. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction
or under a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that such Person's conduct was finally
adjudged to have been knowingly fraudulent, deliberately dishonest or
willful misconduct. The foregoing right to indemnification shall apply
to all Persons serving as directors or officers and to all Persons who
serve as a Representative at any time or who serve at any time at the
request of the Company as a director, officer or in any other
comparable position of any Other Enterprise. Nothing herein prevents
any Member from indemnifying its representatives or directors or
officers under such Member's organizational documents or other
agreements. If any Person is entitled to indemnification both from the
Company and from a Member, then indemnification would come first from
the Company and thereafter from the Member.
5.14 Non-Exclusivity. The indemnification and advancement of
expenses provided by this Article V shall not be exclusive of any
other rights to which those seeking indemnification or advancement of
expenses may be entitled under any statute, or any agreement, vote of
the Board of Directors or Voting Members, policy of insurance or
otherwise, both as to action in their official capacity and as to
action in another capacity while holding their respective offices, and
shall not limit in any way any right that the Company may have to make
additional indemnifications with respect to the same or different
Persons or classes of Persons. The indemnification and advancement of
expenses provided by, or granted pursuant to, this Article V shall
continue as to a Person who has ceased to be a director or an officer
of the Company, a Representative or a Person eligible for designation
as a Representative and as to a Person who has ceased serving at the
request of the Company as a director, officer or in any other
15
comparable position of any Other Enterprise and shall inure to the
benefit of the heirs, executors and administrators of such Person.
5.15 Insurance. The Board of Directors may cause the Company to
purchase and maintain insurance on behalf of any Person who is or was
a director or an officer, agent or employee of the Company or a
Representative or is or was serving at the request of the Company as a
director, officer or in any other comparable position of any Other
Enterprise, against any liability asserted against such Person and
incurred by such Person in any such capacity, or arising out of such
Person's status as such, whether or not the Company would have the
power, or the obligation, to indemnify such Person against such
liability under the provisions of this Article V.
5.16 Amendment and Vesting of Rights. The rights granted or created
hereby shall be vested in each Person entitled to indemnification
hereunder as a bargained-for, contractual condition of such Person's
serving or having served as a director or an officer of the Company or
a Representative or serving at the request of the Company as a
director, officer or in any other comparable position of any Other
Enterprise and, while this Article V may be amended or repealed, no
such amendment or repeal shall release, terminate or adversely affect
the rights of such Person under this Article V with respect to any (a)
act taken or the failure to take any act by such Person prior to such
amendment or repeal, or (b) any action, suit or proceeding concerning
such act or failure to act filed after such amendment or repeal.
5.17 Severability. If any provision of this Article V or the
application of any such provision to any Person or circumstance is
held invalid, illegal or unenforceable for any reason whatsoever, the
remaining provisions of this Article V and the application of such
provision to other Persons or circumstances shall not be affected
thereby and, to the fullest extent possible, the court finding such
provision invalid, illegal or unenforceable shall modify and construe
the provision so as to render it valid and enforceable as against all
Persons and to give the maximum possible protection to Persons subject
to indemnification hereby within the bounds of validity, legality and
enforceability. Without limiting the generality of the foregoing, if
any director or officer of the Company, any Representative or any
Person who is or was serving at the request of the Company as a
director, officer or in any other comparable position of any Other
Enterprise is entitled under any provision of this Article V to
indemnification by the Company for some or a portion of the judgments,
amounts paid in settlement, attorneys' fees, ERISA excise taxes or
penalties, fines or other expenses actually and reasonably incurred by
any such Person in connection with any threatened, pending or
completed action, suit or proceeding (including, without limitation,
the investigation, defense, settlement or appeal of such action, suit
or proceeding), whether civil, criminal, administrative, investigative
or appellate, but not, however, for all of the
16
total amount thereof, the Company shall nevertheless indemnify such
Person for the portion thereof to which such Person is entitled.
5.18 Contracts with Members or their Affiliates. All contracts or
transactions between the Company and one of its Members, directors, or
officers or between the Company and another limited liability company,
corporation, partnership, association or other organization in which a
Member has a financial interest or with which such Member is
affiliated are permissible if such contract or transaction, and such
Member's or officer's interest therein, are fully disclosed to the
Board of Directors and approved by the Board of Directors.
7. Sections 7.4 and 7.5 of the Company's LLC Agreement are hereby amended
by deleting Sections 7.4 and 7.5 in their entirety and by substituting the
following new Sections 7.4 and 7.5 in lieu thereof:
7.4 Third Party Offer to Purchase.
(a) If a third party (a "Proposed Purchaser") makes an offer (the
"Third Party Offer") to purchase the Common Interest of a Member or
Members (each, a "Transferor"), whether such purchase is for cash,
stock or other securities, other property, or a combination thereof,
and such purchase would enable the Proposed Purchaser to acquire, in
one or more transactions, in the aggregate more than 50% of the
outstanding Common Percentage Interests, then such Transferor shall
not accept such Third Party Offer unless the provisions of Section
7.4(b) and (c) are complied with.
(b) Within three (3) Business days after the issuance of the Third
Party Offer to a Transferor, the Proposed Purchaser shall issue in
writing to the other Members an offer (the "Tag-Along Offer"). The
Tag-Along Offer shall specify the name of the Proposed Purchaser, the
amount and type of securities to be purchased by such Proposed
Purchaser (the "Offered Securities"), the amount and type of
consideration offered for such securities, the anticipated closing
date (which shall not be earlier than 30 days from the date of receipt
of the Tag-Along Offer by the other Members), and all of the other
terms and conditions of such proposed sale, and shall offer the other
Members the opportunity whereby such Members, individually, may elect,
within 30 days after receipt of the Tag-Along Offer, one of the
following alternatives:
(i) If a Common Member, to sell any or all of its Common
Interest to the Proposed Purchaser under the same terms and conditions
as the Third Party Offer; or
(ii) If a Class A Preferred Member, to sell any or all of
its Class A Preferred Interest to the Proposed Purchaser for a
purchase price equal to the balance in such Class A Preferred Member's
Preferred Capital Account plus all Accrued Preferred Distributions and
Arrearages under Section 4.2 hereof;
17
provided, that the Common Capital Accounts shall be adjusted pursuant
to Section 3.5(b) hereof and applicable Class A Preferred Capital
Accounts shall be adjusted pursuant to Sections 4.7(l) and (m) hereof
as though an Equity Event had occurred, in each case solely for
purposes of determining the purchase price to be paid to each
applicable Class A Preferred Member in such transaction; or
(iii) To take no action and continue to hold its Interest in
the Company.
The Tag-Along Offer shall constitute an offer by the Proposed
Purchaser to include in the proposed purchase:
(A) the amount of Common Interests of the Company, if
any, designated by each Common Member, not to exceed the amount of
Common Interests equal to the product of (1) the aggregate amount of
Offered Securities, multiplied by (2) a fraction having the numerator
equal to the amount of Common Interests held by such Common Member and
the denominator equal to the amount of Common Interests held by the
Transferor plus the amount of Common Interests held by all Common
Members that exercise their rights to participate in such sale
pursuant to Section 7.4(b)(i); and
(B) all of the Class A Preferred Interests designated by
the Class A Preferred Members pursuant to Section 7.4(b)(ii).
If a Member desires to participate in the proposed sale, it shall so
notify the Transferor not more than 30 days after such Member's
receipt of the Tag-Along Offer. If any of the Members have accepted
the Tag-Along Offer, the Transferor shall reduce the number of Common
Interests that the Transferor would have sold in the proposed sale so
as to permit the accepting Members to sell the number of Interests
that such Members are entitled to sell under this Section 7.4. If the
Members do not exercise their rights in accordance with this Section
7.4, then the Transferor may proceed with such transaction, but only
on the terms set forth in the Tag-Along Offer; provided, however, that
if the transaction is not completed within thirty (30) calendar days
after the expiration of the other Members' rights to participate in
such sale, the Transferor shall not be permitted to transfer any
Common Interests without again complying with the provisions of this
Section 7.4.
(c) To the extent that any Prospective Purchaser refuses to
purchase any securities from a Member exercising its rights under
Sections 7.4(b)(i) or (ii), the Transferor shall not sell to such
Prospective Purchaser any Common Interests unless and until,
simultaneously with such sale, the Transferor purchases from such
Member, on the terms set forth in Section 7.4(b), the securities that
such Member would otherwise have sold to the Prospective Purchaser
pursuant to Section 7.4(b).
18
7.5 Third Party Offer to Acquire the Entire Company. If a third
party makes an offer (the "Purchase Offer") to purchase all of the
Common Interests in the Company for an identical price per Common
Percentage Interest, and the holders of more than 50% in Common
Percentage Interest desire to accept the Purchase Offer, then the
other Members hereby agree to participate in such sale (i) if a Common
Member, on the same terms and conditions as the Purchase Offer and
(ii) if a Class A Preferred Member, at a purchase price equal to the
balance in such Class A Preferred Member's Preferred Capital Account
plus all Accrued Preferred Distributions and Arrearages under Section
4.2 hereof, provided, however, that the purchaser agrees to purchase
all, but not less than all, of the Class A Preferred Interests if such
purchaser acquires Common Interests representing more than 50% in
Common Percentage Interest; and provided, further, that the Common
Capital Accounts shall be adjusted pursuant to Section 3.5(b) hereof
and applicable Class A Preferred Capital Accounts shall be adjusted
pursuant to Sections 4.7(l) and (m) hereof as though an Equity Event
had occurred, in each case solely for purposes of determining the
purchase price to be paid to each applicable Class A Preferred Member
in such transaction.
8. Section 9.7 of the Company's LLC Agreement is hereby amended by
deleting said Section 9.7 in its entirety and substituting the following new
Section 9.7 in lieu thereof:
9.7 Amendments to this Agreement
(a) Except as otherwise provided herein, and except as
specifically set forth in Sections 9.7(b) and 9.7(c) below, this
Agreement shall not be modified or amended in any manner other than by
resolution of the Board of Directors at the time of such modification
or amendment; provided, however, any amendment affecting the
allocation of Income and Loss to a Member shall be approved by that
Member.
(b) This Agreement may be amended by resolution of the Board
of Directors, without any execution of such amendment by all Members,
in order to reflect the occurrence of any of the following events,
provided that all of the conditions, if any, contained in the relevant
sections of this Agreement with respect to such event have been
satisfied:
(i) an adjustment of the Common Percentage Interests of
the Common Members and the Preferred Percentage Interests of the Class
A Preferred Members, as the case may be, upon a Common Member's or a
Class A Preferred Member's failure to make a capital contribution as
required hereunder; and
(ii) the modification of this Agreement to comply with
the relevant tax laws pursuant to Sections 3.6 or 4.7(j) hereof.
19
(c) Any amendment to this Agreement substantially and adversely
affecting the allocation of Income and Loss to a Member which is an
Investor, the balance of a Capital Account of a Member which is an
Investor, the rights of a Member which is an Investor to distributions
or deemed gain allocations under Article IV hereof, the right of a
Member which is an Investor to sell its Interest pursuant to Section
7.4 or 7.5 hereof, the right of a Member which is an Investor to
designate Directors under Article V hereof, or any other amendment
that substantially and adversely affects the value of an Interest of a
Member which is an Investor, shall be approved in writing by that
Member.
9. Upon execution and delivery by a Warrant Investor of a Joinder
Agreement and Warrant Investor Amendment to LLC Agreement upon exercise of such
Warrant Investor's Warrant, such Warrant Investor shall be deemed to be an
"Investor" under this Amendment and shall be entitled to all of the rights and
privileges of an Investor under Sections 2, 3, 4, 5, 6, 7, and 8 of this
Amendment, as though such Warrant Investor had executed this Amendment as of the
date hereof.
10. Except as expressly amended hereby, all of the terms, conditions and
provisions of the Company's LLC Agreement shall remain unamended and in full
force and effect in accordance with its terms, and the Company's LLC Agreement,
as amended hereby, is hereby ratified and confirmed. The amendments provided
herein shall be limited precisely as drafted and shall not constitute an
amendment of any other term, condition or provision of the Company's LLC
Agreement.
11. References in the Company's LLC Agreement to "Agreement", "hereof",
"herein" and words of similar impact shall be deemed to be a reference to the
Company's LLC Agreement as amended by this Amendment.
12. This Amendment may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
20
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
are affixed to their signatures hereto as of the date first above written.
INERGY HOLDINGS, LLC:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Voting Member
INVESTORS:
KCEP VENTURES II, L.P.
By: KCEP II, L.C., its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director of KCEP II, L.C.
MORAMERICA CAPITAL CORPORATION
By: InvestAmerica Investment
Advisors, Inc., Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
NDSBIC, L.P.
By: InvestAmerica ND, L.L.C.,
General Partner
By: InvestAmerica ND Management, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
KANSAS VENTURE CAPITAL, INC.,
a Kansas corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
21
SIGNATURE PAGE TO
AMENDMENT TO COMPANY LLC AGREEMENT
MIDSTATES CAPITAL, L.P., a Kansas limited
partnership
By: Midstate Partners, L.L.C., its
general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Principal
DIAMOND STATES VENTURES, L.P.:
By: DSV Management LLC, its
general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇
--------------------------------------
▇▇▇ ▇. ▇▇▇▇, President
ROCKY MOUNTAIN MEZZANINE FUND, II LP
By: Rocky Mountain Capital Partners,
LLP, as general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Partner
FIRSTAR CAPITAL CORPORATION, an Ohio
corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, ____________________
EAGLE FUND I, LP
By: Eagle Fund, LLC, its general partner
By: Mississippi Valley Capital Company,
its sole member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
22
SIGNATURE PAGE TO
AMENDMENT TO COMPANY LLC AGREEMENT
RNG INVESTMENTS, L.P., A Delaware Limited
Partnership
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Managing General
Partner
SIGNATURE PAGE TO
AMENDMENT TO COMPANY LLC AGREEMENT
23
AMENDMENT NO. 9 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 9 (the "AMENDMENT") to the Limited Liability Company
Agreement of Inergy Partners, LLC referred to below is made and entered into as
of March 30, 2001, by and among Inergy Partners, LLC, a Delaware limited
liability company formerly known as Integrated Propane Partners, LLC)
("COMPANY"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇ ▇▇▇▇▇▇"), and KCEP Ventures II, L.P., a
Missouri limited partnership ("VENTURES II").
WITNESSETH:
WHEREAS, the Company is governed by that certain Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated September 30,
1998, as amended by Amendment No. 1 to Amended and Restated Limited Liability
Company Agreement of Inergy Partners, LLC, dated December 10, 1998, Amendment
No. 2 to Amended and Restated Limited Liability Company Agreement of Inergy
Partners, LLC, dated August 4, 1999, Amendment No. 3 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated September 28,
1999, Amendment No. 4 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated December 31, 1999, Amendment No. 5 to
Amended and Restated Limited Liability Company Agreement of Inergy Partners,
LLC, dated January 1, 2000, Amendment No. 6 to Amended and Restated Limited
Liability Company Agreement of Inergy Partners, LLC, dated May 31, 2000,
Amendment No. 7 to Amended and Restated Limited Liability Company Agreement of
Inergy Partners, LLC, dated January 12, 2001, and Amendment No. 8 to Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
January 12, 2001 (collectively, the "COMPANY'S LLC AGREEMENT");
WHEREAS, the Company entered into that certain Stock Exchange and
Redemption Agreement, dated December 10, 1998, among the Company, ▇▇▇▇▇▇ Oil
Company of ▇▇▇▇▇▇▇ County, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. (the
"▇▇▇▇▇▇ AGREEMENT"), and, pursuant to Section 4.3(b)(v) of the ▇▇▇▇▇▇ Agreement,
▇▇▇▇▇ ▇▇▇▇▇▇ has, based on the achievement of certain Annualized Gross Profits
(as defined in the ▇▇▇▇▇▇ Agreement) by the Company, become entitled to, and has
elected to receive, a Common Interest in the Company valued at $150,000 (the
"▇▇▇▇▇ ▇▇▇▇▇▇ COMMON INTEREST");
WHEREAS, RNG Investments, L.P., a Delaware limited partnership ("RNG"),
purchased $1,500,000 of Class A Preferred Interests of the Company pursuant to
that certain Securities Purchase Agreement dated January 12, 2001, among the
Company and the Investors and Warrant Investors that are signatories thereto
(the "Securities Purchase Agreement"), and RNG desires to transfer two-thirds
(66.67%) of the Class A Preferred Interests acquired by RNG pursuant to the
Securities Purchase Agreement, plus two-thirds (66.67%) of any additional
securities of the Company payable or paid on RNG's Class A Preferred Interests
as a result of any Distributions prior to or on the date of this Amendment
(collectively, the "TRANSFERRED INTERESTS"), to Ventures II as the assignee of
KCEP Ventures III, L.P. ("VENTURES III") of that certain Put/Call Agreement
dated January 12, 2001, between RNG and KCEP Ventures III, L.P.;
WHEREAS, Ventures II as the assignee of Ventures III has exercised the
Class A Preferred Interest Purchase Warrant issued to Ventures III on January
12, 2001 (the "WARRANT"), for the purchase from the Company of an additional
Class A Preferred Interest having an Initial Preferred Capital Account of
$1,500,000 (the "ADDITIONAL VENTURES II INTEREST"); and
WHEREAS, the Board of Directors of the Company desires to amend certain
provisions of the LLC Agreement on and subject to the terms hereof, to reflect
the issuance of the ▇▇▇▇▇ ▇▇▇▇▇▇ Common Interest to ▇▇▇▇▇ ▇▇▇▇▇▇ as of January
1, 2001, the transfer of the Transferred Interests by RNG to Ventures II as of
March 16, 2001, and the issuance of the Additional Ventures II Interest as of
March 30, 2001.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Ventures II do hereby promise and agree as
follows (all capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Company's LLC Agreement):
1. The Company hereby ratifies and confirms the issuance of the ▇▇▇▇▇
▇▇▇▇▇▇ Common Interest to ▇▇▇▇▇ ▇▇▇▇▇▇, effective as of January 1, 2001, with
all of the rights and obligations assigned to a Common Member with respect to
the ▇▇▇▇▇ ▇▇▇▇▇▇ Common Interest pursuant to, and subject to all provisions and
limitations set forth in, the Company's LLC Agreement, except that ▇▇▇▇▇ ▇▇▇▇▇▇
shall be a Non-Voting Member with respect to the ▇▇▇▇▇ ▇▇▇▇▇▇ Common Interest.
▇▇▇▇▇ ▇▇▇▇▇▇ hereby, with respect to the ▇▇▇▇▇ ▇▇▇▇▇▇ Common Interest, confirms
and agrees to comply with, and be bound by, all of the terms and conditions of
the Company's LLC Agreement.
2. Pursuant to Section 7.7 of the Company's LLC Agreement, Ventures II
is hereby, effective as of March 16, 2001, admitted as a Substitute Member in
place of RNG with respect to the Transferred Interests, with all of the rights
and obligations assigned to a Class A Preferred Member with respect to such
Transferred Interests pursuant to, and subject to all provisions and limitations
set forth in, the Company's LLC Agreement, the Securities Purchase Agreement,
and each of the Related Agreements (as such term is defined in the Securities
Purchase Agreement). Ventures II hereby, with respect to the Transferred
Interests, confirms and agrees to comply with, and be bound by, all of the terms
and conditions of the Company's LLC Agreement.
3. The Company hereby ratifies and confirms the issuance of the
Additional Ventures II Interest to Ventures II, effective as of March 30, 2001,
pursuant to the Warrant, with all of the rights and obligations assigned to a
Class A Preferred Member with respect to such Additional Ventures II Interest
pursuant to, and subject to all provisions and limitations set forth in, the
Company's LLC Agreement, the Securities Purchase Agreement, and each of the
Related Agreements (as such term is defined in the Securities Purchase
Agreement). Ventures II hereby, with respect to the Additional Ventures II
Interest, confirms and agrees to comply with, and be bound by, all of the terms
and conditions of the Company's LLC Agreement.
4. Exhibit A and Schedule A to the Company's LLC Agreement are hereby
amended by deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of Common Capital Accounts, Preferred Capital
Accounts, Common Percentage Interests, and Preferred Percentage Interests,
resulting from the issuance of the ▇▇▇▇▇ ▇▇▇▇▇▇ Common Interest to ▇▇▇▇▇ ▇▇▇▇▇▇,
the
2
transfer of the Transferred Interests from RNG to Ventures II, and the
issuance of the Additional Ventures II Interest.
5. Except as expressly amended hereby, all of the terms, conditions and
provisions of the Company's LLC Agreement shall remain in full force and effect
in accordance with its terms, and the Company's LLC Agreement, as amended
hereby, is hereby ratified and confirmed. The amendments provided herein shall
be limited precisely as drafted and shall not constitute an amendment of any
other term, condition or provision of the Company's LLC Agreement.
6. References in the Company's LLC Agreement to "Agreement", "hereof",
"herein" and words of similar impact shall be deemed to be a reference to the
Company's LLC Agreement as amended by this Amendment.
7. This Amendment may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
are affixed to their signatures hereto as of the date first above written.
INERGY PARTNERS, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
KCEP VENTURES II, L.P.
By: KCEP II, L.L.C., its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Manager
3
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP
INITIAL OR RESTATED CAPITAL ACCOUNTS, PERCENTAGE INTERESTS,
AND PREFERRED DISTRIBUTIONS
AS OF 3/30/01
Initial Due
Initial or Initial Common Preferred Preferred Date for
Restated Common Preferred Capital Percentage Percentage Distribution Preferred
Name Capital Account Account Interest Interest Percentage Distributions
------------------- --------------- ----------------- ---------- ---------- ------------ -------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 6,660 7,408 0.0222% 0.0186% 2.25% 1/29/1999
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 6,660 7,408 0.0222% 0.0186% 2.25% 1/29/1999
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 3,330 3,702 0.0111% 0.0093% 2.25% 1/29/1999
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 3,330 3,702 0.0111% 0.0093% 2.25% 1/29/1999
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 4,020 4,443 0.0134% 0.0112% 2.25% 1/29/1999
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 13,290 14,813 0.0443% 0.0373% 2.25% 1/29/1999
H. ▇▇▇▇ ▇▇▇▇ 3,330 3,702 0.0111% 0.0093% 2.25% 1/29/1999
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 13,290 14,813 0.0443% 0.0373% 2.25% 1/29/1999
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 332,100 679,200 1.1070% 1.7085% 2.25% 1/29/1999
------- ------- ------
Total Employee Group 386,010 739,191 1.2867%
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS,
PERCENTAGE INTERESTS AND PREFERRED DISTRIBUTIONS
AS OF 3/30/01
Initial Due
Initial or Restated Initial Common Preferred Preferred Date for
Common Capital Preferred Capital Percentage Percentage Distribution Preferred
Name Account Account Interest Interest Percentage Distributions
-------------------------- ------------------- ----------------- ---------- ---------- ------------ -------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 0 1,564,520 0.0000% 3.9355% 2.25% 1/29/1999
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 150,000 548,000 0.5000% 1.3785% 2.00% 4/30/1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. 0 204,000 0.0000% 0.5132% 2.00% 10/29/1999 *
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 0 96,000 0.0000% 0.2415% 2.00% 10/29/1999 *
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. 0 100,000 0.0000% 0.2515% 2.00% 10/29/1999 *
Zero Butane Gas, Inc. 649,320 1,490,377 2.1644% 3.7490% 2.00% 4/28/2000
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ 51,180 109,623 0.1706% 0.2758% 2.00% 4/28/2000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 37,380 0 0.1246% 0.0000% 0.00%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 9,390 0 0.0313% 0.0000% 0.00%
KCEP Ventures II, L.P. 0 2,000,000 0.0000% 5.0310% 2.50% 4/28/2000
Country Gas Co. 0 9,000,000 0.0000% 22.6394% 2.25% 7/30/2000 *
Inergy Holdings, LLC 28,716,720 0 95.7224% 0.0000% 0.00%
Domex, Inc. 0 962,264 0.0000% 2.4206% 2.25% 4/30/2001 *
Investors 300, Inc. 0 4,367,199 0.0000% 10.9856% 2.25% 4/30/2001 *
L&L Leasing, Inc. 0 2,072,569 0.0000% 5.2135% 2.25% 4/30/2001 *
KCEP Ventures II, L.P.** 0 1,500,000 0.0000% 3.7732% 2.75% 4/30/2001 *
Moramerica Capital Corporation** 0 1,596,000 0.0000% 4.0147% 2.75% 4/30/2001 *
NDSBIC, L.P.** 0 504,000 0.0000% 1.2678% 2.75% 4/30/2001 *
Kansas Venture Capital, Inc.** 0 1,900,000 0.0000% 4.7794% 2.75% 4/30/2001 *
Midstates Capital, L.P.** 0 2,300,000 0.0000% 5.7856% 2.75% 4/30/2001 *
Diamond State Ventures, L.P.** 0 1,900,000 0.0000% 4.7794% 2.75% 4/30/2001 *
Rocky Mountain Mezzanine Fund** 0 3,800,000 0.0000% 9.5588% 2.75% 4/30/2001 *
Firstar Capital Corporation** 0 500,000 0.0000% 1.2577% 2.75% 4/30/2001 *
Eagle Fund I, L.P.** 0 500,000 0.0000% 1.2577% 2.75% 4/30/2001 *
RNG Investments, L.P.** 0 500,000 0.0000% 1.2577% 2.75% 4/30/2001 *
KCEP Ven. II - Warrants 0 1,500,000 0.0000% 3.7732% 2.75% 4/30/2001 *
----------------------------------------------
Total Non-Employee Group 29,613,990 39,014,552 98.7133%
Total Both Groups 30,000,000 39,753,743 100.0000%
** Denotes member of 2001 *Preferred Distribution prorated for initial quarter
Investor Group
AMENDMENT NO. 10 TO AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF INERGY PARTNERS, LLC
THIS AMENDMENT NO. 10 (the "AMENDMENT") to the Limited Liability Company
Agreement of Inergy Partners, LLC referred to below is made and entered into as
of April ___, 2001, by and among Inergy Partners, LLC, a Delaware limited
liability company formerly known as Integrated Propane Partners, LLC)
("COMPANY"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Equities, L.L.C., a Kansas limited liability
company also known as ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ LLC ("▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇").
WITNESSETH:
WHEREAS, the Company is governed by that certain Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated September 30,
1998, as amended by Amendment No. 1 to Amended and Restated Limited Liability
Company Agreement of Inergy Partners, LLC, dated December 10, 1998, Amendment
No. 2 to Amended and Restated Limited Liability Company Agreement of Inergy
Partners, LLC, dated August 4, 1999, Amendment No. 3 to Amended and Restated
Limited Liability Company Agreement of Inergy Partners, LLC, dated September 28,
1999, Amendment No. 4 to Amended and Restated Limited Liability Company
Agreement of Inergy Partners, LLC, dated December 31, 1999, Amendment No. 5 to
Amended and Restated Limited Liability Company Agreement of Inergy Partners,
LLC, dated January 1, 2000, Amendment No. 6 to Amended and Restated Limited
Liability Company Agreement of Inergy Partners, LLC, dated May 31, 2000,
Amendment No. 7 to Amended and Restated Limited Liability Company Agreement of
Inergy Partners, LLC, dated January 12, 2001, Amendment No. 8 to Amended and
Restated Limited Liability Company Agreement of Inergy Partners, LLC, dated
January 12, 2001, and Amendment No. 9 to Amended and Restated Limited Liability
Company Agreement of Inergy Partners, LLC, dated as of March 30, 2001
(collectively, the "COMPANY'S LLC AGREEMENT");
WHEREAS, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has exercised the Class A Preferred Interest
Purchase Warrant issued to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on January 12, 2001 (the "WARRANT"),
for the purchase from the Company of a Class A Preferred Interest having an
Initial Preferred Capital Account of $100,000 (the "▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INTEREST");
and
WHEREAS, the Board of Directors of the Company desires to amend certain
provisions of the LLC Agreement on and subject to the terms hereof, to reflect
the issuance of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Interest as of April ___, 2001.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ do hereby promise and agree
as follows (all capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Company's LLC Agreement):
1. The Company hereby ratifies and confirms the issuance of the ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Interest to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, effective as of April ___, 2001, pursuant
to the Warrant, with all of the rights and obligations assigned to a Class A
Preferred Member with respect to such ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Interest pursuant to, and
subject to all provisions and limitations set forth in, the
Company's LLC Agreement, the Securities Purchase Agreement, and each of the
Related Agreements (as such term is defined in the Securities Purchase
Agreement). ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ hereby, with respect to the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Interest, confirms and agrees to comply with, and be bound by, all of the terms
and conditions of the Company's LLC Agreement.
2. Exhibit A and Schedule A to the Company's LLC Agreement are hereby amended
by deleting said Exhibit A and said Schedule A in their entirety and by
substituting, in lieu thereof, the Exhibit A and the Schedule A attached hereto,
to reflect the realignment of Preferred Capital Accounts, and Preferred
Percentage Interests resulting from the issuance of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Interest.
3. Except as expressly amended hereby, all of the terms, conditions and
provisions of the Company's LLC Agreement shall remain in full force and effect
in accordance with its terms, and the Company's LLC Agreement, as amended
hereby, is hereby ratified and confirmed. The amendments provided herein shall
be limited precisely as drafted and shall not constitute an amendment of any
other term, condition or provision of the Company's LLC Agreement.
4. References in the Company's LLC Agreement to "Agreement", "hereof", "herein"
and words of similar impact shall be deemed to be a reference to the Company's
LLC Agreement as amended by this Amendment.
5. This Amendment may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which shall constitute one
agreement which is binding upon all of the parties hereto, notwithstanding that
all parties are not signatories to the same counterpart.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
are affixed to their signatures hereto as of the date first above written.
INERGY PARTNERS, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ EQUITIES, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, its Managing Member
2
EXHIBIT A
MEMBERS OF THE EMPLOYEE INVESTOR GROUP
INITIAL OR RESTATED CAPITAL ACCOUNTS, PERCENTAGE INTERESTS,
AND PREFERRED DISTRIBUTIONS
AS OF 3/30/01
Initial Due
Initial or Initial Common Preferred Preferred Date for
Restated Common Preferred Capital Percentage Percentage Distribution Preferred
Name Capital Account Account Interest Interest Percentage Distributions
---- --------------- ----------------- ---------- ---------- ------------- -------------
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ 6,660 7,408 0.0222% 0.0186% 2.25% 1/29/1999
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ 6,660 7,408 0.0222% 0.0186% 2.25% 1/29/1999
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 3,330 3,702 0.0111% 0.0093% 2.25% 1/29/1999
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 3,330 3,702 0.0111% 0.0093% 2.25% 1/29/1999
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 4,020 4,443 0.0134% 0.0112% 2.25% 1/29/1999
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 13,290 14,813 0.0443% 0.0373% 2.25% 1/29/1999
H. ▇▇▇▇ ▇▇▇▇ 3,330 3,702 0.0111% 0.0093% 2.25% 1/29/1999
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ 13,290 14,813 0.0443% 0.0373% 2.25% 1/29/1999
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ 332,100 679,200 1.1070% 1.7085% 2.25% 1/29/1999
------- ------- ------
Total Employee
Group 386,010 739,191 1.2867%
SCHEDULE A
INITIAL OR RESTATED CAPITAL ACCOUNTS,
PERCENTAGE INTERESTS AND PREFERRED DISTRIBUTIONS
AS OF 4/__/01
Initial or
Restated Initial Common Preferred Preferred Initial Due Date
Common Capital Preferred Capital Percentage Percentage Distribution for Preferred
Name Account Account Interest Interest Percentage Distributions
---- -------------- ----------------- ---------- ----------- ------------ ----------------
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ 0 1,564,520 0.0000% 3.9257% 2.25% 1/29/1999
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 150,000 548,000 0.5000% 1.3750% 2.00% 4/30/1999
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇. 0 204,000 0.0000% 0.5119% 2.00% 10/29/1999 *
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ 0 96,000 0.0000% 0.2409% 2.00% 10/29/1999 *
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇. 0 100,000 0.0000% 0.2509% 2.00% 10/29/1999 *
Zero Butane
Gas, Inc. 649,320 1,490,377 2.1644% 3.7396% 2.00% 4/28/2000
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ 51,180 109,623 0.1706% 0.2751% 2.00% 4/28/2000
▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ 37,380 0 0.1246% 0.0000% 0.00%
▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ 9,390 0 0.0313% 0.0000% 0.00%
KCEP ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, L.P. 0 2,000,000 0.0000% 5.0183% 2.50% 4/28/2000
Country Gas Co. 0 9,000,000 0.0000% 22.5826% 2.25% 7/30/2000 *
Inergy
Holdings, LLC 28,716,720 0 95.7224% 0.0000% 0.00%
Domex, Inc. 0 962,264 0.0000% 2.4145% 2.25% 4/30/2001 *
Investors 300,
Inc. 0 4,367,199 0.0000% 10.9581% 2.25% 4/30/2001 *
L&L Leasing,
Inc. 0 2,072,569 0.0000% 5.2004% 2.25% 4/30/2001 *
KCEP ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
L.P.(1) 0 1,500,000 0.0000% 3.7638% 2.75% 4/30/2001 *
Moramerica
Capital
Corporation(1) 0 1,596,000 0.0000% 4.0046% 2.75% 4/30/2001 *
NDSBIC, L.P.(1) 0 504,000 0.0000% 1.2646% 2.75% 4/30/2001 *
Kansas Venture
Capital, Inc.(1) 0 1,900,000 0.0000% 4.7674% 2.75% 4/30/2001 *
Midstates
Capital, L.P.(1) 0 2,300,000 0.0000% 5.7711% 2.75% 4/30/2001 *
Diamond State
Ventures,L.P.(1) 0 1,900,000 0.0000% 4.7674% 2.75% 4/30/2001 *
Rocky Mountain
Mezzanine
Fund(1) 0 3,800,000 0.0000% 9.5349% 2.75% 4/30/2001 *
Firstar
Capital
Corporation(1) 0 500,000 0.0000% 1.2546% 2.75% 4/30/2001 *
Eagle Fund I,
L.P.(1) 0 500,000 0.0000% 1.2546% 2.75% 4/30/2001 *
RNG
Investments,
L.P.(1) 0 500,000 0.0000% 3.8739% 2.75% 4/30/2001 *
KCEP Ven. II -
Warrants 0 1,500,000 0.0000% 0.2509% 2.75% 4/30/2001 *
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Equities,
L.L.C. 0 100,000 0.0000% 2.75% 7/30/2001 *
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Total
Non-Employee
Group 29,613,990 39,114,552 98.7133% 98.1452%
Total Both
Groups 30,000,000 39,853,743 100.0000%
(1) Denotes member of 2001 *Preferred Distribution prorated for initial quarter
Investor Group