CLASS D AMENDMENT AMENDMENT NO. 1 TO AMENDED AND RESTATED OPERATING AGREEMENT OF ATLAS ENERGY RESOURCES, LLC
Exhibit
10(x)
CLASS
D AMENDMENT
AMENDMENT
NO. 1 TO AMENDED
AND RESTATED OPERATING AGREEMENT OF ATLAS ENERGY RESOURCES, LLC
THIS
AMENDMENT NO. 1 TO AMENDED AND
RESTATED OPERATING AGREEMENT OF ATLAS ENERGY RESOURCES, LLC (this
“Amendment”), dated as of June 29, 2007, is entered into and
effectuated by the Board of Directors (the “Board”) of Atlas Energy
Resources, LLC, a Delaware limited liability company (the “Company”),
pursuant to authority granted to it in Sections 5.5 and 11.1 of the Amended
and
Restated Operating Agreement of the Company, dated as of December 18, 2006
(the “Limited Liability Company Agreement”). Capitalized terms used
but not defined herein are used as defined in the Limited Liability Company
Agreement.
WHEREAS,
Section 5.5(a) of the
Limited Liability Company Agreement provides that the Company may issue
additional Company Securities for any Company purpose at any time and from
time
to time for such consideration and on such terms and conditions as the Board
shall determine, all without the approval of any Members (subject to the
provisions of Section 5.6 of the Limited Liability Company Agreement);
WHEREAS,
Section 5.5(b) of the
Limited Liability Company Agreement provides that the Company Securities
authorized to be issued by the Company pursuant to Section 5.5(a) of the
Limited Liability Company Agreement may be issued in one or more classes, or
one
or more series of any such classes, with such designations, preferences, rights,
powers and duties (which may be senior to existing classes and series of Company
Securities) as shall be fixed by the Board;
WHEREAS,
Section 11.1(c)(vii)
of the Limited Liability Company Agreement provides that the Board, without
the
approval of any Member (subject to the provisions of Section 5.6 of the
Limited Liability Company Agreement), may amend any provision of the Limited
Liability Company Agreement that the Board determines to be necessary or
appropriate in connection with the authorization of issuance of any class or
series of Company Securities pursuant to Section 5.5 of the Limited
Liability Company Agreement, and the Board has determined that the amendments
contemplated hereby are necessary or appropriate in connection therewith;
WHEREAS,
the Board has determined
that the issuance of the Class D Units provided for in this Amendment is
permitted by Section 5.6 of the Limited Liability Company Agreement;
WHEREAS,
Section 11.1(c)(iv) of
the Limited Liability Company Agreement provides that the Board, without the
approval of any Member, may amend any provision of the Limited Liability Company
Agreement to reflect a change that the Board determines does not adversely
affect the Members (including any particular class of Interests as compared
to
other classes of Interests) in any material respect, and the Board has
determined that such amendments contemplated hereby do not adversely affect
the
Members in any material respect; and
WHEREAS,
the Board deems it in the
best interest of the Company to effect this Amendment to provide for
(i) the issuance of the Class D Units, (ii) the conversion of the
Class D Units into Common Units in accordance with the terms described herein
and (iii) such other matters as are provided herein.
NOW,
THEREFORE, it is hereby agreed
as follows:
| A. | Amendment. The Limited Liability Company Agreement is hereby amended as follows: |
1.
Section 1.1 of the Limited
Liability Company Agreement is hereby amended to add or amend and restate the
following definitions in the appropriate alphabetical order:
“Capital
Account True-Up
Election” has the meaning assigned to such term in
Section 6.1(d)(xii)(C).
“Class
D Distribution Increase
Date” has the meaning assigned to such term in Section 5.11(h).
“Class
D Member Interests”
means the Member Interests represented by the Class D Units.
“Class
D Unit Arrearage”
means, with respect to any Class D Unit, whenever issued, as to any Quarter,
the
amount, if any, by which (a) the Initial Quarterly Distribution in respect
of such Quarter (or, for the period from the Class D Distribution Increase
Date
through the Conversion Approval, 115% of the Initial Quarterly Distribution)
exceeds (b) the sum of all Available Cash distributed with respect to a
Class D Unit in respect of such Quarter pursuant to Sections 6.4(a)(iii)(x)
and
6.4(b)(iii)(x).
“Class
D Unit” means a Unit
representing a fractional part of the Member Interests of all Members and,
to
the extent they are treated as Members hereunder, Assignees, and having the
rights and obligations specified with respect to Class D Units in this
Agreement. A “Class D Unit” shall not constitute a Common Unit until such time
as such Class D Unit is converted into a Common Unit pursuant to the terms
hereof.
“Common
Unit Arrearage” means, with
respect to any Common Unit, whenever issued, as to any Quarter during which
Class D Units are Outstanding, the excess, if any, of (a) the Initial
Quarterly Distribution with respect to a Common Unit in respect of such Quarter
over (b) the sum of all Available Cash distributed with respect to a Common
Unit in respect of such Quarter pursuant to Sections 6.4(a)(i) and 6.4(b)(i).
“Conversion
Approval” has the
meaning assigned to such term in Section 5.11(d).
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“Cumulative
Class D Unit
Arrearage” means, with respect to any Class D Unit, whenever issued, as of
the end of any Quarter, the excess, if any, by which (a) the sum resulting
from adding together the Class D Unit Arrearages for each of the Quarters during
which any Class D Unit has been Outstanding exceeds (b) the sum of any
distributions theretofore made to a Class D Unit pursuant to Sections
6.4(a)(iii)(y), 6.4(b)(iii)(y) and 6.6(d) (including any distributions to be
made in respect of the last of such Quarters).
“Cumulative
Common Unit
Arrearage” means, with respect to any Common Unit, whenever issued, and as
of the end of any Quarter, the excess, if any, of (a) the sum resulting
from adding together the Common Unit Arrearage as to an Initial Common Unit
for
each of the Quarters during which Class D Units are Outstanding ending on or
before the last day of such Quarter over (b) the sum of any distributions
theretofore made pursuant to Sections 6.4(a)(ii), 6.4(b)(ii) and 6.6(b).
“Issue
Price” means the price
at which a Unit is purchased from the Company, after taking into account any
sales commission or underwriting discount charged to the Company and after
taking into account any other form of discount with respect to the price at
which a Unit is purchased from the Company. In the case of the Class D Units,
the Issue Price shall be deemed to be $24.78 per Unit and in the case of the
Privately Placed Common Units, $25.50 per Unit.
“Percentage
Interest” means,
as of any date of determination (a) as to any Unitholder holding
Class A Units, the product obtained by multiplying (i) 2% by
(ii) the quotient obtained by dividing (A) the number of Class A
Units held by such Unitholder by (B) the total number of Outstanding
Class A Units; (b) as to any Unitholder holding Common Units or Class
D Units, the product obtained by multiplying (i) 98% by (ii) the
quotient obtained by dividing (A) the number of Common Units and/or Class D
Units held by such Unitholder by (B) the total number of all Outstanding
Common Units and Class D Units, and (c) as to the holders of other Company
Securities issued by the Company in accordance with Section 5.5, the
percentage established as a part of such issuance.
“Per
Unit Capital Amount”
means, as of any date of determination, the Capital Account, stated on
a per
Unit basis, as the case may be, underlying any Common Unit (other than a
Privately Placed Common Unit), Class A Unit, Class D Unit or Privately
Placed Common Unit, as the case may be, held by a Person.
“Private
Placement Value”
means with respect to the Class D Units and the Privately Placed Common
Units,
$34.19 per Unit.
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“Privately
Placed Common
Units” means the Common Units issued pursuant to the Unit Purchase
Agreement.
“Unit”
means
a Company
Security that is designated as a “Unit” and shall include Class A Units,
Class D Units and Common Units, but shall not include the Management Incentive
Interests.
“Unit
Purchase Agreement”
means the Class D Unit and Common Unit Purchase Agreement dated as of
May 18, 2007 between the Company and the purchasers named therein.
2.
Section 1.1 of the Limited
Liability Company Agreement is hereby further amended to add a new sentence
at
the end of the definition of “Common Unit” as follows:
The
term “Common Unit” does not
include a Class D Unit prior to its conversion into a Common Unit pursuant
to
this Agreement.
3.
Article IV of the Limited
Liability Company Agreement is hereby amended to add a new Section 4.6(e)
as follows:
(e)
The transfer of (1) a Class
D Unit that has been converted into a Common Unit pursuant to Section 5.11
or (2) a Privately Placed Common Unit shall be subject to the restrictions
imposed by Section 6.9.
4.
Section 5.4(a) of the
Limited Liability Company Agreement is hereby amended to add the following
at
the end of such section:
The
initial Capital Account balance
in respect of each Class D Unit shall be the Private Placement Value for such
Class D Unit, and the initial Capital Account balance of each holder of Class
D
Units in respect of all Class D Units held shall be the product of such initial
balance for a Class D Unit multiplied by the number of Class D Units held by
such holder. The initial Capital Account balance in respect of each
Privately Placed Common Unit shall be the Private Placement Value for such
Privately Placed Common Unit, and the initial Capital Account balance of each
holder of Privately Placed Common Units in respect of all Privately Placed
Common Units held shall be the product of such initial balance for a Privately
Placed Common Unit multiplied by the number of Privately Placed Common Units
held by such holder. Immediately following the creation of a Capital
Account balance in respect of each Class D Unit, each holder acquiring a Class
D
Unit at original issuance shall be deemed to have received a cash distribution
in respect of such Class D Units in an amount equal to the product of
(x) the total number of Class D Units so acquired by such holder multiplied
by (y) the difference between the Private Placement Value and the Issue
Price of a Class D Unit. Immediately following the creation of a Capital
Account balance in respect of each Privately Placed Common Unit, each Unitholder
acquiring a Privately Placed Common Unit at original issuance shall be deemed
to
have received a cash distribution in respect of such Privately Placed Common
Units in an amount equal to the product of (x) the total number of
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Privately
Placed Common Units so
acquired by such Unitholder multiplied by (y) the difference between the
Private Placement Value and the Issue Price of a Privately Placed Common
Unit. The purpose of the four preceding sentences is to provide the initial
purchasers of Class D Units and Privately Placed Common Units with a net Capital
Account in the Class D Units and Privately Placed Common Units on the date
of
purchase equal to the Issue Price paid by those purchasers for the Class D
Units
and Privately Placed Common Units.
5.
Section 5.4(c)(i) of the
Limited Liability Company Agreement is hereby amended to add the following
at
the end of such section:
Any
adjustments that are made under
this paragraph in connection with the issuance of the Class D Units or the
Privately Placed Common Units shall be based on the Private Placement Value
of
the Class D Units and the Privately Placed Common Units.
6.
Article V of the Limited
Liability Company Agreement is hereby amended to add a new Section 5.11
creating a new series of Company Securities as follows:
Section 5.11
Establishment
of Class D Units.
(a)
General. The
Board
hereby designates and creates a series of Company Securities to be designated
as
“Class D Units” and consisting of a total of 16,702,828 Class D Units, and fixes
the designations, preferences and relative, participating, optional or other
special rights, powers and duties of holders of the Class D Units as set forth
in this Section 5.11. A form of Certificate Evidencing Class D Units is
attached as Exhibit 4.2.
(b)
Rights
of Class D Units.
During the period commencing upon issuance of the Class D Units and ending
on the upon Conversion Approval (or that later time specified in this
Section 5.11(b)), unless amended pursuant to Section 5.11(h) hereof:
(i)
Allocations.
Except
as
otherwise provided in this Agreement, all items of Company income, gain, loss,
deduction and credit shall be allocated to the Class D Units to the same extent
as such items would be so allocated if such Class D Units were Common Units
(other than Privately Placed Common Units) that were then Outstanding.
(ii)
Distributions.
Except
as
otherwise specified in this Agreement, Class D Units shall have the right to
the
distributions specified in Article VI of this Agreement.
(iii)
Elimination
of Cumulative
Class D Unit Arrearages Upon Conversion. If a Cumulative Class D Unit
Arrearage
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exists
at the time of Conversion
Approval, Available Cash shall be distributed 98% to the Unitholders holding
Class D Units, Pro Rata, and 2% to the holders of Class A Units, Pro Rata,
until there has been distributed in respect of each Class D Unit then
Outstanding an amount equal to the Cumulative Class D Unit Arrearage as of
such
date. This distribution shall not be deemed a distribution on a Common Unit,
but
the satisfaction of prior entitlements of the holders of Class D Units as of
Conversion Approval. For the taxable year in which the distribution is made,
if
not previously allocated, each Person receiving such distribution shall be
allocated items of gross income in an amount equal to such distribution as
provided in Section 6.1(d)(iii)(C).
(c)
[Reserved]
(d)
Vote
of
Unitholders. Except as provided in this Section 5.11, the Class D
Units are not convertible into Common Units. The Board shall, as promptly
as practicable following the issuance of the Class D Units, but in any event
not
later than 135 days after the date hereof, take such actions as
may be necessary or appropriate to submit to a vote or consent of the holders
of
the Units the approval of a change in the terms of the Class D Units to provide
that each Class D Unit will automatically convert into one Common Unit (subject
to appropriate adjustment in the event of any split-up, combination or similar
event affecting the Common Units that occurs prior to the conversion of the
Class D Units), except that for purposes of this Section 5.11(d) the term
“Unitholders” shall not include the holders of Class D Units (the “Conversion
Approval”). Effective immediately upon the Conversion Approval by the
Unitholders, the issuance of additional Common Units to be issued upon such
automatic conversion shall be approved without any further action by the holders
thereof. The vote or consent required for such approval will be the
requisite vote required under this Agreement and under the rules or staff
interpretations of the National Securities Exchange on which the Common Units
are listed or admitted to trading for the listing or admission to trading of
the
Common Units that would be issued upon any such conversion. Upon receipt of
such approval and compliance with Section 5.11(f), the terms of the Class D
Units will be changed, automatically and without further action, so that each
Class D Unit is converted into one Common Unit and, immediately thereafter,
none
of the Class D Units shall be Outstanding.
(e)
Change
in Rules of National
Securities Exchange. If at any time (i) the rules of the National
Securities Exchange on which the Common Units are listed or admitted to trading
or the staff interpretations of such rules are changed or (ii) facts or
circumstances arise so that no vote or consent of Unitholders (except that
for
purposes of this Section 5.11(e) the term “Unitholders” shall not include
the holders of the Class D Units) is required as a condition to the listing
or
admission to trading of the Common Units that would be issued upon any
conversion of any Class D Units into Common Units as provided in
Section 5.11(d), the terms of such Class D Units will be changed so that
each Class D Unit is converted (without further action or any vote of any
Unitholders other than
6
compliance
with
Section 5.11(f)) into one Common Unit (subject to appropriate adjustment in
the event of any split-up, combination or similar event affecting the Common
Units that occurs prior to the conversion of the Class D Units) and, immediately
thereafter, none of the Class D Units shall be Outstanding.
(f)
Surrender
of
Certificates. Upon receipt of the approval of the holders of the Units
(other than holders of the Class D Units, who do not vote as part of the
Conversion Approval) to convert the Class D Units into Common Units in
accordance with Section 5.11(d) or a change in rules of the National
Securities Exchange or a change in facts and circumstances as described in
Section 5.11(e), the Board shall give the holders of the Class D Units
prompt notice of such approval or change and, subject to Section 6.9, each
holder of Class D Units shall promptly surrender the Class D Unit Certificates
therefor, duly endorsed, at the office of the Company or of any transfer agent
for the Class D Units. In the case of any such conversion, the Company
shall, as soon as practicable thereafter, issue and deliver at such office
to
such holder of Class D Units one or more Unit Certificates, registered in the
name of such holder, for the number of Common Units to which such holder shall
be entitled as aforesaid. Such conversion shall be deemed to have been made
as of the date of the event specified in Section 5.11(d) or
Section 5.11(e), as the case may be, and the Person entitled to receive the
Common Units issuable upon such conversion shall be treated for all purposes
as
the record holder of such Units on said date.
(g)
Voting
Rights. The
Class D Units are non-voting, except that the Class D Units shall be entitled
to
vote as a separate class on any matter that adversely affects the rights or
preferences of the Class D Units in relation to other classes of Interests
(including as a result of a merger or consolidation) or as required by
law. The approval of a majority of the Class D Units shall be required to
approve any matter for which the holders of the Class D Units are entitled
to
vote.
(h)
Automatic
Provisions. If
the Conversion Approval has not occurred within 135 days after the date hereof,
then, effective as of the next succeeding day (the “Class D Distribution
Increase Date”) until the Conversion Approval is obtained, Section 5.11(b)
will be deemed to be amended in its entirety, automatically and without further
action, as follows:
(b)
Rights
of Class D Units.
Prior to the Conversion Approval (or the later date specified in this
Section 5.11(b)):
(i)
Allocations.
Except
as
otherwise provided in this Agreement, all items of Company income, gain, loss,
deduction and credit shall be allocated to the Class D Units to the same extent
as such items would be so allocated if such Class D Units were Common Units
(other than Privately Placed Common Units) that were then Outstanding.
(ii)
Distributions.
Except
as
otherwise specified in this Agreement, Class D Units shall have the right to
the
distributions specified in Article VI of this Agreement. Notwithstanding the
provisions of Article VI:
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(A)
Sections 6.4(a)(iii) and
6.4(b)(iii) shall be applied by substituting “115%” for “100%”.
(B)
Each Class D Unit shall be
entitled to 115% of the amount distributed per Common Unit pursuant to Sections
6.4(a)(iv), 6.4(b)(iv), 6.4(b)(v) and 6.4(b)(vi).
(iii)
Elimination
of Cumulative
Class D Unit Arrearages Upon Conversion. If a Cumulative Class D Unit
Arrearage exists at the time of Conversion Approval, Available Cash shall be
distributed 98% to the Unitholders holding Class D Units, Pro Rata, and 2%
to
the holders of Class A Units, Pro Rata, until there has been distributed in
respect of each Class D Unit then Outstanding an amount equal to the Cumulative
Class D Unit Arrearage as of such date. This distribution shall not be deemed
a
distribution on a Common Unit, but the satisfaction of prior entitlements of
the
holders of Class D Units as of Conversion Approval. For the taxable year in
which the distribution is made, if not previously allocated, each Person
receiving such distribution shall be allocated items of gross income in an
amount equal to such distribution as provided in Section 6.1(d)(iii)(C).
7.
Section 6.1(c)(ii) of the
Limited Liability Company Agreement is hereby amended and restated as follows:
(ii)
If a Net Termination Loss is
recognized (or deemed recognized pursuant to Section 5.4(c)), such Net
Termination Loss shall be allocated among the Members in the following manner:
(A)
First, 2% to the holders of
Class A Units, Pro Rata, and 98% to the holders of Class D Units, Pro Rata,
until the Capital Account in respect to each Class D Unit then Outstanding
has
been reduced to zero;
(B)
Second, 2% to the holders of
Class A Units, Pro Rata, and 98% to the holders of Common Units, Pro Rata,
until the Capital Account in respect to each Common Unit then Outstanding has
been reduced to zero; and
(C)
Third, the balance, if any, to
all Unitholders in accordance with their respective Percentage Interests.
8
8.
Article VI of the Limited
Liability Company Agreement is hereby amended to add a new
Section 6.1(d)(iii)(C) as follows:
(C)
After the application of
Sections 6.1(d)(iii)(A) and (B), if the amount of cash or the Net Agreed Value
of any property distributed (except cash or property distributed or deemed
distributed pursuant to Section 5.4(a) of this Agreement with respect to
Class D Units or Privately Placed Common Units, or Section 10.3 of this
Agreement) to any Unitholder with respect to its Units for a taxable year is
greater (on a per Unit basis) than the amount of cash or the Net Agreed Value
of
property distributed to the other Unitholders with respect to their Units (on
a
per Unit basis), then each Unitholder receiving such greater cash or property
distribution shall be allocated gross income in an amount equal to the product
of (a) the amount by which the distribution (on a per Unit basis) to such
Unitholder exceeds the distribution (on a per Unit basis) to the Unitholders
receiving the smallest distribution and (b) the number of Units owned by
the Unitholder receiving the greater distribution.
9.
Article VI of the Limited
Liability Company Agreement is hereby amended to add a new
Section 6.1(d)(xii) as follows:
(xii)
Allocations
for Class D
Units and Privately Placed Common Units.
(A)
With respect to any taxable
period of the Company ending upon, or after, a Book-Up Event, a Book-Down Event
or a sale of all or substantially all of the assets of the Company occurring
after the date of issuance of the Class D Units and the Privately Placed Common
Units, Company items of income or gain for such taxable period shall be
allocated 100% (1) to the Members holding Class D Units or converted Class
D Units that are Outstanding as of the time of such event in proportion to
the
number of Class D Units or converted Class D Units held by such Members, until
each such Member has been allocated the amount that increases the Capital
Account of such Class D Unit or converted Class D Unit to the Per Unit Capital
Amount for a then outstanding Common Unit (other than a converted Class D Unit
or a Privately Placed Common Unit) and (2) to the Members holding Privately
Placed Common Units that are Outstanding as of the time of such event in
proportion to the number of Privately Placed Common Units held by such Members,
until each such Member has been allocated the amount that increases the Capital
Account of such Privately Placed Common Unit to the Per Unit Capital Amount
for
a then outstanding Common Unit (other than a Privately Placed Common Unit or
a
Class D Unit).
(B)
With respect to any taxable
period of the Company ending upon, or after, the transfer of converted Class
D
Units or Privately Placed Common Units to a Person that is not an Affiliate
of
the holder, Company items of income or gain for such taxable period shall be
allocated 100% (1) to the Members transferring such converted Class D Units
in proportion to
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the
number of converted Class D
Units transferred by such Members, until each such Member has been allocated
the
amount that increases the Capital Account of such converted Class D Unit to
the
Per Unit Capital Amount for a then outstanding Common Unit (other than a
converted Class D Unit or a Privately Placed Common Unit) and (2) to the
Members transferring such Privately Placed Common Units in proportion to the
number of Privately Placed Common Units transferred by such Members, until
each
such Member has been allocated the amount that increases the Capital Account
of
such Privately Placed Common Unit to the Per Unit Capital Amount for a then
outstanding Common Unit (other than a Privately Placed Common Unit or a
converted Class D Unit).
(C)
With respect to the first
taxable period of the Company ending upon, or after, the date of issuance of
the
Class D Units or the Privately Placed Common Units, at the election of a Member
holding Class D Units or Privately Placed Common Units (the “Capital Account
True-Up Election”), items of income or gain for such taxable period shall be
allocated 100% to the Members making such Capital Account True-Up Election
with
respect to Class D Units or Privately Placed Common Units held by such Members,
until each such Member has been allocated the amount that increases the Capital
Account of such Class D Unit or Privately Placed Common Unit to the Per Unit
Capital Amount for a then outstanding Common Unit (other than a Class D Unit
or
a Privately Placed Common Unit).
10.
Section 6.4 of the Limited
Liability Company Agreement is amended to read as follows:
Section 6.4
Distributions of
Available Cash from Operating Surplus.
(a)
During
the MII Vesting
Period. Available Cash with respect to any Quarter ending prior to or on the
date of the end of the MII Vesting Period that is deemed to be Operating Surplus
pursuant to the provisions of Section 6.3 or Section 6.6 shall,
subject to Section 8-607 of the Delaware Act, be distributed, except as
otherwise required by Section 5.5(b) in respect of other Company Securities
issued pursuant thereto, as follows:
(i)
First, (A) 2% to the
holder(s) of the Class A Units, Pro Rata and (B) 98% to the holders of
the Common Units, Pro Rata until there has been distributed in respect of each
Common Unit then Outstanding an amount equal to the Initial Quarterly
Distribution for such Quarter;
(ii)
Second, (A) 2% to the
holder(s) of the Class A Units, Pro Rata and (B) 98% to the holders of
the Common Units, Pro Rata until there has been distributed in respect of each
Common Unit then Outstanding an amount equal to the Cumulative Common Unit
Arrearage existing with respect to such Quarter;
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(iii)
Third, (x) (A) 2% to
the holder(s) of the Class A Units, Pro Rata and (B) 98% to the
holders of the Class D Units, Pro Rata, until there has been distributed in
respect of each Class D Unit then Outstanding an amount equal to 100% of the
Initial Quarterly Distribution for such Quarter; and (y) (A) 2% to the
holder(s) of the Class A Units, Pro Rata and (B) 98% to the holders of
the Class D Units, Pro Rata, until there has been distributed in respect of
each
Class D Unit then Outstanding an amount equal to the Cumulative Class D Unit
Arrearage, if any, existing with respect to such Quarter;
(iv)
Fourth, (A) 2% to the
holder(s) of the Class A Units, Pro Rata and (B) 98% to the holders of
the Common Units and Class D Units, Pro Rata.
(b)
After
the MII Vesting
Period. Available Cash with respect to each Quarter after the MII Vesting
Period that is deemed to be Operating Surplus pursuant to the provisions of
Section 6.3 or Section 6.6 shall, subject to
Section 18-607 of the Delaware Act, be distributed, except as otherwise
required by Section 5.5(b) in respect of additional Company
Securities issued pursuant thereto, as follows:
(i)
First, (A) 2% to the
holder(s) of the Class A Units, Pro Rata and (B) 98% to the holders of
the Common Units, Pro Rata until there has been distributed in respect of each
Common Unit then Outstanding an amount equal to the Initial Quarterly
Distribution for such Quarter;
(ii)
Second, (A) 2% to the
holder(s) of the Class A Units, Pro Rata and (B) 98% to the holders of
the Common Units, Pro Rata until there has been distributed in respect of each
Common Unit then Outstanding an amount equal to the Cumulative Common Unit
Arrearage existing with respect to such Quarter;
(iii)
Third, (x) (A) 2% to
the holder(s) of the Class A Units, Pro Rata and (B) 98% to the
holders of the Class D Units, Pro Rata, until there has been distributed in
respect of each Class D Unit then Outstanding an amount equal to 100% of the
Initial Quarterly Distribution for such Quarter; and (y) (A) 2% to the
holder(s) of the Class A Units, Pro Rata and (B) 98% to the holders of
the Class D Units, Pro Rata, until there has been distributed in respect of
each
Class D Unit then Outstanding an amount equal to the Cumulative Class D Unit
Arrearage, if any, existing with respect to such Quarter;
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(iv)
Fourth, (A) 2% to the
holders of Class A Units, Pro Rata, and (B) 98% to the holders of
Common Units and Class D Units, Pro Rata, until there has been distributed
in
respect of each Class A Unit, each Class D Unit and each Common Unit then
Outstanding an amount equal to the Initial Quarterly Distribution for such
Quarter plus $0.06 (the “First Target Distribution”);
(v)
Fifth, (A) 2% to the
holders of the Class A Units, Pro Rata, (B) 83% to the holders of the
Common Units and Class D Units, Pro Rata, and (C) 15% to the holders of the
Management Incentive Interests, Pro Rata, until there has been distributed
in
respect of each Class A Unit, each Class D Unit and each Common Unit then
Outstanding an amount equal to the Initial Quarterly Distribution for such
Quarter plus $0.17 (the “Second Target Distribution); and
(vi)
Thereafter, (A) 2% to the
holders of the Class A Units, Pro Rata, (B) 73% to the holders of the
Common Units and Class D Units, Pro Rata, and (C) 25% to the holders of the
Management Incentive Interests, Pro Rata.
11.
Section 6.6 of the Limited
Liability Company Agreement is amended to read as follows:
Section 6.6
Distributions
of
Available Cash from Capital Surplus
Available
Cash that is deemed to be
Capital Surplus pursuant to the provisions of Section 6.3(a) shall,
subject to Section 18-607 of the Delaware Act, be distributed, unless the
provisions of Section 6.3 require otherwise, be distributed as
follows:
(a)
100% to the holders of Common
Units, Pro Rata, until a hypothetical holder of a Common Unit acquired on the
Closing Date has received with respect to such Common Unit, during the period
since the Closing Date through such date, distributions of Available Cash that
are deemed to be Capital Surplus in an aggregate amount equal to the Initial
Unit Price;
(b)
100% to the holders of Common
Units, Pro Rata, until there has been distributed in respect of each Common
Unit
then Outstanding an amount equal to the Cumulative Common Unit Arrearage.
Thereafter, all Available Cash shall be distributed as if it were Operating
Surplus and shall be distributed in accordance with Section 6.4.
12
(c)
100% to the holders of Class D
Units, Pro Rata, until a hypothetical holder of a Class D Unit acquired on
the
Closing Date has received with respect to such Class D Unit, during the period
since the date Class D Units were originally issued through such date,
distributions of Available Cash that are deemed to be Capital Surplus in an
aggregate amount equal to the Initial Unit Price;
(d)
100% to the holders of Class D
Units, Pro Rata, until there has been distributed in respect of each Class
D
Unit then Outstanding an amount equal to the Cumulative Class D Unit Arrearage;
and
(e)
Thereafter, all Available Cash
shall be distributed as if it were Operating Surplus and shall be distributed
in
accordance with Section 6.4.
12.
Article VI is hereby amended to
add a new Section 6.9 as follows:
Section 6.9
Special
Provisions Relating to Holders of Converted Class D Units and Privately Placed
Common Units. A holder of (1) a Privately Placed Common Unit or
(2) a Class D Unit that has converted into a Common Unit pursuant to
Section 5.11 shall be required to provide notice to the Board of the number
of Privately Placed Common Units or converted Class D Units transferred by
such
holder no later than the last Business Day of the calendar year during which
such transfer occurred, unless (x) the transfer is to an Affiliate of the
holder or (y) by virtue of the application of Section 6.1(d)(xii)(B)
to a prior transfer of the Common Unit or the application of
Section 6.1(d)(xii)(A) or Section 6.1(d)(xii)(C), the Board has
previously determined, based on advice of counsel, that the Privately Placed
Common Unit or converted Class D Unit should have, as a substantive matter,
like
intrinsic economic and federal income tax characteristics of an Initial Common
Unit; provided, that such holder may cure any failure to provide such notice
by
providing such notice within 20 days of the last Business Day of such calendar
year. The sole and exclusive remedy for any holder’s failure to provide any
such notice shall be the enforcement of the remedy of specific performance
against such holder and there will be no monetary damages. In connection
with the condition imposed by this Section 6.9, the Board shall take
whatever steps are required to provide economic uniformity to the Privately
Placed Common Units and converted Class D Units in preparation for a transfer
thereof, including the application of Section 6.1(d)(xii)(B); provided,
however, that no such steps
13
may
be taken that would have a
material adverse effect on the Unitholders holding Common Units represented
by
Certificates.
B.
Agreement
in
Effect. Except as hereby amended, the Limited Liability Company
Agreement shall remain in full force and effect.
C.
Applicable
Law. This
Amendment shall be construed in accordance with and governed by the laws of
the
State of Delaware, without regard to principles of conflicts of laws.
D.
Invalidity
of
Provisions. If any provision of this Amendment is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
14
IN
WITNESS WHEREOF, this Amendment
has been executed as of the date first written above.
| ATLAS ENERGY RESOURCES, LLC | ||
|
By:
|
/s/
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
|
|
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| Title: | CFO | |
[Signature
Page to Form of Class D
Amendment]
15
Exhibit
4.2
| Certificate Evidencing Class D Units | ||||
| Certificate No. | Representing Limited Liability Company Interests in | Class D Units | ||
| Atlas Energy Resources, LLC |
In
accordance with
Section 4.1 of the Amended and Restated Operating Agreement of Atlas Energy
Resources, LLC, as amended, supplemented or restated from time to time (the
“Company Agreement”), Atlas Energy Resources, LLC, a Delaware limited liability
company (the “Company”), hereby certifies that
(the “Holder”) is the
registered owner of
CLASS D UNITS representing limited liability company interests in the
Company (the “Class D Units”) transferable on the books of the Company,
in person or by duly authorized attorney, upon surrender of this Certificate
properly endorsed. The rights, preferences and limitations of the Class D
Units are set forth in, and this Certificate and the Class D Units represented
hereby are issued and shall in all respects be subject to the terms and
provisions of, the Company Agreement. Copies of the Company Agreement are
on file at, and will be furnished without charge on delivery of written request
to the Company at, the principal office of the Company located at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Capitalized terms used herein but not
defined shall have the meanings given them in the Company Agreement.
The
Holder, by accepting this
Certificate, is deemed to have (i) requested admission as, and agreed to
become, a Member and to have agreed to comply with and be bound by and to have
executed the Company Agreement, (ii) represented and warranted that the
Holder has all right, power and authority and, if an individual, the capacity
necessary to enter into the Company Agreement, (iii) granted the powers of
attorney provided for in the Company Agreement and (iv) made the waivers
and given the consents and approvals contained in the Company Agreement.
This
Certificate shall not be valid
for any purpose unless it has been signed by duly authorized officers of the
Company.
|
Dated: _____________,
2007
|
ATLAS ENERGY RESOURCES, LLC | |||
| By: |
|
|||
|
Chairman,
President and
Chief
Executive
Officer
|
||||
| By: |
|
|||
| Secretary | ||||
“THESE
SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED (EXCEPT IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THESE
SECURITIES) OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION THEREUNDER AND, IN THE CASE OF A TRANSACTION EXEMPT FROM
REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT OR THE ISSUER
HAS
RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION
DOES
NOT REQUIRE REGISTRATION UNDER SUCH ACT.” FOR THE AVOIDANCE OF DOUBT, THE
PURCHASED UNITS AND THE PURCHASED CLASS D UNITS MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY SUCH PURCHASED UNITS OR PURCHASED CLASS D UNITS AND SUCH PLEDGE SHALL NOT
BE
DEEMED TO BE A TRANSFER, SALE OR ASSIGNMENT OF SUCH PURCHASED UNITS OR PURCHASED
CLASS D UNITS, AND NO BUYER EFFECTING SUCH A PLEDGE SHALL BE REQUIRED TO PROVIDE
ATLAS ENERGY WITH ANY NOTICE THEREOF OR OTHERWISE MAKE ANY DELIVERY TO ATLAS
ENERGY PURSUANT TO THIS AGREEMENT OR ANY OTHER BASIC
DOCUMENT.
16
Atlas
Energy Resources, LLC
[Reverse
of Certificate]
ABBREVIATIONS
The
following abbreviations, when
used in the inscription on the face of this Certificate, shall be construed
as
follows according to applicable laws or regulations:
| TEN COM | – | as tenants in common | UNIF GIFT MIN ACT– |
|
Custodian |
|
||||||
| TEN ENT | – | as tenants by the entireties | (Cust) | (Minor) | ||||||||
| JT TEN | – | as joint tenants with right of survivorship and not as tenants in common |
under Uniform Gifts to Minors
Act
|
|
||||||||
| (State) | ||||||||||||
| Additional abbreviations, though not in the above list, may also be used. | ||||||||||||
ASSIGNMENT
OF CLASS D UNITS
In
Atlas
Energy Resources, LLC
| FOR VALUE RECEIVED, |
|
hereby assigns, conveys, sells and transfers unto | ||
|
|
||||
| (Please print or typewrite name and address of Assignee) | ||||
|
|
|
|
| (Please insert Social Security or other identifying number of Assignee) | ||
| Class D Units representing limited liability company interests evidenced by this Certificate, subject to the Company Agreement, and does hereby irrevocably constitute and appoint as its attorney-in-fact with full power of substitution to transfer the same on the books of Atlas Energy Resources, LLC. | ||||
| Date: | NOTE: The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular, without alteration, enlargement or change. | |||
|
|
||||
| The signature(s) should be guaranteed by an “eligible guarantor institution” as defined in Rule 17Ad-15 under the Securities and Exchange Act of 1934, as amended | (Signature) | |||
|
|
||||
| (Signature) | ||||
SIGNATURE(S)
GUARANTEED:
No
assignment or transfer of the
Class D Units evidenced hereby will be registered on the books of the Company
unless the Certificate evidencing the Class D Units to be transferred is
surrendered for registration or transfer.
17