EXHIBIT 10-D-5.1
Amendment
to
Operating Agreement
of
Pine Needle LNG Company, LLC
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Amendment
to
Operating Agreement
of
Pine Needle LNG Company, LLC
The Amendment to the Operating Agreement of Pine Needle LNG Company, LLC
is made and entered into by and among Pine Needle LNG Company, LLC, a North
Carolina limited liability company ("Pine Needle"), Pine Needle Operating
Company, a Delaware corporation (the "Operator"), Hess LNG Company, a Delaware
corporation ("Hess"), NCNG Energy Corporation, a North Carolina corporation
("NCNG Energy"), Piedmont Interstate Pipeline Company, a North Carolina
corporation ("Piedmont Interstate"), PSNC Blue Ridge Corporation, a North
Carolina corporation ("PSNC Blue Ridge"), TransCarolina LNG Company, a Delaware
corporation ("TransCarolina"), and the Municipal Gas Authority of Georgia, a
public body corporate and politic, a public corporation and an instumentality of
the State of Georgia ("MGAG"), effective as of the 1st day of October, 1995;
WITNESSETH
WHEREAS, Pine Needle was organized as a limited liability company under
the laws of the State of North Carolina upon the filing of the Articles of
Organization of Pine Needle LNG Company, LLC (the "Articles of Organization")
with the Secretary of State of North Carolina on August 8, 1995 (the
"Organization Date"); and
WHEREAS, Pine Needle will be operated pursuant to the Operating Agreement
of Pine Needle LNG Company, LLC dated as of August 8, 1995 (the "Operating
Agreement"); and
WHEREAS, the Operating Agreement provides that Pine Needle is formed for
the purpose of planning, designing, developing, constructing, owning and
providing for the operation and maintenance of certain facilities to be located
in Guilford County, North Carolina, for the receipt, liquefaction, storage,
vaporization and delivery of natural gas or liquefied natural gas and to conduct
such business activities that are necessary or incidental in connection
therewith; and
WHEREAS, Pine Needle and the Operator entered into the Construction,
Operation and Maintenance Agreement by and between Pine Needle Operating Company
and Pine Needle LNG Company, LLC dated August 8, 1995 (the "CO&M Agreement");
and
WHEREAS, 50% of the Membership Interests (as defined in the Operating
Agreement) of Pine Needle is owned by TransCarolina and 50% of the Membership
Interests is owned by Piedmont Interstate; and
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WHEREAS, Hess has obtained from Piedmont Interstate an option to purchase
from Piedmont Interstate a 5% Membership Interest in Pine Needle and desires to
exercise that option; and
WHEREAS, MGAG desires to purchase a 3% Membership Interest in Pine Needle;
NCNG Energy desires to purchase a 5% Membership Interest in Pine Needle; and
PSNC Blue Ridge desires to purchase a 17% Membership Interest in Pine Needle;
and
WHEREAS, pursuant to Article 3 of the Operating Agreement, Piedmont
Interstate and TransCarolina have unanimously voted for Pine Needle to issue
Membership Interests to Hess, MGAG, NCNG Energy and PSNC Blue Ridge (the "New
Members") in the amounts requested and to admit the New Members as Members of
Pine Needle; and
WHEREAS, the parties desire to execute this Amendment to set forth the
terms upon which the New Members will be admitted as Members of Pine Needle.
NOW, THEREFORE, in consideration of the premises, the parties agree as
follows:
1. Definitions. Unless otherwise specifically provided in this
Amendment, the definitions used in the Operating Agreement shall have the same
meanings in this Amendment.
2. Admission of New Members. Subject to the terms and conditions set forth
in this Amendment and pursuant to Section 3.3 of the Operating Agreement, the
New Members shall be admitted as Members of Pine Needle effective October 1,
1995, at which time the Sharing Ratios and Commitments of the Members shall be
as follows:
Member Commitment Sharing Ratio
TransCarolina $18,725,000 35%
Piedmont Interstate $18,725,000 35%
PSNC Blue Ridge $9,095,000 17%
Hess $2,675,000 5%
NCNG Energy $2,675,000 5%
MGAG $1,605,000 3%
3. Contributions and Advances by Initial Members. The parties acknowledge
and agree that as of the date of this Amendment, the Initial Members have
contributed the following amounts to Pine Needle:
TransCarolina $1,457,954.68
Piedmont Interstate $2,500,000.00
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4. Contributions and Advances by New Members. Upon execution of this
Amendment, each of the New Members shall contribute to Pine Needle the amount
set forth below:
PSNC Blue Ridge $708,149.42
NCNG Energy $208,279.24
Hess $208,279.24
MGAG $124,967.54
5. Additional Contributions and Advances. Additional contributions and
advances shall be made as provided in Article 5 of the Operating Agreement.
6. Amendment of Specific Provisions of Operating Agreement. The
Operating Agreement is amended as follows:
(a) Section 3.2.6 of the Operating Agreement is amended to read as follows:
"3.2.6 If a Member shall cease to be controlled directly or indirectly
by the same Persons who control it as of the date of that
Member's admission to the Company, the Member shall provide
written notice thereof to the other Members. On or before the
expiration of 30 days after such notice is received by the other
Members, such other Members shall have the option to buy that
Member's Membership Interest at a purchase price equal to the
balance in that Member's Capital Account on the date the option
is exercised. If more than one of such other Members wishes to
exercise such option, they shall exercise such option on the same
date and share in such purchase on a pro rata basis based on
their respective Sharing Ratios. This paragraph shall not apply
to a change in control that results from the merger or
consolidation of the corporation which directly or indirectly
controls a Member ("Parent Corporation") with another corporation
or the sale of all or substantially all of the assets of a
Member's Parent Corporation if, in each such case, (a) the Parent
Corporation shall not have been formed for the principal purpose
of directly or indirectly controlling the Member, and (b) either
(i) such Parent Corporation shall be the continuing corporation
and shall continue to directly or indirectly control the Member,
or (ii) the successor corporation (if other than the Parent
Corporation of the Member) shall be a corporation organized and
existing under the laws of the United States of America or a
state thereof or the District of Columbia and such successor
corporation shall continue to be in substantially the same
business as the Parent Corporation. This Section 3.2.6 is
intended to prohibit any kind of financing or corporate structure
techniques designed to avoid the reach of the right of first
refusal provisions of Section 3.2 of this Agreement."
(b) Section 3.2.7 of the Operating Agreement is amended to replace the
phrase "Except as provided in Section 3.2.2, any" in the fifth line thereof with
the word "Any".
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(c) Section 5.2.1 of the Operating Agreement is amended to change the
phrase "Section 5.1 or 5.4" in the first line thereof to "Section 5.1, 5.2.3 or
5.4" .
(d) Section 5.2.2 (b) of the Operating Agreement is amended to change
"Section 5.1 or 5.4" in the third line thereof to "Section 5.1, 5.2.3 or 5.4" .
(e) Section 5.2.3 is amended to read as follows:
"5.2.3 Each Member agrees that it shall make payments of its
respective Capital Contributions in accordance with requests
issued pursuant to Section 5.2.1 and Section 5.2.2;
provided, however, that a Member may elect not to make
Capital Contributions or Loans under Section 5.3 with
respect to a change in the size, design or location of the
Facilities if such change would increase the Member's
Commitment as set forth in Paragraph 2 of the Amendment to
Operating Agreement effective October 1, 1995 by more than
25% (a "Material Change") or with respect to a Modification
if it (i) does not vote for the Material Change or
Modification, as the case may be, and (ii) provides written
notice to all other Members within ten (10) days of a vote
for a Material Change or a vote under Section 4.2.2 to
proceed with a Modification, as the case may be, that it
does not wish to make Capital Contributions or Loans with
respect to such Material Change or Modification. In the
event the Company proceeds with a Material Change or
Modification after one or more Members elect not to make
Capital Contributions or Loans with respect thereto, the
Sharing Ratios and Capital Accounts of all Members shall be
adjusted to reflect the respective Capital Contributions or
Loans of all Members."
(f) Section 7.1.4(a) of the Operating Agreement is amended to change the
phrase "$4.85 per Mcf" in the eighth line thereof to "a monthly demand charge of
$4.85 per Mcf".
7. Ratification of Operating Agreement and CO&M Agreement. Each of the
New Members hereby ratifies the Operating Agreement, as amended hereby, and
the CO&M Agreement and agrees to be bound by the terms and provisions thereof.
8. Representations and Warranties of New Members. Without limiting the
provisions of Paragraph 7 above, each of the New Members represents and warrants
that;
(a) As provided in Section 3.2.2 of the Operating Agreement, it will not
have an interest in any project intended to directly compete with
the liquefied natural gas business of the Company;
(b) The representations and warranties in Sections 4.4 and 4.5 of the
Operating Agreement are true and correct with respect to it;
(c) It has received a copy of, reviewed, been provided an opportunity to
ask questions with respect to and understands each of the following
documents:
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(i) Articles of Organization,
(ii) Operating Agreement,
(iii) CO&M Agreement, and
(iv) Unaudited financial statements of Pine Needle as of
August 31, 1995;
(d) It understands the nature of the business and the risks associated
with businesses in which Pine Needle intends to engage as set forth
in the Operating Agreement;
(e) It understands that Pine Needle intends to make substantial
expenditures prior to the receipt and acceptance of the FERC
Certificate and other required Authorizations and that these
expenditures may not be recoverable if the FERC Certificate and
other required Authorizations are not received and accepted; and
(f) It understands that its ability to dispose of its Membership
Interest is limited by the Operating Agreement, that there may not
be a market for any such disposition and that it may have to hold
its Membership Interest and be subject to the terms and conditions
of the Operating Agreement for an indefinite period of time.
9. Waiver of Sections 3.2.8 and 3.2.9 of the Operating Agreement. Each
party to this Amendment acknowledges that it has read, understands and agrees to
waive the provisions of Sections 3.2.8 and 3.2.9 of the Operating Agreement to
the extent that such provisions are not complied with by this Amendment.
10. Notice Address of Members. The Notice Address of each Member is as
set forth below:
Hess LNG Company
If by mail: Hess LNG Company
1185 Avenue of the Americas
New York, NY 10036
Attn: J. B. Collins, Executive Vice President
and General Counsel
If by hand delivery: Hess LNG Company
1185 Avenue of the Americas
New York, NY 10036
Attn: J. B. Collins, Executive Vice President
and General Counsel
If by telephone: (212) 536-8576
If by facsimile transmission: (212) 536-8339
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The Municipal Gas Authority of Georgia
If by mail: The Municipal Gas Authority of Georgia
104 Town Park Drive
Kennesaw, Georgia 30144
Attn: Arthur C. Corbin, President
If by hand delivery:
The Municipal Gas Authority of Georgia
104 Town Park Drive
Kennesaw, Georgia 30144
Attn: Arthur C. Corbin, President
If by telephone: (770) 590-1000
If by facsimile transmission: (770) 425-3372
NCNG Energy Corporation
If by mail: NCNG Energy Corporation
P.O. Box 909
Fayetteville, North Carolina 28302-0909
Attn: Calvin B. Wells, President
If by hand delivery: NCNG Energy Corporation
150 Rowan Street
Fayetteville, North Carolina 28301
Attn: Calvin B. Wells, President
If by telephone: (910) 483-0315
If by facsimile transmission: (910) 323-6390
Piedmont Interstate Pipeline Company
If by mail: Piedmont Interstate Pipeline Company
P.O. Box 33068
Charlotte, NC 28233
Attn: Thomas Skains, Vice President
If by hand delivery: Piedmont Interstate Pipeline Company
1915 Rexford Road
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Charlotte, NC 28211
Attn: Thomas Skains, Vice President
If by telephone: (704) 364-3120
If by facsimile transmission: (704) 364-8320
PSNC Blue Ridge Corporation
If by mail: PSNC Blue Ridge Corporation
P.O. Box 1398
Gastonia, NC 28053-1398
Attn: Frankin H. Yoho, Vice President
If by hand delivery: PSNC Blue Ridge Corporation
400 Cox Road
Gastonia, NC 28054
Attn: Franklin H. Yoho, Vice President
If by telephone: (704) 864-6731
If by facsimile transmission: (704) 834-6548
TransCarolina LNG Company
If by mail: TransCarolina LNG Company
P. O. Box 1396
Houston, Texas 77251-1396
Attn: Frank J. Ferazzi, Vice President
If by hand delivery: TransCarolina LNG Company
2800 Post Oak Boulevard
Houston, Texas 77056
Attn: Frank J. Ferazzi, Vice President
If by telephone: (713) 439-3482
If by facsimile transmission: (713) 439-4269
11. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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12. Waiver. No waiver by any party of any default by another party in the
performance of any provision, condition or requirement herein shall be deemed to
be a waiver of, or in any manner release the other party from, performance of
any other provision, condition or requirement herein, nor shall such waiver be
deemed to be a waiver of, or in any manner a release of, the other party from
future performance of the same provision, condition or requirement. Any delay or
omission of either party to exercise any right hereunder shall not impair the
exercise of any such right, or any like right, accruing to it thereafter.
13. Assignability; Successors. Any attempt by a party to assign this
Amendment without the written consent of all of the other parties shall be null
and void.
14. Third Persons. Except as expressly provided in this Amendment, nothing
herein expressed or implied is intended or shall be construed to confer upon or
to give any person not a party hereto any rights, remedies or obligations under
or by reason of this Amendment.
15. Laws and Regulatory Bodies. This Amendment and the obligations of the
Parties hereunder are subject to all applicable laws, rules, orders and
regulations of Governmental Authorities having jurisdiction, and to the extent
of conflict, such laws, rules, orders and regulations of governmental
authorities having jurisdiction shall control.
16. Paragraph Numbers; Headings. Unless otherwise indicated, references
to paragraph numbers are to paragraphs of this Amendment. Headings and captions
are for reference purposes only and shall not affect the meaning or
interpretation of this Amendment.
17. Severability. Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of that prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of that
provision in any other jurisdiction.
18. Further Assurances. Each party agrees to execute and deliver all
such other and additional instruments and documents and to do such other acts
and things as may be reasonably necessary more fully to effectuate the terms and
provisions of this Amendment.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their duly authorized representatives as of the date first above written.
HESS LNG COMPANY
By: ____________________________________
Vice President
THE MUNICIPAL GAS AUTHORITY OF GEORGIA
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By: ____________________________________
President and General Manager
NCNG ENERGY CORPORATION
By: _____________________________________
Vice President
PIEDMONT INTERSTATE PIPELINE COMPANY
By: ____________________________________
Vice President
PSNC BLUE RIDGE CORPORATION.
By: ____________________________________
Vice President
TRANSCAROLINA LNG COMPANY
By: ____________________________________
Vice President
PINE NEEDLE LNG COMPANY, LLC By each of its Members:
By: __________________________________
Frank J. Ferazzi
Vice President
TransCarolina LNG Company
By: ____________________________________
Thomas Skains
Vice President
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Piedmont Interstate Pipeline Company
PINE NEEDLE OPERATING COMPANY
By:__________________________________
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