Document:

Exhibit 10.38

 

ICO Global Communications (Holdings) Limited

11700 Plaza America Drive, Suite 1010

Reston, Virginia 20190

 

April 19, 2006

 

 

John Flynn

3717 Underwood Street

Chevy Chase, Maryland,
20815

 

Dear John:

 

We
are pleased that you have agreed to accept the positions of Executive Vice
President, General Counsel, and Corporate Secretary of ICO Global
Communications (Holdings) Limited and ICO North America, Inc.
(collectively, “ICO”) under the terms of this letter agreement. You will have
the rights, powers, duties and obligations as may be agreed upon from time to
time. During the course of your employment with ICO you will devote your full
business time and efforts to ICO; provided, that, nothing herein will
prevent you from (i) participating in industry, trade, professional,
charitable and community activities, (ii) serving on corporate, civic or
charitable boards or committees as mutually agreed by us and you, and (iii) managing
your personal investments and affairs, in each case so long as such activities
do not conflict with ICO’s interests or interfere with the performance of your
responsibilities to ICO.  The starting
date for this position and for purposes of this Letter Agreement shall be May 8,
2006.

 

Base Salary and Annual
Bonus

 

Your current annual
salary will be $325,000, less payroll taxes and required withholding, which will
be paid to you in regular intervals in accordance with ICO’s customary payroll
schedules for salaried employees, but in no event less frequently than twice
each month.  This salary may be adjusted
in the future in accordance with ICO’s compensation practices.  ICO currently does not have a cash bonus plan
for you or your position.  However, you may
be considered for additional restricted stock and/or stock options in the future
if and when the Compensation Committee of ICO’s Board considers such plans
generally.

 

Stock Options

 

ICO has approved the
granting to you of an option to purchase 350,000 shares of ICO Global Class A
Ordinary Shares (the “Option”), with an exercise price equal to $5.88 per
share.  The Option will vest in equal
annual installments on each of the first, second, third, and fourth
anniversaries of your start date of May 8, 2006.  The Option will be evidenced by a stock
option agreement approved by the Committee for the grant of other stock options
under the ICO Global Communications (Holdings) Limited Amended and Restated
2000 Stock Option Plan (the “Plan”) and will be subject to the terms and

 

1

 

conditions of the
Plan.

 

Employee
Intellectual Property Agreement

 

As a condition of continuing
employment, and in exchange for being given a written employment letter
agreement, you agree to execute and abide by the terms of the ICO Employee Intellectual
Property Agreement, a copy of which is enclosed.

 

Termination

 

Without Cause

 

If ICO terminates your
employment without Cause, as defined below, then you will be entitled to the
following:

 

•                  a lump sum
payment (less any required deductions) in an amount equal to (i) your unpaid
base salary through the date of termination, (ii) the value of your vacation
time not used as of the date of termination to the extent that such vacation
time has been accrued during the calendar year of termination, calculated based
upon your base salary at the date of termination, and (iii) reimbursement
of any reasonable business expenses reimbursable under this letter, to the
extent not theretofore reimbursed.

 

In addition, ICO will provide
you the following severance benefits on the condition that you execute a
separation agreement that contains a full release of claims, in a form
acceptable to ICO:

 

•                  continuation of
your base salary then in effect, payable in accordance with the normal payroll
practices of ICO in effect on the date of termination, for a period of six (6) months
(“Severance Period”); and

 

•                  in connection
with, and immediately prior the date of termination, ICO shall take steps
necessary to accelerate and deem immediately vested those options granted to
you under the Plan in which you would have vested had you remained actively
employed through the Severance Period and all restricted shares in which you
would have vested had you remained actively employed through the Severance
Period, at which point all other unvested options shall expire; provided,
however, this provision does not supersede any Change of Control provisions for
accelerated vesting of stock options under the Plan.

 

For Cause

 

ICO may terminate your
employment for Cause at any time upon written notice of such termination to you
setting forth in reasonable detail the nature of such Cause.  If ICO terminates your employment for Cause,
or you resign, then you will be entitled to a lump sum (less any required
deductions) in an amount equal to (i) your base salary through the date of
termination, (ii) the value of your vacation time not used as of the date
of termination to the extent that such vacation time has been accrued during
the

 

2

 

calendar year of
termination, calculated based upon your base salary at the date of termination,
and (iii) reimbursement of any reasonable business expenses reimbursable
under this letter, to the extent not theretofore reimbursed.  In addition, upon termination of your
employment by ICO for Cause, any options granted to you, notwithstanding any
prior vesting, shall automatically expire at the time ICO first notifies you of
such termination.

 

Definition of “Cause”

 

“Cause” means dismissal
for willful material misconduct or failure to discharge duties, conviction or
confession of a crime punishable by law (except minor violations), the performance
of an illegal act while purporting to act in ICO’s behalf, or engaging in
activities directly in competition or antithetical to the best interest of ICO,
such as dishonesty, fraud, unauthorized use or disclosure of confidential
information or trade secrets.

 

Definition of “Disability”

 

For
purposes of this Agreement, “Disability” will mean a medically diagnosed
physical or mental impairment that that renders you incapable (even with
reasonable accommodation) of performing the duties required under this
Agreement for a period of time that is reasonably expected to exceed 8 weeks.  ICO, acting in good faith, will make the
final determination of whether you have a Disability and, for purposes of
making such determination, may require you to submit yourself to a physical
examination by a physician mutually-agreed upon by you and ICO.

 

Benefits; Vacation;
Expenses

 

You may participate in
and to receive benefits from all present and future life, accident, disability,
medical, pension and savings plans and all similar benefits made available
generally to executives of ICO.  The
amount and extent of benefits to which you are entitled will be governed by the
specific benefit plan, as it may be amended from time to time.  At present, as an employee benefit, ICO
contributes 12% of your annual salary to a 401(k) program up to a maximum of
$42,000 per year.

 

You will accrue four
weeks of paid vacation per year or such longer period as may be provided by
ICO.  Such vacation will be taken at such
times and intervals as will be determined by you, subject to the reasonable
business needs of ICO.  You will not be
entitled to defer more than two weeks’ vacation time not taken to a later
calendar year, and you cannot accumulate more than 25 days of accrued but
unused vacation time in the aggregate.

 

ICO will pay or reimburse
you promptly for all reasonable business expenses and other disbursements
incurred or paid by you in the performance of your duties and responsibilities
to ICO, including those incurred or paid in connection with business related
travel, telecommunications and entertainment, subject to reasonable
substantiation of such expenses by you in accordance with ICO’s policies.

 

3

 

Arbitration of Claims

 

You hereby acknowledge
and agree that, except as provided below, all disputes concerning your
employment with ICO, the termination thereof, the breach by either party of the
terms of this letter or any other matters relating to or arising from your
employment with ICO will be resolved in binding arbitration in a proceeding in Reston,
Virginia, administered by and under the rules and regulations of National Rules for
the Resolution of Employment Disputes of the American Arbitration
Association.  This means that the parties
agree to waive their rights to have such disputes or claims decided in court by
a jury.  Instead, such disputes or claims
will be resolved by an impartial AAA arbitrator.  Both parties and the arbitrator will treat
the arbitration process and the activities that occur in the proceedings as
confidential.

 

The arbitration procedure
will afford you and ICO the full range of statutory remedies.  ICO and you will be entitled to discovery
sufficient to adequately arbitrate any covered claims, including access to
essential documents and witnesses, as determined by the arbitrator and subject
to limited judicial review.  In order for
any judicial review of the arbitrator’s decision to be successfully
accomplished, the arbitrator will issue a written decision that will decide all
issues submitted and will reveal the essential findings and conclusions on
which the award is based.  The party that
is not the substantially prevailing party, which determination shall be made by
the arbitrator in the event of ambiguity, shall be responsible for paying for
the arbitration filing fee and the arbitrator’s fees.

 

Nothing contained in this
section will limit ICO’s or your right to seek relief in any court of
competent jurisdiction in respect of the matters set forth in the “ICO Employee
Intellectual Property Agreement.”  We
specifically agree that disputes under the “ICO Employee Intellectual Property
Agreement” will not be subject to arbitration unless both parties mutually
agree to arbitrate such disputes.

 

Employment At Will

 

By signing this letter,
you understand and agree that your employment with ICO will continue at-will.  Therefore, your employment can terminate,
with or without Cause, and with or without notice, at any time, at your option
or ICO’s option, and ICO can terminate or change all other terms and conditions
of your employment, with or without Cause, and with or without notice, at any
time, in all cases subject to the other terms and conditions of this
letter.  This at-will relationship will
remain in effect throughout your employment with ICO or any of its subsidiaries
or affiliates.  The at-will nature of
your employment, as set forth in this paragraph, can be modified only by a
written agreement signed by both ICO’s Chief Executive Officer and you which
expressly alters it.  This at-will
relationship may not be modified by any oral or implied agreement, or by any
policies of ICO, practices or patterns of conduct.

 

4

 

Entire Agreement

 

This letter, any stock
option agreement between you and ICO, and the ICO Employee Intellectual
Property Agreement constitute the entire agreement, arrangement and
understanding between you and ICO on the nature and terms of your employment
with ICO.  This letter agreement supersedes
any prior or contemporaneous agreement, arrangement or understanding on this
subject matter, subject to the sixth sentence in this paragraph regarding any
stock option agreement between you and ICO. 
By executing this letter as provided below, you expressly acknowledge
the termination of any such prior agreement, arrangement or understanding.  Also, by your execution of this letter, you
affirm that no one has made any written or verbal statement that contradicts
the provisions of this letter.  In the
event of any inconsistency between the terms contained in this letter and the
terms contained in any stock option agreement between you and ICO, the terms
contained in this letter will control, and the provisions regarding vesting or
termination contained in your stock option agreements will be superseded by the
provisions of this letter to the extent of any conflict.    In addition, the noncompetition and other covenants
contained in the ICO Employee Intellectual Property Agreement will also
supersede the provisions of any other similar covenant contained in your stock
option agreement to the extent of any conflict. 
We hope that you will accept this offer and look forward to working with
you.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  ICO
  Global Communications

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  J. Timothy Bryan

  
	
   

  	
   

  	
  Name:

  	
  J.
  Timothy Bryan

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
  Signature
  of Acceptance:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  John Flynn

  	
   

  	
   

  
	
  John
  Flynn

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  5/11/06

  	
   

  	
   

  
						

 

5Exhibit 10.1

 

FIRST
AMENDMENT

TO
THE

AMENDED
AND RESTATED

LIMITED
LIABILITY COMPANY AGREEMENT

OF

PAA/VULCAN GAS STORAGE, LLC

 

THIS FIRST AMENDMENT TO THE AMENDED AND RESTATED LIMITED LIABILITY
COMPANY AGREEMENT (this “Amendment”) of PAA/VULCAN GAS STORAGE, LLC, a Delaware
limited liability company (the “Company”), is made and entered into as of the
9th day of May, 2006, by and between Plains All American Pipeline, L.P., a
Delaware limited partnership, and Vulcan Gas Storage, LLC, a Delaware limited
liability company. Capitalized terms which are not otherwise defined herein
shall have the meanings set forth in the Amended and Restated Limited Liability
Company Agreement of PAA/Vulcan Gas Storage, LLC, dated as of September 13,
2005 (the “LLC Agreement”).

 

WHEREAS,
pursuant to the provisions of Section 15.2 of the LLC Agreement, the Initial
Members desire and intend to amend the LLC Agreement;

 

NOW, THEREFORE
for the foregoing purposes and intending to be legally bound, the Initial
Members, as of the date hereof, do hereby consent to and adopt this Amendment
and do hereby agree as follows:

 

1.                                       The
definition of “BGS Debt” set forth in Article I of the LLC Agreement is hereby
amended and restated in its entirety to read as follows:

 

“BGS Debt”
means any credit facility intended to finance the development or operation of
the BGS Project.

 

2.                                       The
definition of “PPEC Debt” set forth in Article I of the LLC Agreement is hereby
amended and restated in its entirety to read as follows:

 

“PPEC Debt”
means any credit facility intended to finance the development or operations of
the PPEC Project or the PPEC Expansion Project.

 

3.                                       The
definition of “PPEC Project” set forth in Article I of the LLC Agreement is
hereby amended and restated in its entirety to read as follows:

 

“PPEC Project”
means the salt cavern natural gas storage facility located in Evangeline
Parish, Louisiana, that is currently under development by Pine Prairie Energy
Center, LLC. For the avoidance of doubt, the PPEC Project does not include any
PPEC Expansion Project.

 

 

4.                                       The
definition of “Project” set forth in Article I of the LLC Agreement is hereby
deleted.

 

5.                                       The
following definitions are hereby added to Article I of the LLC Agreement:

 

“Additional PPEC
Project” means any augmentation or upgrade of the PPEC
Project from the current PPEC Project construction plan. For the avoidance of
doubt, no Additional PPEC Project shall constitute a PPEC Expansion Project or
an Other Approved Project.

 

“Approved PPEC
Expansion Project” means any PPEC Expansion Project
with respect to which Vulcan has made a Funding Election pursuant to Section
3.2(g).

 

“Designated Share”
has the meaning set forth in Section 3.2(g).

 

“Equity Contribution
Agreement” means the Contingent Equity Contribution
Agreement , dated as of May 9, 2006, among Pine Prairie Energy Center, LLC, PAA
and Vulcan, as sponsors, and SunTrust Bank, as administrative agent.

 

“Funding Election”
has the meaning set forth in Section 3.2(g).

 

“Natural Gas Supply
Agreement” means the Natural Gas Supply Agreement,
dated as of May 9, 2006, by and  between
the Company and PAA pursuant to which the Company will purchase natural gas to
provide for minimum operating inventories for the PPEC Project.

 

 “PPEC Credit Agreement”
means that certain Credit Agreement dated as of May 9, 2006, by and among PINE
PRAIRIE ENERGY CENTER, LLC, a Delaware limited liability company, SUNTRUST
BANK, as initial lender and LC Issuer (as defined therein), each of the other
lenders from time to time party hereto, SUNTRUST ROBINSON HUMPHREY, A DIVISION
OF SUNTRUST CAPITAL MARKETS, INC., as lead arranger and bookrunner, ING CAPITAL
LLC, as syndication agent, BANK OF AMERICA, N.A. as co-documentation agent,
COBANK, ACB, as co-documentation agent, and SUNTRUST BANK, as administrative
agent and as collateral agent for the Secured Parties as defined therein.

 

“PPEC Expansion
Project” means the activity and expenditures related
to the development and operation of any salt dome cavern or caverns at the PPEC
Project site to the extent such cavern is in addition to the 3 caverns
contemplated at the Closing Date. For the avoidance of doubt, no PPEC Expansion
Project shall constitute an Additional PPEC Project or an Other Approved
Project.

 

“PPEC Expansion
Project Estimate” has the meaning set forth in Section
3.2(g).

 

 

“PPEC Expansion
Project Notice” has the meaning set forth in Section
3.2(g).

 

6.                                       Section
3.2(c) of the LLC Agreement is hereby amended and restated in its entirety to
read as follows:

 

(c)                                  If, subsequent to the
making of the Initial Capital Contributions the Manager reasonably determines
that:

 

(i)                                     the Company
requires additional Capital Contributions in order to fund (x) either of the
Initial Approved Projects, or (y) the net costs associated with the Natural Gas
Supply Agreement, the Manager may at any time and from time to time give
written notice to each Initial Member of the amount(s) and date(s) on which
such additional Capital Contributions are required, and upon receipt of such
notice each Initial Member shall make a Capital Contribution in cash to the
Company equal to 50% of such additional required Capital Contribution
(regardless of such Initial Member’s respective Percentage Interest at such
time) on or before the due date specified in such notice;

 

(ii)                                  the Company requires
additional Capital Contributions to fund any shortfall with respect to the PPEC
construction budget, then  the Manager
may at any time and from time to time prior to final completion of the PPEC
Project give written notice to each Initial Member of the amount(s) and date(s)
on which such additional Capital Contributions are required, and upon receipt
of such notice each Initial Member shall make a Capital Contribution in cash to
the Company equal to 50% of such additional required Capital Contribution
(regardless of such Initial Member’s respective Percentage Interest at such
time) on or before the due date specified in such notice; provided, however,
that the Manager shall have no right to require additional Capital
Contributions from the Members pursuant to this Section 3.2(c)(ii) from
and after such time as the aggregate amount of (x) additional Capital
Contributions by Vulcan pursuant to this Section 3.2(c)(ii) and (y)
equity contributions by Vulcan under the Equity Contribution Agreement equals
$15 million (and in no event shall the aggregate amount of additional Capital
Contributions required by the Manager from Vulcan pursuant to this Section
3.2(c)(ii) exceed the amount, if any, by which $15 million exceeds the
aggregate amount of equity contributions by Vulcan under the Equity
Contribution Agreement). The Company shall cause any Capital Contributions it
receives pursuant to this Section 3.2(c)(ii) to be contributed promptly
to the capital of Pine Prairie Energy Center, LLC;

 

(iii)                               after a Funding Election
has been made under Section 3.2(g), the Company requires additional Capital
Contributions in order to fund the Approved PPEC Expansion Project to which
such Funding Election relates, the Manager may at any time and from time to
time give written notice to each Initial Member of the amount(s) and date(s) on
which such additional Capital Contributions are required, and upon receipt of
such notice each Initial Member shall make a Capital Contribution in cash to
the Company equal to such Initial

 

 

Member’s Designated Share of such additional required Capital
Contribution (regardless of such Initial Member’s respective Percentage
Interest at such time) on or before the due date specified in such notice; provided, however,
that the Manager shall have no right to require additional Capital
Contributions from Vulcan pursuant to this Section 3.2(c)(iii) with
respect to an Approved PPEC Expansion Project from and after such time as the
aggregate amount of Capital Contributions made by Vulcan pursuant to this Section
3.2(c)(iii) in respect of such Approved PPEC Expansion Project equals
Vulcan’s Designated Share of the PPEC Expansion Project Estimate for such
Approved PPEC Expansion Project. For the avoidance of doubt, Vulcan shall have
no obligation to make any Capital Contribution pursuant to this Section
3.2(c)(iii) in respect of any PPEC Expansion Project which is not an
Approved PPEC Expansion Project; and

 

(iv)                              with respect to any
Approved PPEC Expansion Project, the Company requires Capital Contributions in
excess of the PPEC Expansion Project Estimate for such Approved PPEC Expansion
Project in order to complete such Approved PPEC Expansion Project, then the
Manager may at any time and from time to time give written notice to each
Initial Member of the amount(s) and date(s) on which such additional Capital
Contributions are required, and upon receipt of such notice each Initial Member
shall make a Capital Contribution in cash to the Company equal to such Initial
Member’s Designated Share of such additional required Capital Contribution
(regardless of such Initial Member’s respective Percentage Interest at such
time) on or before the due date specified in such notice; provided, however,
that the Manager shall have no right to require additional Capital
Contributions from the Members pursuant to this Section 3.2(c)(iv) with
respect to any Approved PPEC Expansion Project from and after such time as the
aggregate amount of additional Capital Contributions by Vulcan pursuant to this
Section 3.2(c)(iv) equals $10 million (and in no event shall the
aggregate amount of Capital Contributions required by the Manager from Vulcan
pursuant to this Section 3.2(c)(iv) in respect of all Approved PPEC
Expansion Projects exceed $10 million). For the avoidance of doubt, Vulcan
shall have no obligation to make any Capital Contribution pursuant to this Section
3.2(c)(iv) in respect of any PPEC Expansion Project which is not an
Approved PPEC Expansion Project.

 

7.                                       Section
3.2(d) of the LLC Agreement is hereby amended and restated in its entirety to
read as follows:

 

(d)                                 If, subsequent to the making of the
Initial Capital Contributions, the Manager or any Initial Member (i) reasonably
determines that the Company or any of its Subsidiaries requires additional
capital to fund capital expenditures that the Manager or such Initial Member
reasonably believes are necessary for the BGS Project, the PPEC Project, any
Additional PPEC Project, any PPEC Expansion Project or any Other Approved
Project or (ii) reasonably and in good faith determines that the Company or any
of its Subsidiaries requires additional capital to prevent or cure a default
under any material agreement, including any debt instrument (including without
limitation the BGS Debt and the PPEC Debt),

 

 

and
(A) with respect to expenditures necessary for the PPEC Project or any Approved
PPEC Expansion Project, the limit on additional Capital Contributions set forth
in Section 3.2(c)(ii) or Section 3.2(c)(iv), respectively, has been reached and
(B) the Manager desires to fund such capital through the sale or issuance by
the Company or any Subsidiary of Additional Interests, the Company may, or may
cause such Subsidiary, as applicable, to sell or issue such Additional
Interests, provided that the Manager and the Company or such Subsidiary comply
with Section 3.2(e) or Section 3.2(f), as applicable.

 

8.                                       Section
3.2(e) of the LLC Agreement is hereby amended and restated in its entirety to
read as follows:

 

(e)                                  Prior to issuing any Additional
Percentage Interests (other than any Additional Percentage Interests issued in
exchange for Capital Contributions pursuant to Section 3.2(c)), the
Manager (acting on behalf of the Company) shall comply with the following:

 

(i)                                     if at the time Additional Percentage
Interests are to be issued Vulcan has a Percentage Interest that is greater
than 30%, then except with respect to (w) Additional Percentage Interests
issued in connection with the acquisition of any Initial Approved Project, (x)
Additional Percentage Interests issued in connection with the acquisition of a
Designated Project with respect to which Vulcan has exercised its right
pursuant to Section 3.2(e)(iii), (y) Additional Percentage
Interests issued in connection with any Additional PPEC Project or (z)
Additional Percentage Interests issued in connection with any Approved PPEC
Expansion Project, PAA shall have the right, but not the obligation, to fund up
to 100% of such Additional Percentage Interests up to an amount that would
cause Vulcan’s Percentage Interest to equal no less than 30% (and any remaining
Additional Percentage Interests shall be issued in compliance with Section
3.2(c) or Section 3.2(e)(ii), as applicable); provided, that notwithstanding the
foregoing, if the Fair Value of the Company at the time of the issuance of such
Additional Percentage Interests is less than the Purchase Price (as defined in
the Purchase Agreement), then the Additional Percentage Interests shall be
issued in compliance with Section 3.2(e)(ii).

 

(ii)                                  If any Additional Percentage
Interests are to be issued other than as provided in Section 3.2(c) or 3.2(e)(i),
(iii) or (iv), then the Manager shall request that each Initial Member
acquire such Additional Percentage Interests, in each case in proportion to its
respective Percentage Interest at such time. The request shall specify the
amount(s) and date(s) on which such Additional Percentage Interest purchase(s)
are required. Each Initial Member shall have the right, but not the obligation,
to fund its share of such Additional Percentage Interests in accordance with
such request by notifying the Manager on or before the 10th Business Day
following the request; provided,
that in the case of Vulcan, such notice must be accompanied by assurances
reasonably acceptable to PAA from Paul G. Allen (or another Person
reasonably acceptable to PAA) that Vulcan will have sufficient funds for the
purchase of such Additional Percentage Interests

 

 

(it
being agreed that, without limitation, a letter from Paul G. Allen or such
other Person substantially in the form of Exhibit A hereto with respect to such
funds shall constitute reasonably acceptable assurances). If an Initial Member
elects not to fund its share of such Additional Percentage Interests then,
subject to Section 3.2(e)(v), the other Initial Member shall have the
right, but not the obligation, to fund the entire amount of such Additional
Percentage Interests as provided in the request (and its Percentage Interest
shall be adjusted as provided in Section 3.2(b)).

 

(iii)                               If any Additional Percentage
Interests are to be issued in order to fund (x) any Designated Project or (y)
any Additional PPEC Project, then the Manager shall request that each Initial
Member acquire 50% of such Additional Percentage Interests (regardless of such
Initial Member’s respective Percentage Interest at such time). The request
shall specify the amount(s) and date(s) on which such Additional Percentage
Interest purchase(s) are required, and shall also provide each Initial Member
with all material terms of such Designated Project or, in the case of an expenditure
with respect to an Additional PPEC Project, all material information regarding
such expenditure. Each Initial Member shall have the right, but not the
obligation, to fund 50% of such Additional Percentage Interests in accordance
with such request by notifying the Manager on or before the 10th Business Day
following the request; provided,
that in the case of Vulcan, such notice must be accompanied by assurances
reasonably acceptable to PAA from Paul G. Allen (or another Person reasonably
acceptable to PAA) that Vulcan will have sufficient funds for the purchase of
such Additional Percentage Interests (it being agreed that, without limitation,
a letter from Paul G. Allen or such other Person substantially in the form of
Exhibit A hereto with respect to such funds shall constitute reasonably
acceptable assurances). If an Initial Member elects not to fund its share of
such Additional Percentage Interests, then the other Initial Member shall have
the right, but not the obligation, to fund the entire amount of such Additional
Percentage Interests as provided in the request. In any event, the Percentage
Interest of any Initial Member acquiring Additional Percentage Interests
hereunder shall be adjusted as provided in Section 3.2(b).

 

(iv)                              If any Additional Percentage
Interests are to be issued in order to fund any Approved PPEC Expansion Project
in respect of which the limit on additional Capital Contributions set forth in Section
3.2(c)(iii) or Section 3.2(c)(iv) has been reached, then the Manager
shall request that each Initial Member acquire such Initial Member’s Designated
Share of such Additional Percentage Interests (regardless of such Initial
Member’s respective Percentage Interest at such time). The request shall
specify the amount(s) and date(s) on which such Additional Percentage Interest
purchase(s) are required, and shall also provide each Initial Member with all
material information regarding such expenditure. Each Initial Member shall have
the right, but not the obligation, to fund its Designated Share of such
Additional Percentage Interests in accordance with such request by notifying
the Manager on or before the 10th Business Day following the request; provided, that in the case of Vulcan, such
notice must be 

 

 

accompanied
by assurances reasonably acceptable to PAA from Paul G. Allen (or another
Person reasonably acceptable to PAA) that Vulcan will have sufficient funds for
the purchase of such Additional Percentage Interests (it being agreed that,
without limitation, a letter from Paul G. Allen or such other Person
substantially in the form of Exhibit A hereto with respect to such funds shall
constitute reasonably acceptable assurances). If an Initial Member elects not
to fund its share of such Additional Percentage Interests, then the other Initial
Member shall have the right, but not the obligation, to fund the entire amount
of such Additional Percentage Interests as provided in the request. In any
event, the Percentage Interest of any Initial Member acquiring Additional
Percentage Interests hereunder shall be adjusted as provided in Section
3.2(b).

 

(v)                                 If (x) any Additional Percentage
Interests are being issued pursuant to Section 3.2(e)(ii) or Additional
Issued Interests are being issued pursuant to Section 3.2(f), in either
case in connection with any PPEC Expansion Project in respect of which Vulcan
shall have declined (or is deemed to have declined) to make a Funding Election,
(y) at the time Vulcan declined (or was deemed to have declined) to make a
Funding Election with respect to such PPEC Expansion Project, (1) Vulcan’s
Percentage Interest was greater than 30%, and (2) based on the information set
forth in the PPEC Expansion Project Notice with respect to such PPEC Expansion
Project, completion and funding of such PPEC Expansion Project without a
Funding Election was not expected to reduce Vulcan’s Percentage Interest below
30%, and (z) at any time Additional Percentage Interests or Additional Issued
Interests are to be issued in connection therewith in an amount that would
cause Vulcan’s Percentage Interest to equal 30% or less, then Vulcan shall have
the right, but not the obligation, to fund that portion of such Additional
Percentage Interests (or Additional Issued Interests) as is necessary so that
Vulcan’s Percentage Interest equals 30%. Prior to issuing any Additional
Percentage Interests (or Additional Issued Interests) in the circumstances
described in the preceding sentence, the Manager shall provide Vulcan with
written notice thereof. Such notice shall specify the amount(s) and date(s) on
which such Additional Percentage Interest (or Additional Issued Interest)
purchase(s) are required. Vulcan shall have the right, but not the obligation,
to fund such portion of such as is necessary so that Vulcan’s Percentage
Interest equals 30% in accordance with such request by notifying the Manager on
or before the 10th Business Day following the request; provided, that in the case of Vulcan, such
notice must be accompanied by assurances reasonably acceptable to PAA from Paul
G. Allen (or another Person reasonably acceptable to PAA) that Vulcan will have
sufficient funds for the purchase of such Additional Percentage Interests or
Additional Issued Interest, as the case may be (it being agreed that, without
limitation, a letter from Paul G. Allen or such other Person substantially in
the form of Exhibit A hereto with respect to such funds shall constitute
reasonably acceptable assurances). If Vulcan elects not to fund its share of
such Additional Percentage Interests (or Additional Issued Interests), the
other Initial Member shall have the right, but not the obligation, to fund the
entire amount of such Additional Percentage Interests (or Additional Issued
Interests) as

 

 

provided
in the request (and its Percentage Interest shall be adjusted as provided in Section
3.2(b), to the extent applicable).

 

(vi)                              For the avoidance of doubt, to the
extent each Initial Member participates in the purchase of Additional
Percentage Interests in proportion to its Percentage Interest at the time, such
purchase will be treated as a Capital Contribution but will not effect an
increase in such Initial Member’s Percentage Interest.

 

9.                                       Section
3.2(f) of the LLC Agreement is hereby amended and restated in its entirety to
read as follows:

 

(f)                                    Prior to issuing or selling (or
permitting or causing any Subsidiary to issue or sell) any Additional Issued
Interests, the Manager (acting on behalf of the Company) shall request that
each Initial Member acquire such Additional Issued Interest, in proportion to
its respective Percentage Interest at such time; provided, however, that (x) if
such Additional Issued Interests are to be issued in order to fund any
Designated Project or any Additional PPEC Project, each Initial Member shall
have the right, but not the obligation, to acquire 50% of such Additional
Issued Interests (regardless of such Initial Member’s respective Percentage
Interest at such time), and (y) if such Additional Issued Interests are to be
issued in order to fund any Approved PPEC Expansion Project, each Initial Member
shall have the right, but not the obligation, to acquire its Designated Share
of such Additional Issued Interests (regardless of such Initial Member’s
respective Percentage Interest at such time). The request shall specify the
amount(s) and date(s) on which such Additional Issued Interest purchase(s) are
required. Each Initial Member shall have the right, but not the obligation, to
fund its share of such Additional Issued Interest in accordance with such
request by notifying the Manager on or before the 10th Business Day following
the request; provided, that in
the case of Vulcan, such notice must be accompanied by assurances reasonably
acceptable to PAA from Paul G. Allen (or another Person reasonably
acceptable to PAA) that Vulcan will have sufficient funds for the purchase of
such Additional Issued Interest (it being agreed that, without limitation, a
letter from Paul G. Allen or such other Person substantially in the form of
Exhibit A hereto with respect to such funds shall constitute reasonably acceptable
assurances). If an Initial Member elects not to fund its share of such
Additional Issued Interest, then, subject to Section 3.2(e)(v), the
other Initial Member shall have the right, but not the obligation, to (A) fund
the entire amount of such Additional Issued Interest as provided in the request
(and its interest in the Company or Subsidiary shall be adjusted as provided in
Section 3.2(b)) or (B) cause the Company to issue such Additional Issued
Interests in the Company or such Subsidiary, whether in a private or public
offering, including an initial public offering, to a third party or parties; provided, however, that (i) the Company
may only cause a Subsidiary to issue, grant or sell any such Additional Issued
Interest if the request to the Initial Members specified that the requested
contribution would be made to such Subsidiary and (ii) the terms of such
Additional Issued Interests and the terms on which such Additional Issued
Interests are issued shall

 

 

be
no less favorable in any material respect to the Company (or such Subsidiary)
than those set forth in the request to the Initial Members (allowing for
customary underwriting commissions and discounts, dealer concession and
reallowances, offering expenses and other transaction fees and costs).

 

10.                                 Section
3.2 of the LLC Agreement is hereby amended by adding the following paragraph
(g):

 

(g)                                 PPEC Expansion
Projects. If the Manager reasonably determines that it is in the best
interests of the Company to pursue any PPEC Expansion Project, then prior to
the commencement of such PPEC Expansion Project, the Manager shall give written
notice (a “PPEC Expansion Project Notice”) to Vulcan that contains a detailed
description of such PPEC Expansion Project and a good faith reasonable estimate
of the amount of Capital Contributions necessary to complete such PPEC
Expansion Project (the “PPEC Expansion Project Estimate”). With respect to any
PPEC Expansion Project, Vulcan shall have the right, but not the obligation, to
elect to fund its Designated Share of the Capital Contributions in connection
with such PPEC Expansion Project, up to its Designated Share of the PPEC
Expansion Project Estimate (a “Funding Election”), by notifiying the Manager of
Vulcan’s intent to participate in such PPEC Expansion Project on or before the
10th business day following Vulcan’s receipt of any PPEC Expansion
Project Notice. If Vulcan does not respond to the Manager within 10 business
days of receiving the PPEC Expansion Project Notice, Vulcan shall be deemed to
have declined to make a Funding Election in respect of such PPEC Expansion
Project. With respect to a particular Approved PPEC Expansion Project, (x)
Vulcan’s “Designated Share” shall mean 50%; provided, however, that Vulcan
shall have the right to specify in the Funding Election a Designated Share for
such Approved PPEC Expansion Project that is less than 50%, in which case
Vulcan’s Designated Share for such Approved PPEC Expansion Project shall be
such lesser specified percentage, and (y) PAA’s “Designated Share” shall be
equal to 100% minus Vulcan’s Designated Share for such Approved PPEC Expansion
Project.

 

11.                                 Section
4.1 of the LLC Agreement is hereby amended by adding the following paragraph
(e):

 

(e)  Return of PPEC Capital. In the event
that Pine Prairie Energy Center, LLC is permitted to make any distribution
pursuant to Section 2.3 (d) or (e) of the Contingent Equity Contribution
Agreement (as defined in the PPEC Credit Agreement), then the Company shall
cause the proceeds of such distribution to be distributed to the Initial
Members on a 50/50 basis, regardless of their respective Percentage Interests
at the time. In the event of any distribution pursuant to this Section
4.1(e), at a time when the relative Percentage Interests of the Initial
Members are not 50/50, then the Percentage Interest of each Initial Member
shall be adjusted based upon the Fair Value of the Company at the time of such
distribution determined in the same manner as determined under Section 3.6
in respect of contributions to capital.

 

 

12.                                 Section
9.1(a) of the LLC Agreement is hereby amended by replacing the references to “the
Project” therein with the words “the PPEC Project”.

 

13.                                 Except
as amended by this Amendment, the LLC Agreement remains in full effect.

 

14.                                 This
Amendment shall be construed according to and governed by the laws of the State
of Delaware without regard to principles of conflict of laws. The parties
hereby submit to the exclusive jurisdiction and venue of the state courts of
Harris County, Texas or to the Court of Chancery of the State of Delaware and
the United States District Court for the Southern District of Texas and of the
United States District Court for the District of Delaware, as the case may be,
and agree that the Company or Members may, at their option, enforce their
rights hereunder in such courts..

 

15.                                 This
Amendment may be executed in several counterparts, all of which together shall
constitute one agreement binding on all parties hereto, notwithstanding that
all the parties have not signed the same counterpart. This Amendment shall
become effective upon the execution hereof by each of the signatories hereto,
and the delivery hereof to each signatory executing this Amendment.

 

[Remainder
of Page Intentionally Left Blank]

 

 

IN WITNESS
WHEREOF, the Initial Members have caused this Amendment to be duly executed as
of the date first written above.

 

	
   

  	
  PLAINS ALL AMERICAN PIPELINE, L.P.

  
	
   

  	
  By:

  	
  Plains AAP, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Plains All American GP LLC, its general

  partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tim Moore

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Tim Moore

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VULCAN GAS STORAGE LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David N. Capobianco

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David N. Capobianco

  
	
   

  	
   

  	
  Title:

  	
  Vice President

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