Exhibit 3.4
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
PENN VIRGINIA OPERATING CO., LLC
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions......................................................... 2
Section 1.2 Construction........................................................ 7
ARTICLE II
ORGANIZATION
Section 2.1 Formation........................................................... 7
Section 2.2 Name................................................................ 8
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices. 8
Section 2.4 Purpose and Business................................................ 8
Section 2.5 Powers.............................................................. 9
Section 2.6 Power of Attorney................................................... 9
Section 2.7 Term................................................................ 10
Section 2.8 Title to Company Assets............................................. 11
ARTICLE III
RIGHTS OF MEMBERS
Section 3.1 Limitation of Liability............................................. 11
Section 3.2 Outside Activities of the Members................................... 11
Section 3.3 Rights of Members................................................... 11
ARTICLE IV
TRANSFERS OF INTERESTS
Section 4.1 Transfer Generally.................................................. 12
Section 4.2 Transfer of Membership Interests.................................... 12
Section 4.3 Restrictions on Transfers........................................... 13
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF INTERESTS
Section 5.1 Prior to Closing Date............................................... 13
Section 5.2 Contributions at Closing............................................ 14
Section 5.3 Additional Capital Contributions.................................... 14
Section 5.4 Interest and Withdrawal............................................. 14
Section 5.5 Loans from Members.................................................. 15
Section 5.6 Issuances of Additional Company Securities.......................... 15
Section 5.7 Limited Preemptive Rights........................................... 15
Section 5.8 Fully Paid and Non-Assessable Nature of Membership Interests........ 16
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1 Allocations......................................................... 16
Section 6.2 Distributions....................................................... 16
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ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1 Management.......................................................... 17
Section 7.2 Certificate of Formation............................................ 18
Section 7.3 Restrictions on Managing Member's Authority......................... 18
Section 7.4 Reimbursement of the General Partner; Benefit Plans................. 19
Section 7.5 Outside Activities.................................................. 20
Section 7.6 Loans from the Managing Member; Loans or Contributions from
the Company; Contracts with Affiliates.............................. 20
Section 7.7 Indemnification..................................................... 22
Section 7.8 Liability of Indemnitees............................................ 23
Section 7.9 Resolution of Conflicts of Interest................................. 24
Section 7.10 Other Matters Concerning the Managing Member........................ 25
Section 7.11 Reliance by Third Parties........................................... 26
ARTICLE VIII
OFFICERS
Section 8.1 Officers............................................................ 27
Section 8.2 Compensation........................................................ 29
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting.............................................. 29
Section 9.2 Fiscal Year......................................................... 29
ARTICLE X
TAX MATTERS
Section 10.1 Tax Returns and Information......................................... 29
Section 10.2 Tax Elections....................................................... 29
ARTICLE XI
ADMISSION OF MEMBERS
Section 11.1 Admission of MLP.................................................... 30
Section 11.2 Admission of Substituted Members.................................... 30
Section 11.3 Admission of Additional Members..................................... 30
Section 11.4 Amendment of Agreement and Certificate of Formation................. 30
ARTICLE XII
WITHDRAWAL OF MEMBERS
Section 12.1 Withdrawal of Members............................................... 31
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution......................................................... 31
Section 13.2 Liquidator.......................................................... 31
Section 13.3 Liquidation......................................................... 32
Section 13.4 Cancellation of Certificate of Formation............................ 32
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Section 13.5 Return of Capital Contributions..................................... 33
Section 13.6 Waiver of Partition................................................. 33
Section 13.7 Capital Account Restoration......................................... 33
ARTICLE XIV
AMENDMENT OF AGREEMENT
Section 14.1 Amendment to be Adopted Solely by the Managing Member............... 33
Section 14.2 Amendment Procedures................................................ 34
ARTICLE XV
MERGER
Section 15.1 Authority........................................................... 34
Section 15.2 Procedure for Merger or Consolidation............................... 35
Section 15.3 Approval by Members of Merger or Consolidation...................... 36
Section 15.4 Certificate of Merger............................................... 36
Section 15.5 Effect of Merger.................................................... 36
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Addresses and Notices............................................... 37
Section 16.2 Further Action...................................................... 37
Section 16.3 Binding Effect...................................................... 37
Section 16.4 Integration......................................................... 37
Section 16.5 Creditors........................................................... 38
Section 16.6 Waiver.............................................................. 38
Section 16.7 Counterparts........................................................ 38
Section 16.8 Applicable Law...................................................... 38
Section 16.9 Invalidity of Provisions............................................ 38
Section 16.10 Consent of Members.................................................. 38
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
PENN VIRGINIA OPERATING CO., LLC
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF PENN
VIRGINIA OPERATING CO., LLC, dated as of _______, 2001, is entered into by and
among Penn Virginia Resource Partners, L.P., a Delaware limited partnership
("MLP"), together with any other Persons who hereafter become Members in the
Company or parties hereto as provided herein.
RECITALS:
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WHEREAS, Penn Virginia Coal Company ("Penn Virginia Coal") caused Penn
Virginia Operating Co., LLC (referred to herein as the "Company") to be formed
as a limited liability company under the Delaware Limited Liability Company Act
on September 13, 2001 and a Certificate of Formation was filed with the
Secretary of State of the State of Delaware on such date.
WHEREAS, on September 14, 2001,:
1. Penn Virginia Holding Corp. ("Holding") contributed all of the common
stock of Penn Virginia Coal to Penn Virginia Resource Holdings Corp. ("Resource
Holdings") as a capital contribution;
2. Penn Virginia Coal merged into the Company;
3. The Company distributed certain oil and gas interests, the stock of
Xxxxxx River Rail Corporation and the stock of Kanawha Rail Corp. ("KRC") to
Resource Holdings;
4. Resource Holdings contributed a portion of its membership interest in
the Company to Penn Virginia Resource GP, LLC (the "General Partner") and the
remaining portion of its membership interest in the Company to Penn Virginia
Resource LP Corp. ("LP Corp.") as capital contributions;
5. The General Partner contributed its membership interest in the Company
to the MLP in exchange for a continuation of its 2% general partner interest in
the MLP;
6. LP Corp. contributed its membership interest in the Company to the MLP
in exchange for a 97.5% limited partner interest in the MLP; and
7. The MLP contributed its interest in K Rail LLC to the Company as a
capital contribution.
WHEREAS, the MLP now desires to execute this amended and restated Limited
Liability Company Agreement in connection with the initial public offering of
the MLP to reflect contributions to the Company and certain other matters.
NOW THEREFORE, in consideration of the covenants, conditions and agreements
contained herein, the parties hereto hereby enter into this Agreement:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
Capitalized terms used herein but not otherwise defined shall have the meaning
assigned to such term in the MLP Agreement.
"Act" means the Delaware Limited Liability Company Act, 6 Del. C.(S)18-101,
et seq., as amended, supplemented or restated from time to time, and any
successor to such statute.
"Additional Member" means a Person admitted to the Company as a Member
pursuant to Section 11.3 and who is shown as such on the books and records of
the Company.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Agreement" means this Amended and Restated Limited Liability Company
Agreement of Penn Virginia Operating Co., LLC, as it may be amended,
supplemented or restated from time to time. The Agreement shall constitute a
"limited liability company agreement" as such term is defined in the Act.
"Assignee" means a Person to whom one or more Membership Interests have
been transferred in a manner permitted under this Agreement, but who has not
been admitted as a Substituted Member.
"Associate" means, when used to indicate a relationship with any Person,
(a) any corporation or organization of which such Person is a director, officer
or partner or is, directly or indirectly, the owner of 20% or more of any class
of voting stock or other voting interest; (b) any trust or other estate in which
such Person has at least a 20% beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity; and (c) any relative or
spouse of such Person, or any relative of such spouse, who has the same
principal residence as such Person.
"Available Cash" means, with respect to any Quarter ending prior to the
Liquidation Date,
(a) the sum of (i) all cash and cash equivalents of the Company Group on
hand at the end of such Quarter, and (ii) all additional cash and cash
equivalents of the Company Group on hand on the date of determination of
Available Cash with respect to such Quarter resulting from Working Capital
Borrowings made subsequent to the end of such Quarter, less
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(b) the amount of any cash reserves that are necessary or appropriate in
the reasonable discretion of the Managing Member to (i) provide for the proper
conduct of the business of the Company Group (including reserves for future
capital expenditures and for anticipated future credit needs of the Company
Group) subsequent to such Quarter, (ii) comply with applicable law or any loan
agreement, security agreement, mortgage, debt instrument or other agreement or
obligation to which any Group Member is a party or by which it is bound or its
assets are subject or (iii) provide funds for distributions under Section 6.4 or
6.5 of the MLP Agreement in respect of any one or more of the next four
Quarters; provided, however, that the Managing Member may not establish cash
reserves pursuant to (iii) above if the effect of such reserves would be that
the MLP is unable to distribute the Minimum Quarterly Distribution on all Common
Units, plus any Cumulative Common Unit Arrearage on all Common Units, with
respect to such Quarter; and provided further that disbursements made by a Group
Member or cash reserves established, increased or reduced after the end of such
Quarter but on or before the date of determination of Available Cash with
respect to such Quarter shall be deemed to have been made, established,
increased or reduced, for purposes of determining Available Cash, within such
Quarter if the Managing Member so determines.
Notwithstanding the foregoing, "Available Cash" with respect to the Quarter
in which the Liquidation Date occurs and any subsequent Quarter shall equal
zero.
"Bank Credit Agreement" means the Credit Agreement, dated as of the Closing
Date, among the Company, the MLP and a syndicate of financial institutions led
by PNC Bank, National Association.
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States of
America or the state of New York or the Commonwealth of Pennsylvania shall not
be regarded as a Business Day.
"Capital Contribution" means any cash, cash equivalents or the value of
Contributed Property that a Member contributes to the Company pursuant to this
Agreement or the Contribution Agreement.
"Certificate of Formation" means the Certificate of Formation of the
Company filed with the Secretary of State of the State of Delaware as referenced
in Section 2.1, as such Certificate of Formation may be amended, supplemented or
restated from time to time.
"Closing Contribution Agreement" means the Closing Contribution, Conveyance
and Assumption Agreement, dated the Closing Date, among the Company, the MLP,
the General Partner and certain other parties named therein, together with any
additional documents and instruments contemplated or referenced thereunder.
"Closing Date" means the first date on which Common Units are sold by the
MLP to the Underwriters pursuant to the provisions of the Underwriting
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time. Any reference herein to a specific section or sections of the
Code shall be deemed to include a reference to any corresponding provision of
successor law.
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"Commission" means the United States Securities and Exchange Commission.
"Common Unit" has the meaning assigned to such term in the MLP Agreement.
"Company" means Penn Virginia Operating Co., LLC, a Delaware limited
liability company, and any successors thereto.
"Company Group" means the Company and any Subsidiary of the Company,
treated as a single consolidated entity.
"Company Security" means any class or series of membership interest in the
Company.
"Conflicts Committee" has the meaning assigned to such term in the MLP
Agreement.
"Contributed Property" means each property or other asset, in such form as
may be permitted by the Act, but excluding cash, contributed to the Company.
"First Contribution Agreement" means the Contribution, Conveyance,
Assignment and Assumption Agreement, dated September 14, 2001, among the
Company, the MLP, the General Partner and certain other parties named therein,
together with the additional conveyance documents and instruments contemplated
or referenced thereunder.
"General Partner" means Penn Virginia Resource GP, LLC, a Delaware limited
liability company and its successors and permitted assigns as general partner of
the MLP.
"Group Member" means a member of the Company Group.
"Holding" means Penn Virginia Holding Corp., a Delaware corporation.
"Indemnitee" means (a) the Managing Member, (b) any Person who is or was a
member, partner, director, officer, employee, agent or trustee of any Group
Member, the MLP, the General Partner or any of their respective Affiliates and
(c) any Person who is or was serving at the request of the Managing Member as a
member, partner, director, officer, employee, partner, agent, fiduciary or
trustee of another Person, in each case, acting in such capacity, provided, that
a Person shall not be an Indemnitee by reason of providing, on a
fee-for-services basis, trustee, fiduciary or custodial services.
"Initial Offering" means the initial offering and sale of Common Units to
the public, as described in the Registration Statement.
"KRC" means Kanawha Rail Corp., a Virginia corporation.
"Liquidation Date" means the date on which any event giving rise to the
dissolution of the Company occurs.
"Liquidator" means one or more Persons selected by the Managing Member to
perform the functions described in Section 13.2 as liquidating trustee of the
Company within the meaning of the Act.
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"Loadout LLC" means Loadout LLC, a Delaware limited liability company.
"LP Corp." means Penn Virginia Resource LP Corp., a Delaware corporation.
"Managing Member" means Penn Virginia Resource Partners, L.P. and its
predecessors, successors and permitted assigns as managing member of the
Company.
"Member" means any Person that is admitted to the Company as a member
pursuant to the terms and conditions of this Agreement; but the term Member
shall not include any Person from and after the time such Person withdraws as a
Member from the Company.
"Membership Interest" means the ownership interest of a Member in the
Company.
"Merger Agreement" has the meaning assigned to such term in Section 15.1.
"Minimum Quarterly Distribution" has the meaning assigned to such term in
the MLP Agreement.
"MLP" has the meaning assigned to such term in the recitals.
"MLP Agreement" means the First Amended and Restated Agreement of Limited
Partnership of Penn Virginia Resource Partners, L.P., as it may be amended,
supplemented or restated from time to time.
"MLP Security" has the meaning assigned to the term "Partnership Security"
in the MLP Agreement.
"National Securities Exchange" has the meaning assigned to such term in the
MLP Agreement.
"Omnibus Agreement" means the Omnibus Agreement, dated the Closing Date,
among the Company, the MLP, the General Partner and certain other parties named
therein, together with any additional documents and instruments contemplated or
referenced thereunder.
"Opinion of Counsel" means a written opinion of counsel (which may be
regular counsel to the Company or the MLP or any of their respective Affiliates)
acceptable to the Managing Member in its reasonable discretion.
"Penn Virginia Coal Company" means Penn Virginia Coal Company, a Virginia
corporation.
"Penn Virginia Corporation" means Penn Virginia Corporation, a Virginia
corporation.
"Percentage Interest" means the percentage interest in the Company held by
each Member upon completion of the transactions in Section 5.2 and shall mean,
as to the MLP, 100%.
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"Person" means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.
"Pro Rata" means, when modifying Members and Assignees, apportioned among
all Members and Assignees in accordance with their relative Percentage
Interests.
"PVC Concord LLC" means PVC Concord LLC, a Delaware limited liability
company.
"PVC Lexington LLC" means PVC Lexington LLC, a Delaware limited liability
company.
"PVC Savannah LLC" means PVC Savannah LLC, a Delaware limited liability
company.
"Quarter" means, unless the context requires otherwise, a fiscal quarter of
the Company.
"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 333-65442) as it has been or as it may be amended or
supplemented from time to time, filed by the MLP with the Commission under the
Securities Act to register the offering and sale of the Common Units in the
Initial Offering.
"Restricted Business" has the meaning assigned to such term in the Omnibus
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, supplemented
or restated from time to time and any successor to such statute.
"Special Approval" has the meaning assigned to such term in the MLP
Agreement.
"Subordinated Unit" has the meaning assigned to such term in the MLP
Agreement.
"Subordination Period" has the meaning assigned to such term in the MLP
Agreement.
"Subsidiary" means, with respect to any Person, (a) a corporation of which
more than 50% of the voting power of shares entitled (without regard to the
occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
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"Substituted Member" means a Person who is admitted as a Member to the
Company pursuant to Section 11.2 in place of and with all the rights of a Member
and who is shown as a Member on the books and records of the Company.
"Surviving Business Entity" has the meaning assigned to such term in
Section 15.2(b).
"Transfer" has the meaning assigned to such term in Section 4.1(a).
"Underwriter" means each Person named as an underwriter in the Underwriting
Agreement who purchases Common Units pursuant thereto.
"Underwriting Agreement" means, collectively, the Underwriting Agreement
dated ______, 2001 among the Company, the MLP, the General Partner, Penn
Virginia Corporation and the Underwriters, providing for the purchase of Common
Units by such Underwriters.
"Unit" has the meaning assigned to such term in the MLP Agreement.
"Unit Majority" has the meaning assigned to such term in the MLP Agreement.
"U.S. GAAP" means United States Generally Accepted Accounting Principles
consistently applied.
"Wise LLC" means Wise LLC, a Delaware limited liability company.
"Working Capital Borrowings" has the meaning assigned to such term in the
MLP Agreement.
Section 1.2 Construction.
Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa; (b) references to Articles and Sections refer to Articles and
Sections of this Agreement; and (c) the term "include" or "includes" means
includes, without limitation, and "including" means including, without
limitation.
ARTICLE II
ORGANIZATION
Section 2.1 Formation.
(a) On September 13, 2001, Penn Virginia Coal Company, a Virginia
corporation, formed the Company as a limited liability company pursuant to the
provisions of the Act by virtue of the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware.
(b) On September 14, 2001 and pursuant to the First Contribution
Agreement:
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(i) Holding contributed all of the common stock of Penn Virginia
Coal to Resource Holdings as a capital contribution;
(ii) Penn Virginia Coal merged into the Company and Resource Holdings
became the holder of 100% of the Membership Interests in the Company;
(iii) Resource Holdings contributed a portion of its membership
interest in the Company to the General Partner and the remaining portion of
its membership interest in the Company to LP Corp.;
(iv) The General Partner contributed its membership interest in the
Company to the MLP in exchange for a continuation of its 2% general partner
interest in the MLP; and
(v) LP Corp. contributed its membership interest in the Company to
the MLP in exchange for a 97.5% limited partner interest in the MLP.
Following the contribution of membership interests in the Company by the
General Partner and LP Corp., 100% of the Membership Interests in the Company
were held by the MLP.
Section 2.2 Name.
The name of the Company shall be "Penn Virginia Operating Co., LLC". The
Company's business may be conducted under any other name or names deemed
necessary or appropriate by the Managing Member in its sole discretion,
including, if consented to by the Managing Member, the name of the MLP. The
words "Limited Liability Company," "L.L.C." or "LLC" or similar words or letters
shall be included in the Company's name where necessary for the purpose of
complying with the laws of any jurisdiction that so requires. The Managing
Member in its discretion may change the name of the Company at any time and from
time to time and shall notify the other Member(s) of such change in the next
regular communication to the Members.
Section 2.3 Registered Office; Registered Agent; Principal Office; Other
Offices.
Unless and until changed by the Managing Member, the registered office of
the Company in the State of Delaware shall be located at 0000 Xxxxxx Xxxxxx, Xxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, and the registered agent for service
of process on the Company in the State of Delaware at such registered office
shall be The Corporation Trust Company. The principal office of the Company
shall be located at 0000 Xxxx-xxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, or such other
place as the Managing Member may from time to time designate by notice to the
Members. The Company may maintain offices at such other place or places within
or outside the State of Delaware as the Managing Member deems necessary or
appropriate.
Section 2.4 Purpose and Business.
The purpose and nature of the business to be conducted by the Company shall
be to (a) manage, operate, lease, sell and otherwise deal with any and all
assets or properties contributed to the Company by the Members or hereafter
acquired by the Company, (b) serve as the sole member or stockholder of its
Subsidiaries and, in connection therewith, to exercise all
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the rights and powers conferred upon the Company as the sole member or
stockholder of such Subsidiaries pursuant to the operating agreements or charter
documents of each of such Subsidiaries, (c) engage directly in, or enter into or
form any corporation, partnership, joint venture, limited liability company or
other arrangement to engage indirectly in, any type of business or activity
engaged in by the Company and its Subsidiaries and their predecessors prior to
the Closing Date and, in connection therewith, to exercise all of the rights and
powers conferred upon the Company pursuant to the agreements relating to such
business activity, (d) engage directly in, or enter into or form any
corporation, partnership, joint venture, limited liability company or other
arrangement to engage indirectly in, any business activity that is approved by
the Managing Member and which lawfully may be conducted by a limited liability
company organized pursuant to the Act and, in connection therewith, to exercise
all of the rights and powers conferred upon the Company pursuant to the
agreements relating to such business activity, and (e) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to a Group Member, the MLP or any Subsidiary thereof; provided, however,
in the case of (c) and (d) above, that the Managing Member reasonably
determines, as of the date of the acquisition or commencement of such activity,
that such activity (i) generates "qualifying income" (as such term is defined
pursuant to Section 7704 of the Code) or (ii) enhances the operations of an
activity of the Company or the MLP that generates qualifying income. The
Managing Member has no obligation or duty to the Company, the Members, or the
Assignees to propose or approve, and in its discretion may decline to propose or
approve, the conduct by the Company of any business.
Section 2.5 Powers.
The Company shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described in Section 2.4 and for
the protection and benefit of the Company.
Section 2.6 Power of Attorney.
(a) Each Member and each Assignee hereby constitutes and appoints the
Managing Member and, if a Liquidator shall have been selected pursuant to
Section 13.2, the Liquidator (and any successor to the Liquidator by merger,
transfer, assignment, election or otherwise) and each of their authorized
officers and attorneys-in-fact, as the case may be, with full power of
substitution, as its true and lawful agent and attorney-in-fact, with full power
and authority in his name, place and xxxxx, to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) all certificates, documents and other
instruments (including this Agreement and all amendments or restatements
hereof and all amendments and restatements of the Certificate of Formation)
that the Managing Member or the Liquidator deems necessary or appropriate
to form, qualify or continue the existence or qualification of the Company
as a limited liability company in the State of Delaware and in all other
jurisdictions in which the Company may conduct business or own property;
(B) all certificates, documents and other instruments that the Managing
Member or the Liquidator deems necessary or appropriate to reflect, in
accordance with its terms, any
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amendment, change, modification or restatement of this Agreement; (C) all
certificates, documents and other instruments (including conveyances and a
certificate of cancellation) that the Managing Member or the Liquidator
deems necessary or appropriate to reflect the dissolution and liquidation
of the Company pursuant to the terms of this Agreement; (D) all
certificates, documents and other instruments relating to the admission,
withdrawal, removal or substitution of any Member pursuant to, or other
events described in, Article IV, XI, XII or XIII; (E) all certificates,
documents and other instruments relating to the determination of the
rights, preferences and privileges of any class or series of Membership
Interests issued pursuant hereto; and (F) all certificates, documents and
other instruments (including agreements and a certificate of merger)
relating to a merger or consolidation of the Company pursuant to Article
XV; and
(ii) execute, swear to, acknowledge, deliver, file and record all
ballots, consents, approvals, waivers, certificates, documents and other
instruments necessary or appropriate, in the discretion of the Managing
Member or the Liquidator, to make, evidence, give, confirm or ratify any
vote, consent, approval, agreement or other action that is made or given by
the Members hereunder or is consistent with the terms of this Agreement or
is necessary or appropriate, in the discretion of the Managing Member or
the Liquidator, to effectuate the terms or intent of this Agreement;
provided, that when required by any provision of this Agreement that
establishes a percentage of the Members or of the Members of any class or
series required to take any action, the Managing Member and the Liquidator
may exercise the power of attorney made in this Section 2.6(a)(ii) only
after the necessary vote, consent or approval of the Members or of the
Members of such class or series, as applicable.
Nothing contained in this Section 2.6(a) shall be construed as authorizing
the Managing Member to amend this Agreement except in accordance with Article
XIV or as may be otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and, to
the maximum extent permitted by law, not be affected by the subsequent death,
incompetency, disability, incapacity, dissolution, bankruptcy or termination of
any Member or Assignee and the transfer of all or any portion of such Member's
or Assignee's Membership Interest and shall extend to such Member's or
Assignee's successors and assigns. Each such Member or Assignee hereby agrees to
be bound by any representation made by the Managing Member or the Liquidator
acting in good faith pursuant to such power of attorney; and each such Member or
Assignee, to the maximum extent permitted by law, hereby waives any and all
defenses that may be available to contest, negate or disaffirm the action of the
Managing Member or the Liquidator taken in good faith under such power of
attorney. Each Member or Assignee shall execute and deliver to the President or
the Liquidator, within 15 days after receipt of the request therefor, such
further designation, powers of attorney and other instruments as the Managing
Member or the Liquidator deems necessary to effectuate this Agreement and the
purposes of the Company.
Section 2.7 Term.
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The term of the Company commenced upon the filing of the Certificate of
Formation in accordance with the Act and shall continue in existence in
perpetuity or until the earlier dissolution of the Company in accordance with
the provisions of Article XIII. The existence of the Company as a separate legal
entity shall continue until the cancellation of the Certificate of Formation as
provided in the Act.
Section 2.8 Title to Company Assets.
Title to Company assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Company as an entity,
and no Member, individually or collectively, shall have any ownership interest
in such Company assets or any portion thereof.
ARTICLE III
RIGHTS OF MEMBERS
Section 3.1 Limitation of Liability.
The Members shall have no liability under this Agreement except as
expressly provided in this Agreement or in the Act.
Section 3.2 Outside Activities of the Members.
Subject to the provisions of Section 7.5 and the Omnibus Agreement, which
shall continue to be applicable to the Persons referred to therein, regardless
of whether such Persons shall also be Members or Assignees, any Member or
Assignee shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Company, including
business interests and activities in direct competition with the Company Group.
Neither the Company nor any other Member or Assignee shall have any rights by
virtue of this Agreement in any business ventures of any Member or Assignee.
Section 3.3 Rights of Members.
(a) In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 3.3(b), each Member shall have
the right, for a purpose reasonably related to such Member's interest as a
member in the Company, upon reasonable written demand and at such Member's own
expense:
(i) to obtain true and full information regarding the status of the
business and financial condition of the Company;
(ii) promptly after becoming available, to obtain a copy of the
Company's federal, state and local income tax returns for each year;
(iii) to have furnished to him a current list of the name and last
known business, residence or mailing address of each Member;
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(iv) to have furnished to him a copy of this Agreement and the
Certificate of Formation and all amendments thereto, together with a copy
of the executed copies of all powers of attorney pursuant to which this
Agreement, the Certificate of Formation and all amendments thereto have
been executed;
(v) to obtain true and full information regarding the amount of cash
and a description and statement of the Capital Contributions made by each
Member and which each Member has agreed to contribute in the future, and
the date on which each became a Member; and
(vi) to obtain such other information regarding the affairs of the
Company as is just and reasonable.
(b) The Managing Member may keep confidential from the Members and
Assignees, for such period of time as the Managing Member deems reasonable, (i)
any information that the Managing Member reasonably believes to be in the nature
of trade secrets or (ii) other information the disclosure of which the Managing
Member in good faith believes (A) is not in the best interests of the Company
Group, (B) could damage the Company Group or (C) that any Group Member is
required by law or by agreement with any third party to keep confidential (other
than agreements with Affiliates of the Company the primary purpose of which is
to circumvent the obligations set forth in this Section 3.3).
ARTICLE IV
TRANSFERS OF INTERESTS
Section 4.1 Transfer Generally.
(a) The term "transfer," when used in this Agreement with respect to
a Membership Interest, shall be deemed to refer to a transaction by which the
holder of a Membership Interest assigns such Membership Interest to another
Person who is or becomes a Member or an Assignee, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition by law or otherwise.
(b) No Membership Interest shall be transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article IV. Any transfer or purported transfer of a Membership Interest not made
in accordance with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to
prevent a disposition by any member of the Managing Member of any or all of the
issued and outstanding membership interests in the Managing Member.
Section 4.2 Transfer of Membership Interests.
A Member may transfer all, but not less than all, of its Membership
Interest in connection with the merger, consolidation or other combination of
such Member with or into any other Person or the transfer by such Member of all
or substantially all of its assets to another Person, and following any such
transfer such Person may become a Substituted Member pursuant to
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Article XI. Except as set forth in the immediately preceding sentence and in
Section 5.2, or in connection with any pledge of (or any related foreclosure on)
a Member's Membership Interest solely for the purpose of securing, directly or
indirectly, indebtedness of the Company, the MLP or such Member, and except for
the transfers contemplated by Sections 5.2 and 11.1, a Member may not transfer
all or any part of its Membership Interest or withdraw from the Company.
Section 4.3 Restrictions on Transfers.
(a) Notwithstanding the other provisions of this Article IV, no
transfer of any Membership Interest shall be made if such transfer would (i)
violate the then applicable federal or state securities laws or rules and
regulations of the Commission, any state securities commission or any other
governmental authority with jurisdiction over such transfer, (ii) terminate the
existence or qualification of the Company or the MLP under the laws of the
jurisdiction of its formation or (iii) cause the Company or the MLP to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes (to the extent not already so treated
or taxed).
(b) The Managing Member may impose restrictions on the transfer of
Membership Interests if a subsequent Opinion of Counsel determines that such
restrictions are necessary to avoid a significant risk of the Company or the MLP
becoming taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes. The restrictions may be imposed by making such
amendments to this Agreement as the Managing Member may determine to be
necessary or appropriate to impose such restrictions.
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF INTERESTS
Section 5.1 Prior to Closing Date.
(a) On September 13, 2001, in connection with the formation of the
Company under the Act, Penn Virginia Coal made an initial Capital Contribution
to the Company in the amount of $1,000 for all of the Membership Interests in
the Company;
(b) On September 14, 2001 and pursuant to the First Contribution
Agreement:
(i) Holding contributed all of the common stock of Penn Virginia
Coal to Resource Holdings as a capital contribution;
(ii) Penn Virginia Coal merged into the Company and Resource Holdings
became the holder of 100% of the Membership Interests in the Company;
(iii) Resource Holdings contributed a portion of its membership
interest in the Company to the General Partner and the remaining portion of
its membership interest in the Company to LP Corp.;
(iv) The General Partner contributed its membership interest in the
Company to the MLP in exchange for a continuation of its 2% general partner
interest in the MLP;
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(v) LP Corp. contributed its membership interest in the Company to
the MLP in exchange for a 97.5% limited partner interest in the MLP; and
(vi) The MLP contributed its interest in K Rail LLC to the Company as
a capital contribution.
Pursuant to the First Contribution Agreement, at the close of business on
September 14, 2001, 100% of the Membership Interests in the Company were held by
the MLP.
Section 5.2 Contributions at Closing.
(a) On the Closing Date and pursuant to the Closing Contribution
Agreement, Loadout LLC, Wise LLC, PVC Concord LLC, PVC Lexington LLC and PVC
Savannah LLC will distribute to the Company any accounts receivable due from
Affiliates and other specified assets set forth in the Closing Contribution
Agreement.
(b) On the Closing Date and pursuant to the Closing Contribution
Agreement, any debt of the Company and its Subsidiaries in excess of $[___]
million owed to affiliates of Penn Virginia Corporation will be cancelled.
(c) On the Closing Date, PVC Concord LLC, PVC Lexington LLC and PVC
Savannah LLC will merge into the Company.
(d) On the Closing Date and pursuant to the Closing Contribution
Agreement, the MLP shall contribute the cash received from the Initial Offering
of Common Units after payment of expenses.
(e) On the Closing Date and pursuant to the Closing Contribution
Agreement, the Company shall retire $[___] million of its debt.
Following the foregoing transactions, and by execution of this Agreement,
the MLP shall continue to hold 100% of the Membership Interests in the Company.
Section 5.3 Additional Capital Contributions.
With the consent of the Managing Member, any Member may, but shall not be
obligated to, make additional Capital Contributions to the Company.
Section 5.4 Interest and Withdrawal.
No interest shall be paid by the Company on Capital Contributions. No
Member or Assignee shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent, if any, that distributions made pursuant to
this Agreement or upon termination of the Company may be considered as such by
law and then only to the extent provided for in this Agreement. Except to the
extent expressly provided in this Agreement, no Member or Assignee shall have
priority over any other Member or Assignee either as to the return of Capital
Contributions or as to profits, losses or distributions. Any such return shall
be a compromise to which all Members or Assignees agree within the meaning of
Section 18-502(b) of the Act.
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Section 5.5 Loans from Members.
Loans by a Member to the Company shall not constitute Capital
Contributions. If any Member shall advance funds to the Company in excess of the
amounts required hereunder to be contributed by it to the capital of the
Company, the making of such excess advances shall not result in any increase in
the amount of the Capital Account of such Member. The amount of any such excess
advances shall be a debt obligation of the Company to such Member and shall be
payable or collectible only out of the Company assets in accordance with the
terms and conditions upon which such advances are made.
Section 5.6 Issuances of Additional Company Securities.
(a) The Company may issue additional Company Securities and options,
rights, warrants and appreciation rights relating to the Company Securities for
any Company purpose at any time and from time to time to such Persons for such
consideration and on such terms and conditions as shall be established by the
Managing Member and approved by the Members. The issuance by the Company of
Company Securities or rights, warrants or appreciation rights in respect thereof
shall be deemed an amendment to this Agreement.
(b) Each additional Company Security authorized to be issued by the
Company pursuant to Section 5.6(a) may be issued in one or more classes, or one
or more series of any such classes, with such designations, preferences, rights,
powers and duties (which may be senior to existing classes and series of Company
Securities), as shall be fixed by the Managing Member and approved by the
Members, including (i) the right to share Company profits and losses or items
thereof; (ii) the right to share in Company distributions; (iii) the rights upon
dissolution and liquidation of the Company; (iv) whether, and the terms and
conditions upon which, the Company may redeem such Company Security; (v) whether
such Company Security is issued with the privilege of conversion or exchange
and, if so, the terms and conditions of such conversion or exchange; (vi) the
terms and conditions upon which each Company Security will be issued, evidenced
by certificates and assigned or transferred; and (vii) the right, if any, of the
holder of each such Company Security to vote on Company matters, including
matters relating to the relative designations, preferences, rights, powers and
duties of such Company Security.
(c) The Managing Member is hereby authorized and directed to take all
actions that it deems necessary or appropriate in connection with (i) each
issuance of Company Securities and options, rights, warrants and appreciation
rights relating to Company Securities pursuant to this Section 5.6, (ii) the
admission of Additional Members and (iii) all additional issuances of Company
Securities. The Managing Member is further authorized and directed to specify
the relative rights, powers and duties of the holders of the Membership
Interests or other Company Securities being so issued. The Managing Member shall
do all things necessary to comply with the Act and is authorized and directed to
do all things it deems necessary or advisable in connection with any future
issuance of Company Securities, including compliance with any statute, rule,
regulation or guideline of any federal, state or other governmental agency.
Section 5.7 Limited Preemptive Rights.
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No Person shall have preemptive, preferential or other similar rights with
respect to (a) additional Capital Contributions; (b) issuance or sale of any
class or series of Membership Interests, whether unissued, held in the treasury
or hereafter created; (c) issuance of any obligations, evidences of indebtedness
or other securities of the Company convertible into or exchangeable for, or
carrying or accompanied by any rights to receive, purchase or subscribe to, any
such Membership Interests; (d) issuance of any right of subscription to or right
to receive, or any warrant or option for the purchase of, any such Membership
Interests; or (e) issuance or sale of any other securities that may be issued or
sold by the Company.
Section 5.8 Fully Paid and Non-Assessable Nature of Membership Interests.
All Membership Interests issued pursuant to, and in accordance with the
requirements of this Article V shall be fully paid and non-assessable Membership
Interests, except as such non-assessability may be affected by Section 18-607 of
the Act.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1 Allocations.
All income, gain, loss, deductions and items of income shall be allocated
to the Members in proportion to their ownership of the Membership Interests
unless otherwise required by the Code.
Section 6.2 Distributions.
(a) Within 45 days following the end of each Quarter commencing with
the Quarter ending on December 31, 2001, an amount equal to 100% of Available
Cash with respect to such Quarter shall, subject to Section 18-607 of the Act,
be distributed in accordance with this Article VI by the Company to the Members
in accordance with their respective Percentage Interests. The immediately
preceding sentence shall not require any distribution of cash if and to the
extent such distribution would be prohibited by applicable law or by any loan
agreement, security agreement, mortgage, debt instrument or other agreement or
obligation to which the Company is a party or by which it is bound or its assets
are subject. All distributions required to be made under this Agreement shall be
made subject to Section 18-607 of the Act.
(b) Notwithstanding Section 6.2(a), in the event of the dissolution
and liquidation of the Company, all receipts received during or after the
Quarter in which the Liquidation Date occurs, other than from borrowings
described in (a)(ii) of the definition of Available Cash, shall be applied and
distributed solely in accordance with, and subject to the terms and conditions
of, Section 13.3.
(c) The Managing Member shall have the discretion to treat taxes paid
by the Company on behalf of, or amounts withheld with respect to, all or less
than all of the Members, as a distribution of Available Cash to such Members.
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ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1 Management.
(a) The Company shall be managed by the Managing Member. Except as
otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Company shall be exclusively vested in the Managing
Member, and no other Member shall have any management power or control over the
business and affairs of the Company. Under the direction of the Managing Member,
the day-to-day activities of the Company shall be conducted on the Company's
behalf by the Officers, who shall be agents of the Company.
(b) In addition to the powers now or hereafter granted a manager of
a limited liability company under applicable law or which are granted to the
Managing Member under any other provisions of this Agreement, the Managing
Member, subject to Section 7.3, and the Officers, subject to Article VIII and
the direction of the Managing Member, shall have full power and authority to do
all things and on such terms as they may deem necessary or appropriate to
conduct the business of the Company, to exercise all powers set forth in Section
2.5 and to effectuate the purposes set forth in Section 2.4, including the
following:
(i) the making of any expenditures, the lending or borrowing of
money, the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of
indebtedness, including indebtedness that is convertible into a Membership
Interest, and the incurring of any other obligations;
(ii) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Company;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the Company or the
merger or other combination of the Company with or into another Person;
(iv) the use of the assets of the Company (including cash on hand)
for any purpose consistent with the terms of this Agreement, including the
financing of the conduct of the operations of the Company Group, the
lending of funds to other Persons (including the MLP or any Group Member),
the repayment of obligations of the MLP or Company Group and the making of
capital contributions to any Group Member;
(v) the negotiation, execution and performance of any contracts,
conveyances or other instruments (including instruments that limit the
liability of the Company under contractual arrangements to all or
particular assets of the Company, with the other party to the contract to
have no recourse against the MLP or its assets other than its interest in
the Company, even if same results in the terms of the transaction being
less favorable to the Company than would otherwise be the case);
(vi) the distribution of Company cash;
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(vii) the selection and dismissal of Officers and agents, outside
attorneys, accountants, consultants and contractors and the determination
of their compensation and other terms of employment or hiring;
(viii) the maintenance of such insurance for the benefit of the
Company Group and the Members as it deems necessary or appropriate;
(ix) the formation of, or acquisition of an interest in, and the
contribution of property and the making of loans to, any further limited or
general partnerships, joint ventures, corporations or other Persons subject
to the restrictions set forth in Section 2.4;
(x) the control of any matters affecting the rights and obligations
of the Company, including the bringing and defending of actions at law or
in equity and otherwise engaging in the conduct of litigation and the
incurring of legal expense and the settlement of claims and litigation;
(xi) the indemnification of any Person against liabilities and
contingencies to the extent permitted by law;
(xii) the purchase, sale or other acquisition or disposition of
Membership Interests, or the issuance of additional options, rights,
warrants and appreciation rights relating to Membership Interests; and
(xiii) the undertaking of any action in connection with the Company's
participation in its Subsidiaries as the sole member or stockholder.
(c) Notwithstanding any other provision of this Agreement, the MLP
Agreement, the Act or any applicable law, rule or regulation, each Member and
each other Person who may acquire a Membership Interest in the Company hereby
(i) approves, ratifies and confirms the execution, delivery and performance by
the parties thereto of the Underwriting Agreement, the Omnibus Agreement, the
First Contribution Agreement, the Closing Contribution Agreement and the other
agreements and documents described in or filed as exhibits to the Registration
Statement that are related to the transactions contemplated by the Registration
Statement; (ii) agrees that the Managing Member is authorized to execute,
deliver and perform the agreements referred to in clause (i) of this sentence
and the other agreements, acts, transactions and matters described in or
contemplated by the Registration Statement on behalf of the Company without any
further act, approval or vote of the Members or Assignees or the other Persons
who may acquire an interest in the Company; and (iii) agrees that the execution,
delivery or performance by the Managing Member, the MLP, any Group Member or any
Affiliate of any of them, of this Agreement or any agreement authorized or
permitted under this Agreement (including the exercise by the Managing Member of
the rights accorded pursuant to Article XV), shall not constitute a breach by
the Managing Member of any duty that the Managing Member may owe the Company or
the Members or any other Persons under this Agreement (or any other agreements)
or of any duty stated or implied by law or equity.
Section 7.2 Certificate of Formation.
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Penn Virginia Coal caused the Certificate of Formation to be filed with the
Secretary of State of the State of Delaware as required by the Act and certain
other certificates or documents it determined in its sole discretion to be
necessary or appropriate for the qualification and operation of the Company in
certain other states. The Managing Member shall use all reasonable efforts to
cause to be filed such additional certificates or documents as may be determined
by the Managing Member in its sole discretion to be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited liability company in the State of Delaware or any other state in which
the Company may elect to do business or own property. To the extent that such
action is determined by the Managing Member in its sole discretion to be
reasonable and necessary or appropriate, the Managing Member shall file
amendments to and restatements of the Certificate of Formation and do all things
to maintain the Company as a limited liability company under the laws of the
State of Delaware or of any other state in which the Company may elect to do
business or own property. Subject to the terms of Section 3.3(a), the Managing
Member shall not be required, before or after filing, to deliver or mail a copy
of the Certificate of Formation, any qualification document or any amendments
thereto to any Member or Assignee.
Section 7.3 Restrictions on Managing Member's Authority.
(a) The Managing Member may not, without written approval of the
specific act by the Members, take any action in contravention of this Agreement,
including, except as otherwise provided in this Agreement, (i) committing any
act that would make it impossible to carry on the ordinary business of the
Company; (ii) possessing Company property, or assigning any rights in specific
Company property, for other than a Company purpose; (iii) admitting a Person as
a Member; or (iv) amending this Agreement in any manner.
(b) Except as provided in Articles XIII and XV, the Managing Member
may not sell, exchange or otherwise dispose of all or substantially all of the
Company's assets in a single transaction or a series of related transactions
(including by way of merger, consolidation or other combination) or approve on
behalf of the Company the sale, exchange or other disposition of all or
substantially all of the assets of the Company, without the approval of the
Members; provided, however, that this provision shall not preclude or limit the
Managing Member's ability to mortgage, pledge, hypothecate or grant a security
interest in all or substantially all of the assets of the Company and shall not
apply to any forced sale of any or all of the assets of the Company pursuant to
the foreclosure of, or other realization upon, any such encumbrance.
Section 7.4 Reimbursement of the General Partner; Benefit Plans.
(a) The General Partner shall be reimbursed on a monthly basis, or
such other reasonable basis as the Managing Member may determine in its sole
discretion, for (i) all direct and indirect expenses it incurs or payments it
makes on behalf of the Company (including salary, bonus, incentive compensation
and other amounts paid to any Person including Affiliates of the General Partner
to perform services for the Company or for the Managing Member in the discharge
of its duties to the Company), and (ii) all other necessary or appropriate
expenses allocable to the Company or otherwise reasonably incurred by the
General Partner in furtherance of the Company's business (including expenses
allocated to the General Partner by its Affiliates).
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Reimbursements pursuant to this Section 7.4 shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 7.7.
(b) The Managing Member, in its sole discretion and without the
approval of any Member (who shall have no right to vote in respect thereof), may
propose and adopt on behalf of the Company employee benefit plans, employee
programs and employee practices, or cause the Company to issue Company
Securities, in connection with or pursuant to any employee benefit plan,
employee program or employee practice maintained or sponsored by any Group
Member or any Affiliate thereof, in each case for the benefit of employees of
the General Partner, any Group Member or any Affiliate thereof, or any of them,
in respect of services performed, directly or indirectly, for the benefit of the
Company Group.
Section 7.5 Outside Activities.
(a) Except as specifically restricted by the Omnibus Agreement, each
Indemnitee shall have the right to engage in businesses of every type and
description and other activities for profit and to engage in and possess an
interest in other business ventures of any and every type or description,
whether in businesses engaged in or anticipated to be engaged in by any Group
Member, independently or with others, including business interests and
activities in direct competition with the business and activities of any Group
Member, and none of the same shall constitute a breach of this Agreement or any
duty express or implied by law to any Group Member or any Member or Assignee.
Neither any Group Member, any Member nor any other Person shall have any rights
by virtue of this Agreement or the relationship established hereby in any
business ventures of any Indemnitee.
(b) Subject to the terms of Section 7.5(a) and the Omnibus Agreement,
but otherwise notwithstanding anything to the contrary in this Agreement, (i)
the engaging in competitive activities by any Indemnitee in accordance with the
provisions of this Section 7.5 is hereby approved by the Company and all
Members, (ii) it shall be deemed not to be a breach of the Managing Member's
fiduciary duty or any other obligation of any type whatsoever of the Managing
Member for the Indemnitees to engage in such business interests and activities
in preference to or to the exclusion of the Company and (iii) the Indemnitees
shall have no obligation to present business opportunities to the Company.
(c) Anything in this Agreement to the contrary notwithstanding, to the
extent that provisions of this Agreement purport or are interpreted to have the
effect of restricting the fiduciary duties that might otherwise, as a result of
Delaware or other applicable law, be owed by the Managing Member to the Company
and its Members, or to constitute a waiver or consent by the Members to any such
restriction, such provisions shall be inapplicable and have no effect in
determining whether the Managing Member has complied with its fiduciary duties
in connection with determinations made by it under this Section 7.5.
Section 7.6 Loans from the General Partner; Loans or Contributions from the
Company; Contracts with Affiliates.
(a) The General Partner or its Affiliates may lend to any Group
Member, and any Group Member may borrow from the Company or any of its
Affiliates, funds needed or
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desired by any Group Member for such periods of time and in such amounts as the
Managing Member may determine; provided, however, that in any such case the
lending party may not charge the borrowing party interest at a rate greater than
the rate that would be charged the borrowing party or impose terms less
favorable to the borrowing party than would be charged or imposed on the
borrowing party by unrelated lenders on comparable loans made on an arm's-length
basis (without reference to the lending party's financial abilities or
guarantees). The borrowing party shall reimburse the lending party for any costs
(other than any additional interest costs) incurred by the lending party in
connection with the borrowing of such funds. For purposes of this Section 7.6(a)
and Section 7.6(b), the term "Group Member" shall include any Affiliate of a
Group Member that is controlled by the Group Member. No Group Member may lend
funds to the General Partner or any of its Affiliates (other than the MLP, a
subsidiary of the MLP or another Group Member).
(b) The General Partner may itself, or may enter into an agreement
with any of its Affiliates to, render services to a Group Member or to the MLP
in the discharge of its duties as the General Partner of the MLP. Any services
rendered to a Group Member by the General Partner or any of its Affiliates shall
be on terms that are fair and reasonable to the Company, provided, however, that
the requirements of this Section 7.6(b) shall be deemed satisfied as to (a) any
transaction approved by Special Approval, (ii) any transaction, the terms of
which are not less favorable to the Company Group than those generally being
provided to or available from unrelated third parties or (iii) any transaction
that, taking into account the totality of the relationships between the parties
involved (including other transactions that may be particularly favorable or
advantageous to the Company Group), is equitable to the Company Group. The
provisions of Section 7.4 shall apply to the rendering of services described in
this Section 7.6(b).
(c) The Company may lend or contribute to any Group Member, and any
Group Member may borrow from the Company, funds on terms and conditions
established in the sole discretion of the Managing Member; provided, however,
that the Company may not charge the Group Member interest at a rate less than
the rate that would be charged to the Group Member by unrelated lenders on
comparable loans. The foregoing authority shall be exercised by the Managing
Member in its sole discretion and shall not create any right or benefit in favor
of any Group Member or any other Person.
(d) The Company Group may transfer assets to joint ventures, other
partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and applicable
law.
(e) Neither the General Partner nor any of its Affiliates shall sell,
transfer or convey any property to, or purchase any property from, the Company,
directly or indirectly, except pursuant to transactions that are fair and
reasonable to the Company; provided, however, that the requirements of this
Section 7.6(e) shall be deemed to be satisfied as to (i) the transactions
effected pursuant to Sections 5.2 and 5.3, the First Contribution Agreement, the
Closing Contribution Agreement and any other transactions described in or
contemplated by the Registration Statement, (ii) any transaction approved by
Special Approval, (iii) any transaction, the terms of which are no less
favorable to the Company than those generally being provided to
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or available from unrelated third parties, or (iv) any transaction that, taking
into account the totality of the relationships between the parties involved
(including other transactions that may be particularly favorable or advantageous
to the Company), is equitable to the Company.
(f) The General Partner and its Affiliates will have no obligation to
permit any Group Member to use any facilities or assets of the General Partner
and its Affiliates, except as may be provided in contracts entered into from
time to time specifically dealing with such use, nor shall there be any
obligation on the part of the General Partner or its Affiliates to enter into
such contracts.
(g) Without limitation of Sections 7.5(a) through 7.5(f), and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of interest described in the Registration Statement are hereby
approved by all Members.
Section 7.7 Indemnification.
(a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees shall be
indemnified and held harmless by the Company from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee; provided, that in each case
the Indemnitee acted in good faith and in a manner that such Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Company and, with respect to any criminal proceeding, had no reasonable cause to
believe its conduct was unlawful; provided, further, no indemnification pursuant
to this Section 7.7 shall be available to the General Partner with respect to
its obligations incurred pursuant to the Underwriting Agreement, the First
Contribution Agreement or the Closing Contribution Agreement (other than
obligations incurred by the General Partner on behalf of the MLP or the
Company). The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that the Indemnitee acted in a manner contrary to
that specified above. Any indemnification pursuant to this Section 7.7 shall be
made only out of the assets of the Company, it being agreed that the General
Partner shall not be personally liable for such indemnification and shall have
no obligation to contribute or loan any monies or property to the Company to
enable it to effectuate such indemnification.
(b) To the fullest extent permitted by law, expenses (including legal
fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.7(a) in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Company prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the Company of
any undertaking by or on behalf of the Indemnitee to repay such amount if it
shall be determined that the Indemnitee is not entitled to be indemnified as
authorized in this Section 7.7.
(c) The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any
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vote of the Members, as a matter of law or otherwise, both as to actions in the
Indemnitee's capacity as an Indemnitee and as to actions in any other capacity
(including any capacity under the Underwriting Agreement and the Bank Credit
Agreement), and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitee.
(d) The Company may purchase and maintain (or reimburse the General
Partner, the Managing Member or their Affiliates for the cost of) insurance, on
behalf of the Managing Member, its Affiliates and such other Persons as the
Managing Member shall determine, against any liability that may be asserted
against or expense that may be incurred by such Person in connection with the
Company's activities or such Person's activities on behalf of the Company,
regardless of whether the Company would have the power to indemnify such Person
against such liability under the provisions of this Agreement.
(e) For purposes of this Section 7.7, the Company shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Company also imposes duties
on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute "fines"
within the meaning of Section 7.7(a); and action taken or omitted by it with
respect to any employee benefit plan in the performance of its duties for a
purpose reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is in, or
not opposed to, the best interests of the Company.
(f) In no event may an Indemnitee subject the Members to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 7.7 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Company, nor the
obligations of the Company to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
Section 7.8 Liability of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in this
Agreement or the MLP Agreement, no Indemnitee shall be liable for monetary
damages to the Company, the
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Members, the Assignees or any other Persons who have acquired interests in the
Company or MLP Securities, for losses sustained or liabilities incurred as a
result of any act or omission if such Indemnitee acted in good faith.
(b) Subject to its obligations and duties set forth in Section 7.1(a),
the Managing Member may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents, and the Managing Member shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the Managing Member in good faith.
(c) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the Company or
to the Members, the Managing Member and any other Indemnitee acting in
connection with the Company's business or affairs shall not be liable to the
Company or to any Member for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict or
otherwise modify the duties and liabilities of an Indemnitee otherwise existing
at law or in equity, are agreed by the Members to replace such other duties and
liabilities of such Indemnitee.
(d) Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability to the Company, the Members, the Managing Member,
and the Member's directors, officers and employees under this Section 7.8 as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.
Section 7.9 Resolution of Conflicts of Interest.
(a) Unless otherwise expressly provided in this Agreement, whenever a
potential conflict of interest exists or arises between the General Partner or
any of its Affiliates, on the one hand, and the Company, any Member or any
Assignee, on the other, any resolution or course of action by the Managing
Member or its Affiliates in respect of such conflict of interest shall be
permitted and deemed approved by all Members, and shall not constitute a breach
of this Agreement, of any agreement contemplated herein, or of any duty stated
or implied by law or equity, if the resolution or course of action is, or by
operation of this Agreement is deemed to be, fair and reasonable to the Company.
The Managing Member shall be authorized but not required in connection with its
resolution of such conflict of interest to seek Special Approval of such
resolution. Any conflict of interest and any resolution of such conflict of
interest shall be conclusively deemed fair and reasonable to the Company if such
conflict of interest or resolution is (i) approved by Special Approval (as long
as the material facts known to the Managing Member or any of its Affiliates
regarding any proposed transaction were disclosed to the Conflicts Committee at
the time it gave its approval), (ii) on terms no less favorable to the Company
than those generally being provided to or available from unrelated third parties
or (iii) fair to the Company, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Company). The Managing
Member may also adopt a resolution or course of action that has not received
Special Approval. The Managing Member (including the Conflicts Committee in
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connection with Special Approval) shall be authorized in connection with its
determination of what is "fair and reasonable" to the Company and in connection
with its resolution of any conflict of interest to consider (A) the relative
interests of any party to such conflict, agreement, transaction or situation and
the benefits and burdens relating to such interest; (B) any customary or
accepted industry practices and any customary or historical dealings with a
particular Person; (C) any applicable generally accepted accounting practices or
principles; and (D) such additional factors as the Managing Member (including
the Conflicts Committee) determines in its sole discretion to be relevant,
reasonable or appropriate under the circumstances. Nothing contained in this
Agreement, however, is intended to nor shall it be construed to require the
Managing Member (including the Conflicts Committee) to consider the interests of
any Person other than the Company. In the absence of bad faith by the Managing
Member, the resolution, action or terms so made, taken or provided by the
Managing Member with respect to such matter shall not constitute a breach of
this Agreement or any other agreement contemplated herein or a breach of any
standard of care or duty imposed herein or therein or, to the extent permitted
by law, under the Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby
provides that the Managing Member or any of its Affiliates is permitted or
required to make a decision (i) in its "sole discretion" or "discretion," that
it deems "necessary or appropriate" or "necessary or advisable" or under a grant
of similar authority or latitude, except as otherwise provided herein, the
Managing Member or such Affiliate shall be entitled to consider only such
interests and factors as it desires and shall have no duty or obligation to give
any consideration to any interest of, or factors affecting, the MLP, the
Company, any Member or any Assignee, (ii) it may make such decision in its sole
discretion (regardless of whether there is a reference to "sole discretion" or
"discretion") unless another express standard is provided for, or (iii) in "good
faith" or under another express standard, the Managing Member or such Affiliate
shall act under such express standard and shall not be subject to any other or
different standards imposed by this Agreement, the MLP Agreement or any other
agreement contemplated hereby or under the Act or any other law, rule or
regulation. In addition, any actions taken by the Managing Member or such
Affiliate consistent with the standards of "reasonable discretion" set forth in
the definition of Available Cash shall not constitute a breach of any duty of
the Managing Member to the Company or the Members. The Managing Member shall
have no duty, express or implied, to sell or otherwise dispose of any asset of
the Company Group other than in the ordinary course of business. No borrowing by
any Group Member or the approval thereof by the Managing Member shall be deemed
to constitute a breach of any duty of the Managing Member to the Company or the
Members by reason of the fact that the purpose or effect of such borrowing is
directly or indirectly to (A) enable distributions by the MLP to the General
Partner or its Affiliates to exceed 2% of the total amount distributed to all
partners or (B) hasten the expiration of the Subordination Period or the
conversion of any Subordinated Units into Common Units.
(c) Whenever a particular transaction, arrangement or resolution of a
conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair and reasonable nature of such transaction,
arrangement or resolution shall be considered in the context of all similar or
related transactions.
Section 7.10 Other Matters Concerning the Managing Member.
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(a) The Managing Member may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(b) The Managing Member may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion (including an Opinion of Counsel) of such Persons as to matters
that the Managing Member reasonably believes to be within such Person's
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.
(c) The Managing Member shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers, a duly appointed attorney or attorneys-in-fact or the duly authorized
officers of the Company.
(d) Any standard of care and duty imposed by this Agreement or under
the Act or any applicable law, rule or regulation shall be modified, waived or
limited, to the extent permitted by law, as required to permit the Managing
Member to act under this Agreement or any other agreement contemplated by this
Agreement and to make any decision pursuant to the authority prescribed in this
Agreement, so long as such action is reasonably believed by the Managing Member
to be in, or not inconsistent with, the best interests of the Company.
Section 7.11 Reliance by Third Parties.
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Company shall be entitled to assume that the Managing Member
and any Officer authorized by the Managing Member to act on behalf of and in the
name of the Company has full power and authority to encumber, sell or otherwise
use in any manner any and all assets of the Company and to enter into any
authorized contracts on behalf of the Company, and such Person shall be entitled
to deal with the Managing Member or any such Officer as if it were the Company's
sole party in interest, both legally and beneficially. Each Member hereby waives
any and all defenses or other remedies that may be available against such Person
to contest, negate or disaffirm any action of the Managing Member or any such
officer in connection with any such dealing. In no event shall any Person
dealing with the Managing Member or any such officer or its representatives be
obligated to ascertain that the terms of the Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
Managing Member or any such officer or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Company by
the Managing Member or its representatives shall be conclusive evidence in favor
of any and every Person relying thereon or claiming thereunder that (a) at the
time of the execution and delivery of such certificate, document or instrument,
this Agreement was in full force and effect, (b) the Person executing and
delivering such certificate, document or instrument was duly authorized and
empowered to do so for and on behalf of the Company and (c) such certificate,
document or instrument was duly executed and delivered in accordance with the
terms and provisions of this Agreement and is binding upon the Company.
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ARTICLE VIII
OFFICERS
Section 8.1 Officers.
(a) Generally. The Managing Member, as set forth below, shall appoint
agents of the Company, referred to as "Officers" of the Company as described in
this Section 8.1, who shall be responsible for the day-to-day business affairs
of the Company, subject to the overall direction and control of the Managing
Member. Unless provided otherwise by Managing Member, the Officers shall have
the titles, power, authority and duties described below in this Section 8.1.
(b) Titles and Number. The Officers shall be the President, any and
all Vice Presidents, the Secretary and any and all Assistant Secretaries and any
Treasurer and any and all Assistant Treasurers and any other Officers appointed
pursuant to this Section 8.1. There shall be appointed from time to time, in
accordance with this Section 8.1, such Vice Presidents, Secretaries, Assistant
Secretaries, Treasurers and Assistant Treasurers as the Managing Member may
desire. Any person may hold two or more offices.
(i) President. The Managing Member shall elect an individual to
serve as President. The President may sign, with the secretary, an
assistant secretary or any other proper officer of the Company thereunto
duly authorized by the Managing Member, any deeds, mortgages, bonds,
contracts or other instruments which the Managing Member has authorized to
be executed except in cases where the execution thereof shall be expressly
delegated by the Managing Member or by this Agreement to some other officer
or agent of the Company or shall be required by law to be otherwise
executed. In general, the President shall perform all duties incident to
the office of President of the Company and such other duties as may be
prescribed from time to time by the Managing Member.
(ii) Vice Presidents. The Managing Member, in its discretion, may
elect one or more Vice Presidents. In the absence of the President or in
the event of the President's inability or refusal to act, the Vice
President (or in the event there be more than one vice president, the vice
presidents in the order designated, or in the absence of any designation,
then in the order of their election) shall perform the duties of the
President, and the Vice President, when so acting, shall have all of the
powers and be subject to all the restrictions upon the President. Each Vice
President shall perform such other duties as from time to time may be
assigned by the President or the Managing Member.
(iii) Secretary and Assistant Secretaries. The Managing Member, in its
discretion, may elect a Secretary and one or more Assistant Secretaries.
The Secretary shall record or cause to be recorded in books provided for
that purpose the minutes of the meetings or actions of the Managing Member
and of the Members, shall see that all notices are duly given in accordance
with the provisions of this Agreement and as required by law, shall be
custodian of all records (other than financial), shall see that the books,
reports, statements, certificates and all other documents and records
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required by law are properly kept and filed, and, in general, shall perform
all duties incident to the office of Secretary and such other duties as
may, from time to time, be assigned to him by this Agreement, the Managing
Member or the President. The Assistant Secretaries shall exercise the
powers of the Secretary during that Officer's absence or inability or
refusal to act.
(iv) Treasurer and Assistant Treasurers. The Managing Member, in its
discretion, may elect a Treasurer and one or more Assistant Treasurers. The
Treasurer shall keep or cause to be kept the books of account of the
Company and shall render statements of the financial affairs of the Company
in such form and as often as required by this Agreement, the Managing
Member or the President. The Treasurer, subject to the order of the
Managing Member, shall have the custody of all funds and securities of the
Company. The Treasurer shall perform all other duties commonly incident to
his office and shall perform such other duties and have such other powers
as this Agreement, the Managing Member or the President, shall designate
from time to time. The Assistant Treasurers shall exercise the power of the
Treasurer during that Officer's absence or inability or refusal to act.
Each of the Assistant Treasurers shall possess the same power as the
Treasurer to sign all certificates, contracts, obligations and other
instruments of the Company. If no Treasurer or Assistant Treasurer is
appointed and serving or in the absence of the appointed Treasurer and
Assistant Treasurer, the President or such other Officer as the Managing
Member shall select, shall have the powers and duties conferred upon the
Treasurer.
(c) Other Officers and Agents. The Managing Member may appoint such
other Officers and agents as may from time to time appear to be necessary or
advisable in the conduct of the affairs of the Company, who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Managing Member.
(d) Appointment and Term of Office. The Officers shall be appointed by
the Managing Member at such time and for such terms as the Managing Member shall
determine. Any Officer may be removed, with or without cause, only by the
Managing Member. Vacancies in any office may be filled only by the Managing
Member.
(e) Powers of Attorney. The Managing Member may xxxxx xxxxxx of
attorney or other authority as appropriate to establish and evidence the
authority of the Officers and other Persons.
(f) Officers' Delegation of Authority. Unless otherwise provided by
resolution of the Managing Member, no Officer shall have the power or authority
to delegate to any Person such Officer's rights and powers as an Officer to
manage the business and affairs of the Company.
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Section 8.2 Compensation.
The Officers shall receive such compensation for their services as may be
designated by the Managing Member. In addition, the Officers shall be entitled
to be reimbursed for out-of-pocket costs and expenses incurred in the course of
their service hereunder.
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The Managing Member shall keep or cause to be kept at the principal office
of the Company appropriate books and records with respect to the Company's
business, including all books and records necessary to provide to the Members
any information required to be provided pursuant to Section 3.4(a). Any books
and records maintained by or on behalf of the Company in the regular course of
its business, including books of account and records of Company proceedings, may
be kept on, or be in the form of, computer disks, hard drives, punch cards,
magnetic tape, photographs, micrographics or any other information storage
device; provided, that the books and records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books of
the Company shall be maintained, for financial reporting purposes, on an accrual
basis in accordance with U.S. GAAP.
Section 9.2 Fiscal Year.
The fiscal year of the Company shall be a fiscal year ending December 31.
ARTICLE X
TAX MATTERS
Section 10.1 Tax Returns and Information.
The Company shall timely file all returns of the Company that are required
for federal, state and local income tax purposes on the basis of the accrual
method and a taxable year ending on December 31. The tax information reasonably
required by the Members for federal and state income tax reporting purposes with
respect to a taxable year shall be furnished to them within 90 days of the close
of the calendar year in which the Company's taxable year ends. The
classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for
federal income tax purposes.
Section 10.2 Tax Elections.
(a) The Company shall not elect to be treated as a corporation under
the Code.
(b) Except as otherwise provided herein, the Managing Member shall
determine whether the Company should make any other elections permitted by the
Code.
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ARTICLE XI
ADMISSION OF MEMBERS
Section 11.1 Admission of MLP.
Upon the consummation of the transfers and conveyances described in Section
5.1, the MLP was admitted as a Member and the MLP is now the only Member of the
Company.
Section 11.2 Admission of Substituted Members.
By transfer of a Membership Interest in accordance with Article IV, the
transferor shall be deemed to have given the transferee the right to seek
admission as a Substituted Member subject to the conditions of, and in the
manner permitted under, this Agreement. A transferor of a Membership Interest
shall, however, only have the authority to convey to a purchaser or other
transferee (a) the right to negotiate such Membership Interest to a purchaser or
other transferee and (b) the right to request admission as a Substituted Member
to such purchaser or other transferee in respect of the transferred Membership
Interests. Each transferee of a Membership Interest shall be an Assignee and be
deemed to have applied to become a Substituted Member with respect to the
Interests so transferred to such Person. Such Assignee shall become a
Substituted Member (x) at such time as the Members consent thereto, which
consent may be given or withheld in the Members' discretion, and (y) when any
such admission is shown on the books and records of the Company. If such consent
is withheld, such transferee shall remain an Assignee. An Assignee shall have an
interest in the Company equivalent to that of a Member with respect to
allocations and distributions, including liquidating distributions, of the
Company. With respect to voting rights attributable to Membership Interests that
are held by Assignees, the Managing Member shall be deemed to be the Member with
respect thereto and shall, in exercising the voting rights in respect of such
Interests on any matter, vote such Membership Interests at the written direction
of the Assignee. If no such written direction is received, such Membership
Interests will not be voted. An Assignee shall have no other rights of a Member.
Section 11.3 Admission of Additional Members.
(a) A Person (other than a Substituted Member) who makes a Capital
Contribution to the Company or acquires Company Securities in accordance with
this Agreement shall be admitted to the Company as an Additional Member only
upon furnishing to the Managing Member (i) evidence of acceptance in form
satisfactory to the Managing Member of all of the terms and conditions of this
Agreement, including the power of attorney granted in Section 2.6, and (ii) such
other documents or instruments as may be required in the discretion of the
Managing Member to effect such Person's admission as an Additional Member.
(b) Notwithstanding anything to the contrary in this Section 11.3, no
Person shall be admitted as an Additional Member without the consent of the
Managing Member, which consent may be given or withheld in the Managing Member's
discretion. The admission of any Person as an Additional Member shall become
effective on the date upon which the name of such Person is recorded as such in
the books and records of the Company, following the consent of the Managing
Member to such admission.
Section 11.4 Amendment of Agreement and Certificate of Formation.
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To effect the admission to the Company of any Member, the Managing Member
shall take all steps necessary and appropriate under the Act to amend the
records of the Company to reflect such admission and, if necessary, to prepare
as soon as practicable an amendment to this Agreement and, if required by law,
the Managing Member shall prepare and file an amendment to the Certificate of
Formation, and the Managing Member may for this purpose, among others, exercise
the power of attorney granted pursuant to Section 2.6.
ARTICLE XII
WITHDRAWAL OF MEMBERS
Section 12.1 Withdrawal of Members.
Without the prior written consent of the Managing Member, which may be
granted or withheld in its sole discretion, and except as provided in Section
11.1, no Member shall have the right to withdraw from the Company.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution.
The Company shall not be dissolved by the admission of Substituted Members
or Additional Members in accordance with the terms of this Agreement. The
Company shall dissolve, and its affairs shall be wound up, upon:
(a) an election to dissolve the Company by the Managing Member that is
approved by all of the Members;
(b) the entry of a decree of judicial dissolution of the Company
pursuant to the provisions of the Act;
(c) the sale of all or substantially all of the assets and properties
of the Company Group; or
(d) the dissolution of the MLP.
Section 13.2 Liquidator.
Upon dissolution of the Company, the Managing Member shall select one or
more Persons to act as Liquidator. The Liquidator shall be entitled to receive
such compensation for its services as may be approved by a majority of the
Members. The Liquidator shall agree not to resign at any time without 15 days'
prior notice and may be removed at any time, with or without cause, by notice of
removal approved by a majority of the Members. Upon dissolution, removal or
resignation of the Liquidator, a successor and substitute Liquidator (who shall
have and succeed to all rights, powers and duties of the original Liquidator)
shall within 30 days thereafter be approved by holders of at least a majority of
the Members. The right to approve a successor or substitute Liquidator in the
manner provided herein shall be deemed to refer also to any such successor or
substitute Liquidator approved in the manner herein provided. Except as
expressly
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provided in this Article XIII, the Liquidator approved in the manner provided
herein shall have and may exercise, without further authorization or consent of
any of the parties hereto, all of the powers conferred upon the Managing Member
under the terms of this Agreement (but subject to all of the applicable
limitations, contractual and otherwise, upon the exercise of such powers, other
than the limitation on sale set forth in Section 7.3(a)) to the extent necessary
or desirable in the good faith judgment of the Liquidator to carry out the
duties and functions of the Liquidator hereunder for and during such period of
time as shall be reasonably required in the good faith judgment of the
Liquidator to complete the winding up and liquidation of the Company as provided
for herein.
Section 13.3 Liquidation.
The Liquidator shall proceed to dispose of the assets of the Company,
discharge its liabilities, and otherwise wind up its affairs in such manner and
over such period as the Liquidator determines to be in the best interest of the
Members, subject to Section 18-804 of the Act and the following:
(a) The assets may be disposed of by public or private sale or by
distribution in kind to one or more Members on such terms as the Liquidator and
such Member or Members may agree. If any property is distributed in kind, the
Member receiving the property shall be deemed for purposes of Section 13.3(c) to
have received cash equal to its fair market value; and contemporaneously
therewith, appropriate cash distributions must be made to the other Members. The
Liquidator may, in its absolute discretion, defer liquidation or distribution of
the Company's assets for a reasonable time if it determines that an immediate
sale or distribution of all or some of the Company's assets would be impractical
or would cause undue loss to the Members. The Liquidator may, in its absolute
discretion, distribute the Company's assets, in whole or in part, in kind if it
determines that a sale would be impractical or would cause undue loss to the
Members.
(b) Liabilities of the Company include amounts owed to Members
otherwise than in respect of their distribution rights under Article VI. With
respect to any liability that is contingent, conditional or unmatured or is
otherwise not yet due and payable, the Liquidator shall either settle such claim
for such amount as it thinks appropriate or establish a reserve of cash or other
assets to provide for its payment. When paid, any unused portion of the reserve
shall be distributed as additional liquidation proceeds.
(c) All property and all cash in excess of that required to discharge
liabilities as provided in Section 13.3(b) shall be distributed to the Members
in proportion to their ownership interests.
Section 13.4 Cancellation of Certificate of Formation.
Upon the completion of the distribution of Company cash and property as
provided in Section 13.3 in connection with the liquidation of the Company, the
Company shall be terminated and the Certificate of Formation, as well as all
qualifications of the Company as a foreign limited liability company in
jurisdictions other than the State of Delaware, shall be canceled and such other
actions as may be necessary to terminate the Company shall be taken.
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Section 13.5 Return of Capital Contributions.
The MLP shall not be personally liable for, and shall have no obligation to
contribute or loan any monies or property to the Company to enable it to
effectuate, the return of the Capital Contributions of the Members, or any
portion thereof, it being expressly understood that any such return shall be
made solely from Company assets.
Section 13.6 Waiver of Partition.
To the maximum extent permitted by law, each Member hereby waives any right
to partition of the Company property.
Section 13.7 Capital Account Restoration.
No Member shall have any obligation to restore any negative balance in its
Capital Account upon liquidation of the Company.
ARTICLE XIV
AMENDMENT OF AGREEMENT
Section 14.1 Amendment to be Adopted Solely by the Managing Member.
Each Member agrees that the Managing Member, without the approval of any
Member, may amend any provision of this Agreement and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
(a) a change in the name of the Company, the location of the
principal place of business of the Company, the registered agent of the Company
or the registered office of the Company;
(b) admission, substitution, withdrawal or removal of Members in
accordance with this Agreement;
(c) a change that, in the sole discretion of the Managing Member,
is necessary or advisable to qualify or continue the qualification of the
Company as a limited liability company in which the Members have limited
liability under the laws of any state or to ensure that neither the Company nor
the MLP will be treated as an association taxable as a corporation or otherwise
taxed as an entity for federal income tax purposes;
(d) a change that, in the discretion of the Managing Member, (i)
does not adversely affect the Members in any material respect, (ii) is necessary
or advisable to (A) satisfy any requirements, conditions or guidelines contained
in any opinion, directive, order, ruling or regulation of any federal or state
agency or judicial authority or contained in any federal or state statute
(including the Act) or (B) facilitate the trading of limited partner interests
of the MLP (including the division of any class or classes of outstanding
limited partner interests of the MLP into different classes to facilitate
uniformity of tax consequences within such classes of limited partner interests
of the MLP) or comply with any rule, regulation, guideline or requirement of any
National Securities Exchange on which such limited partner interests are or will
be listed for
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trading, compliance with any of which the Managing Member determines in its
discretion to be in the best interests of the MLP and the limited partners of
the MLP, (iii) is required to effect the intent expressed in the Registration
Statement or the intent of the provisions of this Agreement or is otherwise
contemplated by this Agreement or (iv) is required to conform the provisions of
this Agreement with the provisions of the MLP Agreement as the provisions of the
MLP Agreement may be amended, supplemented or restated from time to time;
(e) a change in the fiscal year or taxable year of the Company and any
changes that, in the discretion of the Managing Member, are necessary or
advisable as a result of a change in the fiscal year or taxable year of the
Company including, if the Managing Member shall so determine, a change in the
definition of "Quarter" and the dates on which distributions are to be made by
the Company;
(f) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Company or its directors, officers, trustees or agents from in any
manner being subjected to the provisions of the Investment Company Act of 1940,
as amended, the Investment Advisers Act of 1940, as amended, or "plan asset"
regulations adopted under the Employee Retirement Income Security Act of 1974,
as amended, regardless of whether such are substantially similar to plan asset
regulations currently applied or proposed by the United States Department of
Labor;
(g) any amendment expressly permitted in this Agreement to be made by
the Managing Member acting alone;
(h) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 15.3;
(i) an amendment that, in the discretion of the Managing Member, is
necessary or advisable to reflect, account for and deal with appropriately the
formation by the Company of, or investment by the Company in, any corporation,
partnership, joint venture, limited liability company or other entity, in
connection with the conduct by the Company of activities permitted by the terms
of Section 2.4;
(j) a merger or conveyance pursuant to Section 15.3(d); or
(k) any other amendments substantially similar to the foregoing.
Section 14.2 Amendment Procedures.
Except with respect to amendments of the type described in Section 14.1,
all amendments to this Agreement shall be made in accordance with the following
requirements. Amendments to this Agreement may be proposed only by or with the
consent of the Managing Member which consent may be given or withheld in its
sole discretion. A proposed amendment shall be effective upon its approval by
the Members.
ARTICLE XV
MERGER
Section 15.1 Authority.
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The Company may merge or consolidate with one or more corporations, limited
liability companies, business trusts or associations, real estate investment
trusts, common law trusts or unincorporated businesses, including a general
partnership or limited partnership, formed under the laws of the State of
Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation ("Merger Agreement") in accordance
with this Article 15.
Section 15.2 Procedure for Merger or Consolidation.
Merger or consolidation of the Company pursuant to this Article XV requires
the prior approval of the Managing Member. If the Managing Member shall
determine, in the exercise of its discretion, to consent to the merger or
consolidation, the Managing Member shall approve the Merger Agreement, which
shall set forth:
(a) The names and jurisdictions of formation or organization of each
of the business entities proposing to merge or consolidate;
(b) The name and jurisdiction of formation or organization of the
business entity that is to survive the proposed merger or consolidation (the
"Surviving Business Entity");
(c) The terms and conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property or
general or limited partner interests, rights, securities or obligations of the
Surviving Business Entity; and (i) if any general or limited partner interests,
securities or rights of any constituent business entity are not to be exchanged
or converted solely for, or into, cash, property or general or limited partner
interests, rights, securities or obligations of the Surviving Business Entity,
the cash, property or general or limited partner interests, rights, securities
or obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such general or
limited partner interests, securities or rights are to receive in exchange for,
or upon conversion of their general or limited partner interests, securities or
rights, and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partner interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be
delivered;
(e) A statement of any changes in the constituent documents or the
adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or agreement
of limited partnership or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or consolidation;
(f) The effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 15.4 or a later date
specified in or determinable in accordance with the Merger Agreement (provided,
that if the effective time of the merger is to be later than the date of the
filing of the certificate of merger, the effective time shall be fixed no later
than the time of the filing of the certificate of merger and stated therein);
and
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(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the Managing Member.
Section 15.3 Approval by Members of Merger or Consolidation.
(a) Except as provided in Section 15.3(d), the Managing Member, upon
its approval of the Merger Agreement, shall direct that the Merger Agreement be
submitted to a vote of Members, whether at a special meeting or by written
consent, in either case in accordance with the requirements of Article XIV. A
copy or a summary of the Merger Agreement shall be included in or enclosed with
the notice of a special meeting or the written consent.
(b) Except as provided in Section 15.3(d), the Merger Agreement shall
be approved upon receiving the affirmative vote or consent of the Members.
(c) Except as provided in Section 15.3(d), after such approval by vote
or consent of the Members, and at any time prior to the filing of the
certificate of merger pursuant to Section 15.4, the merger or consolidation may
be abandoned pursuant to provisions therefor, if any, set forth in the Merger
Agreement.
(d) Notwithstanding anything else contained in this Article XV or in
this Agreement, the Managing Member is permitted, in its discretion, without
Member approval, to merge the Company or any Group Member into, or convey all of
the Company's assets to, another limited liability entity which shall be newly
formed and shall have no assets, liabilities or operations at the time of such
Merger other than those it receives from the Company or other Group Member if
(i) the Managing Member has received an Opinion of Counsel that the merger or
conveyance, as the case may be, would not result in the loss of the limited
liability of any Member or any limited partner in the MLP or cause the Company
or the MLP to be treated as an association taxable as a corporation or otherwise
to be taxed as an entity for federal income tax purposes (to the extent not
previously treated as such), (ii) the sole purpose of such merger or conveyance
is to effect a mere change in the legal form of the Company into another limited
liability entity and (iii) the governing instruments of the new entity provide
the Members with the same rights and obligations as are herein contained.
Section 15.4 Certificate of Merger.
Upon the required approval by the Managing Member and the Members of a
Merger Agreement, a certificate of merger shall be executed and filed with the
Secretary of State of the State of Delaware in conformity with the requirements
of the Act.
Section 15.5 Effect of Merger.
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business
entities that has merged or consolidated, and all property, real, personal
and mixed, and all debts due to any of those business entities and all
other things and causes of action belonging to each of those business
entities, shall be vested in the Surviving Business Entity and after
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the merger or consolidation shall be the property of the Surviving Business
Entity to the extent they were of each constituent business entity;
(ii) the title to any real property vested by deed or otherwise in
any of those constituent business entities shall not revert and is not in
any way impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests
in property of any of those constituent business entities shall be
preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business
entities shall attach to the Surviving Business Entity and may be enforced
against it to the same extent as if the debts, liabilities and duties had
been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article
shall not be deemed to result in a transfer or assignment of assets or
liabilities from one entity to another.
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Addresses and Notices.
Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Member under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by first class United States mail or by other means of written communication to
the Member at the address described below. Any notice to the Company shall be
deemed given if received by the Managing Member at the principal office of the
Company designated pursuant to Section 2.3. The Managing Member may rely and
shall be protected in relying on any notice or other document from a Member,
Assignee or other Person if believed by it to be genuine.
Section 16.2 Further Action.
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 16.3 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
Section 16.4 Integration.
This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
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Section 16.5 Creditors.
None of the provisions of this Agreement shall be for the benefit of, or
shall be enforceable by, any creditor of the Company.
Section 16.6 Waiver.
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.
Section 16.7 Counterparts.
This Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affixing its
signature hereto, independently of the signature of any other party.
Section 16.8 Applicable Law.
This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to the principles of conflicts of
law.
Section 16.9 Invalidity of Provisions.
If any provision of this Agreement 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.
Section 16.10 Consent of Members.
Each Member hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote
or consent of less than all of the Members, such action may be so taken upon the
concurrence of less than all of the Members and each Member shall be bound by
the results of such action.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
PENN VIRGINIA RESOURCE PARTNERS, L.P.
By: Penn Virginia Resource GP, LLC, its General Partner
By:
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Name:
Title:
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