Limited Liability Company Agreement of Encore Energy Partners Operating LLC Effective as of February 13, 2007
Exhibit 3.4.2
of
Effective as of February 13, 2007
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINITIONS | 1 | |||||
ARTICLE II FORMATION OF THE COMPANY | 2 | |||||
2.1 |
Formation | 2 | ||||
2.2 |
Name | 2 | ||||
2.3 |
Place of Business | 2 | ||||
2.4 |
Registered Office and Registered Agent | 2 | ||||
2.5 |
Term | 2 | ||||
2.6 |
Permitted Business; Powers | 3 | ||||
ARTICLE III MEMBER | 3 | |||||
3.1 |
Member | 3 | ||||
ARTICLE IV CAPITAL OF THE COMPANY | 3 | |||||
4.1 |
Capital Contributions | 3 | ||||
4.2 |
Record of Contributions | 3 | ||||
4.3 |
Interest | 3 | ||||
4.4 |
Loans from the Member | 3 | ||||
4.5 |
Loans to Company | 3 | ||||
4.6 |
No Further Obligation | 3 | ||||
ARTICLE V RIGHTS AND OBLIGATIONS OF MEMBER | 4 | |||||
5.1 |
Limitation of Member’s Responsibility, Liability | 4 | ||||
5.2 |
Return of Distributions | 4 | ||||
ARTICLE VI MANAGEMENT BY BOARD OF DIRECTORS | 4 | |||||
6.1 |
Establishment of Board | 4 | ||||
6.2 |
The Board: Delegation of Authority and Duties | 4 | ||||
6.3 |
Term of Office | 5 | ||||
6.4 |
Meetings of the Board and Committees | 5 | ||||
6.5 |
Voting | 6 | ||||
6.6 |
Responsibility and Authority of the Board | 6 | ||||
ARTICLE VII OFFICERS | 6 | |||||
7.1 |
Designation and Appointment | 6 | ||||
7.2 |
Resignation and Removal | 7 | ||||
7.3 |
Duties of Officers Generally | 7 | ||||
7.4 |
President | 7 | ||||
7.5 |
Chief Financial Officer | 7 | ||||
7.6 |
Vice President(s) | 8 | ||||
7.7 |
Secretary | 8 |
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Page | ||||||
ARTICLE VIII INDEMNIFICATION | 8 | |||||
8.1 |
Right to Indemnification | 8 | ||||
8.2 |
Determination of Eligibility | 9 | ||||
8.3 |
Advancement of Expenses | 9 | ||||
8.4 |
Indemnification of Employees and Agents | 9 | ||||
8.5 |
Appearance as a Witness | 10 | ||||
8.6 |
Nonexclusivity of Rights | 10 | ||||
8.7 |
Insurance | 10 | ||||
8.8 |
Savings Clause | 10 | ||||
ARTICLE IX ACCOUNTING PERIOD, RECORDS AND REPORTS | 10 | |||||
9.1 |
Accounting Method | 10 | ||||
9.2 |
Accounting Period | 10 | ||||
9.3 |
Inspection | 10 | ||||
9.4 |
Preparation of Financial Statements | 10 | ||||
ARTICLE X TAX MATTERS | 11 | |||||
10.1 |
Tax Returns and Elections | 11 | ||||
ARTICLE XI DISSOLUTION AND TERMINATION | 11 | |||||
11.1 |
Dissolution | 11 | ||||
11.2 |
Effect of Dissolution | 11 | ||||
11.3 |
Winding Up, Liquidating and Distribution of Assets | 11 | ||||
11.4 |
Certificate of Cancellation | 12 | ||||
ARTICLE XII MISCELLANEOUS | 12 | |||||
12.1 |
Notices | 12 | ||||
12.2 |
Application of Delaware Law | 12 | ||||
12.3 |
Headings | 12 | ||||
12.4 |
Waivers | 12 | ||||
12.5 |
Rights and Remedies Cumulative | 12 | ||||
12.6 |
Severability | 13 | ||||
12.7 |
Heirs, Successors and Assigns | 13 | ||||
12.8 |
Beneficiaries | 13 |
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This Limited Liability Company Agreement (this “Agreement”) is dated as of February 13, 2007,
by Encore Energy Partners LP, a Delaware limited partnership.
WHEREAS, on February 13, 2007, a certificate of formation respecting Encore Energy Partners
Operating LLC (the “Company”) was filed with the Secretary of State of the State of Delaware; and
WHEREAS, it is desired that the orderly management of the affairs of the Company be provided
for; and
WHEREAS, this Agreement shall be effective as of the formation of the Company;
NOW, THEREFORE, it is agreed as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Agreement shall have the following meanings (unless otherwise
expressly provided herein):
“Affiliate,” with respect to a specified Person, shall mean a Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or is under common
control with, the Person specified. For purposes of this definition, “control” shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise.
“Agreement” shall mean this Agreement as originally executed and as it may be amended from
time to time hereafter.
“Board” shall mean the Board of Directors of the Company as provided in Section 6.1.
“Capital Contribution” shall mean any contribution to the capital of the Company in cash or
property by the Member whenever made.
“Certificate of Formation” shall mean the Certificate of Formation of the Company filed with
and endorsed by the Secretary of State of the State of Delaware, as such certificate may be amended
from time to time hereafter.
“Code” shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions
of subsequent superseding federal revenue laws.
“Delaware Act” shall mean the Delaware Limited Liability Company Act, as the same may be
amended from time to time hereafter.
“Directors” shall mean the directors appointed by the Member as provided in Section 6.1.
“Entity” shall mean any foreign or domestic general partnership, limited partnership, limited
liability company, corporation, joint enterprise, trust, business trust, employee benefit plan,
cooperative or association.
“Member” shall mean Encore Energy Partners LP, a Delaware limited partnership.
“Officer” means each Person who has been designated as, and who has not ceased to be, an
Officer of the Company pursuant to Article VII hereof, which Person has been appointed as an
Officer of the Company by a duly adopted resolution of the Board.
“Person” shall mean any individual or Entity, and any heir, executor, administrator, legal
representative, successor or assign of such “Person” where the context so admits.
ARTICLE II
FORMATION OF THE COMPANY
2.1 Formation. On February 13, 2007, the Certificate of Formation of the Company was filed with the
Secretary of State of the State of Delaware pursuant to the Delaware Act.
2.2 Name. The name of the Company is Encore Energy Partners Operating LLC. If the Company shall
conduct business in any jurisdiction other than the State of Delaware, it shall register the
Company or its trade name, as appropriate, with the appropriate authorities in such jurisdiction
and take such other action as may be necessary or appropriate for the legal existence of the
Company to be recognized.
2.3 Place of Business. The Company may locate its places of business and registered office at any
place or places as the Board may from time to time deem advisable.
2.4 Registered Office and Registered Agent. The Company’s registered office shall be at the office of
its registered agent at Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of
Xxx Xxxxxx, Xxxxxxxx, 00000,
and the name of its initial registered agent at such address shall be The Corporation Trust
Company.
2.5 Term. The Company shall continue and this Agreement shall remain in effect until the earliest of
(a) such time as all of the Company’s assets have been sold or otherwise disposed of, or (b) such
time as the Company’s existence has been terminated as otherwise provided herein or in the Delaware
Act.
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2.6 Permitted Business; Powers. The Company may carry on any lawful business, purpose, or activity
that may lawfully be carried on by a limited liability company organized under the Delaware Act.
The Company shall possess and may exercise all the powers and privileges granted by the Delaware
Act or by any other law or by this Agreement, together with any powers incidental thereto,
including such powers and privileges as are necessary or convenient to the conduct of the business,
purposes or activities of the Company.
ARTICLE III
MEMBER
3.1 Member. The name and place of business of the Member is as follows:
Encore Energy Partners LP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
ARTICLE IV
CAPITAL OF THE COMPANY
4.1 Capital Contributions. The Member shall make an initial capital contribution to the Company of
$100. The Member may, but shall not be required to, make Capital Contributions in the future. Any
contributions may be in the form of cash, securities or tangible assets at the option of the
Member.
4.2 Record of Contributions. The books and records of the Company shall include true and full
information regarding the amount of cash and cash equivalents and a description and statement of
the value of any other property contributed by the Member to the Company.
4.3 Interest. No interest shall be paid by the Company on Capital Contributions.
4.4 Loans from the Member. Loans by the Member to the Company shall not be considered Capital
Contributions.
4.5 Loans to Company. Nothing in this Agreement shall prevent the Member from making secured or
unsecured loans to the Company by agreement with the Company.
4.6 No Further Obligation. Except for the obligation to make the Capital Contribution required to be
made by Section 4.1, the Member shall not have any obligation to provide funds to the Company,
whether by Capital Contributions, loans, return of monies received pursuant to the terms of this
Agreement or otherwise.
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ARTICLE V
RIGHTS AND OBLIGATIONS OF MEMBER
5.1 Limitation of Member’s Responsibility, Liability. The Member shall not be obligated personally for
any debt, obligation or liability of the Company, whether arising in contract, tort or otherwise,
solely by reason of being a member of the Company.
5.2 Return of Distributions. The Member will be obligated to return any distribution from the Company
only to the extent, and during the period, such return is required by Section 18-607 of the
Delaware Act.
ARTICLE VI
MANAGEMENT BY BOARD OF DIRECTORS
6.1 Establishment of Board. The Member hereby establishes a Board of Directors (the “Board”) to be
comprised of such number of directors (“Directors”) as shall be determined as set forth in this
Section 6.1. The initial number of Directors shall be two (2). The number of Directors may be
changed from time to time by the Member; provided, however, that pursuant to a resolution adopted
by the Board, the number of Directors may be increased and a Director(s) may be appointed to the
Board to fill the vacancy created by such increase.
6.2 The Board: Delegation of Authority and Duties.
(a) Members and Board. The business and affairs of the Company shall be managed by
the Board, which shall possess all rights and powers which are possessed by managers under the
Delaware Act and otherwise by law, pursuant to Section 18-402 of the Delaware Act, subject to the
provisions of this Agreement. Except as otherwise expressly provided for herein, the Member hereby
consents to the exercise by the Board of all such powers and rights conferred on them by the
Delaware Act or otherwise by law with respect to the management and control of the Company. To the
fullest extent permitted by applicable law, each Director shall have such rights and duties as are
applicable to directors of a corporation under the laws of the State of Delaware.
(b) Delegation by the Board. The Board shall have the power and authority to delegate
to one or more other persons the Board’s rights and powers to manage and control the business and
affairs of the Company, including delegating such rights and powers of the Board to agents and
employees of the Company (including Officers). The Board may authorize any Person (including,
without limitation, any Member, Director or Officer) to enter into any document on behalf of the
Company and perform the obligations of the Company thereunder. Notwithstanding the foregoing, the
Board shall not have the power and authority to delegate any rights or powers customarily requiring
the approval of the directors of a corporation under the laws of the State of Delaware and no
Officer or other Person shall be authorized or empowered to act on behalf of the Company in any way
beyond the customary rights and powers of an officer of a corporation under the laws of the State
of Delaware.
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(c) Committees. The Board may, from time to time, establish one or more committees
and may delegate certain of its responsibilities to such committees. Any such committee shall have
such powers and authority of the Board as provided in the enabling resolution of the Board with
respect thereto. The Board shall have power at any time to fill vacancies in, to change the
membership of, or to dissolve any committee.
6.3 Term of Office. Once designated pursuant to Section 6.1, a Director shall continue in office until
the removal of such Director in accordance with the provisions of this Agreement or until the
earlier death or resignation of such Director. Any Director may resign at any time by giving
written notice of such Director’s resignation to the Board. Any such resignation shall take effect
at the time the Board receives such notice or at any later effective time specified in such notice.
Unless otherwise specified in such notice, the acceptance by the Board of such Director’s
resignation shall not be necessary to make such resignation effective. Notwithstanding anything
herein or at law to the contrary, any Director may be removed at any time with or without cause by
the Member.
6.4 Meetings of the Board and Committees.
(a) Meetings. The Board (or any committee of the Board) shall meet at such time and
at such place as the Chairman of the Board (or the chairman of such committee) may designate.
Written notice of all regular meetings of the Board (or any committee of the Board) must be given
to all Directors (or all members of such committee) at least ten days prior to the regular meeting
of the Board (or such committee). Special meetings of the Board (or any committee of the Board)
shall be held at the request of a majority of the Directors (or a majority of the members of such
committee) upon at least two (2) days (if the meeting is to be held in person) or twenty-four hours
(if the meeting is to be held telephonically) oral or written notice to the Directors (or the
members of such committee) or upon such shorter notice as may be approved by the Directors (or the
members of such committee). All notices and other communications to be given to Directors (or
members of a committee) shall be sufficiently given for all purposes hereunder if in writing and
delivered by hand, courier or overnight delivery service or three days after being mailed by
certified or registered mail, return receipt requested, with appropriate postage prepaid, or when
received in the form of a telegram or facsimile, and shall be directed to the address or facsimile
number as such Director (or member) shall designate by notice to the Company. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the Board (or committee)
need be specified in the notice of such meeting. Any Director (or member of such committee) may
waive the requirement of such notice as to such Director (or such member).
(b) Conduct of Meetings. Any meeting of the Board (or any committee of the Board) may
be held in Person or by conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such participation in a meeting
shall constitute presence in Person at such meeting.
(c) Quorum. A majority of all Directors (or members of a committee of the Board),
present in Person or participating in accordance with Section 6.4(b), shall
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constitute a quorum for
the transaction of business, but if at any meeting of the Board (or committee) there shall be less
than a quorum present, a majority of the Directors (or members) present may adjourn the meeting
without further notice. The Directors (or members of a committee of the Board) present at a duly
organized meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Directors (or members) to leave less than a quorum; provided, however, that
only the acts of the Directors (or members of such committee) meeting the requirements of Section
6.5 shall be deemed to be acts of the Board (or such committee).
(d) Procedures. To the extent not inconsistent with this Agreement or the Delaware
Act, the procedures and rights governing the Board and its committees shall be as provided to the
board of directors and its committees of a corporation under the laws of the State of Delaware.
(e) Chairman of the Board. The chairman of the Board shall preside at all meetings of
the Board. The Directors also may elect a vice-chairman to act in the place of the chairman upon
his absence or inability to act.
6.5 Voting. Except as otherwise provided in this Agreement, the effectiveness of any vote, consent or
other action of the Board (or any committee of the Board) in respect of any matter shall require
either (i) the presence of a quorum and the affirmative vote of greater than a majority of the
Directors (or members of such committee) present or (ii) the unanimous written consent (in lieu of
meeting) of the Directors (or members of such committee) who have been designated and who are then
in office. Any Director may vote in Person or by proxy (pursuant to a power of attorney) on any
matter that is to be voted on by the Board at a meeting thereof.
6.6 Responsibility and Authority of the Board. Except as otherwise specifically provided in this
Agreement, the authority and functions of the Board, on the one hand, and the Officers, on the
other hand, shall be identical to the authority and functions of the board of directors and
officers, respectively, of a corporation organized under the laws of the State of Delaware. The
Officers shall be vested with such powers and duties as are set forth in Article VII hereof and as
are specified by the Board from time to time. Accordingly, except as otherwise specifically
provided in this Agreement, the business and affairs of the Company shall be managed under the
direction of the Board, and 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.
ARTICLE VII
OFFICERS
7.1 Designation and Appointment. The Board may, from time to time, employ and retain Persons as may be
necessary or appropriate for the conduct of the Company’s business (subject to the supervision and
control of the Board), including employees, agents and other Persons (any of whom may be a Member
or Director) who may be designated as Officers of the
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Company, with titles including but not
limited to “chief executive officer,” “president,” “vice president,” “treasurer,” “secretary,”
“general counsel” and “chief financial officer,” as and to the extent authorized by the Board. Any
number of offices may be held by the same Person. In the Board’s discretion, the Board may choose
not to fill any office for any period as it may deem advisable. Officers need not be residents of
the State of Delaware or a Member. Any Officers so designated shall have such authority and
perform such duties as the Board may, from time to time, delegate to them. The Board may assign
titles to particular Officers. Each Officer shall hold office until his successor shall be duly
designated and shall have qualified as an Officer or until his death or until he shall resign or
shall have been removed in the manner hereinafter provided. The salaries or other compensation, if
any, of the Officers of the Company shall be fixed from time to time by the Board.
7.2 Resignation and Removal. Any Officer may resign as such at any time. Such resignation shall be made in writing and shall
take effect at the time specified therein, or if no time be specified, at the time of its receipt
by the Board. The acceptance by the Board of a resignation of any Officer shall not be necessary
to make such resignation effective, unless otherwise specified in such resignation. Any Officer
may be removed as such, either with or without cause, at any time by the Board. Designation of any
Person as an Officer by the Board pursuant to the provisions of Section 7.1 shall not in and of
itself vest in such Person any contractual or employment rights with respect to the Company.
7.3 Duties of Officers Generally. The Officers, in the performance of their duties as such, shall (i)
owe to the Company duties of loyalty and due care of the type owed by the officers of a corporation
to such corporation and its stockholders under the laws of the State of Delaware, and (ii) keep the
Board reasonably apprised of material developments in the business of the Company.
7.4 President. The president shall be responsible for the general management of the affairs of the
Company and shall perform all duties incidental to such person’s office that may be required by law
and all such other duties as are properly required of him by the Board. He shall make reports to
the Board and shall see that all orders and resolutions of the Board and of any committee thereof
are carried into effect. The President may sign, with the Secretary, an Assistant Secretary or any
other Officer of the Company thereunto duly authorized by the Board, any deeds, mortgages, bonds,
contracts or other instruments that the Board has authorized to be executed, except in cases where
the execution thereof shall be expressly delegated by the Board or by this Agreement to some other
Officer or agent of the Company, or shall be required by applicable law to be otherwise executed.
The President, if he is also a director, shall, in the absence of or because of the inability to
act of the chairman of the Board, perform all duties of the chairman of the Board and preside at
all meetings of the Board.
7.5 Chief Financial Officer. The chief financial officer shall keep complete and accurate records of
account, showing at all times the financial condition of the Company. He shall be the legal
custodian of all money, notes, securities and other valuables which may from time to time come into
the possession of the Company. He shall furnish at meetings of the Board, or whenever requested, a
statement of the financial condition of the Company, and shall
7
perform such other duties and have
such other powers as the president of the Company or the Board may from time to time prescribe.
7.6 Vice President(s). The vice president(s) of the Company shall perform such duties and have such
other powers as the president of the Company or the Board may from time to time prescribe. A vice
president may be designated as an Executive Vice President, a Senior Vice President, an Assistant
Vice President, or a vice president with a functional title.
7.7 Secretary.
(a) The secretary of the Company shall attend all meetings of the Board, record all the
proceedings of the meetings and perform similar duties for the committees of the Board when
required.
(b) The secretary of the Company shall keep all documents as may be required under the
Delaware Act. The Secretary (i) shall see that all notices are duly given in accordance with the
provisions of this Agreement and as required by applicable law; (ii) shall be custodian of the
records and the seal of the Company and affix and attest the seal to all documents to be executed
on behalf of the Company under its seal; (iii) shall see that the books, reports, statements,
certificates and other documents and records required by applicable law to be kept and filed are
properly kept and filed; and (iv) in general, shall have the general duties, powers and
responsibilities of a secretary of a corporation and shall perform such other duties and have such
other authority as may be prescribed elsewhere in this Agreement or from time to time by the
president of the Company or the Board.
(c) If the Board chooses to appoint an assistant secretary or assistant secretaries, the
assistant secretaries, in the order of seniority, shall in the Company secretary’s absence,
disability or inability to act, perform the duties and exercise the powers of the secretary of the
Company, and shall perform such other duties as the president of the Company or the Board may from
time to time prescribe.
ARTICLE VIII
INDEMNIFICATION
8.1 Right to Indemnification. Subject to the limitations and conditions provided in this Article VIII,
each Person who was or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or
investigative, or any appeal in such a proceeding or any inquiry or investigation that could lead
to such a proceeding (any such proceeding, appeal, inquiry or investigation being hereinafter
called a “Proceeding”), by reason of the fact that such Person (a) is or was the Member or a
Director or is or was serving as an Officer of the Company or (b) while the Member or a Director or
a Person serving as an Officer of the Company is or was serving at the written request of the
Company as a manager, member, director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar official or functionary of another foreign or domestic limited liability company,
corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise, shall be indemnified by the
8
Company to the fullest extent that would be permitted by
the General Corporation Law of the State of Delaware (the “DGCL”) as the same exists or may
hereafter be amended (but in the case of any such amendment, only to the extent that such amendment
provides broader indemnification rights than were provided by the DGCL prior to such amendment) if
the Company were a corporation organized under the DGCL and the Member or Director were a director
of such a corporation and each such Officer were an officer of such a corporation, against
judgments, penalties (including excise and similar taxes and punitive
damages), fines, settlements and reasonable expenses (including, without limitation, attorneys’
fees) actually incurred by such Person in connection with such Proceeding, and indemnification
under this Article VIII shall continue as to a Person who has ceased to serve in the capacity which
initially entitled such Person to indemnity hereunder with respect to actions or omissions prior to
such cessation and shall inure to the benefit of the heirs, executors and administrators of such
Person. The rights granted pursuant to this Article VIII shall be deemed contract rights, and no
amendment, modification or repeal of this Article VIII shall have the effect of limiting or denying
any such rights with respect to actions or omissions or Proceedings arising prior to any such
amendment, modification or repeal. It is expressly acknowledged that the indemnification provided
in this Article VIII could involve indemnification for negligence or liabilities under theories of
strict liability. Notwithstanding any other provision of this Article VIII, no Person shall be
entitled to indemnification or advancement of expenses under this Article VIII with respect to any
Proceeding (or any claim in any Proceeding) initiated or made by such Person without the express
prior approval of the Board. Notwithstanding any other provision of this Article VIII, and in
addition to the other limitations on indemnification under the DGCL incorporated herein as
aforesaid, no Person shall be entitled to indemnification under this Article VIII against
judgments, penalties, fines, settlements and expenses to the extent they result from actions or
omissions involving gross negligence or willful misconduct on the part of such Person.
8.2 Determination of Eligibility. To the extent the DGCL requires a determination as to whether a
standard of conduct expressed in Section 145 thereof has been met by a Person or any other
determination bearing on whether a Person is entitled to indemnification, such determination shall
be made by the Board.
8.3 Advancement of Expenses. A Person who is or was a Member, Director or Officer of the Company who
may be entitled to indemnification under this Article VIII shall have the right to be paid or
reimbursed by the Company the reasonable expenses (including attorneys’ fees) incurred by such
Person in defending a Proceeding in respect of which such indemnity is sought in advance of the
final disposition of the Proceeding, upon written request to the Company with a written
undertaking, by or on behalf of such Person, to repay the amount so paid or reimbursed if it shall
ultimately be determined that such Person is not entitled to be indemnified under this Article VIII.
8.4 Indemnification of Employees and Agents. The Company, by action of the Board, may indemnify and
advance expenses to an employee or agent of the Company who is not an Officer of the Company to the
same or lesser extent (subject to the same or more restrictive conditions) as it may indemnify and
advance expenses to the Member, any Director or any Person serving as an Officer under this Article
VIII.
9
8.5 Appearance as a Witness. Notwithstanding any other provision of this Article VIII, the Company may
pay or reimburse expenses incurred by the Member, any Director or any Officer in connection with
such Member’s, Director’s or Officer’s appearance as a witness or other participation in a
Proceeding
at a time when such Member, Director or Officer is not a named defendant or respondent in the
Proceeding.
8.6 Nonexclusivity of Rights. The right to indemnification and advancement and payment of expenses
conferred in this Article VIII shall not be exclusive of any other right which the Member, Director
or other Person indemnified pursuant to Section 8.1 may have or hereafter acquire under any law
(common or statutory), provision of the Certificate of Formation or this Agreement, agreement,
action of the Member or Directors or otherwise.
8.7 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and
any Person who is the Member or a Director or was serving as an Officer, employee or agent of the
Company, whether or not the Company would have the power to indemnify such Person against such
expense, liability or loss under this Article VIII.
8.8 Savings Clause. If this Article VIII or any portion hereof shall be invalidated on any ground by
any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold
harmless the Member, any Director or any other Person indemnified pursuant to this Article VIII as
to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative
or investigative to the full extent permitted by any applicable portion of this Article VIII that
shall not have been invalidated and to the fullest extent permitted by applicable law.
ARTICLE IX
ACCOUNTING PERIOD, RECORDS AND REPORTS
9.1 Accounting Method. The books and records of account of the Company shall be maintained in
accordance with any permissible method of accounting as determined by the Board or the appropriate
Officers.
9.2 Accounting Period. The Company’s accounting period shall be the calendar year.
9.3 Inspection. The books and records of the Company shall be maintained at the principal place of
business of the Company and shall be open to inspection by the Member at all reasonable times
during any business day.
9.4 Preparation of Financial Statements. The appropriate Officers shall cause to be prepared from the books of the Company and delivered
to the Member and the Board such financial statements and reports as the Member shall from time to
time request.
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ARTICLE X
TAX MATTERS
10.1 Tax Returns and Elections. The appropriate Officers or the Board shall cause the preparation and
timely filing of all tax returns required to be filed by the Company pursuant to the Code and all
other tax returns deemed necessary and required in each jurisdiction in which the Company does
business and shall make such elections on behalf of the Company under applicable tax laws as the
Board or the appropriate Officers shall determine. Copies of such returns, or pertinent
information therefrom, shall be furnished to the Member promptly after filing.
ARTICLE XI
DISSOLUTION AND TERMINATION
11.1 Dissolution. The Company shall dissolve if the Member or the Board so determine in writing or as
otherwise provided under the Delaware Act.
11.2 Effect of Dissolution. Upon dissolution of the Company, the Company shall cease to carry on its
business, except insofar as may be necessary for the winding up of its business, but its separate
existence shall continue until a Certificate of Cancellation has been issued by the Secretary of
State or until a decree dissolving the Company has been entered by a court of competent
jurisdiction.
11.3 Winding Up, Liquidating and Distribution of Assets.
(a) Upon dissolution, an accounting shall be made of the accounts of the Company and of the
Company’s assets, liabilities and operations, from the date of the last previous accounting until
the date of dissolution. The Board shall immediately proceed to wind up the affairs of the
Company.
(b) If the Company is dissolved and its affairs are to be wound up, the Board shall (1) sell
or otherwise liquidate all of the Company’s assets as promptly as practicable (except to the extent
the Board determines to distribute any assets in kind to the Member), (2) allocate any income or
loss resulting from such sales to the Member in accordance with this Agreement, (3) discharge all
liabilities to creditors in the order of priority as provided by law, (4)
establish such reserves as the Board may reasonably determine to be necessary to provide for
contingent liabilities of the Company, (5) discharge any liabilities of the Company to the Member
other than on account of its interest in Company capital or profits, including all costs relating
to the dissolution, winding up and liquidation and distribution of assets and (6) distribute the
remaining assets to the Member, either in cash or in kind. If any assets of the Company are to be
distributed in kind, the net fair market value of such assets as of the date of dissolution shall
be determined by the Board or by independent appraisal.
(c) Notwithstanding anything to the contrary in this Agreement, upon a liquidation of the
Company the Member shall not have any obligation to make any contribution
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to the capital of the
Company other than any Capital Contributions the Member agreed to make in accordance with this
Agreement.
(d) Upon completion of the winding up, liquidation and distribution of the assets, the Company
shall be deemed terminated.
(e) The Board shall comply with any applicable requirements of applicable law pertaining to
the winding up of the affairs of the Company and the final distribution of its assets.
11.4 Certificate of Cancellation. When all debts, liabilities and obligations have been paid and
discharged or adequate provisions have been made therefor and all of the remaining property and
assets have been distributed to the Member, a Certificate of Cancellation shall be executed, and
verified by the Person signing the Certificate of Cancellation and filed with the Delaware
Secretary of State, which Certificate shall set forth the information required by the Delaware Act.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. Any notice, demand or communication required or permitted to be given by any provision of
this Agreement shall be deemed to have been sufficiently given or served for all purposes if
delivered personally to the party against receipt or to an officer of the party to whom the same is
directed against receipt or if sent by registered or certified mail, postage and charges prepaid,
addressed to the Member’s and/or Company’s address, as appropriate, which is set forth in this
Agreement. If mailed, any such notice shall be deemed to be delivered two calendar days after
being deposited in the United States mail with postage thereon prepaid, addressed and sent as
aforesaid.
12.2 Application of Delaware Law. This Agreement shall be governed by the law of the State of Delaware
applicable to agreements as if made and to be performed wholly within such state (without giving
effect to any
principles of conflicts of laws that would refer the same to the laws of another jurisdiction), and
specifically the Delaware Act.
12.3 Headings. The headings of the provisions of this Agreement are inserted for convenience of
reference and are not intended to describe, interpret, define or limit the scope or intent of this
Agreement or any provision hereof.
12.4 Waivers. No waiver of any right under this Agreement shall be effective unless evidenced in
writing and executed by the Person entitled to the benefits thereof. The failure of any party to
seek redress for violation of or to insist upon the strict performance of any covenant or condition
of this Agreement shall not prevent another act or omission, which would have originally
constituted a violation, from having the effect of an original violation.
12.5 Rights and Remedies Cumulative. The rights and remedies provided by this Agreement are cumulative
and the use of any one right or remedy by any party shall not
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preclude or waive the right to use
any or all other rights or remedies. Said rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance or otherwise.
12.6 Severability. If any provision of this Agreement or the application thereof to any Person or
circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this
Agreement and the application thereof shall not be affected and shall be enforceable to the fullest
extent permitted by law.
12.7 Heirs, Successors and Assigns. Each and all of the covenants, terms, provisions and agreements
herein contained shall be binding upon and inure to the benefit of the parties hereto and, to the
extent permitted by this Agreement, their respective heirs, legal representatives, successors and
assigns.
12.8 Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable
by any Person other than the Company and the Member.
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The undersigned, being the sole Member of the Company, hereby certifies that the foregoing
Agreement is the Limited Liability Company Agreement of the Company, that such Agreement has been
duly adopted and is binding on the Company and its Member, and that such Member agrees to be bound
by the terms of the foregoing Agreement.
EXECUTED to be effective as of the date first above written.
MEMBER: ENCORE ENERGY PARTNERS LP, a Delaware limited partnership By: Encore Energy Partners GP LLC, its General Partner |
||||
By: | /s/ Xxx X. Xxxxxxx | |||
Name: | Xxx X. Xxxxxxx | |||
Title: | Chief Executive Officer and President | |||
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