Exhibit 3.4
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
MARKWEST ENERGY OPERATING COMPANY, L.L.C.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.....................................................................................1
Section 1.2 Construction....................................................................................6
ARTICLE II
ORGANIZATION
Section 2.1 Formation.......................................................................................6
Section 2.2 Name............................................................................................6
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices............................7
Section 2.4 Purpose and Business............................................................................7
Section 2.5 Powers..........................................................................................8
Section 2.6 Power of Attorney...............................................................................8
Section 2.7 Term............................................................................................9
Section 2.8 Title to Company Assets.........................................................................9
ARTICLE III
RIGHTS OF MEMBERS
Section 3.1 Limitation of Liability.........................................................................9
Section 3.2 Outside Activities of the Members...............................................................9
Section 3.3 Rights of Members..............................................................................10
ARTICLE IV
TRANSFERS OF INTERESTS
Section 4.1 Transfer Generally.............................................................................11
Section 4.2 Transfer of Membership Interests...............................................................11
Section 4.3 Restrictions on Transfers......................................................................11
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF INTERESTS
Section 5.1 Prior to Closing Date..........................................................................12
Section 5.2 Contributions and other Transactions at Closing................................................12
Section 5.3 Additional Capital Contributions...............................................................12
Section 5.4 Interest and Withdrawal........................................................................12
Section 5.5 Loans from Members.............................................................................12
Section 5.6 Issuances of Additional Company Securities.....................................................13
Section 5.7 Limited Preemptive Rights......................................................................13
Section 5.8 Fully Paid and Non-Assessable Nature of Membership Interests...................................14
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1 Allocations....................................................................................14
Section 6.2 Distributions..................................................................................14
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ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1 Management.....................................................................................14
Section 7.2 Certificate of Formation.......................................................................16
Section 7.3 Restrictions on Managing Member's Authority....................................................17
Section 7.4 Reimbursement of the General Partner; Benefit Plans............................................17
Section 7.5 Outside Activities.............................................................................18
Section 7.6 Loans from the Managing Member or the General Partner; Loans or Contributions from the Company;
Contracts with Affiliates......................................................................18
Section 7.7 Indemnification................................................................................20
Section 7.8 Liability of Indemnitees.......................................................................21
Section 7.9 Resolution of Conflicts of Interest............................................................22
Section 7.10 Other Matters Concerning the Managing Member...................................................23
Section 7.11 Reliance by Third Parties......................................................................24
ARTICLE VIII
OFFICERS
Section 8.1 Officers.......................................................................................24
Section 8.2 Compensation...................................................................................27
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting.........................................................................27
Section 9.2 Fiscal Year....................................................................................27
ARTICLE X
TAX MATTERS
Section 10.1 Tax Returns and Information....................................................................27
Section 10.2 Tax Elections..................................................................................27
ARTICLE XI
ADMISSION OF MEMBERS
Section 11.1 Admission of MLP...............................................................................28
Section 11.2 Admission of Substituted Members...............................................................28
Section 11.3 Admission of Additional Members................................................................28
Section 11.4 Amendment of Agreement and Certificate of Formation............................................28
ARTICLE XII
WITHDRAWAL OF MEMBERS
Section 12.1 Withdrawal of Members..........................................................................29
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution....................................................................................29
Section 13.2 Liquidator.....................................................................................29
Section 13.3 Liquidation....................................................................................30
Section 13.4 Cancellation of Certificate of Formation.......................................................30
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Section 13.5 Return of Capital Contributions................................................................31
Section 13.6 Waiver of Partition............................................................................31
Section 13.7 Capital Account Restoration....................................................................31
ARTICLE XIV
AMENDMENT OF AGREEMENT
Section 14.1 Amendment to be Adopted Solely by the Managing Member..........................................31
Section 14.2 Amendment Procedures...........................................................................32
ARTICLE XV
MERGER
Section 15.1 Authority......................................................................................32
Section 15.2 Procedure for Merger or Consolidation..........................................................33
Section 15.3 Approval by Members of Merger or Consolidation.................................................34
Section 15.4 Certificate of Merger..........................................................................34
Section 15.5 Effect of Merger...............................................................................34
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Addresses and Notices..........................................................................35
Section 16.2 Further Action.................................................................................35
Section 16.3 Binding Effect.................................................................................35
Section 16.4 Integration....................................................................................35
Section 16.5 Creditors......................................................................................36
Section 16.6 Waiver.........................................................................................36
Section 16.7 Counterparts...................................................................................36
Section 16.8 Applicable Law.................................................................................36
Section 16.9 Invalidity of Provisions.......................................................................36
Section 16.10 Consent of Members.............................................................................36
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AMENDED AND RESTATED
LIMITED LIABILTY COMPANY AGREEMENT
OF
MARKWEST ENERGY OPERATING COMPANY, L.L.C.
THIS AMENDED AND RESTATED LIMITED LIABILTY COMPANY AGREEMENT OF
MarkWest Energy Operating Company, L.L.C., dated as of __________, 2002, is
entered into by and among MarkWest Energy Partners, L.P., a
Delaware limited
partnership (the "MLP"), together with any other Persons who hereafter become
Members in the Company or parties hereto as provided herein.
R E C I T A L S:
WHEREAS, the MLP caused MarkWest Energy Operating Company, L.L.C.
(referred to herein as the "COMPANY") to be formed as a limited liability
company under the
Delaware Limited Liability Company Act on January 25, 2002
and a Certificate of Formation was filed with the Secretary of State of
Delaware on such date.
WHEREAS, the MLP entered into a
Limited Liability Company Agreement
relating to the Company on ______________, 2002.
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 MLP hereby enters 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.ss.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 MarkWest Energy Operating Company, L.L.C., 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
(b) the amount of any cash reserves that is 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.
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"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 Colorado 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 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.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON UNIT" has the meaning assigned to such term in the MLP
Agreement.
"COMPANY" means MarkWest Energy Operating Company, L.L.C., 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.
"CONTRIBUTION AGREEMENT" means the Contribution, Conveyance and
Assumption Agreement, dated the Closing Date, among the Company, MarkWest
Hydrocarbon, Inc., a
Delaware corporation, the MLP, the General Partner and
certain other parties named therein, together with any additional documents
and instruments contemplated or referenced thereunder.
"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 _________________________________.
"GENERAL PARTNER" means MarkWest Energy GP, L.L.C., a
Delaware
limited liability company, and its successors and permitted assigns as
general partner of the MLP.
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"GROUP MEMBER" means a member of the Company Group.
"INDEMNITEE" means (a) the Managing Member, (b) the General Partner,
(c) 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 (d) 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.
"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.
"MANAGING MEMBER" means MarkWest Energy 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 Amended and Restated Agreement of Limited
Partnership of MarkWest Energy 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 MarkWest
Hydrocarbon, Inc.
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"OPINION OF COUNSEL" means a written opinion of counsel (who 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.
"PERCENTAGE INTEREST" means the percentage interest in the Company
held by a Member.
"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.
"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- 81780) 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 the Underwriting Agreement dated
__________, 2002 among the Company, the MLP, the General Partner, MarkWest
Hydrocarbon, Inc. 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.
"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.
MarkWest Energy Partners, L.P. previously 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 on January 25, 2002.
Section 2.2 NAME.
The name of the Company shall be "MarkWest Energy Operating Company,
L.L.C." 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, the name of the MLP. The
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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 000 Xxxxxxxxx Xxxxx
Xxxx, Xxxxxxxxx, 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, partner or
stockholder of its Subsidiaries and, in connection therewith, to exercise all
the rights and powers conferred upon the Company as the sole member, partner
or stockholder of such Subsidiaries pursuant to the operating agreements,
partnership 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, (e) borrow money and issue evidences of
indebtedness and secure any such indebtedness by mortgage or pledge of, or
other lien on, the assets of the Company and (f) 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.
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Section 2.5 POWERS.
The Company shall be empowered to the fullest extent then
permissible under the Act 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 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
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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 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
Managing Member 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.
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 and the Assignees 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.
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Subject to the provisions of Article II of 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;
(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).
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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 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
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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.
On January 25, 2002 in connection with the formation of the Company
under the Act, the MLP made an initial Capital Contribution to the Company in
the amount of $1,000 for all of the Membership Interests in the Company. Upon
completion of such contribution, 100% of the Membership Interests in the
Company were held by the MLP.
Section 5.2 CONTRIBUTIONS AND OTHER TRANSACTIONS AT CLOSING.
(a) On the Closing Date and pursuant to the Contribution
Agreement, the MLP shall contribute to the Company all its ownership
interests in MarkWest Energy Appalachia, L.L.C., Basin Pipeline L.L.C. and
West Shore Processing Company, L.L.C.
(b) On the Closing Date and pursuant to the Contribution
Agreement, the MLP shall contribute to the Company cash in the amount of $7.0
million.
(c) On the Closing Date and pursuant to the Contribution
Agreement, the Company will borrow $25,500,000 under the Credit Agreement and
distribute $25,500,000 to the MLP.
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.
Section 5.5 LOANS FROM MEMBERS.
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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.
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
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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 June 30, 2002, 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.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1 MANAGEMENT.
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(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 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;
(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;
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(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 Contribution Agreement, the Credit 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.
The MLP caused the Certificate of Formation to be filed with the
Secretary of 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
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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). 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
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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 MANAGING MEMBER OR THE GENERAL PARTNER; LOANS OR
CONTRIBUTIONS FROM THE COMPANY; CONTRACTS WITH AFFILIATES.
(a) The Managing Member, the General Partner or any of
their Affiliates may lend to any Group Member, and any Group Member may
borrow from the Company or any of its Affiliates, funds needed or 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
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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 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 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
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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 or the 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 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 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.
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(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 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
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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 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
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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.
(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.
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(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.
ARTICLE VIII
OFFICERS
Section 8.1 OFFICERS.
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(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 Chief
Executive Officer, 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) CHIEF EXECUTIVE OFFICER. The Managing Member shall
appoint an individual to serve as Chief Executive Officer. The Chief
Executive Officer shall have general executive charge, management
and control of the properties and operations of the Company in the
ordinary course of its business, with all such powers with respect
to such properties and operations as may be reasonably incident to
such responsibilities. The Chief Executive Officer shall have the
power to appoint and remove subordinate officers, agents and
employees, including the President, Vice Presidents, Assistant
Secretaries and Assistant Treasurers, except that the Chief
Executive Officer may not remove those elected or appointed by the
Managing Member. In general, the Chief Executive Officer shall
perform all duties incident to the office of Chief Executive Officer
of the Company and such other duties as may be prescribed from time
to time by the Managing Member. The current Chief Executive Officer
is Xxxxxx X. Xxxxxx.
(ii) PRESIDENT. The Managing Member shall elect an
individual to serve as President. The President shall have such
powers and duties as may be assigned to him by the Board of
Directors or the Chief Executive Officer, and shall exercise the
powers of the Chief Executive Officer during that officer's absence,
inability to act or refusal to act. The current President Xxxxxx X.
Xxxxxx.
(iii) 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 Chief Executive Officer, President or the
Managing Member. The current Vice President is Xxxxxx X. Xxxxxxxx.
(iv) 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
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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 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, the Chief
Executive Officer, or the President. The Assistant Secretaries shall
exercise the powers of the Secretary during that Officer's absence
or inability or refusal to act. The current Secretary is Xxxxxx X.
Xxxxxxxx.
(v) 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, the Chief Executive
Officer, 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, the Chief Executive Officer, 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.
MARKWEST ENERGY PARTNERS, L.P.
By: MarkWest Energy GP, L.L.C., its General Partner
By: ________________________________________________
Name:
Title:
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