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EXHIBIT 3.6
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FORM OF
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXXXX XX LLC
A DELAWARE LIMITED LIABILITY COMPANY
DATED AS OF
_________, 2001
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................................................1
Section 1.02 Construction....................................................................................7
ARTICLE II
ORGANIZATION
Section 2.01 Formation.......................................................................................8
Section 2.02 Name............................................................................................8
Section 2.03 Registered Office; Registered Agent; Principal Office...........................................8
Section 2.04 Purposes........................................................................................8
Section 2.05 Foreign Qualification...........................................................................9
Section 2.06 Term............................................................................................9
Section 2.07 No State Law Partnership........................................................................9
ARTICLE III
MEMBERSHIP
Section 3.01 Membership Interests; Additional Members........................................................9
Section 3.02 Access to Information..........................................................................10
Section 3.03 Liability......................................................................................10
Section 3.04 Withdrawal.....................................................................................10
ARTICLE IV
DISPOSITION OF MEMBERSHIP INTERESTS
Section 4.01 General Restriction............................................................................10
Section 4.02 Admission of Assignee as a Member..............................................................11
Section 4.03 Requirements Applicable to All Dispositions and Admissions.....................................11
ARTICLE V
CAPITAL CONTRIBUTIONS
Section 5.01 Initial Capital Contributions..................................................................12
Section 5.02 Loans..........................................................................................12
Section 5.03 Return of Contributions........................................................................12
Section 5.04 Capital Accounts...............................................................................12
ARTICLE VI
DISTRIBUTIONS AND ALLOCATIONS
Section 6.01 Distributions..................................................................................12
Section 6.02 Distributions on Dissolution and Winding Up....................................................13
Section 6.03 Allocations....................................................................................13
Section 6.04 Varying Interests..............................................................................15
Section 6.05 Tax Distributions..............................................................................15
Section 6.06 Withheld Taxes.................................................................................15
Section 6.07 Limitations on Distributions...................................................................16
ARTICLE VII
MANAGEMENT
Section 7.01 Management by Board of Directors...............................................................16
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Section 7.02 Number; Qualification; Tenure..................................................................16
Section 7.03 Regular Meetings...............................................................................16
Section 7.04 Special Meetings...............................................................................16
Section 7.05 Notice.........................................................................................17
Section 7.06 Action by Consent of Board.....................................................................17
Section 7.07 Conference Telephone Meetings..................................................................17
Section 7.08 Quorum.........................................................................................17
Section 7.09 Vacancies; Increases in the Number of Directors................................................18
Section 7.10 Committees.....................................................................................18
Section 7.11 Removal........................................................................................18
ARTICLE VIII
OFFICERS
Section 8.01 Elected Officers...............................................................................19
Section 8.02 Election and Term of Office....................................................................19
Section 8.03 Chairman of the Board; Chief Executive Officer.................................................19
Section 8.04 President; Chief Operating Officer.............................................................19
Section 8.05 Vice Presidents................................................................................20
Section 8.06 Treasurer......................................................................................20
Section 8.07 Secretary......................................................................................20
Section 8.08 Removal........................................................................................20
Section 8.09 Vacancies......................................................................................21
ARTICLE IX
TAXES
Section 9.01 Tax Returns....................................................................................21
Section 9.02 Tax Elections..................................................................................21
Section 9.03 Tax Matters Officer............................................................................21
ARTICLE X
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
Section 10.01 Maintenance of Books...........................................................................22
Section 10.02 Reports........................................................................................23
Section 10.03 Bank Accounts..................................................................................23
ARTICLE XI
DISSOLUTION, WINDING-UP, TERMINATION AND CONVERSION
Section 11.01 Dissolution....................................................................................23
Section 11.02 Winding-Up and Termination.....................................................................23
Section 11.03 Deficit Capital Accounts.......................................................................24
Section 11.04 Certificate of Cancellation....................................................................24
ARTICLE XII
GENERAL PROVISIONS
Section 12.01 Offset.........................................................................................25
Section 12.02 Notices........................................................................................25
Section 12.03 Entire Agreement; Superseding Effect...........................................................26
Section 12.04 Effect of Waiver or Consent....................................................................26
Section 12.05 Amendment or Restatement.......................................................................26
Section 12.06 Binding Effect.................................................................................26
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Section 12.07 Governing Law; Severability....................................................................27
Section 12.08 Further Assurances.............................................................................27
Section 12.09 Waiver of Certain Rights.......................................................................27
Section 12.10 Counterparts...................................................................................27
Section 12.11 Jurisdiction...................................................................................27
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
XXXXXXXX XX LLC
A Delaware Limited Liability Company
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
"Agreement") of XXXXXXXX XX LLC (the "Company"), dated as of __________, 2000
(the "Effective Date"), is adopted, executed and agreed to, for good and
valuable consideration, by Xxxxxxxx Energy Services, a Delaware corporation
("XXX") and Xxxxxxxx Natural Gas Liquids, Inc., a Delaware corporation ("WNGL"),
as the members ("Members").
RECITALS
1. The name of the company is "Xxxxxxxx XX LLC" (the "Company").
2. The Company was originally formed as a Delaware limited liability
company by the filing of a Certificate of Formation (the "Delaware
Certificate"), dated as of August 30, 2000 (the "Original Filing Date") with the
Secretary of State of the State of Delaware, pursuant to the Delaware Limited
Liability Company Act (the "Act") with XXX as the sole member.
3. XXX and the Company desire to admit WNGL as a member of the Company
in exchange for its capital contribution as set forth in Section 5.01.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS.
(a) As used in this Agreement, the following terms have the respective
meanings set forth below or set forth in the Sections referred to below:
"Act" has the meaning given such term in the Recitals.
"Adjusted Capital Account Deficit" means, with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such
Member is obligated to restore pursuant to any provision of this
Agreement or pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant
to the penultimate sentences of Treasury Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5);
(ii) Debit to such Capital Account the items described in
Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
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The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For the purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" has the meaning given such term in the Recitals.
"Applicable Law" means (a) any United States Federal, state or local
law, statute, rule, regulation, order, writ, injunction, judgment, decree or
permit of any Governmental Authority and (b) any rule or listing requirement of
any applicable national stock exchange or listing requirement of any national
stock exchange or Commission recognized trading market on which securities
issued by the MLP are listed or quoted.
"Assignee" means any Person that acquires a Membership Interest or any
portion thereof through a Disposition; provided, however, that, an Assignee
shall have no right to be admitted to the Company as a Member except in
accordance with Article IV. The Assignee of a dissolved Member is the
shareholder, partner, member or other equity owner or owners of the dissolved
Member to whom such Member's Membership Interest is assigned by the Person
conducting the liquidation or winding up of such Member. The Assignee of a
Bankrupt Member is (a) the Person or Persons (if any) to whom such Bankrupt
Member's Membership Interest is assigned by order of the bankruptcy court or
other Governmental Authority having jurisdiction over such Bankruptcy, or (b) in
the event of a general assignment for the benefit of creditors, the creditor to
which such Membership Interest assigned.
"Bankruptcy" or "Bankrupt" means, with respect to any Person, that (a)
such Person (i) makes a general assignment for the benefit of creditors; (ii)
files a voluntary bankruptcy petition; (iii) becomes the subject of an order for
relief or is declared insolvent in any federal or state bankruptcy or insolvency
proceedings; (iv) files a petition or answer seeking for such Person a
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any Applicable Law; (v) files an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against such Person in a proceeding of the type described in
subclauses (i) through (iv) of this clause (a); or (vi) seeks, consents to, or
acquiesces in the appointment of a trustee, receiver, or liquidator of such
Person or of all or any substantial part of such Person's properties; or (b) a
proceeding seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any Applicable Law has been
commenced against such Person and 120 Days have expired without dismissal
thereof or with respect to which, without such Person's consent or acquiescence,
a trustee, receiver, or liquidator of such Person or of all or any substantial
part of such Person's properties has been appointed and 90 Days have expired
without the appointment's having been vacated or stayed, or 90 Days have expired
after the date of expiration of a stay, if the appointment has not previously
been vacated.
"Board" has the meaning given such term in Section 7.01.
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"Business Day" means any day other than a Saturday, a Sunday, or a day
when banks in New York, New York are authorized by Applicable Law to be closed.
"Capital Account" means, with respect to any Member, the Capital
Account maintained for such Member in accordance with the following provisions:
(i) To each Member's Capital Account there shall be credited
such Member's Capital Contributions, such Member's distributive share
of Profits and any items in the nature of income or gain which are
specially allocated pursuant to Section 6.03 hereof, and the amount of
any Company liabilities assumed by such Member or which are secured by
any property (other than money) distributed to such Member.
(ii) To each Member's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any property (other
than money) distributed to such Member pursuant to any provision of
this Agreement, such Member's distributive share of Losses and any
items in the nature of expenses or losses which are specially allocated
pursuant to Section 6.03 hereof, and the amount of any liabilities of
such Member assumed by the Company or which are secured by any property
(other than money) contributed by such Member to the Company.
(iii) In the event all or a portion of a Membership Interest
is transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to
the extent it relates to the Membership Interest so transferred.
(iv) In determining the amount of any liability for purposes
of the foregoing subparagraphs (i) and (ii) of this definition of
"Capital Account," there shall be taken into account Section 752(c) of
the Code and any other applicable provisions of the Code and Treasury
Regulations.
The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Treasury Regulations Section 1.704-1(b) and shall be interpreted and
applied in a manner consistent with such Treasury Regulations.
"Capital Contribution" means, with respect to any Member, the amount of
money and the net agreed value of any property (other than money) contributed to
the Company by such Member. Any reference in this Agreement to the Capital
Contribution of a Member shall include a Capital Contribution of its
predecessors in interest.
"Certified Public Accountants" means a firm of independent public
accountants selected from time to time by the Board.
"Claim" means any and all judgments, claims, causes of action, demands,
lawsuits, suits, proceedings, Governmental investigations or audits, losses,
assessments, fines, penalties, administrative orders, obligations, costs,
expenses, liabilities and damages (whether actual, consequential or punitive),
including interest, penalties, reasonable attorneys' fees, disbursements and
costs of investigations, deficiencies, levies, duties and imposts.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Company" has the meaning given such term in the Recitals.
"Compensation Committee" has the meaning given such term in Section
7.10(d).
"Conflicts Committee" has the meaning given such term in Section
7.10(c).
"Day" means a calendar day; provided, however, that, if any period of
Days referred to in this Agreement shall end on a Day that is not a Business
Day, then the expiration of such period shall be automatically extended until
the end of the next succeeding Business Day.
"Delaware Certificate" has the meaning given such term in the Recitals.
"Depreciation" means, for each fiscal year or other period, an amount
equal to the depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for Federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the Federal income tax depreciation, amortization, or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the Federal income tax
depreciation, amortization, or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the Manager.
"Director" or "Directors" has the meaning given such term in Section
7.02.
"Dispose," "Disposing" or "Disposition" means with respect to any asset
(including a Membership Interest or any portion thereof), a sale, assignment,
transfer, conveyance, gift, exchange or other disposition of such asset, whether
such disposition be voluntary, involuntary or by operation of Applicable Law.
"Disposing Member" has the meaning given such term in Section 4.02.
"Dissolution Event" has the meaning given such term in Section
11.01(a).
"Effective Date" has the meaning given such term in the Recitals.
"Encumber," "Encumbering," or "Encumbrance" means the creation of a
security interest, lien, pledge, mortgage or other encumbrance, whether such
encumbrance be voluntary, involuntary or by operation of Applicable Law.
"GAAP" means generally accepted accounting principles.
"Governmental Authority" or "Governmental" means any Federal, state or
local court or governmental or regulatory agency or authority or any arbitration
board, tribunal or mediator having jurisdiction over the Company or its assets
or Members.
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"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for Federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by
a Member to the Company shall be the gross fair market value of said
asset, as determined by the contributing Member and the Board, in a
manner that is consisted with Section 7701(g) of the Code;
(ii) The Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross fair market values, as
determined by the Board, in a manner that is consistent with Section
7701(g) of the Code, as of the following times: (a) the acquisition of
an additional Membership Interest by any new or existing Member in
exchange for more than a de minimis Capital Contribution; (b) the
distribution by the Company to a Member of more than a de minimis
amount of property other than money as consideration for an Membership
Interest; and (c) the liquidation of the Company within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however,
that adjustments pursuant to clauses (a) and (b) above shall be made
only if the Tax Matters Officer reasonably determines that such
adjustments are necessary or appropriate to reflect the relative
economic interests of the Members in the Company;
(iii) The Gross Asset Value of any Company asset distributed
to any Member shall be the gross fair market value (taking Section
7701(g) of the Code into account) of such asset on the date of
distribution; and
(iv) The Gross Asset Values of any Company assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Section 734(b) of the Code or Section
743(b) of the Code, but only to the extent that such adjustments are
taken into account in determining Capital Accounts pursuant to Treasury
Regulations Section 1.704-1 (b)(2)(iv)(m) and the definition of Capital
Account hereof, provided, however, that Gross Asset Values shall not be
adjusted pursuant to this subparagraph (iv) to the extent the Tax
Matter Officer determines that an adjustment pursuant to the foregoing
subparagraph (ii) of this definition is necessary or appropriate in
connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (iv).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
the foregoing subparagraphs (i), (ii) or (iv), such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.
"Incentive Plan" means any plan or arrangement pursuant to which the
Company may compensate its employees, consultants, directors and/or service
providers.
"Independent Director" has the meaning given such term in Section
7.10(b).
"Majority Interest" means greater than 50% of the Sharing Ratios.
"Member" means any Person executing this Agreement as of the date of
this Agreement as a member of the Company or hereafter admitted to the Company
as a member as provided in this Agreement, but such term does not include any
Person who has ceased to be a member in the Company.
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"Membership Interest" means, with respect to any Member, (a) that
Member's status as a Member; (b) that Member's share of the income, gain, loss,
deduction and credits of, and the right to receive distributions from, the
Company; (c) all other rights, benefits and privileges enjoyed by that Member
(under the Act, this Agreement, or otherwise) in its capacity as a Member,
including that Member's rights to vote, consent and approve and otherwise to
participate in the management of the Company, including through the Board; and
(d) all obligations, duties and liabilities imposed on that Member (under the
Act, this Agreement or otherwise) in its capacity as a Member, including any
obligations to make Capital Contributions.
"Notices" has the meaning given such term in Section 12.02.
"NYSE" has the meaning given such term in Section 7.10(b).
"Original Filing Date" has the meaning given such term in the Recitals.
"Partnership" has the meaning given such term in Section 7.10(c).
"Person" means any individual, firm, partnership, corporation, limited
liability company, association, joint-stock company, unincorporated
organization, joint venture, trust, court, governmental agency or any political
subdivision thereof, or any other entity.
"Profits" and "Losses" means, for each fiscal year or other period, an
amount equal to the Company's taxable income or loss for such year or period,
determined in accordance with Section 703(a) of the Code (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Section 703(a)(1) of the Code shall be included in taxable income or
loss), with the following adjustments:
(i) Any income of the Company that is exempt from Federal
income tax and not otherwise taken into account in computing Profits or
Losses pursuant to this definition shall be added to such taxable
income or loss;
(ii) Any expenditures of the Company described in Section
705(a)(2)(B) of the Code, and not otherwise taken into account in
computing Profits or Losses pursuant to this definition shall be
subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Company asset
is adjusted pursuant to subparagraph (ii) or (iv) of the definition of
Gross Asset Value hereof, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of property
(other than money) with respect to which gain or loss is recognized for
Federal income tax purposes shall be computed by reference to the Gross
Asset Value of the property disposed of notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value;
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(v) In lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for such fiscal
year or other period, computed in accordance with the definition of
Depreciation hereof; and
(vi) Notwithstanding any other provision of this definition of
"Profits and Losses," any items which are specially allocated pursuant
to Section 6.03(d) and Section 6.03(e) hereof shall not be taken into
account in computing Profits or Losses.
"Proper Officer" or "Proper Officers" means those officers authorized
by the Board to act on behalf of the Company.
"Sharing Ratio" means, subject in each case to adjustments in
accordance with this Agreement or in connection with Dispositions of Membership
Interests, (a) in the case of a Member executing this Agreement as of the date
of this Agreement or a Person acquiring such Member's Membership Interest, the
percentage specified for that Member as its Sharing Ratio on Exhibit A, and (b)
in the case of Membership Interests issued pursuant to Section 3.02, the Sharing
Ratio established pursuant thereto; provided, however, that the total of all
Sharing Ratios shall always equal 100%.
"Target Capital Account Amount" means, with respect to a Member, the
distribution the Member would receive pursuant to Section 6.02 if the amount to
be distributed to the Member equaled the product of (i) the amount described in
Section 11.02(a)(iii)(C) multiplied by (ii) the Member's Sharing Ratio.
"Tax Matters Officer" has the meaning given such term in Section
9.03(a).
"Term" has the meaning given such term in Section 2.06.
"Treasury Regulations" - the regulations (including temporary
regulations) promulgated by the United States Department of the Treasury
pursuant to and in respect of provisions of the Code. All references herein to
sections of the Treasury Regulations shall include any corresponding provision
or provisions of succeeding, similar or substitute, temporary or final Treasury
Regulations.
"Xxxxxxxx" has the meaning given such term in Section 7.10(c).
"Withdraw," "Withdrawing" or "Withdrawal" - the withdrawal, resignation
or retirement of a Member from the Company as a Member. Such terms shall not
include any Dispositions of Membership Interest (which are governed by Article
IV), even though the Member making a Disposition may cease to be a Member as a
result of such Disposition.
(b) Other terms defined herein have the meanings so given them.
SECTION 1.02 CONSTRUCTION.
Whenever the context requires, (a) the gender of all words used in this
Agreement includes the masculine, feminine and neuter, (b) the singular forms of
nouns, pronouns and verbs shall include the plural and vice versa, (c) all
references to Articles and Sections refer to articles and
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sections in this Agreement, each of which is made a part for all purposes and
(d) the term "include" or "includes" means includes, without limitation, and
"including" means including, without limitation.
ARTICLE II
ORGANIZATION
SECTION 2.01 FORMATION.
XXX formed the Company as a Delaware limited liability company by the
filing of the Delaware Certificate, dated as of the Original Filing Date, with
the Secretary of State of Delaware pursuant to the Act.
SECTION 2.02 NAME.
The name of the Company is "Xxxxxxxx XX LLC" and all Company business
must be conducted in that name or such other names that comply with Applicable
Law as the Board may select.
SECTION 2.03 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE.
The name of the Company's registered agent for service of process is
The Corporation Trust Company, and the address of the Company's registered
office in the State of Delaware is 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000. The principal place of business of the Company shall be located at Xxx
Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000. The Board may change the Company's
registered agent or the location of the Company's registered office or principal
place of business as the Board may from time to time determine.
SECTION 2.04 PURPOSES.
(a) The Company may carry on any lawful business or activity permitted
by the Act. The Company shall be authorized to engage in any and all other
activities, whether or not related to the foregoing, which in the judgment of
the Board may be beneficial or desirable.
(b) Subject to the limitations expressly set forth in this Agreement,
the Company shall have the power and authority to do any and all acts and things
deemed necessary or desirable by the Board to further the Company's purposes and
carry on its business, including the following:
(i) acting as the general partner of the MLP and the OLP;
(ii) entering into any kind of activity and performing
contracts of any kind necessary or desirable for the accomplishment of
its business (including the business of the MLP and the OLP);
(iii) acquiring any property, real or personal, in fee or
under lease or license, or any rights therein or appurtenant thereto,
necessary or desirable for the accomplishment of its business;
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(iv) borrowing money and issuing evidences of indebtedness and
securing any such indebtedness by mortgage or pledge of, or other lien
on, the assets of the Company;
(v) entering into any such instruments and agreements as the
Board may deem necessary or desirable for the ownership, management,
operation, leasing and sale of the Company's property; and
(vi) negotiating and concluding agreements for the sale,
exchange or other disposition of all or substantially all of the
properties of the Company, or for the refinancing of any loan or
payment obtained by the Company.
The Members hereby specifically consent to and approve the execution and
delivery by the Proper Officers on behalf of the Company of all loan agreements,
notes, security agreements or other documents or instruments, if any, as
required by any lender providing funds to the Company and ancillary documents
contemplated thereby.
SECTION 2.05 FOREIGN QUALIFICATION.
Prior to the Company's conducting business in any jurisdiction other
than Delaware, the Proper Officers shall cause the Company to comply, to the
extent procedures are available and those matters are reasonably within the
control of such officers, with all requirements necessary to qualify the Company
as a foreign limited liability company in that jurisdiction. At the request of
the Proper Officers, the Members shall execute, acknowledge, swear to, and
deliver all certificates and other instruments conforming with this Agreement
that are necessary or appropriate to qualify, continue, and terminate the
Company as a foreign limited liability company in all such jurisdictions in
which the Company may conduct business.
SECTION 2.06 TERM.
The period of existence of the Company (the "Term") commenced on the
Original Filing Date and shall end at such time as a certificate of cancellation
is filed with the Secretary of State of Delaware in accordance with Section
11.04.
SECTION 2.07 NO STATE LAW PARTNERSHIP.
The Members intend that the Company not be a partnership (including a
limited partnership) or joint venture, and that no Member be a partner or joint
venturer of any other Member, for any purposes other than Federal and state
income tax purposes, and this Agreement may not be construed to suggest
otherwise.
ARTICLE III
MEMBERSHIP
SECTION 3.01 MEMBERSHIP INTERESTS; ADDITIONAL MEMBERS.
The Members own Membership Interests in the Company as reflected in
Exhibit A attached hereto. Persons may be admitted to the Company as Members, on
such terms and conditions as the
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Board determines at the time of admission. The terms of admission or issuance
must specify the Sharing Ratios applicable thereto and may provide for the
creation of different classes or groups of Members having different rights,
powers, and duties. The Board may reflect the creation of any new class or group
in an amendment to this Agreement indicating the different rights, powers, and
duties, and such an amendment shall be approved by the Board and executed by the
Proper Officers. Any such admission is effective only after such new Member has
executed and delivered to the Members and the Company an instrument containing
the notice address of the new Member, the Member's ratification of this
Agreement and agreement to be bound by it.
SECTION 3.02 ACCESS TO INFORMATION.
Each Member shall be entitled to receive any information that it may
request concerning the Company; provided, however, that this Section 3.02 shall
not obligate the Company to create any information that does not already exist
at the time of such request (other than to convert existing information from one
medium to another, such as providing a printout of information that is stored in
a computer database). Each Member shall also have the right, upon reasonable
notice, and at all reasonable times during usual business hours to inspect the
properties of the Company and to audit, examine and make copies of the books of
account and other records of the Company. Such right may be exercised through
any agent or employee of such Member designated in writing by it or by an
independent public accountant, engineer, attorney or other consultant so
designated. All costs and expenses incurred in any inspection, examination or
audit made on such Member's behalf shall be borne by such Member.
SECTION 3.03 LIABILITY.
(a) No Member shall be liable for the debts, obligations or liabilities
of the Company.
(b) The Company and the Members agree that the rights, duties and
obligations of the Members in their capacities as members of the Company are
only as set forth in this Agreement and as otherwise arise under the Act.
Furthermore, the Members agree that the existence of any rights of a Member, or
the exercise or forbearance from exercise of any such rights shall not create
any duties or obligations of the Member in their capacities as members of the
Company, nor shall such rights be construed to enlarge or otherwise alter in any
manner the duties and obligations of the Members.
SECTION 3.04 WITHDRAWAL.
A Member does not have the right or power to Withdraw.
ARTICLE IV
DISPOSITION OF MEMBERSHIP INTERESTS
SECTION 4.01 GENERAL RESTRICTION.
A Member may not Dispose of all or any portion of its Membership
Interests except in strict accordance with this Article IV. References in this
Article IV to Dispositions of a Membership Interest shall also refer to
Dispositions of a portion of a Membership Interest. Any attempted Disposition of
a Membership Interest, other than in strict accordance with this Article IV,
shall be,
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and is hereby declared, null and void ab initio. The Members agree that a breach
of the provisions of this Article IV may cause irreparable injury to the Company
and to the other Members for which monetary damages (or other remedy at law) are
inadequate in view of (a) the complexities and uncertainties in measuring the
actual damages that would be sustained by reason of the failure of a Member to
comply with such provision and (b) the uniqueness of the Business and the
relationship among the Members. Accordingly, the Members agree that the
provisions of this Article IV may be enforced by specific performance.
SECTION 4.02 ADMISSION OF ASSIGNEE AS A MEMBER.
An Assignee has the right to be admitted to the Company as a Member,
with the Membership Interests (and attendant Sharing Ratio) so transferred to
such Assignee, only if (a) the Member making the Disposition (a "Disposing
Member") has granted the Assignee either (i) all, but not less than all, of such
Disposing Member's Membership Interests or (ii) the express right to be so
admitted; and (b) such Disposition is effected in strict compliance with this
Article IV.
SECTION 4.03 REQUIREMENTS APPLICABLE TO ALL DISPOSITIONS AND
ADMISSIONS.
Any Disposition of Membership Interests and any admission of an
Assignee as a Member shall also be subject to the following requirements, and
such Disposition (and admission, if applicable) shall not be effective unless
such requirements are complied with; provided, however, that the Board, in its
sole and absolute discretion, may waive any of the following requirements:
(a) Disposition Documents. The following documents must be delivered to
the Board and must be satisfactory, in form and substance, to the Board:
(i) Disposition Instrument. A copy of the instrument pursuant
to which the Disposition is effected.
(ii) Ratification of this Agreement. With respect to any
Disposition, an instrument, executed by the Disposing Member and its
Assignee, containing the following information and agreements, to the
extent they are not contained in the instrument described in Section
4.03(a)(i): (A) the notice address of the Assignee; (B) the Sharing
Ratios after the Disposition of the Disposing Member and its Assignee
(which together must total the Sharing Ratio of the Disposing Member
before the Disposition); (C) the Assignee's ratification of this
Agreement and agreement to be bound by it; and (D) representations and
warranties by the Disposing Member and its Assignee (1) that the
Disposition and admission is being made in accordance with Applicable
Laws, and (2) that the matters set forth in Section 4.03(a)(i) and this
Section 4.03(a)(ii) are true and correct.
(iii) Opinions. With respect to any Disposition, such opinions
of counsel regarding tax and securities law matters as the board, in
its sole discretion, may require.
(b) Payment of Expenses. The Disposing Member and its Assignee shall
pay, or reimburse the Company for, all reasonable costs and expenses incurred by
the Company in connection with the Disposition and admission of the Assignee as
a Member, including the legal fees incurred in connection with the legal
opinions referred to in Section 4.03(a)(iii).
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(c) No Release. No Disposition of Membership Interest shall effect a
release of the Disposing Member from any liabilities to the Company or the other
Members arising from events occurring prior to the Disposition.
ARTICLE V
CAPITAL CONTRIBUTIONS
SECTION 5.01 INITIAL CAPITAL CONTRIBUTIONS.
At the time of the formation of the Company or contemporaneously with
the adoption by the Members of this Agreement, as appropriate, each Member shall
be deemed to have made Capital Contributions as set forth next to the Member's
name on Exhibit A.
SECTION 5.02 LOANS.
If the Company does not have sufficient cash to pay its obligations,
any Member(s) that may agree to do so with the consent of the Board may advance
all or part of the needed funds to or on behalf of the Company. An advance
described in this Section 5.02 constitutes a loan from the Member to the
Company, bears interest at a rate determined by the Board from the date of the
advance until the date of payment, and is not a Capital Contribution.
SECTION 5.03 RETURN OF CONTRIBUTIONS.
Except as expressly provided herein, no Member is entitled to the
return of any part of its Capital Contributions or to be paid interest in
respect of either its Capital Account or its Capital Contributions. An unrepaid
Capital Contribution is not a liability of the Company or of any Member. A
Member is not required to contribute or to lend any cash or property to the
Company to enable the Company to return any Member's Capital Contributions.
SECTION 5.04 CAPITAL ACCOUNTS.
An individual Capital Account shall be established and maintained for
each Member. A Member that has more than one class or series of Membership
Interest shall have a single Capital Account that reflects all such class,
classes or series of Membership Interests, regardless of the classes or series
of Membership Interests owned by such Member and regardless of the time or
manner in which such Membership Interests were acquired. Upon the Disposition of
all or a portion of a Membership Interest, the Capital Account of the Disposing
Member that is attributable to such Membership Interest shall carry over to the
Assignee in accordance with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(l).
ARTICLE VI
DISTRIBUTIONS AND ALLOCATIONS
SECTION 6.01 DISTRIBUTIONS.
Except as otherwise provided in Section 6.02 and Section 6.05,
distributions to the Members shall be made only to all Members simultaneously in
proportion to their respective Sharing Ratios
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(at the time the amounts of such distributions are determined) and in such
aggregate amounts and at such times as shall be determined by the Board;
provided, however, any loans from Members pursuant to Section 5.02 shall be
repaid prior to any distributions to Members pursuant to this Section 6.01.
SECTION 6.02 DISTRIBUTIONS ON DISSOLUTION AND WINDING UP.
Upon the dissolution and winding up of the Company, after adjusting the
Capital Accounts for all distributions made under Section 6.01 and all
allocations under Article VI, all available proceeds distributable to the
Members as determined under Section 11.02 shall be distributed to all of the
Members in amounts equal to the Members' positive Capital Account balances.
SECTION 6.03 ALLOCATIONS.
Subject to the allocation rules of Section 6.03(c), (d) and (e) hereof,
Profits and Losses of the Company for any fiscal year shall be allocated as
follows:
(a) Profits for any fiscal year shall be allocated in the following
order of priority:
(i) First, to all Members, in proportion to the deficit
balances (if any) in their Capital Accounts, in an amount necessary to
eliminate any deficits in the Members' Capital Accounts and restore
such Capital Accounts balances to zero;
(ii) Second, to the Members until each Member has been
allocated an amount equal to the amount distributed to such Member
pursuant to Section 6.01 in the current and in all previous fiscal
years in excess of amounts previously allocated to such Members
pursuant to this Section 6.03(a)(ii);
(iii) Third, to the Members, to the greatest extent possible,
an amount required to cause the positive Capital Account balances of
each of the Members to be in the same proportion as the Member's
respective Sharing Ratios; and
(iv) Thereafter, to the Members in proportion their respective
Sharing Ratios.
(b) Losses for any fiscal year shall be allocated in the following
order of priority:
(i) First, to the Members, to the greatest extent possible, an
amount required to cause the positive Capital Account balances of each
of the Members to be in the same proportion as the Member's respective
Sharing Ratios
(ii) Next, to the Members in proportion to their respective
Sharing Ratios until the Capital Account balances of such Members have
been reduced to zero;
(iii) Next, to any Member that has a positive Capital Account
balance until the Capital Account balances of all of the Members have
been reduced to zero; and
(iv) Thereafter, to the Members in proportion to their
respective Sharing Ratios.
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(c) Notwithstanding the allocation provisions of Section 6.03(a) and
(b), if the allocation of Profits or Losses to a Member pursuant to Sections
6.03(a) and (b) in the current fiscal year would cause a Member to have a
positive Capital Account balance that is greater than or less than the amount
that has been distributed to such Member in the current fiscal year pursuant to
Section 6.01, then the allocations of Profits and Losses in the current fiscal
year shall be adjusted, to the greatest extent possible, to cause the positive
Capital Account balances of each Member to equal the amount of distributions
made to such Member in the current fiscal year. In addition, in the event of the
dissolution of the Company pursuant to Section 11.01 hereof, if the allocation
of Profits or Losses to a Member pursuant to Sections 6.03(a) and (b) would
cause a Member to have a Capital Account balance in an amount that is greater
than or less than the Member's Target Capital Account Amount, then the
allocations of Profits and Losses shall be adjusted, to the greatest extent
possible, to cause the positive Capital Account balances of each Member to equal
such an amount.
(d) The following special allocations shall be made in the following
order:
(i) Qualified Income Offset. In the event any Member
unexpectedly receives any adjustments, allocations, or distributions
described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Company
income and gain shall be specially allocated to each such Member in an
amount and manner sufficient to restore, to the extent required by the
Treasury Regulations, the Member's Adjusted Capital Account Deficit of
such Member as quickly as possible, provided that an allocation
pursuant to this Section 6.03(d)(i) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit
after all other allocations provided for in this Article VI have been
tentatively made as if this Section 6.03(d)(i) was not in the
Agreement.
(ii) Gross Income Allocation. In the event any Member has a
deficit Capital Account at the end of any Company fiscal year which is
in excess of the sum of (x) the amount such Member is obligated to
restore pursuant to any provision of this Agreement and (y) the amount
such Member is deemed to be obligated to restore pursuant to the
penultimate sentence of Treasury Regulation Sections 1.704-2(g)(1) and
1.704-2(i)(5), each such Member shall be specially allocated items of
Company income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section
6.03(d)(ii) shall be made only if and to the extent that such Member
would have a deficit Capital Account balance in excess of such sum
after all other allocations provided for in this Article VI have been
made as if Section 6.03(d)(i) hereof and this Section 6.03(d)(ii) were
not in the Agreement.
(iii) Section 754 Adjustments. To the extent an adjustment of
the adjusted tax basis of any Company asset pursuant to Section 734(b)
of the Code or Section 743(b) of the Code is required, pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment
to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially
allocated to the Members in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to
such section of the Treasury Regulations.
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(e) In accordance with Section 704(c) of the Code and the Treasury
Regulations thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Members to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its initial Gross Asset Value (computed in accordance with the
definition of same under this Agreement). In the event the Gross Asset Value of
any Company asset is adjusted pursuant to subparagraph (ii) of the definition of
Gross Asset Value hereof, subsequent allocations of income, gain, loss, and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Section 704(c) of the Code and the
Treasury Regulations thereunder. Any elections or other decisions relating to
such allocations shall be made by the Tax Matters Officer in any manner that
reasonably reflects the purpose and intention of this Agreement, provided that,
the Company shall use the remedial allocation method set forth in Treasury
Regulation Section 1.704-3(d). Allocations pursuant to this Section 6.03(e) are
solely for purposes of federal, state, and local taxes and shall not affect, or
in any way be taken into account in computing, any Member's Capital Account or
share of Profits, Losses, other items, or distributions pursuant to any
provision of this Agreement.
SECTION 6.04 VARYING INTERESTS.
All items of income, gain, loss, deduction or credit shall be
allocated, and all distributions shall be made, to the Persons shown on the
records of the Company to have been Members as of the last calendar day of the
period for which the allocation or distribution is to be made. Notwithstanding
the foregoing, if during any taxable year there is a change in any Member's
Sharing Ratio, the Members agree that their allocable shares of such items for
the taxable year shall be determined on any method determined by the Board to be
permissible under Code Section 706 and the related Treasury Regulations to take
account of the Members' varying Sharing Ratios.
SECTION 6.05 TAX DISTRIBUTIONS.
To the extent the Board, in good faith, determines the Company has
sufficient funds, the Company shall make distributions on quarterly basis after
the end of each fiscal quarter of the Company, beginning with the second quarter
for the fiscal year ending December 31, 2000, to each Member in an amount equal
to (i) the total amount of taxable income allocated to such Member for such
fiscal year which exceeds the aggregate allocation of Losses pursuant to
Sections 6.03(b) and (c) for the succeeding fiscal years multiplied by (ii) a
tax rate reasonably selected by the Board; provided, however, that subsequent
distributions to the Members made during such fiscal year and subsequent fiscal
years shall be adjusted as necessary to ensure that, over the entire term of the
Company, the aggregate cash distributed to a Member shall be equal to the amount
to which such Member would have been entitled had there been no distributions
made pursuant to this Section 6.05.
SECTION 6.06 WITHHELD TAXES.
All amounts withheld pursuant to the Code or any provision of any state
or local tax law with respect to any payment, distribution or allocation to the
Company or the Members shall be treated as amounts distributed to the Members
pursuant to this Article VI for all purposes of this Agreement. The Board is
authorized to withhold from distributions, or with respect to allocations, to
the
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Members and to pay over to any federal, state or local government any amounts
required to be so withheld pursuant to the Code or any provision of any other
federal, state or local law and shall allocate such amounts to those Members
with respect to which such amounts were withheld.
SECTION 6.07 LIMITATIONS ON DISTRIBUTIONS.
Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not make a distribution to any Member on account of
its interest in the Company if such distribution would violate Section 18-607 of
the Act or other applicable law.
ARTICLE VII
MANAGEMENT
SECTION 7.01 MANAGEMENT BY BOARD OF DIRECTORS.
The business and affairs of the Company shall be fully vested in, and
managed by, a Board of Directors (the "Board"). In addition to the powers and
authorities expressly conferred on the Board by this Agreement, the Board may
exercise all such powers of the Company and do all such acts and things as are
not restricted by the Act or Applicable Law.
SECTION 7.02 NUMBER; QUALIFICATION; TENURE.
The number of directors constituting the Board shall be seven (each a
"Director" and collectively, the "Directors"), unless otherwise fixed from time
to time pursuant to a resolution adopted by a majority of the Directors. A
Director need not be a Member. The Directors shall be elected or approved by the
Members at an annual meeting of the Members and shall serve as Directors of the
Company until their death or removal from office or until their successors are
elected and qualified.
The initial Directors of the Company shall be Xxxxx X. Xxxxxx, Xxxxxx
X. Xxxxxxx, Xxxxxx X. Xxxxxx, and Xxx X. Xxxxxxxxxx. The Members will appoint
three additional Directors within 90 days of the date of this Agreement.
SECTION 7.03 REGULAR MEETINGS.
The Board shall meet at least quarterly, and a regular meeting of the
Board shall be held without notice other than this Section 7.03 immediately
after, and at the same place as, the annual meeting of Members. The Board may,
by resolution, provide the time and place for the holding of additional regular
meetings without other notice than such resolution.
SECTION 7.04 SPECIAL MEETINGS.
A special meeting of the Board may be called at any time at the request
of (a) the Chairman of the Board or (b) any four Directors.
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SECTION 7.05 NOTICE.
Written notice of all regular meetings of the Board must be given to
all Directors at least 10 Days prior to the regular meeting of the Board and two
Business Days prior to any special meeting of the Board. All notices and other
communications to be given to Directors shall be sufficiently given for all
purposes hereunder if in writing and delivered by hand, courier or overnight
delivery service or three days after being mailed by certified or registered
mail, return receipt requested, with appropriate postage prepaid, or when
received in the form of a telegram or facsimile, and shall be directed to the
address or facsimile number as such Director shall designate by notice to the
Company. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board need be specified in the notice of such
meeting, except for amendments to this Agreement, as provided herein. A meeting
may be held at any time without notice if all the Directors are present or if
those not present waive notice of the meeting either before or after such
meeting.
SECTION 7.06 ACTION BY CONSENT OF BOARD.
Except as otherwise required by Applicable Law, all decisions of the
Board shall require the affirmative vote of a majority of the Directors present
at a meeting at which a quorum, as described in Section 7.08, is present. To the
extent permitted by Applicable Law, the Board may act without a meeting so long
as all Directors shall have executed a written consent with respect to any Board
action taken in lieu of a meeting.
SECTION 7.07 CONFERENCE TELEPHONE MEETINGS.
Directors or members of any committee of the Board may participate in a
meeting of the Board or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.
SECTION 7.08 QUORUM.
A majority of Directors, present in person or participating in
accordance with Section 7.07, shall constitute a quorum for the transaction of
business, but if at any meeting of the Board there shall be less than a quorum
present, a majority of the Directors present may adjourn the meeting from time
to time without further notice. Any act of the majority of the Directors present
at a meeting at which a quorum is present shall be the act of the Board. The
Directors present at a duly organized meeting may continue to transact business
until adjournment, notwithstanding the withdrawal of enough Directors to leave
less than a quorum.
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SECTION 7.09 VACANCIES; INCREASES IN THE NUMBER OF DIRECTORS.
Unless otherwise provided in this Agreement, vacancies and newly
created directorships resulting from any increase in the authorized number of
Directors may be filled by a majority of the Directors then in office, although
less than a quorum, or a sole remaining Director; and any Director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and shall qualify, unless sooner displaced.
SECTION 7.10 COMMITTEES.
(a) The Board may establish committees of the Board and may delegate
certain of its responsibilities to such committees.
(b) The Board shall have an audit committee comprised of three
Directors, all whom shall be Independent Directors. Such audit committee shall
establish a written audit committee charter in accordance with the rules of the
New York Stock Exchange, Inc. (the "NYSE"), as amended from time to time.
"Independent Director" shall mean Directors meeting the independence and
experience requirements as set forth most recently by the NYSE.
(c) The Board shall have a conflicts committee comprised of four
Directors, three of whom shall be Independent Directors (the "Conflicts
Committee"). The Conflicts Committee shall review transactions between Xxxxxxxx
Energy Partners L.P. (the "Partnership") and The Xxxxxxxx Companies, Inc., or
any of its Affiliates (collectively, "Xxxxxxxx"), that the Board believes may
involve conflicts of interest. Any matter approved by the Conflicts Committee
shall be conclusively deemed to be fair and reasonable to the Partnership, and
not a breach by the Company of any fiduciary or other duties owed to the
Partnership by the Company.
(d) The Board shall have a compensation committee comprised of the
Directors serving on the Conflicts Committee (the "Compensation Committee"). The
Compensation Committee shall be charged with setting compensation for officers
of the Company and the Partnership, as well as administering any Incentive Plans
put in place by the Company.
(e) A majority of any committee may determine its action and fix the
time and place of its meetings unless the Board shall otherwise provide. Notice
of such meetings shall be given to each member of the committee in the manner
provided for in Section 7.05. The Board shall have power at any time to fill
vacancies in, to change the membership of, or to dissolve any such committee.
Nothing herein shall be deemed to prevent the Board from appointing one or more
committees consisting in whole or in part of persons who are not Directors;
provided, however, that no such committee shall have or may exercise any
authority of the Board.
SECTION 7.11 REMOVAL.
Any Director or the entire Board may be removed, with or without cause,
by the holders of a Majority Interest then entitled to vote at an election of
Directors.
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ARTICLE VIII
OFFICERS
SECTION 8.01 ELECTED OFFICERS.
The executive officers of the Company shall be selected by, and serve
at the pleasure of, the Board. Such officers shall have the authority and duties
delegated to each of them, respectively, by the Board from time to time. The
elected officers of the Company shall be a Chairman of the Board, a President, a
Secretary, a Treasurer, and such other officers (including, without limitation,
Executive Vice Presidents, Senior Vice Presidents and Vice Presidents) as the
Board from time to time may deem proper. The Chairman of the Board shall be
chosen from among the Directors. All officers elected by the Board shall each
have such powers and duties as generally pertain to their respective offices,
subject to the specific provisions of this Article VIII. The Board or any
committee thereof may from time to time elect, such other officers (including
one or more Vice Presidents, Controllers, Assistant Secretaries and Assistant
Treasurers), as may be necessary or desirable for the conduct of the business of
the Company. Such other officers and agents shall have such duties and shall
hold their offices for such terms as shall be provided in this Agreement or as
may be prescribed by the Board or such committee, as the case may be.
SECTION 8.02 ELECTION AND TERM OF OFFICE.
The elected officers of the Company shall be elected annually by the
Board at the regular meeting of the Board held after the annual meeting of the
Members. If the election of officers shall not be held at such meeting, such
election shall be held as soon thereafter as convenient. Each officer shall hold
office until such person's successor shall have been duly elected and shall have
qualified or until such person's death or until he shall resign or be removed
pursuant to Section 8.08.
SECTION 8.03 CHAIRMAN OF THE BOARD; CHIEF EXECUTIVE OFFICER.
The Chairman of the Board shall preside at all meetings of the Members
and of the Board and shall be the Chief Executive Officer of the Company. The
Chairman of the Board shall be responsible for the general management of the
affairs of the Company and shall perform all duties incidental to such person's
office which may be required by law and all such other duties as are properly
required of him by the Board. He shall make reports to the Board and the Members
and shall see that all orders and resolutions of the Board and of any committee
thereof are carried into effect. The Directors also may elect a Vice-Chairman to
act in the place of the Chairman upon his or her absence or inability to act.
SECTION 8.04 PRESIDENT; CHIEF OPERATING OFFICER.
The President shall act as the Chief Operating Officer of the Company
and shall assist the Chairman of the Board in the administration and operation
of the Company's business and general supervision of its policies and affairs.
The President, if he is also a director, shall, in the absence of or because of
the inability to act of the Chairman of the Board, perform all duties of the
Chairman of the Board and preside at all meetings of Members and of the Board.
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SECTION 8.05 VICE PRESIDENTS.
Each Executive Vice President and Senior Vice President and any Vice
President shall have such powers and shall perform such duties as shall be
assigned to him by the Board.
SECTION 8.06 TREASURER.
(a) The Treasurer shall exercise general supervision over the receipt,
custody and disbursement of corporate funds. The Treasurer shall cause the funds
of the Company to be deposited in such banks as may be authorized by the Board,
or in such banks as may be designated as depositories in the manner provided by
resolution of the Board. The Treasurer shall, in general, perform all duties
incident to the office of the Treasurer and shall have such further powers and
duties and shall be subject to such directions as may be granted or imposed from
time to time by the Board.
(b) Assistant Treasurers shall have such of the authority and perform
such of the duties of the Treasurer as may be provided in this Agreement or
assigned to them by the Board or the Treasurer. Assistant Treasurers shall
assist the Treasurer in the performance of the duties assigned to the Treasurer,
and in assisting the Treasurer, each Assistant Treasurer shall for such purpose
have the powers of the Treasurer. During the Treasurer's absence or inability,
the Secretary's authority and duties shall be possessed by such Assistant
Treasurer or Assistant Treasurers as the Board may designate.
SECTION 8.07 SECRETARY.
(a) The Secretary shall keep or cause to be kept, in one or more books
provided for that purpose, the minutes of all meetings of the Board, the
committees of the Board and the Members. The Secretary shall see that all
notices are duly given in accordance with the provisions of this Agreement and
as required by law; shall be custodian of the records and the seal of the
Company and affix and attest the seal to all documents to be executed on behalf
of the Company under its seal; and shall see that the books, reports,
statements, certificates and other documents and records required by law to be
kept and filed are properly kept and filed; and in general, shall perform all
the duties incident to the office of Secretary and such other duties as from
time to time may be assigned to the Secretary by the Board.
(b) Assistant Secretaries shall have such of the authority and perform
such of the duties of the Secretary as may be provided in this Agreement or
assigned to them by the Board or the Secretary. Assistant Secretaries shall
assist the Secretary in the performance of the duties assigned to the Secretary,
and in assisting the Secretary, each Assistant Secretary shall for such purpose
have the powers of the Secretary. During the Secretary's absence or inability,
the Secretary's authority and duties shall be possessed by such Assistant
Secretary or Assistant Secretaries as the Board may designate.
SECTION 8.08 REMOVAL.
Any officer elected, or agent appointed, by the Board may be removed by
the affirmative vote of a majority of the Board whenever, in their judgment, the
best interests of the Company would be served thereby. No elected officer shall
have any contractual rights against the Company for compensation by virtue of
such election beyond the date of the election of such person's successor,
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such person's death, such person's resignation or such person's removal,
whichever event shall first occur, except as otherwise provided in an employment
contract or under an employee deferred compensation plan.
SECTION 8.09 VACANCIES.
A newly created elected office and a vacancy in any elected office
because of death, resignation or removal may be filled by the Board for the
unexpired portion of the term at any meeting of the Board.
ARTICLE IX
TAXES
SECTION 9.01 TAX RETURNS.
The Tax Matters Officer (as defined below) of the Company shall prepare
and timely file (on behalf of the Company) all federal, state and local tax
returns required to be filed by the Company. Each Member shall furnish to the
Company all pertinent information in its possession relating to the Company's
operations that is necessary to enable the Company's tax returns to be timely
prepared and filed. The Company shall bear the costs of the preparation and
filing of its returns.
SECTION 9.02 TAX ELECTIONS.
(a) The Company shall make the following elections on the appropriate
tax returns:
(i) to adopt as the Company's fiscal year the calendar year;
(ii) to adopt the accrual method of accounting;
(iii) if a distribution of the Company's property as described
in Section 734 of the Code occurs or upon a transfer of Membership
Interest as described in Section 743 of the Code occurs, on request by
notice from any Member, to elect, pursuant to Section 754 of the Code,
to adjust the basis of the Company's properties;
(iv) to elect to amortize the organizational expenses of the
Company ratably over a period of 60 months as permitted by Section
709(b) of the Code; and
(v) any other election the Board may deem appropriate.
(b) Neither the Company nor any Member shall make an election for the
Company to be excluded from the application of the provisions of subchapter K of
chapter 1 of subtitle A of the Code or any similar provisions of applicable
state law and no provision of this Agreement (including Section 2.07) shall be
construed to sanction or approve such an election.
SECTION 9.03 TAX MATTERS OFFICER.
(a) The Board shall select the President or the Chief Financial Officer
(or, if there are no officers serving under such titles, such other officer in a
comparable position), of the Company to
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act as the "tax matters partner" of the Company pursuant to Section 6231(a)(7)
of the Code (the "Tax Matters Officer"). The Tax Matters Officer shall take such
action as may be necessary to cause to the extent possible each Member to become
a "notice partner" within the meaning of Section 6223 of the Code. The Tax
Matters Officer shall inform each Member of all significant matters that may
come to its attention in its capacity as Tax Matters Officer by giving notice
thereof on or before the fifth Business Day after becoming aware thereof and,
within that time, shall forward to each Member copies of all significant written
communications it may receive in that capacity.
(b) The Tax Matters Officer shall take no action without the
authorization of the Board, other than such action as may be required by
Applicable Law. Any cost or expense incurred by the Tax Matters Officer in
connection with its duties, including the preparation for or pursuance of
administrative or judicial proceedings, shall be paid by the Company.
(c) The Tax Matters Officer shall not enter into any extension of the
period of limitations for making assessments on behalf of the Members without
first obtaining the consent of the Board. The Tax Matters Officer shall not bind
any Member to a settlement agreement without obtaining the consent of such
Member. Any Member that enters into a settlement agreement with respect to any
Company item (as described in Section 6231(a)(3) of the Code) shall notify the
other Members of such settlement agreement and its terms within 90 Days from the
date of the settlement.
(d) No Member shall file a request pursuant to Section 6227 of the Code
for an administrative adjustment of Company items for any taxable year without
first notifying the other Members. If the Board consents to the requested
adjustment, the Tax Matters Officer shall file the request for the
administrative adjustment on behalf of the Members. If such consent is not
obtained within 30 Days from such notice, or within the period required to
timely file the request for administrative adjustment, if shorter, any Member
may file a request for administrative adjustment on its own behalf. Any Member
intending to file a petition under Sections 6226, 6228 or other Section of the
Code with respect to any item involving the Company shall notify the other
Members of such intention and the nature of the contemplated proceeding. In the
case where the Tax Matters Officer is intending to file such petition on behalf
of the Company, such notice shall be given within a reasonable period of time to
allow the Members to participate in the choosing of the forum in which such
petition will be filed.
(e) If any Member intends to file a notice of inconsistent treatment
under Section 6222(b) of the Code, such Member shall give reasonable notice
under the circumstances to the other Members of such intent and the manner in
which the Member's intended treatment of an item is (or may be) inconsistent
with the treatment of that item by the other Members.
ARTICLE X
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
SECTION 10.01 MAINTENANCE OF BOOKS.
(a) The Board shall cause to be kept a record containing the minutes of
the proceedings of the meetings of the Board and of the Members, appropriate
registers and such books of records and accounts as may be necessary for the
proper conduct of the business of the Company.
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(b) The books of account of the Company shall be (i) maintained on the
basis of a fiscal year that is the calendar year, (ii) maintained on an accrual
basis in accordance with GAAP, consistently applied and (iii) audited by the
Certified Public Accountants at the end of each calendar year.
SECTION 10.02 REPORTS. With respect to each calendar year, the Board
shall prepare, or cause to be prepared, and deliver, or cause to be delivered,
to each Member:
(a) Within 120 Days after the end of such calendar year, a profit and
loss statement and a statement of cash flows for such year, a balance sheet and
a statement of each Member's Capital Account as of the end of such year,
together with a report thereon of the Certified Public Accountants; and
(b) Such federal, state and local income tax returns and such other
accounting, tax information and schedules as shall be necessary for the
preparation by each Member on or before June 15 following the end of each
calendar year of its income tax return with respect to such year.
SECTION 10.03 BANK ACCOUNTS.
Funds of the Company shall be deposited in such banks or other
depositories as shall be designated from time to time by the Board. All
withdrawals from any such depository shall be made only as authorized by the
Board and shall be made only by check, wire transfer, debit memorandum or other
written instruction.
ARTICLE XI
DISSOLUTION, WINDING-UP, TERMINATION AND CONVERSION
SECTION 11.01 DISSOLUTION.
(a) The Company shall dissolve and its affairs shall be wound up on the
first to occur of the following events (each a "Dissolution Event"):
(i) the unanimous consent of the Members; or
(ii) entry of a decree of judicial dissolution of the Company
under Section 18-802 of the Act.
(b) No other event shall cause a dissolution of the Company.
SECTION 11.02 WINDING-UP AND TERMINATION.
(a) On the occurrence of a Dissolution Event of the type described in
Section 11.01(a)(i) or Section 11.01(a)(ii), the Board shall act as liquidator.
The liquidator shall proceed diligently to wind up the affairs of the Company
and make final distributions as provided herein and in the Act. The costs of
winding up shall be borne as a Company expense. Until final distribution, the
liquidator shall continue to operate the Company properties with all of the
power and authority of the Members. The steps to be accomplished by the
liquidator are as follows:
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(i) as promptly as possible after dissolution and again after
final winding up, the liquidator shall cause a proper accounting to be
made by a recognized firm of certified public accountants of the
Company's assets, liabilities, and operations through the last Day of
the month in which the dissolution occurs or the final winding up is
completed, as applicable;
(ii) the liquidator shall discharge from Company funds all of
the debts, liabilities and obligations of the Company (including all
expenses incurred in winding up or otherwise make adequate provision
for payment and discharge thereof (including the establishment of a
cash escrow fund for contingent liabilities in such amount and for such
term as the liquidator may reasonably determine); and
(iii) all remaining assets of the Company shall be distributed
to the Members as follows:
(A) the liquidator may sell any or all Company
property, including to Members, and any resulting gain or loss
from each sale shall be computed and allocated to the Capital
Accounts of the Members in accordance with the provisions of
Article VI;
(B) with respect to all Company property that has not
been sold, the fair market value of that property shall be
determined and the Capital Accounts of the Members shall be
adjusted to reflect the manner in which the unrealized income,
gain, loss, and deduction inherent in property that has not
been reflected in the Capital Accounts previously would be
allocated among the Members if there were a taxable
disposition of that property for the fair market value of that
property on the date of distribution; and
(C) Company property (including cash) shall be
distributed among the Members in accordance with Section 6.02;
and those distributions shall be made by the end of the
taxable year of the Company during which the liquidation of
the Company occurs (or, if later, 90 Days after the date of
the liquidation).
(b) The distribution of cash or property to a Member in accordance with
the provisions of this Section 11.02 constitutes a complete return to the Member
of its Capital Contributions and a complete distribution to the Member of its
Membership Interest and all the Company's property and constitutes a compromise
to which all Members have consented pursuant to Section 18-502(b) of the Act. To
the extent that a Member returns funds to the Company, it has no claim against
any other Member for those funds.
SECTION 11.03 DEFICIT CAPITAL ACCOUNTS.
No Member will be required to pay to the Company, to any other Member
or to any third party any deficit balance that may exist from time to time in
the Member's Capital Account.
SECTION 11.04 CERTIFICATE OF CANCELLATION.
On completion of the distribution of Company assets as provided herein,
the Members (or such other Person or Persons as the Act may require or permit)
shall file a certificate of cancellation
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with the Secretary of State of Delaware, cancel any other filings made pursuant
to Section 2.05, and take such other actions as may be necessary to terminate
the existence of the Company. Upon the filing of such certificate of
cancellation, the existence of the Company shall terminate (and the Term shall
end), except as may be otherwise provided by the Act or by Applicable Law.
ARTICLE XII
GENERAL PROVISIONS
SECTION 12.01 OFFSET.
Whenever the Company is to pay any sum to any Member, any amounts that
Member owes the Company may be deducted from that sum before payment.
SECTION 12.02 NOTICES.
All notices, demands, requests, consents, approvals or other
communications (collectively, "Notices") required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served, delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile. Notice otherwise sent as provided herein shall be deemed
given upon delivery of such notice:
To the Company:
Xxxxxxxx XX LLC
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: President
Telephone: (___) ________
Fax: (___) ________
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To Xxxxxxxx Energy Services:
Xxxxxxxx Energy Services
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: President
Telephone: (___) ________
Fax: (___) ________
To Xxxxxxxx Natural Gas Liquids, Inc.
Xxxxxxxx Energy Services
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: President
Telephone: (___) ________
Fax: (___) ________
SECTION 12.03 ENTIRE AGREEMENT; SUPERSEDING EFFECT.
This Agreement constitutes the entire agreement of the Members and
their Affiliates relating to the Company and the transactions contemplated
hereby, and supersedes all provisions and concepts contained in all prior
contracts or agreements between the Members or any of their Affiliates with
respect to the Company, whether oral or written.
SECTION 12.04 EFFECT OF WAIVER OR CONSENT.
Except as otherwise provided in this Agreement, a waiver or consent,
express or implied, to or of any breach or default by any Member in the
performance by that Member of its obligations with respect to the Company is not
a consent or waiver to or of any other breach or default in the performance by
that Member of the same or any other obligations of that Member with respect to
the Company. Except as otherwise provided in this Agreement, failure on the part
of a Member to complain of any act of any Member or to declare any Member in
default with respect to the Company, irrespective of how long that failure
continues, does not constitute a waiver by that Member of its rights with
respect to that default until the applicable statute-of-limitations period has
run.
SECTION 12.05 AMENDMENT OR RESTATEMENT.
This Agreement or the Delaware Certificate may be amended or restated
only by a written instrument executed (or, in the case of the Delaware
Certificate, approved) by the Members.
SECTION 12.06 BINDING EFFECT.
Subject to the restrictions on Dispositions set forth in this
Agreement, this Agreement is binding on and shall inure to the benefit of the
Members and their respective successors and permitted assigns.
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SECTION 12.07 GOVERNING LAW; SEVERABILITY.
THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR
PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT
TO THE LAW OF ANOTHER JURISDICTION. In the event of a direct conflict between
the provisions of this Agreement and any mandatory, non-waivable provision of
the Act, such provision of the Act shall control. If any provision of the Act
provides that it may be varied or superseded in a limited liability company
agreement (or otherwise by agreement of the members or managers of a limited
liability company), such provision shall be deemed superseded and waived in its
entirety if this Agreement contains a provision addressing the same issue or
subject matter. If any provision of this Agreement or the application thereof to
any Member or circumstance is held invalid or unenforceable to any extent, (a)
the remainder of this Agreement and the application of that provision to other
Members or circumstances is not affected thereby, and (b) the Members shall
negotiate in good faith to replace that provision with a new provision that is
valid and enforceable and that puts the Members in substantially the same
economic, business and legal position as they would have been in if the original
provision had been valid and enforceable.
SECTION 12.08 FURTHER ASSURANCES.
In connection with this Agreement and the transactions contemplated
hereby, each Member shall execute and deliver any additional documents and
instruments and perform any additional acts that may be necessary or appropriate
to effectuate and perform the provisions of this Agreement and those
transactions.
SECTION 12.09 WAIVER OF CERTAIN RIGHTS.
Each Member irrevocably waives any right it may have to maintain any
action for dissolution of the Company or for partition of the property of the
Company.
SECTION 12.10 COUNTERPARTS.
This Agreement may be executed in any number of counterparts with the
same effect as if all signing parties had signed the same document. All
counterparts shall be construed together and constitute the same instrument.
SECTION 12.11 JURISDICTION.
Any and all Claims arising out of, in connection with or in relation to
(i) the interpretation, performance or breach of this Agreement, or (ii) any
relationship before, at the time of entering into, during the term of, or upon
or after expiration or termination of this Agreement, between the parties
hereto, shall be brought in any court of competent jurisdiction in the State of
Delaware. Each party hereto unconditionally and irrevocably consents to the
jurisdiction of any such court over any Claims and waives any objection that
such party may have to the laying of venue of any Claims in any such court.
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IN WITNESS WHEREOF, the Members have executed this Agreement as of the
date first set forth above.
MEMBERS
XXXXXXXX ENERGY SERVICES
By:
------------------------------------
Xxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
XXXXXXXX NATURAL GAS LIQUIDS, INC.
By:
------------------------------------
Xxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
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EXHIBIT A
MEMBER MEMBERSHIP INTEREST CAPITAL CONTRIBUTION
------ ------------------- --------------------
Xxxxxxxx Energy Services %
Xxxxxxxx Natural Gas Liquids, Inc. %
