Execution Version
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
QUEST MIDSTREAM GP, LLC
A Delaware Limited Liability Company
Dated as of
December 22, 2006
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS............................................6
Section 1.01 Definitions.......................................6
Section 1.02 Construction.....................................17
ARTICLE II. ORGANIZATION.........................................18
Section 2.01 Formation........................................18
Section 2.02 Name.............................................18
Section 2.03 Registered Office; Registered Agent;
Principal Office.................................18
Section 2.04 Purposes.........................................18
Section 2.05 Foreign Qualification............................19
Section 2.06 Term.............................................20
Section 2.07 No State Law Partnership.........................20
ARTICLE III. MEMBERSHIP INTERESTS; UNITS.........................20
Section 3.01 Membership Interests; Additional Members.........20
Section 3.02 Liability........................................20
Section 3.03 Withdrawal.......................................21
ARTICLE IV. TRANSFER OF UNITS....................................21
Section 4.01 General..........................................21
Section 4.02 Requirements Applicable to All Transfers and
Admissions.......................................21
Section 4.03 Assignees........................................22
Section 4.04 Prohibition Against Hypothecation................22
Section 4.05 Option to Repurchase Units Assigned by
Operation of Law.................................22
Section 4.06 General Provisions Relating to Transfer of
Units............................................23
ARTICLE V. RIGHTS UPON A DISPOSITION.............................24
Section 5.01 Right of First Refusal...........................24
Section 5.02 Notice of Certain Sales..........................25
Section 5.03 Co-Sale Obligations and Rights...................25
Section 5.04 Delivery of Documents to Effectuate Transfer.....26
Section 5.05 Consummation of Transfer.........................26
Section 5.06 Specific Performance.............................26
Section 5.07 Termination of Rights Conferred in this
Article V........................................26
ARTICLE VI. ISSUANCE OF UNITS; CERTIFICATES......................27
Section 6.01 Issuance of Units................................27
Section 6.02 Issuance of Additional Units.....................27
Section 6.03 Grant of Preemptive Rights.......................27
Section 6.04 Certificates.....................................28
Section 6.05 Transfers........................................29
Section 6.06 Record Holders...................................29
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ARTICLE VII. CAPITAL CONTRIBUTIONS...............................29
Section 7.01 Initial Capital Contributions....................29
Section 7.02 Additional Contributions.........................30
Section 7.03 Loans............................................30
Section 7.04 Return of Contributions..........................30
Section 7.05 Capital Accounts.................................30
Section 7.06 Effect of Transfer of Membership Interest........30
Section 7.07 Certain Tax Incidents............................31
ARTICLE VIII. DISTRIBUTIONS AND ALLOCATIONS......................31
Section 8.01 Distributions....................................31
Section 8.02 Distributions on Dissolution and Winding Up......31
Section 8.03 Allocations......................................31
Section 8.04 Varying Interests................................34
Section 8.05 Withheld Taxes...................................34
Section 8.06 Limitations on Distributions.....................34
ARTICLE IX. MANAGEMENT...........................................34
Section 9.01 Management by Board of Directors and Executive
Officers.........................................34
Section 9.02 Number; Qualification; Tenure....................35
Section 9.03 Regular Meetings.................................35
Section 9.04 Special Meetings.................................35
Section 9.05 Notice...........................................35
Section 9.06 Action by Consent of Board.......................36
Section 9.07 Conference Telephone Meetings....................36
Section 9.08 Quorum...........................................36
Section 9.09 Vacancies; Increases in the Number of Directors..36
Section 9.10 Committees.......................................37
Section 9.11 Removal..........................................37
ARTICLE X. OFFICERS..............................................38
Section 10.01 Elected Officers.................................38
Section 10.02 Election and Term of Office......................38
Section 10.03 Chairman of the Board; Chief Executive Officer...38
Section 10.04 President; Chief Operating Officer...............39
Section 10.05 Vice Presidents..................................39
Section 10.06 Treasurer........................................39
Section 10.07 Secretary........................................39
Section 10.08 Removal..........................................40
Section 10.09 Vacancies........................................40
ARTICLE XI. MEMBER MEETINGS......................................40
Section 11.01 Meetings.........................................40
Section 11.02 Notice of a Meeting..............................41
Section 11.03 Quorum; Voting Requirement.......................41
Section 11.04 Action by Consent of Members.....................41
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ARTICLE XII. INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS................................41
Section 12.01 Indemnification..................................41
Section 12.02 Liability of Indemnitees.........................43
Section 12.03 Standards of Conduct and Fiduciary Duties........43
ARTICLE XIII. TAXES..............................................44
Section 13.01 Tax Returns......................................44
Section 13.02 Tax Elections....................................44
Section 13.03 Tax Matters Officer..............................45
ARTICLE XIV. BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS..........46
Section 14.01 Maintenance of Books.............................46
Section 14.02 Reports..........................................46
Section 14.03 Bank Accounts....................................46
ARTICLE XV. DISSOLUTION, WINDING-UP, TERMINATION AND CONVERSION..47
Section 15.01 Dissolution......................................47
Section 15.02 Winding-Up and Termination.......................47
Section 15.03 Deficit Capital Accounts.........................49
Section 15.04 Certificate of Cancellation......................49
ARTICLE XVI. GENERAL PROVISIONS..................................49
Section 16.01 Offset...........................................49
Section 16.02 Notices..........................................49
Section 16.03 Entire Agreement; Superseding Effect.............50
Section 16.04 Effect of Waiver or Consent......................50
Section 16.05 Amendment or Restatement.........................51
Section 16.06 Binding Effect...................................51
Section 16.07 Governing Law; Severability......................51
Section 16.08 Further Assurances...............................51
Section 16.09 Waiver of Certain Rights.........................52
Section 16.10 Counterparts.....................................52
Section 16.11 Jurisdiction.....................................52
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
QUEST MIDSTREAM GP, LLC
A Delaware Limited Liability Company
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
"Agreement") of Quest Midstream GP, LLC (the "Company"), dated as of December
22, 2006 (the "Effective Date"), is adopted, executed and agreed to, for good
and valuable consideration, by Quest Resource Corporation, a Nevada corporation
("QRC"), Alerian Opportunity Partners IV, LP, a Delaware limited liability
company ("AOP"), Swank MLP Convergence Fund, LP, a Texas limited partnership
("Swank MLP Fund"), Swank Investment Partners, LP, a Texas limited partnership
("SIP"), The Xxxxxxx MLP Opportunity Fund I, LP, a Delaware limited partnership
("Xxxxxxx MLP Fund") and The Xxxxxxx XX Strategies Fund, LP, a Delaware limited
partnership ("Xxxxxxx XX Fund," together with Swank MLP Fund, SIP and Xxxxxxx
MLP Fund, "Swank").
RECITALS
WHEREAS, the name of the Company is "Quest Midstream GP, LLC";
WHEREAS, 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 December 13, 2006 (the "Original Filing Date"), with
the Secretary of State of the State of Delaware pursuant to the Delaware Limited
Liability Company Act;
WHEREAS, on December 13, 2006, QRC entered into the Limited Liability
Company Agreement (the "Prior Agreement") to provide for the regulation and
management of the Company;
WHEREAS, QRC desires to amend and restate in its entirety the Prior
Agreement to add AOP and Swank as members and to set forth the respective
rights, duties and obligations of the members.
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NOW, THEREFORE, in consideration of the covenants, conditions and
agreements contained herein, the parties hereto hereby amend and restate in its
entirety the Prior Agreement as follows:
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" means the Delaware Limited Liability Company Act, as amended from
time to time.
"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); and
(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).
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 first 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.
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"Agreement" has the meaning given such term in the introductory paragraph,
as the same may be amended from time to time.
"AOP" has the meaning given in the introductory paragraph.
"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 securities exchange or listing requirement of any national
securities exchange or Commission recognized trading market on which securities
issued by the Partnership are listed or quoted.
"Assignee" means any Person receiving Units as a result of a Transfer in a
manner permitted under this Agreement, but who has not been admitted as a Member
and thus has only the rights set forth in Section 4.03.
"Available Cash" means, with respect to any Quarter ending prior to a
Dissolution Event,
(a) the sum of all cash and cash equivalents of the Company on hand at the
end of such Quarter, less
(b) the amount of any cash reserves that is established by the Board to (i)
satisfy general, administrative and other expenses and debt service
requirements, (ii) permit the Company to make capital contributions to the
Partnership to maintain its 2% general partner interest upon the issuance of
partnership securities by the Partnership, (iii) comply with applicable law or
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, (iv) provide funds for distributions under Section
8.01 in respect of any one or more of the next four Quarters; provided, however,
that disbursements made by the Company 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 Board so determines or (v) otherwise
provide for the proper conduct of the business of the Company subsequent to such
Quarter.
Notwithstanding the foregoing, "Available Cash" with respect to the Quarter
in which a Dissolution Event occurs and any subsequent Quarter shall equal zero.
"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
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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. The foregoing definition of "Bankruptcy" is
intended to replace and shall supersede and replace the definition of
"Bankruptcy" set forth in the Act.
"Board" has the meaning given such term in Section 9.01.
"Business Day" means any day other than a Saturday, a Sunday, or a day when
banks in New York, New York are authorized or required 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 that are specially allocated
pursuant to Section 8.03, and the amount of any Company liabilities assumed
by such Member or that 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 that are specially allocated pursuant to Section 8.03,
and the amount of any liabilities of such Member assumed by the Company or
that 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.
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(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.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning given such term in the introductory paragraph.
"Company's First Refusal Notice" has the meaning given such term in Section
5.01(b).
"Conflicts Committee" means a committee of the Board composed entirely of
two or more directors, each of whom (a) is not a security holder, officer or
employee of the Company, (b) is not an officer, director or employee of any
Affiliate of the Company, (c) is not a holder of any ownership interest in the
Partnership Group other than common units in the Partnership and (d) meets the
independence standards required of directors who serve on an audit committee of
a board of directors established by the Securities Exchange Act and the rules
and regulations of the Commission thereunder and by the Nasdaq Global Market.
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"Co-Sale Notice" has the meaning given such term in Section 5.02.
"Co-Sale Obligation" has the meaning given such term in Section 5.03.
"Co-Sale Transferee" has the meaning given such term in Section 5.02.
"Co-Sale Terms" has the meaning given such term in Section 5.02.
"Xxxxxxx XX Fund" has the meaning given such term in the introductory
paragraph.
"Xxxxxxx MLP Fund" has the meaning given such term in the introductory
paragraph.
"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 that 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 Tax Matters Officer.
"Director" or "Directors" has the meaning given such term in Section 9.02.
"Dissolution Event" has the meaning given such term in Section 15.01(a).
"Drag-Along Election" has the meaning given such term in Section 5.03.
"Effective Date" has the meaning given such term in the introductory
paragraph.
"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.
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"First Refusal Period" has the meaning given such term in Section 5.01(a).
"First Refusal Units" has the meaning given such term in Section 5.01(a).
"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.
"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 the asset, as
determined by the contributing Member and the Board, in a manner that is
consistent 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 or for the provision of services; (b) the
distribution by the Company to a Member of more than a de minimis amount of
property other than money as consideration for a 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;
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provided, however, that Gross Asset Values shall not be adjusted pursuant
to this subparagraph (iv) to the extent the Tax Matters 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.
"Group Member" shall have the meaning set forth in the Partnership
Agreement.
"Indemnitee" means (a) any Person who is or was an Affiliate of the
Company, (b) any Person who is or was a member, partner, officer, director,
employee, agent or trustee of the Company or any Affiliate of the Company and
(c) any Person who is or was serving at the request of the Company or any
Affiliate of the Company as an officer, director, employee, member, partner,
agent, fiduciary or trustee of another Person; provided, however, that a Person
shall not be an Indemnitee by reason of providing, on a fee-for-services basis,
trustee, fiduciary or custodial services.
"Independent Director" means a director who meets the independence
standards required of directors who serve on an audit committee of a board of
directors established by the Securities Exchange Act and the rules and
regulations of the Commission thereunder and by the Nasdaq Global Market.
"Investors' Rights Agreement" means that certain Investors' Rights
Agreement dated as of even date herewith among the Partnership, the Company,
QRC, AOP, Swank, Tortoise Capital Resources Corporation, Xxxxxxxx Opportunity
Partners, L.P. and HCM Energy Fund, LLC.
"Limited Partner" and "Limited Partners" shall have the meaning given such
terms in the Partnership Agreement.
"Majority Interest" means greater than 50% of the outstanding Units.
"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 and as a holder of Units; (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.
"Non-Selling Members" has the meaning given such term in Section 5.02.
"Notices" has the meaning given such term in Section 16.02.
"Operating Company" means Bluestem Pipeline, LLC, a Delaware limited
liability company.
"Original Filing Date" has the meaning given such term in the Recitals.
"Ownership Percentage" shall mean, with respect to a Member, the percentage
ownership of the Company of such Member equal to a percentage obtained by
dividing (i) the number of Units owned by such Member by (ii) the total number
of outstanding Units owned by all Members.
"Partner" shall have the meaning set forth in the Partnership Agreement.
"Partnership" means Quest Midstream Partners, L.P., a Delaware limited
partnership.
"Partnership Agreement" means the First Amended and Restated Agreement of
Limited Partnership of the Partnership, dated of even date herewith, as amended,
or any successor agreement.
"Partnership Group" means the Partnership and its Subsidiaries treated as a
single consolidated entity.
"Permitted Transfer" of a Member Interest shall mean any Transfer by a
Member to any of the following (each, a "Permitted Transferee"):
(a) in the case of any Member which is an entity, to any Affiliate of
such Member;
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(b) in the case of any Member who is a natural person, to the spouse,
children or grandchildren of such Member, provided that such Member retains
exclusive voting control over the transferred Interest, or to a trust,
limited partnership or limited liability company created for the benefit of
such Member, such Member's spouse, children or grandchildren and controlled
by such Member, in either case with Notice thereof to the Company and the
Members;
(c) upon the death of any Member who is a natural person, to such
Member's estate or executor, as the case may be, with Notice thereof to the
Company and the other Members; or
(d) as required or otherwise permitted hereunder;
provided, that in each of clauses (a) and (b) the Permitted Transferee grants to
the Member an irrevocable proxy coupled with an interest to vote all of the
Member Interest so Transferred.
"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;
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(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;
(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 8.03(d) and Section 8.03(e) 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.
"Proposed Seller" has the meaning given such term in Section 5.01(a).
"Proposed Transferee" has the meaning given such term in Section 5.01(a).
"Pro Rata Share" has the meaning given such term in Section 6.03(a)
"Quarter" means, unless the context requires otherwise, a fiscal quarter of
the Company, or, with respect to the first fiscal quarter of the Company after
the Closing Date, the portion of such fiscal quarter commencing on December 1,
2006.
"QRC" has the meaning given such term in the introductory paragraph.
"Sale Price" has the meaning given such term in Section 5.01(a).
"Selling Members" has the meaning given such term in Section 5.02.
"Selling Members Representative" has the meaning given such term in Section
5.02.
"Seller's Notice" has the meaning given such term in Section 5.01(a).
"SIP" has the meaning given such term in the introductory paragraph.
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"Special Approval" means approval by a majority of the members of the
Conflicts Committee.
"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.
"Swank" has the meaning given such term in the introductory paragraph.
"Swank MLP Fund" has the meaning given such term in the introductory
paragraph.
"Target Capital Account Amount" means, with respect to a Member, the
distribution the Member would receive pursuant to Section 8.02, if the amount to
be distributed to the Member equaled the product of (i) the amount described in
Section 15.02(a)(iii)(C) multiplied by (ii) a fraction (x) the numerator of
which is the number of Units held by such Member and (y) the denominator of
which is the total number of outstanding Units owned by all Members.
"Tax Matters Officer" has the meaning given such term in Section 13.03(a).
"Term" has the meaning given such term in Section 2.06.
"Transaction" has the meaning given such term in Section 5.02.
"Transfer" (and related words) means with respect to any Units, a sale,
assignment, transfer, conveyance, gift, exchange or other transfer of such
asset, whether such transfer be voluntary, involuntary or by operation of
Applicable Law.
"Transferee" means a person who has received Units by means of a Transfer.
16
"Transferor" has the meaning given such term in Section 4.02(b)(ii).
"Treasury Regulations" means 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.
"Units" has the meaning set forth in Section 3.01.
"Valuation Price" shall mean, with respect to any Units that are the
subject of a valuation for purposes of this Agreement, the fair market value of
such Units, determined jointly by the Company and the Transferor; provided that
if they are unable to reach agreement on such value within ten Business Days
following the relevant date of determination of such fair market value, such
value shall be determined by an independent qualified appraiser selected by the
Transferor and the Company within ten Business Days thereafter; the
determination of fair market value by such appraiser shall be final and binding
on the Company and the Transferor, and the fees and expenses of such appraiser
shall be paid by the Company. If the Transferor and the Company cannot agree
upon a single appraiser, such fair market value shall be equal to the average of
two appraisals (one made by an independent qualified appraiser selected and paid
for by the Transferor and one by an independent qualified appraiser selected and
paid for by the Company); however, if the two appraisals differ from each other
by more than ten percent of the lower appraisal, either the Company or the
Transferor may, within ten Business Days after receipt of both appraisals,
direct the two appraisers to select a third independent qualified appraiser (the
cost of whom shall be shared one-half by Company and one-half by Transferor), in
which case the fair market value shall be the appraisal by such third appraiser
(but in no event higher than the higher of the first two appraisals or lower
than the lower of the first two appraisals). All appraisers shall be experienced
in valuing businesses similar to those engaged in by the Company, the
Partnership and the Operating Company. The determination of fair market value of
such Units should consider discounts for lack of marketability or liquidity,
restrictions on Transfer, minority interests or lack of voting power.
"Withdraw," "Withdrawing" or "Withdrawal" means the withdrawal, resignation
or retirement of a Member from the Company as a Member. Such terms shall not
include any Transfers of Membership Interest (which are governed by Article IV),
even though the Member making a Transfer may cease to be a Member as a result of
such Transfer.
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
17
shall include the plural and vice versa, (c) all references to Articles and
Sections refer to articles and 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.
QRC 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 "Quest Midstream GP, 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 0000 Xxxxx Xxx,
Xxxxx 000, Xxxxxxxx Xxxx, 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 (i) act as the general partner of the Partnership (and
acquire, hold and dispose of partnership interests and related rights in the
Partnership) and only undertake activities that are ancillary or related thereto
and (ii) in connection with acting in such capacity, carry on any lawful
business or activity permitted by the Act.
(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
18
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 Partnership;
(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 Partnership and the Operating Company);
(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 purposes;
(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, if applicable, terminate the
Company as a foreign limited
19
liability company in all such jurisdictions in which the Company may conduct
business or in which it has ceased to 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
15.04.
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 INTERESTS; UNITS
Section 3.01 Membership Interests; Additional Members.
The Members own Membership Interests in the Company that shall be
represented by units ("Units"). Exhibit A reflects the Members' ownership of the
Units as of the Effective Date. Persons may be admitted to the Company as
Members, on such terms and conditions as the Board determines at the time of
admission. The terms of admission or issuance must specify the number of Units
to be issued to a New Member and the consideration for such issuance and may
provide for the creation of different classes or groups of Members having
different rights, powers, and duties. Subject to the approval of a Majority
Interest, the Board may reflect the creation of any new class or group of Units
in an amendment to this Agreement indicating the different rights, powers, and
duties. Any such admission shall be 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 new Member's ratification of this
Agreement and agreement to be bound by it.
Section 3.02 Liability.
(a) No Member shall be liable for the debts, obligations or liabilities of
the Company solely by reason of being a member of the Company.
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(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 Members 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 3.03 Withdrawal.
A Member does not have the right or power to Withdraw, except as a result
of a Transfer of all of such Member's Units in accordance with Article IV and
Article V.
ARTICLE IV.
TRANSFER OF UNITS
Section 4.01 General.
Subject to Article V, a Member may Transfer all or any portion of its Units
so long as such Transfer complies with the provisions of this Article IV and
Article V.
Section 4.02 Requirements Applicable to All Transfers and Admissions.
Any Transfer of Units and any admission of a Transferee as a Member shall
also be subject to the following requirements, and such Transfer (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 (other than the requirements of
Section 4.02(b) and Article V):
(a) Right of First Refusal. The Transfer must comply with the provisions of
Article V;
(b) Transfer Documents. The following documents must be delivered to the
Board and must be satisfactory, in form and substance, to the Board:
(i) Transfer Instrument. A copy of the instrument pursuant to which
the Transfer is effected.
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(ii) Ratification of this Agreement. With respect to any Transfer, an
instrument, executed by the Member making the Transfer (a "Transferor") and
its Transferee, containing the following information and agreements, to the
extent they are not contained in the instrument described in Section
4.02(b)(i): (A) the notice address of the Transferee; (B) the total number
of Units owned by the Transferee after the Transfer of the Transferor and
its Transferee (which together must total the total number of Units owned
by the Transferor before the Transfer); (C) the Transferee's ratification
of this Agreement and agreement to be bound by it; and (D) representations
and warranties by the Transferor and its Transferee (1) that the Transfer
and admission is being made in accordance with Applicable Laws, and (2)
that the matters set forth in Section 4.02(b)(i) and this Section
4.02(b)(ii) are true and correct.
(iii) Opinions. With respect to any Transfer, such opinions of counsel
regarding tax and securities law matters as the Board, in its reasonable
discretion, may require.
(c) Payment of Expenses. The Transferor and its Transferee shall pay, or
reimburse the Company for, all reasonable costs and expenses incurred by the
Company in connection with the Transfer and admission of the Transferee as a
Member, including the legal fees incurred in connection with the legal opinions
referred to in Section 4.02(b)(iii); and
(d) No Release. No Transfer of any Units shall effect a release of the
Transferor from any liabilities to the Company or the other Members arising from
events occurring prior to the Transfer.
Section 4.03 Assignees.
Unless admitted as a Member, no Transferee, whether by a voluntary
Transfer, by operation of law or otherwise, shall have any rights hereunder,
other than the rights of an Assignee as provided in this Section 4.03. An
Assignee shall be entitled to all the rights of an assignee of a Member's Member
Interest under the Act, including the right to receive distributions from the
Company and the share of Profits and Losses attributable to the Units
Transferred to such Assignee, and the right to Transfer the Units as provided in
this Article IV and Article V, but shall not be deemed to be a holder of Units
for any other purpose under this Agreement and shall not be entitled to vote or
consent with respect to such Units on any matter presented to the Members for
approval (such power and right to so vote and consent remaining with the
Transferor). In the event any Assignee desires to further Transfer any Units,
such Assignee shall be subject to all the provisions of this Article IV and
Article V to the same extent and in the same manner as any Member desiring to
make a Transfer of Units.
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Section 4.04 Prohibition Against Hypothecation.
A Member may pledge its Units to a third party lender with the consent of
the Company, which will be provided within ten (10) Business Days from such time
as the Company has received a written request therefor so long as the Member
requesting the consent has provided to the Company documentation satisfactory to
the Company that the proposed lender has agreed to notify the Company of any
default that may result in the lender becoming the owner of, or selling or
otherwise disposing of, such Units and has further agreed to allow the Company
to purchase the Units for an amount not to exceed the amount equal to the
indebtedness secured by such lender's lien on the pledged Units. In the event
the Company exercises its right hereunder to purchase the Units from the lender
upon a default by the Member, such member shall lose any right it may have to
designate directors, if applicable. Notwithstanding the foregoing, QRC is
permitted to pledge its Units to the lenders under its existing credit
facilities and any renewals, refinancings or replacements thereof.
Section 4.05 Option to Repurchase Units Assigned by Operation of Law.
If, notwithstanding the prohibition set forth in Section 4.04, applicable
law requires that a Transfer of Units in breach of this Article IV must be given
effect (an "Involuntary Transfer"), the Company shall have, for a period of five
years following the effective date of such Transfer (the "Involuntary Transfer
Date"), the right to purchase from the Transferee of such Units any Units so
Transferred. The purchase price for each such Unit shall be the Valuation Price
for each Unit so Transferred. The Valuation Price shall be calculated as of the
Involuntary Transfer Date. If the Company exercises the right to repurchase
Units pursuant to this Section 4.05, the purchase price shall be paid by the
Company in cash to such Transferee within 60 days after giving notice to the
Transferee of its election to repurchase such Units.
Section 4.06 General Provisions Relating to Transfer of Units.
(a) No Member may withdraw from the Company, other than as a result of a
Transfer of all of such Member's Units in accordance with this Article IV and
Article V with respect to which the Transferee becomes a Member in place of the
Transferor. Except as otherwise provided in this Agreement, any Member who
Transfers all of the Units held by such Member in a Transfer permitted pursuant
to this Article IV and Article V where the Transferee is admitted as a Member
shall automatically cease to be a Member as of the date of consummation of such
Transfer.
(b) All distributions and allocations with respect to which the record date
is before the effective date of any Transfer shall be made to the Transferor,
and all distributions and allocations thereafter shall be made to the
Transferee.
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(c) In addition to any other restrictions on Transfer contained herein, in
no event may any Transfer or assignment of Units by any Member be made (i) to
any Person who lacks the legal right, power or capacity to own Units or (ii) in
violation of applicable law.
ARTICLE V.
RIGHTS UPON A DISPOSITION
Section 5.01 Right of First Refusal.
(a) Except for a Permitted Transfer, Transfers of Units by a Member shall
not be permitted unless the Member has complied with this Section 5.01. If a
Member intends to so Transfer any of its Units (a "Proposed Seller"), the
Proposed Seller shall give prompt written notice (the "Seller's Notice") to the
Company and the other Members at least 30 days prior to the closing of such
Transfer (such period herein referred to as the "First Refusal Period"), stating
that the Proposed Seller intends to make such a Transfer, identifying the
material terms and conditions of such Transfer, including the name and address
of the prospective purchaser or transferee (the "Proposed Transferee"), the
number of Units proposed to be purchased or acquired pursuant to the offer (the
"First Refusal Units") and the per Unit purchase price which the Proposed
Transferee has offered to pay for the First Refusal Units (the "Sale Price"),
which Seller's Notice shall constitute an irrevocable election to sell. A copy
of the offer, if available, shall be attached to the Seller's Notice.
(b) The Company shall have the irrevocable right and option, prior and in
preference to the right of any other Person under this Section 5.01, to purchase
all but not less than all of the First Refusal Units at the Sale Price prior to
the expiration of the First Refusal Period; provided, however, that the Company
shall not exercise its rights under this Section 5.01(b) without the consent of
the Board. Within 15 calendar days following delivery of the Seller's Notice,
the Company shall deliver a written notice (the "Company's First Refusal
Notice") to the Proposed Seller and the other Members stating whether it elects
to exercise its option under this Section 5.01(b), and such notice shall
constitute an irrevocable commitment on the part of the Company to purchase such
Units on the terms set forth in the Seller's Notice.
(c) To the extent that the Company does not elect to purchase the First
Refusal Units pursuant to Section 5.01(b), QRC shall have the irrevocable right
and option to purchase at the Sale Price the First Refusal Units. Within 15
calendar days following delivery of the Company's First Refusal Notice, QRC
shall deliver a written notice to the Proposed Seller stating whether it elects
to exercise its option under this Section 5.01(c), and such notice shall
constitute an irrevocable commitment to purchase such Units on the terms set
forth in the Seller's Notice.
(d) If the First Refusal Units are not elected to be purchased by the
Company and QRC pursuant to this Section 5.01, then, subject to Article IV, the
Proposed Seller shall be free, for a period of 30 days from the date of the
expiration of the First Refusal Period, to sell such
24
First Refusal Units to the Proposed Transferee (i) at a price per unit equal to
or greater than the Sale Price and upon terms no more favorable to the Proposed
Transferee than those specified in the Seller's Notice and (ii) subject to the
terms and restrictions of this Agreement, including as set forth in Article IV.
Any Transfer of such First Refusal Units by the Proposed Seller after the end of
such 30 day period or any change in the terms of the sale as set forth in the
Seller's Notice that are more favorable to the Proposed Transferee shall require
a new notice of intent to Transfer to be delivered to the Company and QRC and
shall give rise anew to the rights provided in the preceding paragraphs.
(e) If the Company or QRC elects to purchase any or all of the First
Refusal Units mentioned in the Seller's Notice, the Company or QRC, as the case
may be, shall have the right to purchase the First Refusal Units for cash
consideration whether or not part or all of the consideration specified in the
Seller's Notice is other than cash. If part or all of the consideration to be
paid for the First Refusal Units as stated in the Seller's Notice is other than
cash, the price stated in such Seller's Notice shall be deemed to be the sum of
the cash consideration, if any, specified in such Seller's Notice, plus the fair
market value of the non-cash consideration. The fair market value of the
non-cash consideration shall be determined in good faith by the Board, and such
determination as to the fair market value of such non-cash consideration shall
be binding upon the Proposed Seller, the Company and QRC.
Section 5.02 Notice of Certain Sales.
If one or more Members (the "Selling Members") proposes to Transfer Units
representing 50% or more of the outstanding Units of the Company in one or more
related arms'-length transactions to any Person that is not an Affiliate of any
of the Selling Members (a "Transaction"), then the Selling Members shall give
written notice (the "Co-Sale Notice") to the Company and to each of the Members
that is not a Selling Member (the "Non-Selling Members") at least 30 calendar
days prior to the closing of such Transfer. The Co-Sale Notice shall describe in
reasonable detail (i) the identification of the Selling Members, (ii) the
Selling Member to which the Non-Selling Members shall direct all notices
pursuant to this Article V (the "Selling Members Representative") and (iii) the
proposed Transfer including the nature of such Transfer, the proposed closing
date of such Transfer, the consideration to be paid, whether such consideration
is to be paid in one lump sum or installments, the name and address of each
prospective Transferee (the "Co-Sale Transferee"), and the other material terms
of the Transfer (the "Co-Sale Terms").
Section 5.03 Co-Sale Obligations and Rights.
(a) If in the Co-Sale Notice the Selling Members elect to require each of
the Non-Selling Members to participate in the proposed Transaction (the
"Drag-Along Election"), upon delivery of the Co-Sale Notice, each Non-Selling
Member shall be required to participate in such
25
Transfer by Transferring Units on the same terms and conditions specified in the
Co-Sale Notice (the "Co-Sale Obligation").
(b) If the Selling Members do not make a Drag-Along Election in the Co-Sale
Notice, each Non-Selling Member shall have the right to elect, by providing
written notice to the Selling Members Representative at least 20 calendar days
prior to the projected closing date of the applicable Transfer as set forth in
the Co-Sale Notice, to sell to the Co-Sale Transferee a number of Units equal to
the product of (i) the aggregate number of Units proposed to be Transferred to
the Co-Sale Transferee and (ii) a fraction, the numerator of which is the number
of Units held by such Non-Selling Member and the denominator of which is the
aggregate number of outstanding Units.
Section 5.04 Delivery of Documents to Effectuate Transfer.
Each Non-Selling Member participating in the Transfer shall effect its
participation in the Transfer by promptly delivering to the Selling Members
Representative such instruments, in form and substance satisfactory to the
Selling Members Representative, as the Selling Members Representative may deem
necessary or desirable to effect the Transfer specified in the Co-Sale Notice.
Section 5.05 Consummation of Transfer.
Concurrently with the consummation of the Transfer specified in the Co-Sale
Notice, the Selling Members Representative shall remit or cause to be remitted
to each Non-Selling Member that portion of the Transfer consideration to which
such Non-Selling Member is entitled by reason of his participation in such
Transfer.
Section 5.06 Specific Performance.
The Members agree that a breach of the provisions of this Article V 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 of the Company and the relationship among the
Members. Accordingly, the Members agree that the provisions of this Article V
may be enforced by specific performance.
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Section 5.07 Termination of Rights Conferred in this Article V.
The provisions of this Article V shall terminate upon the closing of the
Company's sale of all or substantially all of its assets or the acquisition of
the Company by another entity by means of a merger or consolidation resulting in
the exchange of Units for securities or consideration issued, or caused to be
issued, by the acquiring entity or its subsidiary.
ARTICLE VI.
ISSUANCE OF UNITS; CERTIFICATES
Section 6.01 Issuance of Units.
In exchange for each Member's capital contribution to the Company referred
to in Section 7.01, the Company shall issue to each Member the number of Units
set forth opposite such Member's name on Exhibit A upon the execution and
delivery of this Agreement by such Member.
Section 6.02 Issuance of Additional Units.
Subject to Section 6.03, in order to raise capital or acquire assets, to
redeem or retire any Company debt or for any other proper purpose consistent
with the purposes of the Company, the Company may from time to time issue Units
to Members or any other Persons (and, in connection with the issuance thereof,
may accept additional contributions from such Persons and admit any such Persons
to the Company as Members), in each case without the approval of the Members.
There shall be no limit on the number of Units that may be so issued. The Board
of Directors shall have full and absolute discretion in determining in good
faith the consideration therefor and the other terms and conditions with respect
thereto. In connection with any such issuance, the Board of Directors shall do
all other things they shall determine are necessary or appropriate, including,
but not limited to, the filing of any certificates or other documents with any
federal, state or other governmental agency. The admission of any Person as a
Member upon the issuance of Units pursuant to this Section 6.02 shall be
effective only after the new Member has executed and delivered to the Board of
Directors a document, in form and substance satisfactory to the Board of
Directors, that (i) sets forth the address for notices of such new Member and
(ii) includes an agreement on the part of such Member to be bound by the
provisions of this Agreement. The Board of Directors shall have the power to
amend this Agreement as necessary to reflect the issuance of Units, and such an
amendment need be executed only by an officer of the Company authorized by the
Board of Directors to do so.
Section 6.03 Grant of Preemptive Rights.
(a) The Company hereby grants to each Member the right, on the terms and
conditions set forth in this Section 6.03, to purchase such Member's Pro Rata
Share (as
27
hereinafter defined) of any Units that the Company may from time to time propose
to sell and issue. For purposes of this Section 6.03, "Pro Rata Share" shall
mean the ratio of Units held by a Member on the day immediately prior to the
date of the notice described in Section 6.03(b) below to the total number of the
then outstanding Units held by all Members.
(b) If the Company proposes to undertake an issuance of Units, it shall
give each Member written notice of such proposal describing the Units, the cash
consideration to be paid for such Units and the general terms upon which the
Company proposes to issue such Units. Each Member shall have fifteen (15)
Business Days from the date of receipt of the notice to agree to purchase all or
any portion of its Pro Rata Share of such Units for the cash consideration and
upon the general terms specified in the notice by giving written notice to the
Company that states the quantity of Units to be purchased.
(c) Should any Member not agree to purchase all of its Pro Rata Share of
such Units, the Company shall offer such Member's remaining Pro Rata Share to
those Members that did so agree, proportionately among them in accordance with
their respective Unit ownership.
(d) Section 6.03(a) shall not apply to (i) the issuance or sale of Units,
options or convertible Units to a seller or its designee in connection with and
as consideration for the Company's direct or indirect acquisition of an
operating business, which acquisition has been approved by the Board of
Directors; (ii) the issuance or sale of Units, options or convertible Units to
financial institutions or commercial lenders or their designees, in connection
with commercial loans to the Company by such financial institutions or
commercial lenders, which are approved by the Board of Directors; (iii) the
issuance or sale of Units, options or convertible Units pursuant to any
transaction approved by the Board of Directors primarily for the purpose of (A)
a joint venture, technology licensing or research and development activity or
(B) any other transaction involving strategic or similar partners, and in each
case primarily for purposes other than raising capital; and (iv) the issuance of
Units pursuant to the terms of options or convertible Units which have been
issued, sold or granted in compliance with this Section 6.03.
Section 6.04 Certificates.
Every holder of Units shall be entitled to have a certificate evidencing
the number of Units owned by such holder signed by or in the name of the Company
by the President.
(a) In case any Person who has signed a certificate shall have ceased to be
the President before such certificate is issued, such certificate may be issued
by the Company with the same effect as if such Person continued to serve in such
capacity at the date of issuance.
(b) The Company may issue a new certificate in place of any certificate
theretofore issued by it which is alleged to have been lost, stolen or destroyed
upon the making of an
28
affidavit of that fact by the Person claiming the certificate to be lost, stolen
or destroyed. When authorizing the issuance of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require that the owner of such lost, stolen
or destroyed certificate or certificates, or its legal representative, give the
Company a bond sufficient to indemnify the Company against any claim that may be
made against the Company on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.
Each certificate evidencing any Units shall bear a legend to the following
effect:
THESE SECURITIES ARE SUBJECT TO THE TERMS, CONDITIONS AND RESTRICTIONS ON
TRANSFER SET FORTH IN (A) THE COMPANY'S LIMITED LIABILITY COMPANY
AGREEMENT, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, OR (B) THE TERMS
AND CONDITIONS OF THE INVESTORS' RIGHTS AGREEMENT, DATED DECEMBER 22,
2006, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, BY AND AMONG QUEST
MIDSTREAM PARTNERS, L.P. AND ITS GENERAL AND LIMITED PARTNERS. A COPY OF
SUCH AGREEMENTS WILL BE FURNISHED TO THE RECORD HOLDER OF THE UNITS
EVIDENCED BY THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE
COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
Section 6.05 Transfers.
Units shall be transferable in the manner prescribed by law and in
accordance with and subject to the provisions of Article IV. Transfers of Units
shall be made on the books of the Company only by the Person named in the
certificate or by its attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be canceled before a new
certificate shall be issued.
Section 6.06 Record Holders.
Except as otherwise required by law, the Company shall be entitled to
recognize the exclusive right of the Person registered on its books as the owner
of Units to receive distributions in respect of such Units and to vote as the
owner thereof, and shall not be bound to recognize any equitable or other claim
to or interest in such Units on the part of any other Person, whether or not the
Company shall have notice thereof.
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ARTICLE VII.
CAPITAL CONTRIBUTIONS
Section 7.01 Initial Capital Contributions.
Prior to the date hereof, a capital contribution of $1,000.00 was made to
the Company and 1,000 Units were issued in consideration therefor. As of the
date hereof, the parties hereto agree that the respective capital contributions
of the Members (or their respective share of any such capital contributions made
by their predecessors in interest to the extent such Member is the transferee of
one or more Units) and Units of the Members are as set forth on Exhibit A.
Section 7.02 Additional Contributions.
No Member shall be obligated to make any additional capital contributions
to the Company apart from those capital contributions specified in Section 7.01.
Section 7.03 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 7.03 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 7.04 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 7.05 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 Units shall have a
single Capital Account that reflects all such classes or series of Units,
regardless of the classes or series of Units owned by such Member and regardless
of the time or manner in which such Units were acquired. Upon the Transfer of
all or a portion of a Membership Interest, the Capital Account of the Transferor
that
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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).
Section 7.06 Effect of Transfer of Membership Interest.
In the event that any Unit is transferred in accordance with the terms of
this Agreement, the transferee shall succeed to the Capital Account of the
transferor Member to the extent such Capital Account relates to the transferred
Unit.
Section 7.07 Certain Tax Incidents.
The foregoing provisions of this Article VII relating to the maintenance of
Capital Accounts are intended to comply with Treasury Regulation section
1.704-1(b) and shall be interpreted and applied in a manner consistent with such
Treasury Regulations.
ARTICLE VIII.
DISTRIBUTIONS AND ALLOCATIONS
Section 8.0 Distributions.
Except as otherwise provided in Section 8.02, within 50 days following the
end of each Quarter commencing with the Quarter ending on December 31, 2006, an
amount equal to 100% of Available Cash with respect to such Quarter shall be
distributed in accordance with this Article VIII to all Members simultaneously
pro rata in accordance with each Member's Ownership Percentage (at the time the
amounts of such distributions are determined). Section 8.02....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 8.01 and all
allocations under this Article VIII, all available proceeds distributable to the
Members as determined under Section 15.02 shall be distributed to all of the
Members in amounts equal to the Members' positive Capital Account balances.
Section 8.03 Allocations.
Subject to the allocation rules of Section 8.03(d) and (e), 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:
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(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
8.01 in the current and in all previous fiscal years in excess of amounts
previously allocated to such Members pursuant to this Section 8.03(a)(ii);
(iii) Third, to the Members, to the greatest extent possible, in the
proportions and amounts required to cause the positive Capital Account
balances of the Members to be in the same proportion as the Members'
respective Ownership Percentages; and
(iv) Thereafter, to the Members in proportion their respective
Ownership Percentages.
(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, in the
proportions and amounts required to cause the positive Capital Account
balances of the Members to be in the same proportion as the Members'
respective Ownership Percentages;
(ii) Second, to the Members in proportion to their respective
Ownership Percentages until the Capital Account balances of such Members
have been reduced to zero;
(iii) Third, to any Member that has a remaining 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
Ownership Percentages.
(c) Notwithstanding the allocation provision of Section 8.03(a) and (b), in
the event of the dissolution of the Company pursuant to Section 15.01, if the
allocation of Profits or Losses to a Member pursuant to Section 8.03(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 balance of each Member to equal
such an amount.
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(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 Adjusted Capital Account Deficit of such Member
as quickly as possible, provided that an allocation pursuant to this
Section 8.03(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 VIII have been tentatively made as if this
Section 8.03(d)(i) was not in this 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 8.03(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 VIII have been
made as if Section 8.03(d)(i) and this Section 8.03(d)(ii) were not in this
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.
(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
33
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 8.03(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 8.04 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 Ownership Percentage,
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 Ownership Percentages.
Section 8.05 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 VIII for all purposes of this Agreement. The Board is
authorized to withhold from distributions, or with respect to allocations, to
the 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 8.06 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.
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ARTICLE IX.
MANAGEMENT
Section 9.01 Management by Board of Directors and Executive Officers.
The business and affairs of the Company shall be fully vested in, and
managed by, a Board of Directors (the "Board") and any executive officers
elected pursuant to this Article IX. The Directors and executive officers shall
collectively constitute "managers" of the Company within the meaning of the Act.
Except as otherwise specifically provided in this Agreement, the authority and
functions of the Board, on the one hand, and the executive officers, on the
other hand, shall be identical to the authority and functions of the board of
directors and officers, respectively, of a corporation organized under the
General Corporation Law of the State of Delaware. The executive officers shall
be vested with such powers and duties as are set forth this Article IX and as
are specified by the Board. Accordingly, except as otherwise specifically
provided in this Agreement, the business and affairs of the Company shall be
managed under the direction of the Board, and the day-to-day activities of the
Company shall be conducted on the Company's behalf by the executive officers who
shall be agents of the Company.
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 this Agreement, the Act or
Applicable Law.
Section 9.02 Number; Qualification; Tenure.
The number of directors constituting the Board shall be between three and
nine (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. Each Director shall be elected or
approved by the Members at an annual meeting of the Members and shall serve as a
Director of the Company for a term of one year (or their earlier death or
removal from office) or until their successors are elected and qualified.
The initial Board Directors of the Company shall consist of five members,
which shall initially be Xxxxx X. Xxxx, Xxxxxxx Xxxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxx Xxxxxxx and Xxxxx Xxxxxxx. QRC will appoint a sixth director who will
qualify to be a member of the Conflicts Committee as soon as reasonably
practicable.
Section 9.03 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 9.03 immediately after, and
at the same place as, the
35
annual meeting referred to in Section 9.02. The Board may, by resolution,
provide the time and place for the holding of additional regular meetings
without other notice than such resolution.
Section 9.04 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 two Directors.
Section 9.05 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 one
Business Day 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, delivered by
electronic mail or when received in the form of a 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. 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 9.06 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 9.08, 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 9.07 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 9.08 Quorum.
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A majority of Directors, present in person or participating in accordance
with Section 9.07, 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. 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.
Section 9.09 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 9.10 Committees.
(a) The Board may establish committees of the Board and may delegate
certain of its responsibilities to such committees.
(b) At such time as the Board determines appropriate, but in no event later
than the date of the Partnership's initial public offering, the Board shall
establish an audit committee comprised of three Directors, all of whom shall be
Independent Directors. Such audit committee shall establish a written audit
committee charter in accordance with the rules of the securities exchange upon
which the Partnership's securities are listed, if applicable.
(c) The Board shall have a Conflicts Committee. At the request of the
Board, the Conflicts Committee may review, and approve or disapprove,
transactions in which a potential conflict of interest exists or arises between
the Company or any of its Affiliates, on the one hand, and the Partnership, any
Group Member, any Partner or Assignee (as defined in the Partnership Agreement),
on the other hand, all in accordance with the applicable provisions of the
Partnership Agreement. Any matter approved by the Conflicts Committee in the
manner provided for in the Partnership Agreement 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) 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 9.05. The Board shall have the power at any time to fill
vacancies in, or to change the membership of, any committee,
37
or to dissolve any such committee other than the Conflicts 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 9.11 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.
ARTICLE X.
OFFICERS
Section 10.01 Elected Officers.
The executive officers of the Company shall 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 X. 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 10.02 Election and Term of Office.
The officers of the Company shall be elected annually by the Board at the
regular meeting of the Board held after the annual meeting referred to in
Section 9.02. 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 10.08.
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Section 10.03 Chairman of the Board; Chief Executive Officer.
The Chairman of the Board shall preside at all meetings of the Members and
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 10.04 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 the Members and the Board.
Section 10.05 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 10.06 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
39
Secretary's authority and duties shall be possessed by such Assistant Treasurer
or Assistant Treasurers as the Board may designate.
Section 10.07 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 10.08 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, 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 10.09 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.
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ARTICLE XI.
MEMBER MEETINGS
Section 11.01 Meetings.
Except as otherwise provided in this Agreement, all acts of the Members to
be taken hereunder shall be taken in the manner provided in this Article XI. An
annual meeting of the Members for the transaction of such business as may
properly come before the meeting shall be held at such time and place as the
Board shall specify in the notice of the meeting, which shall be delivered to
each Member at least 10 and not more than 60 days prior to such meeting. Special
meetings of the Members may be called by the Board or by any Member. A Member
shall call a meeting by delivering to the Board one or more requests in writing
stating that the signing Member wishes to call a meeting and indicating the
general or specific purposes for which the meeting is to be called.
Section 11.02 Notice of a Meeting.
Notice of a meeting called pursuant to Section 11.01 shall be given to the
Members in writing by mail or other means of written communication in accordance
with Section 9.05. The notice shall be deemed to have been given at the time
when deposited in the mail or sent by other means of written communication.
Attendance of a Member at a meeting shall constitute a waiver of notice of such
meeting, except where a Member attends the meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting is
not lawfully called or convened.
Section 11.03 Quorum; Voting Requirement.
The presence, in person or by proxy, of a Majority Interest shall
constitute a quorum for the transaction of business by the Members. The
affirmative vote of a Majority Interest present at a meeting at which a quorum
is present shall constitute a valid decision of the Members.
Section 11.04 Action by Consent of Members.
Any action that may be taken at a meeting of the Members may be taken
without a meeting if an approval in writing setting forth such action is signed
by the Members holding a Majority Interest.
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ARTICLE XII.
INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS
Section 12.01 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 the Indemnitee shall not be
indemnified and held harmless if there has been a final and non-appealable
judgment entered by a court of competent jurisdiction determining that, in
respect of the matter for which the Indemnitee is seeking indemnification
pursuant to this Section 12.01, the Indemnitee acted in bad faith or engaged in
fraud, willful misconduct or, in the case of a criminal matter, acted with
knowledge that the Indemnitee's conduct was unlawful. 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 12.01 shall be made only out of the
assets of the Company.
(b) To the fullest extent permitted by law, expenses (including legal fees
and expenses) incurred by an Indemnitee who is indemnified pursuant to Section
12.01(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 12.01.
(c) The indemnification provided by this Section 12.01 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement,
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, and shall continue as
to an Indemnitee who has ceased to serve in such capacity and shall inure to the
benefit of the heirs, successors, assigns and administrators of the Indemnitee.
(d) The Company may purchase and maintain insurance on behalf of the
Company, its Affiliates and such other Persons as the Company 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
42
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 12.01, 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 12.01(a); and action taken or omitted by the
Indemnitee 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) An Indemnitee shall not be denied indemnification in whole or in part
under this Section 12.01 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.
(g) The provisions of this Section 12.01 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.
(h) No amendment, modification or repeal of this Section 12.01 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 12.01 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 12.02 Liability of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in this Agreement,
no Indemnitee shall be liable for monetary damages to the Company or any other
Persons who have acquired interests in the Company, for losses sustained or
liabilities incurred as a result of any act or omission of an Indemnitee unless
there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of the matter in question,
the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in
the case of a criminal matter, acted with knowledge that the Indemnitee's
conduct was criminal.
43
(b) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the Company,
such 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.
(c) Any amendment, modification or repeal of this Section 12.02 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability to the Company, and the Company's directors,
officers and employees under this Section 12.02 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 12.03 Standards of Conduct and Fiduciary Duties.
(a) In causing the Company to make a determination or take or decline to
take any action, unless another express standard is provided for in this
Agreement, an Indemnitee shall act in good faith and shall not be subject to any
other or different standards imposed by this Agreement, any other agreement
contemplated hereby or under the Act or any other law, rule or regulation. In
order for a determination or other action affecting the Company to be in "good
faith" for purposes of this Agreement, an Indemnitee must believe that the
determination or other action is in the best interests of the Company.
(b) 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 any Member, an Indemnitee acting under this Agreement shall not be liable to
the Company or to any Member for its good faith reliance on the provisions this
Agreement. The provisions of this Agreement, to the extent that they restrict
the duties and liabilities of an Indemnitee otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnitee.
ARTICLE XIII.
TAXES
Section 13.01 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
44
timely prepared and filed. The Company shall bear the costs of the preparation
and filing of its returns.
Section 13.02 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; and
(iv) 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 13.03 Tax Matters Officer.
(a) QRC shall 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.
45
(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 XIV.
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
Section 14.01 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.
(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.
46
Section 14.02 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 14.03 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 XV.
DISSOLUTION, WINDING-UP, TERMINATION AND CONVERSION
Section 15.01 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; or
(iii) at any time there are no Members of the Company, unless the
Company is continued in accordance with the Act or this Agreement.
47
(b) No other event shall cause a dissolution of the Company.
(c) Upon the occurrence of any event that causes there to be no Members of
the Company, to the fullest extent permitted by law, the personal representative
of the last remaining Member is hereby authorized to, and shall, within 90 days
after the occurrence of the event that terminated the continued membership of
such Member in the Company, agree in writing (i) to continue the Company and
(ii) to the admission of the personal representative or its nominee or designee,
as the case may be, as a substitute Member of the Company, effective as of the
occurrence of the event that terminated the continued membership of such Member
in the Company.
(d) Notwithstanding any other provision of this Agreement, the Bankruptcy
of a Member shall not cause such Member to cease to be a member of the Company
and, upon the occurrence of such an event, the Company shall continue without
dissolution.
Section 15.02 Winding-Up and Termination.
(a) On the occurrence of a Dissolution Event, 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:
(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, conditional and unmatured 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:
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(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 VIII;
(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 8.02; and, to the extent
practicable, 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 15.02 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 15.03 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 15.04 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 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.
49
ARTICLE XVI.
GENERAL PROVISIONS
Section 16.01 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 16.02 Notices.
Except as otherwise provided with respect to the annual meeting of the
Limited Partners pursuant to Section 9.02, 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:
Quest Midstream GP, LLC
0000 Xxxxx Xxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn:President
To AOP:
Alerian Opportunity Advisors II LLC
00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
To Swank:
Swank Capital, LLC
Xxx Xxxx Xxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
50
Section 16.03 Entire Agreement; Superseding Effect.
This Agreement and the Investors' Rights Agreement constitute the entire
agreement of the Members 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 with respect to the Company,
whether oral or written.
Section 16.04 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 16.05 Amendment or Restatement.
This Agreement or the Delaware Certificate may be amended or restated only
by a written instrument approved by the Conflicts Committee and executed (or, in
the case of the Delaware Certificate, approved) by a Majority Interest.
Section 16.06 Binding Effect.
Subject to the restrictions on Transfers 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.
Section 16.07 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
51
any provision of the Act 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 16.08 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 16.09 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 16.10 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 16.11 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.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Members have executed this Agreement as of the date
first set forth above.
MEMBERS:
QUEST RESOURCE CORPORATION
By: /s/ Xxxxx X. Xxxx
--------------------------
Xxxxx X. Xxxx
Chief Executive Officer
ALERIAN OPPORTUNITY PARTNERS IV, LP
By: Alerian Opportunity Advisors IV LLC, its
general partner
By: /s/ Xxxxxxx Xxxxxxx
--------------------------
Xxxxxxx Xxxxxxx
Managing Member
SWANK MLP CONVERGENCE FUND, LP
By: Swank Energy Income Advisors, L.P.
its general partner
By: Swank Capital, LLC
its general partner
By: /s/ Xxxxx X. Xxxxx
----------------------
Xxxxx X. Xxxxx
Manager
SWANK INVESTMENT PARTNERS, LP
By: Swank Energy Income Advisors, L.P.
its general partner
By: Swank Capital, LLC
its general partner
By: /s/ Xxxxx X. Xxxxx
----------------------
Xxxxx X. Xxxxx
Manager
THE XXXXXXX MLP OPPORTUNITY FUND I, LP
By: Carbon County Partners I, LP
its general partner
By: Carbon County GP I, LLC
its general partner
By: /s/ Xxxxx X. Xxxxx
----------------------
Xxxxx X. Xxxxx
Manager
THE XXXXXXX XX STRATEGIES FUND, LP
By: Carbon County Partners I, LP
its general partner
By: Carbon County GP I, LLC
its general partner
By: /s/ Xxxxx X. Xxxxx
----------------------
Xxxxx X. Xxxxx
Manager
EXHIBIT A
Member Number Effective Capital Contribution
of Units
Held
Quest Resource Corporation 850 $1,000 and a 2.64%
member interest in
Bluestem Pipeline, LLC
with an agreed value of
$3,700,000
Alerian Opportunity Partners IV, LP 75 $75
Swank MLP Convergence Fund, LP 30 $30
Swank Investment Partners, LP 5 $5
The Xxxxxxx MLP Opportunity Fund I, LP 10 $10
The Xxxxxxx XX Strategies Fund, LP 30 $30
-- ---
Total: 1000 $3,701,150
Exhibit A
