COMPANY AGREEMENT OF TEPPCO MIDSTREAM COMPANIES, LLC
Exhibit 10.5
OF
TEPPCO MIDSTREAM COMPANIES, LLC
This Company Agreement (this “Agreement”) of TEPPCO Midstream Companies, LLC, a Texas
limited liability company (the “Company”), is hereby adopted by TEPPCO GP, Inc., a Delaware
corporation (“TEPPCO GP”), and TEPPCO Partners, L.P., a Delaware limited partnership (the
“MLP”), to be effective June 30, 2007, in accordance with the Texas Limited Liability
Company Law, part of the Texas Business Organizations Code, as amended (the “TLLCL”), to
govern the affairs of the Company and the conduct of its business.
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise clearly indicated to the
contrary, apply to the terms used in this Agreement.
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly
controls, is controlled by or is under common control with, the Person in question. As used
herein, the term “control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
“Agreement” has the meaning given such term in the preamble hereto.
“Certificate” means the Certificate of Formation filed with the Secretary of State of the
State of Texas as referenced in Section 2.5, as such Certificate may be amended and/or restated
from time to time.
“Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time, as
interpreted by the applicable regulations thereunder. Any reference herein to a specific section
or sections of the Code shall be deemed to include a reference to any corresponding provision of
future law.
“Company” has the meaning given such term in the preamble hereto.
“Indemnitee” has the meaning given such term in Section 10.1(a).
“Manager” means (i) TEPPCO GP in its capacity as the sole manager of the Company prior to its
removal or resignation and (ii) any other Person designated as a manager of the Company pursuant to
the terms of this Agreement.
“Member” means TEPPCO GP and the MLP, in their respective capacities as members of the
Company, or any other Person admitted to the Company from time to time as a member and that is
shown as a member on the books and records of the Company.
“Membership Interest” means the interest of a Member in the Company.
“MLP” has the meaning given such term in the preamble hereto.
“Percentage Interest” means, as of the date of such determination, (a) 0.001% as to TEPPCO GP
and (b) 99.999% as to the MLP.
“Person” means an individual or a corporation, partnership, limited liability company, trust,
unincorproated organization, association or other entity.
“Subsidiary” means a Person controlled by the Company directly, or indirectly through one or
more intermediaries.
“TEPPCO GP” has the meaning given such term in the preamble hereto.
“TLLCL” has the meaning given such term in the preamble hereto.
ARTICLE II
ORGANIZATIONAL MATTERS
Section 2.1 Formation. The Company was formed when its certificate of formation (the
“Certificate”) was filed by an “organizer” (within the meaning of the TLLCL) with the
Secretary of State of the State of Texas pursuant to and in accordance with the TLLCL. The
execution of the Certificate by such organizer, and the filing of the Certificate with the
Secretary of State of the State of Texas, are hereby ratified, confirmed and approved. Upon the
filing of the Certificate with the Secretary of State of the State of Texas, such organizer’s
powers as the “organizer” (within the meaning of the TLLCL) ceased. Except as expressly provided to
the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and
obligations of the Members and the administration, winding up and termination of the Company shall
be governed by the TLLCL. The Membership Interest of each Member shall be personal property for all
purposes.
Section 2.2 Name. The name of the Company shall be “TEPPCO Midstream Companies, LLC”. The
Company’s business may be conducted under any other name or names deemed necessary or appropriate
by the Manager, including, without limitation, the name of the Manager or any Affiliate thereof.
The words “Limited Liability Company,” “LLC,” or similar words or letters shall be included in the
Company’s name where necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The Manager in its sole discretion may change the name of the Company at any time and
from time to time.
Section 2.3 Registered Office; Principal Office. Unless and until changed by the Manager, the
registered office of the Company in the State of Texas shall be located at 0000 Xxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, and the registered agent for service of process on the Company in the
State of Texas at such registered office shall be CT Corporation System. The principal office of
the Company and the address of the Manager shall be 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, or
such other place as the Manager may from time to time designate. The Company may maintain offices
at such other place or places within or outside the State of Texas as the Manager deems advisable.
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Section 2.4 Term. The Company commenced upon the filing of the Certificate in accordance with the
TLLCL and shall have perpetual existence, unless the Company is sooner terminated in accordance
with the provisions of this Agreement. The existence of the Company as a separate legal entity
shall continue until the termination of the Company as provided in the TLLCL.
Section 2.5 Certificate of Formation. The organizer has caused the Certificate to be filed with
the Secretary of State of the State of Texas as required by the TLLCL. The Manager shall use all
reasonable efforts to cause to be filed such other certificates or documents as may be determined
by the Manager in its sole discretion to be reasonable and necessary or appropriate for the
formation, continuation, qualification and operation of a limited liability company in the State of
Texas or any other state in which the Company may elect to do business or own property. To the
extent that such action is determined by the Manager in its sole discretion to be reasonable and
necessary or appropriate, the Manager shall file amendments to and restatements of the Certificate
and do all things to maintain the Company as a limited liability company under the laws of the
State of Texas or of any other state in which the Company may elect to do business or own property.
ARTICLE III
PURPOSE
Section 3.1 Purpose and Business. The purpose and nature of the business to be conducted by the
Company shall be (a) to engage in the gathering of natural gas and natural gas liquids and related
products and activities, (b) to engage directly in, or to enter into or form any corporation,
partnership, joint venture, limited liability company or similar arrangement to engage in, any
business activity that may be lawfully conducted by a limited partnership organized pursuant to the
TLLCL and, in connection therewith, to exercise all of the rights and powers conferred upon the
Company pursuant to the agreements relating to such business activity, (c) to do anything necessary
or appropriate to the foregoing (including, without limitation, the making of capital contributions
or loans to any Subsidiary or in connection with its involvement in the activities referred to in
clause (b) of this sentence), and (d) to engage in any other business activity as permitted under
Texas law.
Section 3.2 Powers. The Company shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment
of the purposes and business described in Section 3.1 and for the protection and benefit of the
Company.
ARTICLE IV
CAPITAL CONTRIBUTIONS
Section 4.1 Prior Contributions. Prior to the date hereof, the Members, or their predecessors,
have made capital contributions to the Company’s predecessor.
Section 4.2 Additional Contributions. The Members may contribute additional cash or property to
the capital of the Company, but no Member has any obligation pursuant to this Agreement to make any
such contribution.
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Section 4.3
Return of Contributions; Other Provisions Relating to Contributions. No Member shall
be entitled to withdraw any part of its capital contributions or its capital account or to receive
any distribution from the Company, except as provided in this Agreement. An unrepaid capital
contribution is not a liability of the Company or any Member, and no interest shall accrue on
capital contributions or on balances in the Members’ capital accounts.
Section 4.4
Loans. A Member may make secured or unsecured loans to the Company, but no Member has
any obligation pursuant to this Agreement to make any such loan. Loans by a Member to the Company
shall not be considered capital contributions.
ARTICLE V
CAPITAL ACCOUNTS; ALLOCATIONS; DISTRIBUTIONS
Section 5.1 Capital Accounts. The Company shall maintain for each Member a separate capital
account in accordance with the regulations issued pursuant to Section 704 of the Code and as
determined by the Manager as consistent therewith.
Section 5.2 Allocations for Tax and Capital Account Purposes. For federal income tax purposes,
each item of income, gain, loss, deduction and credit of the Company shall be allocated among the
Members in accordance with their Percentage Interests, except that the Manager shall have the
authority to make such other allocations as are necessary and appropriate to comply with Section
704 of the Code and the regulations issued pursuant thereto.
Section 5.3 Distributions. The Company shall make distributions to the Members at such times, and
in such forms and amounts, as the Manager may from time to time determine. Distributions in
liquidation of the Company shall be made in accordance with the positive balances in the Members’
respective capital accounts maintained pursuant to Section 5.1. All other distributions shall be
made to the Members in accordance with their respective Percentage Interests.
ARTICLE VI
MANAGEMENT AND OPERATIONS OF BUSINESS
The Manager shall conduct, direct, and exercise full control over all activities of the
Company. Except as otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Company shall be exclusively vested in the Manager. The Manager shall
be designated from time to time by the Members, and the Members may remove the Person serving as
the Manager, with or without cause, at any time and may designate any other Person to serve as the
Manager. In addition to the powers now or hereafter granted a manager under applicable law or which
are granted to the Manager under any other provision of this Agreement, the Manager shall have full
power and authority to do all things and on such terms as it, in its sole discretion, may deem
necessary or desirable to conduct the business of the Company, to exercise all powers set forth in
Section 3.2 and to effectuate the purposes set forth in Section 3.1.
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ARTICLE VII
RIGHTS AND OBLIGATIONS OF MEMBERS
No Member, by virtue of its status as a member of the Company, shall have any management power
over the business and affairs of the Company or actual or apparent authority to enter into
contracts on behalf of, or to otherwise bind, the Company.
ARTICLE VIII
WINDING UP AND TERMINATION
The Company shall terminate, and its affairs shall be wound up, upon (a) an event of
resignation of the Manager, (b) a written consent of all of the Members, (c) a judicial decree
ordering the winding up and termination of the Company under Section 11.301 of the TLLCL, (d) the
sale of all or substantially all of the assets and properties of the Company and its Subsidiaries,
taken as a whole, (e) the dissolution of the MLP, if such dissolution occurs while the MLP is a
Member or (f) any other event requiring the winding up of the Company under the TLLCL; provided,
however, that the Company shall not be terminated or required to be wound up by reason of any event
of resignation of the Manager described in the preceding clause if within 90 days after the
resignation, a majority of the Members agree by vote to continue the business of the Company and to
the appointment of a manager of the Company.
ARTICLE IX
AMENDMENT OF COMPANY AGREEMENT
The Manager may amend any provision of this Agreement without the consent of the Members and
may execute, swear to, acknowledge, deliver, file and record whatever documents may be required in
connection therewith, except that any amendment that would increase the liability of the Members or
materially and adversely affect the rights of the Member under this Agreement requires the consent
of the Members.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnification.
(a) To the fullest extent permitted by law but subject to the limitations expressly provided
in this Agreement, the Manager, the Members and any Person who is or was an officer or director of
the Manager (each, an “Indemnitee”) shall each be indemnified and held harmless by the
Company from and against any and all losses, claims, damages, liabilities (joint or several),
expenses (including, without limitation, legal fees and expenses), judgments, fines, penalties,
interest, settlements and 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 10.1, 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. Any indemnification pursuant to this Section 10.1 shall be made only out of the
assets of the Company, it being agreed that the Members shall
not
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be personally liable for such indemnification and shall have no obligation to contribute or
loan any monies or property to the Company to enable it to effectuate such indemnification.
(b) To the fullest extent permitted by law, expenses (including, without limitation, legal
fees and expenses) incurred by an Indemnitee 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 an 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 10.1.
(c) The indemnification provided by this Section 10.1 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.
(d) The Company may purchase and maintain (or reimburse the Manager or its Affiliates for the
cost of) insurance, on behalf of the Manager and such other Persons as the Manager 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, whether or not the Company would have the power to
indemnify such Person against such liabilities under the provisions of this Agreement.
(e) In no event shall the Members be subjected to personal liability by reason of the
indemnification provisions set forth in this Agreement, whether by action of an Indemnitee or
otherwise.
(f) An Indemnitee shall not be denied indemnification in whole or in part under this Section
10.1 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 10.1 are for the benefit of the Indemnitees, their heirs,
successors and assigns 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 10.1 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 obligation of the Company to indemnify any such Indemnitee
under and in accordance with the provisions of this Section 10.1 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.
(i) THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 10.1 ARE INTENDED BY THE
PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF EXCULPATING THE INDEMNITEE FROM LEGAL
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RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSON’S NEGLIGENCE, FAULT OR OTHER CONDUCT.
Section 10.2 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 Member 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.
(b) Subject to its obligations and duties as the Manager set forth in Article VI, the Manager
may exercise any of the powers granted to it by this Agreement and perform any of the duties
imposed upon it hereunder either directly or by or through its agents, and the Manager shall not be
responsible for any misconduct or negligence on the part of any such agent appointed by the Manager
in good faith.
(c) Any amendment, modification or repeal of this Section 10.2 or any provision hereof shall
be prospective only and shall not in any way affect the limitations on the liability of an
Indemnitee under this Section 10.2 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.
ARTICLE XI
BOOKS AND RECORDS
The Manager shall keep or cause to be kept at the principal office of the Company appropriate
books and records with respect to the Company’s business including, without limitation, all books
and records necessary to provide to the Members any information, lists, and copies of documents
required to be provided pursuant to the TLLCL. Any such records may be maintained in other than a
written form if such form is capable of conversion into a written form within a reasonable time.
ARTICLE XII
GENERAL PROVISIONS
Section 12.1 Addresses and Notices. Any notice, demand, request or report required or permitted
to be given or made to a Member under this Agreement shall be in writing and shall be deemed given
or made if received by it at the principal office of the Company referred to in Section 2.3.
Section 12.2 Titles and Captions. All article or section titles or captions in this Agreement are
for convenience only. They shall not be deemed part of this Agreement and in no way define, limit,
extend or describe the scope or intent of any provisions hereof. Except as
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specifically provided otherwise, references to “Articles” and “Sections” are to articles and sections of this
Agreement.
Section 12.3 Pronouns and Plurals. Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice-versa.
Section 12.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors, legal representatives and permitted assigns.
Section 12.5 Integration. This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
Section 12.6 Creditors. None of the provisions of this Agreements shall be for the benefit of, or shall be enforceable
by, any creditor of the Company.
Section 12.7
Waiver. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy
consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant,
duty, agreement or condition.
Section 12.8 Applicable Law. This Agreement shall be construed in accordance with and governed by
the laws of the State of Texas, without regard to the principles of conflicts of law.
Section 12.9 Invalidity of Provisions. If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
Section 12.10 Counterparts. This Agreement may be executed in counterparts, all of which together
shall constitute an agreement binding on all the parties hereto, notwithstanding that all such
parties are not signatories to the original or the same counterpart.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the Members as of the date first
above written.
| MEMBERS: | ||||||
| TEPPCO GP, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx
|
|||||
| Name: Xxxxxxx X. Xxxxxx | ||||||
| Title: Vice President and Chief Financial Officer | ||||||
| TEPPCO PARTNERS, L.P. | ||||||
| By: Texas Eastern
Products Pipeline Company, LLC, its sole general partner |
||||||
| By: | /s/ Xxxxxxx X. Xxxxxx
|
|||||
| Name: Xxxxxxx X. Xxxxxx | ||||||
| Title: Vice President and Chief Financial Officer | ||||||
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