FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF PENN VIRGINIA RESOURCE GP, LLC A Delaware Limited Liability Company Dated as of March 31, 2010
EXHIBIT
3.2
FIFTH
AMENDED AND RESTATED
OF
PENN
VIRGINIA RESOURCE GP, LLC
A
Delaware Limited Liability Company
Dated
as of
March
31, 2010
TABLE
OF CONTENTS
ARTICLE
I
DEFINITIONS
|
Section
1.01
|
Definitions.
|
2
|
|
Section
1.02
|
Construction.
|
9
|
ARTICLE
II
ORGANIZATION
|
Section
2.01
|
Formation.
|
10
|
|
Section
2.02
|
Name.
|
10
|
|
Section
2.03
|
Registered
Office; Registered Agent; Principal Office.
|
10
|
|
Section
2.04
|
Purposes.
|
10
|
|
Section
2.05
|
Foreign
Qualification.
|
11
|
|
Section
2.06
|
Term.
|
11
|
ARTICLE
III
OWNERSHIP
INTEREST
|
Section
3.01
|
Interest.
|
11
|
|
Section
3.02
|
Voting.
|
12
|
|
Section
3.03
|
Distributions.
|
13
|
|
Section
3.04
|
Establishment
of Special Member’s Percentage Interest.
|
13
|
|
Section
3.05
|
Allocations.
|
15
|
|
Section
3.06
|
Capital
Accounts.
|
15
|
|
Section
3.07
|
Restriction
on Transfer of Incentive Distribution Rights.
|
17
|
ARTICLE
IV
MANAGEMENT
|
Section
4.01
|
Management
by Board of Directors and Executive Officers.
|
18
|
|
Section
4.02
|
Number;
Qualification; Tenure; Peabody Designee.
|
18
|
|
Section
4.03
|
Regular
Meetings.
|
20
|
|
Section
4.04
|
Special
Meetings.
|
20
|
|
Section
4.05
|
Notice.
|
20
|
|
Section
4.06
|
Action
by Consent of Board or Committee of Board.
|
20
|
|
Section
4.07
|
Conference
Telephone Meetings.
|
21
|
|
Section
4.08
|
Quorum.
|
21
|
|
Section
4.09
|
Intentionally
Omitted.
|
21
|
|
Section
4.10
|
Committees.
|
21
|
|
Section
4.11
|
Removal
of Peabody Designee.
|
22
|
ARTICLE
V
OFFICERS
|
Section
5.01
|
Elected
Officers.
|
22
|
|
Section
5.02
|
Election
and Term of Office.
|
23
|
|
Section
5.03
|
Chairman
of the Board.
|
23
|
|
Section
5.04
|
Chief
Executive Officer.
|
23
|
|
Section
5.05
|
President;
Chief Operating Officer.
|
23
|
|
Section
5.06
|
Chief
Financial Officer.
|
24
|
|
Section
5.07
|
Vice
Presidents.
|
24
|
|
Section
5.08
|
Controller.
|
24
|
|
Section
5.09
|
Secretary.
|
24
|
|
Section
5.10
|
Removal.
|
25
|
|
Section
5.11
|
Vacancies.
|
25
|
ARTICLE
VI
INDEMNIFICATION
OF DIRECTORS,
OFFICERS,
EMPLOYEES AND AGENTS
|
Section
6.01
|
Indemnification.
|
25
|
|
Section
6.02
|
Liability
of Indemnitees.
|
27
|
ARTICLE
VII
BOOKS,
RECORDS, REPORTS, AND BANK ACCOUNTS
|
Section
7.01
|
Maintenance
of Books.
|
27
|
|
Section
7.02
|
Reports.
|
28
|
|
Section
7.03
|
Bank
Accounts.
|
28
|
ARTICLE
VIII
DISSOLUTION
AND TERMINATION
|
Section
8.01
|
Dissolution.
|
28
|
|
Section
8.02
|
Effect
of Dissolution.
|
28
|
|
Section
8.03
|
Application
of Proceeds.
|
29
|
ARTICLE
IX
GENERAL
PROVISIONS
|
Section
9.01
|
Offset.
|
29
|
|
Section
9.02
|
Notices.
|
29
|
|
Section
9.03
|
Entire
Agreement; Superseding Effect.
|
30
|
|
Section
9.04
|
Amendment
or Restatement.
|
30
|
|
Section
9.05
|
Binding
Effect.
|
31
|
|
Section
9.06
|
Governing
Law; Severability.
|
31
|
|
Section
9.07
|
Further
Assurances.
|
32
|
|
Section
9.08
|
Counterparts.
|
32
|
|
Section
9.09
|
Jurisdiction.
|
32
|
EXHIBITS
|
Exhibit
A
|
IDR
Percentage Interest
|
|
|
Exhibit
B
|
Acknowledgement
Agreement
|
|
|
Exhibit
C
|
Officers
|
ii
FIFTH
AMENDED AND RESTATED
OF
PENN
VIRGINIA RESOURCE GP, LLC
THIS
FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of Penn Virginia
Resource GP, LLC, a Delaware limited liability company (the “Company”), dated as of March
31, 2010 and effective immediately
prior to the closing of the secondary public offering of common units in PVG (as
defined below) on March 31, 2010 (the “Effective Date”), is among
Penn Virginia Resource Partners, L.P., a Delaware limited partnership (the “MLP”), as the Class A Member
(as defined below), Penn Virginia GP Holdings, L.P., a Delaware limited
partnership (“PVG”), as
the Class B Member (as defined below) and the Economic Member (as defined
below), and Peabody Energy Corporation, a Delaware corporation and the special
member of the Company (“Peabody” or the “Special
Member”).
RECITALS:
WHEREAS,
Penn Virginia Holding Corp, a Delaware corporation (“Holding”), caused the
Company, originally named “Penn Virginia GP, LLC”, to be formed as a limited
liability company under the Delaware Limited Liability Company Act (the “Act”) on July 9, 2001 (the
“Original Filing Date”)
and a Certificate of Formation (the “Delaware Certificate”) was
filed with the Secretary of State of the State of Delaware on such
date;
WHEREAS,
Holding entered into a Limited Liability Company Agreement relating to the
Company on July 9, 2001;
WHEREAS,
Holding entered into a First Amended and Restated Limited Liability Company
Agreement relating to the Company on July 17, 2001 to, among other things,
provide for a board of directors and officers of the Company;
WHEREAS,
Holding caused the name of the Company to be changed to “Penn Virginia Resource
GP, LLC” on September 6, 2001 by filing a Certificate of Amendment with the
Secretary of State of the State of Delaware on such date;
WHEREAS,
Holding contributed all of the Membership Interests (as defined below) in the
Company to Penn Virginia Resource Holdings Corp., a Delaware corporation (“Resource Holdings”), and
Resource Holdings in turn contributed all of the Membership Interests in the
Company to Penn Virginia Resource GP Corp., a Delaware corporation (“PVR GP Corp”), on September
14, 2001;
WHEREAS,
PVR GP Corp entered into a Second Amended and Restated Limited Liability Company
Agreement relating to the Company on September 14, 2001 to, among other things,
appoint two additional directors and to reflect the contribution made on
September 14, 2001;
WHEREAS,
the MLP and the Special Member are parties to a Purchase and Sale Agreement,
dated as of December 19, 2002 (the “Purchase Agreement”), which
provides for the purchase by the MLP and sale by the Special Member or its
affiliates of certain coal reserves and related assets in West Virginia and New
Mexico and which contemplates possible future sales of additional coal reserves
to the MLP in consideration for increases in the Special Member’s Percentage
Interest (as defined below);
WHEREAS,
PVR GP Corp entered into a Third Amended and Restated Limited Liability Company
Agreement relating to the Company on December 19, 2002 in connection with the
Purchase Agreement to, among other things, designate Peabody as the Special
Member;
WHEREAS,
PVG purchased all of PVR GP Corp’s Membership Interest and entered into the
Fourth Amended and Restated Limited Liability Company Agreement relating to the
Company on December 8, 2006 (the “Fourth A&R LLC
Agreement”) to, among other things, admit PVG to the Company as the sole
managing member of the Company;
WHEREAS,
PVG desires to amend and restate the Fourth A&R LLC Agreement to, among
other things, reflect the conversion of its Membership Interests into the Class
A Interests, the Class B Interests and the Economic Interest to PVG, and to
reflect the assignment of the Class A Interest from PVG to the MLP;
WHEREAS,
pursuant to Section 9.04 of the Fourth A&R LLC Agreement, the Managing
Member (as defined in the Fourth A&R LLC Agreement) may amend or restate the
Fourth A&R LLC Agreement without the consent of any other parties if such
amendment or restatement does not affect certain rights of other parties and the
amendments adopted by this Agreement do not affect such rights.
NOW
THEREFORE, in consideration of the premises and the mutual covenants and
promises contained in this Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree 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:
“Acceptance Notice” has the
meaning given such term in the Purchase Agreement.
“Act” has the meaning given
such term in the Recitals.
“Affiliate” means, with
respect to any Person, any other Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such
Person. For the purposes of this definition, “control” when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
2
“Agreed Value” of any property
contributed to the Company means the fair market value of such property or other
consideration at the time of contribution as determined by the Board using such
reasonable method of valuation as it may adopt.
“Agreement” has the meaning
given such term in the introductory paragraph above the Recitals.
“Applicable Law” means (a) any
United States Federal, state or local law, statute, rule, regulation, order,
writ, injunction, judgment, decree or permit of any Governmental Authority and
(b) any rule or listing requirement of any applicable national stock exchange or
Commission-recognized trading market on which securities issued by the MLP are
listed or quoted.
“Audit Committee” has the
meaning given such term in Section 4.10(b).
“Board” means the Board of
Directors of the Company elected or approved in accordance with Article
IV.
“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 the
capital account maintained for a Member pursuant to Section 3.06.
“Carrying Value” means (a)
with respect to property contributed to the Company, the Agreed Value of such
property reduced (but not below zero) by all depreciation, amortization and cost
recovery deductions charged to the Members’ Capital Accounts in respect of such
contributed property, and (b) with respect to any other Company property, the
adjusted basis of such property for federal income tax purposes, all as of the
time of determination. The Carrying Value of any property shall be
adjusted from time to time in accordance with Sections 3.06(d)(i) and
3.06(d)(ii) and to reflect changes, additions or other adjustments to the
Carrying Value for dispositions and acquisitions of Company properties, as
deemed appropriate by the Board.
“Cause” means a court of
competent jurisdiction has entered a final, non-appealable judgment finding a
Director liable for actual fraud, gross negligence or willful or wanton
misconduct in his or her capacity as a Director.
“Certified Public Accountants”
means a firm of independent public accountants selected from time to time by the
Board.
“Change of Control” shall
occur with respect to the Special Member for purposes of Section 3.04(h) if: (a)
any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of
the Exchange Act), other than one or more Affiliates of the Special Member
immediately prior to such transaction, becomes the “beneficial owner(s)” (as
defined in Rule 13d-3 of the Exchange Act) of equity securities of the Special
Member that entitle the holder thereof to control more than fifty percent (50%)
of the total voting power of the Special Member; (b) the equity securityholders
of the Special Member approve a merger, reorganization, consolidation, exchange
of equity interests, recapitalization, restructuring or other business
combination which results in beneficial ownership of more than fifty percent
(50%) of the total voting power of the Special Member being transferred to a
Person or Persons, other than one or more Affiliates of the Special Member
immediately prior to such transaction, unless the equity securityholders of the
Special Member immediately before such transaction beneficially own, directly or
indirectly, immediately following such transaction, at least a majority of the
combined voting power of the outstanding voting securities of the Person
resulting from such transaction, entitled to vote generally on the election of
such resulting or acquiring Person’s directors, in substantially the same
proportion as their ownership of the equity securities immediately before such
transaction; (c) there occurs a sale of all or substantially all of the assets
of the Special Member to a Person, other than one or more Affiliates of the
Special Member; or (d) Continuing Directors (as defined below) cease to comprise
a majority of the directors on the board of directors or other similar governing
body of the Special Member. For purposes of this definition, “Continuing Directors” shall
mean (x) all individuals constituting the board of directors or other similar
governing body of the Special Member at the time such Person became the Special
Member and (y) all individuals thereafter designated as nominees for election to
the board of directors or other similar governing body of such Person by a
majority of the Continuing Directors who were members of such board of directors
or other similar governing body at the time of such nomination or
election.
3
“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.
“Class A Director” has the
meaning given such term in Section 4.02(b).
“Class A Interest” means the
non-economic, management interest of the Class A Member in the Company,
including any and all rights and benefits to which the Class A Member is
entitled as provided in this Agreement; provided, however, that the Class A
Interest shall not entitle the holder thereof to any economic rights in the
Company, including rights to profits or any rights to receive any distributions
from the Company.
“Class A Member” means the
MLP, as the initial Class A Member, and includes its permitted successors and
assigns of the Class A Interest that are admitted as members of the Company
pursuant to the provisions of this Agreement, each in its capacity as a member
of the Company owning the Class A Interest.
“Class B Common Units” means
the Class B Common Units issued pursuant to the Purchase Agreement.
“Class B Director” has the
meaning given such term in Section 4.02(c).
“Class B Interest” means the
non-economic, management interest of the Class B Member in the Company,
including any and all rights and benefits to which the Class B Member is
entitled as provided in this Agreement; provided, however, that the Class B
Interest shall not entitle the holder thereof to any economic rights in the
Company, including rights to profits or any rights to receive any distributions
from the Company.
4
“Class B Member” means PVG,
as the initial Class B Member, and includes its permitted successors and assigns
of the Class B Interest that are admitted as members of the Company pursuant to
the provisions of this Agreement, each in its capacity as a member of the
Company owning the Class B Interest.
“Coal Assets” means Qualifying
Assets and assets not constituting Qualifying Assets, in each case comprised of
coal properties, interests or other related assets.
“Code” means the Internal
Revenue Code of 1986, as amended.
“Commission” means the
Securities and Exchange Commission.
“Common Unit” has the meaning
ascribed thereto in the Partnership Agreement.
“Company” has the meaning
given such term in the introductory paragraph above the Recitals.
“Compensation Committee” has
the meaning given such term in Section 4.10(d).
“Conflicts Committee” has the
meaning given such term in Section 4.10(c).
“Contribution Agreement” means
the Contribution, Conveyance and Assumption Agreement, dated September 14, 2001,
among Penn Virginia Operating Co., LLC, the MLP, the Company, PVG and certain
other parties named therein, together with the additional conveyance documents
and instruments contemplated or referenced thereunder.
“Credit Agreement” means the
Amended and Restated Credit Agreement, dated as of August 5, 2008, among PVR
Xxxxx LLC, a syndicate of financial institutions led by PNC Bank, National
Association, and certain other parties, as amended by the First Amendment
thereto, dated as of March 27, 2009.
“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.
“Director” or “Directors”
means a director or the directors, respectively, serving on the Board in
accordance with Article IV.
“Economic Interest” means the
non-voting, limited liability company interest in the Company of the Economic
Member, including any and all rights (including the exclusive right to the
profits and losses of the Company, except to the extent such rights are provided
to the Special Member) and benefits to which the Economic Member is entitled as
provided in this Agreement; provided, however, that the Economic Interest shall
not entitle the holder thereof to any voting rights whatsoever, whether under
the Act, at law or otherwise with respect to any matter including the Company,
except as specifically provided in this Agreement or required by
law.
5
“Economic Member” means PVG,
as the initial Economic Member, and includes its permitted successors and
assigns of the Economic Interest that are admitted as members of the Company
pursuant to the provisions of this Agreement, each in its capacity as a member
of the Company owning the Economic Interest.
“Effective Date” has the
meaning given such term in the introductory paragraph above the
Recitals.
“Eligible Investment Bank”
shall mean any of Xxxxxx Brothers Inc., UBS Warburg, LLC, Xxxxxx Xxxxxxx &
Co. Incorporated, Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx, Incorporated,
Xxxxxxx Xxxxx Barney Inc., Xxxxxxx Xxxxx & Co., X.X. Xxxxxx Securities,
Inc., X.X. Xxxxxxx & Sons, Inc. and RBC Capital Markets and their respective
successors and assigns.
“Exchange Act” means
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Fair Market Value” means the
price agreed upon between the Company and the Special Member prior to the
expiration of the ten-Day period after delivery of the Redemption Notice; provided, however, that if the Company
and the Special Member are unable to agree within such ten-Day period or if the
Company or Special Member desires not to negotiate with the other, then the
Company and the Special Member each shall immediately select an Eligible
Investment Bank of its choice no later than ten (10) days after such ten-Day
period. The two Eligible Investment Banks appointed by the Company
and the Special Member shall appoint a third Eligible Investment Bank not later
than five (5) days after such two Eligible Investment Banks have been so
appointed. Within twenty (20) days from the appointment of the third
Eligible Investment Bank, each Eligible Investment Bank appointed as aforesaid
shall provide the Company with a written valuation, with appropriate
documentation, setting forth its valuation of the Fair Market Value in U.S.
dollars. The “Fair Market Value” shall be the average of the two
highest valuations. The determination of the “Fair Market Value”
shall be binding on the Company and the Special Member, and shall not be
appealable. “Fair Market Value” shall mean the price that a willing
buyer would pay to a willing seller after due inquiry and taking into
consideration the Special Member’s entitlement to a portion of income
attributable to the Incentive Distribution Rights as determined as soon as
practicable but in no event longer than 30 days by the Investment Bank after
review of the materials it deems appropriate. The Company and the
Special Member shall be responsible for the costs and expenses of its Eligible
Investment Bank appointee, and the cost of the third Eligible Investment Bank
shall be shared equally by the Company and the Special Member.
“Fourth A&R LLC Agreement”
has the meaning given such term in the recitals.
“GAAP” means generally
accepted accounting principles.
6
“General Partner Interest” has
the meaning given such term in the Partnership Agreement.
“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 any Member.
“IDR Proceeds” means, for any
period, any cash and other property distributed to the Company from the MLP in
respect of the Company’s ownership of the Incentive Distribution
Rights.
“IDR Percentage Interest”
means, as of any date of determination, (i) in the case of the Special Member,
the Special Member’s Percentage Interest and (ii) in the case of the Economic
Member, 100 reduced by the Special Member’s Percentage Interest.
“Incentive Distribution
Rights” has the meaning given such term in the Partnership
Agreement.
“Incentive Plan” means any
plan or arrangement pursuant to which the Company may compensate its employees,
consultants, directors and/or service providers.
“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, fiduciary 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” has the
meaning given such term in Section 4.10(b).
“Leases” has the meaning given
such term in the Purchase Agreement.
“Limited Partner” has the
meaning given such term in the Partnership Agreement.
“Managing Member” means Penn
Virginia GP Holdings, L.P., a Delaware limited partnership, and its successors
and assigns.
“Member” or “Members” means the Class A
Member, the Class B Member, the Economic Member and the Special
Member.
“Membership Interest” means,
with respect to a Member, such Member’s rights, powers and interests in the
Company in such Member’s capacity as a Member, all as provided in the Delaware
Certificate, this Agreement and the Act, including, without limitation, such
Member’s interest in the capital, income, gain, deductions, losses and credits
of the Company, if any.
“MLP” has the meaning given
such term in the Recitals.
7
“MLP Proceeds” means, for any
period, any cash and other property distributed to the Company from the MLP in
respect of the Company’s ownership of Partnership Interests (as defined in the
Partnership Agreement); provided, however, that MLP Proceeds
shall not include IDR Proceeds.
“Net Agreed Value” means, (a)
in the case of any contributed property, the Agreed Value of such property
reduced by any liabilities either assumed by the Company upon such contribution
or to which such property is subject when contributed, and (b) in the case of
any property distributed to the Economic Member or the Special Member by the
Company, the Company’s Carrying Value of such property (as adjusted pursuant to
Section 3.06(d)(i)) at the time such property is distributed, reduced by any
indebtedness either assumed by such Economic Member or Special Member upon such
distribution or to which such property is subject at the time of distribution,
in either case, as determined under Section 752 of the Code.
“Notices” has the meaning
given such term in Section 9.02.
“NYSE” has the meaning given
such term in Section 4.10(b).
“Original Filing Date” has the
meaning given such term in the Recitals.
“Outstanding” has the meaning
given such term in the Partnership Agreement.
“Partnership Agreement” means
the Third Amended and Restated Agreement of Limited Partnership of the MLP,
dated as of August 5, 2008, as amended, modified, supplemented or restated from
time to time, or any successor agreement.
“Peabody” means Peabody Energy
Corporation and its successors.
“Peabody Designee” means an
individual nominated by Peabody to serve as a Director in accordance with
Section 4.02.
“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.
“Proper Officer” or “Proper Officers” means those
officers authorized by the Board to act on behalf of the Company.
“Purchase Agreement” has the
meaning given such term in the Recitals.
“PVG” has the meaning given
such term in the introductory paragraph above the Recitals.
“Qualifying Assets” means
assets that generate “qualifying income” within the meaning of Section 7704(d)
of the Code.
“Redemption Notice” has the
meaning given such term in Section 3.04(h).
“Redemption Price” has the
meaning given such term in Section 3.04(h).
8
“Special Member” has the
meaning given such term in the introductory paragraph above the
Recitals.
“Special Member Account” means
a bank account of the Company held solely on behalf of the Special
Member.
“Special Member’s Percentage Increase
Event” means the consummation, during the term of the Leases, of any sale
or other transfer by the Special Member or its Affiliates to the MLP or its
subsidiaries of Coal Assets pursuant to definitive agreements entered into by
the Special Member or its Affiliates and the MLP or its subsidiaries in
connection therewith.
“Special Member’s Percentage
Interest” is initially zero and shall be increased, if at all, as
provided by Section 3.04.
“Subordinated Units” has the
meaning given such term in the Partnership Agreement.
“Transfer” has the meaning
given such term in Section 3.04(d).
“Unaffiliated Limited
Partners” has the meaning given such term in Section
4.02(b)(i).
“Unit” has the meaning given
such term in the Partnership Agreement.
“Unrealized Gain” attributable
to any item of Company property means, as of any date of determination, the
excess, if any, of (a) the fair market value of such property as of such date
(as determined under Section 3.06(d)) over (b) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant to Section
3.06 as of such date).
“Unrealized Loss” attributable
to any item of Company property means, as of any date of determination, the
excess, if any, of (a) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 3.06(d) as of such date)
over (b) the fair market value of such property as of such date (as determined
under Section 3.06).
(b) Other
terms defined herein have the meanings so given them.
|
Section
1.02
|
Construction.
|
Whenever
the context requires, (a) the gender of all words used in this Agreement
includes the masculine, feminine and neuter, (b) the singular forms of nouns,
pronouns and verbs shall include the plural and vice versa, (c) all references
to Articles and Sections refer to articles and 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.
9
ARTICLE
II
ORGANIZATION
|
Section
2.01
|
Formation.
|
Holding
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. On the Effective Date, the
Members hereby continue the Company without dissolution.
|
Section
2.02
|
Name.
|
The name
of the Company is “Penn Virginia Resource GP, LLC” and all Company business must
be conducted in that name or such other names that comply with Applicable Law
and 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 Xxxx-Xxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000. The Board may change the Company’s
registered agent or the location of the Company’s registered office or principal
place of business as the Board may from time to time determine.
|
Section
2.04
|
Purposes.
|
(a) The
Company may carry on any lawful business or activity permitted by the
Act. The Company shall be authorized to engage in any and all other
activities, whether or not related to the foregoing, which in the judgment of
the Board may be beneficial or desirable.
(b) Subject
to the limitations expressly set forth in this Agreement, the Company shall have
the power and authority to do any and all acts and things deemed necessary,
appropriate, desirable or convenient by the Board to further the Company’s
purposes and carry on its business, including, without limitation, the
following:
(i) acting
as the general partner of the MLP;
(ii) entering
into any kind of activity and performing contracts of any kind necessary,
appropriate, desirable or convenient for the accomplishment of its business
(including the business of the MLP);
(iii) acquiring
any property, real or personal, in fee or under lease or license, or any rights
therein or appurtenant thereto, necessary, appropriate, desirable or convenient
for the accomplishment of its business;
10
(iv) subject
to the terms of the Credit Agreement, 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,
appropriate, desirable or convenient 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, guarantees,
notes, security agreements or other documents or instruments, if any, as
required by any lender providing funds to the Company, the MLP or Penn Virginia
Operating Co., LLC 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, each Member 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 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 commenced on the Original Filing Date and
shall continue for a perpetual duration unless and until such time as a
certificate of cancellation is filed with the Secretary of State of Delaware
following dissolution of the Company in accordance with Section
8.01.
ARTICLE
III
OWNERSHIP
INTEREST
|
Section
3.01
|
Interest.
|
(a) On
July 9, 2001, Holding formed the Company as a limited liability company pursuant
to the provisions of the Act by virtue of the filing of the Delaware Certificate
with the Secretary of State of the State of Delaware. Holding’s
initial capital investment in the Company was $1,000. On September
14, 2001, pursuant to the Contribution Agreement, Holding contributed all of the
Membership Interests of the Company to Resource Holdings which, in turn,
contributed all of the Membership Interests of the Company to PVR GP Corp.,
which Membership Interests were subsequently purchased by
PVG. Following such transfer of the Membership Interests to PVG, PVG
became the owner of the entire equity interest of the Company and, at such time,
the Membership Interest held by PVG was the only outstanding Membership Interest
of the Company. Peabody was admitted to the Company as the Special
Member prior to the date hereof. As of the Effective Date (i) the
Membership Interest previously held by PVG is automatically converted into the
Class A Interest, the Class B Interest and the Economic Interest, and (ii) the
Membership Interests in the Company are comprised of the Class A Interest, the
Class B Interest, the Economic Interest and the Special Member's Percentage
Interest (which, on the Effective Date, is zero). Simultaneously with
the conversion of PVG's Membership Interest into the Class A Interest, the Class
B Interest and the Economic Interest, PVG hereby assigns the Class A Interest to
the MLP and the MLP is admitted as the Class A Member upon its execution of a
counterpart signature page agreeing to be bound by this Agreement.
11
(b) At
the Effective Time, the members of the Company are (i) PVG, holding the Class B
Interest and the Economic Interest, (ii) the MLP, holding the Class A Interest,
and (iii) the Special Member.
(c) The
MLP shall not Transfer the Class A Interest to any Person except pursuant to a
merger, consolidation or sale of all or substantially all of the assets of the
MLP or other similar transaction of the MLP for which the approval of holders of
Units is required pursuant to the Partnership Agreement or Delaware law;
provided, however, the foregoing restriction shall not apply to the delegation
of election rights and control of voting power with respect to the Class A
Interest set forth in Section 4.02(b)(i). Any transferee of the Class
A Interest pursuant to a Transfer effected in accordance with the immediately
preceding sentence shall be admitted as a substitute Class A Member upon its
execution of a written instrument by which it agrees to be bound by this
Agreement.
|
Section
3.02
|
Voting.
|
(a) Except
as provided in Section 4.02, to the fullest extent permitted by law, the Class A
Member and the Class B Member shall not be entitled to consent or vote with
respect to any matter relating to the Company, including, without limitation,
matters relating to the amendment of this Agreement, any merger, consolidation
or conversion of the Company, sale of all or substantially all of the assets of
the Company and the termination, dissolution and liquidation of the
Company. If, notwithstanding the foregoing, the Class A Member or the
Class B Member is required by law to vote or consent with respect to any matter
relating to the Company (other than with respect to the matters set forth in
Section 4.02), the Class A Member and the Class B Member hereby irrevocably
authorize the Class A Directors and the Class B Directors, as applicable, to
vote with respect to such matter and the Class A Member and the Class B Member
each irrevocably direct that its vote be cast in the same manner as a majority
of the Class A Directors or a majority of the Class B Directors, as applicable,
vote with respect to the matter.
(b) The
Economic Member shall have no voting rights with respect to any matter relating
to the Company, except as required by law. The Special Member shall
have no voting rights with respect to any matter relating to the Company, except
as required by law or pursuant to Section 9.04.
|
Section
3.03
|
Distributions.
|
(a) Distributions
by the Company of any MLP Proceeds shall be made to the Economic Member promptly
upon receipt by the Company, unless the Board, in good faith, determines (i)
that making such distribution would violate applicable law or any agreement to
which the Company is a party, or (ii) that it is necessary or advisable for the
Company to reserve any or all of the MLP Proceeds to pay expenses.
(b) Distributions
by the Company of any IDR Proceeds shall be made to the Economic Member and the
Special Member, pro rata, based on their respective IDR Percentage Interests
existing at the time of the Company’s receipt of such IDR
Proceeds. The Company shall cause the MLP to distribute the Special
Member’s pro rata share of IDR Proceeds directly to the Special Member
Account.
12
(c) Any
distribution that is made by the Company shall be deemed to be a distribution of
IDR Proceeds that is divided among the Economic Member and the Special Member as
provided in Section 3.03(b) until the distributions that have been made and
divided pursuant to such Section 3.03(b) are equal in the aggregate to the
amount of IDR Proceeds that the Company has theretofore received.
|
Section
3.04
|
Establishment of
Special Member’s Percentage
Interest.
|
(a) The
Managing Member previously designated and created a Membership Interest
designated as the “Special Member’s Percentage Interest” and held by the Special
Member.
(b) (i)
Upon each Special Member’s Percentage Increase Event, the Special Member’s
Percentage Interest shall increase by one percent for each $10 million in Coal
Assets sold or otherwise transferred to the MLP or its subsidiaries in
connection with such Special Member’s Percentage Increase Event, it being
understood and agreed that such increase in the Special Member’s Percentage
Interest shall be the sole and exclusive consideration for each $10 million of
such Coal Assets except to the extent set forth in the definitive agreements
providing for the sale of such Coal Assets. The value of the Coal
Assets shall be determined by agreement of the Special Member and the Board and
set forth in the definitive agreements providing for the sale of such Coal
Assets; provided,
however, that nothing herein shall give rise to any obligation whatsoever
of any party hereto or any of their Affiliates to negotiate or enter into such
definitive agreements or consummate such sale or disposition. The
Special Member’s Percentage Interest will be evidenced by certificates issued by
the Company. The Company shall increase Special Member’s Percentage
Interest by a fraction of one percent to the extent that the agreed value of the
Coal Assets exceeds a multiple of $10 million (for the avoidance of doubt, zero
shall be deemed to be a multiple of $10 million for purposes of calculating such
fraction), and the fraction shall be the excess over such multiple of $10
million (or zero) divided by $10 million. Nothing herein shall
prohibit the Company from increasing the Special Member’s Percentage Interest in
consideration for a de minimis amount of assets that are not Qualifying Assets
purchased in connection with Coal Assets.
13
(ii) It
is anticipated that, during the term of the Leases, the Special Member may
identify to the MLP opportunities to purchase Coal Assets that are owned by a
third party that the MLP is not otherwise considering, and that the Company, in
its capacity as the general partner of the MLP, will consider the acquisition of
such Coal Assets. To the extent the MLP acquires such Coal
Assets, the Company will, to the extent, if any, that the Company and the
Special Member so agree, increase the Special Member’s Percentage Interest in
consideration of the Special Member identifying such opportunities to
the MLP. The determination of whether to acquire such Coal Assets will be made
by the Company in the sole discretion of the Board.
(c) Notwithstanding
anything to the contrary, in no event shall the Special Member’s Percentage
Interest exceed 40 percent.
(d) The
Special Member shall not sell, assign, transfer, convey, pledge, hypothecate,
encumber or otherwise dispose of (collectively, a “Transfer”) its Special
Member’s Percentage Interest without the prior written consent of the Board;
provided, however, that
the Special Member shall be entitled, upon prior written notice to the Board, to
Transfer some or all of its Special Member’s Percentage Interest to (2) an
Affiliate of the Special Member, (3) to a financial institution in connection
with the pledge of such Special Member’s Percentage Interest or (4) any party in
the event that the Company or its Affiliates do not exercise their redemption
rights under Section 3.04(h) within 30 days of the happening of an event
specified in (i) or (ii) under Section 3.04(h) that gives rise to such
redemption right; provided that such transferee agrees to be bound by all of the
terms and conditions of this Agreement.
(e) Except
as provided in Section 9.04, the Special Member’s Percentage Interest shall not
entitle the Special Member or any other Person to vote on any matters with
respect to the Company or otherwise.
(f) The
Board shall, from time to time, update Exhibit A hereto to
reflect any increase in the Special Member’s Percentage Interest upon a Special
Member’s Percentage Increase Event and the applicable IDR Percentage Interest of
each Economic Member upon each such increase. The Board shall provide
any such updated versions of Exhibit A to the Special Member promptly upon such
updates.
(g) Upon
each Special Member’s Percentage Increase Event, as a condition to each increase
in the Special Member’s Percentage Interest in connection therewith, the Special
Member shall execute and deliver to the Company and the Board an Acknowledgement
Agreement in the form of Exhibit B
hereto.
(h) The
Special Member’s Percentage Interest may be redeemed by the Company or its
Affiliates, in whole but not in part, at the option of the Company, at a
redemption price equal to the Fair Market Value of the Special Member’s
Percentage Interest (the “Redemption Price”) payable in
immediately available funds to an account designated by the Special Member, if
either: (5) the Special Member or any of its Affiliates delivers an
Acceptance Notice to the MLP or otherwise exercises its rights pursuant to
Section 9.1 of the Purchase Agreement; or (6) there is a Change of Control with
respect to the Special Member. The Company shall exercise its
redemption option by delivering to the Special Member a written notice (the
“Redemption Notice”),
in the case of (i) within ten Days after the MLP’s receipt of the Acceptance
Notice, and, in the case of (ii) within twenty days of the Change of Control of
the Special Member, in each case specifying the Company’s election to redeem the
Special Member’s Percentage Interest. If the Company exercises its
redemption option hereunder, the closing of the transaction shall take place, in
the case of (i) contemporaneously with, and shall be conditioned upon, the
closing of the transaction contemplated by Section 9.1 of the Purchase Agreement
unless extended for the determination of Fair Market Value and in such case,
five days after the determination, and, in the case of (ii) within five (5) days
after the determination of Fair Market Value unless extended because of the need
to obtain necessary consents or approvals which the appropriate party is using
commercially reasonable efforts to obtain. If the Company exercises
its redemption option hereunder, the Company and the Special Member shall
cooperate in good faith and enter into appropriate agreements, make (or cause to
be made) appropriate deliveries and obtain (or cause to be obtained) any
necessary consents or approvals, in each case to effect the redemption of the
Special Member’s Percentage Interest.
14
(i) Notwithstanding
anything to the contrary, the provisions of this Article III with respect to the
Special Member’s Percentage Interest shall terminate and the Special Member
shall cease to have any rights under Article III, in each case automatically and
without any action by any of the parties hereto upon the earlier to occur
of: (7) the actual purchase of the Special Member’s Percentage
Interest by the Company or its Affiliates upon a redemption pursuant to this
Section 3.04 and (8) if at any time subsequent to the term of the Leases, the
Special Member’s Percentage Interest is zero or not outstanding. Upon
such termination, the Board shall be entitled to amend or restate this Agreement
to make such changes as it deems appropriate to reflect such event.
(j) Nothing
in this Agreement requires the Special Member to make a capital contribution to
the Company.
|
Section
3.05
|
Allocations.
|
(a) Company
gross income or gain for the taxable period, if any, shall be allocated 100% to
the Special Member until the aggregate amount of such items allocated to the
Special Member pursuant to this Section 3.05(a) for the current taxable year and
all previous taxable years is equal to the cumulative amount of all
distributions of IDR Proceeds made to the Special Member from the effective date
of the Fourth A&R LLC Agreement to a date 45 days after the end of the
current taxable year.
(b) All
other items of income, gain, loss and deduction shall be allocated 100% to the
Economic Member.
|
Section
3.06
|
Capital
Accounts.
|
(a) The
Company shall maintain for each Member a separate Capital Account in accordance
with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of cash and the Net Agreed Value of
other property contributed by such Member to the Company pursuant to this
Agreement and (ii) all items of Company income and gain (including, without
limitation, income and gain exempt from tax) allocated to such Member pursuant
to Section 3.05, and decreased by (x) the amount of cash or Net Agreed Value of
all actual and deemed distributions of cash or property made to such Member
pursuant to this Agreement and (y) all items of Company deduction and loss
allocated to such Member pursuant to Section 3.05.
15
(b) For
purposes of computing the amount of any item of income, gain, loss or deduction
which is to be allocated and reflected in the Members’ Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes (including, without limitation, any method of depreciation, cost
recovery or amortization used for that purpose), provided, that:
(i) Solely
for purposes of this Section 3.06, the Company shall be treated as owning
directly its proportionate share (as determined by the Board based upon the
provisions of the Partnership Agreement) of all property owned by the
MLP.
(ii) Except
as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the
computation of all items of income, gain, loss and deduction shall be made
without regard to any election under Section 754 of the Code which may be made
by the Company and, as to those items described in Section 705(a)(1)(B) or
705(a)(2)(B) of the Code, without regard to the fact that such items are not
includable in gross income or are neither currently deductible nor capitalized
for federal income tax purposes. To the extent an adjustment to the adjusted tax
basis of any Company asset pursuant to Section 734(b) or 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 in the Capital Accounts shall be treated as an item of gain or
loss.
(iii) Any
income, gain or loss attributable to the taxable disposition of any Company
property shall be determined as if the adjusted basis of such property as of
such date of disposition were equal in amount to the Company’s Carrying Value
with respect to such property as of such date.
(iv) In
accordance with the requirements of Section 704(b) of the Code, any deductions
for depreciation, cost recovery or amortization attributable to any Contributed
Property shall be determined as if the adjusted basis of such property on the
date it was acquired by the Partnership were equal to the Agreed Value of such
property. Upon an adjustment pursuant to Section 3.06(d) to the Carrying Value
of any Company property subject to depreciation, cost recovery or amortization,
any further deductions for such depreciation, cost recovery or amortization
attributable to such property shall be determined (A) as if the adjusted basis
of such property were equal to the Carrying Value of such property immediately
following such adjustment and (B) using a rate of depreciation, cost recovery or
amortization derived from the same method and useful life (or, if applicable,
the remaining useful life) as is applied for federal income tax purposes;
provided, however, that, if the asset has a zero adjusted basis for federal
income tax purposes, depreciation, cost recovery or amortization deductions
shall be determined using any reasonable method that the Board may
adopt.
16
(c) A
transferee of a Membership Interest shall succeed to a pro rata portion of the
Capital Account of the transferor relating to the Membership Interest so
transferred.
(d) (i) In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance
of additional Membership Interests for cash or Contributed Property, the Capital
Account of all Members and the Carrying Value of each Partnership property
immediately prior to such issuance shall be adjusted upward or downward to
reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership
property, as if such Unrealized Gain or Unrealized Loss had been recognized on
an actual sale of each such property immediately prior to such issuance and had
been allocated to the Members at such time pursuant to Section 3.05 in the same
manner as any item of gain or loss actually recognized during such period would
have been allocated. In determining such Unrealized Gain or Unrealized Loss, the
aggregate cash amount and fair market value of all Company assets (including,
without limitation, cash or cash equivalents) immediately prior to the issuance
of additional Membership Interests shall be determined by the Board using such
reasonable method of valuation as it may adopt; provided, however, that the
Board, in arriving at such valuation, must take fully into account the fair
market value of the Membership Interests of all Members at such time. The Board
shall allocate such aggregate value among the assets of the Company (in such
manner as it determines in its discretion to be reasonable) to arrive at a fair
market value for individual properties.
(ii) In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately
prior to any actual or deemed distribution to a Member of any Company property
(other than a distribution of cash that is not in redemption or retirement of a
Membership Interest), the Capital Accounts of all Members and the Carrying Value
of all Company property shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Company property, as if
such Unrealized Gain or Unrealized Loss had been recognized in a sale of such
property immediately prior to such distribution for an amount equal to its fair
market value, and had been allocated to the Members, at such time, pursuant to
Section 3.05 in the same manner as any item of gain or loss actually recognized
during such period would have been allocated. In determining such Unrealized
Gain or Unrealized Loss the aggregate cash amount and fair market value of all
Company assets (including, without limitation, cash or cash equivalents)
immediately prior to a distribution shall be determined and allocated in the
same manner as that provided in Section 3.06(d)(i).
|
Section
3.07
|
Restriction on
Transfer of Incentive Distribution
Rights
|
The
Company shall not Transfer the Incentive Distribution Rights to any party unless
the Company agrees to proportionately adjust the amount of Special Member’s
Percentage Interest to be issued under Section 3.04(b) upon a Special Member’s
Percentage Increase Event.
17
ARTICLE
IV
MANAGEMENT
|
Section
4.01
|
Management by Board of
Directors and Executive
Officers.
|
(a) The
business and affairs of the Company shall be fully vested in, and managed by,
the Board, subject to the executive officers elected pursuant to Article V
hereof. The authority of the Board pursuant to the preceding sentence
shall include, without limitation, the authority to approve matters relating to
any merger, consolidation or conversion of the Company, sale of all or
substantially all of the assets of the Company and the termination, dissolution
and liquidation of the Company. 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
in Article V hereof and as are specified by the Board. Accordingly,
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. The authority to increase the Special Member’s Percentage
Interest is vested solely in the Board.
(b) In
addition to the powers and authorities expressly conferred on the Board by this
Agreement, the Board may exercise all such powers of the Company and do all such
acts and things as are not restricted by the Act or Applicable Law.
(c) Notwithstanding
any other provision of this Agreement, the Company, and the Board on behalf of
the Company, shall not amend the Partnership Agreement without the consent of
(i) a majority of the Class A Directors and (ii) a majority of the Class B
Directors.
|
Section
4.02
|
Number; Qualification;
Tenure; Peabody
Designee.
|
(a) The
number of Directors constituting the Board shall be six; provided, however, that
if at any time, pursuant to Section 4.02(d), the Board shall contain the Peabody
Designee, then the number of Directors constituting the Board shall be
seven. Subject to Sections 4.02(b), (c) and (d), any vacancy on the
Board may only be filled by a person nominated for election by a majority of the
Directors then in office.
(b) (i) The
Class A Member shall be entitled to elect three Directors to the Board, provided
that such Directors are Independent Directors (the “Class A
Directors”). The Board hereby delegates its authority to nominate
Class A Directors (whether to fill a vacancy or otherwise) to the Persons given
nomination rights in Section 13.4(b) of the Partnership Agreement. The Members
and the Company hereby adopt as part of the terms of this Agreement, and agree
to be bound by, Section 13.4(b) of the Partnership Agreement as if such section
were set forth in full herein and hereby delegate to the Limited Partners
holding a majority of the Outstanding Units (other than the Company and those
Limited Partners holding an interest in the Company or any of their respective
Affiliates) (the "Unaffiliated
Limited Partners") the right to elect the Class A Directors at an annual
meeting of the Limited Partners to be held by the Company in accordance with
Section 13.4(b) of the Partnership Agreement. As a result, the control of all
voting power of the Class A Interest is vested in the Unaffiliated Limited
Partners. Such delegation shall not cause any Member to cease to be a
member of the Company and shall not constitute a delegation of any other rights,
powers, privileges or duties of the Members with respect to the
Company. A Director need not be a Member or a Limited
Partner.
18
(ii) The
Limited Partners shall not, as a result of exercising the rights granted under
Section 13.4(b) of the Partnership Agreement, be deemed to be Members or holders
of Membership Interests as such terms are defined in this Agreement or to be
“members,” “managers” or holders of “limited liability company interests” as
such terms are defined in the Act. The exercise by a Limited Partner of the
right to elect Class A Directors and any other rights afforded to such Limited
Partner hereunder and under Section 13.4(b) of the Partnership Agreement shall
be in such Limited Partner’s capacity as a limited partner of the Partnership,
and no Limited Partner shall be liable for any debts, obligations or liabilities
of the Company by reason of the foregoing.
(iii) The
Members, the Directors and the Company shall use their commercially reasonable
best efforts to take such action as shall be necessary or appropriate to give
effect to and implement the provisions of Section 13.4(b) of the Partnership
Agreement as adopted in this Section 4.02(b).
(iv) The
Board, by adoption of a resolution that is approved by the Board (including a
majority of the Class A Directors) and without the consent of any other Person,
shall have the authority to provide for staggered elections of the Class A
Directors in the manner set forth in Section 13.4(b)(v) of the Partnership
Agreement.
(v) Notwithstanding
any duty otherwise existing at law or in equity, to the fullest extent permitted
by law, each Class A Director shall owe no fiduciary duties to the Class B
Member or the Economic Member.
(c) The
Class B Member shall be entitled to elect three Directors to the Board (the
“Class B Directors”). The Board hereby delegates its authority to
nominate Class B Directors (whether to fill a vacancy or otherwise) to the Class
B Directors (or, if there are no Class B Directors, to the Class B
Member). Each Class B Director shall hold office until such Class B
Director’s successor shall have been duly elected and qualified, or until such
Class B Director’s earlier death, resignation or removal. The Class B
Member shall have the right to remove any Class B Director (with or without
cause). If at any time there are less than three Class B Directors on
the Board, any such vacancy may be filled only by a person nominated in
accordance with the second sentence of this clause (c) and thereafter elected by
the Class B Member. Immediately prior to the effectiveness of this
Agreement, Xxxxxx X. Xxxxxx, XX, Xxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxx, Xx.
were Directors and upon the effectiveness of this Agreement, Xxxxxx X. Xxxxxx,
XX, Xxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxx, Xx. shall each serve as a Class B
Director.
(d) For
so long as Peabody and its Affiliates together own any combination of Class B
Common Units, on an as-converted basis, and Common Units representing in the
aggregate at least 5% of the number of outstanding Common Units, then Peabody
shall be entitled to have one Peabody Designee serve on the Board; provided, however, that for
so long as such condition above is satisfied and the number of Directors
constituting the Board is equal to or greater than eleven, then Peabody shall be
entitled to have appointed to the Board an aggregate number of Peabody Designees
equal to the product obtained by multiplying (X) one-sixth by (Y) the total
number of Directors constituting the Board (such product to be rounded up or
down, as appropriate, to the nearest whole number and rounded up for
0.50). Any vacancy with respect to a Peabody Designee will be filled
solely by Peabody.
19
(e) For
so long as Peabody is entitled to a designee on the Board pursuant to this
Agreement, Peabody, in its sole discretion, upon written notice to the Board
shall be entitled to convert such right into the right to one observer’s seat on
the Board, provided,
that the person serving in such capacity enters into a confidentiality agreement
with the Company. Once converted to an observer’s right, Peabody
shall in no event be entitled to a designee to serve on the Board.
|
Section
4.03
|
Regular
Meetings.
|
The Board
shall meet at least quarterly. The Board may, by resolution, provide
the time and place for the holding of additional regular meetings without other
notice than such resolution.
|
Section
4.04
|
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
4.05
|
Notice.
|
Written
notice of all regular meetings of the Board must be given to all Directors at
least 10 Days prior to the regular meeting of the Board and two Business Days
prior to any special meeting of the Board. All notices and other
communications to be given to Directors shall be sufficiently given for all
purposes hereunder if in writing and delivered by hand, courier or overnight
delivery service or three days after being mailed by certified or registered
mail, return receipt requested, with appropriate postage prepaid, or when
received in the form of a telegram or facsimile, and shall be directed to the
address or facsimile number as such Director shall designate by notice to the
Company. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Board need be specified in the notice
of such meeting, except for amendments to this Agreement, as provided
herein. A meeting may be held at any time without notice if all the
Directors are present or if those not present waive notice of the meeting either
before or after such meeting.
|
Section
4.06
|
Action by Consent of
Board or Committee of
Board.
|
Except as
otherwise required by Applicable Law or as otherwise specified in this
Agreement, all decisions of the Board, or any committee 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 4.08 or 4.10, as applicable, is
present. To the extent permitted by Applicable Law, the Directors may
act without a meeting so long as a majority of the Directors on the Board or
committee of the Board (or such other number of Directors or class of Directors
as is required for such action under this Agreement) shall have executed a
written consent with respect to any Director or committee of the Board action,
as applicable, taken in lieu of a meeting. With respect to any matter
requiring approval of the Board (but not any matter requiring approval of only a
specific class of Directors), in the event of a tie vote, the Board hereby
delegates to Penn Virginia Corporation the authority to break the tie vote
(which authority Penn Virginia Corporation may, in its sole discretion, delegate
to any direct or indirect wholly-owned subsidiary of Penn Virginia Corporation
other than the general partner of PVG); provided, however, Penn Virginia
Corporation (and any delegate thereof) shall not have such tie breaking
authority at any time (i) there is a Peabody Designee serving on the Board, or
(ii) after either a majority of the Class A Directors or a majority of the Class
B Directors have provided ten (10) days prior written notice of their election
to terminate such tie breaking authority.
20
|
Section
4.07
|
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
4.08
|
Quorum.
|
A
majority of Directors or class of Directors, as applicable, present in person or
participating in accordance with Section 4.07, shall constitute a quorum for the
transaction of business, but if at any meeting of the Directors 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. Except as otherwise
required by Applicable Law or as otherwise specified in this Agreement, any act
of the majority of the Directors present at a meeting at which a quorum is
present shall be the act of the Board. The Directors present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Directors to leave less than a
quorum.
|
Section
4.09
|
Intentionally
Omitted.
|
|
Section
4.10
|
Committees.
|
(a) The
Board may establish committees of the Board and may delegate certain of its
responsibilities to such committees.
(b) The
Board shall have an audit committee comprised of three Directors, all of whom
shall be Independent Directors (the “Audit
Committee”). The Audit Committee shall establish a written
audit committee charter in accordance with the rules of the New York Stock
Exchange, Inc. (the “NYSE”), as amended from time
to time. “Independent Director” shall
mean Directors meeting the independence and experience requirements as set forth
most recently by the NYSE and the Commission.
21
(c) The
Board shall have a conflicts committee comprised of three Directors, all of whom
shall be Independent Directors (the “Conflicts
Committee”). The Conflicts Committee shall review transactions
between the MLP and Penn Virginia Corporation or any of its Affiliates, and any
other transactions involving the MLP or its Affiliates that the Board believes
may involve conflicts of interest. 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 MLP, and not a
breach by the Company of any fiduciary or other duties owed to the MLP by the
Company.
(d) The
Board shall have a compensation committee comprised of the Directors serving on
the Conflicts Committee (the “Compensation
Committee”). The Compensation Committee shall be charged with
setting compensation for officers of the Company and the MLP, as well as
administering any Incentive Plans put in place by the Company.
(e) A
majority of any committee, present in person or participating in accordance with
Section 4.07, shall constitute a quorum for the transaction of business of such
committee.
(f) 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 4.05. The Board shall have power at any time to fill
vacancies in, to change the membership of, or to dissolve any such
committee. Nothing herein shall be deemed to prevent the Board from
appointing one or more committees consisting in whole or in part of persons who
are not Directors; provided,
however, that no such committee shall have or may exercise any authority
of the Board.
|
Section
4.11
|
Removal of Peabody
Designee.
|
The
Peabody Designee(s) may be removed, with or without Cause, by Peabody and may be
removed with Cause by the Board.
ARTICLE
V
OFFICERS
|
Section
5.01
|
Elected
Officers.
|
The
executive officers of the Company shall serve at the pleasure of the Board;
provided, however, the Chief Executive Officer and the Chief Financial Officer
shall be elected by a majority of the Class B Directors, subject to the prior
consent of a majority of the Class A Directors (such consent not to be
unreasonably withheld or delayed). The elected officers of the
Company shall be a Chairman of the Board, a Chief Executive Officer, a
President, a Chief Operating Officer, a Chief Financial Officer, a Secretary, a
Controller, 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 other than the Peabody Designee. All
other officers may, in the discretion of the Board, be chosen from among the
Directors other than the Peabody Designee. 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 V, and
such other authority and duties as may be delegated to each of them,
respectively, by the Board from time to time. The Board or any
committee thereof may from time to time elect such other officers (including one
or more Vice Presidents, Assistant Secretaries and Assistant Controllers) 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.
22
|
Section
5.02
|
Election and Term of
Office.
|
The names
and titles of the officers of the Company as of the Effective Date are set forth
on Exhibit C
hereto. Thereafter, the officers of the Company shall be elected
annually at the regular annual meeting of the Board. 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 5.10.
|
Section
5.03
|
Chairman of the
Board.
|
The
Chairman of the Board shall preside at all meetings of the Board. The
Directors also may elect a Vice-Chairman to act in the place of the Chairman
upon his absence or inability to act.
|
Section
5.04
|
Chief Executive
Officer.
|
The Chief
Executive Officer 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 shall see
that all orders and resolutions of the Board and of any committee thereof are
carried into effect. The Chief Executive Officer may sign, with the
Secretary, an Assistant Secretary or any other Proper Officer of the Company
thereunto duly authorized by the Board, any deeds, mortgages, bonds, contracts
or other instruments which the Board has authorized to be executed except in
cases where the execution thereof shall be expressly delegated by the Board or
by this Agreement to some other officer or agent of the Company or shall be
required by law to be otherwise executed. The Chief Executive
Officer, if he is also a Director, shall, in the absence of or because of the
inability to act of the Chairman of the Board, perform all duties of the
Chairman of the Board and preside at all meetings of the Board.
|
Section
5.05
|
President; Chief
Operating Officer.
|
The
President shall act as Chief Operating Officer and assist the Chief Executive
Officer 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 Chief Executive Officer, perform all duties of the Chief Executive
Officer.
23
|
Section
5.06
|
Chief Financial
Officer.
|
The Chief
Financial Officer shall be responsible for financial reporting for 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 shall see that all
orders and resolutions of the Board and of any committee thereof relating to
financial reporting are carried into effect.
|
Section 5.07
|
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 or
her by the Board.
|
Section
5.08
|
Controller.
|
(a) The
Controller shall exercise general supervision over the receipt, custody and
disbursement of corporate funds. The Controller 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 Controller shall, in general, perform
all duties incident to the office of the Controller 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) Each
Assistant Controller shall have such of the authority and perform such of the
duties of the Controller as may be provided in this Agreement or assigned to him
or her by the Board or the Controller. Assistant Controllers shall
assist the Controller in the performance of the duties assigned to the
Controller, and in assisting the Controller, each Assistant Controller shall for
such purpose have the powers of the Controller. During the
Controller’s absence or inability, the Controller’s authority and duties shall
be possessed by such Assistant Controller or Assistant Controllers as the Board
may designate.
|
Section
5.09
|
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 and committees of the
Board. 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.
24
|
Section
5.10
|
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. Subject to
first obtaining the prior consent of a majority of the Class A Directors (such
consent not to be unreasonably withheld or delayed), the Chief Executive Officer
and Chief Financial Officer may be removed by the affirmative vote of a majority
of the Class B Directors 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
5.11
|
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; provided, however, a vacancy in the
offices of Chief Executive Officer or Chief Financial Officer may only be filled
by approval of a majority of the Class B Directors for the unexpired portion of
the term, with such replacement officer being subject to the prior approval of a
majority of the Class A Directors (such approval not to be unreasonably withheld
or delayed).
ARTICLE
VI
INDEMNIFICATION
OF DIRECTORS,
OFFICERS,
EMPLOYEES AND AGENTS
|
Section
6.01
|
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 in each case
the Indemnitee acted in good faith and in a manner that such Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Company and, with respect to any criminal proceeding, had no reasonable cause to
believe its conduct was unlawful; provided, further, however,
no indemnification pursuant to this Article VI shall be available to Peabody or
its Affiliates with respect to their obligations incurred pursuant to the
Purchase Agreement or the other agreements and transactions contemplated
thereby. 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 6.01 shall be made only out of the assets of the Company.
25
(b) To
the fullest extent permitted by law, expenses (including legal fees and
expenses) incurred by an Indemnitee who is indemnified pursuant to Section
6.01(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 6.01.
(c) The
indemnification provided by this Section 6.01 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 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 6.01, 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 6.01(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 6.01 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 6.01 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.
26
(h) No
amendment, modification or repeal of this Section 6.01 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 6.01 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
6.02
|
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, the Members or any other Persons who
have acquired membership interests in the Company, for losses sustained or
liabilities incurred as a result of any act or omission if such Indemnitee acted
in good faith.
(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, the Members or any other Persons who have acquired
membership interests in the Company 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 6.02 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
liability under this Section 6.02 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.
ARTICLE
VII
BOOKS,
RECORDS, REPORTS, AND BANK ACCOUNTS
|
Section
7.01
|
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, 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 Company’s
Certified Public Accountants at the end of each calendar year.
27
|
Section
7.02
|
Reports.
|
With
respect to each calendar year, the Board shall prepare, or cause to be prepared,
and deliver, or cause to be delivered, to the Members:
(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 and a balance sheet 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 such
Member’s income tax return with respect to such year.
|
Section
7.03
|
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. When, if at all, the Special Member’s Percentage
Interest is first increased to an amount greater than zero as provided by this
Agreement, the Board shall cause the Company to open and maintain the Special
Member Account.
ARTICLE
VIII
DISSOLUTION
AND TERMINATION
|
Section
8.01
|
Dissolution.
|
(a) The
Company shall be of perpetual duration; provided, however, that the
Company may be dissolved upon:
(i) The
direction of the Board to dissolve the Company; or
(ii) A
decree of dissolution being entered with respect to the Company by a court of
competent jurisdiction; or
(iii) A
merger or consolidation under the Act where the Company is not the surviving
entity in such merger or consolidation.
(b) No
other event shall cause a dissolution of the Company.
|
Section
8.02
|
Effect of
Dissolution.
|
Except as
otherwise provided in this Agreement, upon the dissolution of the Company, the
Board shall take such actions as may be required pursuant to the Act and shall
proceed to wind up, liquidate and terminate the business and affairs of the
Company. In connection with such winding up, the Board shall have the
authority to liquidate and reduce to cash (to the extent necessary or
appropriate) the assets of the Company as promptly as is consistent with
obtaining fair value therefor, to apply and distribute the proceeds of such
liquidation and any remaining assets in accordance with the provisions of
Section 8.03, and to do any and all acts and things authorized by, and in
accordance with, the Act and other applicable laws for the purpose of winding up
and liquidation.
28
|
Section
8.03
|
Application of
Proceeds.
|
Upon
dissolution and liquidation of the Company, the assets of the Company shall be
applied and distributed in the following order of priority:
(a) To
the payment of debts and liabilities of the Company (including to the Members to
the extent otherwise permitted by law) and the expenses of
liquidation.
(b) Next,
to the setting up of such reserves as the Person required or authorized by law
to wind up the Company’s affairs may reasonably deem necessary or appropriate
for any disputed, contingent or unforeseen liabilities or obligations of the
Company; provided,
however, that any such reserves shall be paid over by such
Person to an escrow agent appointed by the Board, to be held by such agent or
its successor for such period as such Person shall deem advisable for the
purpose of applying such reserves to the payment of such liabilities or
obligations and, at the expiration of such period, the balance of such reserves,
if any, shall be distributed as hereinafter provided.
(c) The
remainder to the Economic Member, except for any cash or property that
constitutes IDR Proceeds which shall be distributed in accordance with Section
3.03(b).
ARTICLE
IX
GENERAL
PROVISIONS
|
Section
9.01
|
Offset.
|
Whenever
the Company is to pay any sum to a Member, any amounts the Member owes the
Company may be deducted from that sum before payment.
|
Section
9.02
|
Notices.
|
All
notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”) required or
permitted to be given hereunder or which are given with respect to this
Agreement shall be in writing and shall be personally served, delivered by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to such
other address as such party shall have specified most recently by written
notice. Notice shall be deemed given on the date of service or transmission if
personally served or transmitted by telegram, telex or facsimile. Notice
otherwise sent as provided herein shall be deemed given upon delivery of such
notice:
29
To the
Company:
Penn
Virginia Resource GP, LLC
Three
Radnor Corporate Center, Xxxxx 000
000
Xxxxxxxxxx Xxxx
Xxxxxx,
Xxxxxxxxxxxx 00000
Attn: General
Counsel
|
Telephone:
|
(000)
000-0000
|
|
|
Fax:
|
(000) 000-0000 |
To the
MLP:
Penn
Virginia Resource Partners, L.P.
Three
Radnor Corporate Center, Xxxxx 000
000
Xxxxxxxxxx Xxxx
Xxxxxx,
Xxxxxxxxxxxx 00000
Attn: General
Counsel
|
Telephone:
|
(000)
000-0000
|
|
|
Fax:
|
(000) 000-0000 |
To
PVG:
Penn
Virginia GP Holdings, L.P.
Three
Radnor Corporate Center, Xxxxx 000
000
Xxxxxxxxxx Xxxx
Xxxxxx,
Xxxxxxxxxxxx 00000
Attn: General
Counsel
|
Telephone:
|
(000)
000-0000
|
|
|
Fax:
|
(000) 000-0000 |
To the
Special Member:
Peabody
Energy Corporation
000
Xxxxxx Xxxxxx
Xx.
Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx
X. Xxxxxxx
Fax: (000)
000-0000
|
Section
9.03
|
Entire Agreement;
Superseding Effect.
|
This
Agreement constitutes the entire agreement of the Members and their Affiliates
relating to the Company and the transactions contemplated hereby, and supersedes
all provisions and concepts contained in all prior contracts or agreements
between the Members or any of their Affiliates with respect to the Company and
the transactions contemplated hereby, whether oral or written.
|
Section
9.04
|
Amendment or
Restatement.
|
This
Agreement and the Delaware Certificate may be amended or restated only by a
written instrument executed (or, in the case of the Delaware Certificate,
approved) by the Board; provided, however, that the
Board shall not amend or restate this Agreement (A) without the prior written
consent of the Special Member (in the case of clause (i) or (iii) below) or
Peabody (in the case of clause (ii) below) if such amendment or restatement (10)
relates to the redemption of the Special Member’s Percentage Interest pursuant
to Section 3.04 or would have an adverse effect on the distribution of IDR
Proceeds with respect to the Special Member’s Percentage Interest, or on the
allocation of income, gain, loss or deduction pursuant to Section 3.05, (11)
would adversely affect Peabody’s rights with respect to the Peabody Designee(s)
under Article IV, or (12) decrease the Special Member’s rights to
indemnification as compared to the Managing Member's right to indemnification or
increase the obligations of the Special Member hereunder, (B) without the
consent of a majority of the Class A Directors if such amendment would have an
adverse effect on the rights of the Class A Member under this Agreement, or (C)
without the consent of a majority of the Class B Directors if such amendment
would have an adverse effect on the rights of the Class B Member or the Economic
Member under this Agreement. Notwithstanding the foregoing except for
(A)(i), (ii) and (iii) above, if necessary to eliminate the breach of any
agreement, which breach could reasonably be expected to materially adversely
affect the Class B Member, or to permit the Class B Member to comply with any
applicable law, including, without limitation, to prevent the Class B Member
from being treated as an "investment company" under the Investment Company Act
of 1940 (as amended from time to time), in any case as determined in good faith
by the Class B Directors, this Agreement may be amended by a majority of the
Class B Directors, without the consent of any other Member or Person, to the
extent that a majority of the Class B Directors determine in good faith that
such amendment is necessary to eliminate the breach of any agreement, which
breach could reasonably be expected to materially adversely affect the Class B
Member, or to permit the Class B Member to comply with any applicable law,
including, without limitation, to prevent the Class B Member from being treated
as an "investment company" under the Investment Company Act of 1940 (as amended
from time to time), and such amendments may, to the extent necessary, provide
the Class B Member with additional control or voting rights with respect to the
Company.
30
|
Section
9.05
|
Binding
Effect.
|
This
Agreement is binding on and shall inure to the benefit of each Member and its
respective successors and permitted assigns.
|
Section
9.06
|
Governing Law;
Severability.
|
THIS
AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT
MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF
ANOTHER JURISDICTION. In the event of a direct conflict between the
provisions of this Agreement and any mandatory, non-waivable provision of the
Act, such provision of the Act shall control. If any provision of the
Act 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. Each provision of this Agreement shall be considered
severable and if for any reason any provision or provisions herein are
determined to be invalid, unenforceable or illegal under any existing or future
law, such invalidity, unenforceability or illegality shall not impair the
operation of or affect those portions of this Agreement which are valid,
enforceable and legal.
31
|
Section
9.07
|
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 9.08
|
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
9.09
|
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]
32
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.
|
|
|
|
PENN
VIRGINIA RESOURCE PARTNERS, L.P.
|
|||
| By: |
PENN
VIRGINIA RESOURCE GP, LLC
|
||
|
Its
General Partner
|
|||
|
|
By:
|
/s/ Xxxxxxx X. Xxxx, Xx. | |
| Name: Xxxxxxx X. Xxxx, Xx. | |||
| Title: Chief Executive Officer | |||
|
PENN
VIRGINIA GP HOLDINGS, L.P.
|
|||
|
By:
|
PVG GP, LLC | ||
|
Its
General Partner
|
|||
|
|
By:
|
/s/ Xxxxxxx X. Xxxx, Xx. | |
| Name: Xxxxxxx X. Xxxx, Xx. | |||
| Title: President and Chief Executive Officer | |||
33
EXHIBIT
A
IDR
PERCENTAGE INTERESTS
|
Date
|
Special
Member’s
IDR
Percentage
Interest
|
Economic
Member’s
IDR
Percentage
Interest
|
||
|
Effective
Date
|
0
|
100
|
A-1
EXHIBIT
B
ACKNOWLEDGEMENT
AGREEMENT
[Letterhead
of Special Member]
[Date]
Penn
Virginia Resource GP, LLC
Three
Radnor Corporate Center, Xxxxx 000
000
Xxxxxxxxxx Xxxx
Xxxxxx,
Xxxxxxxxxxxx 00000
|
Attn:
|
General
Counsel
|
Board of
Directors
c/o Penn
Virginia Resource GP, LLC
Three
Radnor Corporate Center, Suite 300
100
Matsonford Road
Radnor,
Pennsylvania 19087
|
Attn:
|
General
Counsel
|
Re: Increase
of Special Member’s Percentage Interest
To Whom
It May Concern:
Reference
is made to that certain Fifth Amended and Restated
Limited Liability Company Agreement (the “LLC Agreement”) of Penn Virginia
Resource GP, LLC, a Delaware limited liability company (the “Company”), dated as of the __
day of March 2010, between Penn Virginia GP Holdings, L.P., a Delaware limited
partnership, Penn Virginia Resource Partners, L.P., a Delaware limited
partnership, and Peabody Energy Corporation, a Delaware corporation and the
special member of the Company (the “Special
Member”). Capitalized terms used but not defined herein shall
have the meanings set forth in the LLC Agreement. This letter is
being delivered to you pursuant to Section 3.04(g) of the LLC
Agreement.
Reference
is further made to that certain [TITLE OF AGREEMENT] (the “Purchase Agreement”) dated as
of [DATE], between [PARTIES], pursuant to which the Special Member and/or its
Affiliates agreed to sell to the MLP and/or its subsidiaries, and the MLP and/or
its subsidiaries agreed to purchase, $_____ million of Coal Assets, which
transaction was consummated on [DATE].
Accordingly,
pursuant to the LLC Agreement, the undersigned hereby requests the Company to
issue to and in the name of the undersigned a certificate representing the
undersigned’s Special Member’s Percentage Interest of _____%, which certificate
shall supersede and replace any prior such certificate(s) that may have been
issued pursuant to the LLC Agreement.
B-1
In
connection herewith, the undersigned represents, acknowledges and agrees
that:
(1) it
is an “accredited investor” as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act;
(2) it
is acquiring the Special Member’s Percentage Interest for its own account for
investment, and not with a view to any distribution or resale, thereof in
violation of the Securities Act or any other applicable domestic or foreign
securities law;
(3) it
is a Member of the Company, has reviewed a copy of the LLC Agreement, has access
to the Public Documents and has had an opportunity to ask questions of and
receive answers from the Company, the Board or a person acting on behalf of the
Company concerning the Special Member’s Percentage Interest and the
Company;
(4) based
in part upon its representations contained herein and in reliance upon
applicable exemptions, no Special Member’s Percentage Interest has been or will
be registered under the Securities Act or any other Applicable Laws of any other
domestic or foreign jurisdiction;
(5) the
Special Member’s Percentage Interest is subject to transfer restrictions
pursuant to the LLC Agreement;
(6) the
Special Member’s Percentage Interest is subject the Company’s redemption option
pursuant to the LLC Agreement; and
(7) the
certificate or certificates representing the Special Member’s Percentage
Interest shall contain appropriate legends to reflect the matters described in
paragraphs (4), (5) and (6) above.
|
Very
truly yours,
|
|||
|
[Peabody
Energy Corporation]
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
B-2
EXHIBIT
C
OFFICERS
|
A.
Xxxxx Xxxxxxxx
|
Chairman
|
|
Xxxxxxx
X. Xxxx, Xx.
|
Chief
Executive Officer
|
|
Xxxxx
X. Xxxxxx
|
Co-President
and Chief Operating Officer – Coal
|
|
Xxxxxx
X. Page
|
Co-President
and Chief Operating Officer – Midstream
|
|
Xxxxxx
X. Xxxxxxx
|
Executive
Vice President and Chief Financial Officer
|
|
Xxxxx
X. Xxxxxx
|
Vice
President, Chief Administrative Officer, General Counsel and Assistant
Secretary
|
|
Xxxx
X Xxxxxx
|
Vice
President, Business Planning
|
|
Forest
X. XxXxxx
|
Vice
President and Controller
|
|
Xxxxxx
X. Xxxxxxx
|
Vice
President and Treasurer
|
|
Xxxxxxx
X. Xxxxxxx
|
Vice
President, Human Resources
|
|
Xxxxx
X. Xxxxxxxxxxx
|
Vice
President and Assistant General Counsel
|
|
Xxxxx
X. Xxxx
|
Vice
President, Investor Relations
|
|
Xxxx
X. Xxxxxxxxx
|
Secretary
|
|
Xxxxxxx
X. Xxxxxxx
|
Assistant
Treasurer
|
C-1
