Exhibit 3(b)
OPERATING AGREEMENT
OF
ATLAS RESOURCES, LLC
OPERATING AGREEMENT
OF
ATLAS RESOURCES, LLC
THIS OPERATING AGREEMENT OF ATLAS RESOURCES, LLC dated as of this 24th
day of March, 2006 (this "AGREEMENT"), is made by AIC, Inc. (the "MEMBER") to
establish and organize a limited liability company (the "COMPANY"). The Member,
intending to be legally bound, hereby sets forth the terms of its agreement as
to the affairs of the Company and the conduct of its business, as follows:
ARTICLE 1
FORMATION, PURPOSE AND DEFINITIONS
1.1 ESTABLISHMENT OF LIMITED LIABILITY COMPANY. The Member hereby
agrees to establish and organize a limited liability company pursuant to the
provisions of the Pennsylvania Limited Liability Company Law (15 Pa.C.S.A.
ss.8901, et seq.), as heretofore or hereafter amended (the "ACT"), upon the
terms set forth in this Agreement. The Member is hereby admitted to membership
in the Company and shall be the sole Member of the Company.
1.2 NAME. Pursuant to the terms of this Agreement, the Member intends
to carry on a business for profit under the name Atlas Resources, LLC. The
Company may conduct its activities under any other permissible name designated
by the Member. The Member shall be responsible for complying with any
registration requirements in the event an alternate name is used.
1.3 REGISTERED OFFICE OF THE COMPANY. The registered office of the
Company shall be the location set forth in the Company's Certificate of
Formation filed with the Office of the Secretary of State of the Commonwealth of
Pennsylvania. The Board of Directors may, from time to time, change such
registered agent and registered office, by appropriate filings as required by
law.
1.4 PURPOSE. The Company's purpose shall be to engage in all lawful
businesses for which limited liability companies may be organized under the Act.
The Company shall have the authority to do all things necessary or advisable in
order to accomplish such purposes.
1.5 DURATION. Unless the Company shall be earlier terminated in
accordance with Article 6, it shall continue in existence in perpetuity.
1.6 OTHER ACTIVITIES OF MEMBER. The Member may engage in or possess an
interest in other business ventures of any nature, whether or not similar to or
competitive with the activities of the Company.
ARTICLE 2
CAPITAL CONTRIBUTIONS
2.1 CAPITAL CONTRIBUTIONS. The Member may, but shall not be required
to, make capital contributions to the Company.
2.2 LIMITATION OF LIABILITY OF MEMBER. The Member shall not have any
liability or obligation for any debts, liabilities or obligations of the
Company, or of any agent or employee of the Company, beyond the Member's capital
contribution, except as may be expressly required by this Agreement or
applicable law.
2.3 LOANS. If the Member makes any loans to the Company, or advances
money on its behalf, the amount of any such loan or advance shall not be deemed
an increase in, or contribution to, the capital contribution of the Member.
Interest shall accrue on any such loan at an annual rate agreed to by the
Company and the Member (but not in excess of the maximum rate allowable under
applicable usury laws).
ARTICLE 3
DISTRIBUTIONS
3.1 DISTRIBUTIONS. The Company shall make distributions of cash or
other assets to the Member in the manner that the Board deems appropriate and as
permitted by law.
ARTICLE 4
MANAGEMENT OF THE COMPANY
4.1 BOARD OF DIRECTORS. Unless delegated by the Board, all management
powers over the business and affairs of the Company shall be exclusively vested
in a Board of Directors (the "BOARD OF DIRECTORS" or the "BOARD"). The Board
shall consist of at least two individuals. Each person serving on the Board of
Directors is referred to herein as a "DIRECTOR" and shall, except to the extent
otherwise provided herein, have all the powers of a "manager" under the Act. The
initial Board shall consist of Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxxx, and Xxxxxxx X. Xxxxx who shall be deemed duly appointed to the Board as
of the date of this Agreement and shall serve for a one-year term, or until
their successors are duly elected. The Member shall elect Directors to serve on
the Board on an annual basis on such date as may be set by the Board. A Director
may resign at any time by delivering written notice to the President of the
Company. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. Subject to the provisions of this
Agreement, the Member may remove one or more Directors from office, with or
without cause. The Member may fill any vacancy, whether temporary or permanent,
which then may exist on the Board. In addition, subject to the foregoing, in the
absence of action by the Member in the event of a vacancy on the Board, the
remaining Directors, although less than a quorum, may fill such vacancy by vote
of a majority of such remaining Directors. Any temporary vacancy on the Board
shall be filled only
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for the period of the incapacity, illness or absence of the Director whose place
on the Board is temporarily vacated.
4.2 (A) MEETINGS, ETC. Meetings of the Board and any committee thereof
shall be held at the principal offices of the Company or at such other place as
may be determined by the Board or such committee. Regular meetings of the Board
shall be held on such dates and at such times as shall be determined by the
Board. Special meetings of the Board or any committee may be called by any
Director upon prior notice to the other Directors (or, in the case of a special
meeting of any committee of the Board, by any member thereof), which notice
shall state the purpose or purposes for which such meeting is being called. The
actions taken by the Board or any committee at any meeting, however called and
noticed, shall be as valid as though taken at a meeting duly held after regular
call and notice if (but not until), either before, at or after the meeting, the
Director as to whom it was improperly held signs a written waiver of notice or a
consent to the holding of such meeting or an approval of the minutes thereof. A
vote of the Board or any committee may be taken either in a meeting of the Board
of Directors thereof or by written consent so long as such consent is signed by
at least the minimum number of Directors that would be necessary to authorize or
take such action at a meeting of the Board or such committee. A meeting of the
Board or any committee may be held by conference telephone or similar
communications equipment by means of which all individuals participating in the
meeting can be heard. At least a majority of the Board of Directors, present in
person or represented by proxy, shall constitute a quorum at all meetings of the
Board. The acts of a majority of the Directors present at a meeting at which a
quorum is present shall be the acts of the Board. The Board may from time to
time authorize other persons to attend any such meeting or make a provision for
an observer or observers in any agreement governing the right of a creditor or
securityholder of the Company. The Board and any committee may establish
reasonable rules and regulations to (i) limit the number and participation of
observers and to require them to observe reasonable confidentiality obligations,
and (ii) otherwise provide for the keeping of minutes and other internal Board
and committee governance procedures.
(B) ACTION by WRITTEN CONSENT. Any action by the Board of Directors may
be taken in the form of a written consent rather than at a Board of Directors'
meeting. The Company shall maintain a permanent record of all actions taken by
the Board of Directors.
4.3 POWERS OF THE BOARD OF DIRECTORS. Subject to the following
sentence, the Board shall have the power to do any and all acts necessary or
convenient to or for the furtherance of the purposes described herein, including
all powers, statutory or otherwise, possessed by the Board of Directors under
the laws of the Commonwealth of Pennsylvania. Without limiting the generality of
the foregoing, the Board shall have the specific power and authority to cause
the Company, in the Company's own name:
(a) To sell or otherwise dispose of all or substantially all of the
assets of the Company as part of a single transaction or plan so long as that
disposition is not in violation of or a cause of a default under any other
agreement to which the Company may be bound;
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(b) To execute all instruments and documents, including, without
limitation, checks; drafts; notes and other negotiable instruments; mortgages or
deeds of trust; security agreements; financing statements; documents providing
for the acquisition, mortgage or disposition of property; assignments; bills of
sale; leases; partnership agreements; operating agreements of other limited
liability companies; and any other instruments or documents necessary, in the
opinion of the Board, to the business of the Company;
(c) To enter into any and all other agreements on behalf of the
Company, with any other person for any purpose, in such form as the Board may
approve;
(d) To make distributions in accordance with Section 3.1; and
(e) To do and perform all other acts as may be necessary or appropriate
to the conduct of the Company's business.
4.4 OFFICERS.
(a) Designation and Appointment. The Board may, from time to time,
employ and retain persons as may be necessary or appropriate for the conduct of
the Company's business (subject to the supervision and control of the Board),
including employees, agents and other persons (any of whom may be a Member) who
may be designated as officers of the Company, with titles including but not
limited to "chief executive officer," "chairman," "president," "executive vice
president," "senior vice president," "vice president," "treasurer," "secretary,"
"chief financial officer" and "chief operating officer," as and to the extent
authorized by the Board. Any number of offices may be held by the same person.
In its discretion, the Board may choose not to fill any office for any period as
it may deem advisable. Officers need not be residents of the Commonwealth of
Pennsylvania. Any officers so designated shall have such authority and perform
such duties as the Board may, from time to time, delegate to them. The Board may
assign titles to particular officers. Each officer shall hold office until his
or her successor shall be duly designated and shall qualify or until his or her
death or until he shall resign or shall have been removed in the manner
hereinafter provided.
(b) Resignation/Removal. Any officer may resign as such at any time.
Such resignation shall be made in writing and shall take effect at the time
specified therein, or if no time be specified, at the time of its receipt by the
Board. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation. Any officer may be
removed as such at any time with or without cause by the Board. Designation of
an officer shall not of itself create any contractual or employment rights.
(c) Duties of Officers Generally. The officers, in the performance of
their duties as such, shall owe to the Company duties of loyalty and due care of
the type owed by the officers of a corporation to such corporation and its
stockholders under the laws of the Commonwealth of Pennsylvania.
4.5 MEMBER HAS NO EXCLUSIVE DUTY TO COMPANY. The Member shall not be
required to manage the Company as its sole and exclusive function and the Member
may have
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other business interests and may engage in other activities in addition to those
relating to the Company. The Company shall not have any right, by virtue of this
Agreement, to share or participate in such other investments or activities of
the Member or to the income or proceeds derived from such investments or
activities. The Member shall incur no liability to the Company as a result of
engaging in any other business or venture.
ARTICLE 5
TRANSFER OF MEMBERSHIP INTERESTS
5.1 TRANSFERS. The Member may transfer all or any portion of its
membership interest in the Company at any time or from time to time, to the
extent and in the manner provided by applicable law.
ARTICLE 6
DISSOLUTION AND LIQUIDATION
6.1 EVENTS TRIGGERING DISSOLUTION. The Company shall dissolve and
commence winding up and liquidation upon the first to occur of any of the
following:
(a) the written consent of the Member;
(b) the entry of a decree of judicial dissolution under Section 8972 of
the Act.
The Company shall not be dissolved for any other reason, including without
limitation, the Member's becoming bankrupt or executing an assignment for the
benefit of creditors.
6.2 LIQUIDATION. Upon dissolution of the Company in accordance with
Section 6.1, the Company shall be wound up and liquidated by the Member or by a
liquidating manager selected by the Member. The proceeds of such liquidation
shall be applied and distributed in the following order of priority:
(a) to creditors, including the Member if it is a creditor, in the
order of priority as established by law, in satisfaction of liabilities of the
Company (whether by payment or the making of reasonable provision for payment
thereof) other than liabilities for which reasonable provision for payment has
been made and liabilities for distributions to the Member under the Act; and
then
(b) to the setting up of any reserves in such amount and for such
period as shall be necessary to make reasonable provisions for payment of all
contingent, conditional or unmatured claims and obligations known to the Company
and all claims and obligations known to the Company but for which the identity
of the claimant is unknown; and then
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(c) to the Member, which liquidating distribution may be made to the
Member in cash or in kind, or partly in cash and partly in kind.
6.3 CERTIFICATE OF CANCELLATION. Upon the dissolution of the Company
and the completion of the liquidation and winding up of the Company's affairs
and business, the Member shall on behalf of the Company prepare and file a
certificate of cancellation with the Department of State of the Commonwealth of
Pennsylvania, as required by Section 8975 of the Act. When such certificate is
filed, the Company's existence shall cease.
ARTICLE 7
ACCOUNTING AND FISCAL MATTERS
7.1 FISCAL YEAR. The fiscal year of the Company shall begin on October
1 and end on September 30 unless otherwise determined by the Board of Directors.
7.2 METHOD OF ACCOUNTING. The Member shall select a method of
accounting for the Company as deemed necessary or advisable and shall keep, or
cause to be kept, full and accurate records of all transactions of the Company
in accordance with sound accounting principles consistently applied.
7.3 FINANCIAL BOOKS AND RECORDS. All books of account shall, at all
times, be maintained in the principal office of the Company or at such other
location as specified by the Board of Directors.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF
MEMBER; EXCULPATION AND INDEMNIFICATION
8.1 NO LIABILITY OF MEMBER. The Member shall not have any duty to the
Company except as expressly set forth herein, in other written agreements or as
otherwise required by applicable law.
8.2 LIABILITY OF OFFICERS AND DIRECTORS; LIMITS. No Director or officer
of the Company shall be liable to the Company or to the Member for any loss or
damage sustained by the Company or to the Member, unless the loss or damage
shall have been the result of:
(a) gross negligence, fraud or intentional misconduct, bad faith or
knowing violation of law by the Director or officer in question;
(b) a breach of the duty of loyalty of such Director or officer to the
Company or the Member;
(c) a transaction from which the officer or Director derived an
improper personal benefit;
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(d) in the case of an officer, breach of such person's duties pursuant
to Section 4.4(c);
(the conduct described in each of the foregoing clauses (a) through (d),
inclusive, being hereinafter referred to as "IMPROPER CONDUCT"). In performing
his or her duties, each such person shall be entitled to rely in good faith on
the provisions of this Agreement and on information, opinions, reports or
statements (including financial statements and information, opinions, reports or
statements as to the value or amount of the assets, liabilities, profits or
losses of the Company or any facts pertinent to the existence and amount of
assets from which distributions to the Member might properly be paid) of the
following other persons or groups: one or more officers or employees of the
Company; any attorney, independent accountant, appraiser or other expert or
professional employed or engaged by or on behalf of the Company; any Director;
or any other person who has been selected with reasonable care by or on behalf
of the Company or the Board, in each case as to matters which such relying
person reasonably believes to be within such other person's competence.
8.3 LIMITED LIABILITY. Except as otherwise provided by the Act, the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Member, Director or officer of the Company shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Member, Director or officer of the Company. The Member shall
not be required to lend any funds to the Company.
8.4 LACK OF AUTHORITY. The Member in its capacity as a Member shall not
have any power to represent, act for, sign for or bind the Company or make any
expenditures on behalf of the Company and the Member hereby consents to the
exercise by the Board and officers of the Company of the powers conferred on
them by law and this Agreement.
8.5 RIGHT TO INDEMNIFICATION. Subject to the limitations and conditions
as provided in this Article 8, each person who was or is made a party or is
threatened to be made a party to or is involved in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
arbitrative (hereinafter a "PROCEEDING"), or any appeal in such a Proceeding or
any inquiry or investigation that could lead to such a Proceeding, by reason of
the fact that he, or a person of which he is the legal representative, is or was
a Director, Member or officer shall be indemnified by the Company to the fullest
extent permitted by applicable law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such amendment) against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable expenses (including, without limitation,
reasonable attorneys' fees) actually incurred by such person in connection with
such Proceeding, appeal, inquiry or investigation, and indemnification under
this Article 8 shall continue as to a person who has ceased to serve in the
capacity which initially entitled such person to indemnity hereunder. The rights
granted pursuant to this Article 8 shall be deemed contract rights, and no
amendment, modification or repeal of this Article 8 shall have the effect of
limiting or denying any such rights with respect to actions taken or
Proceedings, appeals, inquiries or investigations arising
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prior to any amendment, modification or repeal. It is expressly acknowledged
that the indemnification provided in this Article 8 could involve
indemnification for negligence or under theories of strict liability.
Notwithstanding the foregoing, no such indemnity shall extend to any officer or
Director to the extent that any Proceeding or such judgment, penalty, fine,
settlement or expense results from Improper Conduct on the part of such officer
or Director.
8.6 ADVANCE PAYMENT. The right to indemnification conferred in this
Article 8 shall include the right to be paid or reimbursed by the Company the
reasonable expenses incurred by a person of the type entitled to be indemnified
under Section 8.6 who was, is or is threatened to be, made a named defendant or
respondent in a Proceeding in advance of the final disposition of the Proceeding
and without any determination as to the person's ultimate entitlement to
indemnification; provided, however, that the payment of such expenses incurred
by any such person in advance of the final disposition of a Proceeding shall be
made only upon delivery to the Company of a written affirmation by such person
of his or her good faith belief that he has met the standard of conduct
necessary for indemnification under Article 8 and a written undertaking, by or
on behalf of such person, to repay all amounts so advanced if it shall
ultimately be determined that such indemnified person is not entitled to be
indemnified under this Article 8 or otherwise.
8.7 INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Company, upon the
direction of the Board, may indemnify and advance expenses to an employee or
agent of the Company to the same extent and subject to the same conditions under
which it may indemnify and advance expenses under Sections 8.5 and 8.6.
Notwithstanding the foregoing, no such indemnity shall extend to any employee or
agent to the extent that any Proceeding or judgment, penalty, fine, settlement
or expenses result from Improper Conduct on the part of such employee or agent.
8.8 APPEARANCE AS A WITNESS. Notwithstanding any other provision of
this Article 8, the Company may pay or reimburse reasonable out-of-pocket
expenses incurred by any Member, Director, officer or agent in connection with
his or her appearance as a witness or other participation in a Proceeding at a
time when he is not a named defendant or respondent in the Proceeding.
8.9 NONEXCLUSIVITY OF RIGHTS. The right to indemnification and the
advancement and payment of expenses conferred in this Article 8 shall not be
exclusive of any other right that a Member, Director, officer or other person
indemnified pursuant to this Article 8 may have or hereafter acquire under any
law (common or statutory) or provision of this Agreement.
8.10 INSURANCE. The Company may purchase and maintain (if and to the
extent feasible, as determined by the Board) insurance, at its expense, to
protect itself and any Member, Director, officer or agent of the Company who is
or was serving at the request of the Company as a manager, representative,
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another foreign or domestic limited liability company,
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other
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enterprise against any expense, liability or loss, whether or not the Company
would have the power to indemnify such person against such expense, liability or
loss under this Article 8.
8.11 SAVINGS CLAUSE. If this Article 8 or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each person indemnified
pursuant to this Article 8 as to costs, charges and expenses (including
reasonable attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any such Proceeding, appeal, inquiry or investigation to the
full extent permitted by any applicable portion of this Article 8 that shall not
have been invalidated and to the fullest extent permitted by applicable law.
ARTICLE 9
MISCELLANEOUS
9.1 BINDING EFFECT. Except as otherwise provided in this Agreement to
the contrary, this Agreement shall be binding upon and inure to the benefit of
the Member and, subject to Article 5, his successors and assigns.
9.2 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Pennsylvania without
reference to conflict of laws principles.
9.3 SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
9.4 GENDER. As used in this Agreement, the masculine gender shall
include the feminine and the neuter, and vice versa and the singular shall
include the plural.
9.5 HEADINGS. The Section headings used herein are for reference and
convenience only and shall not be used for purposes of interpretation.
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IN WITNESS WHEREOF, the Member, intending to be legally bound, has
signed this instrument on and as of the date first set forth above.
AIC, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Secretary
