Exhibit 3.8
Execution Copy
FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
K-SEA GENERAL PARTNER GP LLC
DATED AS OF JANUARY 14, 2004
THE SECURITIES ISSUED BY K-SEA GENERAL PARTNER GP LLC (INCLUDING, WITHOUT
LIMITATION, THE SECURITIES DISTRIBUTED BY NEW K-SEA TRANSPORTATION LLC TO ITS
MEMBERS) IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR REGISTERED OR QUALIFIED UNDER ANY
STATE SECURITIES LAWS AND, AS SUCH THEY MAY NOT BE OFFERED FOR SALE, SOLD,
DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS THE
SECURITIES HAVE BEEN QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL
SECURITIES LAWS OR UNLESS SUCH QUALIFICATION AND REGISTRATION IS NOT LEGALLY
REQUIRED. TRANSFER OF THE SECURITIES REPRESENTED BY THIS AGREEMENT MAY BE
FURTHER SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET FORTH HEREIN.
TABLE OF CONTENTS
ARTICLE I DEFINITIONS......................................................................... 2
1.1. Definitions......................................................................... 2
1.2. Terms Generally.................................................................... 11
ARTICLE II ORGANIZATION; PURPOSE AND POWERS.................................................. 11
2.1. Formation.......................................................................... 11
2.2. Certificate........................................................................ 11
2.3. Name............................................................................... 12
2.4. Term............................................................................... 12
2.5. Office and Agent................................................................... 12
2.6. Qualification in Other Jurisdictions............................................... 12
2.7. Purpose and Powers................................................................. 12
ARTICLE III MEMBERS.......................................................................... 13
3.1. Members............................................................................ 13
3.2. Admission of New Members........................................................... 14
3.3. Withdrawals or Resignations........................................................ 14
3.4. Voting Rights and Procedures....................................................... 14
3.5. Termination of Units............................................................... 15
3.6. Liability to Third Parties......................................................... 15
3.7. Lack of Authority.................................................................. 15
3.8. Nature of Interest in the Company.................................................. 15
3.9. Representations and Warranties of Members.......................................... 15
3.10. Successors and Substitute Members................................................. 16
3.11. Business Opportunities of K-Sea Investors L.P..................................... 16
ARTICLE IV CAPITAL CONTRIBUTIONS............................................................. 17
4.1. Initial Member Capital Contributions............................................... 17
4.2. Additional Capital Contributions................................................... 17
ARTICLE V DISTRIBUTIONS...................................................................... 17
5.1. Distributions...................................................................... 17
5.2. Tax Distributions.................................................................. 17
5.3. Distribution in Kind............................................................... 18
ARTICLE VI ALLOCATIONS AND CAPITAL ACCOUNTS.................................................. 18
6.1. Capital Accounts................................................................... 18
6.2. Allocations........................................................................ 18
6.3. Limitations on Losses and Special Rules............................................ 19
6.4. Tax Allocations.................................................................... 21
6.5. Curative Allocations............................................................... 21
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ARTICLE VII MANAGEMENT....................................................................... 22
7.1. Establishment of Board............................................................. 22
7.2. The Board: Delegation of Authority and Duties...................................... 22
7.3. Term of Office..................................................................... 23
7.4. Meetings of the Board and Committees............................................... 23
7.5. Voting............................................................................. 24
7.6. Responsibility and Authority of the Board.......................................... 24
7.7. Company Funds...................................................................... 24
7.8. Devotion of Time................................................................... 24
7.9. Payments to Directors: Reimbursements.............................................. 24
7.10. Citizenship Requirements.......................................................... 25
7.11. Officers.......................................................................... 25
ARTICLE VIII TRANSFERS OF UNITS.............................................................. 27
8.1. General............................................................................ 27
8.2. Permitted Transfers................................................................ 28
8.3. Legend............................................................................. 29
ARTICLE IX OTHER COVENANTS AND REPRESENTATIONS............................................... 30
9.1. Approved Sales..................................................................... 30
9.2. Tag-Along.......................................................................... 30
9.3. Management Investment.............................................................. 32
9.4. Purchaser Representative........................................................... 34
ARTICLE X DISSOLUTION AND LIQUIDATION........................................................ 34
10.1. Duration.......................................................................... 34
10.2. Liquidation of Company Interests.................................................. 34
10.3. Termination....................................................................... 36
ARTICLE XI BOOKS AND RECORDS................................................................. 36
11.1. Books............................................................................. 36
11.2. Tax Allocations and Reports....................................................... 36
ARTICLE XII EXCULPATION AND INDEMNIFICATION.................................................. 37
12.1. Indemnification................................................................... 37
12.2. Liability of Indemnitees.......................................................... 38
12.3. Indemnification and Reimbursement for Payments on Behalf of a Unitholder.......... 39
ARTICLE XIII MISCELLANEOUS................................................................... 39
13.1. Confidentiality................................................................... 39
13.2. Waiver of Jury Trial.............................................................. 40
13.3. Governing Law..................................................................... 40
13.4. Descriptive Headings.............................................................. 40
13.5. Severability...................................................................... 40
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13.6. Amendments........................................................................ 41
13.7. Gender and Number................................................................. 41
13.8. Notice............................................................................ 41
13.9. Counterparts...................................................................... 42
13.10. Entire Agreement................................................................. 42
13.11. No Waiver of Remedies............................................................ 42
13.12. Remedies Cumulative.............................................................. 42
13.13. Binding Effect................................................................... 43
13.14. Determinations of Fair Market Value.............................................. 43
SCHEDULE A - LIST OF MEMBERS AND CAPITALIZATION
EXHIBIT A - FORM OF JOINDER
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FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
K-SEA GENERAL PARTNER GP LLC
THIS FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT of
K-Sea General Partner GP LLC, a
Delaware limited liability company (the
"COMPANY"), dated as of January 14, 2004, is adopted, executed and agreed to,
for good and valuable consideration, by New K-Sea Transportation LLC, a
Delaware
limited liability company and the sole member of the Company ("NEW K-SEA LLC").
Capitalized terms used herein but not otherwise defined shall have the meanings
set forth in Article I below.
WHEREAS, Xxxxxxx X. Xxxxx ("XXXXX") caused the Company to be formed as a
limited liability company under the
Delaware Limited Liability Company Act on
August 29, 2003 and a Certificate of Formation was filed with the Secretary of
State of the State of
Delaware on such date; and
WHEREAS, Xxxxx, as the sole member, adopted, executed and agreed to enter
into a
Limited Liability Company Agreement (the "PRIOR AGREEMENT") relating to
the Company on August 29, 2003; and
WHEREAS, Xxxxx assigned his entire membership interest in the Company to
K-Sea Transportation LLC, a
Delaware limited liability company ("K-SEA LLC"), on
August 29, 2003; and
WHEREAS, K-Sea LLC merged with and into K-Sea LP1, L.P., a Texas limited
partnership ("K-SEA LP1"), with LP#1 as the surviving entity of the merger; and
WHEREAS, LP#1 and K-Sea LP2, L.P., a Texas limited partnership, merged with
both entities surviving the merger; and
WHEREAS, LP#1 and K-Sea GP1, LLC, a
Delaware limited liability company
("K-SEA GP1"), merged with and into New K-Sea LLC, with New K-Sea LLC as the
surviving entity of the merger whereby New K-Sea LLC became the sole member of
the Company; and
WHEREAS, New K-Sea LLC intends to distribute all of its member interest in
the Company pro rata to its members; and
WHEREAS, in contemplation of the distribution of all of its Membership
Interest in the Company pro rata to its members New K-Sea LLC desires to amend
and restate in its entirety the Prior Agreement;
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements contained herein, New K-Sea LLC, as the sole member of the Company,
hereby amends the Prior Agreement and, as so amended, restates it in its
entirety as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. When used in this Agreement, the following terms shall
have the meanings set forth below (all terms used in this Agreement that are not
defined in this Article I shall have the meanings set forth elsewhere in this
Agreement):
"ACQUISITION DATE" means, with respect to a given Unit, the date such Unit
was purchased by its initial Unitholder; provided that in the case of a Unit
distributed to the members of New K-Sea LLC, the Acquisition Date of such Unit
means the date the corresponding New K-Sea Unit was deemed to be initially
purchased by such Unitholder. The Acquisition Dates for the Units issued as of
the date of the distribution of all of New K-Sea LLC's Membership Interest to
its members are set forth in SCHEDULE A hereto.
"ACT" means the
Delaware Limited Liability Company Act,
Delaware Code,
Title 6, Sections 18-101, et. seq., as in effect from time to time.
"ADDITIONAL INTERESTS" has the meaning specified in Section 3.2.
"AFFILIATE" means, as to any Person, any Person directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common
control with such Person; PROVIDED, the term "control," as used in this
definition, shall mean with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled entity (whether through ownership of voting
securities, by contract or otherwise).
"AGREEMENT" means this
Limited Liability Company Agreement, as amended,
restated or modified from time to time, including any exhibits and schedules
hereto.
"APPLICABLE LAW" means, with respect to any Person, any statute, law,
regulation, ordinance, rule, injunction, order, decree, Governmental Approval,
directive, requirement, or other governmental restriction or any similar form of
decision of, or determination by, or any interpretation or administration of any
of the foregoing by, any Governmental Authority, applicable to such Person or
its subsidiaries or their respective assets.
"APPROVED SALE" has the meaning specified in Section 9.1.
"AVAILABLE CASH" means, at any time, the net amount of cash of the Company
which the Board determines it may distribute to the Members after due
consideration of (i) operating expenses of the Company, (ii) outstanding and
unpaid obligations of the Company, (iii) payment of any excess cash required to
be made to any creditor and (iv) such other reserves as the Board determines.
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"BANKRUPTCY EVENT" means, with respect to any Person: (i) the filing of a
petition by or against a Person as "debtor" under Title 11 of the United States
Code (the "Bankruptcy Code") seeking the adjudication of such Person as bankrupt
or the appointment of a trustee, receiver, or custodian of such Person's assets
and in case of a petition filed against such Person, such filing not having been
withdrawn or dismissed within thirty (30) days after the date of such filing;
(ii) the making by such Person of a general assignment for the benefit of
creditors; (iii) the entry of an order, judgment, or decree by any court of
competent jurisdiction appointing a trustee, receiver, or custodian to take
possession of or control over the assets of such Person unless such proceedings
and the person appointed are dismissed within thirty (30) days of the date upon
which the court issued its order, judgment, or decree; or (iv) the determination
by the Bankruptcy Court or the written admission of such Person that such Person
is generally unable to pay his or her debts as they become due within the
meaning of Section 303(h)(l) of the Bankruptcy Code.
"BASE RATE" means on any date of determination, a variable rate per annum
equal to the rate of interest published, from time to time, by THE WALL STREET
JOURNAL as the "prime rate" at large U.S. money center banks.
"BOARD" means the Board of Directors as specified in Article VII hereof.
"CAPITAL ACCOUNT" means, for each Unitholder, the Capital Account
established for each Unitholder pursuant to Article VI as maintained for each
Unitholder as follows:
(A) to each Unitholder's Capital Account there shall be credited
(a) such Unitholder's Capital Contributions, if any, when and as received and
(b) the Profit, Gross Income and other items of Company income and gain
allocated to such Unitholder pursuant to Article VI;
(B) to each Unitholder's Capital Account there shall be debited (a)
the aggregate amount of cash distributed to such Unitholder, (b) the Loss and
other items of Company loss and deduction allocated to such Unitholder pursuant
to Article VI (other than Section 6.3), and (c) the Gross Asset Value of any
Company assets (other than cash) distributed to such Unitholder in kind (net of
any liabilities secured by such distributed property that the Unitholder is
considered to assume or take under Code Section 752);
(C) Capital Accounts shall be otherwise adjusted in accordance with
Treasury Regulations Section 1.704-1(b); and
(D) if Units are Transferred in accordance with the terms of this
Agreement, the Transferee shall succeed to the Capital Account of the Transferor
to the extent it relates to the Transferred Units.
The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Treasury
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Treasury Regulations.
"CAPITAL CONTRIBUTION" means for each Unitholder the total amount of cash
and the Gross Asset Value of property contributed to the Company by such
Unitholder pursuant to Section 4.1 or 4.2 or otherwise, net of any liabilities
associated with such contributed property that the
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Company is considered to assume or "take subject to" under Section 752 of the
Code, which Capital Contribution shall be reflected on Schedule A hereto as
amended from time to time in accordance with the terms of this Agreement. With
respect to Units distributed by New K-Sea LLC to its members, Capital
Contribution shall be the proportionate share of the Initial Capital
Contribution made by Xxxxx that relates to such Unit.
"CAUSE" means with respect to a Management Member that such Management
Member has (i) been convicted of, or has plead guilty or NOLO CONTENDERE to any
felony or to any crime involving moral turpitude; (ii) willfully or
intentionally failed to perform the Management Member's duties and
responsibilities or failed to follow a lawful written directive of the board of
directors or equivalent body or supervisor of the K-Sea Group member that
employs such Management Member (other than any such failure resulting from the
Management Member's Incapacity); (iii) committed any fraud, embezzlement,
misappropriation of funds, or breached any of the Management Member's material
obligations under any non-competition, confidentiality or non-solicitation
agreements to which such Management Member is a party, or (iv) committed any
other act or omitted to take any other action that gives any member of the K-Sea
Group the right to terminate such Management Member for cause under any
employment agreement to which the Management Member is a party or any
company-wide policy applicable to all employees of the K-Sea Group member that
employs such Management Member; PROVIDED, HOWEVER, if a Management Member has a
written employment agreement with any member of the K-Sea Group containing a
definition of "Cause," "CAUSE" shall have the meaning given such term in such
written employment agreement.
"XXXXX" has the meaning set forth in the recitals hereto.
"C CORPORATION" means a corporation subject to taxation under Section 11 of
the Code.
"CERTIFICATE" means the Certificate of Formation for the Company originally
filed with the Secretary of State of the State of
Delaware and as amended or
restated from time to time.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(a) the sale or transfer of all or substantially all of the
consolidated assets of the Company as an entirety to any Person or related
group of Persons other than an Affiliate or Affiliates of the Company;
(b) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other
than the Members as of the date of this Agreement and their Permitted
Transferees, including, without limitation, the members of New K-Sea LLC
who receive Units as part of the distribution of all of New K-Sea LLC's
Membership Interest to its members, becomes the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of more than 50% of the Units;
(a) the Company engages in any merger, consolidation, sale of Units
held by Members, or any other transaction with any other Person, with the
effect that the Unitholders of the Company immediately prior thereto own,
directly or indirectly, in the aggregate, less than 50% of (i) the Units of
the Company if the Company is the surviving
4
entity or (ii) the voting common stock (or the equivalent) of the surviving
or resulting entity if the Company is not the surviving entity, in each
such case immediately after such transaction;
provided, however, that the consummation of the transactions contemplated by or
referred to in the Contribution, Conveyance and Assumption Agreement shall not
singly or in the aggregate constitute a Change of Control.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMPANY" has the meaning set forth in the recitals hereto.
"COMPANY MINIMUM GAIN" has the same meaning as "partnership minimum gain"
in Treasury Regulations Section 1.704-2(b)(2) and 1.704-2(d). A Unitholder's
share of Minimum Gain shall be computed in accordance with the provisions of
Treasury Regulations Section 1.704-2(g).
"CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT" means the Contribution,
Conveyance and Assumption Agreement effective as of the Closing Date (as defined
therein) by and among K-Sea Investors L.P., K-Sea LLC, MLP, EW Holding Corp., a
New York corporation, K-Sea Transportation Corp., a New York corporation, and
K-Sea Operating Partnership L.P., a
Delaware limited partnership.
"CORPORATION" means a corporation organized under the Delaware General
Corporation Law.
"DEFICIT CAPITAL ACCOUNT" shall mean with respect to any Unitholder, the
deficit balance, if any, in such Unitholder's Capital Account as of end of the
Taxable Year, after giving effect to the following adjustments:
(a) credit to such Capital Account any amount which such Unitholder
is obligated to restore under Treas. Reg. Section 1.704-l(b)(2)(ii)(c), as
well as any addition thereto pursuant to the next to last sentence of
Treas. Reg. Section l.704-2(g)(1) and (i)(5), after taking into account
thereunder any changes during such year in partnership minimum gain (as
determined in accordance with Treas. Reg. Section 1.704-2(d)) and in the
minimum gain attributable to any partner nonrecourse debt (as determined
under Treas. Reg. Section 1.704-2(i)(3)); and
(b) debit to such Capital Account the items described in Treas.
Reg. Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
This definition of Deficit Capital Account is intended to comply with the
provision of Treas. Reg. Sections 1.704-1 (b)(2)(ii)(d) and 1.704-2, and will be
interpreted consistently with those provisions.
"DEPRECIATION" means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Fiscal Year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal
5
income tax purposes at the beginning of such Fiscal Year, Depreciation shall be
an amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such Fiscal Year bears to such beginning adjusted tax basis; PROVIDED, that
if the adjusted basis for federal income tax purposes of an asset at the
beginning of such Fiscal Year is zero and the Gross Asset Value of the asset is
positive, Depreciation shall be determined with reference to such beginning
Gross Asset Value using any permitted method selected by the Board.
"DERIVATIVES" means, with respect to any Units, derivative securities whose
value or other economic features is based on the value or such other economic
features of such Units.
"DIRECTORS" has the meaning specified in Section 7.1.
"ESCROW AMOUNT" has the meaning specified in Section 9.2.
"ESCROW NOTICE" has the meaning specified in Section 9.2.
"FAIR MARKET VALUE" means, as of any date, the fair market value on such
date as determined pursuant to Section 13.14. For this purpose, securities that
are restricted by law, contract, market conditions (including trading volume
relative to the Company's holding) or otherwise as to saleability or
transferability may be valued at an appropriate discount, based on the nature
and term of such restrictions.
"FISCAL YEAR" means (i) the taxable year of the Company, which shall be
determined by the Board consistent with Section 706(b) of the Code, and (ii) for
purposes of Article VI, the portion of any Fiscal Year for which the Company is
required to (or does) allocate Gross Income, Profit, Loss, or other items
pursuant to Article VI.
"XXXXXX XXXX GROUP" means Xxxxxx Xxxx Investors II L.P., FS Employee
Investors LLC, FS Parallel Fund L.P., FS Private Investments LLC, Xxxxxx Xxxx
Investments II LLC and any present or former managing director, partner, general
partner, limited partner, member, officer, employee or shareholder of any of the
foregoing.
"GOOD REASON" means the resignation of an employee after the location of
the principal office of the Company is moved outside of a 75 mile radius of the
current location of the Company unless such successor location is mutually
agreed upon by the employee and the Company.
"GOVERNMENTAL APPROVAL" means any action, order, authorization, consent,
approval, license, ruling, permit, tariff, rate, certification, exemption,
filing or registration by or with any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any government or political subdivision
thereof, governmental department, commission, board, bureau, agency, regulatory
authority, instrumentality, judicial or administrative body having jurisdiction
oven the matter or matters in question.
6
"GROSS ASSET VALUE" means, with respect to any Company asset, the adjusted
basis of such asset for Federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any Company asset contributed
by a Member to the Company shall be the gross Fair Market Value of such
Company asset as of the date of such contribution;
(b) The Gross Asset Value of each Company asset may, at the
discretion of the Tax Matters Partner, be adjusted to equal its respective
gross Fair Market Value, as of the following times: (i) the acquisition of
an Additional Interest in the Company by any new or existing Member in
exchange for more than a DE MINIMUS Capital Contribution; (ii) the
distribution by the Company to a Unitholder of more than a DE MINIMUS
amount of Company assets (other than cash) as consideration for all or part
of its Units unless the Board reasonably determines that such adjustment is
not necessary to reflect the relative economic interests of the Unitholders
in the Company; and (iii) the liquidation of the Company within the meaning
of Treasury Regulations Section Section 1.704-l(b)(2)(ii)(g);
(c) The Gross Asset Value of a Company asset distributed to any
Unitholder shall be the Fair Market Value of such Company asset as of the
date of distribution thereof;
(d) The Gross Asset Value of each Company asset shall be increased
or decreased, as the case may be, to reflect any adjustments to the
adjusted basis of such Company asset pursuant to Section 734(b) or Section
743(b) of the Code, but only to the extent that such adjustments are taken
into account in determining Capital Account balances pursuant to Treasury
Regulations Section Section 1.704-1(b)(2)(iv)(m); provided, that Gross
Asset Values shall not be adjusted pursuant to this subparagraph (d) to the
extent that an adjustment pursuant to subparagraph (b) above is made in
conjunction with a transaction that would otherwise result in an adjustment
pursuant to this subparagraph (d); and
(e) If the Gross Asset Value of a Company asset has been determined
or adjusted pursuant to subparagraphs (a), (b) or (d) above, such Gross
Asset Value shall thereafter be adjusted to reflect the Depreciation taken
into account with respect to such Company asset for purposes of computing
Profits and Losses.
"GROSS INCOME" means for each Fiscal Year, all items of income and gain
recognized by the Company.
"HOLD" means direct or indirect possession and/or beneficial or record
ownership.
"INCAPACITY" means, as to any Person, the death or the adjudication of
incompetence or insanity of such Person.
"INDEMNITEE" means each and every Member, Director, Officer or direct or
indirect officer, director, stockholder, member or partner of a Member.
"INITIAL CAPITAL CONTRIBUTION" has the meaning specified in Section 4.1(a).
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"K-SEA GP1" has the meaning set forth in the recitals hereto.
"K-SEA GROUP" means the Company and its Affiliates and the MLP and its
Affiliates.
"K-SEA INVESTORS L.P." has the meaning specified in Section 3.11.
"K-SEA LLC" has the meaning set forth in the recitals hereto.
"K-SEA LP1" has the meaning set forth in the recitals hereto.
"K-SEA UNIT" means a "Unit" of K-Sea LLC as such term is defined in the
Amended and Restated
Limited Liability Company Agreement of K-Sea LLC dated as
of January 8, 2004.
"LIQUIDATOR" means the Person responsible for winding up the Company
pursuant to Section 10.2 hereof.
"MAJORITY APPROVAL" of the Units means the approval of Members owning a
majority of the Units.
"MANAGEMENT MEMBER" has the meaning specified in Section 9.3.
"MANAGEMENT UNITS" has the meaning specified in Section 9.3.
"MEMBER" means each Person who (a) (i) is an initial signatory to this
Agreement, (ii) is a member of New K-Sea LLC at the time that New K-Sea LLC
distributes all of its Membership Interest to its members and has signed the
signature page hereof or has executed and delivered to the Board a written
undertaking in the form of Exhibit A attached hereto to be bound by the terms
and conditions of this Agreement, or (iii) has been admitted to the Company as a
Member in accordance with the provisions of Article III of this Agreement, and
(b) has not become subject to an Incapacity or otherwise ceased to be a Member
in accordance with the provisions of this Agreement or for any other reason. No
Person who is not a Member shall be deemed a "member" under the Act.
"MEMBERSHIP INTEREST" means a Member's entire interest in the Company,
including such Member's economic interest, the right to vote on or participate
in the Company's management, and the right to receive information concerning the
business and affairs of the Company, in each case, to the extent expressly
provided in this Agreement or required by the Act.
"MLP" means K-Sea Transportation Partners L.P., a Delaware limited
partnership.
"MLP GP" means K-Sea General Partner L.P., a Delaware limited partnership
and the general partner of MLP.
"NEW K-SEA LLC" has the meaning set forth in the recitals hereto.
"NEW K-SEA UNIT" means a "Unit" of New K-Sea LLC as such term is defined in
the
Limited Liability Company Agreement of New K-Sea LLC dated as of January 8,
2004.
8
"OFFICER" means each Person who has been designated as, and who has not
ceased to be, an officer of the Company pursuant to Section 7.11 hereof, which
Person has been appointed as an officer of the Company by a duly adopted
resolution of the Board.
"OTHER UNITHOLDER" means, with respect to a Unitholder, all Unitholders
other than such Unitholder.
"PERMITTED TRANSFER" means all Transfers permitted under Section 8.2.
"PERMITTED TRANSFEREES" means all Transferees permitted under Section 8.2.
"PERSON" means an individual, a partnership, a corporation, an association,
a joint stock company, a limited liability company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.
"PRIOR AGREEMENT" has the meaning set forth in the recitals hereto.
"PROFIT" and "LOSS" mean, for each Fiscal Year, an amount equal to the
Company's taxable income or loss for such Fiscal Year, determined in accordance
with Code Section 703(a) (including for this purpose, all items of income, gain,
loss or deduction required to be separately stated pursuant to Code Section
703(a)(1)), with the following adjustments:
(a) Any income of the Company that is exempt from Federal income
tax and not otherwise taken into account in computing Profit or Loss
pursuant to this definition shall be added to such taxable income or loss;
(b) Any expenditures of the Company described in Section
705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code
expenditures pursuant to Treasury Regulations Section 1.704-l(b)(2)(iv)(i)
(other than expenses in respect of which an election is properly made under
Section 709 of the Code), and not otherwise taken into account in computing
Profit or Loss pursuant to this definition shall be subtracted from such
taxable income or loss;
(c) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraph (b) or (c) of the definition of Gross
Asset Value, the amount of such adjustment shall be taken into account as
gain (if the adjustment increases the Gross Asset Value of an asset) or
loss (if the adjustment decreases the Gross Asset Value of an asset) from
the disposition of such Company asset for purposes of computing Profit or
Loss;
(d) Gain or loss resulting from any disposition of any Company
asset with respect to which gain or loss is recognized for Federal income
tax purposes shall be computed by reference to the Gross Asset Value of the
Company asset disposed of, notwithstanding that the adjusted tax basis of
such Company asset may differ from its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or
loss, there shall be
9
taken into account Depreciation for such Fiscal Year, computed in
accordance with the definition of Depreciation;
(f) To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Code Section 734(b) is required, pursuant to
Treasury Regulation Section 1 704-1(b)(2)(iv)(m)(4), to be taken into
account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Member's interest in the Company, the amount of
such adjustment shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis) from the disposition of such asset and shall be taken into account
for purposes of computing Profit or Loss; and
(g) Any items of income, gain, loss or deduction specially
allocated under Section 6.3(b) through and including 6.3(h) shall be
excluded.
"REPURCHASE FAIR MARKET VALUE" has the meaning specified in Section 9.3.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statute then in effect, and any reference to a particular
section thereof shall include a reference to the comparable section, if any, of
any such similar Federal statute, and the rules and regulations promulgated
thereunder.
"SELLER'S NOTICE" has the meaning specified in Section 9.2.
"SHIPPING ACT" means the Shipping Xxx, 0000, as amended from time to time.
"SUBSIDIARY" of any Person (with respect to such Subsidiary, the "PARENT")
means any other Person whose (a) securities having ordinary voting power to
elect a majority of its board of directors or managing or general partners (or
other persons having similar functions) or (b) other ownership interests
(including partnership and membership interests) ordinarily constituting a
majority interest in the capital, profits or cash flow of such Person, are at
the time, directly or indirectly, owned or controlled by such parent, or by one
or more other Subsidiaries of such parent, or by such parent and one or more of
its other Subsidiaries.
"TAG-ALONG NOTICE" has the meaning specified in Section 9.2.
"TAX MATTERS PARTNER" has the meaning specified in Section 11.2.
"TERMINATION NOTICE" has the meaning specified in Section 9.3.
"TRANSFER" means any sale, transfer, assignment, pledge, or other disposal
of a Unit, and the terms "Transferee," "Transferor," "Transferring," and
"Transferred" shall have correlative meanings.
"TRANSFERRING UNITHOLDER" means any Unitholder making a Transfer of any
Units pursuant to the provisions of Article VIII.
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"TREASURY REGULATIONS" means the final or temporary regulations that have
been issued by the U.S. Department of Treasury pursuant to its authority under
the Code, and any successor regulations.
"UNIT" means a unit of economic interest embodied in a Membership Interest,
including without limitation, an interest in certain allocations of Gross
Income, Profits, Losses, and items of income, gain, loss, deduction, and credit
of the Company, and in certain distributions under this Agreement. Units may be
issued in whole and fractional numbers. The number of Units allocated to each
Unitholder following the distribution of New K-Sea LLC's Membership Interests to
its members is listed on SCHEDULE A attached hereto, subject to adjustment
pursuant to this Agreement.
"UNITHOLDER" means any Member or other Person in its capacity as owner of
one or more Units, as reflected on the Company's books and records; PROVIDED,
that for purposes of Article VI, "Unitholder" may only be a Member or other
Person that is treated as a "partner" for purposes of Code Section 704 and the
regulations thereunder.
"UNITHOLDER NONRECOURSE DEBT" has the same meaning as "partner nonrecourse
debt," as defined in Treasury Regulations Section 1.704-2(b)(4).
"UNITHOLDER NONRECOURSE DEBT MINIMUM GAIN" means an amount, with respect to
each Unitholder Nonrecourse Debt, equal to the Company Minimum Gain that would
result if such Unitholder Nonrecourse Debt were treated as a nonrecourse
liability, determined in accordance with Treasury Regulations Section
1.704-2(i)(3).
"UNRETURNED CAPITAL CONTRIBUTION" means, as to any Unitholder, the
Unitholder's Capital Contribution, reduced by the total distributions to such
Unitholder made pursuant to Sections 5.1 and 5.2.
1.2. TERMS GENERALLY. Throughout this Agreement:
The definitions in Article I shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." Each reference to a Person shall include the
successors thereto by merger, reorganization or other similar transaction.
ARTICLE II
ORGANIZATION; PURPOSE AND POWERS
2.1. FORMATION. The Company was formed as a Delaware limited liability
company under the Act by the filing of the Certificate. The rights and
liabilities of the Members shall be determined pursuant to the Act and this
Agreement. To the extent that the rights or obligations of any Member are
different by reason of any provision of this Agreement than they would be in the
absence of such provisions, this Agreement shall, to the extent permitted by the
Act, control.
2.2. CERTIFICATE. The Certificate has been prepared, executed and filed
in the Office of the Secretary of State for the State of Delaware.
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2.3. NAME. The name of the Company shall be "K-Sea General Partner GP
LLC," and the Company may conduct business under that name or any other name
hereafter approved by the Board.
2.4. TERM. The term of the Company commenced as of the date of the filing
of the Certificate. The Members shall continue the existence of the Company
until dissolution and termination of the Company in accordance with the
provisions of Article IX hereof.
2.5. OFFICE AND AGENT. The principal office of the Company shall be
located at 0000 Xxxxxxxx Xxxxxxx, X.X. Xxx 000000, Xxxxxx Xxxxxx, XX 00000-0000,
or such other location as the Board may determine. The registered agent and
office in the State of Delaware shall be The Corporation Trust Company, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 or as hereafter determined by the Board in
accordance with the Act.
2.6. QUALIFICATION IN OTHER JURISDICTIONS. The Officers shall cause the
Company to be qualified or registered under foreign entity or assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company owns property or transacts business to the extent such qualification or
registration is necessary or advisable in order to protect the limited liability
of the Members or to permit the Company lawfully to own property or transact
business. In connection with the foregoing, any Officer, as an authorized person
within the meaning of the Act, shall execute, deliver and file any certificates
(and any amendments and/or restatements thereof) necessary for the Company to
qualify to do business in a jurisdiction in which the Company may wish to
conduct business.
2.7. PURPOSE AND POWERS.
(a) The nature or purpose of the business to be conducted or
promoted by the Company is to engage in any lawful act or activity for which a
limited liability company may be organized under the Act. The Company may engage
in any and all activities necessary, desirable or incidental to the
accomplishment of the foregoing. Notwithstanding anything herein to the
contrary, nothing set forth herein shall be construed as authorizing the Company
to possess any purpose or power, or to do any act or thing, forbidden by law to
a limited liability company organized under the laws of the State of Delaware.
(b) Subject to the limitations expressly set forth in this
Agreement, the Company shall have the power and authority to do any and all acts
and things deemed necessary or desirable by the Board to further the Company's
purposes and carry on its business, including, without limitation, the
following:
(i) acting as the general partner of MLP GP;
(ii) entering into any kind of activity and performing
contracts of any kind necessary or desirable for the accomplishment of its
business (including the business of MLP GP, MLP and their respective
Subsidiaries);
(iii) acquiring any property, real or personal, in fee or
under lease or license, or any rights therein or appurtenant thereto, necessary
or desirable for the accomplishment of its business;
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(iv) borrowing money and issuing evidences of indebtedness
and securing any such indebtedness by mortgage or pledge of, or other lien on,
the assets of the Company;
(v) entering into such instruments and agreements as the
Board may deem necessary or desirable for the ownership, management, operation,
leasing and sale of the Company's property; and
(vi) negotiating and concluding agreements for the sale,
exchange or other disposition of all or substantially all of the properties of
the Company, or for the refinancing of any loan or payment obtained by the
Company.
(c) Subject to the provisions of this Agreement, the Company shall
have the power and authority to take any and all actions necessary, appropriate,
proper, advisable, convenient or incidental to, or for the furtherance of, the
purposes set forth in Sections 2.7(a) and (b).
(d) Subject to the provisions of this Agreement, (i) the Company
may enter into and perform any and all documents, agreements and instruments
contemplated thereby, all without any further act, vote or approval of any
Member, (ii) the Board may authorize any Person (including, without limitation,
any other Member or Officer) to enter into and perform any document on behalf of
the Company and (iii) the Company may merge with, or consolidate into, another
Delaware limited liability company or other business entity (as defined in the
Act).
ARTICLE III
MEMBERS
3.1. MEMBERS. The names and addresses of the Members, the number of Units
held by each Member and the amount of the Capital Contribution of each Member
are as set forth opposite its name on SCHEDULE A hereto, which Schedule may be
amended from time to time to reflect any change in the identity or Capital
Contribution of the Members and any changes in the number of Units held by each
of the Members. Each such Person shall be deemed to have been admitted as a
Member of the Company upon the date that this Agreement becomes effective
without the need for any further action or consent by any Person, whereupon each
such Person shall be issued its Membership Interest (including, without
limitation, the respective Units that correspond to and are part of such
Membership Interest as indicated on SCHEDULE A attached hereto); PROVIDED,
HOWEVER that the members of New K-Sea LLC who receive a portion of New K-Sea
LLC's Membership Interest upon the distribution of all of New K-Sea's Membership
Interest shall be deemed to have been admitted as a Member of the Company upon
(i) the consummation of the distribution and (ii) the signing of the signature
page of this Agreement or the execution of and delivery to the Board of a
written undertaking in the form of Exhibit A attached hereto to be bound by the
terms and conditions of this Agreement by such member of New K-Sea LLC,
whereupon each such member shall be issued Membership Interest (including,
without limitation, the respective Units that correspond to and are part of such
Membership Interest as indicated on SCHEDULE A attached hereto).
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3.2. ADMISSION OF NEW MEMBERS.
(a) ADDITIONAL INTERESTS. The Board shall have the right to cause
the Company to issue or sell to any Person (including Members and Affiliates of
Members) any of the following (which for purposes of this Agreement shall be
referred to as "ADDITIONAL INTERESTS"): (i) additional Membership Interests,
Units or other economic interests in the Company (including new classes or
series thereof having different rights); (ii) obligations, evidences of
indebtedness or other securities or economic interests convertible into or
exchangeable for Membership Interests, Units or other interests in the Company;
and (iii) warrants, options, or other rights to purchase or otherwise acquire
Membership Interests, Units, or other economic interests in the Company. Subject
to the provisions of this Agreement, the Board shall determine the terms and
conditions governing the issuance of such Additional Interests, including (x)
the number and designation of such Additional Interests, (y) the preference
(with respect to distributions, in liquidation or otherwise) over any other
Membership Interests, and (z) any required contributions, and the form thereof,
in connection therewith.
(b) ADDITIONAL MEMBERS AND INTERESTS. In order for a Person to be
admitted as a Member of the Company with respect to an Additional Interest or
otherwise: such Person shall have delivered to the Company a written undertaking
in the form of EXHIBIT A attached hereto to be bound by the terms and conditions
of this Agreement and shall have delivered such documents and instruments as the
Board determines to be necessary or appropriate in connection with the issuance
of such Additional Interest to such Person or to effect such Person's admission
as a Member; thereafter, the Secretary of the Company shall amend SCHEDULE A
without the further vote, act or consent of any other Person to reflect such new
Person as a Member and shall make available for review a copy of such amended
SCHEDULE A to each Member. Upon the delivery of such documents and instruments,
such Person shall be admitted as a Member and deemed listed as such on the books
and records of the Company and thereupon shall be issued such Person's
Membership Interest, including any Units that correspond to and are part of such
Membership Interest. If an Additional Interest is issued to an existing Member
in accordance with the terms hereof; the Secretary of the Company shall amend
SCHEDULE A without the further vote, act or consent of any other Person to
reflect the issuance of such Additional Interest, shall make available for
review a copy of such amended SCHEDULE A to each Member, and, upon the amendment
of such SCHEDULE A, such Member shall be issued such Member's Additional
Interest.
3.3. WITHDRAWALS OR RESIGNATIONS. Except as otherwise provided by this
Agreement, no Member may withdraw, retire, or resign from the Company.
3.4. VOTING RIGHTS AND PROCEDURES.
(a) Except as specifically provided herein or otherwise required by
Applicable Law, the Unitholders shall be entitled to one vote per Unit held by
such holders on all matters to be voted on by the Members.
(b) Any action permitted to be taken by the vote of Members
hereunder may be taken by written consent of Members holding at least a majority
of the Units then outstanding or at a meeting of the Members by the vote of
Members holding at least a majority of the Units
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then outstanding. A meeting of Members may be called by the Board or by Members
holding at least one-third of the Units. Notice of such meeting shall be given
to all Members at least five (5) days prior to such meeting.
3.5. TERMINATION OF UNITS. A Member shall cease to be a Member or
Unitholder, as the case may be at such time that such Member transfers all of
its Units in accordance with this Agreement.
3.6. LIABILITY TO THIRD PARTIES. No Member shall, by virtue of its, his
or her status as a Member or its, his or her ownership of a Membership Interest
or a Unit, be liable for the debts, obligations or liabilities of the Company.
3.7. LACK OF AUTHORITY. The Members shall have no power to participate in
the management of the Company except as expressly authorized by the Act or this
Agreement. No Member, acting solely in the capacity of a Member, is an agent of
the Company nor does any Member, unless expressly and duly authorized in writing
to do so by the Board, have any power or authority to act for or on behalf of
the Company, to do any act that would be binding on the Company, to pledge its
credit, to incur any expenditures on behalf of the Company, to execute any
instrument on its behalf or to render it liable for any purpose.
3.8. NATURE OF INTEREST IN THE COMPANY. A Member's Membership Interests
shall be personal property for all purposes.
3.9. REPRESENTATIONS AND WARRANTIES OF MEMBERS. In connection with the
acquisition by the Members of Units pursuant to the terms and conditions of this
Agreement, each Member represents and warrants to the Company that:
(a) The Units will be acquired for the Member's own account and not
with a view to, or intention of, distribution thereof in violation of the
Securities Act, or any applicable state securities laws, and the Units will not
be disposed of in contravention of the Securities Act or any applicable state
securities laws;
(b) No commission, fee or other remuneration is to be paid or given
directly or indirectly, to any Person for soliciting the Member to acquire the
Units;
(c) The Member is sophisticated in financial matters and is able to
evaluate the risks and benefits of making the Capital Contribution contemplated
hereunder with respect to the Units and has determined that such investment is
suitable for the Member, based upon the Member's financial situation and needs,
as well as the Member's other securities holdings;
(d) The Member is not subject to any state's administrative
enforcement order or judgment which prohibits, denies or revokes the use of any
exemption from registration in connection with the offer, purchase or sale of
securities;
(e) The Member is able to bear the economic risk of its investment
in the Units for an indefinite period of time and the Member understands that
the Units have not been registered under the Securities Act and cannot be sold
unless subsequently registered under the Securities Act or unless an exemption
therefrom is available;
15
(f) The Member has had an opportunity to ask questions and receive
answers concerning the terms and conditions of its investment in the Units and
has had full access to such other information concerning the Company, MLP GP and
MLP as the Member has requested;
(g) This Agreement constitutes the legal, valid and binding
obligation of the Member, enforceable in accordance with its terms (subject to
principles of equity, the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium, and other similar laws), and the execution, delivery
and performance of this Agreement by the Member does not and will not, in any
material respect, conflict with, violate or cause a breach of any Applicable
Law, material agreement, contract or instrument to which the Member is a party
or any judgment, order or decree to which the Member is subject; and
(h) Except as indicated on SCHEDULE A hereto, the Member is a
citizen of the United States within the meaning of Section 2 of the Shipping
Act, for the purpose of the operation of vessels in the United States coastwise
trade.
3.10. SUCCESSORS AND SUBSTITUTE MEMBERS. Upon the Bankruptcy Event,
termination, liquidation or dissolution of a Member which is a partnership,
trust, corporation, limited liability company or other entity or the Bankruptcy
Event, death or Incapacity of a Member who is an individual, the estate or
successor in interest of such Member shall thereupon succeed to the rights of
such Member as a Unitholder only to receive allocations and distributions
hereunder and may become a substitute Member only upon the terms and conditions
set forth in Section 3.2(b) hereof.
3.11. BUSINESS OPPORTUNITIES OF K-SEA INVESTORS L.P. The Members hereby
acknowledge that the interest of K-Sea Investors L.P., a Delaware limited
partnership ("K-Sea Investors L.P."), in the Company is that of an investor
providing capital for the Company in accordance with the terms hereof; and the
very nature of the business of K-Sea Investors L.P. and the Xxxxxx Xxxx Group
and their respective Affiliates is to provide capital and financing in a wide
variety of forms to, and to make investments with respect to, a vast and
expanding number of diverse Persons, businesses and enterprises. Accordingly,
the Members hereby agree that K-Sea Investors L.P., the Xxxxxx Xxxx Group and
their respective Affiliates may engage, provide financing, invest or possess an
interest in other businesses and enterprises of any kind, nature or description,
independently or with others, whether (i) such ventures are competitive with any
member of the K-Sea Group or (ii) the operations or property of such businesses
and enterprises are transacted or located in the vicinity of or adjacent to any
member of the K-Sea Group or any area in which any member of the K-Sea Group
engages in business; and, to the extent permitted by the Act, K-Sea Investors
L.P., the Xxxxxx Xxxx Group and their respective Affiliates shall not have any
duties or responsibilities to any member of the K-Sea Group that they might
otherwise have under the Act. The fact that K-Sea Investors L.P., the Xxxxxx
Xxxx Group or any of their respective Affiliates may take advantage of such
opportunities and not offer such opportunities, or disclose information
pertaining thereto, to any member of the K-Sea Group or to the other Members,
shall not subject K-Sea Investors L.P., the Xxxxxx Xxxx Group or any of their
respective Affiliates to any liability to any member of the K-Sea Group or to
the other Members whatsoever. Neither the Company, nor any other member of the
K-Sea Group nor any other Member shall have the right by virtue of this
Agreement, or the relationship created hereby, in or to such ventures,
investments or other opportunities, or to the income or profits derived
16
therefrom by K-Sea Investors L.P., the Xxxxxx Xxxx Group or any of their
respective Affiliates; and the pursuit of, and nondisclosure of information to
the members of the K-Sea Group pertaining to, such ventures, investments or
other opportunities even though competitive with the business of the members of
the K-Sea Group, shall not be deemed wrongful or improper or in violation of
this Agreement or any rights of the members of the K-Sea Group or the Members
under the Act or other Applicable Law.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1. INITIAL MEMBER CAPITAL CONTRIBUTIONS.
(a) In connection with the formation of the Company, Xxxxx made an
initial Capital Contribution of $1,000 (the "Initial Capital Contribution").
(b) SCHEDULE A sets forth the Capital Contributions attributed to
the members of New K-Sea LLC who will receive a portion of New K-Sea LLC's
Membership Interest upon the pro rata distribution of all of New K-Sea LLC's
Membership Interest to its members. Upon the distribution of all of New K-Sea
LLC's Membership Interests to its members and the signing of the signature page
of this Agreement or the execution and delivery to the Board of a written
undertaking in the form of Exhibit A attached hereto to be bound by the terms
and conditions of this Agreement by such member of New K-Sea LLC, such Member
shall be deemed to own the number of Units set forth opposite such Member's name
on SCHEDULE A. The Company may in its discretion issue certificates to the
Members representing the Membership Interest held by each Member. The Capital
Account of each Member described above shall include the amount of the Initial
Capital Contribution allocated to such Member as shown on SCHEDULE A.
4.2. ADDITIONAL CAPITAL CONTRIBUTIONS. Except for the Capital
Contributions of the Members made pursuant to Section 4.1, the Members shall not
be required to make any additional Capital Contributions. If any Unitholder has
a deficit balance in his Capital Account (after giving effect to all Capital
Contributions made pursuant to Article IV or otherwise, distributions pursuant
to Article V or Article X, and allocations of items of Profit or Loss pursuant
to Article VI for all taxable years, including the taxable year during which the
liquidation described in Article X occurs), such Unitholder shall have no
obligation to make any Capital Contribution to the Company with respect to such
deficit, and such deficit shall not be considered a debt owed to the Company or
to any other Person for any purpose whatsoever.
ARTICLE V
DISTRIBUTIONS
5.1. DISTRIBUTIONS. Distributions, including, without limitation,
distributions of Available Cash, shall be made to the Unitholders only when and
if, and in the amounts, the Board shall determine. All distributions shall be
made pro rata in accordance with the number of Units held by each Unitholder.
5.2. TAX DISTRIBUTIONS. Notwithstanding Section 5.1, if the Tax Matters
Partner determines that the Unitholders may incur a tax liability arising from
the allocation of Profits to
17
them from this Company pursuant to Article VI (after taking into account any
Losses allocated to them pursuant to Article VI in prior years) then, in the Tax
Matters Partner's discretion, the Company may distribute among the Unitholders
an amount equal to such anticipated tax liability, such amount to be determined
by the Tax Matters Partner. Any amounts so distributed shall be taken into
account in determining subsequent distributions under Section 5.1.
5.3. DISTRIBUTION IN KIND. The Board may make distributions in cash or in
kind. In the event a distribution of property other than cash is made, such
property shall be valued by the Board at its Fair Market Value for purposes of
making distributions pursuant to Section 5.1. If different types of property
(such as different classes of a security) are to be distributed simultaneously,
such different types of property shall be distributed in the same proportion to
each Unitholder. The Board may cause certificates evidencing any security to be
distributed to be imprinted with legends as to such restrictions on Transfer
that it may deem necessary or appropriate, including legends as to applicable
federal or state securities laws or other legal or contractual restrictions, and
may require any Unitholder to which securities are to be distributed to agree in
writing (a) that such securities will not be Transferred except in compliance
with such restrictions and (b) to such other matters as the Board may deem
necessary or appropriate.
ARTICLE VI
ALLOCATIONS AND CAPITAL ACCOUNTS
6.1. CAPITAL ACCOUNTS. A "CAPITAL ACCOUNT" shall be established for each
Unitholder on the books of the Company and shall be maintained as provided in
the definition of Capital Account.
6.2. ALLOCATIONS. After giving effect to the required allocations
pursuant to Section 6.3 hereof or otherwise required by this Article VI or
Section 10.2(b) hereof, items of Profit and Loss shall be allocated among the
Unitholders with respect to each Fiscal Year as follows:
(a) Items of Profit shall be allocated:
(i) First, to those Unitholders who have received
cumulative allocations of Loss in excess of their respective cumulative
allocations of Profit, in the amount of such excess, in reverse chronological
order to that in which such excess arose, in proportion to the amount of such
excess attributable to each such Unitholder for each prior Fiscal Year; and
(ii) Second, to each Unitholder, to the extent of and in
proportion to, the amount by which the amount distributed to such Unitholder
pursuant to Section 5.1 exceeds the amount of such Unitholder's Capital Account
immediately preceding the allocation.
(b) Items of Loss shall be allocated:
(i) First, to those Unitholders who have received
cumulative allocations of Profit in excess of their respective cumulative
allocations of Loss, in the amount of such excess, in reverse chronological
order to that in which such excess arose, in proportion to the amount of such
excess attributable to each such Unitholder for each prior Fiscal Year;
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(ii) Second, to those Unitholders with positive Capital
Account balances immediately prior to this allocation, in an amount equal to the
sum of and in proportion to the amounts of such positive balances; and
(iii) Thereafter, to all Unitholders in proportion to the
number of Units held by each of them.
6.3. LIMITATIONS ON LOSSES AND SPECIAL RULES.
(a) LIMITATIONS ON LOSSES. The Losses or deductions allocated to
any Unitholder pursuant to Section 6.2 hereof shall not exceed the maximum
amount of Losses or deductions that can be so allocated without causing such
Person to have a Deficit Capital Account at the end of any Fiscal Year. In the
event that some, but not all, of the Unitholders would have Deficit Capital
Accounts as a consequence of an allocation of Losses or deductions pursuant to
Section 6.2, the limitation set forth in this Section 6.3(a) shall be applied on
a Unitholder-by-Unitholder basis so as to allocate the maximum permissible
Losses or deductions to each Unitholder under Treasury Regulations Section
1.704-I (b)(2)(ii)(d).
(b) GROSS INCOME ALLOCATION. In the event any Unitholder has a
Deficit Capital Account at the end of any Fiscal Year, each such Unitholder
shall be specially allocated items of Company income and gain in the amount of
such excess as quickly as possible, provided that an allocation pursuant to this
Section 6.3(b) shall be made if and only to the extent that such Unitholder
would have a Deficit Capital Account in excess of such sum after all other
allocations provided for in this Section 6.3 have been tentatively made as if
this Section 6.3(b) were not in this Agreement.
(c) QUALIFIED INCOME OFFSET. In the event any Unitholder
unexpectedly receives any adjustments, allocations, or distributions described
in Treasury Regulations Sections 1.704-l(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6), items of Company income and
gain shall be specially allocated to each such Unitholder in an amount and
manner sufficient to eliminate, to the extent required by the Treasury
Regulations, the Deficit Capital Account of such Unitholder as quickly as
possible, provided that an allocation pursuant to this Section 6.3(c) shall be
made if and only to the extent that such Unitholder would have a Deficit Capital
Account after all other allocations provided for in this Article VI have been
tentatively made as if this Section 6.3(c) were not in this Agreement.
(d) COMPANY MINIMUM GAIN CHARGEBACK. Except as otherwise provided
in Treasury Regulations Section 1.704-2(f), and notwithstanding any other
provision of this Article VI, if there is a net decrease in Company Minimum Gain
during any Fiscal Year, each Unitholder shall be specially allocated items of
Company income and gain for such Fiscal Year (and, if necessary, subsequent
Fiscal Years) in an amount equal to such Unitholder's share of the net decrease
in Company Minimum Gain, determined in accordance with Treasury Regulations
Section 1.704-2(g). The items to be so allocated shall be determined in
accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2).
This Section 6.3(d) is intended to comply with the minimum gain chargeback
requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.
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(e) NONRECOURSE DEDUCTIONS. Nonrecourse deductions, within the
meaning of Treasury Regulations Section 1.704-2(c) shall be allocated pro rata
among the Unitholders.
(f) NONRECOURSE LIABILITIES. That portion of nonrecourse
liabilities of the Company allocable pursuant to Treasury Regulations Section
1.752-3(a)(3) shall be allocated pro rata among the Unitholders.
(g) UNITHOLDER NONRECOURSE DEBT AND MINIMUM GAIN CHARGEBACK.
Deductions and losses attributable to Unitholder Nonrecourse Debt (as defined in
Treas. Reg. Section 1.704-2(b)(4)) shall be allocated in the manner required by
Treas. Reg. Section 1.704-2(i). Except as otherwise provided in Section
1.704.-2(i)(4) of the Regulations and notwithstanding any other provision of
this Article VI, if there is a net decrease in Unitholder Nonrecourse Debt
Minimum Gain attributable to a Unitholder Nonrecourse Debt during any Fiscal
Year, each Person who has a share of the Unitholder Nonrecourse Debt Minimum
Gain attributable to such Unitholder Nonrecourse Debt, determined in accordance
with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated
items of Company income and gain for such Fiscal Year (and, if necessary,
subsequent Fiscal Years) in an amount equal to such Person's share of the net
decrease in Unitholder Nonrecourse Debt Minimum Gain attributable to such
Unitholder Nonrecourse Debt, determined in accordance with Reg. Section
1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Unitholder
pursuant thereto. The items to be so allocated shall be determined in accordance
with Section 1.704-2(i)(4) and Section 1.704-2(j)(2) of the Regulations. This
Section 3.3.3 is intended to comply with the minimum gain chargeback requirement
in Section 1.704-2(i)(4) of the Regulations and shall be interpreted
consistently therewith.
(h) COMPLIANCE WITH SECTION 704(B) REGULATIONS. The provisions of
this Article VI (other than subsections (g) and (h) hereunder) are intended to
comply with Treasury Regulation Sections 1.704-1(b) and 1.704-2, as amended, and
shall be interpreted and applied in a manner consistent with such Regulations.
(i) TRANSFER OF UNITS. If all or any portion of any Unitholder's
Units are transferred during any Fiscal Year, items of Profit and Loss
attributable to the transferred Units for such Fiscal Year shall be allocated
between the transferor and the transferee by closing the books with respect to
such transferred Units as of the date of transfer, as permitted by Code Sections
706(c) and (d).
(j) RELATED PARTY TRANSACTIONS. If, and to the extent that any
Unitholder is deemed to recognize any item of income, gain, loss, deduction or
credit as a result of any transaction between such Unitholder and the Company
pursuant to Code Sections 1272-1274, 7872, 483, 482 or any similar provision now
or hereafter in effect and the Board determines that any corresponding income,
gain, loss or deduction of the Company should be allocated to the Unitholder who
recognized such item in order to reflect the Unitholder's economic interests in
the Company, then such income, gain, loss or deduction shall be so allocated.
(k) INCOME CHARACTERIZATION. For purposes of determining the
character (as ordinary income or capital gain) of any Profits allocated to the
Unitholders pursuant to Section 6.2, such portion of the taxable income of the
Company allocated pursuant to Section 6.2 that is
20
treated as ordinary income attributable to the recapture of depreciation shall,
to the extent possible, be allocated among the Unitholders in the proportion
that (i) the amount of depreciation previously allocated to each Unitholder
bears to (ii) the total of such depreciation allocated to all Unitholders. This
Section 6.3(i) shall not alter the amount of allocation among the Unitholders
pursuant to Section 6.2 but merely the character of income so allocated.
6.4. TAX ALLOCATIONS.
(a) The income, gains, losses, deductions and credits of the
Company will be allocated, for federal, state and local income tax purposes,
among the Unitholders in accordance with the allocation of such income, gains,
losses, deductions and credits among the Unitholders for computing their Capital
Accounts, except that if any such allocation is not permitted by the Code or
other Applicable Law, the Company's subsequent income, gains, losses, deductions
and credit will be allocated among the Unitholders so as to reflect as nearly as
possible the allocation set forth herein in computing their Capital Accounts.
(b) Items of the Company's taxable income, gain, loss and deduction
with respect to any property contributed to the capital of the Company shall be
allocated among the Unitholders in accordance with Code Section 704(c) so as to
take account of any variation between the adjusted basis of such property to the
Company for federal income tax purposes and its Gross Asset Value using the
traditional method of Treas. Reg. Section 1.704-1(b)(2).
(c) If the Gross Asset Value of any Company asset is adjusted,
subsequent allocations of items of taxable income, gain, loss and deduction with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Gross Asset Value in
the same manner as under Code Section 704(c).
(d) Allocations of tax credits, tax credit recapture, and any items
related thereto shall be allocated to the Unitholders according to their
interests in such items as determined by the Board taking into account the
principles of Treas. Reg. Section 1.704-1(b)(4)(ii).
(e) Allocations pursuant to this Section 6.4 are solely for
purposes of federal, state and local taxes and shall not affect, or in any way
be taken into account in computing, any Unitholder's Capital Account or share of
income, gains, losses, deductions, Distributions or other Company items pursuant
to any provision of this Agreement.
6.5. CURATIVE ALLOCATIONS. If the Board determines, after consultation
with counsel experienced in income tax matters, that the allocation of any item
of Company income, gain, loss, deduction or credit is not specified in this
Article VI (an "unallocated item"), or that the allocation of any item of
Company income, gain, loss, deduction or credit hereunder is clearly
inconsistent with the Unitholders' economic interests in the Company (determined
by reference to the general principles of Treas. Reg. Section 1.704-1(b) and the
factors set forth in Treas. Reg. Section 1.704-1(b)(3)(ii)) (a "misallocated
item"), then the Board may allocate such unallocated items, or reallocate such
misallocated items, to reflect such economic interests; PROVIDED, that no such
allocation will be made without the prior consent of each Member which would be
affected thereby (which consent no such Member may unreasonably withhold). Any
such Member's
21
consent which is unreasonably withheld in the good faith judgment of the Board
shall be deemed given for purposes of the immediately preceding sentence.
ARTICLE VII
MANAGEMENT
7.1. ESTABLISHMENT OF BOARD. The Members hereby establish a Board of
Directors (the "BOARD") to be comprised of such number of directors
("DIRECTORS") as shall be determined as set forth in this Section 7.1. The
initial number of Directors shall be three (3). The number of Directors may be
changed from time to time by Majority Approval of the Units; PROVIDED, HOWEVER,
that pursuant to a resolution adopted by the Board, the number of Directors may
be increased and a Director(s) may be appointed to the Board to fill the vacancy
created by such increase. The Board shall initially be composed of Xxxxx X.
Xxxxxxx, Chairman, Xxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxx.
7.2. THE BOARD: DELEGATION OF AUTHORITY AND DUTIES.
(a) MEMBERS AND BOARD. The business and affairs of the Company
shall be managed by the Board, which shall possess all rights and powers which
are possessed by managers under the Act and otherwise by law, pursuant to
Section 18-402 of the Act, subject to the provisions of this Agreement. Except
as otherwise expressly provided for herein, the Members hereby consent to the
exercise by the Board of all such powers and rights conferred on them by the Act
or otherwise by law with respect to the management and control of the Company.
No Member and no Director, in its capacity as such, shall have any power to act
for, sign for, or do any act that would bind the Company. Each Member
acknowledges and agrees that no Member shall, in its capacity as a Member (but
not in his capacity as an employee of the Company and its subsidiaries), be
bound to devote all of such Member's business time to the affairs of the
Company, and that each Member (other than the Management Members) and such
Member's Affiliates do and will continue to engage for such Member's own account
and for the account of others in other business ventures. To the fullest extent
permitted by Applicable Law, each Director shall have such rights and duties as
are applicable to directors of a Corporation.
(b) DELEGATION BY THE BOARD. The Board shall have the power and
authority to delegate to one or more other Persons the Board's rights and powers
to manage and control the business and affairs of the Company, including
delegating such rights and powers of the Board to agents and employees of the
Company (including Officers). The Board may authorize any Person (including,
without limitation, any Member, Officer or Director) to enter into any document
on behalf of the Company and perform the obligations of the Company thereunder.
Notwithstanding the foregoing, the Board shall not have the power and authority
to delegate any rights or powers customarily requiring the approval of the
directors of a Corporation and no Officer or other Person shall be authorized or
empowered to act on behalf of the Company in any way beyond the customary rights
and powers of an officer of a Corporation.
(c) COMMITTEES. The Board may, from time to time, establish one or
more committees and may delegate certain of its responsibilities to such
committees. Any such committee shall have such powers and authority of the Board
as provided in the enabling
22
resolution of the Board with respect thereto. The Board shall have power at any
time to fill vacancies in, to change the membership of, or to dissolve any
committee.
7.3. TERM OF OFFICE. Once designated pursuant to Section 7.1, a Director
shall continue in office until the removal of such Director in accordance with
the provisions of this Agreement or until the earlier death or resignation of
such Director. Any Director may resign at any time by giving written notice of
such Director's resignation to the Board. Any such resignation shall take effect
at the time the Board receives such notice or at any later effective time
specified in such notice. Unless otherwise specified in such notice, the
acceptance by the Board of such Director's resignation shall not be necessary to
make such resignation effective. Notwithstanding anything herein or at law to
the contrary, any Director may be removed at any time with or without cause by
Majority Approval of the Units.
7.4. MEETINGS OF THE BOARD AND COMMITTEES.
(a) MEETINGS. The Board (or any committee of the Board) shall meet
at such time and at such place as the Chairman of the Board (or the chairman of
such committee) may designate. Written notice of all regular meetings of the
Board (or any committee of the Board) must be given to all Directors (or all
members of such committee) at least ten days prior to the regular meeting of the
Board (or such committee). Special meetings of the Board (or any committee of
the Board) shall be held at the request of a majority of the Directors (or a
majority of the members of such committee) upon at least two (2) days (if the
meeting is to be held in person) or twenty-four hours (if the meeting is to be
held telephonically) oral or written notice to the Directors (or the members of
such committee) or upon such shorter notice as may be approved by the Directors
(or the members of such committee). All notices and other communications to be
given to Directors (or members of a committee) 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 (or member) 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 (or committee) need be specified
in the notice of such meeting. Any Director (or member of such committee) may
waive the requirement of such notice as to such Director (or such member).
(b) CONDUCT OF MEETINGS. Any meeting of the Board (or any committee
of the Board) may be held in person or by 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.
(c) QUORUM. A majority of all Directors (or members of a committee
of the Board), present in person or participating in accordance with Section
7.4(b), shall constitute a quorum for the transaction of business, but if at any
meeting of the Board (or committee) there shall be less than a quorum present, a
majority of the Directors (or members) present may adjourn the meeting without
further notice. The Directors (or members of a committee of the Board) present
at a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Directors (or members) to leave less
than a quorum;
23
PROVIDED, HOWEVER, that only the acts of the Directors (or members of such
committee) meeting the requirements of Section 7.5 shall be deemed to be acts of
the Board (or such committee).
(d) PROCEDURES. To the extent not inconsistent with this Agreement
or the Act, the procedures and rights governing the Board and its committees
shall be as provided to the board of directors and its committees of a
Corporation under the General Corporation Law of the State of Delaware.
(e) 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.
7.5. VOTING. Except as otherwise provided in this Agreement, the
effectiveness of any vote, consent or other action of the Board (or any
committee of the Board) in respect of any matter shall require either (i) the
presence of a quorum and the affirmative vote of greater than a majority of the
Directors (or members of such committee) present or (ii) the unanimous written
consent (in lieu of meeting) of the Directors (or members of such committee) who
have been designated and who are then in office. Any Director may vote in person
or by proxy (pursuant to a power of attorney) on any matter that is to be voted
on by the Board at a meeting thereof.
7.6. RESPONSIBILITY AND AUTHORITY OF THE BOARD. Except as otherwise
specifically provided in this Agreement, the authority and functions of the
Board, on the one hand, and the 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 Officers shall be vested with such powers and duties
as are set forth in Section 7.11 hereof and as are specified by the Board from
time to time. Accordingly, except as otherwise specifically provided in this
Agreement, the business and affairs of the Company shall be managed under the
direction of the Board, and the day-to-day activities of the Company shall be
conducted on the Company's behalf by the Officers who shall be agents of the
Company.
7.7. COMPANY FUNDS. Except as specifically provided in this Agreement or
with the approval of the Board, the Company shall not pay to or use for, the
benefit of any Unitholder (except in any Unitholder's capacity as an employee or
independent contractor of the Company), funds, assets, credit, or other
resources of any kind or description of the Company. Funds of the Company shall
(i) be deposited only in the accounts of the Company in the Company's name, (ii)
not be commingled with funds of any Unitholder, and (iii) be withdrawn only upon
such signature or signatures as may be designated in writing from time to time
by the Board.
7.8. DEVOTION OF TIME. The Directors shall not be obligated and shall not
be expected to devote all of their time or business efforts to the affairs of
the Company (except in their capacity as employees of the Company).
7.9. PAYMENTS TO DIRECTORS: REIMBURSEMENTS. Except as otherwise
determined by the Board (by the vote or written consent of a majority of the
votes of the disinterested Directors then in office), no Director shall be
entitled to remuneration by the Company for services rendered in its capacity as
a Director (other than for reimbursement of reasonable out-of-pocket
24
expenses of such Director). All Directors will be entitled to reimbursement of
their reasonable out-of-pocket expenses incurred in connection with their
attendance at Board meetings.
7.10. CITIZENSHIP REQUIREMENTS. No more than a minority of the number of
members of the Board necessary to constitute a quorum of the Board can be
non-United States citizens.
7.11. OFFICERS.
(a) DESIGNATION AND APPOINTMENT. The Officers of the Company as of
the date of this Agreement shall be:
Office Name
------ ----
Chief Executive Officer and President Xxxxxxx X. Xxxxx
Chief Financial Officer Xxxx X. Xxxxxx
Vice President, Operations Xxxxxx X. Xxxxxxxx
Vice President, Administration and Secretary Xxxxxxx X. Xxxxxxxxxx
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 or Director) who may be designated as
Officers of the Company, with titles including but not limited to "chief
executive officer," "president," vice president," "treasurer," "secretary"
"general counsel" and "chief financial officer," as and to the extent authorized
by the Board. Any number of offices may be held by the same Person. In the
Board's 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 State of
Delaware or Members. 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 successor shall be duly designated and shall have qualified as an
Officer or until his death or until he shall resign or shall have been removed
in the manner hereinafter provided. The salaries or other compensation, if any,
of the Officers of the Company shall be fixed from time to time by the Board.
(b) RESIGNATION AND 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 by the Board of a resignation of any Officer shall
not be necessary to make such resignation effective, unless otherwise specified
in such resignation. Any Officer may be removed as such, either with or without
cause, at any time by the Board. Designation of any Person as an Officer by the
Board pursuant to the provisions of Section 7.11(a) shall not in and of itself
vest in such Person any contractual or employment rights with respect to the
Company.
(c) DUTIES OF OFFICERS GENERALLY. The Officers, in the performance
of their duties as such, shall (i) 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 State of Delaware, and (ii) keep the
Board reasonably apprised of material developments in the business of the
Company.
25
(d) PRESIDENT. The president of the Company shall be a citizen of
the United States. The president shall be responsible for the general management
of the affairs of the Company and shall perform all duties incidental to such
person's office that 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 President may sign, with the Secretary, an
Assistant Secretary or any other Officer of the Company thereunto duly
authorized by the Board, any deeds, mortgages, bonds, contracts or other
instruments that 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
Applicable Law to be otherwise executed. The President, if he is also a
director, shall, in the absence of or because of the inability to act of the
chairman of the Board, perform all duties of the chairman of the Board and
preside at all meetings of the Board.
(e) CHIEF FINANCIAL OFFICER. The chief financial officer shall keep
complete and accurate records of account, showing at all times the financial
condition of the Company. He shall be the legal custodian of all money, notes,
securities and other valuables which may from time to time come into the
possession of the Company. He shall furnish at meetings of the Board, or
whenever requested, a statement of the financial condition of the Company, and
shall perform such other duties and have such other powers as the president of
the Company or the Board may from time to time prescribe.
(f) VICE PRESIDENT(S). The vice president(s) of the Company shall
perform such duties and have such other powers as the president of the Company
or the Board may from time to time prescribe. A vice president may be designated
as an Executive Vice President, a Senior Vice President, an Assistant Vice
President, or a vice president with a functional title.
(g) SECRETARY.
(i) The secretary of the Company shall attend all meetings
of the Board, record all the proceedings of the meetings and perform similar
duties for the committees of the Board when required.
(ii) The secretary of the Company shall keep all documents
as may be required under the Act. The Secretary (i) shall see that all notices
are duly given in accordance with the provisions of this Agreement and as
required by Applicable Law; (ii) 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; (iii) shall see that the books, reports,
statements, certificates and other documents and records required by Applicable
Law to be kept and filed are properly kept and filed; and (iv) in general, shall
have the general duties, powers and responsibilities of a secretary of a
corporation and shall perform such other duties and have such other authority as
may be prescribed elsewhere in this Agreement or from time to time by the
president of the Company or the Board.
(iii) If the Board chooses to appoint an assistant secretary
or assistant secretaries, the assistant secretaries, in the order of seniority,
shall in the Company secretary's absence, disability or inability to act,
perform the duties and exercise the powers of the secretary
26
of the Company, and shall perform such other duties as the president of the
Company or the Board may from time to time prescribe.
ARTICLE VIII
TRANSFERS OF UNITS
8.1. GENERAL.
(a) RESTRICTIONS ON TRANSFER. No Unitholder shall Transfer any
Units without the Majority Approval of the Units other than a Transfer to a
Permitted Transferee as defined in Section 8.2 and otherwise in accordance with
the terms and conditions of this Article VIII and IX and the other provisions of
this Agreement provided that so long as K-Sea Investors L.P. and its Affiliates
and their respective Permitted Transferees own a majority of the Units any
Transfers by K-Sea Investors L.P. and its Affiliates and their respective
Permitted Transferees shall be deemed approved. Notwithstanding anything to the
contrary contained herein, no Unitholder shall Transfer any Units or any
Derivatives (or create any Derivatives) if such Transfer or creation would cause
(i) the Company to be taxed as a C Corporation, (ii) a termination of the
Company for purposes of Section 708 of the Code (a "708 TERMINATION"), unless
the Transferring Unitholder indemnities and reimburses the Other Unitholders for
any taxes (including interest and penalties) incurred by the Other Unitholders
that would not have been incurred but for such 708 Termination, (iii) the
Company to be treated as a publicly-traded partnership for purposes of Section
7704 of the Code or (iv) the Company to cease to be a United States citizen
within the meaning of Section 2 of the Shipping Act (if at such time the Company
and its Subsidiaries are then engaged in the operation of vessels in the United
States coastwise trade within the meaning of the Shipping Act), unless in the
case of each of clauses (i), (ii) and (iii), such Transfer or creation receives
Majority Approval of the Units.
(b) VOID TRANSFERS. Any Transfer or attempted Transfer of any Units
or Derivatives in violation of any provision of this Agreement shall be null and
void, and the Company shall not record such Transfer on its books or treat any
purported Transferee of such Units as the owner thereof for any purpose.
(c) TRANSFER MECHANICS. In connection with any proposed Transfer of
Units, including a Transfer to a Permitted Transferee, the holder of the Units
proposed to be Transferred shall (a) provide the Company with at least five (5)
days prior written notice of a Transfer of any Units to a person who is not a
United States citizen within the meaning of Section 2 of the Shipping Act, and
(b) deliver to the Company (if required by the Board) at least five (5) days
(and no more than sixty (60) days) prior to any such Transfer an opinion of
counsel reasonably acceptable to the Company to the effect that such proposed
Transfer may be effected in compliance with the Securities Act and the Shipping
Act; provided that no such notices or opinions shall be necessary in connection
with the transfer by K-Sea Investors L.P. of Units to entities the general
partner of which or the managing member of which is Park Avenue Transportation
Inc. or another member of the Xxxxxx Xxxx Group. In addition, if the holder of
the Units proposed to be Transferred delivers to the Company an opinion of
counsel reasonably acceptable to the Company to the effect that no subsequent
Transfer of such Units shall require registration under the Securities Act, the
Company shall promptly upon consummation of such Transfer deliver to such holder
new certificates (if any) for such Units that do not bear the legend
27
set forth in Section 8.3. If the Company is not required to deliver new
certificates for such Units (if certificates were previously issued for such
Units) not bearing such legend, the holder thereof shall not consummate a
Transfer of the same until the prospective Transferee has confirmed to the
Company in writing its agreement to be bound by the conditions contained herein,
as provided in Section 8.1(f).
(d) INFORMATION REQUESTS. Upon the request of a Unitholder, the
Company shall promptly supply to such Person or its prospective Transferees all
information regarding the Company required to be delivered in connection with a
Transfer pursuant to Rule 144A under the Securities Act (or any similar rule or
rules then in effect).
(e) REMOVAL OF LEGEND. Upon the request of any Unitholder, the
Company shall remove the legend set forth in Section 8.3 below from the
certificates for such Unitholder's Units; PROVIDED, that such Units are eligible
for sale pursuant to Rule 144(k) under the Securities Act (or any similar rule
or rules then in effect) and such Unitholder delivers to the Company, if
required by the Board, an opinion of counsel reasonably acceptable to the
Company to the effect that such Units are so eligible.
(f) SURVIVAL OF RESTRICTIONS. All Transferees of Units under this
Article VIII who are not parties to this Agreement shall agree in writing to be
bound by the provisions of this Agreement by executing a joinder substantially
in the form attached hereto as EXHIBIT A and, other than Permitted Transferees,
each such Transferee shall not be deemed to be a Unitholder until such
Transferee has been admitted as a Member pursuant to the provisions of Section
3.2(b).
8.2. PERMITTED TRANSFERS. For purposes of this Agreement, a Permitted
Transfer shall mean:
(a) a Transfer by any Member or Permitted Transferee pursuant to
Article IX of this Agreement;
(b) a Transfer by any Member or Permitted Transferee to any
Permitted Transferee. As used herein, "PERMITTED TRANSFEREE" shall mean:
(i) in the case of K-Sea Investors L.P. or its Permitted
Transferees, (A) any member of the Xxxxxx Xxxx Group and (B) any Affiliate of
K-Sea Investors L.P., including any partnership or limited liability company the
general partner or managing member of which is Park Avenue Transportation Inc.
or a member of the Xxxxxx Xxxx Group;
(ii) in the case of any Member or Permitted Transferee who
is a natural person, such Member's or Permitted Transferee's spouse or children
or grandchildren (in each case, natural or adopted), any trust for the exclusive
benefit of such Member or Permitted Transferee or such Member's or Permitted
Transferee's spouse or children or grandchildren (in each case, natural or
adopted), or any corporation or partnership in which the direct and beneficial
owner of all of the equity interest is such individual Member or Permitted
Transferee or such Member's or Permitted Transferee's spouse or children or
grandchildren (in each case, natural or adopted) (or any trust for the exclusive
benefit of such persons);
28
(iii) in the case of any Member or Permitted Transferee who
is, in each case, a natural person, the heirs, executors, administrators or
personal representatives upon the death of such Member or Permitted Transferee
or upon the incompetency or disability of such Member or Permitted Transferee
for purposes of the protection and management of such Member's or Permitted
Transferee's assets;
(iv) in the case of any Member or Permitted Transferee that
is a trust, the grantor of such trust, any beneficiary of such trust who is a
spouse or child or grandchild (in each case, natural or adopted) of the grantor
of such trust, or any corporation, partnership, limited liability company, trust
or other entity in which all direct and beneficial ownership interests are owned
by the grantor of such trust, the spouse of the grantor of such trust or one or
more children or grandchildren (in each case, natural or adopted) of the grantor
of such trust; or
(v) in the case of any Member or Permitted Transferee who
is not a natural person, any Affiliate of such Member or Permitted Transferee;
provided, however, that in no event shall any Person be a Permitted Transferee
if as a result of such Transfer the Company would cease to be a United States
citizen within the meaning of Section 2 of the Shipping Act, if at the time of
such proposed Transfer the Company and its subsidiaries are then engaged in the
operation of vessels in the United States coastwise trade within the meaning of
the Shipping Act.
8.3. LEGEND. The Units have not been registered under the Securities Act
and, therefore, in addition to the other restrictions on Transfer contained in
this Agreement, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is then available. To the
extent such Units have been certificated, each certificate evidencing Units and
each certificate issued in exchange for or upon the Transfer of any Units shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON [INSERT DATE] AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
IN THE ABSENCE OF AN EXEMPTION FROM REGISTRATION THEREUNDER. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE FIRST AMENDED
AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT, DATED AS OF
JANUARY 14, 2004, AS AMENDED AND MODIFIED FROM TIME TO TIME. THE
COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH
TRANSFER. A COPY OF SUCH
29
CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF
UPON WRITTEN REQUEST AND WITHOUT CHARGE."
The Company shall imprint such legend on certificates (if any) evidencing Units.
The legend set forth above shall be removed from the certificates (if any)
evidencing any Units which cease to be Units in accordance with the definition
thereof. Notwithstanding the foregoing, to the extent the Units are not
certificated, this Agreement will contain a legend in substantially the form
stated above.
ARTICLE IX
OTHER COVENANTS AND REPRESENTATIONS
9.1. APPROVED SALES.
(a) If the Board approves the sale of the Company to a Person
(whether by merger, consolidation, sale of all or substantially all of its
assets or sale of all of the outstanding Units) (an "APPROVED SALE"), each
Member and Permitted Transferee will consent to, vote for, and raise no
objections against, and waive dissenters and appraisal rights (if any) with
respect to, the Approved Sale, and if the Approved Sale is structured as a sale
of Units, each Member and Permitted Transferee will agree to sell and will be
permitted to sell all of such Member's and Permitted Transferee's Units on the
terms and conditions approved by the Board of Directors. Each Member and
Permitted Transferee will take all necessary and desirable actions in connection
with the consummation of an Approved Sale.
(b) Each Member and Permitted Transferee shall, in connection with
a sale of its Units pursuant to this Section 9.1, at the request of the Company
and without further cost and expense to the Company, execute and deliver such
other instruments of conveyance and transfer and take such other actions as may
reasonably be requested in order to consummate the Approved Sale.
(c) The obligations of each of the Members with respect to an
Approved Sale are subject to the satisfaction of the conditions that: (i) upon
the consummation of the Approved Sale all of the Members and Permitted
Transferees will receive the consideration per Unit that such Member or
Permitted Transferee would have received if a distribution had then been made to
the Unitholders of the aggregate net proceeds from such Approved Sale in
accordance with Article V; and (ii) the terms of sale shall not include any
indemnification, guaranty or similar undertaking of the Member (other than
voluntary undertakings of Management Members in respect of continued employment)
that (A) is not made or given pro rata with other Members on the basis of share
of the aggregate consideration to be received by each Member in the Approved
Sale or (B) could result in liability to such Member that is in excess of the
fair market value of the consideration to be received by such Member in the
Approved Sale.
9.2. TAG-ALONG.
(a) Subject to Section 9.2(c) no Member who holds more than 10% of
the Units (each a "SELLER") shall sell any Units in any transaction or series of
related transactions unless all Remaining Holders (as hereinafter defined) are
offered an equal opportunity to
30
participate in such transaction or transactions on a pro-rata basis and on
identical terms (including price and type of consideration paid) based on
priority in a distribution as determined pursuant to Article V. As used in this
Section 9.2, "REMAINING HOLDERS" shall mean the Members (other than the Sellers)
and their Permitted Transferees.
(b) Prior to any sale of Units subject to these provisions, the
Seller shall notify the Company in writing of the proposed sale. Such notice
(the "SELLER'S NOTICE") shall set forth: (A) the number of Units subject to the
proposed sale; (B) the name and address of the proposed purchaser; and (C) the
proposed amount of consideration and terms and conditions of payment offered by
such proposed purchaser. The Company shall promptly, and in any event within 15
days, mail or cause to be mailed the Seller's Notice to each Remaining Holder. A
Remaining Holder may exercise the tag-along right by delivery of a written
notice (the "TAG-ALONG NOTICE") to the Seller within 15 days of the date the
Company mailed or caused to be mailed the Seller's Notice. The Tag-Along Notice
shall state the number of Units that the Remaining Holder proposes to include in
the proposed sale. If no Tag-Along Notice is received during the 15-day period
referred to above, the Seller shall have the right for a 120-day period to
effect the proposed sale of Units on terms and conditions no more favorable than
those stated in the notice and in accordance with the provisions of this Section
9.2.
(c) Notwithstanding anything herein to the contrary, a Seller may
make any of the following sales without offering the Remaining Holders the
opportunity to participate: (a) sales by a Seller to any Permitted Transferee,
PROVIDED that the proposed purchaser agrees in writing to be bound by the
provisions of this Agreement; (b) sales pursuant to an effective registration
statement under the Securities Act; (c) sales pursuant to an Approved Sale; (d)
sales to the Company for resale to managers or directors of the Company,
provided that the Company shall within 90 days thereafter resell such
transferred Units to managers or directors of the Company at not less than the
price per Unit (not including accrued and unpaid distributions) received by such
Seller in its sale to the Company and (e) sales other than those specified in
the foregoing (a) through (d) which in the aggregate on a cumulative basis do
not exceed five percent of the number of Units then outstanding.
(d) Each Member acknowledges for itself and its transferees that
the Company and the other Members may grant in the future tag-along rights to
other holders of Units and such holders will (a) have substantially the same
opportunity to participate as provided to the parties hereto, and (b) be
included in the calculation of the pro rata basis upon which the Remaining
Holders may participate in a sale.
(e) The tag-along obligations of the Sellers and the rights of the
Remaining Holders with respect thereto provided under this Section 9.2 shall
terminate upon a public offering of the Units.
(f) Notwithstanding the requirements of this Section 9.2 a Seller
may sell Units at any time without complying with such requirements so long as
the Seller deposits into escrow with an independent third party at the time of
sale that amount of the consideration received in the sale equal to the Escrow
Amount. The "ESCROW AMOUNT" shall equal that amount of consideration as all the
Remaining Holders would have been entitled to receive if they had the
opportunity to participate in the sale on a pro rata basis, determined as if
each Remaining Holder
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(A) delivered a Tag-Along Notice to the Seller in the time period set forth in
Section 9.2(b) and (B) proposed to include all of its Units in the sale.
No later than five (5) business days after the date of the sale, the
Seller shall notify the Company in writing of the sale. Such notice (the "ESCROW
NOTICE") shall set forth the information required in the Seller's Notice, and in
addition, such notice shall state the name of the escrow agent and, if the
consideration (in whole or in part) for the sale was cash, then the account
number of the escrow account. The Company shall promptly, and in any event
within 10 days, mail or cause to be mailed the Escrow Notice to each Remaining
Holder.
A Remaining Holder may exercise the tag-along right by delivery to
the Seller, within 15 days of the date the Company mailed or caused to be mailed
the Escrow Notice, of (i) a written notice specifying the number of Units it
proposes to sell, and (ii) the certificates for Units, with unit powers duly
endorsed in blank.
Promptly after the expiration of the 15th day after the Company has
mailed or caused to be mailed the Escrow Notice, (A) the Seller shall purchase
that number of Units as Seller would have been required to include in the sale
had Seller complied with the provisions of Section 9.2(b), (B) all Units not
required to be purchased by Seller shall be returned to the Remaining Holders
thereof, and (C) all remaining funds and other consideration held in escrow
shall be released to Seller. If Seller received consideration other than cash in
its sale, Seller shall purchase the Units tendered by paying to the Remaining
Holders non-cash consideration and cash in the same proportion as received by
Seller in the sale.
(g) Each Remaining Holder that exercises its tag-along rights
pursuant to this Section 9.2 shall, at the request of Seller and without further
cost and expense to Seller, execute and deliver such other instruments of
conveyance and transfer and take such other actions as may reasonably be
requested in order to consummate the proposed sale of Units by Seller and the
Remaining Holders which have exercised their tag-along rights pursuant to this
Section 9.2.
9.3. MANAGEMENT INVESTMENT.
(a) GENERAL. Each of the individuals designated on SCHEDULE A
hereto as a "Management Member" (individually, a "MANAGEMENT MEMBER" and
collectively, the "MANAGEMENT MEMBERS") has acquired the number of Units (the
"MANAGEMENT UNITS") set forth opposite such Management Member's name on SCHEDULE
A attached hereto. A Management Member's Management Units shall vest 20% on each
of the first through fifth anniversaries of the Acquisition Date of such Units.
The Management Units shall vest in full upon a Change of Control of the Company.
(b) RE-PURCHASE RIGHT OF THE COMPANY.
(i) GENERAL. Should any of the Management Members cease to
be employed by the Company or another member of the K-Sea Group for any reason,
including, without limitation, death and temporary or permanent disability, or
for no reason, the Company (or its designees) shall have the right to repurchase
the unvested Management Units held by such Management Member.
32
(ii) PURCHASE PRICE. The purchase price for such unvested
Management Units shall be such Management Member's original cost for such
Management Units (or, if such Management Unit was distributed to such Management
Member by New K-Sea LLC, the original cost of the corresponding New K-Sea Unit)
if the Management Member resigns without Good Reason or is terminated for Cause,
and the Repurchase Fair Market Value of such Units if the Management Member is
terminated for no reason or for any reason other than for Cause or his
resignation without Good Reason including, without limitation, death and
temporary or permanent disability, in both cases less any distributions received
by such Management Member in respect of such Management Units pursuant to
Article V.
"REPURCHASE FAIR MARKET VALUE" means with respect to a
particular Management Unit, the fair market value as determined jointly by the
Company and the Management Member owning such Management Unit; provided that if
such parties are unable to reach agreement within 30 days following the receipt
by the Company of the Termination Notice, such Repurchase Fair Market Value
shall be determined by an independent appraiser jointly selected by the Company
and such Management Member. In the event that such parties are unable to reach
agreement with respect to such independent appraiser within 5 days following the
conclusion of the 30-day period described above, each of the Company and the
Management Member shall promptly (and in any event within 5 days therefrom)
select an appraiser, and the two appraisers so selected shall, as promptly as
possible (and in any event within 10 days therefrom), jointly select a third
independent appraiser. The independent appraiser hereunder shall determine the
Repurchase Fair Market Value for each such Management Unit within 75 days
following the receipt by the Company of the Termination Notice. The independent
appraiser determining Repurchase Fair Market Value hereunder shall use one or
more valuation methods that such independent appraiser, in its best professional
judgment, determines to be most appropriate under the circumstances. The
determination of such appraiser shall be final and binding on the Company and
the Management Member. The fees and expenses of all appraisers shall be borne
equally by the Company and the Management Member.
(iii) RE-PURCHASE PROCEDURE. At such time that a Management
Member shall cease to be employed by the Company or another member of the K-Sea
Group, such Management Member (or in the case of death, his estate) shall give
prompt notice of such termination to the Company (the "TERMINATION NOTICE"). The
Company (or its designees) shall have the right and option, (i) exercisable at
any time within 30 days after its receipt of the Termination Notice (if the
Management Member resigns without Good Reason or is terminated for Cause and the
purchase price for such units is their original cost or the original cost of the
corresponding New K-Sea Units, as the case may be) or (ii) exercisable at any
time within 30 days after a determination (either by agreement of the parties
or, in the event they cannot agree, by the independent appraiser) of the
Repurchase Fair Market Value of the Management Units has been made (if the
Management Member is terminated for no reason or for any reason other than for
Cause or his resignation without Good Reason and the purchase price for such
units is the Repurchase Fair Market Value), to purchase all or part of the
unvested Management Units owned by such Management Member. Each exercise by the
Company (or its designees) shall be effected by the giving of written notice to
the Management Member in question by the Company, on its own behalf and/or on
behalf of its designees, as the case may be, signed by an Officer of the
Company, prior to the end of the 30-day period (and such notice shall be
effective when given). Such notice shall indicate the number of Management Units
desired to be purchased and
33
the purchase price for each such unit and shall set forth a time and place of
closing for each full or partial exercise of the re-purchase option by the
Company (or its designees), which closing shall be no earlier than ten days and
no later than 30 days after the date of such notice.
9.4. PURCHASER REPRESENTATIVE. In the event that the Company or any
Member enters into any negotiation or transaction (including any transaction
pursuant to Section 9.1 and 9.2 of this Agreement) for which Rule 506 (or any
similar rule then in effect) promulgated by the Securities and Exchange
Commission under the Securities Act may be available (including a merger,
consolidation or other reorganization), each Member will, at the request of
Company, appoint a purchaser representative (as such term is defined in Rule
501(h) promulgated by the Securities and Exchange Commission under the
Securities Act) reasonably acceptable to the Company. Each Member will be
responsible for the fees of the purchaser representative so appointed.
ARTICLE X
DISSOLUTION AND LIQUIDATION
10.1. DURATION. The Company shall terminate upon (i) the sale or other
disposition by the Company of all or substantially all of the assets, properties
or businesses the Company then owns, (ii) the dissolution of the Company by
action of the Board, or (iii) any other event that would cause the dissolution
of a limited liability company under the Act (each of the foregoing events, a
"DISSOLUTION EVENT").
10.2. LIQUIDATION OF COMPANY INTERESTS.
(a) Upon dissolution of the Company, the Board shall appoint one
Member (or any other Person) to serve as the "Liquidator" who shall act at the
direction of the Board, unless and until a successor Liquidator is appointed as
provided herein. The Liquidator shall agree not to resign at any time without 30
days' prior written notice. The Liquidator may be removed at any time, with or
without cause, by notice of removal and appointment of a successor Liquidator
approved by the Board. Within 30 days following the occurrence of any such
removal, a successor Liquidator may be elected by the Board. The successor
Liquidator shall succeed to all rights, powers and duties of the former
Liquidator. The right to appoint a successor or substitute Liquidator in the
manner provided herein shall be recurring and continuing for so long as the
functions and services of the Liquidator are authorized to continue under the
provisions hereof, and every reference herein to the Liquidator shall be deemed
to refer also to any such successor or substitute Liquidator appointed in the
manner herein provided. Except as expressly provided in this Article X, the
Liquidator appointed in the manner provided herein shall have and may exercise,
without further authorization or consent of any of the parties hereto, all of
the powers conferred upon the Board under the terms of this Agreement (but
subject to all of the applicable limitations, contractual and otherwise, upon
the exercise of such powers to the extent necessary or desirable in the good
faith judgment of the Liquidator to carry out the duties and functions of the
Liquidator hereunder for and during such period of time as shall be reasonably
required in the good faith judgment of the Liquidator to complete the winding up
and liquidation of the Company as provided for herein). The Liquidator shall
receive as compensation for its services (i) no additional compensation, if the
Liquidator is an employee
34
of the Company or any of its Subsidiaries, or (ii) if the Liquidator is not such
an employee, out-of-pocket costs and expenses plus such other compensation as
the Board may otherwise approve.
(b) The Liquidator shall liquidate the assets of the Company, and
apply and distribute the proceeds of such liquidation, in the following order of
priority, unless otherwise required by mandatory provisions of Applicable Law:
(i) First, to the payment of the Company's debts and
obligations to its creditors, including sales commissions and other expenses
incident to any sale of the assets of the Company.
(ii) Second, to the establishment of and additions to such
reserves as the Liquidator may deem necessary or appropriate.
(iii) Third, to the Unitholders in proportion to, and to the
extent of, each Unitholder's positive Capital Account balance, if any, as such
account has been adjusted to reflect allocations under Article VI, earlier
distributions under Article V, and any further adjustments made pursuant to this
Section 10.2(b).
The reserves established pursuant to subparagraph (ii) of this Section 10.2(b)
shall be paid over by the Liquidator to a bank or other financial institution,
to be held in escrow for the purpose of paying any such contingent or unforeseen
liabilities or obligations and, at the expiration of such period as the
Liquidator deems advisable, such reserves shall be distributed to the
Unitholders in the priorities set forth in this Section 10.2(b). The allocations
and distributions provided for in this Agreement are intended to result in the
Capital Account of each Unitholder immediately prior to the distribution of the
Company's assets pursuant to this Section 10.2(b) being equal to the amount that
would be distributable to such Unitholder pursuant to Section 5.1. The Company
is authorized to make appropriate adjustments in the allocation of and items of
income, gain, loss and deduction as necessary to cause the amount of each
Unitholder's Capital Account immediately prior to the distribution of the
Company's assets pursuant to this Section 10.2(b) to equal the amount that would
be distributable to such Unitholder pursuant to Section 5.1.
(c) Notwithstanding the provisions of Section 10.2(b) which require
the liquidation of the assets of the Company, but subject to the order of
priorities set forth in Section 10.2(b), if upon dissolution of the Company the
Board determines that an immediate sale of part or all of the Company's assets
would be impractical or could cause undue harm to the Unitholders, then the
Board may, in its discretion, defer the liquidation of any assets except those
necessary to satisfy Company liabilities and reserves, and may, in its
discretion and in accordance with the provisions of Section 10.2(b), (i)
distribute such assets in kind to the Unitholders or (ii) distribute to such
Unitholders, as tenants in common, undivided interests in such Company assets as
the Liquidator deems reasonable and equitable and subject to any agreements
governing the operating of such properties at such time. For purposes of any
such distribution, the Board will determine the Fair Market Value of any
property to be distributed.
(d) A reasonable time will be allowed for the orderly winding up of
the business and affairs of the Company and the liquidation of its assets
pursuant to Section 10.2(b) in order to minimize any losses otherwise attendant
upon such winding up. Distributions upon
35
liquidation of the Company (or any Unitholder's interest in the Company) and
related adjustments will be made by the end of the Fiscal Year of the
liquidation (or, if later, within 90 days after the date of such liquidation) or
as otherwise permitted by Treasury Regulation Section 1.704-1(b)(2)(ii)(b).
10.3. TERMINATION. Upon completion of the orderly winding-up of the
business and affairs of the Company and the liquidation of the assets as
provided in this Article X, the Company shall be terminated, and the Liquidator
shall cause the filing of the Certificate of Cancellation with the Recording
Office pursuant to Section 18-203 of the Act and shall take all such other
actions as may be necessary to terminate the Company. During the period of
winding up and liquidation of the Company, all of the provisions of this
Agreement shall continue in effect.
ARTICLE XI
BOOKS AND RECORDS
11.1. BOOKS. The Company shall maintain complete and accurate books of
account of the Company's affairs at the Company's principal office, which books
shall be open to inspection by any Member (or its authorized representative) to
the extent required by the Act.
11.2. TAX ALLOCATIONS AND REPORTS.
(a) Not later than three calendar months after the end of each
Fiscal Year, the Board shall cause the Company to furnish each Unitholder an
Internal Revenue Service Schedule K-I and any similar form required for the
filing of state or local income tax returns for such Unitholder for such Fiscal
Year; Upon the written request of any such Unitholder and at the expense of such
Unitholder, the Company will use reasonable efforts to deliver or cause to be
delivered any additional information necessary for the preparation of any state,
local and foreign income tax return which must be filed by such Unitholder.
(b) The Tax Matters Partner will determine whether to make or
revoke any available election pursuant to the Code. Each Unitholder will, upon
request, supply the information necessary to give proper effect to any such
election.
(c) The Company hereby designates K-Sea Investors L.P. to act as
the "TAX MATTERS PARTNER" (as defined in Section 6231(a)(7) of the Code) in
accordance with Sections 6221 through 6233 of the Code. The Tax Matters Partner
is authorized and required to represent the Company (at the Company's expense)
in connection with all examinations of the Company's affairs by tax authorities,
including resulting administrative and judicial proceedings, and to expend
Company funds for professional services and costs associated therewith;
PROVIDED, that the Tax Matters Partner may be removed and replaced by, and shall
act in such capacity at the direction of, the Board. Each Unitholder agrees to
cooperate with the Tax Matters Partner and to do or refrain from doing any or
all things reasonably requested by the Tax Matters Partner with respect to the
conduct of such proceedings. Subject to the foregoing proviso, the Tax Matters
Partner will have reasonable discretion to determine whether the Company (either
on its own behalf or on behalf of the Unitholders) will contest or continue to
contest any tax deficiencies assessed or proposed to be assessed by any taxing
authority. Any deficiency for taxes imposed on any Unitholder (including
penalties, additions to tax or interest imposed with respect to such
36
taxes) will be paid by such Unitholder, and if paid by the Company, will be
recoverable from such Unitholder (including by offset against distributions
otherwise payable to such Unitholder).
ARTICLE XII
EXCULPATION AND INDEMNIFICATION
12.1. INDEMNIFICATION.
(a) To the fullest extent permitted by Applicable 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. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 12.1 shall be made only out of the
assets of the Company, it being agreed that the Members shall not be personally
liable for such indemnification and shall have no obligation to contribute or
loan any monies or property to the Company to enable it to effectuate such
indemnification.
(b) To the fullest extent permitted by law, expenses (including
legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant
to Section 12.1(a) in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Company of any undertaking by or on behalf of the Indemnitee to repay such
amount if it shall be determined that the Indemnitee is not entitled to be
indemnified as authorized in this Section 12.1.
(c) The indemnification provided by this Section 12.1 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of the Members, 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 Indemnitees, against any liability that may be asserted against or expense
that may be incurred by an Indemnitee in connection with the Company's
activities or such Indemnitee's activities on behalf of the Company, regardless
of whether the Company would have the power to indemnify such Indemnitee against
such liability under the provisions of this Agreement.
37
(e) For purposes of this Section 12.1, 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 (including in
its capacity as general partner of the MLP GP in its capacity as general partner
of the MLP) also imposes duties on, or otherwise involves services by, it to the
plan or participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to Applicable Law
shall constitute "fines" within the meaning of Section 12.1(a); and action taken
or omitted by it 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) In no event may an Indemnitee subject the Members to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or
in part under this Section 12.1 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 12.1 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.
(i) No amendment, modification or repeal of this Section 12.1 or
any provision hereof shall in any manner terminate, reduce or impair the right
of any past, present or future Indemnitee to be indemnified by the Company, nor
the obligations of the Company to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 12.1 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
12.2. LIABILITY OF INDEMNITEES.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, no Indemnitee shall be liable for monetary damages to the Company,
the Members or any other Persons who have acquired Membership Interests, 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 or to the Members and any other Indemnitee acting in connection with the
Company's business or affairs shall not be liable to the Company or to any
Member for its good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict or otherwise
modify the duties and liabilities of an Indemnitee otherwise existing at law or
in equity, are agreed by the Members to replace such other duties and
liabilities of such Indemnitee.
38
(c) Any amendment, modification or repeal of this Section 12.2 or
any provision hereof shall be prospective only and shall not in any way affect
the limitations on the liability to the Company, the Members, the Directors, the
officers and employees of the Company under this Section 12.2 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
12.3. INDEMNIFICATION AND REIMBURSEMENT FOR PAYMENTS ON BEHALF OF A
UNITHOLDER.
(a) If the Company is obligated to pay any amount to a Governmental
Authority or to any other Person (and makes such payment or will make such a
payment within 30 days of charging the Capital Account of the Member pursuant to
the following sentences and either providing notification of an obligation to
indemnify under (i) below or offsetting a distribution pursuant to (ii) below)
on behalf of (or in respect of an obligation of) a Unitholder, then such
Unitholder (the "CHARGED MEMBER") shall indemnify the Company in full for the
entire amount paid (including, without limitation, any interest, penalties and
expenses associated with such payment). The amount to be indemnified shall be
charged against the Capital Account of the Charged Member, and, at the option of
the Board, either:
(i) promptly upon notification of an obligation to
indemnify the Company, the Charged Member shall make a cash payment to the
Company equal to the full amount to be indemnified (and the amount paid
shall be added to the Charged Member's Capital Account but shall not be
deemed to be a Capital Contribution hereunder); or
(ii) the Company shall reduce current or subsequent
distributions that would otherwise be made to the Charged Member until the
Company has recovered the amount to be indemnified (PROVIDED that the
amount of such reduction shall be deemed to have been distributed for all
purposes of this Agreement, but such deemed distribution shall not further
reduce the Charged Member's Capital Account).
(b) A Charged Member's obligation to make contributions to the
Company under this Section 12.3 shall survive the termination, dissolution,
liquidation and winding up of the Company, and for purposes of this Section
12.3, the Company shall be treated as continuing in existence. The Company may
pursue and enforce all rights and remedies it may have against each Charged
Member under this Section 12.3, including instituting a lawsuit to collect such
contribution with interest calculated at a rate equal to the Base Rate plus six
percentage points per annum (but not in excess of the highest rate per annum
permitted by law).
ARTICLE XIII
MISCELLANEOUS
13.1. CONFIDENTIALITY. By executing this Agreement, each Member expressly
agrees, at all times during the term of the Company and thereafter and whether
or not at that time it is a Member of the Company, (unless the prior written
consent of the Company is obtained, which prior consent shall not be
unreasonably withheld) to maintain the confidentiality of, and not to
39
disclose to any Person other than the Company, another Member, any Person who
beneficially owns, whether directly or indirectly, shares of voting stock or
equity interests of any Member that is not a natural person or a person
designated by the Company, any information obtained from the Company or its
representatives that is not generally available or known to the public and which
has not been previously disclosed by any Member without a confidentiality
agreement relating to the identity of any Member, the business, financial
structure, financial position or financial results, clients or affairs of the
Company; PROVIDED, that each Member may deliver or disclose confidential
information to (i) its directors, officers, employees, agents, attorneys and
Affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by its interest in the Company and
such Persons agree to comply with the terms of this Section), (ii) its financial
advisors and other professional advisors who agree to comply with the terms of
this Section, (iii) any Person to which it sells or offers to sell its interest
in the Company or any part thereof or any participation therein in accordance
with the transfer restrictions contained in this Agreement (if such Person has
agreed in writing prior to its receipt of such confidential information to be
bound by the provisions of this Section), or (iv) any Governmental Authority or
other regulatory or self regulatory authority having jurisdiction over a Member
or any nationally recognized rating agency that requires access to information
about a Member's investment portfolio, (a) to effect compliance with any law,
rule, regulation or order applicable to a Member, including the requirements of
any stock exchange, (b) in response to any subpoena or other legal process, or
(c) in connection with any litigation to which a Member is a party.
13.2. WAIVER OF JURY TRIAL. Each of the parties hereto waives to the
fullest extent permitted by law any right it may have to trial by jury in
respect of any claim, demand, action or cause of action based on, or arising out
of, under or in connection with this Agreement, or any course of conduct, course
of dealing, verbal or written statement or action of any party hereto, in each
case whether now existing or hereafter arising, and whether in contract, tort,
equity or otherwise. The parties to this Agreement each hereby agrees that any
such claim, demand, action or cause of action shall be decided by court trial
without a jury and that the parties to this Agreement may file an original
counterpart or a copy of this Agreement with any court as evidence of the
consent of the parties hereto to the waiver of their right to trial by jury.
13.3. GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE APPLICATION,
CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE AND THE DELAWARE LIMITED LIABILITY COMPANY ACT, DELAWARE CODE, TITLE 6,
SECTIONS 18-101, ET SEQ. AS IN EFFECT FROM TIME TO TIME, WITHOUT GIVING EFFECT
TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE
OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
13.4. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
13.5. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall
40
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein. The
Members shall negotiate in good faith to replace any provision so held to be
invalid or unenforceable so as to implement most effectively the transactions
contemplated by such provision in accordance with the original intent of the
Members signatory hereto.
13.6. AMENDMENTS. The parties hereto may at any time amend this Agreement
by Majority Approval of the Units; PROVIDED, that the provisions of Articles V
and VI and Sections 9.2 and 9.3 may not be amended without the consent of a
majority of the Unitholders affected by any such proposed amendment.
13.7. GENDER AND NUMBER. Whenever required by the context, the singular
number shall include the plural number, the plural number shall include the
singular number, the masculine gender shall include the neuter and feminine
genders and vice versa.
13.8. NOTICE. Any Notice or Notices required or permitted under the
provisions of this Agreement shall be sent to the addresses set forth below, or
as otherwise notified to the other party in writing:
if to the Company, to:
K-Sea General Partner GP LLC
0000 Xxxxxxxx Xxxxxxx
X.X. Xxx 000000
Xxxxxx Xxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxx
with copies to (which shall not constitute constructive notice to the
Company):
Dechert LLP
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
if to K-Sea Investors L.P., to:
c/o FS Private Investments LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxx and Xxxx Xxxxxx
Fax No.: (000) 000-0000
41
with copies to (which shall not constitute constructive notice to the
Company):
Dechert LLP
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
if to any Management Member, to such Member's address as set
forth in the records of the Company
with copies to:
Xxxxx Xxxxxx LLP
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Any Notice sent as set forth above shall be deemed to have been given only upon
actual delivery to the intended recipient thereof or upon the date of rejection
of such notice, as evidenced by the return receipt therefor.
13.9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when executed and delivered shall be an original,
and all of which when executed shall constitute one and the same instrument.
13.10. ENTIRE AGREEMENT. Except as otherwise expressly set forth herein,
this document embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
13.11. NO WAIVER OF REMEDIES. The failure of a Member to insist on the
strict performance of any covenant or duty required by this Agreement, or to
pursue any remedy under this Agreement, shall not constitute a waiver of the
breach or the remedy.
13.12. REMEDIES CUMULATIVE. The remedies of the Members under this
Agreement are cumulative and shall not exclude any other remedies to which the
Member may be lawfully entitled. Each of the parties confirms that damages at
law may be an inadequate remedy for a breach or threatened breach of any
provision hereof The respective rights and obligations hereunder shall be
enforceable by specific performance, injunction or other suitable remedy, but
nothing herein contained is intended to or shall limit or affect any rights at
law or by statute or otherwise of any party aggrieved as against the other
parties for a breach or threatened breach of any provision hereof, it being the
intention by this Section to make clear the agreement of the
42
parties that the respective rights and obligations of the parties hereunder
shall be enforceable in equity as well as at law or otherwise.
13.13. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of all of the Members and their permitted successors, legal
representatives, and assigns.
13.14. DETERMINATIONS OF FAIR MARKET VALUE. The Board shall reasonably
determine Fair Market Values hereunder.
43
IN WITNESS WHEREOF, the sole Member of the Company has executed this Agreement,
effective as of the date first written above.
NEW K-SEA TRANSPORTATION LLC
By: /S/ XXXXXXX X. XXXXX
------------------------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer and President
Each of the following members of New K-Sea LLC hereby acknowledges and
agrees, in consideration of the covenants, conditions and agreements contained
in this Agreement, to become bound by and/or a party to this Agreement upon the
distribution of a portion of New K-Sea LLC's Membership Interest to such member.
K-SEA INVESTORS L.P.
By: PARK AVENUE TRANSPORTATION INC.,
its general partner
By: /S/ XXXXX X. XXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxx
President
/S/ XXXXXXX X. XXXXX
-----------------------------------------
Xxxxxxx Xxxxx
/S/ XXXX XXXXXXXXXX
-----------------------------------------
Xxxx Xxxxxxxxxx
/S/ XXXXXX XXXXXXXX
-----------------------------------------
Xxxxxx Xxxxxxxx
/S/ XXXX XXXXXX
-----------------------------------------
Xxxx Xxxxxx
44
/S/ XXXXX XXXX
-----------------------------------------
Xxxxx Xxxx
/S/ XXXX XXXXXXXXX
-----------------------------------------
Xxxx Xxxxxxxxx
/S/ XXXXX XXXX
-----------------------------------------
Xxxxx Xxxx
/S/ XXXXXXX XXXXXXX
-----------------------------------------
Xxxxxxx Xxxxxxx
/S/ XXXX XXXXX
-----------------------------------------
Xxxx Xxxxx
45
SCHEDULE A
K-SEA GENERAL PARTNER GP LLC
LIST OF MEMBERS AND CAPITALIZATION
DATED AS OF JANUARY 14, 2004
ALLOCATED CAPITAL NUMBER ACQUISITION
UNITHOLDER CONTRIBUTION OF UNITS DATE
---------- ----------------- ---------- -----------
K-Sea Investors L.P. $ 460.00 460.0 4/30/99
$ 27.50 27.5 5/20/99
$ 55.00 55.0 10/12/99
$ 357.50 357.5 12/21/99
Xxxxxxx Xxxxx* $ 27.00 27.0 4/30/99
$ 23.00 23.0 12/21/99
$ 5.00 5.0 9/30/02
Xxxx Xxxxxxxxxx* $ 5.40 5.4 4/30/99
$ 4.60 4.6 12/21/99
$ 2.50 2.5 9/30/02
Xxxxxx Xxxxxxxx* $ 5.40 5.4 4/30/99
$ 4.60 4.6 12/21/99
$ 2.50 2.5 9/30/02
Xxxx Xxxxxx* $ 10.00 10.0 9/20/00
$ 2.50 2.5 9/30/02
Xxxxx Xxxx* $ 2.50 2.5 7/31/00
Xxxx Xxxxxxxxx* $ 2.90 2.9 9/30/02
Xxxxx Xxxx* $ 1.10 1.1 9/30/02
Xxxxxxx Xxxxxxx* $ 0.50 0.5 9/30/02
Xxxx Xxxxx* $ 0.50 0.5 9/30/02
Total $ 1,000.00 1,000.0
----------
*Designates a Management Member
46
EXHIBIT A
FORM OF JOINDER
TO
FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
THIS JOINDER to the First Amended and Restated
Limited Liability Company
Agreement, dated as of January 14, 2004, by and among the Members (the
"AGREEMENT"), is made and entered into as of _________ by and between K-Sea
General Partner GP LLC, a Delaware limited liability company (the "Company"),
and _________________ ("HOLDER"). Capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain Units and the Company requires Holder,
as a Unitholder, to become bound by and/or a party to the Agreement, and Holder
agrees to do so in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Joinder hereby agree as follows:
1. AGREEMENT TO BE BOUND. Holder hereby agrees that upon execution
of this Joinder, it shall become bound by and/or a party to the Agreement and
shall be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement as though an original party thereto and shall be
deemed a Unitholder for the purposes of being bound thereby. In addition, Holder
hereby agrees that each of the Units held by Holder shall be deemed Units for
the purposes of being bound thereby and shall have the rights only as provided
in the Agreement.
2. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Joinder shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and Holder (only as provided in the
Agreement) and any subsequent holders of Units and the respective successors and
assigns of each of them, so long as they hold any Units.
3. COUNTERPARTS. This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
4. NOTICES. For purposes of Section 13.8 of the Agreement, all
notices, demands or other communications to the Holder shall be directed to:
[Name]
[Address]
[Facsimile Number]
5. GOVERNING LAW. All issues and questions concerning the
application, construction, validity, interpretation and enforcement of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware and the Delaware Limited Liability Company Act, Delaware Code,
Title 6, Sections 18-101, et seq. as in effect from time to time, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
6. DESCRIPTIVE HEADINGS. The descriptive headings of this Joinder
are inserted for convenience only and do not constitute a part of this Joinder.
IN WITNESS WHEREOF, the parties hereto have executed this Joinder as of the
date first above written.
[HOLDER]
By:
-------------------------------
Name:
Title:
