EXHIBIT 3.4
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NRP (OPERATING) LLC
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.....................................................................................1
Section 1.2 Construction....................................................................................7
ARTICLE II
ORGANIZATION
Section 2.1 Formation.......................................................................................7
Section 2.2 Name............................................................................................7
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices............................7
Section 2.4 Purpose and Business............................................................................8
Section 2.5 Powers..........................................................................................8
Section 2.6 Power of Attorney...............................................................................8
Section 2.7 Term...........................................................................................10
Section 2.8 Title to Company Assets........................................................................10
ARTICLE III
RIGHTS OF MEMBERS
Section 3.1 Limitation of Liability........................................................................10
Section 3.2 Outside Activities of the Members..............................................................10
Section 3.3 Rights of Members..............................................................................10
ARTICLE IV
TRANSFERS OF INTERESTS
Section 4.1 Transfer Generally.............................................................................11
Section 4.2 Transfer of Membership Interests...............................................................12
Section 4.3 Restrictions on Transfers......................................................................12
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF INTERESTS
Section 5.1 Initial Contributions..........................................................................12
Section 5.2 Contributions Pursuant to the Contribution and Conveyance Agreement............................12
Section 5.3 Additional Capital Contributions...............................................................13
Section 5.4 Interest and Withdrawal........................................................................13
Section 5.5 Loans from Members.............................................................................13
Section 5.6 Issuances of Additional Company Securities.....................................................13
Section 5.7 Limited Preemptive Rights......................................................................14
Section 5.8 Fully Paid and Non-Assessable Nature of Membership Interests...................................14
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1 Allocations....................................................................................14
Section 6.2 Distributions..................................................................................14
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ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1 Management.....................................................................................15
Section 7.2 Certificate of Formation.......................................................................17
Section 7.3 Restrictions on Managing Member's Authority....................................................17
Section 7.4 Reimbursement of the General Partner and GP LLC; Benefit Plans.................................18
Section 7.5 Outside Activities.............................................................................18
Section 7.6 Loans from the Managing Member or the General Partner; Loans or Contributions from the
Company; Contracts with Affiliates.............................................................19
Section 7.7 Indemnification................................................................................20
Section 7.8 Liability of Indemnitees.......................................................................22
Section 7.9 Resolution of Conflicts of Interest............................................................23
Section 7.10 Other Matters Concerning the Managing Member...................................................24
Section 7.11 Reliance by Third Parties......................................................................24
ARTICLE VIII
OFFICERS
Section 8.1 Officers.......................................................................................25
Section 8.2 Compensation...................................................................................27
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting.........................................................................27
Section 9.2 Fiscal Year....................................................................................27
ARTICLE X
TAX MATTERS
Section 10.1 Tax Returns and Information....................................................................28
Section 10.2 Tax Elections..................................................................................28
ARTICLE XI
ADMISSION OF MEMBERS
Section 11.1 Initial Member.................................................................................28
Section 11.2 Admission of Substituted Members...............................................................28
Section 11.3 Admission of Additional Members................................................................29
Section 11.4 Amendment of Agreement and Certificate of Formation............................................29
ARTICLE XII
WITHDRAWAL OF MEMBERS
Section 12.1 Withdrawal of Members..........................................................................29
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution....................................................................................29
Section 13.2 Liquidator.....................................................................................30
Section 13.3 Liquidation....................................................................................30
Section 13.4 Cancellation of Certificate of Formation.......................................................31
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Section 13.5 Return of Capital Contributions................................................................31
Section 13.6 Waiver of Partition............................................................................31
Section 13.7 Capital Account Restoration....................................................................31
ARTICLE XIV
AMENDMENT OF AGREEMENT
Section 14.1 Amendment to be Adopted Solely by the Managing Member..........................................31
Section 14.2 Amendment Procedures...........................................................................33
ARTICLE XV
MERGER
Section 15.1 Authority......................................................................................33
Section 15.2 Procedure for Merger or Consolidation..........................................................33
Section 15.3 Approval by Members of Merger or Consolidation.................................................34
Section 15.4 Certificate of Merger..........................................................................35
Section 15.5 Effect of Merger...............................................................................35
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Addresses and Notices..........................................................................35
Section 16.2 Further Action.................................................................................36
Section 16.3 Binding Effect.................................................................................36
Section 16.4 Integration....................................................................................36
Section 16.5 Creditors......................................................................................36
Section 16.6 Waiver. 36
Section 16.7 Counterparts...................................................................................36
Section 16.8 Applicable Law.................................................................................36
Section 16.9 Invalidity of Provisions.......................................................................37
Section 16.10 Consent of Members.............................................................................37
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NRP (OPERATING) LLC
THIS AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF NRP
(Operating) LLC, dated as of July __, 2002, is entered into by and among Natural
Resource Partners, L.P., a
Delaware limited partnership ("MLP"), together with
any other Persons who hereafter become Members in the Company or parties hereto
as provided herein.
RECITALS:
WHEREAS, the MLP caused NRP (OPERATING) LLC (referred to herein as the
"Company") to be formed as a limited liability company under the
Delaware
Limited Liability Company Act on April 17, 2002 and a Certificate of Formation
was filed with the Secretary of State of the State of
Delaware on such date.
WHEREAS, NRP entered into a
Limited Liability Company Agreement
relating to the Company on April 17, 2002 (the "Original Agreement").
WHEREAS, the MLP now desires to amend the Original Agreement to reflect
additional contributions to the Company and certain other matters.
NOW THEREFORE, in consideration of the covenants, conditions and
agreements contained herein, the MLP hereby enters into this Agreement amending
and restating the Original Agreement in its entirety:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
Capitalized terms used herein but not otherwise defined shall have the meaning
assigned to such term in the MLP Agreement.
"ACIN LLC" means ACIN LLC, a
Delaware limited liability company.
"Act" means the
Delaware Limited Liability Company Act, 6 Del. C.
Section 18-101, et seq., as amended, supplemented or restated from time to time,
and any successor to such statute.
"Additional Member" means a Person admitted to the Company as a Member
pursuant to Section 11.3 and who is shown as such on the books and records of
the Company.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise.
"Agreement" means this Amended and Restated
Limited Liability Company
Agreement of NRP (Operating) LLC, as it may be amended, supplemented or restated
from time to time. The Agreement shall constitute a "
limited liability company
agreement" as such term is defined in the Act.
"Arch Coal" means Arch Coal, Inc., a
Delaware corporation.
"Ark Land" means Ark Land Company, a
Delaware corporation.
"Assignee" means a Person to whom one or more Membership Interests have
been transferred in a manner permitted under this Agreement, but who has not
been admitted as a Substituted Member.
"Associate" means, when used to indicate a relationship with any
Person, (a) any corporation or organization of which such Person is a director,
officer or partner or is, directly or indirectly, the owner of 20% or more of
any class of voting stock or other voting interest; (b) any trust or other
estate in which such Person has at least a 20% beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity; and (c)
any relative or spouse of such Person, or any relative of such spouse, who has
the same principal residence as such Person.
"Available Cash" means, with respect to any Quarter ending prior to the
Liquidation Date,
(a) the sum of (i) all cash and cash equivalents of the
Company Group on hand at the end of such Quarter, and (ii) all additional cash
and cash equivalents of the Company Group on hand on the date of determination
of Available Cash with respect to such Quarter resulting from Working Capital
Borrowings made subsequent to the end of such Quarter, less
(b) the amount of any cash reserves that are necessary or
appropriate in the reasonable discretion of the Managing Member to (i) provide
for the proper conduct of the business of the Company Group (including reserves
for future capital expenditures and for anticipated future credit needs of the
Company Group) subsequent to such Quarter, (ii) comply with applicable law or
any loan agreement, security agreement, mortgage, debt instrument or other
agreement or obligation to which any Group Member is a party or by which it is
bound or its assets are subject or (iii) provide funds for distributions under
Section 6.4 or 6.5 of the MLP Agreement in respect of any one or more of the
next four Quarters; provided, however, that the Managing Member may not
establish cash reserves pursuant to (iii) above if the effect of such reserves
would be that the MLP is unable to distribute the Minimum Quarterly Distribution
on all Common Units, plus any Cumulative Common Unit Arrearage on all Common
Units, with respect to such Quarter; and provided further that disbursements
made by a Group Member or cash reserves established, increased or reduced after
the end of such Quarter but on or before the date of determination of Available
Cash with respect to such Quarter shall be deemed to have been made,
established, increased or reduced, for purposes of determining Available Cash,
within such Quarter if the Managing Member so determines.
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Notwithstanding the foregoing, "Available Cash" with respect to the
Quarter in which the Liquidation Date occurs and any subsequent Quarter shall
equal zero.
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States of
America or the State of Texas shall not be regarded as a Business Day.
"Capital Contribution" means any cash, cash equivalents or the value of
Contributed Property that a Member contributes to the Company pursuant to this
Agreement or the Contribution Agreement.
"Certificate of Formation" means the Certificate of Formation of the
Company filed with the Secretary of State of the State of
Delaware as referenced
in Section 2.1, as such Certificate of Formation may be amended, supplemented or
restated from time to time.
"Closing Date" means the first date on which Common Units are sold by
the MLP to the Underwriters pursuant to the provisions of the Underwriting
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time. Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of successor law.
"Commission" means the United States Securities and Exchange
Commission.
"Common Unit" has the meaning assigned to such term in the MLP
Agreement.
"Company" means NRP (Operating) LLC, a
Delaware limited liability
company, and any successors thereto.
"Company Group" means the Company and any Subsidiary of the Company,
treated as a single consolidated entity.
"Company Security" means any class or series of membership interest in
the Company.
"Conflicts Committee" has the meaning assigned to such term in the MLP
Agreement.
"Contribution Agreement" means the Contribution, Conveyance and
Assumption Agreement, dated as of the Closing Date, among the Company, the MLP,
the General Partner, [_________] and certain other parties named therein,
together with the additional conveyance documents and instruments contemplated
or referenced thereunder.
"Contributed Property" means each property or other asset, in such form
as may be permitted by the Act, but excluding cash, contributed to the Company.
"Exercise" means the exercise by the underwriters under the
Underwriting Agreement of their option to purchase an additional [675,000]
Common Units on the terms and conditions set forth in the Underwriting
Agreement.
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"General Partner" means NRP (GP) LP, a
Delaware limited partnership,
and its successors and permitted assigns as general partner of the MLP.
"GNP LLC" shall mean GNP LLC, a Delaware limited liability company.
"GP LLC" shall mean GP Natural Resource Partners LLC, a Delaware
limited liability company, and its successors and permitted assigns as general
partner of the General Partner.
"Great Northern" means Great Northern Properties Limited Partnership, a
Delaware limited partnership.
"Group Member" means a member of the Company Group.
"Indemnitee" means (a) the Managing Member, (b) any Person who is or
was a member, partner, director, officer, employee, agent or trustee of any
Group Member, the MLP, the General Partner, GP LLC or any of their respective
Affiliates and (c) any Person who is or was serving at the request of the
Managing Member as a member, partner, director, officer, employee, partner,
agent, fiduciary or trustee of another Person, in each case, acting in such
capacity, provided, that a Person shall not be an Indemnitee by reason of
providing, on a fee-for-services basis, trustee, fiduciary or custodial
services.
"Initial Offering" means the initial offering and sale of Common Units
to the public, as described in the Registration Statement.
"Liquidation Date" means the date on which any event giving rise to the
dissolution of the Company occurs.
"Liquidator" means one or more Persons selected by the Managing Member
to perform the functions described in Section 13.2 as liquidating trustee of the
Company within the meaning of the Act.
"Managing Member" means Natural Resource Partners, L.P. and its
predecessors, successors and permitted assigns as managing member of the
Company.
"Member" means any Person that is admitted to the Company as a member
pursuant to the terms and conditions of this Agreement; but the term Member
shall not include any Person from and after the time such Person withdraws as a
Member from the Company.
"Membership Interest" means the ownership interest of a Member in the
Company.
"Merger Agreement" has the meaning assigned to such term in Section
15.1.
"Minimum Quarterly Distribution" has the meaning assigned to such term
in the MLP Agreement.
"MLP" has the meaning assigned to such term in the recitals.
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"MLP Agreement" means the First Amended and Restated Agreement of
Limited Partnership of Natural Resource Partners, L.P., as it may be amended,
supplemented or restated from time to time.
"MLP Security" has the meaning assigned to the term "Partnership
Security" in the MLP Agreement.
"National Securities Exchange" has the meaning assigned to such term in
the MLP Agreement.
"New Gauley" shall mean New Gauley Coal Corporation, a West Virginia
corporation.
"NNG LLC" means NNG LLC, a Delaware limited liability company.
"Omnibus Agreement" means the Omnibus Agreement, dated the Closing
Date, among the Company, the MLP, the General Partner, Arch Coal, Ark Land, New
Gauley, Western Pocahontas, Great Northern and certain other parties.
"Opinion of Counsel" means a written opinion of counsel (who may be
regular counsel to the Company or the MLP or any of their respective Affiliates)
acceptable to the Managing Member in its reasonable discretion.
"Original Agreement" shall have the meaning given such term in the
recitals hereto.
"Percentage Interest" means the percentage interest in the Company held
by a Member.
"Person" means an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity.
"Pro Rata" means, when modifying Members and Assignees, apportioned
among all Members and Assignees in accordance with their relative Percentage
Interests.
"Quarter" means, unless the context requires otherwise, a fiscal
quarter of the Company.
"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 333-86582) as it has been or as it may be amended or
supplemented from time to time, filed by the MLP with the Commission under the
Securities Act to register the offering and sale of the Common Units in the
Initial Offering.
"Securities Act" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to such statute.
"Special Approval" has the meaning assigned to such term in the MLP
Agreement.
"Subordinated Unit" has the meaning assigned to such term in the MLP
Agreement.
"Subordination Period" has the meaning assigned to such term in the MLP
Agreement.
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"Subsidiary" means, with respect to any Person, (a) a corporation of
which more than 50% of the voting power of shares entitled (without regard to
the occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
"Substituted Member" means a Person who is admitted as a Member to the
Company pursuant to Section 11.2 in place of and with all the rights of a Member
and who is shown as a Member on the books and records of the Company.
"Surviving Business Entity" has the meaning assigned to such term in
Section 15.2(b).
"Transfer" has the meaning assigned to such term in Section 4.1(a).
"Underwriter" means each Person named as an underwriter in the
Underwriting Agreement who purchases Common Units pursuant thereto.
"Underwriting Agreement" means the Underwriting Agreement dated July
__, 2002 among the Company, the MLP, the General Partner, Arch Coal, Ark Land,
New Gauley, Western Pocahontas and Great Northern, the Underwriters and certain
other parties, providing for the purchase of Common Units by such Underwriters.
"Unit" has the meaning assigned to such term in the MLP Agreement.
"Unit Majority" has the meaning assigned to such term in the MLP
Agreement.
"U.S. GAAP" means United States Generally Accepted Accounting
Principles consistently applied.
"Western Pocahontas" shall mean Western Pocahontas Properties Limited
Partnership, a Delaware limited partnership.
"Working Capital Borrowings" has the meaning assigned to such term in
the MLP Agreement.
"WPP LLC" means WPP LLC, a Delaware limited liability company.
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Section 1.2 Construction.
Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa; (b) references to Articles and Sections refer to Articles and
Sections of this Agreement; and (c) the term "include" or "includes" means
includes, without limitation, and "including" means including, without
limitation.
ARTICLE II
ORGANIZATION
Section 2.1 Formation.
On April 17, 2002, the MLP formed the Company as a limited liability
company pursuant to the provisions of the Act by virtue of the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware.
The MLP hereby amends and restates the Original Agreement in its entirety. This
amendment and restatement shall become effective on the date of this Agreement.
The rights and liabilities of the Members shall be as provided in the Act for
Members except as provided herein. 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 provision, to the extent permitted by the
Act, this Agreement shall control.
Section 2.2 Name.
The name of the Company shall be "NRP (Operating) LLC". The Company's
business may be conducted under any other name or names deemed necessary or
appropriate by the Managing Member in its sole discretion, including, the name
of the MLP. The words "Limited Liability Company," "L.L.C." or "LLC" or similar
words or letters shall be included in the Company's name where necessary for the
purpose of complying with the laws of any jurisdiction that so requires. The
Managing Member in its discretion may change the name of the Company at any time
and from time to time and shall notify the other Member(s) of such change in the
next regular communication to the Members.
Section 2.3 Registered Office; Registered Agent; Principal Office; Other
Offices.
Unless and until changed by the Managing Member, the registered office
of the Company in the State of Delaware shall be located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the registered agent for
service of process on the Company in the State of Delaware at such registered
office shall be The Corporation Trust Company. The principal office of the
Company shall be located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ or such other place as the Managing Member may from time to time designate
by notice to the Members. The Company may maintain offices at such other place
or places within or outside the State of Delaware as the Managing Member deems
necessary or appropriate.
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Section 2.4 Purpose and Business.
The purpose and nature of the business to be conducted by the Company
shall be to (a) manage, operate, lease, sell and otherwise deal with any and all
assets or properties contributed to the Company by the Members or hereafter
acquired by the Company, (b) serve as the sole member, partner or stockholder of
its Subsidiaries and, in connection therewith, to exercise all the rights and
powers conferred upon the Company as the sole member, partner or stockholder of
such Subsidiaries pursuant to the operating agreements, partnership agreements
or charter documents of each of such Subsidiaries, (c) engage directly in, or
enter into or form any corporation, partnership, joint venture, limited
liability company or other arrangement to engage indirectly in, any type of
business or activity engaged in by the Company and its Subsidiaries and their
predecessors prior to the Closing Date and, in connection therewith, to exercise
all of the rights and powers conferred upon the Company pursuant to the
agreements relating to such business activity, (d) engage directly in, or enter
into or form any corporation, partnership, joint venture, limited liability
company or other arrangement to engage indirectly in, any business activity that
is approved by the Managing Member and which lawfully may be conducted by a
limited liability company organized pursuant to the Act and, in connection
therewith, to exercise all of the rights and powers conferred upon the Company
pursuant to the agreements relating to such business activity, (e) borrow money
and issue evidences of indebtedness and secure any such indebtedness by mortgage
or pledge of, or other lien on, the assets of the Company and (f) do anything
necessary or appropriate to the foregoing, including the making of capital
contributions or loans to a Group Member, the MLP or any Subsidiary thereof;
provided, however, in the case of (c) and (d) above, that the Managing Member
reasonably determines, as of the date of the acquisition or commencement of such
activity, that such activity (i) generates "qualifying income" (as such term is
defined pursuant to Section 7704 of the Code) or (ii) enhances the operations of
an activity of the Company or the MLP that generates qualifying income. The
Managing Member has no obligation or duty to the Company, the Members, or the
Assignees to propose or approve, and in its discretion may decline to propose or
approve, the conduct by the Company of any business.
Section 2.5 Powers.
The Company shall be empowered to the fullest extent then permissible
under the Act to do any and all acts and things necessary, appropriate, proper,
advisable, incidental to or convenient for the furtherance and accomplishment of
the purposes and business described in Section 2.4 and for the protection and
benefit of the Company.
Section 2.6 Power of Attorney.
(a) Each Member and each Assignee hereby constitutes and
appoints the Managing Member and, if a Liquidator shall have been selected
pursuant to Section 13.2, the Liquidator (and any successor to the Liquidator by
merger, transfer, assignment, election or otherwise) and each of their
authorized officers and attorneys-in-fact, as the case may be, with full power
of substitution, as its true and lawful agent and attorney-in-fact, with full
power and authority in his name, place and ▇▇▇▇▇, to:
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(i) execute, swear to, acknowledge, deliver, file and record
in the appropriate public offices (A) all certificates, documents and
other instruments (including this Agreement and all amendments or
restatements hereof and all amendments and restatements of the
Certificate of Formation) that the Managing Member or the Liquidator
deems necessary or appropriate to form, qualify or continue the
existence or qualification of the Company as a limited liability
company in the State of Delaware and in all other jurisdictions in
which the Company may conduct business or own property; (B) all
certificates, documents and other instruments that the Managing Member
or the Liquidator deems necessary or appropriate to reflect, in
accordance with its terms, any amendment, change, modification or
restatement of this Agreement; (C) all certificates, documents and
other instruments (including conveyances and a certificate of
cancellation) that the Managing Member or the Liquidator deems
necessary or appropriate to reflect the dissolution and liquidation of
the Company pursuant to the terms of this Agreement; (D) all
certificates, documents and other instruments relating to the
admission, withdrawal, removal or substitution of any Member pursuant
to, or other events described in, Article IV, XI, XII or XIII; (E) all
certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of any class or
series of Membership Interests issued pursuant hereto; and (F) all
certificates, documents and other instruments (including agreements and
a certificate of merger) relating to a merger or consolidation of the
Company pursuant to Article XV; and
(ii) execute, swear to, acknowledge, deliver, file and record
all ballots, consents, approvals, waivers, certificates, documents and
other instruments necessary or appropriate, in the discretion of the
Managing Member or the Liquidator, to make, evidence, give, confirm or
ratify any vote, consent, approval, agreement or other action that is
made or given by the Members hereunder or is consistent with the terms
of this Agreement or is necessary or appropriate, in the discretion of
the Managing Member or the Liquidator, to effectuate the terms or
intent of this Agreement; provided, that when required by any provision
of this Agreement that establishes a percentage of the Members or of
the Members of any class or series required to take any action, the
Managing Member and the Liquidator may exercise the power of attorney
made in this Section 2.6(a)(ii) only after the necessary vote, consent
or approval of the Members or of the Members of such class or series,
as applicable.
Nothing contained in this Section 2.6(a) shall be construed as
authorizing the Managing Member to amend this Agreement except in accordance
with Article XIV or as may be otherwise expressly provided for in this
Agreement.
(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and, to
the maximum extent permitted by law, not be affected by the subsequent
dissolution, bankruptcy or termination of any Member or Assignee and the
transfer of all or any portion of such Member's or Assignee's Membership
Interest and shall extend to such Member's or Assignee's successors and assigns.
Each such Member or Assignee hereby agrees to be bound by any representation
made by the Managing Member or the Liquidator acting in good faith pursuant to
such power of attorney; and each such Member or Assignee, to the maximum extent
permitted by law, hereby waives any and all defenses that may be available to
contest, negate or disaffirm the action of the Managing
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Member or the Liquidator taken in good faith under such power of attorney. Each
Member or Assignee shall execute and deliver to the Managing Member or the
Liquidator, within 15 days after receipt of the request therefor, such further
designation, powers of attorney and other instruments as the Managing Member or
the Liquidator deems necessary to effectuate this Agreement and the purposes of
the Company.
Section 2.7 Term.
The term of the Company commenced upon the filing of the Certificate of
Formation in accordance with the Act and shall continue in existence until the
dissolution of the Company in accordance with the provisions of Article XIII.
The existence of the Company as a separate legal entity shall continue until the
cancellation of the Certificate of Formation as provided in the Act.
Section 2.8 Title to Company Assets.
Title to Company assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Company as an entity,
and no Member, individually or collectively, shall have any ownership interest
in such Company assets or any portion thereof.
ARTICLE III
RIGHTS OF MEMBERS
Section 3.1 Limitation of Liability.
The Members and the Assignees shall have no liability under this
Agreement except as expressly provided in this Agreement or in the Act.
Section 3.2 Outside Activities of the Members.
Subject to the provisions of Section 7.5 and the Omnibus Agreement,
which shall continue to be applicable to the Persons referred to therein,
regardless of whether such Persons shall also be Members or Assignees, any
Member or Assignee shall be entitled to and may have business interests and
engage in business activities in addition to those relating to the Company,
including business interests and activities in direct competition with the
Company Group. Neither the Company, nor any other Member or Assignee shall have
any rights by virtue of this Agreement in any business ventures of any Member or
Assignee.
Section 3.3 Rights of Members.
(a) In addition to other rights provided by this Agreement or
by applicable law, and except as limited by Section 3.3(b), each Member shall
have the right, for a purpose reasonably related to such Member's interest as a
member in the Company, upon reasonable written demand and at such Member's own
expense:
(i) to obtain true and full information regarding the status
of the business and financial condition of the Company;
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(ii) promptly after becoming available, to obtain a copy of
the Company's federal, state and local income tax returns for each
year;
(iii) to have furnished to him a current list of the name and
last known business, residence or mailing address of each Member;
(iv) to have furnished to him a copy of this Agreement and the
Certificate of Formation and all amendments thereto, together with a
copy of the executed copies of all powers of attorney pursuant to which
this Agreement, the Certificate of Formation and all amendments thereto
have been executed;
(v) to obtain true and full information regarding the amount
of cash and a description and statement of the Capital Contributions
made by each Member and which each Member has agreed to contribute in
the future, and the date on which each became a Member; and
(vi) to obtain such other information regarding the affairs of
the Company as is just and reasonable.
(b) The Managing Member may keep confidential from the Members
and Assignees, for such period of time as the Managing Member deems reasonable,
(i) any information that the Managing Member reasonably believes to be in the
nature of trade secrets or (ii) other information the disclosure of which the
Managing Member in good faith believes (A) is not in the best interests of the
Company Group, (B) could damage the Company Group or (C) that any Group Member
is required by law or by agreement with any third party to keep confidential
(other than agreements with Affiliates of the Company the primary purpose of
which is to circumvent the obligations set forth in this Section 3.3).
ARTICLE IV
TRANSFERS OF INTERESTS
Section 4.1 Transfer Generally.
(a) The term "transfer," when used in this Agreement with
respect to a Membership Interest, shall be deemed to refer to a transaction by
which the holder of a Membership Interest assigns such Membership Interest to
another Person who is or becomes a Member or an Assignee, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition by law or otherwise.
(b) No Membership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article IV. Any transfer or purported transfer of a Membership Interest not made
in accordance with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to
prevent a disposition by any member of the Managing Member of any or all of the
issued and outstanding membership interests in the Managing Member.
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Section 4.2 Transfer of Membership Interests.
A Member may transfer all, but not less than all, of its Membership
Interest in connection with the merger, consolidation or other combination of
such Member with or into any other Person or the transfer by such Member of all
or substantially all of its assets to another Person, and following any such
transfer such Person may become a Substituted Member pursuant to Article XI.
Except as set forth in the immediately preceding sentence and in Section 5.2, or
in connection with any pledge of (or any related foreclosure on) a Member's
Membership Interest solely for the purpose of securing, directly or indirectly,
indebtedness of the Company, the MLP or such Member, and except for the
transfers contemplated by Sections 5.2 and 11.1, a Member may not transfer all
or any part of its Membership Interest or withdraw from the Company.
Section 4.3 Restrictions on Transfers.
(a) Notwithstanding the other provisions of this Article IV,
no transfer of any Membership Interest shall be made if such transfer would (i)
violate the then applicable federal or state securities laws or rules and
regulations of the Commission, any state securities commission or any other
governmental authority with jurisdiction over such transfer, (ii) terminate the
existence or qualification of the Company or the MLP under the laws of the
jurisdiction of its formation or (iii) cause the Company or the MLP to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes (to the extent not already so treated
or taxed).
(b) The Managing Member may impose restrictions on the
transfer of Membership Interests if a subsequent Opinion of Counsel determines
that such restrictions are necessary to avoid a significant risk of the Company
or the MLP becoming taxable as a corporation or otherwise to be taxed as an
entity for federal income tax purposes. The restrictions may be imposed by
making such amendments to this Agreement as the Managing Member may determine to
be necessary or appropriate to impose such restrictions.
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF INTERESTS
Section 5.1 Initial Contributions.
On April 17, 2002 in connection with the formation of the Company under
the Act, the MLP made an initial Capital Contribution to the Company in the
amount of $1,000 in exchange for all of the Membership Interests in the Company.
Section 5.2 Contributions Pursuant to the Contribution and Conveyance Agreement.
Pursuant to the Contribution Agreement, the MLP has contributed to the
Company, as a Capital Contribution all of its interest in GNP LLC, WPP LLC, ACIN
LLC and NNG LLC in exchange for a continuation of its Membership Interest.
Following execution of this Agreement, the MLP shall continue to hold 100% of
the Membership Interests in the Company.
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Section 5.3 Additional Capital Contributions.
With the consent of the Managing Member, any Member may, but shall not
be obligated to, make additional Capital Contributions to the Company.
Section 5.4 Interest and Withdrawal.
No interest shall be paid by the Company on Capital Contributions. No
Member or Assignee shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent, if any, that distributions made pursuant to
this Agreement or upon termination of the Company may be considered as such by
law and then only to the extent provided for in this Agreement. Except to the
extent expressly provided in this Agreement, no Member or Assignee shall have
priority over any other Member or Assignee either as to the return of Capital
Contributions or as to profits, losses or distributions. Any such return shall
be a compromise to which all Members or Assignees agree within the meaning of
Section 18-502(b) of the Act.
Section 5.5 Loans from Members.
Loans by a Member to the Company shall not constitute Capital
Contributions. If any Member shall advance funds to the Company in excess of the
amounts required hereunder to be contributed by it to the capital of the
Company, the making of such excess advances shall not result in any increase in
the amount of the Capital Account of such Member. The amount of any such excess
advances shall be a debt obligation of the Company to such Member and shall be
payable or collectible only out of the Company assets in accordance with the
terms and conditions upon which such advances are made.
Section 5.6 Issuances of Additional Company Securities.
(a) The Company may issue additional Company Securities and
options, rights, warrants and appreciation rights relating to the Company
Securities for any Company purpose at any time and from time to time to such
Persons for such consideration and on such terms and conditions as shall be
established by the Managing Member and approved by the Members. The issuance by
the Company of Company Securities or rights, warrants or appreciation rights in
respect thereof shall be deemed an amendment to this Agreement.
(b) Each additional Company Security authorized to be issued
by the Company pursuant to Section 5.6(a) may be issued in one or more classes,
or one or more series of any such classes, with such designations, preferences,
rights, powers and duties (which may be senior to existing classes and series of
Company Securities), as shall be fixed by the Managing Member and approved by
the Members, including (i) the right to share Company profits and losses or
items thereof; (ii) the right to share in Company distributions; (iii) the
rights upon dissolution and liquidation of the Company; (iv) whether, and the
terms and conditions upon which, the Company may redeem such Company Security;
(v) whether such Company Security is issued with the privilege of conversion or
exchange and, if so, the terms and conditions of such conversion or exchange;
(vi) the terms and conditions upon which each Company Security will be issued,
evidenced by certificates and assigned or transferred; and (vii) the right, if
any, of the holder of each such Company Security to vote on Company matters,
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including matters relating to the relative designations, preferences, rights,
powers and duties of such Company Security.
(c) The Managing Member is hereby authorized and directed to
take all actions that it deems necessary or appropriate in connection with (i)
each issuance of Company Securities and options, rights, warrants and
appreciation rights relating to Company Securities pursuant to this Section 5.6,
(ii) the admission of Additional Members and (iii) all additional issuances of
Company Securities. The Managing Member is further authorized and directed to
specify the relative rights, powers and duties of the holders of the Membership
Interests or other Company Securities being so issued. The Managing Member shall
do all things necessary to comply with the Act and is authorized and directed to
do all things it deems necessary or advisable in connection with any future
issuance of Company Securities, including compliance with any statute, rule,
regulation or guideline of any federal, state or other governmental agency.
Section 5.7 Limited Preemptive Rights.
No Person shall have preemptive, preferential or other similar rights
with respect to (a) additional Capital Contributions; (b) issuance or sale of
any class or series of Membership Interests, whether unissued, held in the
treasury or hereafter created; (c) issuance of any obligations, evidences of
indebtedness or other securities of the Company convertible into or exchangeable
for, or carrying or accompanied by any rights to receive, purchase or subscribe
to, any such Membership Interests; (d) issuance of any right of subscription to
or right to receive, or any warrant or option for the purchase of, any such
Membership Interests; or (e) issuance or sale of any other securities that may
be issued or sold by the Company.
Section 5.8 Fully Paid and Non-Assessable Nature of Membership Interests.
All Membership Interests issued pursuant to, and in accordance with the
requirements of this Article V shall be fully paid and non-assessable Membership
Interests, except as such non-assessability may be affected by Section 18-607 of
the Act.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1 Allocations.
All income, gain, loss, deductions and items of income shall be
allocated to the Members in proportion to their ownership of the Membership
Interests unless otherwise required by the Code.
Section 6.2 Distributions.
(a) Within 45 days following the end of each Quarter
commencing with the Quarter ending on September 30, 2002, an amount equal to
100% of Available Cash with respect to such Quarter shall, subject to Section
18-607 of the Act, be distributed in accordance with this Article VI by the
Company to the Members in accordance with their respective Percentage Interests.
The immediately preceding sentence shall not require any distribution of cash if
and to the extent such distribution would be prohibited by applicable law or by
any loan agreement,
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security agreement, mortgage, debt instrument or other agreement or obligation
to which the Company is a party or by which it is bound or its assets are
subject. All distributions required to be made under this Agreement shall be
made subject to Section 18-607 of the Act.
(b) Notwithstanding Section 6.2(a), in the event of the
dissolution and liquidation of the Company, all receipts received during or
after the Quarter in which the Liquidation Date occurs, other than from
borrowings described in (a)(ii) of the definition of Available Cash, shall be
applied and distributed solely in accordance with, and subject to the terms and
conditions of, Section 13.3.
(c) The Managing Member shall have the discretion to treat
taxes paid by the Company on behalf of, or amounts withheld with respect to, all
or less than all of the Members, as a distribution of Available Cash to such
Members.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1 Management.
(a) The Company shall be managed by the Managing Member.
Except as otherwise expressly provided in this Agreement, all management powers
over the business and affairs of the Company shall be exclusively vested in the
Managing Member, and no other Member shall have any management power or control
over the business and affairs of the Company. Under the direction of the
Managing Member, 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.
(b) In addition to the powers now or hereafter granted a
manager of limited liability company under applicable law or which are granted
to the Managing Member under any other provisions of this Agreement, the
Managing Member, subject to Section 7.3, and the Officers, subject to Article
VIII and the direction of the Managing Member, shall have full power and
authority to do all things and on such terms as they may deem necessary or
appropriate to conduct the business of the Company, to exercise all powers set
forth in Section 2.5 and to effectuate the purposes set forth in Section 2.4,
including the following:
(i) the making of any expenditures, the lending or borrowing
of money, the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of
indebtedness, including indebtedness that is convertible into a
Membership Interest, and the incurring of any other obligations;
(ii) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the
Company;
(iii) the acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any or all of the assets of
the Company or the merger or other combination of the Company with or
into another Person;
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(iv) the use of the assets of the Company (including cash on
hand) for any purpose consistent with the terms of this Agreement,
including the financing of the conduct of the operations of the Company
Group, the lending of funds to other Persons (including the MLP or any
Group Member), the repayment of obligations of the MLP or the Company
Group and the making of capital contributions to any Group Member;
(v) the negotiation, execution and performance of any
contracts, conveyances or other instruments (including instruments that
limit the liability of the Company under contractual arrangements to
all or particular assets of the Company, with the other party to the
contract to have no recourse against the MLP or its assets other than
its interest in the Company, even if same results in the terms of the
transaction being less favorable to the Company than would otherwise be
the case);
(vi) the distribution of Company cash;
(vii) the selection and dismissal of Officers and agents,
outside attorneys, accountants, consultants and contractors and the
determination of their compensation and other terms of employment or
hiring;
(viii) the maintenance of such insurance for the benefit of
the Company Group and the Members as it deems necessary or appropriate;
(ix) the formation of, or acquisition of an interest in, and
the contribution of property and the making of loans to, any further
limited or general partnerships, joint ventures, corporations or other
Persons subject to the restrictions set forth in Section 2.4;
(x) the control of any matters affecting the rights and
obligations of the Company, including the bringing and defending of
actions at law or in equity and otherwise engaging in the conduct of
litigation and the incurring of legal expense and the settlement of
claims and litigation;
(xi) the indemnification of any Person against liabilities and
contingencies to the extent permitted by law;
(xii) the purchase, sale or other acquisition or disposition
of Membership Interests, or the issuance of additional options, rights,
warrants and appreciation rights relating to Membership Interests; and
(xiii) the undertaking of any action in connection with the
Company's participation in its Subsidiaries as the sole member or
stockholder.
(c) Notwithstanding any other provision of this Agreement, the
MLP Agreement, the Act or any applicable law, rule or regulation, each Member
and each other Person who may acquire a Membership Interest in the Company
hereby (i) approves, ratifies and confirms the execution, delivery and
performance by the parties thereto of the Underwriting Agreement, the Omnibus
Agreement, the Contribution Agreement and the other agreements and documents
described in or filed as exhibits to the Registration Statement that are related
to the transactions contemplated by the Registration Statement; (ii) agrees that
the Managing Member
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is authorized to execute, deliver and perform the agreements referred to in
clause (i) of this sentence and the other agreements, acts, transactions and
matters described in or contemplated by the Registration Statement on behalf of
the Company without any further act, approval or vote of the Members or
Assignees or the other Persons who may acquire an interest in the Company; and
(iii) agrees that the execution, delivery or performance by the Managing Member,
the MLP, any Group Member or any Affiliate of any of them, of this Agreement or
any agreement authorized or permitted under this Agreement (including the
exercise by the Managing Member of the rights accorded pursuant to Article XV),
shall not constitute a breach by the Managing Member of any duty that the
Managing Member may owe the Company or the Members or any other Persons under
this Agreement (or any other agreements) or of any duty stated or implied by law
or equity.
Section 7.2 Certificate of Formation.
The MLP caused the Certificate of Formation to be filed with the
Secretary of State of the State of Delaware as required by the Act and certain
other certificates or documents it determined in its sole discretion to be
necessary or appropriate for the qualification and operation of the Company in
certain other states. The Managing Member shall use all reasonable efforts to
cause to be filed such additional certificates or documents as may be determined
by the Managing Member in its sole discretion to be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited liability company in the State of Delaware or any other state in which
the Company may elect to do business or own property. To the extent that such
action is determined by the Managing Member in its sole discretion to be
reasonable and necessary or appropriate, the Managing Member shall file
amendments to and restatements of the Certificate of Formation and do all things
to maintain the Company as a limited liability company under the laws of the
State of Delaware or of any other state in which the Company may elect to do
business or own property. Subject to the terms of Section 3.3(a), the Managing
Member shall not be required, before or after filing, to deliver or mail a copy
of the Certificate of Formation, any qualification document or any amendments
thereto to any Member or Assignee.
Section 7.3 Restrictions on Managing Member's Authority.
(a) The Managing Member may not, without written approval of
the specific act by the Members, take any action in contravention of this
Agreement, including, except as otherwise provided in this Agreement, (i)
committing any act that would make it impossible to carry on the ordinary
business of the Company; (ii) possessing Company property, or assigning any
rights in specific Company property, for other than a Company purpose; (iii)
admitting a Person as a Member; or (iv) amending this Agreement in any manner.
(b) Except as provided in Articles XIII and XV, the Managing
Member may not sell, exchange or otherwise dispose of all or substantially all
of the Company's assets in a single transaction or a series of related
transactions (including by way of merger, consolidation or other combination) or
approve on behalf of the Company the sale, exchange or other disposition of all
or substantially all of the assets of the Company, without the approval of the
Members; provided, however, that this provision shall not preclude or limit the
Managing Member's ability to mortgage, pledge, hypothecate or grant a security
interest in all or
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substantially all of the assets of the Company and shall not apply to any forced
sale of any or all of the assets of the Company pursuant to the foreclosure of,
or other realization upon, any such encumbrance.
Section 7.4 Reimbursement of the General Partner and GP LLC; Benefit Plans.
(a) The General Partner and GP LLC shall be reimbursed on a
monthly basis, or such other reasonable basis as the Managing Member may
determine in its sole discretion, for (i) all direct and indirect expenses
either of them incurs or payments they make on behalf of the Company (including
salary, bonus, incentive compensation and other amounts paid to any Person
including Affiliates of the General Partner or GP LLC to perform services for
the Company or for the Managing Member in the discharge of their duties to the
Company), and (ii) all other necessary or appropriate expenses allocable to the
Company or otherwise reasonably incurred by the General Partner or GP LLC in
furtherance of the Company's business (including expenses allocated to the
General Partner or GP LLC by its Affiliates). Reimbursements pursuant to this
Section 7.4 shall be in addition to any reimbursement to the General Partner or
GP LLC as a result of indemnification pursuant to Section 7.7.
(b) The Managing Member, in its sole discretion and without
the approval of any Member (who shall have no right to vote in respect thereof),
may propose and adopt on behalf of the Company employee benefit plans, employee
programs and employee practices, or cause the Company to issue Company
Securities, in connection with or pursuant to any employee benefit plan,
employee program or employee practice maintained or sponsored by any Group
Member or any Affiliate thereof, in each case for the benefit of employees of
the General Partner, any Group Member or any Affiliate thereof, or any of them,
in respect of services performed, directly or indirectly, for the benefit of the
Company Group.
Section 7.5 Outside Activities.
(a) Except as specifically restricted by the Omnibus
Agreement, each Indemnitee shall have the right to engage in businesses of every
type and description and other activities for profit and to engage in and
possess an interest in other business ventures of any and every type or
description, whether in businesses engaged in or anticipated to be engaged in by
any Group Member, independently or with others, including business interests and
activities in direct competition with the business and activities of any Group
Member, and none of the same shall constitute a breach of this Agreement or any
duty express or implied by law to any Group Member or any Member or Assignee.
Neither any Group Member, any Member nor any other Person shall have any rights
by virtue of this Agreement or the relationship established hereby in any
business ventures of any Indemnitee.
(b) Subject to the terms of Section 7.5(a) and the Omnibus
Agreement, but otherwise notwithstanding anything to the contrary in this
Agreement, (i) the engaging in competitive activities by any Indemnitee in
accordance with the provisions of this Section 7.5 is hereby approved by the
Company and all Members, (ii) it shall be deemed not to be a breach of the
Managing Member's fiduciary duty or any other obligation of any type whatsoever
of the Managing Member for the Indemnitees to engage in such business interests
and activities in preference to or to the exclusion of the Company and (iii)
except as set forth in the Omnibus
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Agreement, the Indemnitees shall have no obligation to present business
opportunities to the Company.
(c) Anything in this Agreement to the contrary
notwithstanding, to the extent that provisions of this Agreement purport or are
interpreted to have the effect of restricting the fiduciary duties that might
otherwise, as a result of Delaware or other applicable law, be owed by the
Managing Member to the Company and its Members, or to constitute a waiver or
consent by the Members to any such restriction, such provisions shall be
inapplicable and have no effect in determining whether the Managing Member has
complied with its fiduciary duties in connection with determinations made by it
under this Section 7.5.
Section 7.6 Loans from the Managing Member or the General Partner; Loans or
Contributions from the Company; Contracts with Affiliates.
(a) The Managing Member, GP LLC, the General Partner or any of
their Affiliates may lend to any Group Member, and any Group Member may borrow
from the Company or any of its Affiliates, funds needed or desired by any Group
Member for such periods of time and in such amounts as the Managing Member may
determine; provided, however, that in any such case the lending party may not
charge the borrowing party interest at a rate greater than the rate that would
be charged the borrowing party or impose terms less favorable to the borrowing
party than would be charged or imposed on the borrowing party by unrelated
lenders on comparable loans made on an arm's-length basis (without reference to
the lending party's financial abilities or guarantees). The borrowing party
shall reimburse the lending party for any costs (other than any additional
interest costs) incurred by the lending party in connection with the borrowing
of such funds. For purposes of this Section 7.6(a) and Section 7.6(b), the term
"Group Member" shall include any Affiliate of a Group Member that is controlled
by the Group Member. No Group Member may lend funds to GP LLC, the General
Partner or any of their Affiliates (other than the MLP, a subsidiary of the MLP
or another Group Member).
(b) Each of the General Partner and GP LLC may itself, or may
enter into an agreement with any of its Affiliates to, render services to a
Group Member or to the MLP in the discharge of its duties as the General Partner
of the MLP, or as the general partner of the General Partner of the MLP,
respectively. Any services rendered to a Group Member by the General Partner or
GP LLC or any of their respective Affiliates shall be on terms that are fair and
reasonable to the Company, provided, however, that the requirements of this
Section 7.6(b) shall be deemed satisfied as to (a) any transaction approved by
Special Approval, (ii) any transaction, the terms of which are not less
favorable to the Company Group than those generally being provided to or
available from unrelated third parties or (iii) any transaction that, taking
into account the totality of the relationships between the parties involved
(including other transactions that may be particularly favorable or advantageous
to the Company Group), is equitable to the Company Group. The provisions of
Section 7.4 shall apply to the rendering of services described in this Section
7.6(b).
(c) The Company may lend or contribute to any Group Member,
and any Group Member may borrow from the Company, funds on terms and conditions
established in the sole discretion of the Managing Member; provided, however,
that the Company may not charge
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the Group Member interest at a rate less than the rate that would be charged to
the Group Member by unrelated lenders on comparable loans. The foregoing
authority shall be exercised by the Managing Member in its sole discretion and
shall not create any right or benefit in favor of any Group Member or any other
Person.
(d) The Company Group may transfer assets to joint ventures,
other partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and applicable
law.
(e) Neither the General Partner nor GP LLC, nor any of their
respective Affiliates shall sell, transfer or convey any property to, or
purchase any property from, the Company, directly or indirectly, except pursuant
to transactions that are fair and reasonable to the Company; provided, however,
that the requirements of this Section 7.6(e) shall be deemed to be satisfied as
to (i) the transactions effected pursuant to Sections 5.2 and 5.3, the
Contribution Agreement and any other transactions described in or contemplated
by the Registration Statement, (ii) any transaction approved by Special
Approval, (iii) any transaction, the terms of which are no less favorable to the
Company than those generally being provided to or available from unrelated third
parties, or (iv) any transaction that, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Company), is equitable to
the Company.
(f) Neither the General Partner nor GP LLC nor any of their
respective Affiliates will have any obligation to permit any Group Member to use
any facilities or assets of the General Partner, GP LLC or their respective
Affiliates, except as may be provided in contracts entered into from time to
time specifically dealing with such use, nor shall there be any obligation on
the part of the General Partner, GP LLC or their respective Affiliates to enter
into such contracts.
(g) Without limitation of Sections 7.5(a) through 7.5(f), and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of interest described in the Registration Statement are hereby
approved by all Members.
Section 7.7 Indemnification.
(a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees shall be
indemnified and held harmless by the Company from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee; provided, that in each case
the Indemnitee acted in good faith and in a manner that such Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Company and, with respect to any criminal proceeding, had no reasonable cause to
believe its conduct was unlawful; provided, further, no indemnification pursuant
to this Section 7.7 shall be available to the General Partner or GP LLC with
respect to their respective obligations incurred pursuant to
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the Underwriting Agreement or the Contribution Agreement (other than obligations
incurred by the General Partner or GP LLC on behalf of the MLP or the Company).
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 7.7 shall be
made only out of the assets of the Company, it being agreed that the General
Partner 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 7.7(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 7.7.
(c) The indemnification provided by this Section 7.7 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 (including any capacity under the Underwriting
Agreement), 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 (or reimburse the
General Partner, GP LLC, the Managing Member or their Affiliates for the cost
of) insurance, on behalf of the Managing Member, its Affiliates and such other
Persons as the Managing Member shall determine, against any liability that may
be asserted against or expense that may be incurred by such Person in connection
with the Company's activities or such Person's activities on behalf of the
Company, regardless of whether the Company would have the power to indemnify
such Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 7.7, the Company shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Company also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute "fines" within the meaning of Section 7.7(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.
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(g) An Indemnitee shall not be denied indemnification in whole
or in part under this Section 7.7 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 7.7 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 7.7
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 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
Section 7.8 Liability of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in this
Agreement or the MLP Agreement, no Indemnitee shall be liable for monetary
damages to the Company, the Members, the Assignees or any other Persons who have
acquired interests in the Company or MLP Securities, for losses sustained or
liabilities incurred as a result of any act or omission if such Indemnitee acted
in good faith.
(b) Subject to its obligations and duties set forth in Section
7.1(a), the Managing Member may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents, and the Managing Member shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the Managing Member in good faith.
(c) 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, the Managing Member 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.
(d) Any amendment, modification or repeal of this Section 7.8
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
Managing Member, and the Member's directors, officers and employees under this
Section 7.8 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.
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Section 7.9 Resolution of Conflicts of Interest.
(a) Unless otherwise expressly provided in this Agreement,
whenever a potential conflict of interest exists or arises between the General
Partner or any of its respective Affiliates, on the one hand, and the Company,
any Member or any Assignee, on the other, any resolution or course of action by
the Managing Member or its Affiliates in respect of such conflict of interest
shall be permitted and deemed approved by all Members, and shall not constitute
a breach of this Agreement, of any agreement contemplated herein, or of any duty
stated or implied by law or equity, if the resolution or course of action is, or
by operation of this Agreement is deemed to be, fair and reasonable to the
Company. The Managing Member shall be authorized but not required in connection
with its resolution of such conflict of interest to seek Special Approval of
such resolution. Any conflict of interest and any resolution of such conflict of
interest shall be conclusively deemed fair and reasonable to the Company if such
conflict of interest or resolution is (i) approved by Special Approval (as long
as the material facts known to the Managing Member or any of its Affiliates
regarding any proposed transaction were disclosed to the Conflicts Committee at
the time it gave its approval), (ii) on terms no less favorable to the Company
than those generally being provided to or available from unrelated third parties
or (iii) fair to the Company, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Company). The Managing
Member may also adopt a resolution or course of action that has not received
Special Approval. The Managing Member (including the Conflicts Committee in
connection with Special Approval) shall be authorized in connection with its
determination of what is "fair and reasonable" to the Company and in connection
with its resolution of any conflict of interest to consider (A) the relative
interests of any party to such conflict, agreement, transaction or situation and
the benefits and burdens relating to such interest; (B) any customary or
accepted industry practices and any customary or historical dealings with a
particular Person; (C) any applicable generally accepted accounting practices or
principles; and (D) such additional factors as the Managing Member (including
the Conflicts Committee) determines in its sole discretion to be relevant,
reasonable or appropriate under the circumstances. Nothing contained in this
Agreement, however, is intended to nor shall it be construed to require the
Managing Member (including the Conflicts Committee) to consider the interests of
any Person other than the Company. In the absence of bad faith by the Managing
Member, the resolution, action or terms so made, taken or provided by the
Managing Member with respect to such matter shall not constitute a breach of
this Agreement or any other agreement contemplated herein or a breach of any
standard of care or duty imposed herein or therein or, to the extent permitted
by law, under the Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement
contemplated hereby provides that the Managing Member or any of its Affiliates
is permitted or required to make a decision (i) in its "sole discretion" or
"discretion," that it deems "necessary or appropriate" or "necessary or
advisable" or under a grant of similar authority or latitude, except as
otherwise provided herein, the Managing Member or such Affiliate shall be
entitled to consider only such interests and factors as it desires and shall
have no duty or obligation to give any consideration to any interest of, or
factors affecting, the MLP, the Company, any Member or any Assignee, (ii) it may
make such decision in its sole discretion (regardless of whether there is a
reference to "sole discretion" or "discretion") unless another express standard
is provided for, or (iii) in "good faith" or under another express standard, the
Managing Member or such Affiliate shall act under
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such express standard and shall not be subject to any other or different
standards imposed by this Agreement, the MLP Agreement or any other agreement
contemplated hereby or under the Act or any other law, rule or regulation. In
addition, any actions taken by the Managing Member or such Affiliate consistent
with the standards of "reasonable discretion" set forth in the definition of
Available Cash shall not constitute a breach of any duty of the Managing Member
to the Company or the Members. The Managing Member shall have no duty, express
or implied, to sell or otherwise dispose of any asset of the Company Group other
than in the ordinary course of business. No borrowing by any Group Member or the
approval thereof by the Managing Member shall be deemed to constitute a breach
of any duty of the Managing Member to the Company or the Members by reason of
the fact that the purpose or effect of such borrowing is directly or indirectly
to (A) enable distributions by the MLP to the General Partner or its Affiliates
to exceed 2% of the total amount distributed to all partners or (B) hasten the
expiration of the Subordination Period or the conversion of any Subordinated
Units into Common Units.
(c) Whenever a particular transaction, arrangement or
resolution of a conflict of interest is required under this Agreement to be
"fair and reasonable" to any Person, the fair and reasonable nature of such
transaction, arrangement or resolution shall be considered in the context of all
similar or related transactions.
Section 7.10 Other Matters Concerning the Managing Member.
(a) The Managing Member may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(b) The Managing Member may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion (including an Opinion of Counsel) of such
Persons as to matters that the Managing Member reasonably believes to be within
such Person's professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such opinion.
(c) The Managing Member shall have the right, in respect of
any of its powers or obligations hereunder, to act through any of its duly
authorized officers, a duly appointed attorney or attorneys-in-fact or the duly
authorized officers of the Company.
(d) Any standard of care and duty imposed by this Agreement or
under the Act or any applicable law, rule or regulation shall be modified,
waived or limited, to the extent permitted by law, as required to permit the
Managing Member to act under this Agreement or any other agreement contemplated
by this Agreement and to make any decision pursuant to the authority prescribed
in this Agreement, so long as such action is reasonably believed by the Managing
Member to be in, or not inconsistent with, the best interests of the Company.
Section 7.11 Reliance by Third Parties.
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Company shall be entitled to assume that the Managing Member
and any Officer authorized by
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the Managing Member to act on behalf of and in the name of the Company has full
power and authority to encumber, sell or otherwise use in any manner any and all
assets of the Company and to enter into any authorized contracts on behalf of
the Company, and such Person shall be entitled to deal with the Managing Member
or any such Officer as if it were the Company's sole party in interest, both
legally and beneficially. Each Member hereby waives any and all defenses or
other remedies that may be available against such Person to contest, negate or
disaffirm any action of the Managing Member or any such officer in connection
with any such dealing. In no event shall any Person dealing with the Managing
Member or any such officer or its representatives be obligated to ascertain that
the terms of the Agreement have been complied with or to inquire into the
necessity or expedience of any act or action of the Managing Member or any such
officer or its representatives. Each and every certificate, document or other
instrument executed on behalf of the Company by the Managing Member or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (b) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Company and (c) such certificate, document or instrument was duly
executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Company.
ARTICLE VIII
OFFICERS
Section 8.1 Officers.
(a) Generally. The Managing Member, as set forth below, shall
appoint agents of the Company, referred to as "Officers" of the Company as
described in this Section 8.1, who shall be responsible for the day-to-day
business affairs of the Company, subject to the overall direction and control of
the Managing Member. Unless provided otherwise by Managing Member, the Officers
shall have the titles, power, authority and duties described below in this
Section 8.1.
(b) Titles and Number. The Officers shall be the President and
Chief Operating Officer, the Chief Financial Officer, any and all Vice
Presidents, the Chief Engineer, the Controller, the Secretary, the Treasurer,
and any other Officers appointed pursuant to this Section 8.1. Any person may
hold two or more offices.
(i) President and Chief Operating Officer. The Managing Member
shall appoint an individual to serve as President and Chief Operating
Officer. The President and Chief Operating Officer shall have general
charge, management and control of the administration and operation of
the Company's business and general supervision of its policies and
affairs, with all such powers with respect to such administration and
operations as may be reasonably incident to such responsibilities. The
current President and Chief Operating Officer is ▇▇▇▇ ▇▇▇▇▇▇.
(ii) Chief Financial Officer. The Managing Member shall
appoint a Chief Financial Officer. The Chief Financial Officer shall
have such powers and perform such
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duties as are assigned to him by the Managing Member. The current Chief
Financial Officer is ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(iii) Vice Presidents. The Managing Member, in its discretion,
may elect one or more Vice Presidents. In the absence of the President
or in the event of the President's inability or refusal to act, the
Vice President (or in the event there be more than one vice president,
the vice presidents in the order designated, or in the absence of any
designation, then in the order of their election) shall perform the
duties of the President, and the Vice President, when so acting, shall
have all of the powers and be subject to all the restrictions upon the
President. Each Vice President shall perform such other duties as from
time to time may be assigned by the President or the Managing Member.
The current Vice President is ▇▇▇▇▇ ▇▇▇▇.
(iv) Chief Engineer. The Managing Member shall elect an
individual to serve as Chief Engineer. The Chief Engineer shall have
such powers and perform such duties as are assigned to him by the
Managing Member. The current Chief Engineer is ▇▇▇▇▇ ▇▇▇▇.
(v) Controller. The Managing Member shall elect an individual
to serve as Controller. The Controller shall have such powers and
perform such duties as are assigned to him by the Managing Member. The
current Controller is ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
(vi) Secretary. The Managing Member shall elect a Secretary.
The Secretary shall record or cause to be recorded in books provided
for that purpose the minutes of the meetings or actions of the Managing
Member and of the Members, shall see that all notices are duly given in
accordance with the provisions of this Agreement and as required by
law, shall be custodian of all records (other than financial), shall
see that the books, reports, statements, certificates and all other
documents and records required by law are properly kept and filed, and,
in general, shall perform all duties incident to the office of
Secretary and such other duties as may, from time to time, be assigned
to him by this Agreement, the Managing Member or the President. The
current Secretary is ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(vii) Treasurer. The Managing Member shall elect a Treasurer.
The Treasurer shall keep or cause to be kept the books of account of
the Company and shall render statements of the financial affairs of the
Company in such form and as often as required by this Agreement, the
Managing Member, or the President. The Treasurer, subject to the order
of the Managing Member, shall have the custody of all funds and
securities of the Company. The Treasurer shall perform all other duties
commonly incident to his office and shall perform such other duties and
have such other powers as this Agreement, the Managing Member or the
President, shall designate from time to time. The current Treasurer is
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(c) Other Officers and Agents. The Managing Member may appoint
such other Officers and agents as may from time to time appear to be necessary
or advisable in the conduct of the affairs of the Company, who shall hold their
offices for such terms and shall
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exercise such powers and perform such duties as shall be determined from time to
time by the Managing Member.
(d) Appointment and Term of Office. The Officers shall be
appointed by the Managing Member at such time and for such terms as the Managing
Member shall determine. Any Officer may be removed, with or without cause, only
by the Managing Member. Vacancies in any office may be filled only by the
Managing Member.
(e) Powers of Attorney. The Managing Member may ▇▇▇▇▇ ▇▇▇▇▇▇
of attorney or other authority as appropriate to establish and evidence the
authority of the Officers and other Persons.
(f) Officers' Delegation of Authority. Unless otherwise
provided by resolution of the Managing Member, no Officer shall have the power
or authority to delegate to any Person such Officer's rights and powers as an
Officer to manage the business and affairs of the Company.
Section 8.2 Compensation.
The Officers shall receive such compensation for their services as may
be designated by the Managing Member. In addition, the Officers shall be
entitled to be reimbursed for out-of-pocket costs and expenses incurred in the
course of their service hereunder.
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The Managing Member shall keep or cause to be kept at the principal
office of the Company appropriate books and records with respect to the
Company's business, including all books and records necessary to provide to the
Members any information required to be provided pursuant to Section 3.4(a). Any
books and records maintained by or on behalf of the Company in the regular
course of its business, including books of account and records of Company
proceedings, may be kept on, or be in the form of, computer disks, hard drives,
punch cards, magnetic tape, photographs, micrographics or any other information
storage device; provided, that the books and records so maintained are
convertible into clearly legible written form within a reasonable period of
time. The books of the Company shall be maintained, for financial reporting
purposes, on an accrual basis in accordance with U.S. GAAP.
Section 9.2 Fiscal Year.
The fiscal year of the Company shall be a fiscal year ending December
31.
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ARTICLE X
TAX MATTERS
Section 10.1 Tax Returns and Information.
The Company shall timely file all returns of the Company that are
required for federal, state and local income tax purposes on the basis of the
accrual method and a taxable year ending on December 31. The tax information
reasonably required by the Members for federal and state income tax reporting
purposes with respect to a taxable year shall be furnished to them within 90
days of the close of the calendar year in which the Company's taxable year ends.
The classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for
federal income tax purposes.
Section 10.2 Tax Elections.
(a) The Company shall not elect to be treated as a corporation
under the Code.
(b) Except as otherwise provided herein, the Managing Member
shall determine whether the Company should make any other elections permitted by
the Code.
ARTICLE XI
ADMISSION OF MEMBERS
Section 11.1 Initial Member.
Pursuant to the contributions described in Section 5.1, the MLP is the
only current Member of the Company.
Section 11.2 Admission of Substituted Members.
By transfer of a Membership Interest in accordance with Article IV, the
transferor shall be deemed to have given the transferee the right to seek
admission as a Substituted Member subject to the conditions of, and in the
manner permitted under, this Agreement. A transferor of a Membership Interest
shall, however, only have the authority to convey to a purchaser or other
transferee (a) the right to negotiate such Membership Interest to a purchaser or
other transferee and (b) the right to request admission as a Substituted Member
to such purchaser or other transferee in respect of the transferred Membership
Interests. Each transferee of a Membership Interest shall be an Assignee and be
deemed to have applied to become a Substituted Member with respect to the
Interests so transferred to such Person. Such Assignee shall become a
Substituted Member (x) at such time as the Members consent thereto, which
consent may be given or withheld in the Members' discretion, and (y) when any
such admission is shown on the books and records of the Company. If such consent
is withheld, such transferee shall remain an Assignee. An Assignee shall have an
interest in the Company equivalent to that of a Member with respect to
allocations and distributions, including liquidating distributions, of the
Company. With respect to voting rights attributable to Membership Interests that
are held by Assignees, the Managing Member shall be deemed to be the Member with
respect thereto and shall, in exercising the voting rights in respect of such
Interests on any matter, vote such Membership
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Interests at the written direction of the Assignee. If no such written direction
is received, such Membership Interests will not be voted. An Assignee shall have
no other rights of a Member.
Section 11.3 Admission of Additional Members.
(a) A Person (other than a Substituted Member) who makes a
Capital Contribution to the Company or acquires Company Securities in accordance
with this Agreement shall be admitted to the Company as an Additional Member
only upon furnishing to the Managing Member (i) evidence of acceptance in form
satisfactory to the Managing Member of all of the terms and conditions of this
Agreement, including the power of attorney granted in Section 2.6, and (ii) such
other documents or instruments as may be required in the discretion of the
Managing Member to effect such Person's admission as an Additional Member.
(b) Notwithstanding anything to the contrary in this Section
11.3, no Person shall be admitted as an Additional Member without the consent of
the Managing Member, which consent may be given or withheld in the Managing
Member's discretion. The admission of any Person as an Additional Member shall
become effective on the date upon which the name of such Person is recorded as
such in the books and records of the Company, following the consent of the
Managing Member to such admission.
Section 11.4 Amendment of Agreement and Certificate of Formation.
To effect the admission to the Company of any Member, the Managing
Member shall take all steps necessary and appropriate under the Act to amend the
records of the Company to reflect such admission and, if necessary, to prepare
as soon as practicable an amendment to this Agreement and, if required by law,
the Managing Member shall prepare and file an amendment to the Certificate of
Formation, and the Managing Member may for this purpose, among others, exercise
the power of attorney granted pursuant to Section 2.6.
ARTICLE XII
WITHDRAWAL OF MEMBERS
Section 12.1 Withdrawal of Members.
Without the prior written consent of the Managing Member, which may be
granted or withheld in its sole discretion, and except as provided in Section
11.1, no Member shall have the right to withdraw from the Company.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution.
The Company shall not be dissolved by the admission of Substituted
Members or Additional Members in accordance with the terms of this Agreement.
The Company shall dissolve, and its affairs shall be wound up, upon:
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(a) an election to dissolve the Company by the Managing Member
that is approved by all of the Members;
(b) the entry of a decree of judicial dissolution of the
Company pursuant to the provisions of the Act;
(c) the sale of all or substantially all of the assets and
properties of the Company Group; or
(d) the dissolution of the MLP.
Section 13.2 Liquidator.
Upon dissolution of the Company, the Managing Member shall select one
or more Persons to act as Liquidator. The Liquidator shall be entitled to
receive such compensation for its services as may be approved by a majority of
the Members. The Liquidator shall agree not to resign at any time without 15
days' prior notice and may be removed at any time, with or without cause, by
notice of removal approved by a majority of the Members. Upon dissolution,
removal or resignation of the Liquidator, a successor and substitute Liquidator
(who shall have and succeed to all rights, powers and duties of the original
Liquidator) shall within 30 days thereafter be approved by holders of at least a
majority of the Members. The right to approve a successor or substitute
Liquidator in the manner provided herein shall be deemed to refer also to any
such successor or substitute Liquidator approved in the manner herein provided.
Except as expressly provided in this Article XIII, the Liquidator approved 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 Managing Member under the terms of this Agreement (but
subject to all of the applicable limitations, contractual and otherwise, upon
the exercise of such powers, other than the limitation on sale set forth in
Section 7.3(a)) 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.
Section 13.3 Liquidation.
The Liquidator shall proceed to dispose of the assets of the Company,
discharge its liabilities, and otherwise wind up its affairs in such manner and
over such period as the Liquidator determines to be in the best interest of the
Members, subject to Section 18-804 of the Act and the following:
(a) The assets may be disposed of by public or private sale or
by distribution in kind to one or more Members on such terms as the Liquidator
and such Member or Members may agree. If any property is distributed in kind,
the Member receiving the property shall be deemed for purposes of Section
13.3(c) to have received cash equal to its fair market value; and
contemporaneously therewith, appropriate cash distributions must be made to the
other Members. The Liquidator may, in its absolute discretion, defer liquidation
or distribution of the Company's assets for a reasonable time if it determines
that an immediate sale or distribution of all or some of the Company's assets
would be impractical or would cause undue loss to the
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Members. The Liquidator may, in its absolute discretion, distribute the
Company's assets, in whole or in part, in kind if it determines that a sale
would be impractical or would cause undue loss to the Members.
(b) Liabilities of the Company include amounts owed to Members
otherwise than in respect of their distribution rights under Article VI. With
respect to any liability that is contingent, conditional or unmatured or is
otherwise not yet due and payable, the Liquidator shall either settle such claim
for such amount as it thinks appropriate or establish a reserve of cash or other
assets to provide for its payment. When paid, any unused portion of the reserve
shall be distributed as additional liquidation proceeds.
(c) All property and all cash in excess of that required to
discharge liabilities as provided in Section 13.3(b) shall be distributed to the
Members in proportion to their ownership interests.
Section 13.4 Cancellation of Certificate of Formation.
Upon the completion of the distribution of Company cash and property as
provided in Section 13.3 in connection with the liquidation of the Company, the
Company shall be terminated and the Certificate of Formation, as well as all
qualifications of the Company as a foreign limited liability company in
jurisdictions other than the State of Delaware, shall be canceled and such other
actions as may be necessary to terminate the Company shall be taken.
Section 13.5 Return of Capital Contributions.
The MLP shall not be personally liable for, and shall have no
obligation to contribute or loan any monies or property to the Company to enable
it to effectuate, the return of the Capital Contributions of the Members, or any
portion thereof, it being expressly understood that any such return shall be
made solely from Company assets.
Section 13.6 Waiver of Partition.
To the maximum extent permitted by law, each Member hereby waives any
right to partition of the Company property.
Section 13.7 Capital Account Restoration.
No Member shall have any obligation to restore any negative balance in
its Capital Account upon liquidation of the Company.
ARTICLE XIV
AMENDMENT OF AGREEMENT
Section 14.1 Amendment to be Adopted Solely by the Managing Member.
Each Member agrees that the Managing Member, without the approval of
any Member, may amend any provision of this Agreement and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
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(a) a change in the name of the Company, the location of the
principal place of business of the Company, the registered agent of the Company
or the registered office of the Company;
(b) admission, substitution, withdrawal or removal of Members
in accordance with this Agreement;
(c) a change that, in the sole discretion of the Managing
Member, is necessary or advisable to qualify or continue the qualification of
the Company as a limited liability company in which the Members have limited
liability under the laws of any state or to ensure that neither the Company nor
the MLP will be treated as an association taxable as a corporation or otherwise
taxed as an entity for federal income tax purposes;
(d) a change that, in the discretion of the Managing Member,
(i) does not adversely affect the Members in any material respect, (ii) is
necessary or advisable to (A) satisfy any requirements, conditions or guidelines
contained in any opinion, directive, order, ruling or regulation of any federal
or state agency or judicial authority or contained in any federal or state
statute (including the Act) or (B) facilitate the trading of limited partner
interests of the MLP (including the division of any class or classes of
outstanding limited partner interests of the MLP into different classes to
facilitate uniformity of tax consequences within such classes of limited partner
interests of the MLP) or comply with any rule, regulation, guideline or
requirement of any National Securities Exchange on which such limited partner
interests are or will be listed for trading, compliance with any of which the
Managing Member determines in its discretion to be in the best interests of the
MLP and the limited partners of the MLP, (iii) is required to effect the intent
expressed in the Registration Statement or the intent of the provisions of this
Agreement or is otherwise contemplated by this Agreement or (iv) is required to
conform the provisions of this Agreement with the provisions of the MLP
Agreement as the provisions of the MLP Agreement may be amended, supplemented or
restated from time to time;
(e) a change in the fiscal year or taxable year of the Company
and any changes that, in the discretion of the Managing Member, are necessary or
advisable as a result of a change in the fiscal year or taxable year of the
Company including, if the Managing Member shall so determine, a change in the
definition of "Quarter" and the dates on which distributions are to be made by
the Company;
(f) an amendment that is necessary, in the Opinion of Counsel,
to prevent the Company or its directors, officers, trustees or agents from in
any manner being subjected to the provisions of the Investment Company Act of
1940, as amended, the Investment Advisers Act of 1940, as amended, or "plan
asset" regulations adopted under the Employee Retirement Income Security Act of
1974, as amended, regardless of whether such are substantially similar to plan
asset regulations currently applied or proposed by the United States Department
of Labor;
(g) any amendment expressly permitted in this Agreement to be
made by the Managing Member acting alone;
(h) an amendment effected, necessitated or contemplated by a
Merger Agreement approved in accordance with Section 15.3;
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(i) an amendment that, in the discretion of the Managing
Member, is necessary or advisable to reflect, account for and deal with
appropriately the formation by the Company of, or investment by the Company in,
any corporation, partnership, joint venture, limited liability company or other
entity, in connection with the conduct by the Company of activities permitted by
the terms of Section 2.4;
(j) a merger or conveyance pursuant to Section 15.3(d); or
(k) any other amendments substantially similar to the
foregoing.
Section 14.2 Amendment Procedures.
Except with respect to amendments of the type described in Section
14.1, all amendments to this Agreement shall be made in accordance with the
following requirements. Amendments to this Agreement may be proposed only by or
with the consent of the Managing Member which consent may be given or withheld
in its sole discretion. A proposed amendment shall be effective upon its
approval by the Members.
ARTICLE XV
MERGER
Section 15.1 Authority.
The Company may merge or consolidate with one or more corporations,
limited liability companies, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
general partnership or limited partnership, formed under the laws of the State
of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation ("Merger Agreement") in accordance
with this Article 15.
Section 15.2 Procedure for Merger or Consolidation.
Merger or consolidation of the Company pursuant to this Article XV
requires the prior approval of the Managing Member. If the Managing Member shall
determine, in the exercise of its discretion, to consent to the merger or
consolidation, the Managing Member shall approve the Merger Agreement, which
shall set forth:
(a) The names and jurisdictions of formation or organization
of each of the business entities proposing to merge or consolidate;
(b) The name and jurisdiction of formation or organization of
the business entity that is to survive the proposed merger or consolidation (the
"Surviving Business Entity");
(c) The terms and conditions of the proposed merger or
consolidation;
(d) The manner and basis of exchanging or converting the
equity securities of each constituent business entity for, or into, cash,
property or general or limited partner interests, rights, securities or
obligations of the Surviving Business Entity; and (i) if any general or limited
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partner interests, securities or rights of any constituent business entity are
not to be exchanged or converted solely for, or into, cash, property or general
or limited partner interests, rights, securities or obligations of the Surviving
Business Entity, the cash, property or general or limited partner interests,
rights, securities or obligations of any limited partnership, corporation, trust
or other entity (other than the Surviving Business Entity) which the holders of
such general or limited partner interests, securities or rights are to receive
in exchange for, or upon conversion of their general or limited partner
interests, securities or rights, and (ii) in the case of securities represented
by certificates, upon the surrender of such certificates, which cash, property
or general or limited partner interests, rights, securities or obligations of
the Surviving Business Entity or any general or limited partnership,
corporation, trust or other entity (other than the Surviving Business Entity),
or evidences thereof, are to be delivered;
(e) A statement of any changes in the constituent documents or
the adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or agreement
of limited partnership or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or consolidation;
(f) The effective time of the merger, which may be the date of
the filing of the certificate of merger pursuant to Section 15.4 or a later date
specified in or determinable in accordance with the Merger Agreement (provided,
that if the effective time of the merger is to be later than the date of the
filing of the certificate of merger, the effective time shall be fixed no later
than the time of the filing of the certificate of merger and stated therein);
and
(g) Such other provisions with respect to the proposed merger
or consolidation as are deemed necessary or appropriate by the Managing Member.
Section 15.3 Approval by Members of Merger or Consolidation.
(a) Except as provided in Section 15.3(d), the Managing
Member, upon its approval of the Merger Agreement, shall direct that the Merger
Agreement be submitted to a vote of Members, whether at a special meeting or by
written consent, in either case in accordance with the requirements of Article
XIV. A copy or a summary of the Merger Agreement shall be included in or
enclosed with the notice of a special meeting or the written consent.
(b) Except as provided in Section 15.3(d), the Merger
Agreement shall be approved upon receiving the affirmative vote or consent of
the Members.
(c) Except as provided in Section 15.3(d), after such approval
by vote or consent of the Members, and at any time prior to the filing of the
certificate of merger pursuant to Section 15.4, the merger or consolidation may
be abandoned pursuant to provisions therefor, if any, set forth in the Merger
Agreement.
(d) Notwithstanding anything else contained in this Article XV
or in this Agreement, the Managing Member is permitted, in its discretion,
without Member approval, to merge the Company or any Group Member into, or
convey all of the Company's assets to, another limited liability entity which
shall be newly formed and shall have no assets, liabilities or operations at the
time of such Merger other than those it receives from the Company or other
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Group Member if (i) the Managing Member has received an Opinion of Counsel that
the merger or conveyance, as the case may be, would not result in the loss of
the limited liability of any Member or any limited partner in the MLP or cause
the Company or the MLP to be treated as an association taxable as a corporation
or otherwise to be taxed as an entity for federal income tax purposes (to the
extent not previously treated as such), (ii) the sole purpose of such merger or
conveyance is to effect a mere change in the legal form of the Company into
another limited liability entity and (iii) the governing instruments of the new
entity provide the Members with the same rights and obligations as are herein
contained.
Section 15.4 Certificate of Merger.
Upon the required approval by the Managing Member and the Members of a
Merger Agreement, a certificate of merger shall be executed and filed with the
Secretary of State of the State of Delaware in conformity with the requirements
of the Act.
Section 15.5 Effect of Merger.
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the
business entities that has merged or consolidated, and all property,
real, personal and mixed, and all debts due to any of those business
entities and all other things and causes of action belonging to each of
those business entities, shall be vested in the Surviving Business
Entity and after the merger or consolidation shall be the property of
the Surviving Business Entity to the extent they were of each
constituent business entity;
(ii) the title to any real property vested by deed or
otherwise in any of those constituent business entities shall not
revert and is not in any way impaired because of the merger or
consolidation;
(iii) all rights of creditors and all liens on or security
interests in property of any of those constituent business entities
shall be preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent
business entities shall attach to the Surviving Business Entity and may
be enforced against it to the same extent as if the debts, liabilities
and duties had been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this
Article shall not be deemed to result in a transfer or assignment of assets or
liabilities from one entity to another.
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Addresses and Notices.
Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Member under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by first class United States mail or by other means
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of written communication to the Member at the address described below. Any
notice to the Company or to the Managing Member shall be deemed given if
received by the Managing Member at the principal office of the Company
designated pursuant to Section 2.3. The Managing Member may rely and shall be
protected in relying on any notice or other document from a Member, Assignee or
other Person if believed by it to be genuine.
Section 16.2 Further Action.
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 16.3 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
Section 16.4 Integration.
This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
Section 16.5 Creditors.
None of the provisions of this Agreement shall be for the benefit of,
or shall be enforceable by, any creditor of the Company.
Section 16.6 Waiver.
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.
Section 16.7 Counterparts.
This Agreement may be executed in counterparts, all of which together
shall constitute an agreement binding on all the parties hereto, notwithstanding
that all such parties are not signatories to the original or the same
counterpart. Each party shall become bound by this Agreement immediately upon
affixing its signature hereto, independently of the signature of any other
party.
Section 16.8 Applicable Law.
This Agreement shall be construed in accordance with and governed by
the laws of the State of Delaware, without regard to the principles of conflicts
of law.
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Section 16.9 Invalidity of Provisions.
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
Section 16.10 Consent of Members.
Each Member hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote
or consent of less than all of the Members, such action may be so taken upon the
concurrence of less than all of the Members and each Member shall be bound by
the results of such action.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
NATURAL RESOURCE PARTNERS, L.P.
By: NRP (GP) LP, its General Partner
By: GP Natural Resource Partners LLC, its
General Partner
By:
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Name:
Title:
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