Document/Exhibit Description Pages Size
1: 10-K Natural Resource Partners L.P.- December 31, 2002 117 566K
2: EX-3.2 1st Amended Agreement of Limited Partnership 109 431K
3: EX-3.4 Amended Limited Liability Company Agreement 42 194K
4: EX-3.6 1st Amended Agreement of Limited Partnership 33 137K
5: EX-3.8 2nd Amended to Limited Liability Company Agreement 44 174K
6: EX-10.1 Credit Agreement 82 371K
14: EX-10.10 Lease Amendment No.1 to Coal Mining Lease 3 13K
7: EX-10.2 Contribution, Conveyance & Assumption Agreement 30 111K
8: EX-10.3 Long-Term Incentive Plan 8 36K
9: EX-10.4 Annual Incentive Plan 4 20K
10: EX-10.5 Omnibus Agreement 17 59K
11: EX-10.6 Royalty Pass-Through Agreement 8 23K
12: EX-10.8 Purchasse & Sale Agreement 29 109K
13: EX-10.9 1st Amendment to Purchase & Sale Agreement 4 20K
15: EX-21.1 List of Subsidiaries 1 6K
16: EX-99.1 Audited Balance Sheets of Nrp (Gp) Lp 7 37K
17: EX-99.2 Section 1350 Certifications 2 10K
EX-3.4 — Amended Limited Liability Company Agreement
Exhibit Table of Contents
EXHIBIT 3.4
EXECUTION VERSION
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NRP (OPERATING) LLC
TABLE OF CONTENTS
[Download Table]
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.................................................... 13
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
[Download Table]
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.............................................. 21
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.................................... 25
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....................................... 28
Section 9.2 Fiscal Year.................................................. 28
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............................. 29
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........................................ 30
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution.................................................. 30
Section 13.2 Liquidator................................................... 30
Section 13.3 Liquidation.................................................. 31
Section 13.4 Cancellation of Certificate of Formation..................... 31
[Download Table]
Section 13.5 Return of Capital Contributions.............................. 31
Section 13.6 Waiver of Partition.......................................... 32
Section 13.7 Capital Account Restoration.................................. 32
ARTICLE XIV
AMENDMENT OF AGREEMENT
Section 14.1 Amendment to be Adopted Solely by the Managing Member........ 32
Section 14.2 Amendment Procedures......................................... 33
ARTICLE XV
MERGER
Section 15.1 Authority.................................................... 33
Section 15.2 Procedure for Merger or Consolidation........................ 34
Section 15.3 Approval by Members of Merger or Consolidation............... 35
Section 15.4 Certificate of Merger........................................ 35
Section 15.5 Effect of Merger............................................. 35
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Addresses and Notices........................................ 36
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....................................................... 37
Section 16.7 Counterparts................................................. 37
Section 16.8 Applicable Law............................................... 37
Section 16.9 Invalidity of Provisions..................................... 37
Section 16.10 Consent of Members........................................... 37
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 October 17, 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.
R E C I T A L S:
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 and restate the Original Agreement
in connection with the initial public offering of the MLP 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
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been made, established, increased or reduced, for purposes of determining
Available Cash, within such Quarter if the Managing Member so determines.
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, New Gauley, Great Northern, Western Pocahontas, Ark Land, NNG LLC, GNP
LLC, WPP LLC, ACIN LLC and RCM LLC, 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.
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"Credit Agreement" means the Credit Agreement dated as of October 17, 2002
by and among the Company, ACIN LLC, GNP LLC, NNG LLC, WPP LLC, the MLP and PNC
Bank, National Association.
"Cumulative Common Unit Arrearage" has the meaning assigned to such term
in the MLP Agreement.
"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, the General Partner or GP LLC,
(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.
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"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.
"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 as of the Closing
Date, among the Company, the MLP, the General Partner, GP LLC, Arch Coal, Ark
Land, New Gauley, Western Pocahontas, Great Northern and RCM LLC.
"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.
"RCM LLC" means Robertson Coal Management LLC, a Delaware limited
liability 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.
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"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.
"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 as of
October 10, 2002 among the Company, the MLP, the General Partner, GP LLC, Arch
Coal, Ark Land, New Gauley, Western Pocahontas, Great Northern, ACIN LLC, NNG
LLC, WPP LLC, GNP LLC, RCM LLC and the Underwriters, 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.
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"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.
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 1209 Orange Street, New
Castle County, Wilmington, Delaware 19801, 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
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principal office of the Company shall be located at 601 Jefferson Street, Suite
3600, Houston, Texas 77002 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.
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, that the Managing Member shall not cause the Company or the
MLP to engage, directly or indirectly, in any business activity that the
Managing Member reasonably determines would cause the MLP to be treated as an
association taxable as a corporation or otherwise taxable as an entity for
federal income tax purposes. 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 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
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full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in his name, place and stead, to:
(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
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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 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
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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;
(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
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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.
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, 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, 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.
Upon completion of such contribution, 100% of the Membership Interests in the
Company were held by the MLP.
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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.
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
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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, 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.
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(a) Within 45 days following the end of each Quarter commencing with
the Quarter ending on December 31, 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, 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;
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(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;
(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 or guarantee 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,
limited liability companies or other relationships, 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
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(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, the Credit 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 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
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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 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
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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 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,
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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 the Group Member interest at a rate less than
the rate that would be charged to the Group Member (without reference to the
Managing Member's financial abilities or guarantees) 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.
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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 (in the case of a Person other than the
Managing Member) 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 or their
Affiliates (other than a Group Member) with respect to their respective
obligations incurred pursuant to 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 the Credit 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
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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.
(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.
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(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.
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
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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 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
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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 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
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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 Nick Carter.
(ii) Chief Financial Officer. The Managing Member shall
appoint a Chief Financial Officer. The Chief Financial Officer shall
have such powers and perform such duties as are assigned to him by
the Managing Member. The current Chief Financial Officer is Dwight
L. Dunlap.
(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
Kevin Wall.
(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 Kevin Wall.
(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 Kenneth Hudson.
(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
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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 Dwight L. Dunlap.
(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 Dwight L. Dunlap.
(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 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 grant powers 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.
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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.
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 Sections 5.1 and 5.2, the MLP
is the only current Member of the Company.
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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 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.
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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:
(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, exchange or disposition 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
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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 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.
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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:
(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;
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(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;
(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.
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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 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.
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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 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;
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(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 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.
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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.
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: /s/ Nick Carter
---------------------------------
Name: Nick Carter
Title: President
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Dates Referenced Herein and Documents Incorporated by Reference
4 Subsequent Filings that Reference this Filing
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