SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ACADIAN GAS, LLC A Delaware Limited Liability Company SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ACADIAN GAS, LLC A Delaware Limited Liability Company TABLE OF CONTENTS

THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of ACADIAN GAS, LLC, a Delaware limited liability company (the “Company”), executed on June 1, 2010 (the “Effective Date”), is adopted, executed and agreed to, by Enterprise Products Operating LLC (successor of Enterprise Products Operating L.P.), a Texas limited liability company (“Enterprise Products LLC”) and DEP Operating Partnership, L.P., a Delaware limited partnership (“DEP OLP”), as the Members of the Company.

A. The Company was formed on January 20, 1998 by the filing of the Certificate of Formation with the Secretary of State of the State of Delaware.

B. The Limited Liability Company Agreement of the Company was executed effective January 20, 1998 by its Initial Member, Acadian Gas Corporation, a Nevada corporation (the “Initial Agreement”).

C. DEP OLP entered into that certain Contribution, Conveyance and Assumption Agreement by and among DEP Holdings, LLC, Duncan Energy Partners L.P. (“MLP”), DEP OLPGP, LLC and Enterprise Products LLC on the Effective Date (the “Contribution Agreement”) whereby Enterprise Products LLC contributed 66% of its membership interests in the Company (the “Interest”) to MLP as consideration for the receipt of proceeds raised in the initial public offering of MLP.< /font>

D. Pursuant to the Contribution Agreement, MLP contributed the Interest to DEP OLP as a capital contribution.

E. Enterprise Products LLC and DEP OLP considered it advisable to amend and restate the Initial Agreement in its entirety to reflect (i) the contribution of the Interest from Enterprise Products LLC to DEP OLP and (ii) the admission of DEP OLP as a Member of the Company, which is reflected by that certain Amended and Restated Limited Liability Company Agreement dated February 5, 2007 between DEP OLP and Enterprise Products LLC (the “Existing Agreement”).

F. Enterprise Products LLC and DEP OLP have agreed to fund through the Company the construction of a 270-mile pipeline from the Haynesville shale formation in northern Louisiana to the existing pipeline system of the Company in southern Louisiana (the “Haynesville Extension”) on a pro rata basis in accordance with their respective Sharing Ratios.

G. Enterprise Products LLC and DEP OLP consider it advisable to reflect their additional agreements and modifications to the Existing Agreement in their entirety and to amend and restate the Existing Agreement as set forth herein.

 

1.01 Definitions.  Each capitalized term used herein shall have the meaning given such term in Attachment I.

 

1.02 Construction.  Unless the context requires otherwise: (a) the gender (or lack of gender) of all words used in this Agreement includes the masculine, feminine and neuter; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) references to Laws refer to such Laws as they may be amended from time to time, and references to particular provisions of a Law include any corresponding provisions of any succeeding Law; (d) references to money refer to legal currency of the United States of America; (e) “including” means “including without limitation” and is a term of illustration and not of limitation; (f) all definitions set forth herein shall be deemed applicable whether the words defined are used herein in the singular or the plural; and (g) neither this Agreement nor any other agreement, document or instrument referred to herein or executed and delivered in connection herewith shall be construed against any Person as the principal draftsperson hereof or thereof.

 

2.01 Formation.  The Company was organized as a Delaware limited liability company by the filing of a Certificate of Formation (“Organizational Certificate”) on January 20, 1998 with the Secretary of State of the State of Delaware under and pursuant to the Act.

 

2.02 Name.  The name of the Company is “Acadian Gas, LLC” and all Company business must be conducted in that name or such other names that comply with Law as the Board of Directors may select.

 

2.03 Registered Office; Registered Agent; Principal Office; Other Offices.  The registered office of the Company required by the Act to be maintained in the State of Delaware shall be the office of the initial registered agent for service of process named in the Organizational Certificate or such other office (which need not be a place of business of the Company) as the Board of Directors may designate in the manner provided by Law.  The registered agent for service of process of the Company in the State of Delaware shall be the initial registered agent for service of process name d in the Organizational Certificate or such other Person or Persons as the Board of Directors may designate in the manner provided by Law.  The principal office of the Company in the United States shall be at such a place as the Board of Directors may from time to time designate, which need not be in the State of Delaware, and the Company shall maintain records there and shall keep the street address of such principal office at the registered office of the Company in the State of Delaware.  The Company may have such other offices as the Board of Directors may designate.

 

2.04 Purpose.  The purposes of the Company are the transaction of any or all lawful business for which limited liability companies may be organized under the Act.

 

2.05 Term.  The period of existence of the Company commenced on January 20, 1998 and shall end at such time as a Certificate of Cancellation is filed in accordance with Section 13.02(c).

 

2.06 No State-Law Partnership; Withdrawal.  It is the intent that the Company shall be a limited liability company formed under the Laws of the State of Delaware and shall not be a partnership (including a limited partnership) or joint venture, and that the Members not be a partner or joint venturer of any other party for any purposes other than federal and state tax purposes, and this Agreement may not be construed to suggest otherwise.  A Member does not have the right to Withdraw from the Company; provided, however, that a Member shall have the power to Withdraw at any time in violation of this Agreement.  If a Member exercises such power in violation of this Agreement, (a) such Member shall be liable to the Company and its Affiliates for all monetary damages suffered by them as a result of such Withdrawal; and (b) such Member shall not have any rights under Section 18.604 of the Act.  In no event shall the Company have the right, through specific performance or otherwise, to prevent a Member from Withdrawing in violation of this Agreement.

 

3.01 Members.

 

(a) Enterprise Products LLC has previously been admitted as a Member of the Company.

 

(b) DEP OLP has previously been admitted as a Member of the Company.

 

3.02 Creation of Additional Membership Interest.  The Company may issue additional Membership Interests in the Company only in compliance with the provisions in Article 5 of the Omnibus Agreement.  The Company shall be bound by the terms of such Omnibus Agreement.

 

3.03 Liability to Third Parties.  No Member or beneficial owner of any Membership Interest shall be liable for the Liabilities of the Company.

 

4.01 Capital Contributions.

 

(a) The amount of money and the fair market value (as of the date of contribution) of any property (other than money) contributed to the Company by a Member shall constitute a “Capital Contribution.” Any reference in this Agreement to the Capital Contribution of a Member shall include a Capital Contribution of its predecessors in interest.

(b) Enterprise Products LLC directly, or its predecessor in interest, has made certain Capital Contributions.

 

(c) DEP OLP directly, or its predecessor in interest, has made certain Capital Contributions.

 

(d) Except as set forth below in Sections 4.01(e) and (f), no Member shall be required to make any additional Capital Contributions on or after the date of this Agreement.

 

(e) If the Board of Directors determines for any quarter there exists an operating cash flow deficit such that available cash is insufficient to cover operating expenses, debt service and a reasonable contingency reserve (but excluding cash needed for acquisitions or Expansion Projects), the Board of Directors may require each Member to make additional Capital Contributions pro rata in accordance with its respective Sharing Ratio in an amount sufficient, together with the other Member’s Capital Contributions, to cover such operating cash flow deficit.  If the Board of Directors determines, in accordance with a procedure approved by the Members, that an operating cash flow deficit exists for any qu arter for any Expansion Project such that available cash therefrom is insufficient to cover operating expenses, debt service and a reasonable contingency reserve therefor, the Board of Directors may require each Expansion Participating Member with respect to that Expansion Project to make additional Capital Contributions in accordance with its respective Expansion Sharing Ratio, if any, in an amount sufficient, together with the other Expansion Participating Members’ (with respect to that Expansion Project) Capital Contributions, to cover such operating cash flow deficit.

 

(f) The Members acknowledge that the construction of the Haynesville Extension is underway and that certain construction expenses have been funded to date by Enterprise Products LLC for the benefit of the Company and its Members, and that as soon as practical following the entry into this Agreement, DEP OLP shall reimburse Enterprise Products LLC for 66% of such expenditures to date funded separately by Enterprise Products LLC, along with interest accrued on such capital contributions from the date of each such contribution to the reimbursement date at an annual interest rate of LIBOR plus 250 basis points (with LIBOR being determined as of a date within 30 days prior to the date of such reimbursement).  0;The Members agree to make capital contributions to the Company in order to fund the remainder of the construction of the Haynesville Extension in accordance with their respective Sharing Ratios.  Upon completion of the Haynesville Extension, to the extent any portion thereof is not owned by the Company or a direct or indirect wholly owned subsidiary of the Company, Enterprise Products LLC and DEP OLP, as applicable, shall contribute, or cause to be contributed, such portion to the Company.  With respect to any reimbursement DEP OLP makes directly to Enterprise Products LLC pursuant to this Section 4.01(f) other than interest accrued on such capital contributions, (A) DEP OLP shall be deemed to have made a cash Capital Contribution to the Company in an amount equal to such reimbursement, and (B) the Company shall be deemed to have made a cash distribution to Enterprise Products LLC in an amount equal to such reimbursement.  The Board of Directors shall provide ea ch Member a reasonably detailed quarterly status report containing, among other things, a quarterly comparison of actual costs incurred to date versus budgeted costs as presented to each Member in connection with the Haynesville Extension, accompanied by an explanation of all variances among the two amounts in excess of 10% during the period for which the status report is rendered.

 

(a) The Company may request additional Capital Contributions from each Member to fund the costs of construction of, acquisition of assets relating to, and other expenditures (collectively, “Expansion Costs”) for Expansion Projects (“Expansion Cash Calls”).  Except as otherwise provided in the following sentence of this Section 4.02(a) or otherwise agreed to by each Member, each Member shall make any Capital Contribution for Expansion Cash Calls in an amount equal to its Sharing Ratio multiplied by the aggregate Expansion Cash Call. 0; Each Member may decline to make a Capital Contribution for any Expansion Cash Call, and the Members may agree to make Capital Contributions for Expansion Cash Calls in amounts other than  based upon their respective Sharing Ratios; provided, that if the aggregate Capital Contributions which all Members agree to make total less than the Expansion Cash Call, the Members shall decide whether to proceed with the Expansion Project with the agreed upon level of Capital Contributions.  Unless otherwise agreed to by each Member, the Company shall fund any Expansion Project for which an Expansion Cash Call is made solely from Expansion Capital Contributions. The Expansion Costs and the related funding of any Expansion Cash Calls shall be borne by each Member participating (“Expansion Participating Members”), unless ag reed to otherwise by all of the Expansion Participating Members, in an amount equal to the product of (A) the aggregate amount of the Expansion Costs for the applicable Expansion Project multiplied by (B) a fraction (the “Expansion Sharing Ratio”), the numerator of which is the Sharing Ratio, or agreed upon contribution percentage, as applicable, of that Expansion Participating Member for that Expansion Project and the denominator of which is the aggregate Sharing Ratio of all of the Expansion Participating Members, or 100%, as applicable.

 

(b) The Board of Directors shall provide written notice to the Members of the initial date contributions are due, which date shall be not less than 30 nor more than 90 Days following the date of such notice, the aggregate amount of the Capital Contribution required and each Member’s share thereof, and setting forth in reasonable detail the proposed Expansion Project and Expansion Costs associated therewith.  Each Member shall advise the Board of Directors in writing within 20 Days whether it elects to make an Expansion Capital Contribution.

 

(c) In connection with any Expansion Project, the Board of Directors shall provide to each Member a reasonably detailed monthly status report containing, among other things, a month-by-month comparison of actual Expansion Costs incurred to date versus Expansion Costs as presented to each Member on the date the Expansion Cash Call notice was sent, accompanied by an explanation of all variances among the two amounts in excess of 10% during the period for which the status report is rendered.

 

4.03 Loans.  If the Company does not have sufficient cash to pay its obligations, any Member that may agree to do so may, upon approval by the Board of Directors, advance all or part of the needed funds for such obligation to or on behalf of the Company.  An advance described in this Section 4.03 constitutes a loan from the Member to the Company, shall bear interest at a rate comparable to the rate the Company could obtain from third parties, from the date of the advance until the date of repayment, and is not a Capital Contribution.

 

4.04 Return of Contributions.  A Member is not entitled to the return of any part of its Capital Contributions or to be paid interest in respect of its Capital Contributions.  An unrepaid Capital Contribution is not a liability of the Company or of any Member.  No Member will be required to contribute or to lend any cash or property to the Company to enable the Company to return any Member’s Capital Contributions.

4.05 Capital Accounts.

 

(a) A separate capital account shall be established and maintained for each Member in accordance with Treas. Reg. § 1.704-1(b)(2)(iv).

 

(b) Each Member’s capital account (a) shall be increased by (i) the amount of money contributed by that Member to the Company, (ii) the fair market value of property contributed by that Member to the Company (net of liabilities secured by the contributed property that the Company is considered to assume or take subject to under section 752 of the Code), and (iii) allocations to that Member of Company income and gain (or items of income and gain), including income and gain exempt from tax and income and gain described in Treas. Reg. § 1.704-1(b)(2)(iv)(g), but excluding income and gain described in Treas. Reg. § 1.704- 1(b)(4)(i), and (b) shall be decreased by (i) the amount of money distribut ed to that Member by the Company, (ii) the fair market value of property distributed to that Member by the Company (net of liabilities secured by the distributed property that the Member is considered to assume or take subject to under section 752 of the Code), (iii) allocations to that Member of expenditures of the Company described in section 705(a)(2)(B) of the Code, and (iv) allocations of Company loss and deduction (or items of loss and deduction), including loss and deduction described in Treas. Reg. § 1.704-1(b)(2)(iv)(g), but excluding items described in clause (b)(iii) above and loss or deduction described in Treas. Reg. § 1.704-1(b)(4)(i) or § 1.704-1(b)(4)(iii).  The Members’ capital accounts also shall be maintained and adjusted as permitted by the provisions of Treas. Reg. § 1.704-1(b)(2)(iv)(f) and as required by the other provisions of Treas. Reg. §§ 1.704- 1(b)(2)(iv) and 1.704-1(b)(4), including adjustments to reflect the allocations to the Membe rs of depreciation, depletion, amortization, and gain or loss as computed for book purposes rather than the allocation of the corresponding items as computed for tax purposes, as required by Treas. Reg. § 1.704-1(b)(2)(iv)(g).  A Member that has more than one Membership Interest shall have a single capital account that reflects all its Membership Interests, regardless of the class of Membership Interests owned by that Member and regardless of the time or manner in which those Membership Interests were acquired.

 

5.01 Allocations.

 

(a) General.  After giving effect to the special allocations set forth in Section 5.01(b), for purposes of maintaining the capital accounts and in determining the rights of the Members among themselves, the Profits and Losses of the Company shall be allocated and charged to the Members’ capital accounts in accordance with their Sharing Ratios; provided, however, Losses shall not be allocated pursuant to this Section 5.01(a) to the extent such allocation would cause any Member to have a deficit adjusted capital account balance at the end

of such taxable year (or increase any existing deficit adjusted capital account balance) but shall instead be allocated to the Member(s) with a positive adjusted capital balance to the extent of such balance.

 

(b) Special Allocations. Notwithstanding any other provisions of this Section 5.01, the following special allocations shall be made prior to making any allocations provided for in 5.01(a) above:

 

(i) Minimum Gain Chargeback.  Notwithstanding any other provision hereof to the contrary, if there is a net decrease in Minimum Gain (as generally defined under Treas. Reg. § 1.704-1 or § 1.704-2) for a taxable year (or if there was a net decrease in Minimum Gain for a prior taxable year and the Company did not have sufficient amounts of income and gain during prior years to allocate among the Members under this subsection 5.01(b)(i)), then items of income and gain shall be allocated to each Member in an amount equal to such Member’s share of the net decrease in such Minimum Gain (as determined pursuant to Treas. Reg. §& #160;1.704-2(g)(2)).  It is the intent of the Members that any allocation pursuant to this subsection 5.01(b)(i) shall constitute a “minimum gain chargeback” under Treas. Reg. § 1.704­2(f) and shall be interpreted consistently therewith.

 

(ii) Member Nonrecourse Debt Minimum Gain Chargeback.  Notwithstanding any other provision of this Article 5, except subsection 5.01(b)(i), if there is a net decrease in Member Nonrecourse Debt Minimum Gain (as generally defined under Treas. Reg. § 1.704-1 or § 1.704-2), during any taxable year, any Member who has a share of the Member Nonrecourse Debt Minimum Gain shall be allocated such amount of income and gain for such year (and subsequent years, if necessary) determined in the manner required by Treas. Reg. § 1.704-2(i)(4) as is necessary to meet the requirements for a chargeback of Member Nonrecourse Debt Minim um Gain.

 

(iii) Qualified Income Offset.  Except as provided in subsection 5.01(b)(i) and (ii) hereof, in the event any Member unexpectedly receives any adjustments, allocations or distributions described in Treas. Reg. Sections 1.704-1(b)(2)(i)(d)(4), 1.704- 1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specifically allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Allocation Regulations, the deficit balance, if any, in its adjusted capital account created by such adjustments, allocations or distributions as quickly as possible.

 

(iv) Gross Income Allocations.  In the event any Member has a deficit balance in its adjusted capital account at the end of any Company taxable period, such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible.

 

(v) Company Nonrecourse Deductions.  Company Nonrecourse Deductions (as determined under Treas. Reg. Section 1.704-2(c)) for any fiscal year shall be allocated among the Members in proportion to their Membership Interests.

 

(vi) Member Nonrecourse Deductions.  Any Member Nonrecourse Deductions (as defined under Treas. Reg. Section 1.704-2(i)(2)) shall be allocated pursuant to

 

Treas. Reg. Section 1.704-2(i) to the Member who bears the economic risk of loss with respect to the partner nonrecourse debt to which it is attributable.

 

(vii) Code Section 754 Adjustment.  To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to the Allocation Regulations, to be taken into account in determining capital accounts, the amount of such adjustment to the capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their capital accounts are required to be adjusted pursuant to the A llocation Regulations.

 

(viii) Curative Allocation.  The special allocations set forth in subsections 5.01(b)(i)-(vi) (the “Regulatory Allocations”) are intended to comply with the Allocation Regulations.  Notwithstanding any other provisions of this Section 5.01, the Regulatory Allocations shall be taken into account in allocating items of income, gain, loss and deduction among the Members such that, to the extent possible, the net amount of allocations of such items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocat ed to each Member if the Regulatory Allocations had not occurred.

 

(ix) Expansion Projects.  If an Expansion Project has occurred and all of the Members are not Expansion Participating Members in the same percentage as their Sharing Ratios, unless otherwise agreed to by the Company and the Members in connection with an Expansion Cash Call, the Company shall determine for each calendar month, Expansion Profits and Losses, which shall be allocated among Expansion Participating Members in accordance with their respective Expansion Sharing Ratios.

 

(c) For federal income tax purposes, except as otherwise required by the Code, the Allocation Regulations or the following sentence, each item of Company income, gain, loss, deduction and credit shall be allocated among the Members in the same manner as corresponding items are allocated in Section 5.01(a) and (b).  Notwithstanding any provisions contained herein to the contrary, solely for federal income tax purposes, items of income, gain, depreciation, gain or loss with respect to property contributed or deemed contributed to the Company by a Member or whose value is adjusted pursuant to the Allocation Regulations shall be allocated among the Members so as to take into account the variation between th e Company’s tax basis in such property and its Carrying Value in the manner provided under section 704(c) of the Code and Treas. Reg. § 1.704-3(d) (i.e., the “remedial method”).

 

5.02 Distributions.

 

(a) Within thirty days after the end of each calendar quarter, prior to commencement of winding up under Article 13, , the Board of Directors shall determine in its reasonable judgment to what extent (if any) the Company’s cash on hand (other than Expansion Capital Contributions and cash attributable to Expansion Cash Flow) exceeds its current and anticipated needs, including, without limitation, for operating expenses, debt service, acquisitions, and a reasonable contingency reserve.  If such an excess exists, the Board of Directors shall cause the Company to distribute to the Members, in accordance with their

 

Sharing Ratios, an amount in cash equal to that excess on or after the date 30 days following the end of that calendar quarter.

 

(b) If an Expansion Project has occurred and all of the Members are not Expansion Participating Members in an Expansion Project in the same percentage as their Sharing Ratios, the Board of Directors shall determine, in accordance with a procedure approved by the Members for that Expansion Project, for each calendar quarter, the Expansion Cash Flow for that Expansion Project.  Within thirty days after the end of each calendar quarter prior to commencement of winding up under Article 13, the Board of Directors shall cause the Company to distribute to each Expansion Participating Member for that Expansion Project an amount of cash equal to (x) such Expansion Participating Member’s Expansion Sharing R atio for that Expansion Project multiplied by (y) the excess Expansion Cash Flow for that Expansion Project for such calendar quarter, minus any reasonably anticipated current and anticipated needs with respect to that Expansion Project, including, without limitation, operating expenses, debt service, maintenance capital expenditures and a reasonable contingency reserve.

 

(c) From time to time the Board of Directors also may cause property of the Company other than cash to be distributed to the Members, which distribution must be made in accordance with their Sharing Ratios and may be made subject to existing liabilities and obligations.   Immediately prior to such a distribution, the capital accounts of the Members shall be adjusted as provided in Treas. Reg. § 1.704-1(b)(2)(iv)(f).

 

(d) For purposes of Section 5.02(a), each Expansion Capital Contribution shall be deemed made and applicable to the foregoing calculations only effective as of the first day of the quarter immediately following the Commencement Date of such Expansion Project.

 

6.01 Limitation of Members’ Responsibility, Liability.  The Members shall not perform any act on behalf of the Company, incur any expense, obligation or indebtedness of any nature on behalf of the Company, or in any manner participate in the management of the Company, except as specifically contemplated hereunder.  No Member shall be liable under a judgment, decree or order of a court, or in any other manner, except as agreed to by any such Member, for the indebtedness or any other obligations or liabilities of the Company or liable, responsible or accountable in damages to the Company or its Members for breach of fiduciary duty as a Member, for any acts performed within the scope of the authority conferred on it by this Agreement, or for its failure or refusal to perform any acts except those expressly required by or pursuant to the terms of this Agreement, or for any debt or loss in connection with the affairs of the Company, except as required by the Act.

6.02 Return of Distributions.  A Member will be obligated to return any distribution from the Company only as provided by applicable law.

 

6.03 Priority and Return of Capital.  Except as may be provided in this Agreement, no Member shall have priority over any other Member, either as to the return of Capital

 

Contributions or as to profits, losses or distributions; provided that this Section shall not apply to loans (as distinguished from Capital Contributions) that a Member has made to the Company.

 

6.04 Competition.  Except as otherwise expressly provided in this Agreement and notwithstanding any duty otherwise existing at law or in equity, each Member may engage in or possess an interest in any other business venture or ventures, including any activity that is competitive with the Company without offering any such opportunity to the Company, and neither the Company nor the other Member shall have any rights in or to such venture or ventures or activity or the income or profits derived therefrom.

 

6.05 Admission of Additional Members.  The Company shall not admit additional Members without the prior written consent of all of the Members.

 

6.06 Resignation.  Without the prior approval of all other Members, no Member may resign from the Company.

 

6.07 Indemnification.  To the extent permitted by law, the Company shall (to the extent of the assets of the Company) indemnify, defend and hold harmless each Member and each officer, employee, director, manager or equivalent thereof, and the general partner and each officer, employee, director, manager or equivalent thereof of the general partner, of such Member from and against all losses, expenses, claims or liabilities, including reasonable attorneys’ fees and disbursements, arising out of or in connection with the indebtedness or any other obligation or liabilities of the Company , other than losses, expenses, claims or liabilities of such indemnified Member which result from a violation in any material respect of any of the provisions of this Agreement or fraud, willful misconduct, gross negligence or misappropriation of funds.  The foregoing indemnity expressly includes an indemnity with respect to the negligence (excluding the gross negligence) of a Member.

 

7.01 Meetings.  Meetings of the Members, for any purpose or purposes, unless otherwise prescribed by law, may be called by the Chairman of the Board of Directors or the President of the Company or by any Member.  The chairperson at any meeting shall be designated by the Chairman of the Board of Directors or the President of the Company.

 

7.02 Place of Meetings.  Meetings of the Members shall be held at the principal place of business of the Company or at such other place as may be designated by the Chairman of the Board of Directors or the President of the Company.

 

7.03 Notice of Meetings.  Except as provided in Section 7.04, written notice stating the place, day and hour of the meeting and the purpose or purposes for which the meeting is called shall be sent not less than five days before the date of the meeting, either personally, by facsimile or by mail, by or at the direction of the person calling the meeting, to each Member.

 

7.04 Meeting of All Members.  If all of the Members shall meet at any time and place and consent to the holding of a meeting at such time and place, such meeting shall be valid without call or notice, and at such meeting any lawful action may be taken.

 

7.05 Action by Members Without a Meeting.  Action required or permitted to be taken at a meeting of Members may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by all Members and delivered to the Secretary or any Assistant Secretary of the Company for inclusion in the minutes or for filing with the Company records.  Action taken under this Section is effective when all Members have signed the consent, unless the consent specifies a different effective date.

 

7.06 Waiver of Notice.  When any notice is required to be given to any Member, a waiver thereof in writing signed by the Person entitled to such notice, whether before, at or after the time stated therein, shall be equivalent to the giving of such notice.

 

7.07 Delegation to Board.  Except as may be otherwise specifically provided in this Agreement or the Act, the Members agree that they shall act solely through the mechanisms provided herein relating to the appointment and authority of the Board of Directors.

 

7.08 Voting and Special Voting Rights of the Members. Except as may be otherwise specifically provided in this Agreement or the Act, the Members agree that the following actions requiring a vote of the Members shall require the vote of the Members as follows:

 

          (a) The Members shall be entitled to vote on the election of Directors as set forth in Sections 8.01(b) and (e).

 

          (b) The vote and approval by all of the Members shall be required (i) to amend or restate this Agreement (as also provided in Section 15.04), or to repeal or adopt a new limited liability company agreement, or to amend or restate the Organizational Certificate, (ii) to increase or decrease the number of Directors constituting the Board pursuant to Section 8.01, (iii) to approve a fundamental business transaction by the Company (including, without limitation, the sale of all or substantially all of the assets of the Company, or to approve or adopt any merger or consolidation as described in Section 18-209(b) of the Act, (iv) to approve an action that would make it impossible for the Company to carry out the ordinary business of the Compa ny, (v)  for the Company to approve or permit the issuance of any equity securities (or any securities convertible, exercisable or exchangeable into any equity securities) by any subsidiary of the Company to any Person other than direct or indirect wholly owned subsidiaries of the Company, or (vi) for the Company to approve or permit any repurchases or redemptions of any equity interest of the Company or its subsidiaries (other than of equity interests of its Subsidiaries by the Company or by direct or indirect wholly owned Subsidiaries of the Company).

 

          (c) The vote of the Members holding a majority of the voting interest shall be required for any other matters under the Act requiring the vote of a majority of the Members.

 

 

8.01 Management by Board of Directors.

 

discretion of the Board, officers elected pursuant to this Article 8.  The Directors and officers shall collectively constitute “managers” of the Company within the meaning of the Act.  Except as otherwise provided in this Agreement, the authority and functions of the Board, on the one hand, and of the officers, on the other hand, shall be identical to the authority and functions of the board of directors and officers, respectively, of a corporation organized under the General Corporation Law of the State of Delaware.  The officers shall be vested with such powers and duties as are set forth in this Article 8 and as are specified by the Board.  Accordingly, except as otherwise specifically provided in this Agreement, the business and affairs of the Company shall be managed under the direction of the Board, and the day-to-day activities of the Company shall be conducted on the Company’s behalf by the officers who shall be agents of the Company.

 

(b) Number; Qualification; Tenure.  The number of Directors constituting the initial Board of Directors shall be four.  The number of Directors constituting the Board of Directors may be increased or decreased from time to time by resolution of the Members.  Except as provided in Section 8.01(e) hereof, Directors shall be elected by the Members holding a plurality of the Member Interests, and each Director so elected shall hold office for the full term to which he shall have been elected and until his successor is duly elected and qualified, or until his earlier death, resignation or removal.  Any Director may resign at any time upon notice to the Company.  A Director need not be a Member of the Company or a resident of the State of Delaware.

 

(c) Regular Meetings.  Regular quarterly and annual meetings of the Board shall be held at such time and place as shall be designated from time to time by resolution of the Board.  Notice of such regular quarterly and annual meetings shall not be required.

 

(d) Special Meetings.  Special meetings of the Board of Directors may be held at any time, whenever called by the Chairman of the Board of Directors, the President of the Company or a majority of Directors then in office, at such place or places within or without the State of Delaware as may be stated in the notice of the meeting.  Notice of the time and place of a special meeting must be given by the person or persons calling such meeting at least twenty-four (24) hours, before the special meeting.  The attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the sole purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

 

(e) Term; Resignation; Vacancies; Removal.  Each Director shall hold office until his successor is appointed and qualified or until his earlier resignation or removal.  Any Director may resign at any time upon written notice to the Board, the Chairman of the Board, to the Chief Executive Officer or to any other Officer.  Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective.  Vacancies and newly created directorships resulting from any increase in the authorized number of Directors or from any o ther cause shall be filled by an affirmative vote of a majority of the remaining Directors then in office, though less than a quorum, or by a sole remaining Director, and each Director so elected shall hold office for the remainder of the full term in which the new directorship was created or the vacancy occurred and

 

until such Director’s successor is duly elected and qualified, or until his earlier death, resignation or removal.  Any Director may be removed, with or without cause, by a majority of the Members at any time, and the vacancy in the Board caused by any such removal shall be filled by a majority of the Members.

 

(f) Quorum; Required Vote for Action.  Except as may be otherwise specifically provided by law or this Agreement, at all meetings of the Board of Directors a majority of the whole Board of Directors shall constitute a quorum for the transaction of business.  The vote of a majority of the Directors present at any meeting of the Board of Directors at which there is a quorum shall be the act of the Board of Directors.  If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quor um shall be present.

 

(g) Committees.  The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of one or more of the Directors of the Company.  The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.  In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any absent or disqualified member.  Any committee, to the extent provided in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers which may require it.  Each committee shall keep regular minutes and report to the Board of Directors when required.

 

The designation of any such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed upon it or him by law, nor shall such committee function where action of the Board of Directors is required under applicable law.  The Board of Directors shall have the power at any time to change the membership of any such committee and to fill vacancies in it.  A majority of the members of any such committee shall constitute a quorum.  Each such committee may elect a chairman and appoint such subcommittees and assistants as it may deem necessary.  Except as otherwise provided by the Board of Directors, meetings of any committee shall be conducted in the same manner as the Board of Directors conducts its busi ness pursuant to this Agreement, as the same shall from time to time be amended.  Any member of any such committee elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Company will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.  Election or appointment of a member of a committee shall not of itself create contract rights.

 

8.02 Officers.

 

(a) Generally.  The officers of the Company shall be appointed by the Board of Directors.  Unless provided otherwise by resolution of the Board of Directors, the Officers shall have the titles, power, authority and duties described below in this Section 8.02.

 

(b) Titles and Number.  The Officers of the Company shall be the Chairman of the Board (unless the Board of Directors provides otherwise), the Chief Executive Officer, the President, any and all Vice Presidents (including any Vice Presidents who may be designated as Executive Vice President or Senior Vice President), the Secretary, the Chief Financial Officer, any Treasurer and any and all Assistant Secretaries and Assistant Treasurers and the General Counsel.  There shall be appointed from time to time such Vice Presidents, Secretaries, Assistant Secretaries, Treasurers and Assistant Treasurers as the Board of Directors may desire.  ; Any person may hold more than one office.

 

(c) Appointment and Term of Office.  The Officers shall be appointed by the Board of Directors at such time and for such term as the Board of Directors shall determine.  Any Officer may be removed, with or without cause, only by the Board of Directors.  Vacancies in any office may be filled only by the Board of Directors.

(d) Chairman of the Board.  The Chairman of the Board shall preside at all meetings of the Board of Directors and he shall be a non-executive unless and until other executive powers and duties are assigned to him from time to time by the Board of Directors.

 

(e) Chief Executive Officer.  Subject to the limitations imposed by this Agreement, any employment agreement, any employee plan or any determination of the Board of Directors, the Chief Executive Officer, subject to the direction of the Board of Directors, shall be the chief executive officer of the Company and shall be responsible for the management and direction of the day-to-day business and affairs of the Company, its other Officers, employees and agents, shall supervise generally the affairs of the Company and shall have full authority to execute all documents and take all actions that the Company may legally take.  In the absence o f the Chairman of the Board, the Chief Executive Officer shall preside at all meetings (should he be a director) of the Board of Directors.  The Chief Executive Officer shall exercise such other powers and perform such other duties as may be assigned to him by this Agreement or the Board of Directors, including any duties and powers stated in any employment agreement approved by the Board of Directors.

 

(f) President.  Subject to the limitations imposed by this Agreement, any employment agreement, any employee plan or any determination of the Board of Directors, the President, subject to the direction of the Board of Directors, shall be the chief executive officer of the Company in the absence of a Chief Executive Officer and shall be responsible for the management and direction of the day-to-day business and affairs of the Company, its other Officers, employees and agents, shall supervise generally the affairs of the Company and shall have full authority to execute all documents and take all actions that the Company may legally take.  The President shall preside at all meetings of the Members and, in the absence of the Chairman of the Board and a Chief Executive Officer, the President shall preside at all meetings (should he be a director) of the Board of Directors.  The President shall exercise such other

 

 

powers and perform such other duties as may be assigned to him by this Agreement or the Board of Directors, including any duties and powers stated in any employment agreement approved by the Board of Directors.

 

(g) Vice Presidents.  In the absence of a Chief Executive Officer and the President, each Vice President (including any Vice Presidents designated as Executive Vice President or Senior Vice President) appointed by the Board of Directors shall have all of the powers and duties conferred upon the President, including the same power as the President to execute documents on behalf of the Company.  Each such Vice President shall perform such other duties and may exercise such other powers as may from time to time be assigned to him by the Board of Directors or the President.

 

(h) Secretary and Assistant Secretaries.  The Secretary shall record or cause to be recorded in books provided for that purpose the minutes of the meetings or actions of the Board of Directors, shall see that all notices are duly given in accordance with the provisions of this Agreement and as required by law, shall be custodian of all records (other than financial), shall see that the books, reports, statements, certificates and all other documents and records required by law are properly kept and filed, and, in general, shall perform all duties incident to the office of Secretary and such other duties as may, from time to time, be assigned to hi m by this Agreement, the Board of Directors or the President.  The Assistant Secretaries shall exercise the powers of the Secretary during that Officer’s absence or inability or refusal to act.

 

(i) Chief Financial Officer.  The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of account of the Company.  He shall receive and deposit all moneys and other valuables belonging to the Company in the name and to the credit of the Company and shall disburse the same and only in such manner as the Board of Directors or the appropriate Officer of the Company may from time to time determine.  He shall render to the Board of Directors and the Chief Executive Officer, whenever any of them request it, an account of all his transactions as Chief Financial Off icer and of the financial condition of the Company, and shall perform such further duties as the Board of Directors or the Chief Executive Officer may require.  The Chief Financial Officer shall have the same power as the Chief Executive Officer to execute documents on behalf of the Company.

(j) Treasurer and Assistant Treasurers.  The Treasurer shall have such duties as may be specified by the Chief Financial Officer in the performance of his duties.  The Assistant Treasurers shall exercise the power of the Treasurer during that Officer’s absence or inability or refusal to act.  Each of the Assistant Treasurers shall possess the same power as the Treasurer to sign all certificates, contracts, obligations and other instruments of the Company.  If no Treasurer or Assistant Treasurer is appointed and serving or in the absence of the appointed Treasurer and Assistant Treasurer, the Senior Vice Presiden t, or such other Officer as the Board of Directors shall select, shall have the powers and duties conferred upon the Treasurer.

 

(k) General Counsel.  The General Counsel subject to the discretion of the Board of Directors, shall be responsible for the management and direction of the day-to-day legal affairs of the Company.  The General Counsel shall perform such other duties and may exercise such other powers as may from time to time be assigned to him by the Board of Directors or the President.

(l) Powers of Attorney.  The Company may grant powers of attorney or other authority as appropriate to establish and evidence the authority of the Officers and other persons.

 

(m) Delegation of Authority.  Unless otherwise provided by resolution of the Board of Directors, 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.

 

(n) Officers.  The Board of Directors shall appoint Officers of the Company to serve from the date of such appointment until the death, resignation or removal by the Board of Directors with or without cause of such officer.

 

8.03 Duties of Officers and Directors.  Except as otherwise specifically provided in this Agreement, the duties and obligations owed to the Company and to the Board of Directors by the Officers of the Company and by members of the Board of Directors of the Company shall be the same as the respective duties and obligations owed to a corporation organized under the Delaware General Corporation Law by its officers and directors, respectively.

 

8.04 Compensation.  The members of the Board of Directors who are neither Officers nor employees of the Company shall be entitled to compensation as directors and committee members as approved by the Board and shall be reimbursed for out-of-pocket expenses incurred in connection with attending meetings of the Board of Directors or committees thereof.

 

8.05 Indemnification.

 

(a) To the fullest extent permitted by Law but subject to the limitations expressly provided in this Agreement, each Indemnitee (as defined below) shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities (joint or several), expenses (including reasonable legal fees and expenses), judgments, fines, penalties, interest, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any such person may be involved, or is threatened to be involved, as a party or otherwise, by reason of such person’s status as (i) a present or former member of t he Board of Directors or any committee thereof, (ii) a present or former Member, (iii) a present or former Officer, or (iv) a Person serving at the request of the Company in another entity in a similar capacity as that referred to in the immediately preceding clauses (i) or (iii), provided, that the Person described in the immediately preceding clauses (i), (ii), (iii) or (iv) (“Indemnitee”) shall not be indemnified and held harmless if there has been a final and non- appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 8.05, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.  Any indemnification pursuant to this Section 8.05 shall be made only out of the assets of the Company.

(b) To the fullest extent permitted by law, expenses (including reasonable legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 8.05(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 an 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 8.05.

 

(c) The indemnification provided by this Section 8.05 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity.

 

(d) The Company may purchase and maintain insurance, on behalf of the members of the Board of Directors, the Officers and such other persons as the Board of Directors 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, 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 8.05, the Company shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by the Indemnitee of such Indemnitee’s duties to the Company also imposes duties on, or otherwise involves services by, the Indemnitee 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 8.05(a); and action taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of such Indemnitee’s duties for a purpose reasonably b elieved by such Indemnitee 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 any Members of the Company to personal liability by reason of the indemnification provisions of this Agreement.

 

(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 8.05 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 8.05 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 8.05 or any provision hereof shall in any manner terminate, reduce or impair either the right of any past, present or future Indemnitee to be indemnified by the Company or the obligation of the Company to indemnify any such Indemnitee under and in accordance with the provisions of this Section 8.05 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, and such Person became an Indemnitee hereunder prior to such amendment, modification or repeal.

 

(j) THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 8.05 ARE INTENDED BY THE PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF EXCULPATING THE INDEMNITEE FROM LEGAL RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSON’S NEGLIGENCE, FAULT OR OTHER CONDUCT.

 

8.06 Liability of Indemnitees.

 

(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Company, the Members or any other Person for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered in a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal.

 

(b) Subject to its obligations and duties as set forth in this Article 8, the Board of Directors and any committee thereof 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 the Company’s Officers or agents, and neither the Board of Directors nor any committee thereof shall be responsible for any misconduct or negligence on the part of any such Officer or agent appointed by the Board of Directors or any committee thereof in good faith.

 

(c) Any amendment, modification or repeal of this Section 8.06 or any provision hereof shall be prospective only and shall not in any way affect the limitations on liability under this Section 8.06 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 be asserted.

 

 

9.01 Accounting Method.  The books and records of account of the Company shall be maintained in accordance with the accrual method of accounting.

 

9.02 Accounting Period.  The Company’s accounting period shall be the fiscal year.

9.03 Records, Audits and Reports.  At the expense of the Company, the Board of Directors shall maintain books and records of account of all operations and expenditures of the Company.

9.04 Inspection.  The books and records of account of the Company shall be maintained at the principal place of business of the Company or such other location as shall be