Exhibit 10.23

Execution Version

 

 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

RICE ENERGY HOLDINGS LLC

January 29, 2014

 

 

 

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TABLE OF CONTENTS

 

         Page   ARTICLE I    FORMATION OF COMPANY   

Section 1.1

 

Formation

     1   

Section 1.2

 

Name

     1   

Section 1.3

 

Business

     2   

Section 1.4

 

Places of Business; Registered Agent; Names and Addresses of Members

     2   

Section 1.5

 

Term

     2   

Section 1.6

 

Filings

     2   

Section 1.7

 

Title to Company Property

     2   

Section 1.8

 

No State Law Partnership

     3    ARTICLE II    DEFINITIONS AND REFERENCES   

Section 2.1

 

Defined Terms

     3   

Section 2.2

 

References and Titles

     10    ARTICLE III    CAPITALIZATION AND COMPANY INTERESTS   

Section 3.1

 

Capital Contributions of Members

     10   

Section 3.2

 

Return of Contributions

     11   

Section 3.3

 

Incentive Units

     11    ARTICLE IV    ALLOCATIONS AND DISTRIBUTIONS   

Section 4.1

 

Allocations of Profits and Losses

     13   

Section 4.2

 

Special Allocations

     13   

Section 4.3

 

Distributions

     15   

Section 4.4

 

Income Tax Allocations

     17    ARTICLE V    MANAGEMENT AND RELATED MATTERS   

Section 5.1

 

Power and Authority of Board

     18   

Section 5.2

 

Officers

     20   

 

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Section 5.3

 

Acknowledged and Permitted Activities

     20   

Section 5.4

 

Duties and Services of the Board

     21   

Section 5.5

 

Liability and Indemnification

     21   

Section 5.6

 

Contracts with Affiliates

     23   

Section 5.7

 

Reimbursement of Members

     23   

Section 5.8

 

Insurance

     23   

Section 5.9

 

Tax Elections and Status

     23   

Section 5.10

 

Tax Returns

     24   

Section 5.11

 

Tax Matters Member

     24   

Section 5.12

 

Outside Manager Expenses

     24    ARTICLE VI    RIGHTS OF MEMBERS   

Section 6.1

 

Rights of Members

     24   

Section 6.2

 

Limitations on Members

     25   

Section 6.3

 

Liability of Members

     25   

Section 6.4

 

Withdrawal and Return of Capital Contributions

     25   

Section 6.5

 

Voting Rights

     26    ARTICLE VII    BOOKS, REPORTS, MEETINGS AND CONFIDENTIALITY   

Section 7.1

 

Capital Accounts, Books and Records

     26   

Section 7.2

 

Bank Accounts

     27   

Section 7.3

 

Reports

     27   

Section 7.4

 

Meetings of Members

     27   

Section 7.5

 

Confidentiality

     28    ARTICLE VIII    DISSOLUTION, LIQUIDATION AND TERMINATION   

Section 8.1

 

Dissolution

     28   

Section 8.2

 

Liquidation and Termination

     29    ARTICLE IX    ASSIGNMENTS OF COMPANY INTERESTS   

Section 9.1

 

Assignments of Company Interests

     30   

 

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ARTICLE X    REPRESENTATIONS AND WARRANTIES    ARTICLE XI    MISCELLANEOUS   

Section 11.1

 

Notices

     32   

Section 11.2

 

Amendment

     33   

Section 11.3

 

Partition

     34   

Section 11.4

 

Entire Agreement

     34   

Section 11.5

 

Severability

     34   

Section 11.6

 

No Waiver

     34   

Section 11.7

 

Applicable Law

     34   

Section 11.8

 

Successors and Assigns

     34   

Section 11.9

 

Arbitration

     35   

Section 11.10

 

Spouses

     36   

Section 11.11

 

Counterparts

     37   

Section 11.12

 

Representation

     37   

 

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AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

OF

RICE ENERGY HOLDINGS LLC

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”)
of Rice Energy Holdings LLC, a Delaware limited liability company (the
“Company”), dated effective as of January     , 2014 (the “Effective Date”), is
adopted, executed and agreed to by the Members (as defined below).

WHEREAS, the Company has been formed as a limited liability company under the
Delaware Limited Liability Company Act (the “Act”) by filing a certificate of
formation with the Secretary of State of the State of Delaware on January     ,
2014 (as amended, the “Certificate”);

WHEREAS, on January     , 2014, Rice Energy entered into that limited liability
company agreement of the Company (as amended, the “Original Agreement”); and

WHEREAS, pursuant to the Master Reorganization Agreement, dated as of
January     , 2014, by and among the Company, the Members, and the other parties
thereto (the “Master Reorganization Agreement”), the Members contributed their
equity in Rice Energy Appalachia Holdings LLC to the Company and, in certain
cases, NGP in exchange for equity in the Company (as described further herein)
and, in certain cases, NGP.

NOW, THEREFORE, in consideration of the premises and the covenants and
provisions hereinafter contained, the Members hereby amend and restate the
Original Agreement in its entirety and further agree as follows:

ARTICLE I

FORMATION OF COMPANY

Section 1.1 Formation. Subject to the provisions of this Agreement, the Members
do hereby desire to establish this Agreement to continue and govern the Company
as a limited liability company under the provisions of the Act. The Company was
formed upon the execution and filing of the Certificate by the organizer (such
Person being hereby authorized to take such action) with the Secretary of State
of the State of Delaware.

Section 1.2 Name. The name of the Company shall be Rice Energy Holdings LLC, or
such other name as designated by the Board from time to time. The Board shall
cause to be filed on behalf of the Company such assumed or fictitious name
certificate or certificates or similar instruments as may from time to time be
required by law.

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Section 1.3 Business. The business of the Company shall be, whether directly or
indirectly through subsidiaries, to conduct all activities permissible by
applicable law.

Section 1.4 Places of Business; Registered Agent; Names and Addresses of
Members.

(a) The address of the principal United States office and place of business of
the Company and its street address shall be 171 Hillpointe Drive, Suite 301,
Canonsburg, Pennsylvania 15317. The Board, at any time and from time to time,
may change the location of the Company’s principal place of business upon giving
prior written notice of such change to the Members and may establish such
additional place or places of business of the Company as the Board shall
determine to be necessary or desirable.

(b) The registered office of the Company in the State of Delaware shall be, and
it hereby is, established and maintained at Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801, and the registered agent for service
of process on the Company shall be the Corporation Trust Company, whose business
address is the same as the Company’s registered office in Delaware. The Board,
at any time and from time to time, may change the Company’s registered office or
registered agent or both by complying with the applicable provisions of the Act,
and may establish, appoint and change additional registered offices and
registered agents of the Company in such other states as the Board shall
determine to be necessary or advisable.

(c) The mailing address and street address of each of the Members shall be the
same as for the Company, unless another address for such Member is set forth on
Exhibit A to this Agreement.

Section 1.5 Term. The Company shall continue until terminated in accordance with
Section 8.1.

Section 1.6 Filings. Upon the request of the Board, the Members shall promptly
execute and deliver all such certificates and other instruments conforming
hereto as shall be necessary for the Board to accomplish all filing, recording,
publishing and other acts appropriate to comply with all requirements for the
formation and operation of a limited liability company under the laws of the
State of Delaware and for the qualification and operation of a limited liability
company in all other jurisdictions where the Company shall propose to conduct
business. Prior to conducting business in any jurisdiction, the Board shall use
its reasonable good faith efforts to cause the Company to comply with all
requirements for the qualification of the Company to conduct business as a
limited liability company in such jurisdiction.

Section 1.7 Title to Company Property. All property owned by the Company,
whether real or personal, tangible or intangible, shall be deemed to be owned by
the Company as an entity, and no Member, individually, shall

 

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have any ownership of such property. The Company may hold its property in its
own name or in the name of a nominee which may be the Board or any of its
Affiliates or any trustee or agent designated by it.

Section 1.8 No State Law Partnership. The Members intend that the Company not be
a partnership (including a limited partnership) or joint venture, and that no
Member be a partner or joint venturer of any other Member, for any purposes
other than federal or state tax purposes, and this Agreement may not be
construed to suggest otherwise.

ARTICLE II

DEFINITIONS AND REFERENCES

Section 2.1 Defined Terms. When used in this Agreement, the following terms
shall have the respective meanings set forth below:

“Act” shall have the meaning assigned to such term in the recitals hereto.

“Adjusted Capital Account” shall mean the Capital Account maintained for each
Member, (a) increased by any amounts that such Member is obligated to restore or
is treated as obligated to restore under Treasury Regulation Sections
1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5)), and (b) decreased by any
amounts described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4),
(5) and (6) with respect to such Member. The foregoing definition of “Adjusted
Capital Account” is intended to comply with the provisions of Treasury
Regulation Sections 1.704-1(b)(2)(ii)(d) and 1.704-2 and shall be interpreted
consistently therewith.

“Adjusted Property” shall mean any property the Carrying Value of which has been
adjusted pursuant to Section 7.1(b)(v) or any property that has a Carrying Value
different than the adjusted tax basis at the time of a Capital Contribution by a
Member.

“Affiliate” (whether or not capitalized) shall mean, with respect to any Person:
(a) any other Person directly or indirectly owning, controlling or holding power
to vote 10% or more of the outstanding voting securities of such Person, (b) any
other Person 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held with power to vote by such Person, (c) any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and (d) any officer, director, member, partner or
immediate family member of such Person or any other Person described in
subsection (a), (b) or (c) of this paragraph. Notwithstanding the foregoing or
anything to the contrary, PublicCo and its subsidiaries shall not be deemed to
be Affiliates or subsidiaries of the Company and its subsidiaries; provided,
however, in the definition of “cause”, each of PublicCo and its subsidiaries
shall be deemed to be a subsidiary of the Company.

“Agreement” shall have the meaning assigned to such term in the introductory
paragraph of this document.

 

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“Board” shall have the meaning assigned to such term in Section 5.1(a).

“Capital Account” shall have the meaning assigned to such term in Section
7.1(b).

“Capital Contributions” shall mean for any Member at the particular time in
question the aggregate of the dollar amounts of any cash and the initial
Carrying Value of any property contributed to the capital of the Company, or, if
the context in which such term is used so indicates, the dollar amounts of cash
or the fair market value of any property agreed to be contributed, or requested
to be contributed, by such Member to the capital of the Company.

“Capital Interest” shall mean Rice Energy’s (and its successors’ and assigns’)
membership interest in the Company, with the rights and obligations specified in
this Agreement.

“Carrying Value” shall mean with respect to any asset, the value of such asset
as reflected in the Capital Accounts of the Members. The Carrying Value of any
asset shall be such asset’s adjusted basis for federal income tax purposes,
except as follows:

(a) The initial Carrying Value of any asset contributed by a Member to the
Company will be the fair market value of the asset on the date of the
contribution, as determined by the Board.

(b) The Carrying Value of all Company assets shall be adjusted to equal their
respective fair market values, as determined by the Board, upon (i) the
acquisition of an additional Company Interest by any new or existing Member in
exchange for a Capital Contribution that is not de minimis; (ii) the
distribution by the Company to a Member of Company property that is not de
minimis as consideration for a Company Interest; (iii) the grant of a Company
Interest for the performance of services that is not de minimis to or for the
benefit of the Company by any new or existing Member; (iv) the liquidation of
the Company within the meaning of Treasury Regulation
Section 1.704-1(b)(2)(ii)(g)(1) (other than pursuant to Internal Revenue Code
Section 708(b)(1)(B)); or (v) any other event to the extent determined by the
Board to be necessary to properly reflect Carrying Values in accordance with the
standards set forth in Treasury Regulation Section 1.704-1(b)(2)(iv)(q);
provided that adjustments pursuant to clauses (i), (ii), and (iii) above shall
be made only if the Board determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Members in the
Company.

(c) The Carrying Value of any Company asset distributed to any Member shall be
adjusted to equal the fair market value of such asset on the date of
distribution, as determined by the Board.

(d) The Carrying Value of all Company assets shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such property pursuant to
Internal Revenue Code Section 734(b) or Internal Revenue Code Section 743(b),
but only to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m) and clause (f) of the definition of Net Profit or
Net Loss or Section 4.2(e); provided, however, that the Book Value of Company
assets shall not be adjusted pursuant to this clause (d) to the extent that the
Board determines an adjustment pursuant to clause (b) is necessary or
appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this clause (d).

 

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(e) If the Carrying Value of any Company asset has been determined or adjusted
pursuant to clauses (a), (b) or (d) hereof, the Carrying Value of an asset shall
be adjusted by Depreciation taken into account with respect to such asset for
purposes of computing Net Profits, Net Losses and other items allocated pursuant
to Sections 4.1 and 4.2.

(f) The Carrying Value of Company assets shall be adjusted at such other times
as required in the applicable Treasury Regulations.

“Company” shall have the meaning assigned to it in the introductory paragraph of
this Agreement.

“Company Interest” shall mean a membership interest in the Company, including
any Capital Interests and any Incentive Units.

“Company Nonrecourse Liabilities” shall mean nonrecourse liabilities (or
portions thereof) of the Company for which no Member bears the economic risk of
loss in accordance with applicable Treasury Regulations.

“Confidential Information” shall mean, without limitation, all proprietary and
confidential information of the Company and its subsidiaries or Affiliates,
including business opportunities of the Company and its subsidiaries or
Affiliates, intellectual property and any other information heretofore or
hereafter acquired, developed or used by the Company and its subsidiaries or
Affiliates relating to their business, including any confidential information
contained in any lease files, well files and records, land files, abstracts,
title opinions, title or curative matters, contract files, seismic records,
electric logs, core data, pressure data, production records, geological and
geophysical reports and related data, memoranda, notes, records, drawings,
correspondence, financial and accounting information, customer lists,
statistical data and compilations, patents, copyrights, trademarks, trade names,
inventions, formulae, methods, processes, agreements, contracts, manuals or any
other documents relating to the business of the Company and its subsidiaries or
Affiliates, developed by, or originated by any third party and brought to the
attention of, the Company and its Affiliates.

“Credited Shares” shall initially be 20,000,000 shares, and shall be adjusted
from time to time as set forth in Section 4.3.

“Credited Value” shall have the meaning set forth in Section 4.3.

“D. Rice III” shall mean Daniel J. Rice III.

“Depreciation” shall mean for each fiscal year or other period, an amount equal
to the depreciation, amortization or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such fiscal year or
other period, except that if the Carrying Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
other period, Depreciation shall be an amount which bears the same ratio to such

 

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beginning Carrying Value as the federal income tax depreciation, amortization or
other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis (unless the adjusted tax basis at the beginning of
such year or other period is equal to zero, in which event Depreciation shall be
determined under any reasonable method selected by the Board).

“Dispute” shall have the meaning assigned to such term in Section 11.9.

“Distributable Amounts” shall mean, as of the date of determination, the
aggregate of (a) available cash of the Company, and (b) the product of (i) the
sum of the number of shares of common stock of PublicCo held by the Company and
the Credited Shares, in each case, as of such date, multiplied by (ii) the
Distributable Amount Value, in excess of the liabilities of the Company on such
date, in each case as determined by the Board.

“Distributable Amount Value” means, as of the date of determination, with
respect to any share of common stock of PublicCo, the volume-weighted average
trading price of a share of common stock of PublicCo on the New York Stock
Exchange over the 30-trading day period ending on and including the trading day
immediately preceding such date of determination.

“Effective Date” shall have the meaning assigned to such term in the preamble
hereto.

“Employee” shall mean an individual who is employed by, or serves as an
independent contractor for, PublicCo or any of its subsidiaries. In the event
any provision of this Agreement refers to the resignation of an Employee, such
resignation or termination shall apply to the entity that is the employer of
such Employee.

“Excluded Affiliate Transfer” shall mean (a) any Transfer of a Company Interest
by a Member who is a natural person to a member of such Member’s family or to a
revocable trust for estate planning purposes, but only if and for so long as
such Transferring Member retains the exclusive right to vote such Company
Interest following such Transfer; (b) any Transfer occurring by operation of law
upon the death or mental incapacity of a Member who is a natural person; (c) any
Transfer to a corporation, partnership or limited liability company that is
wholly owned and controlled (through voting rights) by such Member, but only if
and for so long as such Transferring Member retains the exclusive right to vote
such Company Interest following such Transfer (provided, however, that any
failure to retain the right to vote or the failure to retain 100% ownership and
control shall then immediately and automatically be deemed to be a Transfer that
is not an Excluded Affiliate Transfer) and (d) any Transfer of a Company
Interest by a Member that is a trust to the principal beneficiary of that trust;
provided, however, that, in the case of any Transfer described in clauses (a) –
(d) above, such Transferee agrees to be bound by the terms of this Agreement,
and any applicable agreement with respect to such Company Interest (including
that the provisions thereof relating to vesting, forfeiture and redemption shall
continue to be applicable to such Company Interests after such Transfer as if
held by the Transferring Member regardless of the holder of such Company
Interests) and evidences the same by executing a copy of this Agreement and such
other documents as the Company may reasonably request promptly upon receiving
the assignment of such Company Interest and (ii) such Transferee shall not be
entitled to make any further Excluded Affiliate Transfers, except for a Transfer
of such acquired Company Interests back to such original holder or another
Transfer that would have been an Excluded Affiliate Transfer had such original
holder made such Transfer.

 

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“First Distribution Date” shall mean (a) in the event NGP Alignment Date has
occurred prior to December 3, 2015, the date that is 30 calendar days after the
NGP Alignment Date or (b) otherwise, January 2, 2016.

“First Scheduled Distribution” shall have the meaning set forth in Section
4.3(a).

“Incentive Units” shall mean the Company Interests issued as Tier I Units, Tier
II Units or Tier III Units, pursuant to Section 3.3 and reflected on Exhibit A
as, from time to time, may be updated pursuant to this Agreement.

“Indemnitee” shall have the meaning set forth in Section 5.5.

“Indirect Transfer” shall mean (with respect to any Member that is a
corporation, partnership, limited liability company or other entity) a deemed
Transfer of a Company Interest, which shall occur upon any Transfer of the
ownership of, or voting rights associated with, the equity or other ownership
interests in such Member.

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986.

“JAMS” shall have the meaning assigned to such term in Section 11.9(a).

“Manager” shall have the meaning assigned to such term in Section 5.1(a).

“Master Reorganization Agreement” shall have the meaning set forth in the
recitals hereto.

“Members” shall mean the Persons (including holders of Incentive Units) who from
time to time shall execute a signature page to this Agreement (including by
counterpart) as the Members, including any Person who becomes a substituted
Member of the Company pursuant to the terms hereof, but does not include any
Person that ceases to hold any Company Interest.

“Member Nonrecourse Debt” shall mean any nonrecourse debt of the Company for
which any Member bears the economic risk of loss in accordance with applicable
Treasury Regulations.

“Member Nonrecourse Deductions” shall mean the amount of deductions, losses and
expenses equal to the net increase during the year in Minimum Gain attributable
to a Member Nonrecourse Debt, reduced (but not below zero) by proceeds of such
Member Nonrecourse Debt distributed during the year to the Members who bear the
economic risk of loss for such debt, as determined in accordance with applicable
Treasury Regulations.

“Minimum Gain” shall mean (a) with respect to Company Nonrecourse Liabilities,
the amount of gain that would be realized by the Company if the Company
Transferred (in a taxable transaction) all Company properties that are subject
to Company Nonrecourse Liabilities in full satisfaction of Company Nonrecourse
Liabilities, computed in accordance with applicable

 

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Treasury Regulations or (b) with respect to each Member Nonrecourse Debt, the
amount of gain that would be realized by the Company if the Company Transferred
(in a taxable transaction) the Company property that is subject to such Member
Nonrecourse Debt in full satisfaction of such Member Nonrecourse Debt, computed
in accordance with applicable Treasury Regulations.

“Net Profit” or “Net Loss” shall mean, with respect to any fiscal year or other
fiscal period, the net income or net loss of the Company for such period,
determined in accordance with federal income tax accounting principles and
Section 703(a) of the Internal Revenue Code (including any items that are
separately stated for purposes of Section 702(a) of the Internal Revenue Code),
with the following adjustments:

(a) any income of the Company that is exempt from federal income tax shall be
included as income;

(b) any expenditures of the Company that are described in Section 705(a)(2)(B)
of the Internal Revenue Code or treated as so described pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(i) shall be subtracted from such taxable
income or loss;

(c) in the event the Carrying Value of any Company asset is adjusted pursuant to
clause (b) or clause (c) of the definition of Carrying Value, the amount of such
adjustment shall be taken into account as gain (if the adjustment increases the
Carrying Value of the asset) or loss (if the adjustment decreases the Carrying
Value of the asset) from the disposition of such asset and shall, except to the
extent allocated pursuant to Section 4.2, be taken into account for purposes of
computing Net Profit or Net Loss;

(d) gain or loss resulting from any Transfer of Company property with respect to
which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Carrying Value of the property Transferred,
notwithstanding that the adjusted tax basis for such property differs from its
Carrying Value;

(e) in lieu of the depreciation, amortization and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation for such fiscal year or other period;

(f) to the extent an adjustment to the adjusted tax basis of any asset pursuant
to Internal Revenue Code Section 734(b) is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Account balances as a result of a distribution other than in
liquidation of a Member’s interest in the Company, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or an item of loss (if the adjustment decreases such basis) from the
disposition of such asset and shall be taken into account for purposes of
computing Net Profit or Net Loss; and

(g) items specially allocated under Section 4.2 shall be excluded.

“NGP” shall mean NGP Rice Holdings LLC.

 

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“NGP Alignment Date” shall mean that date on which NGP no longer holds (as a
result of sale, distribution or otherwise) at least 50% of shares of the common
stock of PublicCo that it held on the date hereof. For purposes of the foregoing
sentence, any shares of common stock of PublicCo sold by NGP in connection with
PublicCo’s initial public offering shall be deemed “held on the date hereof” by
NGP.

“Original Agreement” shall have the meaning set forth in the recitals hereto.

“Person” (whether or not capitalized) shall mean any natural person,
corporation, company, limited or general partnership, joint stock company, joint
venture, association, limited liability company, trust, bank, trust company,
business trust or other entity or organization, whether or not a governmental
authority.

“PublicCo” means Rice Energy, Inc., and its successors and assigns.

“Regulatory Allocations” shall have the meaning assigned to such term in Section
4.2(g).

“Rice Energy” shall mean Rice Energy Family Holdings, LP, a Delaware limited
partnership, and its successor and assigns.

“Rules” shall have the meaning assigned to such term in Section 11.9(a).

“Scheduled Distribution Date” shall mean the First Distribution Date and the
first, second and third anniversaries thereof.

“Second Scheduled Distribution” shall have the meaning set forth in Section
4.3(a).

“Securities Act” shall mean the Securities Act of 1933.

“Sponsor Indemnitees” shall mean those Indemnitees that have rights to
indemnification, advancement of expenses or insurance provided by the Sponsor
Indemnitors.

“Sponsor Indemnitors” shall mean Rice Energy and its Affiliates.

“Tax Matters Member” shall have the meaning assigned to such term in Section
5.11.

“Third Scheduled Distribution” shall have the meaning set forth in Section
4.3(a).

“Tier I Units” shall mean Tier I Units representing Company Interests with the
rights and obligations specified in this Agreement.

“Tier II Units” shall mean Tier II Units representing Company Interests with the
rights and obligations specified in this Agreement.

“Tier III Units” shall mean Tier III Units representing Company Interests with
the rights and obligations specified in this Agreement.

 

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“Transaction Documents” shall mean, collectively, this Agreement, the Master
Reorganization Agreement and all other agreements, documents or instruments
executed in conjunction with, or relation to, any of the foregoing.

“Transfer,” or any derivation thereof, shall mean any sale, assignment,
conveyance, mortgage, pledge, granting of security interest in, or other
disposition of a Company Interest or any asset of the Company, as the context
may require.

“Treasury Regulations” shall mean regulations promulgated by the United States
Treasury Department under the Internal Revenue Code.

“Unrealized Gain” attributable to any item of Company property shall mean, as of
any date of determination, the excess, if any, of (a) the fair market value of
such property as of such date over (b) the Carrying Value of such property as of
such date (prior to any adjustment to be made pursuant to Section 7.1(b)(v) as
of such date).

“Unrealized Loss” attributable to any item of Company property shall mean, as of
any date of determination, the excess, if any, of (a) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant to
Section 7.1(b)(v) as of such date) over (b) the fair market value of such
property as of such date.

Section 2.2 References and Titles. All references in this Agreement to articles,
sections, subsections and other subdivisions refer to corresponding articles,
sections, subsections and other subdivisions of this Agreement unless expressly
provided otherwise. Titles appearing at the beginning of any of such
subdivisions are for convenience only and shall not constitute part of such
subdivisions and shall be disregarded in construing the language contained in
such subdivisions. The words “this Agreement,” “herein,” “hereof,” “hereby,”
“hereunder” and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. Pronouns in
masculine, feminine and neuter genders shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise requires. The word “including” (in
its various forms) means including without limitation. All references to laws,
contracts, agreements and instruments refer to such laws, contracts, agreements
and instruments as they may be amended from time to time, and references to
particular provisions of laws or regulations include a reference to the
corresponding provisions of any succeeding law or regulation.

ARTICLE III

CAPITALIZATION AND COMPANY INTERESTS

Section 3.1 Capital Contributions of Members.

(a) Pursuant to the Master Reorganization Agreement and contemporaneous with the
execution date of this Agreement, Rice Energy made a Capital Contribution to the
Company in the amount set forth on the books and records of the Company and
received in exchange therefor the Capital Interests.

 

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Section 3.2 Return of Contributions. No interest shall accrue on any
contributions to the capital of the Company, and no Member shall have the right
to withdraw or to be repaid any capital contributed by such Member, except as
otherwise specifically provided in this Agreement.

Section 3.3 Incentive Units.

(a) The following Incentive Units are hereby created, subject to the adjustments
provided for in this Section 3.3:

(i) 990,414 “Tier I Units,” which are held, as of the date hereof, by those
individuals set forth on Exhibit A in the amount opposite each such individual’s
name in the column entitled “Tier I Units;”

(ii) 1,000,000 “Tier II Units,” which are held, as of the date hereof, by those
individuals set forth on Exhibit A in the amount opposite each such individual’s
name in the column entitled “Tier II Units;” and

(iii) 1,000,000 “Tier III Units,” which are held, as of the date hereof, by
those individuals set forth on Exhibit A in the amount opposite each such
individual’s name in the column entitled “Tier III Units.”

(b) The Incentive Units are non-voting, and subject to vesting, forfeiture and
termination as follows:

(i) (A) The Tier I Units held by each Employee shall vest ratably over a
three-year period following the grant of the “Legacy Tier I Units” of Rice
Energy Appalachia Holdings, LLC that corresponds, pursuant to the Master
Reorganization Agreement, to the Tier I Units granted thereunder to such
Employee, with one-third vesting on the first anniversary of such grant, an
additional one-third vesting on the second anniversary of such grant and the
remaining one-third vesting on the third anniversary of such grant (with vesting
between such anniversaries occurring pro rata determined by multiplying the
number of such Incentive Units that would vest on the next annual vesting date
by a fraction with a numerator equal to the number of full months which have
then elapsed since the last vesting date and a denominator of 12, and rounding
to the closest whole number).

(B) The Tier II Units held by each Employee shall vest only upon and
concurrently with Rice Energy receiving, pursuant to Section 4.3,
$682,212,620.04 (in cash or otherwise) in the aggregate.

 

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(C) The Tier III Units held by each Employee shall vest only upon and
concurrently with Rice Energy receiving, pursuant to Section 4.3,
$909,616,826.72 (in cash or otherwise) in the aggregate.

(ii) Unless otherwise agreed by the Board, all Incentive Units that have not yet
vested in accordance with the vesting requirements set forth in
Section 3.3(b)(i) that are held by an Employee shall automatically, without any
action required of any Person, be forfeited and thereby become null and void, if
and when such Person’s status as an Employee is terminated for any reason or
without reason, including by termination, resignation, death or disability, and
any vested, unforfeited Incentive Units held by such Person shall, upon such
termination, remain non-voting.

(iii) Anything herein to the contrary notwithstanding, unless otherwise agreed
by the Board in the case of Section 3.3(b)(iii)(B), all Incentive Units held by
an Employee (regardless of whether vested or unvested) shall automatically be
forfeited and thereby become null and void if and when such Person’s status as
an Employee is terminated:

(A) for “cause,” which shall mean by reason of such holder’s: (1) conviction of,
or plea of nolo contendere to, any felony or to any crime or offense causing
substantial harm to PublicCo, the Company or any of their respective Affiliates
or involving acts of theft, fraud, embezzlement, moral turpitude or similar
conduct, (2) repeated intoxication by alcohol or drugs during the performance of
such holder’s duties in a manner that materially and adversely affects the
holder’s performance of such duties, (3) malfeasance, in the conduct of such
holder’s duties, including (I) misuse or diversion of funds of PublicCo, the
Company or any of their respective Affiliates, (II) embezzlement or (III)
misrepresentations or concealments on any written reports submitted to the
Company or its Affiliates, (4) violation of any provision of this Agreement or
of such Person’s agreements with any of PublicCo, the Company or their
respective Affiliates or (5) failure to perform the duties of such holder’s
employment or service relationship with PublicCo, the Company or any of their
respective Affiliates, or failure to follow or comply with the reasonable and
lawful written directives of the Board or the managers or directors of the
Person that employs such holder or for whom such holder provides services; or

(B) by such Employee’s resignation or early termination of service relationship.

(c) Upon any forfeiture or other termination of Incentive Units, the Company
shall amend Exhibit A to reflect such occurrence.

(d) The Company shall not issue any Incentive Units following the Effective
Date.

 

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ARTICLE IV

ALLOCATIONS AND DISTRIBUTIONS

Section 4.1 Allocations of Profits and Losses. After giving effect to the
allocations under Section 4.2, the Members shall share Company Net Profits and
Net Losses and all related items of income, gain, loss, deduction and credit for
federal income tax purposes as follows:

(a) Net Profits and Net Losses for each fiscal year shall be allocated among the
Members in such manner as shall cause the Capital Accounts of each Member to
equal, as nearly as possible, (i) the amount such Member would receive if all
assets on hand at the end of such year were sold for cash at the Carrying Values
of such assets, all liabilities were satisfied in cash in accordance with their
terms (limited in the case of Member Nonrecourse Debt and Company Nonrecourse
Liabilities to the Carrying Value of the assets securing such liabilities) and
any remaining or resulting cash was distributed to the Members under
Section 4.3, minus (ii) an amount equal to such Member’s allocable share of
Minimum Gain as computed on the last day of such fiscal year in accordance with
the applicable Treasury Regulations.

(b) The Board shall make the foregoing allocations as of the last day of each
fiscal year; provided, however, that if during any fiscal year of the Company
there is a change in any Member’s Company Interest, the Board shall make the
foregoing allocations as of the date of each such change in a manner which takes
into account the varying interests of the Members and in a manner the Board
reasonably deems appropriate.

Section 4.2 Special Allocations.

(a) Notwithstanding any of the provisions of Section 4.1 to the contrary:

(i) If during any fiscal year of the Company there is a net increase in Minimum
Gain attributable to a Member Nonrecourse Debt that gives rise to Member
Nonrecourse Deductions, each Member bearing the economic risk of loss for such
Member Nonrecourse Debt shall be allocated items of Company deductions and
losses for such year (consisting first of cost recovery or depreciation
deductions with respect to property that is subject to such Member Nonrecourse
Debt and then, if necessary, a pro-rata portion of the Company’s other items of
deductions and losses, with any remainder being treated as an increase in
Minimum Gain attributable to Member Nonrecourse Debt in the subsequent year)
equal to such Member’s share of Member Nonrecourse Deductions, as determined in
accordance with applicable Treasury Regulations.

(ii) If for any fiscal year of the Company there is a net decrease in Minimum
Gain attributable to Company Nonrecourse Liabilities, each Member shall be
allocated items of Company income and gain for such year (consisting first of
gain recognized from the Transfer of Company property subject to one or more
Company Nonrecourse Liabilities and then, if necessary, a pro-rata portion of
the Company’s other items of

 

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income and gain, and if necessary, for subsequent years) equal to such Member’s
share of such net decrease (except to the extent such Member’s share of such net
decrease is caused by a change in debt structure with such Member commencing to
bear the economic risk of loss as to all or part of any Company Nonrecourse
Liability or by such Member contributing capital to the Company that the Company
uses to repay a Company Nonrecourse Liability), as determined in accordance with
applicable Treasury Regulations.

(iii) If for any fiscal year of the Company there is a net decrease in Minimum
Gain attributable to a Member Nonrecourse Debt, each Member bearing the economic
risk of loss for such Member Nonrecourse Debt shall be allocated items of
Company income and gain for such year (consisting first of gain recognized from
the Transfer of Company property subject to Member Nonrecourse Debt, and then,
if necessary, a pro-rata portion of the Company’s other items of income and
gain, and if necessary, for subsequent years) equal to such Member’s share of
such net decrease (except to the extent such Member’s share of such net decrease
is caused by a change in debt structure such that the Member Nonrecourse Debt
becomes partially or wholly a Company Nonrecourse Liability or by the Company’s
use of capital contributed by such Member to repay the Member Nonrecourse Debt)
as determined in accordance with applicable Treasury Regulations.

(b) The Net Losses allocated pursuant to this Article IV shall not exceed the
maximum amount of Net Losses that can be allocated to a Member without causing
or increasing a deficit balance in the Member’s Adjusted Capital Account
balance. All Net Losses in excess of the limitations set forth in this
Section 4.2(b) shall be allocated to Members with positive Adjusted Capital
Account balances remaining at such time in proportion to such positive balances.
In the event an allocation of Net Losses has been made to any Member(s) pursuant
to the terms of this Section 4.2(b), Net Profits shall be allocated to such
Member(s), in proportion to the amount of such allocation of Net Losses, until
such Member(s) receive an allocation of Net Profits equal to such amount of Net
Losses allocated pursuant to the terms of this Section 4.2(b).

(c) In the event that a Member unexpectedly receives any adjustment, allocation
or distribution described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes or increases a deficit
balance in such Member’s Adjusted Capital Account, items of Company income and
gain shall be allocated to that Member in an amount and manner sufficient to
eliminate the deficit balance as quickly as possible; provided, however, that an
allocation pursuant to this Section 4.2(c) shall be made only if and to the
extent that such Member would have a deficit balance in its Adjusted Capital
Account after all other allocations provided for in this Section 4.2 have been
tentatively made as if this Section 4.2(c) were not in this Agreement. This
Section 4.2(c) is intended to constitute a qualified income offset under
Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

(d) In the event that any Member has a deficit balance in its Adjusted Capital
Account at the end of any fiscal period, such Member shall be allocated items of
Company gross income and gain in the amount of such deficit as quickly as
possible; provided, however, that an allocation pursuant to this Section 4.2(d)
shall be made only if and to the extent that such

 

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Member would have a deficit balance in its Adjusted Capital Account after all
other allocations provided for in this Section 4.2 have been tentatively made as
if Section 4.2(c) and this Section 4.2(d) were not in this Agreement.

(e) To the extent an adjustment to the adjusted tax basis of any Company
properties pursuant to Internal Revenue Code Section 734(b) or Internal Revenue
Code Section 743(b) is required pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) to be taken into
account in determining Capital Accounts as the result of a distribution to any
Member in complete liquidation of such Member’s Company Interests, the amount of
such adjustment to 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 gain or loss shall be allocated to the Members in
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(2) if such
Treasury Regulation Section applies, or to the Member to whom such distribution
was made if Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(4) applies.

(f) If any holder of Incentive Units forfeits all or a portion of such Company
Interests, such holder shall be allocated items of loss and deduction in the
year of such forfeiture in an amount equal to the portion of such holder’s
Capital Account attributable to such forfeited Company Interests.

(g) The allocations set forth in subsections (a) through (e) of this Section 4.2
(collectively, the “Regulatory Allocations”) are intended to comply with certain
requirements of the Treasury Regulations. It is the intent of the Members that,
to the extent possible, all Regulatory Allocations that are made be offset
either with other Regulatory Allocations or with special allocations pursuant to
this Section 4.2(g). Therefore, notwithstanding any other provisions of this
Article IV (other than the Regulatory Allocations), the Board shall make such
offsetting special allocations in whatever manner it determines appropriate so
that, after such offsetting allocations are made, each Member’s Adjusted Capital
Account balance is, to the extent possible, equal to the Adjusted Capital
Account balance such Member would have had if the Regulatory Allocations were
not part of this Agreement and all Company items were allocated pursuant to
Section 4.1 and the remaining subsections of this Section 4.2.

Section 4.3 Distributions.

(a) Scheduled Distributions.

(i) First Scheduled Distribution. Within 10 days following the First
Distribution Date, the Company shall make a distribution (the “First Scheduled
Distribution”) to the Members in accordance with Section 4.3(b) in an amount
equal to one-quarter of the Company’s then Distributable Amounts determined as
of the First Distribution Date.

(ii) Second Scheduled Distribution. Within 10 days following the first
anniversary of the First Distribution Date, the Company shall make a
distribution (the “Second Scheduled Distribution”) to the Members in accordance
with Section 4.3(b) in an amount equal to one-third of the Company’s then
Distributable Amounts determined as of the first anniversary of the First
Distribution Date.

 

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(iii) Third Scheduled Distribution. Within 10 days following the second
anniversary of the First Distribution Date, the Company shall make a
distribution (the “Third Scheduled Distribution”) to the Members in accordance
with Section 4.3(b) in an amount equal to one-half of the Company’s then
Distributable Amounts determined as of the second anniversary of the First
Distribution Date.

(iv) Fourth Scheduled Distribution. Within 10 days following the third
anniversary of the First Distribution Date, the Company shall make a
distribution in accordance with Section 4.3(b) of all of the Company’s property
and assets.

(b) Subject to Sections 4.3(c) and 4.3(d), all distributions made pursuant to
Section 4.3(a) shall be made to the Members as follows and in the following
order of priority:

(i) First: 100% to Rice Energy until Rice Energy has received total
distributions pursuant to Section 4.3 of $454,808,413.36;

(ii) Second: 90% to Rice Energy and 10% to the holders of Tier I Units until
Rice Energy has received total distributions pursuant to Section 4.3 of
$682,212,620.04;

(iii) Third: 80% to Rice Energy, 10% to the holders of Tier I Units and 10% to
the holders of Tier II Units until Rice Energy has received total distributions
pursuant to Section 4.3 of $909,616,826.72; and

(iv) Fourth: 70% to Rice Energy, 10% to the holders of Tier I Units, 10% to the
holders of Tier II Units, and 10% to the holders of Tier III Units.

Distributions to the holders of Tier I Units, Tier II Units and Tier III Units
shall be allocated among the holders of such Units pro rata, in accordance with
the number of such Units held by each holder.

(c) The “Credited Value” shall mean, with respect to the relevant date of
determination, (x) the number of Credited Shares multiplied by (y) the
Distribution Amount Value determined as of such date. If the Credited Value is
greater than zero on any Scheduled Distribution Date, any distribution payable
to Rice Energy on such date shall be deemed satisfied to the extent of such
Credited Value. Following such Scheduled Distribution Date, the number of
Credited Shares shall be reduced by an amount equal to the quotient of (x) the
distribution payable to Rice Energy in connection with such Scheduled
Distribution Date (without giving effect to this Section 4.3(c)) divided by
(y) the Distributable Amount Value as of such Scheduled Distribution Date.

(d) Prior to making distributions to the Members, and subject to applicable law,
the Board shall cause the Company to pay to the Members within 90 days after the
end of each year an amount equal to the lesser of (i) the excess of the
available cash of the Company over the liabilities of the Company on such date,
as determined by the Board, or (ii) an amount equal to the highest marginal
federal and applicable state income tax rate for individuals (taking into

 

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account the character of the taxable income (e.g., long-term capital gain,
qualified dividend income, ordinary income, etc.)) multiplied by the taxable
income of the Company, if any, for such year, such payment to be made among the
Members in the same percentages as the taxable income for such year was
allocated. Any such payments to a Member under this Section 4.3(d) shall be
deemed to be a draw against such Member’s share of future distributions under
Sections 4.3(b) and 8.2(b), so that such Member’s share of such future
distributions shall be reduced by the amounts previously drawn under this
Section 4.3(d) until the aggregate reductions in such distributions equal the
aggregate draws made under this Section 4.3(d).

(e) No distribution may be made by the Company except in accordance with this
Section 4.3 or Article VIII.

Section 4.4 Income Tax Allocations.

(a) Except as provided in this Section 4.4, each item of income, gain, loss and
deduction of the Company for federal income tax purposes shall be allocated
among the Members in the same manner as such items are allocated for Capital
Account purposes under Sections 4.1 and 4.2.

(b) The Members recognize that, with respect to Adjusted Property, there will be
a difference between the Carrying Value of such property at the time of
revaluation and the adjusted tax basis of such property at the time. All items
of tax depreciation, cost recovery, amortization, amount realized and gain or
loss with respect to such Adjusted Property shall be allocated among the Members
to take into account the disparities between the Carrying Values and the
adjusted tax basis with respect to such properties in accordance with the
provisions of Sections 704(b) and 704(c) of the Internal Revenue Code and the
Treasury Regulations under those sections; provided, however, that any tax items
not required to be allocated under Sections 704(b) or 704(c) of the Internal
Revenue Code shall be allocated in the same manner as such gain or loss would be
allocated for Capital Account purposes under Sections 4.1 and 4.2. In making
such allocations under Section 704(c) of the Internal Revenue Code, the Board
shall use the remedial allocation method pursuant to Treasury Regulation
Section 1.704-3(d).

(e) All recapture of income tax deductions resulting from the Transfer of
Company property shall, to the maximum extent possible, be allocated to the
Member to whom the deduction that gave rise to such recapture was allocated
hereunder to the extent that such Member is allocated any gain from the Transfer
of such property. For this purpose, deductions that were allocated as a
component of Net Profit or Net Loss shall be treated as if allocated in the same
manner as the allocation of the related Net Profit or Net Loss.

(f) Allocations pursuant to this Section 4.4 are solely for purposes of U.S.
federal, state and local taxes and, except as otherwise specifically provided,
shall not affect, or in any way be taken into account in computing, any Member’s
Capital Account or share of Net Profit, Net Loss, other items or distributions
pursuant to any provision of this Agreement.

 

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ARTICLE V

MANAGEMENT AND RELATED MATTERS

Section 5.1 Power and Authority of Board.

(a) The Company shall be managed by a Board of Managers (the “Board”). The
Company shall initially have three (3) managers (each, a “Manager” and,
collectively, the “Managers”).

(b) Subject to Section 5.1(c), Rice Energy shall have the right to designate
each of the three (3) Managers, which Managers currently are Daniel J. Rice IV,
Toby Z. Rice and Daniel J Rice III. Rice Energy shall also have the right to
remove any Manager with or without cause. In the event that any Manager of the
Company is removed or ceases to serve as a Manager of the Company during such
Manager’s term of office, the resulting vacancy shall only be filled by Rice
Energy. Managers need not be Members or residents of the State of Delaware. A
Manager must be a natural person.

(c) 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 Board, and the Members shall have no right of control over the business
and affairs of the Company. In addition to the powers now or hereafter granted
to managers under the Act or which are granted to the Board under any other
provision of this Agreement, the Board shall have full power and authority to do
all things deemed necessary or desirable by it to conduct the business of the
Company in the name of the Company.

(d) Notwithstanding the foregoing, the Company (and the officers, authorized
persons, employees, and agents acting on behalf of the Company) shall not,
either acting on its own behalf or when acting as controlling equity-holder of
any of its subsidiaries (and the officers, authorized persons, employees, and
agents acting on the Company’s behalf in such capacity) permit such subsidiaries
to, do any of the things described in this Section 5.1(d) without the consent of
the Board (it being agreed that the below items are not intended to be an
exclusive statement of all of the actions of the Board that require prior
approval of the members of the Board, and such provisions are in addition to any
and all other requirements imposed by other provisions of this Agreement or
applicable law):

(i) approve, agree or consent to or make or enter into any agreement,
transaction or take any other action the effect of which is to cause, any
fundamental change in the Company or any of its subsidiaries, or their
respective businesses, including the following: (A) any material change in the
Company’s or any of its subsidiaries’ operating strategies; (B) any merger or
consolidation or amalgamation, or liquidation, winding-up or dissolution, or
Transfer of, in one transaction or a series of transactions, all or any material
part of their respective businesses or Properties, whether now owned or
hereafter acquired; or (C) the institution of proceedings to be adjudicated a
bankrupt or insolvent, or the consent to the institution of bankruptcy or
insolvency proceedings or the

 

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filing of a petition or consent to a petition seeking reorganization or relief
under any applicable federal or state law relating to bankruptcy, or the consent
to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or
other similar official, or an assignment for the benefit of creditors, or,
except as may be required by any fiduciary obligation of the Board or as may be
required by applicable law, the admission in writing of inability to pay debts
generally as they become due, or any corporate action in furtherance of any such
action;

(ii) issue any Company Interest or any equity interest in any of its
subsidiaries or repurchase any Company Interest or any equity interest in any of
its subsidiaries or otherwise call for payment upon any outstanding subscription
or other funding by the Members;

(iii) incur, create, authorize, issue, assume or suffer to exist any debt or any
liens related thereto;

(iv) create subsidiaries or make additional contributions or investments in any
subsidiaries;

(v) sell, lease or Transfer, directly or indirectly (including by way of any
farm-out), any assets;

(vi) enter into or modify in any material respect any (A) contract to sell or
market hydrocarbons, or (B) hedge, swap, futures, option, or other derivative
transactions or contracts;

(vii) designate (or otherwise form, empower or delegate any responsibility to)
any committee of the Board;

(viii) make any determination of Distributable Funds or otherwise make, except
as required by Section 4.3, distributions to the Members; or

(ix) take any other action required or permitted hereunder to be taken by the
Board.

(e) The Board may hold such meetings at such place and at such time as it may
determine. Notice of a meeting shall be served not less than 24 hours before the
date and time fixed for such meeting by confirmed facsimile or other written
communication or not less than three days prior to such meeting if notice is
provided by overnight delivery service. Notice of a meeting need not be given to
any Manager who signs a waiver of notice or provides a waiver by electronic
transmission or a consent to holding the meeting or an approval of the minutes
thereof, whether before or after the meeting, or who attends the meeting without
protesting, either prior thereto or at its commencement, the lack of notice to
such Manager. A special meeting of the Board may be called by any member of the
Board. Any member of the Board may participate in a meeting by conference
telephone or similar communications equipment. Any action required or permitted
to be taken by the Board may be taken without a meeting if such action is
evidenced in writing and signed by Managers representing a majority of the
entire Board. At any meeting of the Board, the presence in person or by
telephone or similar electronic communication of Managers representing at least
a majority of the Board shall constitute a quorum.

 

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(f) Each Manager serving on the Board shall have one vote on any Company matter.
Except as otherwise provided in this Agreement, the business of the Company
presented at any meeting of the Board shall be decided by a vote of Managers
representing a majority of the entire Board.

(g) In accomplishing all of the foregoing and in fulfilling its obligations
pursuant to this Agreement, the Board may, in its sole discretion, retain or use
any Company Affiliates’ personnel, properties and equipment or the Board may
hire or rent those of third parties and may employ on a temporary or continuing
basis outside accountants, attorneys, consultants and others on such terms as
the Board deems advisable. No Person, firm or corporation dealing with the
Company shall be required to inquire into the authority of the Board to take any
action or make any decision.

Section 5.2 Officers.

(a) Designation. The Board may, from time to time, designate individuals (who
need not be a Manager) to serve as officers or authorized persons of the
Company. The officers may, but need not, include a president and chief executive
officer, a chief financial officer, a treasurer, one or more vice presidents and
a secretary. Any two or more offices may be held by the same Person.

(b) Term of Office; Removal; Filling of Vacancies.

(i) Each officer or authorized person of the Company shall hold office until his
successor is chosen and qualified in his stead or until his earlier death,
resignation, retirement, disqualification or removal from office.

(ii) Any officer or authorized person may be removed at any time by the Board
for any or no reason. Designation of an officer or authorized person shall not
of itself create any contract rights in favor of such officer or authorized
person.

(iii) If the office of any officer becomes vacant for any reason, the vacancy
may be filled by the Board.

Section 5.3 Acknowledged and Permitted Activities. The Company and the Members
acknowledge and agree that (i) none of the Managers or Rice Energy: (A) shall be
prohibited or otherwise restricted by his or its relationship with the Company
and its subsidiaries from engaging in the business of investing any other
Person, entering into agreements to provide advisory services to any Person or
acting as a director or advisor to, or other principal of, any Person,
regardless of whether such activities are in direct or indirect competition with
the business or activities of any of the Company or its subsidiaries and
(B) shall have any obligation to offer the Company or its subsidiaries any
business opportunity

 

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and (ii) the Company and the Members hereby renounce any interest or expectancy
in any business opportunity pursued by any Person described in Clause (A) and
waive any claim that any such business opportunity constitutes a corporate,
partnership or other business opportunity of any of the Company or its
subsidiaries. Nothing in this Section 5.3 shall relieve any Person of his
confidentiality obligation with respect to Confidential Information as provided
in Section 7.5.

Section 5.4 Duties and Services of the Board. The Board shall comply in all
respects with the terms of this Agreement. The Board shall be obligated to
perform the duties, responsibilities and obligations of the Board hereunder only
to the extent that funds of the Company are available therefor. During the
existence of the Company, each Manager serving on the Board shall devote such
time and effort to the Company’s business as he deems necessary to manage and
supervise Company business and affairs in an efficient manner.

Section 5.5 Liability and Indemnification.

(a) To the fullest extent permitted by law and notwithstanding any provision of
this Agreement, no Member in its capacity as a Member, Manager in his capacity
as a Manager, officer in his or her capacity as an officer, or authorized person
in his or her capacity as an authorized person shall have any duty, fiduciary or
otherwise, to the Company or any Member in connection with the business and
affairs of the Company or any consent or approval given or withheld pursuant to
this Agreement, other than the implied contractual covenant of good faith and
fair dealing. The foregoing sentence will not be deemed to alter the contractual
obligations of a Member to another Member or the Company pursuant to the
Transaction Documents. To the maximum extent permitted by applicable law, each
Member acknowledges and agrees that any Manager, officer or authorized person
shall serve in such capacity to represent the interests of Rice Energy and shall
be entitled to consider only such interests (including the interests of Rice
Energy) and factors specified by Rice Energy, and shall not owe duties,
fiduciary or otherwise (including any duty of disclosure), at law, in equity or
under the Transaction Documents, to the Company, any other Member or to any
creditor of the Company (even if the Company is insolvent or near insolvency),
other than the implied contractual covenant of good faith and fair dealing. To
the maximum extent permitted by applicable law, each Member acknowledges and
agrees that any Member may act hereunder to represent its own interests and
shall be entitled to consider only such interests (including its own interests),
and shall not owe duties, fiduciary or otherwise (including any duty of
disclosure), at law, in equity or under the Transaction Documents, to the
Company, any other Member or to any creditor of the Company (even if the Company
is insolvent or near insolvency), other than the implied contractual covenants
of good faith and fair dealing. The Company’s officers, authorized persons, the
Board, the Members and their Affiliates, and their respective managers, members,
partners, officers, authorized persons, directors, employees, authorized persons
and agents, shall not be liable, responsible or accountable in damages or
otherwise to the Company or the other Members for any acts or omissions that do
not constitute a violation of the implied contractual covenant of good faith and
fair dealing, and the Company shall indemnify to the maximum extent permitted

 

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under the Act and save harmless the Company’s officers, authorized persons, the
Board and the Members and their Affiliates, and their respective managers,
members, partners, officers, authorized persons, directors, employees and agents
(individually, an “Indemnitee”) from all liabilities reasonably incurred or
suffered by any such Indemnitee in connection with the activities of the Company
or its subsidiaries. Any act or omission performed or omitted by an Indemnitee
on advice of legal counsel or an independent consultant who has been employed or
retained by the Company shall be presumed to have been performed or omitted in
good faith without gross negligence or willful misconduct. THE PARTIES RECOGNIZE
THAT THIS PROVISION SHALL RELIEVE ANY SUCH INDEMNITEE FROM ANY AND ALL
LIABILITIES, OBLIGATIONS, DUTIES, CLAIMS, ACCOUNTS AND CAUSES OF ACTION
WHATSOEVER ARISING OR TO ARISE OUT OF ANY NEGLIGENCE BY ANY SUCH INDEMNITEE, AND
SUCH INDEMNITEE SHALL BE ENTITLED TO INDEMNIFICATION FROM ACTS OR OMISSIONS THAT
MAY CONSTITUTE NEGLIGENCE.

(b) The Company shall, to the maximum extent permitted under the Act, pay or
reimburse expenses incurred by an Indemnitee in connection with the Indemnitee’s
appearance as a witness or other participation in a proceeding involving or
affecting the Company at a time when the Indemnitee is not a named defendant or
respondent in the proceeding.

(c) The Board shall have the right to require that any contract entered into by
the Company provide that the Board shall have no personal liability for the
obligations of the Company thereunder.

(d) The indemnification provided by this Section 5.5 shall be in addition to any
other rights to which each Indemnitee may be entitled under any agreement or
vote of the Members, as a matter of law or otherwise, both as to action in the
Indemnitee’s capacity as a Member or an officer, authorized person, director,
manager, employee or agent of a Member or as a Person serving at the request of
the Company as set forth above and to action in another capacity, and shall
continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns, administrators and
personal representatives of the Indemnitees.

(e) In no event may an Indemnitee subject the Members to personal liability by
reason of this indemnification provision.

(f) An Indemnitee shall not be denied indemnification in whole or in part under
this Section 5.5 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.

(g) The Company hereby agrees, and the Members hereby acknowledge, that: (i) to
the extent legally permitted and as required by the terms of this Agreement and
the Certificate (or by the terms of any other agreement between the Company and
a Sponsor Indemnitee), (A) the Company is the indemnitor of first resort (i.e.,
its obligations to each Sponsor Indemnitee are primary and any obligation of the
Sponsor Indemnitors to advance expenses or to provide indemnification for the
same expenses or liabilities incurred by any Sponsor Indemnitee are

 

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secondary) and (B) the Company shall be required to advance the full amount of
expenses incurred by a Sponsor Indemnitee and shall be liable for the full
amount of all expenses, judgments, penalties, fines and amounts paid in
settlement, without regard to any rights that a Sponsor Indemnitee may have
against the Sponsor Indemnitors and (ii) the Company irrevocably waives,
relinquishes and releases the Sponsor Indemnitors from any and all claims for
contribution, subrogation or any other recovery of any kind in respect of any of
the matters described in clause (i) of this sentence for which any Sponsor
Indemnitee has received indemnification or advancement from the Company. No
advancement or payment by the Sponsor Indemnitors on behalf of any Sponsor
Indemnitee with respect to any claim for which a Sponsor Indemnitee has sought
indemnification from the Company shall affect the foregoing and that the Sponsor
Indemnitors shall have a right of contribution or be subrogated to the extent of
such advancement or payment to all of the rights of recovery of such Sponsor
Indemnitee against the Company.

Section 5.6 Contracts with Affiliates. The Company may enter into contracts and
agreements with any Member and/or any of its Affiliates for the rendering of
services and the sale and lease of supplies and equipment on such arm’s-length
terms that are no less favorable to the Company than those available from
unrelated third parties as determined by the Board.

Section 5.7 Reimbursement of Members. The Company or its subsidiaries shall pay
or reimburse to Rice Energy all reasonable direct and indirect costs and
expenses incurred by Rice Energy to the extent solely related to the Company,
including legal fees and accounting fees.

Section 5.8 Insurance. The Company shall acquire and maintain insurance covering
such risks and in such amounts as the officers or authorized persons of the
Company shall, from time to time, determine to be necessary or appropriate.

Section 5.9 Tax Elections and Status.

(a) The Board shall make such tax elections on behalf of the Company as it shall
deem appropriate in its sole discretion.

(b) The Members agree to classify the Company as a partnership for income tax
purposes. Therefore, any provision hereof to the contrary notwithstanding,
solely for income tax purposes, each of the Members hereby recognizes that the
Company, so long as it has at least two Members, shall be subject to all
provisions of subchapter K of Chapter 1 of Subtitle A of the Internal Revenue
Code and, to the extent permitted by law, any comparable state or local income
tax provisions. Neither the Company, any Member nor any Manager shall make an
election for the Company to be excluded from the application of the provisions
of subchapter K of chapter 1 of subtitle A of the Code or any similar provisions
of applicable state law or to be classified as other than a partnership pursuant
to Treasury Regulation Section 301.7701-3.

 

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Section 5.10 Tax Returns. The Company shall deliver necessary tax information to
each Member after the end of each fiscal year of the Company. Not less than 60
days prior to the date (as extended) on which the Company intends to file its
federal income tax return or any state income tax return but in any event no
earlier than March 1 of each year, the return proposed by the Board to be filed
by the Company shall be furnished to the Members (other than Members holding
Incentive Units) for review; provided, however, that an IRS Form K-1 or a good
faith estimate of the amounts to be included on such IRS Form K-1 for each
Member shall be sent to each Member on or before March 1 of each year. In
addition, not more than 10 days after the date on which the Company files its
federal income tax return or any state income tax return, a copy of the return
so filed shall be furnished to the Members.

Section 5.11 Tax Matters Member. Rice Energy shall be designated the tax matters
member under Section 6231 of the Internal Revenue Code (in such capacity, the
“Tax Matters Member”). The Tax Matters Member is authorized to take such actions
and to execute and file all statements and forms on behalf of the Company which
may be permitted or required by the applicable provisions of the Internal
Revenue Code or Treasury Regulations issued thereunder. The Tax Matters Member
shall have full and exclusive power and authority on behalf of the Company to
represent the Company (at the Company’s expense) in connection with all
examinations of the Company’s affairs by tax authorities, including resulting
administrative and judicial proceedings, and to expend Company funds for
professional services and costs associated therewith. The Tax Matters Member
shall keep the Members informed as to the status of any audit of the Company’s
tax affairs, and shall take such action as may be necessary to cause any Member
so requesting to become a “notice partner” within the meaning of Section 6223 of
the Internal Revenue Code.

Section 5.12 Outside Manager Expenses. Each member of the Board shall be
entitled to be reimbursed by the Company for all reasonable out-of-pocket
expenses incurred by such Person in connection with the services rendered on
behalf of, or for the benefit of, the Company.

ARTICLE VI

RIGHTS OF MEMBERS

Section 6.1 Rights of Members. Each of the Members shall have the right to:
(a) have the Company books and records (including those required under the Act)
kept at the principal United States office of the Company and at all reasonable
times to inspect and copy any of them at the sole expense of such Member for any
reasonably requested purpose; (b) have dissolution and winding up of the Company
by decree of court as provided for in the Act and (c) exercise all rights of a
Member

 

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under the Act (except to the extent otherwise specifically provided herein).
Notwithstanding the foregoing, the Members shall not have the right to receive
data pertaining to the properties of the Company if the Company is subject to a
valid agreement prohibiting the distribution of such data or if the Board shall
otherwise determine that such data is Confidential Information.

Section 6.2 Limitations on Members. No Member (in his or its capacity as a
Member) shall: (a) be permitted to take part in the business or control of the
business or affairs of the Company; (b) have any voice in the management or
operation of any Company property or (c) have the authority or power to act as
agent for, or on behalf of, the Company or any other Member, to do any act which
would be binding on the Company or any other Member, or to incur any
expenditures on behalf of or with respect to the Company. No Member (in his or
its capacity as a Member) shall hold out or represent to any third party that
the Members have any such power or right or that the Members are anything other
than “members” of the Company. The foregoing provision shall not be applicable
to a Member acting in his or its capacity as a member of the Board or an
officer, authorized person or employee of the Company.

Section 6.3 Liability of Members. Except as otherwise provided under the Act,
the debts, liabilities, contracts and other obligations of the Company (whether
arising in contract, tort or otherwise) shall be solely the debts, liabilities,
contracts and other obligations of the Company, and no Member in its capacity as
such shall be liable personally for any debts, liabilities, contracts or other
obligations of: (i) the Company, except to the extent and under the
circumstances set forth in any non-waivable provision of the Act or in any
separate written instrument signed by the applicable Member or (ii) any other
Member. No Member shall have any responsibility to restore any negative balance
in its Capital Account or to contribute to or in respect of the liabilities or
obligations of the Company or to return distributions made by the Company,
except as expressly provided in this Agreement or required by any non-waivable
provision of the Act. The agreement set forth in the immediately preceding
sentence shall be deemed to be a compromise with the consent of all of the
Members for purposes of Section 18-502(b) of the Act. However, if any court of
competent jurisdiction orders, holds or determines that, notwithstanding the
provisions of this Agreement, any Member is obligated to restore any such
negative balance, make any such contribution or make any such return, such
obligation shall be the obligation of such Member and not of any other Person.

Section 6.4 Withdrawal and Return of Capital Contributions. No Member shall be
entitled to (a) withdraw from the Company, except upon the assignment by such
Member of all of its Company Interest in accordance with Article IX or (b) the
return of its Capital Contributions, except to the extent, if any, that
distributions made pursuant to the express terms of this Agreement may be
considered as such by law or upon dissolution and liquidation of the Company,
and then only to the extent expressly provided for in this Agreement and as
permitted by law.

 

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Section 6.5 Voting Rights. Except as otherwise provided herein, to the extent
that the vote of the Members may be required hereunder, the act of Rice Energy
shall be an act of the Members. Notwithstanding anything in this Agreement to
the contrary, with respect to any Company Interests held by any Member who is an
Employee, such Company Interests shall be non-voting if and when such Person’s
status as an Employee is terminated for any reason or without reason, including
by termination, resignation, death or disability and the Incentive Units will be
non-voting.

ARTICLE VII

BOOKS, REPORTS, MEETINGS AND CONFIDENTIALITY

Section 7.1 Capital Accounts, Books and Records.

(a) The Company shall keep books of account for the Company in accordance with
the terms of this Agreement. Such books shall be maintained at the principal
office of the Company.

(b) An individual capital account (the “Capital Account”) shall be maintained by
the Company for each Member as provided below:

(i) The Capital Account of each Member shall, except as otherwise provided
herein, be increased by the amount of cash and the fair market value of any
property contributed to the Company by such Member (net of liabilities secured
by such contributed property that the Company is considered to assume or take
subject to under Section 752 of the Internal Revenue Code) and by such Member’s
share of the Net Profits of the Company and special allocations under
Section 4.2, and shall be decreased by such Member’s share of the Net Losses of
the Company and special allocations under Section 4.2 and by the amount of cash
or the fair market value of any property distributed to such Member (net of
liabilities secured by such distributed property that such Member is considered
to assume or take subject to under Section 752 of the Internal Revenue Code).

(ii) Any adjustments of basis of Company property provided for under Sections
734 and 743 of the Internal Revenue Code and comparable provisions of state law
(resulting from an election under Section 754 of the Internal Revenue Code or
comparable provisions of state law) shall not affect the Capital Accounts of the
Members (unless otherwise required by applicable Treasury Regulations), and the
Members’ Capital Accounts shall be debited or credited pursuant to the terms of
this Section 7.1 as if no such election had been made.

(iii) Capital Accounts shall be adjusted, in a manner consistent with this
Section 7.1, to reflect any adjustments in items of Company income, gain, loss
or deduction that result from amended returns filed by the Company or pursuant
to an agreement by the Company with the Internal Revenue Service or a final
court decision.

 

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(iv) It is the intention of the Members that the Capital Accounts of each Member
be kept in the manner required under Treasury Regulation
Section 1.704-1(b)(2)(iv). To the extent any additional adjustment to the
Capital Accounts is required by such regulation, the Board is hereby authorized
to make such adjustment after notice to the Members.

(v) In accordance with the provisions of Treasury Regulation
Section 1.704-1(b)(2)(iv)(f), upon a Member’s contribution to the Company of
cash or properties in exchange for a Company Interest, the Capital Accounts of
all Members and the Carrying Values of all Company properties shall, immediately
prior to such issuance, be adjusted upward or downward to reflect any Unrealized
Gain or Unrealized Loss attributable to the Company properties, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual Transfer of
each such property immediately prior to such contribution for an amount equal to
its fair market value and had been allocated to the Members at such time
pursuant to Sections 4.1 and 4.2.

(vi) Any Person who acquires a Company Interest directly from a Member, or whose
Company Interest shall be increased by means of a Transfer to it of all or part
of the Company Interest of another Member, shall have a Capital Account
(including a credit for all Capital Contributions made by such Member
Transferring such Company Interest) which includes the Capital Account balance
of the Company Interest or portion thereof so acquired or Transferred.

Section 7.2 Bank Accounts. The Board shall cause one or more Company accounts to
be maintained in a bank (or banks) that is a member of the Federal Deposit
Insurance Corporation or some other financial institution, which accounts shall
be used for the payment of the expenditures incurred by the Company in
connection with the business of the Company, and in which shall be deposited any
and all receipts of the Company. The Board shall determine the number of and the
Persons who will be authorized as signatories on each such bank account. The
Company may invest the Company funds in such money market accounts or other
investments as the Board shall determine to be of high quality.

Section 7.3 Reports. The Company shall provide Rice Energy with copies of such
financial reports as shall be reasonably requested from time to time and such
other information reasonably requested by Rice Energy and any such other reports
and financial information as the Board shall determine from time to time.

Section 7.4 Meetings of Members. The Board may hold meetings of the Members from
time to time to inform and consult with the Members concerning the Company’s
assets and such other matters as the Board deems appropriate, provided that
nothing in this Section 7.4 shall require the Board to hold any such meetings.
Such meetings shall be held at such times and places, as often and in such
manner, as shall be determined by the Board. The Board at its election may
separately inform and consult

 

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with the Members for the above purposes without the necessity of calling and/or
holding a meeting of the Members. Notwithstanding the foregoing provisions of
this Section 7.4, the Members shall not be permitted to take part in the
business or control of the business of the Company; it being the intention of
the parties that the involvement of the Members as contemplated in this
Section 7.4 is for the purpose of informing the Members with respect to various
Company matters, explaining any information furnished to the Members in
connection therewith, answering any questions the Members may have with respect
thereto and receiving any ideas or suggestions the Members may have with respect
thereto; it being the further intention of the parties that the Board shall have
full and exclusive power and authority on behalf of the Company to acquire,
manage, control and administer the assets, business and affairs of the Company
in accordance with Section 5.1 and the other applicable provisions of this
Agreement.

Section 7.5 Confidentiality. No Member shall use, publish, disseminate or
otherwise disclose, directly or indirectly, any Confidential Information that
should come into the possession of such Member for other than a proper Company
purpose. No Member shall disclose any such Confidential Information, except as
expressly authorized by this Agreement or by the Board, or as required by law or
governmental or regulatory authority. Each Member shall instruct all Affiliates
(including their representatives, agents and counsel) to comply with this
Section 7.5; provided, however, Rice Energy shall only be required to instruct
its controlling Affiliates to comply with this Section 7.5. If a Member is
required by law or court order to disclose information that would otherwise be
Confidential Information under this Agreement, such Member shall immediately
notify the Company of such notice and provide the Company the opportunity to
resist such disclosure by appropriate proceedings. The terms of this Section 7.5
shall survive with respect to each Member until the earlier to occur of (a) the
date following one year from the date of the liquidation of the Company and
(b) the date following two years from the date such Member ceases to be a
Member.

ARTICLE VIII

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 8.1 Dissolution. The Company shall be dissolved only upon the occurrence
of any of the following:

(a) after the third anniversary of the First Distribution Date, the consent in
writing of Rice Energy;

(b) at any time when there are no Members; and

(c) the entry of a decree of judicial dissolution of the Company under
Section 18-802 of the Act;

provided, however, if the event described in Section 8.1(b) shall occur, the
Company shall not be dissolved, and the business of the Company shall be
continued, if the requirements of Section 18-801 of the Act for the avoidance of
dissolution are satisfied.

 

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Section 8.2 Liquidation and Termination. Upon dissolution of the Company, the
Board or, if the Board so desires, a Person selected by the Board, shall act as
liquidator or shall appoint one or more liquidators who shall have full
authority to wind up the affairs of the Company and make final distribution as
provided herein. The liquidator shall continue to operate the Company properties
with all of the power and authority of the Board. The steps to be accomplished
by the liquidator are as follows:

(a) As promptly as possible after dissolution and again after final liquidation,
the liquidator, if requested by any Member, shall cause a proper accounting to
be made by the Company’s independent accountants of the Company’s assets,
liabilities and operations through the last day of the month in which the
dissolution occurs or the final liquidation is completed, as appropriate.

(b) The liquidator shall pay all of the debts and liabilities of the Company
(including all expenses incurred in liquidation) or otherwise make adequate
provision therefor (including the establishment of a cash escrow fund for
contingent liabilities in such amount and for such term as the liquidator may
reasonably determine). After making payment or provision for all debts and
liabilities of the Company, the liquidator shall sell all properties and assets
of the Company for cash as promptly as is consistent with obtaining the best
price therefor; provided, however, that upon the consent of Rice Energy, the
liquidator may distribute such properties in kind. All Net Profit and Net Loss
(or other items of income, gain loss or deduction allocable under Section 4.2)
realized on such sales shall be allocated to the Members as provided in this
Agreement, and the Capital Accounts of the Members shall be adjusted
accordingly. In the event of a distribution of properties in kind, the
liquidator shall first adjust the Capital Accounts of the Members by the amount
of any Net Profit and Net Loss (or other items of income, gain loss or deduction
allocable under Section 4.2) that would have been recognized by the Members if
such properties had been sold at fair market value. The liquidator shall then
distribute the proceeds of such sales or such properties to the Members in the
manner provided in Section 4.3(b). If the foregoing distributions to the Members
do not equal the Member’s respective positive Capital Account balances as
determined after giving effect to the foregoing adjustments and to all
adjustments attributable to allocations of Net Profit and Net Loss realized by
the Company during the taxable year in question and all adjustments attributable
to contributions and distributions of money and property effected prior to such
distribution, then, the allocations of Net Profit and Net Loss provided for in
this Agreement shall be adjusted, to the least extent necessary, to produce a
Capital Account balance for each Member which corresponds to the amount of the
distribution to such Member. Each Member shall have the right to designate
another Person to receive any property which otherwise would be distributed in
kind to that Member pursuant to this Section 8.2.

(c) Except as expressly provided herein, the liquidator shall comply with any
applicable requirements of the Act and all other applicable laws pertaining to
the winding up of the affairs of the Company and the final distribution of its
assets.

(d) The distribution of cash and/or property to the Members in accordance with
the provisions of this Section 8.2 shall constitute a complete return to the
Members of their Capital Contributions and a complete distribution to the
Members of their Company Interest and all Company property.

 

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ARTICLE IX

ASSIGNMENTS OF COMPANY INTERESTS

Section 9.1 Assignments of Company Interests.

(a) No Member’s Company Interest or rights therein shall be Transferred, or made
subject to an Indirect Transfer, in whole or in part, without the prior written
consent of the Board except as provided in this Section 9.1; provided, however,
Rice Energy may Transfer its Company Interests or make any Indirect Transfer
subject to compliance with Section 9.1(c), and, if applicable,
Sections 9.1(e)(i) and 9.1(e)(iii).

(b) Any Member (including Members holding Incentive Units) may assign his or its
Company Interest without the consent of the Board pursuant to an Excluded
Affiliate Transfer.

(c) In addition to any of the other requirements and prohibitions in this
Section 9.1, any permitted Transfer must meet the availability of an exemption
from registration under the Securities Act, and applicable state securities laws
in connection with such Transfer and stating the factual and statutory bases
relied upon by such counsel, and the Company may require an opinion of counsel
in form and substance reasonably acceptable to the Company and its counsel as to
these matters as a condition to the effectiveness of such Transfers.

(d) Any attempt by a Member to assign its Company Interest in violation of any
provision of this Section 9.1 shall be void ab initio. Unless an assignee of a
Company Interest becomes a substituted Member in accordance with the provisions
set forth below, such assignee shall not be entitled to any of the rights
granted to a Member hereunder, other than the right to receive allocations of
income, gains, losses, deductions, credits and similar items and distributions
to which the assignor would otherwise be entitled, to the extent such items are
assigned.

(e) An assignee of a Company Interest shall become a substituted Member entitled
to all of the rights of a Member if, and only if, (i) the assignor gives the
assignee such right; (ii) the Board consents in writing to such substitution,
the granting or denying of which shall be in the Board’s sole discretion;
(iii) the assignee executes and delivers such instruments, in form and substance
satisfactory to the Board, as the Board may deem necessary or desirable to
effect such substitution and to confirm the agreement of the assignee to be
bound by all of the terms and provisions of this Agreement; and (iv) if the
Board so requires, the assignee reimburses the Company for any costs incurred by
the Company in connection with such assignment and substitution. Upon the
satisfaction of such requirements, such assignee shall be admitted as of such
date as shall be provided for in any document evidencing such assignment as a
substituted Member of the Company.

 

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(f) The Company and the Board shall be entitled to treat the record Member of
any Company Interest as the absolute Member thereof in all respects and shall
incur no liability for distributions of cash or other property made in good
faith to such Member until such time as a written assignment of such Company
Interest that complies with the terms of this Agreement has been received by the
Board.

ARTICLE X

REPRESENTATIONS AND WARRANTIES

Each Member hereby represents and warrants to the Company and all other Members
that such Member:

(a) has sufficient financial resources to continue such Member’s investment in
the Company for an indefinite period;

(b) has adequate means of providing for its current needs and contingencies and
can afford a complete loss of its investment in the Company;

(c) intends to acquire and hold its Company Interest solely for its private
investment and for its own account and with no view or intention to Transfer
such Company Interest (or any portion thereof);

(d) has no contract, undertaking, agreement or arrangement with any Person to
sell or otherwise Transfer to any Person, or to have any Person sell on behalf
of such Member, its Company Interest (or any portion thereof), and such Member
is not engaged in, and does not plan to engage within the foreseeable future in,
any discussion with any Person relative to the sale or any Transfer of its
Company Interest (or any portion thereof);

(e) is not aware of any occurrence, event or circumstance upon the happening of
which such Member intends to attempt to Transfer its Company Interest (or any
portion thereof), and such Member does not have any present intention of
Transferring its Company Interest (or any portion thereof) after the lapse of
any particular period of time;

(f) by making other investments of a similar nature and/or by reason of his/its
business and financial experience or the business and financial experience of
those Persons it has retained to advise such Member with respect to its
investment in the Company, is a sophisticated investor who has the capacity to
protect its own interest in investments of this nature and is capable of
evaluating the merits and risks of this investment;

(g) has had all documents, records, books and due diligence materials pertaining
to this investment made available to such Member and such Member’s accountants
and advisors; such Member has also had an opportunity to ask questions of and
receive answers from the Company concerning this investment; and such Member has
all of the information deemed by such Member to be necessary or appropriate to
evaluate the investment and the risks and merits thereof;

 

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(h) has a close business association with the Company or certain of its
Affiliates, thereby making the Member a well-informed investor for purposes of
this investment; and

(i) is aware of the following:

(i) the Company is newly organized and has no financial or operating history
and, further, the investment in the Company is speculative and involves a high
degree of risk of loss by the Member of its entire investment, with no assurance
of any income from such investment;

(ii) no federal or state agency has made any finding or determination as to the
fairness of the investment, or any recommendation or endorsement, of such
investment;

(iii) there are substantial restrictions on the Transferability of the Company
Interest of such Member, there will be no public market for the Company Interest
and, accordingly, it may not be possible for such Member readily to liquidate
its investment in the Company in case of emergency;

(iv) an exemption from registration under the Securities Act or any applicable
state securities laws under the Securities Act or any applicable state
securities laws may not be available if the Company Interest is acquired by such
Member with a view to resale or distribution thereof under any conditions or
circumstances as would constitute a distribution of such Company Interest within
the meaning and purview of the Securities Act or the applicable state securities
laws; and

(v) any federal or state income tax benefits which may be available to such
Member may be lost through changes to existing laws and regulations or in the
interpretation of existing laws and regulations; and in making this investment
such Member is relying, if at all, solely upon the advice of its own tax
advisors with respect to the tax aspects of an investment in the Company.

Each Member agrees that (x) its Company Interest shall not be resold unless the
provisions set forth in Article IX are complied with and (y) it has no right to
require registration of its Company Interest under the Securities Act or
applicable state securities laws, and, in view of the nature of the Company and
its business, such registration is neither contemplated nor likely.

Each of the representations and warranties in this Article X made with respect
to Company Interests are hereby also given by each Member with respect to such
Member’s interests (whether acquired hereafter or at any other time) in
PublicCo.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Notices. All notices, elections, demands or other communications
required or permitted to be made or given pursuant to this Agreement shall be in
writing and shall be considered as properly

 

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given or made on the date of actual delivery (so long as delivery is made on a
business day) if given by (a) personal delivery; (b) United States mail;
(c) expedited overnight delivery service with proof of delivery or (d) via
facsimile with confirmation of delivery, addressed to the respective
addressee(s). Any Member may change its address by giving notice in writing to
the other Members of its new address.

Section 11.2 Amendment.

(a) In addition to the right of the Board to amend this Agreement as provided
below, and except as otherwise provided below, any change, modification or
amendment to this Agreement shall be effective if made by an instrument in
writing that has been duly approved by the Board and Rice Energy.

(b) Notwithstanding Section 11.2(a) with respect to any change, modification or
amendment to this Agreement that would (i) increase the liability or duties of
any of the Members; (ii) change the contributions required of any of the
Members; (iii) cause the Company to be taxed as a corporation or (iv) otherwise
result in any disproportionate and material adverse tax consequences for any
Member, such change, modification or amendment shall not be binding on such
Member unless contained in a written instrument duly executed by such Member;
provided, however, that this Section 11.2(b) shall not apply to the Board’s
ability to amend this Agreement pursuant to Article III; provided further, that
any amendment which is made to facilitate a merger or consolidation of the
Company with any other entity, to convert the Company into another entity, or to
cause the Company to participate in an exchange of interests or some type of
business combination with any other entity, shall require the approval only of
the Board and Rice Energy, if each of the material terms and provisions of such
merger, consolidation, conversion, exchange or combination provides for equal
and/or proportionate treatment of each of the Members holding a class or series
of Company Interests relative to the other Members holding the same class or
series of Company Interests.

(c) Notwithstanding anything herein to the contrary, the Board may change,
modify or amend this Agreement in a written instrument to (i) change the name of
the Company; (ii) admit new or substituted Members in accordance with the terms
of Article IX; (iii) in a manner that does not adversely affect the Members in
any disproportionate and material respect and (iv) ensure that the Company is
not and will not be treated as an association taxable as a corporation for
federal income tax purposes or to conform with changes in applicable tax law
(provided, however, such changes do not have a material adverse effect on the
Members); provided, however, that the Board notifies the Members of such change,
modification or amendment.

(d) Notwithstanding anything herein to the contrary, prior to the third
anniversary of the First Distribution Date, any change, amendment or
modification to Sections 4.3 or 8.1 shall require the prior written consent of
NGP.

 

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Section 11.3 Partition. Each of the Members hereby irrevocably waives for the
term of the Company any right that such Member may have to maintain any action
for partition with respect to the Company property.

Section 11.4 Entire Agreement. This Agreement and the other documents
contemplated hereby constitute the full and complete agreement of the parties
hereto with respect to the subject matter hereof, and supersedes all prior
contracts or agreements with respect to the subject matter hereof, whether oral
or written, including the Original Agreement.

Section 11.5 Severability. Every provision in this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity of the
remainder of this Agreement.

Section 11.6 No Waiver. The failure of any Member to insist upon strict
performance of a covenant hereunder or of any obligation hereunder, irrespective
of the length of time for which such failure continues, shall not constitute a
waiver of such Member’s right to demand strict compliance in the future. No
consent or waiver, express or implied, to or of any breach or default in the
performance of any obligation hereunder shall constitute a consent or waiver to
or of any other breach or default in the performance of the same or any other
obligation hereunder.

Section 11.7 Applicable Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and interpreted, construed and
enforced in accordance with the internal laws of the State of Delaware, without
regard to rules or principles of conflicts of law requiring the application of
the law of another State.

Section 11.8 Successors and Assigns. This Agreement shall be binding upon, and
inure to the benefit of, the Members and their respective heirs, legal
representatives, successors and assigns; provided, however, that no Member may
Transfer all or any part of its rights or Company Interest or any interest under
this Agreement, except in accordance with Article IX. Nothing in this Agreement
(express or implied) is intended to confer upon any Person other than the
Members any rights or remedies of any nature whatsoever under or by reason of
this Agreement; provided, however, that each Indemnitee is hereby granted
third-party beneficiary status with respect to Section 5.5 and shall be entitled
to enforce such obligations as if such Indemnitee were a party hereto; provided,
further, that NGP is hereby granted third-party beneficiary status with respect
to Section 11.2(d) and shall be entitled to enforce such obligations as if NGP
were a party hereto.

 

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Section 11.9 Arbitration. Any dispute arising out of or relating to this
Agreement, the Transaction Documents or the Company, including claims sounding
in contract, tort, statutory or otherwise (a “Dispute”), shall be settled
exclusively and finally by arbitration in accordance with this Section 11.9.

(a) Rules and Procedures. Such arbitration shall be administered by
JAMS/Endispute, Inc., a Delaware corporation and national dispute resolution
company (“JAMS”), pursuant to (i) the JAMS Streamlined Arbitration Rules and
Procedures, if the amount in controversy is $250,000 or less or (ii) the JAMS
Comprehensive Arbitration Rules and Procedures, if the amount in controversy
exceeds $250,000 (each, as applicable, the “Rules”). The making, validity,
construction and interpretation of this Section 11.9, and all procedural aspects
of the arbitration conducted pursuant hereto, shall be decided by the
arbitrator(s). For purposes of this Section 11.9, “amount in controversy” means
the stated amount of the claim, not including interest or attorneys’ fees, plus
the stated amount of any counterclaim, not including interest or attorneys’
fees. If the claim or counterclaim seeks a form of relief other than damages,
such as injunctive or declaratory relief, it shall be treated as if the amount
in controversy exceeds $250,000, unless all parties to the Dispute otherwise
agree.

(b) Discovery. Discovery shall be allowed only to the extent permitted by the
Rules.

(c) Time and Place. All arbitration proceedings hereunder shall be conducted in
Dallas, Texas or such other location as all parties to the Dispute may agree.
Unless good cause is shown or all parties to the Dispute otherwise agree, the
hearing on the merits shall be conducted within 180 days of the initiation of
the arbitration, if the arbitration is being conducted under the Streamlined
Arbitration Rules, or within 270 days of the initiation of the arbitration, if
the arbitration is being conducted under the Comprehensive Arbitration Rules.
However, it shall not be a basis to challenge the outcome or result of the
arbitration proceeding that it was not conducted within the specified timeframe,
nor shall the failure to conduct the hearing within the specified timeframe in
any way waive the right to arbitration as provided for herein.

(d) Arbitrator(s).

(i) If the amount in controversy is $250,000 or less, the arbitration shall be
before a single arbitrator selected by JAMS in accordance with the Rules.

(ii) If the amount in controversy is more than $250,000, the arbitration shall
be before a panel of three arbitrators, selected in accordance with this
paragraph. The party initiating the arbitration shall designate, with its
initial filing, its choice of arbitrator. Within 30 days of the notice of
initiation of the arbitration procedure, the opposing party to the Dispute shall
select one arbitrator. If any party to the Dispute shall fail to select an
arbitrator within the required time, JAMS shall appoint an arbitrator for that
party. In the event that the Dispute involves three or more parties, JAMS shall
determine the parties’ alignment pursuant to Rule 15 and each “side” shall have
the right to appoint one arbitrator as provided above. The two arbitrators so
selected shall select a third arbitrator, failing agreement on which, the third
arbitrator shall be selected in accordance with JAMS Rule 15. Notwithstanding
that each party may select an arbitrator, all arbitrators (whether selected by
the parties, JAMS or otherwise) shall be independent and shall disclose any
relationship that he or she may have with any party to

 

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the Dispute at the time of their respective appointment. All arbitrators shall
be subject to challenge for cause under JAMS Rule 15. In the event that any
party-selected arbitrator is struck for cause, JAMS shall appoint the
replacement arbitrator.

(e) Waiver of Certain Damages. Notwithstanding any other provision in this
Agreement to the contrary, the Company and the Members expressly agree that the
arbitrators shall have absolutely no authority to award consequential,
incidental, special, treble, exemplary or punitive damages of any type under any
circumstances regardless of whether such damages may be available under Delaware
law, or any other laws, or under the Federal Arbitration Act or the Rules,
unless such damages are a part of a third-party claim for which a Member is
entitled to indemnification hereunder.

(f) Limitations on Arbitrators. The arbitrators shall have authority to
interpret and apply the terms and conditions of this Agreement and to order any
remedy allowed by this Agreement, including specific performance of the
Agreement, but may not change any term or condition of this Agreement, deprive
any Member of a remedy expressly provided hereunder or provide any right or
remedy that has been excluded hereunder.

(g) Form of Award. The arbitration award shall conform with the Rules, but also
contain a certification by the arbitrators that, except as permitted by
Section 11.9(e), the award does not include any consequential, incidental,
special, treble, exemplary or punitive damages.

(h) Fees and Awards. The fees and expenses of the arbitrator(s) shall be borne
equally by each side to the Dispute, but the decision of the arbitrator(s) may
include such award of the arbitrators’ expenses and of other costs to the
prevailing side as the arbitrators may determine. In addition, the prevailing
party shall be entitled to an award of its attorneys’ fees and interest.

(i) Binding Nature. The decision and award shall be binding upon all of the
parties to the Dispute and final and nonappealable to the maximum extent
permitted by law, and judgment thereon may be entered in a court of competent
jurisdiction and enforced by any party to the Dispute as a final judgment of
such court.

Section 11.10 Spouses.

(a) As a condition to becoming or remaining a Member, each Member that is an
individual and is or becomes married, shall cause his or her spouse to promptly
execute an agreement in the form of Exhibit B.

(b) If any Company Interest is required by law to be Transferred to a spouse of
a holder thereof pursuant to an order of a court of competent jurisdiction in a
divorce proceeding (notwithstanding the provisions of Section 9.1), then such
holder shall nevertheless retain all rights with respect to such interest and
any interest of such spouse shall be subject to such rights of such holder. In
addition, if it is determined that the holder will be required to pay any taxes
attributable to such interest of the spouse in the Company, then any tax
liability of such holder that is attributable to such spouse’s interest shall be
taken into account, and shall reduce such

 

36

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spouse’s interest in the Company; in no event shall the Company be required to
provide any financial, valuation or other information regarding the Company or
any of its subsidiaries or Affiliates or any of their respective assets to the
spouse or former spouse of such holder.

(c) Any Company Interests held by an individual who has failed to cause his or
her spouse to execute an agreement in the form of Exhibit B and any Company
Interests held by a Person who is an assignee shall be subject to the option of
the Company to acquire all of such Person’s Company Interests for the fair
market value thereof, determined as of the date the Company elects to acquire
such Company Interests.

(d) In the event of a property settlement or separation agreement between a
Member that is an individual and his or her spouse, such Member shall use his or
her best efforts to assign to his or her spouse only the right to share in
profits and losses, to receive distributions and to receive allocations of
income, gain, loss, deduction or credit or similar item to which the Member was
entitled, to the extent assigned.

(e) If a spouse or former spouse of a Member that is an individual acquires a
Company Interest without prior approval of the Board, such spouse or former
spouse hereby grants, as evidenced by Exhibit B, an irrevocable power of
attorney (which shall be coupled with an interest) to the original Member who
held such Company Interest, as the case may be, to vote or to give or withhold
such approval as such original Member shall himself or herself vote or approve
with respect to such matter and without the necessity of the taking of any
action by any such spouse or former spouse. Such power of attorney shall not be
affected by the subsequent disability or incapacity of the spouse or former
spouse granting such power of attorney. Such spouse or former spouse agrees that
the Company shall have the option at any time to purchase all of the Company
Interests, if any, acquired by such spouse or former spouse at fair market
value.

(f) This Section 11.10 shall apply mutatis mutandis to each Member, transferee
or any of their respective Affiliates that is controlled by (or for the benefit
of) any current or former Employee, which Employee is married or becomes
married, and such Employee’s spouse.

Section 11.11 Counterparts. This Agreement may be executed in one or more
counterparts (including by electronic means), each of which shall be an original
and all of which shall constitute but one and the same document.

Section 11.12 Representation. Each Member hereby acknowledges that the Member
has been advised that the Member should seek and has had the opportunity to seek
independent legal counsel to review the Transaction Documents on the Member’s
behalf and to obtain the advice of such legal counsel relating to such
documentation.

*    *    *    *

[Signature Pages Attached]

 

37

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IN WITNESS WHEREOF, the Members have executed this Agreement as of the day and
year first above written.

 

RICE ENERGY FAMILY HOLDINGS, LP By:   Rice Energy Management LLC, General
Partner By:  

/s/ Daniel J. Rice III

  Name:   Daniel J. Rice III   Title:   Manager

/s/ Gina Banai

GINA BANAI

/s/ Jenna Difrancesco

JENNA DIFRANCESCO

/s/ Matt Fahey

MATT FAHEY

/s/ Jide Famuagun

JIDE FAMUAGUN

/s/ Kris Hancock

KRIS HANCOCK

/s/ Ryan Kanto

RYAN KANTO

/s/ Glenn King

GLENN KING

/s/ Michael Lauderbaugh

MICHAEL LAUDERBAUGH

/s/ John Lavelle

JOHN LAVELLE

/s/ Gray Lisenby

GRAY LISENBY

/s/ David Miller

DAVID MILLER

/s/ Varun Mishra

VARUN MISHRA

 

LIMITED LIABILITY COMPANY AGREEMENT

SIGNATURE PAGES

--------------------------------------------------------------------------------

/s/ Aileen Rice

AILEEN RICE

/s/ Daniel J. Rice IV

DANIEL J. RICE IV

/s/ Derek Rice

DEREK RICE

/s/ Toby Z. Rice

TOBY Z. RICE

/s/ Robert Rikeman

ROBERT RIKEMAN

/s/ Stephen Rikeman

STEPHEN RIKEMAN

/s/ Jamie Rogers

JAMIE ROGERS

/s/ Zachary Willens

ZACHARY WILLENS

/s/ Rob Wingo

ROB WINGO

/s/ Tonya Winkler

TONYA WINKLER

 

LIMITED LIABILITY COMPANY AGREEMENT

SIGNATURE PAGES

--------------------------------------------------------------------------------

EXHIBIT A

 

Name

   Equity of the Company held as of the Effective Date      Capital
Interest      Tier I Units      Tier II Units      Tier III Units  

Rice Energy Family Holdings, LP

    
  Capital
Interest   
        0         0         0   

John Lavelle

     0         4.95         5         5   

Varun Mishra

     0         9.90         10         10   

Robert Rikeman

     0         4.95         5         5   

David Miller

     0         0.99         1         1   

Jamie Rogers

     0         6.93         7         7   

Ryan Kanto

     0         4.95         5         5   

Zachary Willens

     0         9.90         10         10   

Gina Banai

     0         2.48         2.50         2.50   

Stephen Rikeman

     0         0.99         1         1   

Michael Lauderbaugh

     0         0.99         1         1   

Glenn King

     0         4.95         5         5   

Toby Rice

     0         3.96         4         4   

Daniel J. Rice IV

     0         6.93         7         7   

Derek Rice

     0         6.93         7         7   

Aileen Rice

     0         4.46         4.50         4.50   

Tonya Winkler

     0         2.48         2.50         2.50   

Gray Lisenby

     0         9.90         10         10   

Jide Famuagun

     0         4.95         5         5   

Matt Fahey

     0         2.48         2.50         2.50   

Jenna Difrancesco

     0         2.48         2.50         2.50   

Kris Hancock

     0         2.48         2.50         2.50   

Rob Wingo

     0         0         0         0   

--------------------------------------------------------------------------------

EXHIBIT B

Consent of Spouse

I, the undersigned spouse of                     , one of the Members of Rice
Energy Holdings LLC (the “Company”) or a Person who controls a Member of the
Company, hereby acknowledge that I have read the Amended and Restated Limited
Liability Company Agreement, dated January     , 2014 (the “Agreement”) and that
I understand its contents. I hereby consent to and approve of the provisions of
the Agreement, as it may be amended, restated or supplemented from time to time
in accordance with its terms, and agree that the Company Interests (as defined
in the Agreement) held by my spouse and my interest in such Company Interests
are subject to such provisions. I hereby agree, for the benefit of the Company
(which is relying hereupon) that (i) my spouse’s interest in the Company is
subject to the Agreement and the other agreements referred to therein and any
interest I may have in the Company or its equity shall be irrevocably bound by
the Agreement and the other agreements referred to therein and any community
property interest of mine (if any) shall be similarly bound and (ii) I will take
no action at any time to hinder the operations of the Company.

Dated:             , 20    

 

 

Name:  

 

Address: