Exhibit 10.3





Exhibit 10.3




AMENDED AND RESTATED OPERATING AGREEMENT OF




EVERFLOW MANAGEMENT LIMITED, LLC




AN OHIO LIMITED LIABILITY COMPANY




THIS AMENDED AND RESTATED OPERATING AGREEMENT (the “Agreement”) is made and entered into
effective as of the 31st day of December, 2008, by and among Everflow Management
Corporation, an Ohio corporation (“EMC”), Thomas L. Korner, an individual (“Korner”), Richard M.
Jones, an individual (“Jones”), William A. Siskovic, an individual (“Siskovic”), Brian A. Staebler,
an individual (“Staebler”), and Sykes Associates, LLC, a New York limited liability company
(“Sykes”) (EMC, Korner, Jones, Siskovic, Staebler and Sykes are collectively referred to herein as
the “Members”).



RECITALS




WHEREAS, the Members have organized Everflow Management Limited, LLC, an Ohio limited
liability company (the “Company”), to engage in any lawful acts or activities for which limited
liability companies can be formed under the laws of the State of Ohio;



NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties
hereto agree as follows:



ARTICLE I




DEFINITIONS




1.1 Definitions. Certain capitalized words and phrases used in this Agreement shall have the
meanings set forth on Exhibit 1 attached hereto and incorporated herein by reference.



ARTICLE II




ORGANIZATION OF THE COMPANY




2.1 Organization. On March 8, 1999, the Company was organized upon the execution and delivery
of Articles of Organization to the Secretary of State of Ohio in accordance with and pursuant to
the Ohio Act.




2.2 Name. The name of the Company is Everflow Management Limited, LLC.



2.3 Principal Place of Business. The principal place of business of the Company shall be
located at 585 West Main Street, Canfield, Ohio 44406 or at such other location as shall be
determined from time to time by the Manager.



2.4 Statutory Agent. The name and address of the agent for service of process in Ohio shall
be William A. Siskovic, 585 West Main Street, Canfield, OH 44406.



2.5 Term. The term of the Company shall commence on the date of filing of the Articles of
Organization with the Secretary of State of Ohio and shall continue until terminated in accordance
with the terms of this Agreement.


 


 









 





ARTICLE III




PURPOSES OF THE COMPANY




The purpose for which the Company is organized and the powers which it may exercise, all being
in furtherance of and not in limitation of the general powers conferred upon limited liability
companies by the laws of the State of Ohio, are to act as the general partner of Everflow Eastern
Partners, L.P., a Delaware limited partnership (“Everflow”), and manage the business and affairs of
Everflow; and to take all such actions which may be necessary, appropriate or incidental thereto as
the Manager may determine from time to time. The Company shall have the power and authority to
incur indebtedness, to invest Company funds and to enter into joint ventures, partnerships and
other business arrangements to achieve the purposes of the Company, and shall have all other rights
and powers not expressly prohibited to limited liability companies under the laws of the State of
Ohio.



ARTICLE IV




NAMES AND ADDRESSES OF MEMBERS




The names and addresses of the Members are as set forth on Schedule A attached to this
Agreement and incorporated herein by reference.



ARTICLE V




MANAGEMENT OF THE COMPANY




5.1 Manager. Everflow Management Corporation, an Ohio corporation, is the Manager of the
Company (the “Manager”).



5.2 Authority of the Manager. Except as specifically reserved to the Members in Section 6.7
or elsewhere in this Agreement, the Manager shall have all power and authority to manage, and
direct the management of, the business and affairs of the Company. Any action taken by the Manager
shall constitute the act of and serve to bind the Company. In dealing with the Manager acting on
behalf of the Company, no person shall be required to inquire into the authority of the Manager to
bind the Company. Persons dealing with the Company are entitled to rely conclusively on the power
and authority of the Manager as set forth in this Agreement.



5.3 Powers of the Manager. Subject to the limitation imposed by the Ohio Act and this
Agreement, the Manager shall exercise all powers necessary or convenient for the
management and operation of the Company and shall use its best efforts to further the interests of
the Company.


 


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5.4 Restrictions on Authority. With respect to the Company and its property, the Manager
shall have no authority to perform any act in violation of the Ohio Act or any other applicable
laws or regulations thereunder, nor shall the Manager have any authority, except as expressly
provided in this Agreement, to:




	 	(a)	 	withdraw as the general partner of Everflow;







	 	(b)	 	take any action which could result in the
dissolution of Everflow;







	 	(c)	 	do any act in contravention of limited
partnership agreement of Everflow;







	 	(d)	 	do any act in contravention of this Agreement;







	 	(e)	 	do any act which would make it impossible to
carry on the ordinary business of the Company;







	 	(f)	 	possess Company property or assign the right of
the Company in specific Company property for other than a Company
purpose;







	 	(g)	 	guarantee in the name or on behalf of the
Company the payment of money or the performance of any contract or
other obligation of any person; and







	 	(h)	 	without having received the prior written
consent of a Majority-in-Interest of the Members, assign Company
property in trust for creditors or on the assignee’s promise to pay the
debts of the Company, consent to a judgment against the Company or
submit a Company claim or liability to arbitration.






5.5 Standard of Care. At all times the Manager will have a fiduciary relationship to the
Company and to each Member. In performing its duties under this Agreement, the Manager shall act
in good faith and on a fair dealing basis with the Company and each of the Members.



5.6 Time Devoted. The Manger shall devote such time to the business of the Company as, in the
Manager’s sole discretion, the Manager deems to be necessary to conduct the Company’s affairs
properly.



5.7 Compensation. The Manager shall not be entitled to receive any compensation for its
services pursuant to this Agreement. The Company shall reimburse the Manager for any expenses it
incurs in connection with the business and affairs of the Company and shall cause Everflow to
reimburse the Manager for any expenses it incurs in connection with the business and affairs of
Everflow.



5.8 Termination of Manager. The Members may terminate all management powers, duties and
responsibilities of the Manager by a vote of the Members owning seventy-one percent (71%) or more
of the aggregate Percentage Interests. In the event the Members terminate and replace the Manager
in accordance with the foregoing provision, such Members owning such Percentage Interests shall
have the right to elect and name a replacement to the Manager who shall become the successor
Manager and be entitled to all powers, duties and responsibilities of the Manager as set forth in
this Agreement.


 


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ARTICLE VI




RIGHTS AND POWERS OF THE MEMBERS




6.1 No Commitments. In dealing with third parties with respect to the Company’s business or
on behalf of the Company, the Members shall act in accordance with the policies established by the
Manager or by consent of the Majority-in-Interest of the Members. No Member shall, in the name of
or on behalf of the Company, sign or execute any contract, instrument or document, perform any
other act, engage in any transaction, commit or bind the Company to any act, contract, instrument
or document, or incur any debt, except as expressly permitted by this Agreement or with the written
concurrence of a Majority-in-Interest of the Members or the Manager.



6.2 New Members. Notwithstanding anything to the contrary contained in this Agreement, no
person shall be admitted as an additional Member or Substituted Member of the Company without the
prior written consent of all of the Members.



6.3 Meetings of the Members. Any Member may call a meeting of the Members upon fifteen (15)
days notice in writing (which may be facsimile), which notice shall specify the date, time and
purpose or purposes of the meeting. Meetings of the Members shall be held at the Company’s
principal executive offices, unless a Majority-in-Interest of the Members agree to meet at another
location. Members may be present at any meeting of the Members by telephone, provided that each
Member can hear all other present Members. A Majority-in-Interest of the Members shall constitute
a quorum of the Members for the transaction of business at any meeting.



6.4 Decisions of the Members. Except as expressly provided otherwise herein, decisions of the
Members shall be made by a Majority-in-Interest of the Members.



6.5 Actions of the Members Without a Meeting. Any action which may be taken by the Members at
a meeting may be taken by written action without a meeting signed by all of the Members, provided
that the writing setting forth such action shall be kept with the minutes of the meetings of the
Members.



6.6 Waiver of Notice. Notice of any meeting of the Members may be waived by a Member by a
waiver of the notice in writing, signed by the Member entitled to the notice, whether before, at or
after the time stated for the meeting. Attendance of a Member at any meeting, whether in person,
by proxy or by telephone as provided above, shall constitute waiver of notice of such meeting. Any
waiver of notice of a meeting by a Member hereunder shall be equivalent to the giving of such
notice.


 


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6.7 Rights of the Members. Each Member shall be entitled to (i) have the Company books kept
at the principal place of business of the Company, and at all times, during reasonable business
hours, inspect and copy any of them; (ii) have a list of all the Members kept at the principal
place of business of the Company, and at all times, during reasonable business hours, inspect and
copy such list; (iii) have on demand true and full information of all matters affecting the Company
and a formal account of Company affairs whenever circumstances render it just and reasonable; (iv)
have dissolution and winding up of the Company as provided by this Agreement; and (v) have such
additional rights as are elsewhere provided in this Agreement.



Notwithstanding anything to the contrary elsewhere in this Agreement, the Manager shall not
have the right to undertake any of the following actions without the prior written approval of
Members owning at least seventy-one percent (71%) of the aggregate Percentage Interests:




	 	(a)	 	admit a person or persons as Members;







	 	(b)	 	withdraw as general partner of Everflow;







	 	(c)	 	take any action which could result in the
dissolution of Eveflow;







	 	(d)	 	propose any amendment to the partnership
agreement of Everflow;







	 	(e)	 	vote its interest as a general partner of
Everflow on any matter put to a vote of the limited partners of
Everflow; and







	 	(f)	 	effect a dissolution of the Company.







6.8 Limitations on the Rights of Members. No Member shall have the right:




	 	(a)	 	to have his capital contribution repaid except
to the extent provided in this Agreement, to demand property other than
cash in payment of his capital contribution or to receive interest on
his capital contribution;







	 	(b)	 	to require partition of Company property or to
compel any sale or appraisement of Company assets or sale of a deceased
Member’s Interest therein, notwithstanding any provisions of law to the
contrary;







	 	(c)	 	to sell or assign his Member Interest or to
constitute the vendee or assignee thereunder a substituted Member,
except as provided in Article 11; or







	 	(d)	 	to withdraw as a Member except as provided in
Article 11.





 


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ARTICLE VII




LIMITATION OF LIABILITY; INDEMNIFICATION




7.1 Proof of Failure to Satisfy Standard of Conduct. A Member, a Manager or an officer,
director, shareholder, employee, agent or Affiliate of the Manager shall not be deemed to have
violated any standard of conduct under this Article 7 unless such violation is proved by clear and
convincing evidence, in an action brought against such Person. The termination of any action, suit
or proceeding by judgment, order, settlement or upon a plea of nolo contendre or its equivalent
shall not of itself constitute proof or create a presumption that the appropriate standard of
conduct has been violated.



7.2 Limitation of Liability. Neither the Manager, nor any officer, director, shareholder,
employee, agent or Affiliate of the Manager, nor any Member is to be held liable for damages to the
Company or any Member with respect to claims relating to his, her or its conduct for or on behalf
of the Company, except that any of the foregoing persons is to be liable to the Company for damages
to the extent that it is proved by clear and convincing evidence (i) that his, her or its conduct
was not taken (A) in good faith, (B) in a manner reasonably believed to be in or not opposed to the
best interests of the Company, or (C) with the care that an ordinarily prudent person in a like
position would use under similar circumstances; or (ii) with respect to any criminal action,
proceeding, or investigation, that he, she, or it had no reasonable cause to believe his, her or
its conduct was unlawful.



7.3 Indemnification of Members and the Manager. The Company agrees to indemnify each Member
and the Manager, its officers, directors, shareholders, employees, agents and Affiliates acting in
good faith (each an “Indemnified Party”), to the fullest extent permitted by law, and to save and
hold each Indemnified Party harmless from, and in respect of, all (1) fees, costs and expenses
incurred in connection with or resulting from any claim, action or demand against such Indemnified
Party or the Company that arise out of or in any way relate to the Company, its properties,
business or affairs, and (2) such claims, actions or demands, and any losses or damages resulting
from such claims, actions and demands, including amounts paid in settlement or compromise (if
recommended by attorneys for the Company) of any such claim, action or demand; provided,
however, that this indemnification shall apply only so long as the Indemnified Party has
acted in good faith on behalf of the Company, in a manner reasonably believed by him or her to be
within the scope of his or her authority under this Agreement and in the best interests of the
Company, and only if such action or failure to act did not constitute willful misconduct, fraud or
gross negligence. Expenses, including attorneys’ fees, incurred by an Indemnified Party in
defending any proceeding referred to in this Section 7.3, shall be paid by the Company, in advance
of the final disposition of such proceeding, upon receipt of an undertaking by or on behalf of the
Indemnified Party to repay such amount, if it shall ultimately be determined that he or she is not
entitled to be indemnified by the Company as authorized in this Section 7.3.


 


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ARTICLE VIII




CAPITAL CONTRIBUTION




8.1 Initial Capital Contribution. Upon the execution of this Agreement, the Members shall
have contributed initially to the capital of the Company the sum of money or the gross fair market
value of property set forth opposite each Member’s name on Exhibit A attached hereto in full
payment of his Capital Contribution.



8.2 Additional Capital Contributions. Except as otherwise specifically provided in this
Agreement, no Member shall be required to make any other contributions to the capital of the
Company.



8.3 Interest. No Member shall be entitled to receive any interest on the Member’s Capital
Account.




8.4 Capital Accounts



(a) A separate capital account (“Capital Account”) for each Member shall be established on the
books of the Company and maintained throughout the term of the Company. As funded and adjusted in
accordance with this Agreement, the Capital Accounts of the Members shall reflect the underlying
economic arrangements of the Members.



(b) In the event any Interest is transferred in accordance with the terms of this Agreement,
the transferee shall succeed to the Capital Account of the transferor to the extent it relates to
the transferred Interest.



(c) The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and
shall be interpreted and applied in a manner consistent with such Regulations. In the event the
Manager shall determine that it is prudent to modify the manner in which the Capital Accounts (or
any debits or credits thereto) are computed in order to comply with such Regulations, the Manager
may make such modification, provided that it shall not have a material effect on the amounts
distributable to any Member pursuant to Article 9 or Article 12 hereof.



ARTICLE IX




ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS




9.1 Profits and Losses. Except as provided in Section 9.2 below, Profits and Losses shall be
allocated among the Members in proportion to each Member’s respective Interest in the Company. All
Profits and Losses allocated to the Members shall be credited or charged, as the case may be, to
their respective Capital Accounts.


 


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9.2 Tax Allocation



(a) In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss
and deduction with respect to any property contributed to the capital of the Company shall, solely
for tax purposes, be allocated among the Members so as to take account of any variation between the
adjusted basis of such property to the Company for federal income tax purposes and its initial
gross fair market value (as reflected on Exhibit A attached hereto).



(b) Any elections or other decisions relating to such allocations shall be made by the Manger
in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations
pursuant to this Section 9.2 are solely for the purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or
share of Profits, or other items or distributions pursuant to any provision of this Agreement.




9.3 Other Allocation Rules



(a) For purposes of determining Profits, Losses or any other items allocable to any period,
Profits, Losses and any such other item shall be determined on a daily, monthly or other basis, as
determined by the Manager using any permissible method under Code Section 706 and the Regulations
thereunder.



(b) Except as otherwise provided in this Agreement, all items of Company income, gain, loss,
deduction and any other allocations not otherwise provided for shall be among the Members in the
same proportions as they share Profits and Losses, as the case may be, for each fiscal year.




9.4 Distributions



(a) General. From time to time, the Manager may determine the amount of Cash Flow, if
any, of the Company available for distribution to the Members. Distributions of Cash Flow shall be
made to the Members, when, as, and if determined by the Manager; provided, however,
that the Company shall distribute Cash Flow to the Members in amounts and at the times necessary to
cover the Members’ Federal, state and local income and franchise taxes attributable to the
Company’s operations.



(b) Distribution of Cash Flow. All Cash Flow distributable other than in connection
with the dissolution of the Company (as to any Member) or the termination and winding up of the
Company (as to all of the Members) shall be distributed in proportion to their respective aggregate
Capital Contribution to the Company.



(c) Distributions Upon Winding Up. Cash available for distribution in connection with
the liquidation, termination and winding up of the Company shall be distributed in accordance with
the provisions of Article 12.



(d) No Withdrawal. No Member shall be entitled to withdraw or obtain a return of all
or any part of his Capital Contribution, except upon liquidation, termination and winding up of the
Company or upon unanimous prior approval of the other Members.




 


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ARTICLE X




BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS




10.1 Books and Records. The Manager shall maintain full and accurate books at its principal
office or such office as shall be designated for such purpose by the Members with respect to the
operations of the Company. The books shall be closed and balanced at the end of each calendar year
and annual statements showing (i) cash, receipts and disbursements; (ii) Company profits and losses
for the calendar year, and (iii) profits and losses for each Member for income tax purposes shall
be prepared by the accountants for the Company and distributed to all Members within a reasonable
time after the close of each calendar year. Accounts shall also be maintained showing the basis
for federal income tax purposes of each Member’s Interest and the Members shall be advised of such
basis annually.



10.2 Reports. The Manager shall deliver to each Member within ninety (90) days after the end
of its fiscal year, tax information necessary for the preparation of the Members’ Federal income
tax returns.



10.3 Tax Matters Member. The Manager shall be the designated party to receive all notices
from the Internal Revenue Service which pertain to the tax affairs of the Company. The Manager
shall be the “tax matters partner” as such term is defined in Section 6231(a)(7) of the Code with
respect to operations conducted by the Company pursuant hereto and in accordance therewith take
such actions and execute and file all statements and forms on behalf of the Company which may be
permitted or required by the applicable provisions of the Code or Regulations.



10.4 Bank Accounts. The Manager shall cause one or more accounts to be maintained in a bank
(or banks) which is (are) a member(s) of the Federal Deposit Insurance Corporation, which accounts
shall be used for the payment of the expenditures incurred by the Company in connection with its
business and in which shall be deposited any and all Company monies. All such amounts shall be and
remain the property of the Company and will be received, held and disbursed by the Manager for only
such purposes as are specified in this Agreement. There shall not be deposited in any of such
accounts any funds other than funds belonging to the Company, and no other funds shall in any way
be commingled with such funds. The Manager may invest such funds, as it may deem appropriate, in
short term certificates of deposit, government obligations, or prime grade commercial paper. All
Company checks written upon and any withdrawals from any such bank account or accounts may be made
by the Manager.



10.5 Fiscal Year. The fiscal year of the Company shall be the calendar year.


 


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ARTICLE XI


TRANSFER OF INTERESTS; EFFECT OF WITHDRAWAL EVENTS




11.l Transfer of Interests. No Member shall be entitled to sell, mortgage, hypothecate,
transfer, pledge, assign, donate, create a security interest in or lien on, encumber, give, place
in trust (voting or other) or otherwise dispose of, including any involuntary transfer or transfer
by operation of law upon divorce, in bankruptcy or by way of execution, seizure or sale by legal
process (hereinafter “transfer”), all or any portion of his, her or its Interest or any portion
thereof unless the applicable provisions of this Article 11 are complied with in full. Any
attempted transfer of a Member’s Interest other than in accordance with the preceding sentence
shall be null and void and be of no force or effect. Each Member hereby further agrees to hold the
Company and each Member (and each Member’s successors and assigns) wholly and completely harmless
from any cost, liability or damage (including without limitation liabilities for income taxes and
costs of enforcing this indemnity) incurred by any such indemnified persons as a result of a
transfer or an attempted transfer in violation of this Agreement.




11.2 Requirements of Transfer



(a) In the event a Member seeks to withdraw from the Company and transfer his Interest
(“Withdrawing Member”), he shall first be required to obtain the approval of a majority of the
then-remaining Members (on a per capita basis). If such approval is granted, the
Withdrawing Member shall then be required to transfer such Interest pro rata to all
of the then-remaining Members. Each such remaining Member shall be obligated to acquire from such
Withdrawing Member that portion of such Withdrawing Member’s Interest equal to the amount obtained
by multiplying such Withdrawing Member’s Interest by a fraction, the numerator of which is the
Interest of the Member acquiring the Withdrawing Member’s Interest and the denominator of which is
all of the Interests in the Company less the Withdrawing Member’s Interest.



(b) The consideration to be paid by the then-remaining Members to the Withdrawing Member for
such Interest shall be Units of Everflow. The value of the Withdrawing Member’s Interest shall be
equal to the percentage interest such Withdrawing Member’s Interest represents in Everflow.
Accordingly, such value shall be calculated as a percentage interest in Everflow and be paid to the
Withdrawing Member in such number of Units (which also represent a percentage interest in Everflow)
as shall equal the indirect percentage interest of the Withdrawing Member in Everflow. In the
event any of the then-remaining Members has insufficient Units of Everflow as consideration to the
Withdrawing Member, such deficiency shall be paid in cash within 90 days of the event of the
Withdrawing Member’s withdrawal, as determined as follows: One hundred thirty-five percent (135%)
of the most recent year end Repurchase Price per Unit calculation per the terms of the Limited
Partnership Agreement of Everflow; less any interim distributions paid per Unit since the most
recent year end (“Cash Consideration Price”). The cash consideration is then calculated by
multiplying the Cash Consideration Price per Unit by the number of Units that would have been paid
to the Withdrawing Member.


 


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(c) The provisions of Subsection 11.2(a) and (b) notwithstanding, no Member shall be able to
withdraw and transfer his Interest to another Member pursuant to this Agreement, if the effect of
any such withdrawal or transfer would be to reduce the number of Members to fewer than three (3)
Members. In such event, a Member shall only be able to withdraw as a Member and transfer his
Interest to a substitute Member acceptable to all of the then remaining Members in their absolute
discretion and otherwise comply with the provisions of Section 11.2(e).



(d) In the event the provisions of Section 11.2(c) prevent a Member from withdrawing from the
Company, such a Member shall be entitled to withdraw from the Company only upon compliance with the
provisions of Section 11.2(e).



(e) Upon the prior written approval of all then-remaining Members, a substitute Member may
acquire such Withdrawing Member’s Interest pursuant to the provisions of Section 11.2(b) (i.e. such
substitute Member shall pay the Withdrawing Member for such Withdrawing Member’s Interest in Units
of Everflow and such Interest shall be valued equal to such Interest’s indirect percentage in
Everflow). In the event such substitute Member does not own any Units or sufficient Units to
acquire such Withdrawing Member’s Interest, the then-remaining Members, on a pro
rata basis, shall be obligated to acquire such Withdrawing Member’s Interest by payment to
such Withdrawing Member of such number of Units as shall be equal to such Interest’s indirect
percentage interest in Everflow. Upon the occurrence of the events described in the previous
sentence, the substitute Member shall still be admitted to the Company but shall be obligated to
make such capital contribution to Everflow as the Manager shall determine (any such transfer as
heretofore described in this Section 11.2(e) shall also be deemed a “Permitted Transfer” for
purposes of this Article VIII). In addition, such proposed substitute Member shall have agreed to
assume, perform and discharge all of the duties and obligations of a Member hereunder.



(f) In addition to the requirements of subsections 11.2(a) through (e), no sale, exchange,
assignment or transfer by a Member may be made (i) if the Interests sought to be sold, exchanged,
assigned or transferred, when added to the total of all other Interests sold, exchanged, assigned
or transferred within the period of twelve (12) months prior thereto, would result in the
termination of the Company under Section 708 of the Code, or any successor section thereto; (ii)
except pursuant to an effective registration statement under all applicable federal and state
securities laws or in a transaction which is exempt from registration under such laws; and (iii)
(if the Manger shall request) unless the transferor Member delivers to the Manager an opinion, in
form and substance and issued by counsel acceptable to the Manager, covering such securities laws,
tax and other aspects of the proposed transfer as the Manager may request.



(g) Any Member who sells, assigns or otherwise transfers all or any portion of his Interest in
strict compliance with the terms and provisions of this Agreement shall promptly notify the Manager
of such transfer and furnish the Manager the name and address of the transferee and such other
information as might be required under Section 650K of the Code and the Regulations.


 


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11.3 Effect of Employment Termination, Death or Disability. Notwithstanding anything to the
contrary herein, in the event any Member (i) who is an
employee of the Company, Everflow, EEI or EMC, has such employment involuntarily terminated by the
Company, Everflow, EEI or EMC, as the case may be, (ii) dies or (iii) becomes permanently disabled,
any such Member shall be obligated to sell and all the then-remaining Members shall be obligated to
acquire, the Interest of such Member as if such purchase and sale were a Permitted Transfer
pursuant to the provisions of Section 11.2, and all the terms and conditions of Section 11.2 shall
apply to such purchase and sale.



11.4 Substitute Member. The assignee or successor in interest of a Member in a Permitted
Transfer may become a substitute Member only when:



(a) the Manager shall have consented thereto, and such consent may be withheld by the Manager
in its sole discretion;



(b) the assignee shall have expressed his intention to become a substitute Member and accepts
and adopts all of the terms and provisions of this Agreement and any amendments hereto (including,
without limitation, the restrictions imposed under this Article VIII) by becoming a party to this
Agreement by executing a Substitute Member Counterpart Signature Page;



(c) such certificates or instruments as are required by law shall have been executed and
filed; and



(d) the assignor or the assignee shall have paid or obligated himself to pay all reasonable
expenses (as the Manger may determine) connected with such admission or substitution.



11.5 Restrictions of Substitute Member. Notwithstanding anything to the contrary herein, a
Member’s Interest or any portion thereof shall not be assigned or transferred to any person who is
insane, incompetent or has not attained the age of majority, or to a person or entity not lawfully
empowered to own such Interest, and any assignment or transfer directly to a person or entity under
such disability may be disregarded by the Company, in its discretion.



11.6 Time of Transfer. Any transfer of an Interest to a third party by a Member permitted
under this Article 11 shall be effective as of midnight of the last day of the calendar month in
which it is made, or, at the election of a Majority-in-Interest of the remaining Members, as of
7:00 A.M. the day following the date of the transfer (the “Effective Transfer Date.”).



11.7 Distributions and Allocations in Respect of Transferred Interest. If any Interest is
transferred during any accounting period to a third party or to a Member in compliance with the
provisions of this Article 11, Profits, Losses and each item thereof and all other items
attributable to such Interest for such period, shall be divided and allocated between the
transferor and the transferee by taking into account their varying interests during the period in
accordance with Article 9 hereof and Code Section 706(d), using the Effective Transfer Date as the
date upon which the change in ownership of the Interest occurred, and using any conventions
permitted by law and selected by a Majority-in-Interest of the remaining Members. All
distributions on or before the Effective Transfer Date shall be made by the transferor and all
distributions thereafter shall be made to the transferee. Neither the Company nor any Manager
or Member shall incur any liability for making allocations and distributions in accordance with the
provisions of this Section 11.7, whether or not any of them has knowledge of any transfer of
ownership of any Interest.


 


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11.8 Effect of Withdrawal Events



(A) No Resignation. No Member shall be entitled to resign as a Member, except in
connection with a transfer of such Member’s entire Member’s Interest in the Company in compliance
with the terms and conditions of this Article 11 and, in the case of a resigning Member, with
respect to which his or her transferee has been admitted as a substitute Member in accordance with
Section 11.4.



(B) Death, Dissolution, Adjudication of Incompetency. If the Company is continued in
accordance with Section 12.1 below following the death, dissolution or adjudication of incompetency
of a Member, such Member’s Interest shall not be terminated or repurchased and the
successor-in-interest or legal representative of such Member shall be substituted as a Member upon
compliance with the terms and conditions of Section 11.4.



(C) Bankruptcy Event. If the Company is continued in accordance with Section 12.1
below following the occurrence of a Bankruptcy Event with respect to a Member, then (1) his or her
Member Interest shall be immediately converted into an Economic Interest only and such Member shall
be immediately removed as a Member and shall thereafter have only the rights of an Economic
Interest Owner; (2) unless the call option provided under clause (3) below is exercised by the
Company, such Member shall not withdraw or resign from the Company, have his or her Member Interest
repurchased or have any right to compel any payment by the Company for his or her Member Interest;
and (3) the Company shall have the option, but not the obligation, to repurchase such Member’s
Interest in its entirety, which such option shall be exercisable by the delivery to such Member of
written notice to such effect within 180 days after a Majority-in-Interest of the remaining Members
have elected to continue the Company. The price for such Member’s Interest in connection with a
purchase and sale hereunder shall be the Appraised Price. Such purchase and sale shall be
consummated not more than ninety (90) days after the date the Company elects to exercise its option
hereunder, by the payment of the purchase price by the Company in cash or by certified check
against the delivery by such Member (or its successors) of written representations and warranties
with respect to his or its good and marketable title to the Member Interest, free and clear of
adverse claims, his or its full capacity and legal right to transfer the Interest to the Company
and his or its right to transfer the Member Interest to the Company without the consent or action
of any third party.



(D) No Other Withdrawal. Except as expressly provided in this Section 11.8 and in
Section 12.2 in connection with the termination and winding up of the Company, the Company shall
not be obligated to repurchase the Member’s Interest of any Member, nor shall a Member be entitled
to receive any other payment or distribution in connection with his or her withdrawal from the
Company.


 


13









 





ARTICLE XII




TERMINATION, LIQUIDATION AND WINDING UP




12.1 Termination of the Company. The Company shall terminate upon the first to occur of: (a)
the unanimous written agreement of the Members; (b) the occurrence of a Withdrawal Event as to any
Member, unless a Majority-in-Interest of the remaining Members agree to continue the Company within
ninety (90) days after the occurrence of such Withdrawal Event. Except as specifically stated in
this Section 12.1, no event that would cause a dissolution under the Act causes a dissolution of
the Company.



12.2 Method of Distribution Upon Winding Up. Upon termination of the Company pursuant to
Section 12.1 above, the assets of the Company and proceeds of any liquidation shall be applied and
distributed in the following manner and order of priority:



(a) to the payment and discharge of all of the Company’s debts and liabilities and expenses of
liquidation and dissolution;



(b) to the setting up of any reserves reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Company;



(c) to the payment of the balance, if any, of the respective Capital Accounts of the Members
(after making the allocations required under the provisions of Article IX), but if the amount
available for such payment shall be insufficient, then pro rata among all of the
Members according to the respective positive balances of their Capital Accounts at such time; and




(d) the remainder, if any, to the Members in accordance with their respective balances.



12.3 Winding Up and Liquidation. As soon as possible following the occurrence of any event of
termination, the Company shall execute and file as provided in the Ohio Act a statement of intent
to dissolve in such form as shall be prescribed by the Secretary of State of Ohio or which
otherwise complies with the Act. Upon the filing of such statement of intent to dissolve with the
Secretary of State of Ohio, the Company shall cease to carry on its business, except insofar as may
be necessary for the winding up of its affairs, but its separate existence shall continue until a
certificate of dissolution has been filed with the Secretary of State of Ohio or until a decree
dissolving the Company has been entered by a court of competent jurisdiction. The filing of the
statement of intent to dissolve shall not affect the limited liability of the Members. A
reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the
discharge of liabilities to creditors so as to enable the Members to minimize the normal losses
attendant upon a liquidation.


 


14









 





ARTICLE XIII




MISCELLANEOUS PROVISIONS




13.1 Notices. Any notice or communication required or permitted to be given by any provision
of this Agreement shall be deemed to have been given and received for all purposes when delivered
personally to the party to whom the same is directed or when mailed or sent by overnight delivery
service, charges prepaid, addressed to the party to whom the same is directed at the address set
forth in this Agreement, or such other address as the Company has received written notice from time
to time.



13.2 Governing Law. The Company, this Agreement and the rights of the Members hereunder shall
be governed by the laws of the State of Ohio.



13.3 Waiver of Action for Partition. Each Member irrevocably waives any right that he, she or
it may have to maintain any action for partition with respect to the property of the Company.



13.4 Amendments. The Agreement may be amended from time to time by a writing executed by the
Majority-in-Interest of the Members; provided, however, that (i) Schedule A may be
modified from time to time by the Manager to reflect any change in the Members or in their
respective interests, (ii) no amendment shall reduce a Member’s percentage interest unless the
writing is executed by him, (iii) no amendment shall effect any change in this section unless the
writing is executed by all of the Members, and (iv) no amendment shall effect any change in any
provision of this Agreement providing for action to be taken by a specified percentage of Interests
in the Company unless the writing is executed by Members whose aggregate Interests at least equal
the percentage specified in the provision to be changed.



13.5 Construction. Whenever the singular is used in this Agreement and when required by the
context, the same shall include the plural and vice versa, and the masculine gender shall include
the feminine and neuter genders and vice versa. The headings in this Agreement are for convenience
only and are in no way intended to describe, interpret, define or limit the scope, extent or intent
of this Agreement or any of its provisions.



13.6 Entire Agreement. This Agreement contains the entire understanding among the parties
with respect to the subject matter hereof and supersedes any prior understandings and agreements,
whether written or oral, with respect to such subject matter.



13.7 Severability. If any provision of this Agreement or its application to any person or
circumstance shall, for any reason and to any extent, be invalid, illegal or unenforceable, the
remainder of this Agreement and the application of such provision to other persons or circumstances
shall not be affected thereby, but rather shall be enforceable to the fullest extent permitted by
law.



13.8 Heirs, Successors and Assigns. Each and all of the covenants, terms, provisions and
agreements contained in this Agreement shall be binding upon and inure to the benefit of the
parties hereto and, to the extent permitted by this Agreement, their respective heirs, legal
representatives, successors and assigns.


 


15









 





13.9 Creditors. None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditors of the Company.



13.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same instrument.



13.11 Federal Income Tax Election. In the event of a transfer of all or any portion of the
Interest of any Member, the Company shall elect pursuant to Section 754 of the Code to adjust the
basis of assets of the Company upon written request of the transferee.



13.12 Injunctive Relief. Each Member acknowledges that it will be impossible to measure in
money the damage to the Company and to the other Members if there is a failure to comply with this
Agreement. It is therefore agreed that the Company or any other Member, in addition to any other
rights or remedies which they may have, shall be entitled to immediate injunctive relied and to
specific performance to enforce this Agreement and that if any action or proceeding is brought in
equity to enforce it, no party will urge, as a defense, that there is an adequate remedy at law.



[The remainder of this page is intentionally left blank.]




 


16









 







IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date
first above written.



	 	 	 	 	 
	 	EVERFLOW MANAGEMENT CORPORATION

 	 
	 	By:  	/s/ William A. Siskovic
 	 
	 	 	Its:  Vice President 	 
	 	

SYKES ASSOCIATES, LLC

 	 
	 	By:  	/s/ Robert F. Sykes
 	 
	 	 	Robert F. Sykes, Co-Managing Member 	 
	 	

SYKES ASSOCIATES, LLC

 	 
	 	By:  	/s/ David F. Sykes
 	 
	 	 	David F. Sykes, Co-Managing Member 	 
	 	 	 
	 	       /s/ Thomas L. Korner
 	 
	 	Thomas L. Korner 	 
	 	 	 
	 	       /s/ William A. Siskovic
 	 
	 	William A. Siskovic 	 
	 	 	 
	 	       /s/ Richard M. Jones
 	 
	 	Richard M. Jones 	 
	 	 	 
	 	      /s/ Brian A. Staebler
 	 
	 	Brian A. Staebler 	 




 


17









 







SCHEDULE A




MEMBERS’ NAMES, CAPITAL CONTRIBUTION

AND PERCENTAGE INTERESTS




	 	 	 	 	 	 	 	 	 
	 	 	Capital	 	 	Percentage	 
	 	 	Account	 	 	Interest	 
	 
	 	 	 	 	 	 	 	 
	Everflow Management Corporation

585 West Main Street

Canfield, OH 44406
	 	$	9,602	 	 	 	1	%
	 
	 	 	 	 	 	 	 	 
	Sykes Associates, LLC

60 Brookside Drive

Rochester, NY 14618
	 	$	475,335	 	 	 	49.501476	%
	 
	 	 	 	 	 	 	 	 
	Thomas L. Korner

4200 W. Middletown Road

Canfield, OH 44406
	 	$	158,440	 	 	 	16.500000	%
	 
	 	 	 	 	 	 	 	 
	William A. Siskovic

3745 Fawn Drive

Canfield, OH 44406
	 	$	158,440	 	 	 	16.500000	%
	 
	 	 	 	 	 	 	 	 
	Richard M. Jones

6591 Thornbriar Street NW

Canton, OH 44718
	 	$	79,213	 	 	 	8.249262	%
	 
	 	 	 	 	 	 	 	 
	Brian A. Staebler

544 Beechwood Lane

Painesville, OH 44077
	 	$	79,213	 	 	 	8.249262	%







 


 









 







EXHIBIT 1




DEFINITIONS




Certain capitalized words and phrases used in this Agreement shall have the following meanings:




(A) “Affiliate” means with respect to another person, (i) any person who directly or
indirectly owns, controls or holds, with power to vote, five percent (5%) or more of the
outstanding voting securities of such other person, (ii) any person with respect to which
five percent (5%) or more of the outstanding voting securities are directly or indirectly
owned, controlled or held, with power to vote, by such other person, (iii) any person
directly or indirectly controlling, controlled by or under common control with such other
person, (iv) any officer, director or partner of such other person, and (v) if such other
person is an officer, director or partner, any company, partnership, association or other
entity or organization for which such person acts in any such capacity.




(B) “Agreement” means this Amended and Restated Operating Agreement of Everflow
Management Limited, LLC, as originally executed and as amended from time to time in
accordance with Section 13.4 hereof.




(C) “Appraised Price” means the price determined by a qualified appraiser selected by
the Manager.




(D) “Articles of Organization” mean the Articles of Organization of the Company as
filed with the Secretary of State of Ohio on March 8, 1999, as the same may be amended from
time to time in accordance with the Ohio Act.




(E) “Bankruptcy Event” means, with respect to any Member:




	 	(1)	 	the making of an assignment for the benefit of
creditors;







	 	(2)	 	the filing of a voluntary petition in
bankruptcy;







	 	(3)	 	the adjudication of bankruptcy or insolvency,
or the entry of an order for relief, in any bankruptcy or insolvency
proceeding;







	 	(4)	 	the filing of a petition or answer seeking for
the Member any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or
regulation;







	 	(5)	 	the filing of an answer or other pleading
admitting or failing to contest the material allegations of a petition
filed against the Member in any proceeding of a nature described in (1)
 — (4) above;





 


 









 











	 	(6)	 	seeking, consenting to or acquiescing in the
appointment of a trustee, receiver or liquidator of the Member or of
all or any substantial part of his or its properties; or







	 	(7)	 	the passage of 120 days after the commencement
of any proceeding against the Member seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any statute, law or regulations, if the proceeding
has not been dismissed, or the passage of 90 days after the appointment
without his or its consent or acquiescence of a trustee, receiver or
liquidator of the Member or of all or any substantial part of his or
its properties, if the appointment is not vacated or stayed, or the
passage of 90 days after the expiration of any such stay, if the
appointment is not vacated.







(F) “Capital Account” means, with respect to any Member, the Capital Account maintained
for such Person pursuant to the provisions of Section 8.4 of this Agreement, which shall be
determined and adjusted as follows:




	 	(1)	 	To each Member’s Capital Account, there shall
be credited the following: (a) such Member’s Capital Contributions; and
(b) such Member’s allocations of Profits; and







	 	(2)	 	To each Member’s Capital Account there shall be
debited the following: (a) the amount of cash distributed to such
Member pursuant to any provision of this Agreement; and (b) such
Member’s allocation of Losses.







(G) “Capital Contribution” means the amount in cash or agreed-upon value of property
contributed by each Member (or its or his/her predecessors in interest) to the capital of
the Company for its or his/her Interest, as set forth on Schedule A attached hereto.




(H) “Cash Flow” means the excess of all cash received by the Company (whether from the
sale of Company assets or otherwise), over amounts applied to the payment of the obligations
and expenses incurred by the Company and any reserves deemed necessary and prudent by the
Manager for future operations of the Company.




(I) “Code” means the Internal Revenue Code of 1986, as amended, or corresponding
provisions of succeeding federal revenue laws.




(J) “Company” means Everflow Management Limited, LLC.




(K) “Economic Interest” means the interest in the Company’s Profits, Losses and
distributions owned by a Person who is not a Member.


 


 









 






(L) “Economic Interest Owner” means any Person who owns an Economic Interest but who is
not a Member.




(M) “Effective Transfer Date” is defined in Section 11.6.




(N) “Everflow” means Everflow Eastern Partners, L.P., a Delaware limited partnership.




(O) “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis
for federal income tax purposes, except as follows:




	 	(1)	 	The Gross Asset Values of all Company assets
shall be adjusted to equal their respective gross fair market values as
of the following times: (a) the acquisition of an additional Member’s
Interest or Economic Interest (other than pursuant to Section 8.1
hereof) by any new or existing Member in exchange for more than a
de minimis Capital Contribution; (b) the distribution by the
Company to a Member of more than a de minimis amount of Company
property (including cash) as consideration for an Interest, if the
Manager reasonably determines that such adjustment is necessary or
appropriate to reflect the relative economic interests of the Members
in the Company; and (iii) the liquidation of the Company within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g).







	 	(2)	 	The Gross Asset Values of Company assets shall
be increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code
Section 743(b), but only to the extent that such adjustments are taken
into account in determining Capital Accounts pursuant to Regulation
Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this paragraph
(O)(2) to the extent the Manager shall determine that an adjustment
pursuant to paragraph (O)(1) is necessary or appropriate in connection
with a transaction that would otherwise result in an adjustment
pursuant to this paragraph (O)(2).







(P) “Interests” means the interest in the Company’s Profits, Losses and distributions
owned by a Member.




(Q) “Majority-in-Interest”, when used with respect to the Members, means Members
holding more than 71% of the Percentage Interests held in the aggregate by all Members.




(R) “Manager” means Everflow Management Corporation, an Ohio corporation.


 


 









 






(S) “Member” means (1) any Person whose name is set forth on Schedule A
attached hereto under the caption “Member,” or (2) any Person who has been admitted as a
additional or substituted Member pursuant to the terms of this Agreement; provided,
that, if a Member transfers all of his or its interest in the Company’s Profits, Losses and
distributions, from and after the date of such transfer such transferor shall no longer be a
Member and shall thereafter have none of the other rights associated with his or its
Member’s Interest. “Members” means all such Persons.




(T) “Member’s Interest” means the entire interest in the Company owned by a Member,
including such Member’s (1) interest in the Company’s Profits, Losses and distributions, (2)
rights with respect to the management and administration of the Company, (3) access to or
rights to demand or require any information or account of the Company or its affairs, and
(4) rights to inspect the books and records of the Company.




(U) “Ohio Act” means the Ohio Limited Liability Company Act, Ohio Revised Code Sections
1705.01 et seq., as amended from time to time (or any corresponding provisions of succeeding
law).




(V) “Percentage Interest” means the Members’ relative shares of the Company’s Profits,
Losses and interim distributions, as set forth from time to time on Schedule A
attached hereto.




(W) “Person” has the meaning set forth in Section 1705.01(K) of the Ohio Revised Code,
as amended from time to time (or any corresponding provisions of succeeding law).




(X) “Profits” and “Losses” means, for each fiscal year or other period, an amount equal
to the Company’s taxable income or loss for such year or period, determined in accordance
with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction
required to be stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:




	 	(1)	 	Any income of the Company that is exempt from
federal income tax and not otherwise taken into account in computing
Profits or Losses pursuant to this paragraph (X) shall be added to such
taxable income or loss.







	 	(2)	 	Any expenditures of the Company described in
Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and
not otherwise taken into account in computing Profits or Losses
pursuant to this paragraph (X), shall be subtracted from such taxable
income or loss.





 


 









 











	 	(3)	 	At any time the Gross Asset Value of any
Company property is adjusted pursuant to paragraph (O)(1), the amount
of such
adjustment shall be taken into account as gain or loss from the
disposition of such property for purposes of computing Profits or
Losses.







	 	(4)	 	Gain or loss resulting from the disposition of
any Company asset with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross
Asset Value of the property disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value.







(Y) “Regulations” means the regulations promulgated under the Code, as the same may be
amended from time to time, including corresponding provisions of any succeeding regulations.




(Z) “Withdrawal Event” means the death, dissolution, adjudication of incompetency,
occurrence of a Bankruptcy Event or resignation (except as expressly permitted by this
Agreement) of or with respect to a Member.