OPERATING AGREEMENT OF DEEP DOWN INTERNATIONAL HOLDINGS, LLC, A NEVADA LIMITED LIABILITY COMIPANY
Exhibit
4.11
Exhibit
4.11
OF
DEEP
DOWN INTERNATIONAL HOLDINGS, LLC,
A
NEVADA LIMITED LIABILITY COMIPANY
In
accordance with the Nevada Limited Liability Company Act, on the 16TH day of
February, 2009, the Members of DEEP DOWN INTERNATIONAL HOLDINGS, LLC, who have
reserved the right of management of DEEP DOWN INTERNATIONAL HOLDINGS, LLC, adopt
the following OPERATING AGREEMENT of DEEP DOWN INTERNATIONAL HOLDINGS, LLC, a
Limited Liability Company referred to in these Articles as the
"company":
ARTICLE
ONE
ORGANIZATION
1.01.
Formation. The company
has been organized as a Nevada Limited Liability Company by the filing of
Articles of Organization (the "Articles") under and pursuant to the Nevada
Limited Liability Company Act (as amended from time to time, the "Act") and the
issuance of a certificate of organization for the Company by the Secretary of
State of Nevada.
1.02.
Name. The name of the
company is "DEEP DOWN INTERNATIONAL HOLDINGS, LLC." and all company business
must be conducted in that name or such other names that may be selected by a
Majority Interest (as defined in Section 5.02) and that comply with applicable
law.
1.03.
Registered Office; Registered
Agent; Offices. The registered office and registered agent of the Company
in the State of Nevada shall be as specified in the Articles or as designated by
a Majority Interest in the manner provided by applicable law. The offices of the
Company shall be at such places as a Majority Interest may designate, which need
not be in the State of Nevada.
1.04.
Purposes. The purposes
of the Company are those set forth in the Articles.
1.05. Foreign Qualification.
Prior to the Company's conducting business in any jurisdiction other than
Nevada, the Members shall cause the Company to comply with all requirements
necessary to qualify the Company as a foreign limited liability company in that
jurisdiction.
1.06.
Term. The Company
commenced on the date the Secretary of State issued a certificate of
organization for the Company and shall continue in existence for the period
fixed in the Articles for the duration of the Company, or such earlier time as
this Operating Agreements may specify.
1.07.
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 applicable tax laws,
and this Operating Agreement may not be construed to suggest
otherwise.
1
1.08.
Power to Specify Operating
Agreement. The power to adopt, alter, amend, or repeal the Operating
Agreement is entirely vested in the Members of the Company, and
managers may not alter, amend, or repeal any Operating Agreement.
1.09.
Authority to Contract on
behalf of the Company. The Members and President have the authority to
enter contracts and incur obligations on behalf of the Company.
1.10.
Authority to Execute
Documents. The Members and President have the authority to execute
documents and instruments for the acquisition, mortgage, or disposal of property
on behalf of the Company.
ARTICLE
TWO
MEMBERSHIP;
DISPOSITIONS OF INTERESTS
2.01.
Initial Members. The
initial Members of the Company are the Persons executing
this Operating Agreement as of the date of this
Operating Agreement as Members, each of which is admitted to the Company as a
Member effective contemporaneously with the execution by such Person of this
Operating Agreement.
2.02.
Representations and
Warranties. Each Member hereby represents and warrants to the Company and
each other Member as follows:
(a) in
the case of a Member that is an Entity: (i) that Member is duly incorporated,
organized, or formed (as applicable), validly existing, and (if applicable) in
good standing under the Law of the jurisdiction of its incorporation,
organization, or formation; (ii) if required by applicable Law, that Member is
duly qualified and in good standing in the jurisdiction of its principal place
of business, if different from its jurisdiction of incorporation, organization,
or formation; and (iii) that Member has full power and authority to execute and
deliver this Operating Agreement and to perform its obligations
hereunder, and all necessary actions by the board of directors, shareholders,
managers, members, partners, trustees, beneficiaries, or other applicable
Persons necessary for the due authorization, execution, delivery, and
performance of this Operating Agreement by that Member have
been duly taken;
(b) that
Member has duly executed and delivered this Operating Agreement, and they
constitute the legal, valid, and binding obligation of that Member enforceable
against it in accordance with their terms (except as may be limited by
bankruptcy, insolvency or similar laws of general application and by the effect
of general principals of equity, regardless of whether considered at law or
equity).
(c) that
Member's authorization, execution, delivery, and performance of
this Operating Agreement do not and will not (i)
conflict with, or result in a breach,
default, or violation of, (A) the organizational documents of such Member (if it
is an Entity), (B) any contract or agreement to which that Member is a party or
is otherwise subject, or (C) any Law, order, judgment, decree, writ, or arbitral
award to which that Member is subject; or (ii) require any consent, approval, or
authorization from, filing or registration with, or notice to, any governmental
authority or other Person, unless such requirement has already been
satisfied;
2
(d) that
Member is familiar with the existing or proposed business, financial condition,
properties, operations, and prospects of the Company; it has asked such
questions, and conducted due diligence, concerning such matters and concerning
its acquisition of Membership Rights as it has desired to ask and conduct, and
all such questions have been answered to its full satisfaction; it has knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Company; it understands
that owning Membership Rights involves various risks, including the restrictions
on Dispositions and Encumbrances set forth in Section 2.03, the ▇▇▇▇ of any
public market for Membership Rights, the risk of owning its Membership Rights
for an indefinite period of time and the risk of losing its entire investment in
the Company; it is able to bear the economic; risk of such investment; it is
acquiring its Membership Rights for investment, solely for its own beneficial
account and not with a view to Or any present intention of directly or
indirectly selling, transferring, offering to sell or transfer, participating in
any distribution, or otherwise Disposing of all or a portion of its Membership
Rights; and it acknowledges that the Membership Rights have not been registered
under the Securities Act or any other applicable federal or state securities
laws, and that the Company has no intention, and shall not have any obligation,
to register or to obtain an exemption from registration for the Membership
Rights or to take action so as to permit sales pursuant to the Securities Act
(including Rules 144 and 144A thereunder).
2.03.
Dispositions and Encumbrances
of Membership Rights.
(a) General Restriction. A Member
may not Dispose of or Encumber all or any portion of its Membership Rights
except in strict accordance with this Section 2.03. Any attempted Disposition or
Encumbrance of all or any portion of its Membership Rights, other than in strict
accordance with this Section 2.03, shall be, and is hereby declared null and
void ab initio. The Members agree that breach of the provisions of this Section
2.03 may cause irreparable injury to the Company for which monetary damages (or
other remedy at law) are inadequate in view of (i) the complexities and
uncertainties in measuring the actual damages that would be sustained by reason
of the failure of the Member to comply with such provisions, and (ii) the
uniqueness of the Company business and relationship among the Members,
Accordingly, the Members agree that the provisions of this Section 2.03 may be
enforced by specific performance.
(b) Depositions of Membership
Rights.
(i) General Restriction. A Member
may not Dispose of all or any portion of its Membership Rights without the
consent of Members holding among them a majority of the profits interests in the
Company (as defined in Rev Proc. 95-10, 1995-3 I.R.B. 20) (calculated without
regard to the Member making such Disposition), which may be granted or withheld
in their sole discretion; provided, however, that this Section 2.03(b)(i) shall
not apply to the following Dispositions:
3
(A) Dispositions
that are solely limited to a Member's Interest, which are governed by Section
2.03 (c); or
(B) Dispositions
arising as a result of the death, dissolution, or Bankruptcy of a Member or the
occurrence of a Divorce or Spouse's Death, all of which are governed by Article
8, provided, however, that an Assignee to which such Member's membership Rights
have been Disposed as a result of such Buy-out Event may request admission to
the Company in the circumstances described in Sections 8.06(a) or (b) (as
applicable), in which case such request shall be granted or denied in accordance
with Section 2.03(b)(ii)(13).
(ii) Admission of Assignee as a Member.
An Assignee has the sight to be admitted to the Company as a Member, with
the Membership Rights (and attendant Sharing Ratio and Commitment) so
transferred to such Assignee, only if the following requirements are
satisfied:
(A) except
for Dispositions resulting from the death, dissolution, or Bankruptcy of a
Member or the occurrence of a Divorce or Spouse's Death, (I) the Member making
the Disposition must have granted the Assignee either (y) the Member's entire
Membership Rights or (z) the express right to be so admitted; and (II) such
Disposition must be consented to in accordance with Section 2.03(b)(i);
or
(B) in
the case of a Disposition resulting from the death, dissolution or Bankruptcy of
a Member or the occurrence of a Divorce or Spouse's Death, (1) such Assignee
must have been granted (by will, probate court order, act of the liquidator of a
dissolved entity, bankruptcy court order, family court order, community property
partition, or otherwise) either (y) the Member's entire Membership Rights or (z)
the express right to be so admitted; and (II) such admission must receive the
consent of the same Members whose consent would be required to approve a
Disposition under Section 2.03(b)(i), with respect to which each Member's
consent may be given or withheld in the Member’s sole discretion.
If an
Assignee is admitted to the Company as a Member, it shall cease to have the
status of an Assignee. If the Assignee requests admission, but such request is
denied in accordance with this Section 2.03(b)(ii), the Assignee shall continue
to have the status of an Assignee and shall own the Interest attendant to the
Membership Rights transferred to it.
(c) Depositions of
Interests.
(i) General Restriction. If a
Member desires to make a Disposition that is solely limited to all or a portion
of its Interest, it may do so without complying with Section 2.03(b), but it
must first offer the other Members The right to purchase such interest (or
portion thereof; as applicable), in accordance with Section 2.03(c)(ii);
provided, however, that compliance with Section 2.03(c)(ii) shall not be
require4 in the case of (A) Dispositions by a Member to one of its Affiliates;
and (13) Dispositions of all or any portion of a Delinquent Member's Membership
Rights to a purchaser at a foreclosure of the security interest granted therein
pursuant to Section 3.03(b).
4
(ii)
Preferential Purchase
Right.
(A) Procedure. Should any Member
at any time desire to Dispose of all or a portion of its Interest pursuant to a
bona fide offer from another person (except in the circumstances described in
the provision to 2.03(c)(i)), such Member (the "Disposing Member") shall
promptly give notice thereof (the "Disposition Notice") to the Company and the
other Members. The Disposition Notice shall set forth all relevant information
with respect to the proposed Disposition, including the name and address of the
prospective acquirer, the purchase price (and any related information that is
required by Section 2.03(c)(ii)(B)), the precise Interest that is the subject of
the Disposition, and any other terms and conditions of the proposed Disposition.
The other Members shall have the preferential right to acquire such Interest for
the same purchase price, and on the same terms and conditions, as are set forth
in the Disposition Notice, except as provided otherwise in ibis Section
2.03(c)(ii). Each Member (other than the Disposing Member) shall have thirty
(30) days following its receipt of the Disposition Notice in which to notify the
Disposing Member whether such Member desires to exercise its preferential right;
provided, however, that if any Person elects to require arbitration pursuant to
Section 2.03(c)(ii)(B)(II) and Article 9, then the applicable deadline for all
Members shall be fifteen (15) days following delivery of the Arbitrator's
decision. (A notice in which a Member exercises such right is referred to herein
as a "Exercise Notice," and a Member that delivers an Exercise Notice is
referred to herein as a "Purchasing Member"). Any Member that does not respond
during the applicable period shall be deemed to have waived such right. If there
is more than one Purchasing Member, each Purchasing Member shall
participate in the purchase in the same proportion that its Sharing Ratio bears
to the aggregate Sharing Ratios of all Purchasing Members (or on such other
basis as the Purchasing Members may mutually agree).
(d) Requirements Applicable to All
Dispositions and Admissions. In addition to the requirements
set forth in Section 2.03(b) or (c), as applicable, any Disposition of
Membership Rights or any portion thereof (including an Interest), and any
admission of an Assignee as a Member, shall also be subject to the following
requirements; and such Disposition (and admission, if applicable) shall not be
effective unless such requirements are complied with; provided, however, that a
Majority Interest, in their sole and absolute discretion, may waive any of the
following requirements:
(i) Disposition Documents. The
following documents must be delivered to the
Members
and must be satisfactory, in form and substance, to a Majority
Interest:
(A) Disposition Instrument. A
copy of the instillment pursuant to which Disposition is effected.
5
(B) Ratification of Operating Agreement.
An instrument, executed by the Member making the Disposition and its
Assignee, containing the following information and agreements, to the extent
they are not contained in the instrument described in Section 2.03(d)(i)(A): (i)
the notice address of the Assignee; (ii) the Sharing Ratios and (if the Assignee
is to be admitted as a Member) the Commitments after the Disposition of the
Member effecting the Disposition and its Assignee (which together must total the
Sharing Ratio and the Commitment of the Member effecting the Disposition before
the Disposition); (iii) if the Assignee is to be admitted as a Member, (A) the
Assignees ratification of this Operating Agreement and
agreement to be
bound by them, and (B) its confirmation that the representations and warranties
in Section 2.02 are true and correct with respect to it; (iv) if the Assignee is
not to be admitted as a Member, an acknowledgement by the Assignee that the
Interest (or other applicable Membership Rights) acquired by it is subject in
all respects to this Operating Agreement; and (v) representations and warranties
by the Member and its Assignee (A) that the Disposition (and admission, if
applicable), is being made in accordance with all applicable Law.
(e) Encumbrances of Membership Rights.
A Member may not Encumber all or any portion of its Membership Rights
without the consent of a Majority Interest (calculated without reference to the
Member desiring to make such Encumbrance); provided, however, that this Section
2.03(e) shall not apply to (i) the creation of the security interest granted
pursuant to Section 103(b), or (ii) Encumbrances by a Member in favor of one of
its affiliates.
2.04.
Creation of Additional
Membership Rights. Additional Membership Rights may be created and issued
to existing Members or to other Persons, and such Persons may be admitted to the
Company as Members, at the Direction of a Majority Interest, on such terms and
conditions as such Majority Interest may determine at the time of admission. The
terms of admission or issuance must specify the Sharing Ratios and the
Commitments applicable thereto and may provide for the creation of different
classes or groups of Members and having different rights, powers, and duties. A
Majority Interest may reflect the creation of any new class or group in an
amendment to this Operating Agreement indicating the different
rights, powers, and duties, and such an amendment need be executed only by a
Majority Interest. Any such admission is effective only after the new Member has
executed and delivered to the Members an instrument containing the notice
address of the new Member, the Assignee's ratification of this Operating
Agreement and agreement to be bound by them, and its confirmation
that the representations and warranties in. Section 2.02 are true and correct
with respect to it. The provisions of Section 2.04 shall not apply to
Dispositions of Membership Rights or admissions of Assignees in connection
therewith, such matters being governed by Section 2.03.
2.05.
Dispositions of Interests in a
Member. No Member that is not a natural Person may cause or permit an
interest, direct or indirect, in itself to be Disposed of such that, after the
Disposition the Company would be considered to have terminated within the
meaning of Code Section 708.
6
2.06.
Withdrawal. A Member
does not have the right to Withdraw; provided, however, a Member shall have the
power to Withdraw at any time in violation of this Section 2.06. If a Member
exercises such power in violation of this Section 2.06, (a) such Withdrawing
Member shall be liable to the Company and the other Members for all monetary
damages suffered by them as a result of such Withdrawal (including indirect,
incidental and consequential damages); (b) such other Members shall, in addition
thereto, have the rights set forth M Article 8; and (c) such Withdrawing Member
shall not have, any rights under Article 5.06 of the Act. In no event shall the
Company or any Member have the right, through specific performance or otherwise,
to prevent a Member from Withdrawing in violation of this Section
2.06.
2.07.
Liability to Third Parties.
No Member shall be liable for the debts, obligations, or liabilities of
the Company, including under a judgment decree or order of a court.
ARTICLE
THREE
CAPITAL
CONTRIBUTIONS
3.01.
Initial Contributions.
Contemporaneously with the execution by such Member of
this Operating Agreement , each Member shall make the
contributions to the capital of the Company ("Capital Contributions") described
for that Member in Exhibit "A".
3.02.
Subsequent Contributions
Without creating any rights in favor of any third party, each Member
shall contribute to the Company, in cash, on or before the date specified as
hereinafter described, that Member's Sharing Ratio of all monies that in the
judgment of a Majority Interest are necessary to enable the Company to cause the
assets of the Company to be properly operated and maintained and to discharge
its costs, expenses, obligations, and liabilities; provided, however, that a
Member is not obligated to contribute a total amount that, when added to all
Capital Contributions that Member previously has made pursuant to Section 3.01
or this Section 302, exceeds that Member's commitment.
3.03.
Failure to Contribute.
(a) If a Member does not contribute, within ten (10) days of the date
required, all or any portion of a Capital Contribution that Member is required
to make as provided in this Operating Agreement , a Majority Interest may cause
the Company to exercise, on notice to that Member (the "Delinquent Member"), one
or more of the following remedies:
|
|
(i)
|
taking
such action (including court proceedings), at the cost and expense of the
Delinquent Member, as a Majority Interest may deem appropriate to obtain
payment by the Delinquent
Member of the portion of the Delinquent Member's Capital Contribution that
is in default, together with interest thereon from the date that the
Capital Contribution was due until the date that it is made, at a rate per
annum equal to the lesser of (A) the maximum rate permitted by applicable
law and (B) ten percent (10%).
|
|
|
(ii)
|
exercising
the rights of a secured party under the Uniform Commercial Code of the
State of Nevada, as more fully set forth in Section 3.03(b);
or
|
|
|
(iii)
|
exercising
any other rights and remedies available at law or in
equity.
|
7
B) Each
Member grants to the Company, as security for the payment of all Capital
Contributions that Member has agreed to make, a security interest in and a
general lien on its Membership Interest and the proceeds thereof, all under the
Uniform Commercial Code of the State of Nevada. On any default in the payment of
a Capital Contribution, the Company is entitled to all the rights and remedies
of a secured party under the Uniform Commercial Code of the State of Nevada with
respect to the security interest granted in this Section 3.03(b), Each Member
shall execute and deliver to the Company all financing statements and other
instruments that a Majority Interest may request to effectuate and carry out the
preceding provisions of this Section 3.03(b). At the option of a Majority
Interest, this Operating Agreement or a carbon, photographic, or other copy
hereof may serve as a financing statement.
3.04.
Return of Contributions.
A Member is not entitled to the return of any part of its Capital
Contributions or to be paid interest in respect of either its capital account or
its Capital Contributions. An unrepaid Capital Contribution is not a liability
of the Company or of any Member. A Member is not required to contribute or lend
any cash or property to the Company to enable the Company to return any Member’s
Capital Contributions.
3.05.
Advances by Members. If
the Company does not have sufficient cash to pay its obligations, any Member(s)
that may agree to do so with the consent of a Majority Interest may advance all
or part of the needed funds to or on behalf of the Company, at such interest
rate and on such other terms as such Member and a Majority Interest may agree.
An advance described in this Section 3.05 constitutes a loan from the Member to
the Company and is not a Capital Contribution.
ARTICLE
FOUR
DISTRIMMONS
AND ALLOCATIONS
4.01.
Distributions. At such
time as determined by a Majority Interest, but in no event no less often than
annually on or before the thirtieth (30th) day after the end of the fiscal year,
Net Cash Flow (as defined in this Section 4.01) for each fiscal year (or such
shorter period for which the distribution is made) shall be distributed to the
Members in proportion to their Sharing Ratios. The term "Net Cash Flow" shall
mean all cash funds derived by the Company (including interest received on
reserves, borrowings, and capital transactions),without reduction for any
non-cash charges, but less cash funds used to pay current operating expenses,
debt payments, capital improvements, replacements, and establish seasonable
reserves for future expenses and costs as determined by a Majority
Interest.
4.02.
Allocations. Except
as may be required
by Code Section 704(c) and Treasury Regulation Section 1.704-3, all items of
income, gain, loss, deduction, and credit of the Company shall be allocated to
the Members in their Sharing Ratios.
8
ARTICLE
FIVE
MANAGEMENT
5.01. Management by Members. The
management of the Company is fully reserved to the Members, and the Company
shall not have "managers," as that term is used in the Act. The powers of the
Company shall be exercised by or under the authority of and the business and
affairs of the Company shall be managed under the direction of, the Members. In
managing the business and affairs of the Company and exercising its powers, the
Members shall act (a) collectively through resolutions adopted at meetings and
in written consents pursuant to Sections 5.02 and 5.06; and (b) through
committees and individual Members to which authorities and duties have been
delegated pursuant to Section 5.04, No Member has the right, power, or authority
to act for or on behalf of the Company, to do any act that would be binding on
the Company, or to incur any expenditures on behalf of the Company, except in
accordance with the immediately preceding sentence. Decisions or actions taken
by Members in accordance with Operating
Agreement (including this Section 5.01 and Section 5.02) shall
constitute decisions or actions by the Company and shall be binding on each
Member, Officer (as defined in Section 5.07), and employee of the
Company.
5.02.
Meetings of Members.
Regular meetings of Members may be held on such dates and at such times
as shall be determined by Members holding among them at least a majority of all
Sharing Ratios (a "Majority Interest"), with notice of the establishment of such
regular meeting schedule being given to each Member that was not present at the
meeting at which it was adopted. Special meetings of the Members may be called
by Members holding among them at least ten percent (10%) of the Sharing Ratios
of all Members, by notice thereof (specifying the place and time of such
meeting) that is delivered to each other Member at least three days prior to
such meeting. Neither the business to be transacted at, nor the purpose of, such
special meeting need be specified in the notice (or waiver of notice) thereof.
Unless otherwise expressly provided in this Operating Agreement; at any meeting
of the Members, a Majority Interest, represented either in person or by proxy,
shall constitute a quorum for the transaction of business, and an act of a
Majority Interest shall be the act of the Members. Each Member may, with respect
to any vote, consent, or approval that it is entitled to grant pursuant to this
Operating Agreement, grant or withhold such vote, consent, or approval in its
sole discretion.
5.03.
Decisions Requiring
Supermajority Consent. Notwithstanding any power or authority granted a
Majority Interest under the Act, the Articles or this Operating Agreement, (a) a
Majority Interest may not make any decision to take any action for which the
consent of a greater number of the Members is expressly required by the Articles
or this Operating Agreement, without first obtaining such consent.
This
Section 5.03 shall supersede Article 2.23(D) and (E) of the Act.
5.04.
Committees of Members;
Delegation of Authority to Individual Members. A Majority Interest may
designate one or more committees, each of which shall be comprised of one or
more of the Members, and may designate one or more of the Members as alternate
members of any committee. Except for matters that cannot be delegated to such a
committee pursuant to Article 2.18B) of the Act (but notwithstanding the last
sentence of Article 2.18(A) of the Act), any such committee, to the extent
provided in the resolution establishing it, shall have and may exercise all of
the authority that may be exercised by a Majority Interest. Regular and special
meetings of such committee shall be held in the manner designated by a Majority
Interest or, if not so designated, by such committee. A Majority Interest may
dissolve any committee at any time. In addition, a Majority Interest may
delegate to. one or more Members such authority and duties, and assign to them
such titles, as a Majority Interest may deem advisable, Any such delegation may
be revoked at any time by a Majority Interest.
9
5.05.
Compensation. The
Members shall receive such compensation, if any, for their services in the
management of the Company as may be designated by a Majority interest. In
addition, the Members shall be entitled to be reimbursed for out-of-pocket costs
and expenses incurred in the course of their service in the management of the
Company.
5.06.
Provisions Applicable to All
Meetings. In connection with any meeting of the Members or any committee
thereof, the following provisions shall apply:
|
|
(a)
|
Place of the Meeting.
Any such meeting shall be held at the principal place
of business of the Company, unless the notice of such meeting
(or resolution of the Members or committee, as applicable) specifies a
different place, which need not be in the State of
Nevada.
|
|
|
(b)
|
Waiver of Notice Through
Attendance. Attendance of a Person at such meeting (including
pursuant to Section 5.06(e)) shall constitute a waiver of notice of such
meeting, except where such Person attends the meeting for the express
purpose of objecting to the transaction of any business on the ground that
the meeting is not lawfully called or
convened.
|
|
|
(c)
|
Proxies. A Person may
vote at such meeting by a written proxy executed by that Person and
delivered to another Member or member of the committee, as applicable. A
proxy shall be revocable unless it is stated to be
irrevocable.
|
|
|
(d)
|
Action by Written Consent.
Any action required or permitted to be taken at such
a meeting may be taken without a meeting, without prior notice,
and without a vote if a consent or consents in writing, setting forth the
action so taken, is signed by the Members or members of the committee, as
applicable, having not fewer than the minimum number of Sharing Ratios or
votes that would be necessary to take the action at a meeting at which all
Members or members of the committee, as applicable, entitled to vote on
the action were present and voted.
|
|
|
(e)
|
Meetings by Telephone.
Members or members of the committee, as applicable, may participate
in and hold such meeting by means of conference telephone,
videoconference, or similar communications equipment by means of which all
Persons participating in the meeting can bear each
other.
|
5.07.
Officers. A Majority
Interest may designate one or more Persons to be Officers of the Company
("Officers"), and any Officers so designated shall have such title, duties, and
salaries as a Majority Interest may delegate to them. Any Officer may be removed
as such, either with or without cause, by a Majority Interest.
5.08.
Limitations on Liability of
Members. The liability of the Members to the Company
and Officers shall be limited to the extent, if any, set forth in the
Articles.
10
5.09.
Conflicts of Interest.
Subject to the other express provisions of this Operating Agreement, each
Member, Officer, or affiliate thereof may engage in and possess interests in
other business ventures of any and every type and description, independently or
with others, including ones in competition with the Company, with no obligation
to offer the Company or any other Member or Officer the right to participate
therein. The Company may transact business with any Member, Officer, or
affiliate thereof, provided the terms of those transactions are no less
favorable than those the Company could obtain from unrelated third
parties.
5.10.
Indemnification; Reimbursement
of Expenses; Insurance. To the fullest extent permitted by the Act: (a)
the Company shall indemnify each Member or officer who was, is, or is threatened
to be made a party to any threatened, pending, or completed action, suit, or
proceeding ("Proceeding"), any appeal therein, or any inquiry or investigation
preliminary thereto, by reason of the fact that it is or was a Member; (b) the
Company shall pay or reimburse a Member or officer for expenses incurred by it
(i) in advance of the final disposition of a Proceeding to which such Member
was, is, or is threatened to be made a party, and (ii) connection with its
appearance as a witness or other participation in any Proceeding. The Company
shall indemnify and advance expenses to an Officer of the Company to the extent
required to do so by the Act or other applicable Law. The Company, by adoption
of a resolution of a Majority Interest, may indemnify and advance expenses to an
Officer, employee, or agent of the Company to the same extent and subject to the
same conditions under which it may indemnify and advance expenses to Members or
officers under the preceding sentence. The provisions of this Section 5.10 shall
not be exclusive of any other right under any law, provision of the Articles or
this Operating Agreement , agreement, or otherwise. The Company may purchase and
maintain insurance to protect itself and any .Member, Officer, employee, or
agent of the Company, whether or not the Company would have the power to
indemnify such Person under this Section 5.10.
ARTICLE
SIX
TAXES
6.01.
Tax Returns. The
Company shall prepare and timely file all federal, state, and local tax returns
required to be filed by the Company. Each Member shall furnish to the Company
all pertinent information in its possession relating to the Company's operations
that is necessary to enable the Company's tax returns to be timely prepared and
filed. The Company shall deliver a copy of each such return to the Members on or
before ten (10) days prior to the due date of any such return, together with
such additional information as may be required by the Members in older for the
Members to file their individual returns reflecting the Company's operations.
The Company shall bear the costs of the preparation and filing of its
returns.
6.02.
Tax Elections. The
Company shall make the following elections on the appropriate tax
returns:
(a) to
adopt the calendar year as the Company's fiscal year.
(b) to
adopt the cash method of accounting and to keep the Company's books
and records on the income-tax method;
(c) if
a distribution of the Company's property as described in Code Section 734 occurs
or upon a transfer of Membership interests as described in Code Section 743
occurs, on request by notice from any Member, to elect, pursuant to Code Section
754, to adjust the basis of Company's properties;
11
(d) to
elect to amortize the organizational expenses of the Company ratably over a
period of 60 months as permitted by Code Section 709(b); and
(e) any
other election a Majority Interest may deem appropriate and in the best
interests of the Members.
Neither
the Company nor any Member may 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 and no provision
of this Operating Agreement (including Section 1.07) shall be
construed to sanction or approve such an election.
6.03.
Tax Matters Member. A
Majority Interest shall designate one Member to be the "tax matters partner" of
the Company pursuant to Code Section 6231(a)(7) (the "Tax Matters Member"). The
Tax Matters Member shall take such action as may be necessary to cause to the
extent possible each other Member to become a "notice partner" within the
meaning of Code Section 6223. The Tax Matters Member shall inform each other
Member of all significant matters that may come to its attention in its capacity
as Tax Matters Member by giving notice thereof on or before the fifth (5th)
business day after becoming aware thereof and, within that time, shall forward
to each other Member copies of all significant written communications it may
receive in that capacity. The Tax Matters Member shall take no action without
the authorization of a Majority Interest, other than, such action as may be
required by applicable law. Any cost or expense incurred by the Tax Matters
Member in connection with its duties, including the preparation for or pursuance
of administrative or judicial proceedings, shall be paid by the
Company.
ARTICLE
SEVEN
BOOKS,
RECORDS, AND BANK ACCOUNTS
7.01.
Maintenance of Books.
The Members shall keep or cause to be kept at the principal office of the
Company complete and accurate books and records of the Company, supporting
documentation of the transactions with respect to the conduct of the Company's
business, and minutes of the proceedings of its Members and each committee
thereof, The books and records shall be maintained with respect to accounting
matters in accordance with sound accounting practices, and all books arid
records shall be available at the Company's principal office for examination by
any Member or the Member's duly authorized representative at any and all
reasonable times during normal business hours.
7.02.
Reports. Within
seventy-five (75) days after the end of each taxable year, the Company shall
cause to be sent to each Member at the end of the taxable year a complete
accounting of the financial affairs of the Company for the taxable year then
ended.
7.03.
Accounts. The Members
shall establish one or more separate bank and investment accounts and
arrangements for the Company, which shall be maintained in the Company's name
with financial institutions and firms that a Majority Interest determine. The
Members may not commingle the Company's funds -with the
funds of any Member.
12
ARTICLE
EIGHT
BUY-OUT
OPTION
8.01.
Buy-out Events. This
Article 8 shall apply to any of the following events (each a
"Buy-out Event");
(a) a
Member shall die, dissolve, Withdraw or become Bankrupt;
(b) a
Member shall be the subject of a Change of Control;
(c) a
Member shall commit a Default; or
(d) a
Divorce or Spouse's Death shall occur.
In each
case, the Member with respect to whom a Buy-out Event has occurred is referred
to herein as the "Affected Member."
8.02.
Procedure for Member-Related
Buy-out Events. If a Member shall die, dissolve, Withdraw, become
Bankrupt, become the subject of a Change of Control, or commit a Default, the
Affected Member (or its representative) shall promptly give notice thereof to
the Company and the other Members. Each of the other Members shall have the
option to acquire the Membership Rights of the Affected Member, by notifying the
Affected Member (or its representative) of such exercise within one hundred
eighty (180) Days following such Member's receipt of the Affected Member's
notice. Any Member that does not respond during the applicable period shall be
deemed to have waived its right. If more than one Member exercises its right,
each exercising Member shall participate in the purchase in the same proportion
that its Sharing Ratio bears to the aggregate Sharing Ratios of all existing
Members (or on such basis as the exercising Members may mutually
agree).
8.03.
Procedure for Spouse-Related
Buy-out Events. If a Divorce or Spouse's Death shall occur, the Affected
Member shall promptly give notice thereof to the Company and the other Members.
The Affected Member shall have the option to acquire such Spouse's Fraction, by
notifying the Affected Member's spouse or former spouse (or his or her
representative) of such exercise within ninety (90) Days following the
occurrence of the Buy-out Event. If the Affected Member does not exercise his or
her right, then the other Members shall have the option to acquire such Spouse's
Fraction, by notifying the Affected Member's spouse or former spouse (or his Or
her representative) of such exercise within one hundred twenty (120) days
following such Member's receipt of the notice described in the first sentence of
this Section 8.03. Any Member that does not respond during the applicable period
shall be deemed to have waived its right. If more than one Member exercises its
right, each exercising Member shall participate in the purchase in the same
proportion that its Sharing Ratio bears to the aggregate Sharing Ratios of all
existing Members (or on such basis as the exercising Members may mutually
agree).
13
8.04.
Purchase Price. The
Person that is required to sell its Membership Rights or Spouse's Fraction
pursuant to this Article 8 is referred to herein as the "Seller," and the
Persons that exercise a right to purchase Membership Rights or a Spouse's
Fraction pursuant to this Article 8 are referred to herein as "Buyers." The
purchase price for Membership Rights or a Spouse's Fraction being purchased
pursuant to this Article 8 the ("Purchase Price") shall be determined in the
following manner. Seller and the Buyers shall attempt to agree on fair market
value of the applicable Membership Rights or Spouse's Fraction. If those Persons
do not reach such agreement on or before the thirtieth (30th) Day following the
exercise of the option, any such Person, by notice to the others, may require
the determination of fair market value to be made by an Independent Arbitrator
pursuant to Article 9.
8.05.
Closing. If an option
to purchase is exercised in accordance with the other provisions of this Article
8, the closing of such purchase shall occur at the principal place of business
of the Company on the 30th Day after the determination of the Fair Market Value
pursuant to Section 8.04 (or, if later, the fifth Business Day after receipt of
all applicable regulatory and government approvals to the purchase), unless the
parties to such closing agree upon a different place or date. At the closing,
(a) the Seller shall execute and deliver to the Buyers (i) an assignment of the
Seller's Membership Rights or Spouse's Fraction (as applicable), in form and
substance reasonably acceptable to the Buyers, containing a general warranty of
title as to such Membership Rights or Spouse's Fraction (including that such
Membership Rights or Spouse's Fraction is free and clear of any Encumbrances),
and (ii) any other instruments reasonably requested by the Buyers to give effect
to the Purchase; and (b) the Buyers shall deliver to the Seller (i) the portion
of the Purchase Price required to be paid at the Closing, in immediately
available funds. The Sharing Ratios and Commitments of the Members shall be
deemed adjusted to reflect the effect of the purchase.
8.06.
Relationship of Buy-out,
Dissolution, and Disposition Provisions. The following sets forth the
relationship among this Article 8, Section 2.03 regarding Dispositions of
Membership Rights and admission of Assignees), Section 2.06 (regarding
Withdrawals of Members) and Section 10 (regarding dissolution):
(a) Death or Dissolution. If the
Buy-out Event is the death or dissolution of the Affected Member, then the
Affected Member shall automatically cease to be a Member upon the occurrence of
such Buy-out Event, and such Buy-out Event shall constitute a Dissolution Event
under Section 10.01(a)(iii). If the other Members purchase the Affected Member's
Membership Rights pursuant to the Article 8, the Assignees of such Affected
Member shall have no further rights with respect to such Membership Rights
(except the right to receive the Purchase Price in accordance with Sections 8.04
and 8.05), regardless of whether a Continuation Election is made. If, however,
the other Members do not purchase the Affected Member's Membership Rights
pursuant to this Article 8, then the following procedures will apply. If a
Continuation Election is not made, the Assignees of the Affected Member shall
receive the applicable liquidating distribution described in Section 10.02(b),
If a Continuation Election is made, the Assignees of the Affected Member may
request admission to the Company as Members in the circumstances described in
Section 2,02. If such Assignees do not request admission, or if they request
admission and it is not granted pursuant to Section 2.02, then such Assignees
shall remain Assignees and shall only own the Affected Member's
Interest.
14
(b) Bankruptcy. If the Buy-out
Event is the Bankruptcy of the Affected Member, then the Affected Member shall
not cease to be a Member, but such Bankruptcy shall constitute a Dissolution
Event under 10.01(a)(iii). If the other Members purchase the Affected Member's
Membership Rights pursuant to this Article 8, the Affected Member shall have no
further rights with respect to such Membership Rights (except the right to
receive the Purchase Price in accordance with Sections 8.04 and 8.05),
regardless of whether a Continuation Election is made. If, however, the other
Members do not purchase the Affected Member's Membership Rights pursuant to this
Article 8, then the following procedures will apply. If a Continuation Election
is not made, the Affected Member shall receive the applicable liquidating
distribution described in Section 10.02(b). If a Continuation Election, is made,
the Assignees of the Affected Member may request admission to the Company as
Members in the circumstances described in Section 2.03(b)(ii)(B). If such
Assignees do not request admission, or if they request admission and it is not
granted pursuant to Section 2.03(b)(ii)(B), then such Assignees shall remain
Assignees and shall only own the Affected Member's Interest. If there are no
Assignees of the Affected Member, the Affected Member shall be deemed to be an
Assignee and shall only own its Interest.
(c) Withdrawal. If the Buy-out
Event is the Withdrawal of the Affected Member, then the Affected Member will
automatically cease to be a Member upon such Withdrawal, and such Withdrawal
shall constitute a Dissolution Event under Section 10.01(a)(iii). If the other
Members purchase the Affected Member's Membership Rights pursuant to this
Article 8, the Affected Member shall have no further rights with respect to such
Membership Rights (except the right to receive the purchase price in accordance
with Sections 8.04 and 8.05), regardless of whether a Continuation Election is
made. If, however, the other Members do not purchase the Affected Member's
Membership Rights pursuant to this Article 8, then the following procedures will
apply, If a Continuation Election is not made, the Affected Member shall receive
the applicable liquidating distribution described in Section 10.02(b), less any
damages owed by the Affected Member to the Company and the Members pursuant to
Section 2.06. If a Continuation Election is made, the Affected Member shall be
deemed to be an Assignee and shall MA its own Interest.
(d) Change of Control or Default. If the Buy-out Event
is the Change of Control or Default of the Affected Member, then the Affected
Member shall not cease to be a Member and such Buy-out Event, in itself; shall
not constitute a Dissolution Event. If the other Members purchase the Affected
Member's Membership Rights pursuant to this Article 8, however, (i) such
purchase shall constitute an Expulsion of the Affected Member and, therefore, a
Dissolution Event under Section 10(a)(iii), and (ii) the Affected Member shall
have no further rights with respect to such Membership Rights (except the right
to receive the purchase price in accordance with Sections 8.04 and 8.05),
regardless of whether a Continuation Election is made. If, however, the other
Members do not purchase the Affected Members Membership Rights, then such
Affected Member shall remain a Member, and no Dissolution Event shall have
occurred.
15
(e) Divorce or Spouse's Death. If
the Buy-out Event is a Divorce or Spouse's Death, then the Affected Member shall
not cease to be a Member and such Buy-out Event shall not constitute a
Dissolution Event. If the other Members purchase the applicable Spouse's
Fraction pursuant to this Article 8, the spouse or Rimier spouse (or his or her
representative) shall have no further rights with respect to such Spouse's
Fraction (except the rights to receive the Purchase Price in accordance with
Sections 8.04 and 8.05). 1f however, the other Members do not purchase such
Spouse's Fraction, then such spouse or former spouse (or his or her
representative) shall be deemed to be an Assignee and shall only own the
Interest attendant to such Spouse's Fraction.
ARTICLE
NINE
ARBITRATION
9.01.
Submission of Disputes to
Arbitration. (a) This Article 9 shall apply to any of the following types
of disputes (each a "Dispute"):
(i) any
dispute as to fair market value under Section 2.03(c)(ii)(8)(11) or
8.04;
(ii) any
dispute as to any accounting or tax issue under this OPERATING AGREEMENT ;
or
(iii) except
for disputes described in the foregoing paragraphs (i) and (ii), (a) any dispute
regarding the construction, interpretation, performance, validity, or
enforceability of any provision of the Articles or this Operating Agreement, or
whether any person is in compliance with, or breach of any provisions of the
Articles or this Operating Agreement , or (B) any other dispute of a legal
nature arising under the Articles or this Operating Agreement , it being
intended that this Section 9.01(a)(i) shall not include any disputes of a purely
business nature, such as disputes as to business
strategy.
With
respect to a particular Dispute, each Person that is a ▇▇▇▇▇ to such Dispute
(whether a member or other Person) is referred to herein as a "Disputing
Party."
(b) If
the Disputing Parties are unable to resolve a dispute within a reasonable
period
of time
after the commencement of the Dispute (or, in the case of Disputes described in
Section 2.03(c)(ii)(B)(11) or 8.04, the time period set forth in such Section),
and Disputing Party may submit such Dispute to binding arbitration under this
Article 9 by notifying the other Disputing Parties (an "Arbitration Notice").
Arbitration pursuant to this Article 9 shall be the exclusive method of
resolving Disputes other than through agreement of the Disputing
Parties.
9.02.
Selection of
Arbitrator.
(a) Any arbitration
conducted under this Article 9 shall be heard by a sole arbitrator (the
"Arbitrator") selected in accordance with this Section 9.02. In the ease of a
Dispute described in Section 9.01(a)(i), the Arbitrator shall be a Person (such
as an investment banker or appraiser) with expertise in the valuation of assets
and interests similar to the asset or interest required to be valued thereunder.
In the case of a Dispute described in Section In the case of a Dispute described
in Section
16
(b) The
Disputing Party that submits a Dispute to arbitration shall designate a proposed
Arbitrator in its Arbitration Notice. If any other Disputing Party objects to
such proposed Arbitrator, it may, on or before the tenth (10th) Day following
delivery of the Arbitration Notice, notify all of the other Disputing Parties of
such objection. All of the Disputing Parties shall attempt to agree upon a
mutually- acceptable Arbitrator. If they are unable to do so within twenty (20)
Days following delivery of the notice described in the immediately-preceding
sentence, any Disputing Party -may
petition the American Arbitration Association to designate the Arbitrator. If
the Arbitrator so chosen shall die, resign, or otherwise fail or becomes unable
to serve as Arbitrator, a replacement Arbitrator shall be chosen in accordance
with this Section 9.02.
9.03.
Conduct of Arbitration,
The Arbitrator shall expeditiously (and, if possible, within sixty (60)
Days after the Arbitrator's selection) hear and decide all matters concerning
the Dispute. Any Arbitration hearing shall be held in the City of Houston. The
Arbitration shall be conducted in accordance with the then-current Commercial
Arbitration Rules of the American Arbitration Association (excluding rules
governing the payment of arbitration, administrative, or other fees or expenses
to the Arbitrator or such Association), to the extent that such Rules do not
conflict with the terms of this Operating Agreement. Except as expressly
provided to the contrary in this Operating Agreement, the
Arbitrator shall have the power (a) to gather such materials, information,
testimony, and evidence as it deems relevant to the dispute before it (and each
Member shall provide such
materials, information, testimony, and evidence requested by the Arbitrator,
except to the extent any information so requested is proprietary, subject to a
third-party confidentiality restriction or to an attorney-client or other
privilege) and (b) to grant injunctive relief and enforce specific performance.
If it deems necessary, the Arbitrator may propose to the Disputing Parties that
one or more other experts be retained to assist it in resolving the Dispute. The
retention of such other experts shall require the unanimous consent of the
Disputing Parties, which shall not be unreasonably withheld. Each Disputing
Party, the Arbitrator and any proposed expert shall disclose to the other
Disputing Parties any business, familial or other relationship or Affiliation
that may exist between such Disputing Party (or the Arbitrator) and such
proposed expert; and any Disputing Party may disapprove of such proposed expert
on. the basis of such relationship or affiliation. The decision of the
Arbitrator (which shall be rendered in writing) shall be final, nonappealable,
and binding upon the Disputing Parties and may be enforced in any court of
competent jurisdiction. The responsibility for paying the costs and expenses of
the Arbitration, including compensation to the Arbitrator and any Experts
retained by the Arbitrator, shall be allocated among the Disputing Parties in a
manner determined by the Arbitrator to be fair and reasonable 'under the
circumstances. Each Disputing Party shall be responsible for the fees and
expenses of its respective counsel, consultants and witnesses, unless the
Arbitrator determines that compelling reasons exist for allocating all or a
portion of such costs and expenses to one or more other Disputing
Parties.
ARTICLE
TEN
DISSOLUTION,
WINDING UP, AND TERMINATION
10.01. Dissolution. (a) Subject to
Section 10.01(b), the Company shall dissolve and its affairs shall be wound up
on the first to occur of the following events (each a "Dissolution
Event"):
17
(i) the
expiration of the period fixed for the duration of the Company in the
Articles;
(ii) the
unanimous consent of the Members;
(iii) the
death, expulsion, Withdrawal, dissolution, or Bankruptcy of any Member, or the
occurrence of any Other event that terminates the continued membership of
any Member in the Company;
|
|
(iv) entry
of a decree of judicial dissolution of the Company under Article 6.02 of
the Act; and
|
|
|
(v)
the occurrence of any event specified in the Articles to cause
dissolution (if any).
|
(b) If a
Dissolution Event described in subparagraphs (i), (iii), or (v) of Section
10.01(a) shall occur and there shall be at least one (1) other Member remaining,
the Company shall not be dissolved, and the business of the Company shall be
continued, if remaining Member(s) holding among them both (i) a majority of the
profits interests in the Company (as defined in Rev. Proc. 94-46, 1994-28 1.R.B.
129) held by the remaining Members, and (ii) a majority of the aggregate
positive balances in the capital accounts (as defined in such Rev. Proc. 94-46)
of the remaining Members, so agree within 90 days of the occurrence of such
Dissolution Event (such agreement referred to herein as a "Continuation Event").
If a Continuation Election is made following the occurrence of a Dissolution
Event described in subparagraph (i) or (v) of Section 8.01(a), the Members shall
promptly amend the Articles in the manner described in Article 6.01(B) of the
Act.
(c) As
used herein, the term "Bankrupt" shall mean, with respect to any Person, that
(i) such Person (A) makes a general assignment for the benefit of creditors; (B)
files a voluntary bankruptcy petition; (C) becomes the subject of an order for
relief or is declared insolvent in any federal or state bankruptcy or insolvency
proceedings; (D) files a petition or answer seeking for such Person a
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any applicable law; (E) files an answer or
other pleading admitting or failing to contest the Material allegations of a
petition filed against such Person in a proceeding of the type described in
subleases (A) through (D) of this clause (i); or (F) seeks, consents to, or
acquiesces in the appointment of a trustee, receiver, or liquidator of such
Person or of all or any substantial part of such Person's properties; or (ii)
against such Person, a proceeding seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
applicable law has been commenced and 120 days have expired without dismissal
thereof or with respect to which, without such Person's consent or acquiescence,
a trustee, receiver, or liquidator of such Person or of all or any substantial
part of such Person's properties has been appointed and 90 days have expired
without the appointment's having been vacated or stayed.
18
10.02.
Winding Up and
Termination. (a) On the occurrence of a
Dissolution Event described in Section 8.01(a), unless an election is made to
continue the business of the Company pursuant to Section 8.01(b), the Members
shall act as liquidator or may appoint one or more Members as liquidator;
provided, however, that no Member with respect to whom an event described in
subparagraph (iii) of Section 8.01(a) has occurred shall serve as (or act with
any other Person as) a liquidator. The liquidator shall proceed diligently to
wind up the affairs of the Company as provided in the Act.
Until final distribution, the liquidator shall continue to operate the Company
properties with all of the power and authority of a Majority Interest. The costs
of winding up shall be home as a Company expense.
(b) Any
assets of the Company remaining at the conclusion of the winding up process
shall be distributed among the Members in accordance with their Sharing Ratios.
All distributions in kind to the Members shall be made subject to the liability
of each distribute for costs, expenses, and liabilities theretofore incurred or
for which the Company has committed prior to the date of termination. The
distribution of cash and/or property to a Member in accordance with the
provisions of this Section 8.02(b) constitutes a complete return to the Member
of its Capital Contributions and a complete distribution to the Member of its
Membership Interest and all the Company's property and constitutes a compromise
to which all Members have consented within the meaning of Article 5.02(D) of the
Act.
(c) On completion of such
final distribution, the -Members shall file Articles of
Dissolution with the Secretary of State of Nevada, cancel any other filings made
pursuant to Section 1.05, and take such other actions as may be necessary to
terminate the existence of the Company.
10.03.
No Restoration of Capital
Accounts. No Member shall be required to pay to the Company, to any other
Member or to any third party any deficit balance that may exist from time to
time in any capital or similar account maintained for such Member for any
purpose.
ARTICLE
ELEVEN
GENERAL
PROVISIONS
11.01. Offset. Whenever the
Company is to pay any sum to any Member, any amounts that Member owes the
Company may be deducted from that sum) before
payment.
11.02. Notices. All notices,
requests, or consents under this Operating Agreement shall be (a) in writing, (b)
delivered to the recipient in person, by courier or mail or by facsimile,
telegram, telex, cablegram, or similar transmission, (c) if to a Member,
delivered to such Member at the applicable address on Exhibit A or such other
address as that Member may specify by notice to the other Members, and (d)
effective only upon actual receipt by such Person. Whenever any notice is
required .to be given by applicable law, the Articles or this Operating
Agreement, a written waiver thereof, signed by the Person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
11.03.
Entire Agreement; Supersedure.
This Operating Agreement constitutes the entire agreement of the Members
relating to the Company and supersedes all prior contracts or agreements with
respect to the Company, whether oral or written.
19
11.04.
Effect of Waiver or Consent.
A waiver or consent,
express or implied, to or of any breach or default by any Person in the
performance by that Person of its obligations with respect to the Company is not
a consent or waiver to or of any other breach or default in the performance by
that Person of the same or any other obligations of that Person with respect to
the Company.
11.05.
Amendments of Articles and
Operating Agreement. The Articles and this Operating Agreement may be
amended or restated only with the unanimous approval of the Members; provided,
however, that amendments of the type described in Section 2.04 may be adopted as
therein provided.
11.06.
Binding Effect. Subject
to the restrictions on Dispositions set forth in this Operating Agreement , this
Operating Agreement is binding on and inure to the benefit of the
Members and their respective heirs, legal representatives, successors and
assigns.
11.07.
Governing Law; Severability.
THIS OPERATING AGREEMENT ARE GOVERNED BY AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA (EXCLUDING ITS CONFLICT-OF-LAWS
RULES). If any provision of this Operating Agreement or the application thereof
to any Person or circumstance is held invalid or unenforceable to any extent,
the remainder of this Operating Agreement and the application of that provision
to other Persons or circumstances is not affected thereby and that provision
shall be enforced to the greatest extent permitted by applicable
law.
11.08.
Construction. Unless
the context requires otherwise: (a) the gender (or lack of gender) of all words
used in this Operating Agreement includes the masculine, feminine, and neuter;
(b) the word "including" means "including without limitation"; (c) references to
Articles and Sections refer to Articles and Sections of this Operating
Agreement; and (d) references to Exhibits are to the Exhibits attached to
this Operating Agreement, each of which is made a part hereof for all
purposes.
11.09.
Further Assurances. In
connection with this Operating Agreement and the transactions contemplated
hereby, each Member shall execute and deliver any additional documents and
instruments and perform any additional acts that may be necessary or appropriate
to effectuate and perform the provisions of this Operating Agreement and those
transactions.
11.10. Counterparts. This Operating
Agreement may be executed in any number of counterparts, all of which
shall constitute the same instrument.
20
IN
WITNESS WHEREOF, the Members have adopted and executed this OPERATING AGREEMENT
as of the date first set forth above.
|
SOLE
MEMBER
|
|
|
Deep
Down, Inc., a Nevada
|
|
|
corporation
|
|
|
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇
|
|
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇, President and Chief
|
|
|
Executive
Officer
|
|
Deep
Down International Holdings, LLC
Operating
Agreement
Signature
Page
21