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Exhibit 3.1
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SECOND AMENDED AND RESTATED OPERATING AGREEMENT
OF
CHILES OFFSHORE LLC
DATED AS OF MAY 1, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS..............................................2
ARTICLE 2 FORMATION AND OFFICES....................................9
2.1. Formation....................................................9
2.2. Principal Office.............................................9
2.3. Registered Office and Registered Agent.......................9
2.4. Purpose of Company..........................................10
2.5. Date of Dissolution.........................................10
2.6. Qualification...............................................10
ARTICLE 3 CAPITALIZATION OF THE COMPANY...........................10
3.1. Capital Contributions.......................................10
3.2. Additional Capital Contributions............................11
3.3. Loans ...................................................12
3.4. Maintenance of Capital Accounts.............................12
3.5. Capital Withdrawal Rights, Interest and Priority............13
3.6. Additional Membership Interests.............................13
3.7. Certain SEACOR Transactions.................................13
ARTICLE 4 DISTRIBUTIONS...........................................14
4.1. Distributions of Net Cash Flow..............................14
4.2. Persons Entitled to Distributions...........................14
4.3. Limitations on Distributions................................14
ARTICLE 5 ALLOCATIONS.............................................14
5.1. Profits ...................................................14
5.2. Losses ...................................................14
5.3. Special Allocations.........................................15
5.4. Curative Allocations........................................16
5.5. Loss Limitation.............................................16
5.6. Tax Allocations:Code Section 704(c).........................17
5.7. Change in Percentage Interests..............................17
5.8. Withholding.................................................17
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 6 MEMBERS' MEETINGS.......................................18
6.1. Meetings of Members; Place of Meetings......................18
6.2. Quorum; Voting Requirement..................................18
6.3. Proxies 18
6.4. Action Without Meeting......................................18
6.5. Notice ...................................................19
6.6. Waive of Notice.............................................19
6.7. No Authority................................................19
ARTICLE 7 MANAGEMENT AND CONTROL..................................19
7.1. Management Committee; Managers..............................19
7.2. Management Committee Meetings; Quorum; Proxies..............21
7.3. Management Committee's Authority; Certain Limitations.......21
7.4. Officers; Agents............................................22
7.5. Resignation of a Manager....................................22
7.6. Compensation................................................22
ARTICLE 8 LIABILITY AND INDEMNIFICATION...........................22
8.1. Liability of Members........................................22
8.2. Indemnification.............................................22
ARTICLE 9 TRANSFERS OF MEMBERSHIP INTERESTS.......................24
9.1. General Restrictions........................................24
9.2. Permitted Transferees.......................................25
9.3. Substitute Members..........................................26
9.4. Effect of Admission as a Substitute Member..................26
9.5. Consent 26
9.6. No Dissolution..............................................26
9.7. Additional Members; Certain Representations of Members......27
9.8. Right of First Offer........................................27
9.9. Tag-Along Rights............................................28
9.10. Drag-Along Rights...........................................29
9.11. Piggyback Registration......................................31
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TABLE OF CONTENTS
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9.12. Additional Members; Certain Representations of Members......33
ARTICLE 10 DISSOLUTION AND TERMINATION.............................33
10.1. Events Causing Dissolution..................................33
10.2. Notices to Secretary of State...............................33
10.3. Cash Distributions Upon Dissolution.........................34
10.4. In-Kind 34
10.5. No Action for Dissolution...................................34
ARTICLE 11 TAX MATTERS MEMBER......................................35
11.1. Tax Matters Member..........................................35
11.2. Certain Authorizations......................................35
11.3. Indemnity of Tax Matters Member.............................36
11.4. Information Furnished.......................................36
11.5. Notice of Proceedings, etc..................................36
11.6. Notices to Tax Matters Member...............................36
11.7. Preparation of Tax Returns..................................36
11.8. Tax Elections...............................................37
11.9. Taxation as a Partnership...................................37
ARTICLE 12 ACCOUNTING AND BANK ACCOUNTS............................37
12.1. Fiscal Year and Accounting Method...........................37
12.2. Books and Records...........................................37
12.3. Delivery to Members; Inspection.............................38
12.4. Financial Statements........................................38
12.5. Filings ...................................................38
12.6. Non-Disclosure..............................................38
12.7. Bank Accounts...............................................39
ARTICLE 13 MISCELLANEOUS...........................................39
13.1. Title to Property...........................................39
13.2. Waiver of Default...........................................39
13.3. Amendment...................................................39
13.4. No Third Party Rights.......................................40
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TABLE OF CONTENTS
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13.5. Severability................................................40
13.6. Nature of Interest in the Company...........................40
13.7. Binding Agreement...........................................40
13.8. Headings 40
13.9. Word Meanings...............................................40
13.10. Counterparts................................................40
13.11. Entire Agreement............................................40
13.12. Partition...................................................41
13.13. Governing Law; Consent to Jurisdiction and Venue............41
13.14. Discretion..................................................41
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SECOND AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CHILES OFFSHORE LLC
THIS SECOND AMENDED AND RESTATED OPERATING AGREEMENT (this "AGREEMENT")
of CHILES OFFSHORE LLC (the "COMPANY"), is made and entered into as of the 1st
day of May, 2000 by and among the Persons referred to in Section 3.1 hereof, who
have executed or have otherwise agreed to be bound by, either directly or by an
attorney-in-fact, this Agreement as members of the Company (together with such
other Persons that may hereafter become members as provided herein, referred to
collectively as the "MEMBERS" or, individually, as a "MEMBER").
WHEREAS, the Company was formed as a limited liability company under
the Delaware Limited Liability Company Act (the "ACT") by the filing on August
1, 1997 of a certificate of formation of the Company with the Delaware Secretary
of State and, thereafter, on August 5, 1997, SEACOR Offshore Rigs Inc., a
Delaware corporation ("SEACOR"), as the Group A Member, and COI, LLC, a Delaware
limited liability company ("COI"), as the Group B Member, adopted an Operating
Agreement of Chiles Offshore LLC (the "ORIGINAL OPERATING AGREEMENT") as the
limited liability company agreement of the Company pursuant to Section 18-201(d)
of the Act effective as of such date; and
WHEREAS, on December 16, 1997, the Members adopted an Amended and
Restated Operating Agreement of Chiles Offshore LLC (the "AMENDED OPERATING
AGREEMENT"), which was further amended on April 28, 1998 (as so amended, the
"Prior Operating Agreement"); and
WHEREAS, the Members, pursuant to Section 13.3 of the Prior Operating
Agreement, wish to amend and restate the Prior Operating Agreement in its
entirety as provided in this Second Amended and Restated Operating Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
AMENDMENT AND RESTATEMENT. The Members hereby agree to adopt this
Agreement, as the limited liability company agreement of the Company, which
Agreement will henceforth be substituted in its entirety for the Prior Operating
Agreement by deleting in its entirety the Prior Operating Agreement and
substituting therefor the above preambles and the following:
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ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the following meanings,
unless the context otherwise requires:
"ACT" means the Delaware Limited Liability Company Act, 6 Del. L. P.
18-101, eT SEq., as amended from time to time.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to a Member, the
deficit balance, if any, in such Member's Capital Account as of the end of the
relevant Taxable Year, after giving effect to the following adjustments:
(a) Credit to such Capital Account any amounts which such Member is
obligated to restore pursuant to any provision of this Agreement or is deemed to
be obligated to restore pursuant to the penultimate sentences of Regulation
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) Debit to such Capital Account the items described in Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-
1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulation Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
"AFFILIATE" of a specified Person means any Person who directly or
indirectly controls, is controlled by, or is under common control with, such
Person.
"AGREEMENT" means this Second Amended and Restated Operating Agreement,
which shall constitute the limited liability company agreement of the Company
for purposes of the Act, as amended from time to time.
"BUSINESS DAY" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the state of New York) on which banks are open for
business in New York City.
"CAPITAL ACCOUNT" means, with respect to any Member, a separate account
established by the Company and maintained for each Member in accordance with
Section 3.4 hereof.
"CAPITAL CONTRIBUTION" means, with respect to any Member, the amount of
money and the initial Gross Asset Value of any Property (other than money)
contributed to the Company with respect to the interests purchased by such
Member pursuant to the terms of this Agreement, in return for which the Member
contributing such capital shall receive Membership Interests or other securities
of the Company.
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"CERTIFICATE" means the Certificate of Formation of the Company as
filed on August 1, 1997 with the Secretary of State of Delaware, as amended or
restated from time to time.
"CODE" means the United States Internal Revenue Code of 1986, as
amended.
"COI" means COI, LLC, a Delaware limited liability company.
"COI/SEACOR OWNERSHIP SCHEDULE" means a schedule of the ownership
interests in COI and in SEACOR, as previously delivered by COI and SEACOR to the
Company.
"COMPANY" means Chiles Offshore LLC.
"COMPANY AFFILIATE" shall have the meaning set forth in Section 8.2.
"COMPANY MINIMUM GAIN" shall have the meaning set forth for
"partnership minimum gain" in Regulation Section 1.704-2(b)(2) and shall be
determined in accordance with the provisions of Regulation Section 1.704-2(d).
"DEPRECIATION" means, for each Taxable Year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such Taxable Year, except that if the
Gross Asset Value of an asset differs from its adjusted basis for federal income
tax purposes at the beginning of such Taxable Year, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such Taxable Year bears to such beginning adjusted tax basis; PROVIDED,
HOWEVER, that if the adjusted basis for federal income tax purposes of an asset
at the beginning of such Taxable Year is zero, Depreciation shall be determined
with reference to such beginning Gross Asset Value using any reasonable method
selected by the Management Committee.
"GROSS ASSET VALUE" means with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows and as
otherwise provided in clause (ii) of Section 3.2(b):
(a) The initial Gross Asset Value of any asset contributed by
a Member to the Company shall be the gross fair market value of such
asset, as reasonably determined by the Management Committee;
(b) The Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross fair market values (taking
Code Section 7701(g) into account), as reasonably determined by the
Management Committee as of the following times: (i) the acquisition of
an additional interest in the Company by any new or existing Member in
exchange for more than a DE
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MINIMIS Capital Contribution; (ii) the distribution by the Company to a
Member of more than a DE MINIMIS amount of Company property as
consideration for an interest in the Company; and (iii) the liquidation
of the Company within the meaning of Regulation Section
1.704-1(b)(2)(ii)(g); PROVIDED, HOWEVER, that an adjustment described
in clauses (i) and (ii) of this paragraph shall be made only if the
Management Committee reasonably determines that such adjustment is
necessary to reflect the relative economic interests of the Members in
the Company; and
(c) The Gross Asset Value of any item of Company assets
distributed to any Member shall be adjusted to equal the gross fair
market value (taking Code Section 7701(g) into account) of such asset
on the date of distribution as reasonably determined by the Management
Committee.
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (b), such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset, for purposes of
computing Profits and Losses.
"GROUP" shall mean any specific group of Membership Interests in the
Company.
"GROUP A MEMBERS" means, the Persons named, from time to time, in the
books and records of the Company, as Group A members, and their respective
permitted successors or assigns.
"GROUP B MEMBERS" means, the Persons named, from time to time, in the
books and records of the Company, as Group B members, and their respective
permitted successors or assigns.
"GROUP C MEMBERS" means, the Persons named, from time to time, in the
books and records of the Company, as Group C members, and their respective
permitted successors or assigns.
"GROUP D MEMBERS" means, the Persons named, from time to time, in the
books and records of the Company, as Group D members, and their respective
permitted successors or assigns.
"GROUP E MEMBERS" means, the Persons named, from time to time, in the
books and records of the Company, as Group E members, and their respective
permitted successors or assigns.
"GROUP F MEMBERS" means, the Persons named, from time to time, in the
books and records of the Company, as Group F members, and their respective
permitted successors or assigns.
"GROUP G MEMBERS" means, the Persons named, from time to time, in the
books and records of the Company, as Group G members, and their respective
permitted successors or assigns.
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"IMMEDIATE FAMILY MEMBER" shall mean with respect to any Member that is
a natural Person, such Member's spouse, mother, father, brother, sister or
child, a trust established solely for the benefit of one or more Immediate
Family Members or the estate or personal representative of a deceased Member.
"INITIAL TAG-ALONG NOTICE" shall have the meaning set forth in Section
9.9(a).
"LOSSES" has the meaning set forth in the definition of "Profits" and
"Losses".
"MAJORITY IN INTEREST" means, with respect to the Members or to any
specified group or class of Members, Members owning more than fifty percent
(50%) of the total Percentage Interests held by all Members or such specified
group or class of Members, as applicable.
"MANAGEMENT COMMITTEE" means the management committee of the Company
established pursuant to Section 7.1.
"MANAGERS" means, collectively, the Persons designated and serving in
accordance with Article 7 as members of the Management Committee.
"MEMBER" or "MEMBERS" shall have the meaning set forth in the preamble
hereof.
"MEMBER NON-RECOURSE DEBT" has the meaning set forth for "partner
non-recourse debt" in Regulation Section 1.704-2(i)(4).
"MEMBER NON-RECOURSE DEBT MINIMUM GAIN" means an amount, with respect
to each Member Non-recourse Debt, equal to the Company Minimum Gain that would
result if such Member Non-recourse Debt were treated as a Non-recourse
Liability, determined in accordance with Regulation Section 1.704-2(i)(3).
"MEMBER NON-RECOURSE DEDUCTIONS" has the meaning set forth for "partner
non-recourse deductions" in Regulation Sections 1.704-2(i)(1) and 1.704-2(i)(2).
"MEMBERSHIP INTEREST" means a Member's limited liability company
interest in the Company which refers to all of a Member's rights and interests
in the Company in such Member's capacity as a Member, all as provided in this
Agreement and the Act.
"NET CASH FLOW" shall mean the gross cash proceeds from the Company's
operations and any distributions received from its subsidiaries (excluding the
proceeds of Company borrowings and capital contributions) and from all sales and
other dispositions of the Company's Property and any amount released by the
Management Committee from Reserves, less the portion of gross proceeds (other
than the proceeds of the Company's borrowings and capital contributions) used to
pay or establish Reserves for all the Company's expenses, debt payments
(including principal, interest and required redemption payments), capital
improvements, replacements and contingencies, all as reasonably determined by
the Management Committee. Net Cash Flow shall not be
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reduced by Depreciation or similar allowances and shall include the net cash
proceeds of all principal and interest payments actually received by the Company
with respect to any promissory note or other deferred payment obligation held by
the Company in connection with sales and other dispositions of the Company's
Property.
"NON-RECOURSE DEDUCTIONS" has the meaning set forth in Regulation
Section 1.704-2(b)(1).
"NON-RECOURSE LIABILITY" has the meaning set forth in Regulation
Section 1.704-2(b)(3).
"NOTICE" means a writing, containing the information required by this
Agreement to be communicated to a party, and shall be deemed to have been
received (a) when personally delivered or sent by telecopy, (b) one day
following delivery by overnight delivery courier, with all delivery charges
pre-paid, or (c) on the third Business Day following the date on which it was
sent by United States mail, postage prepaid, to such party at the address or fax
number, as the case may be, of such party as shown on the records of the
Company.
"PERCENTAGE INTEREST" of a Member means the aggregate limited liability
company percentage interest set forth in the books and records of the Company,
as the same may be modified from time to time as provided herein.
"PERMITTED TRANSFEREE" means a Person who becomes a transferee in
accordance with Section 9.2.
"PERSON" means any individual, partnership, limited liability company,
corporation, cooperative, trust, estate or other entity.
"PROFITS" and "LOSSES" means, for each Taxable Year, an amount equal to
the Company's taxable income or loss for a taxable year, determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:
(a) Any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing Profits or
Losses shall be added to such taxable income or loss;
(b) Any expenditures of the Company described in Section
705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulation Section 1.704-1(b)(2)(iv)(i), and
not otherwise taken into account in computing Profits or Losses, shall
be subtracted from such taxable income or loss;
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(c) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraphs (b) or (c) of the definition of
Gross Asset Value, the amount of such adjustment shall be treated as an
item of gain (if the adjustment increases the Gross Asset Value of the
asset) or an item of loss (if the adjustment decreases the Gross Asset
Value of the asset) from the disposition of such asset and shall be
taken into account for purposes of computing Profits or Losses;
(d) Gain or loss resulting from any disposition of Property
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;
(e) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for such
Taxable Year, computed in accordance with the definition of
Depreciation; and
(f) Notwithstanding any other provision of this definition,
any items which are specially allocated pursuant to Section 5.3 or
Section 5.4 hereof shall not be taken into account in computing Profits
or Losses. The amounts of the items of the Company income, gain, loss
or deduction available to be specially allocated pursuant to Sections
5.3 and 5.4 hereof shall be determined by applying rules analogous to
those set forth in subparagraphs (a) through (e) above.
"PROPERTY" means all assets, real or intangible, that the Company may
own or otherwise have an interest in from time to time.
"REGULATIONS" means the regulations, including temporary regulations,
promulgated by the United States Department of Treasury with respect to the
Code, as such regulations are amended from time to time, or corresponding
provisions of future regulations.
"RESERVES" means the cash reserves established by the Management
Committee to provide for working capital, future investments, debt service and
such other purposes as may be deemed reasonably necessary or advisable by the
Management Committee.
"SEACOR" means SEACOR Offshore Rigs Inc., a Delaware corporation.
"SEACOR GROUP" shall have the meaning set forth in Section 3.7(a).
"SEACOR SMIT" means SEACOR SMIT Inc., a Delaware corporation and, as of
the date hereof, the parent of SEACOR.
"SEC" means the Securities and Exchange Commission.
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"SECRETARY" shall mean the Secretary of the Treasury or his/her
delegate or the Internal Revenue Service.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECTION 9.8 OFFEREE" shall have the meaning set forth in Section
9.8(a).
"SECTION 9.8 PROPOSED PURCHASER" shall have the meaning set forth in
Section 9.8(a).
"SECTION 9.8 SELLING MEMBER" shall have the meaning set forth in
Section 9.8(a).
"SECTION 9.9 PARTICIPATING TAGGED MEMBERS" shall have the meaning set
forth in Section 9.9(a).
"SECTION 9.9 PROPOSED PURCHASER" shall have the meaning set forth in
Section 9.9(a).
"SECTION 9.9 TAG-ALONG MEMBERSHIP INTEREST" shall have the meaning set
forth in Section 9.9(a).
"SECTION 9.9 TAGGED MEMBERS" shall have the meaning set forth in
Section 9.9(a).
"SECTION 9.10 DRAG-ALONG MEMBERSHIP INTEREST" shall have the meaning
set forth in Section 9.10(a).
"SECTION 9.10 DRAGGED MEMBERS" shall have the meaning set forth in
Section 9.10(a).
"SECTION 9.10 PROPOSED PURCHASER" shall have the meaning set forth in
Section 9.10(a).
"SECTION 9.10 SELLING MEMBER" shall have the meaning set forth in
Section 9.10(a).
"TAG-ALONG RIGHT" shall have the meaning set forth in Section 9.9(a).
"TAG-ALONG NOTICE" shall have the meaning set forth in Section 9.9(a).
"TAXABLE YEAR" shall mean the taxable year of the Company in accordance
with the provisions of Section 706 of the Code.
"TAX DISTRIBUTION" means an amount equal to (i) the product of (x) the
taxable income of the Company and (y) the highest effective marginal combined
rate of Federal, state and city income tax, imposed on an individual taxpayer
(taking into account for purposes of determining the rate of "state and city
income tax rate" the highest combined
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New York State and New York City income tax rate imposed upon individuals)
reduced by (ii) to the extent not previously taken into account, any income tax
benefit attributable to the Company which could be realized (without regard to
the actual realization) by its Members in the current or any prior Taxable Year
or a portion thereof, commencing on or after April 28, 1998 (including any tax
losses or tax credits) computed at the applicable percentage calculated pursuant
to subclause (y) of clause (i) above for the Taxable Year that such benefit is
taken into account for purposes of this computation. Cash Distributions in
respect of the Tax Distribution shall be made quarterly as provided in Section
4.1 hereof, based on a reasonable estimate of the amount of Tax Distribution for
such Taxable Year. The amount of Tax Distribution shall be computed by the
accountants that regularly prepare the Company's tax returns and related
information. 1
"TAX MATTERS MEMBER" shall have the meaning set forth in Article 11.
"TRANSFER" or "TRANSFERRED" means (a) when used as a verb, to give,
sell, exchange, assign, transfer, pledge, hypothecate, bequeath, devise or
otherwise dispose of or encumber, and (b) when used as a noun, the nouns
corresponding to such verbs, in either case voluntarily or involuntarily, by
operation of law or otherwise. When referring to a Membership Interest,
"TRANSFER" shall mean the Transfer of such Membership Interest whether of
record, beneficially, by participation or otherwise.
"UNAFFILIATED MEMBERS" shall have the meaning set forth in Section 3.2.
ARTICLE 2
FORMATION AND OFFICES
2.1. FORMATION. Pursuant to the Act, the Company has been formed as a
Delaware limited liability company effective upon the filing of the Certificate
of the Company with the Secretary of State of Delaware. To the extent that the
rights or obligations of any Member are different by reason of any provision of
this Agreement than they would be in the absence of such provision, to the
extent permitted by the Act, this Agreement shall control.
2.2. PRINCIPAL OFFICE. The principal office of the Company shall be
located at 11200 Richmond Avenue, Suite 490, Houston, Texas 77082 or at such
other place(s) as the Management Committee may determine from time to time.
2.3. REGISTERED OFFICE AND REGISTERED AGENT. The location of the
registered office and the name of the registered agent of the Company in the
State of Delaware shall be as stated in the Certificate, as determined from time
to time by the Management Committee.
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1 These changes were effected pursuant to the April 28, 1998 amendment to the
Prior Operating Agreement.
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2.4. PURPOSE OF COMPANY. The Company's purposes, and the nature of the
business to be conducted and promoted by the Company are (a) to manage and
supervise either directly or through one or more other Persons owned and
controlled directly or indirectly by the Company, all aspects of the
construction of premium jackup rigs, and, upon their completion, manage all
aspects of their operation and receive therefor certain construction supervision
fees and management fees, (b) to form and act as managing general partner of any
such Person that is a partnership, (c) to engage in any other lawful act or
activity for which limited liability companies may be formed under the Act, and
(d) to engage in any and all activities necessary, advisable, convenient or
incidental to the foregoing.
2.5. DATE OF DISSOLUTION. The term of the Company shall continue until
the close of business on August 1, 2032 or until the earlier dissolution under
Article 10 hereof. The existence of the Company as a separate legal entity shall
continue until cancellation of the Certificate in the manner required by the
Act.
2.6. QUALIFICATION. The execution, delivery and filing of the
Certificate on August 1, 1997 by David E. Zeltner, in his capacity as an
authorized person, within the meaning of the Act, is hereby ratified, approved
and confirmed in all respects. The President and Chief Executive Officer, any
Vice President, the Secretary and any Assistant Secretary of the Company are
hereby authorized to qualify the Company to do business as a foreign limited
liability company in any state or territory in the United States in which the
Company may wish to conduct business and each is hereby designated as an
authorized person, within the meaning of the Act, to execute, deliver and file
any amendments or restatements of the Certificate and any other certificates and
any amendments or restatements thereof necessary for the Company to so qualify
to do business in any such state or territory.
ARTICLE 3
CAPITALIZATION OF THE COMPANY
3.1. CAPITAL CONTRIBUTIONS.
Each of the Members hereby acknowledges that (i) each of SEACOR and COI
made certain Capital Contributions to the Company on August 5, 1997, (ii) Group
C Members made certain Capital Contributions to the Company on December 16,
1997, (iii) Group E Members made certain Capital Contributions to the Company on
November 30, 1999 and (iv) subject to the satisfaction of certain conditions set
forth in their respective Subscription Agreements with the Company, the Group F
Member and each of Group G Members are making Capital Contributions to the
Company as of the date hereof.
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3.2. ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Except as otherwise expressly provided in this Agreement, no Member
shall be required to make any additional Capital Contribution. No Member shall
be permitted to make any additional Capital Contribution without the approval of
the Management Committee.
(b) The Company may offer and sell additional Membership Interests, on
such terms and conditions as may be determined from time to time by the
Management Committee, to:
(i) any Person that is not an Affiliate or Immediate Family
Member of a Member, as the case may be, with the approval of the
Management Committee; or
(ii) any Person that is a Member or is an Affiliate of a
Member or Immediate Family Member of a Member, as the case may be, with
the approval of (A) the Management Committee, and (B) a Majority in
Interest of the Members other than (1) any Member purchasing such
additional Membership Interests and (2) any Member whose Affiliate(s)
or Immediate Family Member(s) is purchasing such additional Membership
Interests (such Members, other than those referred to in clauses (1)
and (2) above being referred to as the "UNAFFILIATED MEMBERS"), it
being expressly understood that such approval of the Members shall also
include their approval of any related valuations of Gross Asset Value
by the Management Committee and, if such Members approve the Transfer
without approving said valuation, Gross Asset Value shall be determined
by a third Person familiar with the valuation of such transactions
selected jointly by the Management Committee and a Majority in Interest
of the Unaffiliated Members not later than ten (10) days after their
approval of the Transfer or, if the Management Committee and such
Members fail to so select a third Person, then such third Person will
be selected in accordance with the rules and procedures of the American
Arbitration Association in New York, New York.
If after the date hereof, any additional Capital Contributions are made
by Members but not in proportion to their respective Percentage Interests, the
Percentage Interest of each Member shall be adjusted such that each Member's
revised Percentage Interest determined immediately following the additional
Capital Contributions shall be equal to a fraction (1) the numerator of which is
the sum of (a) the positive Capital Account balance of the Member determined
immediately preceding the date the additional Capital Contribution is made (such
Capital Account to be computed by adjusting the book value for Capital Account
purposes of each Company asset to equal its Gross Asset Value as of such date,
as provided in subparagraph (b) of the definition herein of "Gross Asset
Value"), and (b) the additional Capital Contribution, if any, made by such
Member, and (2) the denominator of which is the sum of the positive Capital
Account balances and additional Capital Contributions of all Members, including
any new Members (in each case calculated as provided in Section 3.2(b)(ii)(l)).
The names,
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addresses and Capital Contributions of the Members shall be reflected in the
books and records of the Company.
3.3. LOANS. (a) No Member shall be obligated to loan funds to the
Company. Loans by a Member to the Company shall not be considered Capital
Contributions. The amount of any such loans shall be a debt of the Company owed
to such Member in accordance with the terms and conditions upon which such loans
are made.
(b) A Member may (but shall not be obligated to) guarantee a loan made
to the Company. If a Member guarantees a loan made to the Company and is
required to make payment pursuant to such guarantee to the maker of the loan,
then the amounts so paid to the maker of the loan shall be treated as a loan by
such Member to the Company and not as an additional capital contribution.
3.4. MAINTENANCE OF CAPITAL ACCOUNTS.
(a) The Company shall maintain for each Member, a separate Capital
Account with respect to the Membership Interest owned by such Member in
accordance with the following provisions:
(i) To each Member's Capital Account there shall be credited
(A) such Member's Capital Contributions, (B) such Member's distributive
share of Profits and any items in the nature of income or gain which
are specially allocated pursuant to Section 5.3 or Section 5.4 hereof,
and (C) the amount of any Company liabilities assumed by such Member or
which are secured by any Property distributed to such Member. The
principal amount of a promissory note which is not readily traded on an
established securities market and which is contributed to the Company
by the maker of the note (or a Member related to the maker of the note
within the meaning of Regulation Section 1.704-1(b)(2)(ii)(c)) shall
not be included in the Capital Account of any Member until the Company
makes a taxable disposition of the note or until (and only to the
extent) principal payments are made on the note, all in accordance with
Regulation Section 1.704-1(b)(2)(iv)(d)(2);
(ii) To each Member's Capital Account there shall be debited
(A) the amount of money and the Gross Asset Value of any Property
distributed or treated as an advance distribution to such Member
pursuant to any provision of this Agreement (including without
limitation any distributions pursuant to Section 4.1(a)), (B) such
Member's distributive share of Losses and any items in the nature of
expenses or losses which are specially allocated pursuant to Section
5.3 or Section 5.4 hereof, and (C) the amount of any liabilities of
such Member assumed by the Company or which are secured by any Property
contributed by such Member to the Company;
(iii) In the event Membership Interests are Transferred in
accordance with the terms of this Agreement, the transferee shall
succeed to the Capital
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Account of the transferor to the extent it relates to the Transferred
Membership Interests; and
(iv) In determining the amount of any liability for purposes
of Sections 3.4(a)(i) and 3.4(a)(ii) there shall be taken into account
Code Section 752(c) and any other applicable provisions of the Code and
Regulations.
(b) The foregoing Section 3.4(a) and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulation Section 1.704-1(b) and, to the greatest extent practicable,
shall be interpreted and applied in a manner consistent with such Regulation.
The Management Committee in its discretion and to the extent otherwise
consistent with this Agreement shall (i) make any adjustments that are necessary
or appropriate to maintain equality between the Capital Accounts of the Members
and the amount of capital reflected on the Company's balance sheet, as computed
for book purposes, in accordance with Regulation Section 1.704-1(b)(2)(iv)(q),
and (ii) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Regulation Section
1.704-1(b).
3.5. CAPITAL WITHDRAWAL RIGHTS, INTEREST AND PRIORITY. Except as
expressly provided in this Agreement, no Member shall be entitled (a) to
withdraw or reduce such Member's Capital Contribution or to receive any
distributions from the Company, or (b) to receive or be credited with any
interest on the balance of such Member's Capital Contribution at any time.
3.6. ADDITIONAL MEMBERSHIP INTERESTS. Subject to Section 3.1, if the
Company elects to offer and sell any additional Membership Interests
("ADDITIONAL MEMBERSHIP INTERESTS"), such Additional Membership Interests shall
be in the form of Membership Interests having such Percentage Interest,
designations and such rights and provisions, including, but not limited to,
provisions relating to distributions and allocations of Profits and Losses, and
Management Committee representation, as shall be reasonably determined from time
to time by the Management Committee to be in the best interest of the Company.
3.7. CERTAIN SEACOR TRANSACTIONS.
(a) Except as otherwise provided in Section 3.7(b), in the event SEACOR
or its parent SEACOR SMIT, or any other consolidated subsidiary of SEACOR SMIT
(collectively, the "SEACOR GROUP") provides management, administrative,
financial or investment-banking type services to the Company or any of its
subsidiaries with the respect to any rig transactions or otherwise, such member
of the SEACOR Group shall be entitled to receive reasonable fees and
reimbursement for expenses incurred in connection with the provision of such
services so long as such fees are not in excess of fees charged by unrelated
Persons for comparable services.
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(b) The Company shall pay SEACOR SMIT a management fee for financial
and other services provided to the Company and its subsidiaries by Dick H.
Fagerstal, Vice President, Finance of SEACOR SMIT. Such management fee to be
determined based on the value of the services provided by Mr. Fagerstal to the
Company and its subsidiaries, including reimbursement of any related
out-of-pocket expenses incurred by SEACOR SMIT, after taking into account the
compensation typically paid for such services and the percentage of Mr.
Fagerstal's time allocated to activities relating to the Company and its
subsidiaries.
ARTICLE 4
DISTRIBUTIONS
4.1. DISTRIBUTIONS OF NET CASH FLOW. Distributions of Net Cash Flow to
the Members shall be made as follows:
(a) quarterly, to the Members in proportion to and to the
extent of their relative Percentage Interests, an amount not in excess
of the Tax Distribution for the Taxable Year; PROVIDED, HOWEVER, that
distributions under this Section 4.1(a) shall be treated as advance
distributions under Section 4.1(b), with the result that distributions
otherwise made under Section 4.1(b) to such Member shall be reduced by
the amount of advances made pursuant to this Section 4.1(a); and
(b) upon the approval of and in the amount so approved by the
Management Committee acting in its sole discretion, to the Members in
proportion to their relative Percentage Interests.
4.2. PERSONS ENTITLED TO DISTRIBUTIONS. All distributions of Net Cash
Flow to the Members under this Article 4 shall be made to the Persons shown on
the records of the Company to be entitled thereto as of the last day of the
fiscal period prior to the time for which such distribution is to be made,
unless the transferor and transferee of any Membership Interest otherwise agree
in writing to a different distribution and such distribution is consented to in
writing by the Management Committee.
4.3. LIMITATIONS ON DISTRIBUTIONS. Notwithstanding anything to the
contrary herein provided, no distribution hereunder shall be permitted to the
extent prohibited by Section 18-607 of the Act.
ARTICLE 5
ALLOCATIONS
5.1. PROFITS. After giving effect to the special allocations set forth
in Sections 5.3 and 5.4 hereof and subject to Section 5.7 hereof, Profits for
any Taxable Year shall be allocated to the Members in proportion to their
Percentage Interests.
5.2. LOSSES. After giving effect to the special allocations set forth
in Sections 5.3 and 5.4, subject to the limitation in Section 5.5 hereof and
subject to Section 5.7
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hereof, Losses for any Taxable Year shall be allocated to the Members in
proportion to their Percentage Interests.
5.3. SPECIAL ALLOCATIONS. The following special allocations shall be
made in the following order:
(a) MINIMUM GAIN CHARGEBACK. Except as otherwise provided in
Section 1.704-2(f) of the Regulations, notwithstanding any other
provision of this Article 5, if there is a net decrease in Company
Minimum Gain during any Taxable Year, each Member shall be specially
allocated items of Company income and gain for such year (and, if
necessary for subsequent years) in proportion to, and to the extent of,
an amount equal to each Member's share of the net decrease in Company
Minimum Gain during such taxable year as determined in accordance with
the provisions of Regulation Section 1.704-2(g). Allocations pursuant
to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with
Sections 1.704-2(f) (6) and 1.704-2(j)(2) of the Regulations. This
Section 5.3(a) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
(b) MEMBER MINIMUM GAIN CHARGEBACK. Except as otherwise
provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding
any other provision of this Section 5, if there is a net decrease in
Member Non-recourse Debt Minimum Gain attributable to a Member
Non-recourse Debt during any Taxable Year, each Member who has a share
of the Member Non-recourse Debt Minimum Gain attributable to such
Member Non-recourse Debt, determined in accordance with Section
1.704-2(i)(5) of the Regulations, shall be specially allocated items of
Company income and gain for such Taxable Year (and, if necessary,
subsequent Taxable Years) in an amount equal to such Member's share of
the net decrease in Member Non-recourse Debt, determined in accordance
with Regulation Section 1.704-2(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto. The items to
be so allocated shall be determined in accordance with Sections
1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 5.3(b)
is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(i)(4) of the Regulations and shall be interpreted
consistently therewith.
(c) QUALIFIED INCOME OFFSET. In the event any Member
unexpectedly receives any adjustments, allocations, or distributions
described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5),
or 1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Company income
and gain shall be specially allocated to such Member in an amount and
manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of the Member as
quickly as possible, provided that an allocation pursuant to this
Section 5.3(c)
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shall be made only if and to the extent that the Member would have an
Adjusted Capital Account Deficit after all other allocations provided
for in this Section 5 have been tentatively made.
(d) GROSS INCOME ALLOCATION. In the event any Member has a
deficit Capital Account at the end of any Taxable Year which is in
excess of the sum of (i) the amount such Member is obligated to restore
pursuant to any provision of this Agreement and (ii) the amount such
Member is obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member
shall be specially allocated items of Company income and gain in the
amount of such excess as quickly as possible; PROVIDED, HOWEVER, that
an allocation pursuant to this Section 5.3(d) shall be made only if and
to the extent that such Member would have a deficit Capital Account in
excess of such sum after all other allocations provided for in this
Section 5 have been made other than those allocations pursuant to
Section 5.3(c) and this Section 5.3(d).
(e) NON-RECOURSE DEDUCTIONS. Non-recourse Deductions for any
Taxable Year shall be specially allocated to the Members in proportion
to their respective Percentage Interests.
(f) MEMBER NON-RECOURSE DEDUCTIONS. Any Member Non-recourse
Deductions for any Taxable Year shall be specially allocated to the
Member who bears the economic risk of loss with respect to the Member
Non-recourse Debt to which such Member Non-recourse Deductions are
attributable in accordance with Regulation Section 1.704-2(i)(1).
5.4. CURATIVE ALLOCATIONS. The allocations set forth in Sections
5.3(a), 5.3(b), 5.3(c), 5.3(d), 5.3(e), 5.3(f) and 5.5 (the "REGULATORY
ALLOCATIONS") are intended to comply with certain requirements of the
Regulations. It is the intent of the Members that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations
or with special allocations of other items of Company income, gain, loss or
deduction pursuant to this Section 5.4. Therefore, notwithstanding any other
provision of this Section 5 (other than the Regulatory Allocations), following
any Regulatory Allocation, the Management Committee shall use its best efforts
to make such offsetting special allocations of Company income, gain, loss or
deduction in whatever reasonable manner it determines so that, after such
offsetting allocations are made, each Member's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Member would have
had if the Regulatory Allocations had not been made and all Company items were
allocated pursuant to Sections 5.1 and 5.2.
5.5. LOSS LIMITATION. Losses allocated pursuant to Section 5.2 hereof
shall not exceed the maximum amount of Losses that can be allocated without
causing any Member to have an Adjusted Capital Account Deficit at the end of any
Taxable Year. In the event some but not all the Members would have Adjusted
Capital Account Deficits as a consequence of an allocation of Losses pursuant to
Section 5.2 hereof, the limitation set forth in this Section 5.5 shall be
applied on a Member by Member basis and Losses not
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allocable to any Member as a result of such limitation shall be allocated to the
other Members PRO RATA in accordance with the positive balances in such Members'
Capital Accounts so as to allocate the maximum permissible Losses to each Member
under Section 1.704-1(b)(2)(ii)(D) of the Regulations.
5.6. TAX ALLOCATIONS: CODE SECTION 704(C).
(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 Asset Value (computed in accordance with the definition of
Gross Asset Value).
(b) In the event the Gross Asset Value of any Company asset is adjusted
pursuant to subparagraph (b) of the definition of Gross Asset Value, subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Regulations thereunder.
(c) Any elections or other decisions relating to such allocations shall
be made by the Management Committee in any manner that reasonably reflects the
purpose and intention of this Agreement; PROVIDED, that the Company, in the
discretion of the Management Committee, may make, or not make, "curative" or
"remedial" allocations (within the meaning of the Regulations under Code Section
704(c)) including, but not limited to, "curative" allocations which offset the
effect of the "ceiling rule" for a prior Taxable Year (within the meaning of
Regulation Section 1.704-3(c)(3)(ii) and "curative" allocations from disposition
of contributed property (within the meaning of Regulation Section
1.704-3(c)(3)(iii)(B). Allocations pursuant to this Section 5.6 are solely for
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, Losses, other items, or distributions (other than Tax Distributions)
pursuant to any provision of this Agreement.
5.7. CHANGE IN PERCENTAGE INTERESTS. In the event that the Members'
Percentage Interests change during a Taxable Year, Profits and Losses shall be
allocated taking into account the Members' varying Percentage Interests for such
Taxable Year, determined on a daily, monthly or other basis as determined by the
Management Committee, using any permissible method under Code Section 706 and
the Regulations thereunder.
5.8. WITHHOLDING. Each Member hereby authorizes the Company to withhold
and to pay over any taxes payable by the Company or any of its Affiliates as a
result of such Member's participation in the Company; if and to the extent that
the Company shall be required to withhold any such taxes, such Member shall be
deemed for all purposes of
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this Agreement to have received a payment from the Membership as of the time
such withholding is required to be paid, which payment shall be deemed to be a
distribution to such Member to the extent that the Member is then entitled to
receive a distribution. To the extent that the aggregate of such payments in
respect of a Member for any period exceeds the distributions to which such
Member is entitled for such period, the amount of such excess shall be
considered a demand loan from the Company to such Member, with interest at 8%
per annum, which interest shall be treated as an item of Company income, until
discharged by such Member by repayment, which may be made in the sole discretion
of the Management Committee out of distributions to which such Member would
otherwise be subsequently entitled. The withholdings referred to in this Section
5.8 shall be made at the maximum applicable statutory rate under the applicable
tax law unless the Management Committee shall have received an opinion of
counsel or other evidence, satisfactory to the Management Committee, to the
effect that a lower rate is applicable, or that no withholding is applicable.
ARTICLE 6
MEMBERS' MEETINGS
6.1. MEETINGS OF MEMBERS; PLACE OF MEETINGS. Regular meetings of the
Members may be held on an annual basis or more frequently as determined by a
Majority in Interest of the Members. All meetings of the Members shall be held
in New York, New York or Houston, Texas as designated from time to time by the
Management Committee and stated in the Notice of the meeting or in a duly
executed waiver of the Notice thereof. Special meetings of the Members may be
held for any purpose or purposes, unless otherwise prohibited by law, and may be
called by the Management Committee or by Members owning not less than
twenty-five percent (25%) of the Percentage Interests. Members may participate
in a meeting of the Members by means of conference telephone or other similar
communication equipment whereby all Members participating in the meeting can
hear each other. Participation in a meeting in this manner shall constitute
presence in person at the meeting.
6.2. QUORUM; VOTING REQUIREMENT. The presence, in person, by telephone
or by proxy, of a Majority in Interest of the Members shall constitute a quorum
for the transaction of business by the Members. The affirmative vote of a
Majority in Interest of the Members present, in person, by telephone or by
proxy, at any meeting shall constitute a valid decision of the Members, except
where a larger vote is required by the Act.
6.3. PROXIES. At any meeting of the Members, every Member having the
right to vote thereat shall be entitled to vote in person or by proxy appointed
by an instrument in writing signed by such Member and bearing a date not more
than one year prior to such meeting.
6.4. ACTION WITHOUT MEETING. Any action required or permitted to be
taken at any meeting of Members of the Company may be taken without a meeting,
without prior notice and without a vote if a consent in writing setting forth
the action so taken is signed by Members having not less than the minimum
Percentage Interests that would be
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necessary to authorize or take such action at a meeting of the Members. Prompt
Notice of the taking of any action taken pursuant to this Section 6.4 by less
than the unanimous written consent of the Members shall be given to those
Members who have not consented in writing.
6.5. NOTICE. Notice stating the place, day and hour of the meeting and
the purpose for which the meeting is called shall be delivered personally or
sent by mail or by telecopier not less than five (5) days nor more than sixty
(60) days before the date of the meeting by or at the direction of the
Management Committee or other persons calling the meeting, to each Member
entitled to vote at such meeting.
6.6. WAIVER OF NOTICE. When any Notice is required to be given to any
Member hereunder, a waiver thereof in writing signed by the Member, whether
before, at or after the time stated therein, shall be equivalent to the giving
of such Notice.
6.7. NO AUTHORITY. Unless expressly authorized herein or by action of
the Members or the Management Committee in accordance herewith and the Act, no
Member shall have any authority to act on behalf of the Company or bind the
Company in any manner whatsoever, including, without limitation, entering into
any agreement on behalf of the Company.
ARTICLE 7
MANAGEMENT AND CONTROL
7.1. MANAGEMENT COMMITTEE; MANAGERS.
(a) Except as otherwise provided hereunder, the business and affairs of
the Company shall be managed by a Management Committee comprised of up to nine
(9) Managers, (i) up to four (4) of whom shall be designated in writing by a
Majority in Interest of the Group A Members (the four individuals designated
pursuant to this clause (i) being referred to herein collectively as the "GROUP
A MANAGERS" and, individually, as a "GROUP A MANAGER"), (ii) up to two (2)
individuals designated in writing by a Majority in Interest of the GROUP B
MEMBERS (the two individuals designated pursuant to this clause (ii) being
referred to herein collectively as the "GROUP B Managers" and individually as a
"GROUP B MANAGER"), (iii) one (1) individual designated in writing by a Majority
in Interest of the Group C Members (the one individual designated by a Majority
in Interest of the Group C Members pursuant to this clause (iii) being referred
to as a "GROUP C MANAGER"), (iv) one (1) individual designated in writing by a
Majority in Interest of Group F Members (the one individual designated by a
Majority in Interest of Group F Members pursuant to this clause (iv) being
referred to as a "GROUP F MANAGER"), and (v) in the event that one Person or a
group of Persons who are Affiliates owns at least a Majority in Interest of the
Group G Membership interests, one (1) individual designated in writing by such
Person or members of such group (the one individual so designated pursuant to
this clause (v) being referred to as a "GROUP G MANAGER"). Anything herein to
the contrary notwithstanding, so long as William E. Chiles continues to be
employed as the Chief Executive Officer of the Company, one of
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the Managers designated by the Group B Members as provided in clause (ii) of the
first sentence of this Section 7.1(a) shall be deemed to be William E. Chiles.
(b) After the date hereof, (i) a Majority in Interest of the Group A
Members shall be entitled at any time, with or without cause, to designate any
Group A Manager for removal as a Manager, (ii) a Majority in Interest of the
Group B Members shall be entitled at any time, with or without cause, to
designate any Group B Manager for removal as a Manager except that if William E.
Chiles is serving as Chief Executive Officer of the Company, the Group B Members
shall only be entitled at any time with or without cause to designate the other
Group B Manager for removal as a Manager, (iii) a Majority in Interest of the
Group C Members shall be entitled at any time, with or without cause, to
designate the Group C Manager for removal as a Manager, (iv) a Majority in
Interest of the Group F Members shall be entitled at any time, with or without
cause, to designate the Group F Manager for removal as a Manager, and (v) any
Person or group of Persons who are Affiliates that owns at least a Majority in
Interest of the Group G Members shall be entitled at any time, with or without
cause, to designate any Group G Manager then in office for removal as a Manager.
Any Manager designated for removal pursuant to this Section 7.1(b) shall be
deemed removed as a Manager upon receipt by the Company of the Notice from the
appropriate Member or Members designating said Manager for removal; PROVIDED,
HOWEVER, in the event that any Person or group of Persons who are Affiliates
ceases to own at least a Majority in Interest of the Group G Members, any Group
G Manager then in office shall be deemed to have been removed as a Manager upon
the Company receiving notice from such Person or group or otherwise having
knowledge of such event.
(c) If at any time a vacancy is created on the Management Committee by
reason of the death, removal or resignation of any Manager, the person to fill
such vacancy, shall be designated as a Manager (i) by a Majority in Interest of
the Group A Members, if the person who has ceased to be a Manager was a Group A
Manager, (ii) by a Majority in Interest of the Group B Members, if the person
who has ceased to be a Manager was a Group B Manager, (iii) by a Majority in
Interest of the Group C Members, if the person who has ceased to be a Manager
was the Group C Manager, (iv) by a Majority in Interest of the Group F Members,
if the person who has ceased to be a Manager was the Group F Manager, or (v) by
any Person or group of Persons who are Affiliates who then owns a Majority in
Interest of the outstanding Group G Members if the person who has ceased to be a
Manager was the Group G Manager.
(d) Except as otherwise expressly provided herein, the power and
authority granted to the Management Committee hereunder shall include all those
necessary or convenient for the furtherance of the purposes of the Company and
shall include the power to make all decisions with regard to the management,
operations, assets, financing and capitalization of the Company.
(e) Anything to the contrary herein notwithstanding, no Manager shall
have any authority to bind the Company or the Management Committee in his
individual
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capacity in any manner whatsoever, except for such authority as shall be
expressly delegated to a Manager in this Agreement or by the Management
Committee.
(f) The board of directors (or similar governing body) of any
subsidiary of the Company shall be comprised of such members as may be approved
by the Management Committee of the Company.
7.2. MANAGEMENT COMMITTEE MEETINGS; QUORUM; PROXIES.
(a) The Management Committee will establish a regular meeting schedule,
and will use its reasonable best efforts to meet at least once every quarter.
Unless otherwise agreed by a majority of the Managers, meetings of the
Management Committee shall be held in New York, New York or Houston, Texas.
Meetings may be conducted in person, by telephone or in any other manner agreed
to by the Management Committee. Any two (2) Managers may call a meeting of the
Management Committee upon delivery of written or telephonic Notice at least
three (3) Business Days prior to the date of such meeting, which Notice shall be
accompanied by a proposed agenda or statement of purpose and by copies of all
documents, agreements and information to be considered at such meeting;
PROVIDED, HOWEVER, at any such meeting, the Managers may address any and all
business matters which may come before it, whether or not such items were
provided for in the proposed agenda.
(b) A quorum shall exist when at least the majority of the Managers are
present in person, by telephone or by proxy. Each Manager is entitled to vote at
any meeting of the Management Committee. The vote of a majority of the Managers
present in person, by telephone or by proxy at any meeting of the Management
Committee shall be required for action by the Management Committee.
(c) At each meeting of the Management Committee, every Manager shall be
entitled to vote in person, by telephone or by proxy appointed by instrument in
writing, subscribed by such Manager.
7.3. MANAGEMENT COMMITTEE'S AUTHORITY; CERTAIN LIMITATIONS. (a) Except
as expressly set forth herein, the Management Committee shall have the maximum
power and authority with respect to the business and operations of the Company
permitted by law, including, without limitation, the right to cause the Company
to merge or consolidate with, or sell all, or substantially all, of its asset to
any Person.
(b) Notwithstanding the grant of authority to the Management Committee
pursuant to Section 7.3(a) and except as otherwise contemplated in Sections
10.1(a), (b) and (c), the Management Committee shall not authorize the Company
to merge or consolidate with, or sell all, or substantially all, of its assets
to, a Member or an Affiliate or Immediate Family Member of a Member without the
prior written consent of a Majority in Interest of the Members other than the
Member or the Member whose Affiliate(s) or Immediate Family Member(s) is a party
to such transaction.
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7.4. OFFICERS; AGENTS. The Management Committee shall have the power to
appoint any Person or Persons as agents (who may be referred to as officers) to
act for the Company with such titles, if any, as the Management Committee deems
appropriate and to delegate to such officers or agents such of the powers as are
granted to the Management Committee hereunder, PROVIDED, HOWEVER, that without
the express approval of the Management Committee, no officer or agent shall have
the authority to take any action (i) outside the ordinary course of business of
the Company or (ii) material to the Company and its subsidiaries taken as a
whole. Any decision or act of an officer appointed under this Section 7.4 within
the scope of the officer's designated or delegated authority shall control and
shall bind the Company. The officers or agents so appointed may have such titles
as the Management Committee shall deem appropriate, which may include (but need
not be limited to) President and Chief Executive Officer, Senior Vice President,
Vice President, Chief Operating Officer, Chief Financial Officer, Treasurer,
Controller or Secretary. Unless the authority of the agent designated as the
officer in question is limited by the Management Committee, any officer so
appointed shall have the same authority to act for the Company as a
corresponding officer of a Delaware corporation would have to act for a Delaware
corporation in the absence of a specific delegation of authority; PROVIDED,
HOWEVER, that without the express approval of the Management Committee, no
officer or agent shall have the authority to take any action (i) outside the
ordinary course of business of the Company or (ii) material to the Company and
its subsidiaries taken as a whole. The Management Committee, in its sole
discretion, may by vote, resolution or otherwise ratify any act previously taken
by an officer or agent acting on behalf of the Company.
7.5. RESIGNATION OF A MANAGER. A Manager may resign from such position
at any time upon giving Notice to the Management Committee.
7.6. COMPENSATION Except as otherwise provided herein, each Manager
shall be entitled to reimbursement from the Company for all reasonable direct
out-of-pocket expenses incurred on behalf of the Company, including
reimbursement for such expenses incurred by such Manager in connection with
attending meetings of the Management Committee, and shall not be entitled to
further compensation except as may be approved by the Management Committee.
ARTICLE 8
LIABILITY AND INDEMNIFICATION
8.1. LIABILITY OF MEMBERS. A Member shall only be liable to make the
payment of its Capital Contribution. No Member, except as otherwise specifically
provided in the Act, shall be obligated to pay any distribution to or for the
account of the Company or any creditor of the Company.
8.2. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless each Manager and
Member and their respective Affiliates and all officers, directors, members,
partners,
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stockholders, managers and employees thereof, and each officer of the Company
and any Person serving in any similar capacity for another Person affiliated
with the Company at the request of the Company (solely for purposes of this
Section 8.2, each such Person being referred to as, a "COMPANY AFFILIATE"), from
and against any and all losses, claims, demands, costs, damages, liabilities,
expenses of any nature (including reasonable attorneys' fees and disbursements),
judgments, fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, whether civil, criminal, administrative
or investigative, in which a Company Affiliate may be involved, or threatened to
be involved, as a party or otherwise, arising out of or incidental to the
business of the Company, including, without limitation, liabilities under the
Federal and state securities laws, regardless of whether a Company Affiliate
continues to be a Company Affiliate, at the time any such liability or expense
is paid or incurred, if (i) the Company Affiliate acted in good faith and in a
manner it or he reasonably believed to be in, or not opposed to, the interests
of the Company and, with respect to any criminal proceeding, had no reason to
believe its or his conduct was unlawful, and (ii) the Company Affiliate's
conduct did not constitute actual fraud, gross negligence or willful or wanton
misconduct. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of NOLO CONTENDERE, or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Company Affiliate acted in a manner contrary to
that specified in (i) or (ii) above.
(b) Expenses (including reasonable legal fees and expenses) incurred in
defending any proceeding subject to subsection (a) of this Section 8.2 shall be
paid by the Company in advance of the final disposition of such proceeding upon
receipt of a written affirmation by the Company Affiliate of his or its good
faith belief that he or it has met the standard of conduct necessary for
indemnification under this Section 8.2 and a written undertaking (which need not
be secured) by or on behalf of the Company Affiliate to repay such amount if it
shall ultimately be determined, by a court of competent jurisdiction or
otherwise, that the Company Affiliate is not entitled to be indemnified by the
Company as authorized hereunder.
(c) The indemnification provided by this Section 8.2 shall be in
addition to any other rights to which each Company Affiliate may be entitled
under any agreement or vote of the Management Committee by the vote of Managers
that are disinterested and unaffiliated with such Company Affiliate, as a matter
of law or otherwise, both as to action in the Company Affiliate's capacity as a
Company Affiliate or as a Person serving at the request of the Company and shall
continue as to a Company Affiliate who has ceased to serve in such capacity and
shall inure to the benefit of the heirs, successors, assigns, administrators and
personal representatives of such Company Affiliate.
(d) The Company may purchase and maintain directors and officers
insurance or, similar coverage, for its Managers and its officers in such
amounts and with such deductibles or self-insured retentions as are customary
for Persons engaged in businesses similar in size and type to those engaged in
by the Company.
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(e) Except as provided in Section 3.4, any indemnification hereunder
shall be satisfied only out of the assets of the Company and the Members shall
not be subject to personal liability by reason of these indemnification
provisions. To the extent the Company does not have adequate cash available to
satisfy its obligations under this Article 8, the Company shall pay its
obligations under this Article 8 out of Net Cash Flow prior to making any
distributions (other than distributions under Section 4.1(a) hereof) to the
Members.
(f) A Company Affiliate shall not be denied indemnification in whole or
in part under this Section 8.2 because the Company Affiliate had an interest in
the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement and all
material facts relating to such indemnitee's interest were adequately disclosed
to the Management Committee at the time the transaction was consummated.
(g) The provisions of this Section 8.2 are for the benefit of the
Company Affiliates and the heirs, successors, assigns, administrators and
personal representatives of the Company Affiliates and shall not be deemed to
create any rights for the benefit of any other Persons.
(h) Any repeal or amendment of any provisions of this Section 8.2 shall
be prospective only and shall not adversely affect any Company Affiliate's right
existing at the time of such repeal or amendment.
ARTICLE 9
TRANSFERS OF MEMBERSHIP INTERESTS
9.1. GENERAL RESTRICTIONS.
(a) No Member may Transfer all or any part of such Member's Membership
Interest, except as provided in this Agreement. Any purported Transfer or
purported purchase of a Membership Interest or a portion thereof in violation of
the terms of this Agreement shall be null and void and of no effect. A permitted
Transfer shall be effective as of the date specified in the instruments relating
thereto. Any transferee desiring to make a further Transfer shall become subject
to all the provisions of this Article 9 to the same extent and in the same
manner as any Member desiring to make any Transfer. No Member shall have the
right to withdraw as a Member of the Company.
(b) In the event that the Membership Interests (or securities issued in
exchange for Membership Interests upon conversion of the Company into a
corporation) are registered under the Securities Act, the Transfer restrictions
set forth in this Article 9 shall terminate.
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9.2. PERMITTED TRANSFEREES.
(a) Notwithstanding the provisions of Section 9.8 and 9.9, each Member
that is a natural person shall have the right to Transfer (but not to substitute
the transferee as a substitute Member in such Member's place, except in
accordance with Section 9.3), by a written instrument, all or any part of such
Member's Membership Interest, to an Immediate Family Member; it being understood
that any such Permitted Transferee shall be deemed to be an additional or
substitute Member as of the date of such Transfer and each Member agrees to take
such action and execute such documents as such transferee may deem reasonably
necessary and appropriate for such transferee to become a substitute or
additional Member.
(b) Notwithstanding the provisions of Sections 9.8 and 9.9, each Member
that is not a natural Person (other than COI) shall have the right to Transfer
(but not to substitute the transferee as a substitute Member in such Member's
place, except in accordance with Section 9.3), by a written instrument, all or
any part of a Member's Membership Interest, to any of its Affiliates; it being
understood that any such Permitted Transferee shall be deemed to be an
additional or substitute Member as of the date of such Transfer and each Member
agrees to take such action and execute such documents as such transferee may
deem reasonably necessary and appropriate for such transferee to become a
substitute or additional Member.
(c) Notwithstanding the provisions of Sections 9.8 and 9.9, COI shall
have the right to Transfer (but not to substitute the transferee as a substitute
Member in COI's place, except in accordance with Section 9.3), by a written
instrument, all of its Membership Interest, to its members PRO RATA in
accordance with their percentages of membership interests set forth on the
COI/SEACOR Ownership Schedule; it being understood that each such Permitted
Transferee shall be deemed an additional or substitute Member as of the date of
such Transfer and each Member agrees to take such action and execute such
documents as such transferee may deem reasonably necessary and appropriate for
such transferee to become a substitute or additional Member.
(d) Notwithstanding the provisions of Sections 9.8 and 9.9, a Member
shall have the right to pledge such Member's Membership Interest, in whole or in
part, to a financial institution as collateral security for a loan to such
Member by such financial institution so long as the Management Committee has
given its prior written consent to said pledge, which consent shall not be
unreasonably withheld; PROVIDED, HOWEVER, that no such pledge shall be made for
the purpose of effecting a disguised sale to the pledgee and; PROVIDED FURTHER,
that any such pledgee or a transferee of such pledgee, as appropriate, shall
agree in a writing delivered to the Company to be bound by all of the terms and
conditions of this Agreement.
(e) Unless and until admitted as a substitute Member pursuant to
Section 9.3, a transferee of a Member's Membership Interest in whole or in part
shall be an assignee with respect to such Transferred Membership Interest and
shall not be entitled to participate in the management of the business and
affairs of the Company or to become
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or to exercise the rights of a Member, including the right to vote, the right to
require any information or accounting of the Company's business or the right to
inspect the Company's books and records. Such transferee shall only be entitled
to receive, to the extent of the Membership Interest transferred to such
transferee, the share of distributions and profits, including distributions
representing the return of Capital Contributions, to which the transferor would
otherwise be entitled with respect to the Transferred Interest. The transferor
shall have the right to vote such Transferred Interest until the transferee is
admitted to the Company as a substituted Member with respect to the Transferred
Interest.
9.3. SUBSTITUTE MEMBERS. No transferee of all or part of a Member's
Membership Interest shall become a substitute Member in place of the transferor
unless and until:
(a) the transferee has executed an instrument in form and
substance reasonably satisfactory to the Management Committee accepting
and adopting the terms and provisions of the Certificate and this
Agreement; and
(b) the transferee has caused to be paid all reasonable
expenses of the Company in connection with the admission of the
transferee as a substitute Member.
Upon satisfaction of all the foregoing conditions with respect to a
particular transferee, the President and Chief Executive Officer shall cause the
books and records of the Company to reflect the admission of the transferee as a
substitute Member to the extent of the Transferred Interest held by the
transferee.
9.4. EFFECT OF ADMISSION AS A SUBSTITUTE MEMBER. A transferee who has
become a substitute Member has, to the extent of the transferred Membership
Interest, all the rights, powers and benefits of, and is subject to the
restrictions and liabilities of a Member under the Certificate, this Agreement
and the Act. Upon admission of a transferee as a substitute Member, the
transferor of the Membership Interest so held by the substitute Member shall
cease to be a Member of the Company to the extent of such transferred Membership
Interest.
9.5. CONSENT. Each Member hereby agrees that upon satisfaction of the
terms and conditions of this Article 9 with respect to any proposed Transfer,
the Person proposed to be such transferee may be admitted as a Member.
9.6. NO DISSOLUTION. If a Member transfers all of its Membership
Interest pursuant to this Article 9 and the transferee of such Membership
Interest is admitted as a Member pursuant to Section 9.3, such Person shall be
admitted to the Company as a Member effective on the effective date of the
Transfer or such other date as may be specified when the Member is admitted. In
such event, the Company shall not dissolve if the business of the Company is
continued without dissolution in accordance with clause (c) of Section 10.1
hereof.
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9.7. ADDITIONAL MEMBERS; CERTAIN REPRESENTATIONS OF MEMBERS. From and
after the date hereof, any Person acceptable to the Management Committee may
become an additional Member of the Company for such consideration as the
Management Committee shall determine, provided that such additional Member
complies with all the requirements of a transferee under Sections 9.3(a) and
(b).
9.8. RIGHT OF FIRST OFFER.
(a) If at any time any Member (hereinafter for purposes of this Section
9.8, the "SECTION 9.8 SELLING Members") proposes to Transfer to any Person other
than a Permitted Transferee (hereinafter for purposes of this Section 9.8, the
"SECTION 9.8 PROPOSED PURCHASER") its Membership Interest (or any portion
thereof), such Section 9.8 Selling Member shall provide Notice of the proposed
Transfer to the other Members (hereinafter for purposes of Section 9.8, the
"SECTION 9.8 OFFEREES") setting forth the price, terms and conditions of the
proposed sale of the Membership Interest. Each of the Section 9.8 Offerees shall
have the option to acquire such Member's PRO rata portion (which shall be in
proportion to the Percentage Interests of all Section 9.8 Offerees) at the time
of such Notice on the terms and conditions set forth in such Notice. The option
of Section 9.8 Offerees to purchase their PRO RATA portions of the Membership
Interest shall be exercised by delivery of a Notice to the Section 9.8 Selling
Member and the Company of exercise within twenty (20) days following receipt of
the Section 9.8 Selling Member's Notice of the price, terms and conditions of
the sale. A Section 9.8 Offeree may exercise such Member's option to purchase
such Membership Interest only as to the entire portion thereof that such Member
is entitled to purchase. If any Section 9.8 Offeree fails or declines to
purchase such Member's PRO RATA portion of such Membership Interest, then such
Member's portion of such Membership Interest shall be offered to the Section 9.8
Offerees who have exercised their options to purchase their PRO RATA portions.
This procedure shall continue until such time as the entire Membership Interest
offered hereby has been purchased by such Section 9.8 Offerees or until no such
Member desires to purchase any additional Membership Interest hereunder. Each
Section 9.8 Offeree shall have the right to offer to acquire such Membership
Interest by delivering to the Section 9.8 Selling Member and the Company such
Member's Notice of acceptance within five (5) Business Days following receipt of
the Company's Notice that additional portions are available. If less than the
entire Membership Interest to be sold by the Section 9.8 Selling Member is to be
purchased by the Section 9.8 Offerees, the Section 9.8 Selling Member may sell
the entire Membership Interest to be sold within sixty (60) days from the Notice
referred in the preceding sentence, upon terms and conditions no less favorable
to the Section 9.8 Selling Member than were set forth in the initial Notice (it
being understood that such terms may include the receipt by the Selling Member
of consideration consisting of only cash and/or securities with a readily
ascertainable market value).
(b) The sale of any Membership Interest to Section 9.8 Offerees who
exercise their options to purchase any Membership Interest shall occur
twenty-one (21) days after the expiration of the last option to expire under
Section 9.8(a) above. At the closing, each of the Section 9.8 Offerees shall
deliver a certified or bank cashier's check in, or wire transfer immediately
available funds in the appropriate amount to the Section 9.8
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Selling Member against the simultaneous delivery of an assignment in form and
substance reasonably satisfactory to each Section 9.8 Offeree of the Member
Interest (or portion thereof) being transferred to such Section 9.8 Offeree,
such assignment shall be made free and clear of all liens, claims and
encumbrances, except as provided by this Agreement or as otherwise agreed to by
such Section 9.8 Offeree; PROVIDED, HOWEVER, that each such Section 9.8 Selling
Member shall not be required to make any other representations or warranties in
connection with such sale except that it has the authority to sell its
Membership Interest, is the sole owner of such Membership Interest and has good
and valid title to such Membership Interest and that the sale of its Membership
Interest does not violate any agreement to which it is a party or by which it is
bound.
9.9. TAG-ALONG RIGHTS. (a) In the event of any proposed Transfer in any
one transaction or in a series of related transactions by any Member or Members
(hereinafter for purposes of this Section 9.9, collectively, the "SECTION 9.9
SELLING MEMBER") of its or their Membership Interests constituting in the
aggregate twenty percent (20%) or more of all the Membership Interests to any
Person (such Person being hereinafter referred to as the "SECTION 9.9 PROPOSED
PURCHASER"), other than to a Permitted Transferee or in a bona fide public
distribution pursuant to an effective Registration Statement under the
Securities Act, each of the other Members (hereinafter for purposes of this
Section 9.9, the "SECTION 9.9 TAGGED MEMBERS") shall have the irrevocable and
exclusive right, but not the obligation (the "TAG-ALONG RIGHT"), to require the
Section 9.9 Proposed Purchaser to purchase from each of them such Section 9.9
Tagged Member's PRO RATA portion (I.E., such Tagged Member's Percentage
Interest) of the Membership Interests proposed to be sold by the Section 9.9
Selling Members to the Section 9.9 Proposed Purchaser (collectively, the
"SECTION 9.9 TAG-ALONG MEMBERSHIP INTEREST"). The Section 9.9 Selling Members
shall give Notice (the "INITIAL TAG-ALONG NOTICE") to the Section 9.9 Tagged
Members at least thirty (30) days prior to the date of the proposed Transfer and
at least three (3) Business Days after the expiration of the last option to
expire under Section 9.8(a) above, stating:
(i) the name and address of the Section 9.9 Proposed
Purchaser;
(ii) the proposed amount of consideration and terms and
conditions of payment offered by such Section 9.9 Proposed Purchaser
(if the proposed consideration is not cash, the Notice shall describe
the terms of the proposed consideration) and any other material terms
and conditions of the Section 9.9 Proposed Purchaser's offer;
(iii) the Membership Interest proposed to be transferred; and
(iv) that the Section 9.9 Proposed Purchaser has been informed
of the Tag-Along Right and has agreed to purchase Membership Interests
in accordance with the terms hereof.
The Tag-Along Right shall be exercised by any or all of the Section 9.9
Tagged Members by giving Notice to the Company ("TAG-ALONG NOTICE") with a copy
to each
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Section 9.9 Selling Member, within five (5) days following receipt of the
Initial Tag-Along Notice, indicating its election to exercise the Tag-Along
Right (hereinafter referred to for purposes of this Section 9.9, the "SECTION
9.9 PARTICIPATING TAGGED MEMBERS"). The Tag-Along Notice shall state the amount
of Membership Interests that such Section 9.9 Participating Tagged Member
proposes to include in such transfer to the Section 9.9 Proposed Purchaser.
Failure by any Section 9.9 Tagged Member to give such Tag-Along Notice within
such 5 day period shall be deemed an election by such Section 9.9 Tagged Member
not to sell its Membership Interests pursuant to the Initial Tag-Along Notice.
The closing with respect to any sale to a Section 9.9 Proposed Purchaser
pursuant to this Section shall be held at the time and place specified in the
Initial Tag-Along Notice but in any event within sixty (60) days of the date the
Initial Tag-Along Notice is given. Consummation of the sale of Membership
Interests by any Section 9.9 Selling Member to a Section 9.9 Proposed Purchaser
shall be conditioned upon consummation of the sale by each Section 9.9
Participating Tagged Member to such Section 9.9 Proposed Purchaser of the
Section 9.9 Tag-Along Membership Interest, if any.
(b) In the event that the Section 9.9 Proposed Purchaser does not
purchase the Section 9.9 Tag-Along Membership Interest from the Section 9.9
Participating Tagged Members on the same terms and conditions as purchased from
the Section 9.9 Selling Member, then the Section 9.9 Selling Member making such
Transfer shall purchase on such terms and conditions such Section 9.9 Tag-Along
Membership Interest if the Transfer occurs.
(c) The Section 9.9 Selling Members who are parties to a sale to a
Section 9.9 Proposed Purchaser shall arrange for payment (by bank cashier's
check or certified check or by wire transfer of immediately available funds)
directly by the Section 9.9 Proposed Purchaser to each Section 9.9 Participating
Tagged Member, upon delivery of an appropriate assignment in form and substance
reasonably satisfactory to the Section 9.9 Proposed Purchaser, which assignment
shall be made free and clear of all liens, claims and encumbrances except as
provided by this Agreement or as otherwise agreed to by such Section 9.9
Proposed Purchaser; PROVIDED, HOWEVER, that each such Section 9.9 Participating
Tagged Member shall not be required to make any other representations or
warranties in connection with such sale except that it has the authority to sell
its Membership Interest, is the sole owner of such Membership Interest and has
good and valid title to such Membership Interest and that the sale of its
Membership Interest does not violate any agreement to which it is a party or by
which it is bound.
(d) If at the end of 60 days following the date on which an Initial
Tag-Along Notice was given, the sale of Membership Interests by the Section 9.9
Selling Members and the sale of the Section 9.9 Tag-Along Membership Interests
have not been completed in accordance with the terms of the Section 9.9 Proposed
Purchaser's offer, all the restrictions on sale, transfer or assignment
contained in this Agreement with respect to Membership Interests owned by the
Members shall again be in effect.
9.10. DRAG-ALONG RIGHTS.
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(a) In the event of any proposed Transfer of Membership Interest
constituting a majority of all Membership Interests by any Member or Members
(hereinafter for purposes of this Section 9.10, collectively a "SECTION 9.10
SELLING MEMBERS") of all of its or their Membership Interest to a Person (such
Person being hereinafter referred to as the "SECTION 9.10 PROPOSED PURCHASER"),
other than a Permitted Transferee or in a bona fide public distribution pursuant
to an effective Registration Statement under the Securities Act, such Section
9.10 Selling Members shall have the right (the "DRAG-ALONG RIGHT"), to require
each other Member (hereinafter for purposes of this Section 9.10, the "SECTION
9.10 DRAGGED MEMBERS") to Transfer to the Section 9.10 Proposed Purchaser each
such Section 9.10 Dragged Member's entire Membership Interest (such Membership
Interests as may be required to be so Transferred being hereinafter referred to
as the "SECTION 9.10 DRAG-ALONG MEMBERSHIP INTERESTS"). The Section 9.10 Selling
Members shall exercise their Drag-Along Right by giving Notice (the "DRAG-ALONG
NOTICE") to each Section 9.10 Dragged Member at least twenty (20) days prior to
the date of the proposed Transfer and at least three (3) Business Days after the
expiration of the last option to expire under Section 9.8(a) above, stating:
(i) the name and address of the Section 9.10 Proposed
Purchaser;
(ii) the proposed amount of consideration and terms and
conditions of payment offered by such Section 9.10 Proposed Purchaser
(if the proposed consideration is not cash, the notice shall describe
the terms of the proposed consideration);
(iii) the Membership Interests proposed to be transferred; and
(iv) that the Section 9.10 Proposed Purchaser has been
informed of the Drag-Along Right and has agreed to purchase Membership
Interests in accordance with the terms hereof.
The closing with respect to any sale to a Section 9.10 Proposed
Purchaser pursuant to this Section shall be held at the time and place specified
in the Drag-Along Notice but in any event within sixty (60) days of the date the
Drag-Along Notice is given. Consummation of the sale of Membership Interests by
any Member to a Section 9.10 Proposed Purchaser shall be conditioned upon
consummation of the sale by each Section 9.10 Selling Member to such Section
9.10 Proposed Purchaser of the Membership Interests proposed to be sold by the
Section 9.10 Selling Members.
(b) In the event that the Section 9.10 Proposed Purchaser does not
purchase the Section 9.10 Drag-Along Membership Interests from the Section 9.10
Dragged Members on the same terms and conditions as purchased from the Section
9.10 Selling Members, then such Section 9.10 Dragged Members shall have the
right to require the Company to cause the Section 9.10 Selling Members making
such Transfer to purchase on such terms and conditions such Section 9.10
Drag-Along Membership Interests if the Transfer occurs.
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(c) The Section 9.10 Selling Members who are parties to a sale to a
Section 9.10 Proposed Purchaser shall arrange for payment directly by the
Section 9.10 Proposed Purchaser to each Section 9.10 Dragged Member, upon
delivery of the an appropriate assignment in form and substance reasonably
satisfactory to the Section 9.10 Proposed Purchaser, which assignment shall be
made free and clear of all liens, claims and encumbrances, except as provided by
this Agreement or as otherwise agreed to by such Section 9.10 Proposed
Purchaser; PROVIDED, however, that each such Dragged Stockholder shall not be
required to make any other representations or warranties in connection with such
sale except that it has the authority to sell its Membership Interest, is the
sole owner of such Shares and has good and valid title to such Membership
Interest, and that the sale of such Membership Interest does not violate any
agreement to which it is a party or by which it is bound.
(d) If at the end of 60 days following the date on which a Drag-Along
Notice was given, the sale of Membership Interests by the Section 9.10 Selling
Members and the sale of the Section 9.10 Drag-Along Membership Interests have
not been completed in accordance with the terms of the Drag-Along Notice, all
the restrictions on sale, transfer or assignment contained in this Agreement
with respect to Membership Interests owned by the Section 9.10 Selling Members
shall again be in effect.
9.11. PIGGYBACK REGISTRATION.
(a) For the purposes of this Section 9.11, the following capitalized
terms shall have the following meanings:
(i) "COMMON STOCK" shall mean the common stock of the Company
issued upon conversion of the Company to a corporation;
(ii) "OTHER SHARES" shall mean at any time those shares of
Common Stock or other securities of the Company which do not constitute
Primary Shares or Registrable Shares;
(iii) "PRIMARY SHARES" shall mean at any time authorized but
unissued shares of Common Stock or shares of Common Stock held by the
Company in its treasury;
(iv) "REGISTRABLE SHARES" shall mean the shares of Common
Stock held by the Members in the Company which constitute Restricted
Shares and which are not then eligible for sale to the public pursuant
to Rule 144 (other than Rule 144(k)) in a single transaction (and
including Membership Interests held by Members prior to the conversion
of the Company to a corporation).
(v) "RESTRICTED SHARES" shall mean any Membership Interests,
shares of Common Stock or other securities received in respect thereof
held or which may be acquired from the Company by the Members as of the
applicable date,
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and which theretofore have not been sold to the public pursuant to a
registration statement under the Securities Act or pursuant to Rule
144; and
(vi) "RULE 144" shall mean Rule 144 promulgated under the
Securities Act or any successor rule thereto or any complementary rule
thereto (such as Rule 144A).
(b) If the Company at any time proposes for any reason to register
Primary Shares or Other Shares under the Securities Act (other than on Form S-4
or Form S-8 promulgated under the Securities Act or any successor forms
thereto), it shall promptly give Notice to the Members of its intention so to
register the Primary Shares or Other Shares and, upon the written request, given
within 30 days after delivery of any such Notice by the Company, of the Members
to include in such registration Registrable Shares (which request shall specify
the number of Registrable Shares proposed to be included in such registration),
the Company shall use its best efforts to cause all such Registrable Shares to
be included in such registration on the same terms and conditions as the
securities otherwise being sold in such registration; PROVIDED, HOWEVER, that if
the managing underwriter advises the Company that the inclusion of all
Registrable Shares or Other Shares proposed to be included in such registration
would interfere with the successful marketing (including pricing) of Primary
Shares proposed to be registered by the Company, then the number of Primary
Shares, Registrable Shares and Other Shares proposed to be included in such
registration shall be included in the following order:
(i) FIRST, the Primary Shares; and
(ii) SECOND, the Registrable Shares and Other Shares requested
to be included in such registration PRO RATA, based upon the respective
numbers of Restricted Shares owned at the time by each Member and the
respective numbers of Other Shares owned at the time by each holder of
Other Shares.
(c) If at any time after giving Notice pursuant to this Section 9.11 of
its intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason either not to register or to delay registration
of such securities, the Company may, at its election, give Notice of such
determination to the Members and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities.
(d) If a registration under this Section 9.11 involves an underwritten
offering, the underwriter or underwriters and any additional investment bankers
and managers to be used in connection with such registration shall be selected
by the Company, and any Member desiring to have Registrable Shares included in
such registration, and any such Investor shall be required to sign an
underwriting agreement in customary form with such underwriter or underwriters.
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9.12. ADDITIONAL MEMBERS; CERTAIN REPRESENTATIONS OF MEMBERS.
(a) Any Person acceptable to the Management Committee may become an
additional Member of the Company for such consideration as the Management
Committee shall determine, provided that such additional Member complies with
all the requirements of a transferee under Section 9.3. (b) Each of COI and
SEACOR hereby represents to the Company that, as of the date hereof, its
outstanding membership interests or issued and outstanding shares of capital
stock, as the case may be, are as set forth on the COI/SEACOR Ownership Schedule
and such membership interests or shares, as the case may be, are owned
beneficially and of record by the Persons identified on such Schedule.
(c) In order to prevent any direct transfer of interests in the
Company, each of COI and SEACOR acknowledge and confirms that each of its
members or stockholders, as the case may be, agreed to certain transfer
restrictions with respect to the transfer of such Person's membership interests
or shares of COI or SEACOR, as the case may be, by executing and delivering to
the Company a letter agreement dated August 5, 1997.
ARTICLE 10
DISSOLUTION AND TERMINATION
10.1. EVENTS CAUSING DISSOLUTION. The Company shall be dissolved and
its affairs wound up upon the first to occur of the following events:
(a) The vote to dissolve Members holding not less than ninety
percent (90%) of the Membership Interests;
(b) The sale, Transfer or other disposition of substantially
all of the assets of the Company and the receipt and distribution of
all the proceeds therefrom;
(c) The death, retirement, resignation, insanity, expulsion,
bankruptcy or dissolution of a Member, or any other event which
terminates the continued membership of a Member in the Company, unless
there is at least one remaining Member;
(d) The entry of a decree of judicial dissolution pursuant to
Section 18-802 of the Act; or
(e) The expiration of the term of the Company as provided in
Section 2.5.
10.2. NOTICES TO SECRETARY OF STATE. When all the remaining property
and assets of the Company have been distributed, the Certificate shall be
cancelled by filing a certificate of cancellation with the Secretary of State of
Delaware.
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10.3. CASH DISTRIBUTIONS UPON DISSOLUTION. Upon the dissolution of the
Company as a result of the occurrence of any of the events set forth in Section
10.1, the Management Committee shall proceed to wind up the affairs of and
liquidate the Company and any cash and proceeds therefrom shall be applied and
distributed in the following order of priority:
(a) First, to the payment (or the making of reasonable
provision for payment) of debts and liabilities of the Company in the
order of priority as provided by law (including any loans or advances
that may have been made by any of the Members to the Company) and the
expenses of liquidation including the establishment of any Reserves
which the Management Committee may reasonably deem necessary for any
contingent, conditional or unasserted claims or obligations of the
Company. Such Reserves may be paid over by the Company to an escrow
agent to be held for disbursement in payment of any of the
aforementioned liabilities and, at the expiration of such period as
shall be reasonably deemed advisable by the Management Committee, for
distribution of the balance in the manner provided in this Article 10;
(b) Finally, the remaining balance, if any, to the Members in
proportion to their respective positive Capital Accounts, after giving
effect to all contributions, distributions and allocations for all
periods, in accordance with the requirements of Regulation Section
1.704-1(b)(2)(ii)(b)(2).
10.4. IN-KIND. Notwithstanding the foregoing but subject to Section
18-804(a)(1) of the Act, in the event the Management Committee shall determine
that an immediate sale of part of or all the Property would cause undue loss to
the Members, or the Management Committee determines that it would be in the best
interest of the Members to distribute the Property to the Members in-kind (which
distributions do not, as to the in-kind portions, have to be in the same
proportions as they would be if cash were distributed, but all such in-kind
distributions shall be equalized, to the extent necessary, with cash), then the
Management Committee may either defer liquidation of, and withhold from
distribution for a reasonable time, any of the Property except that necessary to
satisfy the Company's debts and obligations, or distribute the Property to the
Members in-kind.
10.5. NO ACTION FOR DISSOLUTION. The Members acknowledge that
irreparable damage would be done to the goodwill and reputation of the Company
if any Member should bring an action in court to dissolve the Company under
circumstances where dissolution is not required by Section 10.1. Accordingly,
except where the Managers have failed to liquidate the Company as required by
Section 10.1 and except as specifically provided in Section 18-802 and Section
18-803(a) of the Act, each Member hereby to the fullest extent permitted by law
waives and renounces his right to initiate legal action to seek dissolution of
the Company or to seek the appointment of a receiver or trustee to wind up the
affairs of the Company, except in the cases of fraud, violation of law, bad
faith, gross negligence, willful misconduct or willful violation of this
Agreement.
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ARTICLE 11
TAX MATTERS MEMBER
11.1. TAX MATTERS MEMBER. SEACOR shall be the initial Tax Matters
Member of the Company as provided in the Regulations under Section 6231 of the
Code and analogous provisions of state law. The Management Committee shall have
the authority to remove or replace (following death or resignation) the Tax
Matters Member of the Company and designate its successor.
11.2. CERTAIN AUTHORIZATIONS. The Tax Matters Member shall represent
the Company, at the Company's expense, in connection with all examinations of
the Company's affairs by tax authorities including any resulting administrative
or judicial proceedings. Without limiting the generality of the foregoing, and
subject to the restrictions set forth herein, the Tax Matters Member, but only
with the consent or approval or at the director of the Management Committee, is
hereby authorized:
(a) to enter into any settlement with the Secretary with
respect to any tax audit or judicial review, in which agreement the Tax
Matters Member may expressly state that such agreement shall bind the
other Members except that such settlement agreement shall not bind any
Member that has not approved such settlement agreement in writing;
(b) if a notice of a final administrative adjustment at the
Company level of any item required to be taken into account by a Member
for tax purposes is mailed to the Tax Matters Member, to seek judicial
review of such final adjustment, including the filing of a petition for
readjustment with the Tax Court, the District Court of the United
States for the district in which the Company's principal place of
business is located, or elsewhere as allowed by law, or the United
States Claims Court;
(c) to intervene in any action brought by any other Member for
judicial review of a final adjustment;
(d) to file a request for an administrative adjustment with
the Secretary at any time and, if any part of such request is not
allowed by the Secretary, to file a petition for judicial review with
respect to such request;
(e) to enter into an agreement with the Internal Revenue
Service to extend the period for assessing any tax that is attributable
to any item required to be taken into account by a Member for tax
purposes, or an item affected by such item; and
(f) to take any other action on behalf of the Members (with
respect to the Company) or the Company in connection with any
administrative or judicial tax proceeding to the extent permitted by
applicable law or the Regulations.
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Each Member shall have the right to participate in any such actions and
proceedings to the extent provided for under the Code and Regulations.
11.3. INDEMNITY OF TAX MATTERS MEMBER. To the maximum extent permitted
by applicable law and without limiting Article 8, the Company shall indemnify
and reimburse the Tax Matters Member for all expenses (including reasonable
legal and accounting fees) incurred as Tax Matters Member pursuant to this
Article 11 in connection with any administrative or judicial proceeding with
respect to the tax liability of the Members as long as the Tax Matters Member
has determined in good faith that the Tax Matters Member's course of conduct was
in, or not opposed to, the best interest of the Company. The taking of any
action and the incurring of any expense by the Tax Matters Member in connection
with any such proceeding, except to the extent provided herein or required by
law, is a matter in the sole discretion of the Tax Matters Member.
11.4. INFORMATION FURNISHED. To the extent and in the manner provided
by applicable law and Regulations, the Tax Matters Member shall furnish the
name, address, profits and loss interest, and taxpayer identification number of
each Member to the Internal Revenue Service.
11.5. NOTICE OF PROCEEDINGS, ETC. The Tax Matters Member shall use best
efforts to keep each Member informed of any administrative and judicial
proceedings for the adjustment at the Company level of any item required to be
taken into account by a Member for income tax purposes or any extension of the
period of limitations for making assessments of any tax against a Member with
respect to any Company item, or of any agreement with the Internal Revenue
Service that would result in any material change either in Income or Loss as
previously reported.
11.6. NOTICES TO TAX MATTERS MEMBER. Any Member that receives a notice
of an administrative proceeding under Section 6233 of the Code relating to the
Company shall promptly provide Notice to the Tax Matters Member of the treatment
of any Company item on such Member's Federal income tax return that is or may be
inconsistent with the treatment of that item on the Company's return. Any Member
that enters into a settlement agreement with the Internal Revenue Service or any
other government agency or official with respect to any Company item shall
provide Notice to the Tax Matters Member of such agreement and its terms within
sixty (60) days after its date.
11.7. PREPARATION OF TAX RETURNS. The Tax Matters Member shall arrange
for the preparation and timely filing of all returns of Company income, gains,
deductions, losses and other items necessary for Federal, state and local income
tax purposes and shall use all reasonable efforts to furnish to the Members
within ninety (90) days of the close of the taxable year a Schedule K-1 and such
other tax information reasonably required for Federal, state and local income
tax reporting purposes. The classification, realization and recognition of
income, gain, losses and deductions and other items shall be on the cash or
accrual method of accounting for Federal income tax purposes, as the
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Management Committee shall determine in its sole discretion in accordance with
applicable law.
11.8. TAX ELECTIONS. The Management Committee shall, in its sole
discretion, determine whether to make any available election.
11.9. TAXATION AS A PARTNERSHIP. The Members hereby agree that the
Company shall be treated as a partnership for tax purposes under United States
federal, state and local income tax laws or other laws, and further agree not to
take any position or take any action inconsistent therewith, in a tax return or
otherwise. No election shall be made by the Company or any Member for the
Company to be excluded from the application of any of the provisions of
Subchapter K, Chapter I of Subtitle A of the Code or from any similar provisions
of any state tax laws or to be treated as a corporation for federal tax
purposes.
ARTICLE 12
ACCOUNTING AND BANK ACCOUNTS
12.1. FISCAL YEAR AND ACCOUNTING METHOD. The fiscal year and taxable
year of the Company shall be as designated by the Management Committee in
accordance with the Code. The Company shall use an accrual method of accounting.
12.2. BOOKS AND RECORDS. The Company shall maintain at its principal
office, or such other office as may be determined by the Management Committee,
all the following:
(a) A current list of the full name and last known business or
residence address of each Member and the Percentage Interest of each
Member, together with information regarding the amount of cash and a
description and statement of the agreed value of any other property or
services contributed by each Member and which each Member has agreed to
contribute in the future, and the date on which each Member became a
Member of the Company;
(b) A copy of the Certificate and this Agreement, including
any and all amendments to either thereof, together with executed copies
of any powers of attorney pursuant to which the Certificate, this
Agreement, or any amendments have been executed;
(c) Copies of the Company's Federal, state, and local income
tax or information returns and reports, if any, which shall be retained
for at least six fiscal years;
(d) The financial statements of the Company, which shall be
retained for at least six fiscal years; and
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(e) The Company's books and records, which shall be retained
for at least six fiscal years.
12.3. DELIVERY TO MEMBERS; INSPECTION. Upon the request of any Member,
for any purpose reasonably related to such Member's interest as a member of the
Company, the Management Committee shall cause to be made available to the
requesting Member the information required to be maintained by clauses (a)
through (d) of Section 12.2 and such other information regarding the business
and affairs of the Company as any Member may reasonably request. Upon the giving
of ten (10) days' prior Notice to the Company, any Member or its authorized
representatives and advisors shall have the right to inspect the books and
records of the Company at the offices of the Company during normal business
hours.
12.4. FINANCIAL STATEMENTS. The Management Committee shall cause to be
prepared for the Members at least annually, at the Company's expense, financial
statements of the Company and its subsidiaries, prepared in accordance with
generally accepted accounting principles and audited by Arthur Andersen & Co.,
LLP, or another nationally recognized accounting firm. The financial statements
so furnished shall include a balance sheet, statement of income or loss,
statement of cash flows, and statement of Members' equity. In addition, the
Management Committee shall provide on a timely basis to the Members, whom shall
so request in writing, quarterly financials, statements of cash flow, any
available internal budgets or forecast or other available financial reports, as
well as any reports or notices as are provided by the Company, or any of its
subsidiaries to any financial institution. Financial statements may be delivered
to Members by first class mail, courier, overnight delivery service, email or
such other method as the Management Committee shall, in its discretion,
determine.
12.5. FILINGS. At the Company's expense, the Management Committee shall
cause the income tax returns for the Company to be prepared and timely filed
with the appropriate authorities and to have prepared and to furnish to each
Member such information with respect to the Company as is necessary (or as may
be reasonably requested by a Member) to enable the Members to prepare their
Federal, state and local income tax returns. The Management Committee, at the
Company's expense, shall also cause to be prepared and timely filed, with
appropriate Federal, state and local regulatory and administrative bodies, all
reports required to be filed by the Company with those entities under then
current applicable laws, rules, and regulations. The reports shall be prepared
on the accounting or reporting basis required by the regulatory bodies.
12.6. NON-DISCLOSURE. Each Member agrees that, except as otherwise
consented to by the Management Committee in writing, all non-public and
confidential information furnished to it pursuant to this Agreement will be kept
confidential and will not be disclosed by such Member, or by any of its agents,
representatives, or employees, in any manner whatsoever, in whole or in part,
except that (a) each Member shall be permitted to disclose such information to
those of its agents, representatives, and employees who need to be familiar with
such information in connection with such Member's investment in the Company, so
long as such agents, representatives and
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employees agree to keep such information confidential on the terms set forth
herein, (b) each Member shall be permitted to disclose such information to its
partners, stockholders and affiliates so long as they agree to keep such
information confidential on the terms set forth herein, (c) each Member shall be
permitted to disclose information to the extent required by law, legal process
or regulatory requirements, so long as such Member shall have used its
reasonable efforts to first afford the Company with a reasonable opportunity to
contest the necessity of disclosing such information, (d) each Member shall be
permitted to disclose such information to possible purchasers of all or a
portion of the Member's Interest, provided that such prospective purchaser shall
execute a suitable confidentiality agreement containing terms not less
restrictive than the terms set forth herein, and (e) each Member shall be
permitted to disclose information to the extent necessary for the enforcement of
any right of such Member arising under this Agreement.
12.7. BANK ACCOUNTS. All funds of the Company shall be deposited in a
separate bank, money market or similar account(s) approved by the Management
Committee and in the Company's name. Withdrawals therefrom shall be made only by
Persons authorized to do so by the Management Committee.
ARTICLE 13
MISCELLANEOUS
13.1. TITLE TO PROPERTY. Title to the Property shall be held in the
name of the Company. No Member shall individually have any ownership interest or
rights in the Property except indirectly by virtue of such Member's ownership of
a Membership Interest.
13.2. WAIVER OF DEFAULT. No consent or waiver, express or implied, by
the Company or a Member with respect to any breach or default by the Company or
a Member hereunder shall be deemed or construed to be a consent or waiver with
respect to any other breach or default by any party of the same provision or any
other provision of this Agreement. Failure on the part of the Company or a
Member to complain of any act or failure to act of the Company or a Member or to
declare such party in default shall not be deemed or constitute a waiver by the
Company or the Member of any rights hereunder.
13.3. AMENDMENT.
(a) Except as otherwise expressly provided elsewhere in this Agreement,
this Agreement shall not be altered, modified or changed except by an amendment
approved by Members holding not less than ninety percent (90%) of the Membership
Interests.
(b) In addition to any amendments otherwise authorized herein, the
Manager or Management Committee may make any amendments to any Schedule to this
Agreement from time to time to reflect transfers of Membership Interests and
issuances
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of additional Membership Interests. Copies of such amendments shall be delivered
to the Members upon execution thereof.
(c) The Managers shall cause to be prepared and filed any amendment to
the Certificate that may be required to be filed under the Act as a consequence
of any amendment to this Agreement.
(d) Any modification or amendment to this Agreement or the Certificate
made in accordance with this Section 13.3 shall be binding on all Members and
the Managers.
13.4. NO THIRD PARTY RIGHTS. Except as provided in Article 8, none of
the provisions contained in this Agreement shall be for the benefit of or
enforceable by any third parties, including creditors of the Company. Subject to
Article 8, the parties to this Agreement expressly retain any and all rights to
amend this Agreement as herein provided, notwithstanding any interest in this
Agreement or in any party to this Agreement held by any other Person.
13.5. SEVERABILITY. In the event any provision of this Agreement is
held to be illegal, invalid or unenforceable to any extent, the legality,
validity and enforceability of the remainder of this Agreement shall not be
affected thereby and shall remain in full force and effect and shall be enforced
to the greatest extent permitted by law.
13.6. NATURE OF INTEREST IN THE COMPANY. A Member's Membership Interest
shall be personal property for all purposes.
13.7. BINDING AGREEMENT. Subject to the restrictions on the disposition
of Membership Interests herein contained, the provisions of this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective heirs, personal representatives, successors and permitted assigns.
13.8. HEADINGS. The headings of the Certificate and sections of this
Agreement are for convenience only and shall not be considered in construing or
interpreting any of the terms or provisions hereof.
13.9. WORD MEANINGS. The words such as "herein", "hereinafter",
"hereof", and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural, and vice versa, unless the context
otherwise requires.
13.10. COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which together shall constitute one agreement binding on
all parties hereto, notwithstanding that all the parties have not signed the
same counterpart.
13.11. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto and thereto and supersedes all prior writings or
agreements with respect to the subject matter hereof.
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13.12. PARTITION. The Members agree that the Property is not and will
not be suitable for partition. Accordingly, each of the Members hereby
irrevocably waives any and all right such Member may have to maintain any action
for partition of any of the Property. No Member shall have any right to any
specific assets of the Company upon the liquidation of, or any distribution
from, the Company.
13.13. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE. This Agreement
shall be construed according to and governed by the laws of the State of
Delaware without regard to principles of conflict of laws. The parties hereby
submit to the exclusive jurisdiction and venue of the state courts of New York
County, New York or to the Court of Chancery of the State of Delaware and the
United States District Court for the Southern District of New York and of the
United States District Court for the District of Delaware, as the case may be,
and agree that the Company or Members may, at their option, enforce their rights
hereunder in such courts.
13.14. DISCRETION. Whenever a Manager shall have discretion to act
hereunder, such Person agrees to act in a reasonable manner on behalf of the
Company and its Affiliates."
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