EXHIBIT 10.3
to
INTEGRATED DATA CORP FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 2006
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LIMITED LIABILITY COMPANY OPERATING AGREEMENT
FOR
IDC PALM ENERGY, LLC
A Delaware Manager-Managed Limited Liability Company
THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT (the Agreement) is made
and entered into this 26th day of October, 2007 by: Palm Acquisition Partners
LLC, a Florida limited liability company ("Palm") and Integrated Data Corp.,
a Delaware corporation ("IDC"), and each individual or business entity later
subsequently admitted to the Company. These individuals and/or business
entities shall be known as and referred to as "Members" and individually as a
"Member."
As of this date the Members have formed the Limited Liability Company named
above under the laws of the State of Delaware. Accordingly, in consideration
of the conditions contained herein, they agree as follows:
ARTICLE I
Company Formation and Registered Agent
1.1 FORMATION. The Members have previously formed a Limited Liability
Company ("Company") subject to the provisions of the Limited Liability
Company Act as currently in effect as of this date. A Certificate of
Formation has heretofore been filed with the Secretary of State of the State
of Delaware on October 24, 2007.
1.2 NAME. The name of the Company is IDC Palm Energy, LLC.
1.3 REGISTERED AGENT AND OFFICE, QUALIFICATION IN OTHER JURISDICTIONS. The
name of the Registered Agent is RLF Service Corp., and the location of the
registered office of the Company is Xxx Xxxxxx Xxxxxx, Xxxxxxxxxx (Xxx Xxxxxx
Xxxxxx), Xxxxxxxx 00000. The Company intends to qualify to do business as a
foreign limited liability company in the States of Florida, Texas, and such
other jurisdictions where the nature of its business or the ownership of its
property may make it necessary or desirable for it to so qualify.
1.4 TERM. The Company shall continue in perpetuity unless dissolved
according to the provisions of this agreement, to wit:
(a) Members whose capital interest as defined in Article 2.2 exceeds 80
percent vote for dissolution; or (b) Any event which makes it unlawful for
the business of the Company to be carried on by the Members; or
(c) Any other event causing dissolution of a limited liability company under
the laws of the State of Delaware.
1.5 CONTINUANCE OF COMPANY. Notwithstanding the provisions of ARTICLE 1.4,
in the event of an occurrence described in ARTICLE 1.4(c), if there is at
least one remaining Member, said remaining Member(s) shall have the right to
continue the business of the Company. Such right can be exercised only by
the unanimous vote of the remaining Members within ninety (90) days after the
occurrence of an event described in ARTICLE 1.4(c). If not so exercised, the
right of the Members to continue the business of the Company shall expire.
1.6 BUSINESS PURPOSE. The purpose of the Company is to engage in any lawful
act or activity for which a Limited Liability Company may be formed under the
Limited Liability statutes of the State of Delaware.
1.7 PRINCIPAL PLACE OF BUSINESS. The location of the principal place of
business of the Company shall be: 0000 X. Xxx Xxxx Xxxx., Xx. 000, Xxxx
Xxxxxxxxxx, XX 00000xx at such other place as the Manager from time to time
may select.
1.8 THE MEMBERS. The name and place of residence of each member are
contained in Exhibit 1 attached to this Agreement.
1.9 ADMISSION OF ADDITIONAL MEMBERS. Except as otherwise expressly provided
in the Agreement, no additional members may be admitted to the Company
through issuance by the company of a new interest in the Company without the
prior unanimous written consent of the Members.
ARTICLE 2
Capital Contributions and Member Loans
2.1 INITIAL CONTRIBUTIONS. The Members hereby are deemed to have
contributed to the Company capital contributions, either as cash, property or
services as described in Exhibit 2 attached to this Agreement.
2.2 MEMBER LOANS. IDC shall make a loan to the Company in a minimum amount
of $1.2 million concurrent with execution of this Agreement, pursuant to a
note in the form attached as Exhibit 3 hereto. In the event that the Company
meets the performance criteria as agreed by the Members, within 120 days of
the date hereof IDC shall commit to make further loans as required by the
Company of up to $3.8 million in aggregate on the same terms.
2.3 ADDITIONAL CONTRIBUTIONS OR LOANS. Except as provided above or in
ARTICLE 6.2, no Member shall be obligated to make any additional contribution
to the Company's capital or make additional Member loans.
ARTICLE 3
Profits, Losses and Distributions
3.1 PROFITS/LOSSES. For financial accounting and tax purposes the Company's
net profits or net losses shall be determined on an annual basis and shall be
allocated to the Members in proportion to each Member's relative capital
interest in the Company as set forth in Exhibit 2 as amended from time to
time in accordance with Treasury Regulation 1.704-1.
3.2 DISTRIBUTIONS. The Members shall determine and distribute available
funds annually or at more frequent intervals as they see fit. Available
funds, as referred to herein, shall mean the net cash of the Company
available after appropriate provision for expenses and liabilities, as
determined by the Members. Distributions in liquidation of the Company or in
liquidation of a Member's interest shall be made in accordance with the
positive capital account balances pursuant to Treasury Regulation 1.704-
l(b)(2)(ii)(b)(2). To the extent a Member shall have a negative capital
account balance, there shall be a qualified income offset, as set forth in
Treasury Regulation 1.704-l(b)(2)(ii)(d).
ARTICLE 4
Management
4.1 MANAGEMENT OF THE BUSINESS. The business of the Company shall be
managed under the direction of a Board of Directors, consisting initially of
X. Xxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxx and Xxxxx X. Xxxxx. For the
avoidance of doubt, it is the intent of the Members that IDC shall have the
right to appoint one member of the Board and Palm shall have the right to
appoint one member of the Board. Additional members of the Board, of which
there shall be a minimum of one, shall be appointed only through mutual
agreement of IDC and Palm. The Board shall elect a Manager, who shall report
to the Board of Directors. Initially the Manager shall be X. Xxx Xxxxxx.
Any replacement of the Manager shall require the unanimous approval of the
Board. The Board shall also elect a Treasurer, who shall initially be Xxxxx
X. Xxxxx, who shall serve at the pleasure of the Board.
4.2 MEMBERS. The liability of the Members shall be limited as provided
under the laws of the Delaware Limited Liability statutes. Members that are
not a Manager shall take no part whatever in the control, management,
direction, or operation of the Company's affairs and shall have no power to
bind the Company. The Manager may from time to time seek advice from the
Members, but he need not accept such advice, and at all times the Manager
shall have the exclusive right to control and manage the Company, subject to
the direction of the Board of Directors as provided in ARTICLE 4.1 above. No
Member shall be an agent of any other Member of the Company solely by reason
of being a Member.
4.3 POWERS OF MANAGER. Subject to the limitations imposed by ARTICLE 4.1
above, the Manager is authorized on the Company's behalf to make all
decisions as to (a) the sale, development lease or other disposition of the
Company's assets; (b) the purchase or other acquisition of other assets of
all kinds; (c) the management of all or any part of the Company's assets; (d)
the borrowing of money and the granting of security interests in the
Company's assets; (e) the pre-payment, refinancing or extension of any loan
affecting the Company's assets; (f ) the compromise or release of any of the
Company's claims or debts; and, (g) the employment of persons, firms or
corporations for the operation and management of the Company's business. In
the exercise of these management powers, the Manager is authorized to execute
and deliver (a) all contracts, conveyances, assignments leases, sub-leases,
franchise agreements, licensing agreements, management contracts and
maintenance contracts covering or affecting the Company's assets; (b) all
checks, drafts and other orders for the payment of the Company's funds; (c)
all promissory notes, loans, security agreements and other similar documents;
and, (d) all other instruments of any other kind relating to the Company's
affairs, whether like or unlike the foregoing.
4.4 OUTSIDE BUSINESS ACTIVITIES. Any Manager or Member may have other
business interests and may engage in other activities in addition to those
relating to the Company, so long as such interest and/or activities are not
in direct competition with the business of the Company. Neither the Company
nor any Member shall, by virtue of this Agreement, have any right to or
interest in any such other business interests or activities. Notwithstanding
the foregoing, if IDC provides a minimum of $5 million in Member loans to the
Company as provided above, Palm shall not conduct any business related to the
acquisition and development of any new "stripper" xxxxx without the expressed
written consent of IDC.
4.5 NOMINEE. Title to the Company's assets shall be held in the Company's
name or in the name of any nominee that the Manager may designate. The
Manager shall have power to enter into a nominee agreement with any such
person, and such agreement may contain provisions indemnifying the nominee
except for his willful misconduct.
4.6 COMPANY INFORMATION. Upon request, the Manager shall supply to any
Member information regarding the Company or its activities. Each Member or
its authorized representative shall have access to and may inspect and copy
all books, records and materials in the Manager's possession or subject to
his control regarding the Company or its activities. The exercise of the
rights contained in this ARTICLE 4.6 shall be at the Company's expense.
4.7 EXCULPATION. Unless constituting gross negligence or willful
misconduct, any act or omission of the Manager if done in good faith to
promote the best interests of the Company, the effect of which may cause or
result in loss or damage to the Company or the Members, shall not subject the
Manager to any liability to the Members.
4.8 INDEMNIFICATION. The Company shall indemnify any person who was or is a
party defendant, or is threatened to be made a party defendant, to any
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of
the Company) by reason of the fact that he is or was a Member of the Company,
Manager, employee or agent of the Company, or is or was serving at the
request of the Company, for instance expenses (including attorney's fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if the Members
determine that he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interest of the Company, and with respect
to any criminal action proceeding, has no reasonable cause to believe his/her
conduct was unlawful. 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 itself create a presumption that the person
did or did not act in good faith and in a manner which he reasonably believed
to be in the best interest of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his/her conduct
was lawful.
4.9 RECORDS. The Manager shall cause the Company to keep at its principal
place of business the following:
(a) a current list in alphabetical order of the full name and the last known
street address of each Member;
(b) a copy of the Certificate of Formation and the Company Operating
Agreement and all amendments;
(c) copies of the Company's federal, state and local income tax returns and
reports, if any, for the three most recent years;
(d) copies of any financial statements of the limited liability Company for
the three most recent fiscal years.
ARTICLE 5
Compensation
5.1 MANAGEMENT FEE. The Manager and other parties providing services to the
Company as approved by the Board of Directors shall be entitled to reasonable
compensation commensurate with the value of such services as provided in an
annual budget approved by the Board.
5.2 REIMBURSEMENT. The Company shall reimburse the Manager, members of the
Board of Directors and others providing services to the Company for all
reasonable direct out-of-pocket expenses incurred by them on behalf of the
Company.
ARTICLE 6
Bookkeeping
6.1 BOOKS. The Manager shall maintain complete and accurate books of
account of the Company's affairs at the Company's principal place of
business. Such books shall be kept according to U.S. generally accepted
accounting principles (US GAAP) applied on a consistent basis, and shall be
audited on an annual basis by IDC's auditors at its expense. The Company's
accounting period shall be the fiscal year ended June 30.
6.2 MEMBER'S ACCOUNTS. The Manager shall maintain separate capital and
distribution accounts for each Member. Each Member's capital account shall
be determined and maintained in the manner set forth in Treasury Regulation
1.704-l(b)(2)(iv) and shall consist of the Member's initial capital
contribution increased by:
(a) any additional capital contribution made by the Member;
(b) credit balances transferred from the Member's distribution account to
his capital account;
and decreased by:
(a) distributions to the Member in reduction of Company capital;
(b) the Member's share of Company losses if charged to its capital
account.
6.3 REPORTS. The Manager shall close the books of account after the close
of each fiscal year, and shall prepare and send to each member a statement of
such Member's distributive share of income and expense for income tax
reporting purposes.
ARTICLE 7
Transfers
7.1 SALE, DISPOSITION OR ASSIGNMENT. If at any time a Member proposes to
sell, assign or otherwise dispose of all or any part of his interest in the
Company, such Member shall first make a written offer to sell such interest
to the other Members at a price determined by mutual agreement or the price
as agreed with any third party intending to acquire the Member's interest.
If such other Members decline or fail to elect to purchase such interest
within thirty (30) days, and if the sale or assignment is made and the
Members fail to approve this sale or assignment unanimously then, pursuant to
the Delaware Limited Liability statutes, the purchaser or assignee shall have
no right to participate in the management of the business and affairs of the
Company. The purchaser or assignee shall only be entitled to receive the
share of the profits or other compensation by way of income and the return of
contributions to which that Member would otherwise be entitled.
7.2 TAG-ALONG RIGHTS. Within two business days after entering into a
binding agreement to sell all or any part of its interest in the Company
(other than sales or other dispositions to affiliates of such Member)(the
"Soliciting Member"), the Soliciting Member shall deliver a copy of such
binding agreement to the other Member (the "Notified Member"). The Notified
Member shall have twenty business days to elect, by providing written notice
to the Soliciting Member, to require the purchaser of the Soliciting Member's
interest to purchase a percentage of the Notified Member's interest
(determined as set forth below) in the Company on the same terms and
conditions (including, without limitation, the same purchase price per
percentage point of ownership interest in the Company) set forth in the
agreement between the Soliciting Member and the purchaser ("Tag-Along
Rights"). For purposes of the preceding sentence, in connection with any
proposed sale the Notified Member may exercise Tag-Along Rights with respect
to a percentage of its membership interest equal to the product of (i) the
percentage of the Soliciting Member's membership interest to be sold in the
contemplated transfer and (ii) the percentage of Notified Member's membership
interest in the Company. If the payment for Soliciting Member's interest
includes consideration other than cash, the Soliciting Member, the Notified
Member and the purchaser shall agree upon the cash value of the sale and all
consideration paid from the purchaser to the Notified Member for the Notified
Member's interest shall be in cash. Any disagreement between the Soliciting
Member and the Notified Member concerning the cash value of the sale shall be
resolved in accordance with the arbitration provision in this agreement. In
the event the Notified Member elects to exercise its Tag-Along Rights
pursuant to this Section 7.2 and the purchaser refuses to purchase the
Notified Member's interest in the Company as provided above, the Soliciting
Member shall not sell its interest to the purchaser without the written
consent of the Notified Member, which consent may be withheld in the sole
discretion of the Notified Member.
ARTICLE 8
Arbitration
8.1. SUBMISSION TO ARBITRATION. The Members hereby submit all
controversies, claims and matters of difference arising under this Agreement
to arbitration. Without limiting the generality of the foregoing, the
following shall be considered controversies for this purpose: (a) all
questions relating to the interpretation or breach of this Agreement, (b) all
questions relating to any representations, negotiations and other proceedings
leading to the execution hereof, and (c) all questions as to whether the
right to arbitrate any such question exists.
8.2. INITIATION OF ARBITRATION AND SELECTION OF ARBITRATORS. The Member
desiring arbitration shall so notify the other Member, identifying in
reasonable detail the matters to be arbitrated and the relief sought.
Arbitration hereunder shall be before a single neutral arbitrator, who shall
be an attorney with at least ten years' experience in general commercial law,
including oil and gas matters. The American Arbitration Association ("AAA")
shall submit a list of persons meeting the criteria outlined above, and the
Members shall select one person in the manner established by the AAA. The
arbitrator shall be entitled to a fee commensurate with his or her fees for
professional services requiring similar time and effort.
8.3. ARBITRATION PROCEDURES. All matters arbitrated hereunder shall be
arbitrated in Ft. Lauderdale, Florida pursuant to Florida law (except matters
relating to the organization and governance of the Company, which shall be
governed by Delaware law), and shall be conducted in accordance with the
Commercial Arbitration Rules of the AAA, except to the extent such Rules
conflict with the expressed provisions of this Article (which shall prevail
in the event of such conflict). At the hearing, the Members shall present
such evidence and witnesses as they may choose, with or without counsel.
Adherence to formal rules of evidence shall not be required but the
arbitrator shall consider any evidence and testimony that it determines to be
relevant, in accordance with procedures that it determines to be appropriate.
Any award entered in an arbitration shall be made by a written opinion
stating the reasons for the award made.
8.4. ENFORCEMENT. This submission and agreement to arbitrate shall be
specifically enforceable. Arbitration may proceed in the absence of any
Member if notice of the proceedings has been given to such Member. The
Members agree to abide by all awards rendered in such proceedings. Such
awards shall be final and binding on all Members to the extent and in the
manner provided by Florida law. All awards may be filed with the clerk of
one or more courts, state, federal or foreign having jurisdiction over the
Member against whom such award is rendered or its property, as a basis of
judgment and of the issuance of execution for its collection. No Member
shall be considered in default hereunder during the pendency of arbitration
proceedings specifically relating to such default.
8.5. FEES AND COSTS. The arbitrator's fees and other costs of the
arbitration and the reasonable attorney fees, expert witness fees and costs
of the prevailing Member shall be borne by the non-prevailing Member. In its
written opinion, the arbitrator shall, after comparing the respective
positions asserted in the arbitration claim and answer thereto, declare as
the prevailing Member the Member whose position was closest to the
arbitration award (not necessarily the Member in favor of which the award on
the arbitration claim is rendered) and declare the other Member to be the
non-prevailing Member. The arbitration award shall include an award of the
fees and costs provided by this Article against the non-prevailing Member.
Signed and Agreed this 26th day of October, 2007.
Member /s/X. Xxx Xxxxxx
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X. Xxx Xxxxxx, Chief Executive Member
Palm Acquisition Partners, LLC
Member /s/Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, President
Integrated Data Corp.
EXHIBIT 1
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
FOR
IDC PALM ENERGY, LLC
LISTING OF MEMBERS
As of the 26th day of October, 2007 the following is a list of Members of the
Company:
NAME: ADDRESS:
Palm Acquisition Partners, LLC 0000 X. Xxx Xxxx Xxxx., Xx. 000
Xxxx Xxxxxxxxxx, XX 00000
Integrated Data Corp. 0000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Authorized by Member(s) to provide Member Listing as of this 26th day of
October, 2007
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Palm Acquisition Partners LLC
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Integrated Data Corp.
EXHIBIT 2
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
FOR
IDC PALM ENERGY, LLC
CAPITAL CONTRIBUTIONS
Pursuant to ARTICLE 2, the Members' initial contribution to the Company
capital is stated to be as follows.
Integrated Data Corp. 50.01% for $500.10
Palm Acquisition Partners LLC 49.99% for $499.90
SIGNED AND AGREED this 26th day of October, 2007.
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Integrated Data Corp.
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Palm Acquisition Partners, LLC
EXHIBIT 3
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
FOR
IDC PALM ENERGY, LLC
PROMISSORY NOTE
FOR VALUE RECEIVED, [name] L.L.C., a Delaware limited liability company
("BORROWER"), promise(s) to pay to the order of INTEGRATED DATA CORP.
("LENDER"), at its home office in 0000 X. Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxx, XX 00000xx at such other place as Lender may direct, in lawful
money of the United States of America, without grace or offset, the principal
sum of up to Five Million Dollars ($5,000,000), with interest thereon as
provided herein below.
1. PAYMENT TERMS
The unpaid principal of this Promissory Note shall be due in payable on
the fifth anniversary of the original issuance hereof.
2. INTEREST
This Promissory Note shall bear interest at a rate per annum equal to the
average "prime rate" as published by the Wall Street Journal for each twelve
month period during the term hereof. Interest on this Promissory Note shall
be due and payable only at maturity or upon prepayment. Interest accruing
hereunder shall be calculated on the basis of a 360-day year and the actual
number of days elapsed.
3. APPLICATION OF PAYMENTS
Each payment received by Lender shall be applied first to accrued
interest and then to the principal balance hereof.
4. PREPAYMENT
The principal of this Promissory Note may be prepaid at any time without
premium.
5. SUBORDINATION
It is the intent of the parties that the indebtedness under this
Promissory Note, including accrued interest, shall be subordinate to any
indebtedness owed by the Borrower to any bank or other institutional lender
who may hereafter provide credit to the Borrower. Xxxxxx, by acceptance
hereof, agrees to enter into any subordination agreement which any such bank
or other institutional lender may require.
6. FEES AND COSTS
Borrower further promises to pay upon demand all reasonable attorneys'
fees and costs (including, without limitation, court costs and appraisal
fees) incurred by Lender in connection with any event of default under this
Promissory Note and in any proceeding, including all appeals, brought to
enforce any of the provisions of this Promissory Note.
7. TIME OF THE ESSENCE
Time shall be of the essence in performance of all obligations of
Borrower under this Promissory Note.
8. HEADINGS FOR CONVENIENCE
Headings and captions used in this Promissory Note are inserted for
convenience of reference only and neither constitute a part of this
Promissory Note nor are to be used to construe or interpret any of the
provisions hereof.
9. NOTICES: HOW GIVEN
Any notice required or permitted under this Promissory Note shall be
given in writing and shall be effective for all purposes if hand delivered to
the party designated below, or if sent by (a) certified or registered United
States mail, postage prepaid; or (b) expedited prepaid delivery service,
commercial or United States Postal Service, with proof of attempted delivery,
addressed in either case as follows:
To Borrower:
0000 X. Xxx Xxxx Xxxx., Xx. 000
Xxxx Xxxxxxxxxx, XX 00000
Attention: Manager
To Lender:
0000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
or to such other address and person as shall be designated from time to time
by Lender or Borrower, as the case may be, in a written notice to the other
given in the manner provided for in this paragraph. The notice shall be
deemed to have been given at the time of delivery if hand delivered, or in
the case of registered or certified mail, three (3) Business Days after
deposit in the United States mail, or if by expedited prepaid delivery, upon
first attempted delivery on a Business Day. A party receiving a notice which
does not comply with the technical requirements for notice under this
paragraph may elect to waive any deficiencies and treat the notice as having
been properly given.
10. NO ORAL CHANGE
This Promissory Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on
the part of the Borrower or Lender, but only by an agreement in writing,
intended for that specific purpose and signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.
11. APPLICABLE STATE LAW
This Promissory Note has been made and entered into in the State of
Delaware, and is to be construed and enforced in accordance with the laws and
commercial customs of the State of Delaware, without giving effect to
Delaware's conflicts of laws rules.
Borrower: IDC Palm Energy, LLC
By:
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Chief Financial Officer
Date:
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