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EXHIBIT 3.7
LIMITED LIABILITY COMPANY AGREEMENT
OF
GRANT PRIDECO USA, LLC
DATED AS OF MARCH 27, 2000
THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY JURISDICTION. NO MEMBERSHIP
INTEREST MAY BE SOLD OR OFFERED FOR SALE (WITHIN THE MEANING OF ANY SECURITIES
LAW) UNLESS A REGISTRATION STATEMENT UNDER ALL APPLICABLE SECURITIES LAWS WITH
RESPECT TO THE INTEREST IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS IS THEN APPLICABLE TO THE INTEREST. A MEMBERSHIP
INTEREST ALSO MAY NOT BE TRANSFERRED OR ENCUMBERED UNLESS THE APPLICABLE
PROVISIONS OF THIS AGREEMENT ARE SATISFIED.
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LIMITED LIABILITY COMPANY AGREEMENT
OF
GRANT PRIDECO USA, LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT OF Grant Prideco USA, LLC (this
"Agreement"), dated as of March 27, 2000, is adopted, executed and agreed to by
Grant Prideco, Inc., a Delaware corporation, as the sole Member:
RECITALS:
The Member desires to form a Delaware limited liability company in
accordance with the following terms and conditions.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein set forth and intending to be legally bound, the parties
hereto hereby enter into this Agreement pursuant to the provisions and upon the
terms and conditions herein contained, and hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. As used in this Agreement, the following terms have the
following meanings:
"Act" means the Delaware Limited Liability Company Act (6 Del C.
Section 18-101, et seq.) and any successor statute, as amended from time to
time.
"Agreement" has the meaning given that term in the introductory
paragraph.
"Capital Contribution" means any contribution by the Member to the
capital of the Company.
"Certificate" has the meaning given that term in Section 2.01.
"Company" means Grant Prideco USA, LLC, a Delaware limited liability
company.
"Managers" has the meaning given that term in Section 5.01.
"Member" means Grant Prideco, Inc., a Delaware Corporation.
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"Officers" has that meaning given in Section 6.01.
"Person" has the meaning given that term in Section 18-101(12)
of the Act.
"Proceeding" has the meaning given that term in Section 7.01.
Other terms defined herein have the meanings so given them.
1.02 Construction. Whenever the context requires, the gender of all
words used in this Agreement includes the masculine, feminine and neuter. All
references to Articles and Sections refer to articles and sections of this
Agreement. Terms used with initial capital letters will have the meanings
specified, applicable to both singular and plural forms, for all purposes of
this Agreement. The word include (and any variation) is used in an illustrative
sense rather than a limited sense. The word day means a calendar day.
ARTICLE II
ORGANIZATION
2.01 Formation. The Company has been organized as a Delaware limited
liability company by the filing of a Certificate of Formation (the
"Certificate") under and pursuant to the Act.
2.02 Name. The name of the Company is "Grant Prideco USA, LLC" and all
Company business must be conducted in that name or such other names that comply
with applicable law as the Member may select from time to time.
2.03 Registered Office; Registered Agent; Principal Office in the
United States; Other Offices. The registered office of the Company required by
the Act to be maintained in the State of Delaware shall be the office of the
initial registered agent named in the Certificate or such other office (which
need not be a place of business of the Company) as the Member may designate from
time to time in the manner provided by law. The registered agent of the Company
in the State of Delaware shall be the initial registered agent named in the
Certificate or such other Person or Persons as the Member may designate from
time to time in the manner provided by law. The principal office of the Company
in the United States shall be at such place as the Member may designate from
time to time, which need not be in the State of Delaware. The Company may have
such other offices as the Member may designate from time to time.
2.04 Purpose. The purpose of the Company is to engage solely in the
business of holding and maintaining the limited partnership interests of Grant
Prideco, LP and ownership interests in other entities affiliated with the Member
and the Company is authorized to conduct any lawful business, purpose or
activity directly or indirectly related thereto. The Company's places of
business shall be outside the State of Texas.
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2.05 Powers. The Company has all of the powers necessary or convenient
to achieve its purposes and to further its business.
2.06 Legal Title. Legal title to the assets of the Company will be
taken and at all times held in the name of the Company.
2.07 Qualifications. The Managers may take any and all actions deemed
reasonably necessary by the Managers to qualify the Company in foreign
jurisdictions.
2.08 Mergers and Exchanges. With the consent of the Member, the Company
may be a party to (a) a merger, or (b) an exchange or acquisition of the type
described in Section 18-209 of the Act.
2.09 Liability to Third Parties. The Member shall not be liable for the
debts, obligations or liabilities of the Company, including under a judgment
decree or order of a court.
2.10 Resignation of the Member. The Member may resign from the Company
prior to the dissolution and winding up of the Company.
2.11 Transfer or Pledge by the Member. The Member may transfer or
pledge its interest in the Company without restriction. The pledge or
hypothecation of, or the granting of any security interest or other lien or
encumbrance against, all or part of the Member's membership interest in the
Company by the Member will not cause the withdrawal of the Member from the
Company.
2.12 Bankruptcy of the Member. The Member shall not cease to be a
Member of the Company by virtue of the occurrence of any of the events listed in
Section 18-304 of the Act.
ARTICLE III
CAPITAL CONTRIBUTIONS
3.01 Initial Contributions. The Member is making a Capital Contribution
to the Company by contributing on behalf of the Company approximately 99% of its
assets and liabilities (other than intellectual property assets, to Grant
Prideco, LP, which shall be effected pursuant to a general conveyance and
assignment to be entered into between the Member and Grant Prideco, LP, which
transfer shall be effective April 14, 2000.
3.02 Additional Contributions. The Member shall not be required to make
any additional contributions to the capital of the Company.
3.03 No Withdrawal of Contributions. The Member shall not be entitled
to withdraw any part of the Member's capital account or to receive any
distribution from the Company, except as specifically provided in this
Agreement. There shall be no obligation to return to the Member any part of the
Member's capital contributions to the Company until such time as the Company is
dissolved and terminated.
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3.04 Advances by the Member. If the Company does not have sufficient cash
to pay its obligations, the Member may advance all or part of the needed funds
to or on behalf of the Company. An advance described in this Section constitutes
a loan from the Member to the Company, bears interest at a rate determined by
the Member from the date of the advance until the date of payment, and is not a
Capital Contribution.
3.05 Certification of Membership Interests. The Member hereby specifies,
acknowledges and agrees that all interests in the Company are securities
governed by Article 8 and all other provisions of the Uniform Commercial Code as
adopted and amended in the State of Delaware (the "UCC"), and pursuant to the
terms of Section 8.103 of the UCC, such interests shall be "securities" for all
purposes under such Article 8 and under all other provisions of the UCC, and
that the ownership interest of the Member shall be recognized by a form of
Membership Certificate attached hereto as Annex A ("Certificates"). Certificates
shall be numbered and executed by the President and Secretary of the Company and
shall be entered into a membership transfer register as they are issued, which
register shall be maintained by the Secretary of the Company. Upon surrender to
the Secretary of the Company of a certificate for membership interests duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the Company to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
4.01 Allocations. All items of income, gain, loss, deduction, and credit of
the Company shall be allocated to the Member.
4.02 Distributions. Subject to the limitations of Section 18-607 of the
Act, from time to time the Managers may cause the Company to make a distribution
of cash or other property to the Member. From time to time the Managers also may
cause property of the Company other than cash to be distributed to the Member,
which distribution may be made subject to existing liabilities and obligations.
ARTICLE V
MANAGEMENT
5.01 Management. Subject to the provisions of this Agreement, the Company
shall appoint managers (the "Managers"), who shall have exclusive authority to
act on behalf of the Company. Subject to the provisions of this Agreement, the
Managers shall have the authority to manage the business and affairs of the
Company. The Member shall have no authority to act on behalf of or bind the
Company.
5.02 Selection, Removal and Resignation of Managers. The Member shall
select any and all Managers of the Company. The initial Managers of the Company
shall be Xxxxxxx X. Xxxxxx, Xxxxx
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X. Xxxxxx, and Xxxx X. Xxxxx. The Member may remove any of the Managers at any
time, with or without cause, upon delivery to such Manager at the principal
office of the Company of written notice of such removal. Further, any of the
Managers may resign upon delivery to the Member at the principal office of the
Company of written notice of such resignation.
5.03 Compensation. The Managers shall receive such compensation for
their duties as Managers as the Member shall determine in its sole discretion.
ARTICLE VI
OFFICERS
6.01 Officers. The officers of the Company shall be elected by the
Managers, and shall include a President, a Secretary, a Treasurer, and such
other officers, employees and agents as appointed, from time to time, in
accordance with this Agreement. Additionally, the President shall have the
power to appoint such Vice Presidents and other officers equivalent or junior
thereto as the President may deem appropriate.
6.02 Term. Each officer of the Company shall serve at the pleasure of
the Managers, and the Managers may remove any officer at any time with or
without cause. Any officer, if appointed by the President of the Company, may
likewise be removed by the President of the Company.
6.03 Authority and Duties. All officers and agents of the Company
shall have such authority and perform such duties in the management of the
property and affairs of the Company as generally pertain to their respective
offices, as well as such authority and duties as may be determined by the
Managers.
6.04 Execution of Instruments. Checks, notes, drafts, other commercial
instruments, assignments, guarantees of signatures, and contracts (except as
otherwise provided herein or by law) shall be executed by the President, any
Vice President, the Secretary, the Treasurer, or such officers or employees or
agents as the Managers or any of such designated officers may direct.
ARTICLE VII
INDEMNIFICATION
7.01 Right to Indemnification. Subject to the limitations and
conditions as provided in this Article VI, each Person who was or is made a
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (hereinafter a "Proceeding"), or
any appeal in such a Proceeding or any inquiry or investigation that could lead
to such a Proceeding, by reason of the fact that he, or a Person of whom he is
the legal representative, is or was a Manager or Member of the Company shall be
indemnified by the Company to the fullest extent permitted by the Act, as the
same
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exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment) against judgments, penalties (including excise and similar taxes
and punitive damages), fines, settlements and reasonable expenses (including,
without limitation, attorneys' fees) actually incurred by such Person in
connection with such Proceeding, and indemnification under this Article VI shall
continue as to a Person who has ceased to serve in the capacity which initially
entitled such Person to indemnity hereunder. The rights granted pursuant to this
Article VI shall be deemed contract rights, and no amendment, modification or
repeal of this Article VI shall have the effect of limiting or denying any such
rights with respect to actions taken or Proceedings arising prior to any such
amendment, modification or repeal. It is expressly acknowledged that the
indemnification provided in this Article VI could involve indemnification for
negligence or under theories of strict liability.
7.02 Advance Payment. The right to indemnification conferred in this
Article VI shall include the right to be paid or reimbursed by the Company the
reasonable expenses incurred by a Person of the type entitled to be indemnified
under Section 6.01 who was, is or is threatened to be made a named defendant or
respondent in a Proceeding in advance of the final disposition of the Proceeding
and without any determination as to the Person's ultimate entitlement to
indemnification; provided, however, that the payment of such expenses incurred
by any such Person in advance of the final disposition of a Proceeding, shall be
made only upon delivery to the Company of a written affirmation by the Person of
his good faith belief that he has met the standard of conduct necessary for
indemnification under this Article VI and a written undertaking, by or on behalf
of such Person, to repay all amounts so advanced if it shall ultimately be
determined that such indemnified Person is not entitled to be indemnified under
this Article VI or otherwise.
7.03 Indemnification of Officers, Employees and Agents. The Company, by
adoption of a resolution of the Member, may indemnify and advance expenses to an
officer, employee or agent of the Company to the same extent and subject to the
same conditions under which it may indemnify and advance expenses to a Manager
or Member under this Article VI; and, the Company may indemnify and advance
expenses to Persons who are not or were not a Manager or Member, officers,
employees or agents of the Company but who are or were serving at the request of
the Company as a manager, director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another foreign or domestic
limited liability company, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise against any
liability asserted against him and incurred by him in such a capacity or arising
out of his status as such a Person to the same extent that it may indemnify and
advance expenses to a Manager or Member under this Article VI.
7.04 Appearance as a Witness. Notwithstanding any other provision of this
Article VI, the Company may pay or reimburse expenses incurred by a Person in
connection with his appearance as a witness or other participation in a
Proceeding at a time when he is not a named defendant or respondent in the
Proceeding.
7.05 Nonexclusivity of Rights. The right to indemnification and the
advancement and payment of expenses conferred in this Article VI shall not be
exclusive of any other right which the Managers, the Member or other Person
indemnified pursuant to this Article VI may have or hereafter
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acquire under any law (common or statutory), provision of the Certificate or
this Agreement, agreement, vote of the Member or otherwise.
7.06 Insurance. The Company may purchase and maintain insurance, at its
expense, to protect itself and any Person who is or was serving as a Manager,
officer, employee or agent of the Company or is or was serving at the request
of the Company as a member, manager, director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic limited liability company, corporation, partnership, joint venture,
sole proprietorship, trust, employee benefit plan or other enterprise against
any expense, liability or loss, whether or not the Company would have the power
to indemnify such Person against such expense, liability or loss under this
Article VI.
7.07 Savings Clause. If this Article VI or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless the Managers or the
Member or any other Person indemnified pursuant to this Article VI as to costs,
charges and expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement with respect to any action, suit or proceeding, whether
civil, criminal, administrative or investigative to the fullest extent
permitted by any applicable portion of this Article VI that shall not have been
invalidated and to the fullest extent permitted by applicable law.
ARTICLE VIII
TAXES AND BOOKS
8.01 Federal Income Tax Treatment. For federal income tax purposes, the
Company shall be an entity separate from the Member pursuant to Treasury
Regulations Section 301.7701-3(b)(1)(ii). The Managers are hereby authorized to
make such elections and to take any and all action to ensure that the Company
is classified as an entity separate from the Member for federal income tax
purposes.
8.02 Other Tax Returns. Subject to Section 7.01, the Managers shall cause
to be prepared and filed all necessary tax returns for the Company.
8.03 Maintenance of Books and Records. The Company shall keep accurate
books and records of accounts. The calendar year shall be the accounting year
of the Company. The Member shall be permitted access to all books and records
of the Company at the principal office of the Company during business hours.
ARTICLE IX
DISSOLUTION, LIQUIDATION AND TERMINATION
9.01 Dissolution. The Company shall dissolve and its affairs shall be
wound up on the first to occur of the following:
(a) The written consent of the Member;
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(b) At any time there are no Members, unless the business of the Company
is continued pursuant to Section 18-801(4) of the Act; and
(c) Entry of a decree of judicial dissolution of the Company under Section
18-802 of the Act.
The death, retirement, resignation, expulsion, bankruptcy or dissolution
of any Member or the occurrence of any other event that terminates the
continued membership of any Member shall not cause the Company to be dissolved
or its affairs to be wound up.
9.02 Liquidation and Termination. On dissolution of the Company, the
Managers shall act as liquidating trustees or the Member may appoint one or
more other Persons to act as liquidating trustee. The liquidating trustee shall
proceed diligently to wind up the affairs of the Company in accordance with
Section 18-804 of the Act and make final distributions to the Member. The costs
of liquidation shall be borne as a Company expense. Until final distribution,
the liquidating trustee shall continue to operate the Company assets with all
of the power and authority of the Managers.
9.03 Deficit Capital Accounts. Notwithstanding anything to the contrary
contained in this Agreement, and notwithstanding any custom or rule of law to
the contrary, the Member shall not be responsible for any deficit in any capital
account attributed to the Member, and upon dissolution of the Company any such
deficit shall not be an asset of the Company and the Member shall not be
obligated to contribute such amount to the Company to bring the balance of the
Member's capital account to zero.
9.04 Certificate of Cancellation. On completion of the distribution of
Company assets as provided herein, the Company is terminated, and the Managers
(or such other Person or Persons as the Act may require or permit) shall file a
Certificate of Cancellation with the Secretary of State of Delaware and take
such other actions as may be necessary to terminate the Company.
ARTICLE X
GENERAL PROVISIONS
10.01 Entire Agreement; Supersedure. This Agreement constitutes the entire
agreement of the Member relating to the Company and supersedes all prior
contracts or agreements with respect to the internal governance of the Company,
whether oral or written.
10.02 Effect of Waiver or Consent. A waiver or consent, express or
implied, to or of any breach or default by any Person in the performance by
that Person of its obligations with respect to the Company is not a consent or
waiver to or of any other breach or default in the performance by that Person
of the same or any other obligations of that Person with respect to the
Company. Failure on the part of a Person to complain of any act of any Person
or to declare any Person in default with respect to the Company, irrespective
of how long that failure continues, does not constitute a waiver by that Person
of its rights with respect to that default until the applicable statute of
limitations period has run.
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10.03 Amendment or Modification. This Agreement may be amended or modified
from time to time only by a written instrument adopted by the Member.
10.04 Binding Effect. This Agreement is binding on, and inures to the
benefit of, the Member and its heirs, legal representatives, successors, and
assigns.
10.05 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance is held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of that provision
to other Persons or circumstances is not affected thereby and that provision
shall be enforced to the greatest extent permitted by law.
10.06 Headings. Article and Section titles have been inserted for
convenience of reference only, and they are not intended to affect the meaning
or interpretation of this Agreement.
10.07 Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT OF
LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF
THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event of a direct
conflict between the provisions of this Agreement and (a) any provision of the
Certificate, or (b) any mandatory provision of the Act, the applicable
provision of this Agreement shall control except to the extent required by the
Act.
IN WITNESS WHEREOF, the Member has executed this Limited Liability Company
Agreement as of the date first set forth above.
Grant Prideco, Inc.
a Delaware Corporation,
sole member
By: XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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