Document:

ex10_11.htm

    Exhibit
      10.11

    

    

     

    

    

    OPERATING
      AGREEMENT

    OF

    JDM
      REEF CAPITAL MANAGEMENT, LLC

    

    Dated:  January
      23, 2007

     

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    OPERATING
      AGREEMENT

    OF

    JDM
      REEF
      CAPITAL MANAGEMENT, LLC

    

    This
      Agreement is entered into
      effective as of January 23, 2007, by and between JDM CAPITAL CORPORATION (“JDM
      REEF” or “Manager”), a New York Corporation, and Red Reef Laboratories
      International (“JV Partner”), a Florida corporation.

    

    ARTICLE
      1. ORGANIZATION

    

    Section
      1.1  Formation.  Effective as of the date
      hereof, the parties have organized the Company as a limited liability company
      pursuant to the Act by executing and filing its Articles of Organization with
      the Secretary of State as stated above on or before January 23, 2007. Copies
      of
      the Articles of Organization and any amendments shall be maintained at the
      principal office of the Company, and provided to each Member upon
      request.

    

    Section
      1.2  Term. The period of duration of the Company
      shall be perpetual, unless earlier terminated in accordance with the provisions
      of this Agreement.

    

    Section
      1.3  Name. The name of the Company shall be JDM
      REEF CAPITAL MANAGEMENT, LLC (“Company”) a formed Delaware Limited Liability
      Company.

    

    Section
      1.4  Business and Purpose. The Company is organized
      for the conduct of all lawful business permitted to be carried on by limited
      liability companies organized under the Act, including but not limited to the
      following:

    

    
      	
              (a)  

            	
              To
                engage in the business of, or own stock in a corporation or interests
                in
                another entity which is engaged in the business of performing any
                of all
                “core remediation services” in connection with the acquisition,
                development of real estate transactions that have environmentally
                challenged or encumbered properties.  This includes standard and
                proprietary practices.

            

    

    

    
      	
              (b)  

            	
              To
                act as an agent and to obtain necessary licenses related thereto;
                and

            

    

    

    
      	
              (c)  

            	
              To
                carry on any business or activity in connection with the foregoing
                purposes and to have and   exercise all
                of   the powers and   rights conferred
                by   the laws of Delaware and any other applicable
                jurisdiction upon limited liability companies formed under the
                Act.

            

    

    

    Section
      1.5  Intention for
      Company.  The Members have formed the Company as a
      Limited Liability Company under and pursuant to the Act.  The members
      specifically intend and agree that the Company not be a partnership (including,
      without limitation, a limited partnership) or any other venture, but a limited
      liability company under and pursuant to the Act.  No Member, as
      manager or otherwise, shall be construed to be a partner in either Company
      or a
      partner of any other Member, manager or Person.  The Articles and this
      Agreement and the relationships created thereby and arising there from shall
      not
      be construed to suggest otherwise.  Notwithstanding the foregoing, the
      parties intend to create an entity that is treated as a partnership for state
      and federal tax purposes under the Code and Regulations for the specific
      purposes of the stated Joint Venture.

    

    Section
      1.6 Powers.  To carry out
      the business and purpose of the Company as set forth in section 1.4, the Company
      shall have and exercise all powers permitted by the Act to be exercised by
      limited liability companies formed under the laws of the State of Delaware
      and
      to do any and all things not prohibited by law in furtherance of the business
      of
      the Company.

    

    Section
      1.7  Principal Office.  The principal office
      of the Company shall be 730 5th Avenue
      New York,
      NY 10019.  The location of the principal office may be changed by the
      Manger by written notice to each Member.  Upon any change of principal
      office, the Company shall file a notice of change with the Delaware Secretary
      of
      State as required under the Act.

     

    
      
         

      

      
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    Section
      1.8 [Intentionally
      Deleted]

    

    Section
      1.9 Business in
      Other States.  The Company shall apply for a certificate
      of authority to do business in any state or jurisdiction as may be
      appropriate.

    

    Section
      1.10  Definitions.  Terms defined in the
      singular shall include the plural, and vice versa.  Pronouns in any
      gender shall include the masculine, feminine and neuter, as the context
      requires.  All references to a “section” refer to this Agreement
      unless the context otherwise requires.  The capitalized terms in this
      Agreement shall have the following meaning:

    

    Act
      shall mean Chapter 57C of the Delaware General Statutes (and the corresponding
      provisions of any succeeding law regarding limited liability companies), as
      amended and in effect at such time.

    

    Adjusted
      Capital Account shall at any time mean, with respect to any Member,
      such Member’s Capital Account at such time (i) increased by (A) any amounts such
      Member is obligated to restore pursuant to this Agreement or is treated as
      obligated to restore under the provisions of section 1.704-1(b) of the
      Regulations, and (B) such Member’s share of minimum gain (as defined for
      purposes of Section 1.704-2(d) of the Regulations) and (ii) decreased by the
      amount of any adjustments, distribution or allocation described in sections
      1.704-1(b)(2)(ii)(d)(4) through (6) of the Regulations.

    

    Affiliate
      of any person shall mean any person directly or indirectly controlling,
      controlled by or under common control, whether through ownership, agreement
      or
      otherwise, with such person.

    

    Agreement
      shall mean this Operating Agreement, including all exhibits, as amended to
      such
      time.

    

    Capital
      Account shall mean the separate Capital Account maintained for each
      Member under section 4.1 at such time.

    

    Cash
      Available for Distribution shall mean all cash and cash equivalents of
      the Company at such time from whatever sources derived after (I) provision
      for
      all cash reserves as then set up and maintained pursuant to section 5.3(a);
      and
      (ii) payment, or reservation for payment, of all sums due and payable on all
      Company obligations then due.  Cash Available for Distribution shall
      not include:

    

    
      	
              (a)  

            	
              Proceeds
                from dispositions which (i) are required by any valid and binding
                agreement with any person or otherwise by law to be used, or otherwise
                are
                intended by the Company to be used, for (A) the purchase or other
                acquisition of property to replace the property disposed of or (B)
                the
                repayment of any indebtedness for borrowed money or other liability
                secured by the property disposed of; or (ii) are from the sale or
                other
                disposition by the Company of any Interests;
                or

            

    

    

    
      	
              (b)  

            	
              Final
                Distribution Proceeds.

            

    

    

    Cash
      Available for Distribution for any
      period shall mean Cash Available for Distribution that is determined to be
      available for distribution as of the end of that period as provided in section
      5.1.

    

    Code
      shall mean the Internal Revenue Code of 1986 (or the corresponding provisions
      of
      succeeding law regarding the taxation of income by the United States), as
      amended and in effect at such time.

    

    Company
      shall mean the limited liability company created under the Act pursuant to
      the
      Articles of Organization and operated pursuant to this Agreement.

    

    Event
      of Liquidation shall mean the liquidation (as defined by section 761(d)
      of the Code and Regulations thereunder) of the Interest of one or more Members
      within the meaning of section 1.704-1(b)(2)(ii)(g) of the
      Regulations.

    

    Event
      of Termination shall mean an event terminating the Company pursuant to
      section 9.1.

    

    Final
      Distribution Proceeds shall mean all cash and other property of the
      Company, if any, remaining for distribution to the Members following an Event
      of
      Termination after (i) the payment of the liabilities and obligations of the
      Company; and (ii) the funding of the reserves, if any, pursuant to section
      5.3(b).

     

    
      
         

      

      
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    Interest
      shall mean each Member’s interest in the capital, allocations of Profit or Loss
      and Federal income tax items, distributions of cash or other property, and
      all
      other right, title and interest in the Company and its assets as determined
      pursuant to this Agreement.

    

    Involuntary
      Withdrawal shall mean, with respect to any Member, (i) the entering of
      an order for relief in any proceeding commenced by the Member under Federal
      bankruptcy laws; (ii) the commencement of any proceeding under any Federal
      or
      state bankruptcy, reorganization or similar law by the Member with respect
      to
      itself or the failure within 90 days to dismiss or stay any such proceeding
      commenced against such Member if a natural person; (iv) the dissolution (and
      commencement of winding up) or other termination of the existence (whether
      by
      merger, consolidation or otherwise) of the Member if the successor to the Member
      acquires all or substantially all of the assets, capital stock, partnership
      interests or other ownership interests of that Member; or (v) any other event
      described in section 1705.15 of the Act, other than section 1705.15(A) of the
      Act.

    

    Manager
      shall mean the person designated as such pursuant to section 3.1 to be
      responsible for the management of the Company as provided in this
      Agreement.

    

    Member
      shall at any time mean each person that is a member of the Company at such
      time
      pursuant to the provisions of this Agreement.

    

    Person
      shall mean any natural person, corporation, partnership, trust or other entity
      or association, and any government or governmental agency or
      authority.

    

    Profit
      or Loss shall, for any period, mean the Company’s taxable income or
      loss for purpose of Federal income taxation for such period (including all
      items
      of income, gain, loss or deduction even if required to be separately stated
      by
      section 703(a) of the Code) subject to the following adjustments:

    

    
      	
              (a)  

            	
              All
                Company income that is exempt from Federal income taxation (to the
                extent
                not included in the computation of the Company’s taxable income or loss)
                shall be added;

            

    

    

    
      	
              (b)  

            	
              All
                Company expenditures that are not deductible or not properly chargeable
                to
                Capital Accounts (including deemed section 705(a)(2)(B) expenditures
                pursuant to the Regulations under section 704(b) of the Code) for
                purpose
                of Federal income taxation pursuant to section 705(a)(2)(B) of the
                Code
                (to the extent not included in the computation of the Company’s taxable
                income or loss) shall be
                subtracted;

            

    

    

    
      	
              (c)  

            	
              If
                the value of Company property has been restated in accordance with
                section
                4.2 or if the value of any Company property for purpose of the Members’
                Capital Accounts is different from the adjusted basis of the property
                for
                purpose of Federal income taxation, then in lieu of using the amount
                of
                depreciation, amortization or other
                cost

            

    

    

    
      	
               

            	
              Regulations
                shall mean the income tax regulations (including any temporary
                regulations) promulgated under the Code, as such regulations may
                be
                amended and in effect at such time, including the promulgation of
                any
                temporary regulations as final
                regulations.

            

    

    

    
      	
               

            	
              Unit
                shall mean the unit of measurement into which the Interests of Members
                are
                divided.  A Unit becomes outstanding at the time it is first
                acquired by a Member and remains outstanding until it is reacquired
                by the
                Company or an Event of Liquidation occurs with respect
                thereto.

            

    

    

    
      	
               

            	
              Voluntary
                Transfer shall mean (i) any transfer, encumbrance or other
                disposition (either directly by sale, pledge, gift or any other
                disposition) of any Interest (or any interest therein) or (ii) with
                respect to any Member that is not a natural person, any transfer
                or
                disposition directly or through one or more Affiliates of a majority
                or
                more of the outstanding capital stock, partnership interests or other
                ownership interests of that Member, provided such transfer is not
                an
                Involuntary Withdrawal by such
                Member.

            

    

    

    
      	
               

            	
              Vote
                shall mean with respect to any Member each Vote that such Member
                has
                pursuant to section 2.3.  A majority or other stated percentage
                Vote of Units shall mean such number of Votes of Units then outstanding
                (excluding Unites of transferees who cannot vote under section 8.4)
                that,
                when divided by the total number of Units outstanding at such time
                (excluding Units of transferees who cannot vote under section 8.4),
                results in a percentage at least equal to the stated
                percentage.  Notwithstanding any provision in this Agreement
                requiring a greater percentage Vote to authorize such action than
                the
                percentage stated in this Agreement, then the percentage Vote required
                by
                the Act must be obtained in order to authorize such action, and the
                contravening stated percentage Vote set forth in this Agreement shall
                be
                construed and deemed amended accordingly with respect to such
                action.

            

    

     

    
      
         

      

      
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    ARTICLE
      2.  MEMBERS

    

    Section
      2.1  General.  The Members of the Company
      shall be JDM CAPITAL CORPORATION and Red Reef Laboratories
      International.  Except as otherwise provided in this Agreement, no
      person may be admitted as an additional or substitute Member without the
      unanimous written consent of all the Members.  Except as otherwise
      provided in this Agreement, a Member shall have the same rights and powers,
      and
      shall be subject to the same restrictions and liabilities, as a member under
      the
      Act.

    

    Section
      2.2  Units.  The Interests shall be divided
      into 100 Units, which shall be allocated to each Member as set forth
      below.

    

          
      Member                                                                           Units

    

    JDM
      CAPITAL
      CORPORATION                                                        50

    Red
      Reef Laboratories
      International                                                       50

    

    Section
      2.3  Voting

    

    (a)           Except
      as otherwise provided in this Agreement, any vote, consent or authorization
      permitted or required by this Agreement shall require a majority Vote of
      Units.

    

    (b)           Each
      Member shall have a number of Votes on each matter submitted at any time for
      vote of all Members equal to the number of Units owned by such Member at that
      time.

    

    (c)           Any
      Vote or consent required by this Agreement may be given by any of the
      following:

    

    
      	
              (1)  

            	
              By
                a written consent given by the consenting Member and received by
                the
                Manager at or prior to the doing of the act or thing for which the
                consent
                is solicited, provided that such consent shall not have been nullified
                by:

            

    

    

    
      	
              (A)  

            	
              Written
                notice to the Manager of such nullification by the consenting Member
                prior
                to the doing of any act or thing;

            

    

    

    
      	
              (B)  

            	
              Written
                notice to the Manager of such nullification by the consenting Member
                prior
                to the time of any meeting called pursuant to section 2.4 to consider
                the
                doing of such act or thing; or

            

    

    

    
      	
              (C)  

            	
              The
                negative Vote by such consenting Member at any meeting called pursuant
                to
                section 2.4 to consider the doing of such act or
                thing.

            

    

    

    
      	
              (2)  

            	
              By
                the affirmative Vote by the consenting Member to the doing of the
                act or
                thing for which the consent is solicited at any meeting called pursuant
                to
                section 2.4 to consider the doing of such act or
                thing.

            

    

    

    
      	
              (c)  

            	
              Any
                Vote by a Member may be in person or by duly appointed
                proxy.

            

    

    

    Section
      2.4  Meetings.

    

    
      	
              (a)  

            	
              A
                meeting of Members may be called and any action may be presented
                for
                consideration at such meeting by any Member.  Except as waived
                pursuant to section 2.4(d), notice of the time and place of each
                meeting
                shall be given by personal delivery, mail, telegram, telecopy, cablegram
                or other written communication, which notice shall be given at least,
                but
                need not be given more than, 5 days before such meeting provided,
                however,
                that none of the actions enumerated in section 3.2 may be authorized
                or
                taken at any meeting unless the notice thereof states that such action
                would be presented for consideration at such
                meeting.

            

    

    

    
      	
              (b)  

            	
              The
                place of each meeting shall be at the principal place of business
                of the
                Company or such other place as designated by the Manager.  Each
                Member which is an organization, and any other Member who is unable
                to
                attend a meeting and to represent and cast the Vote(s) of such
                Member.

            

    

     

    
      
         

      

      
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              (c)  

            	
              Any
                Member or representative of a Member who is present at any meeting
                in
                person or by means of communications equipment pursuant to which
                all
                persons participating can hear each other shall be deemed present
                at that
                meeting for voting and all other
                purposes.

            

    

    

    
      	
              (d)  

            	
              Any
                Member may, either before or after any meeting, waive any notice
                required
                to be given of the time or place of, or actions to be considered
                at, such
                meeting, and any notice of any meeting shall not be required to be
                given
                to any Member who is represented by any designated representative
                who is
                present at such meeting in person or by means of communications
                equipment.

            

    

    

    Section
      2.5  Limited Liability.  The Members shall not
      be bound by, or be personally liable for the expenses, liabilities or
      obligations of the Company, except to the extent of their capital contributions
      and to the extent required under the Act.

    

    Section
      2.6  Indemnification.  Each Member shall be
      indemnified by the Company to the fullest extent permitted under the
      Act.

    

    Section
      2.7  Related Party Transactions.  No
      transaction or contract to which the Company is or may be a party shall be
      void,
      voidable or a breach of fiduciary duty for reason that any Member, or any
      Affiliate of the Member, is a party thereto.  Notwithstanding the
      preceding sentence, with respect to any transaction or contract to which a
      Member is a party, the transaction or contract must not be less favorable to
      the
      Company than an arm’s length transaction or contract with an unrelated person
      would be to the Company at the time it is authorized.

    

    Section
      2.8  Business Activities of Members.  Each
      Member and its Affiliates may engage in other business activities without
      liability or accounting to the Company.

    

    Section
      2.9  Investment Representations.  Each Member
      hereby makes the following representations and warranties to the Company and
      to
      the other Members which are acknowledged and agreed to constitute material
      representations to be relied upon in connection with the organization of the
      Company and the issuance of Interests:

    

    
      	
              (a)  

            	
              The
                Interest in the Company being acquired by the Member is being acquired
                only for the account of the Member and of on behalf of any other
                person.

            

    

    

    
      	
              (b)  

            	
              The
                Interest is being acquired by the Member for purposes of holding
                for
                investment and management of and not with view to any further distribution
                thereof.

            

    

    

    
      	
              (c)  

            	
              The
                Member has no agreement, arrangement or understanding for transfer
                of any
                of the Interest or any interest therein to any other person or
                persons.

            

    

    

    
      	
              (d)  

            	
              The
                Member (i) has such knowledge and experience in financial and business
                matters to be able to evaluate the merits and risks of an investment
                in
                the Interest, (ii) has been given or had access to sufficient information
                regarding the Company to evaluate the merits and risks of an investment
                in
                the Interest and (iii) is able to bear the risks of an investment
                in the
                Interest.

            

    

    

    
      	
              (e)  

            	
              The
                Member understands that the Interests are not traded and that no
                market is
                likely to exist for an Interest at the time of any desired
                resale.  In addition, the Member understands that the transfer
                of Interest is subject to certain restrictions set forth in this
                Agreement
                and under applicable federal and state securities
                laws.

            

    

     

    
      
         

      

      
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    ARTICLE
      3. MANAGEMENT

    

    Section
      3.1  Manager. JDM CAPITAL CORPORATION shall be the
      Manager.  Except as provided by the Act and in this Agreement, the
      powers of the Company shall be exercised, its business affairs conducted and
      its
      property managed under the exclusive direction of the Manager, including without
      limitation all of the following:

    

    
      	
              (a)  

            	
              To
                lease any real or personal property which may be necessary, convenient
                or
                incidental to the accomplishment of the purposes of the
                Company;

            

    

    

    
      	
              (b)  

            	
              To
                execute any and all agreements, contracts, documents, certifications
                and
                instruments necessary or convenient in connection with the manager,
                maintenance and operation of the Company and its properties and assets
                and
                to employ such persons as are necessary to perform the duties required
                thereby, all as necessary, convenient or incident to the accomplishment
                of
                the purposes of the Company;

            

    

    

    
      	
              (c)  

            	
              To
                invest, care for, and distribute pursuant to Article 5, all funds
                of the
                Company to the Members by way of cash, income, return on capital
                or
                otherwise, and to perform all matters and enter into any and all
                agreements in furtherance of the objectives of the Company or this
                Agreement;

            

    

    

    
      	
              (d)  

            	
              To
                engage in any kind of activity and to perform and carry out contracts
                of
                any kind necessary or incidental to, or in connection with, the
                accomplishment of the purposes of the Company, as may be lawfully
                carried
                on in which the Company is then formed or qualified;
                and

            

    

    

    
      	
              (e)  

            	
              To
                employ and/or contract for such personnel as are necessary to the
                accomplishment of the purposes of the company;
                and

            

    

     

    Section
      3.2  Limitations on Manager’s
      Authority.  Notwithstanding the authority granted to the
      Manager pursuant to section 3.1, without the affirmative unanimous Vote of
      all
      Members, the Manager may not:

    

    
      	
              (a)  

            	
              Authorize
                or cause the Company to engage in a business materially different
                from the
                business as described in section
                1.4.

            

    

    

    
      	
              (b)  

            	
              Amend
                the Articles of Organization.

            

    

    

    
      	
              (c)  

            	
              Effect
                or permit the Voluntary Transfer of the Interest of a
                Member.

            

    

    

    
      	
              (d)  

            	
              Admit
                the transferee of an Interest as a substitute Member with respect
                to such
                Interest.

            

    

    

    
      	
              (e)  

            	
              Admit
                any additional Members.

            

    

    

    
      	
              (f)  

            	
              Amend
                this Agreement.

            

    

    

    
      	
              (g)  

            	
              Confess
                a judgment against the Company.

            

    

    

    
      	
              (h)  

            	
              Borrow
                money or deliver on behalf of the Company evidence of indebtedness
                in an
                amount in excess of $10,000 per annum, in the
                aggregate.

            

    

    

    
      	
              (i)  

            	
              Take
                an action that results in the imposition of the personal liability
                of a
                Member for any Company debt, obligation or
                liability.

            

    

    

    
      	
              (j)  

            	
              Sell
                or otherwise dispose of all or substantially all of the Company’s
                assets.

            

    

    

    
      	
              (k)  

            	
              enter
                into or amend any agency agreement or other similar agreement with
                any
                title insurance underwriter or its affiliate;
                or

            

    

    

    
      	
              (l)  

            	
              enter
                into any settlement in excess of $5,000.00 of any claim with the
                company’s
                title insurance underwriter.

            

    

     

    
      
         

      

      
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    Section
      3.3  Operating
      Restrictions.

    

    
      	
              (a)  

            	
              All
                Company property in the form of cash not otherwise invested shall
                be
                deposited in one or more accounts maintained in such financial
                institutions as the Manager shall determine or shall be invested
                in
                short-term liquid securities or shall be left in escrow and withdrawals
                shall be made only in the regular course of Company business on such
                signature or signatures as the Manager may determine from time to
                time.

            

    

    

    
      	
              (b)  

            	
              The
                signature of the Manager shall be the only signature necessary to
                convey
                title to Company property (expressly including any real property
                owned by
                the Company) or to execute any promissory notes, trust deeds, mortgage,
                or
                other instruments of hypothecation.

            

    

    

    Section
      3.4  Officers.  For the purpose of conducting
      the day-to-day operations of the Company, the Manger may appoint such officers
      as deemed appropriate in its discretion.

    

    Section
      3.5  Expenses.  The Manager and each officer
      shall be reimbursed by the Company for all reasonable and necessary expenses
      directly incurred in the conduct of any Company business.

    

    Section
      3.6  Compensation. No
      Member or Manager shall receive any salary, fee, or draw for services rendered
      to or on behalf of the Company.  Notwithstanding the previous
      sentence, Manager shall receive incentive warrants in Red Reef Laboratories
      International based upon specific hurdles and structure further defined in
      Exhibit A.

    

    Section
      3.7Indemnification.  The
      Manager and each officer of the Company shall be indemnified to the fullest
      extent permitted under the Act.

    

    Section
      3.8  Bylaws.  The Manager may adopt bylaws to
      govern its proceedings and the transaction of business, and any other matters
      properly within the authority or discretion of the Manger so long as consistent
      with the Act, the Articles of Organization and this Agreement.

     

    ARTICLE
      4.  CAPITAL AND LOANS

     

    Section
      4.1  Capital Accounts.  A separate Capital
      Account shall be maintained for each Member.  No Member shall have any
      interest in the Capital Account of any other Member.  Capital Accounts
      shall be determined and maintained on the same basis as Capital Accounts are
      determined and maintained by the Company for purpose of Federal income taxation
      in accordance with section 1.704-1(b) of the Regulations.  The Capital
      Account of each Member shall be maintained by:

    

    
      	
              (a)  

            	
              Crediting
                the Capital Account (i) at the time of each capital contribution
                with the
                amount of money and with the fair market value of property contributed
                with respect to that Member; (ii) at the time of assumption or
                distribution with the amount of all liabilities of the Company that
                are
                assumed by the Member or that are secured by property distributed
                to the
                Member, and (iii) as of the last day of each calendar year (or other
                periods of which Profit or Loss is determined) with the Member’s
                allocation of Profit and Items of Income allocated for that period
                pursuant to Article 6; and

            

    

    

    
      	
              (b)  

            	
              Debiting
                the Capital Account (i) at the time of each distribution with the
                amount
                of money and with the fair market value of property distributed as
                a
                distribution to the Member pursuant to Article 5; (ii) at the time
                of
                assumption or distribution with the amount of all liabilities of
                the
                Member that are assumed by the Company or that are secured by property
                contributed to the Company; and (iii) year (or other periods for
                which
                Profit or Loss is determined) with the Member’s allocation of Loss and
                other items in the nature of a loss or expenditure allocated for
                that
                period pursuant to Article 6.

            

    

    

    Section
      4.2  Restatement of Capital Accounts. Upon the events
      set forth in section 1.704-1(b)(2)(iv)(f) of the Regulations, the Members shall
      have the right to restate the value at which Company property is stated for
      purpose of the Members’ Capital Accounts to equal the fair market value thereof
      in the event the value of Company property is so restated, the Capital Account
      of each Member shall be adjusted as if an Event of Termination had occurred
      where the Company had disposed of all Company property at its fair market value
      as of the date of the event giving rise to the restatement and had distributed
      its remaining assets pursuant to Article 9.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    Section
      4.3  Capital Contributions.  Each Member shall
      make an initial cash capital contribution as set forth below:

    

    Members                                                                Capital
      Contribution

    

    JDM
      CAPITAL
      CORPORATION                                               $
      50.00

    

    Red
      Reef Laboratories
      International                                              $
      50.00

    

    Section
      4.4  Additional Amounts.  The Members hereby
      agree to make all additional capital contributions as may be determined by
      a
      majority vote of the members. If additional capital funds are required for
      any
      reason by the Company, each Member shall have the right, but shall not be
      obligated, to lend, or to cause an Affiliate of the Member to lend, or to have
      another Member or Affiliate thereof lend, all or any portion of the required
      funds.  Any such loan shall bear interest at a variable rate floating
      daily at 2 percentage points above the prime commercial lending rate of HSBC,
      as
      in effect from time to time over the term of such loan, and the principal of,
      and accrued interest on, any such loan shall be repaid prior to any
      distributions to Members pursuant to Article 5.

    

    Section
      4.5  Return of Capital.  Except as otherwise
      provided in this Agreement, no Member shall:

    

    
      	
              (a)  

            	
              Have
                the right to demand the return of any capital contribution or have
                priority over any other Member either as to the return of capital
                contributions or as to any cash or other distributions by the
                Company.

            

    

    

    
      	
              (b)  

            	
              Be
                liable for the return of all or any part of the capital contributions
                of
                the other Members.  Any such return shall be made solely in cash
                and solely from the assets of the
                Company.

            

    

    

    
      	
              (c)  

            	
              have
                the right to (i) receive property other than cash in return of capital
                contributions or as any other form of distribution, (ii) withdraw
                any part
                of the Members capital contributions; or (iii) receive any funds
                or
                property of the Company.

            

    

    

    
      	
              (d)  

            	
              Have
                interest accrue or be paid on the capital contributions of such
                Member.

            

    

    

    ARTICLE
      5.  DISTRIBUTIONS

    

    Section
      5.1  Cash
      Available for Distribution.    The Manager
      shall determine as of the end of each calendar year (or such other shorter
      period as the Members deem appropriate) the amount of Cash Available for
      Distribution as of the end of such period to be applied as provided in this
      section 5.1 Cash Available for Distribution as so determined shall be
      distributed to the Members in proportion to their Units.

    

    Section
      5.2  Final Distribution Proceeds.  The Manager
      shall determine the amount of Final Distribution Proceeds following an Event
      of
      Termination.  Final Distribution Proceeds shall be applied as provided
      in this section 5.2 not later than the end of the Company’s taxable year in
      which the Event of Termination occurs (or, if later, the 90th calendar
      day
      following the Event of Termination).  Notwithstanding the preceding
      sentence as long as such retention complies with the provisions of section
      1.704-1(b) of the Regulations, the Company may (i) establish reasonable reserves
      for contingent or unforeseen liabilities or obligations pursuant to section
      5.3(b) which need not be distributed until such liabilities or obligations
      are
      satisfied; and (ii) with respect to installment obligations and other amounts
      owed to the Company which are not collected prior to the time the Company is
      required to distribute its assets, may retain each such obligation until payment
      is received by the Company.  The amount of Final Distribution Proceeds
      shall be distributed to all Members having a positive balance in their Capital
      Accounts, after giving effect to the allocations pursuant to Article 6, in
      proportion to the positive balances in the Capital Accounts of such
      Members.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    Section
      5.3  Reserves.  The following reserves shall
      be established by the Company.

    

    
      	
              (a)  

            	
              Operational.  The
                Manager shall, in its discretion, maintain such cash reserves as
                are
                reasonable and prudent to fund the Company business prior to an Event
                of
                Termination.  Upon any reduction in such cash reserve, any
                excess cash resulting therefrom shall constitute Cash Available for
                Distribution.

            

    

    

    
      	
              (b)  

            	
              Termination.  The
                Manager shall, in its discretion, maintain such cash or other reserves
                as
                are reasonable and prudent to fund any contingent or unforeseen
                liabilities or obligations of the Company upon and after an Event
                of
                Termination.  Upon any reduction in such cash or other reserve
                or in the event that any such cash or other reserves are determined
                to be
                no longer needed, any excess cash or other property resulting therefrom
                shall constitute Final Distribution
                Proceeds.

            

    

    

    Section
      5.4  Company Property.  All real or personal
      property, tangible or intangible, acquired by or contributed to the Company
      shall be Company property and title shall be held in the name of the
      Company.  No Member individually shall have any beneficial ownership
      of such property or the right to have any such property
      partitioned.  No Company property shall be withdrawn or otherwise
      distributed to any Member unless the Manager determines such property is not
      needed in the operation of the Company and the distribution shall not impair
      the
      solvency of the Company.  In such event, unless otherwise agreed upon
      by the Members, the Company property shall be distributed to each Member in
      the
      proportion of each Members respective interest in the Company determined as
      if
      an Event of Termination had occurred where the Company had disposed of the
      Company property at its fair market value as of the date of the distribution
      of
      the Company property and had distributed its remaining assets pursuant to
      Article 9.

    

    ARTICLE
      6.  ALLOCATIONS

    

    Section
      6.1  Profit or Loss.  The Profit or Loss of
      the Company shall be determined for each calendar year (or for such interim
      periods within each calendar year as the Manager shall determine appropriate,
      so
      long as such interim period is consistent with section 706 of the Code and
      the
      Regulations thereunder).  The Profit or Loss shall be allocated for
      each period as follows:

    

    
      	
              (a)  

            	
              Subject
                to the special allocations set forth in section 6.3, any Profit shall
                be
                allocated to the Members in proportion to their
                Units.

            

    

    

    
      	
              (b)  

            	
              Subject
                to the special allocations set forth in section 6.3, any Loss shall
                be
                allocated to the Members in proportion to their
                Units.

            

    

    

    Section
      6.2  Special
      Allocations

    

    
      	
              (a)  

            	
              Nonrecourse
                Liabilities.  To the extent the Company has any nonrecourse
                deductions, partner nonrecourse deductions or minimum gain (within
                the
                meaning of section 1.704-2(b) of the Regulations), such items shall
                be
                allocated to each Member in a manner intended to comply with the
                requirements of section 1.704-2(b0 of the
                Regulations.  furthermore, the allocations shall be interpreted
                and construed in accordance with the economic terms of this Agreement
                which is to allocate all items in accordance with each Member’s Interest
                in the Company.

            

    

    

    
      	
              (b)  

            	
              Special
                Income Offsets.  After giving effect to the allocations as
                set forth in Section 6.1 for any period, and to any distributions
                of Cash
                Available for Distribution for that period, the following items for
                that
                period and, if necessary, subsequent periods, shall be reallocated
                as
                follows:

            

    

    

    
      	
              (1)  

            	
              Loss
                Limitation.  To the extent that all or any portion of a Loss
                allocated for any period pursuant to section 6.1(b) causes or increases
                a
                negative balance in any Member’s Adjusted Capital Account, such Loss, or
                any portion thereof, shall be reallocated to any Members which would
                not
                have a negative Adjusted Capital Account balance as a result of the
                allocation (in proportion to their respective Adjusted Capital Account)
                or, if no such Members exist, then to the Members in accordance with
                their
                interests in the Company, which is intended to be in proportion to
                their
                Units at the end of the period.

            

    

    

    
      	
              (2)  

            	
              Qualified
                Income Offset.  In the event any Member unexpectedly
                receives for any period any adjustment, allocation, or distribution
                described in section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the
                Regulations, which create or increase a negative Adjusted Capital
                Account
                of the Member, then income and gain (consisting of a pro rata portion
                of
                each item of Company income, including gross income, and gain for
                such
                year and, if necessary, for subsequent years) shall be specially
                allocated
                to the Capital Account of the Member in an amount and manner sufficient
                to
                eliminate, to the extent required by the Regulations the negative
                Adjusted
                Capital Account balance so created as quickly as possible.  The
                special reallocation described in this section 6.2(b)(2) is intended
                to
                qualify as a "qualified income offset”, as that term is used in section
                1.704(b)(2)(ii)(d) of the Regulations and shall be interpreted and
                construed in accordance therewith.

            

    

    

    
      	
              (3)  

            	
              Gross
                Income Offset.  To the extent that a Member has a negative
                Adjusted Capital Account balance at the end of any period after taking
                into account (I) all allocations under Article 6 (other than this
                section
                6.2(b)(3)) for such period and (ii) all distributions under Article
                5 with
                respect to such period, then income and gain for the period shall
                be
                reallocated from any Member which would not have a negative Adjusted
                Capital Account as a result of such reallocation (and if more than
                one,
                from each Member in the same ratio as allocated to each of them)
                to each
                such Member to the extent of such Member’s negative Adjusted Capital
                Account balance.

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
              (c)  

            	
              Curative
                Allocations.  The special allocations set forth in this
                section 6.3 are intended to comply with certain requirements of section
                1.704-1(b) of the Regulations.  Notwithstanding any other
                provision of this Agreement, if there are any such special allocations
                for
                any period, income and gain for subsequent periods shall as quickly
                as
                possible be allocated to each such Member to offset such earlier
                special
                reallocations so that the new amount that is resultingly allocated
                to each
                Member will equal the net amount that would have been allocated to
                each
                Member if such special reallocations had not occurred.  Any such
                curative allocations pursuant to this section 6.2 of income and gain
                for
                any period shall be made prior to any allocation of Profit and Loss
                for
                the period pursuant to section 6.1.

            

    

    

    Section
      6.3  Federal Income Tax Items.  The following
      rules shall apply for all allocations for purposes of Federal income
      taxation:

    

    
      	
              (a)  

            	
              Taxable
                Income.  All items of Company income, gain, credit, loss,
                and deduction shall be allocated to each Member’s Interest on the same
                basis as Profit and Loss, and items thereof, are allocated pursuant
                to
                section 6.1 for the calendar year or period corresponding to such
                taxable
                year or other period.

            

    

    

    
      	
              (b)  

            	
              Alternative
                Minimum Tax.   All preference items for alternative minimum
                tax purposes shall be allocated in the same portion as the underlying
                item
                was allocated for regular Federal income tax
                purposes.

            

    

    

    
      	
              (c)  

            	
              Contributed
                Property.  Items of income, gain, loss and deduction with
                respect to any property contributed to the capital of the Company
                shall be
                allocated among the Members so as to take account of any variation
                between
                the adjusted basis of such property to the Company for purpose of
                Federal
                income taxation and the fair market value thereof at the time of
                contribution in accordance with sections 704(c) and 737 of the Code
                and
                the Regulations thereunder.

            

    

     

    Allocations
      pursuant to this section 6.3 are solely for purposes of federal income taxation,
      and any related state or local taxes incorporating the Federal income tax
      provisions of the Code, and shall not affect or in any way be taken into account
      in computing any Member’s Capital Account under section 4.1 or share of
      allocations pursuant to sections 6.1 and 6.2.

    

    Section
      6.4  Allocations upon Transfer of an
      Interest.  Notwithstanding anything to the contrary in
      this Article 6, the Profit or Loss for any period allocated to any Interest
      that
      was transferred during that period shall be allocated between the transferor
      and
      the transferee using any convention permitted under section 706(d) of the Code
      and reasonably selected by the Manager to determine the transferor’s and
      transferee’s separate interests.  For purposes of determining any
      allocations to any Member under this Article 6 that are based upon the aggregate
      amount of any allocations or distributions to that Member, the aggregate amount
      of any such allocations or distributions to any Member shall include the
      aggregate amount of all such allocations and distributions made with respect
      to
      the Interest of that Member, including those made to prior transferors of such
      Interest.

    

    ARTILCE
      7.  ACCOUNTING

    

    Section
      7.1  Books and Records.  The books and records
      of the Company shall be kept in sufficient detail to determine the Profit or
      Loss and the Federal income tax items of the Company for each period for which
      an allocation is to be made pursuant to this Agreement.  The Company
      shall also keep such books and records in sufficient detail so as to permit
      preparation of financial statements in accordance with generally accepted
      accounting methods and principles for such period and in such form and content
      as reasonably requested by another Member.  Such books and records and
      financial statements together with any other records and documents required
      to
      be made available by the Company for inspection under the Act shall be
      maintained at the principal office of the Company.  Such documents
      shall be open for inspection and examination, copying, verification or audit
      thereof by any Member or its duly authorized representative.  The
      annual financial statements of the Company need not be audited unless requested
      by a Member and shall be provided to Members within a reasonable period after
      the end of each fiscal year.  The Manager shall provide every Member
      with monthly reports of pertinent operating information.  The Manager
      shall use reasonable efforts to furnish all Members with necessary tax
      information within 45 days after the end of each fiscal year.

    

    Section
      7.2  Accounting Period and
      Basis.    The accounting period and taxable
      year of the Company shall be period ending December 31 each year.  The
      Company shall prepare all financial statements on the accrual method of
      accounting or such other reasonable accounting method approved by the
      Members.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    Section
      7.3  Tax
      Matters Partner.  JDM REEF CAPITAL MANAGEMENT, LLC shall
      act as the Tax Matters Partner as defined in section 6231(a)(7) of the
      Code.  The Tax Matters Partner shall provide the Members with a copy
      of all correspondence and shall keep the other Members reasonably informed
      of an
      audit, administrative or judicial proceedings involving the potential adjustment
      at the Company level of any item required to be taken into account by the
      Members for purpose of Federal income taxation.  In any controversy
      with the Internal Revenue Service or any other taxing authority involving the
      Company, either directly or indirectly, the Tax Matters Partner may in respect
      thereof incur expenses on behalf of the Company which it deems necessary and
      advisable in the interest of the Company including, without limitation,
      attorneys’ and accounting fees.  The Tax Matters Partner may execute
      or agree to a settlement or compromise of such controversy, waive or extend
      the
      statute of limitation, choose the forum for litigation and file amended tax
      returns only with the prior consent of the other Members.

    

    ARTICLE
      8.  WITHDRAWAL; TRANSFER

    

    Section
      8.1  Voluntary
      Withdrawal.

    

    
      	
              (a)  

            	
              Any
                Member may withdraw from the company by giving 120 days notice of
                intent
                of Voluntary Withdrawalto each of the other members. Upon the effective
                date of the Voluntary Withdrawal of any Member, the Companyshall
                be
                terminated, unless within 120 days of receipt by the Company of the
                notice
                of intent of Voluntary Withdrawal, all of the remaining Members shall
                give
                notice to the withdrawing Member of the remaining Members’ election to
                purchase the interest of the withdrawing Member in accordance with
                Section
                8.4 hereof and to continue the business of the
                company.

            

    

    

    
      	
              (b)  

            	
              [DELETED]

            

    

    

          Section
      8.2  Involuntary Withdrawal. Except as otherwise
      provided herein, upon the Involuntary Withdrawal of any Member, the Company
      shall be dissolved unless within 120 days of receipt by the Company of notice
      of
      intent of Involuntary Withdrawal the remaining Members elect to continue the
      business of the Company by a majority Vote of Units of such remaining Members
      and elect to purchase the Interest of the withdrawing Member in accordance
      with
      Section 8.4 hereof. 8.4.

    

    Section
      8.3 Restriction on
      Voluntary Transfer No member may make a Voluntary Transfer of
      the whole or any portion of its interest without a unanimous Vote of Units
      and
      compliance with the requirements of Section 8.6 hereof.

    

    (a)           Not
      Used

    

    
      	
              (b)  

            	
              Permitted
                Transfers.  Notwithstanding any other provision to the
                contrary in this Agreement other than section 8.6, a Member may make
                a
                Voluntary Transfer of its Interest without the written consent of
                the
                other Members, or any portion thereof, directly to, in trust for,
                or
                otherwise for the benefit of an entity owned and controlled entirely
                by a
                Member.  Each permitted transferee under this section 8.3 shall
                be admitted as a substitute Member as soon as practicable after the
                transferee has satisfied the requirements set forth in section 8.6
                (b)-(e).

            

    

    

    Section
      8.4 Closing of
      Purchase  When under this Agreement the Interest of any
      Member is to be purchased in accordance with this Section 8, the closing on
      the
      purchase of the Interest shall occur no later than 60 days after the date of
      said notice of election is given. The purchase price for such interest shall
      be
      an amount equal to the positive Capital Account balance attributed at that
      time
      to the interest to be purchased. The purchase price shall be paid in cash at
      the
      closing. If the interest to be purchased is subject to any pledge or
      encumbrance, the purchase price payable for such interest shall be paid to
      discharge the liability under such pledge or encumbrance, which amounts when
      so
      applied shall be credited against the purchase price to be paid. Further, the
      Company at closing shall pay in full any and all Company loans outstanding
      to
      the selling Member and the purchasing Members shall execute and deliver to
      the
      Selling Member an indemnification agreement whereby the purchasing Member,
      jointly and severally, indemnify and hold harmless the selling Member from
      any
      and all loss, damage, cost or expense, including reasonable legal fees,
      resulting from or arising out of any and all Company obligations to third
      parties.

    

    Section
      8.5  Call
      Option.  JDM REEF CAPITAL MANAGEMENT, LLC, or its
      successor, shall have the option to acquire the Interest of any remaining Member
      by giving sixty (60) days prior written notice to said Member of its intent
      to
      exercise the call option under this section 8.5.  The closing on the
      purchase of the Interest of Red Reef Laboratories International shall occur
      no
      later than sixty (60) days after the date written notice of such election is
      given.  Should said call option be exercised prior to one year from
      the first day of operation of the Company, the purchase price for such Interest
      shall be an amount equal to the positive Capital Account balance attributed
      to
      the interest of Red Reef Laboratories International at that time. If said call
      option is exercised after a period of one year from the first day of operation
      of the Company, the purchase price under this call option shall be equal to
      the
      last 12 month after-tax profit times 3 times the percentage of ownership
      attributed to the selling Member at that time. The purchase price shall be
      paid
      in cash at the closing.  If the Interest to be purchased is subject to
      any pledge or encumbrance, the purchase price payable for such Interest shall
      be
      paid to discharge the liability under such pledge or encumbrance, which amounts
      when so applied shall be credited against the purchase price to be
      paid.  Further, upon its exercise of the call option under this
      section, the Company shall immediately pay in full any and all Company loans
      outstanding and the selling Member shall hold JDM REEF CAPITAL MANAGEMENT,
      LLC
      harmless from and indemnify against any and all loss, damage, costs or expense,
      including reasonable attorney fees, resulting from or arising out of any and
      all
      Company obligations to third parties.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    Section
      8.6  Rights of Transferees.  A transferee of
      an Interest pursuant to any transfer in accordance with the provisions of this
      Agreement shall be entitled to participate in all allocations and distributions
      pursuant to this Agreement with respect to the transferred Interest and to
      succeed to the Capital Account and Adjusted Capital Account representing the
      transferred Interest and to have the Capital Account adjusted pursuant to this
      Agreement.  However, until such transferee is admitted as a substitute
      Member pursuant to this Agreement, such transferee shall not be entitled to
      any
      other rights or privileges of a Member, including without limitation any rights
      to inspect Company records, cast any Vote or to give any consent under any
      provision of this Agreement, or otherwise to approve, authorize, or consent
      to,
      or to withhold approval, authorization or consent any action which requires
      the
      approval, authorization or consent of the Members under this
      Agreement.  If such transferee is not admitted as a substitute Member,
      then the right to Vote or give consent attributed to the Interest held by the
      transferee shall not be deemed allocated or otherwise be deemed outstanding
      for
      any provision of this Agreement.  A transferee of the whole or any
      portion of any Interest of a Member shall become a substitute Member with
      respect to such Interest only if:

    

    
      	
              (a)  

            	
              The
                admission of the substitute Member has been approved by a unanimous
                Vote
                of Units.

            

    

    

    
      	
              (b)  

            	
              The
                transferring Member shall have forwarded to the Company a request
                for
                admission of the substitute Member, duly executed by the transferring
                Member and the proposed substitute
                Member.

            

    

    

    
      	
              (c)  

            	
              The
                proposed substitute Member shall have agreed in writing to assume
                all
                obligations of it as a Member under, and to be bound by, this
                Agreement.

            

    

    

    
      	
              (d)  

            	
              The
                transferring Member and the proposed substitute Member shall have
                executed
                such documents as the Company may reasonably require for affecting
                such
                substitution.

            

    

    

    
      	
              (e)  

            	
              The
                transferring Member shall have paid or caused to be paid all costs
                related
                to such transfer, including legal fees and other expenses incurred
                by the
                Company.

            

    

    

    Section
      8.7  Restrictions on Sale or Exchange.  The
      Interests have not been registered under the United States Securities Act of
      1933, as amended, but were issued pursuant to an exemption from such
      registration.  Notwithstanding any provisions to the contrary in this
      Agreement, no reoffers, reoffers for sale, resale or transfer of the Interests
      may be made except pursuant to an exemption from such registration under the
      Securities Act of 1933 and applicable state law evidenced by an opinion of
      counsel in form and by counsel reasonably satisfactory to the
      Manager.

    

    Section
      8.8  Section 6050K.  Immediately upon the
      occurrence of any transfer, the transferor or its legal representative shall
      provide the Company with the information set forth in Section 6050K of the
      Code,
      as applicable, and the Company shall furnish that information to the Internal
      Revenue Service, the transferor, and the transferee, as required by that Code
      section.

    

    ARTICLE
      9.  DISSOLUTION

    

    Section
      9.1  Event of Termination.  The Company shall
      continue until terminated upon the happening of any one of the following
      events:

    

    
      	
              (a)  

            	
              The
                sale of all or substantially all of the Company’s
                assets.

            

    

    

    
      	
              (b)  

            	
              The
                Involuntary Withdrawal of a Member and the failure of the remaining
                Member
                to elect to continue the Company pursuant to section
                8.2.

            

    

    

    
      	
              (c)  

            	
              As
                decided by a majority vote of the
                Members.

            

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    Upon
      termination of the Company pursuant to this section 9.1, the Company business
      shall be terminated, its liabilities discharged, its property distributed as
      hereinafter described, and the Company shall be liquidated.  A
      reasonable period of time shall be allowed for the orderly termination of the
      business, discharge of its liabilities, and distribution of its remaining cash
      and other property as Final Distribution Proceeds pursuant to section
      5.2.

    

    Section
      9.2  Winding Up.  Upon an Event of
      Termination, for purposes of the termination of the Company business, discharge
      of its liabilities, and distribution of its remaining property, the Manger
      (or
      the absence of a Manager such person as selected by Members holding a majority
      of the Units) shall have the exclusive power and authority to act on behalf
      of
      the Company, to terminate the Company business, to sell and convey any real
      or
      personal property of the Company for such considerations and upon such terms
      and
      conditions as the Manager reasonably deems appropriate, to discharge the
      Company’s liabilities, to set up and maintain all cash and other reserves
      permitted pursuant to section 5.3(b) and to apply all Company property as
      provided in this section 9.2.  The Manager shall apply all Company
      property to pay, or to provide the reserves as then set up and maintained
      pursuant to section 5.3(b) for payment of; all expenses of liquidation and
      to
      satisfy all liabilities and obligations of the Company as provided by the Act,
      and then distribute any remaining cash and other property as Final Distribution
      Proceeds pursuant to section 5.2.

    

    ARTICLE
      10  MISCELLENEOUS

    

    Section
      10.1  Notices.  All notices shall be in
      writing and shall be sent by (i) personal delivery; (ii) first class mail,
      postage prepaid; (iii) national overnight courier; or (iv) telecopier, with
      telephone confirmation.  Notice shall be deemed given on the day such
      notice is delivered to the recipient or, with respect to any mailing, three
      days
      after such notice is deposited in the mail.  Unless otherwise
      specified by a notice to the Members, all notices shall be given or made upon
      the Members at the address (or telecopy number) last shown upon the records
      of
      the Company.

    

    Section
      10.2  Amendment.  This Agreement may be
      amended in whole or part in a writing approved by the Members pursuant to
      section 3.2.  However, no amendment may reduce any right under this
      Agreement of any transferee of an Interest, including any right attributable
      to
      such Interest to participate in allocations, without the consent of the
      transferee.

    

    Section
      10.3  Construction.  The following shall be
      applicable in interpreting and construing the terms of this
      Agreement:

    

    
      	
               

            	
              (a)

            	
              This
                Agreement contains the entire agreement among the parties and supersedes
                any prior understandings or agreements between them respecting the
                subject
                matter hereof.  This Agreement may be executed in several
                counterparts, and each executed counterpart shall be considered as
                an
                original of this Agreement.

            

    

    

    
      	
              (b)  

            	
              This
                Agreement shall be binding upon and inure to the benefit of the parties,
                their respective heirs, personal representatives, successors and
                permitted
                assigns.

            

    

    

    The
      captions at the beginning of the sections of this Agreement are not part of
      the
      context hereof but are merely labels to assist in locating and reading those
      sections and shall be ignored in construing this Agreement.  Each
      exhibit and schedule referred to in this Agreement is incorporated by
      reference.  This Agreement shall be governed by, and construed
      pursuant to, the laws of the State of Delaware.  Each provision of
      this Agreement is severable from every other provision of this
      Agreement.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    SIGNATURES

    

    IN
      WITNESS WHEREOF,
      the Members hereto have executed this Agreement effective as of the date first
      set forth above.

    

    JDM
      CAPITAL CORPORATION,

    a
      New York Company

    

    

    By:
      /s/ Joseph W.
      DeMatteo                                                                

    Joseph
      W. DeMatteo,
      President

    

    

    Red
      Reef Laboratories International

     a  Florida
      corporation

    

    

    By:
      /s/ Claus Wagner
      Bartak                                                                

    Dr
      Claus Wagner Bartak,
      President

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    Exhibit
      A

    

    Manager
      Incentive Program

    

    Red
      Reef
      Laboratories as an additional incentive to the expansion and development of
      the
      venture will issue stock warrants as compensation for the achievement of the
      following acquisition values for the partnership....

    

    Once
      the
      Manager achieves the total acquisition and closing (“Opportunities”) of 5mm plus
      of Opportunities, Manager will receive warrants in Red Reef Laboratories as
      scheduled to the following

    

    (B)

    
      	 	 	 	 	 	 	 	 	 	 
	 	
              JDM
                Reef Capital Management, LLC

            	 	 	 	 	 	 
	 	
              Warrant
                Schedule and Grid For JDM CAPITAL CORPORATION

            	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              Maximum

            	 	
              Strike

            	 
	 	
              Transaction
                Value

            	 	
              Percentage

            	 	
              Warrants

            	 	
              Price

            	 
	 	 	 	 	 	 	 	 	 	 
	
              1

            	
               $                    -

            	
               $         4,999,999

            	 	
              0%

            	 	
              0

            	 	
               $        -

            	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
              2

            	
               $        5,000,000

            	
               $       10,000,000

            	 	
              1.5%

            	 	
               $      150,000

            	 	
               $    0.25

            	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
               

            	 	 	 	
               

            	 	
              Ceiling

            	
               

            	
               $    3.00

            	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
              3

            	
               $       10,000,000

            	
               $       50,000,000

            	 	
              2%

            	 	
               $      800,000

            	 	
               $    0.50

            	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
               

            	 	 	 	
               

            	 	
              Ceiling

            	
               

            	
               $    3.00

            	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
              4

            	
               $       50,000,000

            	
               $     100,000,000

            	 	
              2%

            	 	
                    1,000,000

            	 	
               $    0.75

            	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
               

            	 	 	 	
               

            	 	
              Ceiling

            	
               

            	
               $    3.00

            	 
	
               

            	 	 	 	
               

            	 	 	 	 	 
	
              5

            	
               $     100,000,000

            	
               $     250,000,000

            	 	
              3%

            	 	
                    4,500,000

            	 	
               $    3.00

            	 
	 	 	 	 	
               

            	 	 	 	 	 
	 	 	 	 	
               

            	 	
              Ceiling

            	
               

            	
               $    7.00

            	 
	 	 	 	 	
               

            	 	 	 	 	 
	
              6

            	
              250,000,000

            	
              (thereafter)

            	 	
              2%

            	 	
              Ceiling/
                Strike

            	
               

            	
               $   10.00

            	 
	 	 	 	 	
               

            	 	 	 	 	 

    

     

    
 

    
      
         

      

      
        16ex10_12.htm

    Exhibit
      10.12

    

    SUBREGISTRANT

    LICENSING
      AND HOLD HARMLESS AGREEMENT (“Agreement”)

    BETWEEN
      STEPAN COMPANY AND RED REEF LABORATORIES INTERNATIONAL

    

    STEPAN
      COMPANY (”Stepan”) hereby grants a non-exclusive license to RED REEF
      LABORATORIES INTERNATIONAL (“Licensee”) to distribute and sell the products set
      forth in Attachment A, which is attached hereto and made a part hereof (the
      “Product(s)”), such license is conditioned upon;

    

    1.)           Licensee’s
      receipt of a valid Company Number from the United States Environmental
      Protection Agency (the “EPA”), and

    

    2.)           Licensee’s
      receipt of a supplemental registration for the Product(s) from Stepan, and
      further subject to the following terms and conditions:

    

    Licensee
      certifies that it understands and will comply with all present and future FIFRA
      regulations as they apply to the quality control, record keeping, labeling,
      distribution, and sale of each product.  Licensee aggress to submit to
      Stepan a four (4) ounce sample of each of Licensee’s first three (3) production
      batches to assure compliance with percent quaternary actives
      determination.

    

    All
      initial Product labels must be approved by Stepan prior to their use by their
      Licensee (trademark selection is the sole responsibility of
      Licensee).  Licensee shall not re-package, dilute, or otherwise after
      the Product(s).  In addition, Licensee agrees that it will not change
      the label without prior written consent of Stepan.  In the event of
      any label violation, Licensee may be requested to perform any one or all of
      the
      following actions: to cease and desist from the advertising, marketing or sale
      of any products with such label, stop further shipments of product with such
      label, and to take steps to identify and recall products with such label in
      the
      marketplace.

    

    Licensee
      agrees to indemnify and hold Stepan harmless from any and all loss, liability,
      damage, cost, and expense and civil or administrative penalty, including
      reasonable attorney’s fees, arising as a result of any claim involving the
      Product(s) sold or distributed by the Licensee.  The foregoing
      indemnity obligation shall include, but not be limited to, Licensee’s failure to
      comply with the terms of this Agreement, claims made against Stepan arising
      from
      Licensee’s alleged or actual non-compliance with FIFRA or any other government
      regulations, except to the extent that such non-compliance occurred due to
      action or inaction be Stepan. Stepan shall also be entitled to recover its
      costs
      and reasonable attorney’s fees in the event that it is necessary to enforce the
      terms of this license against Licensee.

    

    The
      provisions of this Agreement shall be governed by Illinois law, without regard
      to any conflict of law provisions.  This Agreement may only be
      modified by a written document signed by both of the parties.  In the
      event any court of competent jurisdiction determines that any provision of
      this
      agreement is void or unenforceable, such finding shall not affect the
      applicability or enforceability of the remaining provisions.

    

    Cancellation:                                This
      written agreement may be cancelled by either party with ninety (90) days prior
      written notice, or immediately with written notice if the Licensee is in
      violation of any applicable governmental regulations.

    

    If
      during
      the term of this agreement Licensee obtains any information that any of the
      Product(s) has an unreasonable adverse health effect on human health, domestic
      animals or the environment, it shall notify Stepan immediately, Attention:
      Product, Safety, and Compliance Department.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    STEPAN
      COMPANY:

    

    By:
      /s/ Bruce L. Greene

           Bruce
      L. Greene

    

    Date:  September
      12, 2005

    

    

    LICENSEE:

    

    By:  /s/
      Peter F. Versace

            Peter
      F. Versace

    

    Date:  July
      18, 2005

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    SUB-REGISTRANT’S
      ATTACHMENT A

    

    

    Product
      Name

    Red
      Reef
      Laboratories International – BioClear 2000 Advanced
      Detergent/Disinfectant

    

    EPA
      No.

    1839-81

    

    Formulator

    Long’s
      Preferred Products, Inc.

    

     

    Product
      Name

    Red
      Reef
      Laboratories International – BioClear 2000 Advanced
      Detergent/Disinfectant

    

    EPA
      No.

    1839-81

    

    Formulator

    Hadco
      Denver Chemical Company

     

     

    

    Dated
–
      September 12, 2005

    Replacing
      – N/A

    

    By:
      /s/ Bruce L. Greene

           Bruce
      L. Greene

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    SUB-REGISTRANT’S
      ATTACHMENT A

    UPDATED

    

    

    Product
      Name

    Red
      Reef
      Laboratories International – BioClear 2000 Advanced
      Detergent/Disinfectant

    

    EPA
      No.                                                                Formulator

    1839-81                                                                     
        GLH

    

    

    Product
      Name

    Red
      Reef
      Laboratories International – BioClear Ff Poultry and Swine Premise Disinfectant
      Cleaner

    

    EPA
      No.                                                                Formulator

    1839-185                                                                
          GLH

    

    

    Product
      Name

    Red
      Reef
      Laboratories International – BioClear Md Hospital
      Disinfectant/Cleaner

    

    EPA
      No.                                                                Formulator

    1839-83                                                                      
      GLH

    

    

    Product
      Name

    Red
      Reef
      Laboratories International – BioClear Rd Hotel and Restaurant
      Disinfectant/Cleaner

    

    EPA
      No.                                                                Formulator

    1839-83                                                                  
          GLH

     

    

    

    Dated
–
      February 15, 2007

    Replacing
      – January 19, 2007

    

    By:
      /s/ Bruce L. Greene

           Bruce
      L. Greene

     

     

    
      
         

      

      
        4

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