Document:

Unassociated Document

    AGREEMENT

     

    THIS
AGREEMENT ("Agreement") is entered into and is effective as of October 24, 2007,
by and between Gulf Resources, Inc, a Delaware corporation ("GUFR") and Richard
Khaleel, an individual resident in the State of New York
("Khaleel").

    

    Preliminary
Statement

     

    GUFR
desires to retain Khaleel, and Khaleel is willing to serve, as a member of the
Board of Directors of GUFR on the terms and subject to the conditions set forth
in this Agreement.

    

    NOW,
THEREFORE, in consideration of the mutual promises and agreements set forth
below, GUFR and Khaleel hereby agree as follows:

    

    1.  Appointment.  The
Board of Directors of GUFR has elected Khaleel, and Khaleel has agreed to serve,
as a member of the Board of Directors of GUFR, effective as of the date of this
Agreement.

    

    2. Compensation. For the
duties and services to be performed by him under this Agreement, GUFR will pay
to Khaleel, and Khaleel agrees to accept, the compensation described below in
this Section 2.

    

    a.
Directors’ Fees.  GUFR will pay Khaleel a director's fee of $32,500
per annum, payable in equal monthly installments. This fee represents a retainer
for services rendered as a member of its Board of Directors, and is in addition
to any fees to which Khaleel may be entitled under guidelines and rules
established by GUFR from time to time for compensating non-employee directors
for serving on, and attending meetings of, committees of its Board of Directors
and the boards of directors of its subsidiaries.

    

    b. Equity
Component. In addition to the cash fee(s) described in subsection (a), on the
date of this Agreement, GUFR will grant Khaleel options to purchase 25,000
shares of GUFR common stock, which may be exercised immediately. The exercise
price of these options will be the closing sale price of GUFR common stock on
the OTC Bulletin Board on the date of this Agreement.  On October 24,
2008, GUFR will grant Khaleel options to purchase 25,000 shares, which may be
exercised immediately thereafter, with an exercise price of the closing sale
price of GUFR common stock on the OTC Bulletin Board on such date of grant,
provided Khaleel is still a director of or otherwise engaged by
GUFR.  On October 24, 2009, GUFR will grant options to purchase 25,000
shares, which may be exercised immediately thereafter, with an exercise price of
the closing sale price of GUFR common stock on the OTC Bulletin Board on the
date if such grant, provided Khaleel is still a director of or otherwise engaged
by GUFR. The options will be granted under GUFR’s stock option plan, and will be
subject to the terms and conditions of that plan. Subject to the foregoing
provisions and the terms and conditions set forth in the plan, the options may
be exercised until three years from the date of the grant of such options,
except as otherwise provided in the plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    c. Audit
Committee.   The Board of Directors has appointed Khaleel, and
Khaleel has agreed to serve as, a member of the Audit Committee.

    

    3. Expenses. GUFR will
reimburse Khaleel for reasonable expenses incurred by him in furtherance of his
performance of duties hereunder, provided that such expenses are substantiated
in accordance with GUFR policies applicable to members of its Board of
Directors.

    

    4.  Term and
Termination.

    

                a.
General. The term of this Agreement will commence as of the date the Board of
Directors appoints Khaleel a director of GUFR and will remain in effect as long
as Khaleel continues to serve as a non-employee director of GUFR. GUFR has no
obligation to cause the nomination or recommend the election of Khaleel to the
Board for any period of time in the future. Upon the termination
of  Khaleel's tenure as a member of the Board, GUFR will promptly pay
to  Khaleel, or to his estate if his service is terminated upon his
death, all fees accrued for services rendered as a member of the Board and
committees thereof and expense reimbursements due as of the date of
termination.

    

    5.  Indemnification. GUFR
shall indemnify  Khaleel, as a director of GUFR, to the maximum extent
permitted under applicable law against all liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise, or as fines and
penalties, and counsel fees, reasonably incurred by  Khaleel in
connection with the defense or disposition of any civil, criminal,
administrative or investigative action, suit or other proceeding, whether civil
or criminal, in which he may be involved or with which he may be threatened,
while an officer or director of GUFR. Expenses (including attorney's fees)
incurred by Khaleel in defending any such action, suit or other proceeding shall
be paid by GUFR in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of him to repay such
amount if it shall be ultimately determined that he is not entitled to be
indemnified by GUFR. The right of indemnification provided herein shall not be
exclusive of or affect any other rights to which Khaleel may be entitled. The
provisions hereof shall survive expiration or termination of this Agreement for
any reason whatsoever. In the event of any conflict between the provisions
hereof and the indemnification provisions contained in
GUFR's  articles of incorporation or bylaws, or in any agreement
between GUFR and  Khaleel, the terms of such articles, bylaws or
agreement shall govern.

    

    6. Liability Insurance.
In furtherance of its agreement to indemnify Khaleel as provided in section 5
hereof, GUFR will maintain in effect at all times while Khaleel continues to
serve as a member of the Board liability insurance provided by a recognized
carrier covering members of its Board.

    

    7.   Non-Exclusive.
Nothing in this Agreement will prevent  Khaleel (1) from serving as an
employee, officer or director of any other company, provided that such
performance is consistent with  Khaleel's duty of loyalty to GUFR, (2)
from serving on voluntary, community service committees and boards, and (3) from
owning shares representing less than 5% of the outstanding equity securities of
a company that is a competitor of GUFR.   Khaleel will comply
with and be bound by GUFR's policies, procedures and practices applicable to
members of its Board of Directors from time to time in effect during the term of
this Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
8.  Conflicts.  Khaleel
represents that his performance of this Agreement will not conflict with or
breach any other agreement to which he is a party or may be
bound.  Khaleel has not, and will not during the term of this
Agreement, enter into any oral or written agreement in conflict with any of the
provisions of this Agreement.  Khaleel represents and warrants that he
is not bound by any agreements which prohibit or restrict him from: (a)
competing with, or in any way participating in a business that competes with,
any former employer or business of any former employer to the extent
that  Khaleel's performance of his duties under this Agreement would
be deemed to constitute such competition; (b) soliciting personnel of a former
employer or business to leave such former employer's employment or to leave such
business; or (c) soliciting customers, suppliers, financing sources or other
entities having a substantial relationship with a former employer or
business.

    

    9.  Representations and
Warranties of GUFR.  GUFR has filed all reports required to be
filed by it under the Securities Act and the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), including pursuant to Section 13(a) or 15(d) thereof, since
January 1, 2007 (the foregoing materials being collectively referred to herein
as the “SEC
Reports”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension.  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Securities and
Exchange Commission (the “Commission”) promulgated thereunder, and none of the
SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  The financial statements of GUFR
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of GUFR and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.

    

    There is no claim, action, suit,
proceeding, arbitration, reparation, investigation or hearing, pending or
threatened, before any court or governmental, administrative or other competent
authority or private arbitration tribunal, which could have an adverse effect on
the business of GUFR; nor are there any facts known to GUFR which could
reasonably be expected to give rise to a claim, action, suit, proceeding,
arbitration, investigation or hearing, which could have an adverse effect upon
the business of GUFR.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    10. Governing Law; Mediation
& Arbitration. This Agreement will be governed by, and construed in
accordance with the laws of the State of New York, without regard to
choice-of-law principles, as if made and to be performed solely in New
York.

     

    11. Notices. All notices
or other communications which are required or permitted hereunder will be in
writing and sufficient if delivered personally or sent by air courier or first
class certified or registered mail, return receipt requested and postage
prepaid, addressed as follows:

    

                 If
to Khaleel,
to:                   110
Riverside Drive

    New York,
N.Y.  10024

    

    If to
GUFR,
to:                       1330
Avenue of Americas Suite# 2109

    New York,
NY 10019

    Attention:
Ethan Chuang

    

    With a
copy
to:                     Eaton
& Van Winkle

    3 Park
Avenue

    New York,
New York 10016

    Attn:
Vincent J. McGill, Esq.

    

    or to
such other address as the party to whom notice is to be given may have furnished
to the other party in writing in accordance herewith. All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of delivery if
personally delivered; on the business day after the date when sent if sent by
air courier; and on the third business day after the date when sent if sent by
mail, in each case addressed to such party as provided in this Section or in
accordance with the latest written direction from such party.

    

    12. Entire Agreement.
This Agreement constitutes the sole agreement of the parties and supersedes all
oral negotiations and prior writings, including any and all prior agreements
between  Khaleel and GUFR, with respect to the subject matter
hereof.

    

    13. Advice of Counsel.
EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT,
SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL
COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS
AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF
THE DRAFTING OR PREPARATION HEREOF.

    

    14. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.

    

    15. Amendments. No
modification, waiver, amendment, discharge or change of this Agreement shall be
valid unless the same is in writing and signed by the party against which the
enforcement of said modification, waiver, amendment, discharge or change is
sought.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    16. Severability. If any
portion of any provision of this Agreement, or the application of such provision
or any portion thereof to any person or circumstance shall be held invalid or
unenforceable, the remaining portions of such provision or portion of such
provisions of this Agreement or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
effected thereby.

    

    [signature
page appears on the following page]

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    [Signature
page to Agreement of October 24, 2007 by and between Gulf Resources, Inc. and
Richard Khaleel]

     

          The
parties, by signing below, agree to the terms and conditions set forth in this
Agreement.

     

     

    
      
        	 	GULF
      RESOURCES, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Ming
      Yang	 
	 	 	Name: 
      Ming Yang	 
	 	 	Title:
      Chairman and Chief Executive Officer	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	/s/
      Richard Khaleel	 
	 	 	Richard
      Khaleel	 
	 	 	 	 

      

    

     

    6exhibit_10-1.htm

    
      

    

    EXHIBIT
10.1

     

    VERTIGRO
ALGAE TECHNOLOGIES, LLC

     

    A Texas
Limited Liability Company

     

    

     

    LIMITED
LIABILITY COMPANY

     

    OPERATING
AGREEMENT

     

    

     

    effective
as of May 5, 2008

     

    

     

    

     

    THE
MEMBERSHIP RIGHTS REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED UNDER
ANY SECURITIES LAWS AND THE TRANSFERABILITY OF SUCH MEMBERSHIP RIGHTS IS
RESTRICTED.  SUCH MEMBERSHIP RIGHTS MAY NOT BE SOLD, ASSIGNED, OR
TRANSFERRED, NOR WILL ANY ASSIGNEE, VENDEE, TRANSFEREE, OR ENDORSEE THEREOF
BE RECOGNIZED AS HAVING ACQUIRED ANY SUCH MEMBERSHIP RIGHTS BY THE ISSUER FOR
ANY PURPOSES, UNLESS (1) A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH MEMBERSHIP RIGHTS SHALL THEN BE IN
EFFECT AND SUCH TRANSFER HAS BEEN QUALIFIED UNDER ALL APPLICABLE STATE
SECURITIES LAWS, OR (2) THE AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION
AND QUALIFICATION SHALL BE ESTABLISHED TO THE SATISFACTION OF COUNSEL TO
COMPANY.

     

    THE
MEMBERSHIP RIGHTS REPRESENTED BY THIS DOCUMENT ARE SUBJECT TO FURTHER
RESTRICTIONS AS TO THEIR SALE, TRANSFER, HYPOTHECATION, OR ASSIGNMENT AS SET
FORTH IN THIS AGREEMENT AND AGREED TO BY EACH MEMBER.  SUCH
RESTRICTIONS PROVIDE, AMONG OTHER THINGS, THAT NO MEMBERSHIP RIGHT MAY BE
TRANSFERRED WITHOUT FIRST OBTAINING THE CONSENT OF THE BOARD, AND THAT NO
VENDEE, TRANSFEREE, ASSIGNEE, OR ENDORSEE OF A MEMBER SHALL HAVE THE RIGHT TO
BECOME A SUBSTITUTED MEMBER WITHOUT FIRST OBTAINING THE CONSENT OF THE
BOARD.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE OF CONTENTS

     

     

    
      	 	
               Page

            
	
              ARTICLE 1

              ORGANIZATION

            	 
	 	 	 
	
              SECTION
      1.1

            	FORMATION	
               1

            
	
               

            	 	 
	
              SECTION
      1.2 

            	NAME	 1
	 	 	 
	
              SECTION
      1.3  

            	PURPOSE AND
      POWERS	 1
	 	 	 
	
              SECTION
      1.4 

            	PLACE OF
      BUSINESS	 1
	
               

            	 	 
	
              SECTION
      1.5

            	TERM	 1
	 	 	 
	
              SECTION
      1.6  

            	NO STATE-LAW
      PARTNERSHIP	 2
	 	 	 
	
              SECTION
      1.7

            	FILINGS	 2
	 	 	 
	
              SECTION
      1.8

            	FOREIGN
      QUALIFICATION	 2
	 	 	 
	
              SECTION
      1.9 

            	TITLE TO
      PROPERTY	 2
	 	 	 
	
              SECTION
      1.10 

            	PAYMENT OF
      INDIVIDUAL OBLIGATIONS	 2
	 	 	 
	
              SECTION
      1.11

            	MEMBER
      LIABILITY	 2
	 	 	 
	
              SECTION
      1.12 

            	NON-COMPETITION	 2
	 	 	 
	
              SECTION
      1.13 

            	TRANSACTIONS WITH
      AFFILIATES	 3
	 	 	 
	
              SECTION
      1.14   

            	OTHER
      INSTRUMENTS	 3
	 	 	 
	
              ARTICLE
      2

              DEFINITIONS

            	 
	 	 	 
	
              SECTION
      2.1 

            	DEFINITIONS	 3
	 	 	 
	
              SECTION
      2.2  

            	ADDITIONAL
      RULES	 3
	 	 	 
	
              ARTICLE
      3

              BOARD OF DIRECTORS

            	 
	 	 	 
	
              SECTION
      3.1

            	BOARD
      COMPOSITION	 4
	 	 	 
	
              SECTION
      3.2

            	MEETINGS, NOTICE AND
      QUORUM	 4
	 	 	 
	
              SECTION
      3.3

            	CERTAIN LIMITATIONS
      ON THE AUTHORITY OF THE BOARD	 5
	 	 	 
	
              SECTION
      3.4 

            	OFFICERS	 5
	 	 	 
	
              ARTICLE
      4

              MEMBERS

            	 
	 	 	 
	
              SECTION
      4.1    

            	ONE CLASS OF
      MEMBERS	 6
	 	 	 
	
              SECTION
      4.2    

            	VOTING
    RIGHTS	 6
	 	 	 
	
              SECTION
      4.3

            	ANNUAL
      MEETINGS	 6
	 	 	 
	
              SECTION
      4.4 

            	SPECIAL
      MEETINGS	 6
	 	 	 
	
              SECTION
      4.5

            	TIME AND PLACE OF
      MEETING	 6
	 	 	 
	
              SECTION
      4.6       

            	NOTICE OF ANNUAL
      MEETINGS	 6

    

     

     

    
      
        
                                                                        

        

         

      

      
        i

        
          

        

      

      
         

      

    

     

    
      	
              SECTION
      4.7 

            	NOTICE OF SPECIAL
      MEETING	
               6

            
	 	 	 
	
              SECTION
      4.8 

            	WAIVER OF NOTICE BY
      ATTENDANCE	
               6

            
	 	 	 
	
              SECTION
      4.9 

            	QUORUM AND
      ADJOURNMENT	
               7

            
	 	 	
               

            
	
              SECTION
      4.10 

            	RECORD
DATE	
               7

            
	 	 	 
	
              SECTION
      4.11 

            	MANNER OF
      ACTING	
               7

            
	 	 	 
	
              SECTION
      4.12

            	PRESUMPTION OF
      ASSENT	
               7

            
	 	 	 
	
              SECTION
      4.13 

            	TELEPHONE
      CONFERENCE	
               7

            
	 	 	 
	
              SECTION
      4.14

            	RESPONSIBILITIES	
               7

            
	
               

            	 	 
	
              ARTICLE
      5

              INDEMNIFICATION AND INSURANCE

            	 
	 	 	 
	
              SECTION
      5.1

            	GENERAL	
               8

            
	 	 	 
	
              SECTION
      5.2 

            	INSURANCE	
               8

            
	 	 	 
	
              ARTICLE
      6

              CAPITAL STRUCTURE AND CONTRIBUTIONS

            	 
	 	 	 
	
              SECTION
      6.1    

            	ORIGINAL CAPITAL
      CONTRIBUTIONS	
               9

            
	 	 	 
	
              SECTION
      6.2

            	ADDITIONAL CAPITAL
      CONTRIBUTIONS	
               9

            
	 	 	 
	
              SECTION
      6.3

            	FAILURE TO MAKE
      CAPITAL CONTRIBUTIONS	
               9

            
	 	 	 
	
              SECTION
      6.4

            	WITHDRAWAL OF
      CAPITAL	
               10

            
	 	 	 
	
              SECTION
      6.5   

            	LOANS	
               11

            
	 	 	 
	
              SECTION
      6.6 

            	ISSUANCE OF
      UNITS	
               11

            
	 	 	 
	
              SECTION
      6.7 

            	PREEMPTIVE
      RIGHTS	
               11

            
	 	 	 
	
              SECTION
      6.8

            	SECURITIES LAW
      REPRESENTATIONS	
               12

            
	 	 	 
	
              ARTICLE
      7

              DISTRIBUTIONS

            	 
	 	 	 
	
              SECTION
      7.1

            	DISTRIBUTIONS OF NET
      CASH FLOW	
               13

            
	 	 	 
	
              SECTION
      7.2

            	MINIMUM TAX
      DISTRIBUTIONS	
               13

            
	 	 	 
	
              SECTION
      7.3 

            	AMOUNTS
      WITHHELD	
               13

            
	 	 	 
	
              ARTICLE
      8

              ALLOCATIONS

            	 
	 	 	 
	
              SECTION
      8.1

            	PROFITS	
               14

            
	 	 	 
	
              SECTION
      8.2

            	LOSSES	
               14

            
	 	 	 
	
              SECTION
      8.3 

            	SPECIAL
      ALLOCATIONS	
               14

            
	 	 	 
	
              SECTION
      8.4 

            	CURATIVE
      ALLOCATIONS	
               16

            
	 	 	 
	
              SECTION
      8.5 

            	OTHER ALLOCATION
      RULES	
               16

            
	 	 	 
	
              SECTION
      8.6 

            	TAX ALLOCATIONS:
      SECTION 704(c)	
               17

            
	 	 	 
	
              ARTICLE
      9

              TRANSFERS

            	 
	 	 	 
	
              SECTION
      9.1 

            	GENERAL
      RESTRICTIONS	
               18

            

    

     

    
      
        
           

        

         

      

      
        ii

        
          

        

      

      
         

      

    

     

    
    

     

    
      	
              SECTION
      9.2 

            	BUY OUT
    EVENTS	
               18

            
	 	 	 
	
              SECTION
      9.3 

            	RIGHT OF FIRST
      OFFER	
               19

            
	 	 	 
	
              SECTION
      9.4     

            	TRANSACTION
      VOID	
               20

            
	 	 	 
	
              ARTICLE
      10

              BOOKS, RECORDS, AND ACCOUNTING

            	 
	 	 	 
	
              SECTION
      10.1  

            	MAINTENANCE OF BOOKS
      AND RECORDS	
               20

            
	 	 	 
	
              SECTION
      10.2

            	ACCESS TO BOOKS AND
      RECORDS	
               20

            
	 	 	 
	
              SECTION
      10.3  

            	TAX
MATTERS	
               21

            
	 	 	 
	
              SECTION
      10.4 

            	FINANCIAL STATEMENTS
      AND REPORTS	
               21

            
	
               

            	 	 
	
              SECTION
      10.5

            	BANKING	
               22

            
	 	 	 
	
              SECTION
      10.6  

            	NO BILL OF
      ACCOUNTING	
               22

            
	 	 	 
	
              ARTICLE
      11

              DISSOLUTION AND WINDING UP

            	 
	 	 	 
	
              SECTION
      11.1

            	DISSOLUTION
      EVENTS	
               22

            
	 	 	 
	
              SECTION
      11.2

            	ELECTION TO
      RECONSTITUTE COMPANY	
               23

            
	 	 	 
	
              SECTION
      11.3 

            	WINDING UP	
               23

            
	 	 	 
	
              SECTION
      11.4

            	COMPLIANCE WITH
      CERTAIN REQUIREMENTS	
               24

            
	 	 	 
	
              SECTION
      11.5 

            	DEEMED RECONSTITUTED
      COMPANY	
               25

            
	 	 	 
	
              SECTION
      11.6 

            	RIGHTS OF
      MEMBERS	
               25

            
	 	 	 
	
              SECTION
      11.7

            	NOTICE OF
      DISSOLUTION/TERMINATION	
               25

            
	 	 	 
	
              SECTION
      11.8

            	ALLOCATIONS DURING
      LIQUIDATION	
               25

            
	 	 	 
	
              SECTION
      11.9

            	CHARACTER OF
      LIQUIDATING DISTRIBUTIONS	
               26

            
	 	 	 
	
              SECTION 11.10
      

            	FEES AND
      INDEMNIFICATION OF THE LIQUIDATOR	
               26

            
	 	 	 
	
              SECTION
      11.11

            	FORM OF LIQUIDATING
      DISTRIBUTIONS	
               26

            
	 	 	 
	
              ARTICLE
      12

              DISPUTE RESOLUTION

            	 
	 	 	 
	
              SECTION
      12.1

            	SPECIFIC
      PERFORMANCE	
               26

            
	 	 	 
	
              SECTION
      12.2

            	ARBITRATION	
               26

            
	 	 	 
	
              ARTICLE
      13

              MISCELLANEOUS

            	 
	 	 	 
	
              SECTION
      13.1

            	REPRESENTATION AND
      WARRANTIES OF THE MEMBERS 	
               27

            
	 	 	 
	
              SECTION
      13.2

            	ENDMENTS	
               27

            
	 	 	 
	
              SECTION
      13.3

            	ENTIRE
      AGREEMENT	
               28

            
	 	 	 
	
              SECTION
      13.4  

            	NOTICES	
               28

            
	 	 	 
	
              SECTION
      13.5 

            	PUBLIC
      ANNOUNCEMENTS	
               28

            
	 	 	 
	
              SECTION
      13.6  

            	BINDING
    EFFECT	
               28

            
	 	 	 
	
              SECTION
      13.7

            	CONSTRUCTION	
               28

            
	 	 	 
	
              SECTION
      13.8

            	TIME	
               29

            

    

    
    

    
      
        
          
            
              
                
                  
                     

                  

                

              

            

          

        

      

    

    
      
        
           

        

         

      

      
        iii

        
          

        

      

      
         

      

    

     

    
    

     

    
      	
              SECTION
      13.9  

            	HEADINGS	
               29

            
	 	 	 
	
              SECTION
      13.10

            	SEVERABILITY	
               29

            
	 	 	 
	
              SECTION
      13.11

            	INCORPORATION BY
      REFERENCE	
               29

            
	 	 	 
	
              SECTION
      13.12  

            	FURTHER
    ACTION	
               29

            
	 	 	 
	
              SECTION
      13.13 

            	COUNTERPARTS	
               29

            
	 	 	 
	
              SECTION
      13.14 

            	GOVERNING LAW &
      VENUE	
               29

            
	 	 	 
	 	 	 
	EXHIBIT A	Percentage
      Interests	
               A-1

            
	 	 	 
	EXHIBIT
      B 	Glossary of
      Terms	
               B-1

            

    

     

    
      
 

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    

    LIMITED
LIABILITY COMPANY

    OPERATING
AGREEMENT

    OF

    VERTIGRO
ALGAE TECHNOLOGIES, LLC

    A Texas
Limited Liability Company

    

    This
LIMITED LIABILITY COMPANY OPERATING AGREEMENT (“Agreement”) is
entered into and shall be effective as of May 5, 2008 (the “Effective Date”), for
good and valuable consideration, by and among the Members on the following terms
and conditions:

     

    ARTICLE
1

    ORGANIZATION

     

    SECTION
1.1     FORMATION.  Company
has been organized as a limited liability company under the TBOC pursuant to the
filing of the Certificate with the Secretary of State of the State of
Texas.  The Members hereby subscribe to and adopt this Agreement for
purposes of setting forth further terms and conditions pursuant to which Company
will be organized and operated.  Except as expressly provided to the
contrary in this Agreement, the rights, duties, status and liabilities of the
Members, and the formation, administration, dissolution, and continuation or
termination of Company, shall be as provided in the TBOC.

     

    SECTION
1.2     NAME.  The
name of Company is “Vertigro Algae Technologies, LLC,” and all Company business
must be conducted in that name or such other names that comply with Law as the
Members may select from time to time.

     

    SECTION
1.3     PURPOSE AND
POWERS.  The
purposes of Company are (i) to develop the intellectual property, know-how,
confidential processes, modifications and derivative works, and
commercialization thereof arising out of patents pending for the development of
the Technology, (ii) conduct such activities as may be necessary or appropriate
in connection with the foregoing and (iii) to transact any and all lawful
business for which a limited liability company may be organized under the TBOC,
either directly or indirectly through one or more subsidiary
entities.  Company shall have the power to do any and all acts
necessary, appropriate, proper, advisable, incidental or convenient to or in
furtherance of the purpose of Company.

     

    SECTION
1.4     PLACE OF
BUSINESS.  The principal
office of Company in the United States shall be at such place as the
Members may designate, which need not be in the State of Texas, and
Company shall maintain records there as required by
the TBOC.  Company may have such other offices as the Members may
designate.

     

    SECTION
1.5     TERM.  The
term of Company shall commence on the date of the Certificate and shall continue
until the winding up and liquidation of Company and its business is completed
following a Dissolution Event, as provided in Article 11.

     

    
      
        
                                                                     

        

         

      

      
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    SECTION
1.6     NO
STATE-LAW PARTNERSHIP. The
Members intend that Company not be a partnership (including a limited
partnership) or joint venture, and that no Member be a partner or joint venturer
of any other Member, for any purposes other than applicable tax Laws, and this
Agreement may not be construed to suggest otherwise.

     

    SECTION
1.7     FILINGS. The
Members shall take any and all actions, including without limitation the filing
of amendments to the Certificate or new certificates, necessary to perfect and
maintain the status of Company as a limited liability company under the laws of
the State of Texas.  The Members shall cause amendments to the
Certificate to be filed whenever required by the TBOC.  Such
amendments may be executed by any Officer designated by the
Members.  Upon the dissolution and completion of the winding up and
liquidation of Company, the Liquidator shall promptly execute and cause to be
filed certificates of cancellation or dissolution in accordance with the TBOC
and the laws of any other states or jurisdictions in which Company has filed
certificates.

     

    SECTION
1.8     FOREIGN
QUALIFICATION.  Prior
to Company’s conduct of any business in any jurisdiction other than Texas, the
Board shall cause Company to comply, to the extent procedures are available and
those matters are reasonably within the control of the Board, with all
requirements necessary to qualify Company to conduct business in that
jurisdiction.  Each Member shall execute, acknowledge, swear to, and
deliver all certificates and other instruments conforming to this Agreement that
are necessary or appropriate for purposes of obtaining, continuing, and
terminating any such qualifications.

     

    SECTION
1.9     TITLE TO
PROPERTY.  All
property owned by Company shall be owned by Company as an entity and no Member
shall have any ownership interest in such property in its individual name, and
each Member’s interest in Company shall be personal property for all
purposes.  At all times after the Effective Date, Company shall hold
title to all of its property in the name of Company and not in the name of any
Member.

     

    SECTION
1.10     PAYMENT OF INDIVIDUAL
OBLIGATIONS.  Company’s
credit and assets shall be used solely for the benefit of Company, and no asset
of Company shall be Transferred or encumbered for, or in payment of, any
individual obligation of any Member.

     

    SECTION
1.11     MEMBER
LIABILITY.  No
Member shall be liable under a judgment, decree or order of a court, or in any
other manner for the debts or any other obligations or liabilities of
Company.  A Member shall be liable only to make its Capital
Contributions and shall not be required to restore a deficit balance in its
Capital Account or to lend any funds to Company or, after its Capital
Contributions have been made, to make any additional contributions, assessments
or payments to Company.

     

    SECTION
1.12     NON-COMPETITION.  Without
prejudice to any of the rights or obligations that may exist pursuant to the
terms of any other agreement, during such time as they are Members, GGRN and VUI
shall not, and shall cause each of their Affiliates not to, engage, directly or
indirectly, in any business or activity that competes or reasonably could be
expected to compete with the activities of Company.

     

    
      
         

      

      
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    SECTION
1.13     TRANSACTIONS WITH AFFILIATES.

     

    1.13.1     General
Authorization.  To the extent permitted by applicable Law and
except as otherwise provided in this Agreement, the Board and the Members are
hereby authorized to cause Company to purchase property from, sell property to,
engage the services of, or otherwise deal with any Member, acting on their own
behalf, or on behalf of their Affiliates; provided, however, that any such purchase,
sale or other transaction shall be made in the ordinary course of Company’s
business and shall be on terms and conditions that are commercially reasonable
under the circumstances; provided, further, that each Member shall be given
prompt notice following completion of any such transaction, including a
reasonable description of the material terms and conditions of the
transaction.

     

    1.13.2     Lending
Transactions.  Except as otherwise provided in this Agreement,
each Member and their respective Affiliates thereof may also lend money to,
borrow money from, act as a surety, guarantor or endorser for, guarantee or
assume one or more specific obligations of, provide collateral for, and transact
other business with Company and, subject to other applicable Law, has the same
rights and obligations with respect thereto as a Person who is not a
Member.  The existence of these relationships and acting in such
capacities shall not result in a Member being deemed to be participating in the
control of the business of Company or otherwise affect the limited liability of
the Member.

     

    SECTION
1.14     OTHER
INSTRUMENTS.  Each
Member hereby agrees to execute and deliver to Company promptly after receipt of
a written request therefor, such other and further documents and instruments,
statements of interest and holdings, designations, limited powers of attorney
and other instruments, and to take such other action unanimously deemed
necessary, useful or appropriate to comply with any laws, rules or regulations
or enable Company to fulfill its responsibilities under this
Agreement.

     

    ARTICLE
2

    DEFINITIONS

     

    SECTION
2.1     DEFINITIONS.  For
purposes of this Agreement, the terms set forth in Exhibit B to this
Agreement shall have the meanings specified therein.

     

    SECTION
2.2     ADDITIONAL
RULES.  Unless
the context shall require otherwise: (a) words importing the singular
number or plural number shall include the plural number and singular number
respectively; (b) words importing the masculine gender shall include the
feminine and neuter genders and vice versa; (c) reference to “include,”
“includes,” and “including” shall be deemed to be followed by the phrase
“without limitation”; (d) reference in this Agreement to “herein,” “hereby” or
“hereunder,” or any similar formulation, shall be deemed to refer to this
Agreement as a whole, including all Exhibits to this Agreement; (e) references
to “Articles” and “Sections” refer to Articles and Sections of this Agreement;
and (f) references to “Exhibits” are to the Exhibits attached to this
Agreement, each of which is made a part hereof for all purposes.

     

    
      
         

      

      
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    ARTICLE
3

    BOARD OF
DIRECTORS

     

    SECTION
3.1     BOARD
COMPOSITION.

     

    3.1.1     The
Members shall appoint a board of directors (the “Board”) to oversee
the business of Company. Except as otherwise set forth in this Agreement, the
Board shall have the full right and authority (acting on behalf of the Members)
to manage the business and affairs of Company.

     

    3.1.2     The
Board shall consist initially of four (4) directors, (a) two (2) of whom shall
be appointed by GGRN and (b) two (2) of whom shall be appointed by
VUI.  The initial GGRN directors shall be Douglas Frater and Elden
Schorn and the initial VUI directors shall be Malcolm Glen Kertz and F. George
Orr.  Each of the Members shall be entitled at any time to appoint an
alternate director to replace, and/or substitute for, each director it
appointed; provided that, in the event that the ownership interest of any Member
is less than 30% of the Units, then the number of directors that Member shall
have the right to nominate shall be reduced to one; provided, further, that in
the event that the ownership interest of any Member is less than 10% of the
Units, then the number of directors that Member shall have the right to nominate
shall be reduced to zero.  GGRN and VUI shall cease to have rights to
appoint directors pursuant to this Section 3.1 once they no longer own any
Units.

     

    3.1.3     Any
of the directors or alternate(s) thereof shall be removed and/or replaced from
the Board only pursuant to the instructions of the Member appointing such
director; provided, however, that any director may be removed by the Board if
such director commits a Criminal Act; provided, further, that such director
shall be replaced by another Person nominated by the Member who originally
nominated the director being replaced.

     

    3.1.4     Except
as otherwise set forth in this Agreement, the Board shall approve decisions or
resolutions and grant consents only by the vote or written consent of a majority
of the Board.

     

    3.1.5     The
Board shall form and appoint members to such committees as it deems appropriate
and shall delegate certain of the Board’s powers to such committees; provided
that the composition and voting arrangements of such committees shall reflect
the Members’ respective representation on the Board.

     

    SECTION
3.2     MEETINGS, NOTICE AND
QUORUM.

     

    3.2.1     The
Board shall meet at such times as may be determined by at least three of the
directors. Meetings of the Board may be held at any time at any location
specified in the notice thereof in such place within or outside of the State of
Texas. Reasonable and sufficient notice (which shall be at least two (2)
Business Days’ notice) of each meeting shall be given to each director.
Directors may participate in a meeting of the Board by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other or by any other means permitted
by law.

     

    3.2.2     The
Chairman of the Board shall be appointed annually from the then serving
directors of the Board, with representatives of GGRN holding such position in
odd numbered years and representatives of VUI holding such position in even
numbered years.  The Chairman of the Board shall preside over
meetings, but shall not have a deciding vote on matters which come before the
Board.

     

    
      
         

      

      
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    3.2.3     Any
action required or permitted to be taken at any meeting of the Board may be
taken without a meeting pursuant to a written consent signed by the requisite
number of directors required to approve such action, and such writing or
writings shall be filed with the records of the meetings of the Board and
delivered by mail or facsimile to each director who did not execute such written
consent. Such consent, when executed by the requisite number of directors
necessary to approve the action specified therein, shall be treated for all
purposes as the act of the Board.

     

    3.2.4     At
all meetings of the Board, three directors shall constitute a quorum for the
transaction of business, and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board, except as
may be otherwise specifically provided by law, the Certificate or this
Agreement.

     

    3.2.5     If,
at a meeting of the Board, the directors are unable to resolve a matter brought
before the Board because of a deadlocked vote, the directors shall continue to
work together for a period of thirty (30) days to reach a resolution on the
matter.  If after this thirty (30) day period, the directors are
unable to resolve such matter, members of the management of GGRN and VUI shall
intercede and attempt to assist in resolving such matter for an additional
thirty (30) day period.  If after this additional thirty (30) day
period, there is still no resolution on such matter, such matter shall be
resolved in accordance with the arbitration provisions of Section 12.2
hereof.

     

    SECTION
3.3     CERTAIN LIMITATIONS ON THE
AUTHORITY OF THE BOARD.  Notwithstanding
anything to the contrary contained herein, the Board shall not have the
authority or right to do or undertake any of the following (or to authorize or
permit, by action or inaction, any of the following to be done) for and on
behalf of Company, without obtaining the approval of a Required
Interest:

     

    3.3.1     amend
the Certificate;

     

    3.3.2     approve
any merger, consolidation or other form of reorganization of Company, or enter
into any plan of merger, consolidation, reorganization or dissolution of
Company;

     

    3.3.3     increase
the number of directors on the Board;

     

    3.3.4     approve
the annual business plan or budget of Company;

     

    3.3.5     windup
and dissolve Company; or

     

    3.3.6     terminate
the License Agreement.

     

    SECTION
3.4     OFFICERS.  Company
shall have such Officers, with such titles, responsibilities, and authority, as
the Board may determine from time to time.  Any such Officers shall
serve at the discretion of the Board for such term as may be determined from
time to time.  The initial Officers shall be (i) Malcolm Glen
Kertz, Chief Executive Officer of Technology, (ii) Douglas Frater, Chief
Executive Officer of Operations, (iii) Craig Harting, Chief Operating Officer
and (iv) F. George Orr, Chief Financial Officer.

     

    
      
         

      

      
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    ARTICLE
4

    MEMBERS

     

    SECTION
4.1     ONE CLASS OF
MEMBERS.  There
shall be one class of Members.  The respective ownership
interests held by the Members shall be represented by Units shown for each
Member on Exhibit
A to this Agreement, as amended from time to time pursuant to the terms
and conditions of this Agreement.

     

    SECTION
4.2     VOTING
RIGHTS.  The
Members shall have only such voting rights as are specifically provided to the
Members in this Agreement and as are required by the TBOC.  The
Members shall hold the relative voting power in accordance with their Percentage
Interests, and will be entitled to vote on matters presented to the Members for
approval based on such relative voting power.

     

    SECTION
4.3     ANNUAL
MEETINGS.  The
annual meeting of the Members shall be held on such day and at such time as
shall be agreed to unanimously by the Members, and shall be for the purpose of
transacting such business as may come before the meeting.

     

    SECTION
4.4     SPECIAL
MEETINGS.  Special
meetings of the Members may be called upon the written request of any
Member.

     

    SECTION
4.5     TIME AND PLACE OF
MEETING.  All
meetings of Members for any purpose may be held at the time and place within or
without the State of Texas as stated in the notice of the meeting or in a duly
executed waiver of notice of the meeting.

     

    SECTION
4.6     NOTICE OF ANNUAL
MEETINGS.  Notice
stating the place, date and time of each annual meeting shall be delivered not
less than ten (10) nor more than sixty (60) Days before the date of the annual
meeting to each Member of record entitled to vote at such annual
meeting.  Any proper matter may be presented for consideration at an
annual meeting of the Members, even though the matter is not described in the
notice for the meeting.

     

    SECTION
4.7     NOTICE OF SPECIAL
MEETING.  When
a special meeting of the Members is called with notice, such notice shall be
delivered not less than three (3) nor more than sixty (60) Days before the date
of the special meeting to each Member of record entitled to vote at such
meeting.  The purpose for the meeting shall be set forth in the
notice.  Any proper matter may be presented for consideration at a
special meeting of the Members, even though the matter is not described in the
notice for the meeting.

     

    SECTION
4.8     WAIVER OF NOTICE BY
ATTENDANCE.  The
attendance of a Member at a meeting shall constitute a waiver of notice of such
meeting by the Member, except when a Member attends a meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.  Except as may be
otherwise provided by Law, the Certificate, or this Agreement, neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Members must be specified in the notice of or any waiver of notice of
such meeting.

    
      
         

      

      
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    SECTION
4.9     QUORUM AND
ADJOURNMENT.  Unless
otherwise specifically provided by Law, the Certificate, or this Agreement,
Members holding a Required Interest shall constitute a quorum for the
transaction of business at any meeting of the Members.  If less than a
quorum is present at any meeting of Members, the Members present at the meeting
may adjourn the meeting from time to time, without notice other than
announcement of the adjournment at the meeting, until a quorum is
present.

     

    SECTION
4.10     RECORD
DATE.  For
the purpose of determining the Members entitled to vote on any matters coming
before any meeting of the Members, or any adjournment thereof, the Board may
fix, in advance, a date as the record date for any such
determination.  Such date shall not be more than 30 or less than ten
(10) Days before any such meeting.

     

    SECTION
4.11     MANNER OF
ACTING.  Except
as otherwise provided herein, the vote of Members holding a Required Interest
shall decide any question brought before such meeting, unless the question is
one upon which a different vote is required by this Agreement, by Law or by the
Certificate.

     

    SECTION
4.12     PRESUMPTION OF
ASSENT.

     

    4.12.1    
General.  A
Member who is present at a meeting of the Members at which action on any matter
is taken shall be presumed to have assented to the action unless the Member’s
dissent shall be entered in the minutes of the meeting, or unless the Member
either files a written dissent to such action with the person acting as the
secretary of the meeting before the adjournment thereof or forwards such dissent
by registered mail to Company immediately after the adjournment of the
meeting.  Such right to dissent shall not apply to a Member who voted
in favor of such action.

     

    4.12.2    
Written Consent
Action.  Company may solicit approval of any proposed action
requiring the approval of the Members, including any proposed actions covered by
Section 4.12, by delivery of notice (pursuant to Section 13.4) to the Members
seeking written consent of the Members in accordance with Section 6.202 of the
TBOC.  If a Member does not indicate approval or rejection of the
proposed action to Company within ten (10) Business Days after delivery of the
notice, the Member will be conclusively presumed to have approved the proposed
action for all purposes under this Agreement.

     

    SECTION
4.13     TELEPHONE
CONFERENCE.  The
Members may participate in and hold a meeting of the Members by means of
conference telephone or other similar communications equipment pursuant to which
all persons participating in the meeting can hear each other.  Subject
to Section 4.8, participation in a meeting pursuant to this section constitutes
presence in person at such a meeting.

     

    SECTION
4.14     RESPONSIBILITIES.   Until
otherwise determined by the Board, the Members shall provide the following
services to the Company:

     

    
      
         

      

      
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    (a)    
GGRN shall provide operational management services, which will include, with
respect to the business of the Company and the Technology, project management,
commercialization, business development, sales and marketing, engineering,
manufacturing, project delivery, customer and operations and after sales
services, as described in the Commercialization Business Plan to be prepared by
GGRN and approved by the Board.

     

    (b)    
VUI shall provide technical development and support and facility management
services at the Company’s research and development facilities in support of the
Technology, as described in the Development Plan to be prepared by VUI and
approved by the Board.

     

    (c)    
Both GGRN and VUI shall be paid by the Company for all costs and expenses
incurred in connection with the services provided pursuant to this Section
4.14.

     

    ARTICLE
5

    INDEMNIFICATION
AND INSURANCE

     

    SECTION
5.1     GENERAL.  Company
shall indemnify, defend, protect, and hold harmless each past or present
Officer, director, employee and agent to the fullest extent permitted and in the
manner provided by the TBOC from and against all actions, suits, or proceedings,
and all other claims, demands, losses, damages, liabilities, judgments, awards,
penalties, fines, settlements, costs, and expenses (including court costs and
reasonable attorneys’ fees), arising out of the management of Company or such
person’s service or status as an Officer, director, employee or
agent.  THIS INDEMNITY SHALL APPLY TO MATTERS THAT ARISE OUT OF THE
NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OR RESPONSIBILITY BY SUCH OFFICER,
DIRECTOR, EMPLOYEE OR AGENT; PROVIDED, HOWEVER, THAT THIS
INDEMNITY SHALL NOT APPLY TO MATTERS ARISING OUT OF THE GROSS NEGLIGENCE,
WILLFUL MISCONDUCT, OR BREACH OF THIS AGREEMENT BY SUCH PERSON.  Such
indemnification shall not be deemed exclusive of any other rights to which such
persons may be entitled, under this Agreement, other agreements, vote of
disinterested Members, or otherwise, both as to actions taken in their official
capacity and as to action in another capacity while holding such office, and
shall inure to the benefit of the heirs, executors and administrators of such
persons.  Company shall have the power to enter into agreements
providing for indemnification by Company of current or former Officers,
directors, employees and agents or any other person of or who served any
predecessor company, corporation, partnership, joint venture, trust or other
enterprise from and against any and all expenses, liabilities or other
matters.  Company may purchase liability insurance for purposes of
satisfying its obligations under this Section 5.1.  No amendment,
modification, or repeal of this provision will apply to or adversely affect any
right or protection of any Officer, director, employee or agent of Company
hereunder for or with respect to any acts or omissions of such Officer,
director, employee or agent occurring prior to such amendment, modification or
repeal.

     

    SECTION
5.2     INSURANCE.  Company
may purchase and maintain, at its own expense, insurance to protect itself and
any person who is serving as an Officer, director, employee, or agent of
Company, or is or was serving at the request of Company as a manager, director,
partner, Officer, proprietor, trustee, employee, agent or other similar
functionary of another
domestic or foreign entity or enterprise against any claims, demands, losses,
damages, liabilities, judgments, awards, penalties, fines, settlements, costs,
and expenses whether or not Company would have the power to indemnify such
person against such amounts under this Article 5.

     

    
      
         

      

      
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    ARTICLE
6

    CAPITAL
STRUCTURE AND CONTRIBUTIONS

     

    SECTION
6.1     ORIGINAL CAPITAL
CONTRIBUTIONS.  The
Percentage Interests and Original Capital Contributions of each of the Members
as of the Effective Date are set forth on Exhibit A.  Company
shall maintain a Capital Account for each Member in accordance with the
requirements of Section 1.704-1(b) of the Regulations and the definition of
“Capital Account” set forth in Exhibit
B.

     

    SECTION
6.2     ADDITIONAL CAPITAL
CONTRIBUTIONS.  The
Members shall make Additional Capital Contributions from time to time as the
Board determines is necessary or desirable to accomplish the purposes and
objectives of Company.  Such Additional Capital Contributions shall be
made in proportion to the Percentage Interests then held by each of the Members,
except as the Members otherwise unanimously agree
otherwise.  Additionally, any Member may, with the approval of the
Board and each other Member, make additional Capital Contributions to Company at
any time and from time to time; provided, however, that each
other Member shall be given at least five (5) Days advance notice of any such
proposed additional contribution, including a statement of the fair market value
of the proposed additional contributions, and an opportunity to itself make
additional Capital Contributions.  The Percentage Interests held
by each Member shall not be adjusted in connection with any additional Capital
Contribution, except as otherwise is provided by this Agreement or determined by
a Required Interest.

     

    SECTION
6.3     FAILURE TO MAKE CAPITAL
CONTRIBUTIONS.

     

    6.3.1    
General.  A
Member shall be in default under this Agreement if the Member (“Defaulting Member”)
does not timely make the capital contributions contemplated by this Agreement
when required (whether such capital contribution is an Original Capital
Contribution or an Additional Capital Contribution).  In such case,
the Non-Defaulting Members may elect any one or more of the following
remedies:

     

    (a)    
the Non-Defaulting Members may advance funds to Company to satisfy the
Defaulting Member’s capital contribution obligation.  Such advances
shall constitute nonrecourse loans owed by the Defaulting Member to the
Non-Defaulting Members, and shall bear interest at the rate of the greater of
12% per annum or the Prime Rate plus 5%, payable monthly (but not in excess of
the Highest Applicable Rate).  For any period during which such loans
are outstanding, all cash distributions otherwise distributable to the
Defaulting Member under this Agreement shall instead be paid to the
Non-Defaulting Members making such loans until the loans and interest thereon
are paid in full.  Such loans shall be evidenced by promissory notes,
and shall be due and payable by the Defaulting Member one year from the date on
which the loans are made.  Any amounts repaid on such loans prior to
such one year anniversary shall first be applied to interest and thereafter to
principal.  If after one year, any principal or interest remains due
and payable on such loan, the Defaulting Member shall be required to (i)
Transfer all or a portion of the Membership Rights, as applicable, issued in
connection with the Additional Capital Contribution in satisifaction of the
principal due and payable on the promissory note and (ii) pay the interest due
and payable on such date to the Non-Defaulting Members in
cash.  Effective upon a Member becoming a Defaulting Member, the
Defaulting Member hereby grants to the Non-Defaulting Members who advance funds
pursuant to this Section 6.3.1(a) a security interest in the Defaulting Member’s
Membership Rights to secure the Defaulting Member’s obligation to repay such
advances, and hereby agrees to execute and deliver a promissory note as
described above together with a security agreement and such financing statements
and other instruments as the Non-Defaulting Members may reasonably
request.  All Non-Defaulting Members shall have the right and be given
the opportunity to make the advances contemplated by this Section
6.3.1(a).  The procedures set forth in Section 6.3.2 shall be
applicable for this purpose.  The advances made pursuant to this
Section 6.3.1(a) shall be made in proportion to the relative Percentage
Interests then held by the Non-Defaulting Members making such advances, except
as such Non-Defaulting Members otherwise agree; or

    
      
         

      

      
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    (b)           the
Non-Defaulting Members may make Additional Capital Contributions to Company to
cover the amount of the Defaulting Member’s capital contribution
obligation.  The Percentage Interests thereafter shall be adjusted to
take into account such additional Capital Contributions.  All
Non-Defaulting Members shall have the right and be given the opportunity to make
the contributions contemplated by this Section 6.3.1(b).  The
procedures set forth in Section 6.3.2 shall be applicable for this
purpose.  The contributions made pursuant to this Section 6.3.1(b)
shall be made in proportion to the relative Percentage Interests then held by
the Non-Defaulting Members making such contributions, except as such
Non-Defaulting Members otherwise agree.

     

    6.3.2    
Selection of
Remedies.  Promptly following the occurrence of an event of
default referenced above in Section 6.3.1, notice shall be given to the
Non-Defaulting Members (“Default Notice”)
describing the material facts and circumstances associated with the event of
default and proposing the adoption of any one or more of the remedies
contemplated in Section 6.3.1, which remedy shall be selected by the vote of at
least a majority of the Non-Defaulting Members.

     

    6.3.3    
Acknowledgment.  Each
Member hereby acknowledges and agrees that the remedies described in this
Section 6.3 bear a reasonable relationship to the damages that the Members
estimate may be suffered by Company and the Non-Defaulting Members by reason of
the failure of a Defaulting Member to make a Capital Contribution, and the
election of any or all of the remedies provided in this Section 6.3 is not
unreasonable under the circumstances existing as of the Effective
Date.

     

    6.3.4    
No
Waiver.  Any election made under this Section 6.3 shall not
constitute a waiver or limitation of the right to pursue any additional or
different remedy or remedies available hereunder or under law or equity with
respect to any event of default.

     

    SECTION
6.4     WITHDRAWAL OF
CAPITAL.  Except
as otherwise provided in this Agreement or the TBOC, no Member shall demand or
receive a return of its Capital Contributions, or otherwise withdraw from
Company, without the unanimous consent of the Board and the other
Members.  In this regard, no Member shall receive any interest,
compensation
or drawing with respect to the Member’s Capital Contributions or Capital Account
(or for services rendered on behalf of Company or otherwise in such Member’s
capacity as Member), except as otherwise specifically provided in this
Agreement.  Under circumstances requiring a return of any Capital
Contributions, no Member shall have the right to receive property other than
cash, except as otherwise specifically provided in this Agreement.  No
Member shall have any personal liability for the repayment of any Capital
Contributions of any Member.

     

    
      
         

      

      
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    SECTION
6.5     LOANS.

     

    6.5.1.    
Subject to Section 1.13, any Member or Affiliate of a Member, may, with the
approval of the Board, lend or advance money to Company.  The amount
of any such loan or advance shall not be treated as a contribution to the
capital of Company but shall be a debt due from
Company.  The amount of any such loan or advance by a lending
Member, or Affiliate of a Member, shall be repayable out of Company’s cash and
shall bear interest at a commercially reasonable rate as is determined by the
other Members after taking into consideration, without limitation, prevailing
interest rates and the interest rates that the Member, or Affiliate of the
Member, is required to pay in the event the Member, or Affiliate of the Member,
has itself borrowed the funds loaned or advanced to Company, and the terms and
conditions of any such loan, including the rate of interest, shall be no less
favorable to Company than if the Member, or Affiliate of the Member, had been an
independent third party.  None of the Members shall be obligated to
make any loan or advance to Company.

     

    SECTION
6.6     ISSUANCE OF
UNITS.

     

    6.6.1    
Authorized
Units.  Company is authorized to issue 10,000,000
Units.

     

    6.6.2    
Certificates For
Units.  All Units shall initially be
uncertificated.  Ownership certificates representing Units shall be
issued from time to time as may be determined is necessary or appropriate, and
shall be in such form, not inconsistent with the requirements of law and the
Certificate.  All certificates shall be consecutively numbered or
otherwise identified.  The name and address of the person to whom the
Units represented thereby are issued, with the number of Units and date of
issue, shall be entered on the Unit transfer books of Company.  All
certificates surrendered to Company for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
Units shall have been surrendered and canceled, except that in the case of a
lost, destroyed, or mutilated certificate a new one may be issued upon such
terms and indemnity to Company as the other Members may prescribe.

     

    6.6.3    
Unit
Transfers.  Except as otherwise specifically provided in this
Agreement, the person in whose name Units stand on the books of Company shall be
deemed by Company to be the owner thereof for all purposes.  Exhibit A shall be
revised to reflect the permitted transfer of any Units.

     

    SECTION
6.7     PREEMPTIVE
RIGHTS.

     

    6.7.1    
If, following the date of this Agreement, Company proposes to issue additional
Units, or any options, rights or warrants to purchase equity securities or any
securities convertible or exchangeable into (collectively, “Derivative
Securities”) Units, Company shall provide written notice to each Member
of such anticipated issuance no later than twenty (20) Business Days prior to
the anticipated issuance date.  Such notice shall set forth the
material terms and conditions of the issuance, including the proposed purchase
price for such new Units (or Derivative Securities, as the case may be) and the
anticipated issuance date. Each Member shall have the right to purchase up to
its pro rata portion of such new issuance at the price and on the terms and
conditions specified in Company’s notice by delivering an irrevocable written
notice to Company no later than five (5) Business Days before the anticipated
issuance date, setting forth the number of such new Units (or Derivative
Securities, as the case may be) for which such right is exercised. Such notice
shall also include the maximum number of new Units (or Derivative Securities, as
the case may be) such Member would be willing to purchase in the event any other
Member elects to purchase less than its pro rata portion of such Units (or
Derivative Securities, as the case may be). If any Member elects not to purchase
its full pro rata portion of such new Units (or Derivative Securities, as the
case may be), Company shall allocate any remaining amount pro rata among those
Members holding Units who have indicated in their notice to Company a desire to
purchase such Units (or Derivative Securities, as the case may
be).

    
      
         

      

      
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    6.7.2    
In the event Members do not purchase all such new Units (or Derivative
Securities, as the case may be) in accordance with the procedures set forth in
Section 6.7.1 hereof, Company shall have sixty (60) Days after the expiration of
the anticipated issuance date to sell to other Persons the remaining new Units
at the price and on the terms and conditions specified in Company’s notice to
the Members pursuant to Section 6.7.1 hereof. If Company fails to sell such
Units (or Derivative Securities, as the case may be) within sixty (60) Days of
the anticipated issuance date provided in the notice given to Members pursuant
to Section 6.7.1 hereof, Company shall not thereafter issue or sell any Units
(or Derivative Securities, as the case may be) without first offering such Units
(or Derivative Securities, as the case may be) to the Members in the manner
provided in Section 6.7.1 hereof. Company shall amend Exhibit A to reflect
the purchase by any Person of Units (or Derivative Securities, as the case may
be) in accordance with the terms of this Section 6.7.

     

    6.7.3    
The election by a Member not to exercise its preemptive rights under this
Section 6.7 in any one instance shall not affect its right (other than in
respect of a reduction in its percentage holdings) as to any future issuances
under this Section 6.7. Any sale of such securities by Company without first
giving the Members the rights described in this Section 6.7 shall be void
and of no force and effect.

     

    SECTION
6.8     SECURITIES LAW
REPRESENTATIONS.  Each
Member hereby represents and warrants to Company, the Board and each other
Member that (i) the Member is an “accredited investor” within the meaning of
Rule 501 under the Securities Act, (ii) the Member understands that such
Member’s Membership Rights have not, and may never be, registered under the
Securities Act, or under any state securities laws, (iii) the Member’s
Membership Rights are being acquired for the Member’s own account for investment
and not for resale or distribution of such Membership Rights, (iv) the Member
has the knowledge and experience in financial and business matters to enable him
to evaluate the merits and risks of approving this Agreement and the
transactions contemplated herein, including the acquisition of the Member’s
Membership Rights, (v) the Member is able to bear the economic risks and lack of
liquidity inherent in holding the Member’s Membership Rights, (vi) the Member
has been, or has had the opportunity to be, represented by legal counsel in
connection with this transaction, (vii) the Member and the Member’s advisors,
including legal counsel, have been given the opportunity to ask questions of,
and receive answers from, Company, the other Members, and their representatives
concerning the terms of the transactions contemplated by this Agreement and the
affairs and the business and financial condition of Company, (viii) the Member
has received certain information concerning Company, and the Member and the
Member’s advisors have had the opportunity to obtain additional information as
desired in order to evaluate the merits and risks inherent in holding the
Membership Rights, (ix) the Member has made such inquiries directly and/or
through the Member’s advisors in making a decision to approve this Agreement and
the transactions contemplated herein as the Member has deemed necessary and
advisable, and (x) the Member understands and agrees that the Member’s
Membership Rights may not be disposed of except in accordance with the
requirements of the Securities Act and any applicable state securities
laws.

     

    
      
         

      

      
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    ARTICLE
7

    DISTRIBUTIONS

     

    SECTION
7.1     DISTRIBUTIONS OF NET CASH
FLOW.   Except
as otherwise provided in this Agreement, the Board shall cause Company to
distribute, from time to time in its discretion, Net Cash Flow to the Members in
the following order of priority:

     

    7.1.1    
First, 70% to GGRN and 30% to VUI until such time as GGRN has received, taking
into account only distributions under this Section 7.1 and only taking into
account amounts received in excess of its Percentage Interest, an aggregate
amount equal to $3,000,000; and

     

    7.1.2    
Thereafter, to the Members in accordance with their Percentage
Interests

     

    SECTION
7.2     MINIMUM TAX
DISTRIBUTIONS(a)           .  In
order to allow the Members to satisfy U.S. federal income tax obligations
associated with Company’s activities for each Fiscal Year, Company shall
distribute amounts pursuant to this Section 7.2 such that the amounts
distributed to each Member with respect to each Fiscal Year pursuant to Section
7.1 and this Section 7.2 shall not be less than the smallest amount necessary so
that the aggregate amount of all distributions made to a Member under Section
7.1 and this Section 7.2 as of the end of any Tax Allocation Period equals such
Member’s Hypothetical Tax Amount.  Company shall make a cash
distribution of the amounts contemplated in this Section 7.2 to the Members no
later than (a) ten (10) Days after the end of each Tax Allocation Period that
constitutes a period for which an individual estimated federal income tax
payment is due, and (b) ninety (90) Days after the end of each Tax
Allocation Period that constitutes a Fiscal Year.  All distributions
pursuant to this Section 7.2 shall be treated as advances by Company to the
distributee Member, with the next subsequent distributions to such Member
pursuant to Sections 7.1, 11.3.1(c) and/or 11.4 being reduced as necessary until
such deemed advances have been repaid.

     

    SECTION
7.3     AMOUNTS
WITHHELD.  All
amounts withheld or required to be withheld pursuant to the Code or any
provision of any state, local or foreign tax law with respect to any payment,
distribution, or allocation to Company or the Members and treated by the Code
(whether or not withheld pursuant to the Code) or any such tax law as amounts
payable by or in respect of any Member or any Person owning an interest,
directly or indirectly, in such Member shall be treated as amounts actually
distributed to the Member with respect to which such amount was withheld
pursuant to this Article 7 for all purposes under this
Agreement.  Company is authorized to withhold from distributions, or
with respect to allocations, to the Members and to pay over to any federal,
state, local or foreign government any amounts required to be so withheld
pursuant to the Code or any provisions of any other federal, state, local or
foreign law, and shall allocate any such amounts to the Members with respect to
which such amount was withheld.

     

    
      
         

      

      
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    ARTICLE
8

    ALLOCATIONS

     

    SECTION
8.1     PROFITS.  After
giving effect to the special allocations set forth in Sections 8.3 and 8.4
below, Profits for any Allocation Year shall be allocated in the following order
and priority:

     

    (a)           First,
100% to the Members to the extent of the amount equal to the remainder, if any,
of (i) the cumulative Losses allocated to the Members pursuant to Section
8.2.2 for all prior Allocation Years, over (ii) the cumulative Profits
allocated to the Members pursuant to this Section 8.1(a) for all prior
Allocation Years; and

     

    (b)           The
balance, if any, among the Members in proportion to their
Percentage Interests.

     

    SECTION
8.2     LOSSES.

     

    8.2.1    
General.  After
giving effect to the special allocations set forth in Sections 8.3 and 8.4
below (and subject to Section 6.8 and addendums to this Agreement with respect
to Special Projects), Losses for any Allocation Year shall be allocated among
the Members in proportion to their Percentage Interests.

     

    8.2.2    
Limitation.  The
Losses allocated to a Member pursuant to Section 8.2.1 shall not exceed the
maximum amount of Losses that can be so allocated without causing any Member to
have an Adjusted Capital Account Deficit at the end of any Allocation
Year.  All Losses in excess of the limitations set forth in this
Section 8.2.2 shall be allocated to other Members to whom the Losses can be
allocated in compliance with this Section 8.2.2, if any.

     

    SECTION
8.3     SPECIAL
ALLOCATIONS.  The
following special allocations shall be made for purposes of maintaining Capital
Accounts:

     

    (a)    
Minimum Gain
Chargeback.  Notwithstanding any other provision of this
Article 8, if there is a net decrease in Minimum Gain during any Allocation
Year, each Member shall be specially allocated items of Company income and
gain for such Allocation Year (and, if necessary, subsequent Allocation
Years) to the extent required and in the manner provided by Regulations Section
1.704-2(f).  This Section 8.3(a) shall be interpreted and applied in
such a manner as to comply with the minimum gain chargeback requirement in
Regulations Section 1.704-2(f).

     

    
      
         

      

      
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    (b)    
Member Minimum Gain
Chargeback.  Notwithstanding any other provision of this
Article 8 except Section 8.3(a), if there is a net decrease in Member
Nonrecourse Minimum Gain attributable to a Member Nonrecourse Debt during any
Allocation Year, each Member who has a share of the Member Nonrecourse Minimum
Gain attributable to such Member Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company
income and gain for such Allocation Year (and, if necessary, subsequent
Allocation Years) to the extent required and in the manner provided by
Regulations Section 1.704-2(i)(4).  This Section 8.3(b)
shall be interpreted and applied in such a manner as to comply with the minimum
gain chargeback requirement in Regulations
Section 1.704-2(i)(4).

     

    (c)    
Qualified Income
Offset.  In the event any Member unexpectedly receives any
adjustments, allocations, or distributions described in Section
1.704-1(b)(2)(ii)(d)(4),
Section 1.704-1(b)(2)(ii)(d)(5), or Section
1.704-1(b)(2)(ii)(d)(6) of the Regulations, items
of Company income and gain shall be specially allocated to each such Member in
an amount and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such Member as quickly as
possible, provided that an allocation pursuant to this Section 8.3(c) shall be
made only if and to the extent that such Member would have an Adjusted Capital
Account Deficit after all other allocations provided for in this Article 8 have
been tentatively made as if this Section 8.3(c) were not in the
Agreement.

     

    (d)    
Gross Income
Allocation.  In the event any Member has a deficit Capital
Account at the end of any Allocation Year, or in the event any Member would have
a deficit Capital Account in connection with the receipt of distributions made
to the Member in accordance with Section 11.3.1(c), which is in excess of the
sum of (i) the amount such Member is obligated to restore pursuant to any
provision of this Agreement, and (ii) the amount such Member is deemed to be
obligated to restore pursuant to the penultimate sentences of
Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such
Member shall be specially allocated items of Company income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 8.3(d) shall be made only if and to the extent that
such Member would have a deficit Capital Account in excess of such sum after all
other allocations provided for in this Article 8 have been made as if Section
8.3(c) and this Section 8.3(d) were not in the Agreement.

     

    (e)    
Member Nonrecourse
Deductions.  Any Member Nonrecourse Deductions for any
Allocation Year shall be specially allocated to the Member who bears the
economic risk of loss with respect to the Member Nonrecourse Debt to which such
Member Nonrecourse Deductions are attributable in accordance with Regulations
Section 1.704-2(i)(1).

     

    (f)    
Nonrecourse
Deductions.  Nonrecourse Deductions for any Allocation Year
shall be specially allocated among the Members in proportion to their Percentage
Interests.

     

    (g)    
Section 754
Adjustments.  To the extent an adjustment to the adjusted tax
basis of any Company asset pursuant to Code Section 734(b) or Code Section
743(b) is required to be taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), such adjustment shall be
treated as an item of gain (if the adjustment is an increase) or loss (if the
adjustment is a decrease), and such gain or loss shall be allocated to the
Members in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to Regulations Section
1.704-1(b)(2)(iv)(m).

     

    
      
         

      

      
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    (h)    
Taxable Issuances of
Membership Interests.  Any income, gain, loss, or deduction
realized as a direct or indirect result of the issuance of an Interest by
Company to a Member (“Issuance Items”)
shall be allocated among the Members so that, to the extent possible, the net
amount of such Issuance Items, together with all other allocations under this
Agreement to each Member, shall be equal to the net amount that would have been
allocated to each such Member if the Issuance Items had not been
realized.

     

    SECTION
8.4     CURATIVE
ALLOCATIONS.  The
allocations set forth above in Section 8.2.2 and Sections 8.3(a) to 8.3(g)
(“Regulatory
Allocations”) are intended to comply with certain requirements of the
Regulations.  It is the intent of the Members that, to the extent
possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of Company
income, gain, loss or deduction pursuant to this Section
8.4.  Therefore, notwithstanding any other provision of this Article 8
(other than the Regulatory Allocations), the Members shall make such offsetting
special allocations of Company income, gain, loss or deduction in whatever
manner it determines appropriate so that, after such offsetting allocations are
made, each Member’s Capital Account balance is, to the extent possible, equal to
the Capital Account balance such Member would have had if the Regulatory
Allocations were not part of the Agreement and all Company items were allocated
pursuant to Section 8.1, Section 8.2.1 and Section 8.3(h).  In
exercising their discretion under this Section 8.4, the Members shall take into
account future Regulatory Allocations under Sections 8.3(a) and (b) that,
although not yet made, are likely to offset other Regulatory Allocations
previously made under Section 8.3(e) and (f).

     

    SECTION
8.5     OTHER ALLOCATION
RULES.

     

    8.5.1    
Application of Section
8.3.  The special allocations provided in Section 8.3 are
intended to comply with the provisions of Regulation Section 1.704-2 and are to
be interpreted and applied to accomplish that result; provided, however, that to
the extent possible, the special allocations shall be taken into account in
allocating items of income, gain, loss, and deduction among the Members in such
a manner that the net amount of the allocations to each Member shall be the same
as such Member’s distributive shares of Profit and Losses would have been had
the events requiring the special allocations not occurred.  The
Members shall have reasonable discretion to apply the provisions of Section 8.3
in whatever order is likely to minimize the economic distortions that otherwise
might result from the application of the special allocation provisions; provided, however, that the
Members shall apply the special allocations in the order set forth in Section
8.3 to the extent that doing so does not have a material adverse effect on the
Members.

     

    8.5.2    
Timing of
Allocations.  Profits, Losses and any other items of income,
gain, loss or deduction shall be allocated to the Members pursuant to this
Article 8 as of the last day of each Fiscal Year; provided, however, that
Profits, Losses and such other items shall also be allocated at such times as
the Gross Asset Values of Company Property are adjusted pursuant to subparagraph
(ii) of the definition of “Gross Asset Value.”

     

    8.5.3    
Determination of
Profits and Losses.  For purposes of determining the Profits,
Losses, or any other items allocable to any period, Profits, Losses, and any
such other items shall be determined on a daily, monthly, or other basis, as
determined by the Members using any permissible method under Code Section 706
and the Regulations thereunder.

     

    
      
         

      

      
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    8.5.4    
Acknowledgment of Tax
Consequences.  Each Member hereby acknowledges awareness of the
tax consequences of the allocations made by this Article 8 and agrees to be
bound by the provisions of this Article 8 in reporting their shares of Company
income and loss for income tax purposes, except to the extent otherwise required
by Law.

     

    8.5.5    
Excess Nonrecourse
Liabilities.  Solely for purposes of determining the Members’
proportionate shares of the “excess nonrecourse liabilities” of Company within
the meaning of Regulations Section 1.752-3(a)(3), the Members’ interests in
Profits shall be in proportion to their Percentage Interests.

     

    8.5.6    
Distribution of
Certain Proceeds.  To the extent permitted by Regulations
Section 1.704-2(h)(3), the Members shall endeavor not to treat distributions of
cash as having been made from the proceeds of a Nonrecourse Liability or a
Member Nonrecourse Debt, but only to the extent that such distributions would
cause or increase an Adjusted Capital Account Deficit
for any Member.

     

    8.5.7    
Safe Harbor
Election.  In the event the Tax Matters Member makes the
election contemplated by Section 10.3.2, Profits and Losses shall be allocated
in a manner that satisfies the requirements for such election, including any
forfeiture allocations required by proposed Section 1.704-1(b)(4)(xii)(b)(1) of the Regulations and the
revenue procedure contemplated by Internal Revenue Service Notice 2005-43 (or
the corresponding provisions of any final Regulations and associated guidance by
the Treasury Department and the Internal Revenue Service regarding the tax
consequences associated with the issuance or transfer of Membership Rights in
exchange for the performance of services).

     

    SECTION
8.6     TAX ALLOCATIONS: SECTION
704(c).  In
accordance with Code Section 704(c) and the Regulations thereunder, income,
gain, loss, and deduction with respect to any property contributed to the
capital of Company shall, solely for federal income tax purposes, be allocated
among the Members so as to take account of any variation between the adjusted
basis of such property to Company for federal income tax purposes and its
initial Gross Asset Value (computed in accordance with subparagraph (i) of the
definition of “Gross Asset Value”).  In the event the Gross Asset
Value of any Company asset is adjusted pursuant to subparagraph (ii) of the
definition of “Gross Asset Value”, subsequent allocations of income, gain, loss,
and deduction with respect to such asset shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its
Gross Asset Value in the same manner as under Code Section 704(c) and the
Regulations thereunder.  Any elections or other decisions relating to
such allocations shall be made by the Members in any manner that reasonably
reflects the purpose and intention of this Agreement.  Allocations
pursuant to this Section 8.6 are solely for purposes of federal, state, and
local taxes and shall not affect, or in any way be taken into account in
computing, any Capital Account or share of Profits, Losses, other items, or
distributions pursuant to any provisions of this Agreement.  Except as
otherwise provided in this Agreement, all items of Company income, gain, loss,
deduction, and any other allocations not otherwise provided for shall be divided
among the Members in the same proportions as they share Profits or Losses, as
the case may be, for the Allocation Year.

     

    
      
         

      

      
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    ARTICLE
9

    TRANSFERS

     

    SECTION
9.1     GENERAL
RESTRICTIONS.  Except
as otherwise permitted by this Agreement, no Member shall Transfer all or any
portion of its Membership Rights without the unanimous consent of all
Members.

     

    SECTION
9.2     BUY OUT
EVENTS.

     

    9.2.1    
Upon the occurrence of a Buy-Out Event with respect to any Member (“Selling Member”), the
other Members shall have the right, but not the obligation, to purchase all of
the Membership Rights of the Selling Member, and the Selling Member shall have
the obligation to sell such Membership Rights upon an exercise of any such
option, under terms and conditions set forth in this Section 9.2.  For
these purposes, a “Buy-Out Event” occurs
with respect to any Member upon the first to occur of any of the following: (a)
the Bankruptcy of the Member; (b) the breach by the Member of any material
provision of this Agreement and the failure of the Member to cure such breach
within thirty (30) Days after notice thereof from Company; or (c) the occurrence
of a Change of Control with respect to such Member.  Company shall
send notice to all Members of a Buy-Out Event promptly upon learning of its
occurrence (“Buy-Out
Notice”).

     

    9.2.2    
Member
Rights.  Each Member other than the Selling Member (the “Option Members”)
shall have the right, but not the obligation, to purchase the portion of the
Selling Member’s Interest that the Percentage Interest held by the Option Member
bears to the Percentage Interest held by all Option Members, or such other
portion as the electing Option Members mutually agree in writing.  If
no Members elect to exercise their rights under this Section 9.2.2, it shall be
deemed a Dissolution Event pursuant to Section 11.1(b).

     

    9.2.3    
Purchase Price and
Terms.  For purposes of the rights and obligation provided
under this Section 9.2, the purchase price shall be the Fair Market Value of the
Interest at the end of the calendar month immediately preceding the calendar
month in which the event triggering application of this Section 9.2
occurs.  Payment of the purchase price for an Interest acquired
pursuant to this Section 9.2 shall, at the election of the Option Members, be
made to the Selling Member pursuant to either of the following two
methods:

     

    (a)    
cash on the closing date equal in amount to the full purchase price otherwise
determined under this Section 9.2; or

     

    (b)    
(i) cash on the closing date in an amount equal to 10% of the full purchase
price otherwise determined under this Section 9.2, and (ii) the issuance by the
purchasing party of a secured nonrecourse promissory note for the remaining 90%
of the purchase price, the terms of which shall (A) require payment in equal
annual installments on the next three (3) consecutive anniversaries of the
closing date, (B) require the accrual of interest on the unpaid
portion of the promissory note at the Prime Rate, compounded semi-annually from
the closing date, adjusted after the closing date on the first day of each
January and July (with the initial interest rate equal to the Prime Rate in
effect on the closing date), (C) require the payment of all such interest
accrued through the date on which each installment under the promissory note is
due simultaneously with each such installment, (D) provide that payment of
amounts due under the promissory note will be secured by a pledge of the
purchased Interest, and (E) provide such other commercially reasonable terms and
conditions as are customary and appropriate for transactions of this nature and
character.

     

    
      
         

      

      
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    9.2.4    
Closing.  The
closing of the purchase shall occur not later than fifteen (15) Business Days
after the date of the Buy-Out Notice.  At the closing, the Selling
Member shall deliver at such closing, against payment of the purchase price
therefor, good title to the Units to be sold, free and clear of liens,
encumbrances and adverse claims with respect thereto and such other documents as
are deemed reasonably necessary by the Option Members or Company for the proper
Transfer of such Units on the books of Company.  In addition, the
Selling Member shall be required to repay in full any indebtedness owed to
Company as of the closing date, including all accrued and unpaid
interest.  Company shall also its reasonable efforts to obtain a
release of any guarantees or other forms of indemnity which the Selling Member
had previously given in respect of any obligation of Company.

     

    9.2.5    
Remedies.  In
the event that a Member violates, or attempts or threatens to violate, the
requirements of this Section 9.2, the other Members shall, to the extent
permitted by applicable Law, be entitled to (i) obtain injunctive relief, (ii)
obtain a decree compelling specific performance, and/or (iii) obtain any
other remedy legally allowed to them.

     

    SECTION
9.3     RIGHT OF FIRST
OFFER.

     

    (a)    
Following the one (1)-year anniversary of the date hereof, any Member may
Transfer all or any portion of its Membership Rights to any Person; provided,
other than in connection with a Transfer consequent upon the exercise of rights
set forth in Section 9.2 hereof, upon any such proposed Transfer of Membership
Rights by a Member (any such Member, a “Transferring
Member”), each other Member (a “Non-Transferring
Member”) shall have a right of first offer over such Membership Rights,
which shall be exercised in the manner set forth in this Section 9.3; provided
further, that Members shall not be permitted to Transfer all or or any portion
of their Membership Rights at any time to a Person that is, or is an Affiliate
of, a competitor (as determined by the Board) of the business of the Company
without the prior approval of each other Member.

     

    (b)    
The Transferring Member shall provide Company and each Non-Transferring Member
with a written notice (a “Proposed Transfer
Notice”) of its desire to Transfer such Membership Rights. The Proposed
Transfer Notice shall specify the Membership Rights such Transferring Member
wishes to Transfer.

     

    (c)    
Each Non-Transferring Member shall have a period of twenty (20) Days following
the receipt of the Proposed Transfer Notice to offer irrevocably to purchase
such Membership Rights for cash consideration (an “Offer”) by delivering
to the Transferring Member a written notice stating its desire to purchase such
Membership Rights, its proposed cash purchase price for such Units and any other
material terms and conditions of its proposed purchase.

     

    (d)    
In the event that the Transferring Member elects to accept an Offer (provided,
that the Transferring Member may only accept the highest Offer, and, if more
than one Offer is the same, the Transferring Member must accept such Offers on a
pro rata basis), the Transferring Member and the Non-Transferring Member(s)
whose Offer is accepted shall take such action as may be necessary to enter into
a definitive agreement, which will include the terms of the Offer, within sixty
(60) Days of the date of acceptance by the Transferring Member(s). The
Transferring Member(s) will provide representations, warranties, covenants and
indemnities in its individual capacity in connection with such transaction, and
such representations, warranties, covenants and indemnifications shall be
limited to customary fundamental representations and warranties in transactions
of this type.

     

    
      
         

      

      
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    (e)    
If no Offer is made, the Transferring Member may Transfer the Membership Rights
to any Person within sixty (60) Days following such twenty (20)-Day period
specified in Section 9.3(c) above.

     

    (f)    
The closing for any transaction pursuant to this Section 9.3 shall be in
accordance with the terms of Section 9.2.4, as applicable.

     

    SECTION
9.4     TRANSACTION
VOID.    If an
Interest in Company that is covered by this Article 9 is purportedly sold,
assigned, transferred, or otherwise disposed of in a transaction that is not in
compliance with the requirements of this Article 9, such purported sale,
assignment or transfer shall be void and have no force or effect.

     

    ARTICLE
10

    BOOKS,
RECORDS, AND ACCOUNTING

     

    SECTION
10.1     MAINTENANCE OF BOOKS AND
RECORDS.  Company
shall maintain at its principal place of business separate books of account for
Company which shall show a true and accurate record of all costs and expenses
incurred, all charges made, all credits made and received, and all income
derived in connection with the conduct of Company and the operation of Company
business in accordance with this Agreement.

     

    SECTION
10.2     ACCESS TO BOOKS AND
RECORDS.  Any
Member, or any agents or representatives of any Member, at the Member’s own
expense and with notice to the Board, may examine, copy and audit the books and
records of Company and make copies of and abstracts from the financial and
operating records and books of account of Company, and discuss the affairs,
finances and accounts of Company with the independent accountants of Company,
all at such reasonable times and as often as such Member or any agents or
representatives of such Member may reasonably request.  The rights granted
to a Member pursuant to this Section 10.2 are expressly subject to
compliance by such Member with the confidentiality procedures and guidelines of
Company, as such procedures and guidelines may be established from
time to time by the Board; provided, however, that any information
provided pursuant to this Section 10.2 shall be deemed to be confidential for
all purposes unless otherwise determined by the Board in its sole discretion,
and no Member shall disclose the contents thereof to any Person without the
express written permission of the Board.  All confidential information
respecting Company shall be returned to Company or destroyed by any Member
immediately once such Member ceases to own any Units.

     

    
      
         

      

      
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    SECTION
10.3     TAX MATTERS.

     

    10.3.1    
Tax Elections.
F. George Orr shall be designated as the “tax matters partner” of Company
pursuant to Section 6231(a)(7) of the Code. (Any Person who is designated as the
“tax matters partner” is referred to herein as the “Tax Matters
Member.”)  The Tax
Matters Member is authorized to make any and all elections for federal, state,
local and foreign tax purposes including, without limitation, any election, if
permitted by applicable Law: (i) to adjust the basis of Company Property
pursuant to Code Sections 754, 734(b) and 743(b), or comparable provisions
of state, local or foreign law, in connection with Transfers of Company
interests and Company distributions; (ii) to extend the statute of limitations
for assessment of tax deficiencies against Members with respect to adjustments
to Company’s federal, state, local or foreign tax returns; and (iii) to the
extent provided in Code Sections 6221 through 6231, to represent Company
and the Members before taxing authorities or courts of competent jurisdiction in
tax matters affecting Company and the Members in their capacities as Members,
and to file any tax returns and execute any agreements or other documents
relating to or affecting such tax matters, including agreements or other
documents that bind the Members with respect to such tax matters or otherwise
affect the rights of Company and the Members; provided, however, that the
Tax Matters Member shall not, without the consent of a Required Interest, do any
of the following: (a) enter into a settlement agreement with the Internal
Revenue Service which purports to bind Members other than Members holding at
least a majority of Percentage Interests; (b) file a petition as contemplated in
Section 6226(a) or 6228 of the Code, (c) intervene in any action as
contemplated by Section 6226(b) of the Code, or (d) file any request
contemplated by Section 6227(b) of the Code.  The Tax Matters Member
is specifically authorized to act in such capacity on behalf of Company under
the Code and in any similar capacity under state or local law.

     

    10.3.2    
Interests Issued In
Exchange For the Performance of Services.  Following the
promulgation, if any, of final Regulations and associated guidance by the
Treasury Department and the Internal Revenue Service regarding the tax
consequences associated with the issuance or transfer of Membership Rights in
exchange for the performance of services, the Tax Matters Member shall make the
election contemplated by proposed Section 1.83-3(l) of the Regulations and the
revenue procedure contemplated by Internal Revenue Service Notice 2005-43 (or
the corresponding provisions of any such final Regulations or associated
guidance) in connection with the issuance or transfer by Company of any
Membership Rights in exchange for the performance of
services.  Company and each Member (including the Member obtaining an
Interest in exchange for the performance of services) shall comply with all
requirements associated with any such election while the election remains
effective.

     

    10.3.3    
Tax
Returns.  Company shall furnish each Member with such items as
may be required under and in accordance with applicable tax law.  Upon
written request by a Member, Company also shall either allow a Member an
opportunity to review, or furnish to the Member a copy of, the income tax
returns filed by Company, together with any schedules and other information that
are relevant to such Member’s own tax affairs.

     

    SECTION
10.4     FINANCIAL STATEMENTS AND
REPORTS.

     

    10.4.1    
The books of account and records of Company shall be audited as of the end of
each Fiscal Year by Company’s independent certified public accountants.
Company’s independent public accountants shall be an independent certified
public accounting firm selected from time to time by the Board. All reports to
be provided pursuant to this Section 10.4 shall be prepared in accordance with
United States generally accepted accounting principles, with a reconciliation to
Canadian generally accepted accounting principles.

     

    
      
         

      

      
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    10.4.2    
As soon as practicable after the end of each Fiscal Year, Company shall prepare
or cause to be prepared, and shall deliver to the Board and mail to each Member
an audited report setting forth at the end of such Fiscal Year the following: a
balance sheet of Company; an income statement of Company; a statement of the
changes of Company’s capital; and a statement of changes in cash flow of
Company.

     

    10.4.3    
Upon the request of the Members holding at least 20% of the Units, Company shall
prepare or cause to be prepared, and shall deliver to the Board and mail to each
Member monthly and/or quarterly operating reports, an unaudited consolidated
balance sheet and an unaudited consolidated income statement of
Company.

     

    10.4.4    
Company shall deliver to the Board the proposed annual budget of Company for the
upcoming Fiscal Year and each of the next three Fiscal Years no later than
thirty (30) Days prior to the end of each Fiscal Year and such other information
relating to the business, financial condition or operations of the Board as may
be requested.

     

    SECTION
10.5     BANKING.  All
funds of Company shall be deposited in Company’s name, in such account or
accounts with such financial institutions as may be approved by the Board from
time to time.  Withdrawals of funds from Company accounts shall be
made on such signature or signatures as the Board may approve from time to
time.

     

    SECTION
10.6     NO BILL OF
ACCOUNTING.  To the
fullest extent permitted by law, each Member covenants that it will not (except
with the written consent of the Board) file a bill for
Company accounting.

     

    ARTICLE
11

    DISSOLUTION
AND WINDING UP

     

    SECTION
11.1     DISSOLUTION
EVENTS.  Company
shall dissolve and commence winding up and liquidating upon the first to occur
of any of the following (“Dissolution
Event”):

     

    (a)    
the sale or exchange of all or substantially all of Company’s ownership interest
in the Technology;

     

    (b)    
the failure of the Members to purchase the Selling Member’s Interests upon the
occurrence of a Buy-Out Event pursuant to Section 9.2,

     

    (c)    
the affirmative vote of the Board and the Members (in accordance with Section
3.3) to dissolve, wind up, and liquidate Company;

     

    (d)    
a judicial determination that an event has occurred that makes it unlawful,
impossible or impractical to carry on the business of Company; or

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    (e)    
the occurrence of any event that requires dissolution of Company pursuant to any
provision of the TBOC.  The
Members hereby agree that, notwithstanding any provision of the TBOC, Company
shall not dissolve prior to the occurrence of a Dissolution Event.

     

    SECTION
11.2     ELECTION TO RECONSTITUTE
COMPANY.

     

    11.2.1    
General
Requirements.  If it is determined, by a court of competent
jurisdiction, that Company has dissolved prior to the occurrence of a
Dissolution Event, or upon the occurrence of an event specified in Section
11.1(d), then within an additional ninety (90) Days after such determination
(the “Reconstitution
Period”), a Required Interest may elect to reconstitute Company and
continue its business on the same terms and conditions set forth in this
Agreement by forming a new limited liability company on terms identical to those
set forth in this Agreement;  provided, however, that the
right of a Required Interest to reconstitute and continue the business of
Company shall not exist and may not be exercised unless Company has received an
opinion of counsel that the exercise of the right would not result in the loss
of limited liability of any Member and neither Company nor the reconstituted
limited liability company would cease to be treated as a partnership for federal
income tax purposes upon the exercise of such right to
continue.  Unless such an election is made within the Reconstitution
Period, Company shall liquidate and wind up its affairs in accordance with
Section 11.3.

     

    11.2.2    
Consequences of
Election.  If an election is made under Section 11.2.1 within
the Reconstitution Period, then: (i) all Members shall be bound thereby and
shall be deemed to have consented thereto; (ii) the reconstituted limited
liability company shall continue until the occurrence of a Dissolution Event as
provided in Section 11.1; (iii) unless otherwise agreed to by a Required
Interest, the Certificate and this Agreement shall automatically constitute the
Certificate and Agreement of such new Company; provided, however, that if it is necessary to
file a new certificate of formation, or if the Members otherwise determine that
is appropriate to file a new certificate of formation, all necessary steps shall
be taken to cancel the Certificate of Formation and to enter into a new
certificate of formation, and the Members shall cause such certificate of
formation for the new Company to be filed in the office of the Secretary of
State of the State of Texas in accordance with the TBOC; and (iv) all of the
assets and liabilities of the dissolved Company shall be deemed to have been
automatically assigned, assumed, conveyed and transferred to the new
Company.

     

    SECTION
11.3     WINDING
UP.

     

    11.3.1    
General.  Upon
the occurrence of (i) a Dissolution Event or (ii) the determination by
a court of competent jurisdiction that Company has dissolved prior to the
occurrence of a Dissolution Event (unless Company is reconstituted pursuant to
Section 11.2 hereof), Company shall continue solely for the purposes of winding
up its affairs in an orderly manner, liquidating its assets, and satisfying the
claims of its creditors and Members, and no Member shall take any action that is
inconsistent with, or not necessary to or appropriate for, the winding up of
Company’s business and affairs, provided that all covenants
contained in this Agreement and obligations provided for in this Agreement shall
continue to be fully binding upon the Members until such time as Company
Property has been distributed pursuant to this Section 11.3 and Company has been
dissolved pursuant to the TBOC.  The Liquidator shall be responsible
for overseeing the winding up and dissolution of Company, which winding up and
dissolution shall be completed as soon as reasonably possible following the
occurrence of the Dissolution Event and within ninety (90) Days after the last
day on which Company may be reconstituted pursuant to Section
11.2.  The Liquidator shall take full account of Company’s
liabilities and Company Property and shall cause Company Property or the
proceeds from the sale thereof, to the extent sufficient, to be applied and
distributed, to the maximum extent permitted by Law, in the following
order:

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (a)    
First, to creditors (including Members, to the extent permitted by Law) in
satisfaction of all of Company’s debts and other liabilities (whether by payment
or the making of reasonable provision for payment thereof), other than
liabilities for which reasonable provision for payment has been made and
liabilities for distribution to Members under Section 18-601 or Section 18-604
of the TBOC;

     

    (b)    
Second, except as provided in this Agreement, to Members and former Members of
Company in satisfaction of liabilities for distribution arising under Section
18-601 or Section 18-604 of the TBOC; and

     

    (c)    
Third, the balance, if any, to the Members in accordance with their Percentage
Interests.

     

    11.3.2    
No
Compensation.  No Member shall receive additional compensation
for any services performed pursuant to this Article 11.

     

    11.3.3    
Final
Allocations.  The Members intend that the allocations provided
under Article 8 will produce final Capital Account balances for the Members such
that liquidating distributions pursuant to Sections 11.3.1(c) or 11.4 are made
in accordance with such Capital Account balances.  If the allocations
otherwise made under Article 8 would fail to produce such final Capital Account
balances, the Members shall have the power and authority to cause the
allocations made under Article 8 to be made in a manner that achieves the
foregoing intent as close as possible.

     

    SECTION
11.4     COMPLIANCE WITH CERTAIN
REQUIREMENTS.  In
the event Company is “liquidated” within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g),
distributions shall be made to the Members in accordance with their Percentage
Interests.  If any Member has a deficit balance in his Capital Account
(after giving effect to all contributions, distributions and allocations for all
Allocation Years, including the Allocation Year during which such liquidation
occurs), such Member shall have no obligation to make any contribution to the
capital of Company with respect to such deficit, and such deficit shall not be
considered a debt owed to Company or to any other Person for any purpose
whatsoever.  In the discretion of the Liquidator, a pro rata portion
of the distributions that would otherwise be made to the Members pursuant to
this Article 11 may be:

     

    (a)    
Distributed to a trust established for the benefit of the Members for the
purposes of liquidating Company assets, collecting amounts owed to Company, and
paying any contingent or unforeseen liabilities or obligations of
Company.  The assets of any such trust shall be distributed to the
Members from time to time, in the reasonable discretion of the Liquidator, in
the same proportions as the amount distributed to such trust by Company would
otherwise have been distributed to the Members pursuant to Section 11.3 hereof;
or

    
      
         

      

      
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    (b)    
Withheld to provide a reasonable reserve for Company liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations
owed to Company, provided that such withheld amounts shall be distributed to the
Members as soon as practicable.

     

    The
portion of the distributions that would otherwise have been made to each of the
Members that is instead distributed to a trust pursuant to Section 11.4(a) or
withheld to provide a reserve pursuant to Section 11.4(b) shall be determined in
the same manner as the expense or deduction would have been allocated if Company
had realized an expense equal to such amounts immediately prior to distributions
being made pursuant to Section 11.3.

     

    SECTION
11.5     DEEMED RECONSTITUTED
COMPANY.  In
the event Company is liquidated within the meaning of Section
1.704-1(b)(2)(ii)(g) of
the Regulations, but no Dissolution Event has occurred, Company Property shall
not be liquidated, Company’s liabilities shall not be paid or discharged, and
Company’s affairs shall not be wound up.

     

    SECTION
11.6     RIGHTS OF
MEMBERS.  Except
as otherwise provided in this Agreement, each Member shall look solely to
Company Property for the return of its Capital Contribution and has no right or
power to demand or receive Company Property other than cash.  If the
assets of Company remaining after payment or discharge of the debts or
liabilities of Company are insufficient to return such Capital Contribution, the
Members shall have no recourse against Company or any other Member.

     

    SECTION
11.7     NOTICE OF
DISSOLUTION/TERMINATION.

     

    (a)    
In the event a Dissolution Event occurs or an event occurs that would, but for
provisions of Section 11.2, result in a dissolution of Company, Company shall,
within thirty (30) Days thereafter, provide written notice thereof to each of
the Members and to all other parties with whom Company regularly conducts
business (as determined in the discretion of the Members), the Members shall
publish, or cause to be published, notice thereof in a newspaper of general
circulation in each place in which Company regularly conducts business (as
determined in the discretion of the Members).

     

    (b)    
Upon completion of the distribution of Company Property as provided in this
Article 11, Company shall be terminated, and the Liquidator shall cause the
filing of the Certificate of Cancellation pursuant to Section 11.101 of the TBOC
and shall take all such other actions as may be necessary to terminate
Company.

     

    SECTION
11.8     ALLOCATIONS DURING
LIQUIDATION.  During
the period commencing on the first day of the Fiscal Year during which a
Dissolution Event occurs and ending on the date on which all of the assets of
Company have been distributed to the Members pursuant to Section 11.3 hereof
(the “Liquidation
Period”), the Members shall continue to share Profits, Losses, gain, loss
and other items of Company income, gain, loss or deduction in the manner
provided in Article 8.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    SECTION
11.9     CHARACTER OF LIQUIDATING DISTRIBUTIONS.  All
payments made in liquidation of the interest of a Member in Company shall be
made in exchange for the interest of such Member in Company Property pursuant to
Section 736(b)(1) of the Code, including the interest of such Member in Company
goodwill.

     

    SECTION
11.10     FEES AND INDEMNIFICATION OF
THE LIQUIDATOR.

     

    (a)    
Fees.  Company
is authorized to pay a reasonable fee to the Liquidator for its services
performed pursuant to this Article 11 and to reimburse the Liquidator for its
reasonable costs and expenses incurred in performing those
services.

     

    (b)    
Indemnification.  Company
shall indemnify, save harmless, and pay all judgments and claims against the
Liquidator or any officers, directors, agents or employees of the Liquidator
relating to any liability or damage incurred by reason of any act performed or
omitted to be performed by the Liquidator, or any officers, directors, agents or
employees of the Liquidator in connection with the liquidation of Company,
including reasonable attorneys’ fees incurred by the Liquidator, officer,
director, agent or employee in connection with the defense of any action based
on any such act or omission, which attorneys’ fees may be paid as incurred,
except to the extent such liability or damage is caused by the fraud,
intentional misconduct of, or a knowing violation of the laws by the Liquidator
which was material to the cause of action.

     

    SECTION
11.11     FORM OF LIQUIDATING
DISTRIBUTIONS.  For
purposes of making distributions required by Section 11.3 hereof, the Liquidator
may determine whether to distribute all or any portion of Company Property
in-kind or to sell all or any portion of Company Property and distribute the
proceeds therefrom.

     

    ARTICLE
12

    DISPUTE
RESOLUTION

     

    SECTION
12.1     SPECIFIC
PERFORMANCE.  Each
of the Members acknowledges and agrees that Company and the other Members would
be damaged irreparably in the event any of the provisions of this Agreement are
not performed in accordance with their specific terms or otherwise are
breached.  Accordingly, each of the Members agrees that Company and
the other Members shall be entitled to obtain injunctive relief in the form of
temporary restraining orders and/or preliminary injunctions (but not, except to
the extent available under Section 12.2, to permanent injunctions) to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof.

     

    SECTION
12.2     ARBITRATION.  Except
as otherwise provided above by Section 12.1, any controversy which touches on or
concerns this Agreement shall be resolved exclusively by binding arbitration
administered pursuant to American Arbitration Association rules then applicable
for commercial disputes.  In any controversy subject to such
arbitration, the arbitrator may grant any relief, legal or equitable, interim or
final, including without limitation a permanent injunction, which could be
granted by a court of competent jurisdiction.  Any arbitration shall
take place in Harris County, Texas, or as otherwise mutually agreed by the
parties.  This clause shall survive the termination of this contract
and is governed by the Federal Arbitration Act.

     

    
      
         

      

      
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    ARTICLE
13

    MISCELLANEOUS

     

    SECTION
13.1     REPRESENTATION AND
WARRANTIES OF THE MEMBERS.  Each
Member hereby represents and warrants to each other Member and Company that as
of the date hereof:

     

    (a)    
Existence; Authority;
Enforceability.  Such Member has the necessary power and
authority to enter into this Agreement and to carry out its obligations
hereunder. Such Member is duly organized and validly existing under the laws of
its jurisdiction of organization, and the execution of this Agreement, and the
consummation of the transactions contemplated herein, have been authorized by
all necessary corporate or other action, and no other act or proceeding,
corporate or otherwise, on its part is necessary to authorize the execution of
this Agreement or the consummation of any of the transactions contemplated
hereby. This Agreement has been duly executed by such Member and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms.

     

    (b)    
Absence of
Conflicts. The execution and delivery by such Member of this Agreement
and the performance of its obligations hereunder do not and will not (i)
conflict with, or result in the breach of any provision of the constitutive
documents of such Member; (ii) result in any violation, breach, conflict,
default or event of default (or an event which with notice, lapse of time, or
both, would constitute a default or event of default), or give rise to any right
of acceleration or termination or any additional payment obligation, under the
terms of any material contract, agreement or permit to which such Member is a
party or by which such Member’s assets or operations are bound or affected; or
(iii) violate, in any material respect, any applicable Law.

     

    (c)    
 Consents.
Other than any consents that have already been obtained, no consent, waiver,
approval, authorization, exemption, registration, license or declaration is
required to be made or obtained by such Member in connection with (i) the
execution, delivery or performance of this Agreement or (ii) the consummation of
any of the transactions contemplated herein.

     

    (d)    
Compliance with Legal
Requirements. Each such Member, such Member’s assets, business and record
keeping practices is not currently in violation of any applicable Law which
violations could at any time (including, without limitation, after the Closing)
have a material adverse effect upon (i) such Member, (ii) such Member’s ability
to perform its obligations hereunder or (iii) any of the other
Members.

     

    SECTION
13.2     AMENDMENTS.  Amendments
to this Agreement or the Certificate must be approved by the Board in accordance
with the requirements of the Certificate and this Agreement.  A
proposed amendment shall be adopted and be effective as an amendment to this
Agreement or the Certificate, as appropriate; provided however, that this
Agreement shall not be amended without the consent of each Member adversely
affected by a proposed amendment if such amendment would alter the interest of a
Member in any Company capital, assets or distributions.

     

    
      
         

      

      
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    SECTION
13.3     ENTIRE
AGREEMENT.  This
Agreement, along with the License Agreement, sets forth the entire agreement
among the parties with respect to the subject matter hereof, and supersedes all
prior agreements and understandings among the parties with respect to the
subject matter hereof, specifically the Letter of Agreement dated June 25,
2007.

     

    SECTION
13.4     NOTICES.   All
notices, requests, demands, claims, and other communications pertaining to this
Agreement (“Notices”) must be in
writing, must be sent to the addressee at the address set forth in this Section,
or at such other address as the addressee has designated by a Notice given in
the manner set forth in this Section 13.4, and must be sent by facsimile,
courier, or prepaid, certified U.S. mail.  Notices will be deemed
given (a) when received if sent by facsimile, and received between the hours of
8:00 a.m. and 5:00 p.m., local time of the destination address, on a
Business Day (with confirmation of completed transmission sufficing as prima
facie evidence of receipt of a notice sent by facsimile), and (b) when delivered
and receipted for (or when attempted delivery is refused at the address where
sent) if sent by courier or by certified U.S. mail.  Notices sent by
facsimile and received after 5:00 p.m. any day and before 7:59 a.m. the
next Business Day, local time of the destination address, will be deemed given
at 8:00 a.m. on such next Business Day.  The addresses for
Notices are as follows:

     

    
      	
            	
              Company:

            	
              VERTIGRO
      ALGAE TECHNOLOGIES, LLC

            
	 	 	
              1057
      Doniphan Park Circle, Suite H

              El Paso, Texas 79922

              Facsimile No.: ________________

              Telephone No.:
_______________

            

    

     

    
      	
               
      

            	
              Members:

            	
              To
      the addresses set forth on the signature pages
  hereof.

            

    

     

    SECTION
13.5     PUBLIC
ANNOUNCEMENTS..  Unless
required by Law, neither Company nor any Member shall make any public
announcement regarding this Agreement or the transactions contemplated hereby
without the consent of Company and all other Members, as
applicable.  If required by Law, the disclosing party shall consult
with Company and the Members, as applicable, in advance of making such public
announcement.

     

    SECTION
13.6     BINDING
EFFECT.  Every
covenant, term, and provision of this Agreement shall be binding upon and inure
to the benefit of the Members and their respective heirs, legatees, legal
representatives, successors, transferees, and assigns.

     

    SECTION
13.7     CONSTRUCTION.  Every
covenant, term, and provision of this Agreement shall be construed simply
according to its fair meaning and not strictly for or against any
Member.  The terms of this Agreement are intended to embody the
economic relationship among the Members and shall not be subject to modification
by, or be conformed with, any actions by the Internal Revenue Service except as
this Agreement may be explicitly so amended and except as may relate
specifically to the filing of tax returns.

     

    
      
         

      

      
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    SECTION
13.8     TIME.  For
purposes of computing any period of time pursuant to this Agreement, the day of
the act, event or default from which the designated period of time begins to run
shall not be included, but the time shall begin to run on the next succeeding
day.  The last day of the period so computed shall be included, unless
it is a Saturday, Sunday or legal holiday, in which event the period shall run
until the end of the next day which is not a Saturday, Sunday or legal
holiday.

     

    SECTION
13.9     HEADINGS.  Section
and other headings contained in this Agreement are for reference purposes only
and are not intended to describe, interpret, define, or limit the scope, extent,
or intent of this Agreement or any provision hereof.

     

    SECTION
13.10     SEVERABILITY.  Except
as otherwise provided in the succeeding sentence, every provision of this
Agreement is intended to be severable, and, if any term or provision of this
Agreement is illegal or invalid for any reason whatsoever, such illegality or
invalidity shall not affect the validity or legality of the remainder of this
Agreement.  The preceding sentence of this Section 13.10 shall be of
no force or effect if the consequence of enforcing the remainder of this
Agreement without such illegal or invalid term or provision would be to cause
any Member to lose the material benefit of its economic bargain.

     

    SECTION
13.11     INCORPORATION BY
REFERENCE.  Every
exhibit, schedule, and other appendix attached to this Agreement and referred to
herein is not incorporated in this Agreement by reference unless this Agreement
expressly otherwise provides.

     

    SECTION
13.12     FURTHER
ACTION.  Each
Member agrees to perform all further acts and execute, acknowledge, and deliver
any documents which may be reasonably necessary, appropriate, or desirable to
carry out the provisions of this Agreement.

     

    SECTION
13.13     COUNTERPARTS.  This
Agreement may be executed in any number of counterparts with the same effect as
if all of the Members had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.

     

    SECTION
13.14     GOVERNING LAW &
VENUE.  THE
LAWS OF THE STATE OF TEXAS SHALL GOVERN THE VALIDITY OF THIS AGREEMENT, THE
CONSTRUCTION OF ITS TERMS, AND THE INTERPRETATION OF THE RIGHTS AND DUTIES
ARISING HEREUNDER.  THE VENUE FOR RESOLVING ANY DISPUTE ARISING
UNDER THIS AGREEMENT SHALL BE HARRIS COUNTY, TEXAS.

     

    [SEPARATE
SIGNATURE PAGES ATTACHED]

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    SIGNATURE
PAGE

     

    Attached
to and made a part of the

    VERTIGRO
ALGAE TECHNOLOGIES, LLC

    LIMITED
LIABILITY COMPANY OPERATING AGREEMENT

    

     

    dated as
of May 5, 2008

     

    IN
WITNESS WHEREOF, the parties have entered into this Limited Liability Company
Operating Agreement as of the date first above set forth.

     

    

     

    
      
        	 	Global
      Green Solutions, Inc.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/      
      Doug Frater	 
	 	 	Name:
      Doug Frater	 
	 	 	Title:
      President and CEO	 
	 	 	 	 

      

    

                                                                                

    Address
for Notice:

    

    2519 San
Marcos Ave.

    San
Diego, California 92104

    Attention:
Douglas Frater, President and Chief Executive Officer

    Facsimile
No.: (619) 393-0309

    Telephone
No.: (619) 591-8890

    

    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    SIGNATURE
PAGE

     

    Attached
to and made a part of the

    VERTIGRO
ALGAE TECHNOLOGIES, LLC

    LIMITED
LIABILITY COMPANY OPERATING AGREEMENT

    

     

    dated as
of May 5, 2008

     

    IN
WITNESS WHEREOF, the parties have entered into this Limited Liability Company
Operating Agreement as of the date first above set forth.

     

     

    
      
        	 	Valcent
      USA, Inc.	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 

      

    

    

                                                                      

    

     

    Address
for Notice:

    

    1057
Doniphan Park Circle, Suite H

    El Paso,
Texas 79922

    Attention:
F. George Orr

    Facsimile
No.: ________________

    Telephone
No.: _______________

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    

    VERTIGRO
ALGAE TECHNOLOGIES, LLC

    LIMITED
LIABILITY COMPANY OPERATING AGREEMENT

     

    

     

    
      	
              MEMBER
      NAMES

            	
              ORIGINAL
      CAPITAL CONTRIBUTIONS

            	
              NUMBER

              OF
      UNITS

            	
              PERCENTAGE
      INTEREST

            
	
              Global
      Green Solutions, Inc.

            	
              $30,000.00

            	
              3,000,000

            	
              50%

            
	
              Valcent
      USA, Inc.

            	
              $30,000.00

            	
              3,000,000

            	
              50%

            
	
               TOTAL

            	
              $60,000.00

            	
              6,000,000

            	
              100%

            

    

    

     

     

    
 

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    VERTIGRO
ALGAE TECHNOLOGIES, LLC

    LIMITED
LIABILITY COMPANY OPERATING AGREEMENT

    

    DEFINITIONS

    

    As used
in this Agreement, the following terms have the meanings set forth
below:

     

    “Additional Capital
Contributions” means, with respect to each Member, the Capital
Contributions made by such Member pursuant to Section 6.2, reduced by the
amount of any liabilities of such Member assumed by Company in connection with
such Capital Contribution or which are secured by any property contributed by
such Member as a part of such Capital Contribution.  In the event
all or a portion of a Member’s Membership Rights are transferred in accordance
with the terms of this Agreement, the transferee shall succeed to the Additional
Capital Contributions of the transferor to the extent they relate to the
transferred interest.

     

    “Adjusted Capital Account
Deficit” means, with respect to any Member, the deficit balance, if any,
in such Member’s Capital Account as of the end of the relevant Allocation Year,
after giving effect to the following adjustments:

     

    (a)           Credit
to such Capital Account any amounts which such Member is obligated to restore
pursuant to any provision of this Agreement or is deemed to be obligated to
restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and
1.704-2(i)(5) of the Regulations; and

     

    (b)           Debit
to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the
Regulations.

     

    The
foregoing definition is intended to comply with the provisions of Section
1.704-1(b)(2)(ii)(d) of
the Regulations and shall be interpreted consistently therewith.

     

    “Affiliate” means, with
respect to any Person, (i) any Person directly or indirectly controlling,
controlled by, or under common control with such Person, (ii) any officer,
director, manager, or general partner of such Person, or (iii) any Person who is
an officer, director, manager, general partner, or trustee of any Person
described in clauses (i) and (ii) of this sentence.  For purposes of
this definition, the term “controls,” “is controlled by,” or “is under common
control with” shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a person or
entity, whether through the ownership of voting securities, by contract or
otherwise.

     

    “Agreement” has the meaning
set forth in the introductory paragraph.

     

    “Allocation Year” means (i)
the period beginning on the Effective Date and ending on March 31, 2008,
(ii) any subsequent period beginning on January 1 and ending on the
following March 31, or (iii) any portion of the period described in clause (ii)
for which Company is required to allocate Profits, Losses and other items of
Company income, gain, loss or deduction pursuant to Article 8.

     

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    “Bankruptcy” means, with
respect to any Person, a Voluntary Bankruptcy or an Involuntary Bankruptcy, as
hereinafter defined.

     

    “Board” has the meaning set
forth in Section 3.1.

     

    “Book Value” means the Capital
Account on the date of determination.

     

    “Business Day” means any day
other than a Saturday, a Sunday, or a holiday on which national banking
associations in the State of Texas are closed.

     

    “Buy-Out Event” has the
meaning set forth in Section 9.2.

     

    “Buy-Out Notice” has the
meaning set forth in Section 9.2.

     

    “Capital Account” means, with
respect to any Member, the Capital Account maintained for such Member in
accordance with the following provisions:

     

    (a)           To
each Member’s Capital Account there shall be credited (i) the Member’s Capital
Contributions, including such Member’s Original Capital Contribution and any
Additional Capital Contributions, (ii) the Member’s distributive share of
Profits, (iii) any items in the nature of income or gain which are specially
allocated to the Member pursuant to Section 8.3 or Section 8.4 and (iv) the
amount of any Company liabilities assumed by the Member or which are secured by
any Company Property distributed to the Member.

     

    (b)           To
each Member’s Capital Account there shall be debited (i) the amount of cash and
the Gross Asset Value of any Company Property distributed to the Member pursuant
to any provision of this Agreement, (ii) the Member’s distributive share of
Losses, (iii) any items in the nature of expenses or losses which are specially
allocated to the Member pursuant to Section 8.3 or Section 8.4 and (iv) the
amount of any liabilities of the Member assumed by Company or which are secured
by any property contributed by the Member to Company.

     

    (c)           A
Member shall have a single Capital Account reflecting all of its Interest,
regardless of the classes of Interest held and regardless of the time or manner
in which the classes of Interest are acquired.

     

    (d)           In
the event all or a portion of a Membership Interest is transferred in accordance
with the terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred
Interest.

     

    (e)           In
determining the amount of any liability for purposes of clauses (a) and (b)
above of this definition, and for purposes of the definitions of “Additional
Capital Contribution” and “Original Capital Contribution,” there shall be taken
into account Code Section 752(c) and any other applicable provisions of the Code
and Regulations.

     

    (f)           The
foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations Section
1.704-1(b), and shall be interpreted and applied in a manner consistent with
such Regulations.  In the event the Members determine that it is
prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed property or which
are assumed by Company or any Member), are computed in order to comply with such
Regulations, the Members may make such modification, provided that it is not
likely to have a material adverse effect on the amounts distributable to any
Member pursuant to Article 7 hereof upon the dissolution of
Company.  The Members also shall make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Members and the amount of Company capital reflected on Company’s balance
sheet, as computed for book purposes, in accordance with Regulations Section
1.704-1(b)(2)(iv)(q);
provided, however,
that, to the extent that any such adjustment is inconsistent with other
provisions of this Agreement and would have a material adverse effect on any
Member, such adjustment shall require the Member’s consent.

     

    
      
         

      

      
        B-2

        
          

        

      

      
         

      

    

     

    “Capital Contribution” means,
with respect to any Member, the amount of money and the initial Gross Asset
Value of any property (other than money) contributed to Company by such Member
(or its predecessors in interest) with respect to the Interest held by such
Member.  The principal amount of a promissory note which is not
readily traded on an established securities market and which is contributed to
Company by the maker of the note (or a Member related to the maker of the note
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c)) shall not be included in
the Capital Account of any Member until Company makes a taxable disposition of
the note or until (and to the extent) principal payments are made on the note,
all in accordance with Regulations Section 1.704-1(b)(2)(iv)(d)(2).

     

    “Certificate” means the Certificate
of Formation filed with the Secretary of State of the State of Texas on February
29, 2008 for purposes of forming Company under the TBOC.

     

    “Change of Control” means the
acquisition by any person or group of persons (within the meaning of Sections
13(d) or 14(a) of the Securities Exchange Act of 1934, as amended) of either (a)
the beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended) of 50% or more of the ownership interests in the Member, or (b) the
right to otherwise control the conduct and operation of the Member’s business
activities.

     

    “Code” means the Internal
Revenue Code of 1986, as amended, modified or supplemented from time to time (or
any corresponding provisions of succeeding law).

     

    “Company” means VERTIGRO
ALGAE TECHNOLOGIES, LLC, the Texas limited liability company formed pursuant to
the terms and conditions of this Agreement.

     

    “Company Property” means all
real and personal property owned by Company and any improvements thereto, and
shall include both tangible and intangible property.

     

    “Criminal Act” means any act
resulting in a final, non-appealable (i) conviction (including a plea of no
contest) in a U.S. federal or state court of competent jurisdiction of (x) a
felony punishable by 1 or more years in jail or (y) any other violation of a
criminal statute involving intentional fraud, misappropriation or embezzlement
or (ii) determination by a court of competent jurisdiction that such Person has
materially violated the federal or state securities laws of the United States or
any rules or regulations issued pursuant to said laws, or the rules and
regulations of any securities or commodities exchange or
association.

     

    
      
         

      

      
        B-3

        
          

        

      

      
         

      

    

    “Day” means a calendar day;
provided, however,
that, if any period of Days referred to in this Agreement shall end on a Day
that is not a Business Day, then the expiration of such period shall be
automatically extended until the first succeeding Business Day.

     

    “Defaulting Member” has the
meaning set forth in Section 6.3.1.

     

    “Default Notice” has the
meaning set forth in Section 6.3.2.

     

    “Depreciation” means, for each
Allocation Year, an amount equal to the depreciation, amortization, or other
cost recovery deduction allowable for federal income tax purposes with respect
to an asset for such Allocation Year, except that (i) with respect to any asset
the Gross Asset Value of which differs from its adjusted basis for federal
income tax purposes and with respect to which the “remedial method” under
Regulation Section 1.704-3(d) is used to eliminate such difference, Depreciation
for such Allocation Year shall be the amount of book basis recovered for such
Allocation Year under the rules prescribed by Regulation Section 1.704-3(d)(2),
and (ii) with respect to any other asset the Gross Asset Value of which differs
from its adjusted basis for federal income tax purposes at the beginning of such
Allocation Year, Depreciation shall be an amount which bears the same ratio to
such beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such Allocation Year bears to
such beginning adjusted basis; provided, however, that if
the adjusted basis for federal income tax purposes of an asset at the beginning
of such Allocation Year is zero, Depreciation shall be determined with reference
to such beginning Gross Asset Value using any reasonable method selected by the
Members.

     

    “Derivative Securities” has
the meaning set forth in Section 6.7.1.

     

    “Dissolution Event” has the
meaning set forth in Section 11.1.

     

    “Effective Date” has the
meaning set forth in the introductory paragraph hereof.

     

    “Fair Market Value” means, for
purposes of Section 9.2, the fair market value mutually agreed to by the Selling
Member and the Option Members, or, failing the ability of the Selling Member and
the Option Members to agree upon such value within a twenty (20)-day period, the
fair market value determined by a single independent appraiser, mutually
acceptable to the Selling Member and the Option Members, or, failing their
ability to agree upon a single independent appraiser within a ten (10)-day
period, means the fair market value determined by a single independent
appraiser, mutually acceptable to two other independent appraisers one of which
was chosen by the Selling Member and the other chosen by the Option
Members.

     

    “Fiscal Year” means (i) the
period beginning on the Effective Date and ending on March 31, 2008, and
(ii) any subsequent period beginning on January 1 and ending on the earlier to
occur of (A) the following March 31, or (B) the date on which all Company
Property is distributed pursuant to Section 11.3 and Company is dissolved
pursuant to the TBOC.

     

    “GGRN” means Global Green
Solutions, Inc., a Nevada corporation.

     

    “Gross Asset Value” means,
with respect to any asset, the asset’s adjusted basis for federal income tax
purposes, except as follows:

     

    
      
         

      

      
        B-4

        
          

        

      

      
         

      

    

    (A)           The
initial Gross Asset Value of any asset contributed by a Member to Company shall
be the gross fair market value of such asset, as determined by the contributing
Member and the other Members;

     

    (B)           The
Gross Asset Values of all Company assets shall be adjusted to equal their
respective gross fair market values, as determined by the Members, as of the
following times:  (A) the acquisition of additional Units or Interests
by any new or existing Member in exchange for more than a de minimis Capital
Contribution; (B) the distribution by Company to a Member of more than a de minimis amount of Company
Property as consideration for all or a portion of a Unit or Interest; and (C)
the liquidation of Company within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g);
provided, however, that
adjustments pursuant to clauses (A) and (B) shall be made only if the Members
reasonably determine that such an adjustment is necessary or appropriate to
reflect the relative economic interests of the Members in
Company.  For purposes of making adjustments pursuant to this
subparagraph (ii), the gross fair market values of Company assets shall be
determined immediately prior to the event causing
such adjustment;

     

    (C)           the
Gross Asset Value of any Company asset distributed to any Member shall be
adjusted to equal the gross fair market value of such asset on the date of
distribution as determined by the distributee and the other Members;
and

     

    (D)           the
Gross Asset Values of Company assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to
Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of
the definition of “Profits and Losses” or Section 8.3(g); provided, however, that Gross
Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the
extent the Members determine that an adjustment pursuant to subparagraph (ii) is
necessary or appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this subparagraph (iv).

     

    If the
Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraphs (i), (ii), or (iv), such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.  For purposes of this
definition of Gross Asset Value, a Capital Contribution or distribution shall be
considered “de minimis” if its value
is less than $10,000.

     

    “Highest Applicable Rate”
means the maximum interest rate allowable under applicable usury or other
law.

     

    “Hypothetical Tax Amount”
means, with respect to each Member, an amount equal to the product of (i) the
combined maximum prevailing federal and highest state and local income tax rates
applicable to any Member (taking into account the deductibility of state and
local tax rates and the character of income and loss allocated as it effects the
applicable tax rate), and (ii) the net amount of cumulative Profits (net of
Losses) allocated to such Member (or the Member’s predecessor in interest) for
tax purposes since inception of Company through the end of the applicable Tax
Allocation Period.

     

    
      
         

      

      
        B-5

        
          

        

      

      
         

      

    

    “Income Tax Liabilities” means
liabilities and obligations (including estimated liabilities to the extent taxes
and related amounts are required to be paid on an estimated basis) for U.S.
federal and state income taxes (together with interest, penalties, additions to
tax, or additional amounts attributable thereto) resulting from Company
operations.

     

    “Interest” means a Person’s
share of the income, gain, loss, deduction and credits of, and the right to
receive distributions from, Company.

     

    “Involuntary Bankruptcy”
means, with respect to any Person, without the consent or acquiescence of such
Person, the entering of an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or other similar relief
under any present or future bankruptcy, insolvency, or similar statute, law, or
regulation, or the filing of any such petition against such Person, which
petition shall not be dismissed within ninety (90) Days, or without the consent
or acquiescence of such Person, the entering of an order appointing a trustee,
custodian, receiver or liquidator of such Person or of all or any substantial
part of the property of such Person, which order shall not be dismissed within
90 Days.

     

    “Issuance Items” has the
meaning set forth in Section 8.3(h).

     

    “Law” means any applicable
constitutional provision, statute, act, code, law, regulation, rule, ordinance,
order, decree, ruling, proclamation, resolution, judgment, decision,
declaration, or interpretative or advisory opinion or letter of any governmental
authority (including the TBOC and the Code).

     

    “License Agreement” means the
Technology License Agreement dated May 5, 2008 by and among the Company, Pagic
LP, a Texas limited partnership, and West Peak Ventures of Canada Ltd., a
company incorporated federally in Canada.

     

    “Liquidation Period” has the
meaning set forth in Section 11.8.

     

    “Liquidator” means such Person
designated by the Board.

     

    “Losses” has the meaning set
forth in the definition of “Profits and Losses.”

     

    “Member” means any Person
executing this Agreement as of the date of this Agreement as a member or
hereafter admitted to Company as a member as provided in this Agreement, but
such term does not include any Person who has ceased to be a member in
Company.

     

    “Member Nonrecourse
Deductions” shall have the meaning assigned to the term “partner
nonrecourse deductions’’ in Treasury Regulation Section 1.704-2(i).

     

    “Member Nonrecourse Debt”
shall have the meaning assigned to the term “partner nonrecourse debt’’ in
Treasury Regulation Section 1.704-2(b)(4).

     

    “Member Nonrecourse Minimum
Gain” shall have the meaning assigned to the term “partner nonrecourse
minimum gain” in Treasury Regulation Section 1.704-2(i)(3).

     

    
      
         

      

      
        B-6

        
          

        

      

      
         

      

    

    “Membership
Rights”  means with respect to any Member, (a) the Member’s
status as a Member; (b) that Member’s Units and Interest; (c) all other rights,
benefits and privileges enjoyed by that Member (under the TBOC, the Certificate,
this Agreement or otherwise) in its capacity as a Member, including that
Member’s rights to vote, consent and approve and otherwise to participate in the
management of Company; and (d) all obligations, duties and liabilities imposed
on that Member (under the TBOC, the Certificate, this Agreement or otherwise) in
its capacity as a Member, including any obligations to make Capital
Contributions.

     

    “Minimum Gain” shall have the
meaning assigned to that term in Treasury Regulation Section
1.704-2(d).

     

    “Net Cash Flow” means all
cash funds derived from Company’s operations (including interest received on
reserves), without reduction for any non-cash charges, but less cash funds used
to pay current operating expenses and to pay or establish reasonable reserves
for future expenses, debt payments, capital improvements, and
replacements.

     

    “Non-Defaulting Members” means
Members other than Defaulting Members.

     

    “Nonrecourse Deductions”
shall have the meaning assigned that term in Treasury Regulation Section
1.704-2(b)(1).

     

    “Nonrecourse Liability” shall
have the meaning assigned that term in Treasury Regulation Section
1.704-2(b)(3).

     

    “Non-Transferring Member” has
the meaning set forth in Section 9.3(a).

     

    “Notices” has the meaning set
forth in Section 13.4.

     

    “Offer” has the meaning set
forth in Section 9.3(c).

     

    “Officer” means any Person
designated as an officer of Company as provided in Section 3.4, but such
term does not include any Person who has ceased to be an officer of
Company.

     

    “Option Members” has the
meaning set forth in Section 9.2.2.

     

    “Original Capital
Contribution” means, with respect to each Member, the initial Capital
Contribution made by such Member pursuant to Section 6.1, reduced by the amount
of any liabilities of such Member assumed by Company in connection with such
Capital Contribution or which are secured by any property contributed by such
Member to Company as a part of such Capital Contribution.

     

    “Percentage Interest” means,
with respect to any Member, as of any date, the proportionate amount of Units
held by such Member as set forth on Exhibit A at such
time.  In the event all or any portion of a Unit is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Percentage Interest of the transferor to the extent it relates to the
transferred Interest.

     

    
      
         

      

      
        B-7

        
          

        

      

      
         

      

    

    “Person” means any
individual, company (whether general or limited), limited liability company,
corporation, trust, estate, association, nominee, or other entity.

     

    “Prime Rate” means the Prime
Rate of interest most recently published in the
Wall Street Journal.

     

    “Profits and Losses” means,
for each Allocation Year, an amount equal to Company’s taxable income or loss
for such Allocation Year, determined in accordance with Code Section 703(a),
including all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1), with any adjustments that are
necessary or appropriate in order that the Capital Accounts will be considered
to be determined and maintained in accordance with the rules of Regulations
Section 1.704-1(b)(2)(iv); provided, however, that in
lieu of the depreciation, amortization, and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account depreciation, amortization, and other cost recovery
deductions for such Allocation Year, computed in accordance with the definition
of “Depreciation”; provided, further, that any
items which are specially allocated pursuant to Section 8.3 (except those items
set forth in Section 8.3(i)(A)) or Section 8.4 shall not be taken into account
in computing Profits or Losses.  The amounts of the items of Company
income, gain, loss, or deduction available to be specially allocated pursuant to
Sections 8.3 and 8.4 shall be determined by applying rules analogous to those
applicable pursuant to the foregoing requirements.

     

    “Proposed Transfer Notice” has
the meaning set forth in Section 9.3(b).

     

    “Reconstitution Period” has
the meaning set forth in Section 11.2.1

     

    “Regulations” means the
regulations promulgated by the United States Department of the Treasury pursuant
to and in respect of provisions of the Code. All references herein to sections
of the Regulations shall include any corresponding provision or provisions of
succeeding, similar, substitute, proposed, or final Regulations.

     

    “Regulatory Allocations” has
the meaning set forth in Section 8.4.

     

    “Required Interest” means
Members holding more than two-thirds of all Percentage Interests at the time the
determination in question is made; provided, however, in the
case of any matter arising under Section 7.3, any Percentage Interest held by
Defaulting Members shall be disregarded for these purposes.

     

    “Selling Member” has the
meaning set forth in Section 9.2.

     

    “Tax Allocation Period” means
(a) each period for which an individual estimated federal income tax payment is
due, and (b) each Fiscal Year.

     

    “Tax Matters Member” has the
meaning set forth in Section 10.4.1.

     

    “TBOC” means the Texas
Business Organizations Code, as amended, modified or supplemented from time to
time (or any corresponding provisions of succeeding law).

     

    
      
         

      

      
        B-8

        
          

        

      

      
         

      

    

    “Technology” means shall mean
any technologies for the commercial production of a high yield algae based
biomass for industrial, commercial and retail applications, as more fully
described in the License Agreement, including but not limited to, bio-fuel,
food, health, pharmaceutical, and agricultural feedstock.

     

    “Transfer” means, as a noun,
any voluntary or involuntary, direct or indirect, transfer, sale, assignment,
gift, pledge, hypothecation, encumbrance or other disposition and, as a verb,
voluntarily or involuntarily, directly or indirectly, to transfer, sell, assign,
give, pledge, hypothecate, encumber or otherwise dispose of an
item.  With respect to Membership Rights, the term Transfer shall
refer to all or any part of the beneficial ownership of, the voting power
associated with, or any other right, power, or interest in, the Membership
Rights.

     

    “Transferring Member” has the
meaning set forth in Section 9.3(a).

     

    “Unit” means units
representing the entire ownership interest and rights of a Member in Company at
any particular time as a Member, including all Interests held by the Member and
the right of the Member to any and all rights and benefits to which a Member is
entitled pursuant to the terms of this Agreement.

     

    “Voluntary Bankruptcy” means,
with respect to any Person, (a)(i) the inability generally to pay its debts as
they become due, (ii) the failure generally to pay its debts as such debts
become due, or (iii) an admission in writing by such Person of its inability to
pay its debts generally or a general assignment by such Person for the benefit
of creditors, (b) the filing of any petition or answer by such Person seeking to
adjudicate it a bankrupt or insolvent, or seeking for itself any liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of such Person or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking, consenting to, or
acquiescing in the entry of an order for relief or the appointment of a
receiver, trustee, custodian, or other similar official for such Person or for
any substantial part of its property, or (c) corporate action taken by such
Person to authorize any of the actions set forth above.

     

    “VUI” means Valcent USA, Inc.,
a Nevada corporation.

     

    [END OF
EXHIBIT B]

     

     

     

     

     

     

     

     

     

     B-9

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