5.5 DPDW Approval . The Board shall have authority as provided in Section 5.1 with respect to all aspects of the operation of the LLC. Without limiting the generality of the foregoing, so long as Deep Down owns any Units, the LLC shall not take any of the following actions without first obtaining the approval of DPDW:
(a) increasing the constitution of the Board from five (5);
(b) amending this Agreement or the Certificate of Formation in a manner that may be reasonably interpreted to disproportionately (relative to other Members) adversely affect the rights of Deep Down;
(c) engaging, in a significant way, in activities other than the Business (as conducted on the date of this Agreement) or any ancillary functions related to the Business;
(d) declaring or paying any dividends or distributions to the Member’s other than in accordance with Section 4.1 hereof;
(e) repurchasing or redeeming Units;
(f) causing a material change in the nature of the Business;
(g) engaging in any activity that disproportionately affects Deep Down in that it (i) requires Deep Down to pay any material amount of tax or other material payments and Holdings is either not required to pay or is required to pay an amount that is materially less than Deep Down or (ii) requires Deep Down to make any filing with, or obtain any approval or consent from, any governmental entity that imposes a material burden on Deep Down and that Holdings is not required to make or is materially more burdensome than the actions required of Holdings to make such filings or obtain such approvals or consents; provided that ordinary and necessary filings with the SEC shall not be considered to be materially more burdensome on Deep Down;
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(h) liquidating, dissolving or effecting a recapitalization or reorganization of the LLC in any form of transaction, unless the Board determines such liquidation or dissolution is necessary and provision of such rights would violate its fiduciary duties;
(i) prior to November 2, 2012, authorizing, issuing, selling or entering into any agreement providing for the issuance (contingent or otherwise) of any equity securities or debt securities with equity features or securities exercisable or convertible into equity securities or debt securities with equity features; provided, however, that the LLC shall be entitled to, and this Section 5.5(i) shall in no way limit, the ability of the Board to establish equity incentive plans for management of the LLC in accordance with Section 3.1(e) ;
(j) making any loans or advances to, guarantees for the benefit of, or investments in, any Person, except for (a) reasonable advances to employees in the ordinary course of business and (b) investments having a stated maturity no greater than one year from the date the LLC makes such investment in (1) obligations of the United States government or any agency thereof or obligations guaranteed by the United States government, (2) certificates of deposit of commercial banks having combined capital and surplus of at least $500,000,000, (3) commercial paper with a
York cannot just sell their share of the joint venture as all these covenants (see note f above) join them at the hip with DPDW. For a minority partner DPDW wields a lot of power in this relationship especially as they are actively managing the JV.
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