LIMITED LIABILITY COMPANY AGREEMENT
OF
BEKAERT ECD SOLAR SYSTEMS LLC
(A Delaware Limited Liability Company)
THIS LIMITED LIABILITY COMPANY AGREEMENT ("Agreement") is made and
effective as of April 11, 2000 by and between UNITED SOLAR SYSTEMS CORP.
("United Solar"), a Delaware corporation, with its principal office at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and BEKAERT CORPORATION ("Bekaert"), a
Delaware corporation, with its principal office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇. Capitalized terms used herein and not otherwise
defined in this Agreement shall have the meaning given to them in the Foundation
Agreement (defined below).
BACKGROUND INFORMATION
A. United Solar, Energy Conversion Devices, Inc. ("ECD"), a Delaware
corporation, and Bekaert entered into a certain Foundation Agreement dated March
17, 2000 (the "Foundation Agreement"), which contemplates the execution of this
Agreement.
B. United Solar and Bekaert desire to form a limited liability company
in the State of Delaware, for the purpose of designing, manufacturing, marketing
and selling PV Products and PV Systems.
C. The parties intend that this Agreement shall govern their
relationship as Members of the Company, and their rights and obligations with
respect to the conduct of the Company's business effective as of the date set
forth above.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and the Foundation Agreement, the parties by this Agreement set
forth the limited liability company agreement for the Company under the laws of
the State of Delaware upon the terms and subject to the conditions of this
Agreement, as follows:
ARTICLE I
DEFINITIONS
-----------
1.1 Definitions. Each of the defined terms used in this Agreement shall
have the meaning specified in Appendix A attached hereto, unless the context in
which such terms is used otherwise specifically requires. For convenience, some
of the defined terms are defined the first time they appear in the Agreement.
1.2 Construction. Unless the context requires otherwise: (a) the gender
(or lack of gender) of all words used in this Agreement includes the masculine,
feminine and neuter; (b)
references to Articles and Sections refer to Articles and Sections of this
Agreement; (c) references to Appendices and Exhibits refer to the Appendices and
Exhibits attached to this Agreement, each of which is made a part hereof for all
purposes; (d) references to Laws refer to such Laws as they may be amended from
time to time, and references to particular provisions of a Law include any
corresponding provisions of any succeeding Law; and (e) references to money
refer to legal currency of the United States of America.
ARTICLE II
ORGANIZATION
------------
2.1 Formation of the Company. The Members hereby form a Delaware
limited liability company by filing a Certificate of Formation in the form
attached hereto as Exhibit 2.1A with the Delaware Secretary of State (the
"Certificate") and entering into this Agreement, which Agreement shall be deemed
effective as of the date the Certificate was so filed. The rights and
liabilities of the Members shall be determined pursuant to the Act and this
Agreement. To the extent the rights or obligations of any Member are different
by reason of any provision of this Agreement than they would be in the absence
of such provision, this Agreement shall, to the extent permitted by the Act,
control.
2.2 Name. The name of the Company is "Bekaert ECD Solar Systems LLC".
The name of the Company may be changed from time to time as agreed upon by the
Management Committee.
2.3 Office and Agent. The registered office of the Company required by
the Act to be maintained in the State of Delaware shall be the office of the
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Management Committee may designate
in the manner provided by Law. The registered agent shall be as stated in the
Certificate or as otherwise determined by the Management Committee. The
principal office of the Company shall be at such place as the Management
Committee may designate, and the Company shall maintain records there or such
other place as the Management Committee shall designate. The Company may have
such other offices as the Management Committee may designate.
2.4 Purpose of the Company. The purpose of the Company is to engage in
any lawful activity for which a limited liability company may be organized under
the Act. The initial business purpose of the Company is to design, manufacture,
market and sell PV Products and PV Systems and to engage in such other business
activities as the Management Committee may deem necessary or appropriate in
order to carry out the intent of this Agreement.
2.5 Term. The period of existence of the Company (the "Term") commenced
on the initial filing of the Certificate and shall end at such time as a
certificate of cancellation is filed with the Secretary of State of Delaware in
accordance with this Agreement.
2.6 No State Law Partnership. The Members intend that the 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 federal and state tax purposes, and the Agreement may not be
construed to suggest
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otherwise.
2.7 Required Filings. The Management Committee shall cause the Company
to make, execute and file all charter documents, certificates, agreements and
other instruments required by law or as may be necessary or appropriate for the
conduct of the business of the Company.
ARTICLE III
CAPITAL CONTRIBUTIONS
---------------------
3.1 Initial Capital Contributions. The initial capital of the Company
shall be as set forth in Section 3 (MEMBER CONTRIBUTIONS) of the Foundation
Agreement, and each of the Members shall hold the Membership Interest set forth
on Appendix B attached hereto, as amended from time to time.
3.2 Additional Capital Contributions. Except for Bekaert's additional
Capital Contribution made pursuant to the Subscription Agreement and the remedy
provision of Bekaert as set forth in Section 11.1 of the Foundation Agreement,
additional Capital Contributions shall be made upon the unanimous approval of
the Management Committee as provided in Section 6.2.5. A Member shall receive a
credit to its Capital Account in the amount of any additional capital which it
contributes to the Company. Immediately following such Capital Contribution, the
Percentage Interests shall be adjusted by the Management Committee to reflect
the new relative proportions of the Capital Accounts of the Members, and
Appendix B shall be amended to reflect the change in Membership Interest.
3.3 Member Loans. Subject to Section 4.9, any Member or its Affiliate
may make a loan to the Company as requested and approved by the Management
Committee. Any such loan shall bear interest and be on the terms as agreed to by
the Member and the Management Committee.
3.4 Capital Accounts. The Company shall establish an individual Capital
Account for each Member. The Company shall determine and maintain each Capital
Account in accordance with Regulations Section 1.704-1(b)(2)(iv). If a Member
transfers its Membership Interest in accordance with this Agreement, such
Member's Capital Account attributable to the transferred Membership Interest
shall carry over to the new owner of such Membership Interest pursuant to
Regulations Section 1.704-1(b)(2)(iv)(1).
3.5 Withdrawal of Capital Contributions. Except as provided in an
authorized written agreement between the Company and a Member or its Affiliate:
(i) no Member shall have the right to withdraw or reduce its Capital
Contribution(s), or to receive any distributions from the Company, (ii) no
Member shall have the right to demand or receive any property other than cash
from the Company, (iii) no interest or royalties shall be paid to any member on
its Capital Contribution(s), and (iv) no Member shall have priority over any
other Member, either as to the return of its Capital Contribution(s) or Net
Profits, Net Losses or distributions.
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ARTICLE IV
OPERATION
----------
4.1 Business Plan. At such times as shall be specified by the Management
Committee, a business plan (the "Business Plan") of the Company will be prepared
annually by the Operations Committee of the Company and presented to the
Management Committee. The Business Plan will set out, among other things, the
projected operating and capital spending or investment budgets of the Company
and its subsidiaries for the calendar year and shall set forth income and
expense projections, Capital Contributions, planned distributions (including
distributions for taxes of the Members attributable to the income received by
the Members from the Company) and the projected activities of the Company and
its subsidiaries for such year.
4.2 Supply. United Solar shall provide the Company with Strip Cells or
parts of Strip Cells pursuant to the terms of the Exclusive Supply Agreement,
and shall provide such other supplies as requested by the Management Committee
and agreed upon by United Solar. United Solar shall exclusively supply all of
its output to the Company in accordance with the Exclusive Supply Agreement.
4.3 Technology; Research and Development. The Company and United Solar
shall grant each other certain intellectual property rights pursuant to the
terms and conditions of a United Solar Systems Corp.- Bekaert ECD Solar Systems
LLC License Agreement. United Solar shall perform research and development for
the Company pursuant to the terms and conditions of a Research and Development
Agreement.
4.4 Services. United Solar shall provide services to the Company
pursuant to terms and conditions of a Services Agreement.
4.5 Lease of Equipment. The Company shall lease certain of its
equipment to United Solar pursuant to the terms and conditions of an Equipment
Lease Agreement.
4.6 Lease of Employees. United Solar and Bekaert shall lease certain of
their employees to the Company pursuant to the terms and conditions of Employee
Lease Agreements.
4.7 Accounting; Fiscal Year. The accounting methods and systems
employed by the Company shall be in conformance with generally accepted
accounting principles, applied on a consistent basis, and those customarily
employed by entities of a similar nature. The Members shall designate and
appoint an internationally reputable firm of certified public accountants to be
the independent public accountant for the Company. The Fiscal Year of the
Company shall be the calendar year.
4.8 Insurance. The Management Committee shall cause the Company to
maintain adequate amounts of insurance to cover the operations and insurable
risks of the Company. Such insurance shall be procured and maintained by the
Company, or, in the alternative, when it is more cost
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effective to do so, procured and maintained by each individual Member or its
Affiliate in equal amounts of coverage. Each Member or its Affiliate shall also
procure and maintain professional liability insurance for its Representatives.
4.9 Financing. The financing of the Company shall be the responsibility
of the Company. If external borrowing with banks is not available on
commercially reasonable terms, Bekaert will arrange for additional financing on
an as needed basis up to Ten Million US Dollars (US$10,000,000) (reduced by
amounts guaranteed by Bekaert to Canon, Inc. under the Guaranty Agreement,
executed concurrently herewith, relating to FujiLease (whether paid or
contingent) (herein, the "FujiLease Guarantee")). If Bekaert's additional
financing of up to a maximum of Ten Million US Dollars (US$10,000,000) less the
FujiLease Guarantee is insufficient, the Management Committee will decide upon
alternative financing, and such decision will be considered a Material Action
under Section 6.2.5. Except as provided in Section 3.2, no Member shall have any
obligation to the Company or to the other Member to make additional Capital
Contributions or to guarantee the repayment of loans to the Company made by
third parties. Any required guarantee of a third-party loan shall be borne by
each Member in proportion to its respective Percentage Interest or as the
Management Committee otherwise decides, and such decision will be considered a
Material Action under Section 6.2.5.
ARTICLE V
MEMBERS
---------
5.1 Limited Liability. Except as expressly set forth in this Agreement,
no Member shall be personally liable for any debt, obligation, or liability of
the Company, whether that liability or obligation arises in contract, tort, or
otherwise.
5.2 Admission of Additional Members. Except as provided in Article VIII,
no additional Members will be admitted to the Company.
5.3 Withdrawals or Resignations. No Member may withdraw or resign from
the Company without first obtaining the prior written consent of the other
Member.
5.4 Termination of Membership Interest. Upon the withdrawal or
resignation of a Member not in accordance with Section 5.3, the Membership
Interest of such Member shall be terminated by the Management Committee and
thereafter that Member shall be an Assignee only unless such Membership Interest
shall be purchased by the Company and/or remaining Member. Each Member
acknowledges and agrees that such termination or purchase of a Membership
Interest upon the occurrence of any of the foregoing events is not unreasonable
under the circumstances existing as of the date hereof.
5.5 Transactions With the Company. Subject to any limitations set forth
in this Agreement and with the prior approval of the Management Committee, a
Member may lend money to and transact other business with the Company. Subject
to other applicable law, such Member has the
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same rights and obligations with respect thereto as a Person who is not a
Member.
5.6 Remuneration To Members. Except as otherwise specifically provided
in this Agreement or as agreed to in writing between a Member and the Company,
no Member is entitled to remuneration for acting on behalf of the Company.
5.7 Member's Authority. Unless expressly and duly authorized in writing
to do so by the Management Committee or the other Member, no Member, acting
solely in the capacity of a Member, is an agent of the Company nor can any
Member in such capacity bind, nor execute any instrument on behalf of the
Company, pledge its credit or render it liable for any purpose.
5.8 Access to Real Property. Each Member and its authorized agents shall
have complete access during business hours to all real property and improvements
owned or leased by the Company.
5.9 Classification, Rights and Obligations of Members. There shall be
a single class of Members. Management of the Company is fully vested in the
Members; provided, that the Management Committee, Officers and Operating
Committee shall act as provided in Article VI. The rights, obligations and
limitations of the Members shall be as set forth in this Agreement, the
Certificate or, if not expressly provided in the foregoing, the Act.
5.10 Investment Representations. Each Member hereby represents and
warrants to, and agrees with, the other Member and the Company that (i) it is
acquiring the Membership Interest for investment purposes for its own account
only and not with a view to or for sale in connection with any distribution of
all or any part of the Membership Interest; (ii) it is an "accredited investor"
as defined in Rule 501(a) of Regulation D promulgated by the Securities and
Exchange Commission; (iii) it understands that the Membership Interest has not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), or any other applicable blue sky laws in reliance, in part, on its
representations, warranties, and agreements herein; (iv) it understands that the
Membership Interest is a "restricted security" under the Securities Act in that
the Membership Interest will be acquired from the Company in a transaction not
involving a public offering, and that the Membership Interest may be resold
without registration under the Securities Act only in certain limited
circumstances and that otherwise the Membership Interest must be held
indefinitely; and (v) it was not organized for the specific purpose of acquiring
the Membership Interest.
ARTICLE VI
MANAGEMENT AND CONTROL OF THE COMPANY
-------------------------------------
6.1 Management by the Members. The management of the Company is fully
vested in the Members, acting exclusively in their membership capacities. The
Company will not have "managers," as that term is used in the Act, it being
understood that the Representatives and Officers do not constitute "managers."
6.2 Management Committee. The Members shall act collectively through
meetings as a "committee of the whole," which is hereby named the "Management
Committee." The Management
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Committee shall consist of eight persons (each, a "Representative", and
collectively, the "Representatives"). Decisions or actions taken by the
Management Committee in accordance with the provisions of this Agreement shall
constitute decisions or actions by the Company and shall be binding on each
Member, Representative, Officer and employee of the Company. The Management
Committee shall conduct its affairs in accordance with the following provisions
and the other provisions of this Agreement:
6.2.1 Representatives.
---------------
(i) Designation. Prior to Unification, four of the
Representatives shall be appointed by United Solar and four of the
Representatives shall be appointed by Bekaert at each annual meeting
of Members, or at any special meeting held for the purpose of
appointing Representatives. After Unification, the Representatives
shall be appointed in proportion to the Member's Percentage
Interest, which shall mean that the minority Member shall be
entitled to appoint the number of Representatives equal to such
Member's Percentage Interest multiplied by the total number of
Representatives to be appointed (with fractions disregarded), and
the majority Member shall be entitled to appoint the remaining
Representatives. Each Representative shall serve until the earlier
of his resignation, removal by the Member who appointed him, death
or disability, or until his successor is appointed.
(ii) Authority. Each Representative shall have the full
authority to act on behalf of the Member that designated such
Representative; the action of a Representative at a meeting (or
through a written consent) of the Management Committee shall bind
the Member that designated such Representative; and the other Member
shall be entitled to rely upon such action without further inquiry
or investigation as to the actual authority (or lack thereof) of
such Representative.
(iii) Disclaimer of Duties; Indemnification. EACH
REPRESENTATIVE SHALL REPRESENT, AND OWE DUTIES TO, ONLY THE MEMBER
THAT DESIGNATED SUCH REPRESENTATIVE (THE NATURE AND EXTENT OF SUCH
DUTIES BEING AN INTERNAL CORPORATE OR ORGANIZATIONAL AFFAIR OF SUCH
MEMBER), AND NOT TO THE COMPANY, ANY OTHER MEMBER OR REPRESENTATIVE,
OR ANY OFFICER OF EMPLOYEE OF THE COMPANY. THE COMPANY SHALL
INDEMNIFY, PROTECT, DEFEND, RELEASE AND HOLD HARMLESS EACH
REPRESENTATIVE FROM AND AGAINST ANY CLAIMS ASSERTED BY OR ON BEHALF
OF ANY PERSON (INCLUDING ANOTHER MEMBER), OTHER THAN THE MEMBER
THAT DESIGNATED SUCH REPRESENTATIVE, THAT ARISE OUT OF, RELATE TO OR
ARE OTHERWISE ATTRIBUTABLE TO, DIRECTLY OF INDIRECTLY, SUCH PERSON'S
SERVICE ON THE MANAGEMENT COMMITTEE.
(iv) Remuneration; Expenses. No fee or other remuneration
shall be payable by the Company to any Representative for his or her
services as a
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Representative. Each Member shall bear all expenses incurred by its
appointed Representatives in connection with attendance at
Management Committee meetings, including, without limitation,
transportation and lodging.
(v) Attendance. Each Member shall use all reasonable
efforts to cause each of its Representatives to attend each meeting
(including the means set forth in Section 6.2.8) of the Management
Committee or appoint a proxy for such meetings.
6.2.2 Chairman. The Management Committee shall have a Chairman,
who shall serve for a one-year term. Prior to Unification, one
Representative representing Bekaert shall serve as Chairman. After
Unification, the Chairman shall be elected by the Management
Committee. Except as otherwise authorized by the Certificate, the
duties of the Chairman shall be as set forth on Exhibit 6.3.
6.2.3 Time and Place of Meetings. The Management Committee shall
meet quarterly, subject to more or less frequent meetings upon
approval of a majority of the Representatives on the Management
Committee. Notice of all such Management Committee meetings shall be
provided by the Chairman to all Members at least ten (10) days prior
to the date of the meeting, together with the proposed minutes of
the previous Management Committee meeting (if such minutes have not
been previously ratified). Special meetings of the Management
Committee may be called at such times, and in such manner, as any
Member deems necessary. Any Member calling for any such special
meeting shall notify the Chairman, who in turn shall notify all of
the Members of the date and agenda for such meeting at least twenty
(20) days prior to the date of the meeting. The notice periods for
meetings (including special meetings) may be shortened by the
Management Committee; provided, however, that in the event of an
emergency or other circumstance reasonably requiring a meeting on
less than five (5) business days' notice, the Chairman shall provide
each Member with as much notice as practical prior to such meeting.
All meetings of the Management Committee shall be held at a location
designated by the Chairman. Attendance of a Member at a meeting of
the Management Committee shall constitute a waiver of notice of such
meeting, except where such Member attends the 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.
6.2.4 Quorum. Until January 1, 2010, in order for there to be a
quorum for the transaction of any business at a meeting of the
Management Committee there must be at least two (2) Representatives
of each Member present. On and after January 1, 2010, in order for
there to be a quorum for the transaction of any business at a
meeting of the Management Committee there must be at least two
Representatives present. If at any meeting a quorum is not present
at the commencement of business, the meeting shall stand adjourned
until such time as a quorum is present, no later than the thirtieth
(30th) business day thereafter, on which day the meeting shall
reconvene at the same time and place with the same agenda.
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6.2.5 Voting. Until January 1, 2010, any action of the Company
shall be deemed approved if it is unanimously approved by the
Management Committee, and otherwise shall be deemed not to be
approved and will not be undertaken. On and after January 1, 2010,
any action of the Company shall be deemed approved if a majority of
the Representatives voting on such matter vote in favor of such
action, except with respect to any Material Action (as defined in
Exhibit 6.2.5 hereto or as specifically provided for in Section 4.9
of this Agreement) taken by the Management Committee, the unanimous
approval of the Representatives voting on such matter shall be
required; provided, however, that any matter considered a Material
Action under this Section 6.2.5 shall be considered a general action
governed by the approval of a majority of the Representatives if a
Member's Percentage Interest in the Company is less than
thirty-three percent (33%), but, however, if such Member's
Percentage Interest in the Company is less than thirty-three percent
(33%) but greater than nineteen percent (19%) the matters identified
as (b)(ii) and (b)(vi)(excluding issuance of debt securities) of
Exhibit 6.2.5 shall still be considered a Material Action under this
Section 6.2.5.
6.2.6 Deadlock of the Management Committee. If the Management
Committee is unable to act upon any proposal submitted to it for
action at a meeting of the Management Committee, because of lack of
quorum or the required vote (as provided in this Agreement), and
either Member gives notice in writing to the other Member and to the
Company of its decision to cause the commencement of the procedure
set forth below, the Management Committee will be deemed to be in
"Deadlock." The Company shall continue to operate during any period
of Deadlock of the Management Committee, and in no event shall the
Deadlock interfere with the rights of the Representatives and
Officers of the Company to operate the Company. Deadlock shall be
resolved in the following manner:
(a) Upon the occurrence of Deadlock, each Member shall
designate one (1) of its Representatives on the Management
Committee (the "Designated Representative") to meet and
discuss the Deadlock in good faith. The Designated
Representatives shall have thirty (30) days from the
occurrence of Deadlock to reach resolution of the proposal
in Deadlock.
(b) If the Designated Representatives are unable to resolve
the Deadlock within the thirty (30) day period referred to
in subsection (a) above, then each Member shall cause the
Deadlock to be referred to a director or senior officer of
such Member not involved in the business of the Company
("Disinterested Officer") to meet and discuss the Deadlock
in good faith. The Disinterested Officers shall have
thirty (30) days from the end of the period referred to in
subsection (a) above to reach resolution of the proposal
in Deadlock.
(c) If the Disinterested Officers are unable to resolve the
Deadlock within the thirty (30) day period referred to in
subsection (b) above, either Member may elect to submit the
Deadlock proposal for settlement by mediation ("Demanding
Member"). The demand for mediation must be submitted by
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the Demanding Member within thirty (30) days of the end of
the period referred to in subsection (b) above (the
"Demand"). The Members may mutually agree upon a mediator
(who must be experienced in the area of the proposal that
is in Deadlock) and the rules which will apply to the
mediation. If the Members are unable to agree upon a
mediator or the rules to apply to the mediation, then the
parties will use the then current applicable mediation
rules of the CPR Institute for Dispute Resolution to
choose the mediator or set rules of the mediation. Any and
all necessary relevant mediation will be held in Chicago,
Illinois. The Demand will identify the proposal that is
in Deadlock and will state the issue proposed to be
resolved in mediation and the resolution sought. If after
five (5) days of mediation the Deadlock is not resolved,
or if the mediator declares an impasse prior to the end of
the five (5) day period, then if the Members do not
mutually agree to continue mediation, mediation shall
terminate. The resolution of the Deadlock by mediation
shall not be binding on either Member unless the Members
mutually agree to accept the resolution of the Deadlock
achieved through the mediation.
(d) If the Deadlock is not resolved through mediation as set
forth in subsection (c) above, either Member may within
thirty (30) days of the termination of mediation submit the
Deadlock proposal to arbitration in accordance with the
then-current rules of the American Arbitration Association
("AAA"). The arbitration, including the rendering of the
the award, shall take place in Chicago, Illinois. The
governing procedural and substantive law of the arbitration
shall be the internal laws of the State of Delaware,
without regard to conflicts of law principles. The
arbitration shall be conducted by one (1) arbitrator
appointed by the AAA and who shall be experienced in the
area of the proposal that is in Deadlock. Each Member
shall submit to the arbitrator a proposal to resolve the
matter in Deadlock (the "Substantive Proposal"). In
addition to the Substantive Proposal, each Member may
submit to the arbitrator a proposal of an exit method for
such Member if the arbitrator does not find in favor of
that Member's Substantive Proposal (the "Exit Proposal").
With regard to the Substantive Proposals, the arbitrator
shall rule only upon the Substantive Proposals submitted by
the Members, and must choose between the positions taken
on the matter by each Member (as opposed to adopting a
compromise position) and report his conclusion to the
Members as promptly as possible after submission of the
Substantive Proposals. The decision of the arbitrator
as to the Substantive Proposals shall be nonbinding on the
Members. With regard to the Exit Proposals, the arbitrator
may choose either the Exit Proposal submitted by the Member
whose Substantive Proposal is rejected by the arbitrator or
an amended version of such Exit Proposal (such Exit
Proposal, as possibly amended, the "Exit Solution"). In
determining the Exit Solution of a Member the Members agree
that the arbitrator must consider the fair market value of
the Company and the reasonableness of the Member's
Substantive and Exit Proposals. The
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Members further agree that the arbitrator may consider the
respective financial condition of the Members in
determining whether the consideration for the sale of such
Member's Membership Interest shall be paid in cash and/or
in kind, and whether such payment shall be effected at the
closing of the sale and/or shall be deferred. The
arbitrator shall report his decision regarding the Exit
Solution at the same time as he reports his conclusion
regarding the Substantive Proposals. Within thirty (30)
days of the date of written notice from the arbitrator
to the Members and to the Company, the Member whose
Substantive Proposal was rejected by the arbitrator must
elect to accept the Exit Solution. If such Member does not
accept the Exit Solution such Member will remain a member
of the Company. The decision of the arbitrator as to the
Exit Solution shall be final and binding on both Members if
the Member whose Substantive Proposal is rejected chooses
to accept the Exit Solution.
6.2.7 Action by Written Consent. Any action required or permitted
to be taken at a meeting of the Management Committee may be taken
without a meeting, without prior notice, and without a vote if a
consent or consents in writing, setting forth the action so taken,
is signed by the Representatives that could have taken the action
at a meeting of the Management Committee at which all of the
Representatives entitled to vote on the action were represented
and voted.
6.2.8 Meeting by Telephone. The Representatives may participate
in and hold such meeting by means of conference telephone, video
conference or similar communications equipment by means of which
all persons participating in the meeting can hear each other.
Participation in such a meeting shall constitute presence in person
at such meeting, except where a Representative participates in the
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.
6.2.9 Advisors. The Representatives may be accompanied by a
reasonable number of advisors, who may participate in the meetings,
but who shall not vote.
6.2.10 Proxy. Any Representative may, by instrument in writing
signed by such Representative, which may be by letter, or telefax,
appoint a person, who may or may not be a Representative, to act as
his proxy at any meeting or for any stated duration of time. Any
person so appointed shall, for the duration of his appointment,
unless otherwise provided in such proxy, have all the rights of the
appointer (including the right to one vote) and shall be counted in
determining whether a quorum has been constituted.
6.3 Officers. The individuals holding the offices of Chairman, Chief
Executive Officer and President of the Company shall be as set forth in Exhibit
6.3. The Management Committee may also appoint any other officers that the
Management Committee deems necessary to carry on the day-to-day operations of
the Company. All such officers shall be appointed by and serve at the
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pleasure of the Management Committee and shall have only such authority,
responsibility and duties as expressly conferred by the Management Committee
and as described in Exhibit 6.3.
6.4 Operations Committee; Subcommittees.
-----------------------------------
6.4.1 Operations Committee. The Management Committee shall
appoint an Operations Committee consisting of officers of the
Company (the "Operations Committee"). The Operations Committee
shall be responsible for the conduct of the day-to-day business
of the Company, together with such other duties as the Management
Committee may determine. Prior to Unification, one-half of the
members of the Operations Committee shall be appointed by United
Solar and one-half by Bekaert. After Unification, the members of
the Operations Committee shall be appointed in proportion to the
Member's Percentage Interest.
6.4.2 Subcommittees. The Management Committee may create such
subcommittees, delegate to such subcommittees such authority and
responsibility, and rescind any such delegations, as it may deem
appropriate.
ARTICLE VII
ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS
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7.1 Allocations of Net Profit and Net Loss.
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7.1.1 Net Loss. After giving effect to the Special Allocations set
forth in Section 7.2, Net Loss shall be allocated to the Members in
proportion to their Percentage Interests.
7.1.2 Net Profit. After giving effect to the Special Allocations
set forth in Section 7.2, Net Profit shall be allocated to the
Members in proportion to their Percentage Interests.
7.2 Special Tax Allocations
-----------------------
7.2.1 Qualified Income Offset. In the event any Member
unexpectedly receives any adjustments, allocations, or distributions
described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or
(6), 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 7.2.1 shall be made if and
only to the extent that such Member would have an Adjusted Capital
Account Deficit after all other allocations provided for in this
Article VII have been tentatively made as if this Section 7.2.1
were not in the Agreement.
7.2.2 Gross Income Allocation. In the event any Member has a
deficit Capital Account at the end of any Company fiscal year that
is in excess of the sum of (i) the amount such Member is obligated
to restore, and (ii) the amount such Member is deemed to be
obligated to restore pursuant to the next to last sentences of
Regulations Sections 1.704-
12
2(g)(1) and 1.704-2(i)(5), 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 7.2.2 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 VII
have been tentatively made as if Section 7.2.1 and this Section
7.2.2 were not in the Agreement.
7.2.3 Company Minimum Gain Chargeback. Except as otherwise
provided in Section 1.704-2(f) of the Regulations, and
notwithstanding any other provision of this Section 7.2, if there
is a net decrease in Company Minimum Gain during any fiscal year,
each Member shall be specially allocated items of Company income
and gain for such fiscal year (and, if necessary, subsequent fiscal
years) in an amount equal to such Member's share of the net decrease
in Company Minimum Gain, determined in accordance with Regulations
Section 1.704-2(g). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to
be allocated to each Member pursuant thereto. The items to be so
allocated shall be determined in accordance with Sections 1.704-2(f)
(6) and 1.704-2(j)(2) of the Regulations. This Section 7.2.3 is
intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(f) of the Regulations and shall be interpreted
consistently therewith.
7.2.4 Member Minimum Gain Chargeback. Except as otherwise
provided in Section 1.704-2(i)(4) of the Regulations, and
notwithstanding any other provision of this Section 7.2, if there
is a net decrease in Member Minimum Gain attributable to a Member
Nonrecourse Debt during any fiscal year, each Member who has a
share of the Member Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Section 1.704-2(i)
(5) of the Regulations, shall be specially allocated items of
Company income and gain for such fiscal year (and, if necessary,
subsequent fiscal years) in an amount equal to such Member's share
of the net decrease in Member Minimum Gain attributable to such
Member Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(4). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be
allocated to each Member pursuant thereto. The items to be so
allocated shall be determined in accordance with Sections 1.704-2(i)
(4) and 1.704-2(j)(2) of the Regulations. This Section 7.2.4 is
intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(i)(4) of the Regulations and shall be interpreted
consistently therewith.
7.2.5 Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year shall be specially allocated among the Members in
proportion to their Percentage Interests.
7.2.6 Member Nonrecourse Deductions. Any Member Nonrecourse
Deductions for any fiscal 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.
13
7.2.7 Code Section 754 Adjustment. 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, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the
adjustment increased the basis of the asset) or loss (if the
adjustment decreases such basis) and such gain or loss shall be
specially allocated to the Members in a manner consistent with the
manner in which their Capital Accounts are required to be adjusted
pursuant to such section of the Regulations.
7.2.8 Curative Allocations. The "Regulatory Allocations" consist
of the allocations pursuant to Sections 7.2.1 through 7.2.6 hereof.
Notwithstanding any other provision of this Agreement, the
Regulatory Allocations shall be taken into account in allocating
items of income, gain loss and deduction among the Members so that,
to the extent possible, the net amount of such allocations of other
items and the Regulatory Allocations to the Members shall be equal
to the net amount that would have been allocated to the Members if
the Regulatory Allocations had not occurred.
7.3 Tax Allocations: Code Section 704(c).
-------------------------------------
7.3.1 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 the Company shall, solely for
tax purposes, be allocated among the Members so as to take account
of any difference (the "Section 704(c) Amount") between the adjusted
basis of such property to the Company for federal income tax
purposes and its initial Gross Asset Value. Schedule 7.3.1 attached
to this Agreement sets forth the Section 704(c) Amount with respect
to the United Solar Contributed Assets as of the date of their
contribution to the Company by the Members.
7.3.2 In the event the Gross Asset Value of any Company asset is
adjusted pursuant to Member Nonrecourse Debt hereof, 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.
7.3.3 The Company shall elect the traditional method as set forth
in Regulations Section 1.704-3(b) for purposes of making allocations
under Code Section 704(c).
7.3.4 Any other elections or other decisions relating to such
allocations shall be made by the Management Committee in any manner
that reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section 7.3 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 Member's
Capital Account or share of Net Profits, Net Losses, other items,
or distributions pursuant to any provision of this Agreement.
14
7.4 Net Profits and Losses and Distributions in Respect of a Transferred
Interest. If any Economic Interest is transferred, or is increased or decreased
by reason of the admission of a new Member or otherwise, during any Fiscal Year
of the Company, Net Profit or Net Loss for such Fiscal Year shall be assigned
pro rata to each day in the particular period of such Fiscal Year to which such
item is attributable (i.e., the day on or during which it is accrued or
otherwise incurred) and the amount of each such item so assigned to any such
day shall be allocated to the Member or Assignee based upon his or her
respective Economic Interest at the close of such day.
7.5 Distribution of Assets by the Company. Subject to applicable law and
any limitations contained elsewhere in this Agreement, the Management Committee
may elect from time to time to distribute Distributable Cash to the Members
(provided, however, except for the tax distributions described below, that no
distributions will be made prior to Unification), which distributions shall be
in the following order of priority:
(a) To the Members in proportion to their unreturned Capital
Contributions until each Member has recovered his or her Capital
Contributions; and
(b) To the Members in proportion to their Percentage Interests.
Notwithstanding any other provision of this Agreement to the
contrary, the Company shall make pro-rata distributions to the Members for the
payment of taxes in accordance with the following:
(y) the amount distributable with respect to any year shall be equal to
the aggregate amount of Federal, state and local income taxes payable by
the Members with respect to the income items of the Company allocated to
the Members, assuming, for purposes of determining the amount of such
distribution, that each Member will be taxed on the amounts set forth in
its respective K-1 at the highest marginal Federal income tax rate
applicable to corporations in effect for each taxable year, and at the
highest marginal corporate state and local franchise/income tax rates
applicable to any Member for each such taxable year; and
(z) such distributions shall be payable at such time or times and
in such amounts as will enable the Members, or any one of them, to avoid
penalties and interest otherwise payable on account of the failure to
pay a sufficient amount of estimated taxes as required by law.
All such distributions shall be made only to the Persons who, according to the
books and records of the Company, are the holders of record of the Economic
Interests in respect of which such distributions are made on the actual date of
distribution. Neither the Company nor any Representative shall incur any
liability for making distributions in accordance with this Section 7.5.
7.6 Form of Distribution. A Member, regardless of the nature of the
Member's Capital Contribution, has no right to demand and receive any
distribution from the Company in any form
15
other than money. No Member may be compelled to accept from the Company a
distribution of any asset in kind in lieu of a proportionate distribution of
money being made to other Members. Except upon a dissolution and winding up of
the Company, no Member may be compelled to accept a distribution of any asset
in kind.
7.7 Restriction on Distributions
----------------------------
7.7.1 No distribution shall be made if, after giving effect to
the distribution:
(a) The Company would not be able to pay its debts as they
become due in the usual course of business; or
(b) The Company's total assets would be less than the sum
of its total liabilities plus, unless this Agreement
provides otherwise, the amount that would be needed, if
the Company were to be dissolved at the time of the
distribution, to satisfy the preferential rights of other
Members, if any, upon dissolution that are superior to the
rights of the Member receiving the distribution.
7.7.2 The Management Committee may base a determination that a
distribution is not prohibited on any of the following:
(a) Financial statements prepared in accordance with United
States generally accepted accounting principles;
(b) A fair valuation;
(c) Any other method that is reasonable in the circumstances.
Except as provided in Section 18-607(b) of the Act, the effect of a
distribution is measured as of the date the distribution is
authorized if the payment occurs within one hundred twenty (120)
days after the date of authorization, or the date payment is made
if it occurs more than one hundred twenty (120) days after the date
of authorization.
7.7.3 A Member or Representative who votes for a distribution in
violation of this Agreement or the Act is personally liable to the
Company for the amount of the distribution that exceeds what could
have been distributed without violating this Agreement or the Act
if it is established that the Member or Representative did not act
in compliance with Section 7.7.2. Any Member or Representative who
is so liable shall be entitled to compel contribution from (i) each
other Member or Representative who also is so liable and (ii) each
Member for the amount the Member received with knowledge of facts
indicating that the distribution was made in violation of this
Agreement or the Act.
7.8 Return of Distributions. Members and Assignees who receive
distributions made in violation of the Act or this Agreement shall return such
distributions to the Company. Except for
16
those distributions made in violation of the Act or this Agreement, no Member
or Assignee shall be obligated to return any distribution to the Company or pay
the amount of any distribution for the account of the Company or to any creditor
of the Company. The amount of any distribution returned to the Company by a
Member or Assignee or paid by a Member or Assignee for the account of the
Company or to a creditor of the Company shall be added to the account or
accounts from which it was subtracted when it was distributed to the Member or
Assignee.
7.9 Obligations of Members to Report Allocations. The Members are aware
of the income tax consequences of the allocations made by this Article VII and
hereby agree to be bound by the provisions of this Article VII in reporting
their shares of Company income and loss for income tax purposes.
ARTICLE VIII
TRANSFER AND ASSIGNMENT OF MEMBERSHIP INTERESTS
-----------------------------------------------
8.1 Transfer and Assignment of Membership Interests. Except with the
prior written consent of the other Member, which consent may be given or
withheld, conditioned or delayed (as allowed by this Agreement or the Act), as
the other Member may determine in its sole and absolute discretion, or as
provided in Section 8.3 or Section 8.5, no Member shall be entitled to transfer,
assign, convey, sell, encumber or in any way alienate all or any part of its
Membership Interest (collectively, "transfer"). After the consummation of any
transfer of a Membership Interest, the Membership Interest so transferred shall
continue to be subject to the terms and provisions of this Agreement and any
further transfers shall be required to comply with all the terms and provisions
of this Agreement. No Member may transfer less than all of its Membership
Interest or Economic Interest.
8.2 Further Restrictions on Transfer of Interests. In addition to other
restrictions found in this Agreement, no Member shall transfer its Membership
Interest (i) without compliance with all federal and state securities laws; (ii)
if such transfer would cause an acceleration of or be deemed a default under any
financing obligation of the Company; or (iii) except as provided in Section 8.3,
if the Membership Interest to be transferred, when added to the total of all
other Membership Interests transferred in the preceding twelve (12) consecutive
months prior thereto, would cause the termination of the Company under the Code,
as determined by the Management Committee.
8.3 Permitted Transfers. A Member or its Affiliate may transfer all,
but not less than all, of its Membership Interest or Economic Interest to its
Affiliate, subject to compliance with Section 8.2(ii), without the prior written
consent of the Members or the Management Committee; provided, however, the
transferee of such Membership Interest shall (i) become a Member under this
Agreement, (ii) assume all rights and obligations of the transferring Member,
(iii) execute an instrument satisfactory to the Management Committee accepting
and adopting the terms and provisions of this Agreement, and (iv) pay any
reasonable expenses in connection with its admission as a new Member. If after
a transfer to an Affiliate pursuant to this Section 8.3, an Affiliate will no
longer be an Affiliate of the original Member, such Affiliate must sell, assign
and transfer all the Membership Interest back to the original Member and the
original Member must purchase and accept such Membership Interest at least
fifteen (15) days prior to its change in Affiliate status.
17
8.4 No Effect to Transfers in Violation of Agreement. No purported
transfer of Membership Interest in violation of the provisions of this Agreement
shall be valid and the Company shall not transfer any of such Membership
Interest on its books, nor shall the purported transferee of such Membership
Interest be entitled to vote, nor shall any distributions be paid thereon,
during the period of any such violation. The provisions of this Section 8.4
shall be in addition to and not in lieu of any other remedies, legal or
equitable, available to enforce this Agreement. Except as set forth in Section
8.3, each Member hereby undertakes not to make any transfer of its Membership
Interest (i) unless the Company has received an opinion of counsel in form and
substance satisfactory to the Company, to the effect that such transfer will not
be in violation of the Securities Act, and any applicable state securities laws
and (ii) except to a person who has executed a counterpart hereof.
8.5 Right of First Refusal. Except as provided in Section 8.3 with
respect to permitted transfers to an Affiliate, neither Member may transfer its
Membership Interest without the prior written consent of the other Member, which
consent may be given or withheld, conditioned or delayed (as allowed by this
Agreement or the Act) as such other Member may determine in its sole and
absolute discretion. From and after two (2) years from the effective date of
this Agreement, a Member may transfer its Membership Interest provided that each
time a Member proposes to transfer its Membership Interest (or is required by
operation of law or other involuntary transfer to do so) other than pursuant to
Section 8.3, such Member shall first offer such Membership Interest to the
non-transferring Member, and then to the Company, in accordance with the
following provisions:
8.5.1 Such Member shall deliver a written notice to the other
Member and the Company stating (i) such Member's bona fide intention
to transfer its Membership Interest, (ii) the name and address of
the proposed transferee, and (iii) the purchase price and terms of
payment for which the Member proposes to transfer its Membership
Interest.
8.5.2 The non-transferring Member shall have the first right to
purchase such Membership Interest upon the price and terms of
payment designated in the notice provided in Section 8.5.1, by
notifying the transferring Member and the Company in writing, within
thirty (30) days after receipt of the notice provided in Section
8.5.1, of its desire to purchase such Membership Interest. Upon
receipt of such written notice, the transferring Member shall sell
its Membership Interest to the other Member upon such price and
terms. If the notice provided in Section 8.5.1 provides for the
payment of non-cash consideration, the non-transferring Member may
elect to pay the consideration in cash equal to the fair market
value of the non-cash consideration offered, as determined in
accordance with Section 9.3.
8.5.3 The failure of the non-transferring Member to submit a
notice within the period set forth in Section 8.5.2 shall constitute
an election on the part of the non-transferring Member not to
purchase such Membership Interest, in which case, the Management
Committee shall make the determination, within sixty (60) days of
the notice provided in Section 8.5.1, whether the Company will
purchase such Membership Interest, by notice in writing to the
transferring Member; provided, however the Representatives of the
transferring Member shall not participate in or have a vote in the
decision of the Management Committee to purchase such Membership
Interest, and the decision of the Representatives of
18
the non-transferring Member shall be deemed the decision of the
Management Committee with respect to such purchase. The Management
Committee shall notify the transferring Member of its intention to
so purchase, and the transferring Member shall sell its Membership
Interest to the Company upon the price and terms of payment
designated in the notice provided in Section 8.5.1. If the notice
provided in Section 8.5.1 provides for the payment of non-cash
consideration, the Company may elect to pay the consideration in
cash equal to the fair market value of the non-cash consideration
offered, as determined in accordance with Section 9.3.
8.5.4 If neither the non-transferring Member nor the Company
elects to purchase the transferring Member's Membership Interest,
then the transferring Member may transfer its Membership Interest
to the proposed transferee, provided such transfer (a) is completed
within thirty (30) days after the expiration of the non-transferring
Member's or the Company's right to purchase such Membership
Interest, as the case may be, (b) is made on terms no less favorable
to the transferring Member than as designated in the notice, and
(c) complies with the requirements of Section 8.2. If such
Membership Interest is transferred, the transferee of such
Membership Interest shall (i) become a Member under this Agreement,
(ii) assume all rights and obligations of the transferring Member,
(iii) execute an instrument satisfactory to the Management Committee
accepting and adopting the terms and provisions of this Agreement,
and (iv) pay any reasonable expenses in connection with its
admission as a new Member. If such Membership Interest is not so
transferred, the transferring Member must give notice in accordance
with this Section prior to any other or subsequent transfer of such
Membership Interest.
ARTICLE IX
BUY OUT OPTION
--------------
9.1 Buyout Events. This Article 9 shall apply to any of the following
events (each a "Buyout Event"):
(a) a Member shall dissolve or (i) makes a general assignment for
the benefit of creditors; (ii) files a voluntary bankruptcy petition;
(iii) becomes the subject of an order for relief or is declared
insolvent in any federal or state bankruptcy or insolvency proceedings;
(iv) files a petition or answer seeking for such Member a
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any law; (v) files an answer or
other pleading admitting or failing to contest the material allegations
of a petition filed against such person in a proceeding of the type
described in subclauses (i) through (iv) of this clause (a); or (vi)
seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator of such Member or of all or any substantial part
of such Member's properties;
(b) there shall occur a Change In Control; or
(c) a Member shall commit a Buyout Default.
19
It is understood and agreed by the Members that the application of the
provisions of this Article IX in the event of a Buyout Event shall be in
addition to, and not in lieu of, any other remedies (whether at law or in
equity) which a Member may have against the other Member (or a party related to
such Member) upon the occurrence of a Buyout Event. In each case, the Member
with respect to whom a Buyout Event has occurred is referred to herein as the
"Affected Member."
9.2 Procedure. Following the occurrence of a Buyout Event, the Affected
Member shall promptly give notice thereof to the Company and the other Member
(the "Purchasing Member"). The Affected Member shall have sixty (60) days from
the date of the occurrence of the Buyout Event to cure such Buyout Event (the
"Cure Period"). If the Affected Member has not cured the Buyout Event within the
Cure Period, the Purchasing Member shall have the option to acquire the
Membership Interest of the Affected Member by notifying the Affected Member and
the Company in writing, within thirty (30) days after the Cure Period of the
Buyout Event of its desire to purchase the Affected Member's Membership Interest
(either from the Affected Member or otherwise).
9.3 Purchase Price. The purchase price for a Membership Interest being
purchased pursuant to Section 9.2 (the "Purchase Price") shall be determined in
the following manner. The Affected Member and the Purchasing Member shall
attempt to agree upon the fair market value of the applicable Membership
Interest. If those Members do not reach such agreement on or before the
thirtieth (30th) day following the exercise of the option, any such Member, by
notice to the others, may require the determination of fair market value (such
fair market value shall be measured at the time the Buyout Event occurred) to be
made by the Arbitrator pursuant to Article 1 of Appendix C. Following the
determination of fair market value by agreement or arbitration (the "Fair Market
Value"), the Purchase Price shall be determined and paid in accordance with the
following chart and procedures:
Buyout Closing Interest Payment
Event Percent Rate Term Frequency
------------------- ------- ----------- ------- ---------
Set forth in 9.1(a) 20% Buyout Rate 4 years quarterly
Set forth in 9.1(b) 20% Buyout Rate 4 years quarterly
Set forth in 9.1(c) 20% Buyout Rate 4 years quarterly
The following provisions shall apply to the determination and payment of the
Purchase Price:
(a) the Purchase Price shall be the Fair Market Value less the
amount of all monetary damages suffered by the Company and the
Purchasing Member as a result of such Buyout Event;
(b) at the closing of the purchase of the Affected Member's
Membership Interest (the "Buyout Closing"), the Purchasing Member shall
pay the Affected Member a portion of the Purchase Price equal to the
Purchase Price multiplied by the percentage shown for such Buyout Event
in the "Closing Percent" column;
(c) if the applicable Closing Percent is less than 100%, then the
remainder of the Purchase Price (the "Deferred Amount"), shall accrue
interest from the date of the Buyout
20
Closing at the rate per annum shown for such Buyout Event in the
"Interest Rate" column (not to exceed the maximum rate permitted by
Law); and
(d) the Deferred Amount, together with accrued interest (at the
interest rate shown for such Buyout Event in the "Interest Rate" column)
thereon, shall be paid by the Purchasing Member in equal cash
installments over a four (4) year term in quarterly payments, with the
amount of the cash installments being calculated to amortize fully the
Deferred Amount (and accrued interest thereon) over the applicable term.
The installments shall be paid on the first day of January, April, July
and October during the four year term, with appropriate adjustments to
the first or last payments to reflect a closing that does not occur on
the first day of a quarter. The payment to be made to the Affected
Member pursuant to this Section shall be in complete liquidation and
satisfaction of all the rights and interest of the Affected Member in
and in respect of the Company, including any Membership Interest, any
rights in specific Company property, and any rights against the Company
and (insofar as the affairs of the Company are concerned) against the
Purchasing Member, and constitutes a compromise to which all Members
have agreed pursuant to Section 18-502(b) of the Act.
9.4 Buyout Closing. If an option to purchase is exercised in accordance
with Section 9.2, the Buyout Closing shall occur on the thirtieth (30th) day
after the determination of the Fair Market Value pursuant to Section 9.3 (or, if
later, the fifth business day after the receipt of all applicable consents and
approvals of all Governmental Authorities to the purchase); provided, however,
that the Purchasing Member shall deliver to the Affected Member (a) the portion
of the Purchase Price required by Section 9.3 to be paid at the closing, in
immediately available funds, and (b) one or more unsecured promissory notes
reflecting the payment terms established in Section 9.3 for the Deferred Amount.
9.5 Terminated Member. Upon the occurrence of a closing under Section
9.4, the following provisions shall apply to the Affected Member (now a
"Terminated Member"):
(a) The Terminated Member ceases to be a Member immediately upon the
occurrence of the closing.
(b) As the Terminated Member is no longer a Member, it will no
longer be entitled to receive any distributions (including liquidating
distributions) or allocations from the Company, and neither it nor its
Representatives shall be entitled to exercise any voting or consent
rights or to receive any further information (or access to information)
from the Company.
(c) The Terminated Member must pay in full to the Company all
amounts owed to the Company by such Member.
(d) The Terminated Member shall remain obligated for all liabilities it
may have under this Agreement or otherwise with respect to the Company
that accrue prior to the closing.
21
(e) The Percentage Interest of the Terminated Member shall be allocated
to the Purchasing Member.
ARTICLE X
DISSOLUTION, WINDING-UP AND TERMINATION
---------------------------------------
10.1 Dissolution
-----------
10.1.1 Subject to Section 10.1.2, the Company shall dissolve and
its affairs shall be wound up on the first to occur of the following
events (each a "Dissolution Event"):
(a) the unanimous consent of the Members;
(b) the dissolution or Bankruptcy of a Member; or
(c) the entry of a decree of judicial dissolution of the Company
under Section 18-802 of the Act; or
(d) dissolution under Section 11.1(b)(iii) of the Foundation
Agreement.
10.1.2 If a Dissolution Event described in Section 10.1.1(b)
shall occur, the Company shall not be dissolved, and the business
of the Company shall be continued if the remaining Member elects
within ninety (90) days of the occurrence of such Dissolution Event
to continue (such agreement is referred to herein as a "Continuation
Election").
10.2 Winding-Up and Termination.
--------------------------
10.2.1 Liquidation. On the occurrence of a Dissolution Event,
unless a Continuation Election is made, the Management Committee
shall act as liquidator; provided, however, that if a Dissolution
Event described in Section 10.1.1(b) has occurred to a Member, then
the liquidator shall be selected by the majority of the Members
that have not suffered a Dissolution Event. The liquidator may sell
any or all Company property and shall proceed diligently to wind up
the affairs of the Company and make final distributions as provided
herein and in the Act. The costs of winding up shall be borne as a
Company expense. Until final distribution, the liquidator shall
continue to operate the Company properties with all of the power
and authority of the Members. The steps to be accomplished by the
liquidator are as follows:
(a) as promptly as possible after dissolution and again
after final winding-up, the liquidator shall cause a proper
accounting to be made by a recognized firm of certified public
accountants of the Company's assets, liabilities and operations
through the last calendar day of the month in which the
dissolution occurs or the final winding-up is completed, as
applicable;
22
(b) the liquidator shall pay, satisfy or discharge from
Company funds all of the debts, liabilities and obligations of
the Company or otherwise make adequate provision for payment and
discharge thereof (including the establishment of a cash escrow
fund for contingent liabilities in such amount and for such term
as the liquidator may reasonably determine); and
(c) all remaining assets of the Company shall be distributed
to the Members, in accordance with their positive Capital Account
balances; provided, however, the Capital Accounts of the Members
shall first be adjusted to reflect the manner in which any
unrealized income, gain, loss and deduction inherent in the
Company's property, which has not previously been reflected in
the Members' Capital Accounts, would be allocated among the
Members if there were a taxable disposition of such property at
fair market value on the date of distribution.
10.2.2 Complete Distribution. The distribution of cash or property
to a Member in accordance with the provisions of this Section 10.2
constitutes a complete return to the Member of its Capital
Contributions and a complete distribution to the Member of its
Membership Interest and all the Company's property and constitutes a
compromise to which all Members have consented pursuant to Section
18-502(b) of the Act. To the extent that a Member returns funds to
the Company, it has no claim against any other Member for those
funds.
10.3 Deficit Capital Accounts. No Member will be required to pay to the
Company, to any other Member or to any third party any deficit balance that may
exist from time to time in the Member's Capital Account.
10.4 Certificate of Cancellation. On completion of the distribution of
Company assets as provided herein, the Members (or such other Person or Persons
as the Act may require or permit) shall file a certificate of cancellation with
the Secretary of State of Delaware, cancel any other filings made pursuant to
Section 2.7, and take such other actions as may be necessary to terminate the
existence of the Company. Upon the filing of such certificate of cancellation,
the existence of the Company shall terminate (and the Term shall end), except as
may be otherwise provided by the Act or other applicable Law.
ARTICLE XI
ACCOUNTING, RECORDS, REPORTING BY MEMBERS
-----------------------------------------
11.1 Maintenance of Books.
--------------------
11.1.1 The Company shall maintain at its principal office or at
such other location approved by the Management Committee complete and
accurate books and records of the Company, supporting documentation of
the transactions with respect to the conduct of the Company's business
and minutes of the proceedings of its Members and the Management
Committee, and any other books and records that are required to be
maintained by applicable Law.
23
11.1.2 The books of account of the Company shall be (a)
maintained on the basis of a fiscal year that is the calendar year; (b)
maintained on an accrual basis in accordance with US generally accepted
accounting principles, consistently applied, and (c) audited by the
accountants (selected in accordance with Section 4.7) at the end of each
calendar year, taking into account the financial reporting deadlines of
each of the Members.
11.1.3 In addition, the Company shall keep books and accounts in
accordance with the accounting principles applied by Bekaert if and to
the extent that Bekaert's accounting principles deviate materially from
the above mentioned accounting principles.
11.2 Delivery to Members and Inspection.
----------------------------------
11.2.1 Upon the request of any Member or Assignee for purposes
reasonably related to the interest of that Person as a Member or
Assignee, the Representatives shall promptly deliver to the requesting
Member or Assignee, at the expense of the Company, a copy of the
information required to be maintained under Section 11.1, and a copy of
this Agreement.
11.2.2 Each Member, Representative and Assignee has the right,
upon reasonable request for purposes reasonably related to the interest
of the Person as Member, Representative or Assignee, to:
(a) inspect and copy during normal business hours any of the
Company records described in Sections 11.1; and
(b) obtain from the Representatives, promptly after their
becoming available, a copy of the Company's federal, state, and
local income tax or information returns for each Fiscal Year.
11.2.3 The Management Committee shall promptly furnish to a
Member a copy of any amendment to the Certificate or this Agreement
executed by a Representative pursuant to a power of attorney from the
Member.
11.3 Tax Returns. The Management Committee, at Company expense, shall
cause the income tax returns for the Company to be finally prepared and timely
filed with the appropriate authorities, but in no event later than April 15th of
each year (subject to any extension that may be available to the Company). The
Management Committee, at Company expense, shall also cause to be prepared and
timely filed, with appropriate federal and state regulatory and administrative
bodies, amendments to, or restatements of, the Certificate and all reports
required to be filed by the Company with those entities under the Act or other
then current applicable laws, rules, and regulations. If a Representative
required by the Act to execute or file any document fails, after demand, to do
so within a reasonable period of time or refuses to do so, any other
Representative or Member may prepare, execute and file that document with the
appropriate agency or other authority.
24
11.4 Bank Accounts. The Management Committee shall maintain the funds
of the Company in one or more separate accounts in the name of the Company, and
shall not permit the funds of the Company to be commingled in any fashion with
the funds of any other Person, except as otherwise agreed by the Management
Committee.
11.5 Accounting Decisions and Reliance on Others. All decisions as to
accounting matters, except as otherwise specifically set forth herein, shall be
made by the Management Committee. The Management Committee may rely upon the
advice of its accountants as to whether such decisions are in accordance with
accounting methods followed for United States federal income tax purposes.
11.6 Tax Matters for the Company. The Management Committee shall from
time to time cause the Company to make such tax elections as it deems to be in
the best interests of the Company and the Members. Bekaert shall be designated
as "Tax Matters Member" (as defined in Code Section 6231), to represent the
Company (at the Company's expense) in connection with all examination of the
Company's affairs by tax authorities, including resulting judicial and
administrative proceedings, and to expend the Company funds for professional
services and costs associated therewith. In its capacity as "Tax Matters
Member," the designated Member shall oversee the Company tax affairs in the
overall best interests of the Company.
11.7 Status as Company for Tax Purposes. Any provision hereof to the
contrary notwithstanding, solely for United States federal income tax purposes,
each of the Members hereby confirms that the Company will be subject to all
provisions of Subchapter K of Chapter 1 of Subtitle A of the Code; provided,
however, the filing of U.S. Partnership Returns of Income shall not be construed
to extend the purposes of the Company or expand the obligations or liabilities
of the Members.
ARTICLE XII
INDEMNIFICATION AND INSURANCE
-----------------------------
12.1 Indemnification of Agents. The Company shall indemnify any Person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding by reason of the fact that such
Person is or was a Member, Representative, Officer, employee or other agent of
the Company or that, being or having been such a Member, Representative,
Officer, employee or agent, such Person is or was serving at the request of the
Company as a representative, director, officer, employee or other agent of
another limited liability company, corporation, partnership, joint venture,
trust or other enterprise (all such persons being referred to hereinafter as an
"agent"), to the fullest extent permitted by applicable law in effect on the
date hereof and to such greater extent as applicable law may hereafter from time
to time permit.
12.2 Insurance. The Company shall have the power to purchase and
maintain insurance on behalf of any Person who is or was an agent of the Company
against any liability asserted against such Person and incurred by such Person
in any such capacity, or arising out of such Person's status as an agent,
whether or not the Company would have the power to indemnify such Person against
such liability under the provisions of Section 12.1 or under applicable law.
25
ARTICLE XIII
NONDISCLOSURE
-------------
13.1 Nondisclosure. Except as provided in separate written agreements
between a Member and the Company, each Member agrees that it shall not, during
the time it is a member of the Company and for a period of three (3) years
thereafter, disclose, divulge, discuss, copy or otherwise use or suffer to be
used in any manner, the contents of the Foundation Agreement and the Transaction
Agreements, the customer lists, marketing plans and strategies, pricing and
other methods used by the Company or any subsidiary of the Company in its
business, or trade secrets or proprietary information of the entities, it being
acknowledged by each Member that all such information regarding such businesses
of such entities compiled or obtained by, or furnished to, such Member while it
shall have been a member of the Company is confidential information and the
Company's exclusive property. The foregoing obligations shall not apply to any
date, know-how, or information which (i) is or becomes available from another
source such as, without limitation, a public source, other than as a consequence
of breach of the obligations herein set forth, (ii) has been or is independently
developed by the Member without reliance on the confidential information, or
(iii) is required to be disclosed under Law.
13.2 Modifications; Equitable Relief. Each of the Member's expressly
agrees that if any claim is made that if the covenants set forth in Section 13.1
above is invalid or unenforceable, due to the duration or geographic area
thereof, and/or otherwise, the covenant shall not thereby be rendered invalid or
unenforceable, but it shall instead be modified to the maximum duration, maximum
geographic area, and/or otherwise as a court of competent jurisdiction examining
the covenant shall find to be reasonable and legally enforceable. Each Member
expressly agrees and understands that the remedy at law for any breach by it of
any of the provisions of Section 13.1 will be inadequate and that the damages
flowing from such breach are not readily susceptible to being measured in
monetary terms. Accordingly, it is acknowledged that upon adequate proof of a
parties' violation of any legally enforceable provision of Section 13.1 above,
the Company or either Member shall be entitled to immediate injunctive relief
and may obtain a temporary order restraining any threatened or further breach.
Nothing contained herein shall be deemed to limit the Members' or the Company's
remedies at law or in equity which may be pursued or availed of by them for any
breach by a party of the provisions of Section 13.1.
ARTICLE XIV
OTHER PROVISIONS
----------------
14.1 Other Provisions. The terms of Appendix C and any Addenda are
hereby incorporated herein by reference as if fully rewritten herein.
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26
INTENDING TO BE LEGALLY BOUND, the parties have caused this Agreement
to be executed by their duly authorized officers as of the date first above
written.
UNITED SOLAR: BEKAERT:
UNITED SOLAR SYSTEMS CORP. BEKAERT CORPORATION
By: By:
---------------------------- ---------------------------
Title: ------------------------ Title: -----------------------
By: ---------------------------
Title: -----------------------
Appendix A
Definitions
"AAA" shall mean the American Arbitration Association.
"Act" shall mean the Delaware Revised Limited Liability Company Act, as
the same may be amended from time to time.
"Adjusted Capital Account Deficit" shall mean, with respect to any
Member, the deficit balance, if any, in such Member's Capital Account as of the
end of the relevant fiscal year, after giving effect to the following
adjustments:
(1) credit to such Capital Account any amounts which such Member is
obligated to restore or is deemed to be obligated to restore pursuant
to the next to last sentences of Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5); and
(2) debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit 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.
"Affected Member" shall have the meaning set forth in Section 9.1 of
this Agreement.
"Affiliate" shall mean any individual, partnership, corporation, trust
or other entity or association, directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with the
Member. The term "control," as used in the immediately preceding sentence,
means, with respect to a corporation or limited liability company the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the controlled corporation or limited liability company,
and, with respect to any individual, partnership, trust, other entity or
association, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the controlled entity.
"Agent" shall have the meaning set forth in Section 12.1 of this
Agreement.
"Agreement" shall mean this Limited Liability Company Agreement of
Bekaert ECD Solar Systems LLC, as originally executed and as amended from time
to time.
"Assignee" shall mean the owner of an Economic Interest who is not also
a Member.
"Bankruptcy" shall have the meaning that a Member shall (i) makes a
general assignment for
the benefit of creditors; (ii) files a voluntary bankruptcy petition;
(iii) becomes the subject of an order for relief or is declared insolvent in
any federal or state bankruptcy or insolvency proceedings; (iv) files a
petition or answer seeking for such person or a reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any law; (v) files an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against such person in a
proceeding of the type described in subclauses (I) through (iv) of this clause;
or (vi) seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator of such person or of all or any substantial part of such
person's properties.
"Bekaert" shall mean Bekaert Corporation, a Delaware corporation.
"Business Plan" shall have the meaning set forth in Section 4.1 of this
Agreement.
"Buyout Closing" shall have the meaning set forth in Section 9.3(b) of
this Agreement.
"Buyout Default" shall mean any of the following occurring prior to
Unification unless waived by Bekaert and ECD:
(1) Violation of ECD, United Solar, Bekaert or the Company of the
noncompetition provisions of the Noncompetition Agreement between
ECD, Bekaert and N.V. Bekaert S. A., a Belgian corporation of
even date herewith; or
(2) Violation by United Solar of the exclusivity provision of the
Exclusive Supply Agreement; or
(3) Violation by ECD, United Solar or Bekaert of the exclusivity
provisions in the License Agreements; or
(4) Issuance by United Solar of additional equity securities or
redemption by United Solar of its outstanding equity securities.
"Buyout Event" shall have the meaning set forth in Section 9.1 of this
Agreement
"Buyout Rate" shall mean the LIBOR rate plus two percent (2%).
"Capital Account" shall mean with respect to any Member the capital
account which the Company establishes and maintains for such Member pursuant to
Section 3.4 of this Agreement.
"Capital Contribution" shall mean the total value of cash and fair
market value of property (including promissory notes or other obligation to
contribute cash or property) contributed to the Company by Members.
"Certificate" shall have the meaning set forth in Section 2.1 of this
Agreement.
"Chairman" shall have the meaning set forth in Section 6.2.2 of this
Agreement.
"Change In Control" shall mean the disposition of all or substantially
all of the assets of, the merger or consolidation of, or the sale or exchange of
stock by the Company or its Members that results in a change of at least fifty
percent (50%) of the voting stock of: (i) Bekaert, in the case of Bekaert, or
(ii) ECD, in the case of United Solar, other than to one of its Affiliates.
"Close Corporation Shareholder Agreement" shall mean the Close
Corporation Shareholder Agreement between ECD, United Solar and Bekaert dated of
even date hereof.
"Closing Date" shall mean the Closing Date as defined in the Foundation
Agreement by and among Bekaert, United Solar and Energy Conversion Devices,
Inc., a Delaware corporation, of even date hereof.
"Closing Percent" shall have the meaning set forth in Section 9.3 of
this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, the provisions of succeeding law, and to the extent applicable,
the Regulations.
"Company" shall mean Bekaert ECD Solar Systems LLC, a Delaware limited
liability company.
"Company Minimum Gain" has the meaning set forth in Sections
1.704-2(b)(2) and 1.704-2(d) of the Regulations.
"Continuation Election" shall have the meaning set forth in Section
10.1.2 of this Agreement
"Cure Period" shall have the meaning set forth in Section 9.2 of this
Agreement.
"Deadlock" shall have the meaning set forth in Section 6.2.6 of this
Agreement.
"Deferred Amount" shall have the meaning set forth in Section 9.3(c) of
this Agreement.
"Demand" shall have the meaning set forth in Section 6.2.6(c) of this
Agreement.
"Demanding Member" shall have the meaning set forth in Section 6.2.6(c)
of this Agreement.
"Designated Representative" shall have the meaning set forth in Section
6.2.6(a) of this Agreement.
"Disinterested Officer" shall have the meaning set forth in Section
6.2.6(b) of this Agreement.
"Dissolution Event" shall have the meaning set forth in Section 10.1.1.
"Distributable Cash" shall mean the amount of cash which the Management
Committee deems available for distribution to the Members, taking into account
all Company debts, liabilities, and obligations of the Company then due and
working capital and other amounts which the Management Committee deems necessary
for the Company's business or to place into reserves for customary and usual
claims with respect to such business.
"ECD" shall mean Energy Conversion Devices, Inc., a Delaware corporation.
"Economic Interest" shall mean a Member's or Assignee's share of one or
more of the Company's Net Profits, Net Losses, and distributions of the
Company's assets pursuant to this Agreement and the Act, but shall not include
any other rights of a Member, including, without limitation, the right to vote
or participate in the management, or except as provided in Section 18-305 of the
Act, any right to information concerning the business and affairs of Company.
"Employee Lease Agreements" shall mean the Employee Lease Agreement
between the Company and United Solar and the Employee Lease Agreement between
the Company and Bekaert, both dated of even date hereof.
"Equipment Lease Agreement" shall mean the Equipment Lease Agreement
between the Company and United Solar dated of even date hereof.
"Exclusive Supply Agreement" shall mean the Exclusive Supply Agreement
between United Solar and the Company dated of even date hereof.
"Exit Proposal" shall have the meaning set forth in Section 6.2.6(d) of
this Agreement.
"Exit Solution" shall have the meaning set forth in Section 6.2.6(d) of
this Agreement.
"Fair Market Value" shall have the meaning set forth in Section 9.3 of
this Agreement.
"Fiscal Year" shall mean the Company's fiscal year, which shall be the
calendar year.
"Foundation Agreement" shall have the meaning set forth in Recital A of
this Agreement.
"FujiLease Guarantee" shall have the meaning set forth in Section 4.10
of this Agreement.
"Governmental Authority" shall mean a federal, state, local or foreign
governmental authority; a state, province, commonwealth, territory or district
thereof; a county or parish; a city, town, township, village or other
municipality; a district, ▇▇▇▇ or other subdivision of any of the foregoing; any
executive, legislative or other governing body of any of the foregoing; any
agency, authority, board, department, system, service, office, commission,
committee, council or other administrative body of any of the foregoing; any
court or other judicial body; and any officer, official or other representative
of any of the foregoing.
"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Member
to the Company shall be the gross fair market value of such assets,
as agreed to by the 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: (1) the acquisition of an
additional interest in the Company (other than pursuant to the
original purchase at the time of formation of the Company) by any
new or existing Member in exchange for more than a de minimis Capital
Contribution; (2) the distribution by the Company to a Member of
more than a de minimis amount of Company Property as consideration
for an interest in the Company; and (3) the liquidation of the
Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)
(g): provided, however, that the adjustments pursuant to clauses (1)
and (2) above shall be made only if the Members reasonably determine
that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Members in the Company;
(c) The Gross Asset Value of any Company asset distributed to any
Member shall be the gross fair market value of such asset on the
date of distribution as agreed to by the Members;
(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 Section 7.2.7 of this Agreement; provided,
however, that Gross Asset Values shall not be adjusted pursuant to
this paragraph to the extent the Members determine that an adjustment
pursuant to (b) above is necessary or appropriate in connection with
a transaction that would otherwise result in an adjustment pursuant
to this paragraph (d); and
(e) If the Gross Asset Value of an asset has been determined or adjusted
pursuant to (a), (b) or (c) above, such Gross Asset Value shall
thereafter be adjusted by the depreciation taken into account with
respect to such asset for purposes of computing Net Profits and Net
Losses.
"Guaranty Agreement" shall have the meaning set forth in Section 4.9 of
this Agreement.
"Interest Rate" shall have the meaning set forth in Section 9.3 of this
Agreement.
"Law" shall mean any applicable constitutional provision, statute, act,
code (including the Code), law, regulation, rule, ordinance, order, decree,
ruling, proclamation, resolution, judgment, decision, declaration, or
interpretative or advisory opinion or letter of a Governmental Authority having
valid jurisdiction.
"License Agreements" shall mean the ECD-▇▇▇▇ Agreement, the NVB-United
Solar Agreement, the United Solar-▇▇▇▇ Agreement, and the R&D Agreement.
"Management Committee" shall mean the committee of Representatives of
the Company described in Section 6.2 hereof of this Agreement.
"Material Action" shall have the meaning set forth in Section 6.2.5 of
this Agreement.
"Member" shall mean each Person who (a) is an initial signatory to this
Agreement or is a transferee of a Membership Interest in accordance with this
Agreement, (b) has not transferred its Membership Interest or otherwise ceased
to be a Member in accordance with this Agreement and (c) has not had its
Membership Interest terminated for any other reason.
"Membership Interest" shall mean a Member's entire interest in the
Company including the Member's economic interest, the right to vote on or
participate in the management, and the right to receive information concerning
the business and affairs, of the Company.
"Member Minimum Gain" means an amount, with respect to each Member
Nonrecourse Debt, equal to the Company Minimum Gain that would result if such
Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Section 1.704-2(i)(3) of the Regulations.
"Member Nonrecourse Debt" has the meaning set forth in Section
1.704-2(b)(4) of the Regulations.
"Member Nonrecourse Deductions" has the meaning set forth in Sections
1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.
"Net Profits" and "Net Losses" shall mean the income, gain, loss and
deductions of the Company in the aggregate or separately stated, as appropriate,
determined in accordance with generally accepted accounting principles employed
under the method of accounting at the close of each Fiscal Year .
"Nonrecourse Debt" has the meaning set forth in Section 1.704-2(b)(3)
of the Regulations.
"Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(b)(1) of the Regulations.
"Officers" shall mean the officers of the Company as set forth in
Section 6.3 of this Agreement.
"Operations Committee" shall have the meaning set forth in Section
6.4.1 of this Agreement.
"Percentage Interest" shall mean the percentage of a Member as set
forth in Section 3.1 hereto, as such percentage may be adjusted from time to
time pursuant to the terms of this Agreement. Percentage Interests shall be
determined annually, unless otherwise provided herein, in accordance with the
relative proportions of the Capital Accounts of the Members, effective as of the
first day of
the Company's Fiscal Year but with all distributions under this Agreement to be
deemed to have occurred on such day immediately prior to determination of the
Percentage Interest of a Member.
"Person" shall mean an individual, general partnership, limited
partnership, limited liability company, corporation, trust, estate, real estate
investment trust association or any other entity.
"Purchase Price" shall have the meaning set forth in Section 9.3 of
this Agreement.
"Purchasing Member" shall have the meaning set forth in Section 9.2 of
this Agreement.
"PV" shall mean photovoltaic.
"PV Products" shall mean a Strip Cell or an interconnection of Strip
Cells for PV electrical power whether laminated or not.
"PV Systems" shall mean any system integrating one or more PV Products,
if such system has one or more functionalities, one of which is the
production of PV electrical power.
"Regulations" shall, unless the context clearly indicates otherwise,
mean the Regulations in force as final or temporary that have been issued by the
U.S. Department of Treasury pursuant to its authority under the Code, and any
successor Regulations.
"Regulatory Allocations" shall have the meaning set forth in Section
7.2.8 of this Agreement.
"Representative" shall mean a member of the Management Committee as set
forth in Section 6.2 of this Agreement.
"Research and Development Agreement" shall mean the Research and
Development Agreement between the Company and United Solar dated of even date
hereof.
"Section 704(c) Amount" shall have the meaning set forth in Section 7.3
of this Agreement.
"Securities Act" shall have the meaning set forth in Section 5.10(iii)
of this Agreement.
"Services Agreement" shall mean the Services Agreement between the
Company and United Solar dated of even date hereof.
"Special Allocations" shall have the meaning set forth in Section 7.2
of this Agreement.
"Strip Cells" shall mean a device for PV electrical power comprising
single or multiple PIN structures, a grid pattern, contacts and a coating, and
intermediaries thereof.
"Subscription Agreement" shall mean the Subscription Agreement of
Bekaert to purchase additional membership interests in the Company dated of even
date hereof.
"Substantive Proposal" shall have the meaning set forth in Section
6.2.6(d) of this Agreement.
"Tax Matters Member" shall have the meaning set forth in Section 11.6
of this Agreement.
"Term" shall have the meaning set forth in Section 2.5 of this
Agreement.
"Terminated Member" shall have the meaning set forth in Section 9.5 of
this Agreement.
"Transfer" shall have the meaning set forth in Section 8.1 of this
Agreement.
"Unification" shall mean the purchase by Bekaert of additional shares
in United Solar in accordance with the Unification Agreement between Bekaert and
United Solar dated of even date hereof.
"United Solar" shall mean United Solar Systems Corp., a Delaware
corporation.
"United Solar Contributed Assets" shall mean the assets set forth in
Section 3.2 of the Foundation Agreement.
"United Solar Systems Corp.-Bekaert ECD Solar Systems LLC License
Agreement" shall mean the United Solar Systems Corp.- Bekaert ECD Solar Systems
LLC License Agreement between the Company and United Solar dated of even date
hereof.
Appendix B
Membership Interests
Member Name Membership Interest Date
-------------------------- ------------------- --------------
Bekaert Corporation 60% April 11, 2000
United Solar Systems Corp. 40% April 11, 2000