Exhibit 10.1

 

Execution Version

 

AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

RENEWABLE ENERGY LENDING, LLC

 

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT (as may
be amended or restated from time to time, this “Agreement”), executed as of
November 7, 2016 (the “Effective Date”), is made by and between the Members
identified on Schedule A attached hereto.

 

ARTICLE I – FORMATION

 

Section 1.1          Formation.

 

(A)         RDH formed a limited liability company under the name Renewable
Energy Lending, LLC (the “Company”) under the Delaware Limited Liability Company
Act, 6 Del. Code §18-101 et seq. (or any succeeding law) (as amended from time
to time, the “Act”), by causing a Certificate of Formation in the form attached
hereto as Exhibit A (the “Certificate”) to be executed and filed with the Office
of the Secretary of State of the State of Delaware on November 2, 2016, and
entering into the Limited Liability Company Operating Agreement of Renewable
Energy Lending, LLC, effective as of November 2, 2016 (the “Original
Agreement”).

 

(B)         Upon execution of this Agreement, each Member will hold the
Percentage Interest of all Interests in the Company as set forth on Schedule A
hereto.

 

(C)         The Members have agreed (i) to amend and restate the Original
Agreement as set forth herein, and (ii) that the Agreement of the Company shall
be as set forth herein.

 

(D)         The Company’s business shall be conducted under such name until such
time as RDH shall designate otherwise and file amendments to the Certificate in
accordance with Applicable Law.

 

(E)         This Agreement is subject to, and governed by, the Act and the
Certificate. The Members hereby authorize and ratify the execution and filing of
the Certificate by David Stiepleman. In the event of a direct conflict between
the provisions of this Agreement and the mandatory provisions of the Act, such
provisions of the Act will be controlling.

 

Section 1.2.         Place of Business; Registered Agent. The principal office
and place of business of the Company shall be 3600 O’Donnell Street, Suite 600,
Baltimore, Maryland 21224, or at such other place as the Members may from time
to time designate. The address of the Company’s registered office in the State
of Delaware is located at Suite 302, 4001 Kennett Pike, Wilmington, County of
New Castle, Delaware 19807, and the name of the registered agent whose office
address will be the same as the registered office is Maples Fiduciary Services
(Delaware) Inc. The registered office or the registered agent may be changed
from time to time by RDH and by the filing of the prescribed forms with and the
payment of any prescribed fees to the appropriate public official(s).

 

 

 

 

ARTICLE II - INTERPRETATIVE PROVISIONS

 

Section 2.1.         Certain Definitions. The following terms have the
definitions hereinafter indicated whenever used in this Agreement with initial
capital letters:

 

“Act” has the meaning set forth in Section 1.1(A).

 

“Adjusted Basis” has the meaning given such term in Section 1011 of the Code.

 

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

 

(i)          credit to that Capital Account the amount, if any, that such Member
is obligated to contribute upon liquidation of such Member’s interest; the
amount such Member is deemed to be obligated to restore pursuant to Treasury
Regulation Section 1.704-1(b)(2)(ii)(c); or the amount by which such Member is
obligated to restore or is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1) and (i)(5);
and

 

(ii)         debit to that Capital Account the items described in paragraphs
(4), (5) and (6) in Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations.

 

This definition of Adjusted Capital Account Deficit is intended to comply with
the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and
shall be interpreted consistently therewith.

 

“Adjusted Capital Contribution” means, with respect to RDH, any Capital
Contribution actually made to the Company pursuant to Section 5.1 less all
distributions representing a return of Capital Contribution to RDH.

 

“Affiliate” means, with respect to any specified Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such specified Person. For
purposes hereof, “control” (including the terms “controlled by” and “under
common control with”), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly through one or more
intermediaries, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities or by
contract.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Annual Budget” has the meaning set forth in Section 7.1(E).

 

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“Applicable Law” means all applicable provisions of (a) constitutions, treaties,
statutes, laws (including the common law), rules, regulations, decrees,
ordinances, codes, proclamations, declarations or orders of any Governmental
Authority; (b) any consents or approvals of any Governmental Authority; and (c)
any orders, decisions, advisory or interpretative opinions, injunctions,
judgments, awards, decrees of, or agreements with, any Governmental Authority.

 

“Approved Investment” shall have the meaning set forth on Exhibit B attached
hereto.

 

“Bank Account” has the meaning set forth in Section 8.3.

 

“Bankruptcy” means the filing of any insolvency or reorganization case or
proceeding, instituting proceedings to have the Company adjudicated bankrupt or
insolvent, instituting proceedings under any applicable insolvency law, seeking
any relief under any law relating to relief from debts or the protection of
debtors, consenting to the filing or institution of bankruptcy or insolvency
proceedings against the Company, filing a petition seeking or consenting to
reorganization, liquidation or relief with respect to the Company under any
applicable federal or state law relating to bankruptcy, reorganization or
insolvency, seeking or consenting to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian, or any similar official for the
Company or a substantial part of its property, making any assignment for the
benefit of creditors, admitting in writing the inability of the Company to pay
its debts as they become due, or taking action in furtherance of any of the
foregoing.

 

“Budget Act” has the meaning set forth in Section 8.2(B).

 

“Business Day” means any day other than a Saturday, Sunday or any day on which
commercial banks are authorized or required to be closed in the State of
Delaware, the State of New York or the State of Maryland.

 

“Calculation Adjustment” has the meaning set forth in Section 6.1(A)(iv)(a).

 

“Capital Account” has the meaning set forth in Section 5.5(A).

 

“Capital Call Notice” has the meaning set forth in Section 5.1(C).

 

“Capital Contribution” means a contribution to the capital of the Company by a
Member pursuant to Section 5.1.

 

“Capital Transaction” means the sale, refinancing or other disposition of any
Company Asset which represents a return of capital invested by the Company,
including the repayment in whole or in part of principal with respect to any
Investment made by the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any corresponding provisions of succeeding law.

 

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“Company” has the meaning set forth in Section 1.1(A).

 

“Company Assets” means, at any particular time and without double counting, any
assets or property (tangible or intangible, choate or inchoate, fixed or
contingent), including any Investments, then held or owned by the Company, SCL,
SPL or any other subsidiary.

 

“Company Opportunity” has the meaning set forth in Section 7.5(B).

 

“Competing Investment” shall mean the primary market origination of a
construction, late stage development or permanent loan for solar, wind or solar
storage battery facilities.

 

“Covered Persons” means (i) each Member; (ii) the Manager; (iii) each officer,
director, stockholder, partner, member, Affiliate, employee, agent or
representative of each Member, the Manager and each of their Affiliates; and
(iv) each officer, employee, agent or representative of the Company.

 

“Default Loan” has the meaning set forth in Section 5.1(D).

 

“Deposit Account Bank” means Wells Fargo, National Association.

 

“Deposit Account Control Agreement” means the Deposit Account Control Agreement
by and among MEC, RDH, the Company and the Deposit Account Bank, to be entered
into promptly following the Effective Date.

 

“Depreciation” means for each Fiscal Year, an amount equal to the aggregate
depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such Fiscal Year for federal income tax purposes, except
that if the Gross Asset Value of an asset differs from its Adjusted Basis at the
beginning of such Fiscal Year, the Depreciation therefor shall be an amount that
bears the same ratio to such beginning Gross Asset Value as the federal income
tax depreciation, amortization or other cost recovery deduction for such Fiscal
Year bears to such beginning Adjusted Basis; provided, however, that if the
federal income tax depreciation, amortization or other cost recovery deduction
for such Fiscal Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Members.

 

“Draft 8-K” has the meaning set forth in Section 11.7.

 

“Effective Date” has the meaning set forth in the preamble hereto.

 

“Excess Loss” has the meaning set forth in Section 6.2(B).

 

“Exclusivity Term” means the period extending from the Effective Date to the
date which is the seventh (7th) anniversary of the Effective Date, provided,
however, that the Exclusivity Term shall end immediately upon (i) RDH rejecting
(or being deemed to reject) more than three (3) Company Opportunities (excluding
any Company Opportunities in respect of renewable energy development loans,
renewable energy permanent loans or any renewable energy revolving loan) which
fall within the Investment Parameters in accordance with the provisions of
Section 7.1(C) within any twelve (12) month period; (ii) the Manager ceasing for
any reason to be the manager under the Management Agreement, including without
limitation termination of the Management Agreement in accordance with its terms;
or (iii) a Key Person Event.

 

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“Existing Project” has the meaning set forth in Section 9.7.

 

“Fair Market Value” means with respect to any asset of the Company, the price
that would be received to sell such asset in an orderly transaction between
market participants, as determined in good faith by RDH at a given measurement
date.

 

“Fiscal Year” means the calendar year.

 

“GAAP” means United States generally accepted accounting principles consistently
applied.

 

“Government Authority” means any federal, state, local or foreign government or
political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of law), or any arbitrator, court or tribunal of competent
jurisdiction.

 

“Gross Asset Value” means with respect to any Company Asset, the asset’s
Adjusted Basis, except that (i) the initial Gross Asset Value of any asset
contributed by a Member to the Company shall be the gross Fair Market Value of
that asset, (ii) the Gross Asset Value of all Company Assets shall be adjusted
to equal their respective gross Fair Market Values upon the acquisition of an
additional Interest by any new or existing Member in exchange for more than a de
minimis capital contribution, upon a distribution of more than a de minimis
amount of property in consideration of the full or partial liquidation of any
Interest, or upon the liquidation of the Company within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(g). For purposes of determining the
continuing Gross Asset Value of an asset, all depreciation, amortization and
loss recovery deductions with respect to each asset shall be based on the Gross
Asset Value of that asset and shall further adjust the Gross Asset Value of that
asset.

 

“Initial Capital Contribution” shall mean the Initial MEC Contribution or the
Initial RDH Contribution, as the case may be, provided, that in the case of the
Initial MEC Contribution, for the purposes of this Agreement and the
Subscription Agreement, such Initial Capital Contribution shall be deemed to be
reduced by the amount of the preferential distribution to MEC pursuant to
Section 5.1(G).

 

“Initial MEC Contribution” has the definition set forth in Section 5.1(A).

 

“Initial Tag-Along Notice” has the meaning set forth in Section 9.2(A).

 

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“Initial RDH Contribution” has the definition set forth in Section 5.1(C).

 

“Interest” means, with respect to an interest of any Member in the Company, the
entire ownership interest of such Member in the Company at such time, including,
without limitation, such Member’s interest in the capital, profits, losses and
distributions of the Company and any and all benefits to which a Member may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Member to comply with all the terms and provisions of this
Agreement and of the Act.

 

“Investment” means (a) development, construction and permanent loans to
renewable energy projects within the United States directly by the Company or
through SCL, SPL or any other subsidiary, and (b) any other investment by the
Company directly or through SCL, SPL or any other subsidiary (including, without
limitation, in another renewable energy asset or facility) that has been
approved by RDH.

 

“Investment Markdowns” means any markdown in the value of an Investment on the
books of the Company or reflected in the financial statements of the Company
other than any markdown in the nature of a “mark to market” temporary
impairment.

 

“Investment Markups” means any markup in the value of an Investment that has
previously incurred an Investment Markdown other than any markup that is “mark
to market” in nature, provided, that no Investment Markup shall bring the value
of any Investment above “par value” for the purposes of this Agreement.

 

“Investment Memorandum” means a document substantially in the form of Exhibit C
attached hereto, which shall be revised from time to time as reasonably
requested by RDH, including to incorporate a more fulsome legal review section.

 

“Investment Model” means, with respect to any Investment Opportunity, the
financial model for the applicable project demonstrating achievement of the
Investment Parameters and otherwise in form and substance satisfactory to RDH,
as the same may be updated by MEC from time to time to take into account changes
in the assumptions with approval from RDH.

 

“Investment Opportunity” shall have the meaning set forth on Exhibit B attached
hereto.

 

“Investment Parameter Compliance Review” means an investment parameter
compliance review consistent with the Investment Parameters.

 

“Investment Parameters” shall be as set forth on Exhibit F attached hereto.

 

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“IRR” means, for any Member the discount rate at which the net present value of
all Capital Contributions by a Member is equal to the net present value of all
distributions of Net Operating Cash Flow and Net Cash Flow from Capital
Transactions to such Member. IRR for all relevant purposes of this Agreement
shall be calculated using the Microsoft Excel method of calculating IRR, using
XIRR function (or if such program is no longer available, such other software
program for calculating IRR reasonably determined by Managing Member), using the
actual dates and amounts of all previous distributions (or deemed distributions)
of Net Operating Cash Flow and Net Cash Flow from Capital Transactions made by
the Company to such Member pursuant to Section 6.1 and using the actual dates
and amounts of all previous Capital Contributions made (or deemed made) to the
Company by such Member.

 

“IRS” means the Internal Revenue Service, an agency of the United States
government, or any successor agency.

 

“ITC” means the energy tax credit provided for under Section 48 of the Internal
Revenue Code of 1986, as amended from time to time, and any successor federal
tax statute.

 

“Key Person Event” has the meaning set forth in Section 7.1(H).

 

“Kimberlite Fee Letter” means that certain letter agreement, dated as of the
Effective Date, by and between Kimberlite Group, LLC and the Company.

 

“Lien” shall mean any option, pledge, security interest, lien, charge,
encumbrance, claim, covenant, condition or restriction.

 

“Liquidation Reserve” has the meaning set forth in Section 6.1(B)(iv).

 

“Loan Approval Notice” shall have the meaning set forth on Exhibit B attached
hereto.

 

“Losses” has the meaning set forth in Section 7.3(A).

 

“Management Agreement” has the definition set forth in Section 7.1(D).

 

“Manager” means MEC or any successor Manager appointed by RDH.

 

“MEC” means MMA Energy Capital, LLC, a Maryland limited liability company, and
includes any permitted assignees and/or any successors to any of the Interest
held thereby, in each in accordance with the terms hereof.

 

“MMA Guarantee” means the guarantee by MMA for the benefit of RDH and the
Company, dated as if the date hereof.

 

“Member” means each Person listed as a Member on Schedule A hereto, and any
Person hereafter admitted as a Substitute Member pursuant to Section 9.5.

 

“MMA” means MMA Capital Management, LLC, a Delaware limited liability company
and its successors and assigns, the ultimate parent of MEC.

 

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“Net Cash Flow from Capital Transactions” means the net cash proceeds from
Capital Transactions (plus any amounts released from Reserves from prior Net
Cash Flow from Capital Transactions), less any portion thereof used or held (i)
to pay debts and liabilities of the Company, other than any Default Loans, (ii)
to make new Investments, or (iii) to establish or increase Reserves.

 

“Net Income” and “Net Loss” mean, for any Fiscal Year, the net income or net
loss, as applicable, of the Company for federal income tax purposes for such
year as determined by the accountants for the Company without regard to any
adjustments to basis pursuant to Sections 734 or 743 of the Code, but subject to
the following adjustments:

 

(i)          Any income of the Company that is exempt from federal income tax
shall be added to such taxable income or loss.

 

(ii)         Any expenditures of the Company described in Code Section
705(a)(2)(B), or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Treasury Regulations §1.704-1(b)(2)(iv)(i), shall be subtracted from such
taxable income or loss.

 

(iii)        If the Fair Market Value on the date that an asset is contributed
to the Company (or if the basis of such asset for book purposes is adjusted
under the Treasury Regulations, such adjusted “book” basis) differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
other period, in lieu of the depreciation, amortization and other cost recovery
deductions taken into account for computing such taxable income or loss, the
amount for depreciation, amortization and other cost recovery deductions shall
be equal to an amount which bears the same ratio to such beginning Fair Market
Value (or adjusted “book” basis) as the federal income tax deduction for such
year or other period bears to such beginning adjusted tax basis.

 

(iv)         If the value at which an asset is carried on the books of the
Company differs from its adjusted tax basis and gain or loss is recognized from
a disposition of such asset, the gain or loss shall be computed by reference to
the asset’s “book” basis rather than its adjusted tax basis.

 

(v)          Any items which are specially allocated under Section 6.3 shall be
excluded from the calculations of Net Income and Net Loss.

 

“Net Operating Cash Flow” means, for any period, the amount, computed on a cash
basis, equal to:

 

(i)           the sum of (A) gross receipts from operations, being all cash
receipts of the Company (including but not limited to distributions from SCL,
SPL or any other subsidiary, net interest income, Origination Fees and Other
Fees but excluding Capital Contributions, Net Cash Flow from Capital
Transactions, and the proceeds of any borrowing), all without double-counting,
and (B) any amounts released from Reserves from prior Net Operating Cash Flow;

 

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decreased by

 

(ii)         the sum of (A) all disbursements of the Company for operating
expenses, interest and other expenses, including (x) Outgoing Fees and (y) fees
payable under the Management Agreement, but excluding distributions and loan
repayments to the Members, repayments of principal on Company borrowings and
amounts invested in Investments and (B) any increase in Reserves.

 

“Non-Funding Member” has the definition set forth in Section 5.1(D).

 

“Notice” means any writing containing the information required by this Agreement
to be communicated to a Person and personally delivered to such Person, sent by
a nationally recognized overnight courier or sent by registered or certified
mail, postage prepaid, return receipt requested, to such Person at the address
listed on Schedule A attached hereto. The date of personal delivery, delivery by
such overnight courier or of the certification receipt, as the case may be,
shall be deemed the date of such Notice; provided, that any written
communication containing such information actually received by a Person shall
constitute Notice for all purposes of this Agreement. Facsimile or electronic
transmission promptly confirmed by original communication delivered as herein
provided shall be an acceptable means of Notice, with the date of receipt of the
facsimile or electronic transmission being deemed the date of Notice.

 

“Original Agreement” has the definition set forth in Section 1.1(A).

 

“Origination Fees” mean fees earned and received by the Company for the
origination of loans, but excludes any other fees earned and received, including
fees associated with due diligence and loan extension.

 

“Other Fees” fees earned and received by the Company, which are excluded under
the definition of “Origination Fees”.

 

“Outgoing Fees” means fees paid or disbursed by the Company in connection with
Investments, including origination fees paid by the Company and other fees
associated with due diligence, if any.

 

“Percentage Interest” means, with respect to a Member, the aggregate Capital
Contributions of a Member divided by the aggregate Capital Contributions of all
of the Members, as reflected opposite such Member’s name on Schedule A hereto
under the column entitled “Percentage Interest”, as the same may be adjusted
from time to time in accordance herewith (whether or not reflected on Schedule
A).

 

“Person” means any individual, limited liability company, corporation,
partnership, trust or other entity.

 

“Pre-Approval Period” has the meaning set forth in Section 7.1(E).

 

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“Preferred Dividend” means, with respect to RDH, the preferred return per annum,
non-compounding, at eight percent (8%) on the Adjusted Capital Contributions of
RDH, subject to Section 6.1(E), payable out of Net Operating Cash Flow, Net Cash
Flow from Capital Transactions and Liquidation Reserves.

 

“Primary Responsibility” means, with respect to the specified activities and/or
undertakings, the responsibility and obligation to plan, initiate and implement
such activities and undertakings, in all events subject to Section 7.1.

 

“Principal Payments Cash Balance” has the meaning set forth in Section 6.1(F).

 

“Project Costs” means, with respect to any Approved Investment, the project
costs set forth in the applicable Investment Model, which shall not include any
development fee or developer profit.

 

“Proposed Buyer” has the meaning set forth in Section 9.2(A).

 

“RDH” means Renewable Developer Holdings, LLC, a Delaware limited partnership,
and includes any permitted assignees and/or any successors to any of the
Interest held thereby, in accordance with the terms hereof.

 

“Regulations” or “Treasury Regulations” means the income tax regulations
promulgated under the Code, as such Regulations may be amended from time to
time. All references herein to specific sections of the Regulations shall be
deemed to refer also to corresponding provisions of any succeeding regulations.

 

“Regulatory Allocation” has the meaning set forth in Section 6.3(I).

 

“Required Capital Contributions” means the amount of Capital Contributions that
the Members are required to make to the Company as provided in Section 5.1
hereof.

 

“Reserves” means any reserves established and maintained from time to time in
amounts determined by RDH.

 

“SCL” has the definition set forth in Section 5.1(A).

 

“SCL Operating Agreement” means that certain Amended and Restated Operating
Agreement of SCL dated as of November __, 2016, as it may be subsequently
amended, supplemented or otherwise modified from time to time.

 

“SDL” means Solar Development Lending, LLC, a Maryland limited liability
company.

 

“SDL Operating Agreement” means that certain Amended and Restated Operating
Agreement of SDL to be entered into subsequent to the date hereof, as it may be
subsequently amended, supplemented or otherwise modified from time to time.

 

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“Sources and Uses Statement” has the definition set forth in Section 5.1(G).

 

“SPL” has the definition set forth in Section 5.1(A).

 

“SPL Operating Agreement” means that certain Operating Agreement of SPL dated as
of the Effective Date, as it may be subsequently amended, supplemented or
otherwise modified from time to time.

 

“Subscription Agreement” means that certain Subscription Agreement, dated the
date hereof, among MEC, the Company and RDH.

 

“Substitute Member(s)” mean any Person admitted to the Company as a Substitute
Member pursuant to Section 9.5.

 

“Tag-Along Exercise Notice” has the meaning set forth in Section 9.2(B).

 

“Tag-Along Interest” has the meaning set forth in Section 9.2(B).

 

“Tag-Along Right” has the meaning set forth in Section 9.2(A).

 

“Tax Item” has the meaning set forth in Section 6.2(C).

 

“Third Party” means, with respect to any Member, any Person who is not an
Affiliate of such Member.

 

“Transfer” has the meaning set forth in Section 9.1.

 

“Transferred Assets” has the definition set forth in Section 5.1(A).

 

“TSSP Managed Entities” means funds managed by TPG Special Situations Partners,
LLC, excluding (i) TPG Specialty Lending, Inc. and (ii) CLOs managed by TPG
Special Situations Partners, LLC.

 

“Unanimous Approval” means the affirmative unanimous written consent of the
Members.

 

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Section 2.2.         Rules of Construction. The following rules of construction
shall apply to this Agreement:

 

(A)         References to Articles and Sections are intended to refer to
Articles and Sections of this Agreement, and all references to Exhibits and
Schedules are intended to refer to Exhibits and Schedules attached to this
Agreement, each of which is made a part of this Agreement for all purposes. The
words “hereto,” “hereof,” “herein,” “hereunder” and words of similar import when
used in this Agreement will refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term “including” means “including,
without limitation.” Any date specified for action that is not a Business Day
will mean the first Business Day after such date. All personal pronouns used in
this Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders, the singular shall include the plural, and vice
versa, as the context may require. Any reference to a Person will be deemed to
include such Person’s permitted successors and assigns. Any reference to any
document, agreement, instrument or statute will be deemed to refer to such
document, agreement, instrument or statute as amended, modified or supplemented
from time to time and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein.
Whenever a Person is to determine that something is “satisfactory to,”
“acceptable to,” or “to the satisfaction of” such Person, the determination may
not be made in bad faith.

 

(B)         As used in this Agreement and in any certificate or other documents
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, will have the respective meanings given to
them under GAAP. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under GAAP, the definitions contained in this Agreement
or in any such certificate or other document will control.

 

(C)         Unless otherwise specified, all references contained herein, in any
Exhibit or Schedule referred to herein or in any instrument or document
delivered pursuant hereto to dollars or “$” shall mean United States dollars.

 

(D)         Each provision of this Agreement shall be considered severable from
the rest, and if any provision of this Agreement or its application to any
Person or circumstances shall be held invalid and contrary to any existing or
future law or unenforceable to any extent, the remainder of this Agreement and
the application of any other provision to any Person or circumstances shall not
be affected thereby and shall be interpreted and enforced to the greatest extent
permitted by law so as to give effect to the original intent of the parties
hereto.

 

(E)         This Agreement has been negotiated by the Parties and their counsel
and no provision shall be construed for or against a Member on the basis that
such Member or its counsel was or was not the drafter thereof.

 

ARTICLE III - BUSINESS PURPOSE AND TERM

 

Section 3.1.         Business Purpose. The purpose of the Company is to make
Investments directly or through SCL, SPL or any other subsidiary. In furtherance
thereof, the Company may carry on any lawful business, purpose, investment or
activity related to the making of Investments and shall have all powers which
limited liability companies may have under the Act.

 

Section 3.2.         Term. The Company shall be deemed to exist as of the date
the Certificate was filed, and the duration of the Company shall be perpetual
unless and until the Company is dissolved in accordance with the provisions of
Section 10.1 of this Agreement.

 

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ARTICLE IV – MEMBERS AND PERCENTAGE INTERESTS

 

Section 4.1.        Members; Percentage Interests. The name, address, Percentage
Interest as of the Effective Date, Percentage Interest as of any subsequent
date, Initial Capital Contribution and Capital Contribution of each Member are
set forth on the attached Schedule A. To the extent additional or Substituted
Members are admitted to the Company or the Percentage Interest or Capital
Contributions of a Member changes, in each case in accordance with the terms of
this Agreement, RDH is hereby authorized to amend the attached Schedule A to
reflect such change(s).

 

ARTICLE V - CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

 

Section 5.1.         Capital Contributions; Preferential Distribution.

 

(A)         On the Effective Date, pursuant to the Subscription Agreement, MEC
shall convey, assign and transfer to the Company as its initial capital
contribution (the “Initial MEC Contribution”) free and clear of all Liens, all
of its right, title and interest in and to (a) all of its fifty percent (50%)
limited liability company interest in Solar Construction Lending, LLC, a
Maryland limited liability company (“SCL”); (b) all of its fifty percent (50%)
limited liability company interest in Solar Permanent Lending, LLC, a Maryland
limited liability company (“SPL”); and (c) the specific Investments set forth in
the Subscription Agreement (collectively the “Transferred Assets”), effective as
of the Effective Date, and the Company hereby accepts the assignment of the
Transferred Assets. The assignment by MEC of the Transferred Assets includes all
rights of MEC with respect to the Transferred Assets, including, without
limitation (i) those rights arising under the operating agreement of each of SCL
and SPL and (ii) all rights of MEC to receive return of capital contributions or
distributions of profit made with respect to the Transferred Assets on or after
the Effective Date, whether or not such profit distributions relate to profit
that was realized by SCL or SPL prior to the Transfer Date.

 

(B)         Subject to the terms of the Subscription Agreement, the Company has
assumed thereunder all of the obligations, commitments, liabilities and duties
of MEC with respect to the Transferred Assets. The Effective Date will be the
effective date for purposes of maintaining the capital accounts of the Company,
and for federal, state and local income tax purposes.

 

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(C)         On the Effective Date, RDH shall make a Capital Contribution to the
Company in cash in amount equal to $5,000,000 (the “Initial RDH Contribution”).
RDH shall make Capital Contributions to the Company in cash in accordance with
the terms hereof in an amount, together with the Capital Contribution made on
the Effective Date, not to exceed the lesser of (i) eighty-five percent (85%) of
the aggregate Approved Investments of the Company (taking into account the
Initial MEC Contribution), and (ii) an amount that would result in an implied
unlevered project level IRR (calculated by substituting the Project Cost in the
Investment Model with RDH’s implied Capital Contribution associated with the
loan applied against projected pre-tax unlevered cash flows assuming (a) the
project monetizes 90% of the eligible ITC value as a cash inflow in the first
quarter following the initial investment period and (b) no credit is given to
cash flows in periods following the expiration of the applicable revenue
contract) of ten percent (10%). For the avoidance of doubt, the calculation of
unlevered project level IRR shall be made at the aggregate portfolio level,
exclusive of Fundamental’s percentage interest in SCL and SPL. Installments of
each Member’s Required Capital Contribution shall be payable as and when
requested by the Manager from time to time (but no more frequently than monthly)
to (i) consummate an Approved Investment or an Investment that was contributed
to the Company as part of the Initial MEC Contribution, (ii) fund expenses for
the upcoming calendar quarter to the extent such expenses are set forth in the
then current Annual Budget or (iii) consummate any actions determined to be
taken by RDH pursuant to Section 7.1(A). The Manager shall call for an
installment of Required Capital Contribution by delivering written notice to the
Members setting forth (x) the aggregate amount of the Required Capital
Contribution then required to be made by all of the Members, (y) the individual
amount of the Required Capital Contribution then required to be made by each
Member and (z) the purpose to which the proceeds of such Required Capital
Contributions will be applied (such notice, a “Capital Call Notice”). Subject to
the second sentence of this Section 5.1(C), no later than five (5) Business Days
after receipt of a Capital Call Notice for Required Capital Contributions in an
amount less than $25,000,000, and twelve (12) Business Days after receipt of a
Capital Call Notice for Required Capital Contributions in an amount equal to or
in excess of $25,000,000, each Member shall fund its requested portion of
Required Capital Contribution as follows: (i) RDH shall fund one hundred percent
(100%) of all Required Capital Contributions until RDH has in the aggregate
contributed eighty-five percent (85%) of all Capital Contributions and MEC has
in the aggregate contributed fifteen percent (15%) of all Capital Contributions;
and thereafter (ii) RDH shall fund eighty-five percent (85%) of all Required
Capital Contributions and MEC shall fund fifteen percent (15%) of all Required
Capital Contributions.

 

(D)         In the event that a Member fails or refuses for any reason to make
any Capital Contributions required of it pursuant to Section 5.1(C) (a
“Non-Funding Member”), the Company may in any appropriate court of law or equity
sue a Non-Funding Member for any amounts owed to the Company including all costs
and expenses incurred or paid by or on behalf of the Company in enforcing the
Non-Funding Member’s obligations under this Agreement, including attorneys’ fees
and expenses. In addition, the another Member or one of its Affiliates may make
a loan to the Non-Funding Member by transferring directly to the Company, on
behalf of such Non-Funding Member, an amount not to exceed the unpaid portion of
such Non-Funding Member’s Capital Contribution, and each such loan (each, a
“Default Loan”), shall accrue interest as of the date such Default Loan is made
at the annual rate of eighteen percent (18%) compounded quarterly. Each Default
Loan (together with all accrued, unpaid interest thereon and any enforcement
costs) shall be repaid to such Member (or its Affiliate(s), as the case may be)
out of any amounts otherwise distributable to the applicable Non-Funding Member
pursuant to Article VI below, prior to making any subsequent distributions to
such Non-Funding Member pursuant to Article VI (such distributions being applied
first to reduce accrued but unpaid interest and then to reduce principal until
the principal and interest on all Default Loans made to the applicable
Non-Funding Member has been paid in full). For purposes of this Agreement, any
repayment of all or a portion of any Default Loan pursuant to the immediately
preceding sentence shall be deemed to be, and treated as, a distribution to the
Non-Funding Member followed by a re-payment by the Non-Funding Member to such
other Member or its Affiliate(s). If, at any time during which a Default Loan
remains outstanding, the Company receives from the Non-Funding Member all or any
portion of such unpaid Required Capital Contributions (together with all accrued
by unpaid interest on such Default Loan or portion thereof), the Company shall
promptly deliver all such amounts to the Member who made such loan (or its
Affiliates, as the case may be).

 

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(E)         Notwithstanding anything to the contrary contained herein, no Member
shall be required, and no Member shall have any right, to make a Capital
Contribution in excess of its Required Capital Contribution, or to lend any
funds to the Company or to act as a guarantor or indemnitor with respect to any
Company liabilities or obligations, except and to the extent required by law,
explicitly provided herein or as otherwise agreed by Unanimous Approval,
provided, that, RDH may, in its sole discretion, pay on behalf of the Company,
any Placement Fee (as defined in the Kimberlite Fee Letter) or installment
thereof that the Company is obligated to pay to Kimberlite Group, LLC, pursuant
to the Kimberlite Fee Letter, and RDH shall be deemed to have made a Capital
Contribution in an amount equal to any such payment under this Agreement for all
purposes under this Agreement.

 

(F)         No Member shall be personally liable for the return of any portion
of the Capital Contributions (or any return thereon) of the Members. The return
of such Capital Contributions (or any return thereon) shall be made solely from
assets of the Company. No Member shall be required to pay to the Company or any
other Member any deficit in such Member’s Capital Account upon dissolution or
otherwise. No Member shall have the right to demand or receive property other
than cash for its Interest.

 

(G)         Concurrently with the Initial MEC Contribution and the Initial RDH
Contribution, the Company shall make a preferential distribution to MEC in cash
in amount equal to $3,464,704.01, which is the amount by which the value of the
Initial MEC Contribution exceeds Seventy Five Million Dollars ($75,000,000), as
set forth in a sources and uses statement as agreed upon by RDH and MEC and
attached hereto as Exhibit H (the “Sources and Uses Statement”). The Sources and
Uses Statement will also contain other applicable information relating to the
Capital Contributions and distributions being made as of the Effective Date,
including all relevant wire information.

 

Section 5.2.         No Compensation for Services. No Member shall receive any
interest, salary, drawing or other compensation for services rendered to the
Company in its capacity as a Member.

 

Section 5.3.         No Third Party Beneficiaries. The provisions of this
Agreement are not intended to be for the benefit of any creditor of the Company
or other Person (other than a Member in its capacity as a Member or in
accordance with Section 7.3) to whom any debts, liabilities or obligations are
owed by (or who otherwise has any claim against) the Company or any Member, and
no such creditor or other Person shall have or obtain any right under this
Agreement against the Company or any Member by reason of any debt, liability or
obligation or otherwise. Without limiting the generality of the foregoing, any
obligation of a Member set forth in this Agreement to the Company or to any
other Member shall be an obligation only to the Company or such Member, as
applicable, and shall not inure to the benefit of any other Person.

 

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Section 5.4.        Member Liability. Except if and to the extent otherwise
provided by the Act, no Member shall be liable for the repayment, satisfaction
or discharge of any liabilities of the Company in excess of the balance of such
Member’s Capital Account. No Member shall be personally liable for the return of
any portion of the Capital Contribution(s) (or any profits thereon) of any other
Member.

 

Section 5.5.         Capital Accounts.

 

(A)         The Company shall establish and maintain a separate capital account
(the “Capital Account”) for each Member in the manner required by the Treasury
Regulations under Section 704(b) of the Code. The Capital Account of a Member
shall consist of its Initial Capital Contribution and shall be increased by (i)
the amount of any subsequent Capital Contributions, and (ii) the amount of all
Net Income (and any item thereof) allocated to such Member, and decreased by
(iii) the amount of all distributions or deemed distributions to such Member,
and (iv) the amount of all Net Loss (and any item thereof) allocated to such
Member. The Capital Accounts shall be determined, maintained, and adjusted in
accordance with the Code and the Regulations, including the capital account
maintenance rules in Regulations § 1.704-(1)(b)(2)(iv).

 

(B)         If any Member shall lend any monies to, or perform any services for,
the Company, the amount of any such loan or services shall not increase the
Member’s Capital Account or affect in any way his or its share in the profits,
losses or distributions of the Company.

 

(C)         Any transferee of an Interest shall succeed to the Capital Account
relating to the Interest transferred.

 

Section 5.6.         Return of Capital Account. Except as otherwise specifically
provided in this Agreement, (i) no Member shall have any right to withdraw or
reduce its Capital Contributions or Capital Account, or to demand and receive
property or any distribution from the Company in return for its Capital
Contributions or Capital Account, and (ii) any return of Capital Contributions
or Capital Accounts to the Members shall be solely from the Company Assets, and
no Member shall be personally liable for any such return.

 

ARTICLE VI – DISTRIBUTIONS; ALLOCATIONS

 

Section 6.1.         Distributions.

 

(A)        Distributions of Net Operating Cash Flow. Net Operating Cash Flow
shall be distributed monthly in arrears in the following order of priority:

 

(i)          First, one hundred percent (100%) to RDH until RDH has received
accrued but unpaid Preferred Dividend for all prior months; then

 

(ii)         Second, one hundred percent (100%) to RDH until RDH has received
accrued but unpaid Preferred Dividend for the current month; then

 

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(iii)        Third, one hundred percent (100%) to MEC until the amount
distributed to MEC under this Section 6.1(A)(iii), Section 6.1(B)(iii) and
Section 6.1(C)(iii) is equal to the aggregate amount of any distributions
previously made to RDH in accordance with Section 6.1(G); then

 

(iv)         Fourth,

 

(a) until RDH has made aggregate Capital Contributions of at least Two Hundred
Twenty Million Dollars ($220,000,000) to each of RDH and MEC in the respective
percentages that would result in each of RDH and MEC earning an equivalent
percentage return in the applicable quarter on its respective aggregate Capital
Contributions, excluding any amounts distributed pursuant to Clause (i) and
Clause (iii) of this Section 6.1(A) but including any amounts distributed
pursuant to Clause (ii) of this Section 6.1(A) for each of the three months of
the quarter then ended; provided, that, solely for the purposes of calculating
distributions under this Section 6.1(A)(iv)(a), the aggregate Capital
Contributions of MEC shall be deemed to be reduced by the aggregate amount of
any Investment Markdowns and increased for the aggregate amount of any
Investment Markups that shall have occurred prior to the end of the applicable
quarter and that have not previously been taken into account under this Section
6.1(A)(iv)(a) (each, a “Calculation Adjustment”) (after giving effect to any
prior Calculation Adjustment); and

 

(b) after RDH has made aggregate Capital Contributions in excess of Two Hundred
Twenty Million Dollars ($220,000,000) and for all subsequent quarterly periods,
fifty percent (50%) to RDH and fifty percent (50%) to MEC.

 

Notwithstanding the foregoing, for the first two months of each calendar
quarter, Net Operating Cash Flow shall be distributed only in accordance with
Clauses (i) and (ii) of this Section 6.1(A), with any excess being retained by
the Company as Reserves. Monthly distributions for the third month of every
calendar quarter will take into account Net Operating Cash Flow for the full
quarter then ended less any distributions previously made in accordance with the
immediately preceding sentence.

 

(B)         Distributions of Net Cash Flow from Capital Transactions Prior to
Liquidation. Subject to Section 6.1(E), Net Cash Flow from Capital Transactions
prior to liquidation in accordance with Section 10.2 shall be distributed at the
discretion of RDH, to the Members, in the following order of priority:

 

(i)          First, one hundred percent (100%) to RDH until RDH has received
accrued but unpaid Preferred Dividend for all prior months; then

 

(ii)         Second, one hundred percent (100%) to RDH until RDH has received
accrued but unpaid Preferred Dividend for the current month; then

 

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(iii)        Third, one hundred percent (100%) to MEC until the amount
distributed to MEC under this Section 6.1(B)(iii), Section 6.1(A)(iii) and
Section 6.1(C)(iii) is equal to the aggregate amount of any distributions
previously made to RDH in accordance with Section 6.1(G); then

 

(iv)         Fourth, one hundred percent (100%) to RDH until RDH has received an
amount equal to its Adjusted Capital Contribution; then

 

(iv)         Fifth, the balance to fund a cash account held by the Company (the
“Liquidation Reserve”) which shall not be distributed or otherwise reduced until
liquidation in accordance with Section 10.2 hereof.

 

(C)         Distributions of Net Cash Flow from Capital Transactions and
Liquidation Reserve upon Liquidation. Net Cash Flow from Capital Transactions
and the amount of the Liquidation Reserve upon liquidation in accordance with
Section 10.2 shall be distributed to the Members in the following order of
priority:

 

(i)          First, one hundred percent (100%) to RDH until RDH has received
accrued but unpaid Preferred Dividend for all prior months; then

 

(ii)         Second, one hundred percent (100%) to RDH until RDH has received
accrued but unpaid Preferred Dividend for the current month; then

 

(iii)        Third, one hundred percent (100%) to MEC until the amount
distributed to MEC under this Section 6.1(C)(iii), Section 6.1(A)(iii) and
Section 6.1(B)(iii) is equal to the aggregate amount of any distributions
previously made to RDH in accordance with Section 6.1(G); then

 

(iv)         Fourth, one hundred percent (100%) to RDH until RDH has received an
amount equal to its Adjusted Capital Contribution; then

 

(iv)         Fifth, one hundred percent (100%) to MEC.

 

(D)         Distributions Prohibited. Notwithstanding any provision to the
contrary contained in this Agreement, the Company shall not be required to make
a distribution to any Member on account of its Interest in the Company if such
distribution would violate the Act or any other Applicable Law.

 

(E)         Preferred Dividend; Minimum Preferred Dividend. Subject to the last
sentence of this Section 6.1(E), the Preferred Dividend shall be calculated at
the end of each month using the daily weighted average of RDH’s Adjusted Capital
Contributions during such month. The Preferred Dividend shall (i) accrue on
RDH’s Capital Contributions from the date of the applicable Capital
Contributions and (ii) to the extent not paid in full when due in any month,
shall continue to accrue on such unpaid amounts until such amounts and the
accrual thereon are paid in full. Notwithstanding anything to the contrary
contained herein, Preferred Dividend shall continue to accrue on the first Two
Hundred Fifty Million Dollars ($250,000,000) of RDH Capital Contributions for a
minimum of two (2) years from the date of contribution regardless of any return
of such Capital Contribution (i.e., on the aggregate Capital Contribution as
opposed to the Adjusted Capital Contribution).

 

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(F)         Recyclable Proceeds. If at any time the Company holds cash resulting
from the repayment of principal on Investments which is held for the funding of
future Investments in accordance with this Agreement in an amount in excess of
Five Million Dollars ($5,000,000) for ninety (90) days or more (such excess
amount held for such period being the “Principal Payments Cash Balance”), then
RDH shall in its sole discretion elect whether the Company shall retain such
Principal Payments Cash Balance for funding of Investments or whether it shall
distribute such amount in accordance with Section 6.1(B) hereof. Notwithstanding
the foregoing, if the distribution of such Principal Payments Cash Balance would
result in insufficient liquidity for the ordinary course of the Company’s
operations and committed fundings of Investments (e.g., no cash on the balance
sheet of the Company and no funds available under lines of credit or other debt
facilities available to the Company), the Company shall reserve Principal
Payments Cash Balances for up to one (1) month to fund expected loan draws for
Approved Investments and Company costs in the ordinary course in accordance with
the Approved Budget.

 

(G)         Tax Distributions. Notwithstanding anything in Section 6.1 to the
contrary, to the extent the distributions of Net Operating Cash Flow and Net
Cash Flow from Capital Transactions distributed to RDH within a taxable year are
not at least equal to the federal income taxes that must be paid on the excess
of income and gain allocated to RDH for such taxable year (including any Section
731(a) gains and determined using an assumed rate equal to the highest marginal
federal income tax rate then in effect for a corporation) over the amount of any
unused losses previously allocated to RDH that were suspended under Section
704(d), then on the third monthly distribution date in the immediately following
taxable year, the amount otherwise distributed to RDH pursuant to Sections
6.1(A) through (F) shall be increased by, and to the extent of distributions of
Net Operating Cash Flow and Net Cash Flow from Capital Transactions otherwise
distributable to MEC hereunder, in the amount of such shortfall.

 

Section 6.2.         Allocation of Net Income and Net Loss.

 

(A)         Except as otherwise provided in this Section 6.2, Net Income and Net
Loss or items thereof, and, if necessary, items described in Section 707(c) of
the Code, shall be allocated to the Members in such a manner that, as of the end
of such taxable period, and to the extent possible, the Capital Account of each
Member shall be equal to the net amount which would be distributed to each
Member if the Company were to liquidate the assets of the Company for an amount
equal to their book value (as determined pursuant to Section 704(b) of the Code
and the regulations thereunder), reduced, but not below zero, by the amount of
nonrecourse debt to which such property is subject, and distribute the proceeds
in liquidation after the payment of all liabilities (other than nonrecourse
liabilities) in accordance with Section 10.2(B).

 

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(B)         Items of loss, deduction, credit and preference allocated pursuant
to Section 6.2(A) shall not exceed the maximum amount that can be so allocated
without causing any Member to have an Adjusted Capital Account Deficit at the
end of any fiscal period (any such excess being “Excess Losses”). In the event
that some but not all of the Members would have Adjusted Capital Account
Deficits as a consequence of an allocation pursuant to Section 6.2(A), the
limitation set forth in this Section 6.2(B) shall be applied on a Member by
Member basis so as to allocate the maximum permissible items of loss, deduction
and credit to each Member under Treasury Regulations Section
1.704-1(b)(2)(ii)(d). Any Excess Loss shall be allocated to the remaining
Members pro rata based on positive Capital Account balances. With respect to
each allocation period thereafter, 100% of items of income and gain shall be
allocated to the Members up to the aggregate of, and in proportion to, any
Excess Losses previously allocated to each Member in accordance with this
Section 6.2(B) in the reverse order in which such Excess Losses were allocated.

 

(C)         For Federal and state income tax purposes, each item of income,
gain, loss and deduction (each, a “Tax Item”) shall be allocated among the
Members in the same manner as its correlative item of “book” income, gain, loss
or deduction is allocated among the Members pursuant to Section 6.2.

 

Section 6.3.         Regulatory Allocations.

 

(A)         Minimum Gain Chargeback. Notwithstanding any other provision of this
Agreement, if there is a net decrease in “partnership minimum gain” (as that
term is defined in Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d))
for any Fiscal Year, each Member shall, in the manner provided in Treasury
Regulation Section 1.704-2(f), be allocated items of Company income and gain for
such year (and, if necessary, for subsequent Fiscal Years) in an amount equal to
such Member’s share of the net decrease in such partnership minimum gain,
determined in accordance with Treasury Regulation Section 1.704-2(g). This
Section 6.3(A) is intended to comply with the minimum gain chargeback
requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted
consistently therewith.

 

(B)         Member Minimum Gain Chargeback. Notwithstanding any other provision
of this Agreement except Section 6.3(A), if during any Fiscal Year there is a
net decrease in “partner nonrecourse debt minimum gain” (as that term is defined
in Treasury Regulation Sections 1.704-2(i)(2) and (3)), any Member with a share
of such partner nonrecourse debt minimum gain (determined in accordance with
Treasury Regulation Section 1.704-2(i)(5)) as of the beginning of such Fiscal
Year shall be allocated items of Company income and gain for the Fiscal Year
(and, if necessary, for succeeding Fiscal Years) equal to that Member’s share of
the net decrease in such partner nonrecourse debt minimum gain (determined in
accordance with Treasury Regulation Section 1.704-2(i)(4)). This Section 6.3(B)
is intended to comply with the minimum gain chargeback requirement in Treasury
Regulation Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

 

(C)         Qualified Income Offset. In the event any Member unexpectedly
receives any adjustment, allocation or distribution described in paragraph (4),
(5) or (6) of Treasury Regulation Section 1.704-1(b)(2)(ii)(d), 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 Treasury
Regulations, the Adjusted Capital Account Deficit of such Member as quickly as
possible, provided that an allocation pursuant to this Section 6.3(C) shall be
made only if and to the extent that such Member would have an Adjusted Capital
Account Deficit after all other allocations provided for in this Article VI have
been tentatively made as if this Section 6.3(C) were not in the Agreement.

 

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(D)         Gross Income Allocation. In the event any Member has a deficit
Capital Account balance at the end of any Company Fiscal Year which is in excess
of the sum of (i) the amount such Member is obligated to restore pursuant to any
provision of this Agreement and (ii) the amount such Member is deemed obligated
to restore pursuant to the penultimate sentences of Treasury Regulation Sections
1.704-2(g)(1) and 1.704-2(i)(5), 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 6.3(D) shall be made only
if and to the extent that such Member would have a deficit Capital Account
balance in excess of such sum after all other allocations provided for in this
Section 6.3 have been tentatively made as if Section 6.3(C) and this Section
6.3(D) were not in the Agreement.

 

(E)         Nonrecourse Deductions. Any “nonrecourse deductions” as defined in
Treasury Regulation Sections 1.704-2(b)(1) and 1.704-2(c) for any Fiscal Year or
other period shall be specially allocated as items of loss in accordance with
the Members’ Percentage Interest. If the Company incurs “nonrecourse deductions”
or “partner nonrecourse deductions” or if there is any change in the Company’s
“minimum gain,” as those terms are defined in such Regulations, the allocation
of Net Income, Net Loss and items thereof to the Members shall be modified as
deemed reasonably necessary or advisable by the Members to comply with such
Treasury Regulations.

 

(F)         Member Nonrecourse Deductions. Any “partner nonrecourse deductions”
as defined in Treasury Regulation Section 1.704-2(i) for any Fiscal Year or
other period shall be specially allocated to the Member who bears the economic
risk of loss (within the meaning of Treasury Regulation Section 1.752-2) with
respect to the partner nonrecourse debt (as such term is defined in Treasury
Regulation Section 1.704-2(b)(4)) to which such partner nonrecourse deductions
are attributable in accordance with Treasury Regulation Section 1.704-2(i).

 

(G)         Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Company asset pursuant to Code Section 734(b) or 743(b) is
required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be
taken into account in determining capital accounts, the amount of such
adjustment to capital accounts shall be treated as an item of gain (if the
adjustment increases 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 Treasury
Regulations.

 

(H)         Special Allocations Upon Liquidation of the Company. With respect to
the Fiscal Year in which occurs the final liquidation of the Company in
accordance with Article X or in which there is a sale or other disposition of
all or substantially all of the assets of the Company, if, after tentatively
making all allocations pursuant to this Agreement other than this Section
6.3(H), the positive Capital Account balances of the Members do not equal the
amounts that the Members would receive if all remaining Company Assets were
distributed to them pursuant to Section 6.1, then items of Company income, gain,
loss and deduction shall be specially allocated among the Members pursuant to
this Section 6.3(H) in such amounts and priorities as are necessary so that
after making all allocations pursuant to this Article VI the positive Capital
Account balances of the Members equal the amounts that would be so distributed
to each of them. For purposes of this Section 6.3(H), a Member’s Capital Account
balance shall be deemed to be increased for any amounts that such Member is
deemed to be obligated to restore pursuant to the penultimate sentence of
Sections 1.704-2(g)(1) and -2(i)(5) of the Treasury Regulations.         

 

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(I)         Curative Allocations. The allocations set forth in Sections 6.3(A)
through (G) (collectively, the “Regulatory Allocations”) are intended to comply
with certain requirements of the Regulations. It is the intent of the Members
that, to the extent possible, all Regulatory Allocations that are made be offset
either with other Regulatory Allocations or with special allocations of other
items of income, gain, loss or deduction pursuant to this Section 6.3(I).
Therefore, notwithstanding any other provision of this Article VI (other than
the Regulatory Allocations), RDH shall make such offsetting special allocations
of income, gain, loss or deduction in whatever manner they determine appropriate
so that, after such offsetting allocations are made, each Member’s Capital
Account balance is, to the extent possible, equal to the Capital Account balance
such Member would have had if the Regulatory Allocations were not part of this
Agreement and all the Company items were allocated pursuant to Section 6.2 and
Section 6.3(H). In exercising their discretion under this Section 6.3(I), RDH
shall take into account future Regulatory Allocations under Section 6.3(A) and
Section 6.3(B) that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Section 6.3(E) and Section 6.3(F).

 

Section 6.4.         Tax Allocations.

 

(A)         Code Section 704(c) Tax Allocations.

 

(i)          In accordance with Section 704(c) of the Code 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 variation between the
adjusted basis of such property to the Company for federal income tax purposes
and its initial Gross Asset Value.

 

(ii)         In the event the Gross Asset Value of any asset of the Company is
adjusted pursuant to clause (ii) of the definition of Gross Asset Value,
subsequent allocations of income, gain, loss and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Section 704(c) of the Code and the Regulations thereunder.

 

(iii)        Any elections or other decisions relating to such allocations shall
be made by RDH in any manner that reasonably reflects the purpose and intention
of this Agreement. Allocations pursuant to this Section 6.4(A) 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
Income, Net Loss, other items or distributions pursuant to any provision of this
Agreement.

 

 22 

 

 

(B)         Knowledge of Tax Consequences. The Members are aware of the income
tax consequences of the allocations made by this of Article VI and the economic
impact of the allocations on the amounts receivable by them under this
Agreement. The Members hereby agree to be bound by the provisions of this of
Article VI in reporting their share of Company income and loss for income tax
purposes.

 

(C)         Treatment of Company. The Members intend that the Company will be
treated as a partnership, rather than an association taxable as a corporation,
for federal income tax purposes.

 

(D)         Period. For purposes of determining the Net Income, Net Loss or any
other items allocable to any period, Net Income, Net Loss and any such other
items shall be determined on a daily, monthly or other basis as determined by
RDH using any permissible method under Section 706 of the Code and the Treasury
Regulations thereunder.

 

Section 6.5.         Tax Withholding. If RDH determines that the Code or
Regulations (or any provision of state, local or foreign tax law) requires the
Company to withhold with respect to any Member’s distributive share of income or
share of distributions, the Company shall do so. Such withheld amounts shall be
from cash otherwise distributable to such Member, which shall be deemed to have
been distributed hereunder to such Member. The Members shall be authorized to
take such other actions as shall be necessary or appropriate for the Members to
comply with the Company’s obligations under applicable tax laws. In the event
any such payment made by the Members to the IRS or other taxing authority
exceeds the amount of cash otherwise then distributable to such Member, the
amount of such payment equal to such excess shall constitute an advance by the
Company to such Member for which such Member shall have personal liability, and
such Member shall immediately repay such advance to the Company, together with
interest thereon from the date when such payment is made to the date of
repayment, at a rate of interest equal to the applicable federal rate as
published by the IRS at the time such excess advance was made.

 

Section 6.6.         Other Determinations. All decisions and other matters
concerning the computation and allocation of items of income, gain, loss,
deduction and credit among the Members, and accounting procedures not
specifically and expressly provided for by the terms of this Agreement, shall be
determined by RDH, subject in each case to Section 7.1(B).

 

ARTICLE VII – MANAGEMENT; SEPARATE IDENTITY

 

Section 7.1.         Management.

 

(A)         Management of Company Business. Subject only to such matters as are
expressly non-exclusively delegated to the Manager under the Management
Agreement or require the vote or consent of Members under this Agreement, the
members under the SCL Operating Agreement or the members under the SPL Operating
Agreement, the business of the Company, SCL, SPL and any other subsidiary shall
be managed by or under the authority of RDH, including without limitation the
following actions:

 

(i)          approval and funding of Investments;

 

 23 

 

 

(ii)         sale, transfer or disposal of Investments;

 

(iii)        extensions or increases in commitments to make Investments;

 

(iv)        amendments or waivers on payment terms and/or interest and fees;

 

(v)         default waivers;

 

(vi)        any exercise of remedies, including any decision to accelerate,
enforce on collateral or enter into a standstill or forbearance agreement with
respect to any Investment;

 

(vii)       subordination of the obligations of an underlying Investment;

 

(viii)      calculation of Net Operating Cash Flow and Net Cash Flow from
Capital Transactions for any given period;

 

(ix)         making any decision required or permitted to be made by the
“Administrative Member” under the SCL Operating Agreement or the SPL Operating
Agreement, including, without limitation, any Investment Related Action (as
defined in the SCL Operating Agreement or the SPL Operating Agreement, as
applicable);

 

(x)          approval of any Annual Budget proposed by the Manager; and

 

(xi)         release of all or substantially all of the collateral securing an
Investment.

 

Other than rights and powers expressly non-exclusively reserved herein to the
Manager under the Management Agreement and the Members hereunder, RDH shall have
full, exclusive and complete discretion to manage and control the business and
affairs of the Company, to make all decisions affecting the business and affairs
of the Company and to take all such actions as it deems necessary or appropriate
to conduct the business of the Company. Notwithstanding the foregoing or
anything in this Agreement or the Management Agreement to the contrary, but
subject to Section 7.1(B), RDH shall have full power and authority to directly
take any action on behalf of the Company or any subsidiary of the Company that
could otherwise be performed by MEC under this Agreement (including, without
limitation, under Section 5.1(C)) or in its capacity as Manager under the
Management Agreement, and the signature of RDH shall be sufficient to bind the
Company in every manner to any agreement or any document in connection
therewith, provided, that, such power and authority shall include the ability to
delegate the power and authority to take any such action or category of actions
to a third-party service provider, provided, further, that RDH shall give notice
to Manager of any material action that it or a third-party service provider
takes on behalf of the Company, it being the intent of the Members, without in
any manner limiting the right of RDH to take or delegate to a third-party
service provider any action reserved to it under this Agreement or the
Management Agreement, that actions taken by RDH or the applicable third-party
service provider will be coordinated with the duties delegated to the Manager
under this Agreement or the Management Agreement.

 

 24 

 

 

(B)         Actions Requiring Member Approval. Notwithstanding any other
provision of this Agreement, Unanimous Approval shall be required to approve the
following matters by the Company or any subsidiary, and such actions may be
proposed by RDH or MEC:

 

(i)         Changing the purpose of the Company, SCL, SPL or any other
subsidiary;

 

(ii)         Incurring any indebtedness above $100,000;

 

(iii)        Making decisions regarding tax matters, including altering the tax
status of the Company;

 

(iv)        Adoption of any new accounting policies or significant change in
accounting policies;

 

(v)         Acquiring any real or personal property, except for any Investment,
any interest in collateral for an Investment or as permitted in an Annual
Budget;

 

(vi)        Acquiring an interest in or forming a partnership, limited liability
company, corporation or other business entity;

 

(vii)       Liquidating or dissolving the Company, SCL, SPL or any other
subsidiary;

 

(viii)      Authorize or take any action which could constitute a Bankruptcy of
the Company, SCL, SPL or any other subsidiary; and

 

(ix)         Any amendment, supplement or other modification to this Agreement,
the Certificate or any other organizational documents of the Company, SCL, SPL
or any other subsidiary that is materially prejudicial to MEC.

 

(C)         Investment Approval Process. All investments which are presented to
the Company in accordance with Section 7.5 shall be approved or rejected in
accordance with the investment approval process outlined on Exhibit B attached
hereto.

 

(D)         Management Agreement; Manager. On or about the date of this
Agreement, the Company will enter into a management agreement (the "Management
Agreement") with the Manager, in the form and containing the provisions of
Exhibit D attached hereto and made a part hereof, providing that, subject to
this Section 7.1, Manager will manage the day-to-day operation of the Company,
as an independent contractor, for the compensation and term specified therein.
Subject to the Management Agreement and this Agreement, including the foregoing
provisions of this Section 7.1, the Members hereby agree that the Manager shall
have non-exclusive Primary Responsibility for originating and underwriting
Investment Opportunities for submission to RDH, for the day-to-day management
and operation of the Company, SCL, SPL and any other subsidiary and for
day-to-day oversight of its Investments. As such, subject to the Management
Agreement and this Agreement, including the foregoing provisions of this Section
7.1, the Manager shall have the non-exclusive responsibility and authority to
carry out and take actions as and to extent the same are expressly set forth in
the then current Annual Budget. RDH shall have, in its sole discretion, the
right to appoint any successor Manager that the Company as the right to appoint
under the terms of the Management Agreement. In addition, if RDH delivers
written notice to MEC in its capacity as Manager that Manager is to cease
performing any action non-exclusively delegated to Manager under the Management
Agreement, then Manager shall no longer have such authority to perform such
action from and after the date of cessation specified in such notice. Finally,
RDH may, in its sole discretion, deliver, or cause the Company to deliver a
notice of termination to the Manager in accordance with Section 3(a) of the
Management Agreement.

 

 25 

 

 

(E)         Annual Budget. An annual operating expense budget for the Manager,
which shall include allocations of such budget to the Company, SCL, SPL and any
other subsidiaries, the form of which will be agreed upon by Manager and RDH,
will be approved subject to the following terms. The budget approved by RDH for
the balance of Fiscal Year 2016 subsequent to the Effective Date and for Fiscal
Year 2017 is attached hereto as Exhibit E. Each of the annual budgets attached
hereto and any annual budgets approved pursuant to this Section 7.1 are referred
to as the "Annual Budget". The Annual Budget shall be presented in the form of a
budget of MEC with detailed allocations of certain expenses expected to be
incurred directly by the Company, SPL, SDL and SCL as well as the operating
expenses of MEC that are necessary for MEC to perform its duties under this
Agreement and the Management Agreement, the SCL Operating Agreement, the SDL
Operating Agreement and the SPL Operating Agreement, it being acknowledged and
agreed that MEC’s operating expenses will be paid directly by MEC and reimbursed
under the Management Agreement and through the Administrative Member Cost
Reimbursement Fee paid by the SCL, SDL and SPL pursuant to the allocation set
forth in the SCL Operating Agreement, the SDL Operating Agreement, the SPL
Operating Agreement and the Management Agreement. The Manager shall prepare and
deliver to RDH, on or before November 15th of each then current calendar year, a
proposed Annual Budget for the upcoming calendar year. RDH shall approve or
reject the proposed Annual Budget within thirty (30) days after its receipt of
the proposed Annual Budget and satisfactory responses to all of its questions in
respect thereof. To the extent that the Annual Budget is not approved by RDH
prior to the commencement of the calendar year to which such budget is to
relate, unless and until an Annual Budget is approved, the Company shall be
operated for that calendar year based on the Annual Budget for the prior
calendar year with an inflation factor of three percent (3%) per line item. MEC
may propose amendments to the Annual Budget each fiscal quarter to allow the
Company to adjust the last-approved Annual Budget to the current set of
Investments and Company expenses. Once approved by RDH, such amended Annual
Budget shall supersede the prior Annual Budget. Furthermore, RDH and MEC agree
that, at any time that there are members in SCL or SPL which are not Affiliates
of RDH or MEC (the “Pre-Approval Period”), (i) MEC will obtain RDH’s approval of
any budget to be submitted to any such third-party member(s) in accordance with
the terms of the SCL Operating Agreement and the SPL Operating Agreement prior
to submission of such budget to any such third-party member(s), (ii) RDH will
have ultimate authority to approve or reject any changes to such budgets
proposed by any such third-party member(s) and (iii) the Annual Budget will be
reduced proportionally to reflect any lesser amounts agreed with Fundamental in
the budgets for SCL and SPL, as opposed to the corollary amounts set forth in
the Annual Budget, provided, that, during the Pre-Approval Period, the Manager
shall first prepare and deliver to RDH a proposed preliminary Annual Budget for
the upcoming calendar year no later than October 1st of each then current
calendar year for RDH’s initial review and comment.

 

 26 

 

 

(F)         Bankruptcy of a Member. The Bankruptcy of any Member shall not cause
a dissolution of the Company, and the rights of such Member to share in the Net
Income or Net Loss of the Company and to receive distributions of Company funds
shall, on the happening of such event, devolve on its successors or assigns,
subject to the terms and conditions of this Agreement, and the Company shall
continue as a limited liability company. However, in no event shall any such
successor or assign become a Substitute Member, except in accordance with
Article IX.

 

(G)         Amendments. Notwithstanding any other provision of this Agreement,
Unanimous Approval shall be required to approve amendments, supplements or other
modifications to this Agreement.

 

(H)         Key Person Provision. During the Exclusivity Term hereunder, in the
event that Michael L. Falcone, Gary A. Mentesana or Bob Hopper (i) ceases to be
employed by, associated with or devote substantially all of his or her business
time to manage the business and affairs of the Manager, or (ii) is convicted of,
or admits by consent or plea of no contest to, a felony, the Manager shall,
promptly upon becoming aware of such event, notify RDH of such event and prepare
and submit a written plan to RDH to replace the applicable Key Person or to
otherwise address the situation. Within sixty (60) days of its receipt of such
plan RDH may at its option by Notice to MEC declare a “Key Person Event” and
thereby end the Exclusivity Term hereunder.

 

(I)          Late Stage Development Loans. Notwithstanding anything to the
contrary contained herein, the Company and its subsidiaries shall not have
Investments in late stage development loans outstanding at any time in excess of
Ten Million Dollars ($10,000,000) of aggregate principal amount, or such higher
amount as determined by RDH.

 

(J)         Company Procedures. The Company shall conduct its business in
accordance with all requisite limited liability company procedures and
formalities, including, without limitation, maintaining proper limited liability
company records and books of account.

 

(K)         Separate Identity. The Company shall conduct its affairs in
accordance with the following provisions in order to preserve and ensure the
Company’s identity separate and distinct from that of any Member of the Company:

 

(i)          The Company shall hold itself out to the public as a legal entity
separate and distinct from any other person or entity, including any Member of
the Company, any Affiliate of the Company, or any Affiliate of any Member of the
Company, and shall conduct Company business and sign all legal documents solely
in its own name, in order not (A) to mislead others as to the identity with
which such other party is transacting business or (B) to suggest that the
Company is responsible for the debts of any third party (including any Member of
the Company, any Affiliate of the Company, or any Affiliate of any Member of the
Company).

 

 27 

 

 

(ii)         The Company shall maintain records, books of account and bank
accounts separate from those of any other person or entity, including any Member
of the Company, any Affiliate of the Company, or any Affiliate of any Member of
the Company.

 

(iii)        The Company shall allocate fairly and reasonably any overhead
expenses that are shared with any Member of the Company, any Affiliate of the
Company, or any Affiliate of any Member of the Company.

 

(iv)        The Company shall not commingle assets with those of any Member, any
Affiliate of the Company or any Affiliate of any Member of the Company, or any
other person or entity, and shall hold its assets in its own name, in each case,
except as may be otherwise permitted or required by the Management Agreement.

 

(v)         The Company shall maintain financial statements showing its own
assets as being separate from those of any Member, any Affiliate of the Company
or any Affiliate of any Member of the Company, or any other person or entity.

 

(vi)        The Company shall pay its debts, liabilities and (subject to clause
(iii) above) expenses out of its own funds (which may include, for the avoidance
of doubt, proceeds of Capital Contributions), and not out of the funds of any
Member, any Affiliate of the Company or any Affiliate of any Member of the
Company, or any other person or entity, in each case.

 

(vii)       The Company shall not enter into any transaction with any Member or
any Affiliate of the Company or any Affiliate of any Member of the Company,
except upon terms and conditions that are intrinsically fair and substantially
similar to those that would be available on an arm’s-length basis with third
parties other than any Member or Affiliate of the Company or any Affiliate of
any Member of the Company (it being understood and agreed that the Management
Agreement and the transactions contemplated thereby are intrinsically fair and
substantially similar to those that would be available on an arm’s-length basis
with third parties other than any Member or Affiliate of the Company or any
Affiliate of any Member of the Company).

 

(viii)      The Company (x) shall preserve its existence as an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization or formation, and qualification to do business
in the states where its business is conducted and (y) shall not to the fullest
extent permitted by law, engage in any dissolution, liquidation, consolidation,
merger, asset sale or transfer of ownership interests other than such activities
as are expressly permitted pursuant to any provision of this Agreement.

 

(ix)         The Company shall, to the extent used in its business, use separate
stationery, invoices and checks bearing only its own name.

 

(x)          The Company shall maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.

 

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(xi)         The Company shall not guarantee or become obligated for the debts
of any other person or hold out its credit as being available to satisfy the
obligations of others.

 

(xii)        The Company shall not pledge its assets for the benefit of any
other entity except in connection with the incurrence, creation or assumption of
any indebtedness expressly permitted under this Agreement.

 

(xiii)       The Company shall maintain the services of a sufficient number of
persons (by way of secondment arrangements or similar service agreements)
necessary to conduct business in a prudent manner, in light of its contemplated
business operations.

 

(xiv)       The Company shall not incur, create or assume any indebtedness
except as expressly permitted under this Agreement.

 

(xv)        The Company shall correct any known misunderstanding regarding its
separate identity.

 

For the avoidance of doubt, nothing in this Section 7.1(K) shall be construed as
prohibiting or otherwise restricting the Company from retaining the services of
MEC or its Affiliates as Manager pursuant to the Management Agreement or from
authorizing MEC or its Affiliates to perform its duties and responsibilities as
Manager on behalf of the Company in accordance with the terms of the Management
Agreement.

 

(L)         Applicable Law. Without limiting the Manager’s duties, obligations
or liabilities in any way under the Management Agreement, the Company shall
operate, and shall cause SCL and SPL to operate, in accordance with and comply
with all Applicable Laws and regulations.

 

Section 7.2          Standard of Care; Limitation of Liability; Indemnification.

 

(A)        Standard of Care. No Covered Person shall be liable to the Company or
any other Covered Person for any loss, damage or claim incurred by reason of any
action taken or omitted to be taken by such Covered Person in good faith
reliance on the provisions of this Agreement, so long as such action does not
constitute fraud, gross negligence, willful misconduct or a material breach of
this Agreement by such Covered Person or a knowing violation of the provisions
of this Agreement.

 

(B)         Good Faith Reliance. A Covered Person shall be fully protected in
relying in good faith upon the records of the Company and upon such information,
opinions, reports or statements (including financial statements and information,
opinions, reports or statements as to the value or amount of the assets,
liabilities, Net Income or Net Loss of the Company or any facts pertinent to the
existence and amount of assets from which distributions might properly be paid)
of the following Persons or groups: (i) another Member; (ii) the Manager; (iii)
one or more officers or employees of the Company; (iv) any attorney, independent
accountant, appraiser or other expert or professional employed or engaged by or
on behalf of the Company; or (v) any other Person selected in good faith by or
on behalf of the Company, in each case as to matters that such relying Person
reasonably believes to be within such other Person's professional or expert
competence. The preceding sentence shall in no way limit any Person's right to
rely on information to the extent provided in § 18-406 of the Act.

 

 29 

 

 

(C)         Limitation of Liability. This Agreement is not intended to, and does
not, create or impose any fiduciary duty on any Covered Person. Furthermore,
each of the Members and the Company hereby waives any and all fiduciary duties
that, absent such waiver, may be implied by Applicable Law, and in doing so,
acknowledges and agrees that the duties and obligation of each Covered Person to
each other and to the Company are only as expressly set forth in this Agreement.
The provisions of this Agreement, to the extent that they restrict the duties
and liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the Members to replace such other duties and liabilities of such
Covered Person.

 

(D)         Duties. Whenever in this Agreement a Covered Person is permitted or
required to make a decision (including a decision that is in such Covered
Person's "discretion" or under a grant of similar authority or latitude), the
Covered Person shall be entitled to consider only such interests and factors as
such Covered Person desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors affecting
the Company or any other Person. Whenever in this Agreement a Covered Person is
permitted or required to make a decision in such Covered Person's "good faith,"
the Covered Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Agreement or any
other Applicable Law.

 

Section 7.3.         Indemnification.

 

(A)         Indemnification. Notwithstanding anything to the contrary contained
herein, to the fullest extent permitted by the Act, as the same now exists or
may hereafter be amended, substituted or replaced (but, in the case of any such
amendment, substitution or replacement, only to the extent that such amendment,
substitution or replacement permits the Company to provide broader
indemnification rights than the Act permitted the Company to provide prior to
such amendment, substitution or replacement), the Company shall indemnify, hold
harmless, defend, pay and reimburse any Covered Person against any and all
losses, claims, damages, judgments, fines or liabilities, including reasonable
legal fees or other expenses incurred in investigating or defending against such
losses, claims, damages, judgments, fines or liabilities, and any amounts
expended in settlement of any claims (collectively, "Losses") to which such
Covered Person may become subject by reason of:

 

(i)          any act or omission or alleged act or omission performed or omitted
to be performed on behalf of the Company, any Member, SCL, SPL or any other
direct or indirect subsidiary of the foregoing in connection with the business
of the Company; or

 

(ii)         such Covered Person being or acting in connection with the business
of the Company as a member, stockholder, Affiliate, manager, committee member,
director, officer, employee or agent of the Company, any Member, or any of their
respective Affiliates, or that such Covered Person is or was serving at the
request of the Company as a member, committee member, manager, director,
officer, employee or agent of any Person including the Company;

 

 30 

 

 

provided, that (x) such Covered Person acted in good faith and in a manner
believed by such Covered Person to be in, or not opposed to, the best interests
of the Company and, with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful, and (y) such Covered Person's conduct
did not constitute fraud, gross negligence, willful misconduct or a material
breach of this Agreement by such Covered Person or a knowing violation of the
provisions of this Agreement, in either case as determined by a final,
nonappealable order of a court of competent jurisdiction. In connection with the
foregoing, the termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Covered Person did not act
in good faith or, with respect to any criminal proceeding, had reasonable cause
to believe that such Covered Person's conduct was unlawful, or that the Covered
Person's conduct constituted fraud, gross negligence, willful misconduct or a
knowing violation or material breach of this Agreement.

 

(B)         Not Responsible for Other’s Indebtedness or Obligations. None of the
Covered Persons nor the Company shall be responsible or liable for any
indebtedness or obligation of the other Covered Persons incurred either before
or after the execution of this Agreement, except as expressly provided by the
terms of this Agreement.

 

(C)         Control of Defense. Upon a Covered Person's discovery of any claim,
lawsuit or other proceeding relating to any Losses for which such Covered Person
may be indemnified pursuant to this Section 7.3, the Covered Person shall give
prompt written notice to the Company of such claim, lawsuit or proceeding,
provided, that the failure of the Covered Person to provide such notice shall
not relieve the Company of any indemnification obligation under this Section
7.3, unless the Company shall have been materially prejudiced thereby. The
Company shall be entitled to participate in or assume the defense of any such
claim, lawsuit or proceeding at its own expense. After notice from the Company
to the Covered Person of its election to assume the defense of any such claim,
lawsuit or proceeding, the Company shall not be liable to the Covered Person
under this Agreement or otherwise for any legal or other expenses subsequently
incurred by the Covered Person in connection with investigating, preparing to
defend or defending any such claim, lawsuit or other proceeding. If the Company
does not elect (or fails to elect) to assume the defense of any such claim,
lawsuit or proceeding, the Covered Person shall have the right to assume the
defense of such claim, lawsuit or proceeding as it deems appropriate, but it
shall not settle any such claim, lawsuit or proceeding without the consent of
the Company (which consent shall not be unreasonably withheld, conditioned or
delayed).

 

(D)       Reimbursement. The Company shall promptly reimburse (and/or advance to
the extent reasonably required) each Covered Person for reasonable legal or
other expenses (as incurred) of such Covered Person in connection with
investigating, preparing to defend or defending any claim, lawsuit or other
proceeding relating to any Losses for which such Covered Person may be
indemnified pursuant to this Section 7.3; provided, that if it is finally
judicially determined that such Covered Person is not entitled to the
indemnification provided by this Section 7.3, then such Covered Person shall
promptly reimburse the Company for any reimbursed or advanced expenses.

 

 31 

 

 

(E)         Entitlement to Indemnity. The indemnification provided by this
Section 7.3 shall not be deemed exclusive of any other rights to indemnification
to which those seeking indemnification may be entitled under any agreement or
otherwise. The provisions of this Section 7.3 shall continue to afford
protection to each Covered Person regardless of whether such Covered Person
remains in the position or capacity pursuant to which such Covered Person became
entitled to indemnification under this Section 7.3 and shall inure to the
benefit of the executors, administrators, legatees and distributees of such
Covered Person.

 

(F)         Insurance. To the extent available on commercially reasonable terms,
the Company may purchase, at its expense, insurance to cover Losses covered by
the foregoing indemnification provisions and to otherwise cover Losses for any
breach or alleged breach by any Covered Person of such Covered Person's duties
in such amount and with such deductibles as RDH may reasonably determine;
provided, that the failure to obtain such insurance shall not affect the right
to indemnification of any Covered Person under the indemnification provisions
contained herein, including the right to be reimbursed or advanced expenses or
otherwise indemnified for Losses hereunder. If any Covered Person recovers any
amounts in respect of any Losses from any insurance coverage, then such Covered
Person shall, to the extent that such recovery is duplicative, reimburse the
Company for any amounts previously paid to such Covered Person by the Company in
respect of such Losses.

 

(G)         Funding of Indemnification Obligation. Notwithstanding anything
contained herein to the contrary, any indemnity by the Company relating to the
matters covered in this Section 7.3 shall be provided out of and to the extent
of Company Assets only, and no Member (unless such Member otherwise agrees in
writing) shall have personal liability on account thereof or shall be required
to make additional Capital Contributions to help satisfy such indemnity by the
Company.

 

(H)         Savings Clause. If this Section 7.3 or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Covered Person
pursuant to this Section 7.3 to the fullest extent permitted by any applicable
portion of this Section 7.3 that shall not have been invalidated and to the
fullest extent permitted by Applicable Law.

 

(I)          Amendment. The provisions of this Section 7.3 shall be a contract
between the Company, on the one hand, and each Covered Person who served in such
capacity at any time while this Section 7.3 is in effect, on the other hand,
pursuant to which the Company and each such Covered Person intend to be legally
bound. No amendment, modification or repeal of this Section 7.3 that adversely
affects the rights of a Covered Person to indemnification for Losses incurred or
relating to a state of facts existing prior to such amendment, modification or
repeal shall apply in such a way as to eliminate or reduce such Covered Person's
entitlement to indemnification for such Losses without the Covered Person's
prior written consent.

 

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(J)         Survival. The provisions of this Section 7.3 shall survive the
dissolution, liquidation, winding up and termination of the Company.

 

(K)        Other Liabilities. Notwithstanding anything contained herein to the
contrary, in no event shall this Section 7.3 provide any indemnification right
to MEC, MMA or any of their respective Affiliates for any Losses or other
liabilities that arise from (i) MEC’s breach (A) in its capacity as Manager, of
the Management Agreement (including, for the avoidance of doubt, any breach of
the Management Standard) or (B) of the Subscription Agreement or (ii) MMA’s
obligations under the MMA Guaranty.

 

Section 7.4.        Curing Member. If at any time a lender to the Company
requires a payment of any portion of any financing of the Company, SCL, SPL or
any other subsidiary in connection with a default by the Company, SCL, SPL or
any other subsidiary thereunder, then in each such case, either Member shall
have the right but not the obligation to fund all or any portion of the amount
that the applicable lender requires in connection with such default or other
event (including the full repayment of such loan, if applicable), and any such
funding shall be deemed to constitute a Capital Contribution of the Member
making such payment. If both Members elect to fund any such amounts, then they
shall do so in the proportions determined in accordance with Section 5.1(C)
above or as they otherwise shall agree.

 

Section 7.5.         Investment Exclusivity; Other Activities.

 

(A)        Except as provided in Section 7.5(B), any Member or its Affiliates
may engage in, or possess an interest in, other business ventures of every
nature and description, independently or with others, whether or not such other
business ventures shall be in competition with any activities of the Company,
and neither the Company nor the other Members shall have any right by virtue of
this Agreement in and to such independent ventures or to the income or profits
derived therefrom, and such activities shall not be construed as a breach of any
duty of loyalty or other fiduciary duty to the Members or the Company.

 

(B)         During the Exclusivity Term, MEC, the Manager and their Affiliates
shall present all investment opportunities in North America to provide late
stage renewable energy development loans, renewable energy construction loans
and renewable energy permanent loans (such opportunities, “Company
Opportunities”) for consideration by the Company, SCL, SPL or another subsidiary
exclusively; provided, however, that each Member that is not a Non-Funding
Member shall have the option but not the obligation to bring to the Company any
Company Opportunities while there is any unpaid principal or accrued interest
owing to such Member on a Default Loan. For the avoidance of doubt, the
provisions of this Section 7.5(B) shall (i) not apply to RDH and its Affiliates
and (ii) shall cease to apply and be of no further force or effect immediately
upon the expiration of the Exclusivity Term.

 

(C)         Rejected (or deemed rejected) Company Opportunities may be pursued
in accordance with Exhibit B, Section (v).

 

Section 7.6         Fees and Expenses. Any Member shall be entitled to
reimbursement from the Company of all expenses of the Company reasonably
incurred and paid by such Member on behalf of the Company as provided for in the
Annual Budget or otherwise as approved by RDH.

 

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Section 7.7.        Right to Enforce. Notwithstanding anything to the contrary
set forth in this Agreement, RDH shall have the authority to direct the Company
to pursue any and all causes of action against MEC and its Affiliates under this
Agreement, the Management Agreement, the Subscription Agreement and the MMA
Guarantee.

 

ARTICLE VIII - ACCOUNTING AND REPORTS; BANK ACCOUNTS

 

Section 8.1.        Books and Records. The Manager shall maintain at the
principal place of business of the Company set forth in Section 1.2 full and
accurate books of the Company showing all receipts and expenditures, assets and
liabilities, profits and losses, names and current addresses of Members, and all
other records necessary for recording the Company’s business and affairs. All
Members and their duly authorized representatives shall have the right to
inspect and copy any or all of the Company’s books and records, including books
and records necessary to enable a Member to defend any tax audit or related
proceeding.

 

Section 8.2.         Books, Records and Tax Matters.

 

(A)         The books and records of the Company shall be kept, and the
financial position and the results of its operations recorded, in accordance
with GAAP. The Manager shall prepare quarterly and annual financial statements
of the Company and shall distribute them to the Members promptly after
completion. Specifically, the Manager shall prepare the following statements and
reports and deliver them to each Member:

 

(i)          quarterly financial statements, no later than the 30th day of each
quarterly following the end of each calendar quarter, to include the following:

 

(a)          current Company balance sheet;

 

(b)          current Company income statement;

 

(c)          current period Net Operating Cash Flow distribution calculation;

 

(d)          current Company statement of changes in Member’s equity;

 

(e)          current period variance report setting forth any differences
between current Annual Budget and actual expenses; and

 

(f)          schedule of all Investments held by the Company.

 

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(ii)         upon request of any Member the following:

 

(a)          trial balance of general ledger accounts;

 

(b)          general ledger, reflecting all transactions and Investments,
liabilities, Members’ Capital Accounts, gross revenue and expenses;

 

(c)          reconciliation of all bank transactions;

 

(d)          aged accounts receivable report with respect to all Investments;

 

(e)          such other reports and information as reasonably requested by any
Member from time to time; and

 

(f)          within 75 days of the end of each calendar year, audited financial
statements for the Company, provided that no later than March 15 of each year
the Company shall inform the Members and their designated accountants (which
shall initially be KPMG, LLP for RDH) of any differences between the audited
financial statements and the K-1 previously distributed;

 

(iii)        on an annual basis, no later than the 60th day following the end of
each Fiscal Year, Form K-1s and related tax disclosures; provided, if
adjustments are identified during the preparation of the annual audited
financial statements which would impact amounts or disclosures provided on Forms
K-1 and related tax disclosures delivered pursuant to this Section, the Company
shall promptly notify Members and provide revised Forms K-1 and related tax
disclosures no later than the 90th day following the end of each Fiscal Year;
and

 

(iv)        estimated current taxable income, deduction, gain, loss or credit
within 30 days of each of March 31 and September 30 of each Fiscal Year.

 

(B)         The Manager shall be the Tax Matters Member (“TMM”) and shall
prepare, or cause to be prepared, all tax returns required of the Company at the
Company’s expense. The TMM shall promptly take such actions as may be necessary
to cause each Member to become a “notice Member” within the meaning of Section
6231(a)(8) of the Code. The TMM shall promptly furnish to the Members a copy of
all notices or other written communications received by the TMM from the IRS
relating to the Company (except such notices or communications as are sent
directly to the Members by the IRS). The TMM shall keep the Members informed of
all matters which may come to its attention in its capacity as TMM by giving the
Members Notice thereof within fifteen (15) days after the TMM becomes informed
of any such matter or within such shorter period as may be required by the
appropriate statutory or regulatory provisions. The TMM shall give the other
Members prompt Notice upon receipt of advice that the IRS or any other taxing
authority intends to examine any Company tax return or the books and records of
the Company. The TMM shall provide the Members with a reasonable opportunity to
consult with the TMM regarding the course and conduct of all material matters
that are the subject of or relating to or potentially resulting in an adjustment
of Company items and the TMM shall obtain RDH’s written consent prior to
providing correspondence or other information to the IRS or any taxing
authority. At the request of any Member, the TMM shall elect pursuant to Section
754 to adjust the basis of the Company’s properties.

 

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The TMM shall constitute the “partnership representative” under 6223 of the Code
as in effect pursuant to the Bipartisan Budget Act of 2015, P.L. 114-74 (the
“Budget Act”), and the TMM shall take any and all action required under the Code
or Treasury Regulations, as in effect from time to time, to designate itself as
the “partnership representative.” Following the designation of the TMM as the
“partnership representative,” the “partnership representative” shall succeed to
all of the duties and obligations of the TMM that existed prior to the effective
date of the Budget Act, subject to any limitations contained herein. By
Unanimous Approval, as permitted under the Code and applicable Regulations, the
TMM, on behalf of the Company, may: (i) elect pursuant to Section 6221(b) of the
Code (as modified by the Budget Act) that the provisions of Subchapter C of
Chapter 63 of the Code (as modified by the Budget Act) not apply to the Company,
or (ii) elect to use the alternative procedure to payment of imputed
underpayment described in Section 6226 of the Code (as modified by the Budget
Act). Each Member shall cooperate with the TMM in good faith to amend this
Agreement if the TMM determines in its sole discretion that an amendment is
required, after promulgation of Treasury Regulations implementing the Budget
Act, to maintain the intent of the parties with respect to the authority of the
TMM. The TMM or its successor, as partnership representative, shall have all of
the powers and responsibilities of the TMM as otherwise set forth in this
Agreement to the extent permitted under the Code (as modified by the Budget Act)
and applicable Regulations promulgated thereunder. However, in no case, shall
the TMM cause the Company to elect to be subject to the rules under the Budget
Act prior to January 1, 2018.

 

(C)         If the Company incurs any costs related to any tax audit,
declaration of any tax deficiency or any administrative proceeding or litigation
involving any Company tax matter, the Company shall use all available Net
Operating Cash Flow for such purpose, but no Member shall be required to advance
or contribute funds to the Company for such purpose.

 

Section 8.3.         Bank Accounts. The bank accounts of the Company and its
subsidiaries (the “Bank Accounts”) will be maintained in such commercial banks
or trust companies organized and existing under the laws of the United States of
America or of any state and meeting such requirements as RDH will from time to
time determine in its sole discretion. Withdrawals from the Bank Accounts will
be made only in the ordinary course of business and, if such withdrawal is not
expressly provided for in the Approved Budget or does not represent a draw on an
Approved Investment, will require the prior written approval of RDH. There will
be no commingling of the funds or assets of the Company, SCL, SPL or any of its
other subsidiaries and any other Person. Representatives of RDH will be
designated as co-signatories on all Bank Accounts, and the Manager will notify
RDH of the location of each Bank Account. Notwithstanding anything to the
contrary in this Agreement and consistent with the terms of the Deposit Account
Control Agreement, RDH shall at its election at any time and from time to time
have complete authority and control over the Bank Accounts and, following the
Manager ceasing for any reason to be the manager under the Management Agreement,
including without limitation termination of the Management Agreement in
accordance with its terms, the Manager and its Affiliates shall have no
authority or power to withdraw funds or otherwise deal in any manner with any of
the Bank Accounts.

 

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Section 8.4.         Opt-in to UCC Article 8. All Interests in the Company will
be securities governed by Article 8 of the Uniform Commercial Code as in effect
from time to time in the State of New York and any other applicable
jurisdiction. Such Interests are not evidenced by certificates, and will remain
not evidenced by certificates. The Company is not authorized to issue
certificated interests. The Company will keep a register of the Interests of the
Members, in which it will record all transfers of such Interests.

 

ARTICLE IX - TRANSFERS OF INTERESTS

 

Section 9.1.         Restrictions on Transfers. Except with the written consent
of RDH and as otherwise expressly permitted under this Agreement, MEC shall not,
directly or indirectly, sell, assign, transfer, mortgage, pledge, hypothecate or
otherwise encumber or permit or suffer any encumbrance of all or any part of its
Interest (each, a “Transfer”); provided, however, that MEC may Transfer all or
any part of its Interest to any of its Affiliate or Affiliates without the
consent of the RDH; provided further that in the event that such Affiliate
ceases to be an Affiliate of MEC, such Interest shall be transferred back to
MEC, unless the consent of RDH is obtained. Subject to Section 9.2, hereof, RDH
may Transfer all or any part of its Interest without the consent of MEC. For the
avoidance of doubt, transfers of limited liability company interests or other
equity interests, directly or indirectly, in MMA shall not be a Transfer
hereunder.

 

Section 9.2          Tag-Along Right.

 

(A)         In the event that RDH proposes to sell all or any portion of its
Interest in the Company to any Third Party (the “Proposed Buyer”), then MEC
shall have the right, but not the obligation (the “Tag-Along Right”), to require
the Proposed Buyer to purchase up to its pro rata portion (i.e., up to the same
Percentage Interest as the Percentage Interest proposed to be sold by RDH) of
the Interest proposed to be sold by the RDH to the Proposed Buyer. RDH shall
give Notice (the “Initial Tag-Along Notice”) to MEC at least thirty (30) days
prior to the date of the proposed Transfer, stating (a) the identity of the
Proposed Buyer; (b) the proposed amount of consideration and terms and
conditions of payment offered by such Proposed Buyer (if the proposed
consideration is not cash, the Notice shall describe the terms of the proposed
consideration) and any other material terms and conditions of the Proposed
Buyer's offer; (c) the amount of Interest to be transferred; (d) a copy of the
form of agreement, in substantially final form, proposed to be executed in
connection therewith; and (e) that the Proposed Buyer has been informed of the
Tag-Along Right.

 

(B)         If MEC elects to exercise the Tag-Along Right, MEC shall give Notice
to RDH (“Tag-Along Exercise Notice”), within fifteen (15) days following receipt
of the Initial Tag-Along Notice, indicating its election to exercise the
Tag-Along Right. The Tag-Along Exercise Notice shall state the amount of
Interest that the MEC proposes to include in such transfer to the Proposed Buyer
(the “Tag-Along Interest”).

 

(C)         The closing with respect to any sale to a Proposed Buyer pursuant to
this Section shall be held at the time and place specified in the Initial
Tag-Along Notice but in any event within sixty (60) days of the date the Initial
Tag-Along Notice is given.

 

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(D)         If MEC elects to exercise the Tag-Along Right, it shall make or
provide the same representations, warranties, covenants, indemnities and
agreements as RDH makes or provides in connection with the sale (except that in
the case of representations, warranties, covenants, indemnities and agreements
pertaining specifically to RDH, MEC shall make the comparable representations,
warranties, covenants, indemnities and agreements pertaining specifically to
itself); provided, that all representations, warranties, covenants and
indemnities shall be made by RDH and MEC severally and not jointly and any
indemnification obligation in respect of breaches of representations and
warranties that do not relate to specifically to such Member shall be in an
amount not to exceed the aggregate proceeds received by such Member in
connection with any sale consummated pursuant to this Section 9.2. The fees and
expenses of RDH incurred in connection with a sale under this Section 9.2 and
for the benefit of all Members (it being understood that costs incurred by or on
behalf of RDH for its sole benefit will not be considered to be for the benefit
of all Members), to the extent not paid or reimbursed by the Company or the
Proposed Buyer, shall be shared by all the Members on a pro rata basis, based on
the consideration received by each Member; provided, that MEC shall not be
obligated to make any out-of-pocket expenditure prior to the consummation of the
transaction consummated pursuant to this Section 9.2.

 

(E)         Consummation of the Transfer of Interest by RDH to a Proposed Buyer
shall be conditioned upon consummation of the Transfer by MEC to such Proposed
Buyer of the Tag-Along Interest, if any. In the event that the Proposed Buyer
does not purchase the Tag-Along Interest from the electing MEC on the same terms
and conditions as the purchased from the RDH, then RDH shall reduce the portion
of its Interest to be sold to such Proposed Buyer so that MEC may sell a
proportionate amount of its interest to such Proposed Buyer. If at the end of
sixty (60) days following the date on which an Initial Tag-Along Notice was
given, the sale of Interest by RDH and the sale of the Tag-Along Interest have
not been completed in accordance with the terms of the Proposed Buyer's offer,
RDH shall not transfer all or any portion of its Interest without compliance
with this Section 9.2.

 

Section 9.3.         Further Restrictions on Transfer. In addition to the other
requirements of this Article IX, no Transfer may be made by a Member (i) to the
extent such transfer would violate applicable securities laws, or cause the
Company to lose its status as a partnership for federal income tax purposes or
cause a termination of the Company for federal income tax purposes; (ii) if such
Transfer is prohibited under any loan documents then applicable to the Company
unless the applicable lender approves of such Transfer; and/or (iii) if such
Transfer would subject the Company to the registration requirements of the
Investment Company Act of 1940, as amended, or otherwise have a material adverse
effect on the Company as a result of regulatory restrictions imposed by any
governmental authority.

 

Section 9.4.         Effect of Transfer.

 

(A)         Any transferee of an Interest in the Company shall take subject to
the restrictions on Transfer imposed by this Agreement.

 

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(B)         No involuntary Transfer and no Transfer in violation of this
Agreement shall be recognized by the Company, unless otherwise required by
Applicable Law, and then only to the minimum extent required by Applicable Law.
Without limiting the generality of the foregoing, the transferee of such a
Transfer shall have no right to participate in the management of the business
and affairs of the Company or to become a Member.

 

Section 9.5.        Additional or Substitute Members. A transferee shall have
the right to become an additional or Substitute Member only if (i) the
requirements of this Article IX are met, including the approval of RDH if the
Transfer is otherwise prohibited under this Article IX, and (ii) such Person
executes an instrument of transfer reasonably satisfactory to the Members
accepting and adopting the terms and provisions of this Agreement, and (iii)
such Person pays any reasonable expenses incurred by the Company in connection
with such Person’s admission as a Member.

 

Section 9.6.         Representations of Members. Each Member (including each
additional or Substitute Member in connection with its admission as a Member)
severally represents and warrants to the Company and other Member(s), as to
itself, as of the Effective Date (or the date of its admission) as follows:

 

(A)         Such Member is acquiring its Interest for its own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same; and, except as contemplated by this Agreement such Member has no
present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition thereof.

 

(B)         Such Member has made its own independent decisions to enter into
this Agreement and the transaction contemplated herein and as to whether the
transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary.

 

(C)         Such Member is not relying on any communication (written or oral) of
the other Member as investment advice or as a recommendation to enter into this
Agreement, it being understood that information and explanations related to the
terms and conditions of this Agreement will not be considered investment advice
or a recommendation to enter into this Agreement. No communication (written or
oral) received from the other Member will be deemed to be an assurance or
guarantee as to the expected results of this Agreement.

 

(D)         Such Member is capable of assessing the merits of and understanding
(on its own behalf or through independent professional advice), and understands
and accepts, the terms, conditions and risks of entering into this Agreement,
and it is capable of assuming, and assumes, such risks.

 

(E)         Such Member has conducted its own inquiry concerning the Company,
its business and its personnel as such Member has deemed appropriate, and the
Company has made available to such Member any and all written information which
it has requested and has answered to such Member’s satisfaction all inquiries
made by such Member.

 

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(F)         Such Member has such knowledge and experience in financial and
business matters so as to enable it to utilize the information made available to
it in order to evaluate the merits and risks of an investment in the Company and
to make an informed investment decision with respect thereto.

 

(G)         Such Member can afford a complete loss of its investment in the
Interest and can afford to hold the investment in such Interest for an
indefinite period of time, and the Member’s investment in the Interest is
consistent with the investment purposes and objectives and cash flow
requirements of the Member and will not adversely affect the Member’s overall
need for diversification and liquidity.

 

(H)         Such Member meets all suitability standards imposed on it by
Applicable Law and is an “accredited investor” as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as amended.

 

(I)          This Agreement has been negotiated as an arms-length between the
Members, and no agency relationship exists between or among such parties.

 

Section 9.7.        Non-Solicitation. Neither RDH nor any other TSSP Managed
Entity shall solicit for Competing Investments (a) for a period of three (3)
months from the end of the Exclusivity Term, any developer client who has closed
a loan with the Company, SCL, SPL or SDL within the one (1) year period prior to
the end of the Exclusivity Term and (b) for a period of six (6) months from the
date of the executed term sheet, any developer client who has executed a term
sheet with the Company, SCL, SPL or SDL, in respect of the same facility or
portfolio of facilities to which such executed term sheet relates; provided,
however, that the foregoing restrictions shall not apply to SolarCity
Corporation, Sunrun Inc., SunPower Corporation or any of their respective
Affiliates.  Each Member shall not solicit (other than by means of employment
advertisements to the general public) employees of the other for a period of one
year subsequent to the end of the Exclusivity Term.

 

ARTICLE X - DISSOLUTION AND LIQUIDATION

 

Section 10.1.       Term and Dissolution.

 

(A)         The Company shall be dissolved, wound up and terminated as provided
herein upon the first to occur of the following:

 

(i)          An election to dissolve the Company is made by Unanimous Approval;
or

 

(ii)         Termination of the Exclusivity Term hereunder other than upon the
seventh (7th) anniversary of the Effective Date; or

 

(iii)        Notice to dissolve the Company is given by either Member to the
other at any time following the seventh (7th) anniversary of the Effective
Date]; or

 

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(iv)         Notice to dissolve the Company is given by RDH if MEC, in its
capacity as a Member hereunder or the Manager under the Management Agreement, or
any of its managers, members, officers, representatives, employees or agents (A)
commits a felony or other criminal act involving fraud, misappropriation of
funds, dishonesty or acts of a similar nature relating to the Company or its
Investments, (B) misapplies any funds derived from the Investments; or (C)
commits fraud, misrepresentation, gross negligence or willful misconduct with
respect to the performance of this Agreement, the Management Agreement or the
Investments; provided, however, that MEC shall have thirty (30) days from such
notice to cure any such act described in Clauses (A) through (C) immediately
above if such act is committed by any representative, employee or agent of MEC
(for the avoidance of doubt, other than any officer or manager of MEC),
provided, further, that the adequacy of any such cure shall be in RDH’s sole
discretion.

 

Except as expressly provided herein or as otherwise required by applicable
Delaware law, the Members shall have no power to dissolve the Company.

 

(B)         In the event of the dissolution of the Company for any reason, RDH
or a liquidating agent appointed by RDH (the “Liquidator”) shall commence to
wind up the affairs of the Company and to liquidate the Company Assets;
provided, however, that, subject to RDH’s continuing authority pursuant to
Section 7.1(A), the liquidation shall be deferred until the maturity of all of
the Investments, except (i) to the extent provided by the Act; or (ii) to the
extent MEC requests that an Investment be liquidated, RDH, may, in its sole
discretion, liquidate such Investment on behalf of the Company. Notwithstanding
anything in this Section 10.1(B) to the contrary and for the avoidance of doubt,
the Members shall continue to share all income, losses and distributions during
the period of dissolution and liquidation in accordance with Article VI.

 

(C)         The Liquidator is hereby expressly authorized and empowered to
execute any and all documents necessary or desirable to effectuate the
liquidation and termination of the Company and the transfer of any Company
Assets.

 

Section 10.2.       Liquidation of Company Assets.

 

(A)         Once the dissolution process commences, (i) the Company will
continue to close and fund Investments for which the Company issued a binding,
written commitment on or before the date of the election to dissolve pursuant to
Section 10.1(A)(i), the termination of the Exclusivity Term under Section
10.1(A)(ii) or the date the notice to dissolve is given pursuant to Section
10.1(A)(ii), as the case may be, (ii) the Company will not commit to any new
Investments, (iii) the Company will continue to operate until its last
Investment is redeemed or sold, and (iv) the exclusivity provisions of Section
7.5 requiring each Member to bring all investment opportunities to the Company
will terminate.

 

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(B)         The Liquidator shall, subject to Section 10.1(B), as soon as
practicable following the event giving rise to the dissolution, winding up and
termination of the Company, wind up with the affairs of the Company and sell
and/or distribute the Company Assets. The Company Assets shall be applied in the
following order of priority:

 

(i)          first, to pay the costs and expenses of the winding up, liquidation
and termination of the Company;

 

(ii)         second, to creditors of the Company, in the order of priority
provided by law, including fees and reimbursements payable to the Members or
their Affiliates, but not including those liabilities (other than liabilities to
the Members for any expenses of the Company paid by the Members or their
Affiliates, to the extent the Members are entitled to reimbursement hereunder)
to the Members in their capacity as Members;

 

(iii)        third, to establish reserves reasonably adequate to meet any and
all contingent or unforeseen liabilities or obligations of the Company;
provided, that at the expiration of such period of time as the Liquidator may
deem advisable, the balance of such reserves remaining after the payment of such
contingencies or liabilities shall be distributed as hereinafter provided;

 

(iv)         fourth, to the Members for the principal and accrued but unpaid
interest outstanding on any cash loans (other than Default Loans), if any, made
by them to the Company; and

 

(v)          fifth, the remainder to the Members in accordance with Section
6.1(C).

 

Notwithstanding the foregoing, if the Company is dissolved because of
termination of the Exclusivity Term under Section 10.1(A)(ii) resulting from the
replacement of the Manager under Section 7(d) of the Management Agreement, then
MEC shall pay the costs and expenses of the winding up, liquidation and
termination of the Company.

 

(C)         Notwithstanding anything else in this Agreement to the contrary, no
Member shall have an obligation to contribute additional capital to the Company
in order to restore a deficit balance in his Capital Account at any time,
including upon liquidation of a Member’s Interest in the Company (whether or not
in connection with a liquidation of the Company), and such deficit shall not be
considered as owed to the Company or any other Person for any purpose
whatsoever.

 

(D)         Within a reasonable time following the completion of the liquidation
of the Company Assets, the Manager shall cause to be prepared, and shall furnish
to each Member, a statement setting forth the assets and liabilities of the
Company as of the date of complete liquidation and each Member’s portion of
distributions pursuant to Section 10.2(B).

 

(E)         Each Member shall look solely to the Company’s assets for all
distributions with respect to the Company and such Member’s Capital
Contributions (including return thereof), and such Member’s share of profits or
losses thereon, and shall have no recourse therefor (upon dissolution or
otherwise) against the Members or any other Member. No Member shall have any
right to demand or receive property other than cash upon dissolution and
termination of the Company.

 

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(F)         The Company shall terminate when all property owned by the Company
shall have been sold (or the Liquidator shall have determined to distribute them
in kind) and the assets shall have been distributed as provided in Section
10.2(B). Upon such termination, the Members shall cease to be Members of the
Company and the Members shall then cause to be executed and filed a Certificate
of Cancellation of the Company.

 

ARTICLE XI - MISCELLANEOUS PROVISIONS

 

Section 11.1.      Title to Property. All property owned by the Company, whether
real or personal, tangible or intangible, shall be deemed to be owned by the
Company as an entity, and no Member, individually, shall have any ownership of
such property.

 

Section 11.2.      Applicable Law. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of Delaware applied without regard to principles of conflicts
of law. Notwithstanding the foregoing, to the extent permitted by the Act, this
Agreement shall not be governed by any amendments to the Act that become
effective subsequent to the date of this Agreement and that would only be
applicable to the Company absent a provision in this Agreement to the contrary,
unless such amendments are adopted as amendments to this Agreement in accordance
with the applicable provisions hereof.

 

Section 11.3       Further Assurances. The Members will execute whatever
certificates and documents and will file, record and publish such certificates
and documents as are required to form and operate a limited liability company
under the laws of the State of Delaware. The Members will also execute and file,
record and publish, such certificates and documents as they, upon the advice of
counsel, may deem necessary or appropriate to comply with other Applicable Laws
governing the formation and operation of a limited liability company.

 

Section 11.4.       Binding Agreement. This Agreement shall be binding upon the
parties hereto, and their respective permitted successors and assigns.

 

Section 11.5.      Waiver of Partition. Each of the parties hereto irrevocably
waives during the term of the Company any right that it may have to maintain any
action for partition with respect to any property of the Company.

 

Section 11.6.      Counterparts and Effectiveness. This Agreement may be
executed in several counterparts, which shall be treated as originals for all
purposes, and all so executed shall constitute one Agreement, binding on all of
the parties hereto, notwithstanding that all the parties are not signatory to
the original or the same counterpart. Any such counterpart shall be admissible
into evidence as an original hereof against the Person who executed it. The
execution and delivery of this Agreement by electronic means (including
facsimile and electronic mail) shall be sufficient for all purposes and shall be
binding upon any Person who so executes.

 

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Section 11.7.      Publicity. Without the approval of all other Members, no
Member, in its capacity as such, shall, at any time during the term of the
Company and thereafter, whether or not at the time a Member of the Company, (A)
issue any press release or advertisement or take any similar action concerning
the Company’s business or affairs, (B) publicize financial information
concerning the Company, or (C) disclose the Company’s affairs or the terms and
provisions of this Agreement or any other agreement to which the Company or an
Affiliate is a party. Notwithstanding the foregoing, the Members may each
disclose such information (1) to their respective Affiliates, and to the
respective employees, advisors, agents and consultants of the Members and their
respective Affiliates, (2) to actual or prospective lenders to, or actual or
prospective investors in, a Member or any Affiliate of a Member, (3) to actual
or prospective purchasers (direct or indirect) of such Member’s Interest, and
(4) as may be required by law (including regulatory compliance) or to enforce
their rights hereunder, provided, that in each case described in clauses (1),
(2) and (3), such Persons have agreed to abide by the terms of this Section 11.7
or have otherwise entered into a contract with restrictions on disclosure
substantially the same (and not less than one year in duration) as the terms of
this Section 11.7 (or in the case of advisors, agents and consultants, are
otherwise bound by professional or legal obligations of confidentiality); and
provided further that, prior to making any such disclosure, MEC shall (x)
provide RDH with prior written notice and a reasonable opportunity to review a
draft of the proposed disclosure and (y) use good faith in taking into account
RDH’s comments (if any). Without limiting the generality of the foregoing, MMA
shall in its sole judgment be permitted to file a Current Report on Form 8-K
with respect to the execution of this Agreement in the form of Exhibit G
attached hereto (the “Draft 8-K”). Prior to filing, if MEC or MMA wishes to
modify the Draft-8K, it shall share a copy of the revised proposed filing with
RDH and shall cause MMA to use good faith in taking into account RDH’s comments
(if any). Notwithstanding anything to the contrary, the Members may disclose the
tax treatment and tax structure of the transaction unless required to be kept
confidential to the extent necessary to comply with any applicable securities
Laws. The preceding sentence is intended to cause the transaction not to be
treated as having been offered under conditions of confidentiality for purposes
of Treasury Regulation Sections 1.6011-4(b)(3) and 301.6111-2(a)(2)(ii) (or any
successor provision) of the Regulations and shall be construed in a manner
consistent with such purpose.

 

Section 11.8.      Survival of Representations. All representations and
warranties herein shall survive the dissolution and final liquidation of the
Company.

 

Section 11.9.      Entire Agreement. This Agreement (and all Schedules and
Exhibits hereto), the Subscription Agreement and the Management Agreement
contain the entire understanding among the parties hereto and supersede all
prior written or oral agreements among them respecting the within subject
matter, unless otherwise provided herein. There are no representations,
agreements, arrangements or understandings, oral or written, among the Members
hereto relating to the subject matter of this Agreement which are not fully
expressed herein, and in said Exhibits and Schedules, or in the Management
Agreement.

 

[signatures appear on following page]

 

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IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.

 

Members:

 

  RENEWABLE DEVELOPER HOLDINGS, LLC

 

  By: /s/ Joshua Peck     Name: Joshua Peck     Title: Vice President

 

  MMA ENERGY CAPITAL, LLC

 

  By: /s/ Gary A. Mentesano     Name: Gary A. Mentesano     Title: Executive
Vice President