Exhibit 10.17

EXECUTION VERSION

 

 

 

AMENDED AND RESTATED OPERATING AGREEMENT

OF

SCHILLING ROBOTICS, LLC,

a Delaware Limited Liability Company

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER
APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT
REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS AGREEMENT IS
FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH
HEREIN.

Effective as of December 26, 2008

 

 

 

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TABLE OF CONTENTS

 

          Page ARTICLE I    DEFINITIONS    1

  1.1

   Certain Definitions    1

  1.2

   Construction    9 ARTICLE II    ORGANIZATION    9

  2.1

   Formation    9

  2.2

   Name    9

  2.3

   Registered Office; Registered Agent; Principal Office; Other Offices    9

  2.4

   Purposes    9

  2.5

   Foreign Qualification    10

  2.6

   Term    10

  2.7

   No State-Law Partnership    10 ARTICLE III    MEMBERSHIP INTERESTS; UNITS;
CONVERSION; REDEMPTION; VOTING    10

  3.1

   Membership Interests    10

  3.2

   Liability of Members    10

  3.3

   No Authority to Bind Company    11

  3.4

   Voting Rights    11

  3.5

   Issuance of Additional Units and Interests    11

  3.6

   Preemptive Right    11 ARTICLE IV    CAPITAL ACCOUNTS    12

  4.1

   Establishment and Determination of Capital Accounts    12

  4.2

   Capital Contributions    13

  4.3

   Additional Capital Contributions    14

  4.4

   Withdrawals; Interest    14

  4.5

   Loans from Members    14

  4.6

   Negative Capital Accounts    15 ARTICLE V    PRIORITY PAYMENTS;
DISTRIBUTIONS; ALLOCATIONS    15

  5.1

   Tax Distributions    15

  5.2

   Other Distributions    15

  5.3

   Periodic Allocations    16

  5.4

   Allocation of Net Profit or Net Loss    16

  5.5

   Tax Allocations    18

  5.6

   Changes in Member’s Interests    18 ARTICLE VI    MANAGEMENT OF THE COMPANY
   19

  6.1

   Management of the Company    19

  6.2

   Composition and Election of the Board    19

  6.3

   Duties of the Board    20

  6.4

   Meetings    20

 

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TABLE OF CONTENTS

(continued)

 

          Page

  6.5

   Place of Meetings    20

  6.6

   Notice of Special Meetings    20

  6.7

   Spontaneous Meeting of Board    20

  6.8

   Quorum    20

  6.9

   Voting    20

  6.10

   Manner of Acting    21

  6.11

   Written Actions    21

  6.12

   Committees    21

  6.13

   Audit Committee    21

  6.14

   Compensation Committee    22

  6.15

   Specific Authority of the Board    22

  6.16

   Compensation    22

  6.17

   Telephonic Participation in Meetings    22

  6.18

   Subsidiaries    23 ARTICLE VII    OFFICERS    23

  7.1

   Designation of Officers    23

  7.2

   The Chairman of the Board    23

  7.3

   Chief Executive Officer    23

  7.4

   President    23

  7.5

   Vice Presidents    23

  7.6

   Secretary    24

  7.7

   Chief Financial Officer    24

  7.8

   Powers of Execution    24

  7.9

   Resignation; Removal    25

  7.10

   Duties of Officers Generally    25 ARTICLE VIII    MEMBERS    25

  8.1

   [Intentionally Omitted]    25

  8.2

   Membership Status    25

  8.3

   No Participation in Management    25

  8.4

   Meetings    25

  8.5

   Place of Meetings    26

  8.6

   Notice of Meetings    26

  8.7

   Spontaneous Meeting of Members    26

  8.8

   Quorum    26

  8.9

   Voting Rights Generally    26

  8.10

   Special Voting Rights of Holders of Class A-1 Units    26

  8.11

   Manner of Acting    27

  8.12

   Proxies    27

  8.13

   Written Actions    27

  8.14

   Telephonic Participation in Meetings    27

  8.15

   Convening Members Meetings    28

 

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TABLE OF CONTENTS

(continued)

 

          Page

  8.16

   Persons Who May Vote Certain Units    28

  8.17

   Confidentiality    28

  8.18

   Withdrawal    28

  8.19

   Acknowledgment Regarding Outside Businesses and Opportunities    28 ARTICLE
IX    EXCULPATION AND INDEMNIFICATION    30

  9.1

   Exculpation    30

  9.2

   Right to Indemnification    30

  9.3

   Advance Payment    31

  9.4

   Indemnification of Employees and Agents    31

  9.5

   Appearance as a Witness    31

  9.6

   Non-exclusivity of Rights    31

  9.7

   Insurance    32

  9.8

   Savings Clause    32

  9.9

   Transactions Between the Company and the Members    32 ARTICLE X    TAXES   
32

10.1

   Tax Returns    32

10.2

   Tax Matters Partner    32

10.3

   Certain Tax Matters    33 ARTICLE XI    BOOKS, REPORTS AND COMPANY FUNDS   
33

11.1

   Maintenance of Books    33

11.2

   Reports    33

11.3

   Unit Register    34

11.4

   Company Funds    34 ARTICLE XII    EQUITY HOLDER RIGHTS AND RESTRICTIONS ON
TRANSFER    34

12.1

   Transfers Restricted    34

12.2

   Transfer by Member    34

12.3

   Void Transfers    35 ARTICLE XIII    DISSOLUTION, LIQUIDATION AND TERMINATION
   35

13.1

   Dissolution    35

13.2

   Liquidation and Termination    35

13.3

   Cancellation of Certificate    36 ARTICLE XIV    SECTION 351 TRANSACTION   
36

14.1

   Incorporation    36

14.2

   Expenses and Other Matters    37 ARTICLE XV    GENERAL PROVISIONS    37

15.1

   Notices    37

 

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TABLE OF CONTENTS

(continued)

 

          Page

15.2

   Entire Agreement    38

15.3

   Effect of Waiver or Consent    38

15.4

   Amendment, Modification or Waiver    38

15.5

   Binding Effect    38

15.6

   Governing Law; Severability    39

15.7

   Further Assurances    39

15.8

   Waiver of Certain Rights    39

15.9

   Indemnification and Reimbursement for Payments on behalf of a Member    39

15.10

   Notice to Members of Provisions    39

15.11

   Counterparts    40

15.12

   Dispute Resolution    40

15.13

   Waiver of Jury Trial    40

15.14

   Parties in Interest    41 ARTICLE XVI    POWER OF ATTORNEY    41 SCHEDULE A
   BOARD OF DIRECTORS    SCHEDULE B    OFFICERS    SCHEDULE C   
COMPETITORS/CUSTOMERS    EXHIBIT A    FORM OF INDEMNIFICATION AGREEMENT   

 

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AMENDED AND RESTATED OPERATING AGREEMENT

OF

SCHILLING ROBOTICS, LLC,

a Delaware Limited Liability Company

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this “Agreement”) is made and
effective as of December 26, 2008 (the “Effective Date”), by and among the
Persons who have executed a counterpart of this Agreement as of the Effective
Date, and those other Persons who from time to time pursuant to this Agreement
execute a counterpart of this Agreement and are admitted to the Company as
Members. Each signatory to this Agreement is a “Party” to this Agreement.

RECITALS

A. A certificate of formation for the Company has previously been filed with the
Secretary of State of Delaware.

B. The Company is currently governed by the Limited Liability Company Operating
Agreement as Amended dated effective as of December 28, 2007 (the “Existing
Agreement”) entered into by Schilling Robotics Newco, LLC a Delaware limited
liability company (“Newco LLC”) as sole Member.

C. Newco LLC transferred 55 Units in the Company to Schilling Robotics, Inc., a
Delaware corporation (“Inc.”) pursuant to a Purchase Agreement by and among the
Company, Newco LLC and Inc., dated as of December 28, 2007.

D. The Parties desire to amend and restated the Existing Agreement in its
entirety to reflect (i) the transfer of 42 Units in the Company by Inc. to FMC
Technologies, Inc., a Delaware corporation (“FMC”), (ii) the transfer of one
tenth of one (0.1) Unit by Inc. to Tyler Schilling, (iii) the issuance of
Class A-1 Units to FMC and (iv) otherwise as provided in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of and reliance upon the mutual covenants,
rights and obligations set forth herein, the benefits to be derived therefrom
and other good and valuable consideration, the receipt and the sufficiency of
which each Member acknowledges, the Members hereby adopt as Operating Agreement
for the Company as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions. As used in this Agreement, the following terms have the
following meanings:

(a) “Accredited” means a Person who meets the qualifications of an “accredited
investor” set forth in Rule 501 of Regulation D promulgated under the Securities
Act.

 

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(b) “Act” shall mean the Delaware Limited Liability Company Act, Delaware Code
Title 6, Sections 18-601 et seq., as amended from time to time.

(c) “Actual Tax” of a Member for any fiscal year shall mean the amount of
federal, state and local income tax that would be payable by the Member with
respect to the taxable income from the Company allocable to the Member for the
fiscal year of the Company if the Member were subject on such income to: (a) the
highest combined marginal rate of federal and state income tax applicable to
individuals subject to taxation in the state of California plus (b) the highest
rate to which an S corporation is subject to income tax under the California
Revenue and Taxation Code.

(d) “Adjusted Capital Account” means the Capital Account maintained for each
Member, (a) increased by any amounts that such Member is obligated to restore or
is treated as obligated to restore under Treasury Regulation Sections 1.704
1(b)(2)(ii)(c), 1.704 2(g)(1) and 1.704 2(i)(5) and (b) decreased by any amounts
described in Treasury Regulation Sections 1.704 1(b)(2)(ii)(d)(4), (5) and
(6) with respect to such Member.

(e) “Affiliate” means, with respect to a Person, another Person that, directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person.

(f) “Agreement” has the meaning given such term in the first paragraph of this
Agreement.

(g) “Assignee” means a person to whom a Membership Interest has been assigned in
accordance with the terms of this Agreement but who has not been admitted as a
Member in accordance with the terms hereof.

(h) “Audit Committee” has the meaning set forth in Section 6.13.

(i) “Board” means the Board of Directors of the Company, composed of the
individuals designated pursuant to Section 6.2.

(j) “Book Value” means, with respect to any Company property, the Company’s
adjusted basis for federal income tax purposes, adjusted from time to time to
reflect the adjustments required or permitted by Treasury Regulation Sections
1.704-1(b)(2)(iv)(d)-(g).

(k) “Bring Along Right” is defined in the Unitholders Agreement.

(l) “Business Day” means any day other than a Saturday, a Sunday or a holiday on
which banks in the State of California are closed for business.

(m) “Capital Account” shall have the meaning set forth in Section 4.1.

 

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(n) “Capital Contribution” means the contribution made by a Member to the
capital of the Company, whether in cash, in other property or otherwise,
pursuant to the terms and conditions of this Agreement. The amount of any
Capital Contribution shall be the amount of cash and the fair market value of
any other property so contributed (as determined by the Board in its reasonable
good faith judgment).

(o) “Certificate” shall have the meaning set forth in Section 2.1.

(p) “Chairman of the Board” has the meaning set forth in Section 7.2

(q) “Chief Executive Officer” has the meaning set forth in Section 7.3.

(r) “Chief Financial Officer” has the meaning set forth in Section 7.7.

(s) “Class” means a class of Units.

(t) “Class A Unit” has the meaning set forth in Section 3.1(a). The Company
shall have 100 authorized Class A Units or such greater number as is determined
from time to time by the Board. Any or all rights and preferences of the Holders
of the Class A Units may be waived or amended from time to time, in whole or in
part, by the consent of the Holders representing a majority of the then
outstanding Class A Units.

(u) “Class A Unit Holder” means a Person holding at least a fraction of a
Class A Unit.

(v) “Class A-1 Liquidation Preference” has the meaning set forth in
Section 4.2(c)(ii).

(w) “Class A-1 Unit” has the meaning set forth in Section 3.1(a). The Company
shall have 5.45 authorized Class A-1 Units or such greater number as is
determined by the Board. Any or all of the rights and preferences of the Holders
of the Class A-1 Units may be waived or amended from time to time, in whole or
in part, by the consent of the Holders representing a majority of the then
outstanding Class A-1 Units.

(x) “Class A-1 Unit Holder” means a Person holding one or more Class A-1 Units.

(y) “CPR” is defined in Section 15.12(a).

(z) “Code” means the United States Internal Revenue Code of 1986, as amended,
and any successor statute.

(aa) “Company” means Schilling Robotics, LLC, a Delaware limited liability
company.

(bb) “Company Adjustment Payment” has the meaning set forth in the Securities
Purchase Agreement.

 

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(cc) “Company Asset(s)” means any and all property and assets, whether real or
personal, tangible or intangible, or otherwise of the Company.

(dd) “Company Minimum Gain” has the meaning set forth for “partnership minimum
gain” in Treasury Regulation Section 1.704-2(d).

(ee) “Compensation Committee” has the meaning set forth in Section 6.14.

(ff) “Confidential Information” has the meaning set forth in Section 8.17.

(gg) “Corporation” has the meaning set forth in Article XIII.

(hh) “Covered Person” means each current and former Member, the tax matters
partner, Director, Officer and each of their respective Affiliates, officers,
directors, liquidators, partners, stockholders, managers, members and employees,
in each case whether or not such Person continues to have the applicable status
referred to above.

(ii) “Director” shall have the meaning set forth in Section 6.2.

(jj) “Depreciation” means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such Fiscal Year,
except that if the book value of an asset differs from its adjusted basis for
federal income tax purposes at the beginning of such Fiscal Year, Depreciation
shall be an amount which bears the same ratio to such beginning book value as
the federal income tax depreciation, amortization, or other cost recovery
deduction for such Fiscal Year bears to such beginning adjusted tax basis;
provided, however, that if the adjusted basis for federal income tax purposes of
an asset at the beginning of such Fiscal Year is zero, Depreciation shall be
determined with reference to such beginning book value using any reasonable
method selected by the Board.

(kk) “Distributable Cash Flow” means, for any period, all cash received by the
Company from all sources during such period, minus the sum of (i) all
expenditures paid by the Company during the period (excluding depreciation or
other noncash expenses, but including capital expenditures), (ii) amortization
of principal of indebtedness for borrowed money of the Company for the period
and (iii) such additions to the reserves of the Company for contingencies,
working capital or future expansion needs as the Board may reasonably determine
to be necessary. Notwithstanding the preceding sentence, Capital Contributions
shall not be taken into account in computing Distributable Cash Flow for any
period.

(ll) “Distribution” means each distribution made by the Company to a Member or
other Holder of Units, whether in cash, property or any Security of the Company
and whether by dividend, liquidating distributions or otherwise; provided that
neither of the following shall be a Distribution: (a) any redemption or
repurchase by the Company of any Membership Interest, Unit or other Security for
any reason (after which such Unit, Membership Interest or Security shall cease
to be outstanding) or (b) any recapitalization or exchange of any Units, or any
subdivision (by unit split, unit dividend or otherwise) or any combination (by
reverse unit split or otherwise) of any outstanding Units. For the purposes of
this Agreement, the amount of a distribution of property or any Security shall
equal the fair market value of such property or Security (determined by the
Board in its reasonable good faith judgment).

 

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(mm) “Effective Date” has the meaning set forth in the first paragraph of this
Agreement.

(nn) “Entity” means any partnership, corporation, association, cooperative,
joint stock company, trust, limited liability company, business trust, joint
venture, unincorporated organization, employee benefits plan and governmental
entity (or any department, agency or political subdivision thereof).

(oo) “Equity Securities” has the meaning set forth in Section 3.5.

(pp) “Estimated Tax” means the then most current estimate of the Actual Tax, as
made in good faith by the Board.

(qq) “Fiscal Year” of the Company means the Company’s annual accounting period
ending in December of each year or such other date as may be required by the
Code or determined by the Board.

(rr) “FMC” means FMC Technologies, Inc., a Delaware corporation.

(ss) “FMC Director” has the meaning set forth in Section 6.2(a).

(tt) “FMC Liquidation Preference” has the meaning set forth in
Section 4.2(d)(i).

(uu) “GAAP” means United States generally accepted accounting principles,
consistently applied.

(vv) “Holdback Amount” has the meaning set forth in the Securities Purchase
Agreement.

(ww) “Holder” means any Person holding Units (or any fraction of a Unit) of the
Company.

(xx) “Inc.” has the meaning set forth in Recital C.

(yy) “Inc. Liquidation Preference” has the meaning set forth in Section 4.2(b).

(zz) “Incorporation Plan” has the meaning set forth in Article XIV.

(aaa) “Indebtedness” means (a) all indebtedness, whether or not contingent, for
borrowed money or for the deferred purchase price of property or services,
(including but not limited to amounts referred to by the Company as equipment
debt, AR debt, and “growth capital” debt), (b) any other indebtedness that is
evidenced by a note, bond, debenture or similar instrument, (c) all obligations
under financing leases or letters of credit, (d) all obligations in respect of
acceptances issued or created, (e) all liabilities secured by any lien on any
property,

 

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(f) all non compete payments due to owners of businesses acquired by the Company
and (g) all guarantee obligations, in each case including the principal amount
thereof, any accrued interest thereon and any prepayment premiums or fees or
termination fees with respect thereto, provided, however, that trade payables
and accruals incurred in the ordinary course of business shall not be considered
Indebtedness hereunder.

(bbb) “Indemnifying Member” has the meaning set forth in Section 15.9.

(ccc) “Liquidation Event” means any of the following: (a) any voluntary or
involuntary liquidation, dissolution or winding up of the Company, (b) merger or
consolidation of the Company into or with another entity (other than a merger or
consolidation in which the holders of interests of the Company immediately prior
to such merger or consolidation continue to hold a majority of the outstanding
voting power of such surviving entity), (c) the sale, conveyance, lease,
exclusive license or transfer of all or substantially all of the assets of the
Company, or (d) any purchase of shares of Membership Interests of the Company
(either through a negotiated Membership Interest purchase or a tender for such
membership interests) by any Person or group that did not beneficially own a
majority of the outstanding Class A and Class A-1 Units of the Company
immediately prior to such purchase, the effect of which is that such Person or
group beneficially owns at least a majority of such Units immediately after such
purchase. A Section 351 Transaction is not a Liquidation Event.

(ddd) “Major Holder” has the meaning set forth in Section 3.6.

(eee) “Member” means any Person executing this Agreement as of the date of this
Agreement as a member or hereafter admitted to the Company as a member in
accordance with this Agreement and the Act, but does not include any Person who
has ceased to be a member of the Company or who no longer owns any Units or
fraction of a Unit. The Members shall collectively constitute the “members” (as
that term is defined in the Act) of the Company.

(fff) “Member Nonrecourse Debt Minimum Gain” has the meaning set forth for
“partner nonrecourse debt minimum gain” in Treasury Regulation
Section 1.704-2(i).

(ggg) “Membership Interest” means the rights of a Member in distributions
(liquidating and otherwise) and allocations of the Net Profit, Net Loss, items
thereof and credits of the Company. Membership Interests shall be divided into
Class A Units, Class A-1 Units, and such other Units, if any, as authorized by
the Board.

(hhh) “Net Profit” and “Net Loss” means, for each Fiscal Year, an amount equal
to the Company’s taxable income or loss for such Fiscal Year, determined in
accordance with Section 703(a) of the Code but with the following adjustments:

(i) Items allocated pursuant to Section 5.4(c) shall not be included in such
taxable income or loss;

(ii) Items required to be stated separately pursuant to Section 703(a)(1) of the
Code shall be included in such taxable income or loss;

 

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(iii) Any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Net Profit or Net Loss pursuant to
this paragraph shall be added to such taxable income or loss;

(iv) Any expenditures of the Company described in Section 705(a)(2)(B) of the
Code or treated as Section 705(a)(2)(B) expenditures pursuant to
§ 1.704-1(b)(2)(iv)(i) of the Treasury Regulations and not otherwise taken into
account in computing Profits or Losses shall be subtracted from such taxable
income or loss;

(v) In the event book value of any Company Asset is adjusted pursuant to
Section 4.1(c) of this Agreement, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such asset for purposes of
computing Net Profit or Net Loss;

(vi) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year;

(vii) Gain or loss resulting from any disposition of property with respect to
which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the book value of the property disposed of (adjusted
for accumulated Depreciation with respect to such property), notwithstanding
that the adjusted tax basis of such property differs from its book value; and

(viii) To the extent that § 1.704-1(b)(2)(iv)(m)(2) or (4) of the Treasury
Regulations requires an adjustment to the adjusted tax basis of any Company
Asset pursuant to Section 734(b) or Section 743(b) of the Code to be taken into
account in determining Capital Accounts as a result of a distribution other than
in liquidation of a Membership Interest, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases the basis of the assets) from the
disposition of the asset for purposes of computing Net Profit or Net Loss and
adjusting the Members’ Capital Accounts.

(iii) “Newco LLC Liquidation Preference” has the meaning set forth in
Section 4.2(a).

(jjj) “Newco LLC” has the meaning set forth in Recital B.

(kkk) “New Securities” means Securities issued by the Company after the
Effective Date.

(lll) “Nonrecourse Deductions” has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(1).

(mmm) “Offer Notice” has the meaning set forth in Section 3.6(a).

(nnn) “Person” has the meaning set forth in the Act.

(ooo) “Proceeding” has the meaning set forth in Section 9.2.

 

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(ppp) “Qualified Public Offering” means a firm commitment underwritten public
offering pursuant to an effective registration statement on Form S-1 or Form
SB-2 (or a successor form) under the Securities Act covering the offer and sale
of stock with aggregate proceeds to the Company (prior to underwriters’
commissions and expenses) of not less than $50,000,000.

(qqq) “Remaining Securities” has the meaning set forth in Section 3.6(b).

(rrr) “Secretary” has the meaning set forth in Section 7.6

(sss) “Section 351 Transaction” has the meaning set forth in Article XIII.

(ttt) “Security” means and includes common and preferred stock (including
warrants, rights, put and call options and other options relating thereto or any
combination thereof), notes, bonds debentures, trust receipts and other
obligations, instruments or evidences of indebtedness, and other property or
interests commonly regarded as securities (including cash and bank deposits).

(uuu) “Securities Act” means the Securities Act of 1933, as amended.

(vvv) “Securities Purchase Agreement” means that certain Securities Purchase
Agreement, dated as of December 24, 2008, by and among Inc., the Company, FMC
and Tyler Schilling.

(www) “Schilling” means Tyler Schilling, an individual.

(xxx) “Schilling Parties” means Schilling Robotics, Newco LLC and Schilling.

(yyy) “Schilling Robotics, Inc.” means Schilling Robotics, Inc. a Delaware
corporation.

(zzz) “Tag-Along Right” is defined in the Unitholders Agreement.

(aaaa) “Tax” or “Taxes” means federal, state, county, local, foreign or other
income, gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, estimated, value
added and other taxes of any kind whatsoever (including, without limitation,
deficiencies, penalties, additions to tax, and interest attributable thereto)
whether disputed or not.

(bbbb) “Transaction Documents” means this Agreement, the Securities Purchase
Agreement and the Unitholders Agreement.

(cccc) “Transfer” means any sale, transfer, assignment, pledge, mortgage,
exchange, hypothecation, grant of a security interest or other direct or
indirect disposition or encumbrance of an interest (including, without
limitation, by operation of law) or the acts thereof. The terms “Transferee,”
“Transferred,” and other forms of the word “Transfer” shall have correlative
meanings.

 

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(dddd) “Treasury Regulations” means the United States income tax regulations
promulgated under the Code and effective as of the date hereof. Such term shall,
at the Board’s sole discretion, be deemed to include any future amendments to
such regulations and any corresponding provisions of succeeding regulations
(whether or not such amendments and corresponding provisions are mandatory or
discretionary).

(eeee) “Unit” means any or all of a Class A Unit, a Class A-1 Unit and any other
Class of Unit authorized by the Board as the context may require.

(ffff) “Unitholders Agreement” means that certain Unitholders Agreement, dated
as of the date of this Agreement by and between FMC and Inc.

(gggg) “USAA” is defined in Section 15.12(a).

(hhhh) “Vice Presidents” has the meaning set forth in Section 7.5.

1.2 Construction. Whenever the context requires, the gender of all words used in
this Agreement includes the masculine, feminine and neuter. All references to
Articles and Sections refer to articles and sections of this Agreement, and all
references to Schedules are to schedules attached hereto, each of which is made
a part hereof for all purposes.

ARTICLE II

ORGANIZATION

2.1 Formation. The Company, under the name “Schilling Robotics, LLC” was
organized as a Delaware limited liability company by the filing of a Certificate
of Formation (the “Certificate”) under and pursuant to the Act. The rights and
liabilities of the Members shall be determined pursuant to the Act and this
Agreement. To the extent that the rights or obligations of any Member are
different by reason of any provision of this Agreement than they would be in the
absence of such provision, this Agreement, to the extent permitted by the Act,
shall control.

2.2 Name. The name of the Company is “Schilling Robotics, LLC,” and all business
of the Company shall be conducted under that name or such other name that the
Board may select from time to time in compliance with applicable law.

2.3 Registered Office; Registered Agent; Principal Office; Other Offices. The
registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Certificate or such other office (which need not be a place of business of
the Company) as the Board may designate from time to time in the manner provided
by law. The registered agent of the Company in the State of Delaware shall be
the initial registered agent named in the Certificate or such other Person or
Persons as the Board may designate from time to time in the manner provided by
law. The principal office of the Company shall be at such place as the Board may
designate from time to time, which need not be in the State of Delaware, and the
Company shall maintain its records there. The Company may have such other
offices as the Board may designate from time to time.

2.4 Purposes. The purpose of the Company shall be to engage in any lawful
activity or business with the exception of the business of granting policies of
insurance, or assuming

 

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insurance risks or banking, and to engage in any other lawful activities which
are not prohibited by the Act or the laws of any jurisdictions in which the
Company engages in business. The foregoing shall be construed as a statement of
purposes and not legal authority, and the Company shall have all necessary
authority to perform such acts as permitted by law pursuant to this Agreement.

2.5 Foreign Qualification. The Board shall cause the Company to comply with all
requirements necessary to qualify the Company as a foreign limited liability
company in such jurisdictions in which the Company engages or proposes to engage
in business if required by applicable law. At the request of the Board, each
Member shall execute, acknowledge, swear to and deliver all certificates and
other instruments conforming with this Agreement that are necessary or
appropriate to qualify, continue and terminate the Company as a foreign limited
liability company in all such jurisdictions in which the Company may conduct
business.

2.6 Term. The term of the Company commenced on the date the Certificate was
filed with the office of the Secretary of State of Delaware and shall be
perpetual in such Certificate, if any, unless earlier terminated and dissolved
pursuant to Section 13.1 of this Agreement.

2.7 No State-Law Partnership. The Members intend that the Company shall not be a
partnership (including, without limitation, a limited partnership) or joint
venture, and that no Member or the Company shall be a partner or joint venturer
of any other Member or the Company, for any purposes other than federal and, if
applicable, state and local tax purposes, and this Agreement shall not be
construed to the contrary. The Members intend that the Company shall be treated
as a partnership for federal and, if applicable, state and local income tax
purposes, and each Member and the Company shall file all tax returns and shall
otherwise take all tax and financial reporting positions in a manner consistent
with such treatment.

ARTICLE III

MEMBERSHIP INTERESTS; UNITS; CONVERSION; REDEMPTION; VOTING

3.1 Membership Interests. The Company’s Membership Interests shall be divided
into Class A Unit Interests (each a “Class A Unit”), Class A-1 Interests (each a
“Class A-1 Unit”), and each other Unit Interest, if any, as determined by the
Board. Each Holder of Class A Units shall be entitled to the distributions and
other payments and rights as are prescribed for Holders of Class A Units by this
Agreement. Each Holder of Class A-1 Units shall be entitled to the distributions
and other payments and rights as are prescribed for Holders of Class A-1 Units
by this Agreement. The rights of a Unit shall be applied to a fraction of a Unit
in proportion to such fraction of a Unit held. When a Person is admitted as a
new Member after the Effective Date in accordance with the provisions of this
Agreement, such Person shall execute a counterpart to this Agreement and the
name of such Person along with the Capital Contribution and type and number of
Units owned by such Person shall be added to the books and records of the
Company.

3.2 Liability of Members. Except as expressly set forth in this Agreement or the
Act, no Member shall have any personal liability whatsoever in the Member’s
capacity as a Member, whether to the Company, to any of the other Members, to
the creditors of the Company or to any other third party, for the debts,
liabilities, commitments or any other obligations of the Company

 

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or for any losses of the Company. Each Member hereby consents to the exercise by
the Board and the Company’s officers of the powers conferred on them by this
Agreement. No Member shall take, or cause to be taken, any action that would
result in any other Member having any personal liability for the obligations of
the Company.

3.3 No Authority to Bind Company. No Member (in such Person’s capacity as a
Member) shall have the authority or power to represent or act for or on behalf
of the Company, to do any act that would be binding on the Company or to make
any expenditures or incur any obligations on behalf of the Company (unless such
Member is an officer or Director of the Company authorized to do such act, make
such expenditure or incur such expenditure and such Member is acting in such
capacity).

3.4 Voting Rights. With respect to any matter to be voted on by the Members in
general (without respect to Class of Unit), each Member shall be entitled to one
vote per Unit held. With respect to matters to be voted on by Members by Class
of Unit, each Member holding Class A Units shall be entitled to one vote per
Class A Unit, and each Member holding Class A-1 Units shall be entitled to one
vote per Class A-1 Unit. There shall be no cumulative voting for any purpose,
including, without limitation, in the election of Directors.

3.5 Issuance of Additional Units and Interests. Subject to Section 3.6 and
Section 8.10, the Board shall have the right to cause the Company to issue
(a) additional Units in the Company (including other Classes thereof having
different rights beyond those Class A Units and Class A-1 Units),
(b) obligations, evidences of indebtedness or other Securities or interests
convertible or exchangeable into Units and (c) warrants, options or other rights
to purchase or otherwise acquire Units (collectively, “Equity Securities”);
provided that at any time following the date hereof, the Company shall not issue
Units to any Person unless such Person shall have executed a counterpart to this
Agreement and provided such information as is required by the Board. Upon
execution of any such counterpart, such Person shall become a Member under this
Agreement.

3.6 Preemptive Right. Subject to the terms of this Article III and applicable
securities laws, if the Company proposes to offer or sell any Equity Securities,
the Company shall give each Holder of at least five (5) Units and who is
Accredited (each a “Major Holder”) the right to purchase such Major Holder’s pro
rata share (or any part thereof) of such Equity Securities, on the same terms as
the Company is willing to sell such Equity Securities to any other Person or
Entity. A Major Holder’s pro rata share of the Equity Securities shall be equal
to the proportion that the number of Units held by such Major Holder bears to
the number of Units held by all of the Major Holders on the date of the
Company’s written notice referred to in Section 3.6(a) below. A Major Holder
shall be entitled to apportion this right of first offer among itself and its
Affiliates in such proportions as it deems appropriate.

(a) Notice; Exercise of Right. Prior to any sale or issuance by the Company of
any Equity Securities, the Company shall give notice (the “Offer Notice”) to
each Major Holder of its intention to sell and issue such Equity Securities,
setting forth (i) the terms and conditions under which it proposes to make such
sale (including the price and the proposed issuance date), (ii) the amount, kind
and type of Equity Securities to be included in the issuance, including the
designations, preferences, rights, powers and duties to be attached to such
Equity

 

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Securities and (iii) the identity of the proposed purchaser, and shall offer to
such Major Holder the opportunity to purchase its pro rata share (which pro rata
share shall be calculated as of the date of such notice) of such Equity
Securities at the same price, and on the same terms and conditions and at the
same time as the Equity Securities are proposed to be issued by the Company.
Within twenty (20) days after receipt of the Offer Notice, each Major Holder
shall notify the Company whether or not such Major Holder desires to purchase
its pro rata share, or any part thereof, of the Equity Securities so offered. If
any Major Holder notifies the Company of its desire to purchase its pro rata
share of such Equity Securities, the closing of the sale shall occur within
sixty (60) days of the date that the Offer Notice is given or, if later, the
closing date for the proposed sale of such Equity Securities to third parties.

(b) Permitted Sales. With respect to any Equity Securities that are not
subscribed for by Major Holders after the end of the twenty (20) day period
specified in Section 3.6(a) (“Remaining Securities”), the Company may, during a
period of ninety (90) days following the end of such period, offer and sell such
Remaining Securities to other Persons or Entities upon the terms and conditions
not less favorable to the Company than those set forth in the notice to the
Major Holders. In the event the Company has not issued and sold all of the
Remaining Securities within said 90-day period, the Company shall not thereafter
issue or sell any Equity Securities without first offering such securities to
the Major Holders pursuant to this Section 3.6.

(c) Exceptions. The preemptive rights contained in this Section 3.6 shall not
apply to issuances by the Company (i) of Class A-1 Units pursuant to the
Securities Purchase Agreement, (ii) pursuant to a Qualified Public Offering,
(iii) to any person that is not a Member or an Affiliate thereof as
consideration in any acquisition by the Company or any of its subsidiaries of
the assets or Securities of another entity (including in connection with a joint
venture, strategic investment and/or acquisition of technology or intellectual
property) that is approved in accordance with this Agreement, or (iv) in
connection with any split, distribution or recapitalization of the Company.

ARTICLE IV

CAPITAL ACCOUNTS

4.1 Establishment and Determination of Capital Accounts.

(a) A Capital Account shall be maintained for each Member in accordance with the
requirements of Section 704(b) of the Code and the Treasury Regulations
promulgated thereunder. The Capital Account balances of the Members as of the
Effective Date are as set forth on the books and records of the Company as of
the Effective Date.

(b) Each Member’s Capital Account shall be:

(i) increased by the Capital Contributions made by such Member from and after
the date of this Agreement;

(ii) increased by items of income or gain which are allocated to such Member
under Article V;

 

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(iii) decreased by the items of loss and deduction which are allocated to the
Member under Article V; and

(iv) decreased by the amount of any cash and the fair market value of any
Company Asset distributed to such Member (net of any liability assumed by the
Member or to which the distributed property is subject).

(c) If a Company Asset other than cash is distributed to one or more Members,
the value of such property shall be restated on the books of the Company at its
fair market value immediately prior to such distribution and the separate
Capital Accounts of each Member shall be restated to reflect such adjustment,
determined as if the Company had sold such Company Asset for its fair market
value and the resulting gain or loss had been credited or charged to the
Members’ Capital Accounts as provided in this Agreement. Following such
adjustment to the Company’s books, the separate Capital Accounts of the Members
receiving the distributions shall be adjusted to reflect the amount of the
distribution.

(d) If from and after the Effective Date, a Person is admitted to the Company as
an additional Member, money or property is contributed to the Company in other
than a de minimis amount in exchange for a Membership Interest, or money or
property is distributed to a Member in exchange for a Membership Interest, the
Board shall cause the book value of Company Assets to be restated on the
Company’s books to their respective fair market values, and the unrealized gain
or loss inherent in each Company Asset which has not previously been taken into
account under this subsection (d) shall be reflected in the separate Capital
Accounts of the Members, determined by allocating such unrealized gain or loss
to the Members as if there had been a taxable disposition of the Company Asset
at its fair market value on such date. The fair market value of Company Assets
shall be determined in good faith by the Board.

(e) Upon a permitted transfer of any Membership Interest in accordance with the
terms of this Agreement, the Assignee shall succeed to the Capital Account and
Capital Account balance of the transferor which is attributable to such
Membership Interest.

(f) The foregoing provisions and the other provisions of this Agreement relating
to the maintenance of Capital Accounts are intended to comply with and shall be
applied in accordance with §§ 1.704-1(b) and 1.704-2 of the Treasury
Regulations.

4.2 Capital Contributions.

(a) Newco LLC has previously made Capital Contributions to the Company and been
issued 45 Units. As of the Effective Date, those Units are converted into 45
Class A Units and pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f)
the Capital Account balance of Newco LLC is restated to be $95,142,857 (the
“Newco LLC Liquidation Preference”).

(b) Inc. has previously acquired 54.9 Units in the Company and as of the
Effective Date has transferred 42 of those Units to FMC. As of the Effective
Date, the remaining 12.9 Units held by Inc. are converted into Class A Units and
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) the Capital Account
balance of Inc. with respect to those 12.9 Class A Units is restated to be
$27,274,285 (the “Inc. Liquidation Preference”).

 

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(c) Schilling has acquired previously acquired one tenth of one (0.10) Unit in
the Company. As of the Effective Date, the 0.10 Unit held by Schilling is
converted into 0.10 Class A Unit and pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(f) the Capital Account balance of Schilling with
respect to such 0.10 Class A Unit is restated to be $211,429.

(d) As of the Effective Date:

(i) FMC has purchased 42 Units from Schilling Robotics, Inc., those purchased
Units are converted into Class A Units and pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(f) the Capital Account of FMC with respect to those 42
Class A Units is restated to be $88,800,000 (the “FMC Liquidation Preference”);
and

(ii) FMC has made a Capital Contribution to the Company of $17,200,000 (the
“Class A-1 Liquidation Preference”) in exchange for a credit to its Capital
Account in that amount and is issued 5.45 Class A-1 Units. Any amount paid to
the Company by FMC pursuant to Section 1.8(c)(ii) of the Securities Purchase
Agreement because the Holdback Amount exceeds the Company Adjustment Payment
shall be an additional Capital Contribution from FMC for the 5.45 Class A-1
Units and shall increase the Class A-1 Liquidation Preference by the dollar
amount paid. Any amount paid by the Company to FMC pursuant to Section 1.8(c)(i)
of the Securities Purchase Agreement because the Company Adjustment Payment
exceeds the Holdback Amount shall be a distribution to FMC and shall decrease
the Class A-1 Liquidation Preference by the dollar amount distributed to FMC. In
connection with the issuance of the 5.45 Class A-1 Units and all Contributions
to be made by FMC pursuant to this Section 4.2(d)(ii), the Company warrants that
the Board and management of the Company, will, during the period that FMC
continues to hold a majority of the Class A-1 Units, continue to operate the
Company in the ordinary course and in conformity with all legal and regulatory
requirements including adherence to GAAP.

4.3 Additional Capital Contributions.

(a) Subject to Section 8.10(h), the Board shall have the right to cause the
Company to issue New Securities.

(b) No Member shall be required by the terms of this Agreement to make
additional Capital Contributions to the Company.

4.4 Withdrawals; Interest. Except as expressly provided in this Agreement or as
approved by the Board, no Member or Assignee may withdraw from the Company or
receive the return of, or interest on, such Member’s Capital Contributions,
Capital Account, or other amounts.

4.5 Loans from Members. Subject to Section 8.10, any Member may make loans to
the Company on such terms and conditions as are approved by the Board; provided
that such terms and conditions are no more favorable to such lending Member than
those which would be agreed to in an orderly transaction with a willing,
unaffiliated lender in an arm’s-length transaction. Any loan by a Member to the
Company shall not be considered a Capital Contribution. The amount of any such
loan shall be a debt of the Company to such Member and shall be payable or
collectible in accordance with the terms and conditions upon which such loan is
made.

 

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4.6 Negative Capital Accounts. No Member shall be required to pay to any other
Member or the Company any deficit or negative balance which may exist from time
to time in such Member’s Capital Account (including upon and after dissolution
of the Company).

ARTICLE V

PRIORITY PAYMENTS; DISTRIBUTIONS; ALLOCATIONS

5.1 Tax Distributions.

(a) Within 10 days after the end of each calendar quarter, the Board shall cause
the Company to make a distribution of Distributable Cash Flow to each holder of
Units in an amount equal to (i) 80% of the Member’s Estimated Tax for the
portion of the Fiscal Year ending on the last day of such quarter, reduced by
(ii) the aggregate prior distributions made to the Member pursuant to this
Section 5.1(a) and Section 5.2 with respect to such Fiscal Year. A distribution
otherwise payable to a Member pursuant to this Section 5.1(a) may be prorated,
as determined by the Board, in the case of any Member who is the holder of Units
for less than the entire relevant calendar quarter. To the extent distributions
made to a Member under this Section 5.1(a) would cause the aggregate
distributions of Estimated Tax amounts to be made to the Members in a manner
other than based on their respective Units, adjusting distributions shall be
made one or Members as necessary so that the aggregate distributions made to the
Members under this Section 5.1(a) are made to the Members based on their Units.

(b) Within 90 days after the end of each Fiscal Year, the Board shall cause the
Company to make a distribution of Distributable Cash Flow to each holder of
Units in an amount equal to (i) the Member’s Actual Tax for the Fiscal Year,
reduced by (ii) the aggregate prior distributions made to the Member with
respect to such Fiscal Year made pursuant to Sections 5.1(a) and 5.2. Each such
distribution shall be accompanied by information concerning the calculation of
such Actual Tax distribution. A distribution otherwise payable to a Member
pursuant to this Section 5.1(b) may be prorated, as determined by the Board, in
the case of any Member who is the holder of Units for less than an entire Fiscal
Year. To the extent distributions made to a Member under this Section 5.1(b)
would cause the aggregate distributions of Actual Tax amounts to be made to the
Members in a manner other than based on their respective Units, adjusting
distributions shall be made one or Members as necessary so that the aggregate
distributions made to the Members under this Section 5.1(b) are made to the
Members based on their Units.

(c) Notwithstanding the provisions of Section 5.1(a) and 5.1(b), no distribution
shall be required to be made with respect to:(i) any Fiscal Year (or portion
thereof ) ending on or before December 28, 2007 or (ii) any transaction
contemplated by the Securities Purchase Agreement.

5.2 Other Distributions. Subject to Section 8.10(b),the Board may from time to
time cause the Company to make other distributions of the Company’s
Distributable Cash Flow for any period net of any tax distribution pursuant to
Section 5.1, but only to the extent that any such

 

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distribution does not impair the Company’s ability to make a tax distribution
pursuant to Section 5.1 in the current or following quarter. All distributions
of Distributable Cash Flow under this Section 5.2 shall be made to the Holders
of Units based on their respective Units.

5.3 Periodic Allocations. As of the end of each Fiscal Year of the Company, the
Net Loss or Net Profit of the Company for the Fiscal Year shall be determined
and allocated among the Members in accordance with this Article V.

5.4 Allocation of Net Profit or Net Loss.

(a) Allocation of Net Profit – In General. Except as provided in Section 5.5,
the Net Profit for a Fiscal Year shall be allocated among the Members in the
following order of priorities:

(i) First, Net Profits shall be allocated among the Members who were allocated
Net Losses pursuant to Section 5.4(b)(ii), and shall be allocated to them in
proportion to the Net Losses allocated to them pursuant to Section 5.4(b)(ii)
until the aggregate Net Profits allocated to such Members pursuant to this
Section 5.4(a)(i) for such Fiscal Year and all prior Fiscal Years is equal to
the aggregate Net Losses allocated under Section 5.4(b)(ii) for all prior Fiscal
Years; and

(ii) The remaining Net Profit for the Fiscal Year, if any, shall be allocated
pro rata among the Holders of Units, based on their respective Units.

(b) Allocation of Net Loss – In General. Except as provided in Section 5.5, the
Net Loss for a Fiscal Year shall be allocated among the Members in the following
order of priorities:

(i) First, Net Loss shall be allocated among the Holders of Units based upon the
excess, if any, of each such Holder’s Adjusted Capital Account balance over such
Holder’s Liquidation Preference until all such excesses are reduced to zero; and

(ii) The remaining Net Loss for the Fiscal Year shall be allocated the Holders
of Units, based on their respective Units.

(c) Special Allocations. Notwithstanding any other provisions of this
Section 5.4, the following special allocations shall be made for each taxable
period:

(i) Nonrecourse Deductions for any taxable year shall be allocated to the
Members in accordance with their respective Units held.

(ii) Member Nonrecourse Deductions for any taxable year shall be allocated 100%
to the Member that bears the Economic Risk of Loss with respect to the Member
Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in
accordance with Treasury Regulation Section 1.704-2(i). If more than one Member
bears the Economic Risk of Loss with respect to a Member Nonrecourse Debt,
Member Nonrecourse Deductions attributable thereto shall be allocated between or
among such Members in accordance with the ratios in which they share such
Economic Risk of Loss. This Section 5.4(c)(ii) is intended to comply with the
provisions of Treasury Regulation Section 1.704-2(i) and shall be interpreted
consistently therewith.

 

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(iii) Notwithstanding any other provision of this Section 6.2, if there is a net
decrease in Minimum Gain during any taxable year, each Member shall be allocated
items of Company income and gain for such year (and, if necessary, subsequent
taxable years) in the manner and amounts provided in Treasury Regulation
Sections 1.704-2(f)(6), (g)(2) and (j)(2)(i). For purposes of this
Section 5.4(c), each Member’s Capital Account shall be determined, and the
allocation of income or gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 5.4 with respect
to such taxable year. This Section 5.4(c)(iii) is intended to comply with the
partner minimum gain chargeback requirement in Treasury Regulation
Section 1.704-2(f) and shall be interpreted consistently therewith.

(iv) Notwithstanding the other provisions of this Section 6.2 (other than
Section 6.2(c)(iii) above), if there is a net decrease in Member Nonrecourse
Debt Minimum Gain during any taxable year, any Member with a share of Member
Nonrecourse Debt Minimum Gain at the beginning of such taxable year shall be
allocated items of Company income and gain for such year (and, if necessary,
subsequent taxable years) in the manner and amounts provided in Treasury
Regulation Section 1.704-2(i)(4) and (j)(2)(ii). For purposes of this
Section 5.4(c), each Member’s Adjusted Capital Account balance shall be
determined, and the allocation of income and gain required hereunder shall be
effected, prior to the application of any other allocations pursuant to this
Section 5.4, other than Section 5.4(c)(iii) above, with respect to such taxable
year. This Section 5.4(c)(iv) is intended to comply with the partner nonrecourse
debt minimum gain chargeback requirement in Treasury Regulation Section 1.704
2(i)(4) and shall be interpreted consistently therewith.

(v) Except as provided in Sections 5.4(c)(iii) and 5.4(c)(iv) above, in the
event any Member unexpectedly receives an adjustment, allocation or distribution
described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6),
items of Company income and gain shall be allocated to such Member in an amount
and manner sufficient to eliminate, to the extent required by such Treasury
Regulation, the deficit balance, if any, in its Adjusted Capital Account created
by such adjustment, allocation or distribution as quickly as possible unless
such deficit balance is otherwise eliminated pursuant to Section 5.4(c)(iii),
5.4(c)(iv) or 5.4(c)(vi).

(vi) In the event any Member has a deficit balance in its Adjusted Capital
Account at the end of any taxable year, such Member shall be allocated items of
Company gross income and gain in the amount of such excess as quickly as
possible; provided, however, that an allocation pursuant to this
Section 5.4(c)(vi) shall be made only if and to the extent that such Member
would have a deficit balance in its Adjusted Capital Account after all other
allocations provided in this Section 5.4(c) (other than Section 5.4(c)(v)) have
been tentatively made as if Section 5.4(c)(v) and this Section 5.4(c)(vi) were
not in this Agreement.

(vii) To the extent an adjustment to the adjusted tax basis of any Company asset
pursuant to Code Sections 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 as a result of a distribution in liquidation of a Member’s
Interest in the Company, the

 

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amount of such adjustment to the 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 item of gain or loss shall be
allocated to the Members in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such provisions.

(d) Allocation of Net Profits or Net Losses from and after a Liquidation Event.
Notwithstanding the foregoing and except as provided in Section 5.5, if, upon
the final dissolution and termination of the Company and after taking into
account all allocations of Net Profit and Net Loss (and items thereof) under
this Article V from and after a Liquidation Event, the positive Capital Account
balance limits of Section 13.2(a)(iv) would prevent the distribution priority
that would otherwise occur under that Section 13.2(a)(iv) without that limit,
then gross items of Income (and other tax items) for the taxable year of the
Liquidation Event and thereafter, and, to the extent permitted under of the
Code, gross items of income (and other tax items) for the immediately preceding
taxable year, shall be allocated to the Members to increase or decrease Capital
Account balances, as the case may be, so that to the maximum extent possible the
final distributions on dissolution and termination of the Company will occur in
under the priorities provided for under Section 13.2(a)(iv) as they would occur
if there were no positive Capital Account balance limit in Section 13.2(a)(iv).

5.5 Tax Allocations.

(a) Except as otherwise provided in this Section 5.5, the Members’ distributive
shares of items of Company taxable income, gross income, gain, loss, deduction,
and credit shall be determined according to their respective shares of Net
Profits or Net Losses to which such items relate.

(b) Items of Company taxable income, gain, loss and deduction with respect to
any property contributed to the Company by a Member shall be allocated among the
Members in accordance with Section 704(c) of the Code 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 fair value as of the date of contribution.
If the book value of any Company Asset is adjusted pursuant to Section 4.1(d),
subsequent allocations of items of taxable income, gain, loss and deduction with
respect to such Company Asset shall take account of any variation between the
adjusted book value and its book value immediately before the adjustment in the
same manner as under Section 704(c) of the Code. The Company shall adopt the
remedial method of allocation described in Treasury Regulation Section 1.704-3
or such other method as reasonably made by the Board in good faith.

(c) Allocations pursuant to this Section 5.5 are solely for purposes of federal,
state, and local taxes and shall not affect, or in any way be taken into account
in computing, any Member’s Capital Account or share of Net Profits or Net
Losses, distributions, or other Company items pursuant to any provision of this
Agreement.

5.6 Changes in Member’s Interests. If during any fiscal period of the Company
there is a change in any Member’s Membership Interest the Net Profit, Net Loss,
or any other items allocable among the Members under this Article V shall be
determined on a daily, monthly, or other basis, as determined by the Board using
any permissible method under Section 706 of the Code and the Treasury
Regulations promulgated thereunder.

 

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ARTICLE VI

MANAGEMENT OF THE COMPANY

6.1 Management of the Company. Subject to the rights of the Holders of a
majority of the Class A-1 Units as set forth in this Agreement, the Board shall
have full and exclusive right, power, and authority to manage the affairs of the
Company and make all decisions with respect thereto, except for those matters
expressly reserved to the Members by this Agreement or the Act. The Board shall
have the right, power and authority, in the conduct and management of the
business of the Company, to do or cause to be done any and all acts or things
deemed by the Board to be necessary, appropriate, or desirable to carry out or
further the business of the Company. The right, power, and authority of the
Board pursuant to this Agreement shall be liberally construed to encompass all
acts and activities in which a limited liability company may engage under the
Act. Notwithstanding the foregoing, no Director in his or her individual
capacity shall have the authority to manage the Company or approve matters
relating to, or otherwise to bind the Company, such powers being reserved to the
entire Board acting pursuant to Section 6.10 and to such agents of the Company
as are designated by the Board.

6.2 Composition and Election of the Board. The Board shall initially be
comprised of six (6) Persons (each, a “Director”). That number may not be
increased without the consent of the holders of a majority of the Class A-1
Units.

(a) The Directors shall be elected as follows: two Directors shall be elected by
the holders of a majority of the Class A-1 Units (each such Director is an “FMC
Director”), and the remaining four (4) Directors shall be elected by the holders
of a majority of the Class A Units (each such Director is a “Class A Director”).
The names of the Directors constituting the initial Board are set forth on
Schedule A hereto. That Schedule shall be amended from time to time by a
designee of the Board as necessary to reflect changes in the Persons serving as
Directors. Each such Director shall serve until such Director’s successor is
elected by the appropriate action of the Person or Persons entitled to elect
such Director, as the case may be, or until the Director’s earlier death,
disability, resignation or removal. The Person or Persons entitled to elect a
Director shall also be entitled to remove that Director and to fill any vacancy
that occurs by the death, disability, resignation or removal of such Director.

(b) Any Director may resign at any time upon written notice to the Board. A
resignation shall be effective when given unless the notice specifies a
different date. Upon the resignation, removal, or death of a Director, the
Member or Members entitled to vote for such Director’s successor shall elect the
Director’s successor at a special meeting called for such purpose. Directors
need not be residents of the State of Delaware or the state of the Company’s
principal place of business and need not be Members of the Company.

(c) Prior to and as a condition to appointment or election to the Board of
Directors each Director shall execute and deliver to the Company the form of
Officer and Director Indemnification Agreement attached hereto as Exhibit B.

 

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6.3 Duties of the Board. Subject to Section 8.19, each Director shall owe the
same fiduciary duty to the Company and its Members that such Director would owe
to a corporation and its stockholders as a member of the board of directors
thereof under the laws of the State of Delaware No Director shall hold a
position as an officer or director of any organization listed on Schedule C
hereto that requires such Director to owe fiduciary duties to any organization
listed on Schedule C hereto without the consent of a majority of the Class A
Units and the Class A-1 Units, voting as separate classes.

6.4 Meetings. Regular quarterly meetings of the Board shall be held on the first
Tuesday in March, June, September and December, in each year, beginning with the
year 2009 or on such other date as shall be fixed by the Board. If the day fixed
for the annual meeting shall be a legal holiday in the State of Delaware, such
meeting shall be held on the next succeeding business day. The Board may
provide, by resolution fixing the time and place thereof, for the holding of
additional regular meetings, which may thereafter be held at the designated time
and place, without further notice thereof to the Members. Special meetings of
the Board may be called by or at the request of the Chairman of the Board, the
Chief Executive Officer, or a majority of the Directors.

6.5 Place of Meetings. The Board may designate any place as the place of meeting
for any meeting of the Board either within or without the State of Delaware.

6.6 Notice of Special Meetings. Unless waived, written notice of any special
meeting, stating the place, day, and hour thereof shall be given by mail,
facsimile or e-mail at least two (2) Business Days prior thereto by the person
or persons calling the meeting, to each Director. Neither the business to be
transacted at, nor the purpose of, any meeting of the Board need be specified in
the notice or waiver of notice of such meeting. Attendance of a Director at a
meeting shall constitute a waiver of notice of such meeting, except where a
Director attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

6.7 Spontaneous Meeting of Board. If all of the Directors meet at any time and
place (including telephonically) and consent to the holding of a meeting at such
time and place, such meeting shall be valid without call or notice, and any
Company action which may be taken at a meeting of the Board may be taken at such
meeting.

6.8 Quorum. At any meeting of the Board, at least a majority of the authorized
number of Directors (which majority must include at least one FMC Director) must
be present to constitute a quorum for the transaction of any business which may
be taken at such a meeting; provided, however, that in the event a properly
noticed meeting of the Board is adjourned for lack of a quorum solely due to the
failure of at least one FMC Director to be present, a quorum shall be deemed
present at the next properly noticed Board meeting if a majority of the
authorized number of Directors is present, irrespective of whether at least one
FMC Director is present or not. In the absence of a quorum, any Director present
at such meeting in person or by telephone shall have the power to adjourn such
meeting until a quorum shall be constituted.

6.9 Voting. Each Director, only if present in person or telephonically at a
meeting of the Board, shall be entitled to vote, and each Director shall have
one vote upon any matter

 

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submitted to a vote at a meeting of the Board; provided, however, that (a) any
FMC Director shall be entitled to cast an aggregate of up to two votes at any
meeting if (i) the other FMC Director is not present at such meeting and has
provided a written proxy to vote at such meeting to the FMC Director who is
present at such meeting or (ii) if there is a vacancy in the FMC Directors (for
example, if the holders of the Class A-1 Units have only designated one of their
two directors, then that one FMC Director may cast a total of two votes on
matters presented to the Board) and (b) any Class A Director shall be entitled
to cast an aggregate of up to two votes at any meeting if (i) any other Class A
Director is not present at such meeting and has provided a written proxy to vote
at such meeting to such Class A Director who is present at such meeting) or
(ii) if there is a vacancy in the Class A Directors (for example, if the holders
of the Class A Units have only designated three of their four directors, then
one Class A Director may cast a total of two votes on matters presented to the
Board).

6.10 Manner of Acting. Unless otherwise required by the Act or this Agreement,
the affirmative vote of a majority of the Directors present at the meeting shall
be the act of the Board for all purposes of this Agreement, and no single
Director, in the capacity as such, may make any decisions or take any actions on
behalf of the Company without the affirmative vote of a majority of the
Directors.

6.11 Written Actions. Any action required to be, or which may be, taken by the
Board or any committee thereof may be taken without a meeting if consented
thereto in a writing setting forth the action so taken and signed by all of the
Directors. Such consent shall have the same force and effect as a vote of a
majority of the Directors at a meeting, and the execution of such consent by a
Director shall constitute attendance or presence in person at a meeting of the
Board or any such committee, as the case may be.

6.12 Committees. Subject to Sections 6.13 and 6.14, the Board, by resolution
adopted by a majority of the Directors, may designate two (2) or more Directors
to constitute a committee; provided however, that at least one FMC Director and
one Class A Director shall be members of every committee of the Board, including
(a) the Audit Committee and (b) the Compensation Committee. Each such committee,
to the extent provided in the resolution, shall have and exercise all of the
authority of the Board in the management of the Company; provided, however, that
any or all members of each such committee who are Class A Directors may be
removed at any time, with or without cause, by vote of a majority of the Class A
Directors and any or all members of each such committee who are FMC Directors
may be removed at any time, with or without cause, by vote of a majority of the
FMC Directors. Unless the Board provides for a greater number, a majority of the
members constituting each such committee (which majority must include at least
one FMC Director) shall be a quorum and the act of such majority shall be the
act of such committee; provided, however, that in the event a properly noticed
meeting of a committee of the Board is adjourned for lack of a quorum solely due
to the failure of at least one FMC Director to be present, a quorum shall be
deemed present at the next properly noticed committee meeting if a majority of
the members constituting such committee is present, irrespective of whether at
least one FMC Director is present or not.

6.13 Audit Committee. The Company shall have an audit committee (the “Audit
Committee”). The Audit Committee shall be a Board Committee and shall be subject
to the provisions of Section 6.12. The primary duties of the Audit Committee are
to monitor the

 

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integrity of the Company’s financial reporting process and systems of internal
controls regarding finance, accounting and legal compliance, to monitor the
independence and performance of Company’s independent auditors, and to provide
an avenue of communication among the independent auditors, management and the
Board. The Audit Committee shall perform such other duties as shall from time to
time be delegated to the Audit Committee by the Board. The Audit Committee shall
consist solely of members of the Board who are not officers or employees of the
Company.

6.14 Compensation Committee. The Company shall have a compensation committee
(the “Compensation Committee”). The Compensation Committee shall be a Board
committee and shall be subject to the provisions of Section 6.12. The
Compensation Committee shall have the authority to establish the compensation
and benefits for officers of the Company and its subsidiaries, including,
without limitation, fixing the cash compensation of such persons, establishing
and administering compensation and benefit plans for such persons and
determining awards thereunder, and entering into (or amending existing)
employment and compensation agreements with any such persons. The Compensation
Committee shall perform such other duties as shall from time to time be
delegated to the Compensation Committee by the Board.

6.15 Specific Authority of the Board. Subject to the rights of the holders of a
Majority of the Class A-1 Units, the following actions of the Company (or the
approval of such actions by the Company in its capacity as a holder of any
Subsidiaries’ equity interests) shall be taken only by the affirmative vote,
consent or approval of a majority of the Directors:

(a) The making of any distribution by the Company pursuant to Section 5.2;

(b) The issuance by the Company of any additional Units, Securities, equity
interests or debt of the Company;

(c) The hiring or termination of officers of the Company;

(d) Agreeing to sell the Company or a controlling interest in the Company, merge
the Company with any other Entity, or sell or exclusively license all or
substantially all of the Company’s assets; and

(e) Making any acquisition of any stock or other Securities of another entity
unless it is a wholly-owned entity of the Company.

6.16 Compensation. Each Director shall be reimbursed for the reasonable
expenses, if any, incurred by the Director in attending each meeting of the
Board, and shall be paid such compensation, if any, as the Board may determine
from time to time; provided however, that no FMC Director or any Director who is
also an employee of the Company shall receive any compensation from the Company
for that person’s service as a Director prior to a Qualified Public Offering.

6.17 Telephonic Participation in Meetings. Directors may participate in any
meeting of the Board through telephonic or similar communications equipment by
means of which all Directors participating in the meeting can hear one another,
and such participation shall constitute presence in person at such meeting.

 

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6.18 Subsidiaries. The holders of a majority of the Class A-1 Units shall have
the right to designate at least one FMC Director as a director of any Subsidiary
and any actions by the board (or equivalent) of any Subsidiary shall require a
majority of the votes cast on such matter, including at least one vote from such
FMC Director.

ARTICLE VII

OFFICERS

7.1 Designation of Officers. The Board may, from time to time, designate one or
more individuals to be officers of the Company. No officer need be a resident of
the State of Delaware or a Member. Any officers so designated shall have such
authority and perform such duties as the Board may, from time to time, prescribe
or as may be provided in this Agreement. The Board may assign titles to
particular officers. Unless the Board otherwise specifies, if the title is one
commonly used for officers of a business corporation, the assignment of such
title shall constitute the delegation to such officer of the authority and
duties that are normally associated with that office, subject to any specific
delegation of authority and duties made to such officer by the Board pursuant to
this Section 7.1. Each officer shall hold office until the officer’s successor
shall be duly designated and shall qualify or until the officer’s death or until
the officer shall resign or shall have been removed. Any number of offices may
be held by the same individual. The salaries or other compensation, if any, of
the officers and agents of the Company shall be fixed from time to time by the
Board. The current officers of the Company are set forth on Schedule B hereto.

7.2 The Chairman of the Board. The “Chairman of the Board”, if any, shall be
selected by a majority of the Board; and shall, subject to the direction of the
Board, perform such executive, supervisory and management functions and duties
as may be assigned to him from time to time by the Board. The Chairman of the
Board, if present, presides at all meetings of the Board.

7.3 Chief Executive Officer. The “Chief Executive Officer” shall be the chief
executive officer of the Company and shall, subject to the control of the Board,
have general supervision, direction and control of the business and the other
officers of the Company. The Chief Executive Officer shall have the general
powers and duties of management usually vested in the office of chief executive
officer of a corporation formed under the Delaware General Corporation Law, and
shall have such other powers and duties as may be prescribed by the Board or
this Agreement.

7.4 President. The “President” shall be the chief operating officer of the
Company and shall have general supervision, direction and control of the
business and the other officers of the Company (other than the Chief Executive
Officer). In the absence of the Chief Executive Officer, the President shall
perform the duties of the Chief Executive Officer, and when so acting shall have
all the powers of and be subject to all the restrictions upon the Chief
Executive Officer. The President shall have such other powers and duties as may
be prescribed by the Chief Executive Officer, the Board or this Agreement.

7.5 Vice Presidents. In the absence or disability of the President, the “Vice
Presidents”, if any, in order of their rank as fixed by the Board, or, if not
ranked, a vice president

 

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designated by the Board, shall perform all the duties of the President, and when
so acting shall have all the powers of, and be subject to all the restrictions
upon, the President. The Vice Presidents shall have such other powers and
perform such other duties as from time to time may be prescribed for them
respectively by the Board, this Agreement, the Chief Executive Officer or the
President.

7.6 Secretary. The “Secretary” shall keep or cause to be kept, at the principal
executive office or such other place as the Board may direct, a book of minutes
of all meetings and actions of the Members and the Board, with the time and
place of holding, whether regular or special, and, if special, how authorized,
the notice given, the names the Members or members of the Board present or
represented at such meetings, and the proceedings thereof. The Secretary shall
keep, or cause to be kept, at the principal executive office or at the office of
the Company’s transfer agent or registrar, as determined by resolution of the
Board, the registers provided for in Section 11.3. The Secretary shall give, or
cause to be given, notice of all meetings of the Members or Board required by
this Agreement or by applicable law to be given, and the Secretary shall keep
the seal of the Company, if one be adopted, in safe custody, and shall have such
other powers and perform such other duties as may be prescribed by the Board,
this Agreement, the Chief Executive Officer or the President.

7.7 Chief Financial Officer. The “Chief Financial Officer” shall keep and
maintain, or cause to be kept and maintained, adequate and correct books and
records of accounts of the properties and business transactions of the Company,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, Capital Accounts and Membership Interests. The books of account shall at
all reasonable times be open to inspection by any Member and Director. The Chief
Financial Officer shall deposit all cash and other valuables in the name and to
the credit of the Company with such depositories as may be designated by the
Board. The Chief Financial Officer shall disburse the funds of the Company as
may be ordered by the President, shall render to the President and any Members
and any Director, whenever they request it, an account of all of the Chief
Financial Officer’s transactions as the Chief Financial Officer and of the
financial condition of the Company, and shall have other powers and perform such
other duties as may be prescribed by the Board, this Agreement, the Chief
Executive Officer or the President.

7.8 Powers of Execution.

(a) All checks and other demands for money and notes and other instruments for
the payment of money shall be signed on behalf of the Company by the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Financial
Officer or such other officer or officers or by such other Person or Persons as
the Board may from time to time designate. The signature of any such officer or
other Person may be a facsimile if so authorized by the Board.

(b) All contracts, deeds and instruments may be signed on behalf of the Company
by the Chairman of the Board, the Chief Executive Officer, the President, by any
Vice President or by such other Person or Persons as the Board may from time to
time designate.

(c) Subject to Section 6.18, all shares of stock, partnership interests, limited
liability company interests or other interests or Securities owned by the
Company in any other

 

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Entity shall be voted or represented, as the case may be, on behalf of the
Company by the Chairman of the Board, the Chief Executive Officer, the President
or such other Person or Persons as shall be prescribed by the Board.

(d) The officers, to the extent of their powers set forth in this Agreement, are
agents of the Company for the purpose of the Company’s business, and the actions
of the officers taken in accordance with such powers shall bind the Company.

7.9 Resignation; Removal. Any officer may resign as such at any time. Such
resignation shall be made in writing and shall take effect at the time specified
therein, or if no time be specified, at the time of its receipt by the Board.
Any officer may be removed as such, either with or without cause, by the Board
whenever in its judgment the best interests of the Company shall be served
thereby; provided that such removal shall be without prejudice to the contract
rights, if any, of the individual so removed. Designation of an officer shall
not of itself create contract rights. Any vacancy occurring in any office of the
Company may be filled by the Board.

7.10 Duties of Officers Generally. Each officer shall owe to the Company and its
Members the same duties of care and loyalty that such individuals would owe to a
corporation and its stockholders as an officer thereof under the laws of the
State of Delaware.

ARTICLE VIII

MEMBERS

8.1 [Intentionally Omitted].

8.2 Membership Status. After a permitted Transfer of Units in accordance with
Article XII by a Member, such Member shall not be entitled to any Distributions
or payments of any kind from the Company with respect to such Units and shall no
longer be considered a Member with respect to such Units for any purposes.

8.3 No Participation in Management. Subject to Section 8.10, the management of
the business and affairs of the Company shall be vested in whole in the Board in
accordance with Article VI of this Agreement. Except with respect to the
execution and filing of the Certificate, as otherwise specifically provided by
this Agreement or required by the Act, no Member, acting solely in the capacity
of a Member, shall be an agent of the Company or have any authority to act for
or bind the Company.

8.4 Meetings. A regular annual meeting of the Members may be held without notice
on the second Wednesday in the month of December in each year, beginning with
the year 2009, or on such other day as shall be fixed by the Board. If the day
fixed for the annual meeting shall be a legal holiday in the State of Delaware,
such meeting shall be held on the next succeeding business day. The Board may
provide, by resolution fixing the time and place thereof, for the holding of
additional regular meetings, which may thereafter be held at the designated time
and place, without further notice thereof to the Members. Special meetings of
the Members which may be held for any purpose or purposes, may be called by the
Chairman of the Board or by the Chief Executive Officer, by the Board, or by
Members owning at least fifty percent (50%) of either the outstanding Class A
Units or the Class A-1 Units.

 

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8.5 Place of Meetings. The Board or the Member or Members calling such meeting
may designate any place in Yolo County, California or such other place as shall
be determined by the Board as the place of meeting for any meeting of the
Members.

8.6 Notice of Meetings. Written or printed notice stating the place, day and
hour of the meeting and the purpose or purposes for which the meeting is called,
shall be delivered to each Member not less than three (3) nor more than seventy
(70) Business Days before the meeting, at the direction of the Person or Persons
calling such meeting.

8.7 Spontaneous Meeting of Members. If all of the Members meet at any time and
place (including telephonically) and consent to the holding of a meeting at such
time and place, such meeting shall be valid without call or notice, and any
Company action which may be taken at a meeting of the Members may be taken at
such meeting.

8.8 Quorum. At each meeting of the Members, the Members holding a majority of
all outstanding Class A Units and Class A-1 Units entitled to vote, present in
person or by proxy, shall constitute a quorum for the transaction of any
business which may be taken at such a meeting. In the absence of a quorum, any
Member present at such meeting in person, by proxy or by telephone shall have
the power to adjourn such meeting until a quorum shall be constituted.

8.9 Voting Rights Generally. The Members shall have the voting rights associated
with the Units held by such Member as provided in this Agreement. When a vote is
required by the Members, each Member shall be entitled to vote as provided in
Section 3.4 of this Agreement.

8.10 Special Voting Rights of Holders of Class A-1 Units. The vote of the Person
or Persons holding a majority of the Class A-1 Units, voting as a class, shall
be required to approve:

(a) Any Liquidation Event and any liquidation, merger or sale of substantially
all or substantially all of the assets of the Company or any of its
subsidiaries;

(b) Any distributions to Members, except for tax distributions pursuant to
Section 5.1;

(c) Repurchases or redemptions of any Units by the Company;

(d) The sale or issuance of any Securities that would result in a change in
control of the Company;

(e) Any disposition of Company assets having an aggregate value greater than $5
million;

(f) Any acquisition by the Company having a purchase price greater than $10
million;

(g) Incurring Indebtedness or agreeing to furnish a guarantee or other credit
support in respect of any Indebtedness, in each case that would cause the
outstanding Indebtedness of the Company and its Subsidiaries, taken as a whole,
to exceed $70,000,000 on a pro forma basis after giving effect to such
incurrence or agreement;

 

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(h) Prior to December 31, 2013, the issuance of any Equity Securities of the
Company;

(i) Any related party transaction except for trade contracts between the Company
and FMC;

(j) Any change in the Company’s independent auditors;

(k) Any change in any significant accounting policy of the Company;

(l) Any change in or amendment to this Agreement;

(m) Any change in the compensation of any Director, the Chairman of the Board or
the CEO;

(n) The selection and the terms of employment of any person selected by the
Board to serve as CEO; and

(o) The issuance of any security with liquidation rights senior to, or pari
passu with, the Class A-1 Units.

8.11 Manner of Acting. Unless otherwise required by the Act or this Agreement,
the affirmative vote of a majority of the Units entitled to vote represented at
a meeting at which the quorum is present shall constitute the act of the
Members. With respect to any matters put to a vote by a separate Class of Units,
the affirmative vote of a majority of the Holders of Units of such Class
entitled to vote represented at a meeting at which a quorum is present shall
constitute the act of such Class.

8.12 Proxies. A Member, at any meeting of Members, may vote either in person or
by proxy executed in writing by the Member or by the Member’s duly authorized
attorney in fact. No proxy shall be valid after eleven (11) months from the date
of its execution, unless otherwise provided in the proxy. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only so
long as, it is coupled with an interest sufficient in law to support an
irrevocable power of attorney. The interest with which it is coupled need not be
an interest in the Company. Proxies shall be filed with the Secretary of the
Company before or at the time of such meeting.

8.13 Written Actions. Any action required to be, or which may be, taken by
Members may be taken without a meeting if consented thereto in a writing setting
forth the action so taken and signed by the Members entitled to vote who are
required to take such action.

8.14 Telephonic Participation in Meetings. Members may participate in any
meeting through telephonic or similar communications equipment by which all
Persons participating in the meeting can hear one another, and such
participation shall constitute presence in person at such meeting.

 

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8.15 Convening Members Meetings. The Chairman of the Board, or in the Chairman
of the Board’s absence, the Chief Executive Officer, or in the absence of any of
the foregoing, any other officer (in the order of seniority in the time served
in any one or more officer positions) shall call meetings of Members to order
and act as chairman thereof; provided, however, that notwithstanding the
foregoing, the Members present may elect the chairman of such meeting from among
the Members. The Secretary shall act as secretary of all meetings of Members,
but in the absence of the Secretary, or if the Secretary is serving as chairman,
the chairman may appoint any person to act as secretary.

8.16 Persons Who May Vote Certain Units. Units standing in the name of another
limited liability company, domestic or foreign, may be voted by such member,
manager, officer, agent or proxy as the operating agreement or equivalent
instrument of such limited liability company may prescribe, or in the absence of
a governing provision, as the managers or members vested with management of such
limited liability company shall determine. Units standing in the name of a
corporation, domestic or foreign, may be voted by such officer, agent, or proxy
as the bylaws of such corporation may prescribe or, in the absence of a
governing provision, as the board of directors of such corporation may
determine.

8.17 Confidentiality. Each Member acknowledges that during the term of this
Agreement, the Member may have access to or become acquainted with trade
secrets, proprietary information and confidential information belonging to the
Company including, but not limited to, information concerning business plans,
operating practices and methods, expansion plans, strategic plans, marketing
plans, contracts, customer lists or other business documents which the Company
treats as confidential (collectively, “Confidential Information”). Each Member
agrees to maintain the confidentiality of all proprietary, nonpublic
information, documents and materials relating to the business of the Company,
any subsidiaries, any of their Affiliates or any Member which such Member now or
in the future may possess, except to the extent disclosure of any such
information is required by law or authorized by the Company or reasonably occurs
in connection with disputes under this Agreement and, except to the extent the
information becomes generally available to the public, through no fault of such
Member, is released with the Company’s written consent or is necessary to
perform such Member’s obligations under this Agreements. Upon expiration or
other termination of a Member’s interest in the Company, that Member may not
take any of the Confidential Information, and that Member shall promptly return
to the Company all Confidential Information in that Member’s possession or
control.

8.18 Withdrawal. No Member shall have the right to withdraw from the Company at
any time without the consent of the Board.

8.19 Acknowledgment Regarding Outside Businesses and Opportunities.

(a) Notwithstanding anything in this Agreement or any other Transaction Document
to the contrary, each of the Company and the Members acknowledges and agrees
that FMC and its Affiliates (i) have made, prior to the date hereof, and are
expected to make, on and after the date hereof, investments (by way of capital
contributions, loans or otherwise), and (ii) have engaged, prior to the date
hereof, and are expected to engage, on and after the date hereof, in other
transactions with and with respect to, in each case, Persons engaged in
businesses that directly or indirectly compete with the business of the Company
and its Subsidiaries as

 

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conducted from time to time. Except as otherwise expressly set forth in
Section 8.19(b), the Company and the Members agree that any involvement,
engagement or participation of FMC and its Affiliates (including any FMC
Director) in such investments, transactions and businesses, even if competitive
with the Company, shall not be deemed wrongful or improper or to violate any
duty express or implied under applicable Law.

(b) The Company and each Member hereby renounce any interest or expectancy in
any business opportunity, transaction or other matter in which FMC and its
Affiliates (other than the Company and its subsidiaries) participates or desires
or seeks to participate and that involves any aspect of the oil and gas industry
or any other industry or business (each, a “Business Opportunity”) other than a
Business Opportunity that (i) is presented to an FMC Director solely in such
individual’s capacity as an FMC Director (whether at a meeting of the Board or
otherwise) and with respect to which none of FMC or any of its Affiliates (other
than the Company and its subsidiaries) has independently received notice or is
otherwise pursuing or aware of such Business Opportunity or (ii) is identified
to an FMC Director solely through the disclosure of information by or on behalf
of the Company to such FMC Director and with respect to which none of FMC or any
of its Affiliates (other than the Company and its subsidiaries) has
independently received notice or is otherwise pursuing or aware of such Business
Opportunity (each Business Opportunity other than those referred to in clauses
(i) or (ii) of this section are referred to as a “Renounced Business
Opportunity”). None of either FMC or any of its Affiliates (including any FMC
Director) shall have any obligation to communicate or offer any Renounced
Business Opportunity to the Company, and FMC and any of its Affiliates may
pursue for itself, or direct, sell, assign or transfer to a Person other than
the Company, any Renounced Business Opportunity.

(c) Each of the Company and the Members hereby agrees that any claims against,
actions, rights to sue, other remedies or other recourse to or against FMC and
its Affiliates (including any FMC Director) for or in connection with any such
investment activity or other transaction activity or other matters described in
Section 8.19(a) or (b), whether arising in common law or equity or created by
rule of law, statute, constitution, contract (including this Agreement or any
other Transaction Document) or otherwise, are expressly released and waived by
the Company and each Member, in each case to the fullest extent permitted by
Law; provided, however, that this Section 8.19(c) does not release or waive any
claim by the Company or any Member with respect to matters described in clauses
(i) and (ii) of Section 8.19(b).

(d) Notwithstanding anything in this Agreement or any other Transaction Document
to the contrary, each of the Company and the Members acknowledges and agrees
that FMC and its Affiliates (including the FMC Directors) have obtained, prior
to the date hereof, and are expected to obtain, on and after the date hereof,
confidential information from other companies in connection with the activities
and transactions described in Section 8.19(a) or otherwise. Each of the Company
and the Members hereby agrees that (i) none of FMC or any of its Affiliates
(including the FMC Directors) has any obligation to use in connection with the
business, operations, management or other activities of the Company or to
furnish to the Company or any Member any such confidential information, and
(ii) that any claims against, actions, rights to sue, other remedies or other
recourse to or against FMC or any of its Affiliates (including the FMC
Directors) for or in connection with any such failure to use or to furnish such
confidential information, whether arising in common law or equity or created by
rule of law,

 

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statute, constitution, contract (including this Agreement or any other
Transaction Document) or otherwise, are expressly released and waived by the
Company and each Member, to the fullest extent permitted by Law.

(e) Notwithstanding anything in this Agreement or any other Transaction Document
to the contrary, FMC acknowledges and agrees that FMC and its Affiliates
(including the FMC Directors) have obtained, prior to the date hereof, and are
expected to obtain, on and after the date hereof, Confidential Information from
the Company. FMC hereby agrees that none of FMC or any of its Affiliates
(including the FMC Directors) will use in connection with the business,
operations, management or other activities of FMC or any of its Affiliates
(including the FMC Directors) or any of its investment opportunities, or furnish
to any Person associated with other companies encountered by FMC in connection
with the activities and transactions described in Section 8.19(a) or otherwise,
any such Company Confidential Information, except pursuant to Section 8.17.

ARTICLE IX

EXCULPATION AND INDEMNIFICATION

9.1 Exculpation. No Covered Person shall be liable to the Company or to any
officer or Member for any loss suffered by the Company unless such loss is
caused by such Covered Person’s gross negligence, willful misconduct,
intentional violation of law or material breach of this Agreement. No Covered
Person shall be liable for errors in judgment or for any acts or omissions that
do not constitute gross negligence, intentional misconduct, knowing violation of
law or material breach of this Agreement. Any Covered Person acting for, on
behalf of, or in relation to, the Company in respect of any transaction, any
investment or any business decision or action, or otherwise, may consult with
counsel and accountants in respect of Company affairs, and provided such Covered
Person acts in good faith reliance upon the advice or opinion of such counsel or
accountants, such Covered Person shall not be liable for any loss suffered by
the Company in reliance thereon.

9.2 Right to Indemnification. Subject to the limitations and conditions as
provided in this Article IX, each Covered Person (regardless of such person’s
capacity and regardless of whether another Covered Person is entitled to
indemnification) who was or is made a party or is threatened to be made a party
to or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, arbitrative (hereinafter, a
“Proceeding”), or any appeal in such a Proceeding or any inquiry or
investigation that could lead to such a Proceeding, in each case in connection
with the activities of the Company or its Subsidiaries shall be indemnified by
the Company to the fullest extent permitted under applicable law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment) against judgments, penalties, fines, settlements and reasonable
expenses (including, without limitation, attorneys’ fees) actually incurred by
such Covered Person in connection with such Proceeding; provided that (a) such
Covered Person’s course of conduct was pursued in good faith and believed by him
to be in the best interests of the Company and (b) such course of

 

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conduct did not constitute gross negligence, intentional misconduct, or knowing
violation of law on the part of such Covered Person and otherwise was materially
in accordance with the terms of this Agreement. Indemnification under this
Article IX shall continue with respect to a Covered Person who has ceased to
serve in the capacity which initially entitled such Covered Person to indemnity
hereunder. The rights granted pursuant to this Article IX shall be deemed
contractual rights, and no amendment, modification or repeal of this Article IX
shall have the effect of limiting or denying any such rights with respect to
actions taken or Proceedings arising prior to any amendment, modification or
repeal. It is expressly acknowledged that the indemnification provided in this
Article IX could involve indemnification for negligence. Notwithstanding the
foregoing, no indemnification pursuant to this Section 9.2 shall be available to
any Covered Person with respect to its obligations incurred pursuant to any
agreement other than this Agreement, including without limitation the other
Transaction Documents, or with respect to any actions taken by any such Person
if such Person was acting on behalf of itself or was not solely acting in the
capacity that gave rise to its status as a Covered Person.

9.3 Advance Payment. The right to indemnification conferred in this Article IX
shall include the right to be paid or reimbursed by the Company the reasonable
expenses incurred by a Covered Person of the type entitled to be indemnified
under Section 9.2 who was, is or is threatened to be made a named defendant or
respondent in a Proceeding in advance of the final disposition of the Proceeding
and without any determination as to the Covered Person’s ultimate entitlement to
indemnification; provided that the payment of such expenses incurred by any such
Covered Person in advance of the final disposition of a Proceeding shall be made
only with the approval of the Board and upon delivery to the Company of a
written affirmation by such Covered Person of the Covered Person’s good faith
belief that the Covered Person has met the standard of conduct necessary for
indemnification under Article IX and a written undertaking, by or on behalf of
such Covered Person, to repay all amounts so advanced if it shall ultimately be
determined that such indemnified Covered Person is not entitled to be
indemnified under this Article IX or otherwise.

9.4 Indemnification of Employees and Agents. The Company may indemnify and
advance expenses to any Person, as determined by the Board, by reason of the
fact that such Person was an employee or agent of the Company or is or was
serving at the request of the Company as a manager, director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of another
Entity, foreign or domestic, or other enterprise against any liability asserted
against the Person and incurred by the Person in such a capacity or arising out
of the Person’s status as such a Person to the same extent that the Company
shall indemnify and advance expenses to Directors and officers under this
Article IX.

9.5 Appearance as a Witness. Notwithstanding any other provision of this
Article IX, the Company may pay or reimburse reasonable out-of-pocket expenses
incurred by a Director, officer or employee in connection with such Person’s
appearance as a witness or other participation in a Proceeding related to or
arising out of the business of the Company at a time when the Person is not a
named defendant or respondent in the Proceeding.

9.6 Non-exclusivity of Rights. The right to indemnification and the advancement
and payment of expenses conferred in this Article IX shall not be exclusive of
any other right which a Director, officer or other Person indemnified pursuant
to this Article IX may have or hereafter

 

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acquire under any law (common or statutory), provision of the Certificate or
this Agreement, separate contractual arrangement, vote of the Holders of a
majority of the Class A Units and Class A-1 Units or a majority of the Directors
or otherwise.

9.7 Insurance. The Company may purchase and maintain insurance, at its expense,
to protect itself and any Person who is or was serving as a Director, officer,
employee or agent of the Company or is or was serving at the request of the
Company as a manager, director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another Entity, foreign or domestic,
whether or not the Company would have the power to indemnify such Person against
such expense, liability or loss under this Article IX.

9.8 Savings Clause. If this Article IX 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 Director, officer or
any other Person indemnified pursuant to this Article IX as to costs, charges
and expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative to the fullest extent permitted by any
applicable portion of this Article IX that shall not have been invalidated and
to the fullest extent permitted by applicable law.

9.9 Transactions Between the Company and the Members. Notwithstanding that it
may constitute a conflict of interest and subject to Section 8.19, the Members
or their Affiliates may engage in any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or rendering
of any service or the establishment of any salary, other compensation or other
terms of employment) with the Company so long as such transaction is approved in
advance by a majority of the disinterested Directors on the Board.

ARTICLE X

TAXES

10.1 Tax Returns. The Board shall cause to be prepared and filed all necessary
federal, state, local or foreign income tax returns for the Company, including
making any tax elections the Board may deem appropriate and in the best
interests of the Company. Each Member shall furnish to the Board all pertinent
information in its possession relating to Company operations that is necessary
to enable the Company’s income tax returns to be prepared and filed in
accordance with applicable law.

10.2 Tax Matters Partner. The Board shall designate a Member as, and have the
power to replace at any time, the “tax matters partner” of the Company pursuant
to Section 6231(a)(7) of the Code. The initial tax matters partner designated by
the Board is Schilling Robotics, Inc. Any Member who is designated “tax matters
partner” (a) shall take such action as may be necessary to cause each other
Member to become a “notice partner” within the meaning of Section 6223 of the
Code, (b) shall inform each other Member of all significant matters that may
come to its attention in its capacity as “tax matters partner” by giving notice
thereof on or before the fifth (5th) Business Day after becoming aware thereof
and, within that time, shall forward to each other Member copies of all
significant written communications the tax matters partner may receive in that
capacity and (c) may not take any action contemplated by Sections 6222 through

 

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6232 of the Code without the consent of the Board. The preceding sentence does
not authorize any Member acting as tax matters Partner (or any other Member) to
take any action left to the determination of an individual Member under
Sections 6222 through 6232 of the Code.

10.3 Certain Tax Matters. Notwithstanding anything contained in this Agreement
to the contrary (other than Section 5.5(b)), (i) except as otherwise provided
herein, all tax elections and allocations must be approved by a majority of the
Board; provided that no elections shall be made to treat the Company as anything
other than a partnership for U.S. federal, state or local income tax purposes;
(ii) unless otherwise agreed to by the FMC Director, the Company shall elect to
use the remedial method of allocation pursuant to Treas. Reg. § 1.704-3; and
(iii) the Company shall make the election provided for in Section 754 of the
Code effective for the period that includes the Effective Date.

ARTICLE XI

BOOKS, REPORTS AND COMPANY FUNDS

11.1 Maintenance of Books. Except as may be required to compute Capital Accounts
under this Agreement, the Company shall keep appropriate books and records of
accounts in accordance with the method used by the Company under the Code and
also in accordance with generally accepted accounting principles (GAAP) and
shall keep appropriate minutes of the proceedings of its Members, the Board and
its committees.

11.2 Reports.

(a) The Company shall deliver to each Director periodic financial statements,
annual audited financial statements, and annual budgets and other financial
reports requested by the Board.

(b) The Company shall deliver:

(i) to the Holders of Units, no later than 75 days after the end of the
Company’s Fiscal Year, an audited balance sheet as of the end of such Fiscal
Year and audited statements of income and cash flows for such Fiscal Year, such
year-end financial reports to be in reasonable detail and prepared in accordance
with GAAP, and

(ii) to each Holder of at least 5 Class A-1 Units, (A) no later than 45 days
after the end of each calendar quarter, an unaudited balance sheet as of the end
of each such quarterly period, and unaudited statements of income and cash flows
for such period, all in reasonable detail and prepared in accordance with GAAP,
except that they may not contain all of the footnotes that are required by GAAP,
and are subject to changes resulting from year-end audit adjustments and
(B) within 30 days following the beginning of each fiscal year, a budget and
business plan for such fiscal year, prepared on a monthly basis, including
balance sheets, income statements and statements of cash flows for such months,
and as soon as prepared, any other budgets or revised budgets prepared by the
Company.

This Section 11.2(b) shall terminate and be of no further force and effect
(x) immediately prior to the closing of the Company’s (or a successor Entity’s)
first Qualified Public Offering, (y) if and when the Company shall become
subject to the periodic reporting requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, or (z) a Liquidation Event.

 

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(c) The Company shall use reasonable efforts to deliver or cause to be
delivered, within 90 days after the end of each Fiscal Year, to each Person who
was a Member at any time during such Fiscal Year all information necessary for
the preparation of such Person’s U.S. federal and state income tax returns.

11.3 Unit Register. The Secretary shall maintain a register of all of the
Members, setting forth next to the name of each the type and number of Units
owned by such Member, and a register of the owners of any rights (including
warrant and conversion rights, if any) for Units. Such registers shall be
maintained at the Company’s principal place of business, and each Director,
Member or such Person’s duly authorized representative shall have the right to
inspect and copy such registers upon reasonable notice, at all reasonable times
during business hours.

11.4 Company Funds. Pending use in the business of the Company or distribution
to the Members, the funds of the Company may, in the discretion of the Board, be
deposited in a bank account or accounts, or invested in the following
interest-bearing taxable or nontaxable investments: checking and savings
accounts, certificates of deposit and time or demand deposits in commercial
banks, U.S. government securities, securities fully guaranteed by U.S.
government agencies, bankers’ acceptances, securities issued by money market
mutual funds, savings and loan association deposits, deposits in members of the
Federal Home Loan Bank System, or commercial paper, rated A-I or better by
Standard & Poor’s Corporation or Prime-I or better by Moody’s Commercial Paper
Division of Moody’s Investor Services, Inc., or the successor to either of them;
provided that the Board shall not make any such deposits or investments that
would require registration of the Company under the Investment Company Act of
1940. Such funds shall not be commingled with funds of any other Person.
Withdrawal of funds shall be made upon such signatures as the Board may
designate.

ARTICLE XII

EQUITY HOLDER RIGHTS AND RESTRICTIONS ON TRANSFER

12.1 Transfers Restricted. No Member may Transfer any of its Membership Interest
without the consent of the remaining Members. The foregoing restriction shall
not apply to (a) the transfer by Newco LLC of its Membership Interest to Inc.
pursuant to the Securities Purchase Agreement, (b) any transaction giving rise
to a Bring Along Right or Tag Along Right pursuant to the Unitholders Agreement
and (c) any pledge, mortgage, hypothecation or grant of a security interest in
connection with a credit agreement or other secured financing entered into by a
Member.

12.2 Transfer by Member. In addition to the requirements set forth elsewhere in
this Article XII, no Transfer by a Member of all or part of its Membership
Interest, pursuant to Section 12.1, whether or not for value, shall be effective
unless: (i) such Transfer is made in form reasonably satisfactory to the Board;
and (ii) the transferor, transferee, and (if necessary) other Members have
executed all such certificates and other documents and performed all such acts
as the Board deems reasonably necessary to effect a valid transfer and to
preserve the rights, status and existence of the Company.

 

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12.3 Void Transfers. Any Transfer by any Member of any Membership Interest or
other interest in the Company in violation of this Agreement (including, without
limitation, the failure of the transferee to execute a counterpart to this
Agreement) or which would cause the Company to not be treated as a partnership
for U.S. federal income tax purposes shall be void and ineffective and shall not
bind or be recognized by the Company or any other party. No purported assignee
shall have any right to vote on any matter or any right to any profits, losses
or Distribution, receive reports or other information or to inspect the records,
of the Company.

ARTICLE XIII

DISSOLUTION, LIQUIDATION AND TERMINATION

13.1 Dissolution. The Company shall be dissolved and its affairs shall be wound
upon the first to occur of the following:

(a) The affirmative vote of a majority of the Directors and the affirmative vote
of a majority of the outstanding Class A and a majority of the outstanding
Class A-1 Units, voting as separate classes;

(b) The incorporation of the Company pursuant to Article XIV;

(c) The occurrence of a Liquidation Event; or

(d) The entry of a decree of judicial dissolution of the Company under the Act.

The death, retirement, resignation, expulsion, withdrawal, bankruptcy or
dissolution of any Member shall not cause a dissolution of the Company and
thereafter the Company shall continue its existence.

13.2 Liquidation and Termination.

(a) On dissolution of the Company, the Directors shall appoint a Person or
Persons to act as liquidator(s). The liquidator(s) shall proceed diligently to
wind up the affairs of the Company and make final Distributions as provided
herein and in the Act. The costs of liquidation shall be borne as a Company
expense. Until final Distribution, the liquidator(s) shall continue to operate
the Company properties with all of the power and authority of the Members. The
steps to be accomplished by the liquidator(s) are as follows:

(i) as promptly as possible after dissolution and again after final liquidation,
the liquidator(s) shall cause a proper accounting to be made by one of the five
largest accounting firms in the United States (or such other independent
accounting firm approved by the Board) of the Company’s assets, liabilities and
operations through the last day of the calendar month in which the dissolution
occurs or the final liquidation is completed, as applicable;

(ii) the liquidator(s) shall cause the notice described in the Act to be mailed
to each known creditor of and claimant against the Company in the manner
described thereunder;

 

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(iii) the liquidator(s) shall pay, satisfy or discharge from Company funds all
of the debts, liabilities and obligations of the Company (including, without
limitation, all expenses incurred in liquidation) or otherwise make adequate
provision for payment and discharge thereof (including, without limitation, the
establishment of a cash fund for contingent liabilities in such amount and for
such term as the liquidator(s) may reasonably determine); and

(iv) all remaining assets of the Company shall be sold and the cash proceeds
therefrom shall be distributed to the Members as follows:

(A) First, to the Class A-1 Unit Holders based on their respective Class A-1
Units until the aggregate amount distributed pursuant to this
Section 13.2(a)(iv)(A) equals the Class A-1 Unit Liquidation Preference;

(B) Next, to the Class A Unit Holders based on their respective Class A Units an
amount equal to the aggregate of the FMC Liquidation Preference, the Inc.
Liquidation Preference and the Newco LLC Liquidation Preference until FMC has
received the FMC Liquidation Preference, Inc. has received the Inc. Liquidation
Preference and Newco LLC has received the Newco LLC Liquidation Preference
pursuant to this Section 13.2(a)(iv)(B), provided that in the event the amount
available for distribution hereunder is less than such aggregate amount, pro
rata among the Class A Unit Holders based on their respective Class A Units; and

(C) The remainder, pro rata among Class A-1 Unit Holders and Class A Unit
Holders , based on their respective Units held.

(b) All Distributions to the Members under this Section 13.2 shall be made, as
determined by the Board, in cash and/or Securities, and such Distribution of
cash and/or Securities to a Member in accordance with the provisions of this
Section 13.2 shall constitute a complete return to the Member of its Capital
Contributions and a complete Distribution to the Member of the Member’s interest
in the Company and all of the Company’s property and constitutes a compromise to
which all Members have consented within the meaning of the Act. To the extent
that a Member returns funds to the Company, it has no claim against any other
Member for those funds.

13.3 Cancellation of Certificate. On completion of the Distribution of Company
assets as provided above, the Company shall be deemed to have terminated and the
liquidator(s) (or such other Person or Persons as the Act may require or permit)
shall file a certificate of cancellation and such other documentation with the
Secretary of State of Delaware as may be necessary to terminate the Company,
cancel any other filings made pursuant to Section 2.5 and take such other
actions as may be necessary to terminate the Company.

ARTICLE XIV

SECTION 351 TRANSACTION

14.1 Incorporation. Upon either:

(a) Upon either:

 

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(i) The approval of the Board of a plan to incorporate the Company (the
“Incorporation Plan”), provided that prior to December 31, 2013, approval of the
Holders of a majority of the Class A-1 Units shall also be required, or

(ii) The approval of an Incorporation Plan by the Holders of a majority of the
Class A Units, provided that prior to December 31, 2013, approval of the holders
of a majority of the Class A-1 Units shall also be required,

each Member will transfer such Member’s Units to a corporation specifically
formed for such purpose (the “Corporation”) in exchange for stock of the
Corporation in a transaction intended to qualify under Section 351 of the Code,
(the “Section 351 Transaction”). In the Section 351 Transaction, the Corporation
shall issue its stock to the Members in accordance with their respective Units,
without regard to class. Each Member shall consent to and raise no objections
against, and shall take all necessary and desirable actions in connection with
the consummation of the Section 351 Transaction. In the case of a Member that is
a corporation, the Member may, in lieu of transferring all of its Units to the
Corporation, cause all of its shareholders to transfer all of their shares of
stock in the Member to the Corporation.

(b) In the event that the Company is incorporated pursuant to this Section 14.1
but does not effect a Qualified Public Offering immediately thereafter, then the
respective rights, preferences, privileges and restrictions of the Class A Unit
and the Class A-1 Units as they substantially exist under this Agreement and the
Unitholders Agreement shall continue and be in effect in such successor
corporation. Further, the Members of the Company, who shall become stockholders
of such successor corporation that does not effect a Qualified Public Offering
immediately after such incorporation, hereby agree and acknowledge that they
shall, upon such incorporation of the Company, enter into a stockholder
agreement containing substantially the same rights, preferences, privileges and
restrictions with respect to voting as exist in this Agreement and the
Unitholders Agreement.

14.2 Expenses and Other Matters. The Company shall pay any and all
organizational, legal and accounting expenses and filing fees incurred in
connection with the Section 351 Transaction (including, without limitation, any
fees related to a filing under the Hart-Scott-Rodino Anti-Trust Improvements Act
of 1976, as amended). The Corporation shall issue its stock in the Section 351
Transaction in accordance with the Incorporation Plan, which shall specify the
classes of stock for which the Units (or shares of stock of a Member that is a
corporation, as applicable) shall be exchanged and which shall attach as an
exhibit the form of organizational document which shall set forth the rights and
privileges of such classes of stock. In addition, the Incorporation Plan shall
attach as exhibits such other documents and agreements as the Board determines
shall be necessary, if any, to confer the rights, privileges, preferences and
obligations conferred on the holders of Units in this Agreement on the holders
of such classes or series of stock which shall be issued in exchange for such
Units.

ARTICLE XV

GENERAL PROVISIONS

15.1 Notices. Except as expressly set forth to the contrary in this Agreement,
all notices, requests or consents provided for or permitted to be given under
this Agreement must be

 

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in writing and must be given either by depositing that writing in the United
States mail, addressed to the recipient, postage paid, and registered or
certified with return receipt requested or by delivering that writing to the
recipient in person, by reputable overnight courier, or by facsimile
transmission; and a notice, request, or consent given under this Agreement is
effective on receipt by the Person to whom it was sent. All notices, requests
and consents to be sent to a Member must be sent to or made at the address given
for that Member on the books and records of the Company, or such other address
as that Member may specify by notice to the other Members. Any notice, request,
or consent to the Company or the Board must be given to the Board at the
following address:

Schilling Robotics, LLC

201 Cousteau Place

Davis, California 95618-5412

Attention: Chairman

Facsimile: (530) 753-8092

Whenever any notice is required to be given by law, the Certificate or this
Agreement, a written waiver thereof, signed by the Person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.

15.2 Entire Agreement. This Agreement and the Securities Purchase Agreement
constitute the entire agreement of the Members and their Affiliates relating to
the Company and supersede all prior contracts or agreements with respect to the
Company, whether oral or written.

15.3 Effect of Waiver or Consent. A waiver or consent, express or implied, to or
of any breach or default by any Person in the performance by that Person of its
obligations with respect to the Company is not a consent or waiver to or of any
other breach or default in the performance by that Person of the same or any
other obligations of that Person with respect to the Company. Failure on the
part of a Person to complain of any act of any Person or to declare any Person
in default with respect to the Company, irrespective of how long that failure
continues, does not constitute a waiver by that Person of its rights with
respect to that default until the applicable statute of limitations period has
run.

15.4 Amendment, Modification or Waiver. Except as otherwise expressly provided
herein, this Agreement may be amended, modified or waived from time to time only
by a written instrument executed and agreed to by the Members holding a majority
of the Class A-1 Units and the Members holding a majority of the Class A Units
then outstanding, voting as separate classes; provided, however, that the Board
may amend and modify the provisions of this Agreement and the books and records
of the Company to the extent necessary to reflect the issuance of new Units or
other interests in the Company as permitted in accordance with this Agreement
and to comply with applicable law.

15.5 Binding Effect. Subject to the restrictions on Transfers set forth in this
Agreement, this Agreement is binding on and shall inure to the benefit of the
Members and their respective heirs, legal representatives, successors and
assigns.

 

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15.6 Governing Law; Severability. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement, and
all issues and questions concerning the relative rights of the Company and its
Members, shall be governed by, and construed in accordance with, the laws of the
State of Delaware, without giving effect to any choice of law or conflict of
law, rules or provisions (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware. If any provision of this Agreement or the
application thereof to any Person or circumstance is held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of that provision to other Persons or circumstances are not affected thereby and
that provision shall be enforced to the greatest extent permitted by law.

15.7 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each Member shall execute and deliver any additional
documents and instruments and perform any additional acts that may be necessary
or appropriate to effectuate and perform the provisions of this Agreement and
the transactions contemplated hereby.

15.8 Waiver of Certain Rights. Each Member irrevocably waives any right such
Member may have to (a) demand any Distributions (other than, before such Member
has resigned or withdrawn from the Company, Distributions required pursuant to
Section 5.1 and 13.2 hereof) or withdrawal of property from the Company (whether
upon resignation, withdrawal or otherwise) or (b) maintain any action for
dissolution of the Company or for partition of the property of the Company
except upon dissolution of the Company pursuant to Article XIII hereof.

15.9 Indemnification and Reimbursement for Payments on behalf of a Member. If
the Company is obligated under applicable law to pay any amount to a
governmental agency because of a Member’s status as a member of the Company or
for federal or state withholding taxes on payments made to a Member, other than
due to the Company’s actions or inactions, then such Member (the “Indemnifying
Member”) shall indemnify the Company in full for the entire amount paid
(including, without limitation, any interest, penalties and expenses associated
with such payments). The amount to be indemnified shall be charged against the
Capital Account of the Indemnifying Member and, at the option of the Board,
either:

(a) promptly upon notification of an obligation to indemnify the Company, the
Indemnifying Member shall make a cash payment to the Company equal to the full
amount to be indemnified (and the amount paid shall be added to the Indemnifying
Member’s Capital Account but shall not be treated as a Capital Contribution), or

(b) the Company shall reduce Distributions which would otherwise be made to the
Indemnifying Member, until the Company has recovered the amount to be
indemnified (and, notwithstanding Section 4.1, the amount withheld shall not be
treated as a Capital Contribution).

15.10 Notice to Members of Provisions. By executing this Agreement, each Member
acknowledges that it has actual notice of (a) all of the provisions hereof
(including, without limitation, the restrictions on transfer set forth in
Article XII) and (b) all of the provisions of the Certificate.

 

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15.11 Counterparts. This Agreement may be executed in multiple counterparts with
the same effect as if all signing parties had signed the same document. All
counterparts shall be construed together and constitute the same instrument.

15.12 Dispute Resolution.

(a) In the event of any dispute or disagreement among any of the Parties as to
the interpretation of any provision of this Agreement or the performance of
obligations hereunder, after good faith negotiation by the Parties, any Party
may, by written notice to the other Parties, demand arbitration of the matter,
and such arbitration shall be administered by the Center for Public Resources
Institute for Dispute Resolutions (“CPR”) in accordance with its then prevailing
Rules for Non-Administered Arbitration of Business Disputes, by an arbitrator or
arbitrators as selected and described in Section 15.12(b). The arbitrator(s)
shall set a limited time period and establish procedures designed to reduce the
cost and time for discovery while allowing the Parties an opportunity, adequate
in the sole judgment of the arbitrators, to discover relevant information from
the opposing Parties about the subject matter of the dispute. The arbitrator(s)
shall rule upon motions to compel or limit discovery and shall have the
authority to impose sanctions, including, without limitation, attorneys’ fees
and costs, to the same extent as a court of competent jurisdiction, should the
arbitrator(s) determine that discovery was sought without substantial
justification or that discovery was refused or objected to without substantial
justification. The decision of the arbitrator(s) shall be written, shall be in
accordance with applicable law, including, without limitation, the United States
Arbitration Act, 9 U.S.C. §1 et. seq. (the “USAA”), and with this Agreement, and
shall be supported by written findings of fact and conclusions of law which
shall set forth the basis for such decision. The decision of the arbitrator(s)
shall be final and not subject to judicial review and judgment thereon may be
entered in any court of competent jurisdiction, and the Parties shall be
entitled to act in accordance with such decision.

(b) For all disputes for which the aggregate disputed dollar amount is equal to
or less than $3,000,000, the Parties shall agree upon a single arbitrator to
oversee such dispute. If the Parties cannot agree on such arbitrator within 20
days after submitting the dispute for arbitration, then the dispute shall be
managed by a single independent arbitrator to be chosen by the CPR. For all
disputes for which the aggregate disputed dollar amount exceeds $3,000,000, such
dispute shall be managed and ruled upon by a panel of three arbitrators. FMC, on
the one hand, and the Schilling Parties, on the other hand, shall each name one
of the arbitrators, and the third arbitrator shall be chosen by FMC and the
Schilling Parties or, if FMC and the Schilling Parties cannot agree on such
arbitrator within 20 days after submitting the dispute for arbitration, then the
third arbitrator shall be an independent arbitrator selected by the CPR.

(c) Any arbitration under this Section 15.12 shall be governed by the USAA and
shall be held in Delaware. The non-prevailing Party to an arbitration shall pay
its own expenses, the fees of the arbitrator, any fees and expenses of the CPR,
and the expenses, including attorneys’ fees and costs, reasonably incurred by
the other Party to the arbitration.

15.13 Waiver of Jury Trial. The Members waive their respective rights to a jury
trial of any claim or cause of action based upon or arising out of this
Agreement or any dealings between them relating to the subject matter of this
Agreement and the relationship that is being

 

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established. The Members also waive any bond or surety or security upon such
bond which might, but for this waiver, be required of any of the other parties.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this Agreement including, without limitation, contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. The
Members acknowledge that this waiver is a material inducement to enter into a
business relationship, that each has already relied on their waiver in entering
into this Agreement and that each will continue to rely on the waiver in their
related future dealings. The Members further warrant and represent that each has
reviewed this waiver with its or his, as the case may be, legal counsel, and
that each knowingly and voluntarily waives its or his, as the case may be, jury
trial rights following consultation with legal counsel. This waiver is
irrevocable, meaning that it may not be modified either orally or in writing,
and the waiver shall apply to any subsequent amendments, renewals, supplements
or modifications to this Agreement or to any other documents or agreements
relating to the transaction contemplated hereby. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.

15.14 Parties in Interest. Except as expressly provided in the Act, nothing in
this Agreement shall confer any rights or remedies under or by reason of this
Agreement on any Persons other than the Members and their respective successors
and assigns nor shall anything in this Agreement relieve or discharge the
obligation or liability of any other Person to any party to this Agreement, nor
shall any provision give any other Person any right of subrogation or action
over or against any party to this Agreement.

ARTICLE XVI

POWER OF ATTORNEY

Each Member irrevocably constitutes and appoints any Person who is the Chief
Executive Officer of the Company, for so long as the Person shall remain as such
Chief Executive Officer, as the true and lawful attorney-in-fact of such Member
with full power and authority in the name, place and stead of such Member to do
any or all of the following:

(A) To execute, record and file all documents and instruments including an
amendment of this Agreement, which may be necessary to provide for any or all of
carrying out the Incorporation Plan, accomplishing the admission of any Person
as a Member pursuant to this Agreement and any admission described or provided
for in any or all of Sections 3.5, 4.2 and Section 4.3;

(B) To execute any amendment to this Agreement approved in accordance with the
terms of this Agreement;

(C) To document any Transfer permitted under this Agreement; and

(D) To document the incorporation of the Company pursuant to Section XIV.

 

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The foregoing power of attorney is coupled with an interest, shall be
irrevocable, and shall survive the transfer by any Member of the whole or any
portion of such Member’s Membership Interest. This power of attorney shall not
be affected by the disability of the Member.

(Signature Pages Follow)

 

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SCHILLING ROBOTICS, LLC

COUNTERPART SIGNATURE PAGE TO

AMENDED AND RESTATED OPERATING AGREEMENT

Reference is made to that certain Amended and Restated Operating Agreement of
Schilling Robotics, LLC (the “Company”) dated as of
                                , a copy of which is attached hereto (as amended
and in effect from time to time, the “Operating Agreement”). Capitalized terms
used herein without definition shall have the respective meanings ascribed
thereto in the Operating Agreement.

The undersigned, hereby agrees that, the undersigned is a Holder of Units of the
Company, as set forth below, and is entitled to all of the benefits under, and
is subject to all of the obligations, restrictions and limitations set forth in,
the Operating Agreement that are applicable to the Holders of the same Class (or
Classes) of Units that I hold. This Counterpart Signature Page shall take effect
and shall become a part of the Operating Agreement immediately upon the
signature of the undersigned as a Holder of Units of the Company.

Executed as of the date set forth below under the domestic substantive laws of
the State of Delaware without giving effect to any choice or conflict of law
provision or rule that would cause the application of the domestic substantive
laws of any other state.

 

ENTITY MEMBER:

 

Name of Member (Print) By:  

 

Name:   Title:  

Number of Units

 

Class A

 

 

Class A-1

 

 

Address:

 

 

 

 

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Schedule A

Board of Directors

 

Tyler Schilling, Chairman    (Director elected by Holders of Class A Units)
Philip Otto    (Director elected by Holders of Class A Units)
Hobart McK. Birmingham    (Director elected by Holders of Class A Units) J. Taft
Symonds    (Director elected by Holders of Class A Units) John T. Gremp   
(Director elected by Holders of Class A-1 Units) William H. Schumann, III   
(Director elected by Holders of Class A-1 Units)            

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Schedule B

Officers

Tyler Schilling, Chairman, Chief Development Officer and Secretary

Philip Otto, President and Chief Executive Officer

Wes Gerriets, Senior Vice President, Manipulator Sales

John Kehoe, Senior Vice President and Chief Financial Officer

Paul Whalen, Senior Vice President, Operations

Jason Stanley, Vice President, Global Sales

Steve Callori, Vice President, Engineering

Randy Dusseau, Vice President, Manipulator Manufacturing

Mike Gyorfi, Vice President, Systems Manufacturing

Clay Cottingham, Vice President, Customer Service

Gil Llacuna, Vice President and Corporate Controller

Sally Larocca, Vice President, Human Resources

George Shirreffs, Managing Director, Schilling Robotics Ltd, North Sea
Operations

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Schedule C

Competitors/Customers

Triton Group or its member companies

 

•  

Perry Slingsby Systems

•  

Sub Atlantic

•  

Etc.

Soil Machine Dynamics

International Submarine Engineering

Kyst Design

Eastar

Kraft Telerobotics

Hydro-Lek

Oceaneering

Saipem

Subsea 7 (Siem Offshore)

Fugro

Bourbon Offshore

Edison Chouest Offshore

Acergy

Allseas

Expro Group

Schlumberger

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Exhibit A

Form of Indemnification Agreement