EXHIBIT 10.5

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

GBGH, LLC

a Delaware Limited Liability Company

Dated as of August 3, 2006

 

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TABLE OF CONTENTS

 

ARTICLE I

   DEFINITIONS    1

SECTION 1.1

   DEFINITIONS.    1

SECTION 1.2

   INTERPRETATION.    6

ARTICLE II

   GENERAL PROVISIONS    6

SECTION 2.1

   FORMATION.    6

SECTION 2.2

   COMPANY NAME.    7

SECTION 2.3

   REGISTERED OFFICE; REGISTERED AGENT.    7

SECTION 2.4

   PLACE OF BUSINESS.    7

SECTION 2.5

   PURPOSE; NATURE OF BUSINESS PERMITTED; POWERS.    7

SECTION 2.6

   BUSINESS TRANSACTIONS OF A MEMBER WITH THE COMPANY; DUTIES.    7

SECTION 2.7

   COMPANY PROPERTY.    8

SECTION 2.8

   TERM.    8

SECTION 2.9

   NO STATE LAW PARTNERSHIP.    8

SECTION 2.10

   FISCAL YEAR.    8

SECTION 2.11

   TAX TREATMENT.    8

ARTICLE III

   MEMBERS    9

SECTION 3.1

   MEMBERS.    9

SECTION 3.2

   ADDITIONAL EQUITY AND MEMBERS.    9

SECTION 3.3

   CLASSES OF MEMBERS.    9

SECTION 3.4

   NO LIABILITY OF MEMBERS.    9

SECTION 3.5

   ACTIONS BY THE MEMBERS.    9

SECTION 3.6

   POWER TO BIND THE COMPANY.    10

SECTION 3.7

   ACCESS.    10

SECTION 3.8

   REPRESENTATIONS AND WARRANTIES.    11

SECTION 3.9

   CERTIFICATES.    12

ARTICLE IV

   MANAGEMENT    13

SECTION 4.1

   BOARD OF DIRECTORS.    13

SECTION 4.2

   NUMBER OF DIRECTORS.    14

SECTION 4.3

   ELECTION OF DIRECTORS.    14

SECTION 4.4

   REMOVAL OR RESIGNATION OF DIRECTORS.    14

SECTION 4.5

   MEETINGS.    14

SECTION 4.6

   ACTION WITHOUT A MEETING.    15

SECTION 4.7

   NOTICE OF MEETINGS.    15

SECTION 4.8

   QUORUM.    15

SECTION 4.9

   VOTING.    15

SECTION 4.10

   EXPENSES.    15

SECTION 4.11

   THIRD PARTY RELIANCE.    15

SECTION 4.12

   DUTIES OF DIRECTORS.    16

SECTION 4.13

   TRANSACTIONS WITH DIRECTORS AND AFFILIATES.    16

SECTION 4.14

   CERTAIN TRANSACTIONS.    16

SECTION 4.15

   OFFICERS.    16

SECTION 4.16

   INDEMNIFICATION AND INSURANCE.    17

 

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ARTICLE V

   CAPITAL STRUCTURE AND CONTRIBUTIONS    18

SECTION 5.1

   CAPITAL CONTRIBUTIONS.    18

SECTION 5.2

   ADDITIONAL CONTRIBUTIONS.    18

SECTION 5.3

   NO WITHDRAWAL OF CAPITAL CONTRIBUTIONS.    19

SECTION 5.4

   MAINTENANCE OF CAPITAL ACCOUNTS.    20

SECTION 5.5

   CREDIT SUPPORT.    20

ARTICLE VI

   ALLOCATIONS AND DISTRIBUTIONS    22

SECTION 6.1

   ALLOCATIONS OF NET PROFITS AND NET LOSSES FROM OPERATIONS.    22

SECTION 6.2

   SPECIAL ALLOCATIONS.    22

SECTION 6.3

   NO RIGHT TO DISTRIBUTIONS.    25

SECTION 6.4

   DISTRIBUTIONS.    25

SECTION 6.5

   PROPERTY REVALUATION.    26

SECTION 6.6

   TAX ALLOCATIONS.    26

SECTION 6.7

   PUBLIC OFFERINGS.    26

ARTICLE VII

   BOOKS AND REPORTS    27

SECTION 7.1

   BOOKS AND RECORDS; ACCOUNTING.    27

SECTION 7.2

   FORM K-1.    27

SECTION 7.3

   TAX MATTERS PARTNER.    27

ARTICLE VIII

   WITHDRAWAL; TRANSFERS OF MEMBERSHIP INTERESTS    27

SECTION 8.1

   NO RIGHT TO WITHDRAW.    27

SECTION 8.2

   GENERAL RESTRICTION ON TRANSFERS.    28

SECTION 8.3

   INTENTIONALLY OMITTED.    29

SECTION 8.4

   DRAG-ALONG RIGHTS.    29

SECTION 8.5

   TAG-ALONG RIGHTS.    30

ARTICLE IX

   DISSOLUTION OF THE COMPANY    30

SECTION 9.1

   DISSOLUTION.    30

SECTION 9.2

   LIQUIDATION.    31

ARTICLE X

   MISCELLANEOUS    31

SECTION 10.1

   AMENDMENT TO THIS AGREEMENT.    31

SECTION 10.2

   SUCCESSORS; COUNTERPARTS.    31

SECTION 10.3

   GOVERNING LAW; VENUE.    31

SECTION 10.4

   SEVERABILITY.    32

SECTION 10.5

   NO THIRD PARTY BENEFICIARIES.    32

SECTION 10.6

   ADDITIONAL DOCUMENTS.    32

SECTION 10.7

   NOTICES.    32

SECTION 10.8

   WAIVER OF PARTITION.    33

SECTION 10.9

   CONFIDENTIALITY; ANNOUNCEMENTS.    33

EXHIBITS

 

Exhibit A    Members Exhibit B    Form of Certificate

 

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This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT dated as of
August 3, 2006, (this “Agreement,” as it may be amended from time to time as
provided below), of GBGH, LLC, a Delaware limited liability company (the
“Company”), is by and among the Persons executing this Agreement as of the date
of this Agreement. Capitalized terms used in this Agreement have the meanings
given to them in Section 1.1 below.

RECITAL

WHEREAS, USEY Overseas formed the Company as a limited liability company under
the Act pursuant to a Certificate of Formation filed with the Delaware Secretary
of State on February 27, 2006 and entered into a Limited Liability Company
Agreement dated as of February 27, 2006, as amended and restated pursuant to the
Amended and Restated Limited Liability Company Agreement (the “First Amended and
Restated Agreement”), dated as of May 22, 2006;

WHEREAS, USEY Overseas and Marathon desire to amend and restate the First
Amended and Restated Agreement in its entirety, on the terms and conditions
hereinafter set forth herein;

WHEREAS, USEY Overseas and Marathon, contemporaneously with the execution of
this Agreement, will be issued all of the outstanding Membership Interests; and

WHEREAS, the Members desire to adopt this Agreement to govern the affairs of the
Company and the conduct of its business.

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, and agreements contained herein, the Members agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

Terms defined in the Act but not otherwise defined in this Agreement have the
meanings assigned to them in the Act. In addition, as used in this Agreement the
following terms have the following meanings:

“Act” means the Delaware Limited Liability Company Act.

“Adjusted Capital Account Deficit” means, with respect to any Member, the
deficit balance, if any, in that Member’s Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:
(a) credits to such Capital Account of any amounts that that Member is deemed to
be obligated to restore pursuant to the penultimate sentences of sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and (b) debits to such
Capital Account of such Member’s share of

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the items described in sections 1.704-1(b)(2)(ii)(d)(4), (5), and (6) of the
Regulations. The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of section 1.704-1(b)(2)(ii)(d) of the
Regulations and shall be interpreted consistently with those Regulations.

“Affiliate” of any Person means any other Person, including any officer,
director, employee or shareholder, controlling, controlled by, or under common
control with the first Person, where “control” means the power (whether through
the ownership of interests, by contract or otherwise) to direct the vote of a
majority of the shares or other securities entitled to vote on ordinary matters
of, or to direct or cause the direction of the management and policies of, a
Person or (where applicable) that Person’s general partner; provided, however,
that the Company and any Person controlled by the Company shall not be deemed to
be Affiliates of any Member or any of its Affiliates.

“Agreement” has the meaning assigned to that term in the introduction to this
Agreement.

“Board” shall mean the Board of Directors of the Company, as further described
in Section 4.1.

“Business Day” means any day other than a Saturday, a Sunday, or another day on
which banks in New York, New York generally are closed.

“Capital Account” has the meaning assigned to that term in Section 5.4.

“Capital Contributions” means any money and other property (or if the context
requires, the total amount of money and the fair market value of property)
actually contributed, or deemed (for United States federal tax purposes) to have
been contributed, to the capital of the Company by any Member, whether as an
Initial Capital Contribution or as an additional Capital Contribution.

“Certificate” has the meaning assigned to that term in Section 3.9(b).

“Certificate of Formation” means the certificate of formation of the Company
required under the Act, as amended from time to time in accordance with this
Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning assigned to that term in the introduction to this
Agreement.

“Company Property” means all direct and indirect interests in real and personal
property owned by the Company from time to time and shall include both tangible
and intangible property (including cash).

“Contingent Equity Amount” has the meaning assigned to that term in
Section 5.5.(c).

 

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“Contributing Member” has the meaning assigned to that term in Section 5.2(b).

“Co-Selling Member” has the meaning assigned to that term in Section 8.5.

“Credit Support” has the meaning assigned to that term in Section 5.5(a).

“Credit Support Provider” has the meaning assigned to that term in
Section 5.5(a).

“Director” shall mean a member of the Board, who shall be deemed to be a
“manager” for purposes of the Act.

“Disputing Member” has the meaning assigned to that term in Section 5.2(b).

“Drag-Along Interest” has the meaning assigned to that term in Section 8.4.

“Drag-Along Notice” has the meaning assigned to that term in Section 8.4.

“Drag-Along Purchasers” has the meaning assigned to that term in Section 8.4.

“Fiscal Year” has the meaning assigned to that term in Section 2.10.

“Initial Capital Contributions” has the meaning assigned to such term in
Section 5.1.

“Marathon” means Marathon Capital Holdings (UK), LLC, a Delaware limited
liability company, and any other Member that has succeeded to all or any part of
the Membership Interest of Marathon Capital Holdings (UK), LLC.

“Marathon Director” has the meaning assigned to that term in Section 4.2.

“Member” means any of the Persons executing this Agreement as of the date of
this Agreement or any other Person admitted to the Company as a member as
provided in Section 3.2 and Article VIII, but as of any time, excludes any
Person that has ceased to be a Member.

“Membership Interest” means the interest of any Member as a member of the
Company, including that Member’s rights to receive allocations and
distributions, and to vote on matters as provided in this Agreement and its
obligations under this Agreement.

“Necessary Contribution” has the meaning assigned to that term in
Section 5.2(b).

“Net Profits” or “Net Losses” means, with respect to any period, the taxable
income or loss, respectively, of the Company for such period, determined in
accordance with section 703(a) of the Code (for this purpose, all items of
income, gain, loss, deduction, or credit required to be separately stated
pursuant to section 703(a)(1) of the Code shall be included in taxable income or
loss); provided, however, that: (i) any income of the Company that is exempt
from federal income tax, and any distributions to

 

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the Company that are treated under section 301(c)(2) of the Code as a return of
capital, and not otherwise taken into account in computing Net Profits or Net
Losses under this definition shall be added to such income or loss; and (ii) any
expenditures of the Company during such period which are described, or treated
under Regulation section 1.704-1(b)(2)(iv)(i) as described, in section
705(a)(2)(B) of the Code and not otherwise taken into account in computing Net
Profits or Net Losses shall be subtracted from such taxable income or loss.
Notwithstanding anything to the contrary contained in this definition, income,
gain, or loss resulting from the disposition of, distribution to a Member of, or
depreciation, amortization, or other cost recovery deductions with respect to,
any asset of the Company shall be computed by reference to the book value of the
asset disposed of, distributed or depreciated, amortized, or otherwise
recovered, notwithstanding that the adjusted tax basis of that asset differs
from its book value.

“Non-Contributing Member” has the meaning assigned to that term in
Section 5.2(b).

“Non-Participating Member” has the meaning assigned to that term in
Section 5.5(b).

“Nonrecourse Deductions” has the meaning set forth in sections 1.704-2(b)(1) and
1.704-2(c) of the Regulations.

“Nonrecourse Liability” has the meaning set forth in section 1.704-2(b)(3) of
the Regulations.

“Partner Nonrecourse Debt” has the meaning set forth in section 1.704-2(b)(4) of
the Regulations.

“Partner Nonrecourse Debt Minimum Gain” means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with section 1.704-2(i)(3) of the Regulations.

“Partner Nonrecourse Deductions” has the same meaning set forth in sections
1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.

“Partnership Minimum Gain” has the meaning set forth in Regulations sections
1.704-2(b)(2) and 1.704-2(d)(1).

“Percentage” of any Member means, in each case subject to adjustments, including
on account of Transfers, admissions of new Members and dilution, as provided in
this Agreement, (a) in the case of a Member executing this Agreement as of the
date of this Agreement, the percentage set forth for that Member on Exhibit A,
or (b) in the case of a Person subsequently admitted as a Member, the percentage
established on that Person’s admission as provided in this Agreement.

“Permitted Transferee” means (a) with respect to USEY Overseas, any Person and
(b) with respect to Marathon or any other Member, any Affiliate and any Person
that is an institutional investor with experience investing in energy assets,
that is

 

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reasonably acceptable to the lenders under the Senior Debt Documents (so long as
they are in effect) and that is reasonably acceptable to USEY Overseas, whose
consent shall not be unreasonably withheld or delayed.

“Person” means any individual, corporation, association, partnership (general or
limited), joint venture, trust, joint-stock company, estate, limited liability
company, unincorporated organization or other legal entity or organization, or
governmental authority.

“Pledge” means pledge, grant a security interest in, create a lien on, assign
the right to receive distributions or proceeds from, or otherwise encumber,
directly or indirectly, or any act of the foregoing.

“Preferred Return” means, with respect to any Member, as of any date, an amount
equal to a cumulative 12% per annum return, compounded annually, on the
Unrecovered Capital Contributions of such Member.

“Project” means 100% of the equity interest in UK Energy Systems Limited, which
in turn owns 100% of RGS Energy Limited, Viking Petroleum UK Limited and Madison
Management Ltd.

“Purchaser” has the meaning assigned to that term in Section 8.5.

“Regulations” means temporary and final Treasury Regulations promulgated under
the Code.

“SB Letter of Credit” means a stand-by letter of credit meeting the requirements
under the Senior Debt Documents with an available amount of $21,000,000 for the
benefit of the collateral agents under the Senior Debt Documents.

“Senior Debt Documents” means (i) that certain First Lien Credit Agreement to be
entered into by and among the Company, as borrower, the initial lenders named
therein, Credit Suisse or an affiliate thereof, as first lien administrative
agent and as first lien collateral agent and Credit Suisse Securities (USA) LLC,
as sole lead arranger and sole bookrunner and the Loan Documents as defined
therein and (ii) that certain Second Lien Credit Agreement to be entered into by
and among the Company, as borrower, Credit Suisse or an affiliate thereof, as
second lien administrative agent and as second lien collateral agent, Credit
Suisse Securities (USA) LLC, as sole lead arranger and sole bookrunner and the
other parties thereto and the Loan Documents as defined therein.

“Third Lien Pledge Agreement” means the Pledge Agreement to be entered into by
USE Overseas in favor of Silver Point Finance, LLC with respect to USE Overseas’
Membership Interest.

“Transfer” means sell, assign, convey, contribute, give, or otherwise transfer,
whether directly or indirectly, or any act of the foregoing, but excludes Pledge
or any act of Pledging.

 

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“Unrecovered Capital Contributions” means the amount at any time equal to the
excess of (i) the USEY Overseas’ Initial Capital Contribution, over (ii) the
distributions to USEY Overseas pursuant to Section 6.4(b)(iii).

“USEY Director” has the meaning assigned to that term in Section 4.2.

“USEY Overseas” means US Energy Overseas Investments, LLC, a Delaware limited
liability company, and any other Member that has succeeded to all or any part of
the Membership Interest of US Energy Overseas Investments LLC.

Section 1.2 Interpretation.

In construing this Agreement, unless otherwise specifically provided:

(a) Words defined in the singular have the corresponding meaning in the plural,
and words defined in the plural have the corresponding meaning in the singular.

(b) References to any gender include references to the other genders.

(c) The words “include” and “including” and their derivations mean without
limitation.

(d) References to a statute, rule, regulation, or agreement include all
amendments, modifications, and replacements or successor statutes, rules,
regulations, and agreements.

(e) References to “dollars” or “$” are to dollars in currency of the United
States of America.

(f) References to Articles, Sections, and Schedules are to those provisions of
this Agreement, and each Schedule is incorporated into this Agreement as a part
of this Agreement.

ARTICLE II

GENERAL PROVISIONS

Section 2.1 Formation.

The Company was formed as a limited liability company under the Act on the
filing of the Certificate of Formation with the Secretary of State of the State
of Delaware in conformity with the Act on February 27, 2006. The Company and, if
required, each of the Members shall execute or cause to be executed from time to
time all other instruments, certificates, notices, and documents and shall do,
or cause to be done, all such acts and things (including keeping books and
records and making publications or periodic filings) as may now or hereafter be
required for the formation, valid existence, and, when appropriate, termination
of the Company as a limited liability company under the laws of the State of
Delaware, including any amendments required under the Act to reflect the
provisions of this Agreement.

 

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Section 2.2 Company Name.

The name of the Company shall be “GBGH, LLC” or such other name or names as the
Board may determine from time to time, and its business shall be carried on in
such name with such variations and changes as the Board deems necessary to
comply with requirements of the jurisdictions in which the Company’s operations
are conducted. The Board shall cause the Company’s Certificate of Formation to
be amended to reflect the change in the Company’s name to the name just
provided.

Section 2.3 Registered Office; Registered Agent.

The Company shall maintain a registered office in the State of Delaware at, and
the name and address of the Company’s registered agent in the State of Delaware
is The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
The Board from time to time may change the Company’s registered office and/or
registered agent and shall forthwith amend the Certificate of Formation to
reflect such change(s).

Section 2.4 Place of Business.

The Board shall determine the business address of the Company. The Company from
time to time may have such other place or places of business within or without
the State of Delaware as the Board may determine appropriate.

Section 2.5 Purpose; Nature of Business Permitted; Powers.

The Company’s purpose is to own and operate the Project. The Company shall
possess and may exercise all the powers and privileges granted by the Act, any
other law, or this Agreement, together with any powers incidental to those
powers and privileges, insofar as those powers and privileges are necessary or
convenient to the conduct, promotion, financing or attainment of the business
purposes or activities of the Company, including the power to enter into and to
perform its obligations under the Senior Debt Documents.

Section 2.6 Business Transactions of a Member with the Company; Duties.

(a) Without limiting section 18-107 of the Act, and subject to Section 4.13, a
Member or its Affiliates may lend money to, act as surety, guarantor, or
endorser for, guarantee or assume one or more obligations of, provide collateral
for, and transact other business with, the Company and any Person in which the
Company owns an interest and, subject to applicable law, shall have the same
rights and obligations with respect to any such matter as a Person that is not a
Member.

(b) Subject to Section 4.13, each of the Members and their respective Affiliates
may engage, directly or indirectly, in other business ventures and activities of
every nature and description, regardless of whether in competition with the
Company, the Project or any Person in which the Company owns an interest,
independently or with others, and neither the Company nor the

 

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other Members shall have any rights in and to any such independent venture or
activity or the income or profits derived from them. Each Member consents to all
such ventures and activities, which shall not be deemed to be wrongful or
improper, and none of the Members and their respective Affiliates is under any
obligation to disclose or to offer the Company, any Person in which the Company
owns an interest or the other Members any such venture or activity or any
opportunity to participate in them.

(c) Except as this Agreement explicitly may provide otherwise, each Member, to
the extent entitled to act or vote on, or to approve or disapprove, matters
relating to the Company, may do so in its sole discretion and, in exercising
that discretion, may take into account that Member’s and its Affiliates’ own
interests.

Section 2.7 Company Property.

No real or other property of the Company or any Person in which the Company owns
an interest shall be deemed to be owned by any Member individually, but shall be
owned by and title shall be vested solely in the Company. The Membership
Interests constitute personal property.

Section 2.8 Term.

The existence of the Company commenced on the date of the filing of the
Certificate of Formation in the office of the Secretary of State of the State of
Delaware in accordance with the Act. Subject to the provisions of Article IX,
the Company shall have a perpetual life.

Section 2.9 No State Law Partnership.

The Members intend that the Company not be a partnership (including a limited
partnership) or joint venture and that no Member be a partner or joint venturer
of any other Member for any purposes other than applicable tax laws. This
Agreement may not be construed to suggest otherwise.

Section 2.10 Fiscal Year.

Subject to section 448 of the Code, the Board shall determine the fiscal year of
the Company for financial statement and federal income tax purposes (the “Fiscal
Year”).

Section 2.11 Tax Treatment.

The Members and the Company shall timely make any and all necessary elections
and filings for the Company to be treated as a partnership for U.S. federal
income tax purposes and for any analogous state or local tax purposes.

 

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ARTICLE III

MEMBERS

Section 3.1 Members.

USEY Overseas and Marathon are, as of the date of this Agreement, Members of the
Company. The Members as of the date of this Agreement and their names, addresses
for notices under Section 10.7 and Percentages are set forth on Exhibit A.

Section 3.2 Additional Equity and Members.

(a) Additional Equity. Subject to Section 5.2(b), the Company may issue
additional equity only if each existing Member consents to the issuance in its
sole discretion.

(b) Admission as Member. A Person that acquires Membership Interests as provided
in Section 3.2(a) but that is not already a Member shall be admitted as a member
of the Company effective with that acquisition. A Person to which a Membership
Interest is Transferred in accordance with Section 8.2 shall be admitted as a
member of the Company with the Percentage attributable to the Membership
Interest so Transferred.

Section 3.3 Classes of Members.

All Members and Membership Interests are of the same class, but Members may have
different Percentages.

Section 3.4 No Liability of Members.

All debts, obligations, and liabilities of the Company, whether arising in
contract, tort, or otherwise, shall be solely the debts, obligations, and
liabilities of the Company. No Member shall be obligated personally for any such
debt, obligation, or liability of the Company solely by reason of being a
Member.

Section 3.5 Actions by the Members.

(a) Vote. Each Member shall have the right to vote ratably in proportion to its
respective Percentage on all matters to be submitted to the Members. Except as
otherwise provided in this Agreement, the affirmative vote of Members holding a
majority of the aggregate Percentages of all Members shall be required to take
any action being voted upon.

(b) Meetings. The Members entitled to vote on or approve a matter or take any
action may do so at a meeting, in person or by proxy. Any Member or Members may
call a meeting of the Members to consider a matter by giving notice to the other
Members of the time and place of the meeting on or before the third Business Day
before the meeting, or in case of an emergency such shorter period as the
Person(s) calling the meeting may determine appropriate under the circumstances,
which

 

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notice must specify the matter to be considered. The meeting must be held in the
United States or in another place acceptable to all Members, or conducted by
telephone conference or other electronic means. A Member may waive notice before
or after the meeting, and shall be deemed to waive notice if it attends unless
it specifically states at its first appearance at the meeting that it objects on
the basis of improper notice.

(c) Action Without Meeting. Any vote, approval, or other action required or
permitted to be taken by the Members may be taken without a meeting if Members
holding Percentages sufficient to approve the matter or take the action under
the terms of this Agreement consent to the action in writing and the writing or
writings are filed with the minutes of the proceedings of the Members. A copy of
the action taken by written consent shall be sent promptly to all Members and
filed with the records of the Company.

Section 3.6 Power to Bind the Company.

Except as otherwise provided in this Agreement, the Members in their capacity as
Members shall not take part in the management of the business or transact any
business for the Company, nor shall they have power to sign for or to bind the
Company; provided, however, that the Members shall have the right to approve or
consent to certain matters, as provided herein. Notwithstanding the foregoing,
but subject to Sections 4.12, 4.13 and 4.15, any officer of the Company may
delegate to a Member that provides services to the Company on a full-time basis
the authority to manage, transact business, expend money, bind the Company or
otherwise conduct business on the Company’s behalf, and, subject to any
restraints imposed by the President or the Board, any officer of the Company who
is also a Member shall have authority to do any of the foregoing.

Section 3.7 Access.

Without limiting the provisions of Section 10.9, the Company shall, and shall
cause its officers, employees, auditors, legal counsel, advisers, and other
agents or representatives to:

(a) afford the officers, employees, auditors, and other agents or
representatives of each Member during normal business hours and upon reasonable
notice reasonable access at all reasonable times to its officers, employees,
auditors, advisers, legal counsel, other agents and representatives, properties,
offices, plants, and other facilities and to all books and records; and

(b) afford each Member the opportunity to discuss the Company’s affairs,
finances, and accounts with the Company’s officers, employees, auditors,
advisers, legal counsel, and other agents and representatives from time to time
as that Member may reasonably request without creating an undue burden on the
Company.

 

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Section 3.8 Representations and Warranties.

Each Member represents and warrants to the Company and the other Members that:

(a) If it is not a natural person, it is an entity duly formed, validly
existing, and (if applicable) in good standing in the jurisdiction of its
formation and has all power and authority to own its Membership Interest and to
enter into and perform its obligations under this Agreement, and its execution,
delivery, and performance of this Agreement (or of the instrument by which it
agrees to be bound by this Agreement) has been duly authorized by all necessary
action of its board of directors or other governing authority and its equity
owners to the extent required.

(b) It has duly executed this Agreement (or that instrument), and this Agreement
constitutes its valid and binding obligation, enforceable in accordance with its
terms.

(c) Its execution and delivery of this Agreement (or that instrument) and its
performance of this Agreement do not, and will not, (i) if it is not an
individual, violate or conflict with any provision of its constituent documents,
(ii) violate applicable law, (iii) result in a material violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, or acceleration) under,
any note, bond, indenture, lien, mortgage, lease, permit, guaranty, or other
agreement, instrument, or obligation to which it or any of its Affiliates is a
party or by which any of their respective properties may be bound, or
(iv) require any material consent, approval, authorization, or permission of, or
filing with or notification to, any governmental authority or any other Person.

(d) It is acquiring its Membership Interest solely for investment for its own
account and not for distribution or sale to others in connection with any
distribution or public offering.

(e) It understands that there will not be any public market for the Membership
Interests and that it must bear the economic risk of an investment in the
Company for an indefinite period of time because (i) its Membership Interest has
not been registered under the Securities Act of 1933 or any applicable state
securities laws and (ii) it may Transfer or Pledge, in whole or in part, its
Membership Interest only in accordance with this Agreement and then only if its
Membership Interest is subsequently registered in accordance with the provisions
of the Securities Act of 1933 and applicable state securities laws, unless
registration is not required.

(f) It understands that the Company is not obligated to register its Membership
Interest for resale under the Securities Act of 1933 or any applicable state
securities laws.

(g) It is a “qualified institutional buyer” within the meaning of rule 144A of
the Securities and Exchange Commission or an “accredited investor” within the
meaning of Regulation D of the Securities and Exchange Commission and is able to
bear the economic risk of such an investment in the Company for an indefinite
period of time, and it has no need for liquidity of this investment and it could
bear a complete loss of this investment. If it is either a “qualified purchaser”
within the meaning of the Investment Company Act of 1940 or is an entity formed
and is being utilized primarily for the purpose of making an investment

 

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in the Company, each of the shareholders, partners, members, or other holders of
equity or beneficial interests in such member is such a qualified purchaser.

(h) It has the knowledge and sophistication to evaluate the risks of investing
in the Company. It has conducted its own investigation and due diligence into
the Company and the Project and is satisfied that its investment in the Company
is appropriate. It understands and agrees that none of the other Members, their
Affiliates, or the Company, has made nor will make any representation or
warranty with respect to the worthiness, terms, value, or any other aspect of
the Company, the Project or the Membership Interests, and it explicitly
disclaims any warranty, express or implied, with respect to such matters. In
addition, it specifically acknowledges, represents, and warrants that it is not
relying on any other Member or its Affiliates (i) for its investigation or due
diligence concerning, or evaluation of, the Company or any related transaction
or (ii) with respect to tax and other economic considerations involved in an
investment in the Company.

(i) No portion of the assets being used by it to purchase and hold its
Membership Interest constitute assets of a plan within the meaning of section
3(32) of Employee Retirement Income Security Act of 1974.

(j) No broker, investment banker, financial advisor, or other Person is entitled
to any broker’s, finder’s, financial advisor’s, or other similar fee or
commission in connection with the Company based upon arrangements made by or on
behalf of that Member for which the Company, the other Members, or any of their
respective Affiliates may be liable, other than the development fee, if any.

Section 3.9 Certificates.

(a) Article 8 Opt-In. The Company hereby irrevocably elects that all Membership
Interests in the Company shall be securities governed by Article 8 of the
Uniform Commercial Code.

(b) Right to Issue Certificates. The ownership of a Membership Interest in the
Company by a Member shall be evidenced by a certificate (a “Certificate”) issued
by the Company.

(c) Form of Certificates. Certificates attesting to the ownership of Membership
Interests in the Company shall be in substantially the form set forth in Exhibit
B and shall state that the Company is a limited liability company formed under
the laws of the State of Delaware, the name of the Member to whom the
Certificate is issued, and that the Certificate represents a limited liability
company interest within the meaning of section 18-702(c) of the Act. Each
Certificate shall bear the legends set forth in Exhibit B.

(d) Execution. Each Certificate shall be signed by an officer or a
representative of the Company designated by the Board.

 

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(e) Registrar. The Company shall maintain an office where Certificates may be
presented for registration of Transfer or Pledge or for exchange. Such Person as
the Board may designate shall act as registrar and shall keep a register of the
Certificates and of their Transfer, Pledge, and exchange.

(f) Issuance. The Certificates of the Company shall be numbered and registered
in the interest register or transfer books of the Company as they are issued.

(g) Membership Lists. The Company shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Members.

(h) Transfer and Exchange. When Certificates are presented to the Company with a
request to register a Transfer, the Company shall register the Transfer or
Pledge or make the exchange on the register or transfer books of the Company if
the requirements set forth in this Agreement for the Transfer or Pledge are met;
provided, that any Certificates presented or surrendered for registration of
Transfer, Pledge, or exchange shall be duly endorsed or accompanied by a written
instrument of Transfer in form satisfactory to the Company duly executed by the
holder of the Certificate or that Person’s attorney duly authorized in writing.

(i) Record Holder. Except to the extent that the Company shall have received
written notice of a Transfer or Pledge of a Membership Interest and the Transfer
or Pledge complies with the requirements of this Agreement, the Company shall be
entitled to treat the Person in whose name any Certificates issued by the
Company stand on the books of the Company as the absolute owner of that
Membership Interest, and shall not be bound to recognize any equitable or other
claim to, or interest in, that Membership Interest on the part of any other
Person.

(j) Replacement Certificates. If any mutilated Certificate is surrendered to the
Company, or the Company receives evidence to its satisfaction of the
destruction, loss, or theft of any Certificate, the Company shall issue a
replacement Certificate if the requirements of section 8-405 of the Uniform
Commercial Code are met, but no indemnity or bond shall be required. The Company
may charge for its expenses incurred in connection with replacing a Certificate.

ARTICLE IV

MANAGEMENT

Section 4.1 Board of Directors.

Except as otherwise required by the Act or provided in this Agreement, the Board
shall have complete and exclusive control of the management of the Company’s
business and affairs, including the right, power and authority on behalf of the
Company and in its name to execute documents or other instruments and exercise
all of the rights, powers and authority of the Company under the Act and to take
any and all actions that the Company may be entitled to take.

 

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Section 4.2 Number of Directors.

The Board shall consist of five Directors. USEY Overseas shall have the right to
elect four Directors (the “USEY Directors”). Marathon shall have the right to
elect one Director (the “Marathon Director”); provided, that if Marathon’s
Percentage is less than 10% at any time, it shall no longer have the right to
elect a Director and the Marathon Director shall be elected by USEY Overseas.

USEY hereby elects the following persons as the initial USEY Directors to serve
until their respective successors are duly elected and qualified:

Asher Fogel

Henry Schneider

Adam Greene

James Boffardi

Marathon hereby elects the following person as the initial Marathon Director to
serve until his successor is duly elected and qualified:

Richard Brandt

Section 4.3 Election of Directors.

In any and all elections of the Directors (including the filling of vacancies),
the Company hereby agrees to take such actions as are necessary, and each Member
hereby agrees to vote and otherwise use his, her or its best efforts, so as to
fix the size of the Board at five Directors in accordance with the terms of
Section 4.2. The Members may elect their Directors by giving notice to the Board
of the name and contact information of such Directors; provided that any
replacement of the Marathon Director with any individual other than Thomas
White, Robert Braasch, Gregg Elesh or Richard Brandt shall be approved by USEY
Overseas, which approval shall not be unreasonably withheld or delayed.

Section 4.4 Removal or Resignation of Directors.

A Director may be removed (i) by the Member electing such Director at any time
or (ii) by any other Member for cause. Upon the resignation or removal of a
Director, the Members shall elect a new Director in accordance with Section 4.3
hereof.

Section 4.5 Meetings.

A meeting of the Board may be called by any of the Directors. All meetings of
the Board shall be held at such times and such locations as from time to time
may be fixed by the Board. Meetings of the Board may be held in person,
telephonically or by video conference.

 

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Section 4.6 Action Without a Meeting.

Any action required or permitted to be taken at a meeting of the Board may be
taken without a meeting, without prior notice and without a vote if a consent or
consents in writing, setting forth the actions so taken, shall be signed by all
of the Directors.

Section 4.7 Notice of Meetings.

Notice of every meeting of the Board shall be given by the Company (or by the
Director calling such meeting) by letter, telephone or facsimile and shall be
sent not less than 48 hours nor more than 30 days before the date of such
meeting to each Director at such Director’s address, telephone number or
facsimile number on Exhibit A attached hereto or such other address, telephone
number or facsimile number as such Director may have provided in writing to the
Board. Notice of every meeting of the Board shall state the place, day and hour
of the meeting and the purpose or purposes for which the meeting is called. Such
further notice shall be given as may be required by the Act, but meetings may be
held without notice if all the Directors are present in person or by proxy or if
notice is waived in writing by those not present, either before or after the
meeting.

Section 4.8 Quorum.

A majority of the Directors then in office, all of whom shall be present in
person at any meeting duly called, shall constitute a quorum for the transaction
of business. If less than a quorum shall be in attendance at the time for which
a meeting shall have been called, the meeting may be adjourned by a majority of
the Directors present without notice other than by announcement at the meeting.

Section 4.9 Voting.

At any meeting of the Directors, each Director entitled to vote on any matter
coming before the meeting shall, as to such matter, have one vote. Except as
otherwise provided in this Agreement, the affirmative vote of a majority of the
Directors present at a meeting at which a quorum is present shall be sufficient
to take any action being voted upon at such meeting.

Section 4.10 Expenses.

The Company shall pay the reasonable out-of-pocket expenses, including
reasonable travel and lodging expenses, of all Directors in attending meetings
of the Board and committees thereof.

Section 4.11 Third Party Reliance.

Third parties dealing with the Company shall be entitled to rely conclusively
upon the power and authority of the Board as set forth herein.

 

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Section 4.12 Duties of Directors.

The Directors or their delegates, as the case may be, shall devote such of their
time, effort and skill to the business and affairs of the Company as they may,
in their sole discretion, deem to be necessary and proper for the Company’s
welfare and success. In carrying out their duties and exercising their rights
under this Agreement, the Directors shall act in the best interest of the
Company.

Section 4.13 Transactions with Directors and Affiliates.

Subject to obtaining any consent expressly required hereunder, the Board may, in
conducting the business and affairs of the Company, cause the Company to enter
into agreements or arrangements, including the allocation of the Company’s
overhead, and agreements relating to salaries and retainers, or otherwise deal
with Affiliates of Members or Directors, individuals with whom a Member or
Director is related and Persons that have a material financial interest in a
Member or Director or in which a Member or Director has a material financial
interest; provided that (i) the terms of each such agreement or arrangement are
no less favorable than the terms obtainable by the Company in an arms-length
transaction with an unaffiliated third party, (ii) each such agreement or
arrangement shall provide that it is terminable upon 30 days’ notice without
penalty or other adverse consequence to the Company, (iii) each such agreement
or arrangement is reasonably necessary for the transaction of the Company’s
business, (iii) 10 days’ advance notice of each such agreement or arrangement,
including the identity of the parties and the terms thereof, is given to the
Members by the Board and (v) the Company shall give the Board an annual report
of all payments under any such agreements or arrangements within 60 days after
the end of each calendar year. The Company shall not make any loans or advances
to any Member or to any Affiliate of any Member. Any such agreements or
arrangements entered into pursuant to this Section 4.13 providing for an
aggregate payment by the Company over the term of such agreement or arrangement
in excess of $100,000 shall require the prior consent of Marathon, which consent
shall not be unreasonably withheld or delayed. In the event that Marathon does
not give its consent or disapproval within 15 days of notice of the proposed
transaction to, and request for consent to the proposed transaction by,
Marathon, such consent shall be deemed to have been given.

Section 4.14 Certain Transactions.

The Board shall cause the Company to enter into the Senior Debt Documents and to
perform its obligations under the Senior Debt Documents.

Section 4.15 Officers.

The Board may appoint such officers of the Company as it may deem appropriate
and may remove any such officer at any time with or without cause. The Board may
delegate to the Company’s officers such powers and duties, subject to
Section 4.13, as it may deem appropriate and subsequently revoke or modify those
powers and duties, and except to the extent that the Board determines otherwise,
each officer will have the powers and duties normally associated with an officer
having a similar title with a Delaware corporation.

 

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The initial officers of the Company shall be as follows, and shall hold such
office until their respective successors are duly appointed and qualified:

 

Name

  

Title

Asher Fogel    Chief Executive Officer Henry Schneider    President Adam Greene
   Secretary and Treasurer

Section 4.16 Indemnification and Insurance.

(a) Indemnification. The Company shall indemnify and hold harmless each Member,
Director and officer of the Company and each individual serving, at the request
of the Company, as an officer or director of any other Person (individually an
“indemnitee”) from and against any and all losses, claims, damages, liabilities,
expenses (including reasonable legal fees and disbursements), judgments, fines,
settlements, and all other amounts arising from any and all claims, demands,
actions, suits, or proceedings, civil, criminal, administrative, or
investigative, in which the indemnitee may be involved, or threatened to be
involved, as a party or otherwise by reason of his or her status as a Director,
Member or officer of the Company or by reason of his or her status, at the
request of the Company, as a director or officer of any other Person, or his or
her management of the affairs of the Company or by his or her management, at the
request of the Company, as a director or officer of any other Person, or that
relate to the Company or relate to his or her serving, at the request of the
Company, as a director or officer of any other Person, or any of their
respective properties, businesses, or affairs, whether or not the indemnitee
continues to be a Director, Member or officer at the time any such liability or
expense is paid or incurred, if the indemnitee acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the Company and in accordance with the terms and provisions of this
Agreement, and, with respect to any criminal proceeding, had no reasonable cause
to believe his or her conduct to be unlawful; provided that no indemnitee shall
be entitled to indemnification if it shall be finally determined that such
indemnitee’s act or omission constituted willful misconduct or gross negligence.
The Company shall pay expenses (including legal fees and disbursements) incurred
in defending any proceeding in advance of the final disposition of such
proceeding upon receipt of an undertaking by or on behalf of the indemnitee to
repay such amount if it is ultimately determined by a court of competent
jurisdiction that the indemnitee is not entitled to be indemnified by the
Company as authorized hereunder.

(b) Other Indemnities. The Board may cause the Company to indemnify any other
Person on such terms as it reasonably may determine.

(c) Insurance. The Board may cause the Company to procure insurance covering
indemnification liabilities of the Company.

 

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ARTICLE V

CAPITAL STRUCTURE AND CONTRIBUTIONS

Section 5.1 Capital Contributions.

USEY Overseas will make an initial Capital Contribution in the amount of
$5,000,000 (the “Initial Capital Contribution”) and, in addition, USEY Overseas
will contribute an additional Capital Contribution of $8,125,000 and Marathon
will make a Capital Contribution of $375,000, in each case upon and
simultaneously with the execution and closing of the Senior Debt Documents;
provided that the Initial Capital Contribution shall be offset by all funds
previously expended by USEY Overseas on behalf of the Company. USEY Overseas
shall provide to Marathon the same evidence of payment of the $5,000,000 Initial
Capital Contribution that it provides to the lenders under the Senior Debt
Documents. In addition, Marathon will contribute an additional $620,000 within
30 days of the closing of the financing under the Senior Debt Documents, which
amount shall be paid directly to and be retained by USEY Overseas and shall not
result in any changes to the Percentages of either USEY Overseas or Marathon;
provided that if Marathon does not contribute this amount within such 30-day
period, Marathon’s Percentage shall be automatically reduced to 19.66%. USEY and
Marathon will also each make a Capital Contribution in the amount of its
respective portion of the Contingent Equity Amount as provided in
Section 5.5(c). USEY and Marathon also agree that paragraph 3 of the letter
agreement, dated May 22, 2006, from USEY to Richard T. Brandt, II of Marathon
Capital, LLC (which is one of two letter agreements dated May 22, 2006, and a
copy of which is attached hereto as Exhibit C) is terminated and is of no
further force and effect. USE Overseas agrees that any fees and expenses (i)
incurred in connection with the borrowing or other financing by USE Overseas of
its Capital Contributions in GBGH (including, without limitation, all fees and
expenses payable to Silverpoint Finance, LLC and its legal counsel) or (ii) not
otherwise directly related to negotiation and execution of this Agreement or the
financing contemplated by the Senior Debt Documents, shall not constitute
obligations of the Company.

Section 5.2 Additional Contributions.

(a) Except (i) as otherwise provided in the Senior Debt Documents, (ii) in
connection with the issuance of new Membership Interests as provided in
Section 3.2(a), (iii) for the Initial Capital Contribution and the additional
Capital Contributions expressly enumerated in Section 5.1, and (iv) as provided
in Section 5.5(c), a Member may make Capital Contributions only if the Board
approves such additional Capital Contributions.

(b) In the event the Board determines that the Company needs additional funds in
excess of the amount set forth in clause (a) above and such funds are not
available from operating cash flows of the Company or from the proceeds of third
party financings available on commercially reasonable terms (in each case, as
determined by the Board) (a “Necessary Contribution”), the Board shall give
notice of such Necessary Contribution to each of the Members and the Members
shall have the option to contribute their pro rata share (based upon each
Member’s Percentage) of such amount. Each of the Members shall notify the Board
within five (5) Business Days of its decision whether to contribute additional
capital. If any of the

 

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Members elects to contribute additional capital (each, a “Contributing Member”),
such Contributing Member shall make a Capital Contribution to the Company in the
amount of its pro rata share of the Necessary Contribution on the date specified
therefor in the notice from the Board. If any of the other Members elects not to
contribute additional capital or fails to contribute its pro rata share of the
Necessary Contribution (each, a “Non-Contributing Member”), the sole remedy for
such election or failure shall be that the Percentages shall be adjusted based
on the value of the Membership Interests of each Member (without taking into
account the status of such Member as a minority member) at the time the
Necessary Contribution is paid by any Member and taking into account the amount
of such payment, which value shall be determined by the Board and notice thereof
given to the Non-Contributing Member; provided that, on or before the tenth day
following such notice, the Non-Contributing Member may notify the Board that it
disagrees with such valuation. If the Non-Contributing Member has not given any
such notice, the valuation determined by the Board shall be conclusively binding
on the Members. If the Non-Contributing Member does give such notice and
proposes a different valuation, and if the Board and the Non-Contributing Member
have not agreed on the valuation, then the Board or the Non-Contributing Member,
by notice to the others on or after the 60th day following the notice from the
Non-Contributing Member under the second immediately preceding sentence, may
require that the valuation be determined by such internationally recognized
investment bank as they may agree (or if they do not agree, such investment bank
as is designated by Oscar D. Folger, Esq.). The Board on the one hand and the
Non-Contributing Member on the other each shall inform the investment bank of a
proposed valuation, and they shall instruct the investment bank to determine, as
soon as practicable, which of the two proposed valuations is closer to the
amount that an informed and willing purchaser under no compulsion to buy would
pay to acquire the relevant Membership Interests in an arm’s length transaction
and that an informed and willing seller under no compulsion to sell would accept
for the relevant Membership Interests in an arm’s length transaction. The
Company and the Non-Contributing Member shall split the costs of the investment
bank such that the Non-Contributing Member’s share of such costs, after taking
into account the portion of the Company’s share of such costs which would be
allocated to it in accordance with its Percentage, is 50%. The proposed
valuation as so determined by the investment bank shall be conclusively binding
on the Company and the Non-Contributing Member. Notwithstanding the foregoing or
any other provision of this Agreement, to the extent that any additional equity
is required by the Senior Debt Documents to be contributed to the Company at the
closing under the Senior Debt Documents, there shall be no change or adjustment
in the Percentages of the Members to reflect any Capital Contribution made by
any Member at the time of the closing in order to satisfy such requirement.

Section 5.3 No Withdrawal of Capital Contributions.

A Member has no right to withdraw its capital contributions, but is entitled to
distributions as (but only when and to the extent) provided in this Agreement,
including on liquidation of its Membership Interest.

 

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Section 5.4 Maintenance of Capital Accounts.

The Company shall establish for each Member a capital account on its books which
shall reflect the Initial Capital Contributions of each Member (each a “Capital
Account”). Once established on the books of the Company, each Member’s Capital
Account thereafter shall be (i) credited with (A) additional Capital
Contributions, if any, to the capital of the Company made by such Member,
(B) that Member’s allocable share of the Company’s Net Profits, as determined in
accordance with Article VI, (C) any positive adjustment required in connection
with a property revaluation pursuant to Section 6.5 and (D) the amount of any
Company liabilities assumed by such Member or which are secured by any Company
assets distributed to such Member, and (ii) debited with (A) any distributions
by the Company of cash or other property to that Member, (B) that Member’s
allocable share of the Company’s Net Losses, as determined in accordance with
Article VI, (C) any negative adjustment required in connection with a property
revaluation pursuant to Section 6.5 and (D) the amount of any liabilities of
that Member which are assumed by the Company or that are secured by any property
contributed by that Member to the Company. The provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
section 1.704-1(b) of the Regulations, and shall be interpreted and applied in a
manner consistent with those Regulations.

Section 5.5 Credit Support.

(a) Arrangement of Credit Support. The Board may cause the Company to procure
guarantees, bonds or letters of credit to support obligations of the Company
(“Credit Support,” with the Person providing the Credit Support being called a
“Credit Support Provider”) and may cause the Company to enter into agreements
and pay fees in respect of Credit Support on such terms as it may determine
appropriate. Notwithstanding the foregoing, if the Credit Support Provider is a
Member or an Affiliate of a Member, (i) the fees to be paid may not exceed the
fees that an unaffiliated third party would charge for providing the same Credit
Support on substantially the same terms and conditions and (ii) the Board must
first notify each other Member that a Member or its Affiliate intends to provide
Credit Support and the terms and conditions on which they will be provided,
whereupon each other Member may elect, in its sole discretion by notice to the
Board on or before the tenth Business Day following the notice from the Board,
to provide or procure that Member’s Percentage of the Credit Support on the same
terms and conditions, but only if that Member (or the Credit Support Provider it
procures) meets the criteria required by the recipient of the Credit Support.

(b) Support from Member. In connection with any Credit Support under
Section 5.5(a), to the extent the funds to pay for such Credit Support are not
available from operating cash flows of the Company or from the proceeds of third
party financings available on commercially reasonable terms (in each case, as
determined by the Board), the Board shall give notice of such requirement to
each Member, and the Members shall have the option to commit their credit to pay
their Percentage of any amounts paid by the Credit Support Provider to the
beneficiary of the Credit Support upon reasonable advance notice to the Members.
In the event a Member does not so commit its credit (a “Non-Participating
Member”), the sole remedy is that the Percentages shall be adjusted based on the
value of the Membership Interests of each Member (without taking into account
the status of such Member as a minority member) at the time the Credit Support
is provided and taking into account the amount of such Credit Support, which
value shall be determined by the Board and notice thereof given to the
Non-Participating Member;

 

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provided that, on or before the tenth day following such notice, the
Non-Participating Member may notify the Board that it disagrees with such
valuation. If the Non-Participating Member has not given any such notice, the
valuation determined by the Board shall be conclusively binding on the
Non-Participating Member. If the Non-Participating Member does give such notice
and proposes a different valuation, and if the Board and the Non-Participating
Member have not agreed on the valuation, then the Board or the Non-Participating
Member, by notice to the others on or after the 60th day following the notice
from the Non-Participating Member under the second immediately preceding
sentence, may require that the valuation be determined by such internationally
recognized investment bank as they may agree (or if they do not agree, such
investment bank as is designated by Oscar D. Folger, Esq.). The Board on the one
hand and the Non-Participating Member on the other each shall inform the
investment bank of a proposed valuation, and they shall instruct the investment
bank to determine, as soon as practicable, which of the two proposed valuations
is closer to the amount that an informed and willing purchaser under no
compulsion to buy would pay to acquire the relevant Membership Interests in an
arm’s length transaction and that an informed and willing seller under no
compulsion to sell would accept for the relevant Membership Interests in an
arm’s length transaction. The Company and the Non-Participating Member shall
split the costs of the investment bank such that the Non-Contributing Member’s
share of such costs, after taking into account the portion of the Company’s
share of such costs which would be allocated to it in accordance with its
Percentage, is 50%. The proposed valuation as so determined by the investment
bank shall be conclusively binding on the Company and the Non-Participating
Member. On or before the fifth Business Day following notice from the Credit
Support Provider, the Company or the Board that the Credit Support Provider has
made a payment in respect of which a Member’s credit has been committed in
accordance with this Section 5.5(b), such Member shall pay to the Credit Support
Provider its Percentage of the amount so requested (or such greater amount as it
may have agreed to pay).

(c) Contingent Equity; SB Letter of Credit. Pursuant to the Senior Debt
Documents, it is a condition to the closing that $21,000,000 of additional
equity (in addition to the amounts referred to in Section 5.1) be contributed to
the Company and be deposited in a reserve account to be used to pay various
costs of the Project (including debt service) to the extent that other sources
are not sufficient (such funds, the “Contingent Equity Amount”). USEY Overseas
shall provide $17,000,000 of the Contingent Equity Amount and Marathon shall
provide $4,000,000 of the Contingent Equity Amount. The Senior Debt Documents
also provide that, within 45 days of closing, the Contingent Equity Amount may
be replaced by an SB Letter of Credit with a drawing amount of $21,000,000, and
the Contingent Equity Amount will be released. The SB Letter of Credit is
required to be fully cash collateralized, and USEY and Marathon agree that when
released, the Contingent Equity Amount will be used to collateralize the SB
Letter of Credit. When the SB Letter of Credit is provided, each Member shall be
deemed to have posted cash collateral in an amount equal to the amount of the
Contingent Equity Amount provided by such Member, which amounts shall be held in
separate accounts by the issuer of the SB Letter of Credit. Notwithstanding any
other provision of this Agreement (including, without limitation, the provisions
of Article VI), the release of the Contingent Equity Amount shall not be treated
as a distribution of cash or a withdrawal of capital for purposes of this
Agreement.

 

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ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

Section 6.1 Allocations of Net Profits and Net Losses from Operations.

(a) After giving effect to the special allocations set forth in Sections 6.1(c)
and 6.2 hereof, Net Profits of the Company shall be allocated among the Members
as follows:

(i) first, to offset Net Losses previously allocated pursuant to Section 6.1(b)
in an amount equal to any prior Net Loss allocations, to be shared by the
Members in proportion to the manner in which such prior Net Losses were shared
by the Members;

(ii) second, to USEY Overseas in an amount equal to its aggregate accrued
Preferred Return less amounts previously allocated pursuant to this
Section 6.1(a)(ii); and

(iii) thereafter, among the Members in proportion to their respective
Percentages.

(b) After giving effect to the special allocations set forth in Sections 6.1(c)
and 6.2 hereof, Net Losses of the Company shall be allocated among the Members
in proportion to their respective Percentages.

(c) Before allocating Net Profits and Net Losses in accordance with Sections
6.1(a) and 6.1(b), an amount of gross income shall be allocated to Marathon
equal to the excess of the aggregate distributions to Marathon pursuant to
Sections 6.4(b)(ii) and 6.4(b)(iii) over all prior gross income allocations
pursuant to this Section 6.1(c).

(d) If the Members’ Percentages change, the Members shall amend the allocation
provisions in Section 6.1 as necessary to cause the provisions in that Section
to comply with Section 704(b) of the Code.

Section 6.2 Special Allocations.

The following special allocations shall be made in the following order:

(a) Minimum Gain Chargeback. Except as otherwise provided in section 1.704-2(f)
of the Regulations, notwithstanding any other provision of this Section 6.2, if
there is a net decrease in Partnership Minimum Gain during any Fiscal Year, each
Member shall be specially allocated items of Company income and gain for such
Fiscal Year (and, if necessary, for subsequent

 

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Fiscal Years) in an amount equal to such Member’s share of the decrease in
Partnership Minimum Gain, determined in accordance with section 1.704-2(g) of
the Regulations. Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Member
pursuant hereto. The items to be so allocated shall be determined in accordance
with sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This
Section 6.2(a) is intended to comply with the minimum gain chargeback
requirement in section 1.704-2(f) of the Regulations and shall be interpreted
consistently therewith.

(b) Partner Minimum Gain Chargeback. Except as otherwise provided in section
1.704-2(i)(4) of the Regulations, notwithstanding any other provision of this
Section 6.2, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Member
who has a share of the Partner Nonrecourse Debt Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with section
1.704-2(i)(5) of the Regulations, shall be specially allocated items of Company
income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal
Years) in an amount equal to such Member’s share of the net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with section 1.704-2(i)(4) of the Regulations.
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Member pursuant thereto. The
items to be so allocated shall be determined in accordance with sections
1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 6.2(b) is
intended to comply with the minimum gain chargeback requirement in section
1.704-2(i)(4) of the Regulations and shall be interpreted consistently
therewith.

(c) Qualified Income Offset. In the event a Member unexpectedly receives any
adjustments, allocations, or distributions described in sections
1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the Regulations, items of Company income
and gain shall be specially allocated to such Member in an amount and manner
sufficient to eliminate to the extent required by the Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible; provided,
however, that an allocation pursuant to this Section 6.2(c) shall be made only
if and to the extent that the Member would have such an Adjusted Capital Account
Deficit after all other allocations provided for in this Agreement have been
tentatively made as if this Section 6.2(c) were not in this Agreement. This
Section 6.2(c) is intended to comply with the qualified income offset provision
in section 1.704-1(b)(2)(ii)(d) of the Regulations, and shall be interpreted and
applied in a manner consistent therewith.

(d) Gross Income Allocation. In the event that any Member has a deficit Capital
Account at the end of any Fiscal Year which is in excess of the sum of (i) the
amount such Member is obligated to restore pursuant to any provision of this
Agreement, and (ii) the amount such Member is deemed to be obligated to restore
pursuant to the penultimate sentences of sections 1.704-2(g)(1) and
1.704-2(i)(5) of the Regulations, each such Member shall be specially allocated
items of Company income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 6.2(d) shall be
made only if and to the extent that such Member would have a deficit Capital
Account in excess of such sum after all other allocations provided for in this
Article VI have been made as if Section 6.2(a) and this Section 6.2(d) were not
in this Agreement.

 

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

(f) Code Section 754 Adjustment. In the discretion of the Board, the Company may
elect, pursuant to section 754 of the Code, to adjust the basis of Company
Property as permitted and provided in sections 734 and 743 of the Code.

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

(h) Limitation on Allocation of Net Loss. To the extent that any allocation of
Net Loss would cause or increase an Adjusted Capital Account Deficit as to any
Member, such allocation of Net Loss shall be reallocated among the other Members
in accordance with their respective Percentages, subject to the limitations of
this Section 6.2(h).

(i) Curative Allocations. The allocations set forth in Sections 6.2(a)-(h) (the
“regulatory allocations”) are intended to comply with certain requirements of
the Regulations. It is the intent of the Members that to the extent possible,
all regulatory allocations shall be offset either with other regulatory
allocations or with special allocations of other items of Company income, gain,
loss, or deduction pursuant to this Section 6.2(i). Therefore, notwithstanding
any other provision of Section 6.1 or this Section 6.2 (other than the
regulatory allocations), the Board shall make such offsetting special
allocations of Company income, gain, loss, or deduction in whatever manner the
Board determines appropriate so that, after such offsetting allocations are
made, each Member’s Capital Account balance is, to the extent possible, equal to
the Capital Account balance such Member would have had if the regulatory
allocations were not part of this Agreement and all Company items were allocated
pursuant to Section 6.1 and this Section 6.2. In exercising its discretion under
this Section 6.2(i), the Board shall take into account future regulatory
allocations that, although not yet made, are likely to offset other regulatory
allocations previously made.

(j) Other Allocation Rules.

(i) For purposes of determining the profits, losses, or any other items of
income, gain, loss and deduction allocable to any period, profits, losses, and
any such other items shall be determined on a daily, monthly, or other basis, as
determined by the Board using any permissible method under Code section 706 and
the Regulations thereunder.

 

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(ii) Solely for purposes of determining a Member’s proportionate share of the
“excess nonrecourse liabilities” of the Company, within the meaning of section
1.752-3(a)(3), the Members’ interests in Company profits are in proportion to
their Percentage.

(iii) Nonrecourse Deductions shall be allocated among the Members in accordance
with their respective Percentages.

Section 6.3 No Right to Distributions.

A Member has the right to demand or receive distributions of any amount only as
expressly provided in this Article VI or in liquidation of its Membership
Interest as provided in this Agreement.

Section 6.4 Distributions.

(a) Subject to, so long as they are in effect, the provisions of the Senior Debt
Documents, the Company shall distribute (i) at least once during each quarter of
each Fiscal Year, net cash realized from operations of the Company and its
direct or indirect wholly-owned subsidiaries, cash from the sales of assets or
other capital events of the Company and its direct or indirect wholly-owned
subsidiaries, (ii) net proceeds from the sale of equity interests in any direct
or indirect controlled subsidiary and (iii) the net proceeds of any debt
issuance of the Company or its direct or indirect wholly-owned subsidiaries, in
each case, less pending costs and expenses (including amounts currently owed on
all senior and subordinated indebtedness) and any reasonable reserves that the
Board determines that the Company or any such subsidiary should maintain.

(b) All distributions, including any proceeds from the sale of equity interests
in any subsidiary, shall be made as follows: (i) first, (A) 95% to USEY Overseas
and (B) 5% to Marathon, until USEY Overseas has received an aggregate amount
equal to its accrued Preferred Return to the date of any such distribution,
(ii) second, (A) 95% to USEY Overseas and (B) 5% to Marathon, until USEY
Overseas has received an aggregate amount equal to its Initial Capital
Contribution, and (iv) fourth, to the Members pro rata according to their
Percentages.

(c) The Company is authorized to withhold from distributions to a Member, or
with respect to allocations to a Member, and to pay over to a federal, foreign,
state, or local government, any amounts required to be withheld pursuant to the
Code or any provisions of any other federal, foreign, state, or local law. Any
amounts so withheld shall be treated as having been distributed to that Member
as provided in this Article VI for all purposes of this Agreement, and shall be
offset against the current or next amounts otherwise distributable to that
Member.

 

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Section 6.5 Property Revaluation.

The Company shall revalue the Company Property at the election and in the
discretion of the Board, in which case the Company shall take all steps
necessary to accomplish such revaluation, including, but not limited to, the
maintenance of appropriate books and records, the adjustment of Capital Accounts
in accordance with section 1.704-1(b)(2)(iv)(g) of the Regulations, and the
determination of allocations for income tax purposes in accordance with section
1.704-1(b)(2)(iv)(f)(4) of the Regulations.

Section 6.6 Tax Allocations.

(a) Except as otherwise provided in this Section 6.6, for income tax purposes
under the Code and the Regulations each Partnership item of income, gain, loss,
and deduction shall be allocated among the Members in the same manner as its
correlative item of “book” income, gain, loss, or deduction is allocated
pursuant to Sections 6.1 and 6.2.

(b) In accordance with Code section 704(c) and the Regulations thereunder, items
of income, gain, loss, and deduction with respect to any property contributed to
the capital of the Company shall, solely for tax purposes, be allocated among
the Members so as to take account of any variation between the adjusted tax
basis of such property to the Company for federal income tax purposes and its
fair market value at the time of contribution, in a manner determined by the
Board.

Section 6.7 Public Offerings.

In the event that one or more direct or indirect wholly-owned subsidiaries of
the Company consummates a public offering of its debt or equity securities, then
the Company shall forthwith distribute to each of the Members its Percentage of
such securities retained by the Company and such securities shall not be subject
to any drag-along rights, tag-along rights, dilution or restrictions on sale;
provided that any such distribution may only be made in compliance with all
applicable laws, rules and regulations, including securities laws, and the
requirements of any sponsor, underwriter or broker in connection with such
public offering and provided further that the Members comply with all applicable
laws, rules and regulations in relation to the holding of equity interests in
such subsidiary and the requirements of any sponsor, underwriter or broker in
connection with such public offering. The rights appurtenant to any such
securities distributed to Marathon shall be the same rights as those that are
appurtenant to the securities distributed to USEY Overseas. After the expiration
of any restrictions on transferability imposed by any applicable laws, rules and
regulations, including securities laws, or the requirements of any sponsor,
underwriter or broker in connection with the public offering, in the event that
any Member wishes to sell its shares in such public company, the Company shall
(i) cooperate with and assist such selling Member to comply with any legal or
regulatory requirements in connection with such sale and (ii) make management
available for calls or meetings if reasonably requested to facilitate such sale;
provided that the selling Member shall pay the costs and expenses of the Company
in connection with such cooperation.

 

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ARTICLE VII

BOOKS AND REPORTS

Section 7.1 Books and Records; Accounting.

The Company (a) shall keep or cause to be kept at the office of the Company (or
at such other place as the Board in its discretion shall determine) full and
accurate books and records regarding the status of the business and financial
condition of the Company and (b) shall provide to each Member (i) on or before
the 45th day following the end of each quarter (other than the last) of each
Fiscal Year a statement of income, a balance sheet, and a statement of changes
in Members’ capital for the Company for, or as at the end of, that quarter, and
(ii) on or before the 120th day following the end of each Fiscal Year, a
statement of income, a balance sheet, and a statement of changes in Members’
capital for the Company for, or as at the end of, that Fiscal Year accompanied
by a report by a nationally recognized independent registered public accounting
firm in accordance with generally accepted auditing standards in the United
States and including an opinion from the auditor stating that the audited
financial statements present fairly, in all material respects, the financial
position of the Company and the results of its operations in conformity with
accounting principles generally accepted in the United States.

Section 7.2 Form K-1.

After the end of each Fiscal Year, the Board shall cause to be prepared and
transmitted to each Member, as promptly as possible, and in any event by the end
of the third month following the close of the Fiscal Year, a federal income tax
Form K-1 and any required similar state and local income tax form for each
Member.

Section 7.3 Tax Matters Partner.

The Members designate USEY Overseas as the Company’s “tax matters partner” under
section 6231(a)(7) of the Code. If USEY Overseas ceases to be a Member, the
Members shall designate a Member to be the tax matters partner. The tax matters
partner shall have all the powers and responsibilities of such position as
provided in the Code. The tax matters partner is specifically directed and
authorized to take whatever steps are necessary or desirable to perfect such
designation, including filing any forms or documents with the Internal Revenue
Service and taking such other action as may from time to time be required under
the Regulations issued under the Code. The tax matters partner shall cause to be
prepared and shall sign all tax returns of the Company, make any tax elections
for the Company allowed under the Code or the tax laws of any state or other
jurisdiction having taxing jurisdiction over the Company, and monitor any
governmental tax authority in any audit that such authority may conduct of the
Company’s books and records or other documents.

ARTICLE VIII

WITHDRAWAL; TRANSFERS OF MEMBERSHIP INTERESTS

Section 8.1 No Right to Withdraw.

No Member may resign or withdraw from the Company.

 

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Section 8.2 General Restriction on Transfers.

(a) General Rule. A Member may Transfer or Pledge all or any portion of its
Membership Interest only as permitted by the Senior Debt Documents and (with
respect to the USEY Overseas Membership Interest only) the Third Lien Pledge
Agreement, so long as they are in effect, and in accordance with this
Section 8.2 or as provided in Sections 8.4 or 8.5. Any purported Transfer or
Pledge of all or a portion of a Membership Interest not complying with this
Section 8.2 shall be void and shall not create any obligation on the part of the
Company or the other Members to recognize that Transfer or Pledge or to deal
with the Person to which the Transfer or Pledge purportedly was made. The Member
purporting to Transfer or Pledge all or any portion of its Membership Interest
in violation of this Section 8.2(a) shall indemnify the Company and the other
Members from and against any losses, damages, costs, or expenses (including any
incremental tax liabilities and attorneys’ fees) resulting from that violation
or the enforcement of this indemnity.

(b) Permitted Transferees. Subject to compliance with the provisions of the
Senior Debt Documents and (with respect to the USEY Overseas Membership Interest
only) the Third Lien Pledge Agreement, so long as they are in effect, and
Section 8.2(c), a Member may Transfer all (or, if the other Members, acting
reasonably and without delay, approve, any part) of its Membership Interest to a
Permitted Transferee of that Member.

(c) General Requirements. In addition to the requirements of Section 8.2(b), for
a Transfer or Pledge of all or any portion of a Membership Interest under any of
those provisions to be effective:

(i) the Transfer or Pledge must comply with all applicable securities laws and,
if the Board so requests, the Member making the Transfer or Pledge, or the
Person to which the Transfer or Pledge is made, must deliver to the Company an
opinion of counsel (who may be an employee of the Member or one of its
Affiliates) based on customary assumptions that the Transfer or Pledge complies
with all applicable securities laws;

(ii) the Transfer or Pledge must have received all regulatory approvals (if any)
required for its consummation and, if the Board so requests, the Member making
the Transfer or Pledge, or the Person to which the Transfer or Pledge, is made
must deliver to the Company an opinion of counsel (who may be an employee of the
Member, the Person to which the Transfer or Pledge is made, or one of its
Affiliates) based on customary assumptions that all such approvals have been
received;

(iii) the Transfer or Pledge may not have any material adverse tax consequences
on the Company or the other Members and, if the Board so requests, the Member
making the Transfer or Pledge, or the Person to which the Transfer or

 

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Pledge is made, must deliver to the Company an opinion of counsel (who may be an
employee of the Member, the Person to which the Transfer or Pledge is made, or
one of its Affiliates) based on customary assumptions that no such consequences
will arise;

(iv) the Member making the Transfer or Pledge must notify the Company of the
Transfer or Pledge and comply with the provisions of Section 3.9; and

(v) in the case of a Transfer to a Person that is not already a Member at the
time of such Transfer, the Person to which the Transfer is made must (x) execute
and deliver to the Company an instrument in which it agrees to be bound by the
provisions of this Agreement as a Member and represents and warrants that all
the representations and warranties in Section 3.8 are true and correct with
respect to it and (y) notify the Company and the other Members of its address
for notices under Section 10.7.

(d) Senior Debt Documents. Notwithstanding the foregoing provisions of this
Section 8.2, Membership Interests may be Pledged and Transfers may occur on any
foreclosure or Transfer in lieu of a foreclosure as provided in the Senior Debt
Documents and, with respect to the Membership Interests of USE Overseas only,
the Third Lien Pledge Agreement.

(e) Effect of Transfer. When any Transfer of a Membership Interest in accordance
with Section 8.2 is effective, (i) in the case of a transfer of all of a
Member’s Membership Interest, the Member making the Transfer shall cease to be a
member of the Company, and (ii) (if not already a Member) the Person to which
the Transfer is made shall be admitted to the Company as a member with the
Percentage attributable to the Membership Interest so Transferred (or with its
Percentage increased by that amount if it already is a Member), subject to the
other provisions of this Section 8.2.

Section 8.3 Intentionally Omitted.

Section 8.4 Drag-Along Rights.

Except for a Transfer upon a foreclosure or in lieu of foreclosure, if at any
time USEY Overseas and/or any of its Affiliates proposes to Transfer directly or
indirectly to a Person not its Affiliate, in a bona fide arms’ length
transaction, the entire Membership Interest of USEY Overseas and its Affiliates
(its “Drag-Along Interest”), USEY Overseas shall have the right, by notice on or
before the 30th day before the Transfer (the “Drag-Along Notice”), which notice
shall include all of the terms and conditions of such proposed sale and which
shall identify the proposed purchaser(s) of the Drag-Along Interest (the
“Drag-Along Purchaser(s)”), to require each other Member to sell to the
Drag-Along Purchaser(s) that Member’s entire Membership Interest; provided that
the other Members shall have the right, within ten (10) days of receipt of the
Drag-Along Notice, to submit a competing offer to USEY Overseas for the
Drag-Along Interest, which offer USEY Overseas may, in its sole discretion,
accept or reject. If USEY Overseas so elects to require the other Drag-Along
Interests to be sold, the Company shall arrange for the Drag-Along Purchaser(s)
to purchase

 

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the Drag-Along Interests at the same time as and upon the same terms and
conditions (including all direct or indirect consideration or compensation) at
which USEY Overseas and/or its Affiliates sell their Drag-Along Interest;
provided, however, that any indemnification obligations of each of the
participants in connection with such sale shall be borne ratably by all
participants in such sale and shall not exceed such participant’s ratable share
of any loss. On receipt of a Drag-Along Notice, the other Members shall
cooperate with USEY Overseas and/or its Affiliates and otherwise take, or cause
to be taken, all actions and do, or cause to be done, all things necessary or
appropriate to enter into, consummate and make effective the sale and purchase
of the Drag-Along Interests being so Transferred. Each Member shall bear its
proportionate share (based upon consideration received) of any costs and
expenses incurred in connection with any Transfer under this Section 8.4.

Section 8.5 Tag-Along Rights.

If USEY Overseas and/or any of its Affiliates wishes to Transfer all or any part
of its Membership Interest to any Person other than an Affiliate (the
“Purchaser”), then each other Member shall have the right to offer for Transfer
to the Purchaser, as a condition to the Transfer by USEY Overseas and/or any of
its Affiliates, at the same time as and upon the same terms and conditions
(including all direct or indirect consideration or compensation), the same
proportion of its Membership Interest, as the proposed Transfer represents with
respect to the Membership Interest of USEY Overseas and/or any of its
Affiliates. USEY Overseas shall notify each Member of any such proposed Transfer
on or before the 30th day before the Transfer is to occur, and each other Member
wishing to participate in the Transfer (each a “Co-Selling Member”) must notify
USEY Overseas of that election on or before the tenth day following the notice
from USEY Overseas. USEY Overseas and/or its Affiliates and the Co-Selling
Members shall Transfer to the Purchaser all or, at the option of the Purchaser,
any part of the Membership Interests proposed to be Transferred by USEY Overseas
and the Co-Selling Members on terms and conditions (including all direct or
indirect consideration or compensation) not more favorable to the Purchaser than
those in the offer described in the preceding sentence; provided, however, that
any Transfer of less than all of the Membership Interests of USEY Overseas
and/or its Affiliates and of the Co-Selling Members to the Purchaser shall be
made from USEY Overseas and/or its Affiliates and the Co-Selling Members pro
rata based upon the amount offered to be sold by each.

ARTICLE IX

DISSOLUTION OF THE COMPANY

Section 9.1 Dissolution.

The Company shall be dissolved and its affairs shall be wound up on the
occurrence of any of the following events:

 

  (a) the approval of dissolution by the Board; or

 

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(b) the entry of a decree of judicial dissolution under section 18-802 of the
Act.

No other event, including the retirement, insolvency, liquidation, dissolution,
insanity, expulsion, bankruptcy, death, incapacity, or adjudication of
incompetence of a Member, shall cause the Company to be dissolved.

Section 9.2 Liquidation.

(a) Liquidation and Winding Up. If the Company dissolves, then the Company shall
be liquidated and its affairs shall be wound up. All proceeds from such
liquidation shall be distributed in accordance with the provisions of section
18-804 of the Act, and all Membership Interests shall be cancelled.
Distributions to the Members shall be made in accordance with Section 6.4(b).

(b) Certificate of Cancellation. On the completion of the distribution of the
Company’s assets, the Company shall be terminated, and the Members shall cause
the Company to execute and file a Certificate of Cancellation in accordance with
section 18-203 of the Act.

ARTICLE X

MISCELLANEOUS

Section 10.1 Amendment to this Agreement.

Amendments to this Agreement may only be made upon a proposal by the Board
followed by a written instrument executed by all of the Members.

Section 10.2 Successors; Counterparts.

Subject to Article VIII, this Agreement (a) shall be binding on the Members and
their legal successors, nominees, and representatives and (b) may be executed in
several counterparts with the same effect as if the parties executing the
several counterparts had all executed one counterpart.

Section 10.3 Governing Law; Venue.

(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Delaware without giving effect to the
principles of conflicts of law. In particular, this Agreement shall be construed
to the maximum extent possible to comply with all the terms and conditions of
the Act.

(b) Venue. Any action arising out of or relating to this Agreement or the
transactions it contemplates may be brought, if at all, only in courts of the
State of New York, County of New York or the United States District Court for
the Southern District of New York. Each Member irrevocably submits itself to the
jurisdiction of each such court with respect to any such matter, waives

 

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any objection it may have to jurisdiction or venue or that the forum is not
convenient, and waives any right to bring any action in any other court or
forum, other than to enforce judgments of those courts against assets in other
jurisdictions. Each Member irrevocably consents to service of process from any
such court by the mailing of copies by registered or certified mail, postage
prepaid, to its address for notices as provided in this Agreement.

(c) Waiver of Jury Trial. ALL ACTIONS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS IT CONTEMPLATES SHALL BE TRIED WITHOUT A JURY, AND
EACH MEMBER WAIVES ANY RIGHT IT MAY HAVE TO INSIST ON TRIAL BY A JURY.

Section 10.4 Severability.

If it shall be determined by a court of competent jurisdiction that any
provisions or wording of this Agreement shall be invalid or unenforceable under
the Act or other applicable law, such invalidity or unenforceability shall not
invalidate the entire Agreement. In that case, this Agreement shall be construed
so as to limit any term or provision so as to make it enforceable or valid
within the requirements of applicable law, and, in the event such term or
provisions cannot be so limited, this Agreement shall be construed to omit such
invalid or unenforceable terms or provisions. If it shall be determined by a
court of competent jurisdiction that any provision relating to the distributions
and allocations of the Company or to any expenses payable by the Company is
invalid or unenforceable, this Agreement shall be construed or interpreted so as
(a) to make it enforceable or valid and (b) to make the distributions and
allocations as closely equivalent to those set forth in this Agreement as is
permissible under applicable law.

Section 10.5 No Third Party Beneficiaries.

This Agreement is not intended to confer upon any Person other than a Member or,
if applicable, a former Member, any rights as a third party beneficiary.

Section 10.6 Additional Documents.

Each Member agrees to perform all further acts and execute, acknowledge, and
deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement.

Section 10.7 Notices.

All notices, requests, and other communications to any Member, to be effective,
must be in writing and delivered, in person (including by courier) or telecopy,
to that Member (and any other Person designated by that Member) at its address
or telecopier number set forth in Exhibit A or in the document or instrument
signed in connection with its admission as a Member, or such other address or
telecopier number as that Member subsequently may specify for the purpose by
notice to the other Members and to the Company. Each such notice, request, or
other communication shall be deemed received and effective as of receipt if
during the Member or other recipient’s normal business hours and otherwise at
its next opening of business.

 

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Section 10.8 Waiver of Partition.

Each Member irrevocably waives any and all rights that Member may have to
maintain any action for partition of any of the Company’s property.

Section 10.9 Confidentiality; Announcements.

(a) Confidentiality. Each Member shall keep confidential all information of a
confidential nature obtained in connection with the Company or under this
Agreement, except that a Member shall be entitled to disclose such confidential
information (i) to the extent required by law or industry regulatory body,
(ii) to its lawyers, accountants, and other service providers as reasonably
necessary in the furtherance of such Member’s bona fide interests, and (iii) to
potential transferees of its Membership Interests and their representatives,
provided that the potential transferees enter into customary confidentiality
agreements, with the Company expressly stated to be a third party beneficiary of
any such agreement.

(b) Announcements. No Member may make any public announcements regarding this
Agreement or the Company or its business except as required by applicable law;
provided, however, each Member may consult with and obtain prior approval of the
other Members before issuing a press release or other public announcement with
respect to this Agreement and may issue a press release or make a public
announcement following such consultation and approval.

(c) Reasonableness. The Members agree that the restrictions in this Section 10.9
are reasonable.

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the
date first above written.

 

US ENERGY OVERSEAS INVESTMENTS, LLC By:   US Energy Systems, Inc. By:  

 

Name:   Title:   MARATHON CAPITAL HOLDINGS (UK), LLC By:  

 

Name:   Title: