Document:

Exhibit 10.5

 

Execution Version

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

MARTIFER-HIRSCHFELD
ENERGY SYSTEMS LLC

 

 

FIRST
AMENDED AND RESTATED

LIMITED
LIABILITY COMPANY AGREEMENT

 

 

Dated and effective as of June 19,
2009

 

 

THE UNITS CONTEMPLATED BY
THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR UNDER ANY STATE
SECURITIES ACT OR OTHER SIMILAR STATUTE, IN RELIANCE UPON EXEMPTIONS UNDER
THOSE ACTS.  WITHOUT SUCH REGISTRATION,
THE SALE, PLEDGE OR OTHER TRANSFER OF THE UNITS CONTEMPLATED BY THIS LIMITED
LIABILITY COMPANY AGREEMENT IS RESTRICTED, EXCEPT UPON DELIVERY TO THE COMPANY
OF AN OPINION OF LEGAL COUNSEL, SATISFACTORY TO THE COMPANY AND ITS LEGAL
COUNSEL, THAT REGISTRATION IS NOT REQUIRED FOR THE TRANSFER, OR SUCH OTHER
EVIDENCE SATISFACTORY TO THE COMPANY THAT THE TRANSFER IS NOT IN VIOLATION OF
THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAW.  THE SALE, PLEDGE OR OTHER TRANSFER OF THE
UNITS CONTEMPLATED BY THIS LIMITED LIABILITY COMPANY AGREEMENT IS ALSO SUBJECT
TO THE RESTRICTIONS SET FORTH IN THIS LIMITED LIABILITY COMPANY AGREEMENT,
WHICH MAY BE AMENDED FROM TIME TO TIME.

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE 1 DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  ARTICLE 2 CONSENT TO
  ISSUANCE; PURPOSE; TERM; CONFLICTS OF INTEREST

  	
  1

  
	
  SECTION 2.1

  	
  Consent
  to Issuance of Units; Admission of New Member

  	
  1

  
	
  SECTION 2.2

  	
  Company
  Name

  	
  1

  
	
  SECTION 2.3

  	
  Registered
  Office; Registered Agent; Principal Office in the United States; Other
  Offices

  	
  2

  
	
  SECTION 2.4

  	
  Purpose

  	
  2

  
	
  SECTION 2.5

  	
  Foreign
  Qualification

  	
  2

  
	
  SECTION 2.6

  	
  Term

  	
  2

  
	
  SECTION 2.7

  	
  Fiscal
  Year

  	
  2

  
	
  SECTION 2.8

  	
  No
  State-Law Partnership

  	
  3

  
	
  SECTION 2.9

  	
  Consent
  and Acknowledgment of Legend

  	
  3

  
	
  SECTION 2.10

  	
  Affiliate
  Contracts

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 MANAGEMENT;
  MEETINGS AND ACTIONS; COMPENSATION; LIABILITY OF MANAGERS

  	
  4

  
	
  SECTION 3.1

  	
  Management

  	
  4

  
	
  SECTION 3.2

  	
  Appointment
  of Managers

  	
  4

  
	
  SECTION 3.3

  	
  Number
  of Managers; Appointment of Additional Managers

  	
  4

  
	
  SECTION 3.4

  	
  Term;
  Mandatory Resignations; Removal; Vacancies

  	
  5

  
	
  SECTION 3.5

  	
  Actions
  by Board; Meetings; Committees; Certain Actions; Observers

  	
  6

  
	
  SECTION 3.6

  	
  Compensation

  	
  9

  
	
  SECTION 3.7

  	
  Appointment
  and Removal of Officers

  	
  9

  
	
  SECTION 3.8

  	
  Liability
  of Managers to Third Parties

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 MEMBERS;
  DISPOSITIONS OF UNITS; PREEMPTIVE RIGHTS; WITHDRAWAL; LIABILITY

  	
  11

  
	
  SECTION 4.1

  	
  Members

  	
  11

  
	
  SECTION 4.2

  	
  Representations
  and Warranties

  	
  11

  
	
  SECTION 4.3

  	
  Rights
  of Members

  	
  13

  
	
  SECTION 4.4

  	
  Meetings
  of and Actions by Members

  	
  13

  
	
  SECTION 4.5

  	
  Dispositions
  and Encumbrances of Units by Members

  	
  13

  
	
  SECTION 4.6

  	
  Buy/Sell
  Agreement

  	
  20

  
	
  SECTION 4.7

  	
  Issuance
  of Additional Units and Additional Securities

  	
  21

  
	
  SECTION 4.8

  	
  Preemptive
  Rights

  	
  22

  
	
  SECTION 4.9

  	
  Restriction
  on Dispositions of Securities of Members

  	
  22

  
	
  SECTION 4.10

  	
  Withdrawal
  of Member

  	
  22

  
	
  SECTION 4.11

  	
  Liability
  of Members to Third Parties

  	
  23

  

 

 

	
  ARTICLE 5 RESTRICTIVE
  COVENANTS; CORPORATE OPPORTUNITIES

  	
  23

  
	
  SECTION 5.1

  	
  Restrictive
  Covenants

  	
  23

  
	
  SECTION 5.2

  	
  Corporate
  Opportunities

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 CAPITAL
  CONTRIBUTIONS

  	
  26

  
	
  SECTION 6.1

  	
  Contributions

  	
  26

  
	
  SECTION 6.2

  	
  Return
  of Contributions

  	
  26

  
	
  SECTION 6.3

  	
  Additional
  Capital Contributions

  	
  26

  
	
  SECTION 6.4

  	
  Advances
  by Members

  	
  27

  
	
  SECTION 6.5

  	
  Capital
  Accounts

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 ALLOCATIONS
  AND DISTRIBUTIONS

  	
  27

  
	
  SECTION 7.1

  	
  Restrictions
  on Distributions

  	
  27

  
	
  SECTION 7.2

  	
  Distributions
  of Net Cash Flow

  	
  28

  
	
  SECTION 7.3

  	
  Distributions
  of Net Capital Proceeds

  	
  28

  
	
  SECTION 7.4

  	
  Priority
  of Distributions

  	
  28

  
	
  SECTION 7.5

  	
  Distributions
  on Dissolution and Winding Up

  	
  29

  
	
  SECTION 7.6

  	
  Allocations
  of Profit

  	
  29

  
	
  SECTION 7.7

  	
  Allocations
  of Loss

  	
  29

  
	
  SECTION 7.8

  	
  Adjustment
  of Book Value

  	
  29

  
	
  SECTION 7.9

  	
  Tax Allocations; Tax Code Section 704(c)

  	
  30

  
	
  SECTION 7.10

  	
  Stop
  Loss

  	
  31

  
	
  SECTION 7.11

  	
  Minimum
  Gain Chargeback

  	
  31

  
	
  SECTION 7.12

  	
  Member
  Nonrecourse Minimum Gain Chargeback

  	
  31

  
	
  SECTION 7.13

  	
  Qualified
  Income Offset

  	
  31

  
	
  SECTION 7.14

  	
  Gross
  Income Allocation

  	
  32

  
	
  SECTION 7.15

  	
  Nonrecourse
  Deductions

  	
  32

  
	
  SECTION 7.16

  	
  Member
  Nonrecourse Deductions

  	
  32

  
	
  SECTION 7.17

  	
  Tax
  Code Section 754 Adjustments

  	
  32

  
	
  SECTION 7.18

  	
  Curative
  Allocation

  	
  32

  
	
  SECTION 7.19

  	
  Common
  Interests in Company

  	
  33

  
	
  SECTION 7.20

  	
  Withholding

  	
  33

  
	
  SECTION 7.21

  	
  Varying
  Common Interests

  	
  33

  
	
  SECTION 7.22

  	
  Common
  Interest in Company Profits

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 EXCULPATION;
  INDEMNIFICATION

  	
  34

  
	
  SECTION 8.1

  	
  In
  General

  	
  34

  
	
  SECTION 8.2

  	
  Insurance

  	
  34

  
	
  SECTION 8.3

  	
  Advancements

  	
  35

  
	
  SECTION 8.4

  	
  Nonexclusivity
  of Rights

  	
  35

  
	
  SECTION 8.5

  	
  No
  Increase in Member’s Liability

  	
  35

  
	
  SECTION 8.6

  	
  Beneficiaries

  	
  35

  
	
  SECTION 8.7

  	
  Timing;
  Effect of Amendments

  	
  35

  
	
  SECTION 8.8

  	
  Reserves

  	
  35

  
	
  SECTION 8.9

  	
  Survival

  	
  36

  

 

ii

 

	
  ARTICLE 9 TAXES

  	
  36

  
	
  SECTION 9.1

  	
  Tax
  Returns

  	
  36

  
	
  SECTION 9.2

  	
  Tax
  Elections

  	
  36

  
	
  SECTION 9.3

  	
  Tax
  Matters Member

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 BOOKS,
  RECORDS AND BANK ACCOUNTS

  	
  37

  
	
  SECTION 10.1

  	
  Books
  and Records

  	
  37

  
	
  SECTION 10.2

  	
  Accounts

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 CERTIFICATES

  	
  38

  
	
  SECTION 11.1

  	
  Certificates
  Representing Units

  	
  38

  
	
  SECTION 11.2

  	
  Registration
  of Transfer and Exchange

  	
  38

  
	
  SECTION 11.3

  	
  Mutilated,
  Destroyed, Lost or Stolen Certificates

  	
  39

  
	
  SECTION 11.4

  	
  Record
  Holder

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 EVENTS
  REQUIRING WINDING UP

  	
  40

  
	
  SECTION 12.1

  	
  Dissolution

  	
  40

  
	
  SECTION 12.2

  	
  Winding
  Up and Termination

  	
  40

  
	
  SECTION 12.3

  	
  Deficit
  Capital Accounts

  	
  41

  
	
  SECTION 12.4

  	
  Certificate
  of Cancellation

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 GENERAL
  PROVISIONS

  	
  41

  
	
  SECTION 13.1

  	
  Offset

  	
  41

  
	
  SECTION 13.2

  	
  Notices

  	
  42

  
	
  SECTION 13.3

  	
  Entire
  Agreement

  	
  42

  
	
  SECTION 13.4

  	
  Effect
  of Waiver or Consent

  	
  42

  
	
  SECTION 13.5

  	
  Amendment
  or Restatement; No Waiver

  	
  42

  
	
  SECTION 13.6

  	
  Binding
  Effect

  	
  43

  
	
  SECTION 13.7

  	
  Governing
  Law, Severability

  	
  43

  
	
  SECTION 13.8

  	
  Further
  Assurances

  	
  43

  
	
  SECTION 13.9

  	
  Waiver
  of Certain Rights

  	
  43

  
	
  SECTION 13.10

  	
  Directly
  or Indirectly

  	
  43

  
	
  SECTION 13.11

  	
  Indemnification
  by Members

  	
  43

  
	
  SECTION 13.12

  	
  Counterparts

  	
  44

  
	
  SECTION 13.13

  	
  Construction

  	
  44

  
	
  SECTION 13.14

  	
  No
  Third Party Rights

  	
  44

  
	
  SECTION 13.15

  	
  Creditors;
  No Waiver

  	
  44

  
	
  SECTION 13.16

  	
  Rule of Construction

  	
  44

  

 

iii

 

ATTACHMENTS

 

	
  SCHEDULE
  I (Members)

  	
  Schedule I-1

  
	
   

  	
   

  
	
  SCHEDULE
  II (Initial Managers)

  	
  Schedule II-1

  
	
   

  	
   

  
	
  EXHIBIT
  A (Form of Certificate)

  	
  Exhibit A-1

  
	
   

  	
   

  
	
  APPENDIX
  A (Definitions)

  	
  Appendix A-1

  

 

iv

 

MARTIFER-HIRSCHFELD
ENERGY SYSTEMS LLC

 

FIRST
AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

THIS FIRST AMENDED AND
RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF MARTIFER-HIRSCHFELD ENERGY
SYSTEMS LLC (this “Agreement”), dated and effective as of June 19,
2009 (the “Effective Date”), is adopted, executed and agreed to, for
good and valuable consideration, by the Company and the Members.

 

PRELIMINARY
STATEMENT

 

Martifer
formed the Company by virtue of its Certificate of Formation, filed with the
Secretary of State of the State of Delaware on June 17, 2009 (as amended,
the “Certificate”), and the Original Agreement, pursuant to the terms of
the Act.

 

The
Company has become successor-in-interest to the Legacy Company pursuant to the
Merger.

 

As
of the Effective Date and as set forth in Section 4.1 hereof,
Hirschfeld has acquired, and Martifer holds, that number of Units set forth
opposite their respective names on Schedule I attached hereto.  The Company and the Members desire to, and do
hereby, amend and restate in its entirety the Original Agreement as hereinafter
provided, effective as of the Effective Date.

 

ARTICLE
1 

DEFINITIONS

 

For purposes of this
Agreement capitalized terms shall have the meanings set forth in Appendix A
attached hereto.

 

ARTICLE
2 

CONSENT TO ISSUANCE; PURPOSE; TERM; CONFLICTS OF INTEREST

 

SECTION 2.1                                                                     Consent to
Issuance of Units; Admission of New Member.

 

Martifer hereby consents to (a) the
issuance to Hirschfeld of the Units set forth opposite its name on Schedule
I attached hereto and, in order to permit the same, hereby waives any
preemptive or other rights it may have pursuant to the Original Agreement or
otherwise with respect to such issuance and (b) the admission of
Hirschfeld as a Member.

 

SECTION 2.2                                                                     Company Name.

 

The name of the Company
shall be “MARTIFER-HIRSCHFELD ENERGY SYSTEMS LLC” or such other name as the
Board may from time to time designate. 
All business of the 

 

 

Portions of this exhibit have been
omitted and filed separately pursuant to a request for confidential treatment
filed with the Securities and Exchange Commission pursuant to Rule 406
under the Securities Act of 1933, as amended.  Omissions are designated as
[***].

 

Company shall be conducted
under the Company name.  The Company
shall promptly notify the Members of any name change.

 

SECTION 2.3                                                                     Registered
Office; Registered Agent; Principal Office in the United States; Other Offices.

 

The registered office of the
Company required by the Act to be maintained in the State of Delaware shall be
the office of the initial registered agent named in the Certificate, or such
other office (which need not be a place of business of the Company) as the
Board may designate in the manner provided by Law.  The registered agent of the Company in the
State of Delaware shall be the initial registered agent named in the
Certificate or such other Person or Persons as the Board may designate in the
manner provided by Law.  The principal
office of the Company in the United States shall be at such place as the Board
may designate, which need not be in the State of Delaware, and the Company
shall maintain records there as required by the Act.  The Company may have such other offices as
the Board may designate from time to time, which need not be in the State of
Delaware.

 

SECTION 2.4                                                                     Purpose.

 

The primary purpose of the
Company is to manufacture and supply towers [****] for wind turbine markets,
and any other metal-based components reasonably related to wind turbine
markets, in [****] and to engage in any other business, purpose or activity
that may be lawfully engaged in by a limited liability company under the Laws
of the State of Delaware.

 

SECTION 2.5                                                                     Foreign
Qualification.

 

Prior to the Company’s
conducting business in any jurisdiction other than Delaware, the officers shall
cause the Company to comply, to the extent procedures are available and those
matters are reasonably within the control of the officers, with all requirements
necessary to qualify the Company as a foreign limited liability company in such
jurisdiction.  At the request of the
Company, each Member shall execute, acknowledge, swear to, and deliver all
certificates and other instruments conforming with this Agreement that are
necessary or appropriate to qualify, continue and terminate the Company as a
foreign limited liability company in all such jurisdictions in which the
Company may conduct business.

 

SECTION 2.6                                                                     Term.

 

The Company commenced on the
date the Certificate was filed with the Secretary of State of the State of
Delaware, and shall continue in existence until a Certificate of Cancellation
is filed in accordance with Section 12.4.

 

SECTION 2.7                                                                     Fiscal Year.

 

The fiscal year of the
Company (“Fiscal Year”) shall be the period ending on December 31st
of each year or such other fiscal year as the Board may designate.

 

2

 

SECTION 2.8                                                                     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, and this Agreement may not be
construed to suggest otherwise.  This Agreement
shall not subject the Members to joint and several or vicarious Liability, or
impose any Liability that would arise therefrom with respect to any or all of
the Members or the Company.

 

SECTION 2.9                                                                     Consent and
Acknowledgment of Legend.

 

Each and every Member to
this Agreement consents to the terms, as well as the placement, of a legend on
the certificates, if any, evidencing said Member’s Units, which legend shall be
in the form substantially as follows:

 

“THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, OR UNDER ANY STATE SECURITIES ACT OR OTHER SIMILAR STATUTE, IN
RELIANCE UPON EXEMPTIONS UNDER THOSE ACTS. 
WITHOUT SUCH REGISTRATION, THE SALE, PLEDGE OR OTHER TRANSFER OF THESE
UNITS IS RESTRICTED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF LEGAL
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS LEGAL COUNSEL, THAT REGISTRATION
IS NOT REQUIRED FOR THE TRANSFER, OR SUCH OTHER EVIDENCE SATISFACTORY TO THE
COMPANY THAT THE TRANSFER IS NOT IN VIOLATION OF THE SECURITIES ACT OF 1933 OR
ANY APPLICABLE STATE SECURITIES LAW.  THE
SALE, PLEDGE OR OTHER TRANSFER OF THESE UNITS IS ALSO SUBJECT TO THE
RESTRICTIONS SET FORTH IN THE COMPANY’S LIMITED LIABILITY COMPANY AGREEMENT,
WHICH MAY BE AMENDED FROM TIME TO TIME.”

 

SECTION 2.10                                                              Affiliate
Contracts.

 

The Company may enter into
any contract with, or make any payment of Company funds to, any Manager or
Member, or any Affiliate of the foregoing, in an amount that is, and on terms
that are, no less favorable to the Company in relation to the cost or terms of
obtaining similar services from unaffiliated third parties.  Any such agreement must be in writing and
approved by the Board in accordance with Section 3.5(f) hereof;
provided, however, that (a) that certain Management Services
Agreement, of even date herewith, by and between the Company and Hirschfeld and
(b) that certain Management Services Agreement, of even date herewith, by
and between the Company and Martifer Energia are hereby approved in all
respects.

 

3

 

ARTICLE
3 

MANAGEMENT; MEETINGS AND ACTIONS; COMPENSATION; LIABILITY OF MANAGERS

 

SECTION 3.1                                                                     Management.

 

Management of the Company
shall be solely vested in a Board of Managers (the “Board”).  The Board shall have the power to do any and
all acts necessary, convenient or incidental to or for the furtherance of the
purposes described herein, including all powers, statutory or otherwise,
possessed by managers of a limited liability company under the Laws of the
State of Delaware.

 

SECTION 3.2                                                                     Appointment of
Managers.

 

The Board shall initially
consist of six (6) individuals, who need not reside in the State of Delaware.  Subject to this Article 3, the
members of the Board shall be appointed, and the Members agree to elect members
of the Board, as follows:

 

(a)                                  for so long as
Martifer shall hold any Units, three (3) individuals will be appointed by
Martifer (the “Martifer Managers”) and shall initially be those
individuals set forth as such on Schedule II attached hereto; and

 

(b)                                 for so long as
Hirschfeld shall hold any Units, three (3) individuals will be appointed
by Hirschfeld  (the “Hirschfeld Managers”) and shall
initially be those individuals set forth as such on Schedule II attached
hereto.

 

Each individual elected
pursuant to Sections 3.2(a) and 3.2(b), so long as he or she
is a Manager, shall be considered a voting Manager.  Notwithstanding anything contained herein to
the contrary, a Majority Interest shall have the right to create non-voting
classes of Managers and elect individuals to serve as non-voting Managers
within such classes, and such individuals will be subject to removal at any
time, with or without cause, by a Majority Interest.

 

SECTION 3.3                                                                     Number of
Managers; Appointment of Additional Managers.

 

(a)                                  Subject to Section 3.2
hereof, the number of Managers may be increased or decreased from time to time
by consent of a Majority Interest; provided, however,
that for so long as each of Martifer and Hirschfeld owns 50% of the Units,
any such increase or decrease shall be in increments of two.

 

(b)                                 (i)                                     Any vacancy
created by an increase described in Section 3.3(a) hereof
shall be filled by a Majority Interest; provided, however,
that for so long as each of Martifer and Hirschfeld owns 50% of the Units,
any such vacancies shall be filled by the appointment of an equal number of
Martifer Managers and an equal number of Hirschfeld Managers, each in the
manner set forth in Section 3.4(d)(i) or 3.4(d)(ii) hereof,
as applicable.

 

(ii)                                  For so long as each of
Martifer and Hirschfeld owns 50% of the Units, any decrease in the number of
Managers resulting from the application of Section 

 

4

 

3.3(a) hereof shall be made such that the number of
Martifer Managers and Hirschfeld Managers remaining on the Board following the
application of Section 3.3(a) hereof shall be equal.

 

(c)                                  (i)                                     Any vacancy
created by a mandatory resignation described in Section 3.4(b)(i) hereof
shall be filled by the Assignee of all of Martifer’s Units if such Assignee
holds at least 50% of the outstanding Units, or by consent of a Majority
Interest if such Assignee does not hold at least 50% of the outstanding Units.

 

(ii)                                  Any vacancy created by a
mandatory resignation described in Section 3.4(b)(ii) hereof
shall be filled by the Assignee of all of Hirschfeld’s Units if such Assignee
holds at least 50% of the outstanding Units, or by consent of a Majority
Interest if such Assignee does not hold at least 50% of the outstanding Units.

 

SECTION 3.4                                                                     Term; Mandatory
Resignations; Removal; Vacancies.

 

(a)                                  Term.

 

Managers shall serve until they resign, are removed, or die.

 

(b)                                 Mandatory
Resignations.

 

(i)                                     In the event
Martifer shall not hold any Units, all Martifer Managers shall immediately
resign such that, thereafter, there shall be no Martifer Managers, and Martifer
will have no further rights to direct the appointment of any Managers.

 

(ii)                                  In the event
Hirschfeld shall not hold any Units, all Hirschfeld Managers shall immediately
resign such that, thereafter, there shall be no Hirschfeld Managers, and
Hirschfeld will have no further rights to direct the appointment of any
Managers.

 

(c)                                  Removal.

 

(i)                                     Any Manager may
be removed for cause by the Board (which vote or consent shall exclude the
subject Manager), such “cause” being limited to: (A) any action or
omission by the subject Manager that constitutes fraud, deceit, or wrongful
taking against the Company or any of its subsidiaries as reasonably determined
by the Board; (B) any willful misconduct or gross negligence of the
subject Manager in connection with the performance of any of his or her duties;
(C) the entry of any legal order that has the effect of precluding the
subject Manager from performing his or her duties for more than 30 consecutive
Days; (D) the conviction of the subject Manager of, or the entry of a plea
of guilty or nolo contendere by the Subject Manager to, a felony; or (E) any
moral turpitude of, or bankruptcy, insolvency or general assignment for the
benefit of his or her creditors by, the subject Manager.

 

(ii)                                  Any Martifer
Manager may be removed without cause only by Martifer.  Any Hirschfeld Manager may be removed without
cause only by Hirschfeld.  Any Manager
who was appointed as such pursuant to Section 3.3(b) or 3.3(c) hereof
and 

 

5

 

is
not a Martifer Manager or a Hirschfeld Manager may be removed without cause
only by the Member who appointed such Manager or, if such Manager was not
appointed by any single Member, by consent of a Majority Interest.

 

(d)                                 Vacancies.

 

(i)                                     Any vacancy
created by the resignation, death or removal for cause or without cause of a
Martifer Manager (except for a resignation pursuant to Section 3.4(b)(i) hereof)
shall be filled with a Martifer Manager, who shall be an individual appointed
by Martifer.

 

(ii)                                  Any vacancy
created by the resignation, death or removal for cause or without cause of a
Hirschfeld Manager (except for a resignation pursuant to Section 3.4(b)(ii) hereof)
shall be filled with a Hirschfeld Manager, who shall be an individual appointed
by Hirschfeld.

 

(iii)                               Any vacancy
created by the resignation, death or removal for cause or without cause of a
Manager who was appointed as such pursuant to Section 3.3(b) or
3.3(c) hereof and is not a Martifer Manager or a Hirschfeld Manager
shall be filled with an individual nominated by the Member who appointed such
Manager or, if such Manager was not appointed by any single Member, by an
individual nominated by the Board and approved and elected by a Majority
Interest.

 

SECTION 3.5                                                                     Actions by Board;
Meetings; Committees; Certain Actions; Observers.

 

(a)                                  The Board shall
hold at least four regularly scheduled meetings during each Fiscal Year.  Meetings of the Board shall be held (i) at
the time and place fixed by resolution of the Board or (ii) upon the call
of the Chairman of the Board and the Vice Chairman of the Board.  The Secretary or officer of the Company
performing his or her duties shall give at least 24 hours’ notice of all
meetings of the Board to be held by means of conference telephone or other
communications equipment, and at least 96 hours’ notice of all meetings of the
Board to be held in person, all such notices to be given by telephone, mail,
telegram, facsimile, email or hand delivery to the last known number or address
of each Manager entitled to vote at any such meeting, and notice need not be
given of regular meetings held at such time as may be fixed by a resolution of
the Board.  Meetings of the Board may be
held at any time without notice if all Managers entitled to vote at any such
meeting are present, in person or by proxy, or if those not present waive
notice either before or after the meeting.

 

(b)                                 With respect to
all matters, unless otherwise expressly provided herein, the Board will act by
a Majority Vote.  In the event that one
or more Managers appointed by any single Member is not present at a duly
convened meeting of the Board of Managers, the participating Managers that were
appointed by the same single Member shall be entitled to exercise all rights
and privileges, including voting rights, of such non-participating
Manager(s).  For purposes of this Section 3.5(b),
if a Member holds a Majority Interest, then any Manager appointed by a Majority
Interest pursuant to this Agreement shall be deemed to have been appointed by such
Member.

 

6

 

(c)                                  Any action
required to be, or which may be, voted on, consented to or approved by the
Board may be taken without a meeting, without prior notice and without taking a
vote if a consent or consents in writing, setting forth the action so taken,
are signed by Managers having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
the Managers entitled to vote thereon were present and voted; provided, however,
that no such action shall be effective unless the Board shall have sent to each
Manager (including, without limitation, via electronic mail) a copy of the
consent with respect to such proposed action at least 36 hours prior to the
taking of such action.  A consent
transmitted by electronic transmission by a Manager or by a Person or Persons
authorized to act for a Manager shall be deemed to be written and signed for
purposes of this Section 3.5(c).

 

(d)                                 Meetings of the
Board may be held by means of conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 3.5(d) shall
constitute presence in person at the meeting. 
Managers and committee members shall be reimbursed by the Company for
all reasonable and documented out-of-pocket expenses incurred in connection
with the attendance of any meetings.

 

(e)                                  The Board may
designate one or more committees and appoint members of the Board to serve on
such committee or committees; provided, however,
that for so long as each of Martifer and Hirschfeld owns 50% of the Units,
any such committees shall be comprised of an equal number of Martifer Managers
and Hirschfeld Managers.

 

(f)                                    Notwithstanding
anything to the contrary set forth in this Agreement, including, without
limitation, Section 3.5(b) hereof, neither the Board nor any
committee of the Board shall perform or engage in, or cause or permit the
Company, or any of its officers or employees on behalf of the Company, to
perform or engage in, any of the following acts or transactions, unless
approved by a Unanimous Vote:

 

(i)                                     make any
material change to the Company’s primary line of business;

 

(ii)                                  authorize,
issue or enter into any agreement, plan or other commitment providing for the
issuance (contingent or otherwise) of any Units or other equity interests in
the Company, or any securities convertible into or exchangeable or exercisable
for any such Units or other equity interests in the Company;

 

(iii)                               enter into any
transaction with an Affiliate of the Company (other than a subsidiary of the
Company) (including, without limitation, the purchase, sale, lease or exchange
of any property, or rendering of any service or modification or amendment of
any existing agreement or arrangement);

 

(iv)                              directly or
indirectly redeem, purchase or otherwise acquire any Units (including warrants,
options or other securities or rights to acquire any such Units); provided, however,
that only a Majority Vote shall be required for the Company to redeem,
purchase or otherwise acquire any Units on a pro rata basis from all Members in
accordance with their respective Sharing Ratios;

 

7

 

(v)                                 (A) sell,
assign, transfer, lease or otherwise Dispose of, in any single transaction or
related series of transactions, fixed assets with the greater of a Book Value
or fair market value in excess of two hundred thousand dollars ($200,000) in
the aggregate, (B) enter into any material joint venture or strategic
alliance with a third party or (C) merge or consolidate the Company or any
subsidiary, whether or not the Company or such subsidiary survives such merger
or consolidation;

 

(vi)                              acquire, or permit
any subsidiary to acquire, any material business (whether by a purchase of
fixed assets, purchase of equity interests, merger or otherwise) with the
greater of a Book Value or fair market value in excess of two hundred thousand
dollars ($200,000) in the aggregate;

 

(vii)                           approve the
Company’s annual budget for each Fiscal Year;

 

(viii)                        approve of or
make any loans to Members, their respective Affiliates, any Managers, officers
or employees of the Company and its subsidiaries, excluding travel and similar
advances made in the ordinary course of business;

 

(ix)                                commence a
voluntary case under any applicable bankruptcy, insolvency or other similar Law
now or hereafter in effect; or consent to the entry of an order for relief in
an involuntary case, or to the conversion of any involuntary case to a
voluntary case under any such Law; or consent to the appointment of or taking
of possession by a receiver, trustee or other custodian for all or
substantially all of its property; or make a general assignment for the benefit
of creditors or wind up, liquidate or dissolve the Company or any of its
subsidiaries;

 

(x)                                   select or
replace the Company’s independent public accountants or adopt any new or
materially modify any existing accounting policy (including a change to the
Company’s Fiscal Year), principle or practice (including internal controls) or
financial reporting system of the Company or its subsidiaries, except as
otherwise required by Law or generally accepted accounting principles in effect
in the United States from time to time; or

 

(xi)                                commit to do
any of the foregoing or delegate authority to, or permit, any Person to approve
the taking of any of the actions set forth above.

 

(g)                                 Each of
Martifer and Hirschfeld shall have the right at any time and from time to time
to appoint up to two (2) representatives (the “Observers”), who
shall be entitled to participate in a non-voting observer capacity at any or
all meetings of the Board and all committees thereof.  Such right shall from time to time be
exercisable by delivery to the Company of written notice from the appointing
Member specifying the name of any such Observer, subject to the Company’s right
to approve such Observer (such approval not to be unreasonably withheld,
conditioned or delayed).  No Observer,
while acting as such, shall be or be deemed a Manager of the Company or, in his
or her capacity as an Observer, have any ability to direct the management of
the Company, whether by voting or consenting with respect to any action to be
taken or otherwise.  The appointing
Member may at any time, by written notice to the Company, revoke the
appointment of any Observer, effective immediately or at any later time
specified in such written notice, and at such time all of such Observer’s
rights under this 

 

8

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

Section 3.5 shall be
terminated.  The Observers shall
initially be those individuals set forth as such on Schedule II attached
hereto.

 

(h)                                 Each Observer
shall be entitled to receive all notices, minutes, documents and information
furnished in connection with each such meeting to the members of the Board at
the time that such Board members are furnished such notices, minutes, documents
and information, or as promptly as practicable thereafter, and notice of any
action taken by written consent approving a transaction; provided, however,
that each Observer shall prior thereto have entered into a nondisclosure
agreement, in form and substance reasonably satisfactory to the Company, and
shall have agreed that such information will only be used in its role as an
Observer and not in any other role or for any other purpose.  Notwithstanding the foregoing, such observer
rights shall not extend to (i) meetings at which matters covered by any
legally recognized privilege are to be discussed and the presence of the
Observers could be reasonably expected (based on advice of the Company’s legal
counsel) to lead to a loss of such privilege or (ii) information covered
by any legally recognized privilege if the dissemination of such information to
the Observers could be reasonably expected (based on advice of the Company’s
legal counsel) to lead to the loss of such privilege.  The Member appointing each Observer shall be
responsible for all costs and expenses of such Observer in connection with such
Observer’s attendance at such meetings. 
These observer rights shall be for the sole benefit of Martifer and
Hirschfeld and shall not be transferable to any other Person.

 

(i)                                     At each
regularly scheduled meeting of the Board, the agenda shall include updates from
at least one Martifer Manager and at least one Hirschfeld Manager, and a
general discussion by the Board, with respect to the current status of the
market in [****] for towers [****] for wind turbine markets, and any other
metal-based components reasonably related to wind turbine markets.

 

SECTION 3.6                                                                     Compensation.

 

The Members shall have the
sole power to authorize the payment of compensation to the Managers for
services to the Company, including fees for attendance at meetings of the Board
or any committee thereof, provided that such fees shall be reasonable in
relation to the fees paid to those holding similar positions in unaffiliated
Entities.  The Board, or any compensation
committee or similar committee thereof, shall have the sole power to authorize
the payment of compensation to the senior management of the Company for
services to the Company, including fees for attendance at meetings of the
Members, the Board or any committee thereof, provided that such fees shall be
reasonable in relation to the fees paid to those holding similar positions in
unaffiliated Entities.

 

SECTION 3.7                                                                     Appointment and
Removal of Officers.

 

(a)                                  The officers of
the Company shall include a Chairman of the Board, a Vice Chairman, a Chief Executive
Officer and a Secretary, each of whom shall be appointed by the Board in
accordance with Section 3.7(b) hereof.  In addition, the Board may appoint such other
officers, and assign titles to any such individuals, as it deems advisable from
time to time.  Each officer shall have
such duties and authority as may be delegated to such officer from time to time
by the Board.  In addition, unless
inconsistent with the duties and authority specifically delegated to an officer
by the Board, if the title of any officer is one commonly used for officers 

 

9

 

of a business corporation formed under the Act, the
assignment of such title shall constitute the delegation to such person of the
duties and authority that are normally associated with that office for business
corporations formed under the Act.  Any
officer appointed pursuant to Section 3.7(b) hereof may be
removed with or without cause only by the Member who appointed such
officer.  Any other officer may be removed
with or without cause by a Majority Vote.

 

(b)                                 The Board shall
appoint the Chairman of the Board, Vice Chairman of the Board, Chief Executive
Officer and Secretary of the Company at the direction of Martifer and
Hirschfeld, as the case may be, as follows: 
(i) during the three-year period beginning on the Effective Date
(the “First Period”), Martifer shall have the right to direct the
appointment of the Chief Executive Officer and the Vice Chairman of the Board
of the Company and Hirschfeld shall have the right to direct the appointment of
the Chairman of the Board and the Secretary of the Company; (ii) during
the three-year period beginning immediately upon the expiration of the First
Period (the “Second Period”), Hirschfeld shall have the right to direct
the appointment of the Chief Executive Officer and the Vice Chairman of the
Board of the Company and Martifer shall have the right to direct the
appointment of the Chairman of the Board and the Secretary of the Company; (iii) during
the three-year period beginning immediately upon the expiration of the Second
Period, Martifer shall again have the right to direct the appointment of the
Chief Executive Officer and the Vice Chairman of the Board of the Company and
Hirschfeld shall again have the right to direct the appointment of the Chairman
of the Board and the Secretary of the Company; and (iv) thereafter, the
right to direct the appointment of the Chief Executive Officer and the Vice
Chairman of the Board of the Company, on the one hand, and the Chairman of the
Board and Secretary of the Company, on the other hand, shall continue to
alternate in this manner for each successive three-year period.

 

(c)                                  Each officer
appointed pursuant to Section 3.7(b) hereof shall, in the
event that the Member who appointed such officer no longer holds any Units, be
deemed to have resigned, without any action required by the Board, the Members
or the relevant officer, from all offices to which such person was appointed by
such former Member, effective for all purposes as of the time that such Member
no longer holds any Units; provided, however,
that in the event that the Assignee of such former Member’s Units holds at
least 50% of the outstanding Units, then such Assignee shall have the right to
fill any vacancies created pursuant to this Section 3.7(c) and
shall have the same rights to direct the appointment of officers pursuant to Section 3.7(b) hereof
as such former Member had immediately prior to Disposing of its Units; and further provided, however,
that if such Assignee does not hold at least 50% of the outstanding Units, then
any vacancies created pursuant to this Section 3.7(c) shall be
filled by a Majority Interest.

 

SECTION 3.8                                                                     Liability of
Managers to Third Parties.

 

No Manager shall be liable
for the debts, obligations, or liabilities of the Company, including under a
judgment decree or order of a court, whether arising in contract, tort or
otherwise.

 

10

 

ARTICLE
4 

MEMBERS; DISPOSITIONS OF UNITS; PREEMPTIVE RIGHTS; WITHDRAWAL; LIABILITY

 

SECTION 4.1                                                                     Members.

 

(a)                                  The Members of
the Company are Martifer, which was admitted as a Member of the Company upon
its execution of the Original Agreement on June 17, 2009; and Hirschfeld,
which was admitted as a Member of the Company effective as of the Effective
Date.  There is only one class of Units
of the Company.

 

SECTION 4.2                                                                     Representations
and Warranties.

 

(a)                                  Each Member
hereby represents and warrants to the Company and each other Member as follows:

 

(i)                                     (A) that
Member is duly incorporated, organized, or formed (as applicable), validly
existing, and (if applicable) in good standing under the Law of the
jurisdiction of its incorporation, organization or formation; (B) if
required by applicable Law, that Member is duly qualified and in good standing
in the jurisdiction of its principal place of business, if different from its
jurisdiction of incorporation, organization or formation; and (C) that
Member has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and all necessary actions by the board of
directors, shareholders, managers, members, trustees, beneficiaries or other
applicable Persons necessary for the due authorization, execution, delivery and
performance of this Agreement by that Member have been duly taken.

 

(ii)                                  that Member has
duly executed and delivered this Agreement, and it constitutes the legal, valid
and binding obligation of that Member enforceable against it in accordance with
its terms (except as may be limited by bankruptcy, insolvency or similar laws
of general application and by the effect of general principles of equity,
regardless of whether considered at Law or in equity);

 

(iii)                               that Member’s
authorization, execution, delivery, and performance of this Agreement does not
and will not (A) conflict with, or result in a breach, default or
violation of, (I) the organizational documents of such Member (if it is an
Entity), (II) any contract or agreement to which that Member is a party or
is otherwise subject, or (III) any Law, order, judgment, decree, writ,
injunction or arbitral award to which that Member is subject; or (B) require
any consent, approval, or authorization from, filing or registration with, or
notice to, any Governmental Authority or other Person, unless such requirement
has already been satisfied and the Company has been notified thereof;

 

(iv)                              that Member is
familiar with the existing or proposed business, financial condition,
properties, operations, and prospects of the Company (including that the
Company has no operating history); it has asked such questions, and conducted
such due diligence, concerning such matters and concerning its acquisition of
its Units as it has desired to ask and conduct, and all such questions have
been answered to its full 

 

11

 

satisfaction;
it has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of an investment in the Company;
it understands that owning Units involves various risks, including the
restrictions on Dispositions and Encumbrances set forth in Section 4.5
hereof, the lack of any public market for its Units, the risk of owning its
Units for an indefinite period of time and the risk of losing its entire
investment in the Company; it is able to bear the economic risk of such
investment; it is acquiring its Units for investment, solely for its own
beneficial account and not with a view to or any present intention of directly
or indirectly selling, transferring, offering to sell or transfer,
participating in any distribution, or otherwise Disposing of all or a portion
of its Units; and it acknowledges that the Units have not been registered under
the Securities Act or any other applicable federal or state securities laws,
and that the Company has no intention, and shall not have any obligation, to
register or to obtain an exemption from registration for the Units or to take
action so as to permit sales pursuant to the Securities Act (including Rules 144
and 144A thereunder).

 

(b)                                 The Company
hereby represents and warrants to each Member as follows, with all such
representations and warranties being given only as of the Effective Date:

 

(i)                                     The Company is
a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.  The Units, when issued by the Company, will
be validly issued, fully paid and non-assessable and not subject to any adverse
claim.

 

(ii)                                  The execution,
delivery and performance of this Agreement by the Company has been duly
authorized by all necessary limited liability company action on the part of the
Company, and the Company has full limited liability company power and authority
to enter into this Agreement and to perform its obligations hereunder.  This Agreement constitutes the valid and
legally binding obligation of the Company, enforceable against it in accordance
with its terms (except as may be limited by bankruptcy, insolvency or similar
laws of general application and by the effect of general principles of equity,
regardless of whether considered at Law or in equity).

 

(iii)                               The
capitalization of the Company is set forth on Schedule I attached
hereto.  Except as set forth in this
Agreement, on Schedule I attached hereto or as required by Law, there
are no outstanding options, warrants, preemptive rights, subscription rights,
convertible securities or other agreements or plans under which the Company is
or may become obligated to issue, sell or transfer any Units.

 

(iv)                              Neither the
Company nor anyone acting on its behalf has offered Units or any similar
security for sale to or otherwise approached or negotiated in respect of such
offer in a manner constituting a general solicitation.  Neither the Company nor anyone on its behalf
has taken any action that would subject the issuance or sale of any of the
Company’s Units to the registration requirements of Section 5 of the
Securities Act of 1933, as amended.

 

12

 

SECTION 4.3                                                                     Rights of
Members.

 

The Members, in their
capacity as such, cannot transact any business for the Company or take part in
the management of its affairs and will have no power to execute documents on
behalf of or otherwise bind or commit the Company.  Members do, however, except as otherwise
modified by the terms of this Agreement, have the rights and status of members
under the Act and may give consents and approvals and exercise the rights and
powers granted to them in this Agreement and by Law, it being understood that
the exercise of such rights and powers are deemed to be matters affecting the
fundamental structure of the Company and not the exercise of control over its
business.

 

SECTION 4.4                                                                     Meetings of and
Actions by Members.

 

(a)           The Board may call a meeting
of the Members at any time and from time to time by giving notice to each
Member in writing of the time, place and purpose of such meeting at least seven
Days in advance of such meeting.

 

(b)           With respect to all matters,
unless otherwise expressly provided herein, the Members will act by a Majority
Interest.

 

(c)           Any action required to be,
or which may be, voted on, consented to or approved by the Members may be taken
without a meeting, without prior notice and without taking a vote if a consent
or consents in writing, setting forth the action so taken, are signed by
Members having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all Members
entitled to vote thereon were present and voted; provided, however,
that no such action shall be effective unless the Board shall have sent to each
Member (including, without limitation, via electronic mail) a copy of the
consent with respect to such proposed action at least one Day prior to the
taking of such action.  A consent
transmitted by electronic transmission by a Member or by a person or persons
authorized to act for a Member shall be deemed to be written and signed for
purposes of this Section 4.4(c). 
If a written consent is executed by less than all of the Members
entitled to vote on the action so taken, the Company shall promptly cause a
copy of the executed written consent to be delivered to each Member that did
not execute it; provided, however, that the failure of the
Company to so deliver a written consent shall not invalidate the action taken
pursuant to such written consent.

 

(d)           Meetings of the Members may
be held by means of conference telephone or other communications equipment by
means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Section 4.4(d) shall
constitute presence in person at the meeting. 
All such meetings shall be held at such reasonable places as the Company
shall designate and during normal business hours or at such other times as are
otherwise agreed to by the Members.  All
expenses of each Member attending the meetings shall be borne by such Member.

 

SECTION 4.5                                                                     Dispositions
and Encumbrances of Units by Members.

 

(a)           General Restriction on
Members.  No Member may Dispose of or
Encumber all or any portion of its Units (including any rights or obligations
related thereto) 

 

13

 

except in strict accordance with this Section 4.5.  Any attempted Disposition or Encumbrance of
all or any portion of its Units (including any rights or obligations related
thereto), other than in strict accordance with this Section 4.5,
shall be, and is hereby declared, null and void ab initio.  The Members agree that breach of the
provisions of this Section 4.5 may cause irreparable injury to the
Company for which monetary damages (or other remedy at Law) are inadequate in
view of (i) the complexities and uncertainties in measuring the actual
damages that would be sustained by reason of the failure of a Member to comply
with such provisions, (ii) the uniqueness of the Company’s business and (iii) the
relationship among the Members. 
Accordingly, the Members agree that the provisions of this Section 4.5
may be enforced by specific performance (without the posting of bond or other
security).

 

(b)           Dispositions of Units of
Members.

 

(i)            General
Restrictions.

 

(A)          Without the
prior written consent of all other Members, no Member may make any Disposition
of any Units (including any rights or obligations related thereto) that does
not result in the Disposition of all Units (including all rights and
obligations related thereto) held by such Member immediately prior to such
Disposition; provided, however, that, notwithstanding anything to
the contrary contained herein, the foregoing restriction shall not apply in the
case of a Disposition to a Permitted Affiliate of such Member following the
prior written consent of the Company (not to be unreasonably withheld, conditioned
or delayed).

 

(B)           No Member may
Dispose of or Encumber all or any portion of its Units (including any rights or
obligations related thereto) during the period beginning on the Effective Date
and ending on the fourth (4th) anniversary thereof (the “Lock-Up Period”);
provided, however, that, notwithstanding anything to the contrary
contained herein, the restrictions on the Disposition and Encumbrance with
respect to all or any portion of each Member’s Units (including its Common
Interest) during the Lock-Up Period shall not apply in the case of (I) a
Disposition by a Member to the Company, if approved in advance by the Board in
accordance with Section 3.5(f) hereof; (II) a merger or
similar transaction entered into by or on behalf of the Company, if approved in
advance by the Board in accordance with Section 3.5(f) hereof;
(III) a Disposition to a Permitted Affiliate of such Member following the
prior written consent of the Company (not to be unreasonably withheld,
conditioned or delayed); or (IV) a Disposition required by the rules and
regulations of a Governmental Authority, provided that such Member has
provided to the Company a certificate executed by an executive officer of such
Member stating that it has determined in good faith, after consultation with
legal counsel, that such Disposition is required under such rules and
regulations.

 

(C)           Following the
expiration of the Lock-Up Period, if a Member desires to make a Disposition of
all or any portion of its Units (including its Common Interest), it must, as
applicable, first comply with Section 4.5(b)(iii) (Preferential
Purchase Rights) and Section 4.5(b)(iv) (Tag-Along Rights); 

 

14

 

provided, however,
that, notwithstanding anything to the contrary contained herein, compliance
with Section 4.5(b)(iii) (Preferential Purchase Rights) and Section 4.5(b)(iv) (Tag-Along
Rights) shall not be required in the case of (I) a Disposition by a Member
to the Company, if approved in advance by the Board in accordance with Section 3.5(f) hereof;
(II) a merger or similar transaction entered into by or on behalf of the
Company, if approved in advance by the Board in accordance with Section 3.5(f) hereof;
(III) a Disposition to a Permitted Affiliate of such Member following the
prior written consent of the Company (not to be unreasonably withheld,
conditioned or delayed); or (IV) a Disposition required by the rules and
regulations of a Governmental Authority, provided that such Member has
provided to the Company a certificate executed by an executive officer of such
Member stating that it has determined in good faith, after consultation with
legal counsel, that such Disposition is required under such rules and
regulations.

 

(ii)           Admission of
Assignee as a Member.  An Assignee
has the right to be admitted to the Company as a Member with respect to the
Units (and attendant Sharing Ratio) so Disposed to such Assignee; provided
that such Assignee (A) has been granted the entire rights, and assumed the
entire obligations, associated with the Units so disposed (and not merely
limited rights and obligations that, together with other rights and
obligations, constitute the entire rights and obligations with respect to such
Units (“Partial Rights”)) and (B) complies with the requirements of
Section 4.5(b)(vii) hereof.

 

(iii)          Preferential
Purchase Right.

 

(A)          Application and
Procedure.  Should any
Member at any time desire to Dispose of all or a portion of its Units (except
in the circumstances described in the proviso to Section 4.5(b)(i)(A) hereof
and the first proviso to Section 4.5(b)(i)(C) hereof, but
subject to all other provisions contained in Section 4.5(b)(i) hereof),
such Member (the “Disposing Member”) shall promptly give notice thereof
(each, a “Disposition Notice”) to the Company and to each other Member
(collectively, the “Non-Disposing Members”).  The Disposition Notice shall set forth all
relevant information with respect to the proposed Disposition, including the
name and address of the prospective acquirer, the proposed purchase price,
which must be proposed to be and actually be paid in its entirety in cash at
closing, the precise Units that are the subject of the Disposition, and copies
of all available and relevant proposed purchase and sale documents.  Each Non-Disposing Member shall have the
preferential right to acquire all or any portion of such Units (I) on the
same terms and conditions as are set forth in the Disposition Notice
(including, without limitation, the proposed purchase price), (II) on the
terms and conditions set forth in Section 4.5(b)(iii)(B) hereof,
and (III) in accordance with the following procedures:  each Non-Disposing Member shall have 45 Days
following its receipt of the Disposition Notice in which to notify the Company
and the Disposing Member whether it desires to exercise its preferential right
to purchase.  A written notice in which a
Non-Disposing Member exercises such right is referred to herein as an “Exercise
Notice” and each Non-Disposing Member that exercises such right is referred
to herein as a “Purchasing Member.” 
If any Non-Disposing Member does not respond by delivering an Exercise
Notice 

 

15

 

to
the Company and the Disposing Member during the period set forth in this Section 4.5(b)(iii)(A),
then such Non-Disposing Member shall be deemed to have waived such right.  Each Purchasing Member shall have the right
to participate in the Disposition in the same proportion that its Sharing Ratio
(excluding any Partial Rights) bears to the aggregate Sharing Ratios of all
Purchasing Members, collectively (or on such other basis as the Purchasing
Members may mutually agree).

 

(B)           Closing.  If the preferential right is exercised in
accordance with Section 4.5(b)(iii)(A) hereof, the closing of such
purchase shall occur at the principal place of business of the Company on the
30th Day after the expiration of the preferential right period described in Section 4.5(b)(iii)(A) hereof
(or, if later, the fifth Business Day after the receipt of all applicable regulatory
and governmental approvals to the purchase), unless the Disposing Member and
the Purchasing Members agree upon a different place or date.  At the closing, (I) the Disposing Member
shall (w) execute and deliver to each Purchasing Member an assignment of
the Units being Disposed to such Purchasing Member, in form and substance
reasonably acceptable to such Purchasing Member, containing a general warranty
of title as to such Units (including that such Units are free and clear of any
Encumbrances other than any Encumbrance related to a pledge of such Units to a
financial institution providing debt financing to the Company); (x) deliver
to each Purchasing Member the Units being Disposed to such Purchasing Member
free and clear of any Encumbrance (other than any Encumbrance related to a
pledge of such Units to a financial institution providing debt financing to the
Company); (y) deliver to each Purchasing Member certificates, if
applicable, representing the Units being Disposed to such Purchasing Member accompanied
by duly executed stock powers (or equivalent documents); and (z) execute
and deliver to each Purchasing Member any other instrument or document
reasonably requested by such Purchasing Member that is reasonably necessary to
give effect to the Disposition of such Units from the Disposing Member to such
Purchasing Member; and (II) each Purchasing Member shall deliver to the
Disposing Member the proposed purchase price (pro-rata in proportion to the
number of Units being acquired by each Purchasing Member) in immediately
available funds.

 

(C)           Waiver of
Preferential Right.  If the
Non-Disposing Members do not elect (or otherwise fail) to purchase all of the
applicable Units set forth in the applicable Disposition Notice, each
Purchasing Member shall have the right to purchase its pro-rata portion of such
unpurchased Units by providing an additional Exercise Notice to the Company and
the Disposing Member of its intent to do so within 10 Days after the expiration
of the period set forth in the Disposition Notice.  If, after the expiration of such 10 Day
period, any of the applicable Units set forth in the applicable Disposition
Notice remain unpurchased, the Disposing Member shall have the right, subject
to compliance with the provisions of this Section 4.5 (including,
without limitation, Section 4.5(b)(iv) hereof), to Dispose of such
Units described in the Disposition Notice (or such portion thereof that the
Non-Disposing Members did not elect to purchase) to the proposed Assignee
strictly in accordance with the terms of the 

 

16

 

Disposition
Notice for a period of 60 Days after the expiration of the applicable
preferential right period or, if later, after the failure of the Purchasing
Members to complete such purchase in accordance with Section 4.5(b)(iii)(B)
hereof or this Section 4.5(b)(iii)(C) hereof.  If, however, the Disposing Member fails to
Dispose of such Units within such period, the proposed Disposition to the
proposed Assignee shall again become subject to the preferential right set
forth in this Section 4.5(b)(iii).

 

(iv)          Tag-Along
Rights.  In the event a Member elects
to make a Disposition of all or any portion of its Units (except in the
circumstances described in the proviso to Section 4.5(b)(i)(A) hereof
and the first proviso to Section 4.5(b)(i)(C) hereof, but
subject to all other provisions contained in Section 4.5(b)(i) hereof,
and after first complying with the procedures set forth in Section 4.5(b)(iii) hereof)
(the “Tag-Along Disposing Member”), then each other Member (each, a “Potential
Tag-Along Participant”) is hereby granted the non-assignable right to
Dispose, at the relevant selling price, that proportion of its Units as is
described below.  The Tag-Along Disposing
Member shall deliver a notice (each, a “Tag-Along Notice”) to the
Potential Tag-Along Participants, which shall set forth all relevant
information with respect to the proposed Disposition, including the identity of
the buyer, the proposed purchase price, the precise Units that are the subject
of the sale, and any other terms and conditions of the proposed Disposition
(including copies of all available and relevant proposed purchase and sale
documents).  The Potential Tag-Along
Participants shall have the right to sell Units (other than Partial Rights) for
the same price per Unit, and on the same terms and conditions, as are set forth
in the Tag-Along Notice.  Each Potential
Tag-Along Participant shall have 45 Days following its receipt of the Tag-Along
Notice in which to notify the Tag-Along Disposing Member whether it desires to
exercise its sell right.  A notice in
which a Potential Tag-Along Participant exercises such right is referred to
herein as a “Tag-Along Exercise Notice,” and a Potential Tag-Along
Participant that delivers a Tag-Along Exercise Notice is referred to herein as
a “Tag-Along Member.”  Any
Potential Tag-Along Participant that does not respond during the applicable
period shall be deemed to have waived such right.  Each Tag-Along Member shall have the right to
participate in the Disposition in the same proportion that its Sharing Ratio
(excluding any Partial Rights) bears to the aggregate Sharing Ratios of all
Tag-Along Members and the Tag-Along Disposing Member, collectively (or on such
other basis as the Tag-Along Members and the Tag-Along Disposing Member may
mutually agree).  The Tag-Along Disposing
Member shall use commercially reasonable good faith efforts to obtain the
agreement of the buyer to the participation of the Tag-Along Members.  Notwithstanding the Tag-Along Disposing
Member’s commercially reasonable good faith efforts as contemplated by the
immediately preceding sentence, if the buyer is unwilling or unable to acquire
the Units of the Tag-Along Members that have chosen to participate in such Disposition,
then the Tag-Along Disposing Member may proceed with such Disposition without
the written consent of the Tag-Along Members.

 

(v)           Member
Liability. 
Notwithstanding any other provision to the contrary contained herein, in
no event will any Tag-Along Member’s liability in respect of such Disposition,
whether in respect of expenses, indemnification obligations, other third party
indemnities or otherwise, exceed the lesser of (A) such Member’s pro rata 

 

17

 

share
of such liabilities actually paid in respect of such Disposition; or (B) the
net proceeds actually received by such Member in such Disposition; provided,
however, that the foregoing limitations shall not apply to a Member’s
liability with respect to (y) representations and warranties given by such
Member regarding such Member’s authority, title to Units and tax status; or (z) any
fraud committed by such Member.

 

(vi)          Special
Provisions Regarding Involuntary Dispositions.

 

(A)          If an
involuntary Disposition (“Involuntary Disposition”) shall occur in
violation of this Agreement and such Disposition is not for whatever reason
declared null and void ab initio as required by Section 4.5(a) hereof,
then the Members described in Section 4.5(b)(iii) hereof shall
have the same rights as specified in Section 4.5(b)(iii) hereof
with respect to the Units or Partial Rights subject to the Involuntary
Disposition as if the same had been a proposed voluntary Disposition under Section 4.5(b)(iii) hereof
and shall be governed by Section 4.5(b)(iii) hereof except
that (i) the time periods shall run from the date of receipt by the
applicable Members of actual notice of the Involuntary Disposition and (ii) such
rights shall be exercised by notice to the transferee of the Units or Partial
Rights subject to the Involuntary Disposition (the “Involuntary Transferee”)
rather than to the Member who suffered or will suffer the Involuntary
Disposition.

 

(B)           In the event
the provisions of Section 4.5(b)(iv)(A) hereof are held to be
unenforceable with respect to any particular Involuntary Disposition, the
applicable Members shall have the applicable rights specified in Section 4.5(b) hereof
with respect to any Disposition by an Involuntary Transferee, and each Member
agrees that any Involuntary Disposition shall be subject to such rights, in
which case the Involuntary Transferee shall be deemed to be the Disposing
Member for purposes of Section 4.5(b) hereof, and shall be
bound by the provisions of Section 4.5(b) hereof and other
related provisions of this Agreement.

 

(vii)         Requirements
Applicable to All Dispositions and Subsequent Admissions of Members.  In addition to the requirements set forth in Section 4.5(b) hereof,
any Disposition of Units or Partial Rights (including a Common Interest), and
any admission of an Assignee as a Member shall also be subject to the following
requirements, and such Disposition (and admission, if applicable) shall not be
effective unless such requirements are complied with; provided, however,
that the Board may waive any of the following requirements:

 

(A)          Disposition
Documents.  The
following documents must be delivered to the Company and must be satisfactory,
in form and substance, in all reasonable respects, to the Board:

 

(I)            Disposition
Instrument.  A copy of
the instrument pursuant to which the Disposition is effected.

 

18

 

(II)           Ratification of
Agreement.  An
instrument, executed by the Member making the Disposition and its Assignee,
containing the following information and agreements, to the extent they are not
contained in the instrument described in Section 4.5(b)(vii)(A)(I) hereof:  (a) the notice address of the Assignee; (b) the
applicable Sharing Ratios after the Disposition of the Member effecting the
Disposition and its Assignee (which together must equal the applicable Sharing
Ratio of the Member effecting the Disposition immediately before the
Disposition); (c) if the Assignee is to be admitted as a Member, (i) the
Assignee’s ratification of this Agreement and agreement to be bound by it, and (ii) its
confirmation that the representations and warranties in Section 4.2
hereof are true and correct with respect to it; (d) if the Assignee is not
to be admitted as a Member, an acknowledgment by the Assignee that the Common
Interest (or other applicable Partial Rights) acquired by it is subject in all
respects to this Agreement; and (e) representations and warranties by the
Member and its Assignee (i) that the Disposition (and admission, if
applicable), is being made in accordance with all applicable Law, and (ii) that
the factual matters set forth in the opinions delivered pursuant to Sections 4.5(b)(vii)(A)(III) and
(IV) hereof are true and correct in all respects.

 

(III)         Securities Law
Opinion.  Unless the Units (or Partial
Rights) subject to the Disposition are registered under the Securities Act and
any applicable state securities Law, a favorable opinion of the Company’s legal
counsel, or of other legal counsel reasonably acceptable to the Board, to the
effect that the Disposition (and admission, if applicable) is being made
pursuant to a valid exemption from registration under those Laws.

 

(IV)         Tax Opinion.  The Company must receive a favorable opinion
of the Company’s legal counsel or legal counsel reasonably acceptable to the
Board to the effect that the Disposition would not result in the Company’s
being considered to have terminated within the meaning of Tax Code Section 708.

 

(B)           Payment of
Expenses.  The Member
effecting a Disposition and its Assignee shall pay, or reimburse the Company
for, all costs and expenses incurred by the Company in connection with the
Disposition (and admission, if applicable), including the legal fees incurred
in connection with the legal opinions referred to in Sections 4.5(b)(vii)(A)(III) and
(IV) hereof, on or before the 10th Day after the receipt by that
Person of the Company’s invoice for the amount due.  If payment is not made by the date due, the
Person owing that amount shall pay interest on the unpaid amount from the date
due until paid at a rate per annum equal to the Default Rate.

 

(C)           Effective Date.  Each Disposition (and admission, if
applicable) complying with the provisions of this Section 4.5 is
effective as of the 

 

19

 

first
calendar Day of the month immediately succeeding the month in which all of the
requirements of this Section 4.5(b)(vii) have been met.

 

(c)           Encumbrances of Units by
Members.  A Member may not Encumber all
or any portion of its Units (including any rights or obligations related
thereto) without the prior written consent of a Majority Interest; provided, however,
that the pledge of any Member’s Units to any financial institution
providing debt financing to such Member or any of its Affiliates (including the
Company) for the benefit of the Company shall not constitute an Encumbrance for
purposes hereof.

 

SECTION 4.6                                                                     Buy/Sell
Agreement.

 

(a)           Offer.  Any Member (the “Offering Member”)
shall have the right at any time following the expiration of the Lock-Up Period
to make an offer (the “Buy/Sell Offer”) to purchase all (but not less
than all) of the Units held by the other Member (the “Offeree Member”).  The Buy/Sell Offer shall be in writing and
contain a value per Unit (the “Buy/Sell Value”) as specified by the
Offering Member for such Units and established by the Offering Member in its
Sole Discretion.

 

(b)           Alternative Purchase or Sale.  Upon the receipt of a Buy/Sell Offer as set
forth in Section 4.6(a) hereof, the Offeree Member shall have
the alternative either (i) to sell all (but not less than all) of its
Units to the Offering Member for a price equal to the product of (A) the
number of Units held by the Offeree Member times (B) the Buy/Sell
Value, or (ii) to purchase all (but not less than all) of the Units held
by the Offering Member for a price equal to the product of (A) the number
of Units held by the Offering Member times (B) the Buy/Sell Value
(the “Buy/Sell Transaction”).  The
closing of the Buy/Sell Transaction pursuant to this Section 4.6(b) shall
be held at the time and in the manner provided in Section 4.6(d) hereof.

 

(c)           Election of Alternative.  The Offeree Member shall give written notice
(the “Response Notice”) to the Offering Member within 45 Days from the
date of receipt of the Buy/Sell Offer, indicating whether the Offeree Member
elects to sell its Units to the Offering Member or to purchase the Offering
Member’s Units.  Failure to provide the
Offering Member with written notice of the Offeree Member’s election within such
45 Day period shall be conclusively deemed to be an election by the Offeree
Member to sell its Units to the Offering Member in accordance with the Buy/Sell
Offer.  If there are more than two
Members when a Buy/Sell Offer is made, and more than one Offeree Member elects
to purchase all of the Offering Member’s Units, then each such electing Offeree
Member shall have the right to participate in the Buy/Sell Transaction in the
same proportion that its Sharing Ratio (excluding any Partial Rights) bears to
the aggregate Sharing Ratios of all electing Offeree Members, collectively (or
on such other basis as the electing Offeree Members may mutually agree).  If there are more than two Members when a
Buy/Sell Offer is made, and one or more Offeree Members elects to sell all of
its Units and one or more Offeree Members elects to purchase the Offering
Member’s Units, then the Offeree Members making the purchase election may
elect, at their option, by providing an additional Response Notice at least 10
Days prior to the closing of the Buy/Sell Transaction, to purchase all of the
Units that were offered to be sold by the other Offeree Members.  If a Member makes a Buy/Sell Offer and such
Member is an Affiliate of one or more other Members, and one or more Offeree
Members elects to purchase all of the Offering Member’s Units, then 

 

20

 

the Buy/Sell Transaction shall include, and such
electing Offeree Member(s) must purchase, all Units held by the Offering
Member and all of its Affiliates, collectively.

 

(d)           Buy/Sell Closing.  The closing of the Buy/Sell Transaction shall
occur at the principal place of business of the Company on the 60th Day after
the date of receipt of the Buy/Sell Offer by the Offeree Member (or, if later,
the fifth Business Day after the receipt of all applicable regulatory and
governmental approvals to the purchase), unless the Offering Member and the
Offeree Member agree upon a different place or date.  At the closing of the Buy/Sell Transaction, (i) the
selling Member shall (A) deliver an assignment of the Units, in form and
substance reasonably acceptable to such purchasing Member, containing a general
warranty of title as to such Units (including that such Units are free and
clear of any Encumbrances other than any Encumbrance related to a pledge of
such Units to a financial institution providing debt financing to the Company);
(B) deliver the Units subject to the Buy/Sell Transaction free and clear
of any Encumbrance (other than any Encumbrance related to a pledge of such
Units to a financial institution providing debt financing to the Company); (C) deliver
to the purchasing Member certificates, if applicable, representing the Units
subject to the Buy/Sell Transaction accompanied by duly executed stock powers
(or equivalent documents); and (D) any other instrument or document
reasonably requested by the purchasing Member that is reasonably necessary to
give effect to the Buy/Sell Transaction; and (ii) the purchasing Member
shall remit to selling Member the consideration to which it is entitled in
immediately available funds.

 

SECTION 4.7                                                                     Issuance of
Additional Units and Additional Securities.

 

(a)           Subject to Section 4.8
hereof, additional Units (“Additional Units”), and any securities that
by their terms are, directly or indirectly, convertible into or exchangeable or
exercisable for Additional Units (including, without limitation, any option,
warrant or other subscription or purchase right with respect to Additional
Units) (any such securities, “Additional Securities”), may be created
and issued to existing Members or to other Persons pursuant to this Section 4.7
and such other Persons may be admitted to the Company as Members, at the
direction of, and upon the approval of the Board in accordance with Section 3.5(f) hereof.  Without limiting the preceding sentence, the
terms of admission or issuance must specify the Sharing Ratios applicable
thereto and the adjusted Sharing Ratios of the existing Members, if applicable,
and the same shall be reflected in an amendment to this Agreement, and such an
amendment need be executed only by the Chairman of the Board or the Chief
Executive Officer of the Company.  In
addition, the Chairman of the Board or the Chief Executive Officer shall update
the Sharing Ratios each time Additional Units are issued by the Company,
including those issued in accordance with Section 6.3 hereof.  The admission of a new Member shall be
effective only after such new Member has executed and delivered to the Company
an instrument containing the notice address of the new Member, the new Member’s
ratification of this Agreement and agreement to be bound by it, and its
confirmation that the representations and warranties in Section 4.2
hereof are true and correct with respect to it.

 

(b)           The provisions of this Section 4.7
shall not apply to Dispositions of Units or admissions of Assignees in
connection therewith, such matters being governed by Section 4.5.

 

21

 

SECTION 4.8                                                                     Preemptive
Rights.

 

(a)           In General.  In the event the Company proposes to issue
Additional Units or Additional Securities in accordance with Section 4.7
hereof (each, a “Qualifying Issuance”), each Member is hereby granted
the preemptive, non-assignable right to purchase, at the relevant offering
price, that proportion of such Qualifying Issuance as is described below; provided,
however, that (i) no Member shall have any preemptive right to
purchase any Additional Units or Additional Securities as described in this Section 4.8
issued in connection with any merger or acquisition or similar transaction
entered into by or on behalf of the Company with an independent third party;
and (ii) the rights set forth in this Section 4.8 shall not
apply with respect to Units issuable pursuant to any equity-based employee
incentive plan; further  provided, that, for purposes of
clarification, no member of management or other employee of the Company or any
of its subsidiaries shall be considered, or deemed to be, Affiliates of any
Member solely as a result of such individual’s position with the Company or any
such subsidiary.

 

(b)           Procedure.  The Company shall deliver a notice (each, an
“Issuance Notice”) to the Members, which Issuance Notice shall set forth
all relevant information with respect to the Qualifying Issuance, including the
purchase price, the precise Additional Units or Additional Securities that are
the subject of the Qualifying Issuance and any other terms and conditions of
the Qualifying Issuance.  Each Member
shall have the right to acquire such Additional Units or Additional Securities
for the same purchase price, and on the same terms and conditions, as are set
forth in the Issuance Notice.  Each
Member shall have 10 Days following its receipt of the Issuance Notice in which
to notify the Company whether it desires to exercise its preemptive right,
which may only be exercised by such Member in proportion with its Sharing Ratio
immediately prior to the Qualifying Issuance. 
In the event that any Member does not purchase its proportional amount
of the Qualifying Issuance, such Member’s portion not so purchased may be
purchased by other Members purchasing their full proportional shares of the
Qualifying Issuance in such proportion as the Members desiring to purchase so
agree or, failing agreement, in proportion to their respective Sharing Ratios
immediately prior to the Qualifying Issuance based only on each such Member
desiring to purchase their full proportional shares of such Qualifying
Issuance.  Any Member that does not
respond during the applicable period shall be deemed to have waived such right.

 

SECTION 4.9                                                                     Restriction on
Dispositions of Securities of Members.

 

No Member that is an Entity
may cause or permit an equity interest or security, direct or indirect, in
itself to be Disposed of such that, after the Disposition, the Company would be
considered to have terminated within the meaning of Tax Code Section 708.  Any attempted Disposition of any such
interest or security shall be, and is hereby declared, null and void ab initio.

 

SECTION 4.10                                                              Withdrawal of
Member.

 

A Member has no right to
Withdraw from the Company.

 

22

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

SECTION 4.11                                                              Liability of
Members to Third Parties.

 

No Member shall be liable
for the debts, obligations or liabilities of the Company, including under a
judgment decree or order of a court, whether arising in contract, tort or
otherwise.

 

ARTICLE
5 

 

RESTRICTIVE
COVENANTS; CORPORATE OPPORTUNITIES

 

SECTION 5.1                                                                     Restrictive
Covenants.

 

(a)           Covenant Not To Compete.  For so long as a Member (directly or
indirectly through one or more Affiliates) owns any Units and for [****]
thereafter (with respect to such Member, the “Restricted Period”),
without the prior written consent of the Board (which consent may be withheld
in the Sole Discretion of the Board) in accordance with Section 3.5(f) hereof,
neither such Member nor any of its Affiliates shall, directly or indirectly (in
any capacity, including as a shareholder, partner, member, investor, lender,
principal, director, manager, officer, employee, consultant or agent of any
Person other than the Company), (i) engage in, or hold, acquire or finance
an interest, or otherwise invest in any Person (other than the Company) that
engages in, or operate, manage, control or participate in the operation,
management or control of, or consult to, advise or be employed by or an agent
of, any Prohibited Business in the Restricted Area; or (ii) enter into any
contract or other agreement with any Person for [****] (each, a “Contract
Opportunity”) without first (A) providing notice of such Contract
Opportunity to the Company and the other Members, which notice shall include
all material information with respect to such Contract Opportunity known to the
Member providing such notice; (B) providing the Company a reasonable
opportunity to participate in such Contract Opportunity; and (C) using
commercially reasonable best efforts to direct such Contract Opportunity to the
Company.  Notwithstanding the foregoing,
no Member shall be required to obtain the consent of the Board to pursue a
Prohibited Business with respect to the manufacture and supply of “any other
metal-based components reasonably related to wind turbine markets” as
contemplated above, unless the Company is capable at such time, or would be
capable in a reasonable time period thereafter using commercially reasonable
efforts, of manufacturing and supplying such products.

 

(b)           Covenant Not To Solicit.  During the Restricted Period for any Member,
without the prior written consent of the Company (which consent may be withheld
in the Company’s Sole Discretion), neither such Member nor any of its
Affiliates shall, directly or indirectly (in any capacity, including as a
shareholder, partner, member, investor, lender, principal, director, manager,
officer, employee, consultant or agent of any Person other than the Company) (i) solicit
or influence, or attempt to solicit or influence, any customer or potential
customer, supplier or other business relation of the Company that operates its
business within the Restricted Area, or any Person that is, or within the
[****] period immediately preceding the date of such activity was, a purchaser
of goods or services from the Company, to cease doing business with the Company
or to purchase any goods or services in [****] that are substantially similar
to any goods or services sold or provided by the Company in connection with its
business operations at any time during the Restricted Period from any Person
other than the Company, or knowingly prejudice the relationship between the
Company and any customer or potential customer, supplier or other business
relation of the Company; or (ii) employ, or recruit or solicit 

 

23

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

for employment, any Person who is, or within the
[****] period immediately preceding the date of such activity was, an employee
of the Company.

 

(c)           Passive Investments.  No Member’s ownership of not more than 4.99%
of any class of equity securities of any Entity having such class of equity
securities actively traded on a national securities exchange shall be deemed,
in and of itself, to violate the prohibitions set forth in Section 5.1(a) hereof.

 

(d)           Exception for Certain
Affiliates of Hirschfeld. 
Notwithstanding anything contained herein to the contrary, with respect
to any Entity that is at any time an Affiliate of Hirschfeld, but is at no time
a Hirschfeld Affiliate, the restrictive covenants set forth in this Section 5.1
shall apply only for so long as such Entity remains an Affiliate of Hirschfeld.

 

(e)           Covenant Not to Use or
Disclose Confidential Information.  Each Member understands and acknowledges that
during the Restricted Period, such Member may be making use of, acquiring or
adding to the Company’s Confidential Information.  In order to protect the Company’s
Confidential Information, each Member agrees that it shall not in any way
utilize any of the Company’s Confidential Information except in connection with
its efforts for the Company.  Each Member
further agrees not to use any of the Company’s Confidential Information for
such Member’s own benefit or the benefit of any Person, except the Company, at
any time.  Except as expressly authorized
in writing by the Company, no Member shall at any time copy, reproduce or
remove from the Company’s premises the original or any copies of the Company’s
Confidential Information, and no Member shall at any time disclose any of the
Company’s Confidential Information to any Person except in accordance with
discharging such Member’s duties to the Company.

 

(f)            Equitable Relief.  Each Member acknowledges and agrees that the
Company would be irreparably harmed by any violation of the restrictive
covenants set forth in this Section 5.1, that money damages would
be inadequate and the Company would have no adequate remedy at Law and that, in
addition to all other rights and remedies available to the Company at Law or in
equity, the Company will be entitled to injunctive and other equitable relief
to prevent or enjoin any such violation, without posting any bond or
security.  If any Member, or any of its
Affiliates, violates any of the restrictive covenants set forth in this Section 5.1,
the Restricted Period will automatically be extended for a period of time equal
to the sum of (i) the length of time during which the violation of this Section 5.1
was continuing; plus (ii) the length of time during which any court
proceedings necessary to stop such violation were ongoing.

 

(g)           Court Modification.  Notwithstanding the foregoing, if any of the
restrictive covenants set forth in this Section 5.1 is found by a
court of competent jurisdiction to contain limitations as to time, geographic
area or scope of activity that are not reasonable or impose a greater restraint
than is necessary to protect the goodwill or legitimate business interests of
the Company and its Affiliates, then such court is hereby authorized and
requested to reform such provisions to the minimum extent necessary to cause
the limitations contained in this Section 5.1 as to time,
geographic area and scope of activity to be reasonable and to impose a
restraint that is not greater than necessary to protect the goodwill and
legitimate business interests of the Company and its Affiliates.

 

24

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

SECTION 5.2                                                                     Corporate
Opportunities.

 

(a)           No Member, nor any Affiliate
of any Member, shall, directly or indirectly, acquire, finance or otherwise
manage, operate or invest in (or facilitate the acquisition, financing,
management or operation of, or investment in) any business that engages in, or
intends to engage in, the business of manufacturing or supplying towers [****]
for wind turbine markets, or any other metal-based components reasonably
related to wind turbine markets, located within [****] (each, a “Corporate
Opportunity”), except as provided in this Article 5; provided,
however, that, no Member shall be required to comply with this Section 5.2
with respect to a Corporate Opportunity relating to the manufacture and supply
of “any other metal-based components reasonably related to wind turbine
markets” as contemplated above, unless the Company is capable at such time, or
would be capable in a reasonable time period thereafter using commercially
reasonable efforts, of manufacturing and supplying such products.

 

(b)           In the event that any Member
or any Affiliate of any Member (in each case, the “Initiating Member”)
becomes aware of a Corporate Opportunity, the Initiating Member shall provide
notice of such Corporate Opportunity to the Company and the other Members
(collectively, the “Opportunity Members”), which notice shall include
all information with respect to such Corporate Opportunity as is known to the
Initiating Member.  The Board shall
determine, as promptly as reasonably practicable (but in any event within 10
Days), by a Majority Vote (which Majority Vote shall be determined without
reference to any Managers appointed by the Initiating Member), whether the
Company shall pursue such Corporate Opportunity and seek to consummate a
transaction in connection therewith.  In
the event that the Board declines such Corporate Opportunity for the Company,
the Initiating Member shall be free to pursue such Corporate Opportunity and
seek to consummate a transaction with respect thereto; provided, however,
that, in the event that the Initiating Member is able to consummate the
Corporate Opportunity on terms and conditions that are, considered in the
aggregate, more favorable to the Initiating Member than those presented to the
Company, the Initiating Member shall re-offer the Corporate Opportunity to the
Company on such terms and conditions, after which the Board shall determine, as
promptly as reasonably practicable (but in any event within 10 Days), by a
Majority Vote (which Majority Vote shall be determined without reference to any
Managers appointed by the Initiating Member or its Affiliates), whether the
Company shall pursue such Corporate Opportunity and seek to consummate a
transaction in connection therewith.  For
the avoidance of doubt, any investment held by any Member, or any Affiliate of
any Member, as of the Effective Date shall not be considered a Corporate Opportunity
hereunder.

 

(c)           In the event that any
Member, or any Affiliate of any Member, determines to produce “any other
metal-based components reasonably related to wind turbine markets” as
contemplated in Section 5.2(a) above, such Member shall be
considered for all purposes an “Initiating Member” as contemplated by Section 5.2(b) hereof
and the Company shall be entitled to exercise all of the rights as contemplated
by Section 5.2(b) hereof with respect thereto.

 

(d)           Notwithstanding anything
contained herein to the contrary, with respect to any Entity that is at any
time an Affiliate of Hirschfeld, but is at no time a Hirschfeld Affiliate, the
restrictive covenants set forth in this Section 5.2 shall apply
only for so long as such Entity remains an Affiliate of Hirschfeld.

 

25

 

(e)           Except as expressly set
forth in this Agreement, each Member may have other business and financial
interests and investments and may engage in any other business or trade,
profession or employment whatsoever, on its own account, or in partnership
with, or as an employee, officer, manager, director, creditor, advisor,
stockholder or member of any other Person, and no Member shall be required to
devote its entire time (or cause its respective officers, directors, employees
or agents to devote their entire time) to the business of the Company.

 

ARTICLE
6 

 

CAPITAL
CONTRIBUTIONS

 

SECTION 6.1                                                                     Contributions.

 

Each Member has contributed or shall contribute (or
has caused or shall cause to be contributed on its behalf) to the Company on or
before the Effective Date the Capital Contribution set forth opposite its name
on Schedule I attached hereto.

 

SECTION 6.2                                                                     Return of
Contributions.

 

A Member is not entitled to
the return of any part of its Capital Contributions or to be paid interest in
respect of either its Capital Account or its Capital Contributions.  An unrepaid Capital Contribution is not a
liability of the Company or of any Member. 
A Member is not required to contribute or to lend any cash or property
to the Company to enable the Company to return any Member’s Capital
Contributions.  No Member shall be
required to restore any deficit balance in its Capital Account.

 

SECTION 6.3                                                                     Additional
Capital Contributions.

 

(a)           The Board shall determine
from time to time what additional capital, if any, is needed by the Company to
fund operating deficits or for other Company purposes.  The Board shall specify in a written notice
(each, a “Capital Call Notice”) to each Member the total amount of
additional capital required at such time, the Capital Contribution required to
be made by each Member, which shall be determined on a pro rata basis in
accordance with the Sharing Ratios, and the date by which such Capital
Contributions are required to be made.  Each Member shall be obligated to make a
Capital Contribution to the Company in cash in the amount specified in the
Capital Call Notice.  On the first
Business Day after the due date specified in the Capital Call Notice, the
Company shall issue to each Member that has made its Capital Contribution as
specified in such Capital Call Notice that number of Additional Units that is
equal to the product of (i) the amount of the Capital Contribution made by
such Member times (ii) the quotient obtained by dividing (A) the
total number of outstanding Units on such date by (B) an amount equal to
the Outstanding Capital Contributions immediately prior to giving effect to all
Capital Contributions made pursuant to such Capital Call Notice.

 

(b)           If a Member (the “Declining
Member”) refuses to make a Capital Contribution required pursuant to Section 6.3(a) hereof
and within 45 Days of when required pursuant to Section 6.3(a) hereof,
each of the other Members (each, a “Non-Declining Member”) 

 

26

 

may, at its option and in the same proportion that
its Sharing Ratio bears to the aggregate Sharing Ratios of all Non-Declining
Members:

 

(i)            make an advance
to the Company in cash in an amount equal to the Capital Contribution that the
Declining Member failed to make, which advance shall be deemed a loan to the
Declining Member repayable on demand with interest at the lesser of 15% per
annum, compounded monthly, or the maximum rate of interest permitted by
applicable Law; or

 

(ii)           make an
additional Capital Contribution in cash in an amount equal to the amount of the
Capital Contribution which the Declining Member failed to make, in which event
the Non-Declining Members shall be issued that number of Additional Units that
would have been issued to the Declining Member pursuant to Section 6.3(a) hereof
if the Declining Member had made a Capital Contribution equal to that portion
of the Declining Member’s Capital Contribution made by the Non-Declining
Member;

 

provided, however, that in the event that there is
more than one Non-Declining Member and any Non-Declining Member does not
exercise its rights under this Section 6.3(b), then each of the
other Non-Declining Members may elect, at its option and in the same proportion
that its Sharing Ratio bears to the aggregate Sharing Ratios of all such
exercising Non-Declining Members, to exercise such non-exercising Non-Declining
Member’s rights under this Section 6.3(b) with respect to such
non-exercising Non-Declining Member’s pro rata portion of the Capital
Contribution that the Declining Member failed to make.

 

SECTION 6.4                                                                     Advances by
Members.

 

In the event that the
Company does not have sufficient cash to pay its obligations, any Member(s) that
may agree to do so may, with the consent of the Board acting by Majority Vote,
advance all or part of the needed funds to or on behalf of the Company.  An advance described in this Section 6.4
constitutes a loan from the Member to the Company, bears interest at the Prime
Rate from the date of the advance until the date of payment, and is not a
Capital Contribution.

 

SECTION 6.5                                                                     Capital
Accounts.

 

A Capital Account shall be
established and maintained for each Member.

 

ARTICLE
7 

 

ALLOCATIONS
AND DISTRIBUTIONS

 

SECTION 7.1                                                                     Restrictions on
Distributions.

 

Notwithstanding anything to
the contrary herein, no distributions shall be made pursuant to Sections 7.2
through 7.5 if prohibited by applicable Law or by any loan agreement,
security agreement, mortgage, debt instrument or other agreement or obligation
to which the Company is a party or by which it is bound or its assets are
subject; provided, however, that any limitation on 

 

27

 

distributions contemplated
hereby shall be borne by each Member in accordance with its Sharing Ratio.  If any principal or interest amount under any
deemed loan made by any Member to another Member pursuant to Section 6.3(b)(i) hereof
is outstanding on the date on which a distribution is to be made by the
Company, the Company shall distribute to the lending Member (on behalf of the
borrowing Member in repayment of such deemed loan) that amount of such
borrowing Member’s portion of such distribution as may be required in order to
repay in full the entire amount of such outstanding principal or interest under
such deemed loan.

 

SECTION 7.2                                                                     Distributions
of Net Cash Flow.

 

Net Cash Flow shall be
distributed as often as determined by the Board, and at least quarterly, in
accordance with and in the order and priority set forth in Section 7.4;
provided, however, that the Company shall be required to make the
distributions set forth in Sections 7.4(a) to the extent Net Cash Flow
is available therefor.

 

SECTION 7.3                                                                     Distributions
of Net Capital Proceeds.

 

Net Capital Proceeds from a
Capital Transaction (other than a Terminating Capital Transaction) shall be
distributed as soon after the consummation of such Capital Transaction as the
Board reasonably determines is practicable, in accordance with and in the order
and priority set forth in Section 7.4; provided, however,
that the Company shall be required to make the distributions set forth in Section 7.4(a)
to the extent Net Capital Proceeds are available therefor.

 

SECTION 7.4                                                                     Priority of
Distributions.

 

Distributions of Net Cash
Flow and Net Capital Proceeds shall be made in the following order and
priority:

 

(a)           First, if and to the extent
that the Company expects to report or does report to Members items of income or
gain on Form K-1 with respect to their Common Interests in connection with
the Company’s US partnership return on Form 1065 for any Fiscal Year in
excess of items of deduction or loss, without regard to the source thereof,
minimum distributions shall be made (i) to each Member that is not taxed
as a corporation for federal income tax purposes in an amount equal to the
amount of federal and state income tax that would be payable by an individual
with respect to that Member’s share of such net taxable income or gain (based
on the highest combined federal and state marginal income tax rate then
applicable to any individual in the United States, regardless of the actual tax
rate applicable to a Member to whom said net income or gain is allocated and,
for clarity, without taking into account any reduced rate of tax applicable to
long-term capital gains), and (ii) to each Member that is a corporation
for federal income tax purposes in an amount equal to the amount of federal and
state income and franchise taxes that would be payable by a corporation with
respect to that Member’s share of such net taxable income or gain (based on the
highest combined federal and state marginal income and franchise tax rate then
applicable to a corporation incorporated in such Member’s state of organization
with respect to income or receipts earned in said state, regardless of the
actual tax rate applicable to such Member to whom said net income or gain is
allocated).  The amount of such
distributions shall be based upon the amount of net taxable income and gain
allocated to the Members in accordance with this Agreement.  In no event shall distributions be made to
Members under this Section 7.4(a) for taxes actually paid by
the Company.  All such 

 

28

 

distributions shall be made by wire transfer not
later than the first due date, without regard to extensions, on which a federal
income tax return reflecting such income would be required to be filed.  Such distributions also shall be made earlier
on those dates upon which federal estimated tax payments are required for individuals
and corporations, as applicable (such distributions for federal estimated tax
payments to be based upon reasonable estimates).  In the event that on the second anniversary
of the Effective Date, and on each subsequent second anniversary thereafter,
the aggregate amounts distributed to the Members pursuant to this Section 7.4(a)
during the preceding two-year period are not in proportion to their Sharing
Ratios for such period, then as soon as reasonably practicable thereafter, and
to the extent Net Cash Flow is available therefor, the Company shall be
required to make additional distributions until the aggregate amounts
distributed to the Members pursuant to this Section 7.4(a) are
in proportion to their Sharing Ratios for such period.  Any federal, state or local income tax
withholding or other withholdings required by applicable Law shall be treated
as a distribution to the Member for whose benefit the withholding has been made
and, upon demand by the Company, such Member shall indemnify the Company in
full for any amounts imposed on the Company (including interest and penalties)
with respect to such withholdings; and

 

(b)           Second, to the Members in
accordance with their Sharing Ratios.

 

SECTION 7.5                                                                     Distributions
on Dissolution and Winding Up.

 

Upon the dissolution and
winding up of the Company, after adjusting the Capital Accounts for all
distributions made under Sections 7.2, 7.3 and 7.4 and all
allocations made under Article 7, all available proceeds
distributable to the Members as determined under Section 12.2 shall
be distributed to the Members in accordance with the positive balances in their
Capital Accounts.

 

SECTION 7.6                                                                     Allocations of
Profit.

 

After giving effect to the
special allocations set forth in Sections 7.11 through 7.18 and
in the order and priority of those Sections, Profit of the Company shall be
allocated to each Member in accordance with its Sharing Ratio.

 

SECTION 7.7                                                                     Allocations of
Loss.

 

After giving effect to the
special allocations set forth in Sections 7.10 through 7.18 and
in the order and priority of those Sections, Loss of the Company shall be
allocated to each Member in accordance with its Sharing Ratio.

 

SECTION 7.8                                                                     Adjustment of
Book Value.

 

Book Value with respect to
any asset of the Company is the asset’s adjusted tax basis for federal income
tax purposes, except as follows:

 

(a)           The initial Book Value of
any asset contributed to the Company by a Member shall be the fair market value
of the asset as of the date of contribution.

 

(b)           The Book Value of each asset
shall be its respective fair market value, as of (i) the issuance of an
interest in the Company to a new or existing Member in exchange for a 

 

29

 

Capital Contribution, (ii) the distribution by
the Company to a Member in liquidation of the Members’ interest in the Company,
(iii) the liquidation of the Company within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g),
and (iv) the grant of an interest in the Company as consideration for the
provision of services to or for the benefit of the Company by a new or existing
Member.  The determination of the fair
market value of property as required under this Section 7.8(b) shall
be made by an independent appraiser selected by a Majority Interest.

 

(c)           The Book Value of each asset
distributed to any Member will be the fair market value of the asset as of the
date of distribution.

 

(d)           The Book Value of each asset
will be increased or decreased to reflect any adjustment to the adjusted basis
of the asset under Tax Code Section 734(b) or 743(b), but only to the
extent that the adjustment is taken into account in determining Capital
Accounts under Treasury Regulation Section 1.704-1(b)(2)(iv)(m), provided
that the Book Value will not be adjusted under this Section 7.8(d) to
the extent that an adjustment under Section 7.8(b) is
necessary or appropriate in connection with a transaction that would otherwise
result in an adjustment under this Section 7.8(d).

 

(e)           Book Value will be adjusted
by Book Depreciation, and gain or loss on a disposition of any asset shall be
determined by reference to such asset’s Book Value as adjusted herein.

 

SECTION 7.9                                                                     Tax Allocations; Tax Code Section 704(c).

 

(a)           Except as otherwise provided
in this Section 7.9, each item of income, gain, loss, deduction and
credit determined for federal income tax purposes shall be allocated among the
Members in the same manner as each correlative item of income, gain, loss,
deduction and credit is allocated to the Members for purposes of maintaining their
respective Capital Accounts.

 

(b)           Under Tax Code Section 704(c) and
Treasury Regulation Section 1.704-3, income, gain, loss, and deduction
with respect to any asset contributed to the capital of the Company, solely for
federal income tax purposes, shall be allocated among the Members so as to take
into account any variation between the adjusted tax basis of the asset for
federal income tax purposes and the initial Book Value and if such asset has a
built-in loss (as defined in Tax Code Section 704(c)(1)(C)) such built-in
loss shall be taken into account only in determining the amount of items
allocated to the contributing Member.  If
the Book Value of any asset is adjusted under Section 7.8,
subsequent allocations of income, gain, loss and deduction, solely for federal
income tax purposes, will be allocated among the Members so as to take into
account any variation between the adjusted tax basis of the asset and its Book
Value as adjusted in the manner required under Treasury Regulation Section 1.704-3(a)(6).  The allocations required by this Section 7.9
shall be made using the traditional method with curative allocations as
provided in Treasury Regulation Section 1.704-3(c).

 

30

 

SECTION 7.10                                                              Stop Loss.

 

Notwithstanding any other
provision hereof to the contrary, no Loss (or item of loss or deduction) of the
Company shall be allocated to a Member if such allocation would result in a
deficit balance in such Member’s Adjusted Capital Account.  Such Loss (or item of loss or deduction)
shall be allocated among the Members whose Adjusted Capital Account balances
are positive in proportion to such positive balances to the extent necessary to
reduce the balances of such other Member’s positive Adjusted Capital Accounts
balances to zero, it being the intention of the Members that no Member’s
positive Adjusted Capital Account balance shall fall below zero while any other
Member’s positive Adjusted Capital Account balance has a positive balance.

 

SECTION 7.11                                                              Minimum Gain
Chargeback.

 

Notwithstanding any other
provision hereof to the contrary, if there is a net decrease in Minimum Gain
for a taxable year (or if there was a net decrease in Minimum Gain for a prior
Fiscal Year and the Company did not have sufficient amounts of income and gain
during prior years to allocate among the Members under this Section 7.11),
then items of income and gain shall be allocated to each Member in an amount
equal to such Members’ share of the net decrease in such Minimum Gain (as
determined pursuant to Treasury Regulation Section 1.704-2(g)(2)).  It is the intent of the Members that any
allocation pursuant to this Section 7.11 shall constitute a
“minimum gain chargeback” under Treasury Regulation Section 1.704-2(f) and
shall be interpreted consistently therewith.

 

SECTION 7.12                                                              Member
Nonrecourse Minimum Gain Chargeback.

 

Notwithstanding any other
provision hereof to the contrary (except for Section 7.11 regarding
minimum gain chargeback), if there is a net decrease in Member Nonrecourse
Minimum Gain for a taxable year (or if there was a net decrease in Member
Nonrecourse Minimum Gain for a prior Fiscal Year and the Company did not have
sufficient amounts of income and gain during prior years to allocate among the
Members under this Section 7.12), then items of income and gain
shall be allocated to each Member in an amount equal to such Member’s share of
the net decrease in such Member’s Nonrecourse Minimum Gain (as determined
pursuant to Treasury Regulation Section 1.704-2(i)(4)).  It is the intent of the Members that any
allocation pursuant to this Section 7.12 shall constitute a
“minimum gain chargeback” under Treasury Regulation Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.

 

SECTION 7.13                                                              Qualified
Income Offset.

 

A Member who unexpectedly
receives any adjustment, allocation or distribution described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) will be
specially allocated items of income or gain (after the allocations required by Section 7.11
regarding minimum gain chargeback and Section 7.12 regarding
minimum gain chargeback for Member Nonrecourse Debt but before any other
allocation required by this Article 7) in an amount and in the
manner sufficient to eliminate any deficit balance in its Adjusted Capital
Account as quickly as possible; provided, however, that an
allocation shall be made pursuant to this Section 7.13 only if and
to the extent that such Member would have a deficit in his Adjusted Capital
Account 

 

31

 

after all allocations in
this Article 7 have been tentatively made as if Section 7.13
were not in the Agreement.  This Section 7.13
is intended to constitute a “qualified income offset” pursuant to  the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.

 

SECTION 7.14                                                              Gross Income
Allocation.

 

Except as required by Sections 7.11,
7.12 and 7.13, each Member who has a deficit Adjusted Capital
Account balance at the end of the taxable year will be specially allocated
items of income and gain in the amount of the excess as quickly as possible.

 

SECTION 7.15                                                              Nonrecourse
Deductions.

 

All Nonrecourse Deductions
shall be allocated among the Members in accordance with their Sharing Ratios.

 

SECTION 7.16                                                              Member
Nonrecourse Deductions.

 

All Member Nonrecourse
Deductions attributable to Member Nonrecourse Debt shall be allocated among the
Members bearing the economic risk of loss for such debt as determined under
Treasury Regulation Section 1.704-2(b)(4); provided, however,
that if more than one Member bears the economic risk of loss for such debt, the
Member Nonrecourse Deductions attributable to such debt shall be allocated to
and among the Members in the same proportion that they bear the economic risk
of loss for such debt.  This Section 7.16
is intended to comply with the provisions of Treasury Regulation Section 1.704-2(i) and
shall be interpreted consistently therewith.

 

SECTION 7.17                                                              Tax Code Section 754
Adjustments.

 

To the extent an adjustment
to the adjusted tax basis of any Company asset pursuant to Tax Code Section 734(b) or
Tax Code Section 743(b) is required to be taken into account in
determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
Book Value of the Company’s assets shall be adjusted as set forth in Section 7.8,
and any such adjustment in Book Value shall be treated as gain or loss (as the
case may be) in computing Profit or Loss.

 

SECTION 7.18                                                              Curative
Allocation.

 

If any items of income and
gain (including gross income) or loss and deduction are allocated to a Member
pursuant to Sections 7.10 through 7.13, Section 7.16
and Section 7.17, then, prior to any allocation pursuant to Sections 7.6
or 7.7 and subject to Sections 7.10 through 7.13, Section 7.16
and Section 7.17, items of income and gain (including gross income)
and items of loss and deduction for subsequent periods shall be allocated to
the Members in a manner designed to result in each Member’s Adjusted Capital
Account having a balance equal to the balance it would have had had such
allocation of income and gain (including gross income) and item of loss and
deduction not occurred pursuant to Sections 7.10 through 7.13, Section 7.16
and Section 7.17.  For
purposes of applying the foregoing provisions of this Section 7.18:  (i) allocations hereunder with respect
to all allocations under Section 7.17 shall be made only to the 

 

32

 

extent that the Board
reasonably determines that such allocations are consistent with the economic
agreement of the Members; (ii) allocations hereunder with respect to
allocations under Section 7.11 shall not be made prior to a year in
which there is a net decrease in Minimum Gain and then only to the extent that the
Board reasonably determines that such allocations are necessary to avoid a
potential distortion in the economic agreement of the Members and allocations
hereunder with respect to allocations under Section 7.14 shall be
made only to the extent that the Board reasonably determines that such
allocations are necessary to avoid a potential distortion in the economic
agreement of the Members; and (iii) allocations hereunder with respect to
allocations under Section 7.12 shall not be made prior to a year in
which there is a net decrease in Member Nonrecourse Minimum Gain and then only
to the extent that the Board reasonably determines that such allocations are
necessary to avoid a potential distortion in the economic agreement of the
Members and allocations hereunder with respect to allocations under Section 7.16
shall be made only to the extent that the Board reasonably determines that such
allocations are necessary to avoid a potential distortion in the economic
agreement of the Members.

 

SECTION 7.19                                                              Common Interests
in Company.

 

Notwithstanding any other
provision of this Agreement, no allocation of Profit or Loss or item thereof
will be made to a Member if the allocation would not have “substantial economic
effect” under Treasury Regulation Section 1.704-1(b)(2)(ii) or otherwise would
not be in accordance with the Members’ interests in the Company within the
meaning of Treasury Regulation Section 1.704-1(b)(4) or 1.704-2(b)(1).  The Board will have the authority to
reallocate any item in accordance with this Section 7.19; provided,
however, that (a) no such change shall have a material adverse
effect upon the amount of cash or other property distributable to any Member, (b) each
Member shall have 30 Days prior notice of such proposed modification and (c) if
such proposed modification would be material, the Company shall have received
an opinion of tax counsel to the Company that such modification is necessary to
comply with Tax Code Section 704(b).

 

SECTION 7.20                                                              Withholding.

 

All amounts required to be
withheld pursuant to Tax Code Section 1446 or any other provision of
federal, state, or local tax Law shall be treated as amounts actually
distributed to the affected Members for all purposes under this Agreement.

 

SECTION 7.21                                                              Varying Common
Interests.

 

All Profit and Loss (and any
item of income, gain, loss, deduction or credit specially allocated under this
Agreement) shall be allocated, and all distributions shall be made, to the
Persons shown on the records of the Company to have been Members as of the last
calendar day of the period for which the allocation or distribution is to be
made.  Notwithstanding the foregoing, if
during any taxable year there is a change in any Member’s interest in the
Company, the Members agree that their allocable shares of the Profit and Loss
(or items thereof) for the taxable year shall be determined on any method
determined by the Board to be permissible by Tax Code Section 706 and the
related Treasury Regulations to take account of the Member’s varying interest.

 

33

 

SECTION 7.22                                                              Common Interest
in Company Profits.

 

Pursuant to
Section 1.752—3(a)(3) of the Treasury Regulations, the Members’
interest in Company profits for purposes of determining the Members’
proportionate share of the excess nonrecourse liabilities (as defined in
Section 1.752—3(a)(3) of the Treasury Regulations) of the Company
shall be determined in accordance with their Sharing Ratios.

 

ARTICLE
8 

EXCULPATION; INDEMNIFICATION

 

SECTION 8.1                                                                     In General.

 

Except as otherwise provided
by any written employment, consulting or similar agreement, if applicable, or
unless otherwise expressly required by Law, no executive officer, manager or
Member of the Company (including any former executive officer, manager or
Member) (each such Person referred to herein as a “Covered Person”)
shall have any liability to the Company or to any Member for any loss suffered
by the Company or any Member which arises out of any act or omission or alleged
act or omission of the Covered Person in the Covered Person’s capacity as a
Covered Person to the extent that the Covered Person acted in good faith and in
a manner the Covered Person reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the Covered Person’s conduct was
unlawful.  Each Covered Person shall be
indemnified by the Company against any losses, judgments, liabilities, claims,
damages, costs, expenses (including reasonable legal fees and other expenses actually
incurred in investigating or defending against any such losses, judgments,
liabilities or claims and expenses actually incurred enforcing this Agreement)
and amounts paid in settlement of any claim (approved in advance and in good
faith by the Board) sustained by any of them by reason of any act or omission
or alleged act or omission in connection with the activities of the Company
(including any subsidiaries thereof) unless there is a final judicial
determination by a court of competent jurisdiction to which all rights of
appeal have been exhausted or expired that the Covered Person did not act in
good faith and in a manner the Covered Person reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe the Covered Person’s
conduct was unlawful.  The Covered Person
may rely in good faith upon the advice of legal counsel.

 

SECTION 8.2                                                                     Insurance.

 

To the extent available on
commercially reasonable terms, the Company may purchase, in the sole and
absolute discretion of the Board, at the Company’s expense, insurance
(including without limitation, liability insurance policies and errors and
omissions policies) to cover any liabilities covered by this Article 8
in such amount and with such deductibles as the Company may determine; provided,
however, that the failure to obtain such insurance shall not affect the
right to indemnification of any Covered Person. 
Any such insurance may extend beyond the termination of the Company for
a commercially reasonable period.  The
Company shall be subrogated to the Covered Person’s rights under such
indemnification or insurance.  If any Covered
Person recovers any amounts in respect of any such liabilities from insurance
coverage or any third party source, then such Covered Person shall, to the
extent that such recovery is 

 

34

 

duplicative, reimburse the
Company for any amounts previously paid to it by the Company in respect of such
liabilities.  The Company shall not incur
the cost of that portion of any insurance, other than public liability
insurance, which insures any party against any liability the indemnification of
which is herein prohibited.

 

SECTION 8.3                                                                     Advancements.

 

The Company may, in the good
faith judgment of the Board, pay the legal fees and other expenses reasonably
incurred by any Covered Person hereunder in connection with any proceeding in
advance of the final disposition of such proceeding, so long as the Company
receives a written undertaking, in form and content approved by the Company’s
legal counsel in its reasonable judgment, by such Covered Person to repay the
full amount advanced if there is a final judicial determination by a court of
competent jurisdiction, as to which all rights of appeal have been exhausted or
expired, that such Covered Person did not satisfy the standards that entitle it
to indemnification pursuant to the terms of this Article 8.

 

SECTION 8.4                                                                     Nonexclusivity
of Rights.

 

The right of indemnification
hereby provided shall not be exclusive of, and shall not affect, any other
rights to which any Covered Person may be entitled.  Nothing contained in this Article 8
shall limit any lawful rights to indemnification existing independently of this
Article 8.

 

SECTION 8.5                                                                     No Increase in
Member’s Liability.

 

The indemnification rights
provided by this Article 8 shall not be construed to increase the
liability of Members as set forth in Section 4.11 hereof.

 

SECTION 8.6                                                                     Beneficiaries.

 

The indemnification rights
provided by this Article 8 shall inure to the benefit of the heirs,
executors, administrators, successors and assigns of each Covered Person.

 

SECTION 8.7                                                                     Timing; Effect
of Amendments.

 

The provisions of this Article 8
shall continue to afford protection to each Covered Person regardless of
whether such Covered Person remains in the position or capacity pursuant to
which such Covered Person became entitled to indemnification under this Article 8
and regardless of any subsequent amendment to this Agreement; provided, however,
that no such amendment shall reduce or restrict the extent to which the
indemnification provisions of this Article 8 apply to actions taken
or omissions made or alleged actions taken or omissions made prior to the date
of such amendment.

 

SECTION 8.8                                                                     Reserves.

 

If deemed appropriate or
necessary by the Board, the Company may establish reserves, escrow accounts or
similar accounts to fund its obligations under this Article 8.

 

35

 

SECTION 8.9                                                                     Survival.

 

The provisions of this Article 8
shall survive the termination or dissolution of the Company.

 

ARTICLE
9 

TAXES

 

SECTION 9.1                                                                     Tax Returns.

 

The Company shall prepare
and timely file all federal, state, local and foreign tax returns required to
be filed by the Company.  Each Member
shall furnish to the Company all pertinent information in its possession
relating to the Company’s operations that is necessary to enable the Company’s
tax returns to be timely prepared and filed. 
The Company shall deliver a copy of each such return to the Members on
or before 15  Days prior to the due
date of any such return (including filing extensions), together with such
additional information as may be required by the Members in order for the
Members to file their individual returns reflecting the Company’s
operations.  The Company shall bear the
costs of the preparation and filing of its returns.

 

SECTION 9.2                                                                     Tax Elections.

 

The Board shall, without any
further consent of the Members being required (except as specifically required
herein), have authority, in its Sole Discretion, to make any and all elections
for federal, state, local and foreign tax purposes including, without
limitation, any election, if permitted by applicable Law:  (a) to elect to amortize the
organizational expenses of the Company ratably over a period of 180 months as
permitted by Tax Code Section 709(b); (b) to adjust the basis of
property pursuant to Tax Code Sections 754, 734(b), and 743(b), or comparable
provisions of state, local or foreign Law, in connection with transfers of
Units and Company distributions; (c) to extend the statute of limitations
for assessment of tax deficiencies against the Members with respect to
adjustments to the Company’s federal, state, local, or foreign tax returns; and
(d) to the extent provided in Tax Code Sections 6221 through 6231 and
similar provisions of federal, state, local or foreign Law, to represent the
Company and the Members before taxing authorities or courts of competent jurisdiction
in tax matters affecting the Company or the Members in their capacities as
Members, and to file any tax returns and execute any agreements or other
documents relating to or affecting such tax matters, including agreements or
other documents that bind the Members with respect to such tax matters or
otherwise affect the rights of the Company and the Members.

 

Neither the Company nor any
Member may make an election for the Company to be treated as an association
taxable as a corporation or excluded from the application of the provisions of
subchapter K of chapter 1 of subtitle A of the Tax Code or any similar
provisions of applicable state Law and no provision of this Agreement shall be
construed to sanction or approve such an election.

 

36

 

SECTION 9.3                                                                     Tax Matters
Member.

 

(a)                                  The “tax
matters partner” of the Company pursuant to Tax Code
Section 6231(a)(7) shall be the Member that is designated by a
Majority Interest.  The “tax matters
partner” is referred to herein as the “Tax Matters Member”.  The Tax Matters Member shall take such action
as may be necessary to cause to the extent possible each other Member to become
a “notice partner” within the meaning of Tax Code Section 6223.  Unless otherwise changed by a Majority
Interest, the initial Tax Matters Member shall be Hirschfeld.

 

(b)                                 Any cost or
expense incurred by the Tax Matters Member in connection with its duties,
including the preparation for or pursuance of administrative or judicial
proceedings, shall be paid by the Company.

 

(c)                                  Any Member that
enters into a settlement agreement with respect to any Company item (within the
meaning of Tax Code Section 6231(a)(3)) shall notify the other Members of
such settlement agreement and its terms within 90 Days from the date of the
settlement.

 

(d)                                 No Member shall
file a request pursuant to Tax Code Section 6227 for an administrative
adjustment of Company items for any taxable year without first notifying the
other Members.  If a Majority Interest
consents to the requested adjustment, the Tax Matters Member shall file the
request for the administrative adjustment on behalf of the Members.  If such consent is not obtained within 30
Days from such notice, or within the period required to timely file the request
for administrative adjustment, if shorter, any Member, including the Tax
Matters Member, may file a request for administrative adjustment on its own
behalf.  Any Member intending to file a
petition under Tax Code Sections 6226, 6228, or other Tax Code Section with
respect to any item involving the Company shall notify the other Members of
such intention and the nature of the contemplated proceeding.  In the case where the Tax Matters Member is
the Member intending to file such petition on behalf of the Company, such
notice shall be given within a reasonable period of time to allow the other
Members to participate in the choosing of the forum in which such petition will
be filed.

 

(e)                                  If any Member
intends to file a notice of inconsistent treatment under Tax Code
Section 6222(b), such Member shall give reasonable notice under the
circumstances to the other Members of such intent and the manner in which the
Member’s intended treatment of an item is (or may be) inconsistent with the
treatment of that item by the other Members.

 

ARTICLE
10 

BOOKS, RECORDS AND BANK ACCOUNTS

 

SECTION 10.1                                                              Books and
Records.

 

The Board shall keep or
cause to be kept at the principal office of the Company complete and accurate
books and records of the Company and its subsidiaries, supporting documentation
of the transactions with respect to the conduct of the Company’s and its
subsidiaries’ business, and minutes of the proceedings of their respective
Managers, Members and committees.  Such
records shall include, without limitation, complete and accurate information
regarding the status 

 

37

 

of the business and
financial condition of the Company and its subsidiaries; a copy of the
Certificate and this Agreement and all amendments thereto, together with
executed copies of any written powers of attorney pursuant to which the
Certificate or this Agreement or any amendments thereto have been executed; a
current list of the names and last known business, residence, or mailing
addresses of all Managers and Members; promptly after becoming available, a
copy of the Company’s federal, state, and local tax returns for each year; and
complete and accurate information regarding the amount of cash and a
description and statement of the agreed value of any other property or services
contributed by each Member and that each Member has agreed to contribute in the
future, and the date on which each became a Member.  In furtherance and not in limitation of the
foregoing, the Company shall keep and maintain the books, records and other
materials described in the Act,
and shall make such books, records and other materials available to any Member
or Assignee promptly upon any such Person’s request made in accordance with the
Act, subject to the execution of any written agreement as may be required by
the Company in its Sole Discretion requiring such Person to hold such
information in confidence and to use such information solely in its role as a
Member or Assignee and not in any other role or for any other purpose.  Such information shall be made available at
the requesting Member’s expense and may be viewed at a location and time
determined by the Company acting reasonably.

 

SECTION 10.2                                                              Accounts.

 

The authorized officers of
the Company shall establish one or more separate bank and investment accounts
and arrangements for the Company, which shall be maintained in the Company’s
name with financial institutions and firms that such authorized officers
determine.  The Company may not commingle
its funds with the funds of any Member.

 

ARTICLE
11 

CERTIFICATES

 

SECTION 11.1                                                              Certificates
Representing Units.

 

The Company may issue one or
more certificates evidencing the Units of each Member in the form of Exhibit A
attached hereto; provided, however, that no such certificate
shall be issued to evidence any Partial Rights. 
Certificates shall be executed on behalf of the Company by the Chairman
of the Board.  The Members hereby agree
that the Units shall be treated as a “security” for purposes of and shall be
governed by Article 8 of the Delaware Uniform Commercial Code—Investment
Securities, as amended from time to time.

 

SECTION 11.2                                                              Registration of
Transfer and Exchange.

 

The Board shall cause to be
kept on behalf of the Company a register (the “Rights Register”) in
which, subject to such reasonable regulations as it may prescribe, the Company
will provide for the registration and the transfer of the certificates.  Except as otherwise provided herein, the
Company shall not recognize any transfer of Units until the certificates
evidencing such Units, if any, are surrendered for registration of transfer and
such certificates are accompanied by a transfer application (in such form as
the Company may require) duly executed by the transferee (or the transferee’s
attorney-in-fact duly authorized in writing). 
Except as 

 

38

 

otherwise set forth in Section 4.5
hereof, no charge shall be imposed by the Company for such transfer; provided,
however, that, as a condition to the issuance of any new certificate
under this Section 11.2, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed with respect thereto.

 

SECTION 11.3                                                              Mutilated,
Destroyed, Lost or Stolen Certificates.

 

If any mutilated certificate
is surrendered to the Company, the Company shall execute and deliver in
exchange therefor, a new certificate evidencing the same Units as the
certificate so surrendered.  The Company
shall execute and deliver a new certificate in place of any certificate
previously issued if the record holder of the certificate:

 

(a)                                  makes proof by
affidavit, in form and substance satisfactory to the Company, that a previously
issued certificate has been lost, destroyed or stolen;

 

(b)                                 requests the
issuance of a new certificate before the Company has received notice that the
certificate has been acquired by a purchaser for value in good faith and
without notice of an adverse claim;

 

(c)                                  if requested by
the Company, delivers to the Company such security or indemnity as may be
required by the Company, in form and substance reasonably satisfactory to the
Company, with surety or sureties and with fixed or open penalty as the Company
may direct, in its reasonable discretion, to indemnify the Company from any
claim that may be made on account of the alleged loss, destruction or theft of
the certificate; and

 

(d)                                 satisfies any
other reasonable requirements imposed by the Company.

 

If a Member fails to notify
the Company within a reasonable time after he or she has notice of the loss,
destruction or theft of a certificate, and a transfer of such certificate is
registered before the Company, the Member shall be precluded from making any
claim against the Company for such transfer or for a new certificate.  As a condition to the issuance of any
certificate under this Article 11, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.

 

SECTION 11.4                                                              Record Holder.

 

The Company shall be
entitled to recognize the record holder as the Member with respect to any
certificate and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such certificate on the part of any person,
whether or not the Company shall have actual or other notice thereof, except as
otherwise provided by Law.

 

39

 

ARTICLE
12 

EVENTS REQUIRING WINDING UP

 

SECTION 12.1                                                              Dissolution.

 

The Company shall dissolve
and its affairs shall be wound up on the first to occur of the following events
(each a “Dissolution Event”):

 

(a)                                  the consent of
a Majority Interest; and

 

(b)                                 the events
requiring winding up as set forth in Section 18-801 of the Act or any
successor provision thereof.

 

No other event will cause
the Company to dissolve.

 

SECTION 12.2                                                              Winding Up and
Termination.

 

On the occurrence of a
Dissolution Event, a Majority Interest shall appoint a liquidator.  The liquidator shall proceed diligently to
wind up the affairs of the Company and make final distributions as provided
herein and in the Act.  The costs of
winding up shall be treated as a Company expense.  Until final distribution, the liquidator
shall continue to operate the Company properties with all of the power and
authority of the Members.  The steps to
be accomplished by the liquidator are as follows:

 

(a)                                  as promptly as
possible after dissolution and again after final winding up, the liquidator
shall cause a proper accounting to be made by a recognized firm of certified
public accountants of the Company’s assets, liabilities, and operations through
the last calendar day of the month in which the dissolution occurs or the final
winding up is completed, as applicable;

 

(b)                                 the liquidator
shall cause the notice described in the Act, if any, to be mailed to each known
creditor of and claimant against the Company in the manner described in the
Act;

 

(c)                                  the liquidator
shall pay, satisfy or discharge from Company funds all of the debts,
liabilities and obligations of the Company (including all expenses incurred in
winding up and any advances described in Section 6.3 hereof) or
otherwise make adequate provision for payment and discharge thereof (including
the establishment of a cash escrow fund for contingent liabilities in such
amount and for such term as the liquidator may reasonably determine); and

 

(d)                                 all remaining
assets of the Company shall be distributed to the Members as follows:

 

(i)                                     the liquidator
may sell any or all Company property, including to Members, and any resulting
gain or loss from each sale shall be computed and allocated to the Capital
Accounts of the Members in accordance with the provisions of Article 7;

 

(ii)                                  with respect to
all Company property that has not been sold, the fair market value of that
property shall be determined and the Capital Accounts of the 

 

40

 

Members
shall be adjusted to reflect the manner in which the unrealized income, gain,
loss, and deduction inherent in property that has not been reflected in the
Capital Accounts previously would be allocated among the Members if there were
a taxable disposition of that property for the fair market value of that
property on the date of distribution;

 

(iii)                               Company
property shall be distributed among the Members in accordance with Section 7.5
hereof; and those distributions shall be made by the end of the taxable year of
the Company during which the liquidation of the Company occurs (or, if later,
90 Days after the date of the liquidation); and

 

All distributions in kind to
the Members shall be made subject to the liability of each distributee for
costs, expenses, and liabilities theretofore incurred or for which the Company
has committed prior to the date of termination and those costs, expenses, and
liabilities shall be allocated to the distributee pursuant to this Section 12.2.  The distribution of cash and/or property to a
Member in accordance with the provisions of this Section 12.2
constitutes a complete return to the Member of its Capital Contributions and a
complete distribution to the Member of its Units and all the Company’s property
and constitutes a compromise to which all Members have consented under the Act.

 

To the extent that a Member
returns funds to the Company, it has no claim against any other Member for
those funds.

 

SECTION 12.3                                                              Deficit Capital
Accounts.

 

No Member will be required
to pay to the Company, to any other Member, or to any third party any deficit
balance which may exist from time to time in the Member’s Capital Account.

 

SECTION 12.4                                                              Certificate of
Cancellation.

 

On completion of the
distribution of Company assets as provided herein, the Company shall file a
Certificate of Cancellation with the Secretary of State of the State of Delaware,
cancel any other filings made pursuant to Section 2.5 hereof, and
take such other actions as may be necessary to terminate the existence of the
Company.

 

ARTICLE
13 

GENERAL PROVISIONS

 

SECTION 13.1                                                              Offset.

 

Whenever the Company is to
pay any sum to any Member (including a distribution under Article 7),
any amounts that Member or any of its Affiliates owes the Company may be
deducted from that sum before payment and the amount so deducted shall be
treated as distributions to such Member for purposes of Sections 7.2
through 7.5 hereof.

 

41

 

SECTION 13.2                                                              Notices.

 

Except as expressly set
forth to the contrary in this Agreement, all notices, requests, or consents
provided for or permitted to be given under this Agreement must be in writing
and must be delivered to the recipient in person, by courier or mail or by
facsimile, telegram, telex, cablegram, internet mail or email or similar
transmission; and a notice, request or consent given under this Agreement is
effective on receipt by the Person to receive it.  All notices, requests and consents to be sent
to a Member must be sent to or made at the addresses given for that Member on Schedule
I attached hereto or in the instrument described in Section 4.5(b)(vii)(A)(II) hereof,
or such other address as that Member may specify by notice to the other
Members.  Whenever any notice is required
to be given by Law, the Certificate or this Agreement, a written waiver
thereof, signed by the Person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such notice.

 

SECTION 13.3                                                              Entire
Agreement.

 

This Agreement constitutes
the entire agreement of the Members relating to the governance of the Company
and its equity interests and supersedes all prior written or oral, and all
contemporaneous oral, contracts, agreements, understandings, negotiations and
discussions of the Members with respect to the governance of the Company and
its equity interests.

 

SECTION 13.4                                                              Effect of
Waiver or Consent.

 

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

 

SECTION 13.5                                                              Amendment or
Restatement; No Waiver.

 

This Agreement may be
amended or restated only by a written instrument adopted, executed and agreed
to by a Majority Interest; provided, however, that, in addition
to such agreement by a Majority Interest, (a) an amendment or restatement
reducing a Member’s Sharing Ratio (other than to reflect changes or reductions
otherwise permitted by this Agreement) is effective only with that Member’s
consent; (b) an amendment or restatement reducing the required Sharing
Ratio or other measure for any consent or vote in this Agreement is effective
only with the consent of Members having the Sharing Ratio or other measure
theretofore required; (c) an amendment or restatement modifying Article 3
hereof with respect to any rights granted to a Member is effective only with
the consent of such Member; (d) an amendment or restatement modifying Section 3.5(f) hereof
in any manner is effective only with the unanimous consent of all of the
Members; and (e) an amendment or restatement of the type described in Section 4.7
hereof may be adopted as therein provided.

 

42

 

SECTION 13.6                                                              Binding Effect.

 

Subject to the restrictions
on Dispositions set forth in this Agreement, this Agreement is binding on and
inures to the benefit of the Members and their respective heirs, legal
representatives, successors, and assigns.

 

SECTION 13.7                                                              Governing Law,
Severability.

 

THIS AGREEMENT AND ALL
DISPUTES BETWEEN THE PARTIES UNDER OR RELATING TO THIS AGREEMENT OR THE FACTS
AND CIRCUMSTANCES LEADING TO ITS EXECUTION, WHETHER IN CONTRACT, TORT OR
OTHERWISE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT
MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF
ANOTHER JURISDICTION.  In the event of a
direct conflict between the provisions of this Agreement and (a) any
provision of the Certificate or (b) any mandatory, non-waivable provision
of the Act, such provision of the Certificate or the Act shall control.  If any provision of the Act provides that it
may be varied or superseded by agreement of the Members, such provision shall
be deemed superseded and waived in its entirety if this Agreement contains a
provision addressing the same issue or subject matter.  If any provision of this Agreement or the
application thereof to any Person or circumstance is held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of that provision to other Persons or circumstances shall not be
not affected thereby and that provision shall be enforced to the greatest
extent permitted by Law.

 

SECTION 13.8                                                              Further
Assurances.

 

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

 

SECTION 13.9                                                              Waiver of
Certain Rights.

 

Each Member irrevocably
waives any right it may have to maintain any action for dissolution of the
Company or for partition of the property of the Company.

 

SECTION 13.10                                                       Directly or
Indirectly.

 

Where any provision of this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person, including actions taken by or
on behalf of any Affiliate of such Person.

 

SECTION 13.11                                                       Indemnification
by Members.

 

To the fullest extent
permitted by Law, each Member shall indemnify the Company and each other Member
and hold them harmless from and against all losses, costs, liabilities, 

 

43

 

damages and expenses
(including costs of suit and reasonable attorney’s fees) they may incur on
account of any breach by that Member of this Agreement.

 

SECTION 13.12                                                       Counterparts.

 

This Agreement may be
executed in any number of counterparts (including, without limitation, by
facsimile or portable document format (.pdf)) for the convenience of the
parties hereto, with the same effect as if all signing parties had signed the
same document.  Each such counterpart
shall be deemed an original, but all such counterparts shall be construed
together and constitute one and the same instrument.

 

SECTION 13.13                                                       Construction.

 

Unless the context requires
otherwise: (a) the gender (or lack of gender) of all words used in this
Agreement includes the masculine, feminine, and neuter; (b) references to
Articles and Sections refer to Articles and Sections of this Agreement;
(c) references to Exhibits, Appendices and Schedules are to the Exhibits,
Appendices and Schedules attached to this Agreement, each of which is hereby
incorporated by reference and made a part hereof for all purposes; and
(d) references to “including” in this Agreement shall mean “including,
without limitation.”  The article and
section headings contained in this Agreement are for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.

 

SECTION 13.14                                                       No Third Party
Rights.

 

Except for rights expressly
granted hereunder to the Covered Persons, this Agreement is intended solely for
the benefit of the parties hereto and is not intended to confer any benefits
upon, or create any rights in favor of, any Person other than the parties
hereto.  The Covered Persons have the
rights granted to them under this Agreement and may enforce the same.

 

SECTION 13.15                                                       Creditors; No
Waiver.

 

None of the provisions of
this Agreement shall be for the benefit of or enforceable by any creditors of
the Company or any of its Affiliates, and no creditor who makes a loan to the
Company or any of its Affiliates may have or acquire at any time as a result of
making the loan any direct or indirect interest in any Profit, Loss,
distributions, dividends, capital or property of the Company other than as a
creditor.  Notwithstanding any provision
to the contrary contained herein, nothing contained herein shall be construed
to limit, waive, amend or alter the terms and provisions of any loan agreement
or related document among the Company or any of its subsidiaries, on the one
hand, and any Member or any of their respective Affiliates, on the other, or
any rights or remedies available to any lender thereunder as creditors of the
Company or any of its Affiliates.  This
restriction shall terminate only at such time as the Company or its Affiliates
under any such agreements with such lenders have paid in full any and all
obligations thereunder.

 

SECTION 13.16                                                       Rule of
Construction.

 

The general rule of
construction for interpreting a contract, which provides that the provisions of
a contract should be construed against the party preparing the contract, is
waived 

 

44

 

by the parties hereto.  Each party acknowledges that such party was
represented by separate legal counsel in this matter who participated in the
preparation of this Agreement or such party had the opportunity to retain legal
counsel to participate in the preparation of this Agreement but elected not to
do so, despite the recommendations of the other parties to so retain legal
counsel.

 

[SIGNATURE PAGE FOLLOWS]

 

45

 

IN WITNESS WHEREOF, the
undersigned have executed this Agreement effective as of the date first set
forth above.

 

	
   

  	
  THE COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  MARTIFER-HIRSCHFELD
  ENERGY SYSTEMS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Pedro Dinis

  
	
   

  	
  Name:

  	
  Pedro
  Dinis

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Dennis Hirschfeld

  
	
   

  	
  Name:

  	
  Dennis
  Hirschfeld

  
	
   

  	
  Its:

  	
  Chairman
  of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Victor L. Vescovo

  
	
   

  	
  Name:

  	
  Victor
  L. Vescovo

  
	
   

  	
  Its:

  	
  Secretary

  

 

[First
Amended and Restated LLC Agreement — Signature Page 1 of 3]

 

 

	
   

  	
  THE MEMBERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  HIRSCHFELD
  WIND ENERGY SOLUTIONS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/ Dennis Hirschfeld

  
	
   

  	
  Name:

  	
  Dennis
  Hirschfeld

  
	
   

  	
  Its:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Ted W. Beneski

  
	
   

  	
  Name:

  	
  Ted
  W. Beneski

  
	
   

  	
  Its:

  	
  Chairman
  of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Victor L. Vescovo

  
	
   

  	
  Name:

  	
  Victor
  L. Vescovo

  
	
   

  	
  Its:

  	
  Managing
  Director

  

 

[First
Amended and Restated LLC Agreement — Signature Page 2 of 3]

 

 

	
   

  	
  MARTIFER
  WIND ENERGY SYSTEMS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Pedro Dinis

  
	
   

  	
  Name:

  	
  Pedro
  Dinis

  
	
   

  	
  Its:

  	
  Executive
  Director

  

 

[First Amended and Restated LLC Agreement — Signature
Page 3 of 3]

 

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

SCHEDULE I

 

MEMBERS

 

	
  Name and Address

  	
   

  	
  Capital Contribution

  	
   

  	
  Units

  	
   

  	
  Sharing

  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Martifer Wind Energy
  Systems LLC

  3520 Knickerbocker Road

  Suite B, #317

  San Angelo, TX 76904

  Attn: Pedro Dinis

  	
   

  	
  $

  	
  [****]

  	
  *

  	
  100

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hirschfeld Wind Energy
  Solutions LLC

  1400 Civic Place

  Suite 250

  Southlake, TX 76092

  Attn: Victor L. Vescovo

  	
   

  	
  $

  	
  [****]

  	
   

  	
  100

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTALS:

  	
   

  	
  $

  	
  [****]

  	
   

  	
  200

  	
   

  	
  100

  	
  %

  

 

*This
amount represents the Net Agreed Value of the assets held by the Company
immediately prior to the Effective Date. 
The Net Agreed Value will be allocated to specific assets according to
their fair market value as determined in the reasonable discretion of the
Board.

 

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

SCHEDULE II

 

INITIAL
MANAGERS

 

Initial
Martifer Managers pursuant to Section 3.2:

 

1.             [****]

 

2.             [****]

 

3.             [****]

 

Initial
Martifer Observers pursuant to Section 3.5(g):

 

1.             [****]

 

2.             [****]

 

Initial
Hirschfeld Managers pursuant to Section 3.2:

 

1.             [****]

 

2.             [****]

 

3.             [****]

 

Initial
Hirschfeld Observers pursuant to Section 3.5(g):

 

1.             [****]

 

2.             [****]

 

 

EXHIBIT
A

 

CERTIFICATE NO. [          
]

 

CERTIFICATE
OF UNITS

 

of

 

MARTIFER-HIRSCHFELD
ENERGY SYSTEMS LLC

 

A Delaware Limited Liability
Company

 

This Certificate of Units is issued and shall be
held subject to the provisions of the Certificate of Formation of
Martifer-Hirschfeld Energy Systems LLC, a limited liability company organized
under the Laws of the State of Delaware (the “Company”), filed on June 17,
2009, with the Secretary of State of the State of Delaware, and the Company’s
First Amended and Restated Limited Liability Company Agreement, dated as of June 19,
2009, as each may be amended from time to time.

 

This Certificate of Units certifies that
                                                ,
a Member of the Company, is the registered holder of
         “Units” (as such term is
defined in the above-referenced First Amended and Restated Limited Liability
Company Agreement) of the Company, which Units shall be transferable only on
the books of the Company by the holder hereof in person or by a duly authorized
attorney upon surrender of this Certificate with a proper endorsement.

 

SEE RESTRICTIONS ON
REVERSE SIDE.

 

IN WITNESS WHEREOF, the Company has caused this
Certificate to be signed by its duly authorized officer this
       day of
                    ,
20      .

 

	
   

  	
  MARTIFER-HIRSCHFELD
  ENERGY SYSTEMS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[REVERSE
SIDE OF CERTIFICATE]

 

MARTIFER-HIRSCHFELD ENERGY SYSTEMS LLC

 

For value received, the
undersigned hereby sells, assigns, and transfers to
                                                   
                   ,
and its successors and assigns,
                          
Units of Martifer-Hirschfeld Energy Systems LLC standing in the name of
                                                    
on the books of said limited liability company represented by certificate No.
           and does hereby
irrevocably constitute and appoint
                                             ,
and its successors and assigns, attorney to transfer said interests on the
books of the limited liability company with full power of substitution.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  

 

THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, OR UNDER ANY STATE SECURITIES ACT OR OTHER SIMILAR STATUTE IN RELIANCE
UPON EXEMPTIONS UNDER THOSE ACTS. 
WITHOUT SUCH REGISTRATION, THE SALE, PLEDGE OR OTHER TRANSFER OF THESE
UNITS IS RESTRICTED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF LEGAL
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS LEGAL COUNSEL, THAT REGISTRATION
IS NOT REQUIRED FOR THE TRANSFER, OR SUCH OTHER EVIDENCE SATISFACTORY TO THE
COMPANY THAT THE TRANSFER IS NOT IN VIOLATION OF THE SECURITIES ACT OF 1933 OR
ANY APPLICABLE STATE SECURITIES LAW.  THE
SALE, PLEDGE OR OTHER TRANSFER OF THESE UNITS IS ALSO SUBJECT TO THE
RESTRICTIONS SET FORTH IN THE COMPANY’S COMPANY AGREEMENT, WHICH MAY BE
AMENDED OR RESTATED FROM TIME TO TIME.

 

 

APPENDIX
A

 

DEFINITIONS

 

Act — the Delaware
Limited Liability Company Act, Delaware Code Ann. 6, Sections 18-101, et seq.,
and any successor statute, as the same may be amended from time to time.  All references herein to sections of the Act
shall include any corresponding provision or provisions of succeeding Law.

 

Additional Securities — Section 4.7(a).

 

Additional Units — Section 4.7(a).

 

Adjusted Capital Account — a Capital
Account determined and maintained for each Member throughout the term of this Agreement,
the balance of which shall be equal to such Member’s Capital Account balance,
modified as follows:

 

(a)           increased by the amount, if any, of such Member’s share of
the Minimum Gain of the Company as determined under Treasury Regulation Section 1.704-2(g)(1);

 

(b)           increased by the amount, if any, of such Member’s share of
the Minimum Gain attributable to Member Nonrecourse Debt of the Company
pursuant to Treasury Regulation Section 1.704-2(i)(5);

 

(c)           increased by the amount, if any, that such Member is
treated as being obligated to contribute subsequently to the capital of the
Company as determined under Treasury Regulation Section 1.704-1(b)(2)(ii)(c);

 

(d)           decreased by the amount, if any, of cash that is
reasonably expected to be distributed to such Member, but only to the extent
that the amount thereof exceeds any offsetting increase in such Member’s
Capital Account that is reasonably expected to occur during (or prior to) the
Fiscal Year during which such distributions are reasonably expected to be made
as determined under Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(6);
and

 

(e)           decreased by the amount, if any, of loss and deduction
that is reasonably expected to be allocated to such Member pursuant to Tax Code
Section 704(e)(2) or 706(d), Treasury Regulation Section 1.751—1(b)(2)(ii) or
Treasury Regulation Section 1.704-1(b)(2)(iv)(k).

 

Affiliate — (a) with
respect to any Person who is a natural person, (i) each Entity that such
Person Controls, and (ii) each member of such Person’s Family; and (b) with
respect to any Person that is an Entity, (i) each Entity that such Person
Controls, (ii) each Person that Controls such Person, and (iii) each
Entity that is under common Control with such Person.

 

Agreement — introductory
paragraph.

 

Assignee — any Person
that acquires Units or any portion thereof (including a Common Interest)
through a Disposition; provided, however, that, an Assignee shall
have no right to be 

 

A-1

 

admitted to the Company as a
Member except in accordance with Section 4.5(b)(ii).  The Assignee of a deceased Member is the
Person or Persons to whom the deceased Member’s Units are bequeathed, or by
whom they are inherited, pursuant to the deceased Member’s duly-probated will,
a probate court order applying the laws of intestate succession or
otherwise.  The Assignee of a dissolved
Member is the shareholder, partner, member or other equity owner or owners of
the dissolved Member to whom such Member’s Units are properly assigned by the
Person conducting the liquidation or winding up of such Member.

 

Board — Section 3.1.

 

Book Depreciation — for each
Fiscal Year (or other period for which Book Depreciation must be computed), the
depreciation, amortization or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset, except that, if the Book
Value of an asset differs from its adjusted tax basis at the beginning of the
year, Book Depreciation will be an amount which bears the same ratio to Book Value
at the beginning of the year as the federal income tax depreciation,
amortization, or other cost recovery deduction for the year bears to the
beginning adjusted tax basis; provided, however, that if the
adjusted tax basis of the asset at the beginning of the year is zero, Book
Depreciation will be determined by the Board using any reasonable method.

 

Book Value — with respect
to any asset, the adjusted basis of the asset for federal income tax purposes,
adjusted as provided in Section 7.8.

 

Books and Records — Section 10.1.

 

Business Day — any day
other than a Saturday, a Sunday or a holiday on which national banking
associations in the State of Delaware are closed.

 

Buy/Sell Offer — Section 4.6(a).

 

Buy/Sell Transaction — Section 4.6(b).

 

Buy/Sell Value — Section 4.6(a).

 

Capital Account — the account
to be maintained by the Company for each Member in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv) and, to the extent not
inconsistent therewith, the following provisions:

 

(a)           a Member’s Capital Account shall be credited with the cash
or Net Agreed Value of the Member’s Capital Contributions, the Member’s
distributive share of Profit, and any item of income or gain specially
allocated to the Member pursuant to the provisions of Article 7
(other than Section 7.9); and

 

(b)           a Member’s Capital Account shall be debited with the
amount of cash and the Net Agreed Value of any Company property distributed to
the Member, the Member’s distributive share of Loss and any item of expenses or
losses specially allocated to the Member pursuant to the provisions of Article 7
(other than Section 7.9).

 

A-2

 

If any Common Interest is
transferred pursuant to the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent the Capital
Account is attributable to the transferred Common Interest.  A Member that has more than one Common
Interest shall have a single Capital Account that reflects all of its Common
Interests, regardless of the class of Common Interest owned by that Member and
regardless of the time or manner in which it was acquired.

 

Capital Call Notice — Section 6.3(a).

 

Capital Contributions — with respect
to any Member, the amount of money and the initial Book Value of any property
(other than money) contributed to the Company by such Member and identified as
Capital Contributions on Schedule I attached hereto.  Any reference in this Agreement to the
Capital Contributions of a Member shall include any Capital Contributions of
its predecessors in interest.

 

Capital Transaction — any
transaction that results in the Company’s receipt of cash or other
consideration other than Capital Contributions that, in accordance with
generally accepted accounting principles, is considered capital in nature,
including, without limitation, proceeds of sales or exchanges or other
Dispositions of property not in the ordinary course of business, financings,
refinancings, condemnations, recoveries of damage awards, and insurance proceeds.

 

Certificate — Preliminary
Statement.

 

Common Interest — a Member’s
share of the income, gain, loss, deductions and credits of, and the right to
receive distributions from, the Company as provided in this Agreement.

 

Company —
Martifer-Hirschfeld Energy Systems LLC, a Delaware limited liability company
and successor-in-interest to the Legacy Company.

 

Confidential Information — any data or
information with respect to the business conducted by the Company that is
material to the Company’s business operations and is not generally known to the
public.  Without limitation and to the
extent consistent with the foregoing, the term “Confidential Information” shall
include all information, whether existing before or after the Effective Date
and regardless of the form in which it is or was communicated or maintained,
that is confidential and proprietary to the Company, or contains or otherwise
reflects any such information, and shall include all notes, studies, reports,
memoranda and other documents prepared by the Company or its members, managers,
officers, employees, consultants and agents and internal or external advisors
that contain or reflect any such information, including, without
limitation:  (a) trade secrets; (b) lists
and other information about current and prospective customers; (c) plans
or strategies for sales, marketing or business development; (d) sales and
account records; (e) prices or pricing strategy or information; (f) current
and proposed advertising and promotional programs; (g) research and development
processes; (h) the Company’s methods, systems, techniques, procedures,
designs, formulae, inventions and know-how; and (i) other information of a
similar nature not known to the public that, if misused or disclosed, could
adversely affect the business of the Company. 
The term “Confidential Information” shall not include information that (A) is
or becomes generally available to the public other than as a result of acts or
omissions by any Person in breach of the terms of this 

 

A-3

 

Agreement; (B) is
lawfully in a Person’s possession prior to disclosure by the Company and is not
otherwise subject to an obligation of confidentiality; or (C) is required
to be disclosed by applicable Law in the written opinion of a Person’s legal
counsel.

 

Control — the
possession, directly or indirectly, through one or more intermediaries, of the
following: (a) in the case of a corporation, more than 50% of the
outstanding voting securities thereof; (b) in the case of a limited
liability company, partnership, limited partnership or venture, the right to
more than 50% of the distributions therefrom (including liquidating
distributions); (c) in the case of a trust or estate, more than 50% of the
beneficial interest therein; (d) in the case of any other Entity, more
than 50% of the economic or beneficial interest therein; or (e) in the
case of any Entity, the power or authority, through ownership of voting
securities, by contract or otherwise, to direct the management, activities, or
policies of the entity.

 

Contract Opportunity — Section 5.1(a).

 

Corporate Opportunity — Section 5.2(a).

 

Covered Person — Section 8.1.

 

Day — a calendar
day; provided, however, that, if any period of Days referred to
in this Agreement shall end on a Day that is not a Business Day, then the
expiration of such period shall be automatically extended until the first
succeeding Business Day.

 

Declining Member — Section 6.3(b).

 

Default Rate — a rate per
annum equal to the lesser of (a) 3% plus the Prime Rate, and (b) the
maximum rate permitted by Law.

 

Dispose, Disposed,
Disposing or Disposition — with respect to any asset (including
Units or any rights or obligations related thereto, including a Common
Interest), a sale, assignment, transfer, conveyance, gift, exchange or other
disposition of such asset, whether such disposition be voluntary, involuntary,
by operation of Law, direct or indirect, including, without limitation, the
following: (a) in the case of an asset owned by a natural person, a transfer
of such asset upon the death of its owner, whether by will, intestate
succession, or otherwise; (b) in the case of an asset owned by an Entity, (i) a
merger or consolidation of such Entity, (ii) a conversion of such Entity
into another type of Entity, or (iii) a distribution of such asset from
such Entity (by dividend, distribution or otherwise) including, without
limitation, in connection with the dissolution, liquidation, winding up or
termination of such Entity; and (c) a disposition in connection with, or
in lieu of, a foreclosure of an Encumbrance; but such terms shall not include
the creation of an Encumbrance. 
Notwithstanding the foregoing, the following events shall not constitute
a Disposition for purposes hereof:  (A) a
public offering of any equity securities of Hirschfeld or any of its Affiliates
(other than the Company); (B) a change in Control of any Member or any of
its Affiliates (other than the Company); or (C) a transfer of a Member’s
Units in connection with the pledge of such Member’s Units to any financial
institution providing debt financing to such Member or any of its Affiliates
(including the Company) for the benefit of the Company.

 

Disposing Member — Section 4.5(b)(iii)(A).

 

A-4

 

Disposition Notice — Section 4.5(b)(iii)(A).

 

Dissolution Event — Section 12.1.

 

Effective Date — introductory
paragraph.

 

Encumber, Encumbering
or Encumbrance — the creation of a security interest, lien, pledge,
mortgage, hypothecation or other encumbrance, whether for value or no value and
whether such encumbrance be voluntary, involuntary or by operation of Law,
judgment, attachment, garnishment, bankruptcy or other legal equitable
proceeding.

 

Entity — shall mean any
corporation, limited liability company, partnership, limited partnership,
registered limited liability partnership, joint venture, trust, business trust,
foreign trust, foreign business organization, cooperative or association, or
any other legal entity.

 

Exercise Notice — Section 4.5(b)(iii)(A).

 

Family — with respect
to any Person who is a natural person, such Person’s spouse, lineal ancestors
and descendants by birth or adoption, and siblings.

 

First Period — Section 3.7(b).

 

Fiscal Year — Section 2.7.

 

Governmental Authority — any nation or
government, any state or other political subdivision thereof or any Entity
exercising the executive, legislative, judicial, regulatory or administrative
functions of or pertaining to a government and a corporation or other Entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.

 

Hirschfeld — Hirschfeld
Wind Energy Solutions LLC, a Texas limited liability company.

 

Hirschfeld Affiliate — Hirschfeld
Holdings LP, the immediate partners of Hirschfeld Holdings, LP, any subsidiary
of Hirschfeld Holdings LP, or any successor-in-interest to any of the
foregoing.

 

Hirschfeld Managers — Section 3.2(b).

 

Initiating Members — Section 5.2(b).

 

Involuntary Disposition — Section 4.5(b)(vi)(A).

 

Involuntary Transferee — Section 4.5(b)(vi)(A).

 

Issuance Notice — Section 4.8(b).

 

Law — any
applicable constitutional provision, statute, act (including the Act), code,
law, regulation, rule, ordinance, order, decree, ruling, proclamation,
resolution, judgment, decision, declaration, or interpretative or advisory
opinion or letter of a Governmental Authority.

 

A-5

 

Legacy Company — Martifer
Energy Systems LLC, a Delaware limited liability company that was merged with
and into the Company, with the Company surviving such merger, pursuant to the
Merger.

 

Lock-Up Period — Section 4.5(b)(i).

 

Majority Interest — Members
holding among them in excess of fifty percent (50%) of all outstanding Units
entitled to vote on the relevant matter (including, if a Member shall have
Disposed of all or any portion of its Common Interest but shall have retained
the voting rights with respect to the Units associated therewith, such voting
rights); provided, however, that, if a provision of this
Agreement provides that a Majority Interest, for purposes of such provision, is
to be calculated or determined without reference to one or more excluded
Members, then, solely for purposes of such provision, “Majority Interest” shall
mean Members, other than the excluded Members, holding among them at least a
majority of all outstanding Units entitled to vote on the relevant matter,
other than such Units held by such excluded Members.

 

Majority Vote — the
affirmative vote or consent of more than fifty percent (50%) of the Managers
comprising the entire Board.

 

Managers — those
individuals appointed from time to time pursuant to Article 3, who
comprise the Board.

 

Martifer — Martifer
Wind Energy Systems LLC, a Delaware limited liability company.

 

Martifer Energia — Martifer Energia-Equipamentos
Para Energia, S.A., a Sociedade Anónima existing under the laws of Portugal.

 

Martifer Managers — Section 3.2(a).

 

Members — those
Persons identified as Members on Schedule I attached hereto, or
hereafter admitted to the Company as Members as provided in this Agreement, but
such term does not include any Person who has ceased to be a Member.

 

Member Nonrecourse Debt — the meaning
assigned to the term “partner nonrecourse debt” in Treasury Regulation Section 1.704-2(b)(4).

 

Member Nonrecourse
Deductions — the meaning assigned to the term “partner
nonrecourse deductions” in Treasury Regulation Section 1.704-2(i).

 

Member Nonrecourse Minimum
Gain — the meaning assigned to the term “partner nonrecourse minimum gain”
in Treasury Regulation Section 1.704-2(i)(3).

 

Merger — the merger
of the Legacy Company with and into the Company, with the Company surviving
such merger, pursuant to that certain Agreement and Plan of Merger, dated as of
June 18, 2009, by and between the Legacy Company and the Company, and that
certain Certificate of Merger filed with the Secretary of State of the State of
Delaware on June 18, 2009.

 

A-6

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

Minimum Gain — the meaning
assigned to that term in Treasury Regulation Section 1.704-2(d).

 

[****] — Section 2.4.

 

Net Agreed Value — (a) in
the case of any property contributed to the Company, the Book Value of the
property contributed reduced by any indebtedness either assumed by the Company
upon the contribution of the property or to which such property is subject when
contributed; and (b) in the case of any property distributed to a Member,
the Book Value of such property reduced by any indebtedness either assumed by
such Member upon such distribution or to which such property is subject at the
time of distribution.

 

Net Capital Proceeds — the proceeds
received by the Company in connection with a Capital Transaction after the
payment of costs and expenses incurred by the Company in connection with such
Capital Transaction, including brokers’ commissions, loan fees, loan payments,
other closing costs, and the cost of any alteration, improvement, restoration,
or repair of any Company property necessitated by or incurred in connection
with such Capital Transaction and, if the Capital Transaction is a financing or
refinancing, after the payment of any Company indebtedness that is repaid in
connection with such financing or refinancing.

 

Net Cash Flow — all cash
funds derived from operations of the Company (including interest received on
reserves), without reduction for any non—cash charges, but less cash funds used
to pay current operating expenses and to pay or establish reasonable reserves
for future expenses, debt payments, capital improvements, and replacements as
determined by the Board.  Net Cash Flow shall not include proceeds or
costs included in the determination of Net Capital Proceeds but shall be
increased by the reduction of any reserve previously established.

 

Non-Declining Member — Section 6.3(b).

 

Non-Disposing Member — Section 4.5(b)(iii)(A).

 

Nonrecourse Deductions — the meaning
assigned that term in Treasury Regulation Section 1.704-2(b)(1).

 

Observer — Section 3.5(g).

 

Offeree Member — Section 4.6(a).

 

Offering Member — Section 4.6(a).

 

Opportunity Members — Section 5.2(b).

 

Original Agreement — the Limited
Liability Company Agreement of the Company, dated as of June 17, 2009,
between the Company and the Original Member.

 

Partial Rights — Section 4.5(b)(ii)(A).

 

A-7

 

Permitted Affiliate — means (a) with
respect to Hirschfeld, Hirschfeld Holdings LP, any successor thereto or any
Entity that is directly or indirectly 100% owned by it or (b) with respect
to Martifer, Martifer Energy Systems SGPS, S.A., any successor thereto or any
Entity that is directly or indirectly 100% owned by it.

 

Person — includes an
individual, corporation, limited liability company, partnership, limited
partnership, registered limited liability partnership, joint venture, trust,
business trust, foreign trust, foreign business organization, cooperative,
association, estate, custodian, trustee, executor, administrator, nominee,
Governmental Authority or any other legal or commercial Entity in its own or a
representative capacity, regardless of whether the Entity is formed under the
Laws of the State of Delaware or any other jurisdiction.

 

Potential Tag-Along
Participant — Section 4.5(b)(iv).

 

Prime Rate — a rate per
annum equal to the lesser of (a) a varying rate per annum that is equal to
the rate of interest published from time to time by The Wall Street Journal,
Eastern Edition (or any successor publication thereto), designated therein as
the “prime rate” or (b) the maximum rate permitted by Law.

 

Profit and Loss — for each
Fiscal Year of the Company (or other period for which Profit or Loss must be
computed), the Company’s taxable income (not including income allocated
pursuant to Sections 7.11, 7.12, 7.13, 7.14 and 7.18)
or loss (not including loss or deduction allocated pursuant to Sections 7.15,
7.16 and 7.18) determined in accordance with Tax Code Section 703(a),
with the following adjustments:

 

(a)           all items of income, gain, loss and deduction required to
be stated separately pursuant to Tax Code Section 703(a)(1) shall be
included in computing taxable income or loss;

 

(b)           any tax-exempt income of the Company, not otherwise taken
into account in computing Profit or Loss, shall be included in computing
taxable income or loss;

 

(c)           any expenditures of the Company described in Tax Code Section 705(a)(2)(B) (or
treated as such pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i))
and not otherwise taken into account in computing Profit or Loss, shall be
subtracted from taxable income or loss;

 

(d)           gain or loss resulting from any disposition of Company
property shall be computed by reference to the Book Value of the property;

 

(e)           in lieu of the depreciation, amortization, or cost
recovery deductions allowable in computing taxable income or loss, there shall
be taken into account Book Depreciation; and

 

(f)            if the Book Value of an asset of the Company is adjusted
pursuant to Section 7.8, any increase or decrease in the Book Value
of the asset as a result of the adjustment shall be treated as gain or loss,
respectively, from the disposition of the asset and shall be taken into account
in computing Profits or Losses.

 

A-8

 

Portions
of this exhibit have been omitted and filed separately pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 406 under the Securities Act of 1933, as amended. 
Omissions are designated as [***].

 

Prohibited Business — any business
that manufactures or supplies towers [****] for wind turbine markets, and any other
metal-based components reasonably related to wind turbine markets, in [****] or
any other business in which the Company may be engaged in [****] from time to
time.

 

Purchasing Member — Section 4.5(b)(iii)(A).

 

Qualifying Issuance - Section 4.8(a).

 

Response Notice — Section 4.6(c).

 

Restricted Area — any
geographic area within [****].

 

Restricted Period — Section 5.1(a).

 

Rights Register — Section 11.2.

 

SEC — the United
States Securities and Exchange Commission and any successor agency.

 

Second Period — Section 3.7(b).

 

Securities Act — the United
States Securities Act of 1933, as amended, or similar federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at the
time.

 

Sharing Ratio — with respect
to any Member, a fraction the numerator of which is equal to the total number
of Units standing in the name of such Member as set forth on Schedule I
attached hereto, as such Schedule may be amended from time to time as provided
in this Agreement, and the denominator of which is equal to the total number of
Units then outstanding (excluding warrants, options or other securities
convertible into Units).

 

Sole Discretion — with respect
to any Person, that Person’s sole and absolute discretion, with or without
cause, and subject to such conditions as it shall deem appropriate.

 

Tag-Along Disposing Member — Section 4.5(b)(iv).

 

Tag-Along Exercise Notice — Section 4.5(b)(iv).

 

Tag-Along Member — Section 4.5(b)(iv).

 

Tag-Along Notice — Section 4.5(b)(iv).

 

Tax Code — the United
States Internal Revenue Code of 1986, as amended from time to time.  All references herein to sections of the Tax
Code shall include any corresponding provision or provisions of succeeding Law.

 

Tax Matters Member — Section 9.3.

 

A-9

 

Terminating Capital
Transaction — any Capital Transaction that is entered into in
connection with or will result in the dissolution, winding up, and termination
of the Company.

 

Treasury Regulations — the
regulations promulgated by the United States Department of the Treasury
pursuant to and in respect of provisions of the Tax Code.  All references herein to sections of the
Treasury Regulations shall include any corresponding provision or provisions of
succeeding, similar, substitute proposed, or final Treasury Regulations.

 

Unanimous Vote — the
affirmative vote or consent of all of the Managers comprising the entire Board.

 

Units — with respect
to any Member, the units to be issued by the Company to that Member as a quantitative
representation of:  (a) that
Member’s status as a Member; (b) that Member’s Common Interest; (c) all
other rights, benefits and privileges enjoyed by that Member (pursuant to this
Agreement, the Act, the Certificate and other Law) in its capacity as a Member,
including, without limitation, that Member’s rights to vote, consent to, and
approve certain activities as expressly set forth herein; and (d) all
obligations, duties and liabilities imposed on that Member (pursuant to this
Agreement, the Act, the Certificate and other Law) in its capacity as a Member,
including any obligations to make Capital Contributions expressly set forth
herein.

 

Withdraw, Withdrawing
or Withdrawal — the withdrawal, resignation or retirement of a Member
from the Company as a Member.  Such terms
shall not include any Dispositions of Units (which are governed by Section 4.5),
even though the Member making a Disposition may cease to be a Member as a
result of such Disposition.

 

A-10Filed by sedaredgar.com - Freshwater Technologies, Inc. - Exhibit 10.12

THIS DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT (THE
“AGREEMENT”) RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO
PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).

NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT
RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES
LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR
INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES AND PROVINCIAL LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT.

DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT

THIS DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT (the
“Agreement”) made as of the ______of __________________.

	BETWEEN: 	Freshwater Technologies, Inc. (the “Company”) a
      Nevada corporation with an address for business at 30 Denver Crescent,
      Toronto, Ontario, Canada M2J 1G8 
	  	 
	AND: 	_______________(the “Subscriber”), a
      _______________ with an address at _______________ , ___________________________________
      . 

WHEREAS:

A. The Subscriber has made unsecured loans totalling an
aggregate of $___________to the Company (the “Outstanding Amount”); and

B. The Subscriber has agreed to accept shares of the Company’s
  common stock at a price of $_________ per share (the “Shares”), as
  payment of the Outstanding Amount pursuant to the terms and conditions set forth
  in this Agreement.

NOW THEREFORE THIS AGREEMENT witnesses that, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

1. Interpretation

1.1 In this Agreement, words importing the singular number only
shall include the plural and vice versa, words importing gender shall include
all genders and words importing persons shall include individuals, corporations,
partnerships, associations, trusts, unincorporated organizations, governmental
bodies and other legal or business entities of any kind whatsoever.

1.2 Any reference to currency is to the currency of the United
States of America unless otherwise indicated.

- 2 -

2. Acknowledgement of Indebtedness

2.1 The Company and the Subscriber acknowledge and agree that
the Company is indebted to the Subscriber in the amount of the Outstanding
Amount.

3. Payment of Indebtedness

3.1 As full and final payment of the Outstanding Amount, the
Company will on the Closing Date (as defined herein) issue to the Subscriber the
Shares, as fully paid and non-assessable, and the Subscriber will accept the
Shares as full and final payment of the Outstanding Amount.

4. Release

4.1 The Subscriber hereby agrees that upon delivery of the
Shares by the Company in accordance with the provisions of this Agreement, the
Outstanding Amount will be fully satisfied and extinguished, and the Subscriber
will remise, release and forever discharge the Company and its respective
directors, officers, employees, successors, solicitors, agents and assigns from
any and all obligations relating to the Outstanding Amount.

5. Documents Required from Subscriber

5.1 The Subscriber must complete, sign and return to the
Company two (2) executed copies of this Agreement.

5.2 The Subscriber shall complete, sign and return to the
Company as soon as possible, on request by the Company, any documents, notices
and undertakings as may be required by regulatory authorities, stock exchanges
and applicable law.

6. Closing

6.1 Closing of the offering of the Shares (the “Closing”) shall
occur on or before August 14, 2008, or on such other date as may be determined
by the Company (the “Closing Date”).

7. Acknowledgements of Subscriber

7.1 The Subscriber acknowledges and agrees that:

	 	(a) 	
      none of the Shares have been or will be registered under
      the Securities Act of 1933 (the “1933 Act”), or under any state securities
      or “blue sky” laws of any state of the United States, and, unless so
      registered, may not be offered or sold in the United States or, directly
      or indirectly, to U.S. Persons, as that term is defined in Regulation S
      under the 1933 Act (“Regulation S”), except in accordance with the
      provisions of Regulation S, pursuant to an effective registration
      statement under the 1933 Act, or pursuant to an exemption from, or in a
      transaction not subject to, the registration requirements of the 1933 Act
      and in each case only in accordance with applicable securities
  laws;

	 	 	 
	 	(b) 	
      the Company has not undertaken, and will have no
      obligation, to register any of the Shares under the 1933 Act or any other
      applicable securities legislation;

	 	 	 
	 	(c) 	
      the Subscriber has received and carefully read this
      Agreement;

	 	 	 
	 	(d) 	
      the decision to execute this Agreement and acquire the
      Shares hereunder has not been based upon any oral or written
      representation as to fact or otherwise made by or on behalf of the Company
      and such decision is based entirely upon a review of any public
      information which has been filed by the Company with the Securities and
      Exchange Commission (“SEC”) in compliance, or intended compliance, with
      applicable securities legislation;

- 3 -

	 	(e) 	
      the Subscriber and
        the Subscriber’s advisor(s) have had a reasonable opportunity to
        ask questions of and receive answers from the Company in connection with
        the issuance of the Shares hereunder, and to obtain additional information,
        to the extent possessed or obtainable by the Company without unreasonable
        effort or expense; 

	 	  	
       

	 	(f) 	
      the books and records
        of the Company were available upon reasonable notice for inspection, subject
        to certain confidentiality restrictions, by the Subscriber during reasonable
        business hours at its principal place of business and that all documents,
        records and books in connection with the issuance of the Shares hereunder
        have been made available for inspection by the Subscriber and the Subscriber’s
        attorney and/or advisor(s); 

	 	  	
       

	 	(g) 	
      the Subscriber will
        indemnify and hold harmless the Company and, where applicable, its respective
        directors, officers, employees, agents, advisors and shareholders from
        and against any and all loss, liability, claim, damage and expense whatsoever
        (including, but not limited to, any and all fees, costs and expenses whatsoever
        reasonably incurred in investigating, preparing or defending against any
        claim, lawsuit, administrative proceeding or investigation whether commenced
        or threatened) arising out of or based upon any representation or warranty
        of the Subscriber contained herein, or in any document furnished by the
        Subscriber to the Company in connection herewith being untrue in any material
        respect or any breach or failure by the Subscriber to comply with any
        covenant or agreement made by the Subscriber to the Company in connection
        therewith; 

	 	  	
       

	 	(h) 	
      upon the issuance of
        the Shares, and until such time as the same is no longer required under
        the applicable securities laws and regulations, the certificates representing
        any of the Shares will bear a legend in substantially the following form:
      

	 	  	
       

			
      THESE SECURITIES WERE
        SOLD IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS
        DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES
        ACT OF 1933, AS AMENDED (THE “1933 ACT”). 

	 	  	
       

			
      NONE OF THE SECURITIES
        TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE 1933
        ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE
        MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY,
        TO U.S. PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
        OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
        THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
        ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
        TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
        WITH THE 1933 ACT. 

	 	  	
       

	 	(i) 	
      the Subscriber has
        been advised to consult the Subscriber’s own legal, tax and other
        advisors with respect to the merits and risks of an investment in the
        Shares and with respect to applicable resale restrictions, and it is solely
        responsible (and the Company is not in any way responsible) for compliance
        with: 

	 	  	
       
	
       

			
      (i) 
	
      any applicable laws of the jurisdiction
        in which the Subscriber is resident in connection with the distribution
        of any of the Shares hereunder, and 

	 	  	
       
	
       

	 	  	
      (ii) 
	
      applicable resale restrictions;
      

	 	  	
       
	
       

	 	(j) 	
      none of the Shares
        are listed on any stock exchange or automated dealer quotation system
        and no representation has been made to the Subscriber that any of the
        Shares will become listed on any stock exchange or automated dealer quotation
        system, except that currently certain market makers 

- 4 -

	 		
      make market in the shares of common stock of the Company
      on the Over-the-Counter Bulletin Board;

	 	 	 
	 	(k) 	
      the Subscriber is outside the United States when
      receiving and executing this Agreement and is acquiring the Shares as
      principal for its own account, for investment purposes only, and not with
      a view to, or for, resale, distribution or fractionalization thereof, in
      whole or in part, and no other person has a direct or indirect beneficial
      interest in the Shares;

	 	 	 
	 	(l) 	
      none of the Shares may be offered or sold to a U.S.
      Person or for the account or benefit of a U.S. Person (other than a
      distributor) prior to the end of the Distribution Compliance Period (as
      defined herein);

	 	 	 
	 	(m) 	
      neither the SEC nor any other securities commission or
      similar regulatory authority has reviewed or passed on the merits of the
      Shares;

	 	 	 
	 	(n) 	
      no documents in connection with the sale of the Shares
      hereunder have been reviewed by the SEC or any state securities
      administrators;

	 	 	 
	 	(o) 	
      there is no government or other insurance covering any of
      the Shares;

	 	 	 
	 	(p) 	
      the issuance and sale of the Shares to the Subscriber
      will not be completed if it would be unlawful or if, in the discretion of
      the Company acting reasonably, it is not in the best interests of the
      Company;

	 	 	 
	 	(q) 	
      the statutory and regulatory basis for the exemption
      claimed for the offer and issuance of the Shares, although in technical
      compliance with Regulation S, would not be available if the offering is
      part of a plan or scheme to evade the registration provisions of the 1933
      Act; and

	 	 	 
	 	(r) 	
      this Agreement is not enforceable by the Subscriber
      unless it has been accepted by the Company.

8. Representations, Warranties and Covenants of
the Subscriber

8.1 The Subscriber hereby represents and warrants to and
covenants with the Company (which representations, warranties and covenants
shall survive the Closing) that:

	 	(a) 	
      the Subscriber is not a U.S. Person;

	 	 	 
	 	(b) 	
      the Subscriber is not acquiring the Shares for the
      account or benefit of, directly or indirectly, any U.S. Person;

	 	 	 
	 	(c) 	
      the Subscriber is resident in the jurisdiction out on the
      signature page of this Agreement and the issuance of the Shares to the
      Subscriber as contemplated in this Agreement complies with or is exempt
      from the applicable securities legislation of the jurisdiction of
      residence of the Subscriber;

	 	 	 
	 	(d) 	
      the Subscriber is acquiring the Shares as principal for
      investment purposes only and not with a view to resale or distribution
      and, in particular, the Subscriber has no intention to distribute, either
      directly or indirectly, any of the Shares in the United States or to U.S.
      Persons;

	 	 	 
	 	(e) 	
      the Subscriber is outside the United States when
      receiving and executing this Agreement;

	 	 	 
	 	(f) 	
      the Subscriber is aware that an investment in the Company
      is speculative and involves certain risks, including the possible loss of
      the entire investment;

	 	 	 
	 	(g) 	
      the Subscriber has made an independent examination and
      investigation of an investment in the Shares and the Company and has
      depended on the advice of its legal and financial advisors
  and

- 5 -

	 		
      agrees that the Company will not be responsible in any
      way whatsoever for the Subscriber’s decision to invest in the Shares and
      the Company;

	 	 	 
	 	(h) 	
      the Subscriber (i) has adequate net worth and means of
      providing for its current financial needs and possible personal
      contingencies, (ii) has no need for liquidity in this investment, and
      (iii) is able to bear the economic risks of an investment in the Shares
      for an indefinite period of time;

	 	 	 
	 	(i) 	
      the Subscriber understands and agrees that the Company
      and others will rely upon the truth and accuracy of the acknowledgements,
      representations and agreements contained in this Agreement and agrees that
      if any of such acknowledgements, representations and agreements are no
      longer accurate or have been breached, the Subscriber shall promptly
      notify the Company;

	 	 	 
	 	(j) 	
      the Subscriber has the legal capacity and competence to
      enter into and execute this Agreement and to take all actions required
      pursuant hereto;

	 	 	 
	 	(k) 	
      the Subscriber has duly executed and delivered this
      Agreement and it constitutes a valid and binding agreement of the
      Subscriber enforceable against the Subscriber in accordance with its
      terms;

	 	 	 
	 	(l) 	
      the Subscriber is not an underwriter of, or dealer in,
      the common shares of the Company, nor is the Subscriber participating,
      pursuant to a contractual agreement or otherwise, in the distribution of
      the Shares;

	 	 	 
	 	(m) 	
      the Subscriber understands and agrees that none of the
      Shares have been registered under the 1933 Act, or under any state
      securities or “blue sky” laws of any state of the United States, and,
      unless so registered, may not be offered or sold in the United States or,
      directly or indirectly, to U.S. Persons except in accordance with the
      provisions of Regulation S, pursuant to an effective registration
      statement under the 1933 Act, or pursuant to an exemption from, or in a
      transaction not subject to, the registration requirements of the 1933 Act
      and in each case only in accordance with applicable state and provincial
      securities laws;

	 	 	 
	 	(n) 	
      the Subscriber understands and agrees that offers and
      sales of any of the Shares prior to the expiration of a period of six
      months after the date of original issuance of the Shares (the one year
      period hereinafter referred to as the “Distribution Compliance Period”)
      shall only be made in compliance with the safe harbor provisions set forth
      in Regulation S, pursuant to the registration provisions of the 1933 Act
      or an exemption therefrom, and that all offers and sales after the
      Distribution Compliance Period shall be made only in compliance with the
      registration provisions of the 1933 Act or an exemption therefrom and in
      each case only in accordance with applicable state and provincial
      securities laws;

	 	 	 
	 	(o) 	
      the Subscriber understands and agrees not to engage in
      any hedging transactions involving any of the Shares unless such
      transactions are in compliance with the provisions of the 1933 Act and in
      each case only in accordance with applicable state and provincial
      securities laws;

	 	 	 
	 	(p) 	
      the Subscriber understands and agrees that the Company
      will refuse to register any transfer of the Shares not made in accordance
      with the provisions of Regulation S, pursuant to an effective registration
      statement under the 1933 Act or pursuant to an available exemption from
      the registration requirements of the 1933 Act;

	 	 	 
	 	(q) 	
      the Subscriber has the requisite knowledge and experience
      in financial and business matters as to be capable of evaluating the
      merits and risks of the investment in the Shares and the
Company;

	 	 	 
	 	(r) 	
      the Subscriber acknowledges that it has not acquired the
      Shares as a result of, and will not itself engage in, any “directed
      selling efforts” (as defined in Regulation S under the 1933 Act) in the
      United States in respect of any of the Shares which would include any
      activities undertaken for the

- 6 -

	 		
      purpose of, or that could reasonably be expected to have
      the effect of, conditioning the market in the United States for the resale
      of any of the Shares; provided, however, that the Subscriber may sell or
      otherwise dispose of any of the Shares pursuant to registration of any of
      the Shares pursuant to the 1933 Act and any applicable state securities
      laws or under an exemption from such registration requirements and as
      otherwise provided herein;

	 	 	 	 
	 	(s) 	
      the Subscriber is not aware of any advertisement of any
      of the Shares and is not acquiring the Shares as a result of any form of
      general solicitation or general advertising including advertisements,
      articles, notices or other communications published in any newspaper,
      magazine or similar media or broadcast over radio or television, or any
      seminar or meeting whose attendees have been invited by general
      solicitation or general advertising; and

	 	 	 	 
	 	(t) 	
      no person has made to the Subscriber any written or oral
      representations,

	 	 	 	 
	 		(i) 	
      that any person will resell or repurchase any of the
      Shares,

	 	 	 	 
	 		(ii) 	
      that any person will refund the purchase price of any of
      the Shares,

	 	 	 	 
	 		(iii) 	
      as to the future price or value of any of the Shares,
      or

	 	 	 	 
	 		(iv) 	
      that any of the Shares will be listed and posted for
      trading on any stock exchange or automated dealer quotation system or that
      application has been made to list and post any of the Shares of the
      Company on any stock exchange or automated dealer quotation
  system.

8.2 In this Agreement, the term “U.S. Person” shall have the
meaning ascribed thereto in Regulation S.

9. Acknowledgement and Waiver

9.1 The Subscriber has acknowledged that the decision to
acquire the Shares was solely made on the basis of publicly available
information. The Subscriber hereby waives, to the fullest extent permitted by
law, any rights of withdrawal, rescission or compensation for damages to which
the Subscriber might be entitled in connection with the distribution of any of
the Shares.

10. Representations and Warranties will be Relied
Upon by the Company

10.1 The Subscriber acknowledges that the representations and
warranties contained herein and are made by it with the intention that such
representations and warranties may be relied upon by the Company and its legal
counsel in determining the Subscriber’s eligibility to acquire the Shares under
applicable securities legislation, or (if applicable) the eligibility of others
on whose behalf it is contracting hereunder to acquire the Shares under
applicable securities legislation. The Subscriber further agrees that by
accepting delivery of the certificates representing the Shares on the Closing
Date, it will be representing and warranting that the representations and
warranties contained herein and are true and correct as at the Closing Date with
the same force and effect as if they had been made by the Subscriber on the
Closing Date and that they will survive the purchase by the Subscriber of Shares
and will continue in full force and effect notwithstanding any subsequent
disposition by the Subscriber of such Shares.

11. Resale Restrictions

11.1 The Subscriber acknowledges that any resale of the
Securities will be subject to resale restrictions contained in the securities
legislation applicable to the Subscriber or proposed transferee. The Subscriber
acknowledges that the Shares have not been registered under the 1933 Act of the
securities laws of any state of the United States. The Shares may not be offered
or sold in the United States unless registered in accordance with 

- 7 -

United States federal securities laws and all applicable state
and provincial securities laws or exemptions from such registration requirements
are available.

11.2 The Subscriber acknowledges that restrictions on the
transfer, sale or other subsequent disposition of the Shares by the Subscriber
may be imposed by securities laws in addition to any restrictions referred to in
Section 11.1 above, and, in particular, the Subscriber acknowledges and agrees
that none of the Shares may be offered or sold to a U.S. Person or for the
account or benefit of a U.S. Person (other than a distributor) prior to the end
of the Distribution Compliance Period.

12. Legending and Registration of Subject
Shares

12.1 The Subscriber hereby acknowledges that a legend may be
placed on the certificates representing any of the Shares to the effect that the
Shares represented by such certificates are subject to a hold period and may not
be traded until the expiry of such hold period except as permitted by applicable
securities legislation.

12.2 The Subscriber hereby acknowledges and agrees to the
Company making a notation on its records or giving instructions to the registrar
and transfer agent of the Company in order to implement the restrictions on
transfer set forth and described in this Agreement.

13. Collection of Personal Information

13.1 The Subscriber acknowledges and consents to the fact that
the Company is collecting the Subscriber’s personal information for the purpose
of fulfilling this Agreement and completing this offering. The Subscriber’s
personal information (and, if applicable, the personal information of those on
whose behalf the Subscriber is contracting hereunder) may be disclosed by the
Company to (a) stock exchanges or securities regulatory authorities, (b) the
Company’s registrar and transfer agent, and (c) any of the other parties
involved in this offering, including legal counsel, and may be included in
record books in connection with this offering. By executing this Agreement, the
Subscriber is deemed to be consenting to the foregoing collection, use and
disclosure of the Subscriber’s personal information (and, if applicable, the
personal information of those on whose behalf the Subscriber is contracting
hereunder) and to the retention of such personal information for as long as
permitted or required by law or business practice. Notwithstanding that the
Subscriber may be purchasing Shares as agent on behalf of an undisclosed
principal, the Subscriber agrees to provide, on request, particulars as to the
identity of such undisclosed principal as may be required by the Company in
order to comply with the foregoing.

14. Costs

14.1 The Subscriber acknowledges and agrees that all costs and
expenses incurred by the Subscriber (including any fees and disbursements of any
special counsel retained by the Subscriber) relating to the acquisition of the
Shares shall be borne by the Subscriber.

15. Governing Law

15.1 This Agreement is governed by the laws of the State of
Nevada.

16. Survival

16.1 This Agreement, including without limitation the
representations, warranties and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the parties hereto
notwithstanding the completion of the purchase of the Shares by the Subscriber
pursuant hereto.

17. Assignment

17.1 This Agreement is not transferable or assignable.

- 8 -

18. Execution

18.1 The Company shall be entitled to rely on delivery by
facsimile machine of an executed copy of this Agreement and acceptance by the
Company of such facsimile copy shall be equally effective to create a valid and
binding agreement between the Subscriber and the Company in accordance with the
terms hereof.

19. Severability

19.1 The invalidity or unenforceability of any particular
provision of this Agreement shall not affect or limit the validity or
enforceability of the remaining provisions of this Agreement.

20. Entire Agreement

20.1 Except as expressly provided in this Agreement and in the
agreements, instruments and other documents contemplated or provided for herein,
this Agreement contains the entire agreement between the parties with respect to
the sale of the Shares and there are no other terms, conditions, representations
or warranties, whether expressed, implied, oral or written, by statute or common
law, by the Company or by anyone else.

21. Notices

21.1 All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Subscriber shall be
directed to the address on page 9 hereto and notices to the Company shall be
directed to the Company’s President at 30 Denver Crescent, Toronto, Ontario,
Canada M2J 1G8.

22. Counterparts

22.1 This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall constitute an
original and all of which together shall constitute one instrument.

IN WITNESS WHEREOF the Subscriber has duly executed this
Agreement as of the date first above mentioned.

DELIVERY INSTRUCTIONS

	1. 	Delivery - please deliver the certificates to:
    
	  	  
	 	 
	 	 
	2. 	Registration - registration of the certificates
      which are to be delivered at closing should be made as follows: 
	 	 
	  	(name) 
	 	 
	  	(address) 

- 9 -

	3. 	
      The undersigned hereby acknowledges that it will deliver
      to the Company all such additional completed forms in respect of the
      Subscriber’s purchase of the Shares as may be required for filing with the
      appropriate securities commissions and regulatory
  authorities.

	 	 
	 	(Name of Subscriber – Please type or print)
  
	 	 
	 	(Signature and, if applicable, Office) 
	 	 
	 	(Address of Subscriber) 
	 	 
	 	(City, State or Province, Postal Code of
      Subscriber) 
	 	 
	 	(Country of Subscriber) 

A C C E P T A N C E

The above-mentioned Agreement in respect of the Shares is
hereby accepted by FRESHWATER TECHNOLOGIES, INC.

DATED at Vancouver, the ___ day of ___________.

FRESHWATER TECHNOLOGIES, INC.

	Per: 		 
	 	Authorized Signatory

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