EXHIBIT 13
MEMBERS' AGREEMENT
------------------
MEMBERS' AGREEMENT (the "Agreement"), dated as of November 13, 2001, by and
among TPG Wafer Holdings, LLC, a Delaware limited liability company (the
"Company"), TPG Wafer Partners, L.L.C., a Delaware limited liability company
(together with its affiliates and successors, "TPG"), TCW/Crescent Mezzanine
Partners III, L.P. and TCW/Crescent Mezzanine Trust III (together with their
affiliates and successors, "TCW"), Green Equity Investors III, L.P., a Delaware
limited partnership (together with its affiliates and successors, "GEI"), Green
Equity Investors Side III, L.P., a Delaware limited partnership, (together with
its affiliates and successors and GEI, "LGP") and TPG Wafer Management, L.L.C.,
a Delaware limited liability company (together with its affiliates and
successors other than TPG, "TPG Wafer Management") (collectively, the
"Members").
WHEREAS, the Members and the Company have heretofore entered into an
Amended and Restated Limited Liability Company Operating Agreement, dated as of
November 13, 2001, (the "Operating Agreement");
WHEREAS, as of the date hereof, the Members own all of the membership
interests ("Membership Interests") of the Company; and
WHEREAS, the parties hereto desire to enter into an agreement regarding
certain matters described herein, including the imposition of certain
restrictions on the transferability of the Membership Interests.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties mutually agree as follows:
ARTICLE I
---------
Representations and Warranties
------------------------------
Each of the parties hereby severally represents and warrants to each of the
other parties as follows:
1.1 Authority; Enforceability. Such party has the legal capacity or
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. Such party is duly organized and validly existing under
the laws of its jurisdiction of organization, and the execution of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary action. No other act or proceeding, corporate
or otherwise, on its part is necessary to authorize the execution of this
Agreement or the consummation of any of the transactions contemplated hereby.
This Agreement has been duly executed by such party and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with the
terms of this Agreement, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the rights of creditors
generally and to the exercise of judicial discretion in accordance with general
principles of equity (whether applied by a court of law or of equity).
1.2 No Breach. Neither the execution of this Agreement nor the performance
by such party of its obligations hereunder nor the consummation of the
transactions contemplated hereby does or will:
(a) conflict with or violate its certificate of incorporation, bylaws or
other organizational documents;
(b) violate, conflict with or result in the breach or termination of, or
otherwise give any other person the right to accelerate, re-negotiate or
terminate or receive any payment, or constitute a default or an event of default
(or an event which with notice, lapse of time, or both, would constitute a
default or event of default) under the terms of, any contract or agreement to
which it is a party or by which it or any of its assets or operations are bound
or affected; or
(c) constitute a violation by such party of any laws, rules or regulations
of any governmental, administrative or regulatory authority or any judgments,
orders, rulings or awards of any court, arbitrator or other judicial authority
or any governmental, administrative or regulatory authority.
1.3 Consents. No consent, waiver, approval, authorization, exemption,
registration, license or declaration is required to be made or obtained by such
party, other than those which have been made or obtained, in connection with (i)
the execution or enforceability of this Agreement or (ii) the consummation of
any of the transactions contemplated hereby.
ARTICLE II
----------
Transfer of Membership Interests
--------------------------------
2.1 Restrictions on Transfers.
(a) No Member may (directly or indirectly) transfer by way of sale,
exchange, assignment, pledge, gift or other disposition (all of which acts shall
be deemed included in the term "transfer" as used in this Agreement) any or all
of the Membership Interests (whether held in its, his or her own right or by a
representative of the Member) (each Member, is hereinafter referred to as a
"Transferor") unless (i) such transfer of Membership Interests is made in
accordance with the provisions of Article II of this Agreement and (ii) the
transferee of such Membership Interests (if other than (A) the Company or
another Member, (B) a transferee in a sale of Membership Interests made under
Rule 144 (or any successor provision) under the Securities Act of 1933, as
amended (the "Securities Act"), or (C) a transferee of Membership Interests
registered under the Securities Act) agrees to become a party to this Agreement
pursuant to Article IV hereof and executes such further documents as may be
necessary, in the reasonable opinion of the Company, to make him, her or it a
party hereto.
(b) Any purported transfer of Membership Interests other than in accordance
with this Agreement by any Transferor shall be null and void, and the Company
shall refuse to recognize any such transfer for any purpose and shall not
reflect in its records any change in record ownership of Membership Interests
pursuant to any such transfer.
(c) The Company shall not issue any Membership Interests upon original
issue or reissue or otherwise dispose of any Membership Interests unless the
recipient or transferee of such Membership Interests (if other than a Member)
shall agree to become a party to this Agreement pursuant to Article IV hereof
and executes such further documents as may be necessary, in the reasonable
opinion of the Company, to make him, her or it a party hereto.
2.2 Right of First Offer.
(a) In the event that a Member (other than TPG) desires to transfer all or
part of its Membership Interest ("Offered Membership Interest") to a third
party, other than pursuant to Section 2.3 or 2.4 of this Agreement, the
Transferor shall give prompt written notice to the Company and TPG (an "Offer
Notice") of its desire to sell the Offered Membership Interest, which notice
shall identify (i) the percentage of Offered Membership Interest and (ii) the
purchase price (which shall be in cash) and any other material items and
conditions of the proposed transfer. The date on which such Transferor's Notice
is actually received by the Company and TPG is referred to hereinafter as the
"Notice Date."
(b) TPG shall have thirty (30) days following the Notice Date to notify the
Transferor and the Company in writing of an offer to purchase by TPG in cash
(the "Offer to Purchase") all (but not less than all) of the Offered Membership
Interest at the purchase price and upon the other terms and conditions specified
in the Offer Notice. If the Transferor does not receive a written notice from
TPG containing the Offer to Purchase within the thirty (30) day period, TPG
shall be deemed to have declined to purchase the Offered Membership Interest and
the Transferor may, subject to compliance with the provisions of Section 2.1(a)
and Section 2.2(d), thereafter transfer to a purchaser at any time within ninety
(90) days following the Notice Date all (but not less than all) of the Offered
Membership Interest at a price which is not less than the purchase price
specified in the Offer Notice and upon substantially the same terms and
conditions set forth in the Offer Notice; provided that if TPG notifies the
Transferor in writing, within thirty (30) days following receipt of a notice
from the Transferor of the name of a possible purchaser, of an objection to the
possible purchaser because the Manager, in its reasonable discretion, determines
that the possible purchaser or one or more of its affiliates is engaged in a
business that competes in any material respect with MEMC Electronic Materials,
Inc. ("MEMC") or any of its subsidiaries, the Transferor shall not have the
right to transfer any of the Offered Membership Interest to such possible
purchaser; and provided further that if the Offered Membership Interest is not
transferred to a purchaser for any reason within ninety (90) days following the
Notice Date, then such Offered Membership Interest may be transferred only by
again complying with all of the terms and procedures set forth in this Article
II.
(c) In the event that, pursuant to the Offer to Purchase, TPG agrees to
purchase all (but not less than all) of the Offered Membership Interest on the
terms and subject to the conditions set forth in the Offer Notice, the closing
for such transaction shall take place at a time and place reasonably acceptable
to the Transferor and TPG; provided that such closing shall not occur more than
thirty (30) days after the date on which the Transferor receives the Offer to
Purchase. At such closing, TPG shall deliver to the Transferor the consideration
to be exchanged for such Offered Membership Interest, in immediately available
funds, and the Transferor shall deliver to TPG all documents required to effect
the sale of such Offered Membership Interest, duly endorsed and free of any
liens, including appropriate documentation providing indemnities to TPG
regarding its title to such Offered Membership Interest.
(d) As soon as practicable, but in any event no less than thirty (30) days
prior to the consummation of a proposed sale of Offered Membership Interest to a
purchaser pursuant to Section 2.2(b), the Transferor shall give written notice
to the Company and TPG, which notice shall specify with respect to each such
proposed sale, the name or names of one or more possible purchasers, provided
that in no event shall such notice specify more than five possible purchasers.
The Transferor shall not sell the Offered Membership Interest pursuant to
Section 2.2(b) to a purchaser unless the Transferor has given a notice pursuant
to the preceding sentence that such purchaser is a possible purchaser. As soon
as practicable, but in any event no less than ten (10) days prior to the
proposed consummation date of a sale of Offered Membership Interest to a
purchaser, the Transferor shall give written notice to the Company and TPG,
which notice shall specify with respect to each such proposed sale: (i) the
identity of the purchaser, (ii) the cash purchase price to be paid by such
purchaser for the Offered Membership Interest, (iii) the date of the proposed
transfer and (iv) any other material items and conditions of the proposed sale.
2.3 Transfers to Permitted Transferees. A Member may transfer any or all of
the Membership Interest held by such Member to a Permitted Transferee (as
hereinafter defined) of such Member without complying with any other provision
of this Article II other than Section 2.1(a). For purposes of this Agreement, a
"Permitted Transferee" means (a) in the case of any transferor that is not a
corporation or individual, any general or limited partner, member, or affiliate
(as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of such transferor, (b) in the case of any transferor that
is a corporation, any other entity that owns, directly or indirectly, at least
51% of the equity securities of such transferor ("majority ownership") or that
is under common majority ownership with such transferor, (c) in the case of any
transferor that is an individual, any successor by death or divorce, (d) in the
case of any transferor that is a trust whose sole beneficiaries are individuals,
such individuals or their spouses or lineal descendants or (e) in the case of
TPG or TPG Wafer Management, any officer or director of MEMC or other person
providing consulting or other services to MEMC (excluding in each case any TPG
deal professionals or any TPG affiliate (as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) solely to
incentivize such officers, directors or other persons; provided that such
additional Membership Interests constitute less than 10% of the aggregate
Membership Interests on the date hereof.
2.4 Certain Rights.
(a) Drag Along Rights. In the event that TPG wishes to sell all or
substantially all of its Membership Interests by merger, stock sale, asset sale
or otherwise to a purchaser (other than pursuant to Section 2.3) that is not an
affiliate of TPG or any of its affiliates and said purchaser desires to acquire
all or substantially all of the issued and outstanding Membership Interests upon
such terms and conditions as agreed to with TPG and its affiliates, each other
Member agrees to sell all of its Membership Interests to said purchaser (or to
vote such Membership Interests in favor of any merger or other transaction which
would effect a sale of such Membership Interest (or all or substantially all of
the assets of the Company) and to waive its appraisal or dissenters' rights with
respect to such transaction, at a price that reflects the Pro Rata Portion of
its Membership Interest (as defined in Section 2.4(b)(iii) below) at the same
price and on the same terms and conditions as TPG and its affiliates have agreed
to with such purchaser; provided, however, that no Member required to sell
pursuant to this Section 2.4(a) shall be required to make any representation,
covenant or warranty in connection with such sale, other than as to its
ownership and authority to sell, free of liens, claims or encumbrances, the
Membership Interests to be sold by such Member. In such case, TPG shall give
written notice of such sale to the other Members at least thirty (30) days prior
to the consummation of such sale, setting forth (i) the consideration to be
received by the Members, (ii) the identity of the purchaser, (iii) the date of
the proposed transfer and (iv) any other material items and conditions of the
proposed transfer.
(b) Tag Along Rights. (i) If TPG or any of its affiliates proposes to
transfer any of their Membership Interests to a purchaser other than a Permitted
Transferee of TPG, TPG or any of its affiliates (hereinafter referred to as
"Selling TPG Members") shall give written notice (a "Transfer Notice") of such
proposed transfer to the Members other than the Selling TPG Members (the "Other
Members") at least thirty (30) days prior to the consummation of such proposed
transfer, setting forth (i) the percentage of its Membership Interest offered,
(ii) the consideration to be received by the Members, (iii) the identity of the
purchaser, (iv) the date of the proposed transfer, (v) any other material items
and conditions of the proposed transfer and (vi) that each such Other Member
shall have the right to elect to sell up to the Pro Rata Portion of its
Membership Interest.
(ii) Upon delivery of a Transfer Notice, each Other Member may elect to
sell up to the Pro Rata Portion of its Membership Interest pursuant to the same
terms and conditions with respect to payment for the Membership Interest as
agreed to by the Selling TPG Members, by sending written notice to the Selling
TPG Members within thirty (30) days after receipt of the Transfer Notice,
indicating its election to sell up to the Pro Rata Portion of its Membership
Interest in the same transaction, in which case the portion of Membership
Interests to be sold by the Selling TPG Members shall be reduced by such amount
(with the result that each Selling TPG Member and each such electing Other
Member shall sell to the purchaser the same percentage of their respective
Membership Interests). Following such thirty (30) day period, each such Other
Member, concurrently with the Selling TPG Members, shall be permitted to sell to
the purchaser, at any time up to ninety (90) days after the delivery of the
Transfer Notice, on the terms and conditions set forth in the Transfer Notice
the Pro Rata Portion of its Membership Interest; provided, however, that no
Selling TPG Member shall be permitted to sell to the purchaser unless,
simultaneously with the consummation of such sale, the sale by the Other Members
who have elected to sell pursuant to this paragraph (ii) of the Pro Rata Portion
of their Membership Interests is also consummated.
(iii) For purposes of this Agreement, "Pro Rata Portion" shall mean, with
respect to Membership Interests held by a Member, the portion attained by
multiplying (A) the aggregate Membership Interests then owned by such Member by
(B) a fraction, the numerator of which shall be the aggregate Membership
Interests proposed to be sold by the Selling TPG Members to the purchaser as set
forth in the Transfer Notice, and the denominator of which shall be the
aggregate Membership Interests then outstanding (including such Membership
Interests proposed to be sold by the Selling TPG Members).
2.5 Transferee's Rights and Obligations. Any party that acquires a
Membership Interest in the Company shall assume the obligations and, unless
otherwise agreed by the transferee, acquire the rights of the transferring party
with respect to such Membership Interest that it acquires. In connection with
such assumption, the transferee will notify the Company and each of the Members
that is a party hereto of its address for the purpose of providing notices
hereunder.
ARTICLE III
-----------
Rights with Respect to MEMC
---------------------------
3.1 Approval Rights. TPG, as the Managing Member (the "Manager") of the
Company, hereby agrees not to vote the Company's shares in MEMC in support of,
and the Company agrees not to permit any of the following actions of MEMC,
without the prior written consent of each of (i) TCW (so long as TCW and those
of its Permitted Transferees that are controlled by TCW hold at least fifteen
percent (15%) of the Membership Interests) and (ii) LGP (so long as LGP and
those of its Permitted Transferees that are controlled by LGP hold at least
fifteen percent (15%) of the Membership Interests):
(a) the authorization of additional shares of capital stock of MEMC (which
shall include, without limitation, any shares of common stock, preferred stock,
any convertible securities or any warrants or options to acquire common stock),
provided that shares of capital stock authorized and issued to any directors,
employees, officers, consultants or advisors of the Company or any subsidiary
shall not require such approval;
(b) any merger (other than any merger with the Company), consolidation,
statutory share exchange or other business combination or sale of all or
substantially all of the assets of MEMC or any similar transaction in any one
transaction or series of related transactions;
(c) any liquidation, bankruptcy, dissolution, recapitalization,
reorganization, assignment to creditors or any similar transaction by MEMC;
provided that TPG, as the Managing Member, may consent to the conversion of any
shares of preferred stock of MEMC to shares of common stock of MEMC without any
such consent;
(d) any material change in the nature of the business in which MEMC is
engaged;
(e) any material amendment to the certificate of incorporation or by-laws
of MEMC; or
(f) entering into any contract or agreement to do any of the foregoing.
3.2 Board Seats. For so long as TCW and those of its Permitted Transferees
that are controlled by TCW have not sold or otherwise disposed of (other than to
Permitted Transferees) more than 25% of the Membership Interests originally
acquired by TCW pursuant to the Operating Agreement, TCW shall have the right to
nominate one (1) person to the Board of Directors of MEMC. For so long as LGP
and those of its Permitted Transferees that are controlled by LGP have not sold
or otherwise disposed of (other than to Permitted Transferees) more than 25% of
the Membership Interests originally acquired by LGP pursuant to the Operating
Agreement, LGP shall have the right to nominate one (1) person to the Board of
Directors of MEMC. TPG, agrees to cause the Company to vote, and the Company
agrees to vote, its shares in MEMC in support of such TCW and LGP nominees.
ARTICLE IV
----------
Additional Parties
------------------
In accordance with Article II of this Agreement, additional Members may be
added to and be bound by and receive the benefits afforded by this Agreement
(other than benefits specifically afforded to LGP and TCW pursuant to Article
III hereunder) upon the signing and delivery of a counterpart of this Agreement
by the Company and the acceptance thereof by such additional Members. Promptly
after signing and delivering such a counterpart of this Agreement, the Company
will deliver a conformed copy thereof to the Members.
ARTICLE V
---------
Miscellaneous Provisions
------------------------
5.1 Specific Performance. The parties hereby declare and acknowledge that
it is impossible to measure in money the damages that will accrue to any party
hereto or to a representative of a Member by reason of a failure to perform any
of the obligations under this Agreement. Therefore, if any party hereto or the
representative of a Member shall institute any action or proceeding to enforce
the provisions hereof, the person against whom such action or proceeding is
brought hereby waives the claim or defense that such party or such
representative has an adequate remedy at law, and such person shall not urge in
any such action or proceeding the claim or defense that such party or such
representative has an adequate remedy at law. The parties hereto agree that this
Agreement shall be specifically enforceable.
5.2 Confidentiality. Except as required by applicable law or any legal or
regulatory process, each Member shall maintain the confidentiality of (i)
Non-Public Information and (ii) any information subject to a confidentiality
agreement binding upon the Managing Member and made known to the Members;
provided that each Member (including the Managing Member) may disclose
Non-Public Information to (i) its affiliates, officers, employees, agents and
professional consultants upon notification to such affiliate, officer, employee,
agent or consultant that such disclosure is made in confidence and shall be kept
in confidence, (ii) persons having or purporting to have regulatory authority
over such Members or its affiliates, provided that such persons are advised that
the Non-Public Information is confidential, or (iii) to a potential transferee
of all or part of such Member's Membership Interest, if such potential
transferee agrees to be bound by a confidentiality agreement substantially
identical to the provisions of this Section 5.2; and provided, further, that
each Member may disclose Non-Public Information it is required to disclose
pursuant to legal process, in which event each Member agrees to provide the
Company with prompt notice of such process so that it may seek an appropriate
protective order or other appropriate remedy. As used in this Section 5.2,
"Non-Public Information" means information regarding the Company (including
information regarding any person in which the Company holds, or contemplates
acquiring, any Investment) and the Managing Member received by such Member
pursuant to this Agreement, but does not include information that (i) was
publicly known at the time such Member receives such information pursuant to
this Agreement, (ii) subsequently becomes publicly known through no act or
omission by such Member, or (iii) is communicated to such Member by a third
party free of any obligation of confidence known to such Member.
5.3 Notices. Any and all notices, designations, offers, acceptances or
other communications provided for herein shall be given in writing by registered
or certified mail, which shall be addressed, in the case of the Company, to its
principal office, and, in the case of any Member, to such Member's address
appearing on the stock books of the Company or to such other address as may be
designated by such Member in writing to the Company and each other Member.
5.4 Entire Agreement. This Agreement supersedes all prior agreements with
respect to the subject matter hereof. This instrument, together with the Amended
and Restated Limited Liability Company Operating Agreement of the Company, dated
as of the date hereof, by and among the Manager and the Members (the "Operating
Agreement"), contains the entire agreement with respect to such subject matter.
This instrument may not be amended, supplemented or discharged, and no provision
hereof may be modified or waived, except expressly by an instrument in writing
signed by the Members as provided. No waiver of any provision hereof shall be
deemed a waiver of any other provision nor shall any such waiver by any party be
deemed a continuing waiver of any matter. No amendment, modification,
supplement, discharge, or waiver hereof or hereunder shall require the consent
of any person not a party to this Agreement.
5.5 Governing Law. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware without giving
effect to principles of conflicts of laws of the State of Delaware.
5.6 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their successors and assigns.
5.7 Severability. If any portion of this Agreement shall be declared void
or unenforceable by any court or administrative body of competent jurisdiction,
such portion shall be deemed severable from the remainder of this Agreement,
which shall continue in all respects valid and enforceable.
5.8 Amendment and Waiver. Any amendment of this Agreement or any waiver of
any provision hereof to be effective shall be in writing and signed by all of
the parties hereto. The addition of a Transferee of Membership Interests or a
recipient of any Membership Interests as a party hereto shall not constitute an
amendment hereto and need be signed only by the Company and such Transferee or
recipient. Any failure by any party at any time to enforce any of the provisions
of this Agreement shall not be construed a waiver of such provision or any other
provisions hereof.
5.9 Arbitration. Any disputes arising from this Agreement shall be resolved
by exclusive and final arbitration to be carried out in accordance with the
procedures in Section 11.10 of the Operating Agreement.
5.10 Counterparts. This Agreement may be signed by each party hereto upon a
separate copy of this Agreement in which event all of said copies shall
constitute a single counterpart of this Agreement. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
and it shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
Each Member in agreement with the foregoing should sign the form of
acceptance in the space provided for such Member's signature on this copy of
this Agreement delivered to such Member. This Agreement will become a binding
agreement among such Members and the Company when signed by the Company and so
accepted by such Members.
The foregoing Shareholders' Agreement is hereby accepted as of the day and
year first above written.
TPG WAFER PARTNERS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
TCW/CRESCENT MEZZANINE PARTNERS III, L.P. AND
TCW/CRESCENT MEZZANINE TRUST III
By: TCW/Crescent Mezzanine Management III, L.L.C.
Its Investment Manager
By: TCW Asset Management Company
Its Sub-Advisor
By: /s/ Xxxx-Xxxx Xxxxxx
---------------------------------
Name: Xxxx-Xxxx Xxxxxx
Title: Managing Director
By: /s/ Xxxxx X. Xxxxxxx, Xx.
--------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Senior Vice President
GREEN EQUITY INVESTORS III, L.P.
By: GEI Capital III, LLC
Its General Partner
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title: Manager
GREEN EQUITY INVESTORS SIDE III, L.P.
By: GEI Capital III, LLC
Its General Partner
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title: Manager
TPG WAFER MANAGEMENT, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
