Exhibit 10.2
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
NC-M CHASSIS SYSTEMS, LLC
Dated as of [ ], 200[ ]
TABLE OF CONTENTS
Page
----
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1 Certain Definitions....................................1
SECTION 1.2 Rules of Construction.................................13
ARTICLE II
ORGANIZATIONAL MATTERS
SECTION 2.1 Formation.............................................14
SECTION 2.2 The Certificate, Etc..................................14
SECTION 2.3 Name..................................................14
SECTION 2.4 Purpose...............................................14
SECTION 2.5 Powers of the Company.................................15
SECTION 2.6 Representations and Warranties of the Company.........16
SECTION 2.7 Foreign Qualification.................................17
SECTION 2.8 Principal Office; Registered Office...................18
SECTION 2.9 Term..................................................18
SECTION 2.10 No State-Law Partnership..............................18
ARTICLE III
UNITS; CAPITAL ACCOUNTS
SECTION 3.1 Unitholders...........................................18
SECTION 3.2 Unitholder Meetings...................................20
SECTION 3.3 Action of Unitholders by Written Consent or
Telephone Conference................................23
SECTION 3.4 Capital Accounts......................................24
SECTION 3.5 Negative Capital Accounts.............................25
SECTION 3.6 No Withdrawal.........................................25
SECTION 3.7 Certificates..........................................25
SECTION 3.8 Register..............................................25
SECTION 3.9 New Certificates......................................25
SECTION 3.10 Interest as a Security................................26
SECTION 3.11 Restrictive Legend....................................26
-i-
Page
----
ARTICLE IV
DISTRIBUTIONS; REDEMPTIONS AND ALLOCATIONS
SECTION 4.1 Distributions.........................................26
SECTION 4.2 Allocations...........................................28
SECTION 4.3 Special Allocations...................................29
SECTION 4.4 Tax Allocations.......................................30
SECTION 4.5 Adjustment of Book Value of Assets....................31
SECTION 4.6 Indemnification for Payments on Behalf of a
Unitholder..........................................31
ARTICLE V
BOARD OF MANAGERS; OFFICERS
SECTION 5.1 Management by the Board of Managers...................31
SECTION 5.2 Composition and Election of the Board of Managers.....33
SECTION 5.3 Board Meetings and Actions by Written Consent.........34
SECTION 5.4 Committees; Delegation of Authority and Duties........36
SECTION 5.5 Officers..............................................37
ARTICLE VI
GENERAL RIGHTS AND OBLIGATIONS OF UNITHOLDERS
SECTION 6.1 Limitation of Liability...............................37
SECTION 6.2 Lack of Authority.....................................38
SECTION 6.3 No Right of Partition.................................38
SECTION 6.4 Unitholders' Right To Act.............................38
SECTION 6.5 Conflicts of Interest.................................38
SECTION 6.6 Transactions Between the Company and the Unitholders..39
SECTION 6.7 Right of Inspection...................................39
ARTICLE VII
EXCULPATION AND INDEMNIFICATION
SECTION 7.1 Liability.............................................39
SECTION 7.2 Exculpation...........................................39
SECTION 7.3 Right to Indemnification..............................40
SECTION 7.4 Advance Payment.......................................40
SECTION 7.5 Indemnification of Employees and Agents...............40
SECTION 7.6 Appearance as a Witness...............................41
SECTION 7.7 Nonexclusivity of Rights..............................41
SECTION 7.8 Insurance.............................................41
-ii-
Page
----
SECTION 7.9 Savings Clause........................................41
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
SECTION 8.1 Records and Accounting................................41
SECTION 8.2 Fiscal Year...........................................42
SECTION 8.3 Reports...............................................42
SECTION 8.4 Transmission of Communications........................43
SECTION 8.5 Company Funds.........................................43
SECTION 8.6 Auditors..............................................43
ARTICLE IX
TAXES
SECTION 9.1 Tax Returns...........................................44
SECTION 9.2 Tax Elections.........................................44
SECTION 9.3 Tax Matters Partner...................................44
ARTICLE X
TRANSFER OF INTERESTS
SECTION 10.1 Transfers by Unitholders..............................44
SECTION 10.2 Effect of Assignment..................................45
SECTION 10.3 Restrictions on Transfer..............................45
SECTION 10.4 Transfer Fees and Expenses............................45
SECTION 10.5 Void Transfers........................................46
ARTICLE XI
ADMISSION OF UNITHOLDERS
SECTION 11.1 Substituted Unitholders...............................46
SECTION 11.2 Additional Unitholders................................46
ARTICLE XII
WITHDRAWAL AND RESIGNATION OF UNITHOLDERS
SECTION 12.1 Withdrawal and Resignation of Unitholders.............46
SECTION 12.2 Withdrawal of a Unitholder............................47
-iii-
Page
----
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
SECTION 13.1 Dissolution...........................................47
SECTION 13.2 Liquidation and Termination...........................47
SECTION 13.3 Cancellation of Certificate...........................48
SECTION 13.4 Reasonable Time for Winding Up........................48
SECTION 13.5 Return of Capital.....................................48
SECTION 13.6 Reserves Against Distributions........................48
ARTICLE XIV
VALUATION
SECTION 14.1 Determination.........................................49
SECTION 14.2 Fair Market Value.....................................49
ARTICLE XV
CALL AND PUT OPTIONS
SECTION 15.1 Metaldyne Call Option.................................50
SECTION 15.2 Metaldyne Put Option..................................55
SECTION 15.3 DaimlerChrysler Call Option...........................57
SECTION 15.4 Suspension and Termination of Call and Put Options....58
ARTICLE XVI
CERTAIN OBLIGATIONS OF DAIMLERCHRYSLER
SECTION 16.1 Certain Obligations of DaimlerChrysler During JV
Period..............................................59
SECTION 16.2 Certain Obligations of DaimlerChrysler During and
After JV Period.....................................59
SECTION 16.3 Additional Contributions..............................60
ARTICLE XVII
NET WORKING CAPITAL ADJUSTMENT
SECTION 17.1 Net Working Capital Adjustment........................60
ARTICLE XVIII
GENERAL PROVISIONS
SECTION 18.1 Power of Attorney.....................................61
-iv-
Page
----
SECTION 18.2 Amendments............................................62
SECTION 18.3 Title to Company Assets...............................62
SECTION 18.4 Remedies..............................................62
SECTION 18.5 Successors and Assigns................................62
SECTION 18.6 Severability..........................................62
SECTION 18.7 Notice to Unitholder of Provisions....................63
SECTION 18.8 Counterparts..........................................63
SECTION 18.9 Consent to Jurisdiction; Waiver of Jury Trial.........63
SECTION 18.10 Descriptive Headings; Interpretation..................64
SECTION 18.11 Applicable Law........................................64
SECTION 18.12 Addresses and Notices.................................64
SECTION 18.13 Creditors.............................................65
SECTION 18.14 Waiver of Certain Rights..............................65
SECTION 18.15 Further Action........................................65
SECTION 18.16 Entire Agreement......................................65
SECTION 18.17 Delivery by Facsimile.................................65
SECTION 18.18 Survival..............................................66
SECTION 18.19 Dispute Resolution Procedures.........................66
SECTION 18.20 Public Statements.....................................67
SCHEDULES
Schedule A Capital Accounts
EXHIBITS
Exhibit A Board Actions Requiring Supermajority Approval
Exhibit B Actions Requiring Supermajority Unitholder Approval
Exhibit C Form of Securities Purchase Agreement
Exhibit D Term Sheet for Series A-1 Preferred Stock Investor
Rights Agreement
Exhibit E Term Sheet for Indenture and Senior Subordinated Notes
Registration Rights Agreement
Exhibit F Form of Certificate of Designations
Exhibit G Form of Legal Opinion
Exhibit H Form of Transition Services Agreement
Exhibit I Operating Budget and Capital Plan
Exhibit J Government Approvals for Metaldyne Call Option Closing
Exhibit K Form of Letter of Representations
-v-
AMENDED AND RESTATED OPERATING AGREEMENT (this "Operating Agreement"),
dated as of [ ], 200[ ], by and among NC-M Chassis Systems, LLC (the "Company")
and the Unitholders (as defined below).
WHEREAS, the Company was formed on December 6, 2002 for the purpose of
serving as the vehicle for the joint venture between the Initial Unitholders (as
defined below) to be formed pursuant to that certain Joint Venture Formation
Agreement, dated as of December 8, 2002, by and among the Company and the
Initial Unitholders (the "Formation Agreement");
WHEREAS, pursuant to and subject to the terms and conditions of the
Formation Agreement, (i) DaimlerChrysler (as defined below) has contributed and
assigned to the Company, and the Company has received and assumed from
DaimlerChrysler, certain assets and liabilities of the Business (as defined
below) in exchange for the issuance by the Company to DaimlerChrysler of all of
the Units of the Company, and (ii) DaimlerChrysler has sold, transferred and
conveyed to Metaldyne (as defined below), and Metaldyne has purchased from
DaimlerChrysler, 40% of the Class A Units, all as set forth in the Formation
Agreement;
WHEREAS, the execution and delivery of this Operating Agreement is a
condition to the formation of the joint venture and the closing of the
transactions contemplated by the Formation Agreement;
WHEREAS, in accordance with Section 18-201(d) of the Delaware Act (as
defined below), the Unitholders are entering into this Operating Agreement in
order to set forth their agreement as to the affairs of the Company and the
conduct of its business.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1 Certain Definitions. The following terms used herein shall have
the following meanings:
"Accountant" has the meaning set forth in Section 17.1.
"Additional Contributions" has the meaning set forth in Section 16.3.
"Additional Unitholder" means a Person admitted to the Company as a
Unitholder pursuant to Section 11.2.
-2-
"Adjusted Capital Account Deficit" means with respect to any Unitholder's
Capital Account as of the end of any Taxable Year, the amount by which the
balance in such Capital Account is less than zero. For this purpose, such
Capital Account balance shall be:
(i) reduced for any items described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6); and
(ii) increased for any amount such Unitholder is obligated to
contribute or is treated as being obligated to contribute to the Company
pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (relating to
partner liabilities to a partnership) or 1.704-2(g)(1) and 1.704-2(i)
(relating to Minimum Gain).
"Affiliate" with respect to any Person means any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person, where "control"
means, with respect to any Person, the possession, directly or indirectly, of
the power to direct the management and policies of a Person whether through the
ownership of voting securities, by contract or otherwise.
"Assignee" means a Person to whom a Unit has been transferred in accordance
with the terms of this Operating Agreement and the other agreements contemplated
hereby, but who has not become a Unitholder pursuant to Article X.
"Assumed Liabilities" has the meaning set forth in the Formation Agreement.
"Board" means the Board of Managers established pursuant to Section 5.2.
"Book Value" means, with respect to any asset of the Company, initially the
adjusted basis of such asset for federal income tax purposes; provided, however,
that (i) if any asset is contributed to the Company, the initial Book Value of
such asset shall equal its Fair Market Value on the date of contribution (as
agreed to by the Unitholders), and (ii) if the Capital Accounts of the
Unitholders are adjusted pursuant to Treasury Regulation Section 1.704-1(b) to
reflect the Fair Market Value of any asset of the Company, the Book Value of
such asset shall be adjusted to equal its respective Fair Market Value as of the
time of such adjustment, in accordance with such Treasury Regulation. The Book
Value of all assets of the Company shall be adjusted by depreciation and other
items as provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(g) and any
other adjustment to the basis of such assets other than depreciation or
amortization.
"Business" has the meaning set forth in the Formation Agreement.
"Business Day" means a day other than Saturday, Sunday or any other day on
which commercial banks in New York, New York are authorized or required by
applicable Law to close.
"Capital Account" means the capital account maintained for a Unitholder
pursuant to Section 3.4.
-3-
"Capital Contributions" means, with respect to any Unitholder, any cash,
cash equivalents, promissory obligations, or the Fair Market Value of other
property, which a Unitholder contributes or is deemed to have contributed to the
Company with respect to any Unit pursuant to Section 3.1 net of any related
liabilities assumed by the Company or to which such property is subject.
"Capital Stock" means: (i) in the case of a corporation, capital stock;
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock; (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Certificate" means the Company's Certificate of Formation as filed with
the Secretary of State of the State of Delaware on December 6, 2002, as it may
be amended from time to time.
"Certificate of Designations" means the Certificate of Designations for the
Series A-1 Preferred Stock and the Series A-2 Preferred Stock in the form of
Exhibit F.
"Change of Control" means, with respect to any Person ("Person A"), the
occurrence of any of the following: (a) a merger, consolidation, share exchange
or similar transaction involving Person A and one or more other Persons in which
Person A is not the surviving Person, other than a transaction in which at least
66 2/3% of the outstanding Capital Stock entitled to vote generally in the
election of the board of directors (or similar governing body) of the surviving
Person is beneficially owned by the holders of the outstanding Capital Stock
entitled to vote generally in the election of the board of directors (or similar
governing body) of Person A immediately prior to such transaction; (b) the sale
in one or more related transactions of all or substantially all of the assets,
businesses or revenue or income generating operations of Person A; (c) in the
case of Metaldyne, if Heartland Industrial Partners, L.P. and its Affiliates
cease to own 25% or more of the number of shares of Capital Stock entitled to
vote generally in the election of the board of directors of Metaldyne held by
them on the date hereof (appropriately adjusted for stock splits, combinations,
subdivisions, stock dividends and similar events); (d) any person or group
within the meaning of Section 13(d)(3) of the Exchange Act (other than, with
respect to Metaldyne, Heartland Industrial Partners, L.P. and its Affiliates)
shall attain beneficial ownership, within the meaning of Rule 13d-3 adopted
under the Exchange Act, of Capital Stock representing a majority of the voting
power for the election of the board of directors (or similar governing body) of
Person A; or (e) Person A shall engage in any transaction (or any series of
related transactions) with any other Person as a result of which the Person A
Holders do not have the right following the consummation of such transaction (or
such series of related transactions) to elect or to appoint a majority of the
board of directors (or similar governing body) of the surviving Person.
"Class A Unit" means a Unit representing a fractional part of the Interest
of a Unitholder or Assignee and having the rights and obligations specified with
respect to the Class A Units in this Operating Agreement.
"Class A Unitholder" means a Unitholder in its capacity as an owner of
Class A Units.
-4-
"Class A Units Purchase Price" has the meaning set forth in Section
15.1(c)(i).
"Class B Unit" means a Unit representing a fractional part of the Interest
of a Unitholder or Assignee and having the rights and obligations specified with
respect to the Class B Units in this Operating Agreement.
"Class B Unitholder" means a Unitholder in its capacity as an owner of
Class B Units.
"Class B Units Purchase Price" has the meaning set forth in Section
15.1(c)(ii).
"Class B Unreturned Capital" means, as of any date, $185,000,000 minus the
aggregate amount of all Distributions made by the Company to the Class B
Unitholders as of such date that constitute a return of Class B Unreturned
Capital under Section 4.1(a)(i).
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Company" means NC-M Chassis Systems, LLC, a Delaware limited liability
company, and any successor.
"Company Material Adverse Change" means a change (or historical
circumstance or event resulting in a prospective change) that is materially
adverse with respect to the business, operations, assets, liabilities, results
of operations, cash flows or financial condition of the Company and its
Subsidiaries, taken as a whole; provided, however, that any change (or
historical circumstance or event resulting in a prospective change) that is
generally applicable to (i) the industries and markets in which the Company and
its Subsidiaries operate their respective businesses, (ii) the United States or
global economy or (iii) the United States securities markets shall be excluded
from the determination of Company Material Adverse Change; and provided,
further, that any change (or historical circumstance or event resulting in a
prospective change) resulting from or arising out of the exercise or the
consummation of the Metaldyne Call Option shall also be excluded from the
determination of a Company Material Adverse Change.
"Company Material Adverse Effect" means an effect (or historical
circumstance or event resulting in a prospective effect) that is materially
adverse with respect to the business, operations, assets, liabilities, results
of operations, cash flows or financial condition of the Company and its
Subsidiaries, taken as a whole; provided, however, that any effect (or
historical circumstance or event resulting in a prospective effect) that is
generally applicable to (i) the industries and markets in which the Company and
its Subsidiaries operate their respective businesses, (ii) the United States or
global economy or (iii) the United States securities markets shall be excluded
from the determination of Company Material Adverse Effect; and provided,
further, that any effect (or historical circumstance or event resulting in a
prospective effect) resulting from or arising out of the exercise or the
consummation of the Metaldyne Call Option shall also be excluded from the
determination of a Company Material Adverse Effect.
"Company Minimum Gain" means "partnership minimum gain" as defined in
Treasury Regulation Section 1.704-2(d).
-5-
"Competition Laws" has the meaning set forth in Section 15.1(d)(iii).
"Corporate Opportunity" means any potential investment, transaction,
business venture, contractual or other business relationship, prospective
economic advantage or other opportunity within or similar to the Company's
activities or lines of business or otherwise in which the Company may, but for
the provisions of Section 6.5, have an interest or expectancy.
"DaimlerChrysler" means DaimlerChrysler Corporation, a Delaware
corporation, and any successor.
"DaimlerChrysler Call Option" has the meaning set forth in Section 15.3(a).
"DaimlerChrysler Call Option Closing" has the meaning set forth in Section
15.3(d)(i).
"DaimlerChrysler Objection Notice" has the meaning set forth in Section
17.1.
"Delaware Act" means the Delaware Limited Liability Company Act, 6 Del. L.
Section 18-101 et seq., as it may be amended from time to time, and any
successor to the Delaware Act.
"Dispute" has the meaning set forth in Section 18.19.
"Dispute Notice" has the meaning set forth in Section 18.19(a).
"Distribution" means each distribution made by the Company to a Unitholder,
whether in cash, property or securities of the Company, and whether by
liquidating distribution, redemption, repurchase or otherwise; provided that any
recapitalization or exchange or conversion of securities of the Company and any
subdivision (by Unit split or otherwise) or any combination (by reverse Unit
split or otherwise) of any outstanding Units shall not be deemed a Distribution.
"DOJ" has the meaning set forth in Section 15.1(d)(iii).
"Employee Matters Agreement" means the Employee Matters Agreement, dated as
of the date hereof, by and among DaimlerChrysler, the Company and Metaldyne.
"Excess Tax Distributions" has the meaning set forth in Section 4.1(b)(ii).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
applicable rules and regulations promulgated thereunder, and any successor to
such statute, rules or regulations.
"Facility" has the meaning set forth in the Formation Agreement.
"Fair Market Value" means, with respect to any asset or equity interest,
its fair market value determined according to Article XIV.
"Final Balance Sheet" has the meaning set forth in Section 17.1.
-6-
"Final Net Working Capital" means the dollar amount of current assets set
forth on the Final Balance Sheet less the dollar amount of current liabilities
set forth on the Final Balance Sheet.
"Fiscal Quarter" means the three-month period beginning with the first day
of the Fiscal Year and ending on the last day of the third month of such Fiscal
Year and each three-month period thereafter.
"Fiscal Year" means the Company's annual accounting period established
pursuant to Section 8.2.
"Formation Agreement" means the Joint Venture Formation Agreement, dated as
of December 8, 2002, by and among the Company and the Initial Unitholders, as
amended or modified from time to time in accordance with the terms thereof.
"FTC" has the meaning set forth in Section 15.1(d)(iii).
"GAAP" means generally accepted accounting principles in the United States
in effect from time to time.
"General Ledger" has the meaning set forth in Section 8.3(a).
"Governmental Approvals" shall mean any consent, approval, authorization,
waiver, permit, grant, franchise, concession, agreement, license, exemption or
order of, registration, certificate, declaration or filing with, or report or
notice of or to, any Governmental Authority.
"Governmental Authority" means the United States of America or any other
nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government or any agency or department or subdivision of any
governmental authority, including the United States federal government or any
state or local government.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent: (i) in respect of borrowed money; (ii)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof); (iii) in respect of
banker's acceptances; (iv) representing capital lease obligations; (v)
representing the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or trade
payable; and (vi) representing any interest rate or currency hedging
obligations, if and to the extent any of the preceding items (other than letters
of credit and hedging obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP. In addition,
"Indebtedness" includes (a) all Indebtedness of others secured by a Lien on any
asset of such Person (whether or not such Indebtedness is assumed by such
Person), (b) obligations with respect to self-insurance arrangements, including
for workers' compensation, and (c) to the extent not otherwise included, the
guarantee by such Person of any Indebtedness of others.
-7-
"Indenture" means the Indenture, to be dated as of the date of the
Metaldyne Call Option Closing, by and between Metaldyne and DaimlerChrysler,
having substantially the terms set forth on Exhibit E and to be in a form
mutually agreed by DaimlerChrysler and Metaldyne prior to the Closing Date (as
defined in the Formation Agreement).
"Initial Unitholders" means DaimlerChrysler and Metaldyne.
"Interest" means the interest of a Unitholder in Profits, Losses, and
Distributions.
"International Qualified Collective Bargaining Agreement" means an
agreement between DaimlerChrysler and the International UAW constituting the
effective withdrawal of the Facility, including leased bargaining unit employees
as provided in the Employee Matters Agreement and any employees hired and
employed directly by the Company, from all terms and conditions of the
DaimlerChrysler/UAW National Agreement (including all side letters), including,
but not limited to, provisions regarding labor protection (including the
so-called ESS (BEL), SWEL sub pay, and any other job security or job guarantee
provisions), outsourcing restrictions, job relocation provisions, mandatory
classification and training provisions, and all other national terms and
conditions that would in any way limit the ability of the Company to operate the
Facility in any manner following the Metaldyne Call Option Closing.
"Inventory" has the meaning set forth in the Formation Agreement.
"JV Period" means the period beginning on the date of this Operating
Agreement and ending on the JV Termination Date.
"JV Termination Date" means the date of the Metaldyne Call Option Closing,
Metaldyne Put Option Closing or the DaimlerChrysler Call Option Closing,
whichever occurs.
"Law" means any law, statute, regulation, ordinance, rule, order, decree,
judgment, consent decree, settlement agreement or governmental requirement
enacted, promulgated, entered into, agreed to or imposed by any Governmental
Authority.
"Leased Employees Qualified Collective Bargaining Agreements" means
agreements entered into voluntarily, without arbitration or court order, between
DaimlerChrysler and the International UAW, as well as any other unions,
governing DaimlerChrysler employees who will or may be leased to the Company
after the Metaldyne Call Option Closing, in form(s) satisfactory to Metaldyne in
its sole discretion in respect of its operation of the Business.
"Letter of Representations" has the meaning set forth in Section
15.2(d)(iii)(B).
"Liens" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable Law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.
-8-
"Local Qualified Collective Bargaining Agreements" means agreements entered
into voluntarily, without arbitration or court order, between the Company and
the International UAW and its Local 371, as well as any other unions, if any,
representing employees to be hired by the Company at the Facility after the
Metaldyne Call Option Closing, in form(s) satisfactory to Metaldyne in its sole
discretion.
"Loss" means, for each Taxable Year or other period, an amount equal to the
Company's items of deduction and loss for such year or other period, determined
in accordance with Section 703(a) of the Code (including all items of loss or
deduction required to be stated separately under Section 703(a)(1) of the Code),
with the following adjustments:
(i) any expenditures of the Company described in Section 705(a)(2)(B)
of the Code or treated as Section 705(a)(2)(B) expenditures under Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Loss, will be considered an item of Loss;
(ii) loss resulting from any disposition of any assets of the Company
with respect to which gain or loss is recognized for federal income tax
purposes will be computed by reference to the Book Value of such asset,
notwithstanding that the adjusted tax basis of such asset may differ from
its Book Value;
(iii) in lieu of depreciation, amortization and other cost recovery
deductions taken into account in computing taxable income or loss, there
will be taken into account depreciation, amortization and other cost
recovery deductions for the Taxable Year or other period as determined in
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g);
(iv) any items of deduction and loss allocated pursuant to Section 4.4
hereof shall not be considered in determining Loss; and
(v) any decrease to Capital Accounts as a result of any adjustment to
the Book Value of Company assets pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(f) shall constitute an item of Loss.
"Management Agreement" means that the Management Agreement, dated as of the
date hereof, by and among the Company and the Initial Unitholders, as the same
may be amended from time to time pursuant to the terms thereof.
"Manager" means a Person duly elected to the Board who, for purposes of the
Delaware Act, will be deemed a "manager" (as defined in the Delaware Act) but
will be subject to the rights, obligations, limitations and duties set forth in
this Operating Agreement.
"Metaldyne" means Metaldyne Corporation, a Delaware corporation, and any
successor.
"Metaldyne Call Option" has the meaning set forth in Section 15.1(a).
"Metaldyne Call Option Closing" has the meaning set forth in Section
15.1(d)(iv).
-9-
"Metaldyne Call Option Notice" has the meaning set forth in Section
15.1(d)(i).
"Metaldyne Call Option Notice Date" has the meaning set forth in Section
15.1(d)(i).
"Metaldyne Material Adverse Change" means a change (or historical
circumstance or event resulting in a prospective change) that is materially
adverse with respect to the business, operations, assets, liabilities, results
of operations, cash flows or financial condition of Metaldyne and its
Subsidiaries, taken as a whole; provided, however, that any change (or
historical circumstance or event resulting in a prospective change) that is
generally applicable to (i) the industries and markets in which Metaldyne and
its Subsidiaries operate their respective businesses, (ii) the United States or
global economy or (iii) the United States securities markets shall be excluded
from the determination of Metaldyne Material Adverse Change; and provided,
further, that any change (or historical circumstance or event resulting in a
prospective change) resulting from or arising out of the exercise or the
consummation of the Metaldyne Call Option shall also be excluded from the
determination of a Metaldyne Material Adverse Change.
"Metaldyne Material Adverse Effect" means an effect (or historical
circumstance or event involving a prospective effect) that is materially adverse
with respect to the business, operations, assets, liabilities, results of
operations, cash flows or financial condition of Metaldyne and its Subsidiaries,
taken as a whole; provided, however, that any effect (or circumstance or event
involving a prospective effect) that is generally applicable to (i) the
industries and markets in which Metaldyne and its Subsidiaries operate their
respective businesses, (ii) the United States or global economy or (iii) the
United States securities markets shall be excluded from the determination of
Metaldyne Material Adverse Effect; and provided, further, that any effect (or
historical circumstance or event resulting in a prospective effect) resulting
from or arising out of the exercise or the consummation of the Metaldyne Call
Option shall also be excluded from the determination of a Metaldyne Material
Adverse Effect.
"Metaldyne Put Option" has the meaning set forth in Section 15.2(a).
"Metaldyne Put Option Closing" has the meaning set forth in Section
15.2(d)(i).
"Minimum Gain" means the partnership minimum gain determined pursuant to
Treasury Regulation Section 1.704-2(d).
"Net Loss" means, for any period, the excess of items of Loss over items of
Profit, if applicable, for such period determined without regard to any items of
Profit or Loss allocated pursuant to Section 4.3.
"Net Profit" means, for any period, the excess of items of Profit over
items of Loss, if applicable, for such period determined without regard to any
items of Profit or Loss allocated pursuant to Section 4.3.
"Nonrecourse Deductions" has the meaning set forth in Treasury Regulation
Section 1.704-2.
"Notes" has the meaning set forth in Section 15.1(d)(v)(A)(3).
-10-
"Officers" means each person designated as an officer of the Company to
whom authority and duties have been delegated pursuant to Section 5.5, subject
to any resolution of the Board appointing such person as an officer or relating
to such appointment.
"Ongoing Financial Statements" has the meaning set forth in Section 8.3(a).
"Operating Agreement" means this Amended and Restated Operating Agreement,
as amended or modified from time to time in accordance with the terms hereof.
"Operating Budget and Capital Plan" means the operating budget and capital
plan of the Company attached hereto as Exhibit I.
"Permitted Transferee" means with respect to any Unitholder, (A) any
wholly-owned Subsidiary of such Unitholder, (B) any other Unitholder or (C) any
Permitted Transferee of any other Unitholder.
"Person" means any individual, partnership, corporation, limited liability
company, association, joint stock company, trust, joint venture, unincorporated
organization, firm, proprietorship or any other business entity or a
Governmental Authority.
"Proceeding" has the meaning set forth in Section 7.3.
"Profit" means, for each Taxable Year or other period, an amount equal to
the Company's taxable income and gain for such Taxable Year or other period,
determined in accordance with Section 703(a) of the Code (including all items of
income and gain required to be stated separately under Section 703(a)(1) of the
Code), with the following adjustments:
(i) any income of the Company that is exempt from federal income tax
and not otherwise taken into account in computing Profit or Loss will be
considered an item of profit;
(ii) gain resulting from any disposition of any assets of the Company
with respect to which gain or loss is recognized for federal income tax
purposes will be computed by reference to the Book Value of such property,
notwithstanding that the adjusted tax basis of such property may differ
from its Book Value;
(iii) any items allocated pursuant to Section 4.4 hereof shall not be
considered in determining Profit; and
(iv) any increase to Capital Accounts as a result of any adjustment to
the Book Value of Company assets pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(f) shall constitute an item of Profit.
"Qualified Collective Bargaining Agreement Date" means the first date on
which (i) an International Qualified Collective Bargaining Agreement has been
duly ratified voluntarily, without arbitration or court order, by the UAW, (ii)
all Local Qualified Collective Bargaining Agreements have been duly ratified
voluntarily, without arbitration or court order, by those individuals to whom
-11-
Metaldyne has made a conditional offer of employment at the Facility and (iii)
legally enforceable and binding Leased Employees Qualified Collective Bargaining
Agreements have been duly executed.
"Relief Letter" has the meaning set forth in Section 8.3(a).
"Regulatory Allocations" has the meaning set forth in Section 4.3(f).
"Regulatory Challenge" has the meaning set forth in Section 15.1(d)(iii).
"Related Agreement" means any contract, lease, agreement, instrument or
other document that is or is to be entered into on or prior to the date hereof
pursuant to, or in connection with, this Operating Agreement, including, without
limitation, the Formation Agreement, the Employee Leasing Agreement, the Supply
Agreement, the Management Agreement, the Securities Purchase Agreement, the
Investor Rights Agreement, the Indenture and the Transition Services Agreement.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
applicable rules and regulations promulgated thereunder, and any successor to
such statute, rules or regulations.
"Securities Purchase Agreement" means the Securities Purchase Agreement, to
be dated as of the date of the Metaldyne Call Option Closing, by and among
Metaldyne and the Class B Unitholders who receive Series A-1 Preferred Stock or
Senior Subordinated Notes at the Metaldyne Call Option Closing, substantially in
the form of Exhibit C.
"Senior Subordinated Notes" means the $31,746,000 aggregate principal
amount of Metaldyne's 10% Senior Subordinates Notes, in the form required by the
Indenture.
"Senior Subordinated Notes Registration Rights Agreement" means the
Registration Rights Agreement, to be dated as of the date of the Metaldyne Call
Option Closing, by and among Metaldyne and Class B Unitholders who receive
Senior Subordinated Notes at the Metaldyne Call Option Closing, having
substantially the terms set forth on Exhibit E and to be in a form mutually
agreed by DaimlerChrysler and Metaldyne prior to the Closing Date (as defined in
the Formation Agreement).
"Series A-1 Preferred Stock" means Series A-1 Preferred Stock of Metaldyne
having the terms set forth in the Certificate of Designations.
"Series A-1 Preferred Stock Investor Rights Agreement" means the Investor
Rights Agreement, to be dated as of the date of the Metaldyne Call Option
Closing, by and among Metaldyne and the Class B Unitholders who receive Series
A-1 Preferred Stock at the Metaldyne Call Option Closing, having substantially
the terms set forth on Exhibit D and to be in a form mutually agreed by
DaimlerChrysler and Metaldyne prior to the Closing Date (as defined in the
Formation Agreement).
"Series A-2 Preferred Stock" means Series A-2 Preferred Stock of Metaldyne
having the terms set forth in the Certificate of Designations.
-12-
"Shares" has the meaning set forth in Section 15.1(d)(v)(A)(4).
"Subsidiary" means, with respect to any Person: (i) any other Person of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person (or a combination thereof); and (ii) any partnership
or limited liability company (a) the sole general partner or member or the
managing general partner or member of which is such Person or a Subsidiary of
such Person or (b) the only general partners or members of which are such Person
or one or more Subsidiaries of such Person (or any combination thereof).
"Substituted Unitholder" means a Person that is admitted as a Unitholder to
the Company pursuant to Section 11.1.
"Supply Agreement" means the Supply Agreement, dated as of the date hereof,
by and between the Company and DaimlerChrysler.
"Taxes" shall mean all taxes, charges, fees, duties, levies or other
assessments related to the Business, including income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, stamp, leasing, lease,
user, transfer, fuel, excess profits, occupational, interest equalization,
windfall profits, severance, employee's income withholding, other withholding,
unemployment and Social Security taxes, which are imposed by any Governmental
Authority, including any interest, penalties or additions to tax attributable
thereto.
"Tax Distribution" means a Distribution made pursuant to Section 4.1(b).
"Tax Matters Partner" has the meaning set forth in Section 9.3.
"Taxable Year" means the year of the Company for federal income tax
purposes, which shall be the Company's Fiscal Year unless the Board determines
otherwise in compliance with applicable Laws.
"Transaction Documents" means the Formation Agreement, the Employee Leasing
Agreement, the Supply Agreement, the Management Agreement, this Operating
Agreement, the Securities Purchase Agreement, the Investor Rights Agreement, the
Indenture, the Transition Services Agreement and any other Related Agreements.
"Transfer" means any sale, transfer, assignment, pledge, mortgage,
exchange, hypothecation, grant of a security interest or other direct or
indirect disposition or encumbrance of an interest (including, without
limitation, by operation of applicable Law) or the acts thereof. The terms
"Transferee," "Transferred" and other forms of the word "Transfer" shall have
correlative meanings.
"Transition Services Agreement" means the Transition Services Agreement, to
be dated as of the date of the Metaldyne Call Option Closing, by and between the
Company and DaimlerChrysler, substantially in the form of Exhibit H.
-13-
"Treasury Regulations" means the income tax regulations promulgated by the
U.S. Treasury Department pursuant to the Code and effective as of the date
hereof. Such term shall, at the Board's sole discretion, be deemed to include
any future amendments to such regulations and any corresponding provisions of
succeeding regulations (whether or not such amendments and corresponding
provisions are mandatory or discretionary; provided, however, that if they are
discretionary, the term "Treasury Regulations" shall not include them if
including them would have a material adverse effect on any Unitholder).
"UAW" means International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America.
"Unit" means an Interest of a Unitholder or an Assignee representing a
fractional part of the Interests of all Unitholders and Assignees and shall
include Class A Units, Class B Units and any Additional Units; provided that any
class or series of Units issued shall have relative rights, powers and duties
set forth in this Operating Agreement and the Interest represented by such class
or series of Units shall be determined in accordance with such relative rights,
powers and duties set forth in this Operating Agreement.
"Unitholder" means any Initial Unitholder and any Person admitted to the
Company as an Additional Unitholder or Substituted Unitholder, in each case for
so long as such Person is shown on the Company's books and records as the owner
of one or more Units.
"Unitholder Group" has the meaning set forth in Section 6.5.
"Unitholder Minimum Gain" means the Company's "partner nonrecourse debt
minimum gain" as defined in Treasury Regulation Section 1.704-2(i)(2).
"Unitholder Nonrecourse Deductions" means "partner nonrecourse deductions"
as defined in Treasury Regulation Section 1.704-2(i)(2).
"Valuation Date" has the meaning set forth in Section 4.5.
"Vice President Notice" has the meaning set forth in Section 18.19(a).
SECTION 1.2 Rules of Construction.
(a) Words used herein, regardless of the number and gender used, shall be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context requires, and, as
used herein, unless the context requires otherwise, the words "hereof," "herein"
and "hereunder" and words of similar import shall refer to this Operating
Agreement as a whole and not to any particular provision of this Operating
Agreement.
(b) A reference to any statute or statutory provision shall be construed as
a reference to the same as it may have been, or may from time to time be,
amended, modified or reenacted.
(c) The terms "dollars" and "$" shall mean United States dollars.
-14-
(d) The term "including" shall be deemed to mean "including without
limitation".
(e) Article and section headings used in this Operating Agreement are for
convenience of reference only and shall not affect the interpretation of this
Operating Agreement.
(f) This Operating Agreement is among financially sophisticated and
knowledgeable parties and is entered into by the parties in reliance upon the
economic and legal bargains contained herein and shall be interpreted and
construed in a fair and impartial manner without regard to such factors as the
party who prepared, or caused the preparation of, this Operating Agreement or
the relative bargaining power of the parties.
ARTICLE II
ORGANIZATIONAL MATTERS
SECTION 2.1 Formation. The Company has been organized as a Delaware limited
liability company by the filing with the Secretary of State of the State of
Delaware of the Certificate under and pursuant to the Delaware Act and shall be
continued in accordance with this Operating Agreement. The rights and
liabilities of the Unitholders shall be as provided in the Delaware Act, except
as otherwise provided in this Operating Agreement.
SECTION 2.2 The Certificate, Etc. The Certificate was filed with the
Secretary of State of the State of Delaware on December 6, 2002. The Unitholders
hereby agree to execute, file and record all such other certificates and
documents, including amendments to the Certificate, and to do such other acts as
may be reasonably necessary to comply with all requirements for the formation,
continuation and operation of a limited liability company, the ownership of
property, and the conduct of business under the Laws of the State of Delaware
and any other jurisdiction in which the Company may own property or conduct
business.
SECTION 2.3 Name. The name of the Company shall be "NC-M Chassis Systems,
LLC". The Board in its sole discretion may change the name of the Company at any
time and from time to time. Notification of any such change shall be given to
all Unitholders. The Company's business may be conducted under its name and/or
any other name or names deemed advisable by the Board.
SECTION 2.4 Purpose.
(a) General. Except as may be otherwise approved by the Board, the purpose
and business of the Company shall be to engage in any lawful act or activity
which may be conducted by a limited liability company formed pursuant to the
Delaware Act and engaging in all activities, contracts and agreements related to
or incidental to the above stated purposes as the Board may determine to be
appropriate from time to time. Notwithstanding anything herein to the contrary,
nothing set forth herein shall be construed as authorizing the Company to
possess any purpose or power, or to do any act or thing, forbidden by applicable
Law to a limited liability company organized under the Laws of the State of
Delaware.
-15-
(b) Board of Managers. Subject to the provisions of this Operating
Agreement, (i) the Company may, with the approval of the Board when required
herein, enter into and perform under any and all documents, agreements and
instruments, all without any further act, vote or approval of any Unitholder;
and (ii) the Board may authorize any Person (including any Unitholder or
Officer) to enter into and perform under any document, agreement or instrument
on behalf of the Company.
SECTION 2.5 Powers of the Company. Subject to the provisions of this
Operating Agreement (including, without limitation, Sections 3.2(j) and 5.3(g)),
the Company shall have the power and authority to take any and all actions
necessary, appropriate, proper, advisable, convenient or incidental to or for
the furtherance of the purposes set forth in Section 2.4, including, without
limitation, the power to do any and all of the following:
(a) to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the Delaware
Act in any state, territory, district or possession of the United States,
or in any foreign country that may be necessary, convenient or incidental
to the accomplishment of the purposes of the Company;
(b) to acquire by purchase, lease, contribution of property or
otherwise, own, hold, operate, maintain, finance, refinance, improve,
lease, sell, convey, mortgage, transfer, demolish or dispose of any real or
personal property that may be necessary, convenient or incidental to the
accomplishment of the purposes of the Company;
(c) to enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with any Unitholder or any
Affiliate thereof, or any agent of the Company necessary to, in connection
with, convenient to or incidental to the accomplishment of the purposes of
the Company;
(d) to purchase, take, receive, subscribe for or otherwise acquire,
own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise
dispose of, and otherwise use and deal in and with, shares or other
interests in or obligations of domestic or foreign corporations,
associations, general or limited partnerships (including the power to be
admitted as a partner thereof and to exercise the rights and perform the
duties created thereby), trusts, limited liability companies (including the
power to be admitted as a Unitholder or appointed as a manager thereof and
to exercise the rights and perform the duties created thereby) or
individuals or direct or indirect obligations of the United States of
America or any other nation or of any government, state, territory,
governmental district or municipality or of any instrumentality of any of
them;
(e) to lend money for any proper purpose, to invest and reinvest its
funds and to take and hold real and personal property for the payment of
funds so loaned or invested;
(f) to xxx and be sued, complain and defend, and participate in
administrative or other proceedings in its name;
-16-
(g) to appoint employees, managers, contractors, advisors, attorneys,
consultants and agents of the Company and define their duties and fix their
compensation;
(h) to indemnify any Person in accordance with the Delaware Act and to
obtain any and all types of insurance;
(i) to cease its activities and cancel its Certificate;
(j) to negotiate, enter into, renegotiate, extend, renew, terminate,
modify, amend, waive, execute, acknowledge or take any other action with
respect to any lease, contract or security agreement in respect of any
assets of the Company;
(k) to borrow money and issue evidences of Indebtedness and guaranty
indebtedness (whether of the Company or any of its Subsidiaries), and to
secure the same by a mortgage, pledge or other Lien on the assets of the
Company;
(l) to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the
Company or to hold such proceeds against the payment of contingent
liabilities;
(m) to act as a trustee, executor, nominee, bailee, director, officer,
agent or in some other fiduciary capacity for any Person and exercise all
the powers, duties, rights and responsibilities associated therewith;
(n) to take any and all actions necessary or appropriate as trustee,
executor, nominee, bailee, director, officer, agent or other fiduciary,
including the granting or approval of waivers, consents or amendments of
rights or powers relating thereto and the execution of appropriate
documents to evidence such waivers, consents or amendments;
(o) to invest any funds of the Company pending distribution or payment
of the same pursuant to the provisions of this Operating Agreement;
(p) to prepay in whole or in part, refinance, recast, increase, modify
or extend any Indebtedness of the Company and, in connection therewith,
execute any extensions, renewals or modifications of any mortgage or
security agreement securing such Indebtedness; and
(q) to make, execute, acknowledge and file any and all documents or
instruments necessary, convenient or incidental to the accomplishment of
the purposes of the Company.
SECTION 2.6 Representations and Warranties of the Company. As of the date
hereof, the Company by its execution of this Operating Agreement represents and
warrants to each Initial Unitholder and acknowledges that:
-17-
(a) Organization. The Company (i) is duly organized, validly existing
and in good standing under the Laws of the State of Delaware and (ii) has
full power and authority to enter into and perform its obligations under
this Operating Agreement.
(b) Authority; Enforceability. The execution and delivery by the
Company of this Operating Agreement, and its performance and consummation
of the transactions contemplated hereby, have been duly authorized by all
requisite action. This Operating Agreement constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization, fraudulent transfer or
other similar Laws of general applicability relating to or affecting
creditors' rights from time to time in effect and general principles of
equity, including concepts of materiality, reasonableness, good faith and
fair dealing, regardless of whether in a proceeding in equity or at law.
(c) Consents and Approvals. All authorizations, approvals and
consents, if any, required to be obtained from, and all registrations,
declarations and filings, if any, required to be made with, all
Governmental Authorities to permit the Company to issue the Units and to
execute and deliver, and to perform its obligations under, and to
consummate the transactions contemplated by, this Operating Agreement have
been obtained or made, as the case may be, and all such authorizations,
approvals, consents, registrations, declarations and filings are in full
force and effect.
(d) No Violations. Except as otherwise may be required by this
Operating Agreement, neither the issuance of the Units by the Company, the
execution or delivery by the Company of this Operating Agreement, the
performance by the Company of its obligations hereunder, nor the
consummation by the Company of the transactions contemplated hereby, will
(i) conflict with, violate or result in a breach of, any of the terms,
conditions or provisions of any Law applicable to the Company, (ii)
conflict with, violate or result in a breach of, or constitute a default
under any of the terms, conditions or provisions of the Certificate, (iii)
conflict with, violate or result in a material breach of, or constitute a
material default under, any of the terms, conditions or provisions of any
material loan agreement, indenture, trust deed or other agreement or
instrument to which the Company is a party or by which it is bound, or (iv)
result in the creation or imposition of any material Lien upon any material
property or assets of the Company.
SECTION 2.7 Foreign Qualification. The Board shall cause the Company to
comply, to the extent procedures are available and those matters are reasonably
within the control of the Board, with all requirements necessary to qualify the
Company as a foreign limited liability company in each jurisdiction other than
the State of Delaware where such qualification is necessary in order to conduct
the business of the Company. At the request of the Board or any Officer, each
Unitholder shall execute, acknowledge, swear to and deliver all certificates and
other instruments conforming with this Operating 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 or does
conduct business.
-18-
SECTION 2.8 Principal Office; Registered Office. The principal office of
the Company shall be located at 0000 X Xxxxxx, Xxx Xxxxxx, Xxxxxxx 00000 or at
such other place as the Board may from time to time designate, and all business
and activities of the Company shall be deemed to have occurred at its principal
office. The Company may maintain offices at such other place or places as the
Board deems advisable. Notification of any such change shall be given to all
Unitholders. The registered office of the Company required by the Delaware Act
to be maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Board may designate from time to
time in the manner provided by applicable Law. The registered agent of the
Company for service of process in the State of Delaware shall be the initial
registered agent named in the Certificate or such other Person or Persons as the
Board may designate from time to time in the manner provided by applicable Law.
SECTION 2.9 Term. The term of the Company commenced upon the filing of the
Certificate in accordance with the Delaware Act and shall continue in existence
until termination and dissolution thereof in accordance with the provisions of
Article XIII.
SECTION 2.10 No State-Law Partnership. The Unitholders intend that the
Company not be a partnership (including, without limitation, a limited
partnership), and that no Unitholder be a partner of any other Unitholder by
virtue of this Operating Agreement (except for tax purposes as set forth in the
next succeeding sentence of this Section 2.10), and neither this Operating
Agreement nor any other document entered into by the Company or any Unitholder
relating to the subject matter hereof shall be construed to suggest otherwise.
The Unitholders intend that the Company shall be treated as a partnership for
federal and, if applicable, state or local income tax purposes, and that each
Unitholder and the Company shall file all tax returns and shall otherwise take
all tax and financial reporting positions in a manner consistent with such
treatment. Without the vote of the holders of at least 66 2/3% of the
outstanding Class A Units, the Company shall not make an election to be treated
as a corporation for federal income tax purposes pursuant to Treasury Regulation
Section 301.7701-3 (or any successor regulation or provision) and, if
applicable, state and local income tax purposes.
ARTICLE III
UNITS; CAPITAL ACCOUNTS
SECTION 3.1 Unitholders.
(a) Generally. The name, address, number of Units of each class or series,
Capital Contributions and Capital Account of each Unitholder are listed on
Schedule A. Any reference in this Operating Agreement to Schedule A shall be
deemed to be a reference to Schedule A as amended and in effect from time to
time. The Company and each Unitholder shall file all tax returns, including any
schedules thereto, in a manner consistent with the Capital Accounts. Each Person
listed on Schedule A, upon (i) his, her or its execution of this Operating
Agreement or a counterpart thereto and (ii) receipt (or deemed receipt) by the
Company of such Person's Capital Contribution as set forth on Schedule A, is
hereby admitted to the Company as a Unitholder of the Company. Each Unitholder's
interest in the Company, including such Unitholder's Interest in Profits, Losses
and Distributions of
-19-
the Company and the right to vote on certain matters as provided in this
Operating Agreement, shall be represented by the Units owned by such Unitholder.
The ownership of Units shall entitle each Unitholder to allocations of Profits,
Losses and Distributions as set forth in Article IV hereof. The Board may in its
discretion issue certificates to the Unitholders representing the Units held by
each Unitholder.
(b) Representations and Warranties of Unitholders. Each Initial Unitholder,
as of the date hereof by its execution of this Operating Agreement, each other
Unitholder, as of the date of and by its acceptance of any Units, represents and
warrants to the Company and acknowledges that:
(i) Organization. Such Unitholder is duly organized, validly existing
and in good standing under the Laws of its jurisdiction of organization and
has full power and authority to enter into and perform its obligations
under this Operating Agreement;
(ii) Authority; Enforceability. The execution and delivery by such
Unitholder of this Operating Agreement, and its performance and
consummation of the transactions contemplated hereby, have been duly
authorized by all requisite action. This Operating Agreement constitutes a
valid and legally binding obligation of such Unitholder, enforceable
against such Unitholder in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization, fraudulent transfer or other similar Laws of general
applicability relating to or affecting creditors' rights from time to time
in effect and general principles of equity, including concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether in a proceeding in equity or at law.
(iii) Consents and Approvals. All authorizations, approvals and
consents, if any, required to be obtained from, and all registrations,
declarations and filings, if any, required to be made with, all
Governmental Authorities to permit such Unitholder to acquire its Units and
to execute and deliver, and to perform its obligations under, and to
consummate the transactions contemplated by, this Operating Agreement have
been obtained or made, as the case may be, and all such authorizations,
approvals, consents, registrations, declarations and filings are in full
force and effect.
(iv) No Violations. Except as otherwise may be required by this
Operating Agreement, neither the acquisition by such Unitholder of the
Units being acquired by it, the execution or delivery by such Unitholder of
this Operating Agreement, the performance by such Unitholder of its
obligations hereunder, nor the consummation by such Unitholder of the
transactions contemplated hereby, will (A) conflict with, violate or result
in a breach of any of the terms, conditions or provisions of any Law
applicable to such Unitholder, (B) conflict with, violate or result in a
breach of, or constitute a default under, any of the terms, conditions or
provisions of its charter documents, (C) conflict with, violate or result
in a material breach of, or constitute a material default under, any of the
terms, conditions or provisions of any material loan agreement, indenture,
trust deed or other agreement or instrument to which such Unitholder is a
party or by which it is bound, or (D) result in the creation or imposition
of any material Lien upon any material property or assets of such
Unitholder.
-20-
(c) No Liability of Unitholders.
(i) Except as otherwise set forth in this Operating Agreement or
required by applicable Law, no Unitholder shall have any personal liability
whatsoever in such Unitholder's capacity as a Unitholder, whether to the
Company, to any of the other Unitholders, to the creditors of the Company
or to any other third party, for the debts, liabilities, commitments or any
other obligations of the Company or for any losses of the Company. Each
Unitholder shall be liable only to make such Unitholder's Capital
Contribution to the Company, if any, and the other payments provided
expressly herein.
(ii) In accordance with the Delaware Act and the Laws of the State of
Delaware, a Unitholder may, under certain circumstances, be required to
return amounts previously distributed to such Unitholder. It is the intent
of the Unitholders that no distribution to any Unitholder pursuant to
Article IV shall be deemed a return of money or other property paid or
distributed in violation of the Delaware Act. The payment of any such money
or distribution of any such property to a Unitholder shall be deemed to be
a compromise within the meaning of the Delaware Act, and the Unitholder
receiving any such money or property shall not be required to return to any
Person any such money or property. However, if any court of competent
jurisdiction holds that, notwithstanding the provisions of this Operating
Agreement, any Unitholder is obligated to make any such payment, such
obligation shall be the obligation of such Unitholder and not of any other
Unitholder.
SECTION 3.2 Unitholder Meetings.
(a) Voting of Unitholders.
(i) The Class A Unitholders shall be entitled to vote on all matters
submitted to the Unitholders for a vote, with each Class A Unit entitled to
one vote. Except as otherwise required by applicable Law, or as provided
below, the Class B Unitholders shall not be entitled to vote on any matters
submitted to the Unitholders for a vote, except that the Class B
Unitholders shall be entitled to vote separately as a class, with each
Class B Unit entitled to one vote, on each of the following matters:
(A) any action (including, without limitation, any repeal,
amendment or modification to the Company's Certificate or this
Operating Agreement) if such action materially and adversely changes
any rights, privileges and preferences of the Class B Unitholders;
(B) any increase in the number of Class B Units; or
(C) the creation of any new class or series of Units, or
reclassification of any Units on parity with or having a preference or
priority over the Class B Units as to voting, dividend, or liquidation
rights.
(ii) A quorum shall be present at a meeting of Unitholders if the
holders of a majority of the outstanding Class A Units are present at the
meeting in person or by proxy and, if the Class B Unitholders are entitled
to vote separately as a class on any matter to be decided at such meeting,
if
-21-
the holders of a majority of the outstanding Class B Units are present at
the meeting of the Unitholders in person or by proxy.
(iii) Except as otherwise provided for in this Operating Agreement
(including, without limitation, in Section 3.2(j)) or required by
applicable Law, all matters to be voted on by the Unitholders shall require
the vote of the holders of a majority of the outstanding Class A Units
present at a duly held meeting of Unitholders at which a quorum is present,
and if the Class B Unitholders are entitled to vote separately as a class
on any matter to be decided at a meeting, all matters to be voted on by the
holders of Class B Units shall require the vote of the holders of a
majority of the outstanding Class B Units present at a duly held meeting of
the Unitholders at which a quorum of the holders of Class B Units is
present. With respect to any matter, other than a matter for which the vote
of the holders of a specified portion of all Class A Unitholders is
expressly required by this Operating Agreement or applicable Law, the vote
of the holders of a majority of the outstanding Class A Units present at a
duly held meeting of Unitholders at which a quorum is present or, if the
Class B Unitholders are entitled to vote separately as a class on any
matter to be decided at a meeting, the vote of the holders of a majority of
the outstanding Class B Units present at a duly held meeting of the
Unitholders at which a quorum of the holders of Class B Units is present
shall be the act of the Unitholders.
(b) Place. All meetings of the Unitholders shall be held at the principal
place of business of the Company or at such other place within or without the
State of Delaware as shall be specified or fixed in the notices or waivers of
notice thereof; provided, however, that any or all Unitholders participating in
any such meeting by means of conference telephone or similar communications
equipment pursuant to Section 3.3(d) shall be deemed present at the meeting.
(c) Adjournment. Notwithstanding the other provisions of the Certificate or
this Operating Agreement, the chairman of the meeting or the holders of 66 2/3%
of the outstanding Class A Units present at the meeting shall have the power to
adjourn such meeting from time to time, without any notice other than
announcement at the meeting of the time and place of the holding of the
adjourned meeting. If such meeting is adjourned by the Class A Unitholders, such
time and place shall be determined by a vote of the holders of 66 2/3% of the
outstanding Class A Units present at such meeting. Upon the resumption of such
adjourned meeting, any business may be transacted that might have been
transacted at the meeting as originally called.
(d) Annual Meeting. An annual meeting of Unitholders, for the election of
the Managers and for the transaction of such other business as may properly come
before the meeting, shall be held at such place, within or without the State of
Delaware, on such date and at such time as the Board shall fix and set forth in
the notice of the meeting, which date shall be within thirteen (13) months
subsequent to the date of formation of the Company, in the case of the first
annual meeting of Unitholders, or the last annual meeting of Unitholders, in all
other cases.
(e) Special Meetings. Special meetings of the Unitholders for any proper
purpose or purposes may be called at any time by the Board or the holders of 33
1/3% of the outstanding Class A Units or, if any matter arises as to which the
holders of the Class B Units are entitled to vote, the holders of 33 1/3% of the
outstanding Class B Units. If not otherwise stated in or fixed in accordance
-22-
with the remaining provisions hereof, the record date for determining Class A
Unitholders or Class B Unitholders, as the case may be, entitled to call a
special meeting is the date any Class A Unitholder or Class B Unitholder, as the
case may be, first signs the notice of that meeting. Only business within the
purpose or purposes described in the notice (or waiver thereof) required by this
Operating Agreement may be conducted at a special meeting of Unitholders.
(f) Notice. A written or printed notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than three (3) Business
Days or more than thirty (30) days before the date of the meeting, either
personally, by mail or by facsimile, by or at the direction of the Board or the
Class A Unitholders or Class B Unitholders, as the case may be, calling the
meeting to each Unitholder. If mailed, any such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to each Unitholder
at its address provided for in the Company's books and records, or to such other
address or to the attention of such other Person as the recipient party has
specified by prior written notice to the sending party. Any Unitholder may waive
any such notice at any time in writing.
(g) Record Date. The date on which notice of a meeting of Unitholders is
mailed or the date on which the resolution of the Board declaring a distribution
is adopted, as the case may be, shall be the record date for the determination
of the Unitholders entitled to notice of or to vote at such meeting (including
any adjournment thereof) or the Unitholders entitled to receive such
distribution.
(h) Proxies. A Unitholder may vote either in person or by proxy executed in
writing by such Unitholder. A telegram, telex, cablegram, electronic delivery or
similar transmission by such Unitholder, or a photographic, photostatic,
facsimile or similar reproduction of a writing executed by such Unitholder,
shall be treated as an execution in writing for purposes of this Section 3.2(h).
Proxies for use at any meeting of Unitholders or in connection with the taking
of any action by written consent pursuant to Section 3.3 shall be filed with the
secretary of the Company, before or at the time of the meeting or execution of
the written consent, as the case may be. All proxies shall be received and taken
charge of and all ballots shall be received and canvassed by the secretary of
the Company, who shall decide all questions concerning the qualification of
voters, the validity of the proxies and the acceptance or rejection of votes,
unless an inspector or inspectors shall have been appointed by the chairman of
the meeting, in which event such inspector or inspectors shall decide all such
questions. No proxy shall be valid after eleven (11) months from the date of its
execution unless otherwise provided in the proxy. A proxy shall be revocable
unless the proxy form conspicuously states that the proxy is irrevocable and the
proxy is coupled with an interest. Should a proxy designate two or more Persons
to act as proxies, unless that instrument shall provide to the contrary, a
majority of such Persons present at any meeting at which their powers thereunder
are to be exercised shall have and may exercise all the powers of voting or
giving consents thereby conferred, or if only one be present, then such powers
may be exercised by that one; provided that if an even number attend and a
majority do not agree on any particular issue, the Company shall not be required
to recognize such proxy with respect to such issue if such proxy does not
specify how the Units that are the subject of such proxy are to be voted with
respect to such issue.
(i) Conduct of Unitholder Meetings. All meetings of the Unitholders shall
be presided over by the chairman of the meeting, who shall be one of the
Chairman or Vice Chairman (or a repre-
-23-
sentative thereof). The chairman of any meeting of Unitholders shall determine
the order of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of discussion as seem to him
in order.
(j) Actions Requiring Supermajority Unitholder Approval. Notwithstanding
any other provision of this Operating Agreement, in addition to any vote
required by applicable Law, the vote of the holders of at least 66 2/3% of the
outstanding Class A Units shall be required to authorize the Company to take any
of the actions set forth on Exhibit B (and such vote shall be required for the
Company to take any action in its capacity as holder of voting securities of any
of its Subsidiaries with respect to any substantially similar actions proposed
to be taken by or with respect to such Subsidiary). The Company shall take any
and all actions as may be necessary or desirable to ensure that each Subsidiary
of the Company, before taking any actions substantially similar to those set
forth on Exhibit B, must receive the consent of the Company in its capacity as
holder of voting securities of such Subsidiary.
SECTION 3.3 Action of Unitholders by Written Consent or Telephone
Conference.
(a) Written Consent in Lieu of Meeting. Any action required or permitted to
be taken at any annual or special meeting of Unitholders may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the Class A
Unitholders or Class B Unitholders, as applicable, holding not less than the
minimum percentage of Class A Units or Class B Units, as applicable, that would
be necessary to take such action at a meeting at which all Class A Unitholders
or Class B Unitholders, as applicable, entitled to vote on the action were
present and voted. Every written consent shall bear the date of signature of
each Class A Unitholder or Class B Unitholder, as applicable, who signs the
consent. No written consent shall be effective to take the action that is the
subject to the consent unless, within sixty (60) days after the date of the
earliest dated consent delivered to the Company in the manner required by this
Section 3.3(a), a consent or consents signed by the Class A Unitholders or Class
B Unitholders, as applicable, holding not less than the minimum percentage of
Class A Units or Class B Units, as applicable, that would be necessary to take
the action that is the subject of the consent are delivered to the Company by
delivery to its registered office, its principal place of business or the
secretary of the Company. Delivery shall be by hand or certified or registered
mail, return receipt requested. Delivery to the Company's principal place of
business shall be addressed to the secretary of the Company. A telegram, telex,
cablegram, electronic delivery or similar transmission by a Class A Unitholder
or Class B Unitholder, as applicable, or a photographic, photostatic, facsimile
or similar reproduction of a writing signed by a Class A Unitholder or Class B
Unitholder, as applicable, shall be regarded as signed by the Class A Unitholder
or Class B Unitholder, as applicable, for purposes of this Section 3.3(a).
Prompt notice of the taking of any action, including a statement of the action
taken, by the Unitholders without a meeting shall be given to each Unitholder at
its address provided for in the Company's books and records, or to such other
address or to the attention of such other Person as the recipient party has
specified by prior written notice to the sending party.
(b) Record Date. The record date for determining Unitholders entitled to
consent to action in writing without a meeting shall be the first date on which
a signed written consent setting forth
-24-
the action taken or proposed to be taken is delivered to the Company in the
manner required by Section 3.3(a).
(c) Filings. If any action by Unitholders is taken by written consent, any
certificate or documents filed with the Secretary of State of Delaware as a
result of the taking of the action shall state, in lieu of any statement
required by the Delaware Act concerning any vote of Unitholders, that written
consent has been given in accordance with the provisions of the Delaware Act and
that any written notice required by the Delaware Act has been given.
(d) Telephone Conference. Unitholders may participate in and hold a meeting
by means of conference telephone or similar communications equipment by means of
which all Persons participating in the meeting can hear each other, and
participation in such meeting shall constitute attendance and presence in person
at such meeting, except where a Person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
SECTION 3.4 Capital Accounts. A separate Capital Account will be maintained
for each Unitholder in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv). Consistent therewith, the Capital Account of each Unitholder
will be determined and adjusted as follows:
(a) Each Unitholder's Capital Account will be credited with:
(i) any contributions of cash made by such Unitholder to the capital
of the Company plus the Fair Market Value of any property contributed by
such Unitholder to the capital of the Company (net of any liabilities to
which such property is subject or which are assumed by the Company in
connection with the contribution);
(ii) the Unitholder's distributive share of Net Profit, Profit and
items thereof; and
(iii) any other increases required by Treasury Regulation Section
1.704-1(b)(2)(iv).
(b) Each Unitholder's Capital Account will be debited with:
(i) any distributions of cash made from the Company to such Unitholder
plus the Fair Market Value of any property distributed in kind to such
Unitholder (net of any liabilities to which such property is subject or
which are assumed by such Unitholder in connection with the distribution);
(ii) the Unitholder's distributive share of Net Loss, Loss and items
thereof; and
(iii) any other decreases required by Treasury Regulation Section
1.704-1(b)(2)(iv).
-25-
The provisions of this Section 3.4 relating to the maintenance of Capital
Accounts have been included in this Operating Agreement to comply with Section
704(b) of the Code and the Treasury Regulations promulgated thereunder and will
be interpreted and applied in a manner consistent with those provisions.
SECTION 3.5 Negative Capital Accounts. No Unitholder shall be required to
pay to any other Unitholder or the Company any deficit or negative balance which
may exist from time to time in such Unitholder's Capital Account (including upon
and after dissolution of the Company).
SECTION 3.6 No Withdrawal. No Person shall be entitled to withdraw any part
of such Person's Capital Contributions or Capital Account or to receive any
Distribution from the Company, except as expressly provided herein.
SECTION 3.7 Certificates. The interest owned by each of the Unitholders
(denominated in Units) shall be evidenced by one or more certificates. Each
certificate shall be executed by the Secretary of the Company (or other
individual designated by the Board).
SECTION 3.8 Register. The Company shall keep or cause to be kept a register
in which, subject to such regulations as the Board may adopt, the Company will
provide for the registration of Units and the registration of Transfers of
Units. Upon surrender for registration of Transfer of any Certificate, and
subject to the further provisions of Section 3.7 and this Section 3.8 and the
limitations on Transfer contained elsewhere in this Operating Agreement, the
Company will cause the execution, in the name of the registered holder or the
designated transferee, of one or more new Certificates evidencing the same
aggregate number of Units as did the Certificate surrendered or such other
number as is appropriate in the event such Transfer is pursuant to exercise of a
call option or put option pursuant to Article XV. Every Certificate surrendered
for registration of Transfer shall be duly endorsed, or be accompanied by a
written instrument of Transfer in form satisfactory to the Board, duly executed
by the registered holder thereof or such holder's authorized attorney.
SECTION 3.9 New Certificates. The Company shall issue 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 Board, 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
Board, delivers to the Company a bond, in form and substance satisfactory to the
Board, with such surety or sureties and with fixed or open liability as the
Board may direct, to indemnify the Company, as registrar, against 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
Board.
SECTION 3.10 Interest as a Security. A Unit in the Company evidenced by a
certificate shall constitute a security for all purposes of Article 8 of the
Uniform Commercial Code promulgated by the National Conference of Commissioners
on Uniform State Laws, as in effect in the State of Delaware or any other
applicable jurisdiction. The Laws of the State of Delaware shall constitute the
local law of the Company's jurisdiction in its capacity as the issuer of Units.
-26-
SECTION 3.11 Restrictive Legend. In addition to any other legends required
by applicable Law, each certificate evidencing any Unit shall bear a legend
reflecting the restrictions on the Transfer of such Unit contained in this
Operating Agreement in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
AMENDED AND RESTATED OPERATING AGREEMENT OF NC-M CHASSIS SYSTEMS, LLC
(THE "COMPANY"). A COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION
AT THE PRINCIPAL OFFICE OF THE COMPANY.
ARTICLE IV
DISTRIBUTIONS; REDEMPTIONS AND ALLOCATIONS
SECTION 4.1 Distributions.
(a) Distributions Generally. Subject to compliance with the provisions of
this Operating Agreement (including, without limitation, Sections 3.2(j) and
5.3(g)) and Section 18-607 of the Delaware Act, except as otherwise set forth in
this Section 4.1, the Board may cause the Company to make Distributions at any
time or from time to time. All Distributions shall be made only in the following
order and priority:
(i) FIRST, to the Class B Unitholders, up to an amount equal to the
Class B Unreturned Capital as of the time of such Distribution, allocated
pro rata among the Class B Unitholders based on the respective number of
Class B Units owned by each Class B Unitholder, and no Distribution or any
portion thereof may be made pursuant to Section 4.1(a)(ii) until the entire
amount of Class B Unreturned Capital as of the time of such Distribution
has been paid in full.
(ii) THEREAFTER, to the Class A Unitholders, all remaining amounts,
allocated pro rata among the Class A Unitholders based on the respective
balances of the Capital Account of each Class A Unitholder.
(b) Tax Distributions.
(i) So long as the Company is treated as a partnership for federal,
state or local income tax purposes the Company shall distribute to each
Unitholder after the end of each Taxable Year (but no later than the date
the Company files its federal income tax return), to the extent that funds
are legally available therefor, an amount of cash which in the good faith
judgment of the Board equals the excess, if any, of (A) the product of (x)
the amount of taxable income allocable to such Unitholder in respect of the
period beginning on the first day of such Taxable Year and ending at the
close of such Taxable Year, multiplied by (y) the combined maximum federal,
state and local income tax rate to be applied with respect to such taxable
income (calculated by using the highest maximum combined marginal federal,
state and local income tax rates to which such Unitholder may be subject
and taking into account the deductibility of state and local income tax for
federal income tax purposes) for such
-27-
Taxable Year (making an appropriate adjustment for any rate changes that
take place during such Taxable Year) over (B) the sum of (x) all prior Tax
Distributions made to such Unitholder during such Taxable Year and (y) all
Distributions made to such Unitholder prior to the close of such Taxable
Year pursuant to Section 4.1(a)(ii).
(ii) So long as the Company is treated as a partnership for federal,
state or local income tax purposes, to the extent funds are legally
available therefor, the Company shall distribute to each Unitholder:
(A) after the end of the first quarter of each Taxable Year of
the Company, 25% of the amount the Company estimates that it will be
required to distribute to each Unitholder in respect of such Taxable
Year pursuant to Section 4.1(b)(i);
(B) after the end of the second quarter of each Taxable Year of
the Company, (x) 50% of the amount the Company estimates that it will
be required to distribute to each Unitholder in respect of such
Taxable Year pursuant to Section 4.1(b)(i) (determined without regard
to the amount of any Tax Distributions made pursuant to this Section
4.1(b)(ii)), less (y) the amount distributed to such Unitholder
pursuant to Section 4.1(b)(ii)(A) for the first quarter of such
Taxable Year; and
(C) after the end of the third quarter of each Taxable Year of
the Company, (x) 75% of the amount the Company estimates that it will
be required to distribute to each Unitholder in respect of such
Taxable Year pursuant to Section 4.1(b)(i) (determined without regard
to the amount of any Tax Distributions made pursuant to this Section
4.1(b)(ii)), less (y) the sum of the amounts distributed to such
Unitholder pursuant to Section 4.1(b)(ii)(A) and (B) for the first and
second quarters of such Taxable Year.
If the total amount of the Distributions made by the Company to any
Unitholder pursuant to this Section 4.1(b)(ii) with respect to the first three
quarters of any Taxable Year exceeds the amount that the Company is required to
distribute to such Unitholder pursuant to Section 4.1(b)(i) for such Taxable
Year (such excess, the "Excess Tax Distributions"), then each Unitholder shall
return to the Company the Excess Tax Distributions for such Taxable Year within
thirty (30) days of receipt of notice from the Company that the return of such
Excess Tax Distributions is required.
(iii) If the Company does not have funds legally available to
distribute on a timely basis the full Tax Distributions required pursuant
to this Section 4.1(b), then: (A) Tax Distributions shall be made to the
Unitholders in proportion to the Tax Distributions they would have received
had the full amount of funds been legally available; and (B) the unpaid
amount shall (x) carry forward and be paid by the Company as soon as the
Company has funds legally available and (y) bear interest at a rate of 8%
from the date the unpaid amount would have been paid had the full amount of
funds been legally available until the date such unpaid amount is paid.
(c) Persons Receiving Distributions. Each Distribution shall be made to the
Persons shown on the Company's books and records as Unitholders as of the date
of such Distribution; pro-
-28-
vided, however, that any transferor and Permitted Transferee of Units may
mutually agree as to which of them should receive payment of any Distribution
under this Section 4.1.
SECTION 4.2 Allocations. The following allocations shall be made for
each Taxable Year of after all allocations pursuant to Section 4.3 for such
Taxable Year:
(a) Net Profit for a Taxable Year shall be allocated:
(i) First, to the Class A Unitholders pro rata based on the respective
number of Class A Units owned by each Class A Unitholder, to the extent of
any excess of Net Losses allocated to the Class A Unitholders under Section
4.2(b)(iv) for prior periods over Net Profits allocated to the Class A
Unitholders under this Section 4.2(a)(i) for prior periods;
(ii) Second, to the Class B Unitholders pro rata based on the
respective number of Class B Units owned by each Class B Unitholder, to the
extent of any excess of Net Losses allocated to the Class B Unitholders
under Section 4.2(b)(iii) for prior periods over Net Profits allocated to
the Class B Unitholders under this Section 4.2(a)(ii) for prior periods;
(iii) Third, to the Class A Unitholders pro rata based on the
respective number of Class A Units owned by each Class A Unitholder, to the
extent of any excess of Net Losses allocated to the Class A Unitholders
under Section 4.2(b)(ii) for prior periods over Net Profits allocated to
the Class A Unitholders under this Section 4.2(a)(iii) for prior periods;
(iv) Fourth, to DaimlerChrysler, to the extent of any excess of Net
Losses allocated to DaimlerChrysler under Section 4.2(b)(i) for prior
periods over Net Profits allocated to DaimlerChrysler under this Section
4.2(a)(iv) for prior periods; and
(v) Fifth, to the Class A Unitholders pro rata based on the respective
number of Class A Units owned by each Class A Unitholder.
(b) Net Loss for a Taxable Year shall be allocated:
(i) First, to DaimlerChrysler, to the extent of any excess of (A) the
sum of DaimlerChrysler's Additional Contributions under Article XVI and any
Net Profits allocated to DaimlerChrysler under Section 4.2(a)(iv), over (B)
Net Losses allocated to DaimlerChrysler under this Section 4.2(b)(i) for
prior periods;
(ii) Second, to the Class A Unitholders pro rata based on, and to the
extent of, the positive balances of their Capital Accounts, excluding any
Class B Unreturned Capital;
(iii) Third, to the Class B Unitholders, to the extent of the
remaining balance in its Capital Account; and
-29-
(iv) Fourth, the Class A Unitholders pro rata based on the respective
number of Class A Units owned by each Class A Unitholder.
SECTION 4.3 Special Allocations. The following special allocations shall,
except as otherwise provided, be made in the following order:
(a) Notwithstanding any other provision of this Article IV, if there
is a net decrease in Company Minimum Gain or in any Unitholder Minimum Gain
during any Taxable Year of the Company, prior to any other allocation
pursuant hereto, such Unitholder shall be specially allocated items of
Company Profit for such year (and, if necessary, subsequent years) in an
amount and manner required by Treasury Regulation Sections 1.704-2(f) or
1.704-2(i)(4), as appropriate. The items to be so allocated shall be
determined in accordance with Treasury Regulation Section 1.704-2 in
compliance with such Treasury Regulations.
(b) Any Unitholder who unexpectedly receives an adjustment, allocation
or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes or increases a negative
balance in his or its Capital Account shall be allocated items of Profit
sufficient to eliminate the negative balance in its Capital Account, as
quickly as possible, to the extent and in the manner required by Treasury
Regulation Section 1.704-1(b)(2)(ii)(d).
(c) Nonrecourse Deductions for any Taxable Year of the Company or
other period shall be allocated (as nearly as possible) under Treasury
Regulation Section 1.704-2 to the Class A Unitholders pro rata in
proportion to their respective ownership of Class A Units.
(d) Any Unitholder Nonrecourse Deductions for any Taxable Year of the
Company or other period shall be allocated to the Unitholder that made or
guaranteed or is otherwise liable with respect to the loan to which such
Unitholder Nonrecourse Deductions are attributable in accordance with
principles under Treasury Regulation Section 1.704-2(i).
(e) No allocation of Loss shall be made to any Unitholder if, as a
result of such allocation, such Unitholder would have an Adjusted Capital
Account Deficit. Any such disallowed allocation shall be made to the
Unitholders entitled to receive such allocation under Treasury Regulation
Section 1.704-1 in proportion to their respective ownership of Class A
Units first (to the extent allowable under Treasury Regulation Section
1.704-1) and thereafter in proportion to their respective ownership of
Class B Units.
(f) The allocations set forth in Sections 4.3(a) through (e) (the
"Regulatory Allocations") are intended to comply with certain requirements
of Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations. The
Regulatory Allocations may not be consistent with the manner in which the
Unitholders intend to allocate Profit and Loss of the Company or make
Distributions. Accordingly, notwithstanding the other provisions of this
Article IV, but subject to the Regulatory Allocations, income, gain,
deduction and loss shall be reallocated among the Unitholders so as to
eliminate the effect of the Regulatory Allocations and thereby cause the
respective Capital Accounts of the Unitholders to be in the amounts (or as
close
-30-
thereto as possible) they would have been if Profit and Loss (and such
other items of income, gain, deduction and loss) had been allocated without
reference to the Regulatory Allocations. In general, the Unitholders
anticipate that this will be accomplished by specially allocating other
Profit and Loss (and such other items of income, gain, deduction and loss)
among the Unitholders so that the net amount of the Regulatory Allocations
and such special allocations to each such Unitholder is zero.
SECTION 4.4 Tax Allocations.
(a) Except as otherwise provided in this Operating Agreement, all items of
Company income, gain, loss, deduction and any other allocation not otherwise
provided for shall be divided among the Unitholders in the same proportions as
they share the corresponding item of Profit and Loss, as the case may be, for
the Taxable Year.
(b) Items of Company taxable income, gain, loss, and deduction with respect
to any property contributed to the capital of the Company shall be allocated
among the Unitholders in accordance with Code Section 704(c) so as to take
account of any variation between the adjusted basis of such property to the
Company for federal income tax purposes and its Book Value under the traditional
method as set forth in Treasury Regulation Section 1.704-3(b).
(c) If the Book Value of any Company asset is adjusted pursuant to the
requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f)
subsequent allocations of items of taxable income, gain, loss, and deduction
with respect to such asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and its Book Value
in the same manner as under Code Section 704(c) under the traditional method as
set forth in Treasury Regulation Section 1.704-3(b).
(d) Allocations of tax credits, tax credit recapture, and any items related
thereto shall be allocated to the Unitholders according to their interests in
such items as determined by the Board taking into account the principles of
Treasury Regulation Section 1.704-1(b)(4)(ii).
(e) Allocations pursuant to this Section 4.4 are solely for purposes of
federal, state and local taxes and shall not affect, or in any way be taken into
account in computing, any Unitholder's Capital Account or Interest in Profits,
Losses, Distributions, or other Company items pursuant to any provision of this
Operating Agreement.
SECTION 4.5 Adjustment of Book Value of Assets. The Board shall adjust the
Book Value of each of the assets of the Company to equal such asset's gross Fair
Market Value in a manner consistent with Section 14.2 immediately prior to the
occurrence of each of the following events (the date of each such event, a
"Valuation Date"): (i) the acquisition of Units by any Unitholder in connection
with a contribution of money or other property (other than a de minimis amount);
(ii) the liquidation of the Company within the meaning of Treasury Regulation
Section 1.704-1(b)(2)(ii)(g) (other than a deemed liquidation described in
Treasury Regulation Section 1.704-1(b)(2)(iv)(l)) or (iii) any Distribution of
money or other property (other than a de minimis amount) by the Company to a
withdrawing or continuing Unitholder as consideration for an Interest in the
Company.
-31-
SECTION 4.6 Indemnification for Payments on Behalf of a Unitholder. If the
Company is required by applicable Law to make any payment that is specifically
attributable to a Unitholder or a Unitholder's status as such (including federal
withholding taxes, state personal property taxes and state unincorporated
business taxes), the Company shall treat such payment as a Distribution to such
Unitholder for all purposes (including, for the avoidance of doubt, a Tax
Distribution made pursuant to Section 4.1(b)). If there are insufficient amounts
otherwise distributable to such Unitholder to be fully offset by such payment,
then such Unitholder shall indemnify the Company in full for the entire amount
not so offset (including interest, penalties and related expenses). The Company
may pursue and enforce all rights and remedies it may have against each
Unitholder under this Section 4.6, including instituting a lawsuit to collect
such indemnification with interest calculated at a rate equal to 8% per annum,
compounded as of the last day of each year (but not in excess of the highest
rate per annum permitted by applicable Law).
ARTICLE V
BOARD OF MANAGERS; OFFICERS
SECTION 5.1 Management by the Board of Managers.
(a) Unitholders Elect Board. The Unitholders shall not manage and control
the business and affairs of the Company, except for situations in which the
approval of the Unitholders is required by this Operating Agreement (including,
without limitation, Section 3.2(j)) or non-waivable provisions of applicable
Law. The Board shall be elected by the Unitholders pursuant to Section 5.2(a).
(b) Authority of Board of Managers.
(i) Except for situations in which the approval of the Unitholders is
required by this Operating Agreement (including, without limitation,
Section 3.2(j)) or non-waivable provisions of applicable Law, subject to
the provisions of Section 5.1(b)(ii), (x) the powers of the Company shall
be exercised by or under the authority of, and the business and affairs of
the Company shall be managed under the direction of, the Board and (y) the
Board shall have all power and rights necessary, appropriate or advisable
to effectuate and carry out all decisions and take all actions for the
Company not otherwise provided for in this Operating Agreement, including,
without limitation, the following:
(A) entering into, making and performing contracts, agreements
and other undertakings binding the Company that may be necessary,
appropriate or advisable in furtherance of the purposes of the Company
and making all decisions and waivers thereunder;
(B) maintaining the assets of the Company in good order;
(C) collecting sums due the Company;
(D) opening and maintaining bank and investment accounts and
arrangements, drawing checks and other orders for the payment of money
and designating individuals with authority to sign or give
instructions with respect to those accounts and arrangements;
-32-
(E) to the extent that funds of the Company are available
therefor, paying debts and obligations of the Company;
(F) acquiring, utilizing for Company purposes and disposing of
any asset of the Company;
(G) hiring and employing executives, Officers, supervisors and
other employees of, and consultants to, the Company;
(H) selecting, removing and changing the authority and
responsibility of lawyers, accountants and other advisers and
consultants;
(I) entering into guaranties on behalf of the Company's
Subsidiaries;
(J) obtaining insurance for the Company;
(K) determining Distributions of cash and other property of the
Company as provided in Article IV;
(L) establishing reserves for commitments and obligations
(contingent or otherwise) of the Company; and
(M) establishing a seal for the Company.
(ii) The Board may act (A) by resolutions adopted at a meeting duly
held and by written consents pursuant to Section 5.3, (B) by delegating
power and authority to committees pursuant to Section 5.4(a) and (b), (C)
by delegating power and authority to one or more Persons (including any
Manager) pursuant to Section 5.4(c) and (D) by delegating power and
authority to any Officer pursuant to Section 5.5(a).
(iii) Each Unitholder acknowledges and agrees that no Manager shall,
as a result of being a Manager (as such), be bound to devote all of his
business time to the affairs of the Company, and that he and his Affiliates
do and will continue to engage for their own account and for the accounts
of others in other business ventures. Each Unitholder further acknowledges
and agrees that no Unitholder shall, as a result of being a Unitholder (as
such), be bound to devote all of its business time to the affairs of the
Company, and that it and its Affiliates do and will continue to engage for
their own account and for the accounts of others in other business
ventures.
SECTION 5.2 Composition and Election of the Board of Managers.
(a) Number and Election. The number of Managers on the Board shall be nine
(9). The Managers shall be designated as follows:
(i) five (5) Managers will be designated by DaimlerChrysler; and
(ii) four (4) Managers will be designated by Metaldyne.
-33-
The initial Managers designated by DaimlerChrysler shall be [ ]. The
initial Managers designated by Metaldyne shall be [ ]. Each Class A Unitholder
agrees to vote all of its Class A Units at any annual or special meeting of
Unitholders called for the purpose of electing Managers to the Board, on in any
written consent executed in lieu of such a meeting of Unitholders, in favor of
the individuals designated by DaimlerChrysler and Metaldyne in accordance with
this Section 5.2 (including any replacements designated pursuant to Section
5.2(d)), and to take any and all other actions as may be necessary or desirable
to ensure that the Board is comprised in accordance with the foregoing at all
times.
(b) Term. Members of the Board shall serve until their resignation, death
or removal or the election of their successors in accordance with the terms
hereof. Members of the Board need not be Unitholders and need not be residents
of the State of Delaware. A member of the Board may resign as such by delivering
his, her or its written resignation to the Company at the Company's principal
office addressed to the Board. Such resignation shall be effective upon receipt
unless it is specified to be effective at some other time or upon the happening
of some other event.
(c) Removal and Resignation. Any Manager may be removed at any time, with
or without cause, by the Person or Persons entitled to designate such Manager
pursuant to Section 5.2(a). Any Manager or the entire Board may be removed at
any time, for "cause" (as defined below), by the vote of the holders of 66 2/3%
of Class A Units. For the purposes of this Section 5.2(c), "cause" shall mean
the conviction of any felony. Each Class A Unitholder agrees that it will not
vote any of its Class A Units at any annual or special meeting of Unitholders,
or in any written consent executed in lieu of such a meeting of Unitholders, in
favor of the removal of any Manager who shall have been designated pursuant to
Section 5.2(a) unless (i) such removal shall be for cause or (ii) the Person or
Persons entitled to designate such Manager shall have requested or consented to
such removal in writing. Each Class A Unitholder agrees to vote all of its Class
A Units at any annual or special meeting of Unitholders called for the purpose
of removing a Manager from the Board, or in any written consent executed in lieu
of such a meeting of Unitholders, in favor of the removal of any Manager who
shall have been designated pursuant to Section 5.2(a) if the Person or Persons
entitled to designate such Manager shall have requested or consented to such
removal in writing.
(d) Vacancies. If there shall exist or occur any vacancy on the Board as a
result of the resignation, death or removal, with or without cause, of a
Manager, the Person or Persons entitled under Section 5.2(a) to designate such
Manager whose resignation, death or removal resulted in such vacancy may
designate another individual to fill such vacancy and serve as a Manager on the
Board. The Board shall appoint each Manager so designated to fill such vacancy
and such Manager hold office until his successor is duly elected and qualified
or until his earlier death, resignation or removal as provided herein.
(e) Reimbursement. The Company shall pay all reimbursable out-of-pocket
costs and expenses incurred by each member of the Board incurred in the course
of their service hereunder, including in connection with attending regular and
special meetings of the Board, any board of managers or board of directors of
any of the Company's Subsidiaries and any committee thereof.
-34-
(f) Compensation of Managers. Managers shall receive no compensation for
serving in such capacity.
SECTION 5.3 Board Meetings and Actions by Written Consent.
(a) Quorum; Voting. A majority of the total number of Managers must be
present (including pursuant to Section 5.3(g)) in order to constitute a quorum
for the transaction of business of the Board. Except as otherwise provided in
this Operating Agreement (including, without limitation, in Section 5.3(g)), the
act of a majority of the Managers present at a duly held meeting of the Board at
which a quorum is present shall be the act of the Board.
(b) Place; Attendance. Meetings of the Board may be held at such place or
places as shall be determined from time to time by resolution of the Board. All
meetings of the Board shall be presided over by a Chairman who shall be a
Manager designated by DaimlerChrysler from time to time (and not unreasonably
objected to by Metaldyne). At all meetings of the Board, business shall be
transacted in such order as shall from time to time be determined by resolution
of the Board. Attendance of a Manager at a meeting shall constitute a waiver of
notice of such meeting, except where a Manager attends a meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
(c) Special Meetings. Special meetings of the Board may be called by any
Manager on at least 48 hours' notice to each other Manager. Such notice need not
state the purpose or purposes of, or the business to be transacted at, such
meeting, except as may otherwise be required by applicable Law or provided for
in this Operating Agreement. Any Manager may waive any such notice at any time
in writing.
(d) Time, Place and Notice. Notice of regular meetings of the Board or of
any adjourned regular meeting will be given in writing at least ten (10)
Business Days prior to such meeting, unless otherwise agreed in writing by each
Unitholder. Notices of special meetings of the Board or of any adjourned special
meeting will be faxed to each Manager addressed to him or her at his or her
residence or usual place of business, so as to be received at least two (2)
Business Days before the day on which such meeting is to be held. Such notice
will include the purpose, time and place of such meeting and will set forth in
reasonable detail the matters to be considered at such meeting. However, notice
of any such meeting need not be given to any Manager if such notice is waived by
him or her in writing, whether before or after such meeting is held, or if he or
she is present at such meeting (unless such Manager objects, before any business
is conducted thereat, to the holding of such meeting without due notice), or
with respect to a regular meeting scheduled at a meeting of the Board held at
least twenty (20) calendar days prior to the date of a subsequent meeting.
(e) Chairman and Vice Chairman. The Board shall designate one of the
Managers to serve as Chairman and a different Manager to serve as Vice Chairman.
The Chairman shall preside at all meetings of the Board. If the Chairman is
absent at any meeting of the Board, the Vice Chairman shall preside over such
Board meeting. If the Chairman and Vice Chairman are absent, the Managers
present shall designate a member to serve as interim chairman for that meeting.
-35-
(f) Action by Written Consent or Telephone Conference. Any action permitted
or required by the Delaware Act, the Certificate or this Operating Agreement to
be taken at a meeting of the Board or any committee designated by the Board may
be taken without a meeting if a consent in writing, setting forth the action to
be taken, is signed by all the Managers or members of such committee, as the
case may be. Such consent shall have the same force and effect as a unanimous
vote at a meeting and may be stated as such in any document or instrument filed
with the Secretary of State of Delaware, and the execution of such consent shall
constitute attendance or presence in person at a meeting of the Board or any
such committee, as the case may be. Subject to the requirements of the Delaware
Act, the Certificate or this Operating Agreement for notice of meetings, unless
otherwise restricted by the Certificate, the Managers or members of any
committee designated by the Board may participate in and hold a meeting of the
Board or any committee, as the case may be, by means of a conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
(g) Board Actions Requiring Supermajority Approval. Notwithstanding any
other provision of this Operating Agreement, the vote of at least 66 2/3% of the
total number of Managers shall be required for the Board to approve any of the
actions set forth on Exhibit A (and such vote shall be required for the Company
to take any action in its capacity as holder of voting securities of any of its
Subsidiaries with respect to any substantially similar actions proposed to be
taken by or with respect to such Subsidiary). The Company shall take any and all
actions as may be necessary or desirable to ensure that each Subsidiary of the
Company, before taking any actions substantially similar to those set forth on
Exhibit A, must receive the consent of the Company in its capacity as holder of
voting securities of such Subsidiary.
(h) Board Approval of Local Qualified Collective Bargaining Agreements.
Notwithstanding any other provision of this Operating Agreement, (i) a majority
of the Managers designated by Metaldyne shall constitute a quorum for purposes
of approving Local Qualified Collective Bargaining Agreements and (ii) with
respect to Local Qualified Collective Bargaining Agreements, the act of a
majority of the Managers designated by Metaldyne present at a duly held meeting
of the Board at which a quorum (as defined in clause (i) above) is present shall
be the act of the Board.
SECTION 5.4 Committees; Delegation of Authority and Duties.
(a) Committees. The Board may, from time to time, designate one or more
committees and delegate any of its authority and duties to any such committee;
provided that the Board may not delegate all of its authority and duties to any
such committee. At least one third of the members of each such committee must be
Managers designated by Metaldyne and no more than two thirds of the members of
each such committee must be Managers designated by DaimlerChrysler (other than
any committee constituted (i) for the purpose of assessing or determining any
matter in which Metaldyne or DaimlerChrysler, as the case may be, has any
interest materially adverse to any interest of the Company or any other
Unitholder or (ii) solely of independent Managers in order to comply with or to
be afforded protections under Delaware Law, including the Delaware Act). Subject
to Section 5.3(g),
-36-
at every meeting of any such committee, including, without limitation, the audit
committee, the presence of a majority of all the members thereof shall
constitute a quorum, and the affirmative vote of a majority of the members
present shall be necessary for the adoption of any resolution.
(b) Audit Committee. The Board may establish an audit committee to select
the Company's independent accountants and to review the annual audit of the
Company's financial statements conducted by such accountants. Such committee
shall be comprised of three (3) Managers, one (1) of whom shall be a Manager
designated by Metaldyne and two (2) of whom shall be Managers designated by
DaimlerChrysler.
(c) Delegation to Other Persons. The Board may, from time to time, delegate
to one or more Persons (including any Manager or Officer) such authority and
duties as the Board may deem advisable, including pursuant to a management
agreement or another with, or otherwise to, one or more Persons (including any
Manager). The Board also may assign titles (including chairman, vice chairman,
chief executive officer, president, chief financial officer, vice president,
secretary, assistant secretary, treasurer and assistant treasurer) to any
Manager, Unitholder or other individual and may delegate to such Manager,
Unitholder or other individual certain authority and duties. Any number of
titles may be held by the same Manager, Unitholder or other individual. Subject
to Section 5.3(g), any delegation pursuant to this Section 5.4(c) may be revoked
at any time by the Board, without prejudice, however, to any rights under the
provisions of any management, employment or other agreement pursuant to which
such delegation was made.
SECTION 5.5 Officers.
(a) Designation and Appointment. The Board may (but need not), from time to
time, designate and appoint one or more persons as an Officer of the Company. No
Officer need be a resident of the State of Delaware, a Unitholder or a Manager.
Any Officers so designated shall have such authority and perform such duties as
the Board may, from time to time, delegate to them. The Board may assign titles
to particular Officers. Unless the Board otherwise decides, if the title is one
commonly used for officers of a business corporation formed, the assignment of
such title shall constitute the delegation to such Officer of the authority and
duties that are normally associated with that office, subject to (i) any
specific delegation of authority and duties made to such Officer by the Board
pursuant to the third sentence of this Section 5.5(a) or (ii) any delegation of
authority and duties made to one or more Officers pursuant to the terms of
Sections 5.4(c) and 5.5(c). Each Officer shall hold office until such Officer's
successor shall be duly designated and shall qualify or until such Officer's
death or until such Officer shall resign or shall have been removed in the
manner hereinafter provided. Any number of offices may be held by the same
individual. The salaries or other compensation, if any, of the Officers and
agents of the Company shall be fixed from time to time by the Board.
(b) Resignation. Any Officer (subject to any contract rights available to
the Company, if applicable) may resign as such at any time. Such resignation
shall be made in writing and shall take effect at the time specified therein, or
if no time be specified, at the time of its receipt by the Board. The acceptance
of a resignation shall not be necessary to make it effective, unless expressly
so provided in the resignation. Any Officer may be removed as such, either with
or without cause, by the
-37-
Board whenever in its judgment the best interests of the Company shall be served
thereby; provided, however, that such removal shall be without prejudice to the
contract rights, if any, of the individual so removed. Designation of an Officer
shall not of itself create contract rights. Any vacancy occurring in any office
of the Company may be filled by the Board.
(c) Duties of Officers. Subject to Section 6.5, the Officers (including any
person designated by Metaldyne to function as an Officer), in the performance of
their duties as such, shall owe to the Unitholders duties of loyalty and due
care of the type owed by the officers of a corporation to such corporation and
its stockholders under the Laws of the State of Delaware.
ARTICLE VI
GENERAL RIGHTS AND OBLIGATIONS OF UNITHOLDERS
SECTION 6.1 Limitation of Liability. Except as otherwise provided by this
Operating Agreement or applicable Law, the debts, obligations and liabilities of
the Company, whether arising in contract, tort or otherwise, shall be solely the
debts, obligations, and liabilities of the Company, and no Unitholder shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Unitholder of the Company; provided, however, that a
Unitholder shall be required to return to the Company any Distribution made to
it in clear and manifest accounting or similar error. The immediately preceding
sentence shall constitute a compromise to which all Unitholders have consented
within the meaning of the Delaware Act. Notwithstanding any other provision of
this Operating Agreement, the failure of the Company to observe any formalities
or requirements relating to the exercise of its powers or management of its
business and affairs under this Operating Agreement or the Delaware Act shall
not be grounds for imposing personal liability on the Unitholders for
liabilities of the Company.
SECTION 6.2 Lack of Authority. Without derogation to a Unitholder's rights
or obligations under any Related Agreement, no Unitholder in its capacity as
such (other than the members of the Board acting as the Board or an authorized
Officer of the Company acting as such) has the authority or power to act for or
on behalf of the Company in any manner, to do any act that would be (or could be
construed as) binding on the Company or to make any expenditures on behalf of
the Company, and the Unitholders hereby consent to the exercise by the Board of
the powers conferred on it by applicable Law and this Operating Agreement.
SECTION 6.3 No Right of Partition. No Unitholder shall have the right to
seek or obtain partition by court decree or operation of applicable Law of any
Company property, or the right to own or use particular or individual assets of
the Company.
SECTION 6.4 Unitholders' Right To Act. For situations which the approval of
any Unitholders or class thereof (rather than the approval of the Board on
behalf of the Unitholders) is required, the Unitholders shall act through
meetings and written consents as described in Section 3.2.
SECTION 6.5 Conflicts of Interest. A Unitholder, its Affiliates and each of
their respective stockholders, directors, officers, controlling persons,
partners and employees (collectively, the
-38-
"Unitholder Group") may have business interests and engage in business
activities in addition or similar to those relating to the Company and its
Subsidiaries, except as any such Person may have otherwise agreed with the
Company or another Unitholder in writing. Neither the Company nor any other
Unitholders shall have any rights by virtue of this Operating Agreement , such
Person's status as a member of a Unitholder Group or ownership of Units or
otherwise, in any business ventures of any such Person except as and to the
extent expressly provided in any written agreement among the relevant parties.
Without limiting the generality of the foregoing and to the fullest extent
permitted by Delaware Law (but subject to this Section 6.5), except as otherwise
expressly provided in this Operating Agreement or any other written agreement
between the Company and a Unitholder, if any of the Unitholders, any of their
respective Affiliates (other than the Company) or any of their officers,
directors, agents, stockholders, members or partners acquires knowledge of, or
engages in or exploits, any Corporate Opportunity, the Company shall have no
interest or expectancy in, or in being offered an opportunity to participate in,
such Corporate Opportunity, any such interest or expectancy being hereby
renounced, so that, as a result of such renunciation, such Person (a) shall have
no duty to communicate or present such Corporate Opportunity to the Company, (b)
shall have the right to hold any such Corporate Opportunity for his, her or its
(and/or his, her or its officers', directors', agents', stockholders', members'
or partners') own account or to recommend, sell, assign, or transfer such
Corporate Opportunity to Persons other than the Company, and (c) shall not
breach any fiduciary duty to the Company, in such Person's capacity as a
Unitholder of the Company or otherwise, by reason of the fact that such Person
pursues or acquires such Corporate Opportunity for itself, directs, sells,
assigns, or transfers such Corporate Opportunity to another Person, or does not
communicate information regarding such Corporate Opportunity to the Company.
SECTION 6.6 Transactions Between the Company and the Unitholders.
Notwithstanding that it may constitute a conflict of interest or Corporate
Opportunity in which the Company has an interest pursuant to Section 6.5, the
Unitholders or their Affiliates may engage in any transaction (including the
purchase, sale, lease or exchange of any property or rendering of any service or
the establishment of any salary, other compensation or other terms of
employment) with the Company (a) to the extent permitted by the Related
Agreements or (b) so long as such transaction is approved by the Board in
advance by the vote of 66 2/3% of the total number of Managers.
SECTION 6.7 Right of Inspection. From and after the date hereof, the
Company will permit each Unitholder or its representatives, at such Unitholder's
expense, to visit any of the properties of the Company, to examine all its books
of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss its affairs, finances and accounts with its officers,
directors, key employees and independent accountants or any of them (and by this
provision the Company authorizes said accountants to discuss with said
Unitholder and its representatives the finances and affairs of the Company and
its subsidiaries; provided, however, that the Company shall be provided
reasonable advance notice of such Person's intention to speak with such
accountants and the Company shall be provided a reasonable opportunity to
address the questions or matters proposed to be discussed with the accountants
prior to such Person contacting the accountants directly), all at such
reasonable times and all on reasonable notice as may be reasonably requested by
such Unitholder.
-39-
ARTICLE VII
EXCULPATION AND INDEMNIFICATION
SECTION 7.1 Liability. Except as otherwise provided under the Laws of the
State of Delaware or pursuant to this Operating Agreement, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, will be solely the debts, obligations and liabilities of the Company,
and no Manager or Officer will be obligated personally for any such debt,
obligation or liability of the Company.
SECTION 7.2 Exculpation. Except as otherwise provided by this Operating
Agreement, no Officer or Manager shall be liable to any other Officer, Manager
or the Company or to any Unitholder for any loss, damage or claim suffered by
the Company as a result of actions taken in good faith and reasonably believed
by the Officer or Manger to be in, or not opposed to, the best interests of the
Company, unless such loss is caused by such Person's gross negligence, willful
misconduct, violation of applicable Law or material breach of this Operating
Agreement. The Officers and Managers shall not be liable for errors in judgment
or neglect or for any acts or omissions that do not constitute gross negligence,
willful misconduct, violation of applicable Law or material breach of this
Operating Agreement, if such person acted in good faith and reasonably believed
such action to be in, or not opposed to, the best interests of the Company. Any
Officer or Manager may consult with counsel, accountants and other professionals
in respect of Company affairs, and provided such Person acts in good faith
reliance upon the advice or opinion of such counsel, accountants or other
professionals, such Person shall not be liable for any loss suffered by the
Company in reliance thereon.
SECTION 7.3 Right to Indemnification. Subject to the limitations and
conditions as provided in this Article VII, each Person who was or is made a
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or arbitrative (hereinafter a "Proceeding"), or any appeal in
such a Proceeding or any inquiry or investigation that could lead to such a
Proceeding, by reason of the fact that he or she is or was a Manager or Officer
shall be indemnified by the Company to the fullest extent permitted by the
Delaware Act, as the same exist or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the Company
to provide broader indemnification rights than said applicable Law permitted the
Company to provide prior to such amendment), against judgments, penalties
(including excise and similar taxes and punitive damages), fines, settlements
and reasonable expenses (including attorneys' fees) actually incurred by such
Person in connection with such Proceeding, and indemnification under this
Article VII shall continue as to a Person who has ceased to serve in the
capacity which initially entitled such Person to indemnity hereunder. The rights
granted pursuant to this Article VII shall be deemed contract rights, and no
amendment, modification or repeal of this Article VII shall have the effect of
limiting or denying any such rights with respect to actions taken or Proceedings
arising prior to any amendment, modification or repeal. It is expressly
acknowledged that the indemnification provided in this Article VII could involve
indemnification for negligence or under theories of strict liability.
Notwithstanding the foregoing, no Officer or Manager shall be indemnified for
any claim initiated by such Officer or Manager against the Company, except to
the extent such claim is raised to recover an indemnity award to which such
Officer or Manager is entitled pursuant to this Section 7.3.
-40-
SECTION 7.4 Advance Payment. Reasonable expenses incurred by a Person of
the type entitled to be indemnified under Section 7.3 who was, is or is
threatened to be made a named defendant or respondent in a Proceeding shall be
paid by the Company in advance of the final disposition of the Proceeding unless
otherwise determined by the Board in the specific case, upon receipt of an
undertaking by or on behalf of such Person to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
Company.
SECTION 7.5 Indemnification of Employees and Agents. The Company, by
adoption of a resolution of the Board, may indemnify and advance expenses to a
Person who is or was serving as an employee or agent of the Company who is not
and was not a Manager or Officer against any liability asserted against him and
incurred by him in such a capacity or arising out of his status as such a Person
to the same extent and subject to the same conditions under which it may
indemnify and advance expenses to Managers and Officers under this Article VII.
SECTION 7.6 Appearance as a Witness. Notwithstanding any other provision of
this Article VII, the Company may pay or reimburse reasonable out-of-pocket
expenses incurred by a Manager or Officer in connection with his appearance as a
witness or other participation in a Proceeding at a time when he is not a named
defendant or respondent in the Proceeding.
SECTION 7.7 Nonexclusivity of Rights. The right to indemnification and the
advancement and payment of expenses conferred in this Article VII shall not be
exclusive of any other right which a Manager, Officer or other Person
indemnified pursuant to Section 7.3 may have or hereafter acquire under any
applicable Law (common or statutory), provision of the Certificate or this
Operating Agreement, agreement, vote of Unitholders or disinterested Managers or
otherwise.
SECTION 7.8 Insurance. The Company may purchase and maintain insurance, at
its expense, to protect itself and any Person who is or was serving as a
Manager, Officer or agent of the Company or is or was serving at the request of
the Company as a manager, director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another foreign or domestic
limited ability company, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise against any
expense, liability or loss, whether or not the Company would have the power to
indemnify such Person against such expense, liability or loss under this Article
VII.
SECTION 7.9 Savings Clause. If this Article VII or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Manager, Officer or
any other Person indemnified pursuant to this Article VII as to costs, charges
and expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative to the full extent permitted by any
applicable portion of this Article VII that shall not have been invalidated,
subject to applicable Law.
-41-
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
SECTION 8.1 Records and Accounting. The Company shall keep, or cause to be
kept, appropriate books and records with respect to the Company's business,
including all books and records necessary to provide any information, lists, and
copies of documents required to be provided pursuant to Section 8.3 or pursuant
to applicable Law. All matters concerning (a) the determination of the relative
amount of allocations and distributions among the Unitholders pursuant to
Articles III and IV and (b) subject to Section 5.3(g), accounting procedures and
determinations, and other determinations not specifically and expressly provided
for by the terms of this Operating Agreement, shall be determined by the Board,
whose determination shall be final and conclusive as to all of the Unitholders
absent manifest clerical error.
SECTION 8.2 Fiscal Year. The fiscal year (the "Fiscal Year") of the Company
shall constitute the 12-month period ending on December 31 of each calendar
year, or such other annual accounting period as may be established by the Board
from time to time.
SECTION 8.3 Reports.
(a) Financial Information. It is acknowledged that ongoing financial
reporting by the Company is necessary to permit Metaldyne to comply with its
financial reporting and securities offerings requirements. To that end,
Metaldyne has agreed to provide such financial personnel and staff as may be
reasonably requested by the Company to assist the Company in the preparation of
the financial information required by this Section 8.3(a) on a timely basis.
While the financial information shall remain the responsibility of the Company,
the Company shall provide such information to Metaldyne personnel as may enable
them to assist the Company. In any event, the Company shall prepare and furnish
to Metaldyne not later than 15 days after period end (i) an annual, quarterly
and monthly unaudited general ledger trial balance of the Company and its
Subsidiaries (each, a "General Ledger"), which shall be prepared in accordance
with Seller's Accounting Principles (as defined in the Formation Agreement), and
(ii) an annual and quarterly unaudited statement of allocations (which shall
consist of the allocations described on Schedule 8.3 attached hereto) to be used
in conjunction with the annual and quarterly General Ledgers to produce the
financial statements described in the following sentence. Notwithstanding and in
addition to the foregoing, the Company shall be required to prepare and deliver
to all Unitholders (A) not later than 15 days prior to the date upon which
Metaldyne would be required to file its Annual Report on Form 10-K, consolidated
annual balance sheets and consolidated statements of operations and cash flows
and changes in shareholders' equity of the Company and its Subsidiaries, which
shall be prepared in accordance with GAAP, shall set forth in each case in
comparative form the figures for the previous year, and shall be audited by the
Company's independent accountants, and (B) not later than 15 days prior to the
date upon which Metaldyne would be required to file its Quarterly Report on Form
10-Q, consolidated unaudited quarterly balance sheets and consolidated unaudited
statements of operations and cash flows and changes in shareholders' equity of
the Company and its Subsidiaries, which shall be prepared on a basis consistent
with the annual financial statements referred to in clause (A) above, and shall
set forth in each case in comparative form year-to-date figures for the current
year and the comparable
-42-
period of the immediately preceding year and shall have been reviewed by such
auditors in accordance with the requirements of SAS 71 (collectively, the
"Ongoing Financial Statements"). The Ongoing Financial Statements shall be in
the form and for the periods that would be required for inclusion in a
registration statement filed under the Securities Act and shall comply with the
requirements of Regulation S-X under the Securities Act. It is hereby
acknowledged that Metaldyne has submitted a letter to the SEC dated November 4,
2002 in which it is seeking relief with respect to the requirements of
Regulation S-X which may be applicable to Metaldyne as a result of the
transactions contemplated by the Formation Agreement (the "Relief Letter").
Metaldyne agrees to use its reasonable best efforts to follow up with the SEC to
pursue the relief sought by the Relief Letter. To the extent that any of the
foregoing requirements would be reduced or otherwise modified as a result of the
SEC's response to the Relief Letter or otherwise, Metaldyne shall promptly (but
in no event more than five (5) Business Days following receipt of such response
or other information) inform the Company and provide the Company with the
correspondence from the SEC to that effect and the foregoing shall be deemed
modified to the extent thereof. The Company, DaimlerChrysler and Metaldyne shall
each cooperate with one another to ensure compliance with the foregoing on a
timely basis, as well as to ensure the availability of such historical and pro
forma financial information as may be reasonably required to comply with the
requirements of Regulation S-X under the Securities Act applicable to a
securities offering by Metaldyne. Notwithstanding any other provision of this
Operating Agreement, neither the Company nor DaimlerChrysler shall have any
liability to Metaldyne (or any of its Affiliates) for any of the financial
statements required by this Section 8.3 to the extent arising out of or
resulting from Metaldyne's (or any of its Affiliates') use thereof (including,
without limitation, the inclusion of such financial statements in any report or
registration statement filed under the Securities Act or the Exchange Act or any
other offering document used to sell securities of Metaldyne or any of its
Affiliates), and Metaldyne shall indemnify and hold harmless the Company and
DaimlerChrysler from any Losses arising out of or resulting from Metaldyne's (or
any of its Affiliates') use of such financial statements (including, without
limitation, the inclusion of such financial statements in any report or
registration statement filed under the Securities Act or the Exchange Act or any
other offering document used to sell securities of Metaldyne (or any of its
Affiliates).
(b) Tax Information. The Company shall prepare all federal, foreign, state
and local income tax returns that the Company is required to file. The Company
shall deliver or cause to be delivered, within sixty (60) days after the end of
each Taxable Year, to each Person who was a Unitholder at any time during such
Taxable Year, all information necessary for the preparation of such Person's
federal, foreign, state and local income tax returns.
(c) Business Reports. The Company shall prepare and deliver to each
Unitholder within fifteen (15) days after the end of each Fiscal Quarter a
report as to the implementation of the Company's Operating Budget and Capital
Plan during such Fiscal Quarter.
SECTION 8.4 Transmission of Communications. Each Person that owns or
controls Units on behalf of, or for the benefit of, another Person or Persons
shall be responsible for conveying any report, notice or other communication
received from the Company to such other Person or Persons.
SECTION 8.5 Company Funds. The Board and Officers may not commingle the
Company's funds with the funds of any Unitholders or Managers.
-43-
SECTION 8.6 Auditors. The Company's independent auditors shall be a
nationally-recognized accounting firm appointed by the Board from time to time
in accordance with Section 5.3(g), and shall initially be KPMG LLP.
ARTICLE IX
TAXES
SECTION 9.1 Tax Returns. The Company shall prepare and file all necessary
federal, state and local income tax returns, including making the elections
described in Section 9.2. Each Unitholder shall furnish to the Company all
pertinent information in its possession relating to Company operations that is
necessary to enable the Company's income tax returns to be prepared and filed.
SECTION 9.2 Tax Elections. The Company shall make any election the Company
may deem appropriate and in the best interests of the Unitholders.
SECTION 9.3 Tax Matters Partner. DaimlerChrysler shall be the "tax matters
partner" of the Company pursuant to Section 6231(a)(7) of the Code (the "Tax
Matters Partner"). The Tax Matters Partner shall take such action as may be
necessary to cause each other Unitholder to become a "notice partner" within the
meaning of Section 6223 of the Code. The Tax Matters Partner shall inform each
other Unitholder of all significant matters that may come to its attention in
its capacity as Tax Matters Partner by giving notice thereof on or before the
thirtieth (30th) business day after becoming aware thereof and, within that
time, shall forward to each other Unitholder copies of all significant written
communications he may receive in that capacity. The Tax Matters Partner may not
take any action contemplated by Sections 6222 through 6232 of the Code without
the consent of the Board, but this sentence does not authorize the Tax Matters
Partner (or any Manager) to take any action left to the determination of an
individual Unitholder under Sections 6222 through 6232 of the Code.
ARTICLE X
TRANSFER OF INTERESTS
SECTION 10.1 Transfers by Unitholders.
(a) No Unitholder shall Transfer any interest in any Units except in
compliance with this Article X. No Unitholder shall Transfer all or any part of
any interest of such Unitholder's Units unless each of the following conditions
is satisfied:
(i) either (A) the Transfer is made to one or more Permitted
Transferees of such Unitholder, (B) the Transfer has been approved by each
other Unitholder, which approval may be withheld in such Unitholder's sole
discretion or (C) the Transfer is made pursuant to Article XV;
-44-
(ii) except with respect to a Transfer pursuant to Article XV, each
transferee executes a counterpart to this Operating Agreement pursuant to
which such transferee shall agree to be bound by the provisions of this
Operating Agreement; and
(iii) the Transfer otherwise complies with the provisions of this
Operating Agreement and applicable Laws, including federal and state
securities Laws.
(b) If any Unitholder that is a wholly-owned Subsidiary of Metaldyne or
DaimlerChrysler ceases to be a wholly-owned Subsidiary of Metaldyne or
DaimlerChrysler, as the case may be, such Unitholder shall Transfer, to a
Permitted Transferee of Metaldyne or DaimlerChrysler, as the case may be, all
the Units held by it, such Transfer to be effective no later than immediately
prior to the time at which such Unitholder ceases to be a wholly-owned
Subsidiary of Metaldyne or DaimlerChrysler, as the case may be.
(c) Notwithstanding any of the provisions of this Operating Agreement, no
Transfer of Units shall in any way restrict or diminish any Unitholder's rights
with respect to the put options or call options set forth in Article XV.
SECTION 10.2 Effect of Assignment.
(a) Any Unitholder who shall assign any Units or other interest in the
Company shall cease to be a Unitholder of the Company with respect to such Units
or other interest and, except as expressly provided herein, shall no longer have
any rights or privileges of a Unitholder with respect to such Units or other
interest.
(b) Any Person who acquires in any manner whatsoever any Units or other
interest in the Company, irrespective of whether such Person has accepted and
adopted in writing the terms and provisions of this Operating Agreement, shall
be deemed by the acceptance of the benefits of the acquisition thereof to have
agreed to be subject to and bound by all of the terms and conditions of this
Operating Agreement that any predecessor in such Units or other interest in the
Company of such Person was subject to or by which such predecessor was bound.
SECTION 10.3 Restrictions on Transfer. In order to permit the Company to
qualify for the benefit of a "safe harbor" under Code Section 7704,
notwithstanding anything to the contrary in this Operating Agreement, no
Transfer of any Unit or economic interest shall be permitted or recognized by
the Company or the Board (within the meaning of Treasury Regulation Section
1.7704-1(d)) if and to the extent that such Transfer would cause the Company to
have more than 100 partners (within the meaning of Treasury Regulation Section
1.7704-1(h), including the look-through rule in Treasury Regulation Section
1.7704-1(h)(3)).
SECTION 10.4 Transfer Fees and Expenses. The transferor and transferee of
any Units or other interest in the Company shall be jointly and severally
obligated to reimburse the Company for all reasonable expenses (including
attorneys' fees and expenses) of any Transfer or proposed Transfer, whether or
not consummated.
-45-
SECTION 10.5 Void Transfers. Any Transfer by any Unitholder of any Units or
other interest in the Company in contravention of this Operating Agreement
(including, without limitation, the failure of the transferee to execute a
counterpart in accordance with Section 10.1(b)) or which would cause the Company
to not be treated as a partnership for U.S. federal income tax purposes shall be
void and ineffectual and shall not bind or be recognized by the Company or any
other party. No purported assignee shall have any right to any profits, losses
or distributions of the Company.
ARTICLE XI
ADMISSION OF UNITHOLDERS
SECTION 11.1 Substituted Unitholders. In connection with the Transfer of an
Interest of a Unitholder permitted under the terms of this Operating Agreement,
the transferee shall become a Substituted Unitholder on the effective date of
such Transfer, which effective date shall not be earlier than the date of
compliance with or waiver of the conditions to such Transfer (unless one of the
conditions to such Transfer is that Board or Unitholder approval is required for
the admission of such transferee, in which case such consent must first be
obtained), including executing counterparts of, and becoming a party to, this
Operating Agreement, and such admission shall be shown on the books and records
of the Company.
SECTION 11.2 Additional Unitholders. Any Person to whom the Company issues
or sells Units in compliance with the terms of this Operating Agreement
(including, without limitation, Section 3.2(j)) may be admitted to the Company
as an Additional Unitholder upon furnishing to the Board (a) a letter of
acceptance, in form satisfactory to the Board, of all the terms and conditions
of this Operating Agreement, including the power of attorney granted in Section
18.1, and (b) such other documents or instruments as may be necessary or
appropriate to effect such Person's admission as a Unitholder. Such admission
shall become effective on the date on which the Board determines in its sole
discretion that such conditions have been satisfied and when any such admission
is shown on the books and records of the Company.
ARTICLE XII
WITHDRAWAL AND RESIGNATION OF UNITHOLDERS
SECTION 12.1 Withdrawal and Resignation of Unitholders. No Unitholder shall
have the power or right to withdraw or otherwise resign or be expelled from the
Company prior to the dissolution and winding up of the Company pursuant to this
Article XII, except as otherwise expressly permitted by this Operating
Agreement. Notwithstanding that payment on account of a withdrawal may be made
after the effective time of such withdrawal, any completely withdrawing
Unitholder will not be considered a Unitholder for any purpose after the
effective time of such complete withdrawal, and, in the case of a partial
withdrawal, such Unitholder's Capital Account (and corresponding voting and
other rights) shall be reduced for all other purposes hereunder upon the
effective time of such partial withdrawal.
-46-
SECTION 12.2 Withdrawal of a Unitholder. No Unitholder shall have the power
or right to withdraw or otherwise resign from the Company except, simultaneous
with the Transfer of all of a Unitholder's Units in a Transfer permitted by this
Operating Agreement and, if such Transfer is to a person or entity that is not a
Unitholder, the admission of such person or entity as a Unitholder pursuant to
Section 11.1. Any purported resignation or withdrawal from the Company in
violation of this Article XII shall be void.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
SECTION 13.1 Dissolution. The Company shall not be dissolved by the
admission of Additional Unitholders or Substituted Unitholders, or by the death,
retirement, expulsion, bankruptcy or dissolution of a Unitholder or the
occurrence of any other event that terminates the continued membership of a
Unitholder in the Company. The Company may be dissolved, and its affairs may be
wound up, at any time by a determination of the Board. The Company shall be
dissolved, and its affairs shall be wound up, upon the entry of a decree of
judicial dissolution of the Company under Section 18-802 of the Delaware Act or
an administrative dissolution under Section 18-801 of the Delaware Act. Except
as otherwise set forth in this Article XIII, the Company is intended to have
perpetual existence.
SECTION 13.2 Liquidation and Termination.
(a) On dissolution of the Company, the Board shall act as liquidator or may
appoint one or more representatives or Unitholders as liquidator. The
liquidators shall proceed diligently to wind up the affairs of the Company, sell
all or any portion of the Company assets for cash or cash equivalents as they
deem appropriate, and make final distributions as provided herein and in the
Delaware Act. The costs of liquidation shall be borne as a Company expense.
Until final distribution, the liquidators shall continue to operate the Company
properties with all of the power and authority of the Board, without further
authorization or consent. The liquidators shall pay, satisfy, or discharge from
Company funds all of the debts, liabilities and obligations of the Company
(including all expenses incurred in liquidation) or otherwise make adequate
provision for payment and discharge thereof (including the establishment of a
cash fund for contingent liabilities in such amount and for such term as the
liquidators may reasonably determine) and shall promptly distribute the
remaining assets to the holders of Units in accordance with Section 4.1(a). Any
non-cash assets will first be written up or down to their Fair Market Value,
thus creating Profit or Loss (if any), which shall be allocated in accordance
with Sections 4.2 and 4.3. In making such distributions, the liquidators shall
allocate each type of asset (i.e., cash, cash equivalents, securities, etc.)
among the Unitholders ratably based upon the aggregate amounts to be distributed
with respect to the Units held by each such Unitholder. Any such distributions
in kind shall be subject to (i) such conditions relating to the disposition and
management of such assets as the liquidators deem reasonable and equitable and
(ii) the terms and conditions of any agreement governing such assets (or the
operation thereof or the holders thereof) at such time. The amount of the
distribution of any asset in kind shall be the Fair Market Value of such asset
reduced (but not below zero) by any liability encumbering such asset or to which
such asset is subject.
-47-
(b) The distribution of cash and/or property to a Unitholder in accordance
with the provisions of this Section 13.2 constitutes a complete return to the
Unitholder of its Capital Contributions and a complete distribution to the
Unitholder of its interest in the Company and all the Company's property and
constitutes a compromise to which all Unitholders have consented within the
meaning of the Delaware Act. To the extent that a Unitholder is required to
return funds to the Company pursuant to this Operating Agreement or applicable
Law, such Unitholder shall have no claim against any other Unitholder for those
funds.
SECTION 13.3 Cancellation of Certificate. On completion of the distribution
of Company assets as provided herein, the Company shall be terminated (and the
Company shall not be terminated prior to such time), and the Board (or such
other Person or Persons as the Delaware Act may require or permit) shall file a
certificate of cancellation with the Secretary of State of Delaware, cancel any
other filings made pursuant to this Operating Agreement that are or should be
canceled, and take such other actions as may be necessary to terminate the
Company. The Company shall be deemed to continue in existence for all purposes
of this Operating Agreement until it is terminated pursuant to this Section
13.3.
SECTION 13.4 Reasonable Time for Winding Up. A reasonable time shall be
allowed for the orderly winding up of the business and affairs of the Company in
light of prevailing market conditions and the liquidation of its assets pursuant
to Section 13.2 in order to minimize any losses otherwise attendant upon such
winding up.
SECTION 13.5 Return of Capital. The liquidators shall not be personally
liable for the return of Capital Contributions or any portion thereof to the
Unitholders (it being understood that any such return shall be made solely from
Company assets).
SECTION 13.6 Reserves Against Distributions. The Board shall have the right
to withhold from Distributions payable to any Unitholder under this Operating
Agreement (other than Tax Distributions) amounts sufficient to pay and discharge
any reasonably anticipated contingent liabilities of the Company. Any amounts
remaining after payment and discharge of any such contingent liabilities of the
Company will be paid to the Unitholders from whom the Distributions were
withheld.
ARTICLE XIV
VALUATION
SECTION 14.1 Determination. Subject to Sections 4.5 and 14.2, the Fair
Market Value of the assets of the Company will be determined by the Board (or,
if pursuant to Section 13.2, the liquidators) in its good faith judgment in such
manner as its deems reasonable and using all factors, information and data
deemed to be pertinent.
SECTION 14.2 Fair Market Value. For purposes of this Operating Agreement,
the "Fair Market Value" of (i) a specific Company asset will mean the amount
which the Company would receive in an all-cash sale of such asset (assuming that
the asset is free and clear of all Liens) in an arm's-length transaction with an
unaffiliated third party consummated on the day immediately pre-
-48-
ceding the date on which the event occurred which necessitated the determination
of the Fair Market Value (and after giving effect to any transfer taxes payable
in connection with such sale); and (ii) the Company will mean the amount which
the Company would receive in an all-cash sale of all of its assets and
businesses as a going concern (free and clear of all Liens and after payment of
indebtedness for borrowed money) in an arm's-length transaction with an
unaffiliated third party consummated on the day immediately preceding the date
on which the event occurred which necessitated the determination of the Fair
Market Value (assuming that all of the proceeds from such sale were paid
directly to the Company other than an amount of such proceeds necessary to pay
transfer taxes payable in connection with such sale, which amount will not be
received or deemed received by the Company). After a determination of the Fair
Market Value of the Company is made as provided above, the Fair Market Value of
a Unit will be determined by making a calculation reflecting the cash
distributions which would be made to the Unitholders in accordance with this
Operating Agreement in respect of such Unit if the Company were deemed to have
received such Fair Market Value in cash and then distributed the same to the
Unitholders in accordance with the terms of this Operating Agreement incident to
the liquidation of the Company after payment to all of the Company's creditors
from such cash receipts other than payments to creditors who hold evidence of
indebtedness for borrowed money, the payment of which is already reflected in
the calculation of the Fair Market Value of the Company, and assuming that all
of the convertible debt and other convertible securities were repaid or
converted (whichever yields more cash to the holders of such convertible
securities) and all options to acquire Units (whether or not currently
exercisable) that have an exercise price below the Fair Market Value of such
Units were exercised and the exercise price therefor paid. Except as otherwise
provided herein or in any agreement, document or instrument contemplated hereby,
any amount to be paid under this Operating Agreement by reference to the Fair
Market Value shall be paid in full in cash, and any Unit being transferred in
exchange therefor will be transferred free and clear of all Liens.
ARTICLE XV
CALL AND PUT OPTIONS
SECTION 15.1 Metaldyne Call Option.
(a) General. Metaldyne shall have the right, but not the obligation, to
purchase all, but not less than all, of the outstanding Class A Units and Class
B Units held by the other Unitholders (and their respective transferees) on the
terms and subject to the conditions set forth in this Section 15.1 (the
"Metaldyne Call Option").
(b) Conditions to Exercise. Subject to Section 15.4, Metaldyne shall have
the right to exercise the Metaldyne Call Option at any time after the Qualified
Collective Bargaining Agreement Date.
(c) Purchase Prices.
(i) Class A Units. The aggregate purchase price for the Class A Units
shall be $30,000,000 (the "Class A Units Purchase Price"). The Class A
Units Purchase Price shall be payable
-49-
at the Metaldyne Call Option Closing in cash by wire transfer of
immediately available funds to a single account designated in writing by
DaimlerChrysler (who shall act as paying agent for all Class A Unitholders)
at least one Business Day prior to the Metaldyne Call Option Closing.
(ii) Class B Units. The aggregate purchase price for the Class B Units
shall be $185,000,000 the "Class B Units Purchase Price"). The Class B
Units Purchase Price shall be payable at the Metaldyne Call Option Closing
as follows: (A) 48% of the Class B Units Purchase Price shall be payable in
cash by wire transfer of immediately available funds to a single account
designated in writing by DaimlerChrysler (who shall act as paying agent for
all Class B Unitholders) at least one Business Day prior to the Metaldyne
Call Option Closing; and (B) the remainder of the Class B Units Purchase
Price shall be payable in (1) Senior Subordinated Notes having an aggregate
stated principal amount equal to 17.16% of the Class B Units Purchase Price
and (2) Series A-1 Preferred Stock having an aggregate stated liquidation
preference equal to 34.84% of the Class B Units Purchase Price.
(d) Exercise and Closing.
(i) Metaldyne shall exercise the Metaldyne Call Option (provided that
the Metaldyne Call Option has not been suspended or terminated pursuant to
Section 15.4) by delivering to DaimlerChrysler (as representative of all
Class A Unitholders and Class B Unitholders) written notice of the exercise
of the Metaldyne Call Option (the "Metaldyne Call Option Notice"). The date
on which DaimlerChrysler receives the Metaldyne Call Option Notice shall be
referred to as the "Metaldyne Call Option Notice Date".
(ii) Promptly following the exercise of the Metaldyne Call Option
pursuant to Section 15.1(d)(i), each of Metaldyne and the other Unitholders
will use their commercially reasonable efforts to cause the Metaldyne Call
Option Closing (as defined below) to occur pursuant to the terms of this
Section 15.1.
(iii) Promptly following the exercise of the Metaldyne Call Option
pursuant to Section 15.1(d)(i), each of Metaldyne and the other Unitholders
shall: (A) (1) make, or cause to be made, an appropriate filing of a
notification and report form if required pursuant to the HSR Act or any
other Competition Law (as defined below) with respect to the consummation
of the Metaldyne Call Option as promptly as practicable after the Metaldyne
Call Option Notice Date, (2) supply as promptly as practicable any
additional information and documentary material that may be requested
pursuant to the HSR Act or any other Competition Law and (3) otherwise use
its commercially reasonable efforts to obtain clearance and to cause the
expiration or termination of the applicable waiting periods thereunder as
soon as practicable after the Metaldyne Call Option Notice Date; and (B)
use its commercially reasonable efforts to (1) cooperate in all respects
with each other in connection with any filing or submission and in
connection with any investigation or other inquiry, including any
proceeding initiated by any private party, (2) promptly inform the other
parties of any communication received by such party from, or given by such
party to, the Antitrust Division of the U.S. Department of Justice (the
"DOJ"), the U.S. Federal Trade Commission (the "FTC") or any other
Governmental Authority and of any material communication received or given
in connection with any proceeding by a private party, in each case,
regarding the consummation of the Metaldyne Call Option, and (3) per-
-50-
mit the other parties to review any communication given by it to, and
consult with one another in advance of any meeting or conference with, the
DOJ, the FTC or any such other Governmental Authority or, in connection
with any proceeding by a private party, with any other Person and, to the
extent appropriate or permitted by the DOJ, the FTC or such other
applicable Governmental Authority or such other Person, give the other
parties the opportunity to attend and participate in such meetings and
conferences. Subject to the terms and conditions of this Article XV, in
furtherance and not in limitation of the foregoing sentence, if any
administrative or judicial action or proceeding, including any proceeding
by a private party, is instituted or threatened to be instituted
challenging the consummation of the Metaldyne Call Option as violative of
the Xxxxxxx Act, as amended, the HSR Act, the Federal Trade Commission Act,
as amended (collectively, "Competition Laws") (a "Regulatory Challenge"),
each of Metaldyne and the other Unitholders shall cooperate in all respects
with each other and use their respective commercially reasonable efforts in
order to contest and resist any such Regulatory Challenge and to have
vacated, lifted, reversed or overturned any decree, injunction or other
order, whether temporary, preliminary or permanent, that is in effect and
prohibits, prevents or restricts the consummation of the Metaldyne Call
Option. Notwithstanding anything in this Section 15.1(d)(iii) to the
contrary, only the matters listed in Section 15.1(e) shall be conditions to
the parties' respective obligations to consummate the Metaldyne Call
Option.
(iv) The closing of the purchase of the Class A Units and the Class B
Units pursuant to the Metaldyne Call Option (the "Metaldyne Call Option
Closing") shall take place at the offices of DaimlerChrysler Corporation,
0000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx, at 10:00 A.M. (local time) on
the last Business Day of the calendar month in which the conditions set
forth in Section 15.1(e) are satisfied or waived (other than conditions
which by their nature are to be satisfied at closing, but subject to the
satisfaction or waiver of such conditions), or at such other place, time or
date as Metaldyne and DaimlerChrysler shall agree.
(v) At the Metaldyne Call Option Closing:
(A) Metaldyne shall deliver to DaimlerChrysler, in its capacity
as paying agent or representative for the Class A Unitholders and the
Class B Unitholders, as the case may be:
1. the Class A Units Purchase Price as provided in Section
15.1(c)(i);
2. the cash portion of the Class B Units Purchase Price as
provided in Section 15.1(c)(ii)(A);
3. $31,746,000 aggregate principal amount of Senior
Subordinated Notes (the "Notes"), in such denominations and
registered in such names as shall be designated in writing by
DaimlerChrysler at least one Business Day prior to the Metaldyne
Call Option Closing;
4. one or more certificates representing $64,454,000
aggregate liquidation preference of Series A-1 Preferred Stock
(the "Shares"), in such denominations and registered in such
names as shall be designated in writing by DaimlerChrysler at
least one Business Day prior to the Metaldyne Call Option
Closing;
-51-
5. a duly executed counterpart of the Securities Purchase
Agreement;
6. a duly executed counterpart of the Series A-1 Preferred
Stock Investor Rights Agreement;
7. a duly executed counterpart of the Senior Subordinated
Notes Registration Rights Agreement;
8. a duly executed counterpart of the Indenture;
9. a certified copy of the Certificate of Designations
certified by the Secretary of State of the State of Delaware; and
10. an opinion of Xxxxxx Xxxxxx & Xxxxxxx, substantially in
the form of Exhibit G.
(B) Each Class A Unitholder shall deliver to Metaldyne:
1. all certificates representing such Class A Unitholder's
Class A Units, duly endorsed for the transfer of such Class A
Units to Metaldyne; and
2. a duly executed counterpart of the Securities Purchase
Agreement.
(C) Each Class B Unitholder shall deliver to Metaldyne:
1. all certificates representing such Class B Unitholder's
Class B Units, duly endorsed for the transfer of such Class B
Units to Metaldyne;
2. a duly executed counterpart of the Securities Purchase
Agreement;
3. a duly executed counterpart of the Series A-1 Preferred
Stock Investor Rights Agreement;
4. a duly executed counterpart of the Senior Subordinated
Notes Registration Rights Agreement; and
5. a duly executed counterpart of the Indenture.
(D) DaimlerChrysler and the Company shall deliver to each other
duly executed counterparts of the Transition Services Agreement.
(e) Closing Conditions.
(i) The obligation of each of Metaldyne, the Class A Unitholders and
the Class B Unitholders to consummate the Metaldyne Call Option Closing
shall be subject to the satisfaction, or waiver by
-52-
each of them (to the extent permitted by applicable Law), at or prior to
the date of the Metaldyne Call Option Closing, of the following conditions:
(A) any waiting periods (or extensions thereof) applicable to the
consummation of the Metaldyne Call Option under the HSR Act shall have
expired or been terminated, and each of Metaldyne, the Class A
Unitholders and the Class B Unitholders shall have made or obtained
all Governmental Approvals under any other applicable Competition
Laws; and
(B) No applicable Law, temporary restraining order, preliminary
or permanent injunction or other judgment or order issued by any court
of competent jurisdiction or other Governmental Authority shall be in
effect preventing the consummation of the Metaldyne Call Option in any
material respect or imposing any material limitation on the ability of
Metaldyne to receive or own the Units of the Company or of the Company
to own its assets or to operate the Business. No action, suit or
proceeding shall have been instituted, or shall be pending or
threatened, by a Governmental Authority seeking to restrain or
prohibit the consummation of Metaldyne Call Option in any material
respect or to impose any material limitation on the ability of
Metaldyne to receive or own the Units of the Company or of the Company
to own its assets or to operate the Business.
(ii) The obligation of Metaldyne to consummate the Metaldyne Call
Option Closing shall be subject to the satisfaction, or waiver by Metaldyne
(to the extent permitted by applicable Law), at or prior to the date of the
Metaldyne Call Option Closing, of the following conditions:
(A) each of the Class A Unitholders (other than Metaldyne or any
of its Affiliates) and the Class B Unitholders shall have performed
and complied with in all material respects all of its material
covenants, obligations and agreements contained in this Operating
Agreement to be performed and complied with by it at or prior to the
Metaldyne Call Option Closing, including, without limitation, Sections
15.1(d)(v)(B), (C) and (D);
(B) DaimlerChrysler shall not be in material breach of, or be in
material default under, any of its material obligations to Metaldyne
or the Company under any of the Transaction Documents to which
Metaldyne or the Company is a party;
(C) all Governmental Approvals set forth on Exhibit J shall have
been obtained;
(D) no strike or other material work stoppage or material
disruption of operations by employees at the Facility shall have
occurred and be continuing, and no claim, charge, grievance, lawsuit
or action of any kind shall have been asserted which challenges the
rights to enter into or implement, or the legal enforceability of, the
International Qualified Collective Bargaining Agreement, the Local
Qualified Collective Bargaining Agreements or the Leased Employees
Qualified Collective Bargaining Agreements by the UAW and which has a
reasonable possibility of being successful on its merits; and
(E) no Company Material Adverse Change shall have occurred since
the date of this Operating Agreement and be continuing, and no event
shall have occurred which would
-53-
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(iii) The obligation of the Class A Unitholders (other than Metaldyne
or any of its Affiliates) and the Class B Unitholders to consummate the
Metaldyne Call Option Closing shall be subject to the satisfaction, or
waiver by DaimlerChrysler (who shall act as representative of the
Unitholders) (to the extent permitted by applicable Law), at or prior to
the date of the Metaldyne Call Option Closing, of the following conditions:
(A) Metaldyne shall have performed and complied with in all
material respects all of its covenants, obligations and agreements
contained in this Operating Agreement to be performed and complied
with by it at or prior to the Metaldyne Call Option Closing,
including, without limitation, Section 15.1(d)(v)(A);
(B) Metaldyne shall not be in material breach of, or be in
material default under, any of its material obligations to
DaimlerChrysler under any of the Transaction Documents to which
Metaldyne is a party;
(C) Metaldyne shall have sufficient funds available to pay the
Class A Units Purchase Price and the cash portion of the Class B Units
Purchase Price to DaimlerChrysler at the Metaldyne Call Option
Closing, and shall have all requisite authorizations and consents to
issue and deliver the Notes and the Shares to DaimlerChrysler at the
Metaldyne Call Option Closing; and
(D) no Metaldyne Material Adverse Change shall have occurred
since the date of this Operating Agreement and be continuing, and no
event shall have occurred which would reasonably be expected to have,
individually or in the aggregate, a Metaldyne Material Adverse Effect.
(f) Rescission of Exercise.
(i) Metaldyne may rescind its exercise of the Metaldyne Call Option at
any time prior to the consummation of the Metaldyne Call Option Closing:
(A) with the written consent of each Class A Unitholder and Class
B Unitholder; or
(B) if the Metaldyne Call Option Closing has not occurred on or
before the 120th day following the Metaldyne Call Option Notice Date
and any of the conditions to Metaldyne's obligations set forth in
Section 15.1(e)(i) or 15.1(e)(ii) have not been satisfied or waived,
provided that such failure is not attributable to a willful or
intentional act or omission by Metaldyne; or
(C) if the Metaldyne Call Option Closing has not occurred on or
before the 210th day following the Metaldyne Call Option Notice Date
for any reason; provided that such failure is not attributable to a
willful or intentional act or omission by Metaldyne.
-54-
(ii) Any Unitholder (other than Metaldyne or any of its Affiliates)
may rescind the exercise of the Metaldyne Call Option at any time prior to
the consummation of the Metaldyne Call Option Closing:
(A) with the written consent of Metaldyne; or
(B) if the Metaldyne Call Option Closing has not occurred on or
before the 120th day following the Metaldyne Call Option Notice Date
and any of the conditions to the Unitholders' obligations set forth in
Section 15.1(e)(i) or 15.1(e)(iii) have not been satisfied or waived,
provided that such failure is not attributable to a willful or
intentional act or omission by such Unitholder; or
(C) if the Metaldyne Call Option Closing has not occurred on or
before the 210th day following the Metaldyne Call Option Notice Date
for any reason; provided that such failure is not attributable to a
willful or intentional act or omission by such Unitholder.
SECTION 15.2 Metaldyne Put Option.
(a) General. Metaldyne (and its transferees) shall have the right, but not
the obligation, to sell all, but not less than all, of its Class A Units to
DaimlerChrysler on the terms and subject to the conditions set forth in this
Section 15.2 (the "Metaldyne Put Option").
(b) Conditions to Exercise. Subject to Section 15.4, Metaldyne (or such
transferees) shall have the right to exercise the Metaldyne Put Option:
(i) at any time after January 31, 2004 if the Qualified Collective
Bargaining Agreement Date has not occurred on or prior to January 31, 2004;
or
(ii) at any time after the rescission of any exercise of the Metaldyne
Call Option in accordance with Section 15.1(f) other than the rescission of
such exercise due to Metaldyne's failure to satisfy the condition set forth
in Section 15.1(e)(iii)(C); or
(iii) at any time after the Qualified Collective Bargaining Agreement
Date and before Metaldyne exercises the Metaldyne Call Option pursuant to
Section 15.1(d)(i) if the financial information required by Section 8.12 of
the Formation Agreement to have been delivered to Metaldyne prior to the
later of the Qualified Collective Bargaining Agreement Date or the date
required by Section 8.12 of the Formation Agreement has not been delivered
to Metaldyne.
(c) Sale Price. The aggregate sale price for Metaldyne's Class A Units
shall be equal to $20,000,000. Such purchase price shall be payable by
DaimlerChrysler at the Metaldyne Put Option Closing by wire transfer of
immediately available funds to a single account designated in writing by
Metaldyne at least one Business Day prior to the Metaldyne Put Option Closing
Date.
-55-
(d) Exercise and Closing.
(i) Metaldyne shall exercise the Metaldyne Put Option (provided that
the Metaldyne Put Option has not been suspended or terminated pursuant to
Section 15.4) by delivering to DaimlerChrysler written notice of the
exercise of the Metaldyne Put Option. The closing of the sale of
Metaldyne's Class A Units to DaimlerChrysler pursuant to the Metaldyne Put
Option (the "Metaldyne Put Option Closing") shall take place at the offices
of DaimlerChrysler Corporation, 0000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx
at 10:00 A.M. (local time) on the closing date specified in such notice,
which closing date shall not be earlier than ten (10) Business Days nor
later than twenty (20) Business Days following the date of such notice, or
at such other place, time or date as Metaldyne and DaimlerChrysler shall
agree.
(ii) At the Metaldyne Put Option Closing, DaimlerChrysler shall
deliver to Metaldyne the purchase price for Metaldyne's Class A Units as
provided in Section 15.2(c);
(iii) At the Metaldyne Put Option Closing, Metaldyne shall deliver to
DaimlerChrysler:
(A) all certificates representing Metaldyne's Class A Units, duly
endorsed for the transfer of such Class A Units to DaimlerChrysler;
and
(B) a duly executed Letter of Representations, substantially in
the form attached hereto as Exhibit K (the "Letter of
Representations").
(e) Rescission of Exercise. Metaldyne may rescind its exercise of the
Metaldyne Put Option at any time prior to the consummation of the Metaldyne Put
Option Closing.
SECTION 15.3 DaimlerChrysler Call Option.
(a) General. DaimlerChrysler shall have the right, but not the obligation,
to purchase all, but not less than all, of Metaldyne's (and its transferees)
Class A Units on the terms and subject to the conditions set forth in this
Section 15.3 (the "DaimlerChrysler Call Option").
(b) Conditions to Exercise. Subject to Section 15.4, DaimlerChrysler shall
have the right to exercise the DaimlerChrysler Call Option:
(i) at any time after the 20th Business Day following the Qualified
Collective Bargaining Agreement Date if Metaldyne did not exercise the
Metaldyne Call Option on or prior to such 20th Business Day; or
(ii) at any time after the rescission of any exercise of the Metaldyne
Call Option in accordance with Section 15.1(f); or
(iii) at any time after January 31, 2004 if the Qualified Collective
Bargaining Agreement Date has not occurred on or prior to January 31, 2004;
or
(iv) upon a Change of Control of Metaldyne.
-56-
(c) Purchase Price. In the event the DaimlerChrysler Call Option is
exercised (i) pursuant to Section 15.3(b)(i) or (ii) pursuant to Section
15.3(b)(ii) where the rescission of the exercise of the Metaldyne Call Option
was due to Metaldyne's failure to satisfy the condition set forth in Section
15.1(e)(iii)(C) (other than due to DaimlerChrysler's failure to timely provide
to Metaldyne the financial information required by Section 8.12 of the Formation
Agreement), the aggregate purchase price for Metaldyne's Class A Units shall be
$1.00. Except as provided in the immediately preceding sentence, in the event
the DaimlerChrysler Call Option is exercised pursuant to Section 15.3(b)(ii),
(iii) or (iv), the aggregate purchase price for Metaldyne's Class A Units shall
be $20,000,000. Such purchase price shall be payable at the DaimlerChrysler Call
Option Closing by wire transfer of immediately available funds to a single
account designated in writing by Metaldyne at least one Business Day prior to
the DaimlerChrysler Call Option Closing Date.
(d) Exercise and Closing.
(i) DaimlerChrysler shall exercise the DaimlerChrysler Call Option by
delivering to Metaldyne written notice of the exercise of the
DaimlerChrysler Call Option. The closing of the purchase of Metaldyne's
Class A Units by DaimlerChrysler pursuant to the DaimlerChrysler Call
Option (the "DaimlerChrysler Call Option Closing") shall take place at the
offices of DaimlerChrysler Corporation, 0000 Xxxxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxxxxx at 10:00 A.M. (local time) on the closing date specified in such
notice, which closing date shall not be earlier than ten (10) Business Days
nor later than twenty (20) Business Days following the date of such notice,
or at such other place, time or date as Metaldyne and DaimlerChrysler shall
agree.
(ii) At the DaimlerChrysler Call Option Closing, DaimlerChrysler shall
deliver to Metaldyne the applicable purchase price for Metaldyne's Class A
Units as provided in Section 15.3(c).
(iii) At the DaimlerChrysler Call Option Closing, Metaldyne shall
deliver to DaimlerChrysler:
(A) all certificates representing Metaldyne's Class A Units, duly
endorsed for the transfer of such Class A Units to DaimlerChrysler;
and
(B) a duly executed Letter of Representations.
(e) Rescission of Exercise. DaimlerChrysler may rescind its exercise of the
DaimlerChrysler Call Option at any time prior to the consummation of the
DaimlerChrysler Call Option Closing.
(f) Sole Remedy. The right of DaimlerChrysler to exercise and close the
DaimlerChrysler Call Option on the terms and conditions set forth in this
Section 15.3 shall be the sole and exclusive remedy of DaimlerChrysler and its
successors and assigns with respect to the failure by Metaldyne to exercise or
close the Metaldyne Call Option or the Metaldyne Put Option pursuant to Section
15.1 or 15.2 or any breach by Metaldyne of its obligations under this Article
XV.
-57-
SECTION 15.4 Suspension and Termination of Call and Put Options.
Notwithstanding any other provision of this Article XV:
(a) The Metaldyne Call Option shall not be exercisable if (i)
Metaldyne has exercised the Metaldyne Put Option (and such exercise has not
been rescinded) in accordance with Section 15.2 or (ii) DaimlerChrysler has
exercised the DaimlerChrysler Call Option (and such exercise has not been
rescinded) in accordance with Section 15.3. The Metaldyne Call Option shall
terminate upon the occurrence of either the Metaldyne Put Option Closing or
the DaimlerChrysler Call Option Closing.
(b) The Metaldyne Put Option shall not be exercisable if (i) Metaldyne
has exercised the Metaldyne Call Option (and such exercise has not been
rescinded) in accordance with Section 15.1 or (ii) DaimlerChrysler has
exercised the DaimlerChrysler Call Option (and such exercise has not been
rescinded) in accordance with Section 15.3. The Metaldyne Put Option shall
terminate upon the occurrence of either the Metaldyne Call Option Closing
or the DaimlerChrysler Call Option Closing.
(c) The DaimlerChrysler Call Option shall not be exercisable if (i)
Metaldyne has exercised the Metaldyne Call Option (and such exercise has
not been rescinded) in accordance with Section 15.1 (provided, however,
that the DaimlerChrysler Call Option shall be exercisable upon a Change of
Control of Metaldyne whether or not Metaldyne has exercised the Metaldyne
Call Option (and such exercise has not be rescinded) in accordance with
Section 15.1), (ii) Metaldyne has exercised the Metaldyne Put Option (and
such exercise has not been rescinded) in accordance with Section 15.2 or
(iii) (A) DaimlerChrysler has breached its obligation to timely provide to
Metaldyne the financial information required by Section 8.12 of the
Formation Agreement, (B) such breach relates to financial information that
is required in order for Metaldyne to satisfy the condition set forth in
Section 15.1(e)(iii)(C) or satisfy its Exchange Act reporting requirements
and (C) not more than 90 days have elapsed since the first date on which
the DaimlerChrysler Call Option would otherwise have become exercisable
(without regard to this Section 15.4(c)(iii)) pursuant to Section 15.3(b).
The DaimlerChrysler Call Option shall terminate upon the occurrence of
either the Metaldyne Call Option Closing or the Metaldyne Put Option
Closing.
ARTICLE XVI
CERTAIN OBLIGATIONS OF DAIMLERCHRYSLER
SECTION 16.1 Certain Obligations of DaimlerChrysler During JV Period.
During the JV Period, DaimlerChrysler shall:
(a) fund all operating costs of the Company consistent with the
Company's Operating Budget and Capital Plan, as well as any additional
unforeseen operating costs of the Company necessary to operate the Business
and the Transferred Assets in the ordinary course of business, consistent
with past practice or as may be required to enable Metaldyne to fulfill its
obligations under the Supply Agreement as of the JV Termination Date;
-58-
(b) fund all capital expenditures of the Company consistent with the
Company's Operating Budget and Capital Plan, as well as any additional
unforeseen capital expenditures of the Company necessary to operate the
Business and the Transferred Assets in the ordinary course of business,
consistent with past practice or as may be required to enable Metaldyne to
fulfill its obligations under the Supply Agreement as of the JV Termination
Date;
(c) use its commercially reasonable efforts to preserve intact its
current relationships and pricing with suppliers to the Company; and
(d) permit the Company in cooperation with Metaldyne to conduct and
prepare a report of Inventory at December 31, 2002 and at June 30, 2003.
SECTION 16.2 Certain Obligations of DaimlerChrysler During and After JV
Period. During and after the JV Period, without regard to any time limits,
DaimlerChrysler shall:
(a) fund any capital expenditures contractually committed by the
Company during the JV Period but billed to the Company after the JV Period;
(b) fund any capital expenditure for the CS or LX program not funded
during the JV Period but necessary for the production needs of
DaimlerChrysler to the extent presently planned (the anticipated funding
for these programs is as shown in the Operating Budget and Capital Plan);
(c) satisfy directly, or reimburse the Company, for any and all
Indebtedness or other liabilities or obligations of the Company as of the
JV Termination Date, whether or not shown on the Final Balance Sheet,
except for trade payables related to purchases of Inventory shown on the
Final Balance Sheet; and
(d) if requested by Metaldyne within one (1) year following the
Metaldyne Call Option Closing Date, terminate the ICD tooling contract with
the Company at no economic cost to the Company or Metaldyne.
If any of the obligations set forth in this Section 16.2 arise after JV
Termination Date, the Company will notify DaimlerChrysler and DaimlerChrysler
shall promptly satisfy directly, or reimburse the Company, in cash for such
obligation.
SECTION 16.3 Additional Contributions. Any and all out-of-pocket
expenditures made by DaimlerChrysler to or on behalf of the Company pursuant to
Sections 16.1 and 16.2 during the JV Period shall be deemed to be additional
Capital Contributions ("Additional Contributions").
ARTICLE XVII
NET WORKING CAPITAL ADJUSTMENT
SECTION 17.1 Net Working Capital Adjustment. Within sixty (60) days after
the Metaldyne Call Option Closing, Metaldyne shall prepare and deliver to
DaimlerChrysler a draft balance
-59-
sheet of the Company as of the date of the Metaldyne Call Option Closing (the
"Final Balance Sheet"), which shall be prepared in accordance with the
principles set forth on Schedule 2.7 to the Formation Agreement, and a draft
calculation of the Final Net Working Capital based on such draft Final Balance
Sheet.
DaimlerChrysler shall have a period of twenty (20) days following receipt
of the draft Final Balance Sheet and the draft calculation of the Final Net
Working Capital from Metaldyne within which to review the draft Final Balance
Sheet and the draft calculation of the Final Net Working Capital. If
DaimlerChrysler has any objections to the draft Final Balance Sheet and/or the
draft calculation of the Final Net Working Capital, it will deliver to Metaldyne
a detailed statement describing such objections (the "DaimlerChrysler Objection
Notice") within such twenty (20) day review period. DaimlerChrysler and
Metaldyne will use their respective commercially reasonable efforts to resolve
any such objections set forth in the DaimlerChrysler Objection Notice. If a
final resolution is not obtained within a period of twenty (20) days following
delivery of a DaimlerChrysler Objection Notice, DaimlerChrysler and Metaldyne
will select and jointly engage a nationally-recognized accounting firm mutually
acceptable to them (the "Accountant") to resolve any remaining objections. If
DaimlerChrysler and Metaldyne are unable to agree on the choice of an accounting
firm, they will select a nationally-recognized accounting firm by lot (after
excluding their respective independent public accountants). The Accountant shall
promptly, but in no event later than twenty (20) days following its engagement
by DaimlerChrysler and Metaldyne, deliver to DaimlerChrysler and Metaldyne its
decision as to any remaining objections set forth in the DaimlerChrysler
Objection Notice. The decision of the Accountant shall be final and binding on
DaimlerChrysler and Metaldyne.
Metaldyne will revise the draft Final Balance Sheet and the draft
calculation of the Final Net Working Capital as appropriate to reflect the
resolution of any objections set forth in the DaimlerChrysler Objection Notice
(as agreed upon by DaimlerChrysler and Metaldyne or as determined by the
Accountant) and deliver them to DaimlerChrysler within twenty (20) days after
the final resolution of such objections. Such revised drafts shall be the Final
Balance Sheet and the Final Net Working Capital, respectively.
In the event that the Final Net Working Capital is less than zero, the
Company shall assign to DaimlerChrysler, and DaimlerChrysler shall assume from
the Company, trade payables in the amount of such shortfall within 20 days
following the final resolution of the Final Net Working Capital.
If any unresolved objections are submitted to the Accountant for resolution
as provided above, the fees and expenses of the Accountant shall be borne 50% by
DaimlerChrysler and 50% by Metaldyne. Metaldyne will provide reasonable access
to the work papers necessary for the preparation of the Final Balance Sheet and
the calculation of the Final Net Working Capital to DaimlerChrysler and the
Accountant during the preparation of the Final Balance Sheet and the calculation
of the Final Net Working Capital by Metaldyne, the review by DaimlerChrysler of
the Final Balance Sheet and the calculation of the Final Net Working Capital,
and the resolution of any objections with respect thereto.
-60-
ARTICLE XVIII
GENERAL PROVISIONS
SECTION 18.1 Power of Attorney. (a) Each Unitholder hereby constitutes and
appoints each member of the Board and the liquidators, with full power of
substitution, as his true and lawful agent and attorney-in-fact, with full power
and authority in his or its name, place and stead, to execute, swear to,
acknowledge, deliver, file and record in the appropriate public offices (i) this
Operating Agreement, all certificates, and other instruments and all amendments
(in the manner set forth herein) thereof in accordance with the terms hereof
which the Board deems appropriate or necessary to form, qualify, or continue the
qualification of, the Company as a limited liability company in the State of
Delaware and in all other jurisdictions in which the Company may conduct
business or own property; (ii) all conveyances and other instruments or
documents which the Board deems appropriate or necessary to reflect the
dissolution and liquidation of the Company pursuant to the terms of this
Operating Agreement, including a certificate of cancellation; and (iii) all
instruments relating to the admission withdrawal, or substitution of any
Unitholder pursuant to Articles XI and XII.
(b) The foregoing power of attorney is irrevocable and coupled with an
interest, and shall survive the death, disability, incapacity, dissolution,
bankruptcy, insolvency, or termination of any Unitholder and the Transfer of all
or any portion of his or its Interest and shall extend to such Unitholder's
heirs, successors, assigns, and personal representatives.
SECTION 18.2 Amendments. This Operating Agreement may be amended from time
to time by a written instrument by the holders of at least 66 2/3% of the
outstanding Class A Units; provided that no amendment or modification pursuant
to this Section 18.2 that would adversely affect any class or series of Units in
a manner different than other classes or series of Units (as the case may be)
shall be effective against the holders of such class or series of Units (as the
case may be) without the prior written consent of holders of a majority of the
outstanding Units of such class so adversely affected thereby; provided,
further, that no amendment or modification pursuant to this Section 18.2 that
would affect the rights of a Unitholder or group of Unitholders specifically
granted such rights by name shall be modified without the consent of that
Unitholder (or a majority of that group of Unitholders).
SECTION 18.3 Title to Company Assets. Company assets shall be deemed to be
owned solely by the Company as an entity, and no Unitholder, individually or
collectively, shall have any ownership interest in such Company assets or any
portion thereof. Legal title to any or all the Company assets may be held in the
name of the Company or one or more nominees, as the Board may determine. The
Board hereby declares and warrants that any Company assets for which legal title
is held in its name or the name of any nominee shall be held in trust by the
Board or such nominee for the use and benefit of the Company in accordance with
the provisions of this Operating Agreement. All Company assets shall be recorded
as the property of the Company on its books and records, irrespective of the
name in which legal title to such Company assets is held. The interests of
Unitholders in the Company shall constitute personal property.
-61-
SECTION 18.4 Remedies. Each Unitholder and the Company shall have all
rights and remedies set forth in this Operating Agreement and all legal and
equitable rights and remedies which such Person has been granted at any time
under any other agreement or contract and all of the rights which such Person
has at law or in equity. Any Person having any rights under any provision of
this Operating Agreement or any other agreements contemplated hereby shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Operating Agreement and to exercise all other rights under applicable Law.
SECTION 18.5 Successors and Assigns. All covenants and agreements contained
in this Operating Agreement shall bind and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors, legal
representatives and permitted assigns, whether so expressed or not.
SECTION 18.6 Severability. Whenever possible, each provision of this
Operating Agreement will be interpreted in such manner as to be effective and
valid under applicable Law, but if any provision of this Operating Agreement is
held to be invalid, illegal or unenforceable in any respect under any applicable
Law or rule in any jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or the effectiveness or validity of any
provision in any other jurisdiction, and this Operating Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
SECTION 18.7 Notice to Unitholder of Provisions. By executing this
Operating Agreement, each Unitholder acknowledges that it has actual notice of
(a) all of the provisions hereof (including the restrictions on the transfer set
forth herein) and (b) all of the provisions of the Certificate.
SECTION 18.8 Counterparts. This Operating Agreement may be executed
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 18.9 Consent to Jurisdiction; Waiver of Jury Trial. Each Unitholder
irrevocably and unconditionally submits to the exclusive jurisdiction of the
United States District Court for the State of Delaware and the state courts of
the State of Delaware for the purposes of any suit, action or other proceeding
arising out of this Operating Agreement or any transaction contemplated hereby.
Each Unitholder further agrees that service of any process, summons, notice or
document by United States certified or registered mail to such Unitholder's
respective address set forth in the Company's books and records or such other
address or to the attention of such other Person as the recipient party has
specified by prior written notice to the sending party shall be effective
service of process in any action, suit or proceeding in Delaware with respect to
any matters to which it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each Unitholder irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Operating Agreement or the transactions contemplated hereby
in the United States District Court for the State of Delaware or the state
courts of the State of Delaware and hereby irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
-62-
suit or proceeding brought in such court has been brought in an inconvenient
forum. Each party agrees that a final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon such
party and may be enforced in any other courts to whose jurisdiction such party
is or may be subject, by suit upon judgment. THE PARTIES ALSO WAIVE ANY BOND OR
SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED
OF ANY OF THE OTHER PARTIES. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS OPERATING AGREEMENT, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO THIS OPERATING AGREEMENT, THAT EACH HAS
ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS OPERATING AGREEMENT AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE
PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH
ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS OPERATING AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THE TRANSACTIONS COMPLETED HEREBY. IN THE EVENT OF LITIGATION, THIS OPERATING
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
SECTION 18.10 Descriptive Headings; Interpretation. The descriptive
headings of this Operating Agreement are inserted for convenience only and do
not constitute a substantive part of this Operating Agreement. Whenever required
by the context, any pronoun used in this Operating Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa. The use of
the word "including" in this Operating Agreement shall be by way of example
rather than by limitation. Reference to any agreement, document or instrument
means such agreement, document, or instrument as amended or otherwise modified
from time to time in accordance with the terms thereof, and if applicable
hereof. Without limiting the generality of the immediately preceding sentence,
no amendment or other modification to any agreement, document or instrument that
requires the consent of any Person pursuant to the terms of this Operating
Agreement or any other agreement will be given effect hereunder unless such
Person has consented in writing to such amendment or modification. Wherever
required by the context, references to a Fiscal Year shall refer to a portion
thereof. The use of the words "or," "either," and "any" shall not be exclusive.
The parties hereto have participated jointly in the negotiation and drafting of
this Operating Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Operating Agreement shall be construed as if drafted
jointly by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Operating Agreement. Wherever a conflict exists between this
Operating Agreement and any other agreement, this Operating Agreement shall
control but solely to the extent of such conflict.
-63-
SECTION 18.11 Applicable Law. This Operating Agreement shall be governed
by, and construed in accordance with, the Laws of the State of Delaware, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the Laws of any jurisdiction other than the State of
Delaware. Any dispute relating hereto shall be heard in the state or federal
courts of Delaware, and the parties agree to jurisdiction and venue therein.
SECTION 18.12 Addresses and Notices. All notices, requests, instructions,
demands, or other communications to be given or delivered under or by reason of
the provisions of this Operating Agreement shall be in writing and shall be
deemed to have been duly given or made (a) on the date of receipt if given in
person, (b) on the date of transmission if sent by telecopy or e-mail with
receipt of delivery confirmation, (c) three (3) Business Days after being
deposited in the U.S. mail, certified or registered mail (postage prepaid,
return receipt requested), or (d) one (1) Business Day following sending by
overnight delivery via an internationally recognized courier service, in each
case, to the applicable party at the following addresses or facsimile numbers
(or at such other address or facsimile number for a party as shall be specified
by like notice). Such notices, demands, and other communications shall be sent
to the address for such recipient set forth in the Company's books and records,
or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party. Any
notice to the Board or the Company shall be deemed given if received by the
Board at the principal office of the Company designated pursuant to Section 2.5.
SECTION 18.13 Creditors. None of the provisions of this Operating 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 (except pursuant to the terms of a separate
agreement executed by the Company in favor of such creditor) at any time as a
result of making the loan any direct or indirect interest in Company Profits,
Losses, Distributions, capital or property other than as a secured creditor.
SECTION 18.14 Waiver of Certain Rights. No failure by any party to insist
upon the strict performance of any covenant, duty, agreement, or condition of
this Operating Agreement or to exercise any right or remedy consequent upon a
breach thereof shall constitute a waiver of any such breach or any other
covenant, duty, agreement, or condition.
SECTION 18.15 Further Action. The parties shall execute and deliver all
documents, provide all information, and take or refrain from taking such actions
as may be necessary or appropriate to achieve the purposes of this Operating
Agreement.
SECTION 18.16 Entire Agreement. This Operating Agreement, those documents
expressly referred to herein, the other documents of even date herewith, and the
other Transaction Documents constitute the entire agreement and understanding
among the parties thereto and supersede and preempt any prior understandings,
agreements, representations or arrangements written, or oral, by or among the
parties hereto.
-64-
SECTION 18.17 Delivery by Facsimile. This Operating Agreement, the
agreements referred to herein, and each other agreement or instrument entered
into in connection herewith or therewith or contemplated hereby or thereby, and
any amendments hereto or thereto, to the extent signed and delivered by means of
a facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.
SECTION 18.18 Survival. Sections 4.6, 6.1, 7.1 and 7.2 shall survive and
continue in full force in accordance with its terms notwithstanding any
termination of this Operating Agreement or the dissolution of the Company.
SECTION 18.19 Dispute Resolution Procedures. All controversies, claims or
disputes between the Unitholders or between the Company and any Unitholder that
arise out of or relate to this Operating Agreement (a "Dispute"), will be
resolved in accordance with the provisions of this Section 18.19.
Notwithstanding anything to the contrary contained in this Section 18.19, (i)
nothing in this Section 18.19(i) will limit the ability of the directors and
officers of any Unitholder from communicating directly with the directors and
officers of the other Unitholders and (ii) no act of the Board or failure to act
by the Board shall constitute a Dispute or form the basis for a Dispute subject
to the provisions of this Section 18.19.
(a) Dispute Notice and Response. Any Unitholder may give another
Unitholder written notice (a "Dispute Notice") of any Dispute which has not
been resolved in the normal course of business. The Dispute Notice will
include a statement setting forth the position of the Unitholder giving
such notice, a summary of the arguments supporting such position and, if
applicable, the relief sought. At the next regular or special meeting of
the Board following the delivery of the Dispute Notice, the Board will
attempt in good faith to resolve the Dispute. If the Dispute remains
unresolved following such meeting, the initiating Unitholder may request in
writing to the other Unitholders (a "Vice President Notice") that the
Dispute be resolved by officers of the Unitholders (at the Vice President
level or above and having experience in the subject matter of the Dispute)
pursuant to Section 18.19(b).
(b) Negotiation Between Vice Presidents.
(i) Within 10 Business Days after delivery of a Vice President
Notice, officers of the Unitholders (which officers shall hold the
office of Vice President or a higher office and shall have experience
in the subject matter of the Dispute) will meet or communicate by
telephone at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, and will negotiate in good
faith to attempt to resolve the Dispute that is the subject of such
Dispute Notice. If such Dispute has not been resolved within 180
calendar days after delivery of the Dispute Notice, each Unitholder
will be permitted to take such ac-
-65-
tions at law or in equity as it is otherwise permitted to take or as
may be available under applicable Law.
(ii) All negotiations between the Vice Presidents or other
officers pursuant to this Section 18.19(b) will be treated as
compromise and settlement negotiations. Nothing said or disclosed, nor
any document produced, in the course of such negotiations which is not
otherwise independently discoverable will be offered or received as
evidence or used for impeachment or for any other purpose in any
current or future arbitration or litigation.
(c) Right to Equitable Relief Preserved. Notwithstanding anything in
this Operating Agreement to the contrary, any Unitholder or the Company may
at any time seek from any court of the United States located in the State
of Delaware or from any Delaware state court, any interim, provisional or
injunctive relief that may be necessary to protect the rights or property
of such party or maintain the status quo before, during or after the
pendency of the negotiation process or the arbitration proceeding or any
other proceeding contemplated by Section 18.19(b).
SECTION 18.20 Public Statements. Subject to applicable Law, including the
requirements of the Exchange Act, each of the parties agree that, from and after
the date hereof through the earlier of the termination of this Operation
Agreement and January 1, 2005, no public release or announcement concerning this
Operating Agreement, the Related Agreements or the transactions contemplated
hereby or thereby shall be issued without the joint consent with the other
parties, such consent not to be unreasonably withheld or delayed, and, in
connection therewith, the issuing party shall provide each other with a
reasonable opportunity to review such proposed release prior to publication
thereof. Notwithstanding the foregoing, if any party is required to disclose the
terms of this Operating Agreement or any Related Agreement pursuant to the
Securities Act or the Exchange Act, it shall use its commercially reasonable
efforts to avoid any such disclosure and shall, whenever reasonably practicable,
consult with the other parties concerning the timing and content of such
disclosure before the same is made.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have executed or caused to be executed
on their behalf this Amended and Restated Operating Agreement as of the date
first written above.
NC-M CHASSIS SYSTEMS, LLC
By:
------------------------------------------
Name:
Title:
DAIMLERCHRYSLER CORPORATION
By:
------------------------------------------
Name:
Title:
METALDYNE CORPORATION
By:
------------------------------------------
Name:
Title:
Schedule A
Capital Accounts
Class A Class B Capital Capital
Name Address Units Units Contributions Account
---- ------- ----- ----- ------------- -------
DaimlerChrysler 000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx Xxxxxx Xxxxx, XX 00000 60 100 $215,000,000 $215,000,000
Metaldyne 00000 Xxxxxxx Xxxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000 40 0 $ 20,000,000 $ 20,000,000
Exhibit A
Board Actions Requiring Supermajority Approval
1. Establishing or making any amendment to or modification or replacement of
the Company's Operating Budget and Capital Plan or approving any actions of
the Company that are not in accordance with the Company's Operating Budget
and Capital Plan.
2. Appointing or removing Officers of the Company and determining or changing
their titles, duties and compensation.
3. Declaring or paying any dividend or other distribution to the holders of
any Units or other interests or securities of the Company.
4. Entering into or amending or terminating the Management Agreement or
removing the plant manager designated by Metaldyne thereunder.
5. Entering into or amending or terminating (except pursuant to its terms) any
agreement, contract, transaction or arrangement which extends beyond
December 31, 2003 or which is otherwise not in the ordinary course of
business or which is otherwise material to the business of the Company, in
each case except (A) renewing a purchase order in the ordinary course of
business on terms substantially consistent with its existing terms or (B)
otherwise in accordance with the Company's Operating Budget and Capital
Plan.
6. Incurrence by the Company of, or commitment by the Company to incur, any
Indebtedness, other than (A) in accordance with the Company's Operating
Budget and Capital Plan or (B) trade payables and other current liabilities
arising in the ordinary course of business.
7. Incurrence or making by the Company of, or commitment by the Company to
incur or make, any capital expenditures in respect of any items or project
which, in the aggregate, exceed the aggregate amount of budgeted capital
expenditures set forth in the Company's Operating Budget and Capital Plan
as then in effect by $250,000.
8. Making by the Company of, or commitment by the Company to make, any loan or
advance to any Person or entity, in each case except in accordance with the
Company's Operating Budget and Capital Plan or otherwise in the ordinary
course of business.
9. Sale, lease, exchange or other disposition by the Company of less than
substantially all of the assets or properties of the Company or the
acquisition by the Company of any assets or properties, other than sales of
inventory in the ordinary course of business.
10. Entering into, terminating (except pursuant to its terms) or materially
amending (i) any employment or consulting agreement, contract or
commitment, in each case involving amounts in excess of $10,000, or (ii)
any agreement, contract or commitment between the Company and (A) any of
its Affiliates, any of its Managers, Officers or employees or any of its
Unitholders,
-2-
(B) any Affiliate of any of its Unitholders or (C) any Manager, Officer,
employee, stockholder, member or partner of any of its Affiliates, any of
its Unitholders or any Affiliate of any of its Unitholders.
11. Entering into or amending or terminating (except pursuant to its terms) any
collective bargaining agreement to which the Company is or would be a party
or by which the Company is or would be bound, except for the Local
Qualified Collective Bargaining Agreements.
12. Commencement (including the filing of a counterclaim) or settlement of any
litigation, regulatory proceeding or arbitration to which the Company is,
or is to be, a party or by which the Company or any of its businesses,
assets or properties would reasonably be expected to be affected, in each
case involving amounts in controversy in excess of $50,000.
13. Creation or sufferance of any Liens upon the assets or properties of the
Company, other than (A) purchase money and statutory Liens securing
payments not yet due and other Liens that, individually or in the
aggregate, are not substantial in character or amount and do not materially
impair the value of, or materially interfere with the use of, any of the
assets or properties subject thereto or (B) in accordance with the
Company's Operating Budget and Capital Plan.
14. Entering into by the Company of any partnership or joint venture with, or
the acquisition by the Company of any Capital Stock of, or other ownership
interest in, any Person, or the making by the Company of any other
investment in, or any guaranty by the Company of the obligations of, any
Person, other than (A) in accordance with the Company's Operating Budget
and Capital Plan or (B) investments in cash and cash equivalents.
15. Removing KPMG LLP as the independent public accountants of the Company.
16. (A) Adopting or changing any accounting principle which will materially
affect (i) the operating income of the Company or (ii) any securityholder
of the Company, in each case except as required by GAAP, DaimlerChrysler's
accounting principles or applicable Law, or (B) making any election under
Section 9.2 of this Agreement or adopting any position for purposes of any
tax return, in each case that will have a material effect on any
securityholder of the Company, except as required by applicable Law.
Exhibit B
Actions Requiring Supermajority Unitholder Approval
1. Amending or repealing the Company's Certificate or this Operating
Agreement, including any change in the number of Managers constituting the
entire Board or a quorum of the Board, other than as required by applicable
Law.
2. Issuance or sale of any Units or other interests in or securities of the
Company or rights to acquire any Units or other interests in or securities
of the Company (other than in accordance with the terms of any Units of the
Company or this Operating Agreement).
3. Making by the Company of, or commitment by the Company to make, any direct
or indirect redemption, purchase or acquisition of any Units or other
securities of the Company or rights to acquire Units or other securities of
the Company (other than in accordance with the terms of any Units of the
Company or this Operating Agreement).
4. Approving or consummating any recapitalization of the Company's securities.
5. Approving or consummating any merger, amalgamation, consolidation or other
business combination with or into any Person (whether by security purchase,
asset purchase or otherwise), any spin-off, split-up, roll-up or other
reorganization of the Company, any sale of all or substantially all of the
assets of the Company or any conversion of the Company into a corporation
pursuant to Section 18-216 of the Delaware Act (or any successor section
thereto), or adopting any plan with respect thereto.
6. Approving or effecting any liquidation, winding-up or dissolution of the
Company or adopting of any plan with respect thereto, unless such
liquidation, winding-up or dissolution is ordered pursuant to a decree of
the Court of Chancery of the State of Delaware pursuant to Section 18-802
of the Delaware Act.
7. Filing a petition under applicable bankruptcy or any other insolvency Law,
or admitting in writing its bankruptcy, insolvency or general inability to
pay its debts, or consenting to the appointment of or the taking possession
by any receiver, liquidator, assignee, custodian, trustee or sequestrator
or other Person performing similar functions.
8. Making by the Company of any election to be treated other than as a
partnership for tax purposes.
9. Amending or modifying those actions requiring supermajority Board or
Unitholder approval, including, but not limited to, those listed on this
Exhibit B and Exhibit A.
10. Taking any other action requiring a vote of members under applicable Law.
