Exhibit 3.24
WINGFOOT COMMERCIAL TIRE SYSTEMS, LLC
OPERATING AGREEMENT
This Operating Agreement (the "Operating Agreement") dated as of October
31, 2000 (the "Effective Date") for WINGFOOT COMMERCIAL TIRE SYSTEMS, LLC (the
"Company" or "Wingfoot"), an Ohio limited liability company organized pursuant
to Chapter 1705 of the Ohio Revised Code (the "Act"), is by and between THE
GOODYEAR TIRE & RUBBER COMPANY ("Goodyear"), an Ohio corporation, and TREADCO,
INC. ("Treadco"), a Delaware corporation and a wholly-owned subsidiary of
Arkansas Best Corporation ("ABC"); (collectively, the "Parties").
WHEREAS, Goodyear operates (i) commercial truck service center operations.
(ii) retreading services, and (iii) retail sales operations currently performed
at Goodyear's Commercial Tire and Service Centers and the Xxxx Xxxxx Tire
Centers (the "Goodyear Business") and ABC, through Treadco, sells and services
commercial truck tires and provides retreading services under the trade name
"Treadco" (the "Treadco Business") (collectively, the "Businesses"); and
WHEREAS, the Parties have executed a Joint Venture Agreement (including
the Exhibits and Schedules attached thereto, the "JV Agreement") dated as of
September 13, 2000, providing for the creation of Wingfoot; and
WHEREAS, the Parties desire to enter into, and the JV Agreement requires
the execution of, this Operating Agreement; and
WHEREAS, pursuant to the JV Agreement. Goodyear agrees to contribute
assets and liabilities relating to the Goodyear Business and Treadco agrees to
contribute assets and liabilities relating to the Treadco Business, to Wingfoot;
and
WHEREAS, the Parties desire to set forth in this Operating Agreement the
terms, conditions, and provisions that will govern their relationship as Members
and govern the management and operations of the Company.
NOW THEREFORE; in consideration of these premises, the mutual covenants
set forth herein and other consideration, the receipt and sufficiency of which
is hereby acknowledged, the Parties hereby agree as follows;
ARTICLE I
DEFINITIONS
1.1 For purposes of this Operating Agreement, unless the context clearly
indicates otherwise, the following terms shall have the following meanings:
(a) Act. Chapter 1705 of the Ohio Revised Code and all amendments thereto.
(b) Additional Member. A Person other than an Initial Member or a
Substitute Member who has acquired a Membership Interest in the Company.
(c) Admission Agreement. The Agreement between an Additional Member and
the Company described in Section 8.5.
(d) Articles of Organization. The Articles of Organization of the Company,
as properly adopted, initially in the form of Exhibit A attached hereto and as
amended from time to time by the Members and filed with the Secretary of State.
(e) Assignee. A transferee of a Membership Interest who has not been
admitted as a Substitute Member.
(f) Board. The Board of Directors of the Company with the rights, duties
and obligations as set forth in Article V.
(g) Capital Account. The capital account maintained for a Member or
Assignee determined in accordance with Article VII.
(h) Capital Contributions. Any cash, property, services rendered,
promissory note, or other binding obligation to contribute cash or property or
to perform services made by or on behalf of a Member or an Assignee, which a
Member contributes to the Company as capital in that Member's capacity as a
Member in accordance with Article VII.
(i) Certificate of Dissolution. A certificate issued by the Secretary of
State certifying that the Company has been duly dissolved in accordance with the
Act.
(j) Code. The Internal Revenue Code of 1986. as amended from time to time,
and any applicable provisions of the Regulations thereunder.
(k) Commitment. The Capital Contribution that a Member or Assignee is
obligated to make.
(l) Company Liability. Any enforceable debt or obligation for which the
Company is liable or which is secured by any Company Property.
(m) Dissolution Event. An event, the occurrence of which will result in
the dissolution of the Company under Article IX.
(n) Entity. A for-profit corporation existing under the laws of the State
or any other state and any of the following organizations existing under the
laws of the State, the United States, or any other state: a business trust or
association; a real estate investment trust; a
-2-
common law trust; an unincorporated business or for profit organization,
including a general or limited partnership; and a limited liability company.
(o) Initial Members. Goodyear and Treadco
(p) Loan Note. A promissory note of the Company described in Section 6.4.
(q) Majority-in-Interest. In the case of an approval or consent required
of the Members, an affirmative vote of Members with Membership Interests in the
aggregate which exceed fifty percent (50%) of the total Membership Interests
entitled to vote on that particular matter.
(r) Members. Initial Members. Substitute Members, and Additional Members.
(s) Membership Interest. A Member's share of the profits and losses of the
Company and the right to receive Distributions from the Company as set forth on
Exhibit B. Membership Interest is expressed as a percentage.
(t) Net Profit or Net Loss. The net profit or net loss, as the case may
be. of the Company for federal income tax purposes as determined by the
Company's accountants.
(u) Person. Any natural person, partnership. limited partnership, trust,
estate, association, limited liability company, or corporation (profit or
nonprofit): any custodian, nominee, trustee, executor, administrator, or other
fiduciary; or any other individual or Entity in its own or representative
capacity.
(v) Proceeding. Any judicial or administrative trial, hearing, or other
activity, civil, criminal or investigative, the result of which may be that a
court, arbitrator, or governmental agency may enter a judgment, order, decree,
or other determination which, if not appealed and reversed, would be binding
upon the Company, a Member, or other person subject to the jurisdiction of such
court, arbitrator, or governmental agency.
(w) Regulations. Except where the context indicates otherwise, the
temporary or final regulations of the Department of the Treasury under the Code,
as such regulations may be amended from time to time.
(x) Secretary of State. The Secretary of State of the Slate of Ohio.
(y) Substitute Member. An Assignee who has been admitted to all of the
rights of membership pursuant to this Operating Agreement.
(z) Taxable Disposition. A taxable disposition as defined in Section 7.2.
-3-
ARTICLE II
FORMATION
2.1 Organization. The Company will be organized as a limited liability
company by filing the Articles of Organization, a copy of which is attached as
Exhibit A, with the Secretary of State.
2.2 Agreement. The Members executing this Operating Agreement hereby agree
to the terms and conditions of this Operating Agreement, as it may, from time to
time, be amended according to its terms. It is the express intention of the
Members that this Operating Agreement and the provisions of the JV Agreement
incorporated herein by reference shall be the sole source of agreement regarding
the governance of Wingfoot and the Parties. Except to the extent a provision of
this Operating Agreement expressly incorporates federal income tax rules by
reference to sections of the Code or Regulations or is expressly prohibited or
ineffective under the Act, this Operating Agreement shall govern, even when
inconsistent with, or different from, the provisions of the Act or any other law
or rule.
2.3 Name. The name of the Company is WINGFOOT COMMERCIAL TIRE SYSTEMS,
LLC. and all business of the Company shall be conducted under that name,
unless otherwise determined pursuant to the provisions hereof.
2.4 Effective Time. This Operating Agreement shall become effective on the
Effective Date.
2.5 Term. The duration of the Company shall be perpetual in accordance
with the Act and this Operating Agreement unless the Company shall be sooner
dissolved and its affairs wound up in accordance with the Act or this Operating
Agreement, or unless, pursuant to an amendment to this Operating Agreement, a
new duration is specified.
2.6 Registered Agent and Office. The registered agent for the service of
process and the registered office shall be that individual or corporation and
location reflected in the written designation of an agent filed in the office of
the Secretary of State. The Board of Directors (the "Board") may, from time to
time, change the registered agent or office through appropriate filings with the
Secretary of State. In the event the registered agent ceases to act as such for
any reason or the registered office shall change, the Board shall promptly
designate a replacement registered agent or file a notice of change of address,
as the case may be.
2.7 Principal Office. The principal office" of the Company shall be
located in fort Xxxxx, Arkansas or such other location as the Board shall
designate.
2.8 Foreign Qualifications. The Company will qualify to do business in
each jurisdiction where its business requires it to be so qualified as
determined by the Officers. The Officers or their duly appointed agents shall
execute, acknowledge, swear to and deliver all certificates and other
instruments conforming with this Operating Agreement that arc necessary or
appropriate to qualify, continue and terminate, as appropriate, the Company as a
foreign limited liability company in all such jurisdictions in which the Company
may conduct business.
-4-
ARTICLE III
NATURE OF BUSINESS
3.1 Purpose of the Company. The Company has been formed for the purpose of
operating commercial truck tire retail and commercial truck tire retreading
service outlets in North America. In addition, the Company may engage in any
lawful business related to commercial trucks or trucking or the sale and
retreading of tires that is permitted by the Act or the laws of any jurisdiction
in which the Company may do business.
3.2 Acts of the Company. In order to achieve the purposes set forth in,
and subject to. Section 3.1, the Company may engage in any lawful business
permitted by the Act or the laws of any jurisdiction in which the Company may do
business. Without limiting the generality of the foregoing, the Company may do
all things permitted by law and exercise all authority within or incidental to
the purposes stated in this Operating Agreement and the Articles of
Organization.
ARTICLE IV
MEMBERS:
RIGHTS AND DUTIES: GOVERNANCE
4.1 Identification of Members and Membership Interests. The names,
addresses, and . Membership Interests of the Members are reflected on Exhibit B.
as it may be amended from time to time.
4.2 Voting. At all meetings of Members, every Member having the right to
vote shall be entitled to vote in person, or by proxy or power of attorney
appointed by an instrument in writing subscribed by such Member and bearing a
date not more than eleven months prior to said o meeting, unless such instrument
shall provide for a longer period. Each Member shall have a percentage vote
equal to its Membership Interest. A facsimile copy of the proxy or power of
attorney shall qualify as a writing, provided that the original copy shall be
lodged with the records of the Company. Whenever any matter is required or
allowed to be approved by the Members in this Operating Agreement, such matter
shall be considered approved or consented to upon the receipt of the affirmative
approval or consent, either in writing or at a meeting of the Members.
4.3 Member Responsibilities. (a) The Members shall be exclusively
responsible for the following actions:
(i) Electing the Board pursuant to the provisions of Section
5.1 and conferring powers to operate and manage the
Company upon the Board; and
(ii) any other acts on behalf of or with respect to the
Company which under the Act would require action by the
Members.
-5-
(b) All decisions and determinations of the Members shall be
considered adopted if approved by a Majority-in-Interest of the Members, except
that the following actions shall require the approval of those Members with
Membership Interests in the aggregate which exceed seventy-five (75%) of the
total Membership Interests entitled to vote on that particular matter:
(i) Amendment of the Articles of Organization, this
Operating Agreement (except pursuant to Section 10.2),
or any change in the Company's state or form of
organization;
(ii) Merger or consolidation of the Company with another
Person, regardless of whether the Company is the
survivor of such merger, or the acquisition of all or
part of the business or another person;
(iii) Sale, lease, transfer or other disposition of all or
substantially all of the assets of the Company other
than in the Ordinary Course of Business;
(iv) Any change in the Company's capital structure;
(v) Any material change in the scope of business of the
Company or any affiliate controlled by it (including by
acquisition) beyond the permitted scope set forth in
Section 3.1 of this Operating Agreement; and
(vi) Any adjustment or allocation to any Member's Capital
Account other than pursuant to the terms hereof.
4.4 Notice. Written or printed notice of each meeting of the Members,
whether annual or special, stating the place, date and hour of the meeting, and
in the case of a special meeting, the purpose or purposes thereof, shall only be
given to each Member of record of the Company entitled to vote at such meeting,
by internationally recognized private courier service or by facsimile to the fax
number listed on Exhibit B not less than three (3) days nor more than thirty
(30) days prior to the meeting.
4.5 Membership Meetings Without Notice. If all Members are present and
consent to the holding of a meeting, no notice or formal convening of such
meetings shall be required and the meeting of Members may proceed immediately.
No item not included in an agenda may be adopted unless all the Members are
present and none of them have objected to such item.
4.6 Membership Meetings by Telephone, Video or Electronically. Provided
proper notice as contemplated in this Operating Agreement has been given,
meetings of the Members may be held by means of telephone, video or other
electronic communication facility if all persons participating in the meeting
are able to communicate with each other simultaneously throughout the entire
meeting.
-6-
4.7 Consent of Members in Lieu of Meeting. Whenever the vote of Members at
a meeting thereof is required or permitted to be taken for or in connection with
any corporate action, by any provision of the applicable statutes, the Articles
of Organization or this Operating Agreement the meeting and vote of Members may
be dispensed with if all of the Members who would have been entitled to vote
upon the action if such meeting were held shall consent in writing to such
corporate action being taken. Any such writing may consist of several documents,
in like form, each signed by one or more of the Members. Unless the contrary is
stated therein, any such resolution or decision shall be deemed to have been
passed on the date of the last signature by the Members signing such writing. A
facsimile copy of the writing signed by a Member shall be acceptable evidence
that such writing has been signed by the Member whose signature appears on it,
provided that the original, copy shall thereafter be lodged with the records of
the Company.
4.8 Liability of Members. Except as otherwise provided under the Act, (a)
the debts, obligations, and liabilities of the Company, whether arising in
contract, tort, or otherwise, are solely the debts, obligations, and liabilities
of the Company, and (b) neither the Members nor the Directors are personally
liable to satisfy any judgment, decree, or order of a court for, or arc
personally liable to satisfy in any other manner, a debt, obligation, or
liability of the Company solely by reason of being a Member or Director.
4.9 Representations and Warranties. Each Member hereby represents and
warrants to the Company and each other Member: (a) if that Member is an Entity,
that it is duly organized, validly existing, and in good standing under the
law of its stale of organization and that it has full organizational power to
execute and deliver this Operating Agreement and to perform its obligations
hereunder; (b) that the Member is acquiring its interest in the Company for the
Member's own account as an investment and without an intent to distribute the
interest; and (c) that the Member acknowledges that the interests have not been
registered under the Securities Act of 1933, as amended, or any state securities
laws, and may not be resold or transferred by the Member without appropriate
registration or the availability of an exemption from such requirements.
ARTICLE V
BOARD OF DIRECTORS; COMPOSITION; DUTIES
5.1 Board Composition. (a) The Board shall consist of seven (7) Directors.
Treadco shall designate two (2) Directors and Goodyear shall designate five (5)
Directors. The initial Directors shall be those individuals set forth on Exhibit
C. In addition, Goodyear shall appoint one of its designated Directors to serve
as a Chairman of the Board and preside over Board meetings. The Company shall be
managed under the direction of its Board, which shall exercise such powers and
do such acts and things as are set forth herein, or as may be delegated to the
Board from time to time by the Members of the Company. Such Directors shall be
considered "Managers" for purposes of the Ohio Limited Liability Company Act.
(b) Every Director of the Company, upon his election, shall qualify
by accepting the office of Director, and his attendance at, or his written
approval of the minutes of,
-7-
any meeting of the Board subsequent to his election shall constitute his
acceptance of such office; or he may execute such acceptance by a separate
writing, which shall be placed in the minute book.
(c) Directors need not be Members. Directors may be re-designated.
In addition to the powers and authorities that this Operating Agreement and the
Articles of Organization expressly confer upon it, the Board, subject to this
Article V, may exercise all such powers of the Company, and do all such lawful
acts and things as are not by applicable statute or by the Articles of
Organization or by this Operating Agreement directed or required to be exercised
or done by the Members.
(d) An individual who serves on the Board may voluntarily resign at
any time by delivering written notice to the Members. In the event of the
removal, death, complete disability, or resignation of any Director, the Member
who designated such Director shall have the right to designate a substitute
Director. Each Director may be removed from the Board with or without cause by
the Member who designated such Director upon written notice to the other
Members.
5.2 Board Responsibilities. The Board shall have responsibility for (i)
establishing policies and guidelines for the conduct of the business and affairs
of the Company, (ii) supervising and directing the Officers (as herein
defined), and (iii) making determinations with respect to certain other
significant and extraordinary matters which have not been exclusively reserved
to the Members by this Operating Agreement, including, without limitation:
(a) changing the name of the Company or any affiliate controlled
by it;
(b) changing the fiscal year of the Company;
(c) changing the accounting principles of the Company, unless
required (A) to conform to a change in the applicable national
accounting rules applicable to the Company or (B) to permit
Goodyear to consolidate the Company following a change in the
applicable accounting rules;
(d) declaring and paying any distributions to Members other than
pursuant to the provisions of Article VII;
(e) approving the terms of any material settlement involving the
payment of consideration by the Company;
(f) establishing salaries of and declaring bonuses to Officers and
employees of the Company;
(g) electing and removing Officers;
-8-
(h) enter into transactions, other than those which are not in the
Ordinary Course of Business or which are at prices that are
not customarily charged, between the Company and either a
Member or an affiliate of a Member;
(i) change any benefit plans or arrangements offered by the
Company to its employees;
(j) select and remove the auditors or legal counsel of the
Company; and
(k) cause or permit the Company to furnish any collateral or issue
a guarantee.
All Directors of the Company's Board shall be entitled to receive all
financial and other information regarding the Company's businesses. Unless
otherwise required by law, the Articles of Organization or this Operating
Agreement, all decisions of the Board shall be considered adopted if approved
by a majority of the Directors.
5.3 Meetings of the Board. (a) The meetings of the Board shall beheld (i)
at such time and place either within or without the State of Ohio as shall he
suggested or provided by resolution of the Members, or (ii) if not so suggested
or provided for by resolution of the Members, at such time and place as shall be
consented to in writing by a majority of the Directors, provided that written
or printed notice of such meeting shall be given to each of the other Directors
not so consenting in the same manner as provided in Section 4.4 of this
Operating Agreement, except that it shall not be necessary to state the purpose
of the meeting in such notice; or (iii) regardless of whether or not the time
and place of such meeting shall be suggested or provided for by resolution of
the Members at such time and place as shall be consented to in writing by all of
the Directors.
(b) Board meetings shall be held no less frequently than
semi-annually, at such time and place as-determined in good faith by the Board.
The Directors shall be given at least three (3) days advance written notice
before a proposed meeting. Notice may be given by facsimile, e-mail, telegram or
delivered personally. The notice shall specify the place, date and time and the
proposed agenda in proper detail. If reasonable notice is given to all
Directors, the Board may adopt resolutions or decisions without a formal
meeting, if the Directors may communicate with each other simultaneously by
means of telephone, video and other electronic communication facility. If all
Directors are present and consent to the holding of a meeting and all the items
on the proposed agenda, no notice or formal convening of a meeting shall be
required and the meeting shall constitute presence in person at such meeting.
Any meeting of the Board shall be a legal meeting without any notice thereof
having been given to any Director who signs a waiver of notice (whether before
or after the meeting) or who attends the meeting without protesting the lack of
notice prior to its commencement. The Board may invite other persons not
Directors to attend and/or participate in its meeting, such invited person not
having a right to vote.
(c) Each meeting shall include a report on all material actions
taken and material decisions made since the preceding meeting and all material
actions and decisions proposed.
-9-
5.4 Special Meetings. Special meetings of the Board may be called by any
Member or Director at any time on at least three (3) day's advance notice. The
place may be within or without the State of Ohio as designated in the notice.
5.5 Written Statement In Lieu of Meeting. A resolution or decision in
writing, signed by all the Directors, shall be as valid and effectual as if such
resolution or decision has been passed at a meeting duly convened and held. Any
such writing may consist of several documents, in like form, each signed by one
or more of the Directors. Unless the contrary is stated therein, any such
resolution or decision shall be deemed to have been passed on the date of the
latest signature by the Director signing such writing. A facsimile copy of the
writing, signed by a Director, shall be acceptable evidence that such writing
has been signed by the Director whose signature appears on that facsimile,
provided that the original copy shall thereafter be lodged with the records of
the Company. The provisions of this Section 5.5 regarding written statements in
lieu of meetings shall also apply to committees of the Board.
5.6 Proxies. At any meeting of the Board, any Director may be represented
and vote by proxy or proxies appointed by an instrument in writing.
5.7 Standing or Temporary Committees. Without prejudice to any powers
vested in the Members under this Operating Agreement, the Board may, by
resolution or resolutions passed by a majority of the whole Board, designate one
or more committees, such committee to consist of two or more Directors of the
Company, including at least one Director nominated by each of Goodyear and
Treadco.
5.8 Compensation. No fees will be paid to or such fees shall be waived by
any individuals for serving on the Board. The Board or any affiliate controlled
by it may, by resolution, provide for reimbursement of expenses incurred by
Directors in attending each meeting; provided that nothing herein contained
shall be construed to preclude any member from serving this Company or affiliate
controlled by it in any other capacity and receiving his regular compensation
therefor. Service on any standing committees will be similarly treated as stated
above for service on such Boards.
5.9 Indemnification of Directors and Officers. Subject to applicable law,
the Company shall indemnify and advance expenses to each present and future
Director or Officer of the Company (and, in either case, his heirs, estate,
executors or administrators) to the full extent allowed by the laws of the State
of Ohio, both as now in effect and as hereafter adopted. The Company shall also
have the power to contract with any Officer or agent for whatever additional
indemnification the Board shall deem appropriate.
5.10 Representation of the Company. The Board in accordance with the
Articles of Organization may grant to individual Directors or Officers the
authority to represent the Company alone by power of attorney, resolution or
otherwise, subject to the limitations set out in this Operating Agreement. If
the grant of authority or power of attorney from the Board specifically
authorizes, such Directors or Officers may sub-delegate their authority to
others.
-10-
Such Directors or Officers shall take into account all outstanding resolutions
of the Members or Board when carrying out any action representing the Company.
5.11 Agents. Subject to the limitations set forth in the Agreement, the
Board from time to time may also appoint agents for the Company as it shall deem
necessary or advisable, each of whom shall serve at the pleasure of the Board or
for such period as the Board may specify, and shall exercise such powers, have
such titles and perform such duties as shall be determined from time to time by
the Board.
5.12 Duties of Directors May be Delegated. If any Director of the Company
shall be absent or unable to act, or for any other reason that the Board may
deem sufficient, the Board may delegate for the time being, some or all of the
functions, duties, powers and responsibilities of that Director to any other
Director, or to any other agent or employee of the Company or other responsible
person, provided the Member who appointed that Director consents.
5.13 Officers.
(a) Initial Officers. The initial Officers and the offices they hold
shall be those individuals and offices set forth on Exhibit C.
(b) Delegation of Authority. The Board may elect or appoint one or
more of the following Officers who shall have the following powers and
duties, in addition to any other powers and duties as determined by the
Board:
(i) The President. The President will be the Chief Executive
Officer of the Company with such general executive powers and duties
of supervision and management of the business of the Company and he
shall carry into effect all directions and resolutions of the Board,
and shall have such other duties, powers and authority as may be
delegated to him by the Board.
Unless the Board otherwise provides, the President may execute
all bonds, notes, debentures, mortgages and other instruments for
and in the name of the Company.
(ii) Vice President. A Vice President may be elected or
appointed by the Board. In the absence of the President or in the
event of his disability, inability or refusal to act, the Vice
President shall perform the duties and exercise the powers of the
President, and shall perform such other duties as the Board may from
time to time prescribe.
(iii) Secretary and Assistant Secretaries. The Secretary and
any Assistant Secretary shall be elected or appointed by the Board.
The Secretary may attend all sessions of the Board and all meetings
of the Members, and shall record or cause to be recorded all votes
taken and the minutes of all proceedings in a minute book of the
Company to be kept for that purpose. He shall perform
-11-
like duties for the executive and other standing committees
requested by the Board or any such committee to do so.
It shall be the principal responsibility of the Secretary to
give, or cause to be given, notice of all meetings of the Members
and of the Board, but this shall not lessen the authority of others
to give such notice as is authorized elsewhere in this Operating
Agreement.
The Secretary shall see that all books, records, lists and
information, or duplicates, required to be maintained in the State
of Ohio, or elsewhere, are so maintained.
The Secretary shall perform such other duties and have such
other authority as may be prescribed elsewhere in this Operating
Agreement or from time to time by the Board or the President of the
Company, under whose direct supervision he shall be.
In the absence of the Secretary or in the event of his
disability, inability or refusal to act, the Assistant Secretary (or
in the event there be more than one Assistant Secretary, the
Assistant Secretaries in the order designated by the Board, or in
the absence of any designation, then in the order of their election)
may perform the duties and exercise the powers of the Secretary, and
shall perform such other duties as the Board may from time to time
prescribe.
(iv) Treasurer. The Treasurer shall have responsibility for
the safekeeping of the funds and securities of the Company, shall
keep or cause to be kept full and accurate accounts of receipts and
disbursements in books belonging to the Company and shall keep, or
cause to be kept, all books belonging to the Company and shall keep,
or cause to be kept, all other books of account and accounting
records of the Company. He shall deposit or cause to be deposited
all moneys and other valuable effects in the name and to the credit
of the Company in such depositories as may be designated by the
Board or by any officer of the Company to whom such authority has
been granted by the Board.
He shall disburse, or permit to be disbursed, the funds of the
Company as may be ordered, or authorized generally, by the Board,
and shall render to the President of the Company and the Directors
whenever they may require it, an account of all his transactions as
Treasurer and of those under his jurisdiction, and of the financial
condition of the Company.
He shall perform such other duties and shall have such other
responsibility and authority as may be prescribed elsewhere in this
Operating Agreement or from time to time by the Board.
If required by the Board, he shall give the Company a bond in
a sum and with one or more sureties satisfactory to the Board, for
the faithful performance of
-12-
the duties of his office, and for the restoration to the Company, in
the case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control which belong to
the Company.
(c) Standard of Conduct. Each of the Officers shall discharge the
duties of an office in good faith and in a manner he reasonably believes
to be in the best interest of the Company. In discharging his duties, the
Officer is entitled to rely in good faith on information, opinions,
reports or statements, including financial statements and other financial
data, if prepared or presented by employees of the Company whom the
Officer reasonably believes to be reliable and competent in the matters
presented; or legal counsel, public accountants, or other persons as to
matters the Officer reasonably believes are within the person's
professional or expert competence. An Officer is not acting in good faith
who has knowledge concerning the matter in question that makes reliance
otherwise permitted by this provision unwarranted. An Officer shall not be
liable for any action taken as an officer, or any failure to take any
action, if the Officer has performed the duties of the office in
compliance with this provision.
(d) Compensation. The salaries and other compensation of the
Officers and employees of the Company shall be as determined by the Board
from time to time.
(e) Removal. The Board may remove any of the Officers at any time,
with or without cause, but no such removal shall affect the contractual
rights, if any, of the Officer so removed.
(f) Resignation. An Officer may resign at any time by delivering
written notice to the Board. A resignation is effective without acceptance
when the notice is delivered to Board, unless the notice specifies a later
effective date. If a resignation is made effective at a later date and the
Board accepts the future effective date, the Board may fill the pending
vacancy before the effective date if it provides that the successor does
not take office until the effective date. An Officer's resignation does
not affect the Company's contractual rights, if any, with the Officer.
ARTICLE VI
CONTRIBUTIONS AND EXPENSES
6.1 Capital Contributions. Goodyear and Treadco have made the Capital
Contributions described in the JV Agreement attached hereto as Exhibit D. No
interest shall accrue on any Capital Contribution and no Member shall have the
right to withdraw or be repaid any Capital Contribution except as provided in
this Operating Agreement. Each Additional Member shall make the Capital
Contribution described in the Admission Agreement. The value of the Additional
Member's Capital Contribution and the time for making such contribution shall be
set forth in the Admission Agreement admitting that Additional Member as a
Member.
-13-
6.2 No Additional Capital Contributions. In the event additional funds
(over and above the Capital Contributions which are made by the Members pursuant
to Section 6.1) are required or desired to carry on the business and purposes of
the Company, the Company will obtain such funds from loans from third parties
borrowed pursuant to Section 6.3 or from grants from third parties. In no event
shall any Member be required to make any additional Capital Contribution to the
Company.
6.3 Bank Facility and Loans by Third Parties. Goodyear shall use its
reasonable best efforts to arrange a bank facility for Wingfoot by the
Effective Time; provided that such bank facility shall be non-recourse to
Goodyear and Treadco. In the event that additional funds (over and above the
Capital Contributions which are made by Members pursuant to Section 6.1 and the
aforementioned bank facility) are required or desired to carry on the business
and purposes of the Company, the Board may arrange for the Company to borrow
money secured by mortgages, deeds of trust or security interests in the property
or assets of the Company, if necessary.
6.4 Loans by the Members. Notwithstanding any provision of this Article VI
to the contrary, in the event that interim funds beyond the Capital
Contributions of the Members and any available financing from third parties
borrowed pursuant to Section 6.3 are required from time to time for costs,
expenses or obligations of the Company, the Members may, but shall not be
obligated to, loan those additional funds, or a portion thereof, to the Company
to cover those interim needs of the Company. The Board shall make the
determination whether such loans shall be requested of the Members. Any such
loan shall be a debt and obligation of the Company to be evidenced by a
promissory note ("Loan Note") bearing interest, until repaid in full, not to
exceed a rate per annum equal to the lesser of (a) the highest rate for which
parties may legally contract or (b) the then-current rate quoted as the "Prime
Rate" in the Market Rates column in the Wall Street Journal (or, if no such rate
is published, such other, equivalent rate as reasonably selected by the Board).
Any loan made by the Members pursuant to this Section 6.4 shall be repaid to
the Members together with any interest accrued thereon (i) as a priority payment
from the net taxable income of the Company or (ii) if outstanding at the time of
the Company's dissolution and liquidation, in accordance with Section 9.3.
ARTICLE VII
ALLOCATIONS AND DISTRIBUTIONS
7.1 Allocation of Net Profit or Net Loss from Operations. (a) Except as
otherwise provided in Exhibit E attached hereto, the Net Profit or Net Loss (as
such terms are hereinafter defined) of the Company, and each item of income,
gain, loss, deduction, or credit attributable thereto, (other than gain or loss
arising from a Taxable Disposition) shall be allocated among the Members in
proportion to their respective Membership Interests. For purposes hereof, (i)
Net Profit or Net Loss shall mean the net profit or net loss, as the case may
be, of the Company for federal income tax purposes, as determined by the
Company's accountants, and (ii) except as set forth in Section 7.1(b), Net
Profit or Net Loss shall be considered to have been earned ratably over the
fiscal year of the Company.
(b) Allocation of Net Profits and Net Losses and Distributions in
respect of a transferred Interest. If any Membership Interest is assigned, or is
increased or decreased by
-14-
reason of the admission of a new Member or otherwise, during any fiscal year of
the Company, each item of income, gain, loss, deduction, or credit of the
Company for such fiscal year shall be divided and allocated by taking into
account the varying interests of each Person during the period in accordance
with Code Section 706(c), using any conventions permitted by law and selected by
the Members. In the case of an assignment, all Distributions on or before the
date of any such assignment shall be made to the assignor Member, and all
Distributions thereafter shall be made to the assignee; provided, however, that
solely for purposes of making such allocations and Distributions, the Company
shall recognize such assignment not later than the end of the calendar month
during which it is given notice of such assignment and such other information
with respect to the assignment as the Members may reasonably require. The
Members and the Company shall incur no liability to the assignor Member or the
assignee for making allocations and Distributions in accordance with the
provisions of this Article VII, whether or not the Members or the Company have
knowledge of any assignment of any Membership Interest.
7.2 Allocation of Gain or Loss from Taxable Dispositions of Less Than All
or Substantially All of the Property of the Company. Except as otherwise
provided in Exhibit E hereto, in the event of any sale, exchange, or other
disposition of any portion but less than all or substantially all of the
Property of the Company ("Taxable Disposition"), the gain or loss resulting
therefrom shall be allocated among the Members in proportion to their respective
Membership Interests. For purposes of this Section 7.2, gain or loss arising
from a Taxable Disposition shall be taken into account as of the date thereof.
7.3 Allocation of Gain or Loss from Taxable Dispositions of All or
Substantially All of the Property of the Company. Except as otherwise provided
in Exhibit E attached hereto, in the event of any sale, exchange, or other
disposition of all or substantially all of the Property of the Company (also a
"Taxable Disposition"), the gain or loss resulting therefrom shall be allocated
among the Members as follows:
(a) Any gain realized by the Company upon the sale or other
disposition of all or substantially all of the assets of the Company
pursuant to the dissolution and liquidation of the Company shall be
allocated among the Members (after crediting or charging to the Members'
Capital Accounts, as the case may be, the appropriate portion of all Net
Profit, Net Loss, gain or loss of the Company for the then current fiscal
year in accordance with Sections 7.1 and 7.2 and all amounts distributed
or to be distributed for such year under Sections 7.4), as follows and in
the following order of priority:
(i) If the Capital Account of any Member shall have a negative
balance, gain first shall be credited to the Capital Account of such
Member until the balance equals zero. If the Capital Accounts of
more than one Member shall have a negative balance, gain shall be
credited to the Capital Accounts of all such Members with negative
balances in the proportion which the negative balance of such Member
bears to the negative balances of all such Members, until the
balances of the Capital Accounts of all such Members shall equal
zero; and
(ii) In the event that the Capital Account of any Member shall
have a positive balance, gain next shall be credited to the Capital
Accounts of the
-15-
Members to the extent necessary to make the positive balance of each
Member's Capital Account proportionate (in accordance with the
Membership Interests of the Members in the Company) to the positive
balance, if any, of the Member with the highest positive balance in
his Capital Account at such time; and
(iii) The remaining balance of gain, if any, shall be credited
to the Capital Accounts of the Members in accordance with the
Membership Interests of the Members in the Company.
(b) Any loss incurred by the Company upon the sale or other
disposition of all or substantially all of the assets of the Company
pursuant to a dissolution and liquidation of the Company shall be
allocated among the Members (after crediting or charging to the Members'
Capital Accounts, as the case may be, the appropriate portion of all Net
Profit. Net Loss, gain or loss of the Company for the then current fiscal
year in accordance with Sections 7.1 and 7.2 and all amounts distributed
or to be distributed for such year in accordance with Section 7.4), as
follows and in the following order of priority:
(i) If the Capital Account of any Member shall have a positive
balance, loss first shall be charged to the Capital Account of such
Member until the balance equals zero. If the Capital Accounts of
more than one Member shall have a positive balance, loss shall be
charged to all such Members with positive balances in the proportion
which the positive balance of such Member bears to the positive
balances of all such Members, until the Capital Accounts of all such
Members shall equal zero;
(ii) In the event the Capital Account of any Member shall have
a negative balance, loss next shall be charged to the Capital
Accounts of the Members to the extent necessary to make the negative
balance of each Member's Capital Account proportionate (in
accordance with the Membership Interests of the Members in the
Company) to the negative balance of the Capital Account of the
Member with the greatest negative balance in his Capital Account at
such time; and
(iii) The remaining balance of loss, if any, shall be charged
to the Capital Accounts of the Members in accordance with the
Membership Interests of the Members in the Company.
7.4 Distributions. (a) Tax Distributions. The Company shall make
distributions to the Members pursuant to Section 2.1(c)(ii) of the JV Agreement.
Additional distributions are subject to the approval of the Board,
(b) No Member shall be entitled to make withdrawals from the Company
except to the extent of distributions made pursuant to express provisions of
this Operating Agreement. Except as provided in Section 2.1(c)(ii) of the JV
Agreement, Tax Distributions may be made in cash or in property; or partly in
each, but no Member shall have the right to require that a distribution be made
other than in cash.
-16-
7.5 Capital Accounts. A Capital Account shall be maintained for each
Member in accordance with Exhibit E attached hereto. The provisions of Exhibit E
are intended to comply with the requirements of Section 1.704-1 (b)(2)(iv) of
the Regulations with respect to substantial economic effect and shall be
interpreted and applied accordingly. Except as otherwise provided in this
Operating Agreement, the Capital Account of a Member shall be determined after
giving effect to all allocations of Net Profit, Net Loss, gain, or loss of the
Company for the current fiscal year (or portion thereof) as well as all
Distributions for the year in respect of transactions effected prior to the date
as of which the determination is to be made. To the extent that a portion (but
less than all) of any Member's Membership Interest in the Company is transferred
to another Person at any time as permitted by this Operating Agreement, the
Capital Account of the Member shall be divided into separate Capital Accounts
for the Member (to the extent the Member retains an interest in the Company) and
for the other Person in proportion to the relative percentage interest in the
Company held by each of them after the transfer. Except for the Capital
Contributions required by Section 6.1 and as set forth on Exhibit E, no Member
as such shall be required to make any further contribution to the capital of the
Company to restore a deficit in its Capital Account or to discharge any
liability of the Company, nor shall any Member be personally liable for any
liabilities or obligations of the Company, except as otherwise provided by law.
7.6 Accounting. Full and complete books of account of the Company shall be
kept in accordance with generally accepted accounting principles and shall be
maintained at all times by Wingfoot at the Company's principal office or at such
other place as the Board may determine from time to time. The basis on which the
Company's books of account are kept for federal income tax purposes shall be
determined by the Board. All costs and expenses of keeping the books of account
and the fees for any accounting services shall be deemed and treated as expenses
of the Company. The books of account shall be closed and balanced as of the end
of each fiscal quarter, and the Net Profit or Net Loss, as the case may be, of
the Company determined as herein provided. Copies of the Company's audited
annual financial statements prepared by the Company's accountants accompanied by
a report of federal income tax information as of the end of each fiscal year,
shall be furnished by the Board to each Member within sixty (60) days of the end
of each fiscal year. Each Member shall have the right to examine and audit (at
the expense of the Member) the books of account during reasonable business
hours.
7.7 Tax Elections. The Board or an Officer may make any tax elections for
the Company allowed under the Code or the tax laws of any state or other
jurisdiction having taxing jurisdiction over the Company.
7.8 Tax Matters Partner. Goodyear shall be the tax matters partner of the
Company pursuant to Section 6231(a)(7) of the Code.
-17-
ARTICLE VIII
ASSIGNMENTS AND TRANSFERS OF MEMBERSHIP INTERESTS;
WITHDRAWAL
8.1 Restrictions on Pledging and Encumbering. Except as permitted by Section
4.1(a)(iv) of the JV Agreement, No Member may mortgage, pledge, hypothecate,
collaterally assign, or otherwise encumber or permit or suffer the encumbrance
of all or any fractional portion of such Member's Membership Interest in the
Company, without the prior written consent of a Majority-in-Interest of the
other Members, and, except as otherwise expressly provided in this Article VIII,
no Member may sell, assign, transfer, or otherwise dispose of all or any
fractional portion of his Membership Interest in the Company, whether
voluntarily, involuntarily, or by operation of law; provided that nothing
contained in this Section 8.1 shall be deemed to prohibit the pledge or
assignment to the Company of a Member's Membership Interest in the Company for
the purpose of securing the repayment by such Member of a promissory note, if
any, payable to the order of the Company.
8.2 Permitted Assignments and Transfers. (a) Transfers to Members and
Affiliates. Subject to and in full compliance with the terms and conditions of
this Operating Agreement and the Act, a Member may sell, assign, or otherwise
transfer all or a fractional portion of such Member's Membership Interest in the
Company to the extent hereinafter provided to any other Member, or to any Person
(permitted to be a member of a limited liability company under the laws of the
State) in which any Member or Members hold(s) a one hundred percent (100%)
interest; provided that the shares of any such corporation, or the interests in
any such trust, partnership, or other Person, as the case may be, shall be made
subject to the same restrictions on transfer as are set forth in this Article
VIII.
(b) Transfers to Unaffiliated Third Parties. Notwithstanding
anything herein to the contrary, Treadco shall have no right to sell, assign or
otherwise transfer its Membership Interest to an unaffiliated third party other
than pursuant to its "tag along" rights in Section 4.1(a)(iii) of the JV
Agreement Goodyear's right to sell, assign or otherwise transfer its Membership
Interest to an unaffiliated third party shall be subject to Treadco's "tag
along" rights in Section 4.1 (a)(iii) of the JV Agreement.
8.3 Rights of Assignees. The Assignee of a Membership Interest has no
right to participate in the management of the business and affairs of the
Company or to become a Member. The Assignee is only entitled to receive the
Distributions and return of capital, and to be allocated the Net Profits or Net
Losses attributable to the Membership Interest.
8.4 Admission of Substitute Members. An Assignee of a Membership Interest
shall be admitted as a Substitute Member and admitted to all the rights of the
Member who initially assigned the Membership Interest only with the approval of
all of the remaining Members. The Members may grant or withhold the approval of
such admission for any reason in their sole and absolute discretion. If so
admitted, the Substitute Member has all the rights and powers and is subject to
all the restrictions and liabilities of the Member originally assigning the
Membership
-18-
Interest. In addition, a Substitute Member is liable for the obligations of the
assignor to make any unpaid Capital Contributions.
8.5 Admission of Additional Members. The Members may permit the admission
of Additional Members by unanimous consent of all of the other Members and
determine the Capital Contributions of such Additional Members. Each Additional
Member approved for admission to the Company should execute an agreement
containing the terms of the Additional Member's admission to the Company (the
"Admission Agreement").
8.6 Transfers of Membership Interest Pursuant to the JV Agreement.
Notwithstanding the provisions of Section 8.7. each Member hereby agrees, on
behalf of itself, its legal representative and its successors in interest, that
it will sell and transfer its Membership Interest pursuant to the terms and
conditions of Section 4.1 of the JV Agreement.
8.7 Additional Restrictions on Transfer, etc. Notwithstanding the
foregoing provisions of this Article VIII, no Membership Interest in the Company
may be sold, assigned, transferred, or otherwise disposed of at any time if such
disposition (a) would be deemed to result in a termination of the Company under
Section 708(b) of the Code any corresponding provisions of subsequent federal
law, or the applicable rules or regulations thereunder, except that this
subclause (a) shall not prevent a required transfer pursuant to Section 8.6
above. (b)would cause the Company to be taxed as an association for federal
income tax purposes under the Regulations, or (c) would not be exempt from
registration requirements of the Securities Act of 1933, as amended, or would
not be in compliance with any applicable slate blue sky or securities laws.
Accordingly, no such Membership Interest may be sold, assigned, transferred, or
otherwise disposed of on any basis whatsoever without delivery to all other '
Members of an opinion of such counsel as is satisfactory to all other Members
and in form and substance satisfactory to all other Members that such sale,
assignment, transfer, or other disposition (x) will not cause any of the events
described in subclauses (a) (unless such disposition is a required transfer
pursuant to Section 8.6 above), or (b) above to occur and (y) will be exempt
from or in compliance with the registration requirements referred to in
subclause (c)above.
8.8 Survival of Restrictions on Transfer, etc. (a) In the event of a sale,
assignment, transfer, or other disposition pursuant to this Article VIII other
than a transfer pursuant to Section 8.6 above, the Membership Interest so sold,
assigned, transferred, or otherwise disposed of shall remain subject to all
terms and conditions of this Operating Agreement, and the transferee shall
execute and deliver written instruments). in form and substance satisfactory to
the Board, agreeing to become a Member for all purposes hereof and to be bound
by all terms and conditions of this Operating Agreement; provided, that in the
event such sale, assignment, transfer, or other disposition is to a trust, the
instrument to be delivered may provide that the trustee for such trust (and any
successor trustee) shall have no personal liability to the Company or to the
Members arising by reason of serving in such capacity, and such trustee's
liability, as trustee, shall be limited to the assets held by him or it, as
trustee of such trust. The restrictions on transfer and options to purchase
contained in this Operating Agreement shall survive the termination of this
Operating Agreement and shall continue to be binding on the Parties hereto and
their respective heirs, personal representatives, successors and assigns so long
as they shall
-19-
hold title to the assets of the Company as tenants in common or by some other
form of joint or common ownership.
(b) Neither the Company nor any Member shall be required to
recognize the purported transferee of any sale, assignment, transfer, or other
disposition of an interest not made strictly in accordance with the restrictions
and requirements contained in this Article VIII, and, in the event a Member
attempts to sell, assign, transfer, or otherwise dispose of all or a fractional
portion of his Membership Interest in the Company other than as permitted by and
in accordance with this Operating Agreement, (i) such attempted sale,
assignment, transfer, or other disposition shall be void and of no force or
effect and (ii) at the option of the non-transferring Members, exercisable by
notice to the transferor within sixty (60) days following the date on which the
non-transferring Members receive notice or have actual knowledge of such
attempted sale, assignment, transfer, or other disposition, the transferor shall
be treated as having withdrawn from the Company for purposes of Section 8.7
hereof.
(c) The Company may not recognize for any purpose any purported
disposition of all or part of a Membership Interest unless and until the other
applicable provisions of this Article VIII have been satisfied and the Members
have received, on behalf of the Company, a document (i) executed by both the
Member effecting the disposition (or if the transfer is on account of the death,
incapacity, or liquidation of the transferor, its representative) and the Person
to which the Membership Interest or part thereof is disposed. (ii) including the
notice address of any Person to be admitted to the Company as a Member and its
agreement to be bound by this Operating Agreement in respect of the Membership
Interest or part thereof being obtained, (iii) setting forth the Membership
Interests and the Commitments after the disposition of the Member effecting the
disposition and the Person to which the Membership Interest or part thereof is
disposed (which together must total the Membership Interest and the Commitment
of the Member effecting the disposition before the disposition), and (iv)
containing a representation and warranty that the disposition was made in
accordance with all applicable laws and regulations (including, without
limitation, securities laws).
(d) The Member effecting a disposition and any Person admitted to
the Company in connection therewith shall pay, or reimburse the Company for, all
costs incurred by the Company in connection with the disposition or admission
(including reasonable attorney's fees) on or before the tenth day after the
receipt by that Person of the Company's invoice for the amount due. If payment
is not made by the date due, the Person owing that amount shall pay interest on
the unpaid amount from the date until paid at a rate per annum equal to the
Prime Rate.
ARTICLE IX
DISSOLUTION AND WINDING UP
9.1 Dissolution. The Company shall be dissolved, and its affairs wound up,
upon the first to occur of the following events (which shall constitute
"Dissolution Events"):
(a) The unanimous written consent of all of the Members;
-20-
(b) Entry of a decree of judicial dissolution under Section 1705.47
of the Ohio Revised Code; or
(c) The sale of all or substantially all of the Company's assets.
9.2 Effect of Dissolution. Upon the occurrence of a Dissolution Event, the
Company shall continue its existence until the winding up of the affairs of the
Company is completed and the Certificate of Dissolution has been issued by the
Secretary of State. A reasonable time shall be allowed for the orderly
liquidation of the Property of the Company and the discharge of Company
liabilities to creditors so as to minimize the normal losses attendant to such
liquidation.
9.3 Distribution of Assets on Dissolution. Upon the winding up of the
Company, the Company Property shall be distributed in the following order of
priority:
(a) To creditors, excluding Members who are creditors, to the extent
permitted by law, in satisfaction of Company Liabilities;
(b) To Members who are creditors of the Company in satisfaction of
Company liabilities including, without limitation, the repayment of
principal and interest on Loan Notes; and
(c) To Members in accordance with positive Capital Account balances
taking into account all Capital Account adjustments for the Company's
fiscal year in which the liquidation occurs.
Liquidation proceeds shall be paid within sixty (60) days of the end of
the Company's fiscal year or, if later, within ninety (90) days after the date
of liquidation. Such distribution shall be in cash or Property (which need not
be distributed proportionately) or partly in both, as determined by the Board.
9.4 Final Accounting. Each of the Members shall be furnished with a
statement audited by the Company's accountants, which shall set forth the assets
and liabilities of the Company as at the date of distribution and liquidation
of the Company.
9.5 Winding Up and Certificate of Dissolution. The winding up of the
Company shall be completed when all debts, liabilities, and obligations of the
Company have been paid and discharged or reasonably adequate provision therefor
has been made, and all of the remaining property and assets of the Company have
been distributed to the Members. Upon the completion of winding up of the
Company, a Certificate of Dissolution shall be delivered to the Secretary of
State for filing. The Certificate of Dissolution shall set forth the information
required by the Act.
-21-
ARTICLE X
AMENDMENT
10.1 Authority to Amend: Board. This Operating Agreement may be amended by
the Board, without the consent or approval of any Member, if (i) the amendment
is solely for the purpose of clarification and does hot change the substance
hereof; (ii) the amendment is, in the written opinion of outside counsel to the
Company, necessary or appropriate to satisfy requirements of the Code or the Act
with respect to limited liability companies or of any federal or state
securities laws or regulations; or (iii) the amendment is necessary, in the
written opinion of outside counsel to the Company, to implement or effectuate
any provision of this Operating Agreement.
10.2 Authority to Amend: Members. Except for amendments which are
authorized pursuant to Section 10.1, amendments to this Operating Agreement
shall be made only with the approval of a those Members with Membership
Interests in the aggregate which exceed seventy- five (75%) of the total
Membership Interests pursuant to Section 4.3(b). The approval of the Members may
be obtained by the written consent or approval, or the affirmative vote at a
meeting, of the Members and, if the requisite consents or approvals are obtained
as herein provided, each Member agrees to execute all documents and instruments
necessary to implement such amendment so approved. No amendment, however, shall
be made pursuant to any provision of this Article that would disqualify the
Company as an entity classified as a partnership for federal income tax purposes
or adversely affect the limited liability of the Members, without disclosure
thereof to the Members and the approval of all Members.
ARTICLE XI
DISPUTE RESOLUTION
11.1 Procedures. The Parties agree that if any dispute or controversy,
other than a matter for which a Party is entitled to specific performance or
injunctive relief, arises out of this Agreement or any of the other documents to
be delivered hereunder or the performance, breach, validity, interpretation or
enforcement thereof, it is in the best interests of the Parties for such dispute
or controversy to be resolved in the shortest time and with the lowest cost of
resolution practicable. Consequently, the Parties agree to resolve any dispute
or controversy, other than a matter for which a Party is entitled to specific
performance or injunctive relief, without resort to the courts. If any dispute
or controversy arises, the Parties will comply with the following procedures:
(a) the Party believing a dispute to exist will give the other Parties prompt
written notice thereof, setting forth in reasonable detail the facts alleged to
give rise to such dispute, any relevant contractual provisions, the nature of
any claimed default or breach and a statement of the manner in which such Party
believes the dispute should be resolved; (b) within 20 days after receipt of
such notice, each Party against whom relief is sought in connection with such
dispute will deliver a written response, setting forth in reasonable detail its
views of the facts alleged to give rise to such dispute, any relevant
contractual provisions, the nature of the claimed default or breach and a
statement of the manner in which such Party believes the dispute should be
resolved; and (c) if the Parties do not agree on the manner in which the dispute
should be resolved, they will arrange to hold a meeting within 10 days after
delivery of the response. Each
-22-
Party shall have in attendance at such meeting a representative with the
authority to resolve such dispute. At the meeting (and any adjournments
thereof), the Parties will negotiate in an attempt to agree as to whether a
dispute exists, the exact nature of the dispute and the manner in which the
dispute should be resolved. If deemed appropriate by the Parties, a professional
mediator may be engaged to assist in resolving the dispute. Any resolution of
the dispute will be evidenced by a written agreement setting forth in reasonable
detail the actions to be taken by each Party. If no such written agreement is
reached within 20 days after the first meeting (the "Negotiation Period"), a
Party may pursue binding arbitration with respect to such dispute pursuant to
Section 11.2.
11.2 Arbitration. (a) Binding Arbitration. To the extent that the dispute
resolution procedures set forth in Section 11.1 are unsuccessful, all disputes
and controversies arising out of or relating to this Agreement or any of the
other documents to be delivered hereunder, or the performance, breach, validity,
interpretation or enforcement thereof, will be resolved by binding arbitration
in accordance with Title 9 of the U.S. Code (United States Arbitration Act) and
the Commercial Arbitration Rules (the "Rules") of the AAA, and judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
(b) Notice: Selection of Arbitrators. A party may initiate
arbitration by sending written notice of its intention to arbitrate to the other
Parties and to the AAA office located in Chicago, Illinois (the "Arbitration
Notice") within five Business Days after expiration of the Negotiation Period.
The Arbitration Notice will contain a description of the dispute and the
remedy sought. The arbitration will be conducted at the offices of the AAA in
Chicago. Illinois before three independent and impartial arbitrators experienced
in legal matters related to the commercial truck tire industry. Each Party will
be entitled to select one arbitrator, and the two individuals so selected will
select the third arbitrator.
(c) Procedures. Except as otherwise specifically provided herein,
the arbitration and any discovery conducted in connection therewith will be
conducted in accordance with the Rules. The arbitrators' authority to make any
award will be based on and limited by the Laws of the State of Ohio and the
terms and conditions of this Agreement. The arbitrators will deliver their
decision in writing, together with a summary of the reasons for their decision,
including citations to legal authority to the extent appropriate. The decision
of the arbitrators will be final and binding on all Parties and their successors
and permitted assignees. A judgment upon the award rendered by the arbitrators
may be entered by any court having jurisdiction thereof. The Parties intend that
this agreement to arbitrate be irrevocable.
(d) Hearings: Decisions. The panel of arbitrators will be selected
no later than 45 days after the date of the Arbitration Notice. The Parties will
request that the arbitration hearing commence no later than three months after
the panel of arbitrators is selected and that the arbitrators render their
decision no later than 30 days after the close of the hearing, in accordance
with AAA Rules.
(e) In any matter submitted for arbitration hereunder, each party to
such arbitration shall specify to the arbitrator the relief that such party
believes should be granted, including, in matters including claims for the
payment of money, the amount of monetary
-23-
damages that should be awarded (the "Relief"). In determining any matter
submitted for arbitration hereunder, the arbitrator shall be required to
determine which party shall prevail and shall award the Relief proposed by the
prevailing party and shall have no power to make any compromise award or grant
any other relief or make any other award of monetary damages with respect to
such arbitration. In the event that multiple matters are submitted for
arbitration in one Proceeding, the provisions of this section shall be applied
on a matter-by-matter basis.
(f) Fees and Costs of Arbitration. The arbitrators' fees and costs
will conform to the then current AAA fee schedule and will be borne equally by
Goodyear and Treadco.
(g) Limitations. The Parties agree that, notwithstanding anything to
the contrary in this Section 11.2, any award made by the arbitrators will be
consistent with the terms and conditions of this Agreement and that any award
will be restricted to a remedy that would be available to a Party under this
Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Entire Agreement. This Operating Agreement and the Exhibits hereto,
together with the JV Agreement and its Schedules and Exhibits, represent the
entire agreement by and among all the Members. With respect to the operation and
management of Wingfoot, if there is a conflict between this Operating Agreement
and the JV Agreement, the provisions of the JV Agreement shall control.
12.2 No Partnership Intended for Nontax Purposes. The Members have formed
the Company under the Act, and expressly do not intend hereby to form a
partnership under either the Ohio Uniform Partnership Act (Chapter 1775 of the
Ohio Revised Code) nor the Ohio Uniform Limited Partnership Act (Chapter 1782 of
the Ohio Revised Code). The Members do not intend to be partners one to another,
or partners as to any third party. To the extent any Member, by word or action,
represents to another person that any other Member is a partner or that the
Company is a partnership, the Member making such wrongful representation shall
be liable to such other Member who incurs personal liability by reason of such
wrongful representation.
12.3 Rights of Creditors and Third Parties Under Operating Agreement. This
Operating Agreement is entered into by and among the Members for the exclusive
benefit of the Company, its Members, and their successors and assignees. This
Operating Agreement is expressly not intended for the benefit of any creditor of
the Company or any other Person. Except and only to the extent provided by
applicable statute, no such creditor or third party shall have any rights under
this Operating Agreement or any agreement between the Company and any Member
with respect to any Capital Contribution or otherwise.
12.4 Governing Law. This Operating Agreement shall be governed by and
construed in accordance with, and the Company shall be governed by, the laws of
the State of Ohio, without regard to the choice of laws provisions therein.
-24-
12.5 Fiscal Year. The Company's fiscal year for financial and income tax
purposes shall be the calendar year.
12.6 Counterparts. This Operating Agreement and any amendments hereto may
be executed in counterparts, each of which shall be deemed an original and all
of which shall constitute one and the same instrument, binding on all Members,
and the signature of any party to any counterpart shall be deemed a signature
to, and may be appended to, any other counterpart.
12.7 Agreement for Further Execution. As required from time to time in
furtherance of the business of the Company, the Members agree to (a) sign and
acknowledge any certificate required by law, (b) sign and acknowledge any
amendment to or cancellation of such certificate whenever such amendment or
cancellation is required by law (c) sign, certify, acknowledge, and swear to
(if necessary) similar certificates, affidavits, or certificates or fictitious
firm name, trade name or the like (and any amendments or cancellations thereof)
required by the laws of the State of Ohio or any other jurisdiction in which the
Company does, or proposes to do, business, and to cause the filing of any of the
same for record wherever such filing shall be required by law, and (d) execute
and deliver such further instruments as may be necessary or appropriate to carry
out the intent and purposes of this Operating Agreement.
12.8 Severability. If any provision of this Operating Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of the Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the fullest extent permitted
by law.
12.9 Notices. Any notice to the Members or to the Company shall be deemed
to have been properly given as of the date on which such notice is
hand-delivered, or if sent by telecopy, on the day such telecopy is sent to the
Company's principal office, and in the case of notices to the Members, to each
of the Members at their respective telecopy numbers set forth on Exhibit B
attached hereto, or, if mailed, on the third (3rd) business day following the
day on which such notice is so mailed, by prepaid registered or certified mail
(return receipt requested) addressed, in the case of notices to the Company, to
the Company's principal office, and in the case of notices to the Members, to
each of the Members at their respective addresses set forth on Exhibit B
attached hereto. Notices given to the Company shall also be given to each
Member. Any Member may, from time to time, change the address and/or telecopy
number to which notices are to be served upon him by giving at least ten (1.0)
days prior written or telecopy notice to the Company and to each of the other
Members, in the manner aforesaid.
12.10 Waivers. The failure of any party to seek redress for violation of
or to insist upon the strict performance of any covenant or condition of this
Agreement shall not be deemed a waiver of such violation or failure to perform
or of any subsequent violation or failure to perform.
-25-
12.11 Headings, etc. The word "Section" and the titles or captions
contained in this Operating Agreement are for convenience of reference only and
in no way define, limit, extend, and/or describe and scope of this Operating
Agreement or the intent of any of the provisions hereof. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular, or plural as the identification of the person or persons may require.
12.12 Member Bids. If at any time the assets of the Company, or any
portion thereof, are to be sold pursuant to the directive or supervision of any
court of competent jurisdiction, each of the Members shall be entitled to bid at
such sale(s).
IN WITNESS WHEREOF, the undersigned have executed this Operating Agreement
on the dates indicated below.
THE GOODYEAR TIRE & RUBBER CO.
October 31, 2000 By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx, Senior Vice President,
Business Development and Business
Integration
TREADCO, INC.
October 31, 2000 By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxx, Treasurer
