OPERATING AGREEMENT
OF
TECSTAR, LLC
THIS OPERATING AGREEMENT (the "Agreement"), is made effective the date and
year written below, by Wheel to Wheel, Inc. and Starcraft Corporation
(hereinafter referred to collectively as the "Members" and separately as a
"Member"), to form a limited liability company under the provisions and
conditions of the Indiana Business Flexibility Act, IND. CODE ss. 23-18 (the
"Act"). The Members hereby agree as follows:
Article One
NAME OF COMPANY, PLACE,
CHARACTER OF BUSINESS AND INTEREST
Section 1.01. Name. The name of the company shall be Tecstar, LLC
(hereinafter referred to as the "Company").
Section 1.02. Registered Office and Place of Business. The registered
office shall be 0000 Xxxxxxx Xxxxxx, Xxxxxx (located in Elkhart County, State of
Indiana), or at such other place within or without the State of Indiana as may
from time to time be determined by Member Action (as defined in Section 11.02
below). The initial registered agent of the Company shall be Xxxxxxx X.
Xxxxxxxxxx, President, Starcraft Corporation. The place of business of the
Company shall be at the registered office, or at such other place or places
within or without the State of Indiana as may from time to time be determined by
Board of Managers Action (as defined in Section 11.03 below).
Section 1.03. Character of Business. The Company is formed for the sole
purpose of engaging in second stage manufacturing for General Motors Corporation
or other like OEM Companies and the Company may undertake any other lawful act
or engage in any other business or venture permitted under the Act as may from
time to time be determined by unanimous Member Action (the "Company Business").
Section 1.04. Interest in Company. The units of Company capital held by a
Member of the Company shall be personal property for all purposes. All property
owned by the Company, including, but not limited to, real and personal property
and tangible and intangible property, shall be deemed to be owned by the Company
as an entity, and no Member, individually or otherwise, shall have any ownership
interest in such property.
Section 1.05. Outside Activities. The Members agree that, except as
otherwise provided herein, all Company Business shall be conducted through the
Company and no Member shall, whether directly or indirectly, perform any Company
Business other than trough the Company. Each Member will disclose and make
available to the Company each and every opportunity for Company Business tat the
Member becomes aware of. If the Company, pursuant to Board of Managers Action,
elects not to pursue the opportunity, the Member shall be free to pursue said
opportunity on its own. Notwithstanding anything contained herein to the
contrary, any of the Members and any affiliated persons, firms or corporations
may engage in or possess an interest in other business ventures of every nature
or description, independently or with others, and neither the Company nor any of
the Members shall have any right by virtue of this Agreement in or to such
independent ventures, or to the income or profits derived therefrom. Neither
this Agreement, nor any activity undertaken pursuant hereto, shall prevent any
Member from acting as aforesaid or require any Member to permit the Company or
any Member to participate in any such business, Noting herein contained shall
require any Member to give notice to any other Member of such other business
ventures or to present to the Company or any Member any opportunity of any kind
or nature whatsoever, even though such opportunity might come to the attention
of or be available to such Member through his or her participation in the
Company, and each Member waives any right which it may have against the other
for capitalizing on or taking advantage of information learned as a consequence
of his or her association with the affairs of the Company, except as provided in
this Section 1.05 and Section 11.20.
Article Two
TERM OF COMPANY
Section 2.01. Term of Company. The Company shall be formed at the time of
the filing of the initial Articles of Organization off the Company in the office
of the Secretary of State of the State of Indiana (or at any later time
specified in the initial Articles of Organization), and shall continue until
dissolved pursuant to the provisions of Article Nine below, or December 31,
2055, if earlier.
Section 2.02. Wind-Up. Upon dissolution of the Company, the business shall
be wound up, and the remaining property of the Company shall be distributed and
applied as provided in Article Nine below
Article Three
CAPITAL CONTRIBUTIONS AND CAPITAL UNITS
Section 3.01. Classes of Capital Contributions. Contributions to the
capital of the Company ("Capital Contributions") shall be required in the manner
provided in this Article Three. Capital contributions shall be classified as
Initial Capital Contributions and Additional Capital Contributions. The combined
accounts of any Member shall constitute such Member's single capital account
maintained as required under Treas. Xxx.xx. 1.704-1(b).
Section 3.02. Initial Capital Contributions. Each of the Members shall
contribute to the initial capital of the Company and the initial capital
accounts of each Member shall equal the amount specified opposite the Members
name in cash or the fair market value of property (net of liabilities securing
such contributed property that the Company is considered to assume or take
subject to under Section 752 of the Internal Revenue Code of 1986, as amended
(the "Code") ("Initial Capital Contribution"), For each Ten Dollars ($10.00) of
value contributed to the Company upon its formation, each Member shall be
allocated capital units ("Capital Units"). Except as provided herein, the
Company shall not issue additional Capital Units without unanimous Member
Action. Each of the Members shall be allocated the number of units of Company
capital and shall have the initial ownership percentage specified below
("Membership Interest"):
Initial Capital Capital Ownership
MEMBERS Contribution Units Percentage
------- --------------- ------- ----------
Starcraft Corporation $ 510.00 51 51%
Wheel to Wheel, Inc. $ 490.00 49 49%
-------- -- --
TOTALS $1,000.00 100 100%
======== === ===
The initial capital accounts of such Members shall be credited accordingly.
A list of all property which is contributed pursuant to this Section 3.02 and
value thereof shall be shown on Exhibit "3.02" which is attached hereto and
incorporated herein by reference. The Members agree that one (1) Capital Unit
issued to Starcraft Corporation shall be sold to Wheel to Wheel, Inc. for a
purchase price of Ten and No/100 Dollars ($10.00) upon the occurrence of the
earlier of (a) the release of Starcraft Corporation from its corporate guaranty
of the Company's line of credit, or (b) the elapse of six (6) calendar months
from January 1,1999.
Section 3.03. Additional Capital Contributions. Should the Board of
Managers determine by Board of Managers Action that it is desirable to raise
additional funds through capital contributions ("Additional Capital
Contributions")., then the following provisions shall apply:
a. The Company shall issue a written notice of capital request ("Notice
of Capital Request") to each Member to contribute additional capital
to the Company. The Notice of Capital Request shall include the
following information:
i. The total amount of capital requested from all of the Members
("Total Capital Request");
ii. Each Member's share of the Total Capital Request, which shall be
determined by multiplying the Total Capital Request by the
Membership Interest of each Member ("Member Capital
Contribution"); and
iii. The date on or before which the Member Capital Contribution shall
be due, which date shall not be less than thirty (30) days from
the date of the Notice of Capital Request.
b. Should any Member neglect, fail or refuse to timely contribute any
portion of such Member's Capital Contribution ("Delinquent Member"),
then the Company shall so notify the other Members ("Member Notice")
and the other. Members who have paid their Member's Capital
Contribution in full ("Non-Delinquent Members") shall have the option
to contribute the Delinquent Member's Capital Contribution on a
pro-rata basis (in accordance with the then respective Membership
Interest of each other Non-Delinquent Member as compared to the total
Membership Interests of all Non-Delinquent Members). In the event that
any Non-Delinquent Member neglects, fails or refuses to contribute its
pro-rata share of the Delinquent Member's Capital Contribution within
thirty (30) days of its receipt of the Member Notice, then all other
Non-Delinquent Members shall have the right to contribute the
remaining deficiency in the Delinquent Member's Capital Contribution
on a pro-rata basis (as to all such other Non-Delinquent Members and
in the manner hereinabove provided); which procedure shall be repeated
until the Delinquent Member's Capital Contribution is satisfied or all
Non-Delinquent Members fail to contribute any additional capital.
c. The Membership Interests of the Members shall be adjusted to reflect
paid in Initial and Additional Capital Contributions ("Aggregate
Capital Contributions") (any adjustment shall not include an
adjustment for the initial $2,000,000 line of credit referred to in
Section 6.05), so that the Membership Interest of each Member shall
equal an amount determined by the following formula:
Aggregate Capital Contributions of Member
---------------------------------------------- X 100
Aggregate Capital Contributions of All Members
For purposes of the adjustment of Membership Interest as provided
herein, each Member is hereby constituted and appointed the true and
lawful attorney-in-fact for each of the other Members, and any Member
Transferee, with full power of substitution, to act in the name, place
and stead of each other Member, in order to effectuate the adjustment
to each Membership Interest as provided herein and execute any and all
instruments, assignments and amendments to this Agreement on behalf of
the Members which may be necessary or appropriate in connection
therewith. The aforesaid power of attorney is coupled with an interest
and shall be and remain irrevocable and shall not be affected by the
death or incompetence of the principal and, in addition, shall be
effective to the fullest extent permitted pursuant to Ind. Code ss.
30-5-1-1, et. seq.
d. Additional funds may also be obtained by the Company through
borrowings from a Member or other parties which borrowings may be
secured or unsecured and may bear interest and shall be subject to the
other terms and provisions as are acceptable to the Company by Board
of Managers Action and such lender.
Section 3.04. Liability of' Members. No Member shall be personally liable
for the obligations of the Company. Except as otherwise provided in this
Agreement a Member's liability for the obligations of the Company shall be
limited to the aggregate amount of the Member's agreed upon but unpaid Capital
Contributions to the Company. Neither the Member nor Manager(s) shall be
personally liable for the return of all or any portion of the Capital
Contributions of the Members, it being understood and agreed that any such
return shall be made solely from Company assets.
Section 3.05. Return of Contribution; Interest. No Member shall have any
right to the return or withdrawal of said Member's Capital Contributions, until
termination of the Company, unless such withdrawal is consented to by all other
Members or otherwise provided for herein or by law. No interest shall be paid on
Capital Contributions made to the Company, unless otherwise provided for herein
or by law.
Section 3.06. Capital Accounts. The capital account of each Member shall be
determined and maintained in accordance with the rules of Treas. Reg. ss.
1.704-1(b)(2)(iv) and the appropriate initial capital account of each Member
shall be increased by (a) the amount of each Member's additional cash capital
contribution, (b) the fair market value of any additional property contributed
by the Member to the Company (net of liabilities securing such contributed
property that the company is considered to assume or take subject to under
Section 752 of the Code) and (c) allocations to the Member of Company income and
gain (or items thereof), including income and gain exempt from tax and income
and gain described in Treas. Reg. ss. 1.704-1(b)(2)(iv)(g), but excluding income
and gain described in Treas. Reg. ss. 1.704-1(b)(4)(i); and decreased by (d) the
amount of cash distributed to the Member by the Company, (e) the fair market
value of property distributed to the Member byte Company (net of liabilities
securing such distributed property that such Member is considered to assume or
take subject to under Section 752 of the Code), (f) allocations to the Member of
expenditures of the Company described in Section 705(a)(2)(B) of the Code, and
(g) allocations of Company loss and deduction (or item thereof), including loss
and deduction described in Treas. Reg. ss. 1.104-1(b)(2)(iv)(g), but excluding
items described in subparagraph (t) of this Section and loss or deduction
described in Treas. Reg. ss. l.704-l(b)(4)(i) or (iii). Each Member's capital
account shall be otherwise adjusted as required by Tress. Reg. ss.
1.704-1(b)(2)(iv). Each Member who has more than one interest in the Company
shall have a single capital account that reflects all such interests as required
by Treas. Reg. ss. 1.704-1(b).
Section 3.07. Capital Account Restatement. The capital accounts of the
Members shall be restated in the event that additional contributions are made to
the Company, Company property is distributed to a Member, a new Member is
admitted to the Company, a Member withdraws from the Company, the Company is
dissolved or in any other event as the Members deem appropriate. A capital
account restatement shall be effected in such manner and at such time as
required by Section 704(b) of the Code. The capital accounts shall be restated
by (a) determining the fair market value of all Company assets (taking Section
770 1(g) of the Code into account) as of the date of such restatement, (b)
allocating any unrealized income, gain, loss or deduction inherent in such
assets (that has not been reflected previously in the capital accounts) among
the Members as if there were a taxable disposition of such assets for their fair
market value as of the date of such restatement, (c) making any adjustment
required in accordance with Tress. Reg. ss. 1.704-l(b)(2)(iv)(g) for allocations
to the Members of depreciation. depletion, amortization and gain or loss, as
computed for book purposes, with respect to such assets, and (d) determining the
Member's distributive share of depreciation. depletion amortization. and gain or
loss, as computed for tax purposes, with respect to such assets so as to take
into account the variation between the adjusted tax basis and Book Value (as
defined in Section 11.14) of such property in the same manner as required by
Section 704(c) of to Code.
Article Four
ALLOCATION OF INCOME, GAIN, LOSS, DEDUCTION AND CREDIT
Section 4.01. Net Income and Net Loss. The terms "Net Income" or "Net
Loss," as the case may be, of the Company shall mean the Company's taxable
income or taxable loss for Federal income taxation purposes as determined by the
Company in accordance with Section 703(a) of the Code, with the items required
to be separately stated by Section 703(a)(l) of the Code combined into a single
net amount; provided, however, that in the event the taxable income or taxable
loss of the Company for such fiscal year is later adjusted in any manner, as a
result of an audit by the Internal Revenue Service (the "Service") or otherwise,
then the taxable income or taxable loss of the Company shall be adjusted to the
same extent. "Net Income" and "Net Loss" shall be further adjusted as follows:
a. "Net Income" and "Net Loss," as the case may be, shall be adjusted to
treat items of tax-exempt income described in Section 705(a)(1)(B) of
the Code as items of gross income, and to treat as deductible items
all non-deductible, non-capital expenditures described in Section
705(a)(2)(B) of the Code, including any items treated under Treas.
Reg. ss. 1.704-1(b)(2)(iv) as items described in Section 705(a)(2)(B)
of the Code.
b. In lieu of depreciation, depletion, cost recovery and amortization
deductions allowable for Federal income taxation purposes to the
Company with respect to property contributed to the Company by a
Member, there shall be taken into account an amount equal to the
product derived by multiplying the Book Value (as defined in Section
11.14) of such property at the beginning of such fiscal year by a
fraction, the numerator of which is the amount of depreciation,
depletion, cost recovery or amortization deductions allowable with
respect to such property for Federal income taxation purposes and the
denominator of which is the adjusted basis for Federal income taxation
purposes of such property at the beginning of such fiscal year.
c. In lieu of actual gain or loss recognized by the Company for Federal
income taxation purposes as a result of the sale or other disposition
of property of the Company, there shall be taken into account the gain
or loss that would have been recognized by the Company for Federal
income taxation purposes if the Book Value of such property as of the
date sold or otherwise disposed of by the Company were its adjusted
basis for Federal income taxation purposes.
Section 4.02. Allocation of Net Income and Net Loss. After giving effect to
the special allocations set forth in Sections 4.03, 4.04 and 4.06 hereof:
a. Net Income. Net Income for the fiscal year shall be allocated to the
Members in the proportion which the number of Capital Units held by
each Member bears to the total number of capital units held by all
Members.
b. Net Loss. Net Loss for the fiscal year shall be allocated among all
Members in the proportion which the number of Capital Units held by
each Member bears to the number of Capital Units held by all Members.
Section 4.03. Special Allocations. The following special allocations shall
be made in the following order (certain capitalized words and phrases used
herein are defined in Section 4.08 below):
a. Minimum Gain Chargeback. Notwithstanding any other provision of this
Article Four, if there is a net decrease in Company Minimum Gain
during any Company fiscal year, each Member and assignee or transferee
of an interest shall be specially allocated items of Company income
and gain for such fiscal year (and, if necessary, subsequent years) in
an amount equal to the greater of (i) the portion of such Member's or
assignee's or transferee's share of the net decrease in Company
Minimum Gain. determined in accordance with Treas. Xxx.xx.
1.704-2(g)(1) that is allocable to the disposition of Company property
subject to nonrecourse liabilities (as defined in Treas. Xxx.xx.
1.704-2(b)(3)), determined in accordance with Treas. Xxx.xx.
1.704-2(d), or (ii) if such Member or assignee or transferee of an
interest would otherwise have an Adjusted Capital Account Deficit at
the end of such year, an amount sufficient to eliminate such Adjusted
Capital Account Deficit Allocations pursuant to the previous sentence
shall be xxxx in proportion to the respective amounts required to be
allocated to each Member and assignee or transferee of an interest
pursuant thereto. The items to be so allocated shall be determined in
accordance with Treas. Reg. ss. 1.704-2(f). This Section 4.03 (a) is
intended to comply with the minimum gain chargeback requirement in
such Section of the Regulations and shall be interpreted consistently
therewith. To the extent permitted by such Section and only for the
purposes of this Section 4.03(a), each Member's and assignee's or
transferee's Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to this Article Four with
respect to such fiscal year and without regard to any net decrease in
Member Minimum Gain during such fiscal year.
b. Member Minimum Gain Chargeback. Notwithstanding any other provision of
this Article Four except Section 4.03(a), if there is a net decrease
in Member Minimum Gain attributable to a Member Nonrecourse Debt
during any Company fiscal year, each Member or assignee or transferee
of an interest who has a share of the Member Minimum Gain attributable
to such Member Nonrecourse Debt, determined in accordance with Treas.
Xxx.xx. l.704-2(i)(5), shall be specially allocated items of Company
income and gain for such year (and, if necessary, subsequent years) in
an amount equal to the greater of (i) the portion of such Member's or
assignee's or transferee's share of the net decrease in Member Minimum
Gain attributable to such Member Nonrecourse Debt, determined in
accordance with Treas. Reg. ss. 1.704-2(i)(5), that is allocable to
the disposition of Company property subject to such Member Nonrecourse
Debt, determined in accordance with Treas. Xxx.xx. 1.704-2(i)(4), or
(ii) if such Member or assignee or transferee of an interest would
otherwise have an Adjusted Capital Account Deficit at the end of such
year, an amount sufficient to eliminate such Adjusted Capital Account
Deficit. Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to
each Member and assignee or transferee of an interest pursuant
thereto. The items to be so allocated shall be determined in
accordance with Treas. Reg. ss. l.704-2(i)(4). This Section 4.03(b) is
intended to comply with the minimum gain chargeback requirement in
such Section and shall be interpreted consistently therewith. Solely
for the purposes of this Section 4.03(b), each Members or assignee's
or transferee's Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to this Article Four with
respect to such fiscal year, other than allocations pursuant to
Section 4.03(a) hereof.
c. Qualified Income Offset. In the event any Member or assignee or
transferee of an interest unexpectedly receives any adjustments,
allocations, or distributions described in Treas. Reg. xx.xx.
l.704-l(b)(2)(ii)(d)(4), l.704-l(b)(2)(ii)(d)(5), or
l.704-l(b)(2),(ii)(d)(6), items of Company income and gain shall be
specially allocated to each such Member or assignee or transferee of
an interest in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, the Adjusted Capital Account
Deficit of such Member or assignee or transferee of an interest as
quickly as possible, provided that an allocation pursuant to this
Section 4.03(c) shall be made only if and to the extent that such
Member or assignee or transferee of an interest would have an Adjusted
Capital Account Deficit after all other allocations provided for in
this Article Four have been tentatively made as if this Section
4.03(c) were not in the Agreement.
x. Xxxxx Income Allocation. In the event any Member or assignee or
transferee of an interest has a deficit capital account at the end of
any Company fiscal year which is in excess of the sum of (i) the
amount such Member or assignee or transferee of an interest is
obligated to restore pursuant to any provision of this Agreement, and
(ii) the amount such Member or assignee or transferee of an interest
is deemed to be obligated to restore pursuant to the penultimate
sentences of Treas. Xxxx.xx. l.704-2(g)(l) and l.704-2(i)(5), each
such Member or assignee or transferee of an interest shall be
specially allocated items of Company income and gain in the amount of
such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.03(d) shall be made only if and to the
extent that such Member or assignee or transferee of an interest would
have a deficit capital account in excess of such sum after all other
allocations provided for in this Article Four have been tentatively
made as if Section 4.03(c) above and this Section 4.03(d) were not in
the Agreement.
e. Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year or
other period shall be specially allocated as provided in Section
4.02(b) above.
f. Member Loan Nonrecourse Deductions. Any Member Loan Nonrecourse
Deductions for any fiscal year or other period shall be specially
allocated to the Member or assignee or transferee of an interest who
bears the economic risk of loss with respect to the Member Nonrecourse
Debt to which such Member Loan Nonrecourse Deductions are attributable
in accordance with Treas. Reg. ss. 1.704-2(i).
g. Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Company asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Treas. Reg. ss.
l.704-l(b)(2)(iv)(m), to be taken into account in determining capital
accounts, the amount of such adjustment to the capital accounts shall
be treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases such basis) and
such gain or loss shall be specially allocated to the Members and
assignees or transferees of an interest in a manner consistent with
the manner in which their capital accounts are required to be adjusted
pursuant to such Section of the Regulations.
Section 4.04. Curative Allocations.
a. The "Regulatory Allocations" consist of the "Basic Regulatory
Allocations," as defined in Section 4.04(b) hereof the "Nonrecourse
Regulatory Allocations," as defined in Section 4.04(c) hereof, and the
"Member Nonrecourse Regulatory Allocations," as defined in Section
4.04(d) hereof.
b. The "Basic Regulatory Allocations" consist of the allocations pursuant
to Sections 4.03(c), 4.03(d), and 4.03(g) hereof. Notwithstanding, any
other provision of this Agreement, other than the Regulatory
Allocations, the Basic Regulatory Allocations shall be taken into
account in allocating items of income, gain, loss and deduction among
the Members and assignees or transferees of an interest so that, to
the extent possible, the net amount of such allocations of other items
and the Basic Regulatory Allocations to each Member and assignee or
transferee of an interest shall be equal to the net amount that would
have been allocated to each such Member and assignee or transferee of
an interest if the Basic Regulatory Allocations had not occurred. For
purposes of applying the foregoing sentence, allocations pursuant to
this Section 4.04(b) shall, only be made with respect to allocations
pursuant to Section 4.03(g) hereof to the extent the Members
reasonably determine that such allocations will otherwise be
inconsistent with the economic agreement among the panics to this
Agreement.
c. The "Nonrecourse Regulatory Allocations" consist of all allocations
pursuant to Sections 4.03(a) and 4.03(e) hereof. Notwithstanding any
other provision of this Agreement, other than the Regulatory
Allocations, the Nonrecourse Regulatory Allocations shall be taken
into account in allocating items of income, gain, loss and deduction
among the Members and assignees or transferees of an interest so that.
to the extent possible, the net amount of such allocations of other
items and the Nonrecourse Regulatory Allocations to each Member and
assignee or transferee of an interest shall be equal to the net amount
that would have been allocated to each such Member and assignee or
transferee of an interest if the Nonrecourse Regulatory Allocations
had not occurred. For purposes of applying the foregoing sentence (i)
no allocations pursuant to this Section 4.04(c) shall be made prior to
the Company fiscal year during which there is a net decrease in
Company Minimum Gain, and then only to the extent necessary to avoid
any potential economic distortions caused by such net decrease in
Company Minimum Gain, and (ii) allocations pursuant to this Section
4.04(c) shall be deferred with respect to allocations pursuant to
Section 4.03(e) hereof to the extent the Members reasonably determine
that such allocations are likely to be offset by subsequent
allocations pursuant to Section 4.03(a) hereof.
d. The "Member Nonrecourse Regulatory Allocations" consist of all
allocations pursuant to Sections 4.03(b) and 4.03(0 hereof.
Notwithstanding any other provision of this Agreement, other than the
Regulatory Allocations, the Member Nonrecourse Regulatory Allocations
shall be taken into account in allocating items of income, gain, loss
and deduction among the Members and assignees or transferees of an
interest so that, to the extent possible, the net amount of such
allocations of other items and the Member Nonrecourse Regulatory
Allocations to each Member and assignee or transferee of an interest
shall be equal to the net amount that would have been allocated to
each such Member and assignee or transferee of an interest if the
Member Nonrecourse Regulatory Allocation had not occurred. For
purposes of applying the foregoing sentence (i) no allocations
pursuant to this Section 4.04(d) shall be made with respect to
allocations pursuant to Section 4.03(f) relating to a particular
Member Nonrecourse Debt prior to the Company fiscal year during which
there is a net decrease in Member Minimum Gain attributable to such
Member Nonrecourse Debt, and then only to the extent necessary to
avoid any potential economic distortions caused by such net decrease
in Member Minimum Gain, and (ii) allocations pursuant to this Section
4.04(d) shall be deferred with respect to allocations pursuant to
Section 4.03(0 hereof relating to .a particular Member Nonrecourse
Debt to the extent the Members reasonably determine that such
allocations are likely to be offset by subsequent allocations pursuant
to Section 4.03(b) hereof.
e. The Members shall have reasonable discretion, with respect to each
Company fiscal year, to (i) apply the provisions of Sections 4.04(b),
4.04(c) and 4.04(d) hereof in whatever order is likely to minimize the
economic distortions that might otherwise result from the Regulatory
Allocations, and (ii) divide all allocations pursuant to Section
4.04(b), 4.04(c) and 4.04(d) hereof among the Members in a manner that
is likely to minimize such economic distortions.
Section 4.05. Effects of Varying Company Interests During a Company Year.
In the event a Member's interest as a Member varies during any fiscal year of
the Company (whether by reason of withdrawal, additional capital contributions
or otherwise), Net Income and Net Loss shall be computed and allocated in
accordance with this Agreement as if periods between such variations were each a
separate fiscal year of the Company.
Section 4.06. Allocation of Income, Gain, Loss and Deduction, Section
704(c). Upon the sale of any property contributed by any Member, the gain or
loss represented by the difference between the adjusted basis for Federal income
taxation purposes and Book Value of the property to the Company shall be
allocated to the Member who contributed such property, and the gain or loss in
excess of that so allocated shall be allocated among the Members as provided in
Sections 4.01, 4.02, 4.03 and 4.04 above. In addition, any other item of income,
gain, loss or deduction with respect to such property shall be allocated in a
manner consistent with the requirements of Section 704(c) of the Code and Treas.
Reg. ss. 1.704-1(b)(2)(iv)(g), as amended from time to time.
Section 4.07. Allocation of Tax Items. All items of depreciation, gain,
loss, deduction or credit tat are taken into account in determining Net Income
or Net Loss shall be allocated among the Members in the same proportion as is
provided in Section 4.02 above. Any interest paid on loans made by Members to
the Company pursuant to the terms of this Agreement and all salaries and fees
paid to any Member, if any, shall be deducted from gross income for Company book
and tax purposes.
Section 4.08. Special Tax Definitions. Certain capitalized words and
phrases used in this Article Four have the following meanings:
a. Adjusted Capital Account Deficit means, with respect to any Member,
the deficit balance, if any, in such Members capital account as of the
end of the relevant fiscal year, after giving effect to the following
adjustments:
i. Credit to such capital account any amounts which such Member is
obligated to restore pursuant to any provision of this Agreement
or is deemed to be obligated to restore pursuant to the
penultimate sentence of Treas. Reg. ss. 1.704-2(g)(1) or would be
deemed obligated to restore if Member Loan Nonrecourse Deductions
were treated as Nonrecourse Deductions; and
ii. Debit to such capital account the items described in Treas. Reg.
ss. 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treas. Reg. ss.
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
b. Nonrecourse Deductions has the meaning set forth in Treas. Reg. ss.
1.704-2(c). The amount of Nonrecourse Deductions for a Company fiscal
year equals the net increase, if any, in the amount of Company Minimum
Gain during that fiscal year, determined according to the provisions
of Treas. Reg. ss. 1.704-2(c).
c. Member Loan Nonrecourse Deductions has the meaning set Treas. Reg. ss.
1.704-2(i)(2). The amount of Member Loan Nonrecourse Deductions with
respect to a Member Nonrecourse Debt for a Company fiscal year equals
the excess, if any, of the net increase, if any, in the amount of
Member Minimum Gain attributable to such Member Nonrecourse Debt
during that fiscal year over the aggregate amount of any distributions
during that fiscal year to the Members or assignees or transferees of
an interest that bear the economic risk of loss for such Member
Nonrecourse Debt to the extent such distributions are from the
proceeds of such Member Nonrecourse Debt and are allocable to an
increase in Member Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Treas. Reg. ss.
1.704-2(i)(2).
d. Member Nonrecourse Debt Minimum Gain means an amount, with respect to
each Member Nonrecourse Debt, equal to the Company Minimum Gain that
would result if such Member. Nonrecourse Debt were treated as a
nonrecourse liability (as defined in Tress. Reg. ss. 1.704-2(b)(3)),
determined in accordance with Treas. Reg. ss. 1.704-2(i).
e. Member Nonrecourse Debt has the meaning set forth in Treas. Reg. ss.
1.704-2(b)(4).
f. Company Minimum Gain has the meaning set forth in Treas. Reg. ss.
1.704-2(d).
g. Regulations means the regulations promulgated under the Code, as such
regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
Article Five
DISTRIBUTIONS
Section 5.01. Cash Available for Distribution. The term "Cash Available for
Distribution" shall mean the Net Income or Net Loss of the Company determined in
accordance with generally accepted accounting principles and in accordance with
Section 4.01 hereof, with the following adjustments:
a. Any non-cash charges deducted in the computation of Net Income or Net
Loss of the Company shall be added thereto;
b. Required principal and interest payments on all Company indebtedness,
cash expenditures which were not deducted in determining the Net
Income or Net Loss of the Company, and any amounts for working capital
and property replacement reserves of the Company determined by Board
of Managers Action shall be deducted therefrom;
c. The proceeds from any sales or dispositions of Company capital assets,
any financing or refinancing of Company obligations and any insurance
recoveries which were included in determining Net Income or Net Loss
of the Company shall be deducted therefrom; and,
d. Any amounts released from working capital and property replacement
reserves by Board of Managers Action shall be added thereto.
Section 5.02. Allocation of Cash Available for Distribution. Except as
otherwise provided in Article Nine hereof Cash Available for Distribution with
respect to the fiscal year shall be distributed to the Members thirty (30) days
after the end of such fiscal year (if not earlier distributed) in proportion to
Membership Interest at the end of such fiscal year.
Section 5.03. Working Capital and Progeny Replacement Reserves. The Company
may, by Board of Managers Action, from time to time, establish a working capital
reserve or property replacement reserve. Such reserves shall be established only
to the extent the Board of Managers, acting in good faith and in accordance with
their fiduciary duty to all Members, reasonably believe such additions to be
necessary to permit the Company to pay projected cash obligations for succeeding
fiscal years as such obligations become due without being required to liquidate
Company assets or incur debt. In addition, amounts existing in a working capital
reserve or property replacement reserve shall be released from such reserve by
Board of Managers Action at the end of the fiscal year unless the Board of
Managers, acting in good faith and in accordance with their fiduciary duo' to
all Members, reasonably believe retention of such amounts in such reserves are
necessary to permit the Company to pay its cash obligations for succeeding
fiscal years as they become due without being required to liquidate Company
assets or incur debt.
Section 5.04. Distributions of Cash. Cash Available for Distribution,
determined in accordance with the provisions of this Article Five, shall be
distributed to the Members at reasonable intervals as determined by Board of
Managers Action.
Section 5.05. Distributions of Property. Any distribution by the Company to
the Members under any provision off this Agreement shall be made in cash, check
or promissory note of Company unless the Members unanimously agree tint property
may be distributed. In the event of any such property distribution, the capital
accounts shall be adjusted and restated as provided in Article Three above. In
the event of the distribution of cash or property not constituting Cash
Available for Distribution, the amount to be distributed to each Member shall,
except with the unanimous consent of all Members, be determined by multiplying
the amount of distribution (net of any liabilities to be assumed by such Member
and liabilities to which the property is subject) by a fraction the numerator of
which shall be the positive balance of such Members capital account in the
Company at the time of distribution and the denominator of which shall be the
aggregate positive balance of the capital accounts of all Members in the Company
at the time of distribution.
Article Six
MANAGEMENT
Section 6.01. Management of Company. The Board of Managers shall direct,
manage and control the business of the Company with the President and Chief
Operating Officer responsible for the Company's day -to-day activities. Except
for situations in which the approval of the Members is expressly required by
this Agreement or by non-waiveable provisions of the Act, the Board of Managers
shall have full and complete authority, power and discretion to manage and
control to business, affairs and properties of the Company, to make all
decisions regarding those matters and to perform any and other acts or
activities customary or incident to the management of the Company's business and
the President and Chief Executive shall be responsible for the Company's
day-to-day activities.
Section 6.02. Number, Tenure and Qualifications. The Company shall have
three (3) Managers (the "Board of Managers"). One (1) of the Managers shall be
elected and appointed by Wheel to Wheel, Inc. and two (2) of the Managers shall
be elected and appointed by Starcraft Corporation. Each Manager shall hold
office until his successor shall have been elected and qualified. This Agreement
shall in no way limit or preclude an employee of either Member or any of the
Companies' independent contractors from serving as Manager as long as such
individual is selected in compliance with the terms of this Agreement.
Section 6.03. Operation of Company Business. Except as otherwise provided
in this Agreement or the attached Code of Bylaws, all decisions and
determinations respecting the operation of the Company, its business or
properties shall be made or taken by Board of Managers Action, Specifically, but
not by way of limitation the Board of' Managers shall have the right, power and
authority to do or cause to be done the following:
a. Subject to Article Three, to borrow money for the Company and to issue
notes, debentures and any other debt securities of the Company; to
mortgage, or subject to any other security instrument or lien, any or
all of the property of the Company, and to repay, refinance, modify,
consolidate or extend any loan and any mortgage or other security
instrument or lien;
b. To settle, compromise, arbitrate or otherwise adjust claims in favor
of or against the Company, on such terms and in such manner as the
Members may determine, and similarly to prosecute, settle or defend
litigation with respect to the Members, the Company or any assets of
the Company;
c. To make any and all ejections required or permitted to be made by the
Company under the Code and take such action, execute and deliver such
documents and to perform such acts as provided in Section 7.06 below;
d. To manage, lease, sell and otherwise deal with and use Company assets
at such price, rental or amount, in the form of cash, securities, or
other property, and upon such terms and conditions, as the Members may
determine;
e. To employ on behalf of the Company such employees as the Board of
Managers may deem necessary or appropriate, and to pay therefor such
remuneration as the Board of Managers may deem reasonable and
appropriate and to contract with independent contractor's such as
lawyers, accountants and consultants;
f. To purchase, lease, acquire of obtain the use of property that may in
any way be deemed necessary or appropriate for the conduct of the
business of the Company;
g. To engage in any kind of activity and perform and carry out contracts
of any kind necessary or incidental to or in connection with the
accomplishment of the purposes of the Company, as may be lawfully
carried out on or performed under the Act;
h. To open and maintain such bank accounts (savings and/or checking),
investment accounts, money market accounts, certificates of deposit,
mutual fund accounts, brokerage accounts, other accounts necessary or
convenient for the operation of the Company;
i. To designate a Managing Member who shall exercise such rights and
powers and undertake such duties as may be delegated to the Managing
Member by the Managers or as are specified in this Agreement;
j. To acquire by purchase, lease or otherwise any real or personal
property which may be necessary, convenient or incidental to the
accomplishment of the purposes of the Company;
k. To execute any and all agreements, contracts, documents,
certifications and instruments necessary or convenient in connection
with the management, maintenance, and operation of property, or in
connection with managing the affairs of the Company, including
executing amendments to this Agreement in accordance with the terms of
this Agreement;
l. To authorize the distribution of cash.
Section 6.04. Limitations of Board of Managers and Members. Neither the
Board of Managers nor Members shall have any right, power or authority without
the prior written unanimous consent of all Members:
a. To do any act in contravention or violation of this Agreement or the
Articles of Organization or the Act;
b. To do any act which would make it impossible to carry on the business
of the Company;
c. To confess a judgment against the Company;
d. To possess any Company property, or assign the rights of the Members
in the specific Company property, for other than a Company purpose;
e. To assign the Company property or assets in trust for creditors or on
the basis of an assignee's promise or undertaking to pay the debts or
obligations of the Company;
f. To cause the Company to make loans to the Members or to commingle
Company funds with the fluids of others;
g. To admit a person as an additional or substitute Member as otherwise
provided by this Agreement;
h. To enter into any agreement for the sharing of profits or any joint
venture with any person or entity;
i. To sell, assign, convey or otherwise dispose of for such consideration
and upon such terms and conditions as the Members may determine, all
or any part of the property of the Company, and in connection
therewith to execute and deliver such instruments as the Members may
determine;
j. To cause the Company to enter into an exchange agreement or merger
agreement with another entity; or
k. To amend this Agreement or the Articles of Organization.
Section 6.05. Loans by Members.
a. As monies are required from time to time to meet the costs, expenses,
obligations, liabilities and other charges arising out of or resulting
from the operation of the Company, the Members shall cause such monies
to be withdrawn from the Company bank accounts and used to discharge
such costs, expenses, obligations, liabilities or otter charges. In
the event the funds available in those accounts shall at any time be
insufficient to meet such costs, expenses, obligations, liabilities
and other charges, or to make any expenditure authorized by this
Agreement, then the Members shall undertake to borrow on behalf of the
Company the additional fluids which are needed. It is the intention of
all Members that any funds, in excess of fluids available in Company
accounts, necessary for the operation of the Company shall be obtained
by the Company through financing from sources outside the Company. In
the event the Members are unable to arrange financing as herein
contemplated, then any one or more of the Members may. but shall not
be obligated to, advance the necessary fluids, and nil amounts so
advanced under this Section 6.05 shall be treated as loans to the
Company for all purposes and shall bear interest at a rate agreed upon
by the Members and the advancing Members. as provided in Section
3.03.d. Notwithstanding anything contained herein to the contrary,
Starcraft Corporation agrees to arrange for an initial $2,000,000 line
of credit to the Company ("Company Financing"). The Company Financing
shall either be by way of a direct loan from Starcraft Corporation to
the Company or by way of third-party financing from a source other
than Starcraft Corporation, with Starcraft Corporation guarantying
such loan. The terms of the Company Financing will be at least as
favorable as the terms for Starcraft Corporation's financing with its
primary lender.
b. Voluntary loans to the Company made by Members under this Section 6.04
are in addition to and not in lieu of the additional capital
contributions that may be agreed upon under Article Three above.
c. This Section 6.04 shall not apply to any extension of credit to the
Company by a Member in connection with the Company's purchase of
assets or properties from such Member.
Section 6.06. Indemnification. Each Member shall be entitled to indemnity
from the Company for any act performed on behalf of the Company within the scope
of the authority conferred by this Agreement, providing such Member acted in
good faith and in a manner reasonably believed to be in the best interests of
the Company and its Members and such conduct was not negligent or unlawful.
However, no indemnification shall be made in respect to any matter as to which
such Member shall have been adjudged to be liable for negligence or misconduct
in the performance of his duty to the Company unless (and only to the extent
that) the Court in which such action was brought determines that despite the
adjudication of liability, but in view of all circumstances, such Member is
fairly and reasonably entitled to indemnity. Any indemnity under this Section
shall be provided out of and to the extent of Company assets only, and no Member
shall have any personal liability on account thereof.
Section 6.07. No Third Party Beneficiaries. The provisions of this
Agreement are solely for the benefit of the Members and the Company, and no
creditor of any Member or of the Company shall have any rights or benefits
hereunder or be entitled to rely on any provisions of this Agreement.
Section 6.08. Liability of a Manager. No personal liability shall be
imposed upon the Manager with respect to any of the obligations and duties
imposed upon them by the terms of this Agreement, or with respect to the
liabilities of the Company. The liabilities of a Manager arising from the
Manager's performance of the obligations and duties imposed upon the Manager by
the terms of this Agreement and the liabilities of the Company shall be enforced
and satisfied only out of the assets of the Company. The Company shall indemnify
and save harmless the Manager from any loss or damage or expense (including
reasonable attorney fees) incurred by reason of any act performed by the Manager
for and on behalf of the Company and in furtherance of its interests unless such
act constituted gross negligence. willful or wanton misconduct, or intentional
malfeasance.
Section 6.09. Resignation of Manager. A Manager may resign as Manager of
the Company upon giving written notice to the Members and the other Managers and
such resignation shall be effective at the time a successor Manager is duly
elected and qualified, provided, however, the effective date of the resignation
shall not exceed sixty (60) days from the date the notice is given.
Section 6.10. Removal of Managers. Each Manager selected and appointed by
Starcraft Corporation may be removed at any time, with or without cause by the
affirmative vote of Starcraft Corporation and replaced with a new Manager to be
selected, elected and appointed by Starcraft Corporation. Each Manager selected
and appointed by Wheel to Wheel, Inc. may be removed by Wheel to Wheel, Inc. and
replaced by a new Manager selected and appointed by Wheel to Wheel, Inc.
Notwithstanding anything contained within this Agreement to the contrary, the
Members agree that any Manager may be removed "For Cause" (as hereinafter
defined) by a majority vote of the Managers. To the extent that a Manager is
removed "For Cause", the Manager's position shall be replaced by the affirmative
vote of the Member (Starcraft Corporation or Wheel to Wheel, Inc.) that elected
the removed Manager. For purposes of this Section, the term "For Cause" shall
mean the following with respect to the Manager in question:
a. If the Manager is convicted of a felony; or
b. The Manager becomes addicted to illegal drugs, the result of which
clearly impairs his ability to function as a Manager.
c. The Manager's gross neglect of duties or gross misconduct which
continues following the passage of fifteen(l5) days after the Manager
has received written notice from the Company which specifies the acts
of the Manager which the Company believes to constitute gross neglect
of duties or gross misconduct and specifically references this
provision.
Section 6.11. Vacancies. Any vacancy occurring for any reason in the number
of Managers of the Company shall be filled in accordance with the provisions of
Section 6.02 above. A Manager elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office and shall hold office until the
expiration of such term and until his successor shall be elected and qualified
or until his earlier death, resignation or removal.
Section 6.12. Member Meetings. A meeting of the Members to consider any
matter may be called by the Board of Managers or Members who hold more than ten
percent (10%) of the Capital Units of the Company. Such meeting may be called by
giving notice to all Members of the time, date, location and purpose of the
meeting. Any meeting called hereunder shall be held on a date not earlier than
five (5) days nor later than sixty (60) days after delivery of the notice of the
meeting. Notice of any meeting may be waived in writing by a Member before or
after the date and time stated in the notice of the meeting or by attendance by
the Member, without objection, at such meeting.
Section 6.13. Member Consents. Any consent of a Member required or
permitted by this Agreement as Member Action may be given as follows:
a. By a written consent, signed and dated by the consenting Member and
received by the Company at or prior to the doing of the act or thing
for which the consent is solicited; or
b. Except to the extent the written consent of the Members is required
under the terms of this Agreement, by the affirmative vote by the
consenting Member to the doing of the act or thing for which the
consent is solicited at any meeting called pursuant to Section 6.12 to
consider the doing of such act or thing.
Article Seven
BANK ACCOUNTS, FISCAL YEAR, BOOKS, ACCOUNTING AND ELECTIONS
Section 7.01. Company Bank Account. All finds of the Company shall be
deposited in the Company's name in such bank or banks, and all withdrawals
therefrom shall be upon such signatures, as may from time to time be determined
by the Board of Managers Action.
Section 7.02. Company Fiscal Year. The fiscal year of the Company for
accounting, income tax and all other purposes shall end on September 30 of each
year. The fiscal year of the Company may from time to time be changed by Board
of Managers Action.
Section 7.03. Company Books. The Members shall keep or cause to be kept
complete and accurate books and accounts with respect to Company business. The
books and accounts of the Company shall at all times be kept and maintained at
the Company's principal place of business and shall be maintain such method of
accounting as determined by Board of Managers Action.
Section 7.04. Company Accounting. An accounting shall be made of all
Company transactions (for each fiscal year or lesser period of time) and the
Members shall cause to be prepared for the Company a balance sheet, a statement
of cash receipts and disbursements, a statement of net profits and losses, a
statement of Cash Available for Distribution by the Company and a statement of
each Member's share of Company net profits and losses and Cash Available for
Distribution. The Members shall cause the necessary federal, state and local
income tax returns and reports required of the Company to be prepared and filed
no later than required by law.
Section 7.05. Tax Elections. All elections required or permitted by the
Company under the terms of the Code shall be made by Board of Managers Action in
such manner as will be most advantageous to all Members and the Company. In the
event of the distribution of property by the Company within the meaning of
Section 734 of the Code, or the transfer of an interest in the Company within
the meaning of Section 743 of the Code, the Members, by Board of Managers
Action, may elect to adjust the basis of the Company property pursuant to
Sections 734, 743 and 754 of the Code. Any Members affected by such election
shall supply the information as may be required to make, or give effect to, such
elections by the Company.
Section 7.06. Other Tax Matters. The Members shall make such elections and
shall take such other action as the Members believe necessary (a) to extend the
statute of limitations for assessment of tax deficiencies against the Members
with respect to any adjustment to the Company's federal and state income tax
returns; (b) to Cause the Company and the Members to be represented before the
Service, any other taxing authorities or any courts in matters affecting the
Company and the Members; and (c) to cause to be executed any agreements or other
documents that bind. the Members with respect to such tax matters or otherwise
affect the rights of the Company or the Members. Xxxxxxx X. Xxxxxxxxxx,
President, Starcraft Corporation is specifically authorized to act as the Tax
Matters Member" under the Code and in any similar matter under state law.
Section 7.07. Required Records. The Members shall continuously maintain the
following documents at the Company's registered office:
a. A current list of the Ml name and last known mailing address of each
Member in alphabetical order;
b. A copy of the Articles of Organization and all certificates of
amendment thereto, together with executed copies of any powers of
attorney pursuant to which any certificate has been executed;
c. Copies of the Company's federal, state and local tax returns and
reports, if any, for the three (3) most recent years;
d. Copies of this Agreement, any amendments to this Agreement and any
Amended and restated partnership agreements;
e. Copies of any financial statements of the Company for the three (3)
most recent years; and
f. A current List showing the amounts of cash and a description and a
statement of and the value of other property and services which each
Member agreed to contribute to the Company and actually contributed to
the Company.
The Members shall make these documents available during normal business hours
for inspection and copying, at the reasonable request of and at the expense of
any Member. The Members shall not be required to deliver or to mail to each
Member a copy of the Articles of Organization, or any amendments thereto, upon
the return of either the certificate or any amendments from the Secretary of
State of the State of Indiana.
Article Eight
ASSIGNMENT OF COMPANY INTEREST
Section 8.01. Transfer of Company Interest. Except as provided in this
Article Eight and Article Nine below and except upon the prior written consent
of all Members, no interest in the Company may be assigned, transferred,
encumbered, hypothecated or otherwise disposed of and no person may be added as
a Member of the Company, and any attempted transfer, assignment, encumbrance,
hypothecation or other disposition or the addition of~ any Member without such
authorization, shall be null and void and have no force or effect whatsoever,
provided, however, that to the extent required by law, an assignee of any
interest in this Company because of a transfer or assignment which is not
consented to in writing by all Members (except to the extent as is otherwise
provided by this Agreement) shall be entitled only to the tights and benefits
not inconsistent with this Agreement as presently provided by Ind. Code xx.xx.
23-18-6-3, 23-18-6-4 and 23-18-6-7 for such assignee and shall be subject to all
the restrictions and conditions provided in those sections for such assignee.
Section 8.02. Transfer of Interest of Member. No Member (hereinafter
referred to as the "Selling Member") shall offer to sell, transfer or assign all
or any portion of said Member's interest in the Company without first offering,
in writing, to sell such interest to the other Members (hereinafter referred to
as the "Non-Selling Members") on the terms and conditions set forth in Section
8.05 below. Each Non-Selling Member may accept such offer within twenty (20)
days of the receipt thereof in the proportion which the number of the
Non-Selling Member's Membership bears to the total Non-Selling Member's
Membership Interest, at that time. If any of the Non-Selling Members fail to
accept such offer, either in whole or in part, within such twenty (20) day
period, then the Membership Interest not so accepted may be purchased by the
other Non-Selling Members in proportion to the Membership Interest held by the
other Non-Selling Members until each Non-Selling Member has had an opportunity
to purchase all of the Membership Interest offered by the Selling Member but not
accepted by the other Non-Selling Members.
Section 8.03. Sale to Third Party by Member. If any Member receives a bona
tide offer to purchase all or any portion of said Members Membership Interest in
the Company and such Member desires to sell such Membership Interest in
accordance with the terms and conditions set forth in such offer, then such
Member (hereinafter referred to as the "Selling Member") shall first offer in
writing to sell such Membership Interest to the other Members (hereinafter
referred to as the "Non-Selling Members") utilizing the procedure and, except as
otherwise provided in this Section 8.03, upon the terms and conditions set forth
in Section 8.02 above. Such offer shall be in addition to any offer previously
made pursuant to the provisions of Section 8.02 above, shall be in writing and
shall state the name and address of the person or persons to whom the Membership
Interest will be sold in the event the Non-Selling Members fail to accept such
offer and the price and terms upon which such Membership Interest will be sold.
If the Non-Selling Members do not agree to purchase the Membership Interest
which the Selling Member has offered to sell within the time period provided
above, then the Selling Member may sell such Membership Interest to the person
whose name is stated in the offer at the price and the terms set forth in such
offer if the following conditions are fulfilled:
a. Such transfer or assignment is subject to an effective registration
statement pursuant to the federal securities laws, including, without
limitation, the Securities Act of 1933, and applicable state
securities laws or, in the opinion of counsel for the Company, such
transfer or assignment is exempt from the registration requirements of
such laws;
b. Such transferee or assignee agrees in writing to be bound by the terms
and conditions of this Agreement; and
c. The Company is reimbursed for all costs and expenses related to such
transfer or assignment, including reasonable attorneys' fees and costs
of any amendment of its Articles of Organization or certificate of the
Company;
provided, however, that if such sale is not completed within thirty (30) days
after the date the Non-Selling Members could no longer accept such offer, then
such Selling Member shall not sell, transfer or assign such Membership Interest
without again complying with the terms and conditions of this Agreement.
Section 8.04. Acceptances Conditional. If the Non-Selling Members, pursuant
to Section 8.02 or 8.03 above, agree to purchase less than the entire Membership
Interest offered by the Selling Member, then the Selling Member may refuse to
sell such partial Membership Interest In this event, the parties `rights under
this Agreement shall be determined as though there were no acceptances of the
Selling Member's offer pursuant to Section 8.02 or 8.03 above.
Section 8.05. Purchase Price. The price at which any Membership Interest
may be purchased by a Non-Selling Member pursuant to either Section 8.02 above,
or in connection with 8.03 above, at the price and on the terms at which any
Membership Interest may be purchased by a Non-Selling Member shall be the price
and term which the Selling Member is otherwise willing to accept from a third
party purchaser pursuant to Section 8.03 above or at the following price and on
the following terms at the election of the Non-Selling Member:
a. Except as otherwise provided in this Agreement, the value of the
Selling Member's Capital Units to be purchased pursuant to Section
8.02 above shall be the lesser of Book Value, or the value determined
in accordance with the provisions of Section 9.01 as though the
Company were dissolved, and such value shall constitute the total
purchase price to be paid.
b. If the total purchase price to be paid by the Non-Selling Member(s) is
less than or equal to Twenty Thousand Dollars ($20,000.00), then the
purchase price shall paid in full upon completion of the sale. If the
total purchase price to be paid by the Non-Selling Member(s) is
greater than Twenty Thousand Dollars ($20,000.00), then the total
purchase price shall be paid in full upon completion of the sale or,
at the option of the Non-Selling Member(s), the greater of Twenty
Thousand Dollars ($20,000.00) or twenty-five percent (25%) of the
purchase price shall be paid at the time the sale is completed and the
balance shall be paid in eight (8) equal quarterly installments
commencing on the first day of the fourth month following the month in
which such sale is completed. Interest on the unpaid balance of the
purchase price shall accrue at the Prime Rate on the date the sale is
completed, shall be paid on each installment payment date and shall be
adjusted to the then prevailing Prime Rate on each installment payment
date.
Section 8.06. Mandatory Offer to Sell in the Case of a Change of Control
Transaction. In the event that any Member desires for any reason to enter into a
Change of Control Transaction (as hereinafter defined) with a competitor of any
Member or the Company (the "Competitor), then such Member shall provide the
other Member with notice of its intent or desire to enter into the Change of
Control Transaction. For a period of thirty (30) days following the receipt of
such written notice, the other Member shall have the exclusive right and option
to purchase the other Member's interest in the Company pursuant to the price and
terms set forth in Section 8.05.a. and b. of this Agreement. If the Member fails
to exercise such option to purchase such interest, then the Member desiring to
enter into the Change of Control Transaction shall be free to do so, provided,
however, that such interest in the Company shall continue to be subject to all
of the terms and provisions of this Agreement and any new or subsequent Member
must comply with all the terms and provisions of this Agreement. For purposes of
this Agreement, the term "Change in Control Transaction" shall mean any sale,
disposition, exchange or assignment directly or indirectly to a Competitor of
fifty-one percent (51%) or more of the voting control of a Member or any entity
that directly or indirectly controls a Member or any other merger, share
exchange or other transaction between a Member and a Competitor resulting in the
Competitor owning, directly or indirectly, 51% or more of the voting control of
a Member or any entity that directly or indirectly controls a Member.
Section 8.07. Involuntary Transfer. No Membership Interest shall be subject
to any involuntary transfer whatsoever. In the event that any Member suffers any
involuntary transfer or purported involuntary transfer of part or all of its
Membership Interest in the Company, including, but not limited to, transfers
resulting from bankruptcy, insolvency, divorce or separation, then, as of the
date of such transfer, or purported transfer or the date of written notice of
said transfer or purported transfer is received by the Company or the other
Member, if later, said Member shall be automatically deemed to have made an
offer to sell its Membership Interest pursuant to Section 8.05.a. and b.
Section 8.08. Completion of Sale. The purchase of any interest shall be
completed within thirty (30) days of the date upon which the offer is accepted
or, if a series of offers is required, then within thirty (30) days of the date
the final offer in any series of offers is accepted.
Section 8.09. Evidence of Deferred Payment. Any unpaid portion of the
purchase price shall be evidenced by one or more promissory notes executed by
the purchasing Member or Members, as the case may be. Such promissory note or
notes shall be made payable to the person or persons entitled to receive the
proceeds of the sale of such interest, shall provide for prepayment without
penalty, and shall contain a provision giving the holder of such note the option
to accelerate all payments under such note in the event of any default in the
payment of principal or interest which continues for thirteen (13) days after
written notice of such default is given to maker. The unpaid portion of the
purchase price shall be secured by a pledge of the interest so purchased to the
Selling Member, any such pledge shall be evidenced by an agreement in the form
and content customarily utilized by commercial lenders in the county in which
the registered office of the Company is located. In the event the pledgee
acquires the interest through execution of the pledge or otherwise, then such
pledgee shall again become bound by the terms of this Agreement.
Section 8.10. Consent Before Any Transfer. No assignee or transferee of any
Member's interest in the Company shall be substituted or added as a Member of
the Company unless and until all Members consent in writing to such substitution
or addition and such assignee or transferee agrees in writing to be bound by
this Agreement. Until such time, such assignee shall be entitled only to the
rights and benefits not inconsistent with this Agreement as are presently
provided by Ind. Code xx.xx. 23-18-6-3, 23-18-6-4 and 23-18-6-7 for such
assignee and shall be subject to all the restrictions and conditions provided in
those sections for such assignee. Such assignee shall pay all costs and expenses
in connection with such admission or substitution, including but not limited to,
the cost of preparing, filing and recording any amendments to the Company's
Articles of Organization or certificate.
Section 8.11. Continuing Responsibility. Notwithstanding anything contained
herein to the contrary, a Member shall not be relieved of any of such Members
responsibilities under this Agreement without the prior written consent of all
other Members.
Section 8.12. Transfers Further Restricted. No Member shall make any
transfer of an Interest if such transfer would result in a termination of the
Company for federal, state or local income tax purposes without the prior
written consent of all Members.
Section 8.13. Right of Withdrawal. The Members agree that the provisions of
this Agreement shall govern the disposition of their Membership Interest to the
exclusion of any other rights the Members may have under the Act to dispose of
their Membership Interest or to receive any payment or distribution upon the
disposition of their Membership Interest or upon the expulsion or withdrawal of
any Member. The Members hereby waive any right that they might have under the
Act to receive any payment or distribution upon the actual or purported
withdrawal and agree that in the event a Member withdraws from the Company, the
Company and the other Members shall have an option to purchase the withdrawing
Member's membership interest in the Company at a price equal to eighty percent
(80%) of the Purchase Price set forth under Section 8.05 a. and on the terms set
forth under Section 8.05 b. of this Agreement.
Section 8.14. Pledge of Membership Interests. Notwithstanding anything
contained herein to the contrary, Starcraft Corporation may pledge up to 50
capital units of its Membership Interest (no more than fifty percent (50%) of
its fifty-one percent (51%) ownership percentage) to Foothill Capital
Corporation ("Foothill") to secure the obligations of Company and Starcraft
Corporation to Foothill. Any exercise of Foothill's rights under such pledge
shall not be subject to the restrictions set forth in this Article 8.
Article Nine
TERMINATION AND DISSOLUTION
Section 9.01. Priority of Dissolution. Upon the occurrence of any of the
events set forth in Section 9.02 below, the Company shall be dissolved, the
affairs of the Company wound up and the property of the Company distributed and
applied in the following order of priority:
a. First, to the payments of any debts and liabilities of the Company
owing to persons other than any of the Members;
b. Second, to the payment of any debts and liabilities of the Company
owing to any Member, but in the event the amount available for such
payment is insufficient to satisfy all such debts and liabilities,
then to such Members in the proportion which their respective claims
bear to the claims of all such Members; and then
c. Third, the balance, if any, to the Members in respect of their
positive capital account balances as of the date of such distribution,
after giving effect to all contributions, distributions and
allocations for all periods.
No Member shall have a priority over any other Member with respect to the
distributions under subparagraph (c) above. Distributions made in accordance
with this Section 9.01 shall be in full satisfaction of the Member's claim
against the Company for distribution and liquidation. To the extent a Member
shall, be liable to restore to the Company any negative balance standing in such
Members' capital account, following the distributions required under this
Section 9.01, such amount shall, when paid to the Company, be distributed by the
Members to the creditors of the Company, or to the other Members in accordance
with this Section 9.01. The Member restoring any such negative balance shall be
required to do so at a time not later than the latest permissible time permitted
under Treas. Reg. ss. 1.704-1(b)(2)(ii). In making distributions to the Members,
the positive capital account balances of the Members shall be determined after
taking into account all capital account adjustments required by Treas. Reg. ss.
1.704-1(b)(2).
Section 9.02. Events Causing Dissolution. The following events shall cause
the dissolution of the Company:
a. Upon the mutual consent in writing executed by all Members;
b. Upon the occurrence of an event specified under the laws of the State
of Indiana as one effecting dissolution (except to the extent as may
be otherwise provided in this Agreement and the Act);
c. Upon the occurrence of an event of disassociation as specified under
the laws of the State of Indiana with respect to any Member unless the
business of the Company is continued by the consent of all the
remaining Members not more than ninety (90) days after the occurrence
of the event of disassociation or except to the extent as may be
otherwise provided in the Act;
d. On December 31, 2055, unless extended by written agreement of all
Members; or
e. Upon the entry of a decree of judicial dissolution under the Act.
The term "event of disassociation" shall mean (1) the Member ceases to be a
Member as provided by Ind. Code ss. 23-18--6-4(d), (2) a Member is removed as a
Member by the affirmative vote, approval, or consent of a majority in interest
of the Members after the Member has assigned the Member's entire interest in the
Company, (3) in the case of an individual Member, the death of the Member, (4)
in the case of a trustee as Member, the termination of the trust (but not merely
the substitution of a new trustee), (5) in the case of a partnership, limited
partnership or limited liability company as a Member, its non-administrative
dissolution and commencement of winding up the entity, (6) in the case of a
corporate Member, the non-administrative dissolution of the corporation, and (7)
in the case of an estate as a Member, the distribution by its personal
representative of the estate's entire interest in the Company.
Section 9.03. Agreement in Event of Dissolution by Act or Event Relating to
Less Than All Members. If the act of, or an event relating to, less than all
Members (the "Dissolving Members"), including, without Limitation, the
withdrawal of a Member, shall for any purpose be considered an event of
dissolution of the Company, then the remaining Members shall enter into a new
limited liability company upon the terms and conditions set forth above and upon
the same terms and conditions governing the present Company, and each party to
this Agreement hereby agrees for himself or herself such party's executor,
administrator, heirs and assigns to enter into such new limited liability
company and to execute any and all instruments necessary therefor. The act or
event relating to the Dissolving Members shall be treated as a notice of
withdrawal by the Dissolving Members of the entire capital account or capital
accounts of the Dissolving Members.
Section 9.04. Bankruptcy, Incompetency or Death of a Member. Upon the
death, adjudication of incompetency or bankruptcy of a Member, then the personal
representative of such deceased Member, the trustee of such bankrupt Member or
the legal representative of an incompetent Member, as the case may be, shall be
considered an assignee of such Member's Interest in this Company and, unless
admitted to the Company as a new or substituted Member pursuant to Article Eight
above, such personal representative, trustee or legal representative shall be
entitled only td the rights and benefits not inconsistent with this Agreement as
are presently provided by Ind. Code ss. 23-18-6-7 for a creditor of a person
having an Interest.
Section 9.05. Time to Dissolve. A reasonable time shall be allowed for the
orderly liquidation of the assets of the Company and the discharge of
liabilities to creditors so as to minimize the normal losses attendant upon such
liquidation. Each of the Members during the course of winding up the Company
affairs and dissolution shall be finished with a statement prepared by the
Members which shall set forth assets and liabilities of the Company as of the
date of the termination of the Company.
Section 9.06. Date of Termination. The Company shall be terminated when all
of its assets have been applied and distributed in accordance with the
provisions of Section 9.01 above. The establishment of any reserves for the
payment of any contingent or unforeseen liabilities or obligations of the
Company shall not have the effect of extending the term of the Company, and such
reserve shall be applied and distributed in the manner otherwise provided in
Section 9.01 above upon the expiration of the period of such reserve. Upon the
termination of the Company, there shall be recorded Articles of Dissolution of
the Company.
Article Ten
DEALINGS WITH THE COMPANY
Section 10.01. Dealings With the Company. Any Member may deal with the
Company as an independent contractor or as an agent for others, and may receive
from such others or the Company normal profits, compensation, commissions or
other income incident to such dealings. Except as hereinafter provided, no
Member nor any related person or entity in which they, or any one of them, may
hold a material ownership interest, shall deal with the Company as an
independent contractor or as agent for others without first disclosing to all
Members the existence of such relationship or ownership interest and the
compensation or price to be received by the Member or such related person or
entity. The amount payable by the Company to any Member or such related person
or entity shall not be greater than the amount which the Company would have to
pay under an arms-length contract with an unrelated person or entity. In the
event any Member fails to make such disclosure, such Member shall remit to the
Company, on demand of the Members, all compensation or sales price derived by
the Member or related person or entity from such dealings.
Section 10.02. Manager's Salary. The Manager may receive a regular salary
or fees for services rendered in management or operation of the Company business
or property as specifically agreed to by Board of Managers Action. Such
agreement shill be evidenced by a written agreement specifying such salary.
Section 10.03. Management Fee. Any Member may, by agreement of the Board of
Managers, be compensated for performance of his or her duties and
responsibilities as a Member. Any such compensation shall be considered
guaranteed payments within the meaning of Section 707(c) of the Code.
Section 10.04. Fiduciary Obligations. The Managers shall have a fiduciary
responsibility to all Members and shall exercise the management rights and
powers in such manner as will best serve the interests of all Members, including
the safekeeping and use of all funds and assets of the Company, whether or not
in their immediate possession or control. The Manager shall not employ, or
permit another to employ, such finds or assets in any manner except for the
exclusive benefit of the Company.
Section 10.05. Dealings Outside the Company. During the continuance of the
Company, the Managers shall at any time and from time to time, devote such time
and effort to the Company business as may be necessary to promote adequately the
interests of the Company and the mutual interests of the Members. Except as
otherwise provided by agreement with one or more of the Members, the Members
shall not be required to devote full time to Company business. During the
continuance of the Company, the Members individually or collectively may, at any
time and from time to time, engage in and possess an interest in other business
ventures of any and every type and description, independently or with others,
and neither the Company nor any Member shall by virtue of this Agreement have
any right. title or interest in or to such independent ventures of the Members.
Article Eleven
GENERAL
Section 11.01. Notices and Registered Agent. The registered agent of the
Company shall be as follows:
REGISTERED AGENT: Xxxxxxx X. Xxxxxxxxxx
Starcraft Corporation
P.O. Box 1903
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
or at such other address as may hereafter be designated in accordance with the
Act. All notices, demands, offers or other communication which any party hereto
is required or may desire to give to any other party hereto may be delivered in
person or by facsimile transmission or by overnight express delivery or may be
mailed by certified or registered mail, postage prepaid, addressed to the other
party as follows:
COMPANY: X.X. Xxx 0000
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
MEMBERS: Starcraft Corporation
X.X. Xxx 0000
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Wheel to Wheel, Inc.
000 Xxxxxxxxx Xxxxx
Xxxx, XX 00000
or at such other address as any Member may hereafter specify in writing to the
Company and the other Members. Any notice or demand pursuant to this Agreement
shall be deemed given and received immediately if delivered in person, or if
delivered by mail, then forty-eight (48) hours alter deposit in United States
mail postage prepaid.
Section 11.02. Member Action. As used in this Agreement unless provided in,
this Agreement to the contrary, the term "Member Action" shall mean
authorization by more than fifty percent (50%) vote of the Capital Units of
Members at that time.
Section 11.03. Board of Managers Action. As used in this Agreement, the
term "Board of Managers Action" shall mean authorization by all the Managers who
comprise the Board of Managers.
Section 11.04. Titles. The titles and headings in this Agreement are for
convenience only and shall in no way affect, limit or control the meaning or
application of any article or section hereof.
Section 11.05. Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of Indiana.
Section 11.06. Time of Essence. Time is of the essence in this Agreement
and all the terms and provisions hereof. This Agreement and all the terms and
provisions hereof shall, except as herein otherwise provided, inure to the
benefit of and shall be binding upon the heirs, personal representatives,
successors and assigns of the parties hereto.
Section 11.07. Partial Invalidity. If any of the terms and provisions of
this Agreement are determined to be invalid, such invalid term or provision
shall not affect or impair the remainder of this Agreement, but such remainder
shall continue in full force and effect to the same extent as though such
invalid term or provision were not contained herein.
Section 11.08. Singular and Plural. In this Agreement, whenever the context
so requires, the singular includes the plural and the plural includes the
singular.
Section 11.09. Further Action. The Members shall execute and deliver all
documents, provide all information and take or forebear from all such action as
may be necessary or appropriate to achieve the purposes of this Agreement.
Section 11.10. Pronouns. All pronouns and variations thereof shall be
deemed to refer to the masculine, feminine and neuter as the identity of the
person or persons may require.
Section 11.11. Company Obligations Binding. Each Member agrees that the
promises, covenants and conditions contained herein are given individually and
as a Member and inure to and are binding upon his successors, assigns and
estate.
Section 11.12. Partition. The Members hereby agree that no Member, nor any
successor in interest to any Member, shall have the right while this Agreement
remains in effect to have the Company property partitioned, or to file a
complaint or institute any proceeding at law or in equity to have the property
partitioned, and each Member on behalf of himself, his successors, successors in
title and assigns, hereby waives any such right.
Section 11.13. Statutory Accountings, Etc. The Members hereby agree that no
Member, nor any successor in interest to any Member, shall have the right while
this Agreement remains in effect to any statutory right to an accounting or to
institute any proceeding at law or in equity to obtain such accounting, and each
Member on behalf of himself, his successors, successors in title and assigns,
hereby waives any such rights and hereby accepts the provisions of Section 7.04
above as such Member's sole right to any Company accountings.
Section 11.14. Book Value. As used in this Agreement, the term "Book Value"
of any item of Company property as of any particular date shall be determined as
follows: (a) the Book Value of any item of property contributed by a Member to
the capital of the Company shall be the agreed-upon gross fair market value of
such item of property as of the date such property was contributed to the
Company, as adjusted for depreciation, depletion, cost recovery and amortization
deductions with respect to such property computed in the manner provided in
Section 4.01 above; and (b) the Book Value of any other item of Company property
shall be its adjusted basis for Federal income taxation purposes.
Section 11.15. Signatory Requirements. Each Member or additional or
substitute Member may become a signatory hereof by signing a Member Signature
Page to this Agreement and such other instruments as the Manager shall
determine. By so signing, each Member or additional or substitute Member shall
be deemed to have adopted and agreed to be bound by all the provisions of this
Agreement, as amended from time to time in accordance with the provisions of
this Agreement.
Section 11.16. Board of Managers; Bylaws. In the event the company
designates Manager(s), then the Managers may be constituted as a Board of
Managers, with Officers, pursuant to the Bylaws attached hereto and incorporated
herein.
Section 11.17. Amendment and Entire Agreement. This Agreement shall not be
amended, altered, changed or added to except by a written instrument executed by
all Members as of the time of such alteration or amendment This instrument
contains the entire understanding and agreement of the Members with respect to
all matters referred to herein and all prior negotiations and understandings are
hereby merged into this Agreement.
Section 11.18. Waiver of Actions. The Members agree that irreparable damage
will be done to the goodwill and reputation of the Company if any Member should
bring any action in court to dissolve this Company. Care has been taken in this
Agreement to provide for the fair and just compensation to a Member desiring to
terminate said Member's relationship with the Company for any reason.
Accordingly, each Member accepts the provisions of this Agreement as the sole
entitlement on the termination of said Member's relationship with the Company
and acknowledges that such provisions are just and reasonable; waives and
renounces said Member's right to seek a court decree of dissolution or
accounting, or to seek the appointment of a liquidator by judicial action; and
agrees that in the event any Member should bring any action to dissolve this
Company or for the appointment of a liquidator in contravention of this
provision, such Member shall be entitled only to the balance in such Member's
capital account, and that in the event any Member should bring any action for an
accounting such Member shall pay all costs, fees and expenses incurred by the
Company and the remaining Members in such action including, without limitation,
attorneys' fees, accounting fees and other costs.
Section 11.19. Confidentiality. Each Member agrees not to use or disclose
any secret or confidential information, knowledge or data concerning the Company
or any of its clients or customers, or any details of the Company Business or
any Business Records (as hereinafter defined). Each Member agrees that upon
termination of its Membership in the Company, it shall promptly return to the
Company all books, accounting and financial information, data, statements,
correspondence and all other materials, and all copies thereof, related in any
way to the sales, practices, business or financial affairs of the Company or its
clients, customers, suppliers and all those doing business with the Company
("Business Records"). Each Member hereby agrees and acknowledges that all
Business Records (whether or not created or authored by the Member) are the sole
and exclusive property of the Company and shall remain as such upon termination
of its Membership with the Company. At no time shall any Member have any right
or privilege of copying or securing any Business Records for any purposes
whatsoever except as specifically authorized by the Board of Managers of the
Company for purposes of the Company's business. En the event that any court of
competent jurisdiction shall determine that part or all of this Section 11.19 is
unenforceable or invalid due to the scope of the activities restrained, the
geographical extent of the restrains imposed, the duration of the restraints
imposed, or otherwise, the parties expressly agree and stipulate that the
provisions of this Section 11.19 shall be enforceable to the extent permitted by
law. Each Member agrees to deliver to the Company within thirty (30) days of the
date of this Agreement, confidentiality agreements in the form of this Section
11.19 by the officers, directors and persons owning fifty-one percent (51%) or
more of the voting control of such Member.
Section 11.20. Covenant Not To Compete. Each Member hereby agrees that
except as otherwise provided in Section 1.05 of this Agreement, at all times
during which the Member is a Member in the Company, the Member shall not for any
reason whatsoever, directly or indirectly through intermediaries or other
persons or entities, either as owner, shareholder, creditor, director, officer,
agent, consultant, representative, investor, partner, employee, contractor, or
on behalf of any other person or entity, or otherwise engage in the Company
Business.
Section 11.21. Capital Units. Each of the Members represents, acknowledges,
and agrees (i) the Capital Units in the Company are not and will not be
registered under either the Securities Act of 1933 or any applicable state
securities law and, therefore, may not be resold or transferred unless they are
registered or unless an exemption from registration is available, and (ii) each
Member has acquired the Capital Units in the Company for the Member's own
account and for investment purposes only, with no view toward distribution or
resale.
IN WITNESS WHEREOF, the parties hereto have set their hands on this 1st day
of January, 1999, effective the 16th day of October, 1998.
MEMBER
Wheel to Wheel, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx (SEAL)
-------------------------
MEMBER
Starcraft Corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx (SEAL)
-------------------------
EXHIBIT "3.02"
OPERATING AGREEMENT
OF
TECSTAR, LLC
Description of Property Value
Owner: Starcraft Corporation: 510 shares, Tecstar, Inc. $ 510.00
Wheel to Wheel, Inc.: 490 shares, Tecstar, Inc. $ 490.00
----------
TOTAL GROSS VALUE $1,000.00
=========
EXHIBIT C
CODE OF BYLAWS
ATTACHED.
CODE OF BY-LAWS
OF BOARD OF MANAGERS OF
TECSTAR, LLC
Section 1. Annual Meeting. Unless otherwise determined by Member Action,
the Annual Meeting of the Managers shall be held within the earlier of six (6)
months after the end of the Company's fiscal year or fifteen (15) months after
its last annual meeting, if not a legal holiday, and if a holiday then on the
first following day that is not a legal holiday. Failure to hold the annual
meeting at the designated time shall not work any forfeiture or a dissolution of
the Company, and the same may be held at any time thereafter, All meetings of
Managers of the Company shall be held at the principal office of the Company or
at any other place, within or without the State of Indiana, as may be specified
in the notices or waivers of notice of the meeting.
Section 2. Special Meetings. Special meetings of the Managers may be called
by any Member holding of record not less than 50% of capital units of the
Company. Any request or demand for a special meeting shall state the purpose or
purposes of the proposed meeting.
Section 3. Action Without Meeting. Any action required or permitted to be
taken at any meeting of the Managers may be taken without a meeting if one or
more consents in writing setting forth the action taken are signed by all the
Managers entitled to vote on the action, and the written consents are delivered
to the Company for inclusion in the Company records.
Section 4. Meeting By Telephone, Etc. Any or all Managers may participate
in any meeting of Managers by, or through the use of, any means of communication
by which all Managers participating may simultaneously hear each other during
the meeting. A Manager so participating is deemed to be present in person.
Section 5. Quorum. At all Manager meetings, all of the Managers shall be
necessary to constitute a quorum for the transaction of any business.
Section 6. Officers. The Officers of the Company shall be the Chief
Executive Officer, the Chief Operating Officer, the President, one or more Vice
Presidents, the Secretary and the Treasurer, and may include one or more
Assistant Secretaries, one or more Assistant Treasurers and such other Officers
as may be chosen by the Managers at such time in such manner and for such terms
as they may prescribe. Any two or more offices may be held by the same person.
The Managers may from time to time elect or appoint such other Officers as they
shall deem necessary, who shall exercise such powers and perform such duties as
may be prescribed from time to time by these By-Laws or, in the absence of a
provision in these By-Laws in respect thereto, as may be prescribed from time to
time by Member Action.
Section 7. Election of Officers. The Officers shall be elected at the
Annual Meeting and shall hold office for one year or until their respective
successors shall have been duly elected and shall have qualified; provided,
however, that the Managers may at any time elect one or morn persons to new or
different offices and/or change the title, designation and duties and
responsibilities of any of the Officers consistent with these By-Laws.
Section 8. Vacancies; Removal. Any vacancy among the Officers may be filled
for the unexpired term by the Managers. Any Officer may be removed at any time
by Managers, with or without cause.
Section 9. Delegation of Duties. In the case of the absence, disability,
death, resignation or removal from office of any Officer, or for any other
reason that the Managers shall deem sufficient, the Managers may delegate, for
the time being, any or all of the powers or duties of such Officer to any other
Officer.
Section 10. Chief Executive Officer. The Chief Executive Officer shall have
general charge and supervision and authority over the business affairs of the
Company, and shall have such other powers and perform such other duties as are
incident to this office and as may be assigned to him by the Managers. In the
case of the absence or disability of the Chairman or if no Chairman shall be
elected or appointed by the Managers, the Chief Executive Officer shall preside
at all Manager meetings.
Section 11. President. The President shall be Chief Operating Officer, and
shall have general charge, supervision and authority over the day-to-day
business affairs of the Company, and shall have such other powers and perform
such other duties as are incident to this office and as may be assigned to him
by the Chief Executive Officer. In the case of the absence or disability of the
Chief Executive Officer, the President shall preside at all Manager meetings.
Section 12. Vice Presidents. Each of the Vice Presidents shall have such
powers and perform such duties as may be prescribed for him by the President and
Chief Operating Officer. In the case of the absence, disability, death,
resignation or removal from office of the President, the powers and duties of
the President shall, for the time being, devolve upon and be exercised by the
Executive Vice President, if there be one, and if not, then by such one of the
Vice Presidents as the Chief Operating Officer may designate, or, if there be
but one Vice President, then upon such Vice President.
Section 13. Secretary. The Secretary shall have the custody and care of the
records, minutes and the books of the Company; shall attend all Manager
meetings; and duly record and keep the minutes of their proceedings in a book or
books to be kept for that purpose; shall give or cause to be given notice of all
meetings when such notice shall be required; shall file and take charge of all
papers and documents belonging to the Company; and shall have such other powers
and perform such, other duties as are incident to the office of secretary of a
business corporation, subject at all times to the direction and control of the
Chief Executive Officer.
Section 14. Assistant Secretaries. Each of the Assistant Secretaries shall
assist the Secretary in his or her duties and shall have such other powers and
perform such other duties as may be prescribed by the Chief Executive Officer.
In case of the absence, disability, death, resignation or removal from office of
the Secretary, his powers and duties shall, for the time being, devolve upon
such one of the Assistant Secretaries, as the Chief Executive Officer may
designate, or, if there be but one Assistant Secretary, then upon such Assistant
Secretary.
Section 15. Treasurer. The Treasurer shall have control over all records of
the Company pertaining to moneys and securities belonging to the Company; shall
have charge of, and be responsible for, the collection, receipt, custody and
disbursements of funds of the Company; shall have the custody of all securities
belonging to the Company; shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Company; and shall disburse the funds of
the Company subject to the Company's Executive Agreement as may be ordered by
the Chief Executive Officer, taking proper receipts or making proper vouchers
for such disbursements and preserving the same at all times during the term of
office. When necessary or proper, the Treasurer shall endorse on behalf of the
Company all checks, notes or other obligations payable to the Company or coming
into his possession for or on behalf of the Company, and shall deposit the funds
arising therefrom, together with all other funds and valuable effects of the
Company coming into his or her possession. in the name and the credit of the
Company in such depositories as the Chief Executive Officer from time to time
shall direct. The Treasurer shall also have such other powers and perform such
other duties as are incident to the office of treasurer of a business
corporation, subject at all times to the direction and control of the Chief
Executive Officer.
If required by the Chief Executive Officer, the Treasurer shall give the
Company a bond, in such an amount and with such surety or sureties as may be
ordered by the Chief Executive Officer for the faithful performance of the
duties of his office and for the restoration to the Company, in 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 belonging to the Company.
Section 16. Assistant Treasurers. Each of the Assistant Treasurers shall
assist the Treasurer in his duties, and shall have such other powers and perform
such other duties as may be prescribed for him by the Chief Executive Officer.
In case of the absence, disability, death, resignation or removal from office of
the Treasurer, his powers and duties shall, for the time being, devolve upon
such one of the Assistant Treasurers as the Chief Executive Officer may
designate, or, if there be but one Assistant Treasurer, then upon such Assistant
Treasurer; and he shall thereupon, during such period, exercise and perform all
the powers and duties of the Treasurer, and shall likewise give the Company a
bond, in such amount and with such surety or sureties as may be ordered by the
Chief Executive Officer for the same purposes as the bond that may be required
to be given by the Treasurer.
Section 17. Certificates. The Company may. but need not have, certificates
for capital units held by each Member.
Section 18. Records. The book and records of the Company may be kept at
such place or places, within or without the State of Indiana, as shall be
determined by the Chief Executive Officer.
Section 19. Inspection of Records. Any Manager shall be entitled to inspect
and copy at his expense, after giving the Company at least five (5) business
days' written notice of his demand to do so. the following Company records: (1)
the Articles of Organization; (2) these By-Laws; (3) minutes of all Manager
meetings and records of all actions without a meeting and if his demand is made
in good faith and for a proper purpose and describes with reasonable
particularity his purpose and the records he desires to inspect, and the records
are directly connected with his purpose, (4) appropriate accounting records of
the Company.
Section 20. Checks, Drafts; Notes; Etc. All checks, drafts, notes or orders
for the payment of money of the Company shall be signed by one or more Officers
as authorized in writing by the Chief Executive Officer. In addition, the Chief
Executive Officer may authorize any one or more employees of the Company
("Employees") to sign checks. drafts and orders for the payment of money not to
exceed specific maximum amounts as designated in writing by the Chief Executive
Officer for any one check, draft or order. When so authorized by the Chief
Executive Officer, the signature of any such Officer or Employee may be a
facsimile signature.
Section 21. Deeds, Notes, Bonds, Mortgages, Contracts, Etc. All deeds,
notes, bonds and mortgages made by the Company, and all other written contracts
and agreements, other than those executed in the ordinary course of corporate
business, to which the Company shall be a party, shall be executed in its name
by the Chief Executive Officer, or the President, a Vice President or any other
Officer so authorized by the Chief Executive Officer and, when necessary or
required, the Secretary or an Assistant Secretary shall attest the execution
thereof. All written contracts and agreements into which the Company enters in
the ordinary course of corporate business shall be executed by any Officer or by
any other Employee designated by the Chief Executive Officer.
Section 22. Reliance on Records. No Manager, employee or agent of the
Company ("Company Person") shall be liable for any loss or damage if, in taking
or omitting to take any action causing such loss or damage, either (1) such
Company Person acted (A) in good faith, (B) with the care an ordinarily prudent
person in a like position would have exercised under similar circumstances, and
(C) ma manner such Company Person reasonably believed was in the best interests
of the Company, or (2) such Company Person's breach of or failure to act in
accordance with the standards of conduct set forth above (the "Standards of
Conduct") did not constitute willful misconduct or recklessness. Any Company
Person shall be full protected, and shall be deemed to have complied with the
Standards of Conduct, in relying in good faith, with respect to any information
contained therein, upon (1) the Company Records, or (2) information. opinions,
reports or statements (including financial statements and other financial data)
prepared or presented by (A) one or more other Company Persons whom such Company
Person reasonably believes to be competent in the matters presented, (B) legal
counsel, public accountants or other persons as to matters that such Company
Person reasonably believes are within such person's professional or expert
competence.
Section 23. Interest of Members in Contract. Any contract or other
transaction between the Company and (i) any Member or Manager or (ii) any
corporation, unincorporated association, business trust, estate, partnership,
trust joint venture, individual or other, legal entity ("Legal Entity") (A) in
which any Member or Manager has a material financial interest or is a general
partner, or (B) of which any Member or Manager is a director, officer, or
trustee (collectively, a "Conflict Transaction"), shall be valid for all
purposes, if the material facts of the Conflict Transaction and the Member's or
Manager's interest were disclosed or known to the other Members or Managers, and
such Members or Managers authorized. approved or ratified the Conflict
Transaction.
Section 24. Indemnification. The Company shall, to the fullest extent to
which it is empowered to do so, indemnify any person who was or is a party, or
is threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal, by reason of the fact that he is
or was a Member, Manager, Officer, employee or agent of the Company, or who,
while serving as such Member, Manager, Officer, employee or agent of the
Company, is or was serving at the request of the Company as a Manager, officer,
partner, trustee, employee or agent of another corporation, partnership. joint
venture, trust, employee benefit plan or other enterprise, whether for profit or
not, against expenses (including counsel fees), judgments, settlements,
penalties and fines (including excise taxes assessed with respect to employee
benefit plans) actually or reasonably incurred by him in accordance with such
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed, in the case of conduct in his official capacity, was in the
best interest of the Company, and in all other cases, was not opposed to the
best interests of the Company, and, with respect to any criminal action or
proceeding, he either had reasonable cause to believe his conduct was lawful or
no reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not meet the prescribed standard of conduct.
Section 25. Authorization of Indemnification. To the extent that a Member,
Manager, Officer, employee or agent of the Company has been successful, on the
merits or otherwise, in the defense of any action, suit or proceeding referred
to in Section 26, or in the defense of any claim, issue or matter therein, the
Company shall indemnify such person against expenses (including counsel fees)
actually and reasonably incurred by such person in connection therewith. Any
other indemnification under Section 26 (unless ordered by a court) shall be made
by the Company only as authorized in the specific case, upon a determination
that indemnification of the Member, Manager, Officer, employee or agent is
permissible in the circumstances because he has met the applicable standard of
conduct. Such determination shall be made by the Members who were not at the
time parties to such action, suit or proceeding.
Section 26. Good Faith Defined. For purposes of any determination under
Section 27, a person shall be deemed to have acted in good faith and to have
otherwise met the applicable standard of conduct set forth in Section 26 if his
action did not breach the Standards of Conduct described in Section 24.
Section 27. Confidentiality. Each officer and director of the Company shall
execute the Company's confidential information and nondisclosure agreement
attached hereto.
Section 28. Board of Managers. The Board of Managers shall consist of three
(3) Managers, consisting of the President of Wheel to Wheel, Inc.; the President
of Starcraft Corporation; and the Chairman of the Board and Chief Executive
Officer of Starcraft Corporation.
Section 29. Initial Officers. The initial officers of the Company shall
consist of and be the following: Xxxxx X. Xxxx. Chairman of the Board of
Managers and Chief Executive Officer, Xxxxxxx X. Xxxxxxx, President and Chief
Operating Officer, and Xxxxxxx X. Xxxxxxxxxx, Senior Vice President, Chief
Financial Officer, Secretary and Treasurer.
