EXHIBIT 10.11
LIMITED LIABILITY COMPANY AGREEMENT OF
AKW GENERAL PARTNER L.L.C.
among
ACCURIDE VENTURES, INC.,
ACCURIDE CORPORATION, in its capacity as
guarantor of Accuride Ventures, Inc.,
and
▇▇▇▇▇▇ ALUMINUM & CHEMICAL CORPORATION
Dated as of May 1, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 FORMATION OF LIMITED LIABILITY COMPANY . . . . . . . . . . . . . 8
2.1 Formation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Company Name . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Principal Business Office, Registered Office and
Registered Agent . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Business Purposes. . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 The Certificate, Etc.. . . . . . . . . . . . . . . . . . . . . . 9
2.6 Term of Company. . . . . . . . . . . . . . . . . . . . . . . . . 9
2.7 Qualification in Other Jurisdictions . . . . . . . . . . . . . . 9
2.8 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Capital Contributions. . . . . . . . . . . . . . . . . . . . . . 10
3.2 Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 Capital Account Maintenance. . . . . . . . . . . . . . . . . . . 11
3.4 Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 4 ALLOCATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Allocations of Profit and Loss . . . . . . . . . . . . . . . . . 11
4.2 Tax Allocations. . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Special Allocations. . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Restorative Allocations. . . . . . . . . . . . . . . . . . . . . 13
4.5 Section 754 Election . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 5 DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.3 Restricted Distributions . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 6 MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Members Committee. . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Appointment and Removals . . . . . . . . . . . . . . . . . . . . 16
6.4 Action by Members Committee, Officers and Other
Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.5 Disinterested Majority; Transactions with Members and
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Notice; Agendas. . . . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Chief Executive Officer. . . . . . . . . . . . . . . . . . . . . 21
6.10 Other Officers . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.11 Duty of Good Faith . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Implementation; Further Assurances . . . . . . . . . . . . . . . 22
ARTICLE 7 BOOKS; ACCOUNTING; TAX MATTERS; REPORTS. . . . . . . . . . . . . 22
7.1 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . . 23
7.3 Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.4 Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.5 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.6 Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 8 RIGHTS AND OBLIGATIONS OF MEMBERS. . . . . . . . . . . . . . . . 26
8.1 Limited Liability. . . . . . . . . . . . . . . . . . . . . . . . 26
8.2 Access to Information; Records . . . . . . . . . . . . . . . . . 26
8.3 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 26
8.4 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 9 TRANSFERS OF INTERESTS; RIGHTS OF FIRST OFFER. . . . . . . . . . 27
9.1 General Restriction. . . . . . . . . . . . . . . . . . . . . . 27
9.3 Buy/Sell Option. . . . . . . . . . . . . . . . . . . . . . . . . 28
9.4 Transfers to Affiliates. . . . . . . . . . . . . . . . . . . . . 29
9.5 Substitution of a Member . . . . . . . . . . . . . . . . . . . . 29
9.6 Nonrecognition of Certain Transfers. . . . . . . . . . . . . . . 30
ARTICLE 10 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.1 Events of Dissolution. . . . . . . . . . . . . . . . . . . . . . 30
10.2 Liability for Wrongful Dissolution . . . . . . . . . . . . . . . 31
10.3 Distributions to Members . . . . . . . . . . . . . . . . . . . . 31
10.4 Application of Assets. . . . . . . . . . . . . . . . . . . . . . 31
10.5 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 11 CONFIDENTIAL INFORMATION; COVENANT NOT TO COMPETE. . . . . . . . 32
11.1 Confidential Information . . . . . . . . . . . . . . . . . . . . 32
11.2 Covenant Not To Compete. . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 12 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.1 Waiver, Amendment, Etc.. . . . . . . . . . . . . . . . . . . . . 33
12.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.3 Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.4 Word Meanings. . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.5 Binding Provisions . . . . . . . . . . . . . . . . . . . . . . . 35
12.6 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.7 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.8 Separability of Provisions . . . . . . . . . . . . . . . . . . . 36
12.9 Table of Contents; Headings. . . . . . . . . . . . . . . . . . . 36
12.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 36
12.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.12 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 36
12.13 Survival of Certain Provisions . . . . . . . . . . . . . . . . . 37
12.14 Specific Performance . . . . . . . . . . . . . . . . . . . . . . 37
Schedules
Schedule A Capital Contributions
Schedule B Initial Representatives and Alternates
Exhibit A Business Plan
ii
AKW GENERAL PARTNER L.L.C.
LIMITED LIABILITY COMPANY AGREEMENT
LIMITED LIABILITY COMPANY AGREEMENT OF AKW GENERAL PARTNER L.L.C.
(the "COMPANY"), dated as of May 1, 1997, among ACCURIDE VENTURES, INC., a
Delaware corporation ("ACCURIDE SUB") and wholly-owned subsidiary of Accuride
Corporation, a Delaware corporation ("ACCURIDE"), ACCURIDE CORPORATION, in its
capacity as guarantor of Accuride Sub, and ▇▇▇▇▇▇ ALUMINUM & CHEMICAL
CORPORATION, a Delaware corporation ("KAISER"), each of whom shall be a member
of the Company.
W I T N E S S E T H:
WHEREAS, Accuride Sub and Kaiser desire to form and capitalize the
Company in order to serve as the general partner of AKW L.P., a Delaware limited
partnership (the "LIMITED PARTNERSHIP");
WHEREAS, the Company is to be formed under the Delaware Limited
Liability Company Act, Del. Code ▇▇▇ tit. 6, Sections 18-101 ET SEQ. (as from
time to time amended and including any successor statute of similar import, the
"ACT"), pursuant to a Certificate of Formation of Limited Liability Company to
be filed with the office of the Secretary of State of the State of Delaware;
WHEREAS, the Company, as general partner, has entered into a
Limited Partnership Agreement, dated the date hereof (the "LIMITED PARTNERSHIP
AGREEMENT"), with Accuride Sub and Kaiser;
WHEREAS, the Company, Accuride, Kaiser and the Limited Partnership
(as hereinafter defined) have entered into a Contribution Agreement, dated the
date hereof (the "CONTRIBUTION AGREEMENT"), pursuant to which Accuride (on
behalf of Accuride Sub) and Kaiser have agreed, among other things, to
contribute certain assets to capitalize the Company and the Company, Accuride
(through Accuride Sub) and Kaiser have agreed to capitalize the Limited
Partnership;
WHEREAS, Accuride Sub and Kaiser desire to set forth their
agreement as to the management of the Company and the Limited Partnership,
transfers of Interests (as hereinafter defined) in the Company and certain other
matters relating to the Company;
NOW, THEREFORE, in consideration of the mutual covenants, and
subject to the terms and conditions, contained herein, in the Limited
Partnership Agreement and in the Contribution Agreement, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings
set forth below or in the Section of this Agreement referred to below:
"ACCOUNTING PERIOD" means the period beginning on the day following
any Adjustment Date (or, in the case of the first Accounting Period, beginning
on the day of formation of the Company) and ending on the next succeeding
Adjustment Date.
"ACCURIDE" has the meaning given in the first paragraph hereof.
"ACCURIDE EXCLUDED CONTRACTS" has the meaning given in the
Contribution Agreement.
"ACCURIDE SUB" has the meaning given in the first paragraph hereof.
"ACT" has the meaning given in the recitals.
"ADJUSTMENT DATE" means (I) the last day of each Fiscal Year,
(II) the day before the date of admission of any substituted or additional
Member, (III) the day before the date any Capital Contribution which is not
proportionate to the Members' Interests is made or deemed to be made, (IV) the
day before the date a Member ceases to be a member of the Company, (V) the day
before the date of any distribution made or deemed to be made by the Company
which is not proportionate to the Members' Interests or (VI) any other date
determined by the Members as appropriate for a closing of the Company's books.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person. Control of any Person shall consist of the power to direct the
management and policies of such Person whether through the ownership of voting
securities or by contract or otherwise and shall be deemed to exist upon the
ownership of securities entitling the holder thereof to exercise more than 50%
of the voting power in the election of directors of such Person.
"AGREEMENT" means this Limited Liability Company Agreement, as it
may be amended, restated or supplemented from time to time as herein provided.
"ANCILLARY AGREEMENTS" means this Agreement, the Certificate of
Formation, the Contribution Agreement and all other agreements which are
included in the definition of "Ancillary Agreements" in the Contribution
Agreement.
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"BANKRUPTCY" means any occurrence described in clauses (a)(1)
through (a)(6) and (b) of Section 18-304 of the Act.
"BID" has the meaning given in Section 9.3.
"BOOK GAIN OR BOOK LOSS" means the gain or loss, as the case may
be, recognized by the Company for book purposes in any Accounting Period by
reason of any sale or other disposition (including any distribution to a Member)
of any of the assets of the Company, computed by reference to the Book Value of
such assets as of the date of any such sale or other disposition (including any
such distribution), rather than by reference to the tax basis of such assets as
of such date, and each reference herein to "gain" or "loss" shall be deemed to
refer to Book Gain or Book Loss, rather than to tax gain or tax loss, unless the
context specifically requires otherwise.
"BOOK VALUE", as of any date, means the value at which the asset is
reflected on the books and records of the Company as of such date, the initial
Book Value of each asset being its cost to the Company, unless such asset is
contributed to the Company by a Member in which case the initial Book Value
shall be the Fair Value of such asset, in all cases, with such Book Value
thereafter adjusted for Depreciation with respect to such asset (rather than for
the cost recovery deductions to which the Company is entitled for federal income
tax purposes with respect thereto), PROVIDED that the Book Value of such asset
shall not be reduced below zero. The Book Values of all assets of the Company
shall be adjusted in accordance with Section 1.704- 1(b)(2)(iv)(f) of the
Treasury Regulations.
"BUSINESS DAY" means any calendar day other than a Saturday or
Sunday or a day on which either state or national banks in the States of
Pennsylvania, Arizona, California, Kentucky, Ohio or New York are not open for
the conduct of normal banking business.
"BUSINESS PLAN" means the definitive business plan for the Limited
Partnership substantially in the form of Exhibit A to the Limited Partnership
Agreement, and any subsequent plan approved by the Members Committee pursuant to
Section 6.4.
"BUY-SELL NOTICE" has the meaning given in Section 9.3.
"CAPITAL ACCOUNT" has the meaning given in Section 3.2, as adjusted
pursuant to the provisions of this Agreement.
"CAPITAL CONTRIBUTION" means, as to any Member, at any time, the
aggregate of the amount of any cash and the initial Book Value of any property
(net of the amount of any liability which is assumed by the Company in
connection with such contribution or secured by such property) contributed to
the Company by such Member pursuant to Section 3.1 of this Agreement.
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"CERTIFICATE OF FORMATION" means the Certificate of Formation of
Limited Liability Company of the Company as provided for pursuant to the Act, as
filed with the office of the Secretary of State of the State of Delaware, as
amended and restated from time to time pursuant to this Agreement or otherwise.
"CERTIFICATE OF LIMITED PARTNERSHIP" has the meaning given in the
Limited Partnership Agreement.
"CHIEF EXECUTIVE OFFICER" has the meaning given in Section 6.9.
"CLAIM" has the meaning given in Section 8.3.
"CLOSING DATE" has the meaning given in the Contribution Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor act thereto, and, to the extent applicable, any
Treasury Regulations promulgated thereunder.
"COMPANY" has the meaning given in the first paragraph hereof.
"COMPANY BUSINESS" has the meaning given in Section 2.4.
"CONTRIBUTION AGREEMENT" has the meaning given in the recitals.
"DEPRECIATION" means, with respect to a specified asset, for any
Accounting Period, any depreciation, depletion, amortization or other cost
recovery deduction allowable with respect to such asset for such Accounting
Period, PROVIDED that if the Book Value of such asset differs from its adjusted
basis for federal income tax purposes at the beginning of such Accounting
Period, Depreciation shall be an amount that bears the same relationship to the
Book Value of such asset as the depreciation, depletion, amortization or other
cost recovery deduction computed for such tax purposes with respect to such
asset for such Accounting Period bears to the adjusted tax basis of such asset
at the beginning of such Accounting Period, or if such asset has a zero adjusted
tax basis, Depreciation shall be an amount determined under any reasonable
method selected by the Members Committee.
"EFFECTIVE DATE" has the meaning given in Section 2.1.
"FAIR VALUE" means, with respect to any specified asset, its value
as determined by the Members Committee or by appraisal (as directed or requested
by the Members Committee), PROVIDED that the Fair Value of each asset
contributed to the Company pursuant to the Contribution Agreement shall be the
value
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as set forth in Schedule 2.2 to the Contribution Agreement.
"FISCAL YEAR" means the fiscal year of the Company and shall be the
same as its taxable year, which shall be the calendar year unless otherwise
required by the Code. Each Fiscal Year shall commence on the day immediately
following the last day of the immediately preceding Fiscal Year, except that the
initial Fiscal Year shall begin on the Closing Date.
"GAAP" has the meaning given in Section 7.1.
"INDEMNIFIED PERSONS" has the meaning given in Section 8.3.
"INITIAL OFFER" has the meaning given in Section 9.3.
"INITIATING MEMBER" has the meaning given in Section 9.3.
"INTEREST" means, with respect to a Member, the entire interest of
such Member in the Company at any time, which interest, except as otherwise
provided in the second succeeding sentence, shall be proportionate to its
Capital Contribution, PROVIDED that if, at any time after the Closing Date, a
Member or Members make any Capital Contribution to the Company that is not in
proportion to the Members' respective Interests immediately prior to such
Capital Contribution, then unless otherwise determined by the Members Committee,
(I) the aggregate values of the Interests of all Members prior to such Capital
Contribution shall be adjusted to their Fair Values, (II) the Book Values of the
assets of the Company shall be adjusted accordingly, and (III) a Member's
Interest after such Capital Contribution shall be equal to (X) the sum of the
Fair Value of such Member's Interest prior to such Capital Contribution and the
amount of such Capital Contribution made by such Member (Y) divided by the
aggregate Fair Values of the Interests of all Members prior to such Capital
Contribution and the aggregate amount of such Capital Contributions made by all
Members at such time. A Member's Interest shall include the right of such Member
to any and all benefits to which a Member may be entitled as provided in this
Agreement, together with the obligations of such Member to comply with the terms
of this Agreement. Upon completion of the transactions contemplated by the
Contribution Agreement, each of Accuride Sub and Kaiser shall initially hold an
Interest equal to 50% of the total Interests of the Members of the Company,
subject in each instance to adjustment from time to time pursuant to the
applicable provisions of this Agreement.
"JOINT VENTURE PRODUCTS" means (I) aluminum wheels 16" in diameter
and larger primarily for light, medium and heavy duty trucks, trailers and buses
(classes 1-8), although certain of such wheels may also be sold into the
automotive original equipment manufacturer market; (II) tire molds for
automotive and light-medium-heavy truck applications, as to each of clauses (i)
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and (ii) above, produced by forging, fabricating or casting for marketing and
sale worldwide, including without limitation in the original equipment
manufacturer market, after-market and repair and replacement markets; and (III)
such additional or different products as the Members Committee may approve
pursuant to Section 6.4. Notwithstanding the foregoing, Joint Venture Products
shall not include, without ▇▇▇▇▇▇'▇ written consent, motorcycle wheels and wheel
parts, wheel centers for any applications, forged one piece wheel blanks sold to
other wheel manufacturers and finished wheels for the automotive aftermarket
produced or being contemplated for production by Kaiser.
"KAISER" has the meaning given in the first paragraph hereof.
"KAISER EXCLUDED INVENTORY" has the meaning given in the
Contribution Agreement.
"LIMITED PARTNERSHIP" has the meaning given in the recitals.
"LIMITED PARTNERSHIP AGREEMENT" has the meaning given in the
recitals.
"LIMITED PARTNERSHIP BUSINESS" means the design, manufacture (by
forging, fabricating, casting or as otherwise determined by the Members),
marketing and sale of Joint Venture Products.
"MEMBER" means either Accuride Sub or Kaiser, or any Person who
becomes a Member as herein provided and who is listed as a member of the Company
in the books and records of the Company, in such Person's capacity as a member
of the Company.
"MEMBERS COMMITTEE" has the meaning given in Section 6.2(a).
"NONRECOURSE DEDUCTIONS" has the meaning given in Section 1.704-
2(b)(1) of the Treasury Regulations.
"OFFER" has the meaning given in Section 9.2(a).
"OFFER NOTICE" has the meaning given in Section 9.2(a).
"OFFERED INTEREST" has the meaning given in Section 9.2(a).
"OFFERED MEMBERS" has the meaning given in Section 9.2(a).
"OFFERING MEMBER" has the meaning given in Section 9.2(a).
"OFFICERS" has the meaning given in Section 6.10.
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"PARTNER" means the general partner or any limited partner of the
Limited Partnership.
"PARTNER NONRECOURSE DEBT" has the meaning given in Section
1.704-2(b)(4) of the Treasury Regulations.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning given in
Section 1.704-2(i)(2) of the Treasury Regulations.
"PARTNER NONRECOURSE DEDUCTIONS" has the meaning given in
Section 1.704-2(i)(1) of the Treasury Regulations.
"PARTNERSHIP MINIMUM GAIN" has the meaning given in Section
1.704-2(b)(2) of the Treasury Regulations.
"PERSON" means any individual, corporation, partnership,
association, public body, governmental authority or other entity.
"PROFIT" or "LOSS" means for any Accounting Period the net income
or net loss of the Company for such Accounting Period, including any items that
are separately stated for purposes of Section 702(a) of the Code, as determined
in accordance with federal income tax accounting principles, with the following
adjustments:
(a) any income of the Company that is exempt from federal income
tax shall be included as income;
(b) any expenditures of the Company described in Section
705(a)(2)(B) of the Code or treated as such Section 705(a)(2)(B)
expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the
Treasury Regulations shall be treated as current expenses;
(c) Book Gain or Book Loss shall be taken into account in lieu
of any tax gain or tax loss recognized by the Company;
(d) in lieu of depreciation, amortization, depletion, and other
cost recovery deductions taken into account in computing the
taxable income or loss of the Company, there shall be taken into
account Depreciation for such period, computed as provided in this
Agreement;
(e) if any asset of the Company is distributed in kind during
such Accounting Period, the Company shall be deemed to have
realized Profit or Loss thereon in the same manner as if the
Company had sold such asset for an amount equal to the greater of
(I) the Fair Value of such asset or (II) the amount of any debt to
which such asset is then subject; and
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(f) notwithstanding any other provisions of this definition, any
items which are specially allocated pursuant to Section 4.3 shall
not be taken into account.
"RECEIVING MEMBER" has the meaning given in Section 9.3.
"REPRESENTATIVE" has the meaning given in Section 6.2(a).
"RESPONSE" has the meaning given in Section 9.3.
"SPEEDLINE AGREEMENTS" means, collectively, the Cast Aluminum Wheel
Supply Agreement, dated as of December 1, 1995, between Accuride and Speedline
Aluminia, S.p.A. ("Speedline"); the Memorandum of Agreement re: Cast Aluminum
Wheel Venture, dated as of December 1, 1995, between Accuride and Speedline; and
the Letter Agreement, dated June 1, 1996, between Accuride and Speedline.
"STRATEGIC PLAN" has the meaning given in Section 6.4.
"SUBSTITUTED MEMBER" has the meaning given in Section 9.5.
"TAX MATTERS MEMBER" has the meaning given in Section 7.5(a).
"TIRE MOLD BUSINESS" has the meaning set forth in Section 11.2(b).
"TRANSFER" has the meaning given in Section 9.1.
"TREASURY REGULATIONS" means the federal income tax regulations,
including any temporary or proposed regulations, promulgated under the Code, as
such may be amended from time to time.
ARTICLE 2
FORMATION OF LIMITED LIABILITY COMPANY
2.1 FORMATION. By execution of this Agreement, each of Accuride
Sub and Kaiser, or their designees, is hereby authorized to execute and file the
Certificate of Formation pursuant to the Act with the Secretary of State of the
State of Delaware to be effective upon the date filed (the "EFFECTIVE DATE"),
and upon the occurrence of the Effective Date, the Company will be formed as a
Delaware limited liability company.
2.2 COMPANY NAME. The name of the Company shall be AKW General
Partner L.L.C. The business of the Company shall be
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conducted under such name or such other names as the Members Committee shall
from time to time approve.
2.3 PRINCIPAL BUSINESS OFFICE, REGISTERED OFFICE AND REGISTERED
AGENT. The Company shall maintain its principal business office, initially, at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and shall move such principal
business office to Akron, Ohio (at such time as shall be determined by the
Members Committee) or to such other location as may hereafter be determined by
the Members Committee. The address of the registered office of the Company in
the State of Delaware is Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and the name of the Company's
registered agent at such address is The Corporation Trust Company. The
principal business office, the registered office and the registered agent of the
Company may be changed by the Members Committee from time to time in accordance
with the then applicable provisions of the Act and any other applicable laws.
2.4 BUSINESS PURPOSES. The purposes of the Company are to
manage, and to invest in, hold and realize upon partnership interests in, the
Limited Partnership (the "Company Business") and to engage in all actions
necessary, convenient or incidental to the foregoing.
2.5 THE CERTIFICATE, ETC. The Members hereby agree to, and, as
appropriate, to cause the Company to, execute, file and record all such
certificates and documents, including amendments to the Certificate of
Formation, and to do such other acts as may be appropriate in the reasonable
judgment of the Members Committee to comply with all requirements for the
formation, continuation and operation of the Company as a limited liability
company, and the ownership of property and the conduct of the Company Business,
under the laws of the State of Delaware and any other jurisdiction in which the
Company may own property or conduct business.
2.6 TERM OF COMPANY. The term of the Company will commence on
the Effective Date, and shall continue until dissolution occurs by operation of
law, the written consent of the Members or otherwise in accordance with Section
10.1(a) and the liquidation and winding up thereof is complete as provided in
Section 10.5.
2.7 QUALIFICATION IN OTHER JURISDICTIONS. The Members shall
cause the Company to be qualified and registered as a limited liability company
doing business in such jurisdictions, if any, as the Members Committee, with
the advice of counsel, from time to time shall determine is appropriate. The
Members Committee shall execute, file and publish all such certificates,
notices, statements or other instruments necessary to permit the Company to
conduct business as a limited liability company in all jurisdictions where the
Company elects to do business and to maintain the limited liability of the
Members.
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2.8 POWERS. In furtherance of its purposes, but subject to all
of the provisions of this Agreement, the Company shall have the power and is
hereby authorized to do such things and engage in such activities related to the
foregoing as may be necessary, convenient or advisable with respect to the
conduct of the Company Business, and have and exercise all of the powers and
rights conferred upon limited liability companies formed pursuant to the Act.
ARTICLE 3
CAPITALIZATION
3.1 CAPITAL CONTRIBUTIONS. On the Closing Date, each of Accuride
(through Accuride Sub) and Kaiser shall make the Capital Contribution of cash or
property as agreed upon by Accuride and Kaiser in the Contribution Agreement
and, upon the consummation of the transactions contemplated by the Contribution
Agreement, each of Accuride Sub's and ▇▇▇▇▇▇'▇ Capital Contribution shall be as
set forth opposite its name on Schedule A hereto. Thereafter, the Members shall
make Capital Contributions in proportion to their respective Interests from time
to time in such amounts and on such dates as may unanimously be agreed by the
Members. Subject to the approval of the Members Committee, the Members may
satisfy their Capital Contributions by contributing cash or other property.
3.2 CAPITAL ACCOUNTS. A separate capital account (a "CAPITAL
ACCOUNT") shall be established and maintained for each Member and shall be
adjusted as of the close of business on each Adjustment Date as follows:
(a) Each Member's Capital Account shall be credited with such
Member's Capital Contribution, such Member's distributive
share of Profit and any items in the nature of income or
gain which are specially allocated pursuant to Section 4.3,
and the amount of any Company liabilities that are assumed
by such Member or that are secured by any property
distributed to such Member by the Company, in each case
during the Accounting Period ending on such Adjustment Date.
(b) Each Member's Capital Account shall be debited with the
amount of cash and the Book Value of any property
distributed to such Member by the Company pursuant to any
provision of this Agreement, such Member's distributive
share of Loss and any items in the nature of expenses or
losses which are specially allocated pursuant to Section
4.3, and the amount of any liabilities of such Member that
are assumed by the Company or that are secured by any
property contributed by such Member to the
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Company, in each case during the Accounting Period ending on such
Adjustment Date.
(c) If at any time after the Effective Date, the Book Value of
any asset of the Company is adjusted pursuant to the last
sentence of the definition of Book Value set forth in
Article 1 (including pursuant to the proviso to the first
sentence of the definition of Interest set forth in Article
1), the Capital Accounts of all Members shall be adjusted
simultaneously to reflect the aggregate net adjustments as
if the Company had recognized Profit or Loss equal to the
respective amounts of such aggregate net adjustments.
(d) In the event all or a portion of an Interest in the Company
is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the
transferred Interest.
3.3 CAPITAL ACCOUNT MAINTENANCE. The method by which the Capital
Accounts are maintained is intended to comply with Section 704(b) of the Code
and the Treasury Regulations thereunder and shall be interpreted and applied in
a manner consistent therewith.
3.4 WITHDRAWALS. Except as otherwise agreed to by the Members,
no Member shall be entitled to withdraw any part of its Capital Account or to
receive any distributions from the Company except as provided in Articles 5 and
10, or to make any loan or Capital Contribution to the Company except as
expressly provided in this Agreement.
ARTICLE 4
ALLOCATIONS
4.1 ALLOCATIONS OF PROFIT AND LOSS. Except as otherwise provided
in this Article 4, the Profit and Loss of the Company for each Accounting Period
shall be determined as of the end of each such Accounting Period and shall be
allocated among the Members in proportion to their respective Interests.
4.2 TAX ALLOCATIONS. (a) Except as provided in Section 4.2(b)
below, the income, gains, losses, credits and deductions recognized by the
Company shall be allocated among the Members, for federal, state and local
income tax purposes, to the extent permitted under the Code and the Treasury
Regulations, in the same manner that each such item affected the Members'
Capital Accounts.
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(b) In accordance with Section 704(c) of the Code and the Treasury
Regulations thereunder, any income, gain, loss, credit and deduction with
respect to any asset contributed to the capital of the Company by any Member
shall, solely for federal income tax purposes, be allocated among the Members so
as to take account of any variation between the adjusted basis of such asset to
the Company for federal income tax purposes and its initial Book Value
(determined in accordance with the definition of Book Value set forth in Article
1). The method of allocating such income, gain, loss, credit and deduction
shall be such method set forth in Section 1.704-3(b) of the Treasury
Regulations. In the event the Book Value of any asset of the Company is
subsequently adjusted in accordance with the last sentence of such definition of
Book Value, subsequent allocations of any income, gain, loss, credit and
deduction with respect to such asset shall take account of any variation between
the adjusted tax basis of the asset to the Company and its Book Value in the
same manner as under Section 1.704-3(d) of the Treasury Regulations.
4.3 SPECIAL ALLOCATIONS. (a) NONRECOURSE DEDUCTIONS.
Nonrecourse Deductions for any Accounting Period shall be allocated to the
Members in proportion to their respective Interests.
(b) MINIMUM GAIN CHARGEBACK. Except as otherwise provided in
Section 1.704-2(f) of the Treasury Regulations, notwithstanding any other
provision of this Article 4, in the event there is a net decrease in Partnership
Minimum Gain during any Accounting Period, each Member at the end of such
Accounting Period shall be specially allocated items of income and gain for such
Accounting Period (and, if necessary, subsequent Accounting Periods) in an
amount equal to such Member's share of the net decrease in Partnership Minimum
Gain as determined in accordance with Section 1.704- 2(g)(1) of the Treasury
Regulations. The items to be so allocated shall be determined in accordance
with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Treasury Regulations. This
Section 4.3(b) is intended to comply with the minimum gain chargeback
requirement of Section 1.704- 2(f) of the Treasury Regulations and shall be
interpreted and applied in a manner consistent therewith.
(c) PARTNER NONRECOURSE DEDUCTIONS. Any Partner
Nonrecourse Deductions for any Accounting Period shall be specially allocated to
the Member who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Section 1.704-2(i)(1) of the Treasury Regulations. If more
than one Member bears the economic risk of loss with respect to a Partner
Nonrecourse Debt, the Partner Nonrecourse Deductions attributable thereto shall
be allocated between or among such Members in accordance with the ratios in
which they share such economic risk of loss.
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(d) PARTNER MINIMUM GAIN CHARGEBACK. Except as otherwise provided
in Section 1.704-2(i)(4) of the Treasury Regulations, notwithstanding any other
provision of this Article 4, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain during any Accounting Period, each Member who has a share of
the Partner Nonrecourse Debt Minimum Gain shall be specially allocated items of
income and gain for such Accounting Period (and, if necessary, subsequent
Accounting Periods) in an amount equal to such Member's share of the net
decrease in Partner Nonrecourse Debt Minimum Gain determined in accordance with
Section 1.704-2(i)(4) of the Treasury Regulations. The items to be so allocated
shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2)
of the Treasury Regulations. This Section 4.3(d) is intended to comply with the
minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Treasury
Regulations and shall be interpreted and applied in a manner consistent
therewith.
(e) QUALIFIED INCOME OFFSET. No allocation shall be made pursuant
to this Article 4 to the extent it shall cause or increase a deficit in any
Member's Capital Account (in excess of such Member's obligation, including any
obligation under the Treasury Regulations, if any, to restore a deficit in its
Capital Account) as of the end of the Accounting Period to which such allocation
is related. In making the foregoing determination, a Member's Capital Account
shall be reduced by the amounts described in Section 1.704-1(b)(2)(ii)(d)(4),
(5) and (6) of the Treasury Regulations. In the event any Member unexpectedly
receives an adjustment, allocation or distribution described in
Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Treasury Regulations, items
of income and gain shall be specially allocated to each such Member in an amount
and manner sufficient to eliminate, to the extent required by the Treasury
Regulations, such deficit as quickly as possible, provided that an allocation
pursuant to this Section 4.3(e) shall be made only if and to the extent such
Member would have a deficit in its Capital Account after all other allocations
provided for in this Article 4 have been made as if this Section 4.3(e) were not
in the Agreement. This Section 4.3(e) is intended to comply with the alternate
test for economic effect set forth in Section 1.704-1(b)(2)(ii)(d) of the
Treasury Regulations and shall be interpreted and applied in a manner consistent
therewith.
4.4 RESTORATIVE ALLOCATIONS. The allocations set forth in
Section 4.3 are intended to comply with certain requirements of
Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations. Notwithstanding
any other provision of this Agreement, the allocations pursuant to Section 4.3
shall be taken into account in allocating Profit, Loss and items of income,
gain, loss and deduction among the Members so that, insofar as possible, the net
amount of the allocations of Profit, Loss, and other items and the allocations
pursuant to Section 4.3 to each Member shall be equal to the net amount that
would have been
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allocated to each Member had the allocations provided for in Section 4.3 not
occurred.
4.5 SECTION 754 ELECTION. The Company shall, upon the written
request of any Member and the approval of the Members Committee, elect, pursuant
to Section 754 of the Code, to adjust the basis of property of the Company as
permitted and provided in Sections 734 and 743 of the Code. Such election shall
be effective solely for federal (and, if applicable, state and local) income tax
purposes and (except as provided in Section 1.704-1(b)(2)(iv)(m) of the Treasury
Regulations) shall not result in any adjustment to the Book Value of any asset
of the Company or to the Members' Capital Accounts or in the determination or
allocation of Profit or Loss for purposes other than such tax purposes. Each
Member, and not the Tax Matters Member, shall be responsible for preparing any
schedules resulting from the Section 754 election that are relevant to the
computation of such Member's federal income tax liability, PROVIDED that the
other Members shall provide the Member preparing such schedules with the
information necessary for preparing such schedules and readily available from
the books and accounts of such other Members.
ARTICLE 5
DISTRIBUTIONS
5.1 DISTRIBUTIONS. Distributions may be made in accordance with
the Members' respective Interests at the time of distribution at such times and
in such amounts as the Members Committee shall determine. Notwithstanding the
foregoing, if any Member is in default or delinquent in respect of any
obligation to the Company, no distribution shall be made to the defaulting or
delinquent Member until such default is cured or such delinquent obligation is
paid, PROVIDED that, notwithstanding the foregoing, for each Fiscal Year the
Company shall distribute to each Member in cash an amount equal to such Member's
distributive share of the Company's taxable income for such Fiscal Year,
multiplied by the highest marginal corporate income tax rate under the Code in
effect for such Fiscal Year.
5.2 WITHHOLDING. (a) Each Member shall, to the fullest extent
permitted by applicable law, indemnify and hold harmless each Person who is or
who is deemed to be the responsible withholding agent for federal, state or
local income tax purposes against all claims, liabilities and expenses of
whatever nature (other than any claims, liabilities and expenses in the nature
of penalties and accrued interest thereon that result from such Person's fraud,
willful misfeasance, bad faith or gross negligence) relating to such Person's
obligation to withhold and to pay over, or otherwise pay, any withholding or
other taxes payable by the Company or as a result of such Member's participation
in the Company.
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(b) The Company shall withhold and pay over, or otherwise pay, any
withholding or other taxes payable by the Company with respect to such Member or
as a result of such Member's participation in the Company pursuant to any
applicable tax law. If and to the extent that the Company shall be required to
withhold or pay any such taxes, such Member shall be deemed for all purposes of
this Agreement to have received a payment from the Company as of the time such
withholding or tax is required to be paid, which payment shall be deemed to be a
distribution with respect to such Member's Interest in the Company to the extent
that the Member (or any successor to such Member's Interest in the Company) is
then entitled to receive a distribution and shall reduce the amount of
distributions to be made to such Member pursuant to this Article 5. To the
extent that the aggregate of such payments to a Member for any period exceeds
the distributions to which such Member is entitled for such period, such Member
shall make a prompt payment to the Company of such excess.
(c) If the Company makes a distribution in kind and such
distribution is subject to withholding or other taxes payable by the Company on
behalf of any Member, such Member shall make a prompt payment to the Company of
the amount so withheld.
5.3 RESTRICTED DISTRIBUTIONS. Notwithstanding any provision to
the contrary contained in this Agreement, the Company shall not make a
distribution to any Member on account of its interest in the Company if such
distribution would violate Section 18-607 of the Act or other applicable law.
ARTICLE 6
MANAGEMENT
6.1 MANAGEMENT. The Members shall have all of the management
authority of the Company. No delegation of authority to a Representative,
Officer, employee or other Person shall constitute a delegation of the Members'
ultimate management authority. No Member, Representative or officer or employee
of a Member will have authority to act for and to assume any obligations or
responsibilities on behalf of the Company except in accordance with instructions
by the Members Committee. The Company shall not have "managers" within the
meaning of the Act.
6.2 MEMBERS COMMITTEE. (a) In order for the Members to be able to
manage the affairs and conduct the business of the Company, there is hereby
appointed a Members Committee (the "MEMBERS COMMITTEE") comprised of one or more
representatives (each, a "REPRESENTATIVE", and collectively, the
"REPRESENTATIVES") appointed by each Member. The Representative or
Representatives, collectively, designated by each Member shall exercise voting
power proportionate to such Member's then current Interest. Each Representative
will act solely as agent on behalf
- 15 -
of the designating Member. The initial Representatives shall be as set forth in
Schedule B.
(b) Each Member, upon written notice to the other may designate an
alternate to act for its Representative and in the absence of such
Representative, such alternate shall have full power and authority to act in the
place of the Representative for whom he or she has been designated an alternate.
The initial alternates shall be as set forth in Schedule B. Each Representative
shall have the right to give his or her proxy to any other Representative (or
any alternate who is acting in place of such Representative) to exercise his or
her vote at any meeting of the Members Committee. The Representatives (and the
alternates designated to act in the place of Representatives) shall serve for
indefinite terms at the pleasure of the designating Member. Each designation of
a Representative (or an alternate) by a Member shall remain in effect until the
Member making such designation shall notify the Company and the other Members of
a change in such designation. Notwithstanding anything to the contrary herein,
Representatives and alternates must be officers, directors or employees of the
designating Member or its Affiliates.
(c) The Members Committee shall have a Chairman of the Board,
who shall preside at all meetings of the Members Committee and shall have such
other powers and duties as may be prescribed from time to time by the Members.
The first Chairman of the Board shall be a person designated by Accuride Sub,
subject to the approval of Kaiser, and shall hold office for a term ending
December 31, 1998 or until his or her successor is duly selected. Thereafter,
the Chairman of the Board shall hold office for a term of one year or until his
or her successor is duly selected. At the expiration of each Chairman of the
Board's term, the Members Committee will select one of its members as the next
succeeding Chairman of the Board, PROVIDED that such member shall not be the
immediately preceding Chairman of the Board or a person representing such
preceding Chairman of the Board's Member. The Chairman of the Board shall be
subject to removal by the Members Committee.
6.3 APPOINTMENT AND REMOVALS. Each Member may replace any
Representative whom it has appointed to the Members Committee, or any alternate
therefor, at any time and for any reason, upon seven days' prior written notice
thereof to the Company and each Representative.
6.4 ACTION BY MEMBERS COMMITTEE, OFFICERS AND OTHER PERSONS. All
actions and decisions by the Members Committee shall be made at a duly convened
meeting of the Members Committee by the vote of a majority of the voting power
of the Members as provided in Section 6.2, except that none of the following
actions, with respect to the Company and the Limited Partnership (by the Company
acting in its capacity as general partner of the Limited Partnership), shall be
taken by the Members Committee or
- 16 -
any Officer or other Person, without the unanimous approval of all
Representatives:
(i) adoption of the annual capital expenditure and
operating budgets, three-year capital expenditure plans
and five-year strategic plans with respect to the
Limited Partnership (each, a "STRATEGIC PLAN"), or such
budgets or plans for such other periods as may
unanimously be agreed upon by the Members, and approval
of any deviation therefrom which would result in an
expenditure in excess of $1 million, other than as
contemplated by this Agreement and the Limited
Partnership Agreement (which expenditures shall be
supported by a detailed appropriation request);
(ii) amendment, repeal or reinstatement of the Certificate
of Formation or the Certificate of Limited Partnership
and amendment of this Agreement or the Limited
Partnership Agreement;
(iii) dissolution, winding up or liquidation of, or filing of
any petition in bankruptcy by, the Company or the
Limited Partnership, other than as a result of the
bankruptcy, insolvency, dissolution, withdrawal or
resignation of a Member or a Partner, as the case may
be;
(iv) approval of annual financial statements and allocations
or distributions of earnings other than in accordance
with this Agreement, the Limited Partnership Agreement,
the Contribution Agreement, or a previously agreed-upon
allocation or distribution policy as contemplated by
this Agreement or the Limited Partnership Agreement;
(v) merger or consolidation involving the Company or the
Limited Partnership, sale of all or substantially all
of the assets of the Company or the Limited
Partnership, purchase or sale of any assets (other than
in the ordinary course of business) or business for an
amount in excess of $1 million, in a single transaction
or series of related transactions, and entry into joint
ventures, partnerships or similar arrangements between
the Company or the Limited Partnership and any third
party;
(vi) incurrence of any indebtedness greater than $1 million
in a single transaction or a series of related
transactions, other than as contemplated by this
Agreement or the Limited Partnership Agreement;
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(vii) creation of any mortgage, lien, pledge, charge or other
encumbrance securing an obligation greater than $1
million in a single transaction or a series of related
transactions, other than as contemplated by this
Agreement or the Limited Partnership Agreement;
(viii) any substantial change of tax or accounting methods or
policies or auditing practices, and the approval of an
independent auditing firm;
(ix) amendment or termination of the Contribution Agreement
or any other Ancillary Agreement;
(x) admission of any new Members hereunder or limited
partners under the Limited Partnership Agreement, as
the case may be, or issuance of any additional
Interests or limited partnership interests in the
Limited Partnership, as the case may be, to, or
incurrence of any indebtedness from, a Member or a
limited partner, as the case may be, other than as
contemplated by this Agreement or the Limited
Partnership Agreement;
(xi) an election by the Company or the Limited Partnership
to be treated as a corporation for federal, state or
local income tax purposes;
(xii) amendment of the Ultra-Forge Convertor Contract (as
defined in the Contribution Agreement) or entry into
any agreement with Ultra-Forge Incorporated;
(xiii) conduct by the Company of any business unrelated to the
Company Business or by the Limited Partnership of any
business unrelated to the Limited Partnership Business;
(xiv) execution, modification or early termination of
services agreements by the Limited Partnership;
execution, modification or early termination by the
Limited Partnership of supply, purchase and other
material contracts having (A) an original term in
excess of three years or (B) covering the purchase or
sale of products or materials in excess of $5 million;
and approval of any amendment, modification,
termination or waiver of any of the terms or conditions
of any of the Accuride Excluded Contracts or any of the
Accuride Contracts, insofar as such terms or conditions
relate to aluminum wheels or to the extent that any
amendment, modification, termination or waiver of any
terms or conditions of any Accuride Excluded Contract
or Accuride Contract relating to
- 18 -
steel wheels could affect the relevant terms and
conditions relating to aluminum wheels;
(xv) any loans or guarantees (other than accounts payable in
the ordinary course of business);
(xvi) the adoption of any, and any changes to or deviation
from the policies on, and the creation of systems of
control of, hedging and futures contracts and similar
commitments;
(xvii) the adoption of any, and any changes to or deviations
from the policies on, customer credit exposure
limitations;
(xviii) the adoption, approval, implementation or amendment of
any collective bargaining agreement, employee benefit
plan, employee health and welfare plan or management
incentive program;
(xix) termination (other than as provided herein) and
compensation of executive officers;
(xx) the conduct of legal actions, proceedings and
settlements, other than in the ordinary course of
business (but otherwise including actions, proceedings
and settlements in excess of $50,000);
(xxi) the purchase or lease of any Real Property;
(xxii) subject to Section 6.9 and 6.10, establishment of an
appropriate management structure for operating the
Limited Partnership, including, but not limited to, the
establishment of executive offices and the election of
individuals to fill such offices; and
(xxiii) the undertaking or modification of legal obligations,
other than as provided in clauses (ii)-(xxii) of this
Section, that could reasonably be expected to result in
expenditures or loans to the Company or the Limited
Partnership in excess of $250,000.
Any dollar thresholds set forth above may be modified by agreement of all of the
Members. Prior to voting on any matter, each Representative will disclose any
conflict of interest of the Member that appointed such Representative with
respect to such matter.
6.5 DISINTERESTED MAJORITY; TRANSACTIONS WITH MEMBERS AND
AFFILIATES. Notwithstanding anything to the contrary contained herein,
transactions or agreements (including amendments or waivers with respect to such
transactions or
- 19 -
agreements), between the Company, the Limited Partnership or any subsidiary of
the Company or the Limited Partnership, on the one hand, and any Member or any
Affiliate of any Member, on the other hand, and any other action to be taken by
the Members Committee as to which any Member has a conflict of interest will
(I) require the approval of the Representatives (or alternates) of disinterested
Members and (II) be effected on an arm's length basis on terms no less favorable
to the Company or its subsidiary than would be available to any unaffiliated
third party.
6.6 MEETINGS. Regular meetings of the Members Committee shall be
convened at least quarterly at the corporate headquarters of the Company (or
such other place as the Representatives shall agree). Special meetings may be
convened by any Member or its Representative (or alternate) upon giving seven
Business Days' prior written notice to each of the other Representatives or
their designated alternates at the address set forth on Schedule B, which notice
shall specify the purpose of the meeting (unless such notice requirement is
waived by all of the Representatives). Meetings shall be held at such times,
dates and places as may be established from time to time by the Members
Committee. The Members Committee may meet by telephone conference call or by
such other means of communications as may be permitted by the Act, and may take
action by unanimous written consent. Minutes of the meetings of the Members
Committee shall be kept by the Secretary, shall reflect all action taken and
shall promptly be reduced to writing, signed and delivered to the Members. The
Members Committee may adopt resolutions without a formal meeting if each
Representative consents to such resolutions in writing. The Members Committee,
by unanimous approval, may make such further rules and regulations and establish
such procedures for the conduct of its meetings and the discharge of its
responsibilities, consistent with the provisions of this Agreement, as it may
consider necessary or advisable.
6.7 QUORUM. The presence of Representatives (or alternates) of each
Member, in person or by proxy, shall constitute a quorum for the transaction of
business at meetings of the Members Committee.
6.8 NOTICE; AGENDAS. The Chief Executive Officer shall prepare an
agenda for each regular meeting of the Members Committee. Such agenda shall
specify any matters requiring approval of the Representatives in accordance with
the terms of this Agreement. The Chief Executive Officer shall give to the
Representatives not less than ten Business Days' notice of the place, date, and
time of each regular meeting of the Members Committee. This notice shall be
accompanied by the agenda. Members of the Members Committee may waive notice of
any meeting.
6.9 CHIEF EXECUTIVE OFFICER. The Company shall have a Chief
Executive Officer, who shall be the chief executive officer of the Company and,
subject to Section 6.4, this Section 6.9 and the direction and oversight of the
Members Committee,
- 20 -
shall be authorized to implement the Business Plan and shall have such other
powers and duties as may be prescribed from time to time by the Members. The
first Chief Executive Officer shall be a person designated by Accuride Sub,
subject to the approval of Kaiser. Thereafter, the Members Committee will
select the Chief Executive Officer. The Chief Executive Officer shall hold
office for a term designated by the Members Committee or until his or her death,
resignation or removal in accordance with this Section 6.9. The Chief Executive
Officer may be removed (I) for reasons of gross mismanagement or failure to meet
performance measures established in writing by the Members Committee (which
shall substantially be based on the then-current Business Plan), in each case
except as a result of a material adverse change in general market or industry
conditions, by any Member, and (II) for any other reason, with the unanimous
agreement of the Members. In case of removal of the Chief Executive Officer
initiated by a Member pursuant to clause (i) of the preceding sentence, the
succeeding Chief Executive Officer shall be a person designated by the other
Member, subject to the approval of the initiating Member. In case of the death,
resignation or removal of the Chief Executive Officer, the Vice President of
Operations shall act as acting Chief Executive Officer until a successor to the
Chief Executive Officer has been designated.
6.10 OTHER OFFICERS. In addition to the Chief Executive Officer,
the officers of the Company (together with the Chief Executive Officer, the
"OFFICERS") shall be the Controller, the Vice President of Operations, the
Director of Sales and Marketing, the Director of Research and Development, the
Director of Human Resources and such other Officers as may be deemed appropriate
by the Members Committee. The Members Committee may from time to time prescribe
the powers and duties of the Officers appointed pursuant to this Section 6.10.
Accuride Sub shall appoint the initial Director of Sales and Marketing, Director
of Research and Development and Director of Human Resources, and Kaiser shall
appoint the initial Controller and Vice President of Operations, in each case
subject to the approval of the other Member. Except for the Officers initially
appointed by Accuride Sub and Kaiser, the Officers appointed pursuant this
Section 6.10 shall be elected from nominees designated by the Chief Executive
Officer, subject to the consent of each of the Members, which shall not be
unreasonably withheld. Each Officer shall hold office for a term designated by
the Chief Executive Officer (subject to the approval of each of the Members,
which shall not be unreasonably withheld) or until his or her death, resignation
or removal. Officers may be removed (I) for reasons of gross mismanagement or
failure to meet any performance measures established in writing by the Members
Committee, in each case except as a result of general market or industry
conditions, by any Member or (II) for any reason, with the unanimous agreement
of the Members. With the unanimous approval of the Members, any two or more
offices may be held by the same person.
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6.11 DUTY OF GOOD FAITH. The Members, Representatives (or
alternates) and Officers shall perform their management duties in good faith, in
a manner such Members, Representatives (or alternates) and Officers reasonably
believe to be in the Company's best interests, and with such care as ordinary
prudent persons in similar positions would use under similar circumstances and
conditions. No Member, Representative (or alternate) or Officer shall be liable
to the Company for any loss or damage arising in connection with the performance
of their management duties unless the loss or damage was the result of gross
negligence or willful misconduct. This Section 6.11 shall not be construed as
providing rights or benefits for any third parties.
6.12 IMPLEMENTATION; FURTHER ASSURANCES. Each Member shall take
such actions as may be required under applicable law, including actions with
respect to the execution of documents and performance of other ministerial acts,
to give full effect to, and to implement, all decisions of the Members
Committee, including any amendments and supplements to the Business Plan.
ARTICLE 7
BOOKS; ACCOUNTING; TAX MATTERS; REPORTS
7.1 BOOKS AND RECORDS. At all times during the continuance of the
Company, the Company shall maintain books of account for the Company that shall
show a true and accurate record of all costs and expenses incurred, all charges
made, all credits made and received and all income derived in connection with
the operation of the Company Business in accordance with generally accepted
accounting principles consistently applied ("GAAP"). Each Member shall have
full access to such books of account for the Company and to all financial, legal
and business records of the Company. Such books of account, financial, legal
and business records of the Company, together with a copy of this Agreement and
of the Certificate of Formation, shall at all times be maintained at the
principal place of business of the Company and shall be open to inspection,
examination and copying at reasonable times during normal business hours by each
Member and its duly authorized representatives for any purpose reasonably
related to such Member's Interest in the Company. Such books of account,
financial, legal and business records of the Company shall be retained during
the term of this Agreement and for seven years thereafter. Members shall be
entitled to discuss the matters recorded in such books and records with the
independent certified accountants retained by the Company and with any Officers.
A Member shall bear all expenses incurred in any examination made for such
Member's account.
7.2 FINANCIAL STATEMENTS. Within 60 days after the close of each
Fiscal Year there shall be prepared and submitted to each Member the following
financial statements of the Company,
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which shall be prepared on an accrual basis in accordance with GAAP and
accompanied by the report thereon of the independent certified public
accountants for the Company:
(a) a balance sheet as at the end of such Fiscal Year;
(b) a statement of profit or loss for such Fiscal Year;
(c) a statement of cash flows for such Fiscal Year; and
(d) a statement of the Members' Capital Accounts and changes
therein for such Fiscal Year.
7.3 AUDIT. The independent certified public accountant of the
Company shall be ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, unless the Members Committee shall determine
otherwise. The Members Committee shall cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or such other
independent certified public accountant as the Members Committee may determine
to conduct an annual audit of the Company, which shall be performed in
accordance with generally accepted auditing standards, and to accompany such
audit with a report containing such accountant's opinion. The cost of such
audits shall be a direct expense of the Company. A copy of any such audited
financial statements and accountant's report will be distributed to the Members
pursuant to Section 7.2 above. Each Member shall have the right to have the
audit papers of the Company reviewed by such Member's internal and external
auditors, at such Member's sole cost and expense.
7.4 BANK ACCOUNTS. The Company may maintain one or more accounts in
a bank or banks selected by the Members Committee, which accounts shall be used
for the payment of the expenditures incurred in connection with the business of
the Company and in which shall be deposited any and all cash receipts of the
Company. All such amounts shall be and remain the property of the Company.
There shall not be deposited in any of said accounts any funds other than funds
belonging to the Company and no other funds shall in any way be commingled with
such funds. Withdrawals shall be made only in the regular course of business on
such signature or signatures as the Members Committee may determine.
7.5 TAX MATTERS. (a) Kaiser shall act as the tax matters partner
of the Company (the "TAX MATTERS MEMBER") within the meaning of
Section 6231(a)(7) of the Code (and any similar capacity under applicable state
or local tax law). In addition, when the Company acts as the tax matters
partner of the Limited Partnership in its capacity as the general partner
thereof, Kaiser shall act on behalf of the Company as such tax matters partner
and shall comply with Section 7.5 of the Limited Partnership Agreement.
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(b) The Members hereby authorize the Tax Matters Member to take any
and all actions (including preparing, executing and filing Internal Revenue
Service Form 8832 with the Internal Revenue Service) necessary to treat the
Company as a partnership for purposes of federal and, to the extent permitted by
applicable law, state and local income tax and other taxes. Immediately after
the formation of the Company but in no event later than 75 days after the
Effective Date, the Tax Matters Member shall prepare Internal Revenue Service
Form 8832 (together with all information required by such form) and shall
execute and file such form (together with such required information) with the
Internal Revenue Service, effective immediately upon the occurrence of the
Effective Date. The Tax Matters Member shall also prepare and timely file any
state, local and other forms, reports or statements that are necessary to treat
the Company as a partnership for purposes of state and local income tax or other
taxes. Except as otherwise required by applicable law, the Members hereby agree
to treat (and to cause their respective Affiliates to treat) the Company as a
partnership for purposes of federal, state and local income tax or other taxes,
and not to take (and cause their respective Affiliates not to take) any position
or make any election in a tax return or otherwise inconsistent with the
foregoing. Each Member shall indemnify and hold harmless the Company and the
other Members against all Claims (including state or local income tax or other
tax liabilities) arising out of, resulting from or attributable to any breach by
such Member of this Section 7.5(b).
(c) The Tax Matters Member shall cause all required federal, state
and local income, franchise, property or other tax returns, including
information returns with respect to the Company or its business or assets, to be
timely prepared and filed with the appropriate office of the Internal Revenue
Service or any other relevant taxing jurisdiction at the Company's expense. The
Tax Matters Member may cause the Company to retain, at the Company's expense,
the independent certified public accountants of the Company to prepare or review
the necessary federal income tax returns and information returns for the
Company. As promptly as practicable, and in any event in sufficient time to
permit timely preparation and filing by each Member of its respective income or
other tax returns, the Company shall deliver to each Member a copy of each
income tax return or tax report filed by the Company and any required
information, reports and schedules.
(d) Each Member shall provide such information to the Tax Matters
Member, if any, as may be reasonably needed by the Company for purposes of
preparing any required tax return or information return, PROVIDED that such
information is readily available from such Member's books and records.
(e) At least forty-five days prior to the filing of any tax return
referred to in Section 7.5(c) on or measured by net or gross income or net or
gross profits or at least fifteen
- 24 -
days prior to the filing of any other tax return referred to in Section 7.5(c),
the Tax Matters Member shall distribute or cause to be distributed to each
Member a final draft of any such tax return and any Member wishing to do so may
consult with any Officer with respect to the contents of such tax return. Any
Member may protest to the Members Committee or question the manner in which an
item is reported or characterized on the Company tax return. Any Representative
may request a meeting of the Members Committee to discuss the issues raised by
such protest or question in an attempt to resolve such issues. If the Members
Committee shall so determine, adjustments shall be made to the relevant tax
return of the Company.
(f) The Tax Matters Member, under the overall direction and control
of the Members Committee, shall represent the Company in connection with any tax
audit, examination or other administrative or judicial proceedings involving
the tax matters of the Company and, in connection therewith, shall cause the
Company to retain at the Company's expenses, counsel and other advisors selected
by the Members Committee. Each Member shall have the right to participate in
any such audit, examination or other administrative or judicial proceedings.
The Tax Matters Member shall not extend (or agree to extend) any applicable
statute of limitations, make any election, settle any issue or take any other
action binding on the Company or any other Member in connection with any such
tax audit, examination or other administrative or judicial proceedings without
the prior written consent of all Members. Any disagreement among the Members
arising in connection with any such tax audit, examination or other
administrative or judicial proceedings shall be resolved by the Members
Committee. The Tax Matters Member shall promptly deliver to each Member copies
of all notices and communications with respect to the tax matters of the Company
received from the Internal Revenue Service or any other taxing authority.
Section 7.5(e) shall apply MUTATIS MUTANDIS with respect to any written
submission to be filed with the Internal Revenue Service or any other taxing
authority. Neither the Tax Matters Member nor the Company shall be liable for
any additional tax, interest or penalties payable by a Member or any fees or
expense of separate counsel or other advisors retained by such Member to
represent such Member in any tax audit, examination or other administrative or
judicial proceedings relating to the tax items of the Company.
(g) The provisions of this Section 7.5 shall survive the termination
of the Company or the termination of any Member's Interest and shall remain
binding on the Members for as long a period of time as is necessary to resolve
with the Internal Revenue Service any and all matters regarding the federal
income taxation of the Company or the Members.
7.6 RESERVES. The Members Committee may from time to time in its
discretion establish reasonable cash or cash equivalent reserves.
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ARTICLE 8
RIGHTS AND OBLIGATIONS OF MEMBERS
8.1 LIMITED LIABILITY. (a) Each Member's liability with respect to
the Company and any subsidiary of the Company shall be limited as provided in
the Act, this Agreement or any applicable law. A Member shall not be personally
liable for any debts, obligations, liabilities or losses of the Company, or of
any subsidiary of the Company, as the case may be, whether arising in contract,
tort or otherwise, beyond its respective Capital Contribution to the Company and
its pro rata portion of the Company's undistributed profits, except as may
otherwise be provided for by law. No Member shall have any liability for the
restoration of the deficit of such Member's Capital Account and the return of
the Capital Contribution of any other Member unless otherwise provided in this
Agreement.
(b) The Members shall not be required to lend any funds to the
Company. Each Member shall only be liable to make payment of its respective
Capital Contributions as and when due hereunder or as agreed by all of the
Members. If and to the extent a Member's Capital Contributions shall be fully
paid, such Member shall not, except as required by the express provisions of the
Act regarding repayment of sums wrongfully distributed to Members, be required
to make any further contributions to the Company or any subsidiary thereof.
8.2 ACCESS TO INFORMATION; RECORDS. Each Member has the right to
obtain from the Company from time to time, upon demand for any purpose related
to the Member's interest as a Member of the Company, information regarding the
status of the Company's Business and financial condition, a copy of any written
Company agreement or other document, and any information required to be provided
under this Agreement or the Act.
8.3 INDEMNIFICATION. (a) The Company shall, to the fullest extent
permitted by law, indemnify and hold harmless each Member and its Affiliates,
each Officer, Representative (and alternate) and agent of the Company, and any
control person (as such term is defined in the Securities Act of 1933, as
amended, and the rules and regulations thereunder), director, officer, employee
and agent of each Member and its Affiliates (collectively, the "INDEMNIFIED
PERSONS"), from and against any and all losses, liabilities, damages, claims,
costs and expenses whatsoever (including without limitation fees and expenses
and any court costs) ("CLAIMS") arising out of, resulting from or attributable
to any act or omission performed or omitted by such Indemnified Person in good
faith on behalf of the Company after the date hereof and in a manner reasonably
believed to be within the scope of the authority conferred on it by this
Agreement, PROVIDED that no indemnity shall be payable hereunder with
- 26 -
respect to any liability incurred by such Indemnified Person by reason of its
gross negligence or willful misconduct, or in the case of a Member, breach of
such Member's obligations under this Agreement or any Ancillary Agreement.
(b) Expenses incurred by an Indemnified Person in defense or
settlement of any Claim that may be subject to a right of indemnification
hereunder may be advanced by the Company prior to the final disposition thereof
upon receipt of an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall ultimately be determined that the Indemnified
Person is not entitled to be indemnified by the Company.
(c) The Company shall make all indemnification provided for pursuant
to this Section 8.3 solely out of and to the extent of Company assets and no
Member shall have personal liability on account thereof.
8.4 INSURANCE. The Company may purchase and maintain insurance, to
the extent and in such amounts as the Members shall deem reasonable, on behalf
of Indemnified Persons and such other Persons as the Members shall determine,
against any liability that may be asserted against or expenses that may be
incurred by any such Person in connection with the activities of the Company or
such indemnities, regardless of whether the Company would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.
ARTICLE 9
TRANSFERS OF INTERESTS;
RIGHTS OF FIRST OFFER
9.1 GENERAL RESTRICTION. No Member may, directly or indirectly,
sell, transfer, encumber or otherwise dispose of (any such act, a "TRANSFER"),
its Interest to any Person without the written consent of each other Member,
except as permitted by this Article 9 and in accordance with applicable law. A
Member shall provide prior written notice to each other Member of any such
proposed Transfer.
9.2 RIGHT OF FIRST OFFER. (a) If, after the second anniversary of
the Closing Date, a Member (the "OFFERING MEMBER") desires to Transfer all (but
not less than all) of its Interest (the "OFFERED INTEREST"), the Offering Member
shall deliver to each of the other Members (the "OFFERED MEMBERS") a written
notice (the "OFFER NOTICE") specifying all of the material terms of the proposed
Transfer (the "OFFER"), including the consideration for which the Offering
Member proposes to Transfer the Offered Interest and any copies of any agreement
or documents to be executed or delivered in connection with the proposed
Transfer. Thereafter, the Offered Members shall have the exclusive right for a
period of 60 days after receipt of the
- 27 -
Offer Notice to purchase all, but not less than all, of the Offered Interest
upon the terms and conditions contained in the Offer Notice.
(b) Each Offered Member shall have 60 days from the date the Offer
Notice is given in which to notify the Offering Member whether it elects to
purchase the Offered Interest set forth in such Offer. In the event some but
not all of the Offered Members accept the Offer, the Offering Member shall
retransmit the Offer with respect to such remaining Offered Interest to those
Offered Members electing to accept the Offer. Within 10 days from the date such
second offer is made, each such Offered Member will notify the other Offered
Members whether it elects to purchase some or all of the remaining Offered
Interest, it being understood that if such other Offered Members together
indicate an intention to purchase such portion of the Offered Interest greater
than the entire Offered Interest, then such Offered Interest shall be allocated
PRO RATA among such of the Offered Members as accepted such second offer, in the
same proportion that each of their respective Interests bears to the aggregate
Interests held by such Offered Members.
(c) After the completion of the procedures in Section 9.2(a) and (b),
if the Offered Members elect not to purchase all of the Offered Interest within
the 60-day period described in Section 9.2(a), the Offering Member shall have
the right during the ensuing 120-day period to Transfer to a third party, on
terms no more favorable to such third party than the terms set forth in the
Offer Notice.
(d) Upon consummation of any sale to a third party by an Offering
Member pursuant to this Section 9.2, the Offering Member shall promptly notify
the other Members as to the circumstances thereof, including the date of the
sale, the price, the identity of the purchaser and the identity of the ultimate
beneficial owner.
(e) No Member shall offer or transfer its Interest pursuant to this
Section 9.2 to any Member or other Person without concurrently offering and
transferring all of such Member's interest in the Limited Partnership to the
other Members or other Person in accordance with Section 9.2 of the Limited
Partnership Agreement.
9.3 BUY/SELL OPTION. At any time after the second anniversary of the
Closing Date, any Member (the "INITIATING MEMBER") may deliver to the other
Member a written bid (the "BID") which sets forth a cash price at which it would
either
(i) sell all, but not less than all, of its Interest to the other Member or (ii)
purchase all, but not less than all, of the other Member's Interest, which price
shall be an amount at least equal to (a) five times the average EBITDA as shown
in the Strategic Plan of the Limited Partnership (approved in accordance with
Section 6.4(i)) for each of the next succeeding three years times
- 28 -
the percentage of the total interest in the Limited Partnership held by the
Company multiplied by (b) the percentage of the total Interest in the Company
held by the Member whose Interest is to be sold or purchased, as applicable,
unless otherwise agreed by the Member receiving such Bid. The first Bid so
delivered shall control. If two Bids are delivered at the same time, the higher
Bid shall control. Within 25 days after receipt of the Bid, the Member to which
the Bid was delivered must give the Initiating Member written notice (the
"BUY-SELL NOTICE") that it is either selling all of its Interest at such price
or purchasing all of the Initiating Member's Interest at such price. Failure to
give a Buy-Sell Notice within the required time shall be deemed an election by
the Member receiving the Bid not to purchase the Initiating Member's Interest
and to agree to sell all of its Interest to the Initiating Party. No Member
shall deliver a Bid to the other Member or sell to, or purchase from, the other
Member its Interest pursuant to this Section 9.3 without concurrently delivering
a bid and either selling all of its interest in the Limited Partnership to, or
purchasing all of the other Member's interest in the Limited Partnership from,
the other Member in accordance with Section 9.3 of the Limited Partnership
Agreement.
9.4 TRANSFERS TO AFFILIATES. A Member may Transfer all (but not
less than all) of its Interest to an Affiliate if prior to such Transfer (A)
such Member gives notice of the proposed Transfer to each of the other Members,
identifying the facts that make it an Affiliate of such Member, and (B) the
proposed transferee furnishes an assumption agreement or agreements to the
Company in accordance with Section 9.5 of this Agreement. No Transfer by a
Member to an Affiliate shall release or discharge, or be deemed or construed as
releasing or discharging, such Member from any of its covenants, agreements,
duties or obligations hereunder regardless of whether such covenants,
agreements, duties or obligations are required to be performed before or after
the effective date of such Transfer.
No Member shall transfer its Interest to an Affiliate pursuant to this Section
9.4 without concurrently transferring all of such Member's interest in the
Limited Partnership to the same Affiliate in accordance with Section 9.4 of the
Limited Partnership Agreement.
9.5 SUBSTITUTION OF A MEMBER. No Transfer of an Interest pursuant
to Section 9.2 or 9.4 of this Agreement shall be effective until the transferee
has delivered to each of the other Members a written instrument reasonably
satisfactory to counsel for such Members, whereby it (I) accepts, and agrees to
be bound by, the terms and provisions of this Agreement, (II) assumes all of the
liabilities and obligations of the transferor as a Member hereunder theretofore
or thereafter incurred pursuant to this Agreement and attributable to the
Interest transferred to it, and (III) represents and warrants that it has the
capability and authorizations necessary to satisfy all of the obligations
hereunder being assumed by it,
- 29 -
financial and otherwise. Upon effectiveness of the transfer, the transferee
shall become a "SUBSTITUTED MEMBER" and a party to this Agreement, the
respective Interest of the transferor shall be reduced accordingly, and the
transferor shall be relieved of all liabilities and obligations as a Member
hereunder attributable to the acquired Interest of the transferee.
9.6 NONRECOGNITION OF CERTAIN TRANSFERS. Notwithstanding any other
provision of this Agreement, any Transfer in contravention of any of the
provisions of this Agreement shall be void and ineffective, and shall not bind,
or be recognized by, the Company or any Member.
ARTICLE 10
TERMINATION
10.1 EVENTS OF DISSOLUTION. (a) In accordance with Section 18-801
of the Act, the Company shall be dissolved and the affairs of the Company wound
up upon the occurrence of any of the following events:
(i) the bankruptcy (as defined in Section 18-304 of the Act),
dissolution, withdrawal, or resignation of a Member or the
occurrence of any other event which terminates the continued
membership of a Member in the Company, unless, if there is
more than one remaining Member, all of the remaining Members
consent to continuing the business of the Company within 90
days following the occurrence of any such event;
(ii) the entry of a decree of judicial dissolution under Section
18-802 of the Act;
(iii) the unanimous consent of the Members to dissolve the Company;
(iv) if a Member shall attempt to Transfer any Interests other than
as permitted pursuant to Article 9, upon the election of all
of the other Members; and
(v) upon the sale of all or substantially all of the assets of the
Company.
(b) Dissolution of the Company shall be effective on the day on which
the event occurs giving rise to the dissolution, but the Company shall not
terminate until the assets of the Company shall have been distributed as
provided herein and a certificate of cancellation of the Certificate of
Formation has been filed with the Secretary of State of the State of Delaware.
- 30 -
10.2 LIABILITY FOR WRONGFUL DISSOLUTION. If a Member causes a
dissolution of the Company pursuant to the provisions of Section 10.1(a)(i), it
shall be deemed to have wrongfully dissolved the Company and be liable for any
damages caused to the Members that were not responsible for the event causing
dissolution, and in addition to any other remedies the Company or a Member may
have against any such wrongfully defaulting Member, the entire cost and expense
of conducting any proceeding to dissolve, liquidate and terminate the affairs of
the Company, including the cost of any judicial or arbitration proceeding, and
in each case all other direct out-of-pocket costs and expenses of the Company
resulting from such dissolution and liquidation, shall be borne by such
wrongfully defaulting Member. The Company may offset the amount of all such
costs and expenses from amounts which the Company owes any such wrongfully
defaulting Member.
10.3 DISTRIBUTIONS TO MEMBERS. In a dissolution, the Members shall
take such actions as are necessary to liquidate the Company and cause its
dissolution as soon as possible and shall each be entitled to receive an amount
of the net proceeds from such liquidation as provided in Section 10.4. A
dissolution shall not relieve or release any Member or its guarantor from any
liability arising from a breach or default of any of its obligations under this
Agreement or any of the other Ancillary Agreements.
10.4 APPLICATION OF ASSETS. Unless otherwise specified herein, in
the event of a termination or dissolution, the Members Committee shall conduct
only such activities as are necessary to wind up its affairs (including the sale
in an orderly manner of the assets of the Company), and the assets of the
Company shall be applied in the manner and in the order of priority set forth as
follows: (I) first, to creditors of the Company, including Members who are
creditors, to the extent otherwise permitted by law, in satisfaction of the
liabilities of the Company (whether by payment or the making of reasonable
provision for payment thereof); and (II) second, to the Members in proportion
to, and to the extent of, the positive balances of the Capital Accounts of the
Members (after reflecting in such Capital Accounts all adjustments and
allocations thereto required to be made under this Agreement).
It is understood and agreed that all payments under this Section 10.4
shall be made as soon as reasonably practicable and in any event by the end of
the Fiscal Year in which such winding up occurs or, if later, within 90 days
after the date of such winding up.
10.5 TERMINATION. Upon completion of the foregoing, the Members
Committee or the liquidating trustee shall execute, acknowledge and cause to be
filed a certificate of cancellation of the Company with the Secretary of State
of the State of
- 31 -
Delaware as required by the Act, and upon such certificate of cancellation
becoming effective, the Company shall be terminated.
ARTICLE 11
CONFIDENTIAL INFORMATION;
COVENANT NOT TO COMPETE
11.1 CONFIDENTIAL INFORMATION. During the existence of the Company,
each Member (I) shall maintain, and shall use its best efforts to cause its
Representatives, Affiliates, officers, directors, employees, accountants,
counsel and agents to maintain, the confidentiality of any confidential
information concerning the Joint Venture Products, the Company, the business of
the Company or any Member that is not otherwise generally available to the
public and (II) without the prior consent of the Company or of any Member that
would be affected, shall not use or disclose to any third party (other than
their respective financial advisors, attorneys and other agents and
representatives) such confidential information, except (A) in a manner expressly
provided for in any of the Ancillary Agreements, (B) after receipt of a binding
order of confidentiality, if available, in enforcing its rights under this
Agreement or any Ancillary Agreement before a court, governmental agency, or
arbitrator of competent jurisdiction, (C) to a prospective purchaser of any of
its Interest, PROVIDED such purchaser first executes a confidentiality agreement
in form and substance reasonably satisfactory to the other Members, and (D) to
any governmental agency if it believes in good faith that such disclosure is
required by applicable law or by governmental policy, PROVIDED that prior to
making any such disclosure such Member shall, unless prohibited by such
governmental agency, give written notice (identifying such agency and describing
the general nature of such disclosure) to, and consult with, the other Members.
11.2 COVENANT NOT TO COMPETE. Each Member agrees that during the
existence of the Company neither it nor any of its Affiliates (except in
connection with fundamental corporate transactions, such as mergers, spin-offs
and sales of substantially all of the capital stock or assets of Accuride or
Kaiser or any of their respective parent corporations) will (and Accuride Sub
agrees to cause Accuride not to), directly or indirectly, manufacture or sell,
or participate whether by ownership interest or otherwise in the manufacturing
or sale of, any Joint Venture Products, other than Joint Venture Products
manufactured by and sold through the Company, except that (I) Accuride shall be
permitted to sell Joint Venture Products manufactured and sold pursuant to the
Speedline Agreements to the extent set forth in Section 6.7 of the Contribution
Agreement, (II) Kaiser shall be permitted to sell the Kaiser Excluded Inventory,
(iii) Accuride shall be permitted to sell the Accuride Retained Inventory and
(iv) subject to Section 6.8 of the
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Contribution Agreement, Accuride shall be permitted to perform its obligations
under the Accuride Excluded Contracts, PROVIDED that for the purposes of this
Section 11.2 only, the term "Joint Venture Products" shall include any wheels of
the size and type described in clause (i) of the definition of Joint Venture
Products in Article 1 manufactured from non-ferrous materials (other than
thermal plastics and thermal sets). Notwithstanding the foregoing, if at any
time a Member or Accuride or any of their respective Affiliates wishes to
manufacture or sell Joint Venture Products that at the time are not being
manufactured and sold by the Company, it shall be free to do so if (I) it first
gives written notice to the Company of its desire to manufacture or sell such
Joint Venture Products and (II) the Company does not elect to undertake such
business within 180 days of the date upon which such notice is given (which need
not be on the same terms as set forth in such notice, but may include
alternative arrangements appropriate to the Company), PROVIDED that in
determining whether or not the Company shall undertake such business, Accuride
or the Member proposing to undertake such business shall vote in favor of the
Company's undertaking such business.
ARTICLE 12
MISCELLANEOUS
12.1 WAIVER, AMENDMENT, ETC. This Agreement may not be amended or
supplemented, and no waivers of or consents to departures from the provisions
hereof shall be effective, unless set forth in a writing signed by, and
delivered to, each Member. No failure or delay of any Member in exercising any
power or right under this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.
12.2 NOTICES. Any notice or other communication required or
permitted to be given hereunder or for the purposes hereof to any party shall be
in writing and shall be sufficiently given if (I) delivered personally,
(II) mailed by certified or registered mail, postage prepaid, (III) transmitted
by facsimile (and confirmed by certified or registered mail) or (IV) sent by
next-day or overnight mail or delivery to:
(a) Accuride Sub at:
Accuride Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇/▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
- 33 -
with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Kaiser at:
▇▇▇▇▇▇ Aluminum & Chemical Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Aluminum & Chemical Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and,
Kramer, Levin, Naftalis & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(c) the Company at:
AKW L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
or at such other address or to such other person's attention as the party to
whom such notice is to be given shall have last notified the party giving the
same in the manner provided in this Section. Any notice so delivered to the
party to whom it is addressed shall be deemed to have been given and received
(1) if by personal delivery, on the day of such delivery, (2) if by certified or
registered mail, on the seventh day after mailing thereof, (3) if by facsimile,
the day on which such facsimile was
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sent or (4) if by next-day or overnight mail delivery, on the day delivered,
PROVIDED that if any such day is not a Business Day then the notice shall be
deemed to have been given and received on the Business Day next following such
day.
12.3 MATERIALS. All written materials relating to the business of
the Company, including, without limitation, press releases and marketing
materials prepared by the Company or any Member shall be approved by the Members
Committee prior to use, provided that written materials required by law or the
rules of any stock exchange to be filed by any Members shall not require such
approval.
12.4 WORD MEANINGS. The words such as "herein", "hereinafter",
"hereof" and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural and the masculine gender shall include the
feminine and neuter, and vice versa, unless the context otherwise requires.
12.5 BINDING PROVISIONS. The covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the heirs, legal
representatives, successors and assigns of the respective parties hereto.
12.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (OTHER THAN ANY
CONFLICT OF LAWS RULE WHICH MIGHT RESULT IN THE APPLICATION OF THE LAWS OF ANY
OTHER JURISDICTION). IN THE EVENT OF A CONFLICT BETWEEN ANY PROVISION OF THIS
AGREEMENT AND ANY NON-MANDATORY PROVISION OF THE ACT, THE PROVISION OF THIS
AGREEMENT SHALL CONTROL AND TAKE PRECEDENCE.
12.7 ARBITRATION. (a) Any dispute, controversy or claim arising out
of or relating to this Agreement or the breach, validity or termination thereof
shall be finally settled by arbitration. The arbitration shall be conducted in
accordance with the American Arbitration Association's commercial arbitration
rules in effect at the time of arbitration, except as modified herein or by
mutual agreement of the parties. The seat of the arbitration shall be New York,
New York, PROVIDED that the arbitrators may hold hearings in such other
locations as the arbitrators determine to be most convenient and efficient for
all the parties under the circumstances. Notwithstanding anything to the
contrary in Section 12.6, the arbitration shall be governed by the Federal
Arbitration Act. The appointing authority shall be the American Arbitration
Association. The arbitration shall be conducted by three arbitrators.
(b) Any award rendered by the arbitrators shall be in writing and
shall be final and binding upon the parties, and may include an award of costs,
including reasonable attorneys' fees and disbursements. Judgment upon the award
rendered may be
- 35 -
entered in any court having jurisdiction thereof or having jurisdiction over the
parties or their assets.
12.8 SEPARABILITY OF PROVISIONS. Each provision of this Agreement
shall be considered separable and if for any reason any provision or provisions
herein are determined to be invalid, unenforceable or illegal under any existing
or future law, such invalidity, unenforceability or illegality shall not impair
the operation of or affect those portions of this Agreement which are valid,
enforceable and legal. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
12.9 TABLE OF CONTENTS; HEADINGS. The table of Contents and headings
in this Agreement are for descriptive purposes only and shall not control or
alter the meaning of this Agreement as set forth in the text.
12.10 FURTHER ASSURANCES. The Members shall execute and deliver such
further instruments and do such further acts and things as may be required to
carry out the intents and purposes of this Agreement.
12.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this Agreement.
12.12 ENTIRE AGREEMENT. This Agreement, together with the
Contribution Agreement and the other Ancillary Agreements, embodies the entire
agreement and understanding between the parties relating to the subject matter
hereof and thereof, and supersedes any prior oral or written agreements,
commitments or terms, other than Section 13 of the letter, dated September 17,
1996, as amended, from Accuride to Kaiser, regarding the Joint Venture, except
for the penultimate paragraph of such Section 13.
12.13 SURVIVAL OF CERTAIN PROVISIONS. The obligations of the Company
and of each Member pursuant to Sections 6.11 and 7.5 and Articles 8, 10 and 11
shall survive the termination or expiration of this Agreement.
12.14 SPECIFIC PERFORMANCE. The parties hereto agree that any
damages available at law for a breach of this Agreement would not be an adequate
remedy. Therefore, the provisions hereof and the obligations of the parties
hereunder shall be enforceable in a court of equity, or other tribunal having
jurisdiction, by a decree of specific performance, and appropriate injunctive
relief may be applied for and granted in connection therewith. Such remedies
and all other remedies provided for in this Agreement shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.
- 36 -
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
ACCURIDE VENTURES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇ ALUMINUM & CHEMICAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
ACCEPTED AND AGREED:
AKW GENERAL PARTNER L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
- 37 -
In order to induce the parties to enter
into this Agreement, the undersigned,
Accuride Corporation, a Delaware corporation,
being the sole stockholder of Accuride Sub
hereby jointly and severally unconditionally
guarantees the performance by Accuride Sub of
all of its obligations under the foregoing
Agreement and strictly in accordance with the terms
thereof. This guarantee shall be effective despite
any renewal, modification or waiver by the parties
hereto of Accuride Sub's obligations under this
Agreement, and no such modification, renewal or waiver
shall operate to limit, defeat, modify or otherwise
affect this guaranty.
ACCURIDE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Dated as of May 1, 1997
- 38 -
SCHEDULE A
CAPITAL
MEMBER CONTRIBUTION INTEREST
------ ------------ --------
Accuride Ventures, Inc.
▇▇▇▇▇▇ Aluminum & Chemical
Corporation
SCHEDULE B
INITIAL REPRESENTATIVES
NAME ADDRESS
---- -------
Kaiser:
Accuride:
INITIAL ALTERNATES
NAME ADDRESS
---- -------
Kaiser:
Accuride:
Exhibit A Business Plan