Exhibit 3.2
WOLVERINE ENERGY, L.L.C.
Operating Agreement
of
Wolverine Energy, L.L.C.
(Manager Managed)
Manager: Xxxxxx X. Xxxxxxx, Xx. Date: November 8, 1995
Table of Contents
Article 1 Management 1
1.1 AUTHORITY OF MANAGER 1
1.2 APPOINTMENT 2
1.3 REMOVAL 2
1.4 RESIGNATION 2
1.5 STATUS AS MEMBER 2
1.6 COMPENSATION 2
1.7 STANDARD OF CARE 2
1.8 LIMITED LIABILITY 2
1.9 MANAGER NOT FULL-TIME 3
1.10 OTHER BUSINESS INTERESTS 3
1.11 RELIANCE 3
Article 2 Members 3
2.1 INITIAL MEMBERS 3
2.2 ADDITIONAL MEMBERS 3
2.3 LIMITED LIABILITY 3
2.4 PRIORITIES 3
2.5 WAIVER OF ACTION FOR PARTITION 3
Article 3 Restriction on Transfer of Membership 4
3.1 RESTRICTION ON TRANSFER 4
3.2 EXCEPTIONS 4
3.3 DEATH OF A MEMBER 4
3.4 CALL OPTION 5
3.5 RIGHTS OF ASSIGNEE 5
3.6 ADMISSION OF A SUBSTITUTE MANAGER 5
3.7 TAXABLE TERMINATION/SECURITIES VIOLATION 6
Article 4 Restrictions on Withdrawal of Members 6
4.1 WITHDRAWAL OF A MEMBER 6
4.2 WRONGFUL WITHDRAWAL 6
Article 5 Voting Rights 6
5.1 VOTING RIGHTS OF MEMBERS 6
5.2 CONSENT REQUIRED 7
5.3 ARBITRATION 7
Article 6 Meetings 7
6.1 CALL OF MEETING 7
6.2 NOTICE OF MEETING 7
6.3 MAILING OF NOTICE 8
6.4 WAIVER OF NOTICE 8
6.5 PROXIES 8
6.6 PARTICIPATION IN MEETINGS 8
6.7 OTHER MATTERS 8
6.8 ACTION WITHOUT A MEETING 8
Article 7 Capital Contributions 8
7.1 INITIAL CAPITAL CONTRIBUTIONS 8
7.2 PERCENTAGE INTEREST 8
7.3 WITHDRAWAL AND RETURN OF CAPITAL 8
7.4 CAPITAL ACCOUNTS 9
7.5 ADDITIONAL CONTRIBUTIONS TO CAPITAL 9
7.6 CAPITAL CONTRIBUTION OTHER THAN CASH 9
7.7 INTEREST ON CAPITAL 9
7.8 COMPLIANCE WITH IRC 704(b) 9
Article 8 Allocations 10
8.1 ALLOCATION OF PROFITS AND LOSS 10
8.2 COMPANY MINIMUM GAIN CHARGEBACK 10
8.3 MEMBERS MINIMUM GAIN CHARGEBACK 10
8.4 QUALIFIED INCOME OFFSET 10
8.5 DISTRIBUTIONS 10
8.6 LIQUIDATION 10
8.7 DISTRIBUTIONS OF ASSETS IN KIND 10
8.8 COMPLIANCE WITH SUBCHAPTER K 11
Article 9 Indemnification 11
9.1 INDEMNIFICATION OF MANAGER 11
9.2 INDEMNIFICATION OF EMPLOYEES AND AGENTS 11
Article 10 Dissolution and Winding Up 11
10.1 DISSOLUTION OF THE COMPANY 11
10.2 WINDING UP AND DISTRIBUTION 12
10.3 SOURCE OF RETURN OF CAPITAL 12
Article 11 Books and Records 12
11.1 RECORDS KEPT 12
11.2 RIGHT TO INFORMATION 13
11.3 TAX INFORMATION 13
Article 12 General 13
12.1 PROPER NOTICES 13
12.2 APPLICABLE LAW 13
12.3 INTEGRATION 13
12.4 AMENDMENTS 13
12.5 SEVERABILITY 13
12.6 BENEFIT 13
12.7 CAPTIONS 14
12.8 COUNTERPART 14
12.9 RIGHTS AND REMEDIES 14
12.10 CREDITORS 14
12.11 TAX TREATMENT 14
Pursuant to the Michigan Limited Liability Company Act, 1993 PA 23 (the
"Act"), WOLVERINE ENERGY, L.L.C. ("Company"), and XXXXXX X. XXXXXXX, XX. and
XXXXX XX XXXXXXX ("Members") enter into this Operating Agreement ("Agreement")
on November 8, 1995.
The parties agree as follows:
ARTICLE 1
MANAGEMENT
1.1 AUTHORITY OF MANAGER. The business and affairs of the Company shall
be managed solely by the Manager. The Manager has the authority to:
(a) Effectuate this Operating Agreement;
(b) Direct and supervise the operation of the Company;
(c) Establish the charges for services and products of the Company
as necessary to provide adequate income for the efficient operation of the
Company;
(d) Hire and dismiss all personnel and regulate the terms and
conditions of work;
(e) Oversee the preparation of all financial reports of the
Company, and assure that all Company records are properly maintained;
(f) Acquire any real or personal property and execute, on the
Company's behalf, all documents necessary to acquire and perfect title in the
Company's assets;
(g) Sell, lease, exchange, or otherwise dispose of the assets of
the Company, subject to the right of the Members to authorize the sale of all or
substantially all of the Company's assets;
(h) Enter into and terminate agreements on behalf of the Company;
(i) Borrow money from banks and other lenders, and issue notes,
debentures and other debt securities and mortgage, pledge, or encumber the
Company's assets to secure any borrowings on the Company's behalf;
(j) Establish appropriate depository accounts and determine the
authorized signatories for those accounts;
(k) Institute, defend and settle litigation or arbitrations and
settle any disputed claims on the Company's behalf;
(l) Employ on the Company's behalf accountants, attorneys,
brokers, engineers, escrow agents and others and terminate their employment;
(m) Purchase on the Company's behalf liability, casualty, fire and
other insurance as appropriate to protect the Company's assets, employees,
Members and Manager;
(n) Make, revise, or revoke any available allocation, consent or
election affecting any
tax; and
(o) Perform any other acts necessary or appropriate for management
of the Company's business.
1.2 APPOINTMENT. The initial Members appoint Xxxxxx X. Xxxxxxx, Xx., to
serve as Manager of the Company. At the time a Manager resigns, that Manager
may appoint a successor Manager. If at any time there is not a Manager of the
Company, the Members shall elect a new Manager.
1.3 REMOVAL. A Manager may be removed by the Members only for cause.
Removal for cause shall be at a meeting called expressly for that purpose. The
Manager proposed for removal shall have reasonable advance notice of the
allegations offered in support of removal, and shall have an opportunity to be
heard at the meeting.
1.4 RESIGNATION. A Manager may resign upon sixty (60) days written
notice to the Members.
1.5 STATUS AS MEMBER. A Manager who is also a Member shall continue as a
Member upon resignation or removal as a Manager. A Manager is not required to be
a Member.
1.6 COMPENSATION. A Manager shall receive reasonable compensation from
the Company for services provided as a Manager.
1.7 STANDARD OF CARE. A Manager shall discharge the Manager's duties as a
manager in good faith, with the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and in a manner the Manager
reasonably believes to be in the best interests of the Company.
1.8 LIMITED LIABILITY. A Manager is not liable for the acts, debts or
obligations of the Company. The Manager is not liable to the Company or the
Members for any action taken as a Manager or any failure to take any action if
the Manager performs the duties of office in compliance with Section 1.7.
1.9 MANAGER NOT FULL-TIME. A Manager is not required to manage the
Company as the Manager's sole and exclusive function.
1.10 OTHER BUSINESS INTERESTS. A Manager may have other business
interests and may engage in other activities in addition to those relating to
the Company. Neither the Company nor any Member shall have any right, by virtue
of this Agreement, to share or participate in other investments or activities of
a Manager or to the income or proceeds from those investments or activities. A
Manager shall incur no liability to the Company or to any of the Members as a
result of engaging in any other business or venture.
1.11 RELIANCE. The Manager may rely on information, opinions, reports
or statements, including, but not limited to, financial statements or other
financial data, if prepared or presented by: (a) a Member or employee of the
Company whom the Manager believes to be competent and reliable in the matter
presented; or (b) legal counsel, public accountants, engineers or other persons
as to matters the Manager reasonably believes are within the person's
professional or expert competence.
ARTICLE 2
MEMBERS
2.1 INITIAL MEMBERS. The initial Members are listed on the first page of
this Agreement.
2.2 ADDITIONAL MEMBERS. Additional Members may be admitted only if: (a)
all the existing Members unanimously consent in writing; (b) the additional
Member agrees to be bound by the terms and conditions of this Agreement; and (c)
the additional Member makes the required contribution to capital as determined
by the existing Members. The additional Member is considered to be a Member
upon signing a counterpart of this Agreement.
2.3 LIMITED LIABILITY. A Member is not liable for the acts, debts or
obligations of the Company.
2.4 PRIORITIES. No Member shall have priority over any other Member.
2.5 WAIVER OF ACTION FOR PARTITION. Each Member irrevocably waives,
during the term of the Company and during the period of its liquidation
following dissolution, any right to maintain an action for partition of the
Company's assets.
ARTICLE 3
RESTRICTION ON TRANSFER OF MEMBERSHIP
3.1 RESTRICTION ON TRANSFER. A membership interest, as defined in Section
506 of the Act, may not be pledged, sold or otherwise transferred by operation
of law or other means, without the written consent or ratification of the
remaining Members holding a majority of the Percentage Interest in the Company.
Any attempted disposition of a membership interest in violation of this Article
is void.
3.2 EXCEPTIONS. The restrictions in Section 3.1 do not apply to the
following transfers:
(a) A transfer by will or by intestate succession on the death of
a Member;
(b) A voluntary transfer by a Member to a revocable living trust
established by that Member;
(c) A transfer between Members; and
(d) Any pledge of a membership interest to secure a loan from the
Company.
Any membership interest owned by a revocable living trust shall be
considered to be owned by the Member who established the living trust until that
Member's death.
3.3 DEATH OF A MEMBER. Upon the death of a Member, the personal
representative of the deceased Member's estate (or the trustee of a living trust
established by the Member if the membership has been transferred to the trust)
shall sell and the Company shall buy the deceased Member's interest in the
Company.
(a) The closing on the purchase and sale of the deceased Member's
interest shall take place within 90 days of the deceased Member's date of death
or within 10 days after the Company's receipt of insurance proceeds purchased to
fund this purchase, whichever is later.
(b) Each year, the Members shall agree on the fair market value of
the Company, and the value shall be endorsed on Schedule B of this Agreement.
The fair market value shall be established within one hundred and twenty days
(120) after receipt of Company's annual financial statements. The purchase
price shall be the value of the Company multiplied by the Member's Percentage
Interest being transferred to the Company.
(c) The purchase price shall be paid as follows:
(i) The greater of 20% of the purchase price or the amount
of any insurance paid to the Company as a result of the deceased Member's death,
but not more than the purchase price, shall be paid in cash or by certified or
cashier's check at closing; and
(ii) The balance shall be paid by executing a promissory
note payable to the personal representative or trustee in 60 equal monthly
payments of principal and interest. Interest shall accrue from the date of
closing at the prime rate as published in the Wall Street Journal on the date of
closing and as adjusted annually on the anniversary date of the promissory note.
The first payment shall be due one month from the date of closing. The
promissory note shall be subordinate to all the Company's indebtedness incurred
prior to the deceased Member's death to banks or other lending institutions and
shall include any renewals, extensions or modifications of those debts. The
promissory note may be prepaid without penalty.
(d) A personal representative's interest in the Company is that of
an assignee under Section 3.5.
3.4 CALL OPTION. In the event a Member attempts to transfer a membership
interest in violation of this Agreement, the Company may redeem that Member's
membership interest. This option may be exercised by giving the Member whose
interest is to be redeemed written notice of the exercise of the option.
(a) The purchase price for the interest shall be sixty percent (60
%) of the balance in the transferring Member's Capital Account as of the last
day of Company's most recently ended tax year.
(b) Closing shall take place within sixty (60) days after notice
of the exercise of the option is given;
(c) The purchase price shall be paid as follows:
(i) Twenty percent (20%) of the purchase price shall be
paid by cashier's check or by certified check or by wire transfer at closing;
and
(ii) The balance of the purchase price according to the
terms of a promissory note from the Company providing for payment of principal
and interest in equal monthly installments amortized over a period of ten (10)
years and payable in full at the end of ten (10) years. Interest shall accrue
from the date of closing at the prime rate as published in the Wall Street
Journal on the date of closing and as adjusted annually on the anniversary date
of the promissory note. The promissory note shall be subordinate to all the
Company's indebtedness to banks or other lending institutions and shall include
any renewals, extensions or modifications of those debts. The promissory note
may be prepaid without penalty.
3.5 RIGHTS OF ASSIGNEE. Subject to the other provisions of this Article, a
Member may assign the Member's membership interest in the Company in whole or in
part. The assignment of a membership interest does not entitle the assignee to
participate in the management and affairs of the Company or to become a Member.
An assignee is entitled to receive, to the extent assigned, the distributions to
which the assigning Member would otherwise be entitled.
3.6 ADMISSION OF A SUBSTITUTE MEMBER. An assignee of a membership
interest is admitted as
a substitute Member, having all the rights and powers of the assigning Member
only if: (a) the other Members unanimously consent in writing; and (b) the
assignee agrees to be bound by the terms and conditions of this Agreement, An
assignee will be considered to be a substitute Member upon signing a counterpart
of this Agreement.
3.7 TAXABLE TERMINATION/SECURITIES VIOLATION. No Member shall transfer or
dispose of a membership interest if the disposition: (a) would cause a
termination of the Company under the Internal Revenue Code of 1986 as amended
("IRC"); or (b) would not comply with an applicable state and federal securities
laws and regulations.
ARTICLE 4
RESTRICTIONS ON WITHDRAWAL OF MEMBERS
4.1 WITHDRAWAL OF A MEMBER. Except as required by law, a Member may
withdraw only if the written consent or ratification of the remaining Members
holding a majority of the Percentage Interest in the Company has been given to
the withdrawal.
4.2 WRONGFUL WITHDRAWAL. A Member who withdraws from the Company in
violation of this Agreement shall not be entitled to any further distributions
and shall be liable to the Company for all damages caused by the wrongful
withdrawal. The Company may offset part or all of the damages against amounts
to which the former Member is otherwise entitled. The Company may redeem the
Member's membership interest for the purchase price and upon the terms specified
in Section 3.4.
ARTICLE 5
VOTING RIGHTS
5.1 VOTING RIGHTS OF MEMBERS. Each Member is entitled to vote in
proportion to the Member's Percentage Interest in the Company on each of the
following matters:
(a) To dissolve the Company;
(b) To approve the merger of the Company into another limited
liability company;
(c) To approve the sale, exchange, lease or other transfer of all
or substantially all of the Company assets, other than in the ordinary course of
business;
(d) To amend the Articles of Organization or this Agreement;
(e) To select or remove a Manager;
(f) To approve any transaction involving an actual or potential
conflict of interest between a Manager and the Company, including compensation
of a Manager;
(g) To approve the voluntary withdrawal of a Member;
(h) To approve the admission of a successor or additional Member;
(i) To continue the Company after an event causing dissolution;
and
(j) To indemnify a Manager, employee or agent of the Company.
5.2 CONSENT REQUIRED.
(a) The unanimous vote or written consent of all of the Members is
required to admit an additional or substitute Member, to dissolve and liquidate
the Company or to amend this Agreement respecting interests in net income and
net losses, interests in capital of the Company, rights on dissolution, rights
of allocation and distribution, the increase in liability of any Member, or this
Section.
(b) The vote of Members holding a majority of the Members'
Percentage Interests is required for all other actions of the Members.
5.3 ARBITRATION. If there is a tie vote among the Members, any Member may
make a written demand for arbitration under this Section. The parties shall
attempt to agree on the selection of a single arbitrator to be hired for the
purpose of breaking the tie, and whose determination is binding on all parties.
If the parties are unable to agree on the selection of an arbitrator within 15
days after the demand, any party may demand that the tie be broken under the
commercial arbitration rules of the American Arbitration Association. The
arbitration award is enforceable as a judgment of any court having proper
jurisdiction. The costs of arbitration shall be paid by the Company. Each
party shall bear that party's own legal expenses.
ARTICLE 6
MEETINGS
6.1 CALL OF MEETING. The Manager, or Members holding at least fifty
percent (50 %) of the Percentage Interests may call a meeting.
6.2 NOTICE OF MEETING. At least ten (10) days, but no more than sixty
(60) days, prior to the date fixed for a meeting of the Members, written notice
of the time, place and purposes of the meeting shall be mailed, as provided
below, transmitted by facsimile, personally delivered or delivered by a
commercial delivery service to each Member. The business to be conducted at the
meeting is limited to those matters specified in the notice.
6.3 MAILING OF NOTICE. Notice is served when deposited in the United
States mail, postage paid, addressed to the Member at the Member's last address
appearing in the Company's records.
6.4 WAIVER OF NOTICE. A Member may waive notice of a meeting by facsimile
or other writing. The waiver may be given to the Company before, at, or after
the meeting. A Member who attends the meeting in person or by proxy has waived
notice of the meeting unless, at the commencement of the meeting, the Member
states an objection on the basis that the meeting is not lawfully called or
convened.
6.5 PROXIES. A Member may vote by proxy executed in writing by the
Member. The proxy shall be filed with the Company before or at the time of the
meeting. A proxy shall not be valid after three months from the date of
execution, unless otherwise provided in the proxy.
6.6 PARTICIPATION IN MEETINGS. Members may participate in a meeting by a
conference telephone or similar communication equipment. All participants must
be able to hear each other, and shall be advised of the communication equipment.
The names of the participants in the conference shall be
divulged to all participants. Participation in a meeting pursuant to this
procedure shall constitute presence in person at the meeting.
6.7 OTHER MATTERS. At a meeting of the Members, all matters that are not
covered by this Agreement shall be governed by the most recent edition of
Xxxxxxx Rules of Order.
6.8 ACTION WITHOUT A MEETING. Any action by Members may be taken without
a meeting and without prior notice if written consent to the action is signed by
Members having the requisite Percentage Interests. The Company shall give
prompt notice to all non-consenting Members of any action taken without a
meeting by less than unanimous written consent.
ARTICLE 7
CAPITAL CONTRIBUTIONS
7.1 INITIAL CAPITAL CONTRIBUTIONS. The value of the capital contributions
of the Members, the percentage interest ("Percentage Interest") of each Member
in the total capital of the Company and the total capital of the Company are set
out in Schedule A, which shall be amended to reflect additional capital
contributions.
7.2 PERCENTAGE INTEREST. A Member's Percentage Interest is equal to the
Member's proportionate share of the total capital of the Company.
7.3 WITHDRAWAL AND RETURN OF CAPITAL. Except as provided in this
Agreement, no Member may withdraw any portion of the Member's capital
contribution or be entitled to a return of the Member's capital contribution.
No Member shall have any personal liability for the repayment of the capital
contribution of any other Member.
7.4 CAPITAL ACCOUNTS. The Company shall establish and maintain a capital
account for each Member ("Capital Account"). Each Capital Account shall be: (a)
increased by (i) the amount of any cash or the fair market value of any property
contributed by the Member (net of any liabilities secured by the property which
the Company assumes or takes subject to under IRC Section 752); and (ii) the
Member's share of net profits and of any separately allocated items of income or
gain adjusted in accordance with Reg Section 1.704-1(b)(2)(iv)(g); and (b)
decreased by (i) any cash or the fair market value of any property distributed
to the Member (net of any liabilities secured by the property which the Member
assumes or takes subject to under IRC Section 752); and (ii) the Member's share
of net losses and of any separately allocated items of deduction or loss,
adjusted in accordance with Reg Section 1.704-1(b)(2)(iv)(g). Allocation of
items of income, gain, deduction or loss shall reflect the difference between
the book value and tax cost basis of assets contributed by the Members.
7.5 ADDITIONAL CONTRIBUTIONS TO CAPITAL. Any Member may at any time, with
the unanimous written consent of the Members, make additional contributions to
the capital of the Company. The Manager may request additional contributions to
capital from the Members in proportion to their Percentage Interests. If any
Member fails to contribute additional capital, then the other Member(s) may
contribute the additional capital not paid in by the refusing Member and shall
receive an increase in the proportionate share of the ownership or interest in
the entire Company in direct proportion to the additional capital contributed.
If more than one Member wishes to contribute the additional capital not paid by
the refusing Member, each Member shall be permitted to contribute a pro rata
share.
7.6 CAPITAL CONTRIBUTION OTHER THAN CASH. No Member may make a
contribution of property
other than cash without the consent of the Manager. Contributed property shall
be valued by the Company as of the date of its contribution.
7.7 INTEREST ON CAPITAL. No interest shall be paid on any capital
contribution.
7.8 COMPLIANCE WITH IRC SECTION 704(b). The provisions of this Article
which relate to the maintenance of Capital Accounts are intended and, if
necessary, shall be modified to cause the allocations of profits, losses,
income, gain and credit pursuant to Article 8 to have substantial economic
effect under IRC Section 704(b) and the regulations promulgated under it. This
Agreement shall not be construed as creating a deficit restoration obligation or
otherwise personally obligate any Member to make a capital contribution in
excess of the initial contribution.
ARTICLE 8
ALLOCATIONS AND DISTRIBUTIONS
8.1 ALLOCATION OF PROFITS AND LOSS. Except as may be required by IRC
Section 704(c) and Sections 8.2, 8.3 and 8.4, profits and losses shall be
allocated among the Members in proportion to their Percentage Interests.
8.2 COMPANY MINIMUM GAIN CHARGEBACK. If there is a net decrease in
Company minimum gain for a taxable year as determined under Reg Section
1.704-2(d), each Member must be allocated items of income and gain for that
taxable year equal to that Member's share of the net decrease in Company minimum
gain. This provision is intended to be a minimum gain chargeback within the
meaning of Reg Section 1.704-2(b) and shall be interpreted and applied
consistently with the regulations.
8.3 MEMBERS MINIMUM GAIN CHARGEBACK. If during a taxable year there is a
net decrease in member nonrecourse debt, any Member with a share of that member
nonrecourse debt minimum gain (determined under Reg Section 1.704-2(i)(5)) as of
the beginning of that taxable year must be allocated items of income and gain
for that taxable year (and, if necessary, for succeeding taxable years) equal to
that Member's share of the net decrease in the member nonrecourse debt minimum
gain.
8.4 QUALIFIED INCOME OFFSET. If any Member unexpectedly receives an
adjustment, allocation or distribution described in Reg Section
1.704-1(b)(2)(ii)(d)(4), (5), or (6), that Member will be allocated items of
income and gain in an amount and manner sufficient to eliminate, to the extent
required by the regulations, the Member's Capital Account deficit.
8.5 DISTRIBUTIONS. The Manager may, in the Manager's sole discretion,
make distributions to the Members, unless after giving effect to the
distribution: (a) the Company would not be able to pay its debts as they become
due in the usual course of business; or (b) the Company's assets are less than
its total liabilities. The Manager may base a determination that the
distribution is permissible on financial statements prepared on the basis of
accounting practices and principles that are reasonable in the circumstances, on
a fair valuation or any other method that is reasonable. Except as otherwise
stated in this Agreement, all distributions shall be made in proportion to the
Members' Percentage Interests.
8.6 LIQUIDATION. All distributions in liquidation of the Company or of
any Member's interest in the Company shall be in an amount equal to the positive
balance in the Member's Capital Account as determined after all adjustments
required by Treasury Regulation Section 1.704-1.
8.7 DISTRIBUTIONS OF ASSETS IN KIND. With respect to distributions made
under this Article, the
Company may distribute assets in kind. The valuation of Company property shall
be determined by the Manager unless any Member requests in writing that an
independent appraisal be made. If an appraisal is requested, the Manager shall
select the appraiser. The Company shall pay the cost of the appraisal. The
valuation shall be determined by the appraisal.
8.8 COMPLIANCE WITH SUBCHAPTER K. The provisions of this Article which
relate to allocations of tax items to Members are intended and, if necessary,
shall be modified to conform to the provisions of the Internal Revenue Code and
the Treasury Regulations which apply to PARTNERS AND PARTNERSHIPS.
ARTICLE 9
INDEMNIFICATION
9.1 INDEMNIFICATION OF MANAGER. The Company shall indemnify a Manager for
all costs, losses, liabilities and damages paid or accrued by the Manager in
connection with the business of the Company, to the fullest extent allowed by
law.
9.2 INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Company may, in the
discretion of the Manager, indemnify an employee or other agent of the Company
for all costs, losses, liabilities and damages paid or accrued by the employee
or agent in connection with the business of the Company, to the fullest extent
allowed by law.
ARTICLE 10
DISSOLUTION AND WINDING UP
10.1 DISSOLUTION OF THE COMPANY. The Company is dissolved upon the
first to occur of the following:
(a) The expiration of the term stated in Article III of the Articles of
Organization;
(b) Unanimous consent of all Members to dissolve and liquidate;
(c) The date on which the Company is dissolved by operation of law or
judicial decree;
(d) The date on which a Member dies, withdraws, dissolves or is
declared bankrupt, unless within 90 days after the event, the remaining Members
holding a majority of the remaining Percentage Interest consent: (i) to continue
the Company's business; and (ii) if required by the Act or this Agreement, to
admit one or more additional Members; or
(e) The date on which all or substantially all of the assets of the
Company are sold or otherwise disposed of.
10.2 WINDING UP AND DISTRIBUTION.
(a) Upon the dissolution of the Company, the Manager shall within a
reasonable period of time wind up the business and affairs of the Company and
file the appropriate notice of dissolution. While winding up the Company
affairs, the Manager shall continue to exercise all of the powers granted in
this Agreement.
(b) In connection with the winding up, the Company's assets shall be
disposed of in the following order of priority:
(i) To pay the debts and liabilities of the Company and the
expenses of winding up;
(ii) To set up any reserve (to be held in a special interest
bearing account) which the Manager deems reasonably necessary to meet the
Company's obligations provided that the balance of the reserve remaining after
payment of those obligations shall be distributed under section (iii);
(iii) The balance of the assets, if any, shall be distributed to
the Members in proportion to their Percentage Interests.
10.3 SOURCE OF RETURN OF CAPITAL. Upon dissolution, a Member may look
solely to the assets of the Company for the return of the Member's capital
contribution, and is entitled only to a cash distribution in return for the
Member's capital contribution, unless otherwise allowed by the Manager, in the
Manager's sole discretion. If the Company's assets remaining after the payment
or discharge of the Company's obligations are insufficient to return the
Member's capital contribution, the Member has no recourse against the Manager,
the Company or any other Member.
ARTICLE 11
BOOKS AND RECORDS
11.1 RECORDS KEPT. The Manager shall maintain at the Company's
registered office, the following records:
(a) A current fist of the full name and last known address of each
Member and Manager;
(b) A copy of the Articles of Organization and any amendments;
(c) Copies of the Company's federal, state and local tax returns and
reports for the three most recent years;
(d) Copies of any financial statements of the Company for the three
most recent years;
(e) Copies of all operating agreements and amendments; and
(f) Copies of records that would enable a Member to determine each
Member's share of the Company's distributions and each Member's voting rights.
11.2 RIGHT TO INFORMATION. Upon reasonable written request and during
ordinary business hours, a Member or a Member's designated representative may
inspect and copy, at the Member's expense, any of the Company's records
described in Section 11.1. Upon written request of a Member, the Company shall
mail to the Member a copy of the Company's most recent annual financial
statement and of its most recent federal, state and local income tax returns and
reports.
11.3 TAX INFORMATION. Information relating to the Company that is
reasonably necessary for the preparation of the Members' Federal income tax
returns shall be prepared at Company expense and distributed to the Members
within seventy-five (75) days after the end of each fiscal
year of the Company.
ARTICLE 12
GENERAL
12.1 PROPER NOTICES. All notices and other communications required or
permitted under this Agreement shall be deemed to have been given if mailed,
postage paid, transmitted by facsimile, personally delivered or delivered by a
commercial delivery service, to the address listed on Schedule A, or to any
other address of which the party has given written notice.
12.2 APPLICABLE LAW. The validity, construction and performance of this
Agreement shall be governed by the laws of Michigan.
12.3 INTEGRATION. This Agreement is the entire agreement between the
parties as to its subject matter.
12.4 AMENDMENTS. Any amendment, modification or waiver of this
Agreement must be in writing and signed by the requisite number of Members.
12.5 SEVERABILITY. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be unenforceable, this
Agreement stall continue in full force and effect without the provision.
12.6 BENEFIT. This Agreement is binding upon and inures to the benefit
of the parties and their personal representatives, successors and permitted
assigns.
12.7 CAPTIONS. Captions contained in this Agreement are for reference
and in no way define, limit or extend the Agreement or the intent of any of its
provisions.
12.8 COUNTERPART. This Agreement may be executed in counterparts, each
of which is enforceable against the party executing it. All of the counterparts
shall constitute one instrument.
12.9 RIGHTS AND REMEDIES. The rights and remedies provided by this
Agreement are cumulative.
12.10 CREDITORS. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any creditor of the Company or the creditor of
any Member.
12.11 TAX TREATMENT. It is expected that the Internal Revenue Service
will issue a ruling in the near future which may necessitate an amendment to the
Agreement. The Members agree to amend this Agreement to the extent necessary to
obtain: (a) limited liability for the Members pursuant to the Act; and (b)
Federal income tax treatment as a partnership pursuant to the Code.
The parties executed this Agreement on the date stated on the first page.
WOLVERINE ENERGY, L.L.C. MEMBERS
By: /s/ Xxxxxx X. Xxxxxxx, Xx. /s/ Xxxxxx X. Xxxxxxx, Xx.
--------------------------- ---------------------------
Xxxxxx X. Xxxxxxx, Xx. Xxxxxx X. Xxxxxxx, Xx.
/s/ Xxxxx Xx Xxxxxxx
--------------------
Xxxxx Xx Xxxxxxx
SCHEDULE A
LIST OF MEMBERS AND CAPITAL CONTRIBUTIONS
Name and Address Capital Contribution Percentage Interest
---------------- -------------------- --------------------
XXXXXX X. XXXXXXX, XX. $990 99%
0000 Xxxxxxxxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000
XXXXX XX XXXXXXX $10 1%
0000 Xxxxxxxxxxx --- --
Xxxx Xxxxxxx, Xxxxxxxx 00000
TOTAL $1,000 100%
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