DELTA TOWNSHIP UTILITIES, LLC
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LIMITED LIABILITY COMPANY AGREEMENT
____________________________________________________________
DATED AS OF JULY 5, 2001
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TABLE OF CONTENTS
DELTA TOWNSHIP UTILITIES, LLC 1
LIMITED LIABILITY COMPANY AGREEMENT 1
ARTICLE I ORGANIZATION 2
Section 1.1 2
Section 1.2 2
Section 1.3 2
Section 1.4 2
Section 1.5 2
Section 1.6 2
ARTICLE II PURPOSE AND POWERS 3
Section 2.1 3
Section 2.2 3
ARTICLE III MEMBERS 6
Section 3.1 3
Section 3.2 4
Section 3.3 4
Section 3.4 5
ARTICLE IV MANAGEMENT 5
Section 4.1 5
Section 4.2 6
Section 4.3 7
Section 4.4 7
Section 4.5 7
Section 4.6 7
Section 4.7 7
Section 4.8 8
Section 4.9 8
Section 4.10 8
Section 4.11 10
ARTICLE V DEADLOCK RESOLUTION 10
Section 5.1 10
Section 5.2 11
ARTICLE VI SERVICE ARRANGEMENTS, CAPITAL CONTRIBUTIONS,
MATERIAL APPROVALS, ETC 12
Section 6.1 12
Section 6.2 12
Section 6.3 13
Section 6.4 13
Section 6.5 14
Section 6.6 14
ARTICLE VII ALLOCATIONS, DISTRIBUTIONS AND WITHHOLDING 14
Section 7.1 14
Section 7.2 15
Section 7.3 15
Section 7.4 15
ARTICLE VII TAX MATTERS 16
Section 8.1 16
Section 8.2 16
ARTICLE IX BANKING; ACCOUNTING; BOOKS AND RECORDS 16
Section 9.1 16
Section 9.2 17
Section 9.3 17
Section 9.4 17
Section 9.5 17
ARTICLE X LIABILITY, EXCULPATION AND INDEMNIFICATION 18
Section 10.1 18
Section 10.2 18
Section 10.3 19
ARTICLE XI TRANSFER OF INTERESTS 21
Section 11.1 21
Section 11.2 22
Section 11.3 22
ARTICLE XII DISSOLUTION AND TERMINATION OF THE COMPANY 22
Section 12.1 22
Section 12.2 23
Section 12.3 23
Section 12.4 23
ARTICLE XIII CERTAIN DEFINITIONS 24
Section 13.1 24
ARTICLE XIV MISCELLANEOUS PROVISIONS 26
Section 14.1 26
Section 14.2 26
Section 14.3 26
Section 14.4 27
Section 14.5 27
Section 14.6 27
Section 14.7 27
Section 14.8 27
Section 14.9 28
Section 14.10 28
Section 14.11 28
LIST OF ATTACHMENTS
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Schedule 1 - Interest Percentages, Etc.
Schedule 2 - Matters Requiring Action of the board of Managers of the Company
INDEX OF DEFINED TERMS
TERM SECTION NUMBER
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1935 Act 5.2(b)(i)
Acceptance Date 5.2(b)(i)
Affiliate 13.1
Agreement Preamble
Applicable Interest 5.2(b)(i)
Board of Managers 3.2
Business Day 13.1
Capital Account 13.1
Capital Contribution 13.1
Certificate 1.2
Cinergy Solutions Managers 4.1(c)
Cinergy Solutions Service Agreement 6.1
Cinergy Solutions Preamble
Claims 10.3(a)
Code 13.1
Company Preamble
Covered Person 13.1
Damages 10.3(a)
Deadlock 5.1
Delaware Act Recitals
Disabling Conduct 13.1
Executive Committee 4.7
First Offer 11.1(b)
First Offer Price 11.1(b)
Fiscal Year 1.6
Interest 13.1
Interest Percentage 13.1
HSR Act 6.2(c)
Joint Venture Agreement Recitals
Lien 5.2(b)(i)
Liquidating Trustee 12.1
Manager 13.1
Material Approvals 6.2(c)
Member Recitals, 13.1
Members Recitals
Net Loss 13.1
Net Profit 13.1
Offeree 5.2(b)(i)
Offered Interest 11.1(b)
Delta Township Project Recitals
Person 13.1
Proceeding 10.3(a)
Proponent 5.1(i)
Proposal 5.1(i)
Regulatory Approval 5.2(b)(i)
SEC 6.2(c)
Second Member 11.1(b)
Selling Member 11.1(b)
Settlement Date 5.2(b)(i)
Service Arrangements 6.1
Subsidiary or Subsidiaries 13.1
Tax Matters Partner 8.1
Transfer 11.1(a)
Treasury Regulations 13.1
Trigen Solutions Preamble
Trigen Solutions Managers 4.1(c)
Trigen Solutions Service Agreement 6.1
LIMITED LIABILITY COMPANY AGREEMENT
OF
DELTA TOWNSHIP UTILITIES, LLC
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of DELTA
TOWNSHIP UTILITIES, LLC a Delaware limited liability company (the "Company"),
dated as of July 5, 2001 is made by and between Cinergy Solutions Holding
Company, Inc., a Delaware corporation ("Cinergy Solutions"), and Trigen
Solutions, Inc., a Delaware corporation ("Trigen Solutions"). Certain
capitalized terms used herein without definition shall have the meanings
specified in Section 13.1.
W I T N E S S E T H
WHEREAS, Cinergy Solutions and Trigen Solutions have been engaged in
discussions with General Motor Corporation ("GM") concerning the provision of
certain utilities and services to a proposed metal stamping facility and
assembly facility of GM located in Delta Township, Michigan (the "GM Delta
Township Project");
WHEREAS, pursuant to those discussions, and to assist in implementing and
performing the GM Delta Township Project, Cinergy Solutions and Trigen Solutions
have formed the Company under the Delaware Limited Liability Company Act (the
"Delaware Act"); and
WHEREAS, as contemplated by the Delaware Act, Cinergy Solutions and Trigen
Solutions, as the sole initial members of the Company (each in such capacity, a
"Member"), are entering into this Agreement to govern the affairs of the Company
and the conduct of its business.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:
ARTICLE I ORGANIZATION
Section 1.1. Name.
The name of the Company is "Delta Township Utilities, LLC." The business of
the Company may be conducted upon compliance with all applicable laws under any
other name designated by the Company with the concurrence of the Board of
Managers by action taken pursuant to Section 4.4 or 4.5 below.
Section 1.2. Term.
The existence of the Company commenced on July 5, 2001, the date of the
filing of the Certificate of Formation (the "Certificate") with the office of
the Secretary of State of the State of Delaware, and shall continue until the
Company is dissolved in accordance with the provisions of this Agreement.
Section 1.3. Registered Agent and Office.
The registered office of the Company in Delaware shall be c/o The
Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx,
Xxxxxxxx. At any time, the Company may designate another registered agent and/or
registered office. The registered agent for service of process on the Company in
the State of Delaware shall be c/o The Corporation Trust Company, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx.
Section 1.4. Principal Places of Business.
The principal place of business of the Company shall be at c/o Cinergy
Corp., 000 X. Xxxxxx Xxxxxx Xxxxxxxxxx, Xxxx 00000. The Company may change the
location of the Company's principal place of business at any time upon agreement
of its Members. Until the expiration or termination of, and the satisfaction of
all obligations under the Utility Services Agreement and the Loan Documents, the
Company shall give GM and the Lender, respectively, notice of any such change in
location.
Section 1.5. Qualifications in Other Jurisdictions.
The Company shall be qualified or registered to do business in Michigan and
in such jurisdictions, if any, in which the Company transacts business and in
which such qualification or registration is required by law or deemed advisable
by the Company. The Secretary of the Company, as an authorized person within the
meaning of the Delaware Act, shall execute, deliver and file any certificates
(and any amendments and/or restatements thereof) necessary for the Company to
qualify to do business in any such jurisdiction.
Section 1.6. Fiscal Year.
The fiscal year of the Company (the "Fiscal Year") shall end on the 31st
day of December in each year. The Company shall have the same fiscal year for
income tax and for financial and accounting purposes.
ARTICLE II PURPOSE AND POWERS
Section 2.1. Purpose of the Company.
The purpose of the Company is to develop, design, construct, own, operate
and maintain the System (as defined in the Utility Services Agreement); to
obtain financing for such activities; and to take all actions incident thereto
(the "Purpose"). The Members will cooperate and assist each other in
accomplishing the Purpose. The scope of work for the site, building and
professional services to be rendered to GM pursuant to the Utility Services
Agreement are described within the Joint Response. The Joint Response was
submitted pursuant to GM's Request for Proposal WGF # 00033-US.
Section 2.2. Powers of the Company.
Subject to the terms and conditions of this Agreement, the Company shall
have the power and authority to take any and all actions necessary, appropriate,
proper, advisable, incidental or convenient to or for the furtherance of the
Purpose; provided, however, that notwithstanding any other provision of this
Agreement, unless otherwise agreed to in writing by Xxxxxx Financial Services,
Inc., a Colorado corporation, or its successors and assigns ("Lender"), until
all of the Company's obligations under that certain Loan and Security Agreement
to be entered into September 6, 2001, by and between the Company and Lender (as
the same may be amended, modified or supplemented from time to time, the "Loan
Agreement") and all documents related thereto (collectively, with the Loan
Agreement, the "Loan Documents") are satisfied in full pursuant to the terms
thereof, none of the Members, the Managers, the Officers or the Company shall
take any action in contravention of the Company's obligations and covenants
contained in the Loan Documents, including without limitation, the covenants set
forth in Sections 7.01(n), (p), (q), (r), (t) and (u) of the Loan Agreement.
ARTICLE III MEMBERS
Section 3.1. Members.
The name, initial Capital Contributions and initial Interest Percentage of
each Member are listed on Schedule 1 attached hereto. The Company shall be
required to update Schedule 1 from time to time as necessary to reflect
accurately the information therein. Any reference in this Agreement to Schedule
1 shall be deemed to be a reference to Schedule 1 as amended and in effect from
time to time.
Section 3.2. Powers of Members.
Except as otherwise provided herein, the Members shall have no power to
transact any business in the Company's name nor have the power to sign documents
for or otherwise bind the Company. Additional Members may only be added to the
Company upon the unanimous consent of existing Members and otherwise in
compliance with Article XI hereof. Subject to the provisions of the Delaware
Act, the Certificate and this Agreement, the Members hereby delegate any or all
such powers to the Board of Managers of the Company (the "Board of Managers") to
carry out the business affairs of the Company on the Members' behalf. Any power
not reserved to the Members or delegated to the officers shall remain with the
Board of Managers. The Board of Managers shall be appointed in accordance with
the provisions of Article IV.
Section 3.3. Meetings of Members.
(a) Annual Meeting. An annual meeting of the Members shall be held once a
year on such date as the Board of Managers shall designate.
(b) Special Meetings. Special meetings of the Members, for any purpose or
purposes, may be called by the Board of Managers or at the request of
any Member. Business transacted at any special meeting of Members
shall be limited to the purposes stated in the notice, unless
otherwise agreed by the Members attending the meeting.
(c) Place of Meeting. All meetings of Members shall be held at such place
within or without the State of Delaware as the Board of Managers shall
designate.
(d) Notice of Meetings. Notice of all meetings of Members, stating the
time, place and purpose of the meeting, shall be given at least two
(2) days and not more than sixty (60) days before the meeting. Any
adjourned meeting may be held as adjourned without further notice,
provided that any adjourned session or sessions are held within sixty
(60) days after the date set for the original meeting. No notice need
be given to any Member if a written waiver of notice, executed before
or after the meeting by such Member or his representative thereunto
duly authorized, is filed with the records of the meeting, or to any
Member who attends the meeting without protesting prior thereto or at
its commencement the lack of notice to him. A waiver of notice need
not specify the purposes of the meeting.
(e) Quorum and Voting. The presence of at least one duly authorized
representative of each Member shall constitute a quorum for purposes
of transacting business at any meeting of Members. Except as otherwise
provided by this Agreement, any question brought before any meeting
shall be decided by the Members who, at the time in question and in
the aggregate, hold, or hold proxies with respect to, one hundred
percent (100%) of Interest Percentages. Interests of Members may be
voted in person or by proxy.
(f) Electronic Communications. Members may participate in any meeting of
Members by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting
can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
(g) Actions of Members Without a Meeting. Any action required to be taken
at any meeting of Members or otherwise, or any action which may be
taken at any meeting of Members or otherwise, may be taken without a
meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by Members
having one hundred percent (100%) of the Interest Percentages. Any
such written consent may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall
constitute one and the same document.
Section 3.4. Member Representations.
(a) Investment. Each Member represents and warrants to the other and the
Company that (i) its Interest has been acquired for its own account,
for investment, and not with an intent or a present view to
participating, directly or indirectly, in or for the resale in
connection with any distribution (as interpreted under any applicable
law) thereof, nor with any present intention of dividing its
participation, distribution, reselling, assigning or otherwise
disposing of all or part of such Interest, and (ii) it will not make
or offer to make a transfer of its Interest in violation of the
Securities Act of 1933, as amended, or any other applicable Federal or
state securities laws.
(b) Binding Obligation. Each Member represents and warrants to the other
Members and the Company that this Agreement has been duly authorized,
executed and delivered on behalf of such Member and is the legal,
valid and binding obligation of such Member, enforceable against it in
accordance with its terms.
ARTICLE IV MANAGEMENT
Section 4.1. The Board of Managers.
(a) General. Except as specifically set forth herein, the business and
affairs of the Company shall be managed by or under the direction of
the Board of Managers. Other than rights and powers expressly reserved
to Members by this Agreement or the Delaware Act, the Board of
Managers shall have full, exclusive and complete discretion to manage
and control the business and affairs of the Company, to make all
decisions affecting the business and affairs of the Company and to
take all such actions as it deems necessary or appropriate to
accomplish the purposes of the Company as set forth herein.
(b) Duties. The Board of Managers shall be obligated to devote only as
much of their time to the Company's business as shall be reasonably
required in light of the Company's business and objectives. A Manager
shall perform his or her duties in good faith, in a manner he or she
reasonably believes to be in the best interests of the Company, and
with such care as an ordinarily prudent person in a like position
would use under similar circumstances.
(c) Board Composition; Removal and Vacancies. Cinergy Solutions shall be
entitled to designate one-half of the Managers to the Board of
Managers and Trigen Solutions shall be entitled to designate the
remaining half of the Managers to the Board of Managers. Those
Managers designated to the Board of Managers by Cinergy Solutions are
referred to herein as the "Cinergy Solutions Managers" and those
Managers designated to the Board of Managers by Trigen Solutions are
referred to herein as the "Trigen Solutions Managers". Each Manager
shall serve until his or her removal, resignation, death or
retirement. Each Member shall vote all of its Interest and shall take
all other action necessary or desirable within its control (including,
without limitation, attendance at meetings in person or by proxy and
execution of written consents in lieu of meetings), so that the
designees of the other Member are duly elected to the Board of
Managers. Upon the removal, resignation, death or retirement of a
Manager, or vacation of office by any Manager for any reason, his or
her successor shall be nominated and elected by the same Member as
originally proposed by the former Manager. Any successor so elected
shall retain his or her office during such time only as the former
Manager was entitled to retain the same. Trigen Solutions shall have
the exclusive right to remove any Trigen Solutions Manager at any time
and for any reason whatsoever and to fill the vacancy of the Trigen
Solutions Managers, and Cinergy Solutions shall have the exclusive
right to remove any Cinergy Solutions Manager at any time and for any
reason whatsoever and to fill the vacancy of the Cinergy Solutions
Managers.
(d) Restrictions on the Board. The Board of Managers shall not: (i) do any
act in contravention of any applicable law or regulation, or provision
of this Agreement; (ii) possess Company property for other than a
Company purpose; or (iii) admit any new Members without the unanimous
consent of existing Members or without compliance with Article XI
hereof.
Section 4.2. Notice.
Meetings of the Board of Managers may be held at such places and at such
times as the Board of Managers may from time to time determine and, if so
determined by a quorum of the Board of Managers, no advance notice of meeting
need be given. Any Manager may at any time call a meeting of the Board of
Managers. Written notice of the time, place, and purpose of such meeting shall
be served by registered or certified, prepaid first class, mail, or by fax or
cable, upon each member of the Board of Managers and shall be given at least
twenty-four (24) hours prior to the time of the meeting. No notice need be given
to any Manager if a written waiver of notice, executed before or after the
meeting by such Manager thereunto duly authorized, is filed with the records of
the meeting, or to any Manager who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him. A waiver of notice
need not specify the purposes of the meeting.
Section 4.3. Meetings; Electronic Communications.
Regular meetings of the Board of Managers shall be held on such dates as
the Board of Managers shall agree but not less frequently than once during each
fiscal year of the Company. Members of the Board of Managers, or of any
committee designated by the Board, may participate in a meeting of such Board or
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting by such means shall constitute presence in person
at such meeting.
Section 4.4. Quorum and Voting.
A majority of the Managers shall constitute a quorum for the transaction of
business at a meeting of the Board of Managers, provided, that at least one
Cinergy Solutions Manager and one Trigen Solutions Manager are present. Action
by the Board of Managers must be authorized by the unanimous vote of the
Managers present at the meeting.
Section 4.5. Action Without a Meeting.
Any action which is required to be, or which may be, taken at any annual,
regular or special meeting of the Board of Managers or otherwise, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by all of the
Managers in office. Any such written consent may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same document.
Section 4.6. Delegation of Powers.
Subject to any limitation set forth in the Delaware Act, the Board of
Managers may delegate any of its powers to committees or to officers consisting
of persons who may or may not be Managers. Every officer or committee shall, in
the exercise of the power so delegated, comply with any restrictions that may be
imposed on them by the Board of Managers.
Section 4.7. Executive Committee.
The Board of Managers shall have an Executive Committee consisting of two
(2) Managers, one Cinergy Solutions Manager and one Trigen Solutions Manager
(the "Executive Committee"). Actions of the Executive Committee shall require
unanimous consent of both Managers. Meetings of the Executive Committee may be
called by any member thereof upon twenty-four (24) hours' prior notice. The
Executive Committee shall be empowered to act on such matters as may be from
time to time delegated to it by the Board of Managers and in accordance with the
terms and conditions of any such delegation.
Section 4.8 Operating Committee.
The Board of Managers shall have an Operating Committee consisting of four
(4) members, two Cinergy Solutions members and two Trigen Solutions members (the
"Operating Committee"). Actions of the Operating Committee shall require
unanimous consent of all four members. The Operating Committee shall conduct
regular monthly meetings (in person or telephonically). In addition, any member
of the Operating Committee may call a meeting upon 24 hours' prior notice. The
Operating Committee shall be empowered to: (i) approve annual operating budgets;
(ii) review monthly operations reports; (iii) approve construction budgets based
on approved pro formas; (iv) review construction reports; (v) review the status
of development efforts; and (vi) approve any material changes to the budget. The
Operating Committee shall be further empowered to act on such additional matters
as may be from time to time delegated to it by the Board of Managers and in
accordance with the terms and conditions of any such delegation.
Section 4.9. Chairperson and Vice Chairperson.
The Board of Managers shall designate one of its members as the Chairperson
and another as the Vice Chairperson. The Trigen Solutions Managers shall have
the right to designate the Chairperson and the Cinergy Solutions Managers shall
have the right to designate the Vice Chairperson, with each appointee serving
for a term commencing from the date of the formation of the Company and
continuing until May 9, 2003. Thereafter, the Board of Managers (acting together
and without distinguishing between the Trigen Solutions Managers and the Cinergy
Solutions Managers) shall designate one of its members to serve as the
Chairperson and another member to serve as the Vice Chairperson. Neither the
Chairperson nor the Vice Chairperson shall have any additional or special voting
rights and either may be replaced at any time during his or her term by the
Managers by whom initially designated. The Chairperson shall preside over all
meetings of the Board of Managers. In the absence of the Chairperson, the Vice
Chairperson shall preside over a meeting of the Board of Managers. The
Chairperson and Vice Chairperson shall have such other authority and perform
such duties as the Board of Managers may determine in its sole discretion.
Section 4.10. Officers.
(a) General. The Cinergy Solutions Managers shall have the right to
appoint each of the President/Chief Executive Officer, the Secretary,
an Assistant Secretary and an Assistant Treasurer, subject to the
prior consent of Trigen Solutions (which consent shall not be
unreasonably withheld). The Trigen Solutions Managers shall have the
right to appoint each of the Executive Vice President/Chief Operating
Officer, the Treasurer and an Assistant Secretary subject to the prior
consent of Cinergy Solutions (which consent shall not be unreasonably
withheld).
(b) Election, Term of Office, Qualifications, and Compensation. Subject to
Section 4.9(a), the officers shall be appointed by the Board of
Managers. Except as provided in paragraphs (c) or (d) of this Section
4.9, each Officer shall hold office until his or her successor shall
have been chosen and qualified. Any two (2) offices, except those of
the Chief Executive Officer, the Chief Operating Officer and the
Secretary, may be held by the same Person, but no Officer shall
execute, acknowledge or verify any instrument in more than one
capacity if such instrument be required by law or this Agreement to be
executed, acknowledged or verified by any two (2) or more officers.
(c) Resignations and Removals. Any Officer may resign his or her office at
any time by tendering his or her resignation to the Chief Executive
Officer or the Secretary. Unless otherwise specified therein, such
resignation shall take effect upon delivery. Except as set forth in
Section 4.9(a), any Officer may be removed from office with or without
cause by the Board of Managers.
(d) Vacancies and Newly Created Offices. Except as set forth in Section
4.9(a), if any vacancy shall occur in any office by reason of death,
resignation, removal, disqualification or other cause, or if any new
office shall be created, such vacancies or newly created offices may
be filled by the Board of Managers.
(e) Conduct of Business. Subject to the provisions of the Certificate and
this Agreement (including without limitation Section 6.1), the
day-to-day operations of the Company shall be managed by its officers
and such officers shall have full power and authority to make all
business decisions, enter into all commitments and take such other
actions in connection with the business and operations of the Company
as they deem appropriate. Such officers shall perform their duties in
a manner consistent with the Certificate and this Agreement, and with
directions which may be given from time to time by the Board of
Managers.
(f) Chief Executive Officer. Subject to the further directive of the Board
of Managers, the Chief Executive Officer shall have general and active
management of the business of the Company subject to the supervision
of the Board of Managers, shall see that all orders and resolutions of
the Board of Managers are carried into effect and shall have such
additional powers and authority as are specified by the provisions of
this Agreement.
(g) Chief Operating Officer. The Chief Operating Officer shall have such
authority and perform such duties as the Board of Managers may
determine in its sole discretion.
(h) The Secretary. The Secretary shall attend all meetings of the Members
and the Board of Managers and record all the proceedings of the
meetings and all actions taken thereat in a book to be kept for that
purpose and shall perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of
all meetings of the Members or the Board of Managers, and shall
perform such other duties as may be prescribed by the Board of
Managers or the Chief Executive Officer, under whose supervision the
Secretary shall be. The Assistant Secretary, if there be one, shall,
in the absence of the Secretary or in the event of the Secretary's
inability to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other
powers as the Board of Managers may from time to time prescribe.
(i) Other Officers. The Board of Managers from time to time may appoint
such other officers or agents as it may deem advisable, each of whom
shall have such title, hold office for such period, have such
authority and perform such duties as the Board of Managers may
determine in its sole discretion. The Board of Managers from time to
time may delegate to one or more offices or agents the power to
appoint any such officers or agents and prescribe their respective
rights, terms of office, authorities and duties.
(j) Officers as Agents; Authority. The officers, to the extent of their
powers set forth in this Agreement, are agents of the Company for the
purpose of the Company's business, and the actions of the officers
taken in accordance with such powers shall bind the Company.
Section 4.11. Matters for Board Determination.
Notwithstanding anything to the contrary contained in this Agreement, the
Company shall not take any action with respect to matters identified on Schedule
2 hereto without first obtaining the approval of the Board of Managers;
provided, however, that any such action by the Company or the Board of Managers
shall be subject to the restrictions set forth in Section 2.2 hereof.
ARTICLE V DEADLOCK RESOLUTION
Section 5.1. Deadlocks.
A "Deadlock" shall be a fundamental breakdown in the relationship between
the parties as evidenced by the sequence of events described below.
(a) A Member or a Manager (the "Proponent"), advances a proposal (the
"Proposal") for consideration at a meeting of the Board of Managers or
Members of the Company; and
(b) Prior to the meeting at which the Proposal is advanced, the Proponent
notifies the Board of Managers and/or Members that it considers the
Proposal to be essential to the continuance of the Proponent's
investment in the Company, specifying the reasons therefore; and
(c) The Proposal is not approved at that meeting (as a result of either a
rejection thereof or a failure to consider it) or the meeting is
canceled by reason of a lack of a quorum resulting from the
non-attendance of the non-Proponent Member's designees, at which time
a Deadlock will be deemed to have occurred.
Section 5.2. Resolution Mechanism.
(a) Upon the occurrence of a Deadlock, the Proponent may cause the
Proposal and the Deadlock to be referred to the Chief Executive
Officers of the ultimate U.S. parent company of each of their
respective affiliated group of companies (i.e., Trigen Solutions
Energy Corporation, a Delaware corporation, in the case of Trigen
Solutions and Cinergy Corp., a Delaware corporation, in the case of
Cinergy Solutions). If such Chief Executive Officers are unable to
resolve the Deadlock within ten (10) business days thereafter, then
(but only then) the provisions of Section 5.2(b) shall apply;
provided, however, that the provisions of Section 5.2(b) shall not
apply until the first anniversary of the formation of the Company,
unless a failure to act by the Company would result in a breach of a
material agreement to which the Company is a party or violate any
applicable legal or regulatory requirement.
(b) (i) Within thirty (30) days after the expiration of the ten (10)
business-day period referred to in paragraph (a) above, the Proponent
may offer to purchase ("Purchase Offer") all (but not less than all)
of the Interests and any indebtedness of the Company (collectively the
"Applicable Interest") owned by the other Member ("Offeree"),
specifying (x) the aggregate price to be paid for the Applicable
Interest (which aggregate price shall specify separately the price
placed by the Proponent on each component of the Applicable Interest
and be payable only in cash, and other terms and conditions of the
Purchase Offer, (y) a date by which the Purchase Offer must be
accepted (which may not be less than thirty (30) days nor more than
sixty (60) days after the date the Purchase Offer is made) (the
"Acceptance Date") and (z) a proposed settlement date (the "Settlement
Date") therefor (which may not be less than thirty (30) days nor more
than sixty (60) days after the specified Acceptance Date). The
foregoing notwithstanding, the Settlement Date may be extended by
either Member by written notice to the other Member to the extent
reasonably required to accommodate (i) any necessary approval or
non-objection by or filing with any governmental or regulatory
authority (each, a "Regulatory Approval") including, without
limitation, under the Public Utility Holding Company Act of 1935 (the
"1935 Act"), or (ii) the removal of any liens, claims, charges or
encumbrances attributable to the selling Member and existing on the
Applicable Interest (each, a "Lien"), in either case being sought in
good faith by appropriate proceedings promptly initiated and
diligently conducted by the Member requesting the extension.
(ii) On or before the Acceptance Date, the Offeree may either accept
the Purchase Offer or may by written notice to the Proponent
elect to purchase all (but not less than all) of the Proponent's
Applicable Interest at the price and on the other terms and
conditions specified by the Proponent in the Purchase Offer. If
the Offeree neither accepts the Purchase Offer nor elects by the
Acceptance Date to purchase the Proponent's Applicable Interest,
the Offeree will be deemed to have accepted the Purchase Offer.
(iii)In either event, the settlement will take place on the
Settlement Date, as it may be extended per (b)(i) immediately
above, and the Proponent will purchase, and the Offeree will
sell, the Offeree's Applicable Interest, or the Offeree will
purchase, and the Proponent will sell, the Proponent's Applicable
Interest, as the case may be, at the price and place and on the
other terms and conditions specified by the Proponent in the
Purchase Offer, in either case free and clear of all Liens which
are not connected with the financing or operation of the Company,
at which time the Proponent's Applicable Interest or the
Offeree's Applicable Interest (as the case may be) shall be
delivered against payment of the said price. In order to comply
with applicable regulatory requirements, the purchasing Member
may designate a third party to purchase any portion or all of the
Applicable Interest which the purchasing Member is committed to
purchase hereunder, subject to the restrictions set forth in
Section 2.2 hereof.
ARTICLE VI SERVICE ARRANGEMENTS, CAPITAL CONTRIBUTIONS, MATERIAL APPROVALS, ETC.
Section 6.1. Initial Operations; Service Arrangements.
The Members intend to operate the Company initially with appropriate staff and
committed overhead and for the Company to purchase operational and other support
services, technical assistance and intellectual property rights, where
available, from the Members and/or their respective Affiliates or third
parities, in each case pursuant to terms approved by the Members pursuant to
Section 3.3 or the Board of Managers pursuant to Section 4.4 or 4.5 above, as
applicable ("Service Arrangements") Each Member and any Affiliate thereof which
provides services to the Company pursuant to any Service Arrangements shall do
so on an arm's length basis and shall permit the Company reasonable access to
its accounts and records pertaining to such Service Arrangements, including the
basis and computation of cost allocations.
Section 6.2. Budget; Capitalization; Material Approvals.
(a) A complete copy of the Company's first and, thereafter, every annual
budget shall be provided to each Member.
(b) Cinergy Solutions shall commit to contribute fifty-one percent (51%)
of the amount of the capital funding portion of the Company's annual
budget and Trigen Solutions shall commit to contribute forty-nine
percent (49%) of the Company's annual budget, to be paid to the
Company at such times as the Members shall mutually agree. All capital
contributions, when made, shall be in cash, unless the Members shall
otherwise mutually agree. The Members shall be liable only to make
their Capital Contributions pursuant to this Section 6.2 and no
Members shall be required to lend any funds to the Company or to make
any additional Capital Contributions to the Company.
(c) The capitalization of the Company shall be subject to the receipt by
the Members of all requisite Regulatory Approvals and all other
consents, licenses, approvals or other authorizations (together with
such Regulatory Approvals, "Material Approvals") necessary to permit
the establishment and operation of the Company as contemplated herein,
including, to the extent applicable, (i) expiration or termination of
the waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended ("HSR Act"), if applicable, (ii) the approval
of the Securities and Exchange Commission ("SEC") under the 1935 Act,
if applicable, and (iii) any Material Approval of Michigan or any
municipality, utility commission, regulatory body or governmental or
other agency or authority thereof.
(d) With reference to paragraph (c) above, Cinergy Solutions represents
and warrants that no approval or other action of the SEC under the
1935 Act is required to be obtained by Cinergy Solutions, the Company
or any other direct or indirect subsidiary of Cinergy Corp. in
connection with the formation of the Company and the transactions
contemplated by this Agreement or the other agreements relating to the
System.
Section 6.3. Status of Capital Contributions.
(a) Except as otherwise expressly provided in Article VII and XI, no
Member shall have the right to withdraw capital from the Company or to
receive any distribution or return of such Member's Capital
Contributions.
(b) No Member shall receive any interest, salary or drawing with respect
to its Capital Contributions or its Capital Account or for services
rendered on behalf of the Company or otherwise in its capacity as a
Member, except as otherwise specifically provided in this Agreement.
(c) No Member shall have priority over any other Member either as to the
return of the amount of its Capital Contribution to the Company or as
to any allocation of Net Profit and Net Loss.
Section 6.4. Capital Accounts.
(a) There shall be established on the books and records of the Company a
Capital Account for each Member. The initial Capital Account balance
of each Member shall be the respective amounts of each such Member's
initial Capital Contribution.
(b) Each Member's Capital Account shall be adjusted by (a) increasing such
balance by such Member's (i) allocable shares of Net Profit (allocated
in accordance with Article VII) and (ii) Capital Contributions, if
any, and (b) decreasing such balance by (i) the amount of cash or the
fair market value of distributions to such Member pursuant to Article
VII and (ii) such Member's allocable share of Net Loss (allocated in
accordance with Article VII). The provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply
with Treasury Regulation Section 1.704-1(b), and shall be interpreted
and applied in a manner consistent with such Treasury Regulation.
(c) Any Capital Contributions made in a form other than cash shall be
valued at the fair market value of such property as determined by the
mutual consent of the Members.
Section 6.5. Advances.
If any Member, at its reasonable discretion upon reasonable advance notice
to the other Member and only to the extent necessary to meet short-term working
capital requirements, shall advance any funds to the Company in excess of its
Capital Contributions, the amount of such advance shall neither increase its
Capital Account nor entitle it to any increase in its share of the distributions
of the Company. The amount of any such advance shall be a debt obligation of the
Company to such Member and shall be repaid to it by the Company at a reasonable
interest rate not to exceed a market rate, as soon as practicable. Any such
advance shall be payable and collectible only out of Company assets, and the
other Members shall not be personally obligated to repay any part thereof. No
Person who makes any loan to the Company shall have or acquire, as a result of
making such loan, any direct or indirect interest in the profits, capital or
property of the Company, other than as a creditor.
Section 6.6. Negative Capital Accounts.
No Member shall be required to make up a negative balance in its Capital
Account.
ARTICLE VII ALLOCATIONS, DISTRIBUTIONS AND WITHHOLDING
Section 7.1. Allocations of Net Profit and Net Loss.
(a) The Net Profit and Net Loss of the Company, including each item of
income, gain, loss and deduction, and credit shall be allocated with
respect to each Fiscal Year (or portion thereof) among the Members in
accordance with their respective Interest Percentages.
(b) Allocations for tax purposes shall be made in the same manner as the
allocations set forth under Section 7.1(a); however the following
adjustments shall be made and applied, to the extent necessary, in a
manner consistent with Treasury Regulation Section 1.704-1(b):
(i) The allocations of income, gain, loss and deduction pursuant to
Section 7.1(a) shall be adjusted to comply with the qualified
income offset requirements of Treasury Regulation Section
1.704-1(b) and the nonrecourse deduction or minimum gain
charge-back requirements of Treasury Regulation Section 1.704-2.
(ii) Any special allocations pursuant to the preceding clause (i)
required in order to comply with the Treasury Regulations shall
be taken into account, to the extent permitted by the Treasury
Regulations, in computing subsequent allocations pursuant to this
Section 7.1(b) so that the net amount of any items so allocated
and all other items allocated to each Member shall, to the extent
possible, be equal to the amount that would have been allocated
to each Member had there been no such special allocation.
(c) If there is a charge in any Member's share of the distributions or
other items of the Company during any Fiscal Year as a result of the
Transfer (as defined herein) of an Interest, allocations among the
Members shall be made in accordance with their Interests in the
Company from time to time during such Fiscal Year in accordance with
Code Section 706, using the closing-of-the-books method; however
depreciation shall be deemed to accrue ratably on a daily basis over
the entire year during which the corresponding asset is owned by the
Company.
Section 7.2. Distributions.
Distributions may be made to the Members in accordance with their Interest
Percentages at such times as determined in the sole discretion of the Board of
Managers, or at such other times as the Members by unanimous consent shall
determine.
Section 7.3. Limitations on Distribution.
Notwithstanding any provisions of this Article VII to the contrary, no
distribution shall be made (i) if such distribution would violate any contract
or agreement to which the Company is then a party or any law then applicable to
the Company, including the provisions of Section 18-607 of the Delaware Act, or
(ii) to the extent that the Board of Managers determines that any amount
otherwise distributable should be retained by the Company to pay, or to
establish a reserve for the payment of, any liability or obligation of the
Company, including obligations to pay or withhold Federal, state or local
income, franchise or other taxes or levies, whether liquidated, fixed, or
contingent.
Section 7.4. Withholding Taxes.
The Company is authorized to withhold from distributions to a Member, or
with respect to allocations to a Member, and to pay over to a Federal, state or
local government, any amounts required to be withheld pursuant to the Code or
any provisions of any other Federal, state or local law. Any amounts so withheld
shall be treated as having been distributed to such Member for all purposes of
this Agreement, and shall be offset against the current or next amounts
otherwise distributable to such Member.
ARTICLE VII TAX MATTERS
Section 8.1. Tax Matters.
Cinergy Solutions is hereby designated as "Tax Matters Partner" of the
Company under Section 6231 of the Code and the Treasury Regulations thereunder.
Notwithstanding the foregoing designation, the Tax Matters Partner shall not
take any action in its capacity as Tax Matters Partner in connection with any
tax audit, contest or other similar proceeding involving the Company without the
consent or approval of the other Member. The Tax Matters Partner shall keep the
other Member fully apprised of its activities in its capacity as the Tax Matters
Partner.
Section 8.2. Taxation as Partnership.
The Members intend that the Company shall be treated as a partnership for
United States Federal income tax purposes and the Members agree not to take any
action inconsistent with the Company's classification as a partnership for
United States Federal income tax purposes.
Section 8.3 Tax Elections.
The Board of Managers may make on behalf of the Company the election
referred to in Section 754 of the Code. The Board of Managers shall determine
whether to make or revoke any other election (other than an election to be
classified as an association taxable as a corporation which shall be made only
with the unanimous consent of all the Members) pursuant to the Code. Upon the
request of the Board of Managers, each Member shall supply the information
necessary to effect such election.
ARTICLE IX BANKING; ACCOUNTING; BOOKS AND RECORDS
Section 9.1. Banking.
All funds of the Company may be deposited in such bank, brokerage or money
market accounts as shall be established by the Board of Managers. Withdrawals
from and checks drawn on any such account shall be made upon such signature or
signatures as the Board of Managers may designate.
Section 9.2. Maintenance of Books and Records; Accounts and Accounting
Method.
Cinergy Solutions shall keep or cause to be kept at the address of the
Company (or at such other place as the Company shall advise the Members in
writing) full and accurate accounts of the transactions of the Company in proper
books and records of account which shall set forth all information required by
the Delaware Act. Such books and records shall be maintained on the basis of
United States generally accepted accounting principles. Such books and records
shall be available, upon two (2) Business Days' notice to the Board of Managers,
for inspection and copying at reasonable times during business hours by a Member
or its duly authorized agents or representatives for any purpose reasonably
related to such Member's interest as a member in the Company.
Section 9.3. Financial Statements.
As soon as available and in any event within 45 days after the end of each
fiscal quarter, the Company shall have prepared, and delivered to each Member, a
quarterly set of primary financial statements for the Company. This set of
primary financial statements shall include: (i) a balance sheet reflecting the
assets, liabilities and capital accounts of the Company, comparative to the
prior year and the prior year-end; and (ii) quarterly and year-to-date
statements of operations, comparative to the prior year. The Board of Managers
shall cause the annual financial statements of the Company to be examined by the
Company's independent auditor and submitted for adoption at the annual meeting
of Members.
Section 9.4. Additional Information.
Upon the request of a Member, the Company shall prepare additional periodic
or special reports of the Company's accounts and/or business activity considered
necessary by such Member, including but not limited to, detailed reports of
sales by location, detailed expense reports, reports of capital expenditures,
details of assets and liabilities, and non-financial and ratio data.
Section 9.5. Minutes of Meetings.
The Managers shall cause minutes of all proceedings and copies of
resolutions adopted at meetings of Members or Managers to be duly entered in the
minute books which shall be kept at the executive offices of the Company. Any
such minutes must be signed by either the Chairperson or Vice Chairperson, and
one other person (such as the Secretary) who was present at the meeting at which
such resolutions were passed. Further, the Managers shall cause copies of
written actions taken without a meeting to be duly entered in the minute books.
Any such written actions taken without a meeting must be signed by all of the
Mangers in office.
ARTICLE X LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 10.1. Liability.
Except as otherwise provided by the Delaware Act, the debts, obligations
and liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and no
Covered Person shall be obligated personally for any such debt, obligation or
liability of the Company solely by reason of being a Covered Person.
Section 10.2. Exculpation.
(a) Generally. No Covered Person shall be liable to the Company or any
Member for any act or omission taken or suffered by such Covered
Person in good faith and in the reasonable belief that such act or
omission is in or is not contrary to the best interests of the Company
and is within the scope of authority granted to such Covered Person by
this Agreement, provided that such act or omission is not in material
violation of this Agreement and does not constitute Disabling Conduct
by the Covered Person. No Member shall be liable to the Company or any
Member for any action taken by any other Member.
(b) Reliance Generally. A Covered Person shall incur no liability in
acting upon any signature or writing reasonably believed by it to be
genuine, and may rely on a certificate signed by an executive officer
of any Person in order to ascertain any fact with respect to such
Person or within such Person's knowledge and may rely on an opinion of
counsel selected by such Covered Person with respect to legal matters,
except to the extent that such Covered Person engaged in Disabling
Conduct. Each Covered Person may act directly or through its agents or
attorneys. Each Covered Person may consult with counsel, appraisers,
engineers, accountants and other skilled Persons of its choosing, and
shall not be liable for anything done, suffered or omitted in good
faith in reasonable reliance upon the advice of any of such Persons,
except to the extent that such Covered Person engaged in Disabling
Conduct. No Covered Person shall be liable to the Company or any
Member for any error of judgment made in good faith by a responsible
officer or officers of the Covered Person, except to the extent that
such Covered Person engaged in Disabling Conduct. Except as otherwise
provided in this Section 10.2, no Covered Person shall be liable to
the Company or any Member for any mistake of fact or judgment by the
Covered Person in conducting the affairs of the Company or otherwise
acting in respect of and within the scope of this Agreement, except to
the extent that such Covered Person engaged in Disabling Conduct. No
Covered Person shall be liable for the return to any Member of all or
any portion of any Member's Capital Account or Capital Contributions,
except to the extent that such Covered Person engaged in Disabling
Conduct.
(c) Reliance on this Agreement. To the extent that, at law or in equity, a
Covered Person has duties (including fiduciary duties) and liabilities
relating thereto to the Company or to the Members, any Covered Person
acting under this Agreement or otherwise shall not be liable to the
Company or to any Member for its good faith reliance on the provisions
of this Agreement. The provisions of this Agreement, to the extent
that they restrict the duties and liabilities of a Covered Person
otherwise existing at law or in equity, are agreed by the Members to
replace such other duties and liabilities of such Covered Person.
(d) Standard of Care. Whenever in this Agreement a Person is permitted or
required to make a decision (i) in its "sole and absolute discretion,"
"sole discretion," "discretion" or under a grant of similar authority
or latitude, the Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or
factors affecting the Company or any other Person, or (ii) in its
"good faith" or under another express standard, the Person shall act
under such express standard and shall not be subject to any other or
different standard imposed by this Agreement or other applicable law.
Section 10.3. Indemnification.
(a) Indemnification Generally. The Company shall and hereby does, to the
fullest extent permitted by applicable law, indemnify, hold harmless
and release each Covered Person from and against all claims, demands,
liabilities, costs, expenses, damages, losses, suits, proceedings and
actions, whether juridical, administrative, investigative or
otherwise, of whatever nature, known or unknown, liquidated or
unliquidated ("Claims"), that may accrue to or be incurred by any
Covered Person, or in which any Covered Person may become involved, as
a party or otherwise, or with which any Covered Person may be
threatened, relating to or arising out of the business and affairs of,
or activities undertaken in connection with, the Company, or otherwise
relating to or arising out of this Agreement, including, but not
limited to, amounts paid in satisfaction of judgments, in compromise
or as fines or penalties and counsel fees and expenses incurred in
connection with the preparation for or defense or disposition of any
investigation, action, suit, arbitration or other proceeding (a
"Proceeding"), whether civil or criminal (all of such Claims and
amounts covered by this Section 10.3 and all expenses referred to in
Section 10.3(c), are referred to as "Damages"), except to the extent
that it shall have been determined ultimately that such Damages arose
from Disabling Conduct of such Covered Person or that such Covered
Person committed a material breach of this Agreement. The termination
of any Proceeding by settlement shall not, of itself, create a
presumption that any Damages relating to such settlement arose from a
material violation of this Agreement by, or Disabling Conduct of, any
Covered Person.
(b) No Direct Member Indemnity. Members shall not be required directly to
indemnify any Covered Person.
(c) Expenses, etc. Expenses incurred by a Covered 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 Covered Person to repay such amount if it shall be
determined ultimately that the Covered Person is not entitled to be
indemnified hereunder. The right of any Covered Person to the
indemnification provided herein shall be cumulative with, and in
addition to, any and all rights to which such Covered Person may
otherwise be entitled by contract or as a matter of law or equity and
shall extend to such Covered Person's successors, assigns and legal
representatives.
(d) Notices of Claims, etc. Promptly after receipt by a Covered Person of
notice of the commencement of any Proceeding, such Covered Person
shall, if a claim for indemnification in respect thereof is to be made
against the Company, give written notice to the Company of the
commencement of such Proceeding, provided that the failure of any
Covered Person to give notice as provided herein shall not relieve the
Company of its obligations under this Section 10.3 except to the
extent that the Company is actually prejudiced by such failure to give
notice. In case any such Proceeding is brought against a Covered
Person (other than a derivative suit in right of the Company), the
Company will be entitled to participate in and to assume the defense
thereof to the extent that the Board of Managers may wish, with
counsel reasonably satisfactory to such Covered Person. After notice
from the Board of Managers to such Covered Person of the Company's
election to assume the defense thereof, the Company will not be liable
for expenses subsequently incurred by such Covered Person in
connection with the defense thereof. The Company will not consent to
entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Covered Person of a release from all liability in
respect to such Claim.
(e) No Waiver. Nothing contained in this Section 10.3 shall constitute a
waiver by any Member of any right that it may have against any party
under United States Federal or state securities laws.
(f) Authorization. Any indemnification under Section 10.3, as well as the
advance payment of expenses permitted under Section 10.3(c), unless
ordered by a court, must be made by this Company only as authorized in
the specific case upon a determination that indemnification of the
Covered Person is proper under those circumstances. The determination
must be made:
(1) by the Board of Managers by a majority of a quorum
consisting of Managers who were not parties to the act or
Proceeding;
(2) if a majority vote of a quorum consisting of those Managers
who were not parties to the act or Proceeding so orders, by
independent legal counsel in a written opinion; or
(3) if a quorum consisting of Managers who were not parties to
the act or Proceeding cannot be obtained, by independent
legal counsel in a written opinion.
ARTICLE XI TRANSFER OF INTERESTS
Section 11.1. Personal Property; Consent for Transfers.
(a) Restrictions on Transfer. A Member shall not transfer, sell, assign,
convey, exchange, pledge, encumber or otherwise dispose of (each, a
"Transfer") any of its Interest unless: (i) the other Member has been
afforded a right of first offer in accordance with the procedures set
forth in paragraph (b) of this Section 11.1; (ii) the contemplated
Transfer will not adversely affect the regulatory status of the
Company or the GM Delta Township Project; (iii) all requisite
Regulatory Approvals have been duly obtained and are in full force and
effect; (iv) the contemplated Transfer will not result in adverse tax
treatment for the Company, the GM Delta Township Project or either of
the Members; and (v) the contemplated Transfer is in compliance with
the restrictions set forth in Section 2.2 hereof.
(b) Right of First Offer. In the event a Member desires to Transfer all or
any part of its Interest, such Members (the "Selling Member") shall
first deliver a written notice (the "Section 11.1 Notice") to the
other Member (the "Second Member") which notice shall specify the
portion of the Selling Member's Interest to be sold (the "Offered
Interest"). Within thirty (30) days after its receipt of the Section
11.1 Notice, the Second Member shall have the right to offer to
purchase (the "First Offer") all, but not less than all, the Offered
Interest at a price payable only in cash (the "First Offer Price") and
on such other terms and conditions as shall be set forth in the First
Offer. Within thirty (30) days after its receipt of the First Offer,
the Selling Members shall either accept or reject the First Offer. If
the Selling Member accepts the First Offer, the Selling Member shall
sell, and the Second Member shall purchase, the Offered Interest at a
closing to be held at a time not later than sixty (60) days (or such
longer period, if any, pending any necessary Regulatory Approval or
removal of Liens) after the Selling Member's acceptance of the First
Offer and at such location as may be mutually agreed upon, at which
time the Offered Interest shall be delivered, free and clear of all
Liens which may have been imposed on the Offered Interest and are not
connected with the financing or operation of the Company itself,
against payment of the First Offer Price. In order to comply with
applicable regulatory requirements, the purchasing Member may
designate (i) a third party to purchase any portion of the Offered
Interest which the purchasing Member has committed to purchase
hereunder if the Offered Interest constitutes all of the Selling
Member's equity and debt interest in the Company, or (ii) a third
party reasonably acceptable to the Selling Member to purchase any
portion of the Offered Interest which the purchasing Member has
committed to purchase hereunder if the Offered Interest constitutes
less than all of the Selling Member's equity and debt interest in the
Company. If the Selling Member rejects or does not timely accept the
First Offer, then the Selling Member shall have one hundred and twenty
(120) days (or such longer period, if any, required to obtain any
necessary Regulatory Approval or to remove any Liens) following such
rejection within which to consummate the sale of the Offered Interest
at a price per share in cash greater than the First Offer Price and in
all other respects upon terms and conditions no less favorable than
those specified in the First Offer. If no such sale occurs within such
120-day period (or longer period as described above), the Offered
Interest shall again be subject to all of the restrictions set forth
in this Section 11.1(b).
(c) Proportionate Sales Rights. If the Second Member does not elect to
purchase the Offered Interest pursuant to Section 11.1(b) above, the
Second Member shall have the right, but not the obligation, to sell to
the prospective purchaser identified in the First Offer the same
proportion of the Second Member's Interest as the proportion of the
Selling Member's Interest proposed to be sold by the Selling Member at
the same price and otherwise on the same terms and conditions on
which, and at the same time as, the Selling Member wishes to sell its
Interest. The proportionate sale right specified in this Section
11.1(c) shall be exercisable by written notice given by the Second
Member to the Selling Member during the same thirty (30) day period in
which the Second Member may make the First Offer contemplated under
Section 11.1(b). The Selling Member shall not sell any of its Interest
to the prospective purchaser unless such purchaser honors its
obligation to purchase a proportionate Interest from the Second Member
as provided herein. Any purported Transfer inconsistent with this
Section 11.1(c) shall be null and void and of no effect.
Section 11.2. Issue and Replacement of Certificates.
Upon the request of any Member, an Interest certificate shall be delivered
to such Member for the Interest held by it. Every certificate shall be signed by
one Cinergy Solutions Manager and one Trigen Solutions Manager. In the case of
loss, mutilation, or destruction of a share certificate a new certificate may be
issued upon such terms as the Board of Managers may prescribe.
Section 11.3. Interest Certificate Legend.
All certificates representing Interests shall bear the following legend (in
addition to any other legend required by applicable law):
"These interests have not been registered under the Securities Act of 1933,
as amended, or any state securities laws and may not be sold, offered for sale,
pledged, assigned, hypothecated or otherwise transferred in violation of any
applicable securities law. These interests are subject to the terms and
conditions, including restrictions on transfers, pledges or other dispositions,
of a Limited Liability Company Agreement, dated as of October 20, 1999, each as
amended from time to time, copies of which are on file with the Secretary of the
Company."
ARTICLE XII DISSOLUTION AND TERMINATION OF THE COMPANY
Section 12.1. Dissolution.
The Company shall dissolve upon and in accordance with the mutual agreement
of the Members.
Section 12.2. Liquidation.
Upon dissolution of the Company, the Person or Persons approved by the
Board of Managers shall carry out the winding up of the Company (in such
capacity, the "Liquidating Trustee") and shall proceed, subject to the
provisions herein, to liquidate the Company and apply the proceeds of such
liquidation, or in its sole discretion to distribute Company assets, in the
following order of priority:
First, to creditors in satisfaction of debts and liabilities of the
Company, whether by payment or the making of reasonable provision for
payment (other than any loans or advances that may have been made by any of
the Members to the Company), and the expenses of liquidation, whether by
payment or the making of reasonable provisions for payments, any such
reasonable reserves (which may be funded by a liquidating trust) to be
established by the Liquidating Trustee, as the case may be, in amounts
deemed by it to be reasonably necessary for the payment of the Company's
expenses, liabilities and other obligations (whether faxed or contingent);
Second, to the Members in satisfaction of any loans or advances that
may have been made by any of the Members to the Company whether by payment
or the making of reasonable provision for payment; and
Third, to the Members in proportion to, and to the extent of, each
Member's Capital Account, as such Capital Account has been adjusted
pursuant to Article VI.
Section 12.3. Time for Liquidation, etc.
(a) A reasonable time period shall be allowed for the orderly winding up
and liquidation of the assets of the Company and the discharge of
liabilities to creditors as to enable the Liquidating Trustee to seek
to minimize potential losses upon such liquidation. The provisions of
this Agreement shall remain in full force and effect during the period
of winding up and until the filing of a certificate of cancellation of
the Company with the Secretary of State of the State of Delaware.
(b) Upon completion of the foregoing, 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 Delaware.
Section 12.4. Claims of the Members.
The Members and any former Members shall look solely to the Company's
assets for the return of their Capital Contributions, and if the assets of the
Company remaining after payment of or due provisions of all debts, liabilities
and obligations of the Company are insufficient to return such Capital
Contributions, the Members and former Members shall have no recourse against any
Member, any Manager or their Affiliates.
ARTICLE XIII CERTAIN DEFINITIONS
Section 13.1. Definitions.
Unless the context otherwise requires, the terms defined in this Section
shall, for the purposes of this Agreement, have the meanings herein specified.
"Affiliate" shall mean, with respect to any specified Person, a Person
that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, the Person specified.
"Business Day" shall mean any day on which banks located in New York
City are not required or authorized by law to remain closed.
"Capital Account" shall mean, with respect to any Member, the account
maintained for such Member in accordance with the provisions of Section 6.4
hereof.
"Capital Contribution" shall mean, with respect to any Member, the
amount set forth opposite the name of such Member on Schedule I under the
column "Capital Contribution".
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Covered Person" shall mean a Member, a Manager, or any Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with the Company, a Member, or a
Manager; any officers, directors, shareholders, controlling persons,
partners, employees, representatives or agents of a Member, a Manager or
their respective Affiliates; or any officer, employee or agent of the
Company or its Affiliates; or any Person who was, at the time of the act or
omission in question, such a Person.
"Disabling Conduct" shall mean conduct that constitutes fraud, a
willful violation of law, gross negligence or reckless disregard of duty in
the conduct of the duties of the Person referred to.
"Interest" shall mean a Member's limited liability company interest in
the Company which represents such Member's share of the profits and losses
of the Company and such Member's rights to receive distributions of the
Company's assets and to participate in the management of the Company in
accordance with the provisions of this Agreement and the Delaware Act.
"Interest Percentage" shall mean the percentage shown on Schedule 1
hereto under the heading "Interest Percentage".
"Manager" shall mean a "manager" within the meaning of the Delaware
Act and a member of the Board of Managers.
"Member" shall mean any Person named as a member of the Company on
Schedule 1 and "Members" shall mean two (2) or more of such Persons when
acting in their capacities as members of the Company.
"Net Profit" or "Net Loss" shall mean, for any Fiscal Year, the net
income or net loss of the Company for such Fiscal Year, determined in
accordance with Section 703(a) of the Code, 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 Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(1) shall be treated as current expenses;
(c) no effect shall be given to any adjustments made pursuant to
Section 734 or 743 of the Code; and
(d) the basis of property contributed to the Company shall
initially be treated as equal to the agreed upon valuation
of such property, and all gain, loss, depreciation and
amortization on such property shall be determined based on
such agreed upon value in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv)(g).
"Person" shall mean any individual, corporation, association,
partnership (general or limited), joint venture, trust, joint-stock
company, estate, limited liability company, unincorporated organization
other legal entity or organization.
"Senior Debt" shall have the meaning given to that term in the Utility
Services Agreement.
"Subsidiary" or "Subsidiaries" of any Person means any corporation,
partnership, joint venture or other legal entity of which such Person
(either alone or through or together with any other subsidiary), owns,
directly or indirectly, more than fifty percent (50%) of the stock or other
equity interests the holder of which is generally entitled to vote for the
election of the board of directors or other governing body of such
corporation, partnership, joint venture or other legal entity.
"Treasury Regulations" shall mean the Regulations of the Treasury
Department of the United States issued pursuant to the Code.
"Utility Services Agreement" shall mean that certain Utility Services
Agreement to be dated on or about September 6, 2001 by and between GM and
the Company relating to the GM Delta Township Project and the System, as
the same may be modified, amended or restated..
ARTICLE XIV MISCELLANEOUS PROVISIONS
Section 14.1. Amendments Generally.
The terms and provisions of this Agreement shall not be modified or amended
at any time except by the unanimous consent of the Members and subject to the
restrictions set forth in Section 2.2 hereof; provided, that, without the
consent of any of the Members, the Board of Managers may amend Schedule 1
attached hereto to reflect changes validly made, pursuant to the terms of this
Agreement.
Section 14.2. Entire Agreement.
This Agreement (including all attachments hereto) constitutes the entire
agreement between the Members with respect to the Company and supersedes all
other prior agreements and understandings, both written and oral, between the
Members or their respective Affiliates with respect to the Company.
Section 14.3. Notices.
All notices, requests, claims, demands and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by facsimile or by registered or
certified mail (postage prepaid, return receipt requested), to the other Member
as follows:
If to Cinergy Solutions:
Cinergy Solutions Holding Company, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. X'Xxxxxxx
with a copy to:
Cinergy Corp.
000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxx, Senior Counsel
and
if to Trigen Solutions:
Trigen Solutions, Inc.
Xxx Xxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: General Counsel
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 14.4. Table of Contents and Headings.
The table of contents and the headings and subheadings of the sections of
this Agreement are inserted for convenience and identification only and are in
no way intended to describe, interpret, define, or limit the scope, extent or
intent of this Agreement or any provision thereof.
Section 14.5. Assignment.
This Agreement shall not be assigned by either Member or by operation of
law or otherwise.
Section 14.6. Severability.
The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity
and enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefore in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid and unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
Section 14.7. Extension; Waiver.
Each Member may (i) extend the time for the performance of any of the
obligations or other acts of the other Members, (ii) waive any inaccuracies in
the representations and warranties of the other Member contained herein, or
(iii) waive compliance by the other Member with any of the agreements or
conditions contained herein. Any agreement on the part of any Member to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such Member. The failure of any Member hereto to assert any
of its rights hereunder shall not constitute a waiver of such rights.
Section 14.8. Governing Law.
This Agreement shall be governed by and construed in accordance with the
law of the State of Delaware, without regard to the principles of conflicts of
law thereof.
Section 14.9. Names and Logos.
To further the objectives of this Agreement and the Company, the Members
acknowledge and agree that the Company shall have the non-exclusive right to use
the names and logos of the Members to the extent such use is reasonable and in
connection with the implementation of this Agreement.
Section 14.10. Further Actions.
Each Member shall execute and deliver such other certificates, agreements
and documents, and take such other actions, as may reasonably be requested by
the Company in connection with the formation of the Company and the achievement
of its purposes, including, without limitation, (a) any documents that the
Company deems necessary or appropriate to form, qualify or continue the Company
as a limited liability company in all jurisdictions in which the Company
conducts or plans to conduct business and (b) all such agreements, certificates,
tax statements and other documents as may be required to be filed in respect of
the Company.
Section 14.11. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which taken together shall constitute a
single agreement.
[Remainder of page intentionally left blank. Signature page follows.]
IN WITNESS WHEREOF, the undersigned have duly executed this Limited
Liability Company Agreement of Delta Township Utilities, LLC as of the 5th day
or July, 2001.
CINERGY SOLUTIONS HOLDING
COMPANY, INC.
By: __________________________
Name: _______________________
Title: ________________________
TRIGEN SOLUTIONS, INC.
By: __________________________
Name: _______________________
Title: ________________________
SCHEDULE 1
Members' Capital Interest
Names Contribution Percentage
----- ------------ ----------
Cinergy Solutions Holding Company, Inc. $ 51.00 51.0%
Trigen Solutions, Inc. $ 49.00 49.0%
SCHEDULE 2
MATTERS REQUIRING ACTION OF THE BOARD OF MANAGERS OF THE COMPANY
(a) Demand for capital contributions from the Members.
(b) Borrowing money, including without limitation, the Senior Debt, or
guaranteeing the obligations of any Person not in the ordinary course of
business, or mortgaging, pledging or granting a security interest in assets
not in the ordinary course of business, in any one transaction or a series
of related transactions or any amendment or modification of any arrangement
for any of the foregoing not in the ordinary course of business.
(c) Entering into a transaction or agreement or amending or modifying a
material agreement with an Affiliate of a Member other than as specifically
set forth in this Agreement.
(d) Unbudgeted acquisitions not in the ordinary course of business.
(e) Disposition of assets not in the ordinary course of business.
(f) Entering into any contract not in the ordinary course of business which
requires unbudgeted expenditures, commitments or liabilities.
(g) Amendments to governing documents of the Company.
(h) Issuance of Interests or other securities of the Company to third parties.
(i) Engaging in a business activity other than the GM Delta Township Project.
(j) Commencing the process of dissolution, liquidation, insolvency or voluntary
bankruptcy.
(k) Approving any merger or consolidation of the Company.
(l) Forming any Subsidiary of the Company.
(m) Execution of any material credit agreement or any amendment or modification
thereof or implementation of any material change in capital structure,
other than as previously authorized or pursuant to authority previously
granted.
(n) Commencing or settling any material litigation or arbitration.
(o) Engaging or terminating principal auditors or attorneys.
(p) Any execution, amendment or modification of any material agreements with
Members or their Affiliates, except as contemplated by the terms hereof.
(q) Such other matters as the Parties or their designated Managers shall by
mutual consent determine as being appropriate.
