AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CINCAP MADISON, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT ("LLC Agreement")
for CinCap Madison, LLC (formerly Duke Energy Madison, LLC) (the "Company")
dated as of September 13, 2001, is entered into and made effective by CinCap
VIII, LLC, a Delaware limited liability company, the sole member of the Company,
(the "Cinergy Member") as of September 13, 2001 with reference to the following
facts.
X. Xxxx Energy Madison, LLC is a Delaware limited liability company formed by
Duke Energy North America, LLC ("Duke Energy" or sometimes referred to as
"Initial Member") pursuant to the terms of that Single Member Operating
Agreement dated as of December 2, 1998 (the "Original Agreement"), and the
Second Amended and Restated Single Member Operating Agreement dated as of May 3,
1999 (the "Amended and Restated Agreement");
B. Cinergy Member has acquired all of the Membership Interest of the Company
pursuant to that certain Assignment and Assumption of membership interests dated
as of September 13, 2001 by and among CinCap VIII, LLC, as "Assignee" and VMC
Generating Company, a Texas General Partnership, as "Assignor" (the "Assignment
& Assumption Agreement"), and Cinergy Member now wishes to replace the Amended
and Restated Agreement in its entirety by entering into this LLC Agreement to
provide for the governance of the Company and the conduct of its business as a
limited liability company. This LLC Agreement shall be considered the "Limited
Liability Company Agreement" of the Company within the meaning of Section
18-101(7) of the Act.
NOW THEREFORE, the Amended and Restated Agreement is wholly replaced and
superceded by this LLC Agreement in its entirety and this LLC Agreement shall
read as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to them in the Act.
ARTICLE II
General Provisions
Section 2.1 Company Name. The name of the Company is "CinCap Madison, LLC".
The business of the Company may be conducted upon compliance with all applicable
laws under any other name designated by the member(s).
Section 2.2 Registered Office; Registered Agent.
(a) The Company shall maintain a registered office in the State of
Delaware at, and the name and address of the Company's registered agent in
the State of Delaware is, The Corporation Trust Company, Corporation Trust
Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000.
(b) The business address of the Company is 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx, 00000, or such other place as the Member shall designate.
Section 2.3 Nature of Business Permitted; Powers. The purpose of the
Company is to engage in any activity for which limited liability companies may
be organized in the State of Delaware. The Company shall possess and may
exercise all of the powers and privileges granted by the Act or by any other law
or by this Agreement, together with any powers incidental thereto, so far as
such powers and privileges are necessary or convenient to the conduct, promotion
or attainment of the business purposes or activities of the Company.
Section 2.4 Business Transactions of a Member with the Company. In
accordance with Section 18-107 of the Act, a member may transact business with
the Company and, subject to applicable law and the provisions of this LLC
Agreement, shall have the same rights and obligations with respect to any such
matter as a person who is not a member.
Section 2.5 Fiscal Year. The fiscal year of the Company (the "Fiscal Year")
for financial statement purposes shall end on December 31 of each year.
Section 2.6 Effective Date. In accordance with Section 18-201 (d) of the
Act, it is the intention of the Member that the LLC Agreement be effective as of
September 13, 2001.
ARTICLE III
Member(s)
Section 3.1 Admission of Member(s). The Cinergy Member is hereby admitted
as the sole member of the Company in respect of an Interest (as defined in
Section 3.2), which is the sole Interest outstanding as of the effective time of
this LLC Agreement. New member(s) shall be admitted only with the approval of
the Cinergy Member, or if additional members are admitted, with the approval of
all of the members (which approval may be evidenced by, among other things, the
execution of an amendment to, or an amendment and restatement of this LLC
Agreement.
Section 3.2 Interests.
(a) The Company shall be authorized to issue a single class of Limited
Liability Company Interest (as defined in the Act, the "Interest"), which
shall include any and all benefits to which the holder of such Interest may
be entitled in this LLC Agreement, together with all obligations of such
person to comply with the terms and provisions of this LLC Agreement.
Interests may, but need not be, evidenced by a certificate of limited
liability company interest issued by the Company.
(b) In the event that there is more than one member, each member's
Interest in the Company shall be expressed as a percentage equal to the
ratio on any date of such member's capital contributions on such date, to
the aggregate capital contributions of all members on such date (as to any
member, his or its "Percentage Interest"). In the event there is only one
member, its Percentage Interest shall be 100% for purposes of this LLC
Agreement.
Section 3.3 Liability of Member(s).
(a) All 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 member shall be
obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a member.
(b) Except as otherwise expressly required by law, a member shall not
have any liability in excess of (i) the amount of its aggregate capital
contributions to the Company, (ii) its share of any assets and
undistributed profits of the Company, (iii) its obligation to make other
payments, if any, expressly provided for in this LLC Agreement or any
amendment hereto and (iv) the amount of any distributions wrongfully
distributed to it.
Section 3.4 Access to and Confidentiality of Information; Records.
(a) Any member shall have the right to obtain from the Company from
time to time upon reasonable demand for any purpose reasonably related to
the member's interest as a member of the Company, the documents and other
information described in Section 18-305(a) of the Act.
(b) Any demand by a member pursuant to this Section 3.4 shall be in
writing and shall state the purpose of such demand.
Section 3.5 Meetings of Member(s).
(a) Meetings of the member(s) may be called at any time by any member.
(b) Except as otherwise provided by law, (i) if there shall be more
than one member of the Company, a majority of Percentage Interest in the
Company, entitled to vote at the meeting shall constitute a quorum at all
meetings of the member(s); or (ii) if there is only one member of the
Company, such member shall constitute a quorum.
(c) Any action required to or which may be taken at a meeting of
member(s) may be taken without a meeting, without prior notice and without
a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by all member(s).
(d) Regular meetings of the member(s) shall be held at least annually.
Member(s) may participate in a meeting 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 3.6 Vote. Except as specifically set forth in the Act or herein,
any matter requiring the vote of the member(s) shall require (including for
purposes of actions taken by the member(s) in order to manage the Company as
provided in Article IV hereof) a majority of Percentage Interests of the members
in order to constitute an act of the members.
Section 3.7 Notice. Meetings of the member(s) may be held at such places
and at such times as the member(s) may from time to time determine. Written
notice of the time, place, and purpose of such meeting shall be served by
registered or certified prepaid, first class mail, via overnight courier using a
nationally reputable courier, or by fax or cable, upon each member and shall be
given at least two (2) business days prior to the time of the meeting. No notice
of a meeting need be given to any member if a written waiver of notice, executed
before or after the meeting by such member 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 or her. A waiver of notice need not specify the purposes of the meeting.
Section 3.8 Delegation of Powers. Subject to any limitations set forth in
the Act, the Cinergy Member, or if additional member(s) are admitted, the
members may delegate any of its or their powers to officers of the Company,
pursuant to Section 4.2 hereof, or otherwise, to committees consisting of
persons who may or may not be member(s). 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 member(s) and this LLC Agreement.
Section 3.9 Withdrawals and Removals of Member(s). No member may resign,
withdraw or be removed as a member of the Company without the written consent of
all of the member(s).
ARTICLE IV
Management
Section 4.1 General. Except as specifically set forth herein, the business
and affairs of the Company shall be managed by and under the direction of the
Member, or, if additional members are admitted, the members, who 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. The Cinergy
Member or the members shall serve without compensation from the Company, and the
Cinergy Member or the members shall bear the cost of its participation in
meetings and other activities of the Company.
Section 4.2 Officers.
(a) Election, Term of Office. Pursuant to Section 3.8 hereof, the
Cinergy Member hereby creates the offices and delegates to the officers
described in this Section 4.2, the duties set forth herein. The officers
shall be elected annually by the member(s). Except as provided in
paragraphs (b) or (c) of this Section 4.1, each officer shall hold office
until his or her successor shall have been chosen and qualified. Any two
offices, except those of the President 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 is required by law
or this LLC Agreement to be executed, acknowledged or verified by any two
or more officers.
(b) Resignations and Removals. Any officer may resign his or her
office at any time by delivering a written resignation to the member(s).
Unless otherwise specified therein, such resignation shall take effect upon
delivery. Any officer may be removed from office with or without cause by
either the member(s) or the President.
(c) Vacancies and Newly Created Offices. 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 President, subject to approval and
election by the member(s).
(d) Conduct of Business. Subject to the provisions of this LLC
Agreement, 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 this LLC Agreement and with directions which may be given
from time to time by the member(s).
(e) President. Subject to the further directives of the member(s), the
President shall have general and active management of the business of the
Company subject to the supervision of the member(s), shall see that all
orders and resolutions of the member(s) are carried into effect and shall
have such additional powers and authority as are specified by the
provisions of this LLC Agreement.
(f) Secretary. The Secretary shall attend all meetings of the
member(s) 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 member(s), and shall
perform such other duties as may be prescribed by the member(s) or the
President. 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 member(s) may
from time to time prescribe.
(g) Other Officers. The member(s) 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 member(s) may determine in its sole discretion. The
member(s) from time to time may delegate to one or more officers or agents
the power to appoint any such officers or agents and prescribe their
respective rights, terms of office, authorities and duties.
(h) Officers as Agents; Authority. The officers, to the extent of
their powers set forth in this LLC Agreement and/or delegated to them by
the member(s), are agents and managers 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 4.3 Reliance by Third Parties. Persons dealing with the Company are
entitled to rely conclusively upon the power and authority of the member(s)
and/or officers herein set forth.
Section 4.4 Expenses. Except as otherwise provided in this LLC Agreement,
the Company shall be responsible for and shall pay all expenses out of funds of
the Company determined by the member(s) to be available for such purpose,
provided that such expenses are those of the Company or are otherwise incurred
by the member(s) in connection with this LLC Agreement, including, without
limitation:
(a) All expenses related to the business of the Company and all
routine administrative expenses of the Company, including the maintenance
of books and records of the Company, the preparation and dispatch to any
member(s) of checks, financial reports, tax returns and notices required
pursuant to this LLC Agreement or in connection with the holding of any
meetings of the member(s);
(b) All expenses incurred in connection with any litigation or
arbitration involving the Company (including the cost of any investigation
and preparation) and the amount of any judgment or settlement paid in
connection therewith;
(c) All expenses for indemnity or contribution payable by the Company
to any person;
(d) All expenses incurred in connection with the collection of amounts
due to the Company from any person;
(e) All expenses incurred in connection with the preparation of
amendments to this LLC Agreement; and
(f) Expenses incurred in connection with the liquidation, dissolution
and winding up of the Company.
ARTICLE V
Finance
Section 5.1 Form of Contribution.
(a) The contribution of a member to the Company must be in cash or
property, provided that if there is more than one member, all members must
consent in writing to contributions of property. To the extent there is
more than one member, each member shall make additional contributions in
the same proportion, except as may be approved by all members. No member is
required to make any contribution of property or money to the Company in
excess of the property or money it has agreed to contribute to the Company.
The Cinergy Member shall not be required to make a contribution in
connection with its admission pursuant to Section 3.1 hereof.
(b) At any time that there is more than one member, a capital account
shall me maintained for each member, to which contributions and profits
shall be credited and against which distributions and losses shall be
charged. Such capital accounts shall be maintained in accordance with the
tax accounting principles prescribed by the Treasury Regulations (the
"Allocation Regulations") promulgated under Section 704 of the Internal
Revenue Code of 1986 as amended (the "Code"), so that the tax allocations
provided in this LLC Agreement shall, to the extent possible, satisfy the
"alternate economic effect test" with the meaning of the Allocation
Regulations.
Section 5.2 Allocation of Profits and Losses. The profits and losses of the
Company shall be allocated entirely to the Cinergy Member or, if additional
member(s) are admitted, to the members in proportion to their respective
Percentage Interests.
Section 5.3 Distributions. The distributions of the Company shall be
distributed entirely to the Cinergy Member or, if additional member(s) are
admitted, to the members in proportion to their respective Percentage Interests.
ARTICLE VI
Distribution
Section 6.1 Distribution in Kind. Notwithstanding the provisions of Section
18-605 of the Act, a member may be compelled to accept distributions in kind
from the Company.
ARTICLE VII
Assignment of Limited Liability Company Interests
Section 7.1 Assignment of Limited Liability Company Interests. Interests in
the Company may be assignable and transferable. Any assignment or transfer of a
member's Interest in the Company, except those to subsidiaries or affiliates of
members, must receive the consent of all of the members. Any transferee shall
not be admitted as a substituted member unless and until the transferee has
executed a counterpart of this LLC Agreement.
ARTICLE VIII
Dissolution
Section 8.1 Dissolution. The Company shall dissolve and its affairs shall
be wound up upon the earliest to occur of (i) the consent of the Cinergy Member,
or, if additional member(s) are admitted, the unanimous consent of all of the
members, and (ii) an event of dissolution of the Company under the Act.
Section 8.2 Winding Up. Subject to the provisions of the Act, the Cinergy
Member or, if additional member(s) are admitted, the members (acting by written
consent of all members) shall have the right to wind up the Company's affairs in
accordance with Section 18-803 of the Act (and shall promptly do so upon
dissolution of the Company) and shall also have the right to act as or appoint a
liquidating trustee in connection therewith.
Section 8.3 Distribution of Assets Upon Dissolution. Upon the winding up of
the Company, the assets shall be distributed in the manner provided in Section
18-804 of the Act.
ARTICLE IX
Tax Characterization
Section 9.1 Tax Treatment. Until such time as the Company shall have more
than one member, it is the intention of the Cinergy Member that the Company be
disregarded for federal and all relevant state tax purposes and that the
activities of the Company be deemed to be activities of the Cinergy Member for
such purposes. In the event that the Company shall have more than one member, it
is the intention of the members that the Company be taxed as a partnership for
federal and all relevant state tax purposes. All provisions of the Company's
Certificate of Formation and LLC Agreement are to be construed so as to preserve
that tax status. The Company shall timely make all necessary elections and
filings for federal, state, and local tax purposes to accomplish the foregoing
objective.
Section 9.2 Form K-1. After the end of each Fiscal Year for which the
Company shall have more than one member, the members shall cause to be prepared
and transmitted, as promptly as possible, and in any event within 90 days of the
close of such fiscal year, a federal income tax Form K-1 and any required
similar state income tax form for each member.
Section 9.3 Company Tax Returns. The Cinergy Member, or if additional
member(s) are admitted, the members shall cause to be prepared and timely filed
all tax returns required to be filed for the Company. The Cinergy Member or
members, as the case may be, may in their sole discretion, make or refrain from
making any federal, state or local income or other tax elections for the Company
that it deems necessary or advisable; provided that if there is more than one
member, the prior written consent of all members shall be required in order for
the Company to make an election pursuant to Section 754 of the Code.
ARTICLE X
Exculpation and Indemnification
Section 10.1 Exculpation. Notwithstanding any other provisions of this LLC
Agreement, whether express or implied, or obligation or duty at law or in
equity, any member, or any officers, directors, stockholders, partners,
employees, representatives or agents of any of the foregoing, nor any officer,
employee, representative, manager or agent of the Company or any of its
affiliates (individually, a "Covered Person" and collectively, the "Covered
Persons") shall be liable to the Company or any other person for any act or
omission (in relation to the Company, this LLC Agreement, any related document
or any transaction or investment contemplated hereby or thereby) taken or
omitted in good faith by a Covered Person 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 LLC
Agreement, provided that such act or omission does not constitute fraud, willful
misconduct, bad faith, or gross negligence.
Section 10.2 Indemnification. To the fullest extent permitted by law, the
Company shall indemnify and hold harmless each Covered Person from and against
any and all losses, claims, demands, liabilities, expenses, judgments, fines,
settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, in which
the Covered Person may be involved, or threatened to be involved, as a party or
otherwise, by reason of its management of the affairs of the Company or which
relates to or arises out of the Company or its property, business or affairs. A
Covered Person shall not be entitled to indemnification under this Section 10.2
with respect to any claim, issue or matter in which it has engaged in fraud,
willful misconduct, bad faith or gross negligence.
ARTICLE XI
Miscellaneous
Section 11.1 Amendment to this LLC Agreement. Except as otherwise provided
in this LLC Agreement, this LLC Agreement may be amended by, and only by, a
written instrument executed by the Cinergy Member or, if additional member(s)
are admitted, unanimous consent of the members.
Section 11.2 Successors; Counterparts. Subject to Article VIII, this LLC
Agreement (a) shall be binding as to the executors, administrators, estates,
heirs, assigns and legal successors, or nominees or representatives, of the
Cinergy Member or, if additional member(s) are admitted, the members and (b) may
be executed in several counterparts with the same effect as if the parties
executing the several counterparts had all executed one counterpart.
Section 11.3 Governing Law; Severability.
(a) This LLC Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to
the principles of conflict of laws thereof. In particular, this LLC
Agreement shall be construed to the maximum extent possible to comply with
all the terms and conditions of the Act. If, nevertheless, it shall be
determined by a court of competent jurisdiction that any provisions or
wording of this LLC Agreement shall be invalid or unenforceable under the
Act or other applicable law, such invalidity or unenforceability shall not
invalidate the entire LLC Agreement and this LLC Agreement shall be
construed so as to limit any term or provision so as to make it enforceable
or valid within the requirements of applicable law, and, in the event such
term or provisions cannot be so limited, this LLC Agreement shall be
construed to omit such invalid or unenforceable terms or provisions. If it
shall be determined by a court of competent jurisdiction that any
provisions relating to the distributions and allocations of the Company or
to any expenses payable by the Company are invalid or unenforceable, this
LLC Agreement shall be construed or interpreted so as (i) to make it
enforceable or valid and (ii) to make the distributions and allocations as
closely equivalent to those set forth in this LLC Agreement as is
permissible under applicable law.
(b) Each party hereto (i) irrevocably submits to the non-exclusive
jurisdiction of any Delaware state court or Federal court sitting in
Wilmington, Delaware in any action arising out of the LLC Agreement; and
(ii) consents to the service of process by mail. Nothing herein shall
affect the right of any party to serve legal process in any manner
permitted by law or affect his or its right to bring action in any other
court.
Section 11.4 Filings. Following the execution and delivery of this LLC
Agreement, the Cinergy Member shall be an "authorized person" within the meaning
of the Act, and shall prepare any documents required to be filed and recorded
under the Act, and the Cinergy Member shall promptly cause each such document
required to be filed and recorded in accordance with the Act and, to the extent
required by local law, to be filed and recorded or notice thereof to be
published in the appropriate place in each jurisdiction in which the Company may
hereafter establish a place of business. The Cinergy Member shall also promptly
cause to be filed, recorded and published such statements of fictitious business
name and any other notices, certificates, statements or other instruments
required by any provision of any applicable law of the United States or any
state or other jurisdiction which governs the conduct of its business from time
to time.
Section 11.5 Headings. Section and other headings contained in this LLC
Agreement are for reference purposes only and are not intended to describe,
interpret, define or limit the scope or intent of this LLC Agreement or any
provision hereof.
Section 11.6 Further Assurances. Each member agrees to perform all further
acts and execute, acknowledge and deliver any documents that may be reasonably
necessary to carry out the provisions of this LLC Agreement.
Section 11.7 Notices. All notices, requests and other communications to any
member shall be in writing (including telecopier or similar writing) and shall
be given to such member (and any other person designated by such member) at its
address or telecopier number set forth in a schedule filed with the records of
the Company or such other address or telecopier number as such member may
hereafter specify for the purpose by notice. Each such notice, request or other
communication shall be effective (a) if given by telecopier, when transmitted to
the number specified pursuant to this Section and the appropriate confirmation
is received, (b) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid,
or (c) if given by any other means, when delivered at the address specified
pursuant to this Section.
Section 11.8 Books and Records; Accounting. The Cinergy Member or, if
additional member(s) are admitted, the members shall keep or cause to be kept at
the address of the Company (or at such other place as the member(s) shall
determine in their discretion) true and full books and records regarding the
status of the business and financial condition of the Company.
IN WITNESS WHEREOF, the undersigned has caused this LLC Agreement to be
executed as of the date first above written.
CinCap VIII, LLC
By: ____________________________
Xxxxxxx X. Cyrus
President
