SECOND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CINCAP VII, LLC
This SECOND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
"Agreement"), effective as of September 30, 1999 (the "Effective Date"), of
CinCap VII, LLC, a Delaware limited liability company (the "Company"), by CinCap
VIII, LLC, a Delaware limited liability company ("CinCap VIII"), and VMC
Generating Company, a Texas general partnership ("VMC"). This Agreement amends
and restates that certain Restated Limited Liability Company Agreement,
effective as of September 29, 1999, of the Company (the "Original Restated
Agreement").
RECITALS
WHEREAS, the Company was formed on December 2, 1998 by the sole
organizer under the Delaware Limited Liability Company Act (as amended
from time to time, the "Act");
WHEREAS, under that certain Limited Liability Company Agreement
of the Company dated as of December 2, 1998, Cinergy Capital &
Trading, Inc. ("CC&T") was the sole member of the Company, holding
100% of the membership interests thereof;
WHEREAS, pursuant to the Original Restated Agreement, CC&T
assigned and transferred all of its membership interest in the Company
to CinCap VIII (in such capacity, the "Current Member");
WHEREAS, CinCap VIII now desires to assign and transfer, and VMC
(in such capacity, the "Transferee Member") desires to accept, all of
CinCap VIII's membership interest in the Company;
WHEREAS, CinCap VIII and VMC desire to amend and restate the
Original Restated Agreement to evidence such transfer and assignment
and otherwise to set forth VMC's agreement, as sole member in the
Company immediately following such transfer, with respect to, among
other things, its rights, obligations and interests regarding 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 parties hereto agree 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 VII,
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, Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware.
(b) The business address of the Company is 139 East Fourth
Street, Cincinnati, Ohio, or such other place as the Member shall
designate.
SECTION 2.3 NATURE OF BUSINESS PERMITTED; POWERS. The Company may
carry on any lawful business, purpose or activity. The Company shall
possess and may exercise all 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, 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.
ARTICLE III
ASSIGNMENT TO VMC; ADDITIONAL MEMBER(S)
SECTION 3.1 ASSIGNMENT TO VMC; ADDITIONAL MEMBER(S). On the
Effective Date, CinCap VIII hereby assigns and transfers to VMC, and
VMC hereby accepts from CinCap VIII, 100% of CinCap VIII's membership
interest in the Company. Additional member(s) of the Company, if any,
shall be admitted only with the approval of VMC.
SECTION 3.2 CLASSES.
(a) The membership interests of the Company shall consist of
common membership interests ("Common Interests").
(b) All Common Interests shall be identical with each other
in every respect, except that, should additional member(s) be
admitted, Common Interests of each member shall reflect its
capital account relative to the other member(s).
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
capital contribution 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
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, if additional
member(s) are admitted, a majority of the member(s), determined
in proportion to their respective interests in the Company,
entitled to vote at the meeting shall constitute a quorum at all
meetings of the member(s).
(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 herein, the
business and affairs of the Company shall be managed by or under the
direction of the member(s) by majority vote.
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. Any member may at any time call a meeting of the member(s).
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 member(s) may delegate any of its powers to
officers of the Company or 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).
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(s) who shall have full, exclusive and complete
discretion to manage and control the business and affairs of the
Company as would (if the Company were a corporation) be subject to
control by a board of directors, 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 member(s) shall serve without
compensation from the Company, and the member(s) shall bear the cost
of its participation in meetings and other activities of the Company.
SECTION 4.2 OFFICERS.
(a) ELECTION, TERM OF OFFICE. 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 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
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 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
(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 subordinate 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 subordinate 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 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) herein set forth.
SECTION 4.4 EXPENSES. Except as otherwise provided in this
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 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 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 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. The contribution of a member to
the Company must be in cash or property, provided that if there is
more than one member, all member(s) must consent in writing to
contributions of property. To the extent there is more than one
member, additional contributions in the same proportion shall be made
by each member, except as may be approved by all member(s). A capital
account shall be maintained for each member, to which contributions
and profits shall be credited and against which distributions and
losses shall be charged. At any time that there is more than one
member, capital accounts shall be maintained in accordance with the
tax accounting principles prescribed by the Treasury Regulations
promulgated under Code Section 704 (the "Allocation Regulations"), so
that the tax allocations provided in this Agreement shall, to the
extent possible, have "substantial economic effect" within the meaning
of the Allocation Regulations, or, if such allocations cannot have
substantial economic effect, so that they may be deemed to be "in
accordance with the member(s') interests in the Company" within 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 Member or, if
additional member(s) are admitted, the member(s) in proportion to
their respective capital accounts.
SECTION 5.3 ALLOCATION OF DISTRIBUTIONS. The distributions of the
Company shall be allocated entirely to the Member or, if additional
member(s) are admitted, the member(s) in proportion to their
respective capital accounts.
ARTICLE VI
DISTRIBUTION
SECTION 6.1 DISTRIBUTION IN KIND. Notwithstanding the provisions
of Section 18-605 of the Act, a member may receive distributions from
the Company in any form other than cash, and may be compelled to
accept a distribution of any asset in kind from the Company.
ARTICLE VII
ASSIGNMENT OF MEMBERSHIP AND COMMON INTERESTS
SECTION 7.1 ASSIGNMENT OF MEMBERSHIP AND COMMON INTERESTS.
Membership and Common Interests in the Company shall be assignable and
transferable with the consent of the existing member(s). Any
transferee shall not be admitted as a member unless and until the
transferee has executed a counterpart of this Agreement.
SECTION 7.2 CERTIFICATES. Common Interests in the Company may,
but need not be, evidenced by a certificate of limited liability
company interest issued by the Company.
ARTICLE VIII
DISSOLUTION
SECTION 8.1 DURATION AND DISSOLUTION. The duration of the Company
shall be perpetual.
SECTION 8.2 WINDING UP. Subject to the provisions of the Act, the
Member or, if additional member(s) are admitted, the member(s) (acting
by written consent of all member(s)) 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 in
accordance with Section 8.1) and shall also have the right to act as
or appoint a liquidating trustee in connection therewith.
SECTION 8.3 DISTRIBUTION OF ASSETS. 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; REPORTS
SECTION 9.1 TAX TREATMENT. The Company shall timely make all
necessary elections and filings for federal, state, and local tax
purposes such that it will not be treated as a separate entity, but,
instead, will be disregarded, for federal, state, and local tax
purposes.
SECTION 9.2 FORM K-1. After the end of each Fiscal Year for which
the Company shall have more than one member, the member(s) 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 Member, or if additional
member(s) are admitted, the member(s) shall cause to be prepared and
timely filed all tax returns required to be filed for the Company. The
Member or the member(s) (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 the member(s) shall be required in order
for the Company to make an election pursuant to Section 754 of the
Internal Revenue Code of 1986, as amended (the "Code").
ARTICLE X
EXCULPATION AND INDEMNIFICATION
SECTION 10.1 EXCULPATION. Notwithstanding any other provisions of
this 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 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 the 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 AMENDMENTS TO THIS AGREEMENT. Following the
execution and delivery of this Agreement by the parties hereto, this
Agreement may be amended by, and only by, a written instrument
executed by the Transferee Member.
SECTION 11.2 SUCCESSORS; COUNTERPARTS. Subject to Article VIII,
this Agreement (a) shall be binding as to the executors,
administrators, estates, heirs and legal successors, or nominees or
representatives, of the member(s) or, if additional member(s) are
admitted, the member(s) 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. This 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 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
Agreement shall be invalid or unenforceable under the Act or other
applicable law, such invalidity or unenforceability shall not validate
the entire Agreement and this 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 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 is invalid or unenforceable, this
Agreement shall be construed or interpreted so as (a) to make it
enforceable or valid and (b) to make the distributions and allocations
as closely equivalent to those set forth in this Agreement as is
permissible under applicable law.
SECTION 11.4 FILINGS. Following the execution and delivery of
this Agreement, the member(s) shall promptly prepare any documents
required to be filed and recorded under the Act, and the member(s)
shall promptly cause each such document 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 member(s) 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 Agreement are for reference purposes only and are not intended to
describe, interpret, define or limit the scope or intent of this
Agreement or any provision hereof.
SECTION 11.6 ADDITIONAL DOCUMENTS. 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
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 member(s) or, if
additional member(s) are admitted, the member(s) 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.
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first above written.
CinCap VIII, LLC, as Current Member
By: __________________
William L. Sheafer
Treasurer
VMC Generating Company, as Transferee Member
By: ____________________
Name:
Title:
