Exhibit 3.1
TENASKA GEORGIA PARTNERS, L.P.
LIMITED PARTNERSHIP AGREEMENT
October 29, 1999
TABLE OF CONTENTS
PAGE NO.
Article 1 - Parties to this Agreement
1.1 Parties......................................................................................1
Article 2 - Definitions..................................................................................2
2.1 Certain Defined Terms........................................................................2
2.2 Other Defined Terms..........................................................................9
2.3 Construction.................................................................................9
2.4 References...................................................................................9
Article 3 - Formation of the Partnership; Other Related Matters
3.1 Formation...................................................................................10
3.2 Name........................................................................................10
3.3 Sole Purpose................................................................................10
3.4 Representations and Warranties Concerning Formation of Partnership..........................10
3.5 Offices.....................................................................................11
3.6 Power and Authority.........................................................................11
3.7 Regulatory Status of the Partnership........................................................11
3.8 Filings.....................................................................................11
3.9 Term........................................................................................12
3.10 Limitation on Liability of Partners.........................................................12
3.11 No Partner Responsible for Other Partner's Commitments......................................12
Article 4 - Capitalization of the Partnership and Partnership Budgets
4.1 Capitalization of the Partnership...........................................................13
4.2 Construction Equity Contributions; Equity Guarantees........................................13
4.3 Development Funds...........................................................................13
4.4 Project Guarantees..........................................................................13
4.5 Additional Capital..........................................................................14
4.6 Partnership Budgets.........................................................................15
Article 5 - Reimbursement and Development Funds and Distribution of
Unspent Contingency
5.1 Reimbursement of Development Funds..........................................................17
5.2 Annual Fee..................................................................................17
5.3 Distribution of Unspent Contingency.........................................................17
Article 6 - Allocations of Income, Profits and Losses and Distributions of
Cash and Assets
6.1 Income, Profits and Losses..................................................................19
6.2 Distributions...............................................................................19
Article 7 - Management of the Partnership
7.1 Managing Partner............................................................................20
7.2 Executive Review Committee..................................................................21
7.3 Actions Requiring Fifty-One Percent (51%) Approval or
Consent of the ERC..........................................................................23
7.4 Actions Requiring Ninety Percent (90%) Approval or Consent
of the ERC..................................................................................24
7.5 Actions Requiring Unanimous Approval or Consent of the
General Partners............................................................................25
7.6 Actions Requiring Unanimous Approval or Consent of the Partners.............................25
Article 8 - Services From Partners Other Than the Managing Partner
8.1 Services Requested From Partners Other Than the Managing Partner............................26
8.2 Billing Statement Deadline..................................................................26
8.3 Payment Deadline............................................................................26
8.4 Failure to Make Payment.....................................................................26
8.5 Examination of Books and Records............................................................26
Article 9 - Accounting and Taxation
9.1 Location of Records.........................................................................27
9.2 Books of Account............................................................................27
9.3 Annual Financial Statements and Tax Information.............................................27
9.4 Interim Financial Statements................................................................27
9.5 Taxation....................................................................................28
9.6 Governmental Reports........................................................................28
9.7 Inspection of Facilities and Records........................................................28
9.8 Deposit and Withdrawal of Funds.............................................................28
Article 10 - Transfers of Partnership Interests
10.1 Permitted Transfers........................................................................29
10.2 Withdrawal of Transferor Partner...........................................................30
10.3 Effect of Prohibited Transfers.............................................................30
10.4 Transfers under a Security Interest........................................................30
10.5 Tax Election...............................................................................30
10.6 Pledge of Partnership Interests............................................................30
Article 11 - Admission of Additional Partners
11.1 Permitted Admissions.......................................................................31
11.2 Effect of Prohibited Admission.............................................................31
Article 12 - Default and Withdrawal Provisions
12.1 Default Provisions; Withdrawal of Defaulting Partner.......................................32
12.2 Cure Period Distributions..................................................................33
12.3 Automatic Withdrawal.......................................................................33
12.4 General Withdrawal Provisions..............................................................34
Article 13 - Termination of the Partnership
13.1 Voluntary Dissolution......................................................................37
13.2 Automatic Dissolution......................................................................37
13.3 Avoidance of Dissolution...................................................................37
13.4 Winding Down and Liquidation...............................................................38
13.5 Continuance of Partnership.................................................................38
Article 14 - Miscellaneous Provisions
14.1 Effect of Agreement........................................................................39
14.2 Notices....................................................................................39
14.3 Further Assurances.........................................................................40
14.4 Applicable Law and Jurisdiction............................................................40
14.5 Counterparts...............................................................................41
14.6 Headings...................................................................................41
14.7 Waiver.....................................................................................41
14.8 Partition..................................................................................41
14.9 Laws and Regulatory Bodies.................................................................41
14.10 Waiver of Consequential and Punitive Damages...............................................41
14.11 Partnership Opportunity....................................................................42
14.12 Article and Section Numbers................................................................42
14.13 Confidentiality Provisions.................................................................42
14.14 Reference to Money.........................................................................44
14.15 Severability...............................................................................44
14.16 Agency.....................................................................................44
14.17 Materiality................................................................................44
14.18 Prior Agreements...........................................................................44
14.19 Binding Effect.............................................................................45
APPENDICES
APPENDIX A Partnership Percentages
APPENDIX B Standard Billing Practices
APPENDIX C Representatives and Alternate Representatives to the ERC
TENASKA GEORGIA PARTNERS, L.P.
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (the
"Agreement") of Tenaska Georgia Partners, L.P. (the "Partnership") is entered
into by and between Tenaska Georgia, Inc. and Tenaska Georgia I, L.P. effective
October 29, 1999.
In consideration of the mutual covenants hereinafter set forth, the
Parties hereby agree as follows:
ARTICLE 1
PARTIES TO THIS AGREEMENT
1.1 PARTIES. The Parties to this Agreement are as follows:
(a) Tenaska Georgia, Inc. ("TENASKA GP"), a corporation organized under
the laws of the State of Delaware, with its principal offices and
address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, which is
a "General Partner" (as defined in Section 2.1) in the Partnership; and
Tenaska Georgia I, L.P. ("TENASKA LP"), a limited partnership organized
under the laws of the State of Delaware, with its principal offices and
address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, which is
a "Limited Partner" (as defined in Section 2.1) in the Partnership.
PARTNERSHIP AGREEMENT
Page 2
ARTICLE 2
DEFINITIONS
2.1 Unless otherwise required by the context, the terms defined in this
Article 2 shall, for all purposes of this Agreement, have the
respective meanings set forth below:
"ACT" means the Delaware Revised Uniform Limited Partnership Act (6
Del. C. 1953, Section 17-101 et. seq.), as amended from time to time.
"ADDITIONAL CAPITAL" means any capital advances, equity
contribution(s), or loans made by the Partners to the Partnership other
than the advance or contribution of Development Funds or Construction
Equity Contributions.
"ADDITIONAL PARTNER" means a Partner admitted to the Partnership
pursuant to and in accordance with the provisions of this Agreement
after the Effective Date.
"AFFILIATE" means any Person that directly or indirectly controls, is
controlled by, or is under common control with, any Person. For the
purposes of this definition, (a) a Person which has a right to vote
directly or indirectly more than 50% of the voting interests of a
Partner shall be deemed to be in control of such Partner, (b) a Partner
which has a right to vote directly or indirectly more than 50% of the
voting interests of a Person shall be deemed to be in control of such
Person, (c) a Person which has voting interests which are more than 50%
owned or controlled by a direct or indirect Parent of a Partner shall
be deemed to be under common control with such Partner, (d) a Person
which has voting interests which are more than 50% owned by more than
50% of the direct or indirect owners of a Partner shall be deemed to be
under common control with such Partner, and (e) the Partnership shall
not be deemed to be an Affiliate of any Partner.
"AGREEMENT" means this limited partnership agreement of Tenaska Georgia
Partners, L.P., as amended, modified, supplemented, renewed, extended
or restated from time to time, and any and all Appendices attached
hereto.
"ALTERNATE REPRESENTATIVE" means an alternate member of the ERC
designated by each General Partner pursuant to the provisions of
Section 7.2(a).
"BUDGET ITEMS" means revenues, expenses, capital expenditures, cash
calls and distributions.
"BUSINESS DAY" means any day upon which national banks are open for
business in Omaha, Nebraska.
PARTNERSHIP AGREEMENT
Page 3
"CAPACITY UPGRADE" means any capital improvements associated with
increasing the electrical output capacity of the Project which are
economically advantageous to the Partnership; provided such
improvements do not include the installation of additional electric
generator(s) beyond the Project's then current design.
"CERTIFIED PUBLIC ACCOUNTANTS" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or such other
firm of independent public accountants hereafter selected from time to
time by the ERC pursuant to Section 7.3(j).
"CHAIRMAN" means the Chairman of the ERC as provided for in Section
7.2(b).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL AGENCY AGREEMENT" means the Collateral Agency and
Intercreditor Agreement among the Partnership, the Development
Authority of Heard County, Georgia, The Chase Manhattan Bank, in its
capacities as Trustee, Depositary Bank and Collateral Agent as defined
therein, and the agents under certain ancillary agreements described
therein as the DSR LOC Reimbursement Agreement and the PPA LOC
Reimbursement Agreement, including any amendments, modifications,
supplements, extensions, restatements or other changes thereto from
time to time.
"COMMERCIAL OPERATION DATE" means the "Scheduled Date of Commercial
Operation for the Final Units", as such term is defined in the Power
Purchase Agreement.
"COMMON AGREEMENT" means the Agreement as to Certain Undertakings,
Common Representations, Warranties, Covenants and Other Terms among the
Partnership, The Chase Manhattan Bank, in its capacities as Trustee,
Depositary Bank and Collateral Agent as defined therein, and the agents
under certain ancillary agreements described therein as the DSR LOC
Reimbursement Agreement and the PPA LOC Reimbursement Agreement,
including any amendments, modifications, supplements, extensions,
restatements or other changes thereto from time to time.
"CONFIDENTIAL INFORMATION" has the meaning provided in Section
14.13(d).
"CONSTRUCTION EQUITY CONTRIBUTIONS" means collectively the Equity
Contributions which the Partners are required to make to the
Partnership pursuant to the Equity Contribution Agreement.
"CONSTRUCTION EQUITY CONTRIBUTIONS DATE" means the earlier of (i) the
date or dates required by the Equity Contribution Agreement or (ii) the
date or dates otherwise approved by the ERC.
"CONSTRUCTION PERIOD" means the period beginning on the date of
Financial Closing and ending on the Commercial Operation Date.
PARTNERSHIP AGREEMENT
Page 4
"CONTRIBUTE" or "CONTRIBUTED" has the meaning provided in Section 4.5.
"CURE PERIOD" has the meaning provided in Section 12.1(a).
"DEFAULT AFFILIATE" has the meaning provided in Section 12.1(a).
"DEFAULT NOTICE" has the meaning provided in Section 12.1(a).
"DEFAULTING PARTNER" means a Partner which is in default as provided
for in Section 12.1(a).
"DEVELOPMENT FUNDS" means funds advanced by the Partners to the
Partnership pursuant to Section 4.3 (and any funds expended by any
Partner, or Affiliate thereof, on behalf of the Project prior to the
Effective Date as the case may be) to fund the cost of the time
charges, expenses, expenditures, commitment fees and deposits,
cancellation fees and deposits, and other fees and deposits incurred,
expended or accrued by the Partnership or any Partner or Affiliate
thereof on behalf of the Partnership and included in the Partnership
Budget for the Development Period.
"DEVELOPMENT PERIOD" means the period beginning on the Effective Date
and ending on the date of Financial Closing.
"EFFECTIVE DATE" means April 16, 1998.
"EFFICIENCY UPGRADE" means any capital improvements associated with
improving the heat rate for the then existing combustion gas turbine
equipment of the Project which are economically advantageous to the
Partnership.
"ELECTING PARTNER" has the meaning provided in Section 12.4(b).
"ELECTION PERIOD" has the meaning provided in Section 12.4(a).
"ELECTION RESULTS NOTICE" has the meaning provided in Section 12.4(b).
"EQUITY CONTRIBUTION AGREEMENT" means the Equity Contribution Agreement
among the contributing Partners, the Partnership and The Chase
Manhattan Bank, as Collateral Agent, including any amendments,
modifications, supplements, extensions, restatements or other changes
thereto from time to time.
"EQUITY CONTRIBUTIONS" means collectively the contribution of
Construction Equity Contributions and/or Additional Capital by a
Partner to the equity of the Partnership pursuant to Article 4.
PARTNERSHIP AGREEMENT
Page 5
"EQUITY GUARANTEE" means a form of surety or guarantee provided by each
Partner, or Affiliate thereof, in the form as required by the Senior
Parties to support the obligation to make Construction Equity
Contributions.
"EQUITY OWNERSHIP PERCENTAGE" means the percentage for each Partner as
set forth in Column A of Appendix A, as such may be in effect from time
to time and as such may be modified pursuant to the terms of this
Agreement.
"EXECUTIVE REVIEW COMMITTEE" OR "ERC" means the executive management
committee of the Partnership as further provided for in Section 7.2.
"EXEMPT WHOLESALE GENERATOR" OR "EWG" means an entity that meets the
requirements of an exempt wholesale generator pursuant to Section 32 of
PUHCA.
"FEDERAL FUNDS RATE" shall mean, for any day, a per annum rate equal to
the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day by the Federal Reserve
Bank of New York. The Federal Funds Rate shall be adjusted daily to
reflect any change in such rate. Interest shall be calculated on the
basis of a 360 day year for the actual number of days elapsed.
"FERC" means the Federal Energy Regulatory Commission, or its
successor.
"FINANCING" means the financing arrangement by and between the
Partnership and the Senior Parties to fund the cost of developing,
constructing, owning or leasing, and operating the Project as more
fully described in the Common Agreement.
"FISCAL YEAR" means the calendar year, or portion of a calendar year as
may be the case in the first and last year of the Partnership's term of
existence, or such other period as may be approved by the ERC.
"FINANCIAL CLOSING" means the date when the Senior Parties have
acknowledged, either in writing or by allowing loan draws, that the
Partnership has satisfied all conditions precedent to drawdown on funds
available for Financing.
"GAAP" means Generally Accepted Accounting Principles as pronounced
from time to time by the Financial Accounting Standards Board.
"GENERAL PARTNER" means Tenaska GP and any other Person which is
admitted to the Partnership as a general partner pursuant to and in
accordance with this Agreement.
"INTEREST RATE" means the lesser of (a) prime lending rate quoted by
The Chase Manhattan Bank for loans having a maturity of ninety (90)
days or less as reported in THE WALL
PARTNERSHIP AGREEMENT
Page 6
STREET JOURNAL on the first Business Day of each calendar quarter plus
eight hundred (800) basis points or (b) the highest rate allowed by
applicable law.
"LIMITED PARTNER" means TENASKA LP and any other Person admitted to the
Partnership as a limited partner pursuant to and in accordance with
this Agreement.
"MANAGING PARTNER" means TENASKA GP, or a substitute Managing Partner
as the case may be pursuant to Section 7.1(b).
"MATERIAL CONTRACT" means any written agreement entered into, or
contemplated to be entered into, by the Partnership which obligates the
Partnership to expend more than five hundred thousand dollars
($500,000); EXCLUDING, however, agreements related to the ordinary
day-to-day business activities of the Partnership, including but not
limited to agreements related to insurance, spare parts, chemical
supplies, day-to-day or month-to-month fuel management, or short-term
cash management.
"NON-ELECTING PARTNER" has the meaning provided in Section 12.4(b).
"OPERATING PERIOD" means the period which begins immediately after the
"Date of Commercial Operation" as such term is defined in the Power
Purchase Agreement and continues until the Partnership is terminated,
dissolved and liquidated in accordance with this Agreement.
"PARENT" means any Person which owns directly or indirectly more than
fifty percent (50%) of the outstanding voting stock of a Partner or
other form of voting equity interests in a Partner.
"PARTIES" has the meaning provided in Section 1.
"PARTNER" means each of the Parties executing this Agreement, and any
Additional Partner which is admitted to the Partnership pursuant to and
in accordance with this Agreement.
"PARTNERSHIP" means the Delaware limited partnership named Tenaska
Georgia Partners, L.P. formed as of April 16, 1998 and existing
pursuant to the provisions of this Agreement.
"PARTNERSHIP BUDGETS" means collectively the capital and operating
budgets for the Partnership which are established pursuant to Section
4.6 and which include (i) the budget for the Development Funds
incurred, expended or accrued prior to the Effective Date and the
Development Funds to be incurred, expended or accrued during the
Development Period (the "Partnership Budget for the Development
Period"), (ii) the budget for construction costs and Development Funds
to be incurred, expended or accrued during the Construction Period (the
"Partnership Budget for the Construction Period"), and (iii) the
operating plan budget for each Fiscal Year which reflects Budget
PARTNERSHIP AGREEMENT
Page 7
Items expected to be incurred, expended, accrued or realized during the
Operating Period.
"PARTNERSHIP INTEREST" means a Partner's equity interest in the
Partnership comprised of the Partnership Percentages associated with
such equity interest and any other rights, title and obligations
associated with such equity interest that may exist pursuant to this
Agreement.
"PARTNERSHIP PERCENTAGES" means collectively a Partner's Equity
Ownership Percentage and Voting Interest Percentage as set forth in
Appendix A as such may be in effect from time to time and as such may
be modified pursuant to the terms of this Agreement.
"PERMITTED TRANSFER" has the meaning provided in Section 10.1.
"PERSON" means an individual, corporation, limited liability company,
voluntary association, joint stock company, business trust,
partnership, agency or other entity.
"PLEDGE AGREEMENTS" means collectively the Partner Pledge and Security
Agreement made by each of the Partners in favor of The Chase Manhattan
Bank, as Collateral Agent, and provided as additional security for the
Senior Debt, including any amendments, modifications, supplements,
extensions, restatements or other changes to any of the foregoing from
time to time.
"POWER PURCHASE AGREEMENT" means the "Power Purchase Agreement" by and
between the Partnership and PECO Energy Company dated August 24, 1999,
providing for the sale and purchase of the electrical output of the
Project, as thereafter amended, modified, supplemented, renewed,
extended or restated from time to time.
"PRIMARY TERM" has the meaning provided in Section 3.9.
"PROJECT" means the real, personal and mixed property (whether tangible
or intangible), comprising the approximately 936 MW gas-fired
simple-cycle electric generating plant located in Heard County, Georgia
which is to be owned or leased and operated by the Partnership for the
generation and sale of electric power.
"PROJECT CONTRACT" means any agreement relating to the Project to which
the Partnership is a party.
"PROJECT COSTS" means the sum of Development Funds, construction costs
and all other costs and expenditures incurred, expended or accrued by
the Partnership, or by any Partner or Affiliate thereof on behalf of
the Partnership, in connection with the development, financing,
testing, construction and initial operation of the Project which are
set forth in the Partnership Budget for the Construction Period.
PARTNERSHIP AGREEMENT
Page 8
"PROJECT GUARANTEES" means guarantees or surety instruments provided to
or on behalf of the Partnership (which may be in the form of corporate
guarantees, letters-of-credit, cash escrows, security deposits or other
forms acceptable to the Person(s) requiring such guarantees or surety
instruments) to cover any surety and guarantee requirements as may be
required as part of the development, construction and/or operation of
the Project.
"PRUDENT GENERATOR PRACTICES" means any of the practices, methods and
acts engaged in or approved by a significant portion of the independent
power industry in the United States during the relevant time period, or
any of the practices, methods and acts which, in the exercise of
reasonable judgment in the light of the facts known at the time the
decision was made, could have been expected to accomplish the desired
result at the lowest reasonable cost consistent with good business
practices, reliability, safety and expedition. Prudent Generator
Practices is not intended to be limited to the optimum practice, method
or act to the exclusion of all others, but rather to be within a
spectrum of acceptable practices, methods and acts, having due regard
for, among other things, manufacturers' warranties, contractual
obligations, the requirements or guidance of governmental authorities
of competent jurisdiction, applicable laws, applicable North American
Electric Reliability Council (or similar or successor organizations)
policies, the requirements of insurers, and the requirements of the
Power Purchase Agreement.
"PRUDENT OPERATING COSTS" means, collectively, those costs and
expenditures which are incurred, expended or accrued in connection with
(i) the operation of the Project in accordance with Prudent Generator
Practices, (ii) a Capacity Upgrade, and/or (iii) an Efficiency Upgrade.
"PUHCA" means the Public Utility Holding Company Act of 1935 and any
regulations promulgated thereunder, and any successor laws and
regulations.
"REPLACEMENT GUARANTEE" has the meaning provided in Section 12.4(a).
"REPRESENTATIVE" means a member of the ERC designated by a General
Partner pursuant to the provisions of Section 7.2(a).
"SENIOR DEBT" has the meaning provided in the Common Agreement.
"SENIOR PARTIES" means holders of Senior Debt.
"STANDARD BILLING PRACTICES" means the rate and methodology as
calculated and set forth in Appendix B.
"TRANSFER" has the meaning provided in Section 10.1.
"UNSPENT CONTINGENCY" means the aggregate amount of funds transferred
to the Partnership Distribution Fund (as defined in the Collateral
Agency Agreement) pursuant
PARTNERSHIP AGREEMENT
Page 9
to Section 3.2 of the Collateral Agency Agreement which are (or have
met all of the conditions for being) transferred to, or as directed by,
the Partnership pursuant to the Collateral Agency Agreement.
"VOTING INTEREST PERCENTAGE" means the Voting Interest Percentage, as
applicable, for each Partner as set forth in Column B of Appendix A, as
such may be in effect from time to time and as such may be modified
pursuant to the terms of this Agreement.
"WEIGHTED VOTING INTEREST" means each eligible ERC member's vote
weighted by multiplying the Voting Interest Percentage of the General
Partner it represents by the percentage determined by dividing the
Voting Interest Percentage of the General Partner it represents by the
aggregate Voting Interest Percentages of all the General Partners
represented in such vote of ERC members which are eligible to vote,
with each ERC member's voting eligibility determined pursuant to
Section 7.2(d).
"WITHDRAWAL INTEREST" has the meaning provided in Section 12.4(a).
"WITHDRAWAL NOTICE" has the meaning provided in Section 12.1(a) or
12.3.
"WITHDRAWN PARTNER" means a Partner which has become withdrawn from the
Partnership pursuant to this Agreement.
"WITHDRAWN PARTNER OBLIGATIONS" has the meaning provided in Section
12.4(a).
2.2 OTHER DEFINED TERMS. Other capitalized terms used in this Agreement
and not defined in Section 2.1 shall have the meanings indicated
throughout this Agreement.
2.3 CONSTRUCTION. The words "HEREOF", "HEREIN", "HERETO", and "HEREUNDER",
and words of similar import, when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement. Whenever the context requires, the gender of all words used
herein shall include the masculine, feminine and neuter, and the number
of all words shall include the singular and plural.
2.4 REFERENCES. Unless otherwise specified, references in this Agreement to
"SECTIONS", "SUBSECTIONS", "ARTICLES", or "APPENDICES" refer to the
sections, subsections or articles in this Agreement or to the
appendices attached to this Agreement, respectively.
PARTNERSHIP AGREEMENT
Page 10
ARTICLE 3
FORMATION OF THE PARTNERSHIP;
OTHER RELATED MATTERS
3.1 FORMATION. The Partnership was formed on April 16, 1998 pursuant to the
Act.
3.2 NAME. The name of the Partnership shall be Tenaska Georgia Partners,
L.P. and all business of the Partnership shall be conducted in such
name or such other name as the ERC shall approve. The Managing Partner
shall execute, file and amend, or cause the General Partners to
execute, file and amend, limited partnership certificates with such
governmental authorities as may be necessary in connection with the
business of the Partnership.
3.3 SOLE PURPOSE. The sole purpose of the Partnership shall be to plan,
design, develop, finance, construct, own or lease, operate and maintain
the Project and conduct any activities reasonably related thereto. The
Partnership shall be authorized to engage in other activities only as
approved by the unanimous consent of the General Partners pursuant to
Section 7.5(c) and only to the extent permitted by the Common Agreement
as long as any Senior Debt is outstanding.
3.4 REPRESENTATIONS AND WARRANTIES CONCERNING FORMATION OF PARTNERSHIP.
Each Partner represents and warrants to the other Partners and to the
Partnership that:
(a) at the time of its admission to the Partnership, the execution and
delivery of this Agreement, the formation or continuation of the
Partnership, as the case may be, with respect to such Partner, and the
performance of its obligations hereunder will not (i) contravene or
conflict with the charter, by-laws, limited liability company agreement
or partnership agreement of such Partner, (ii) contravene, conflict
with or constitute a default under any indenture, mortgage, instrument
or other agreement of such Partner, or (iii) contravene, conflict with
or constitute a default in respect of any order of any court,
commission or governmental agency applicable to such Partner;
(b) the execution and delivery of this Agreement has been duly
authorized and this Agreement, when executed and delivered by such
Partner, will be its valid and binding agreement, enforceable in
accordance with the terms hereof, except as enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other
similar laws affecting creditors' rights generally and except as
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); and
(c) it is a corporation, limited liability company, or partnership, as
the case may be, duly organized, validly existing and in good standing
under the laws of the jurisdiction of
PARTNERSHIP AGREEMENT
Page 11
its creation, and will do or cause to be done for as long as it is a
Partner, all things necessary to continue such status.
3.5 OFFICES. The principal offices of the Partnership shall be located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other place as the ERC may, from time to time, determine. The
registered office of the Partnership in the State of Delaware is at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the name of the
registered agent for service of process in such state is Corporation
Service Company, or such other registered office and/or registered
agent as the ERC may, from time to time, determine. Written notice of
any change in such offices shall be given to each Partner by the
Managing Partner.
3.6 POWER AND AUTHORITY. The Partnership shall be empowered to do any and
all acts and things necessary, appropriate, proper, advisable,
incidental to or convenient for the furtherance and accomplishment of
the purposes and business described in this Article 3 and for the
protection and benefit of the Partnership. The Partnership shall have
the power and authority to plan, develop, design, secure permits and
regulatory approvals, finance, construct, own or lease, and operate the
Project. In addition, the Partnership shall have the power and
authority to own or lease the property on which the Project is located
and to receive assignment of various documents relating to the
development, construction and operation of the Project. The Partnership
also shall have the authority to enter into and perform its obligations
under the Common Agreement and all other Transaction Documents (as
defined in the Common Agreement) to which it is a party. The Managing
Partner is hereby authorized to execute, deliver and perform the Common
Agreement and all other Transaction Documents on behalf of the
Partnership notwithstanding any other provision of this Agreement.
3.7 REGULATORY STATUS OF THE PARTNERSHIP. The Partnership shall seek a
determination from the FERC that the Partnership is an Exempt Wholesale
Generator (EWG) and thereafter shall register such determination with
the Georgia Public Utility Commission. The Partnership shall also seek
to have FERC authorize the Partnership to sell power under a
market-based rate schedule under Section 205 of the Federal Power Act.
Each Partner agrees to cooperate with the Partnership in all reasonable
and necessary ways to ensure that the Partnership does not lose its EWG
status and to ensure that the Partnership and each Partner does not
become a holding company under PUHCA. Each Partner further agrees to
refrain from activities which would threaten to cause, or would cause,
loss or revocation of the Partnership's EWG status or cause the
Partnership or any Partner to become a holding company under PUHCA.
3.8 FILINGS.
(a) The Managing Partner shall take any and all actions reasonably
necessary to register and maintain the status of the Partnership as a
limited partnership under the laws of the State of Delaware and any
other states or jurisdictions in which the Partnership
PARTNERSHIP AGREEMENT
Page 12
engages in business and otherwise to qualify the Partnership to engage
in business in all such jurisdictions. The Managing Partner shall cause
amendments to the certificate of limited partnership of the Partnership
to be filed whenever required by the Act and/or such other laws. The
Managing Partner is hereby authorized to execute such amendments on
behalf of the Partnership and the Partners.
(b) Upon the dissolution of the Partnership, the Managing Partner shall
promptly execute and cause to be filed a certificate of cancellation in
accordance with the Act and other filings required under the laws of
any other states or jurisdictions in which the Partnership conducts
business.
3.9 TERM. The term of the Partnership commenced on the filing of a
certificate of limited partnership with the Secretary of State in the
State of Delaware, and shall continue until December 31, 2050 (the
"Primary Term"), subject to the earlier winding up and liquidation of
the Partnership and its business under Article 13 following an event of
dissolution described in Article 13.
3.10 LIMITATION ON LIABILITY OF PARTNERS. No Limited Partner shall have any
personal liability for Partnership losses, deficits, liabilities or
obligations, such Limited Partner's obligations being only to the
Partnership for the amount contributed or committed to be contributed
by such Limited Partner to the capital of the Partnership in accordance
with this Agreement. Subject to the provisions of applicable law, no
General Partner shall be liable to third persons for Partnership
losses, deficits, liabilities or obligations, except as otherwise
expressly agreed to in writing by such General Partner or as otherwise
expressly provided for in this Agreement, unless the assets of the
Partnership shall first be exhausted. In the event that the
Partnership's assets are exhausted, each General Partner's share of the
Partnership losses, deficits, liabilities or obligations shall be
limited to the ratio of its Equity Ownership Percentage to the total
Equity Ownership Percentages of all General Partners. The General
Partners shall have the right of contribution against each other to
give effect to the foregoing. The General Partners shall not have any
personal liability for repayment of the capital contributions of any
Limited Partner.
3.11 NO PARTNER RESPONSIBLE FOR OTHER PARTNER'S COMMITMENTS. Neither the
Partnership nor any Partner shall be liable for any debt, obligation or
liability of any other Partner (the "incurring Partner") incurred
either before or after execution of this Agreement, except for those
debts, obligations or liabilities expressly assumed in writing by the
Partnership or other Partner under and pursuant to the terms and
conditions of this Agreement, and each incurring Partner hereby
indemnifies and agrees to hold harmless the Partnership and each other
Partner from all debts, obligations and liabilities of the incurring
Partner not so assumed by the Partnership or such other Partner.
PARTNERSHIP AGREEMENT
Page 13
ARTICLE 4
CAPITALIZATION OF THE PARTNERSHIP
AND PARTNERSHIP BUDGETS
4.1 CAPITALIZATION OF THE PARTNERSHIP. Each Partner hereby commits to
contribute, provide or advance to the Partnership the Equity
Guarantees, Equity Contributions, Development Funds, and Project
Guarantees as described in this Article 4. Except to the extent
expressly provided in this Article 4, the Partners shall not be
obligated to advance, contribute, loan or provide any Additional
Capital to the Partnership.
4.2 CONSTRUCTION EQUITY CONTRIBUTIONS; EQUITY GUARANTEES.
(a) CONSTRUCTION EQUITY CONTRIBUTIONS. On each Construction Equity
Contributions Date, each Partner shall contribute to the Partnership
Construction Equity Contributions in an amount equal to its Equity
Ownership Percentage multiplied by the aggregate amount of Construction
Equity Contributions required to be contributed by all of the Partners
on such Construction Equity Contributions Date pursuant to the Equity
Contribution Agreement.
(b) EQUITY GUARANTEES. On the earlier of (i) the date of Financial
Closing, (ii) the date otherwise required by the Senior Parties, or
(iii) the date otherwise approved by the ERC, each Partner shall
provide to the Partnership or the Senior Parties an Equity Guarantee in
an amount equal to its Equity Ownership Percentage multiplied by the
aggregate amount of Construction Equity Contributions required to be
contributed by all of the Partners pursuant to the Equity Contribution
Agreement.
4.3 DEVELOPMENT FUNDS. Each Partner commits that it will advance
Development Funds to the Partnership as requested by the Managing
Partner, subject to the Partnership Budget. Within seven (7) days after
receipt of a written request from the Managing Partner, each Partner
shall advance Development Funds in an amount equal to its Equity
Ownership Percentage multiplied by the aggregate amount of such
Development Funds requested to be advanced by all of the Partners,
subject to the Partnership Budget.
4.4 PROJECT GUARANTEES. Each Partner commits that it will provide Project
Guarantees to or on behalf of the Partnership as requested by the
Managing Partner, subject to ERC approval or as otherwise required
under a Project Contract. Within seven (7) days after receipt of a
written request from the Managing Partner, each Partner shall provide
Project Guarantees to or on behalf of the Partnership in an amount
equal to its Equity Ownership Percentage multiplied by the aggregate
amount of Project Guarantees required to be provided by all of the
Partners, subject to ERC approval or as required under a Project
Contract.
PARTNERSHIP AGREEMENT
Page 14
4.5 ADDITIONAL CAPITAL. Additional Capital for Prudent Operating Costs
shall be obtained by the Partnership, or contributed, advanced, loaned
or otherwise provided (collectively, "Contribute" or "Contributed", as
the case may be) by the Partners, as set forth in this Section 4.5. Any
Additional Capital for other than Prudent Operating Costs shall require
ERC approval pursuant to Section 7.3(b).
(a) Upon the Managing Partner's determination that Prudent Operating
Costs are required, then, notwithstanding that the Partnership Budget
may not include such Prudent Operating Costs, the Managing Partner is
hereby authorized to incur, expend or accrue such Prudent Operating
Costs. To the extent that Partnership cash reserves are inadequate to
fund such Prudent Operating Costs, the Managing Partner is hereby
authorized: first, to obtain such funds through credit facilities from
third parties on commercially reasonable terms and secured by
Partnership assets; and second, to the extent such third party credit
facilities are unavailable, to request such funds be Contributed by the
Partners, in whatever form the Managing Partner so elects in its sole
discretion.
(b) A Partner shall have the right to decline to Contribute requested
funds for Prudent Operating Costs in its sole discretion. Within seven
(7) days after receipt of the written request from the Managing Partner
for such funds, each Partner shall advise the Partnership of its
election to Contribute, or of its election NOT to Contribute, the
requested funds for Prudent Operating Costs. Partners which so elect to
Contribute such requested funds for Prudent Operating Costs are
referred to individually as a "Contributing Partner" and collectively
as the "Contributing Partners". Partners which decline (including by
failure to timely advise the Partnership of an election to Contribute)
to Contribute such requested funds for Prudent Operating Costs are
referred to individually as a "Non-Contributing Partner" and
collectively as the "Non-Contributing Partners".
(c) Within seven (7) days after receipt of the written request from the
Managing Partner for such funds, the Contributing Partners shall each
Contribute requested funds for Prudent Operating Costs, or if the
Managing Partner specifically requests, the Contributing Partners shall
each provide credit facilities or other credit support for Prudent
Operating Costs, in each case in an amount equal to the Contributing
Partner's pro rata share of such requested funds (based on the
proportion which its Equity Ownership Percentage represents of the
aggregate Equity Ownership Percentages of all Contributing Partners).
(d) In the event that funding pursuant to this Section 4.5 is
Contributed by some but not all of the Partner(s), then each
Contributing Partner is hereby assigned (pro rata, based on the
proportion which each Contributing Partner's Equity Ownership
Percentage represents of the aggregate Equity Ownership Percentages of
all Contributing Partners) all payments and/or distributions from the
Partnership that would otherwise be made to the Non-Contributing
Partners pursuant to this Agreement, including but not limited to
Sections 5.1, 5.2, 5.3, 5.4 or 6.2, until (i) the Contributing
Partner(s) have been repaid the
PARTNERSHIP AGREEMENT
Page 15
sums which it or they have Contributed to the Partnership for Prudent
Operating Requirements in the place of the Non-Contributing Partners,
plus (ii) interest at the Interest Rate on such sums from the date such
sums were Contributed until the date the Contributing Partner(s) have
been repaid in full.
(e) In the event that funding pursuant to this Section 4.5 is made by
some but not all of the Partners and is made in the form of credit
facilities or other credit support provided by a Contributing Partner,
then each Contributing Partner is hereby assigned (pro rata, based on
the proportion which each Contributing Partner's Equity Ownership
Percentage represents of the aggregate Equity Ownership Percentages of
all Contributing Partners) all payments and/or distributions from the
Partnership that would otherwise be made to the Non-Contributing
Partners pursuant to this Agreement, including but not limited to
Sections 5.1, 5.2, 5.3, 5.4 or 6.2, until (i) the Contributing Partners
have been compensated to date for such credit facilities or other
credit support (to the extent not drawn on) for the duration of that
support at an annual rate, equal to the Interest Rate less the Federal
Funds Rate, multiplied by the total amount of such commitment and (ii)
the Contributing Partners have been reimbursed to date for any draws on
such credit facilities or other credit support plus interest at the
Interest Rate on such sums from the date drawn.
4.6 PARTNERSHIP BUDGETS. Expenditures made by or on behalf of the
Partnership shall be limited to the total amounts reflected in each
Partnership Budget unless otherwise authorized by this Agreement or by
the ERC, and shall not be subject to monthly, yearly, line item or
other intermittent amounts if so reflected; provided, however, that the
Managing Partner shall undertake in good faith to manage the day-to-day
Partnership operations within such monthly, yearly, line item or other
intermittent amounts to the fullest extent reasonably practicable.
(a) DEVELOPMENT PERIOD. The Partnership Budget for the Development
Period shall be as approved by the ERC.
(b) CONSTRUCTION PERIOD. The Partnership Budget for the Construction
Period shall be the budget for Project Costs as approved by the Senior
Parties and included as part of the Common Agreement.
(c) OPERATING PERIOD. The Partnership Budget for the initial Fiscal
Year of the Operating Period shall be as approved by the ERC. For each
succeeding Fiscal Year during the Operating Period, a proposed
Partnership Budget shall be prepared by the Managing Partner for each
Fiscal Year during the Operating Period and submitted to the ERC for
its approval on or before the 15th day of the third calendar month
preceding each Fiscal Year. The ERC shall undertake in good faith to
approve such proposed Partnership Budget, with such modifications
thereto, if any, as the ERC may deem appropriate, prior to the
commencement of each Fiscal Year. In the event that the ERC does not in
any Fiscal Year approve a proposed Partnership Budget, with such
modifications thereto, if any, as the ERC may deem appropriate, prior
to and for the ensuing Fiscal Year, or if no
PARTNERSHIP AGREEMENT
Page 16
Partnership Budget is proposed, then a Partnership Budget which
includes and reflects the following items shall automatically be deemed
approved by the ERC (and for all purposes of this Agreement shall be
considered a Partnership Budget approved by the ERC) and become the
effective Partnership Budget on January 1 of the ensuing Fiscal Year
and shall remain in effect during such ensuing Fiscal Year unless and
until the ERC thereafter approves a different Partnership Budget for
such ensuing Fiscal Year:
(i) Budget Items which are directly related, based upon or
connected with Project Contracts, in amounts equal to that
reflected for such Budget Items under such Project Contracts
for the ensuing Fiscal Year;
(ii) annually recurring Budget Items which are not directly related
to, based upon or connected with Project Contracts, in amounts
equal to that reflected for such Budget Items in the
Partnership Budget for the then current Fiscal Year,
annualized if the then current Fiscal Year is a partial year,
and escalated by four percent (4%); and
(iii) non-recurring or extraordinary Budget Items in amounts based
on the long-term maintenance program for the Project including
scheduled outages.
PARTNERSHIP AGREEMENT
Page 17
ARTICLE 5
REIMBURSEMENT OF DEVELOPMENT FUNDS
AND DISTRIBUTION OF UNSPENT CONTINGENCY
5.1 REIMBURSEMENT OF DEVELOPMENT FUNDS. Upon Financial Closing, all
Development Funds advanced by the Partners, either pursuant to the
Partnership Budget or otherwise as approved by the ERC, shall be
reimbursable, due and payable to the Partners on a pro rata basis based
on the percentages determined by dividing the amount of Development
Funds that each Partner has advanced to the Partnership by the
aggregate amount of Development Funds advanced by all of the Partners.
Such reimbursements shall be paid out of and from the initial drawdown
of funds from the Financing; and if sufficient funds are not available
out of the initial drawdown of funds from the Financing to reimburse in
full all of the Development Funds due and owing to the Partners, the
remaining amount of such Development Funds due to be reimbursed to the
Partners shall be paid out of the subsequent drawdown of funds from the
Financing; and if sufficient funds are not available out of such
subsequent drawdowns, then out of and from the first available cash of
the Partnership before any distributions are made to the Partners
pursuant to Sections 5.2, 5.3 or 6.2. Any Development Funds not
previously reimbursed shall be reimbursed upon liquidation of the
Partnership.
5.2 ANNUAL FEE. The Partnership shall pay an Annual Fee to TENASKA GP, or
its designee, throughout the life of the Project as part of the
operations and maintenance expense of the Project. The initial Annual
Fee shall be three hundred fifty thousand dollars ($350,000) and shall
be due and payable on the date of Financial Closing; thereafter the
Annual Fee shall escalate at five percent (5%) per annum, and shall be
due and payable on January 1 of each subsequent calendar year following
the date of Financial Closing until the Project is terminated. As an
accommodation to the Financing, TENASKA GP hereby waives payment of the
Annual Fee during the Construction Period and through 2009 of the
Operating Period. As a result, the Annual Fee in an amount equal to
five hundred ninety-eight thousand six hundred eighteen dollars and
seventy-eight cents ($598,618.78) shall commence being due and payable
to TENASKA GP or its designee on January 1, 2010 and such amount shall
thereafter escalate at five percent (5%) per annum, and continue to be
due and payable on January 1 of each subsequent calendar year until the
Project is terminated.
5.3 DISTRIBUTION OF UNSPENT CONTINGENCY. Subject to the Common Agreement,
an amount equal to the Unspent Contingency, if any, shall be
distributed to TENASKA GP and TENASKA LP as a return of capital on the
earliest date or dates that the funds constituting such Unspent
Contingency are transferred to or at the direction of the Partnership
pursuant to the Collateral Agency Agreement. The Unspent Contingency,
if any, shall be distributed to TENASKA GP and TENASKA LP in accordance
with their
PARTNERSHIP AGREEMENT
Page 18
respective Equity Ownership Percentages. Any Unspent Contingency not
previously distributed shall be distributed upon liquidation of the
Partnership.
PARTNERSHIP AGREEMENT
Page 19
ARTICLE 6
ALLOCATIONS OF INCOME, PROFITS AND LOSSES
AND DISTRIBUTIONS OF CASH AND ASSETS
6.1 INCOME, PROFITS AND LOSSES. Except as otherwise provided in this
Agreement, all revenue, expense and capital items including, but not
limited to, income and expenses from operations, interest income and
expense, insurance settlements, cash received from or paid for
transactions of a capital nature such as refinancing or sale or
purchase of assets, debt service, depreciation, amortization, federal,
state and local taxes, if any, paid by the Partnership, tax adjustment
and preference items related to the calculation of federal, state and
local alternative minimum tax, if applicable, and federal, state and
local tax credits shall be allocated among the Partners in accordance
with each Partner's respective Equity Ownership Percentage.
6.2 DISTRIBUTIONS. Subject to Article 5 and the terms of the Common
Agreement, the Partnership shall seek to maximize cash distributions to
the Partners. Except as otherwise provided in this Agreement,
distributions of cash or other assets of the Partnership (to the extent
that such cash or assets are not required for operations) shall be made
to the Partners (other than a Defaulting Partner or Withdrawn Partner)
as prescribed in such aggregate amounts and at such times as shall be
recommended by the Managing Partner and as are permitted pursuant to
the provisions of the Common Agreement, unless such distributions would
violate or result in a default under any agreement of the Partnership
or applicable law. Except as otherwise provided in this Agreement, all
distributions of cash or other assets shall be made to the Partners in
accordance with each Partner's respective Equity Ownership Percentage.
PARTNERSHIP AGREEMENT
Page 20
ARTICLE 7
MANAGEMENT OF THE PARTNERSHIP
7.1 MANAGING PARTNER.
(a) The day-to-day management, operations, affairs and business of the
Partnership shall be the responsibility of the Managing Partner which
shall have the authority to do all things necessary to carry out its
responsibilities as provided in this Agreement; subject, however, to
certain consent or approval requirements of the ERC or the Partners as
specifically provided in this Agreement. The Managing Partner shall
report fully to the ERC at each meeting of the ERC. Except as otherwise
specifically provided in this Agreement, no Partner shall have
authority to act for or assume any obligation or responsibility on
behalf of the Partnership without the prior grant of authority,
direction or approval from the Managing Partner.
(b) For "cause" and only for "cause", and subject to Section 7.2(d),
upon the unanimous vote of the General Partners, excluding the vote of
the Managing Partner and any Partner which is an Affiliate of the
Managing Partner, the Managing Partner may be removed as Managing
Partner. For the purpose of this Section 7.1(b), "cause" shall mean (i)
the material breach by Managing Partner of any of its obligations under
this Agreement which result in material loss or injury to the
Partnership and which is not cured within thirty (30) days after the
Managing Partner has received written notice of such breach, or (ii)
any action or inaction by the Managing Partner which constitutes
willful misconduct, fraud, or gross negligence by the Managing Partner
and which results in material loss or injury to the Partnership. In the
event that the Managing Partner is to be removed, the removal shall not
be effective until a substitute Managing Partner has been appointed.
Subject to Section 7.2(d), a substitute Managing Partner, which shall
be a General Partner of the Partnership, shall be appointed only upon
approval by the ERC, with the Representative or Alternate
Representative of the Managing Partner that is to be removed, and of
any General Partner which is an Affiliate of the Managing Partner that
is to be removed, having a vote in such appointment; provided, however,
if a substitute Managing Partner has not been appointed within one
hundred eighty (180) days after the date that the initial vote of the
ERC was taken to appoint a substitute Managing Partner and during such
one hundred eighty (180) day period the Representative or Alternate
Representative of the Managing Partner that is to be removed, or of any
General Partner which is an Affiliate of the Managing Partner that is
to be removed, has not cast an affirmative vote for any proposed
substitute Managing Partner, the Representative or Alternate
Representative of the Managing Partner that is to be removed, and of
any General Partner which is an Affiliate of the Managing Partner that
is to be removed, shall NOT have a vote in appointing its substitute
Managing Partner. The right to remove the Managing Partner under this
Section 7.1(b) shall be exercised by providing the Managing Partner
with a written notice which specifies the "cause" for which the
Managing Partner
PARTNERSHIP AGREEMENT
Page 21
is to be removed. Such written notice must be provided to the Managing
Partner within thirty (30) days after the date such "cause" for removal
has become known to any General Partner. If the Managing Partner does
not receive such written notice within such time period, the Managing
Partner may not be removed in respect of such "cause" for removal which
has become known to a General Partner.
(c) The Partnership shall reimburse the Managing Partner in accordance
with the Standard Billing Practices for all reasonable time charges,
expenses and costs it incurs in managing the operations, affairs and
business of the Partnership, subject to the Partnership Budget in
effect from time to time. Each Partner shall, at its own expense, have
the right at all times during normal business hours to examine the
books and records of the Managing Partner to the extent necessary to
verify the accuracy of any statement, charge, computation or demand
made by the Managing Partner under or pursuant to this Section 7.1(c).
Such right may be exercised through any agent or employee of such
examining Partner or by an independent public accountant, attorney or
other consultant so designated by such examining Partner subject to the
confidentiality provisions set forth in Section 14.13.
7.2 EXECUTIVE REVIEW COMMITTEE.
(a) The Executive Review Committee ("ERC") shall have the primary
authority in respect of the material affairs, policies and decisions of
the Partnership pursuant to this Section 7.2 and as provided in
Sections 7.3 and 7.4 and as may otherwise be provided in this
Agreement. The members of the ERC shall be one Representative of each
General Partner, designated from time to time by each such General
Partner by written notice to each other General Partner and the
Partnership. By like notice, each General Partner may designate an
Alternate Representative which shall have authority to act in the
absence of its Representative. By execution of this Agreement, each
General Partner hereby gives notice to each other General Partner and
the Partnership that its Representative and Alternate Representative
designees are as set forth in Appendix C. A General Partner may at any
time, by written notice to all other General Partners and to the
Partnership, remove its Representative or Alternate Representative
designees from the ERC by designating a new Representative and/or
Alternate Representative. The designees set forth in Appendix C shall
serve in such capacity until such time as their respective successors
are designated. Any participation or action (including the execution of
any documents) by an Alternate Representative of a General Partner
shall be deemed to be the act of the Representative of such General
Partner for which such Alternate Representative is permitted to act
without any evidence of the absence or unavailability of such
Representative.
(b) The Chairman of the ERC shall be the Representative of the Managing
Partner or, in the absence of such Representative, the Alternate
Representative of the Managing Partner. There shall be a secretary of
the ERC which shall be selected by the Managing Partner. The Person
selected may or may not be a member of the ERC.
PARTNERSHIP AGREEMENT
Page 22
(c) The Chairman shall preside at all meetings of the ERC. The ERC
shall meet quarterly in person or by teleconference call. Special ERC
meetings may be called at the request of any General Partner. All
meetings of the ERC shall be held upon not less than seven (7) days
prior written notice from the Partnership to each General Partner; and
in the event a special ERC meeting is requested by a General Partner,
the notice shall set forth with particularity the purpose of such
special ERC meeting. All notices for ERC meetings shall set forth the
time, the place, and the manner in which the ERC meeting is to be held.
Attendance or participation by an ERC Representative or Alternate
Representative at an ERC meeting shall constitute a waiver of any
required notice of such ERC meeting. Written minutes for each ERC
meeting shall be recorded by the secretary of the ERC and provided to
the members of the ERC for approval no later than two (2) weeks prior
to the next scheduled quarterly ERC meeting.
(d) Subject to this Section 7.2(d) and except as otherwise provided by
this Agreement, the ERC shall act upon the affirmative vote, approval
or consent of fifty-one percent (51%) of the Weighted Voting Interests
of the General Partners represented on the ERC. Any action that may be
taken by the ERC may be taken without a notice and/or a meeting of the
ERC if written consents setting forth such action are signed by ERC
Representatives or Alternate Representatives which have sufficient
Weighted Voting Interests to have approved the action if a meeting of
the ERC had been held. Any action that may be taken by the Partners
(whether the General Partners, the Limited Partners, or all Partners,
as the case may be) may be taken without a notice and/or a meeting of
such Partners if written consents setting forth such action are signed
by the Partners whose approval or consent would have been sufficient to
have approved the action if a meeting of such Partners had been held.
Notwithstanding any provision in this Agreement to the contrary, no
Defaulting Partner, nor its Representative or Alternate Representative
on the ERC, if applicable, shall be eligible to vote on, consent to,
approve or participate in matters or actions before the ERC or the
Partners for so long as it is a Defaulting Partner.
(e) To the extent the provisions of this Section 7.2(e) are not in
contravention of requirements of law which cannot be modified by
agreement of the Partners, the Partnership shall indemnify and save
harmless the Representatives and Alternative Representatives of the
ERC, the Managing Partner, any Partner performing services pursuant to
Section 8.1, and Affiliates, directors and officers of any of the
foregoing (as required by and to the full extent permitted by the Act)
against all actions, claims, demands, costs and liabilities arising out
of the good faith acts (or good faith failure to act) of such Persons
within the scope of their authority in the course of the Partnership's
business or pursuant to this Agreement, and such Persons shall not be
liable for any obligations, liabilities or commitments incurred by or
on behalf of the Partnership as a result of any such acts or failure to
act even though caused or alleged to be caused by the negligence or
fault of any such Person or its agents, and even though any such claim,
cause of action, or suit is based upon or alleged to be based upon the
strict liability of such Person or its agents against the consequences
of their own negligence; provided,
PARTNERSHIP AGREEMENT
Page 23
however, such indemnification shall not apply to any Person to the
extent that their action or inaction constitutes willful misconduct,
fraud, or gross negligence resulting in a material loss or injury to
the Partnership.
7.3 ACTIONS REQUIRING FIFTY-ONE PERCENT (51%) APPROVAL OR CONSENT OF THE
ERC. Subject to Section 7.2(d) and except as otherwise provided herein,
the approval or consent of fifty-one percent (51%) of the Weighted
Voting Interests of the General Partners represented on the ERC shall
be necessary before any of the following actions can be taken by or on
behalf of the Partnership:
(a) establishing, amending or modifying a Partnership Budget, except as
provided in Section 4.6;
(b) requesting the Partners to contribute or advance Additional Capital
or to provide credit facilities or other credit support, except as
permitted without ERC approval under Section 4.5;
(c) making, incurring, issuing or assuming any of the following (a
"Disbursement or Obligation") in each case involving a dollar amount of
more than five hundred thousand dollars ($500,000): making any
expenditure; lending or borrowing money; incurring any expense;
executing agreements; or incurring, assuming or guaranteeing any
obligation, or contracting for indebtedness or other liability, or
securing the same by mortgage, deed of trust, or other lien or
encumbrance; EXCEPT when any such Disbursement or Obligation is
made, incurred, issued or assumed pursuant to (i) any Material Contract
which has been approved by the ERC, (ii) any applicable Partnership
Budget approved by the ERC, (iii) Section 4.5 as permitted thereunder
without ERC approval, or (iv) the ordinary day-to-day business
activities of the Partnership, including but not limited to agreements
related to insurance, spare parts, chemical supplies, day-to-day or
month-to-month fuel management, or short-term cash management;
provided, however, that the Partnership shall not incur any
indebtedness for borrowed money to the extent that such incurrence is
prohibited by the Financing Documents (as such term is defined in the
Common Agreement);
(d) entering into or terminating any Material Contract, materially
amending any Material Contract, or amending any agreement that is not a
Material Contract when such amendment would have the effect of causing
such agreement to become a Material Contract; EXCEPT when such Material
Contract, terminations thereof, amendments thereto, or other above
described amendments are required with respect to Prudent Operating
Costs;
(e) selling, exchanging, leasing, abandoning, mortgaging, pledging or
otherwise disposing of or transferring assets (a "transfer") in each
case having a fair market value of more than five hundred thousand
dollars ($500,000); EXCEPT for (i) any transfer which relates to
property covered by liens and encumbrances granted pursuant to a deed
of trust
PARTNERSHIP AGREEMENT
Page 24
or other security documents executed in connection with the Common
Agreement, (ii) any transfer which relates to the sale of parts and
equipment inventory in the ordinary course of business, (iii) the sale
or other disposition of assets which are replaced by assets of an
equivalent or greater value or which have become obsolete and are of no
further value to the operation of the Project, or (iv) any transfer
which relates to Prudent Operating Costs;
(f) bringing, defending or otherwise engaging in any actions at law or
in equity, or under alternative forms of dispute resolution including
without limitation arbitration and mediation, on behalf of the
Partnership by or against third parties (each of the foregoing, a
"Legal Proceeding"), or consenting to or entering into a judgment or
settlement of any Legal Proceeding, when any Legal Proceeding involves
the expense, expenditure, loaning or borrowing by the Partnership of
more than five hundred thousand dollars ($500,000), EXCEPT when such
expense, expenditure, loaning or borrowing of funds is made pursuant to
any applicable Partnership Budget approved by the ERC;
(g) engaging in any transaction, or entering into any agreement, with
any Partner (or Affiliate thereof) for goods or services in connection
with the conduct of the Partnership's business; EXCEPT when (i) such
transaction or agreement is effectuated on terms and conditions that
are no less favorable to the Partnership than would be available in a
bona fide arm's-length transaction or agreement with a Person that is
not an Affiliate, or (ii) such transaction or agreement is otherwise
for goods or services provided by a Partner pursuant to provisions set
forth in this Agreement;
(h) establishing or materially amending material Partnership tax
policies and determining material Partnership tax elections EXCEPT
pursuant to the Code;
(i) establishing or materially amending material Partnership accounting
policies EXCEPT in accordance with GAAP;
(j) replacing the Certified Public Accountants;
(k) disclosing to any third party any Confidential Information obtained
directly or indirectly from the Partnership, any other Partner, or any
Affiliate thereof EXCEPT in compliance with the requirements of Section
14.13;
(l) appointing a substitute Managing Partner as provided in Section
7.1(b);
(m) approving the relief of any obligations under this Agreement of a
transferor Partner in the event of a Permitted Transfer which is
effectuated under a security interest as provided in Section 10.4; or
(n) approving the extension of a Cure Period as provided in Section
12.1(a).
PARTNERSHIP AGREEMENT
Page 25
7.4 ACTIONS REQUIRING NINETY PERCENT (90%) APPROVAL OR CONSENT OF THE ERC.
Subject to Section 7.2(d) and except as otherwise provided herein, the
approval or consent of ninety percent (90%) of the Weighted Voting
Interests of the General Partners represented on the ERC shall be
necessary before any of the following actions may be taken by or on
behalf of the Partnership:
(a) causing the Partnership to merge or consolidate with or into any
other Person;
(b) taking any action which would cause the Partnership NOT to be
recognized as a partnership for federal income tax purposes, EXCEPT
when such action is required by law; or
(c) taking any action which would cause the Partnership NOT to be
recognized as an Exempt Wholesale Generator (EWG), or cause the
Partnership or any Partner to become a holding company under PUHCA,
EXCEPT when such action is required by law.
7.5 ACTIONS REQUIRING UNANIMOUS APPROVAL OR CONSENT OF THE GENERAL
PARTNERS. Subject to Section 7.2(d) and except as otherwise provided
herein, the unanimous approval or consent of the General Partners shall
be necessary before any of the following actions may be taken by or on
behalf of the Partnership:
(a) electing to dissolve or wind-up the Partnership or to take any
action that would have such result;
(b) commencing a voluntary proceeding in bankruptcy in the name of the
Partnership, or seeking the protection of any federal or state
bankruptcy or insolvency law or debtor relief statute;
(c) changing the nature of the Partnership's business; or
(d) removing the Managing Partner for "cause" as provided in Section
7.1(b).
7.6 ACTIONS REQUIRING UNANIMOUS APPROVAL OR CONSENT OF THE PARTNERS.
Subject to Section 7.2(d) and except as otherwise provided herein, the
unanimous approval or consent of the Partners shall be necessary before
any of the following actions can be taken by or on behalf of the
Partnership:
(a) admitting Additional Partners, except in the event the Additional
Partner is admitted pursuant to Article 10 or pursuant to Section
12.4(c); or
(b) making any amendment to this Agreement; provided, however, that if
such amendment would not adversely modify the rights or obligations of
any Partner, then only the unanimous approval or consent of the General
Partners shall be required.
PARTNERSHIP AGREEMENT
Page 26
ARTICLE 8
SERVICES FROM PARTNERS
OTHER THAN THE MANAGING PARTNER
8.1 SERVICES REQUESTED FROM PARTNERS OTHER THAN THE MANAGING PARTNER. If
the Managing Partner requests another Partner, or an Affiliate thereof,
to perform services for the Partnership not otherwise specifically
provided for in this Agreement, such Partner shall be reimbursed in
accordance with the Standard Billing Practices.
8.2 BILLING STATEMENT DEADLINE. Partners, or their Affiliates, which
perform services for the Partnership pursuant to Section 8.1, shall, on
or before the fifteenth (15th) day of each calendar month, render a
statement to the Managing Partner itemizing the costs and expenses
incurred during the previous calendar month for which reimbursement is
sought.
8.3 PAYMENT DEADLINE. The amount invoiced on the statement pursuant to
Section 8.2 shall be paid on or before twenty-five (25) days following
the calendar month in which such services were rendered and the costs
and expenses were incurred or fifteen (15) days after receipt of the
statement, whichever is later.
8.4 FAILURE TO MAKE PAYMENT. Should there be a failure to make a timely
payment of any amount to be reimbursed to a Partner or Affiliate
thereof pursuant to this Article 8, interest shall accrue on any
overdue amount until such principal amount and interest thereon are
paid at a per annum rate equal to the lesser of: (i) the posted prime
lending rate of The Chase Manhattan Bank, plus two hundred (200) basis
points, or (ii) the maximum rate allowed by law.
8.5 EXAMINATION OF BOOKS AND RECORDS. Each Partner shall, at its own
expense, have the right at all times during normal business hours to
examine the books and records of a Partner to the extent necessary to
verify the accuracy of any statement, charge, computation or demand
made by such Partner under or pursuant to this Article 8. Such right
may be exercised through any agent or employee of such Partner or by an
independent public accountant, attorney or other consultant so
designated by such Partner subject to the confidentiality provisions
set forth in Section 14.13.
PARTNERSHIP AGREEMENT
Page 27
ARTICLE 9
ACCOUNTING AND TAXATION
9.1 LOCATION OF RECORDS. The books of account for the Partnership shall be
kept and maintained at the principal office of the Partnership or at
such other place as the Managing Partner shall determine.
9.2 BOOKS OF ACCOUNT. The books of account and financial statements for the
Partnership shall be:
(a) maintained and prepared on an accrual basis in accordance with
GAAP; and
(b) audited by the Certified Public Accountants at the end of each
Fiscal Year.
9.3 ANNUAL FINANCIAL STATEMENTS AND TAX INFORMATION. As soon as practicable
following the end of each Fiscal Year of the Partnership, the Managing
Partner shall cause to be prepared and delivered to the Partners:
(a) an income statement and a statement of changes in financial
position for such Fiscal Year, a balance sheet and a statement of each
Partner's capital account as of the end of such Fiscal Year, together
with a report thereon of the Certified Public Accountants;
(b) federal, state and local income tax returns and such other
accounting, tax information and schedules, including but not limited to
the Schedule K-1 for each Partner, as shall be necessary for the
preparation by each Partner of its income tax return for such Fiscal
Year, on or before the thirty-first (31st) day of the third (3rd)
calendar month after the end of each Fiscal Year; and
(c) an estimate of Partnership taxable income or loss, as shall be
necessary for each Partner to make its estimated income tax payment(s),
if any, due for such Fiscal Year, on or before January 15 of each
calendar year.
9.4 INTERIM FINANCIAL STATEMENTS. As soon as practicable after the end of
each calendar quarter, the Managing Partner shall cause to be prepared
and delivered to each Partner, with an appropriate certificate of the
Person authorized to prepare the same:
(a) an income statement and a statement of changes in financial
position for such quarter (including sufficient information to permit
the Partners to calculate their tax accruals), for the portion of the
Fiscal Year then ended;
(b) a balance sheet and a statement of each Partner's capital account
as of the end of such quarter; and
PARTNERSHIP AGREEMENT
Page 28
(c) a statement comparing the actual financial results of the
Partnership for such quarter and the portion of the Fiscal Year then
ended, with the budgeted or forecasted pro forma projections for such
respective periods.
9.5 TAXATION. The parties intend that the Partnership shall be treated as a
partnership for federal and state (and local, if applicable) tax
purposes. The Partnership's federal and state (and local if applicable)
income tax returns shall be prepared by the Certified Public
Accountants subject to review by the Managing Partner. All of the
material Partnership elections for federal and state (and local if
applicable) income tax purposes shall be determined by the ERC, except
those specifically reserved by the Code to be made by the individual
Partners.
9.6 GOVERNMENTAL REPORTS. The Managing Partner shall prepare and file, or
cause to be prepared and filed, all reports prescribed by any
commission or governmental agency having jurisdiction of the Project.
9.7 INSPECTION OF FACILITIES AND RECORDS. Each Partner shall, at its own
expense, have the right at all times during normal business hours to
inspect the Project facilities and to audit or examine the books and
records of the Partnership. Such right may be exercised through any
agent or employee of such Partner or by an independent public
accountant, attorney or other consultant so designated by such Partner
subject to the confidentiality provisions set forth in Section 14.13.
9.8 DEPOSIT AND WITHDRAWAL OF FUNDS. Subject to the Common Agreement, funds
of the Partnership shall be deposited in such recognized and reputable
banks, depositories, or other financial institutions, in the account of
the Partnership, as shall be designated from time to time by the
Managing Partner. All withdrawals from any such depository shall be
made subject to the provisions of this Agreement and shall be made only
by check, wire transfer, debit memorandum or other written instruction.
PARTNERSHIP AGREEMENT
Page 29
ARTICLE 10
TRANSFERS OF PARTNERSHIP INTERESTS
10.1 PERMITTED TRANSFERS. A Partner shall be permitted to transfer, assign,
or pledge ("Transfer") all or any part of its Partnership Interest to
another Person provided that such Transfer is first in compliance with
all of the following conditions (a "Permitted Transfer"); provided,
however, notwithstanding anything herein to the contrary, no provision
of this Agreement, other than Section 10.1(c)(i), shall prohibit any
Transfers pursuant to the terms of the Pledge Agreements:
(a) the Transfer will NOT adversely affect the financial and operating
integrity of the Partnership;
(b) the Transfer will NOT result in a termination of the Partnership
under Section 708 of the Code;
(c) the Transfer will NOT (i) cause revocation or loss of the
Partnership's EWG status, or cause the Partnership, any Partner,
Parent, or Affiliate thereof to become a holding company under PUHCA or
(ii) be in conflict with any other law or regulation which would
otherwise adversely affect the financial and operating integrity of the
Partnership;
(d) the transferor Partner has provided written notice, ten (10) days
prior to effectuating any Transfer, to the Partnership and the other
Partners of its intent to Transfer all or any part of its Partnership
Interest to a specified transferee;
(e) the transferee assumes by operation of law or express agreement
with the Partnership, in form and substance reasonably satisfactory to
the Partnership, all of the obligations of the transferor Partner under
this Agreement to the extent the transferor Partner is transferring all
or any part of its obligations under this Agreement;
(f) in the event the transferee is to be admitted to the Partnership as
an Additional Partner, such transferee is admitted in compliance with
Article 11;
(g) the transferor Partner is NOT a Defaulting Partner at the time of
the Transfer;
(h) the Transfer is NOT prohibited by and will not cause a default
under the terms of any material Project Contract of the Partnership,
including but not limited to the Common Agreement, and if required the
proposed Transfer has been approved and consented to by any third party
from which approval or consent is required under a material Project
Contract of the Partnership; and
(i) such Transfer is in compliance with all applicable requirements of
law, including
PARTNERSHIP AGREEMENT
Page 30
but not limited to any applicable securities laws.
10.2 WITHDRAWAL OF TRANSFEROR PARTNER. In the event of a Permitted Transfer
where the transferor Partner Transfers all of its Partnership Interest,
the transferor Partner shall become a Withdrawn Partner effective on
the date such Permitted Transfer is effectuated.
10.3 EFFECT OF PROHIBITED TRANSFERS. Any proposed Transfer of a Partnership
Interest by a Partner which is prohibited by this Article 10 shall not
be permitted, and in the event a Transfer is erroneously effectuated
and later found not to conform with the requirements of this Article
10, such Transfer shall be void and shall not be recognized by the
Partnership, and the Partner which attempted to effectuate such
prohibited Transfer shall remain liable for all of its obligations
under this Agreement. Nothing in this Agreement shall be deemed to
limit any rights or remedies that the Partnership or any other Partner
may have against a transferor Partner in the event of a prohibited
Transfer.
10.4 TRANSFERS UNDER A SECURITY INTEREST. In the event of a Permitted
Transfer where a transferee becomes a substituted Additional Partner by
operation of a Transfer made in foreclosure or other enforcement of a
security interest pledged by a Partner, such Permitted Transfer and
such transferee shall be subject to all of the terms and provisions of
this Agreement, and the transferor Partner shall not be relieved of any
of its obligations under this Agreement without the prior approval or
consent of the ERC, excluding the vote of the Representative or
Alternate Representative of the transferor Partner and of any Partner
which is an Affiliate of the transferor Partner.
10.5 TAX ELECTION. In the event that a Partnership Interest is transferred
or assigned as permitted by this Article 10, the Partnership shall, at
the request of the transferee, make an election pursuant to Section 754
of the Code.
10.6 PLEDGE OF PARTNERSHIP INTERESTS. If the Partnership Interests are
pledged, or otherwise assigned as a security interest, the transferee
shall become a partner of the Partnership only in the manner and event
and to the extent expressly provided in the agreement effecting such
pledge or assignment or by operation of law.
PARTNERSHIP AGREEMENT
Page 31
ARTICLE 11
ADMISSION OF ADDITIONAL PARTNERS
11.1 PERMITTED ADMISSIONS. Persons which are to be admitted to the
Partnership pursuant to Section 7.6(a), Article 10 or Section 12.4(c)
may be admitted as Additional Partners of the Partnership if such
admission is first in compliance with all of the following conditions:
(a) such admission will NOT adversely affect the financial and
operating integrity of the Partnership;
(b) such admission would NOT result in a termination of the Partnership
under Section 708 of the Code;
(c) such admission would NOT cause revocation or loss of the
Partnership's EWG status, or cause the Partnership, any Partner,
Parent, or Affiliate thereof to become a holding company under PUHCA or
be in conflict with any other law or regulation which would otherwise
adversely affect the financial and operating integrity of the
Partnership;
(d) such Person which is to be admitted as an Additional Partner has
executed a counterpart of this Agreement, and assumes by operation of
law or express agreement with the Partnership, in form and substance
reasonably satisfactory to the Partnership, all of its share of
applicable obligations under this Agreement;
(e) such admission is NOT prohibited by and will not cause a default
under the terms of any material Project Contract of the Partnership,
including but not limited to the Common Agreement, and if required the
proposed admission has been approved and consented to by any third
party from which approval or consent is required under a material
Project Contract of the Partnership; and
(f) such admission is in compliance with all applicable requirements of
law, including but not limited to any applicable securities laws.
11.2 EFFECT OF PROHIBITED ADMISSION. Any proposed admission of an Additional
Partner which is prohibited by this Article 11 shall not be permitted,
and in the event an admission of an Additional Partner is erroneously
effectuated and later found not to conform with the requirements of
this Article 11, such admission shall be void and shall not be
recognized by the Partnership. Nothing in this Agreement shall be
deemed to limit any rights or remedies that the Partnership or any
other Partner may have in the event of a prohibited admission of an
Additional Partner.
PARTNERSHIP AGREEMENT
Page 32
ARTICLE 12
DEFAULT AND WITHDRAWAL PROVISIONS
12.1 DEFAULT PROVISIONS; WITHDRAWAL OF DEFAULTING PARTNER.
(a) In the event any Partner defaults in any of its monetary
obligations provided for in this Agreement (a "Defaulting Partner"),
the Partnership shall have the right to provide the Defaulting Partner
written notice of such default (a "Default Notice") and the Partnership
and each non-defaulting Partner shall be provided a copy of such
Default Notice. Each Default Notice shall set forth with specificity
the nature and the amount of the monetary obligation the Defaulting
Partner has failed to perform. If the Defaulting Partner does not cure
such monetary default, all Affiliate(s) of a Defaulting Partner which
are also Partner(s) in the Partnership (a "Default Affiliate") shall be
jointly and severally obligated with the Defaulting Partner to perform
the monetary obligations which the Defaulting Partner has not
performed. If such monetary default shall continue uncured by the
Defaulting Partner and/or any Default Affiliate(s) thereof for a period
of ten (10) days after the date the Default Notice is given or for such
extended cure period as may be approved by vote of the ERC (the "Cure
Period"), excluding the vote of the Defaulting Partner and any Default
Affiliate(s) thereof, then (i) the Defaulting Partner and all Default
Affiliate(s) thereof shall be deemed to have withdrawn from the
Partnership effective as of the day the Default Notice was given, (ii)
such Defaulting Partner and all Default Affiliate(s) thereof shall
thereafter be Withdrawn Partner(s) in accordance with the applicable
provisions of this Agreement, and (iii) each non-defaulting Partner
shall be provided notice from the Partnership (a "Withdrawal Notice")
that such Defaulting Partner and all Default Affiliate(s) thereof have
become a Withdrawn Partner(s).
(b) After the receipt of a Default Notice and prior to the curing of
any such monetary default or the withdrawal of the Defaulting Partner
and all Default Affiliate(s) thereof as provided in Section 12.1(a),
the Defaulting Partner and all Default Affiliate(s) thereof shall
continue to be Partner(s) until the expiration of the Cure Period and
shall continue to be obligated to contribute all funds and perform all
obligations required of the Defaulting Partner and any Default
Affiliate(s) thereof under this Agreement.
(c) If, within the Cure Period following a monetary default, the
Defaulting Partner or any Default Affiliate thereof cures such default,
it shall be deemed as if the default had not occurred and the
Defaulting Partner and any Default Affiliate(s) thereof shall lose no
rights under this Agreement. A Defaulting Partner or Default Affiliate
thereof shall be deemed to have cured all defaults under this Section
12.1 when it has made all payments and provided all guarantees then due
or overdue within the Cure Period.
PARTNERSHIP AGREEMENT
Page 33
(d) A Withdrawn Partner's withdrawal from the Partnership pursuant to
this Section 12.1 is not an exclusive remedy and shall not affect any
rights and remedies against the Defaulting Partner and any Default
Affiliate(s) thereof which the Partnership and/or the remaining
Partners may have at law and in equity (including, but not limited to,
the right to seek specific performance of those obligations that
continue uncured by such Withdrawn Partner) as a result of such
Withdrawn Partner's default of its monetary obligations under this
Agreement. Further, it is expressly agreed that if a Partner becomes a
Withdrawn Partner pursuant to this Section 12.1, it shall remain liable
for all of its obligations under this Agreement.
(e) In the event any Partner defaults in any of its non-monetary
obligations provided for in this Agreement, the Partnership and any
other Partner that is not also in default pursuant to this Agreement
shall have the right to pursue any rights and remedies against the
Defaulting Partner and any Default Affiliate(s) thereof which they may
have at law and in equity (including, but not limited to, the right to
seek specific performance) as a result of such Partner's default of its
non-monetary obligations under this Agreement.
12.2 CURE PERIOD DISTRIBUTIONS. In the event a Partner is in monetary
default pursuant to Section 12.1 and reimbursements, payments or
distributions are made pursuant to this Agreement, including but not
limited to Sections 5.1, 5.2, 5.3, 5.4 or 6.2, during any Cure Period,
the amount of such reimbursements, payments or distributions that would
otherwise be payable to the Defaulting Partner and any Default
Affiliate(s) thereof shall be reflected in the respective capital
accounts of the Defaulting Partner and any Default Affiliate(s)
thereof, but shall not be distributed to the Defaulting Partner and any
Default Affiliate(s) thereof unless and until such default is cured by
the Defaulting Partner or any Default Affiliate(s) thereof before the
end of the Cure Period. If the monetary default is not cured before the
end of the Cure Period, the reimbursements, payments or distributions
previously reflected in the respective capital accounts of the
Defaulting Partner and any Default Affiliate(s) thereof and
attributable to the period after the effective date of withdrawal of
the Defaulting Partner and any Default Affiliate(s) thereof shall be
removed from such Withdrawn Partners' capital accounts and the amount
so removed shall lapse as a reimbursement, payment or distribution
obligation, and shall NOT be an amount owed to such Withdrawn
Partners by the Partnership, and shall be reallocated to and
distributed to the remaining Partners in proportion to their respective
Equity Ownership Percentages, after the reallocation of Partnership
Percentages as provided in Section 12.4.
12.3 AUTOMATIC WITHDRAWAL. In addition to those instances where withdrawal
is deemed to occur under this Agreement, upon the happening of any of
the following events with respect to a Partner, such Partner and all
Affiliate(s) thereof which are also Partners, shall automatically
become a Withdrawn Partner or Withdrawn Partners, as the case may be,
and promptly following receipt of notice of the happening of any such
event the Partnership shall provide notice of such withdrawal (a
"Withdrawal Notice") to all other Partners:
PARTNERSHIP AGREEMENT
Page 34
(a) the entry by a court of competent jurisdiction of a decree or order
for relief, unstayed on appeal or otherwise and in effect for ninety
(90) days, in respect of such Partner, in an involuntary case under the
federal bankruptcy laws, or any such order adjudicating such Partner as
bankrupt or insolvent under any other applicable bankruptcy, insolvency
or liquidation law;
(b) the entry by a court of competent jurisdiction of a decree or order
appointing a receiver, custodian, assignee, trustee, liquidator,
sequestrator or other similar official of such Partner or of any
substantial part of the property of such Partner, or ordering the
winding down or liquidation of its affairs, and the continuance of any
such decree or order unstayed on appeal or otherwise and in effect for
ninety (90) days, or the commencement by such Partner of a voluntary
case under the federal bankruptcy laws, or under any other bankruptcy
or insolvency law, seeking reorganization, liquidation, arrangement,
adjustment or composition of such Partner under the bankruptcy laws or
any similar statute;
(c) the consenting by such Partner to the appointment of, or taking
possession by, a receiver, assignee, custodian, trustee, liquidator,
sequestrator, or other similar official of it, or of any substantial
part of its property, or the taking of corporate or partnership action
by such Partner in furtherance of any such action;
(d) the filing of a certification of dissolution of the Partner under
the laws of the jurisdiction of its incorporation or formation which
cannot be cured or the entering of a final non-appealable order
dissolving that Partner by any court of competent jurisdiction; or
(e) any event which shall make it unlawful for that Partner to be a
Partner in the Partnership.
12.4 GENERAL WITHDRAWAL PROVISIONS.
(a) Upon a Partner becoming a Withdrawn Partner pursuant to this
Agreement, unless otherwise provided in this Agreement and without
jeopardizing the Partnership's or any Partner's rights under Sections
12.1(d) or 12.1(e), each remaining Partner shall have seven (7) days
after being provided a Withdrawal Notice by the Partnership (the
"Election Period") to provide the Partnership with a written notice of
its commitment and guarantee (a "Replacement Guarantee") that it will
succeed to, perform and fulfill a pro rata portion of the Withdrawn
Partner's obligations under this Agreement, including but not limited
to any obligation to advance Development Funds, provide Equity
Guarantees, contribute Construction Equity Contributions, provide
Project Guarantees, and contribute Additional Capital (collectively,
the "Withdrawn Partner Obligations") and succeed to a pro rata share of
such Withdrawn Partner's Partnership Interest (the "Withdrawal
Interest"). The term "pro rata" as used in this Section 12.4 is in the
proportion which the remaining
PARTNERSHIP AGREEMENT
Page 35
Partner's Partnership Percentage represents of the remaining Partners'
Partnership Percentages in effect at the time, or some other basis as
otherwise agreed to by all of such remaining Partners which elect to
provide a Replacement Guarantee.
(b) After the expiration of the Election Period, the Partnership shall
provide written notice to the remaining Partners indicating the amount
of Replacement Guarantees, if any, it has received (the "Election
Results Notice"). If a Partner fails to provide a Replacement Guarantee
on a timely basis as provided in this Section 12.4, it shall be deemed
to have elected NOT to provide such Replacement Guarantee. If any
Partner has elected not to provide a Replacement Guarantee (a
"Non-Electing Partner") for its pro rata share within the Election
Period, each Partner which did elect within the Election Period to
provide a Replacement Guarantee (an "Electing Partner") shall have two
(2) Business Days following provision of the Election Results Notice to
provide the Partnership with an additional Replacement Guarantee for
its pro rata share (based on the Partnership Percentages of the
Electing Partners) of the Replacement Guarantee not provided by such
Non-Electing Partner. Additional two (2) Business Day election rounds
shall be held among the Electing Partners from the previous election
round(s) until the Electing Partners have elected to provide
Replacement Guarantees for one hundred percent (100%) of the Withdrawn
Partner Obligations or until there are no further Electing Partners
eligible to elect to provide such Replacement Guarantees.
(c) After the last election round, to the extent the remaining Partners
have NOT elected to provide Replacement Guarantees for one hundred
percent (100%) of the Withdrawn Partner Obligations, it shall be deemed
that all of the remaining Partners have elected to be Non-Electing
Partners, and the Managing Partner may elect to admit Additional
Partner(s), subject to Article 11, who provide Replacement Guarantee(s)
for 100% of the Withdrawn Partner Obligations and succeed to the
Withdrawal Interest. In the event the Managing Partner elects not to
admit or is unsuccessful in its efforts to admit Additional Partner(s)
pursuant to this Section 12.4(c), TENASKA GP or its designee shall have
the right, but not the obligation, to provide such Replacement
Guarantee and succeed to the Withdrawal Interest.
(d) A Partner which has become a Withdrawn Partner pursuant to any
provision of this Agreement shall not be entitled to payment or
distribution of any positive balance in its capital account, nor shall
such Withdrawn Partner be entitled to reimbursement of any Equity
Contributions or Development Funds contributed and/or advanced prior to
the date of its withdrawal.
(e) If a Partner has become a Withdrawn Partner pursuant to any
provision of this Agreement, any Equity Guarantees and/or Project
Guarantees which it provided prior to the date of its withdrawal shall
be released to such Withdrawn Partner only after they have been
replaced pursuant to Section 10.1(e) or this Section 12.4, or if not
replaced pursuant to Section 10.1(e) or this Section 12.4, only after
such time as such Equity Guarantees and/or Project Guarantees are no
longer required by the Project, the
PARTNERSHIP AGREEMENT
Page 36
Partnership, any Person which is a party to a Project Contract, or the
Senior Parties in accordance with this Agreement.
(f) Any Partner which has become a Withdrawn Partner pursuant to any
provision of this Agreement shall have only those rights specifically
set forth in this Agreement and such Partner's status and rights as a
Partner shall automatically terminate as of the date of withdrawal.
(g) Except pursuant to Section 13.2, withdrawal by one or more Partners
as described in this Article 12 shall not effect a dissolution of the
Partnership.
(h) The Partnership may set off any amounts owed to a Partner which has
become withdrawn or is deemed to have withdrawn from the Partnership
against amounts owed to the Partnership by such Withdrawn Partner.
PARTNERSHIP AGREEMENT
Page 37
ARTICLE 13
TERMINATION OF THE PARTNERSHIP
13.1 VOLUNTARY DISSOLUTION. Subject to the other terms and conditions of
this Agreement, the Partnership shall not be subject to dissolution,
except as provided in Sections 7.5(a) and 13.2, during the Primary
Term. Just prior to the end of the Primary Term, the Managing Partner
shall, if required, properly file documents with the State of Delaware,
and each calendar year thereafter, to extend the existence of the
Partnership from year to year; provided, however, that a Partner may
elect to dissolve the Partnership and terminate this Agreement after
expiration of the Primary Term by giving the other Partners written
notice of such election not less than four (4) months prior to the date
such dissolution is to take effect.
13.2 AUTOMATIC DISSOLUTION. The Partnership shall be automatically, and
without notice, dissolved upon the happening of any of the following
events (no event other than those hereinafter listed shall cause or
result in the automatic dissolution of the Partnership):
(a) the transfer of all, or substantially all, of the Partnership's
business and assets to any successor entity;
(b) the sale or abandonment of all, or substantially all, of the
Partnership's business and assets;
(c) any event which shall make it unlawful or impossible for the
business of the Partnership to be carried on, or for the Partners to
carry it on in the form of a Partnership; provided, however, that
dissolution will not occur until expiration of the cure period, if any,
approved by the ERC, or that amount of time allowed by law for a cure,
during which time the Partnership will take all reasonable action to
seek a remedy and continue operations;
(d) the bankruptcy or insolvency of the sole remaining General Partner;
provided, however, that dissolution will not occur if, within ninety
(90) calendar days after such bankruptcy or insolvency of the sole
remaining General Partner, all remaining Limited Partners agree in
writing to continue the business of the Partnership and to admit one or
more General Partners.
13.3 AVOIDANCE OF DISSOLUTION. In the event that all Partners but one
withdraw from the Partnership, the remaining Partner may act to admit
an Additional Partner as a General Partner or Limited Partner, as the
case may be, prior to the date of withdrawal of the penultimate Partner
so as to avoid dissolution of the Partnership. In the event that all
Limited Partners withdraw from the Partnership, the remaining General
Partner(s) may act to admit an Additional Partner that is a Limited
Partner, or convert a portion of their
PARTNERSHIP AGREEMENT
Page 38
Partner Interest(s) to that of a Limited Partner, prior to the date of
withdrawal of the last Limited Partner, so as to avoid dissolution as a
limited partnership.
13.4 WINDING DOWN AND LIQUIDATION. Prior to the Partnership being dissolved
pursuant to the provisions of Sections 13.l or 13.2, the Managing
Partner shall be bound by the terms and conditions of this Agreement
for the purpose of winding down the business of the Partnership and
liquidating its assets in an orderly manner; provided, however, the
Partnership shall engage in no new business during the period of such
winding down. Any distribution of assets upon such winding down and
liquidation shall be in accordance with Section 6.2. No dissolution of
the Partnership shall relieve a Partner from any obligation accruing or
accrued to the date of such dissolution.
13.5 CONTINUANCE OF PARTNERSHIP. Except as provided in Sections 13.l and
13.2, it is understood and agreed by each of the Partners that the
relationship of Partnership among them is intended to continue without
interruption until such relationship is either specifically dissolved
by the approval of the General Partners pursuant to Section 7.5(a), or
by the occurrence of any event specified in Sections 13.1 or 13.2 as an
event of dissolution, and each Partner waives and releases, to the
extent permitted by law, its right to dissolve or obtain dissolution of
the Partnership in any other manner or for any other reason. If,
notwithstanding the foregoing, the Partnership may at any time be
deemed by operation of law, notwithstanding Sections 13.1 or 13.2, to
be dissolved (for example, upon the bankruptcy or withdrawal of a
Partner), each of the Partners hereby covenants and agrees with the
other Partners as follows:
(a) the business and affairs of the Partnership shall continue without
interruption and be carried out by a new partnership (the "Successor
Partnership");
(b) the partners of the Successor Partnership shall be the Persons who
were Partners hereunder at the time of such dissolution;
(c) the Successor Partnership and the partners thereof shall be
governed by the terms of this Agreement as if the Successor Partnership
were the Partnership;
(d) each of the Partners covenants and agrees to execute such further
agreements, including (without limitation) notes, novations and
accommodations, as may be necessary to continue the business of the
Partnership and to protect and perfect any lien or security interest
granted by the Partnership; and
(e) as used in this Section 13.5, the term "Partnership", at any point
in time, shall mean the Partnership originally formed pursuant to this
Agreement or the Successor Partnership which at such time is continuing
the business and affairs of the Partnership originally so formed.
PARTNERSHIP AGREEMENT
Page 39
ARTICLE 14
MISCELLANEOUS PROVISIONS
14.1 EFFECT OF AGREEMENT. This Agreement may be amended, restated or
supplemented only as provided in Section 7.6(b).
14.2 NOTICES.
(a) All notices, consents, approvals, designations, directions,
requests or other communications (collectively, "Notices") given
pursuant to this Agreement shall be given in writing and delivered by
registered or certified mail or sent by facsimile. Each Notice
delivered by registered or certified mail, return receipt requested,
shall be deemed given and received on the date of delivery as shown on
the return receipt; or if delivery is attempted at the applicable
address set forth in Section 14.2(b), or other address if changed
pursuant to Section 14.2(b), and the Notice is returned, Notice shall
be deemed given and received on the date the delivery was attempted.
Each Notice delivered by facsimile shall be deemed given and received
on the date that such transmission has been successfully completed as
shown on the facsimile confirmation records maintained by the sending
party.
(b) Unless otherwise notified by the Partnership or by a Partner,
Notices shall be provided at the following addresses:
IF TO THE PARTNERSHIP:
Tenaska Georgia Partners, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Tel. 402/▇▇▇-▇▇▇▇
Fax: 402/▇▇▇-▇▇▇▇
IF TO TENASKA GP:
Tenaska Georgia, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Tel. 402/▇▇▇-▇▇▇▇
Fax: 402/▇▇▇-▇▇▇▇
PARTNERSHIP AGREEMENT
Page 40
IF TO TENASKA LP:
Tenaska Georgia I, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Tel. 402/▇▇▇-▇▇▇▇
Fax: 402/▇▇▇-▇▇▇▇
The Partnership and any Partner may change its address for the receipt
of Notices at any time by giving written notice thereof to the
Partnership and the Partners.
(c) Any Partner may waive any notice to which such Partner is entitled
pursuant to this Agreement by executing a written waiver of such
notice, unless otherwise waived pursuant to the terms of this
Agreement.
14.3 FURTHER ASSURANCES. Each of the Partners agrees to execute and deliver
all such other and additional instruments and documents and to do such
other acts and things as may be reasonably necessary more fully to
effectuate this Partnership and carry on the Partnership business in
accordance with this Agreement.
14.4 APPLICABLE LAW AND JURISDICTION.
(a) The Partners hereby irrevocably designate, appoint and empower the
Managing Partner as agent to receive for and on behalf of the
Partnership, service of process. The Partners further agree that such
service of process may be made on the Managing Partner by personal
service of a copy of the summons and complaint or other legal process
in any such legal suit, action or proceeding, or by other method of
service provided for under the applicable laws of the State of
Delaware, and the Managing Partner is hereby authorized to accept such
service for and on behalf of the Partnership, and to admit service with
respect thereto.
(b) Upon service of process being made on the Managing Partner, a copy
of the summons and complaint or other legal process shall be sent by
the Managing Partner to the other Partners. Service upon the Managing
Partner shall be deemed to be personal service on the Partnership and
shall be legal and binding upon the Partnership for all purposes,
notwithstanding any failure of the Managing Partner to send copies of
such legal process or any failure on the part of the other Partners to
receive the same.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware. With respect to any claim of
any Person arising out of this Agreement, (a) each Partner irrevocably
submits to the exclusive jurisdiction of the federal courts located in
the State of Delaware (unless such federal courts lack subject matter
jurisdiction, in which case each Partner irrevocably submits to the
exclusive
PARTNERSHIP AGREEMENT
Page 41
jurisdiction of the state courts located in the State of Delaware), and
(b) each Partner irrevocably waives any objection which it may have at
any time to the venue of any suit, action or proceeding arising out of
or relating to this Agreement brought in any such courts and
irrevocably waives any claim that such suit, action or proceeding is
brought in an inconvenient forum, and further irrevocably waives the
right to object, with respect to such claim, suit or proceeding brought
in any such court, that such court does not have jurisdiction over such
Partner.
(d) All Partnership Interests shall be governed by and determined to be
a security under Article 8 of the Uniform Commercial Code as adopted in
the State of Delaware and in the State of New York.
14.5 COUNTERPARTS. This Agreement may be executed in counterparts (including
counterparts provided for the execution by an Additional Partner), each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14.6 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of
this Agreement.
14.7 WAIVER. No waiver by any Person of any default by any Partner or
Partners in the performance of any provision, condition or requirement
herein shall be deemed to be a waiver of, or in any manner release of,
said Partner or Partners from performance of any other provision,
condition or requirement herein; nor shall such waiver be deemed to be
a waiver of, or in any manner a release of, said Partner or Partners
from future performance of the same provision, condition or
requirement. Any delay or omission of any Partner to exercise any right
hereunder shall not impair the exercise of any such right, or any like
right, accruing to it thereafter. No waiver of a right created by this
Agreement by one or more Partners shall constitute a waiver of such
right by the other Partners except as may otherwise be required by law
with respect to Persons not parties hereto. The failure of one or more
Partners to perform its or their obligations hereunder shall not
release the other Partners from the performance of such obligations.
14.8 PARTITION. Each of the Partners expressly and irrevocably waives and
releases any right it may have to partition Partnership assets during
the existence of the Partnership and any period of liquidation and
winding down of the Partnership.
14.9 LAWS AND REGULATORY BODIES. This Agreement and the obligations of the
Partners hereunder are subject to all applicable laws, rules, orders
and regulations of governmental authorities having jurisdiction.
14.10 WAIVER OF CONSEQUENTIAL AND PUNITIVE DAMAGES. NO PARTY TO THIS
AGREEMENT SHALL BE LIABLE TO ANY OTHER PARTY FOR INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES RESULTING FROM OR ARISING OUT OF THIS
AGREEMENT.
PARTNERSHIP AGREEMENT
Page 42
14.11 PARTNERSHIP OPPORTUNITY. Nothing in this Agreement shall prohibit any
Partner, Affiliate thereof, or any of such Partners' or Affiliates'
officers, directors, shareholders, or employees from becoming a party
to any agreement or from participating in any business transaction,
whether present or future, which is not directly in competition with
the business purpose of the Partnership; provided, however, nothing in
this Section 14.11 shall relieve any Partner from its express and
implied duties to the Partnership; provided further, however, that no
Partner, Representative, or Alternate Representative may enter into any
agreement with any Person that would impair such Partner's ability to
carry out its obligations as provided in this Agreement. No Partner,
Affiliate thereof, or any of such Partners' or Affiliates' officers,
directors, shareholders, or employees shall under any circumstances be
obligated or bound to offer or present to the Partnership any business
opportunity offered to such Partner, Affiliate, officers, directors,
shareholders, or employees as a prerequisite to the acquisition of or
investment in such business opportunity by any of them.
14.12 ARTICLE AND SECTION NUMBERS. Unless otherwise indicated, references to
article and section numbers are to articles and sections of this
Agreement.
14.13 CONFIDENTIALITY PROVISIONS.
(a) Each Partner, and Affiliates thereof, shall treat as confidential,
and not disclose to any third party (excluding Agents, as defined in
Section 14.13(b)) not authorized by the ERC to receive such
Confidential Information, any Confidential Information obtained
directly or indirectly from the Partnership, any other Partner, or any
Affiliate thereof.
(b) Each Partner, and Affiliates thereof, shall limit disclosure of
Confidential Information obtained directly or indirectly from the
Partnership, any other Partner, or any Affiliate thereof, to only those
employees, officers, agents, advisors, consultants, representatives and
Affiliates (each an "Agent" and collectively the "Agents") of the
disclosing Partner, or Affiliates thereof, who need to know such
Confidential Information in connection with the Partner's investment in
the Project and/or for the purposes of the Partnership's business. Each
Partner shall take such reasonable and prudent steps and precautionary
measures as are required to ensure compliance with this Section 14.13
by those Agents to whom such Partner or an Affiliate thereof discloses
Confidential Information obtained directly or indirectly from the
Partnership, any other Partner, or any Affiliate thereof.
(c) The Partners agree that no adequate remedy at law exists for a
material breach or threatened material breach of any of the provisions
of this Section 14.13, the continuation of which unremedied will cause
the Partnership and the other Partners to suffer irreparable harm.
Accordingly, the Partners agree that the injured Partnership and/or
Partners shall be entitled, in addition to other remedies which may be
available to them, to immediate injunctive relief from any material
breach of any of the provisions of this
PARTNERSHIP AGREEMENT
Page 43
Section 14.13 and to specific performance of their rights hereunder, as
well as to any other remedies available at law or in equity.
(d) "Confidential Information" shall consist of all information, in
whatever form and whether oral or written, disclosed by the
Partnership, any Partner, or any Affiliate thereof, (by or through
their respective representatives) which relates to the Project
(including information disclosed prior to the Effective Date),
including but not limited to information of a technical, political,
commercial, legal or financial nature together with all analyses,
compilations, forecasts, studies, notes, summaries, tapes, recordings,
documents, agreements (whether executed or in draft form), and other
data developed by the Partnership, any Partner, or Affiliate thereof
(by or through their respective representatives). Confidential
Information shall NOT include:
(i) information which was already in the possession of the
receiving party, or Affiliate thereof, at the time it obtained
such Confidential Information hereunder;
(ii) information which the receiving party, or Affiliate thereof,
was or is lawfully entitled outside of this Agreement, and not
subject to an obligation of confidentiality or other legal,
contractual or fiduciary obligation in favor of the disclosing
Person;
(iii) information which was or is in the public domain;
(iv) information which was, is or becomes generally available to
the public other than as a result of a disclosure by the
receiving party or Affiliate thereof;
(v) information which was, is or becomes available to the
receiving party, or Affiliate thereof, from a Person other
than the Partnership, any Partner or Affiliate thereof, which
Person did not acquire such information subject to the
confidentiality requirements of this Section 14.13, and did
not acquire such information subject to an obligation of
confidentiality or other legal, contractual or fiduciary
obligation in favor of the disclosing Person; and
(f) If a receiving party, or Affiliate thereof, is requested or becomes
legally compelled (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or
similar process) to disclose any Confidential Information of another
disclosing party, or Affiliate thereof, such receiving party agrees
that it or its Affiliate shall provide the disclosing Person with
prompt written notice of such request, including identifying
information about the legal proceeding and the parties thereto, so that
the disclosing party, or Affiliate thereof, may seek a protective order
or other appropriate remedy and/or waive compliance with the provisions
of this Agreement. In the event that such protective order or other
remedy is not obtained, the receiving party agrees that it or its
Affiliate shall furnish only that portion of the Confidential
Information which is legally required and shall exercise reasonable
efforts to obtain reliable
PARTNERSHIP AGREEMENT
Page 44
assurances that confidential treatment shall be accorded to the
Confidential Information which is disclosed in such manner.
(g) If a receiving party, or Affiliate thereof, must disclose
Confidential Information of a disclosing party, or Affiliate thereof,
in order to enforce the provisions of this Agreement, then the
receiving party, or Affiliate thereof, shall be entitled to disclose
only such portion of the Confidential Information which is necessary
for such enforcement and shall exercise reasonable efforts to obtain
reliable assurances that confidential treatment shall be accorded to
the Confidential Information which is disclosed in such manner.
(h) Upon any Partner becoming a Withdrawn Partner, such Withdrawn
Partner shall be obligated to promptly return and will cause its Agents
to deliver all written Confidential Information which it has received
to the Partnership; and such Withdrawn Partner shall be obligated to
promptly destroy and will cause its Agents to destroy any and all
copies of such Confidential Information. Notwithstanding the return or
destruction of such Confidential Information, the Withdrawn Partner and
its Affiliates shall continue to be bound by the confidentiality
requirements of this Section 14.13.
(i) The obligations of the Parties pursuant to this Section 14.13 shall
survive the termination of this Agreement for a period of five (5)
years.
14.14 REFERENCE TO MONEY. All references in this Agreement to, and
transactions hereunder in, money shall be to or in Dollars of the
United States of America.
14.15 SEVERABILITY. Should any provision of this Agreement be deemed in
contradiction with the laws of any jurisdiction in which it is to be
performed or unenforceable for any reason, such provision shall be
deemed null and void, but this Agreement shall remain in force in all
other respects. Should any provision of this Agreement be or become
ineffective because of changes in applicable laws or interpretations
thereof or should this Agreement fail to include a provision that is
required as a matter of law, the validity of the other provisions of
this Agreement shall not be affected thereby. If such circumstances
arise, the parties hereto shall negotiate in good faith appropriate
modifications to this Agreement to reflect those changes that are
required by law.
14.16 AGENCY. Nothing contained in this Agreement will be construed to
authorize any party to act as the general agent of any other party or
of the Partnership, except in its relation to the business of the
Partnership as permitted in this Agreement.
14.17 MATERIALITY. The term "material" as used in this Agreement, except when
used in the context of the defined term Material Contract, shall mean
any action, amount, change, or matter which will or may have a
substantial adverse effect on the rights and/or obligations of the
Partnership.
14.18 PRIOR AGREEMENTS. This Agreement and its attached Appendices which are
incorporated
PARTNERSHIP AGREEMENT
Page 45
herein by this reference, constitute the entire agreement of the
Parties with respect to the subject matter hereof, amend and restate
the Limited Partnership Agreement dated effective as of April 16, 1998,
as previously amended, between the Parties, and cancel and supersede
any prior agreements and understandings of the Parties with respect to
such subject matter. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the Parties with respect to such subject matter
other than those set forth in this Agreement.
14.19 BINDING EFFECT. Except as otherwise expressly provided herein to the
contrary, this Agreement shall be binding upon and shall benefit the
Parties signatory hereto and their respective successors and assigns.
PARTNERSHIP AGREEMENT
Page 46
IN WITNESS WHEREOF, the Partners have caused this Agreement to be
executed by their respective duly authorized officers on this 29th day of
October, 1999.
TENASKA GEORGIA, INC.
By: /S/
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
TENASKA GEORGIA I, L.P.
By: Tenaska Georgia, Inc., its Managing General Partner
By: /S/
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX A
PARTNERSHIP PERCENTAGES
COLUMN A COLUMN B
EQUITY VOTING
OWNERSHIP INTEREST
PERCENTAGE PERCENTAGE
TENASKA GP 1.00% 100.00%
TENASKA LP 99.00% 0.00%
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX B
ACTIVITIES TO BE UNDERTAKEN BY THE MANAGING PARTNER
STANDARD BILLING PRACTICES
PROJECT DEVELOPMENT AND MANAGEMENT
The Managing Partner shall implement activities on behalf of the Partnership in
connection with the following, subject to ERC approval as required under the
Agreement, and by way of example but without limitation, in regard to the
development and construction of the Project:
1.0 Project Economics and Pro Formas
2.0 Site Development
2.1 Site Control
2.2 Easements
2.3 Geotechnical and Hydrology Reports
2.4 Environmental Audit
2.5 Tax Abatements
3.0 Permits
3.1 Environmental Impact Report
3.2 FERC
3.3 PUC Order(s)
3.4 Air Permit(s)
3.5 Water Supply
3.6 Waste Water Discharge
3.7 TNRCC
3.7 Zoning
3.8 Other
4.0 Project Contracts
4.1 Power Purchase Agreement
4.2 Fuel Supply Agreement(s)
4.3 Fuel Transportation Agreement(s)
4.4 Interconnection Agreements
4.5 EPC Contract
4.6 O&M Contract
4.7 Long-Term Service Agreement(s)
4.8 Financing and Related Agreement(s)
5.0 Construction of Facility
5.1 Specifications and Scope
5.2 EPC Administration and Management
5.2 Equipment Procurement
5.3 Construction Insurance
5.4 Oversight and Field Management
5.5 Startup Activities/Testing
6.0 Financing Activities
6.1 Construction Loan Agreement and Closing Documentation
6.2 Long-Term Loan Agreement and Closing Documentation
6.3 Equity Agreements and Closing Documents
6.4 Legal Opinions
7.0 Risk Management
7.1 Development/Proposal of Risk Management Policies
7.2 Development/Proposal of Insurance Program
7.3 Health & Safety Policies
PARTNERSHIP ADMINISTRATION
The Managing Partner shall implement activities on behalf of the Partnership in
connection with the following, subject to ERC approval as required under the
Agreement, and by way of example but without limitation, in regard to the
day-to-day administrative and record keeping activities of the Partnership:
1.0 Project Administration
1.1 Project Accounting
1.2 Loan Administration
1.3 Reports to Lenders
1.4 Reports and Filings with Regulatory and/or Government Agencies
1.5 Reports to ERC and Partners
1.6 Contract Management
2.0 Partnership Administration
2.1 Partnership Accounting
2.2 ERC and Partner Meeting Minutes and Records
2.3 Reports to the ERC and/or the Partners
2.4 Tax Reporting and Compliance Activities
2.5 Government Reporting and Compliance Activities
3.0 Public Relations
3.1 Legislative Lobbying
3.2 Press Release Drafting
3.3 Community Relations and Promotions
STANDARD BILLING PRACTICES
Time charges, out-of-pocket costs, and third party expenditures incurred by the
Managing Partner in carrying out the activities as provided in this Agreement
shall be reimbursed as provided in the Agreement, subject to the Partnership
Budget as approved by the ERC, in accordance with the Standard Billing Practices
which shall be as follows:
(i) an hourly billing rate shall be charged for the time charges for all
professional employees of a Partner and its Affiliates, equal to a rate
of $162.20 per hour (1999) which shall be escalated on January 1 of
each calendar year at a per annum rate of four percent (4%);
(ii) an amount equal to one hundred percent (100%) of all costs and
expenditures incurred for travel, marketing, and services provided by
non-internal third parties (i.e. for legal, financial, accounting,
engineering services, etc.) shall be charged; and
(iii) an amount equal to one hundred fifty percent (150%) of all charges made
by a Partner's internal independent contractor consultants that occupy
its office space to provide services to such Partner shall be charged.
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX C
REPRESENTATIVES AND ALTERNATE
REPRESENTATIVES TO THE ERC
Until the Partnership and each other General Partner is notified in writing of
any change, the General Partners designate the following Persons as
Representatives and Alternate Representatives to the ERC pursuant to Section
7.2(a):
TENASKA GP Representative - ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Alternate Representative - ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Alternate Representative - ▇▇▇▇ ▇. ▇▇▇▇▇
Alternate Representative - ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
